Select Committee on Public Administration Fifth Report

1 Introduction

1. This report examines the current policy of government by measurement. Our inquiry has concentrated in particular on the performance targets now set for public services. We have tried to assess how well targets meet the Government's objectives, and have considered some proposals for reform.

Our approach

2. We start from a number of basic assumptions:

  • That the public wants and expects sustained improvements in the delivery of public services, which is also a Government priority;
  • That service providers in receipt of public funds ought to be publicly accountable for their performance; and
  • That setting targets can be one means of stimulating better performance by those who deliver services.

3. We recognise that there is much more to the operation of public services than targets. But they have become a talisman in the debate on public service reform, and we are keen to ensure that they support and do not hinder that reform.

4. The Government has a number of different approaches to gauging service performance. As an aid to clarity, we set out in Box A definitions of the most common features of the measurement culture.

The Language of the Measurement Culture—A Glossary

Inputs: the resources used by an organisation.

Outputs: the services, goods or products provided by the organisation with the inputs.

Outcomes: the benefits or value generated by the organisation's activities.

Performance indicators (PIs): quantifiable measures used to monitor performance and report on it to the public.

Management information, which usually includes both numerical and non-numerical ways of monitoring and understanding performance.

Performance management, which is used in a wide variety of ways and usually at least includes:

identifying objectives;

allocating them to individuals or teams; and

monitoring progress.

Targets: usually desired or promised levels of performance based on performance indicators. They may specify a minimum level of performance, or define aspirations for improvement.

League tables: intended to enable comparisons of performance between different service providers to be made.

Public Service Agreements: (PSAs), first introduced in the 1998 Comprehensive Spending Review as an integral part of the Government's spending plans. Each major department has a PSA, setting out the department's objectives and the targets for achieving these.

Service Delivery Agreements: (SDAs), introduced in the 2000 Spending Review, set out lower level output targets and milestones underpinning delivery of the PSA.

Standards: may be used for a variety of purposes, including indicating to the public the minimum standard of service they can expect from a public body, or to a service provider the standard which should be achieved (and against which they may be assessed for compliance). Targets can be based upon standards—for example to achieve a minimum standard consistently, or to improve over time so that the standard is achieved.

Benchmark: normally involves a detailed analysis of comparative performance to help identify what underlies differences between two similar bodies.[1]

5. This report examines the role of targets across the public services, but much of our evidence relates to targets set in health, education, local government and the police and criminal justice system. We refer often to the system of public service agreements (PSAs), concluded between the Treasury and other departments, and their influence at all levels of public service. (This Report covers some of the same ground as a 1999 Treasury Select Committee report on PSAs).[2] We touch on performance league tables, another prominent feature of the measurement culture. We also identify an increasingly important role for benchmarking in the improvement of services.

Our inquiry and this report

6. This has been a comprehensive inquiry. We had 11 evidence sessions with 39 witnesses, and received 63 memoranda. We also took evidence on two visits, one to Bristol on 9 and 10 December 2002 and one to Canada (Ottawa, Montreal and Toronto) from 8 to 13 June 2003. We are grateful to all those who have given evidence.

7. We are particularly grateful to our specialist advisers: Professor Richard Rose of the University of Strathclyde, Professor Colin Talbot of the University of Nottingham, Tony Travers, Director of the Greater London Group, London School of Economics and Sir Nicholas Monck, formerly Permanent Secretary at the Department of Employment. They have made a major contribution to the inquiry, as has Pauline Ngan, who prepared the annex on the Government's achievements against targets.

8. The first part of this Report largely describes the measurement culture as seen from Whitehall and Westminster. We outline, first, the Government's aspirations for targets and league tables. The second part of the report examines the landscape from closer to the 'front line' where most services are delivered.

The two cultures of public service reform

9. There seem to be two cultures at work in the Government's approach to public service reform. The first approach emphasises capacity-building in organisations, with attention to leadership and management issues. As such, the focus is on the organic ingredients of durable change and improvement. This is a central task for the Prime Minister's Office of Public Services Reform, which has responsibility for "working with departments to embed reform and identify best practice". The second approach is typified by targets, its time frame is shorter and its techniques are more mechanistic. Among other things, the Prime Minister's Delivery Unit "assesses and supports delivery in each of the departments, in particular, ensuring that there is a Delivery Plan in use for each target". Both have their place, but it is important that the former is not crowded out by the latter. Durable capacity-building is the key to public service improvement. This means good leadership and effective management. With this in place, target-setting and other performance measures will form a natural part of an organisation's business planning. This requires a whole-system approach to change and improvement, engaging the knowledge and commitment of all those who work in an organisation.

The Government's five aspirations for the measurement culture

10. In seeking to assess the measurement culture, we believe it is useful first to set out what the Government is trying to achieve with targets and tables, and to examine what benefits they might bring. We take as our main text a recent Government statement on the issue, a joint memorandum to this Committee from the Treasury and the Delivery Unit of the Cabinet Office.[3] In the context of a discussion of PSAs, this asks the question "Why set targets?" and answers by setting out the key aspirations. We now examine each of these statements of Government aspirations in turn, using evidence given to our inquiry to explore their implications.

"Targets provide a clear statement of what the Government is trying to achieve. They set out the Government's aims and priorities for improving public services and the specific results Government is aiming to deliver. Targets can also be used to set standards to achieve greater equity".[4]

11. In 1998 the Government set out its model of an effective target, one that would: "form the heart of the PSA. They are, wherever possible, 'SMART'—specific, measurable, achievable, relevant and timed".[5] In the view of the Government, such targets can help ministers and others give a lead, providing a clear signal to those who deliver services. The former Permanent Secretary at DfEE, Sir Michael Bichard, gave us a vivid description of the logic of targets as seen from Whitehall:

"The point about targets… is that you are never going to have enough money. I used to say to my staff 'It is very unlikely I will ever get up in front of you and you say 'Fair cop, guv, we have got far too much money we do not know what to do with it' It is always going to be 'We have not got enough money'. You have to use that resource as well as you possibly can… targets are a way of making sure that people will focus their energy on the things which you think generally are the priorities otherwise everyone has got their own view about what they should be doing".[6]

12. This describes well how central government can use targets to communicate priorities and give direction in a way that makes the most of the commitment and dedication of public servants. The word 'focus' was used repeatedly in evidence to us on the role of targets. This also involves something else; the fact that among the Government's most important arguments for targets is the need to ensure equity in the provision of public services. Targets are one sign of the Government's belief there is a set of common standards and entitlements which must be met, a form of guarantee that there is fairness in the provision of publicly funded services, wherever they are provided and whoever is receiving them.
"Targets provide a clear sense of direction and ambition. The aim, objectives and targets in each PSA provide a clear statement around which departments can mobilize their resources. This helps in business planning and communicating a clear message to staff and to the various public bodies which contribute to delivering each department's programme".[7]

13. This expresses the importance of planning, motivation and communication in public services. We heard much evidence about the effect of targets on motivation, for good or ill. There is no doubt that targeting can at times lead to a clarity about aims which inspires real commitment. The Chief Constable of Thames Valley Police, Mr Peter Neyroud, told us how the targets attached to the campaign to cut street crime helped to make his force work effectively towards their goal:

"From a Thames Valley perspective, we had a high level of robbery and rising, which clearly needed sorting out. Actually energising folk into reducing robbery this year has completely energised the organisation over this last eight, nine months. There are examples where a target, which is something which people firmly believe is something they should be doing… can deliver much better results than you were expecting".[8]

14. This combination of a clear national focus with 'something which people firmly believe… they should be doing' appears to have achieved the central aim of improving the situation on the streets, while winning the support of those who police them.

15. Targets require a starting point as well as a goal. Without knowing where things stand at present, there is no way of determining whether a target offers an organisation an easy goal, a challenge, or a target as remote as the moon. In order to monitor progress, it is necessary to have a benchmark, agreed by all, showing how an organisation is performing here and now. When a number of schools or hospitals are benchmarked at the same time, the results can be compared. This helps in planning, and should enable service providers to be motivated to achieve their goals.

"Targets provide a focus on delivering results. By starting from the outcome Government is trying to achieve, the targets encourage departments to think creatively about how their activities and policies contribute to delivering those results. They also encourage departments to look across boundaries to build partnerships with those they need to work with to be successful".[9]

16. Targeting shifts attention from the classic Treasury concerns of inputs (money and personnel) to outputs and outcomes. Outputs are goods and services delivered to individuals, households, businesses and communities, for example, patients having operations or students passing examinations. Outcomes are conditions in society, like the number of ex-prisoners getting jobs after release, patients being successfully treated, or children being able to read. Targets can be an important symbol of the need for change, helping to transform cultures; an example is the well-known target for putting 100% of government services online by 2005, which, it has been argued, helped to encourage a more active approach to the issue by departments.[10] By concentrating on outcomes rather than process, agencies can be encouraged to work jointly to produce results. A cohesive approach was now the norm in the Prison Service, its then Director General, Martin Narey, told us:

"I spend a lot of time now with colleagues in the departments of Health, Education, Work and Pensions, working together on targets and our targets on getting prisoners into jobs, for example, were constructed in consultation with Jobcentre Plus and involve and depend on a heavy commitment from them to having job surgeries in prisons and so forth".[11]

"Targets provide a basis for monitoring what is and isn't working. Being clear what you are aiming to achieve, and tracking progress, allows you to see if what you are doing is working. If it is, you can reward that success; if it isn't, you can do something about it".[12]

17. Monitoring has two aspects. One is about keeping a check on the effectiveness, or otherwise, of performance. There may be a punitive element, with failing services at risk of closure or radical overhaul.

18. But monitoring is also about something positive: the chance to identify and learn from success. For example, benchmarking with a group of similar bodies provides a sound basis for monitoring progress and seeing which service deliverers are working well. As Chief Education Officer in Birmingham, one of our witnesses, Professor Tim Brighouse, used comparisons between the performance of different schools as a way of driving up standards:

"You are trying to energise but not simply energise from hoorah, hoorah, but… by helping them to see other people's practice and when they see other people's practice there is no stopping them. They then want to move forward".[13]

19. Tracking and monitoring of progress against targets are helpful to ensure improvements are being effective and to identify potential difficulties. One crucial point emerges from our evidence; there is an important distinction between performance information used internally, to support management and aid learning, and information put into the public domain to show how well services are performing. The quality of both needs to be high, but what is appropriate for one may not be appropriate for the other.

20. The key role of leadership and intelligence in making the most of performance information is well illustrated by the case of the high-performing Staffordshire Ambulance Service, which has a list of 96 measures, monitored each day. What is important is that these are used internally as management information, and they appear to be understood as such. In this way, they are similar to management information in the private sector, used to track progress and inform discussion. The results of such internal sharing of information appear to have been impressive. But 96 public measures would have been indigestible and impossible to interpret.

21. We heard a great deal of evidence about the importance of making intelligent use of targets. Many of our witnesses said that information about performance against targets could help to provide useful pointers to the strengths and weaknesses of services. In order to ensure this, targets should be relevant and meaningful to those asked to deliver them. The Audit Commission told us:

"What makes a target 'good' is not just the way a target is expressed—it's about the way it was derived, the extent to which service users were involved in its development, the extent to which it helps to achieve policy objectives, the extent to which it has the support of the staff whose efforts will achieve it, the quality of the data used to measure its achievement, and the clarity and transparency of its definition".[14]

22. From another perspective, Professor Alison Kitson of the Royal College of Nursing stressed the importance of dialogue on targets between the centre and local deliverers:

"It is about ownership, it is about interpretation and understanding of the relevance and impact of the target to the people who are providing the business. It is that dialogue, that constant iteration between the people who are setting targets and the people who are having to deliver them that improves the quality of them".[15]

23. Comparing service providers offers an opportunity to promote better practices nationwide. Learning can take place through the encouragement of 'horizontal' dialogues between peers: for example head teachers, hospital managers, and police, which already occur in professional associations. By listening to horizontal discussions, policy-makers and target-setters can learn about what does and does not work on the ground. Familiarity with differences in context will avoid the naive assumption that a league leader's practice can quickly be applied in all parts of the country and in widely different circumstances.
"Targets provide better public accountability. Government is committed to regular public reporting of progress against targets. Targets are meant to be stretching. So not all targets can be hit. But everyone can see what progress is being made".[16]

24. Accountability comes in many forms. Good managers, in the public or private sector, can make effective internal use of performance information, including achievement against targets, to find out where problems are arising or successes are being achieved. This is to be warmly welcomed, because internally it provides a good basis for intelligent management of people.

25. Reporting progress, or lack of it, is also an important element in public accountability. In recent years, governments have provided an increasing amount of information on public service performance, the latest example being access to data about PSAs via a single webpage.[17] This is a positive development. Benchmarking the starting point provides a baseline for judging whether progress is being made. As we have indicated, we see this as central to good public services, and we had many examples of the increasing readiness of those involved in public service to make themselves accountable in this way. The Audit Commission told us:

"Many professionals nowadays recognise, and indeed welcome, public scrutiny of their role, as long as this is fair and objective. Using targets to open up the world of the 'expert' for public examination is an important part of accountability".[18]

26. The view from a former senior departmental official, Sir Michael Bichard, was robustly in favour of this approach:

"I think they [league tables]do impose some peer pressure but they do enable also parents to ask questions… People who are running public services have got huge amounts of power and huge amounts of information. This is just a way of encouraging them to share some of that with the clients and I do not think that is unreasonable".[19]

27. In a previous report,[20] this Committee has emphasised this need for a sharing of power, a professionalism which respects accountability, and an accountability which respects professionalism. This principle, we believe, should be central to the practice of government by measurement. In the next Chapter, we assess whether it is happening like that.

1   based partly on Audit Commission submission PST 31A Back

2   Seventh Report 1998-99 HC 378 Back

3   PST 60 Back

4   PST 60 Back

5   'Public Services for the Future: Modernisation, Reform, Accountability' Cm 4181, 1998 Back

6   Q 126 Back

7   Op.cit. Back

8   Q 751 Back

9   Op.cit. Back

10   PST 60 and PST 62 Back

11   Q 728 Back

12   Op.cit. Back

13   Q 367 Back

14   PST 31 Back

15   Q 753 Back

16   Op.cit. Back

17 Back

18   PST 31 Back

19   Q 136 Back

20   'Making Government Work' Seventh Report 2000-01 HC 94 Back

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Prepared 22 July 2003