Chapter 3:
Bringing the two cultures together
The new
localism
96. We have heard much recently about the 'new localism'.
The Government set out its thoughts on a more 'hands-off' attitude
to public services in a document published with the Budget in
April 2003. It called its policy towards local providers 'constrained
discretion', explaining it in this way:
"Greater discretion provides local service providers
with more opportunities to innovate, design and develop services
around the needs and priorities of their communities… it
is likely that many public services will be more effectively governed
by regional or local bodies with better knowledge about providers'
performance and the needs of the communities they serve".[79]
97. We see the new localism as an opportunity for
change. It could be a way of beginning to integrate the two strands
of public service reform—the measurement culture and the
performance culture.
98. We considered whether, in the light of the evidence
of professional demoralisation, perverse consequences, unfair
pressure and alleged cheating, the culture of measurement should
be swept away. Should there be a cull of targets and tables to
allow the front line to work unhindered by central direction?
99. This is a superficially attractive prospect,
but an unrealistic and undesirable one. The increases in accountability
and transparency brought about by the last twenty years of performance
measurement have been valuable. Information is now available that
cannot and must not be suppressed. Open government demands that
people have the right to know how well their services are being
delivered, and professionals and managers need to be held to account.
The aim must be to build on these developments, while reducing
any negative effects.
Our approach
100. The recommendations in this Chapter are founded
on the view that many of the ills of the targets regime can be
alleviated by better integrating the measurement and the performance
culture. One key to this is stronger leadership at all levels
of the public services. In practice this means:
- a willingness by ministers to choose and communicate
clear priorities for public services rather than relying on a
plethora of targets; and
- a willingness by local service providers to understand
the need for measurement and monitoring while also innovating
and improving.
101. This would mean a courageous decision by ministers
to accept that targets will sometimes be missed and that local
service providers should set most of their own targets. If setting
too many targets leads to ministers micromanaging, there is a
danger that they will ignore many of the most important lessons
to be learned from good management in both the public and the
private sectors. If public services are to improve substantially
and sustainably, ministers will have to let the new localism work;
at the moment they seem reluctant to do so. Equally, service providers
will have to acquire new skills so that ministers—and the
public—can safely trust them with new freedoms. The reforms
we recommend below are intended to support this new approach.
102. Although there is much talk about the new localism,
there is little detail about what it will mean in practice. The
Government needs to end the uncertainty. It should, as soon as
possible, set out detailed proposals for decentralisation of performance
setting and measurement in the main public services, aimed at
improving the process by increasing local involvement and reducing
overlap in target setting. The Government should explain how front
line staff and management, along with service users, will be consulted
and how their views will be taken into account. Different arrangements
might make sense for locally based services like schools, social
services and police on the one hand and, on the other, unitary
national organisations.
103. Consultation could give those at the sharp end
of service delivery, and local elected representatives and service
users, the opportunity to draw attention to limitations in departmental
assumptions about what is possible. Equally, it would give central
government the opportunity to encourage service deliverers to
suggest ways of measuring and improving their performance. The
grey zone between what is possible and impossible is negotiable.
Negotiation requires dialogue rather than imposed targets.
104. Front line deliverers should therefore be given
much more freedom to set their own targets. Appropriate monitoring
is needed to ensure that basic standards are maintained, targets
are sufficiently stretching and proper consultation has taken
place. Consultation should be used to establish a consensus about
what constitutes evidence of success in relation to a target.
If service-deliverers are directly involved in the setting and
measurement of targets, they can discuss with departments what
types and amounts of change are realistic within a given time
scale. They will therefore be fully committed to the targets,
making it much harder for providers that subsequently perform
badly to blame either the Government or the statistics that produce
evidence of their shortcomings.
105. The key objective is to develop and nourish
a performance culture within public services. Targets, and measurement,
are merely tools that, if used intelligently, can contribute to
such a culture. If used unintelligently, they can conflict with
this objective and make it harder to achieve.
Options
for local involvement
106. This could be achieved in various ways. One
option is the approach proposed recently by the Secretary of State
for Education and Skills. Under this proposal primary schools
would set their own targets but the case for ambitious improvements
is clearly expressed. Mr Clarke gives LEAs the role of pressing
schools to set challenging targets with year on year improvement,
making use of information about schools in similar circumstances
and offering support for achieving targets.
107. For locally based services arrangements broadly
similar to those now proposed for primary schools would be one
option, though within that the role of local authorities could
be varied. A further variant might give a bigger role to local
authorities which do best in the CPA. Another possibility might
be a development of local PSAs in which the scale of improvement
in the targets would be subject to negotiation between central
and local government.
108. National or unitary organisations such as the
Prison Service could in principle be in a position to advise their
Ministers what nature and level of average targets should be capable
of being 'owned' by, and of motivating, their organisations. They
could then decide targets for their component units which add
up to the national figure. For this to work the sub-targets would
need to take account of the different starting position of different
units—unlike the present targets for units of the NHS which
mostly require uniform performance to "be met within a given
timescale by every NHS or social care organisation".[80]
Again there would need to be an element of negotiation in the
settlement of the national target.
109. We see a role for the Audit Commission in much
of this process, with the opportunity to build on the experience
of the first year of the Comprehensive Performance Assessments.
In particular, the Commission should develop the self-assessment
that was an important and distinctive part of the CPA process.
Central government agencies should be monitored in a similar way
by the National Audit Office. Nor should central government departments
themselves be immune from a CPA-type assessment, with associated
public reporting (and ranking) of performance.
110. One major signal that the Government is serious
about the new localism would be a hard look at the number of targets
and the way they affect those who deliver services. In general,
the number of targets should be as small as possible. If everything
is a target, then nothing is a target. Instead of key priorities
being defined by targets, they are diffused by them. While progress
has been made in cutting the high-level PSAs and making them focussed
on outcomes, reports from service deliverers are unanimous in
saying that there has been no decrease in the total number of
targets which they are supposed to hit. For instance, while the
Chief Executive of the NHS says that there are 62 targets in his
service,[81]
the RCN and the NHS Confederation both suggest that the number
of targets on the health service front line is in the hundreds.[82]
The aggregate impact of targets from different sources which converge
on particular organisations and individuals does not appear to
be monitored. Neither, it appears, is the opportunity cost of
setting and monitoring targets. There needs to be much greater
understanding of why the measurement culture is seemingly expanding
while Ministers claim that targetry is being radically slimmed
down. We believe that Ministers should increasingly concentrate
on the key national priorities and allow, and indeed encourage,
local units to set and monitor their own targets.
111. Time is short if the new localism is to be made
a reality in the next (2004) spending review, as it needs to be.
Already the Treasury is preparing to send out to departments its
guidance on target setting. By the spring of next year, new targets
will have been set, in time for a likely announcement in July.
Action should be taken as quickly as possible.
112. We therefore recommend that the Government
should produce a white paper with proposals for decentralisation
of performance measurement in the main public services, aimed
at improving the process by increasing local involvement in target-setting.
This white paper, which should be published in time to influence
the 2004 spending review, should also set out a strategy for reducing
the number of all targets (especially precisely quantified targets)
which have to be met by service deliverers. The paper should contain
a series of options to enhance autonomy on target-setting by those
directly involved in delivery of services, and detailed proposals
for increasing consultation with them when key national targets
are set. These key national targets should be few in number, and
designed to secure basic national entitlements. The NAO and the
Audit Commission should be involved as much as possible in the
new system set out in the white paper.
113. There is also far too little attention to the
interests and views of users. The Government says a great deal
about strengthening the focus on users, but there is very little
serious attempt to involve them in the measurement culture. There
are increasingly popular experiments at local level with citizens'
panels and other ways of bringing users in to discussion about
services. The Government should consider (as part of its discussion
of the new localism) how it can encourage the inclusion of measurement
issues in these panel debates, with perhaps suggestions that locally-set
targets should be put out for consultation before they are finalised.
We were also interested in the Citizens First initiative in Canada,
which the Committee discussed on its recent visit there, and which
involves systematic monitoring of citizen satisfaction with the
range of public services, along with a target to improve satisfaction
ratings over a defined period. Some developments of this kind
are already happening in this country, especially in the NHS.
We would like to see a concerted national initiative.
114. We recommend that the white paper
should also contain a strategy for encouraging all providers to
involve users more systematically in the setting of targets. This
should include systematic monitoring of user satisfaction with
public services.
The need
for grown-up government by measurement
115. One of the major problems with the current targets
regime is that, if the bulk of our evidence is to be believed,
it does not appear to be particularly effective at motivating
people. Few of our witnesses claimed that, in themselves, targets
were inspirational, and, as we have seen, some saw them as obstacles
to professional satisfaction and improved performance.
116. As we argued earlier in this Chapter, however,
the measurement culture cannot, and should not, be abolished.
The accountability and transparency it brings are now an inherent
part of our public administration. But the Government's policy
needs root and branch reform. It is time for the Government to
promote a new set of measures that reflect reality and support
sustained improvement, with the emphasis on useful and constructive
measures of performance. This should be the next stage of adaptation,
a shift to measures that celebrate progress and identify failure
more accurately and fairly. In this way, it could help to make
a reality of the performance culture, balancing the need to challenge
people at the sharp end of delivery while still making sure that
they are involved and motivated. It is not an easy balance to
strike, but the Government must try to do it.
Asking
the right questions
117. This means, for instance, better and more intelligent
comparisons. Effective benchmarking, for example, sees service
providers being compared with other providers working in a similar
environment or with similar groups of clients or users. For a
hospital which specialises in treating heart conditions, it can
be instructive to compare its performance with the performance
of other heart hospitals, especially where there is a similar
'case mix' of severe or less severe problems. Equally, a school
with a high proportion of free school meal pupils and/or a high
proportion of children whose first language is not English could
sensibly be compared with a group of others facing similar challenges.
Equally, at the other end of the spectrum, a school in a prosperous
and privileged suburb should be compared with others in well favoured
areas to assess whether it is making the best of its comparative
advantages. The effective manager can use such information to
ask staff to explain what it is that might be making life difficult
for them, and what can be done to put it right.
118. Public services need to be seen as learning
organisations, with learning aimed at improvement. This puts the
apparatus of measurement, including targets and league tables,
into its proper context. A target may be missed, but if learning
takes place in the process then that is a gain. While this seems
to be understood by the best private sector organisations, in
the public sector a missed target is likely to be the object of
political and media attack. This is both foolish and damaging,
and prevents target-setting playing its proper role in helping
public sector organisations learn how to improve.
119. Asking the right questions is, indeed, the key
point about the proper use of targets, and performance measurement
generally. Whereas some have seen measurement as the answer to
public service problems, good managers see it as a means of asking
the right questions. Sir Michael Bichard told us: "Targets
are just a way of measuring not a way of doing".[83]
Effective benchmarking allows managers to ask themselves useful
and realistic questions about performance. When targets are interrelated,
for instance, they can be reviewed in 'clusters'. The number of
measures required should be as many or few as suit the problem
at hand. For example, focusing on truants rather than truancy
calls attention to the multiple policy objectives that arise in
dealing with young people in difficulties at school. Likewise,
focusing on people who have been hospital patients calls attention
to what happens to people when they are queuing for admission
and after they are discharged as well as the number of days or
hours that they occupy a hospital bed. Monitoring a 'patient journey'
through the system can be more useful than a set of merely quantitative
measures. Qualitative measurement of this kind is essential. Complex
measures can therefore, in internal discussion, help to tackle
complex issues.
120. A judgement then has to be made about how to
report results to the general public. There is no doubt that those
who both use and pay for services have a right to information
about the performance of those services. But it is difficult to
produce information in a form that is at once clear, comprehensive
and fair. The so-called 'spidergrams', a very promising attempt
to communicate the complex reality of police performance, were
widely derided in the press, while the often misleading league
tables seem as popular as ever. The Government should continue
to strive to square this circle by improving both the quality
of management information and the quality of accountability to
the public, aiming for greater clarity and consistency about the
purpose, audience and form of published information.
Celebrating
progress
121. Much more recognition also needs to be given
to progress made by those on the front line. Providing universal
public services, with inherently limited resources, is a daunting
challenge (and not helped by often crass comparisons with the
private sector). Measures of progress focus on trends: they compare
current performance with past position. Thus, all service providers
can make progress, whether their starting point is above average,
average, or below average. Comparing a school's performance over
a number of years also takes into account differences in starting
points. A school that is below average in performance because
its catchment area includes a disproportionate number of poor
families can still make progress from this unfavourable starting
point, and a school with an intake of more favoured pupils is
prodded to advance further rather than coast on its advantage.
Focusing attention on the degree of progress immediately turns
the spotlight on services that are going nowhere or going backward.
After many years of measurement, much raw performance data is
now available. It should be used to provide measures of progress
that can give a more rounded and accurate picture of how our schools,
hospitals and other public services are performing. This sort
of benchmarking is already available to schools, (eg Performance
and Assessment reports or PANDA) but it needs to be given a much
higher profile in the presentation of information about performance
for all services.
What people
want
122. There is one especially powerful argument in
support of the idea of moving to measures of progress as the touchstones
of success. The first is that progress is what people want from
their public services. Opinion polls about public services ask
questions such as "Do you believe services are improving?".
People are not asked whether services are hitting their targets,
and our perception is that few really care whether they hit them
or not. In the end, targets are a technocrat's tool, useful for
monitoring but not important to the people who use services and
vote in elections. The more targets can be related to progress,
the more they can be meaningful.
123. We are aware that the fascination with league
tables and other crude measures will continue. The media, especially
the local media, are unlikely to stop drawing up their rankings
based on raw data. But the experience of OFSTED reports shows
that rounded and thoughtful analysis has a place in the media.
The success of the Government in moving the focus of comment on
health statistics (at least partly) from waiting lists to waiting
times shows that perceptions can be changed. We hope that the
Government will make a determined attempt to educate the media
and inform the public about the real performance of public services.
124. We recommend that there should be
a shift in emphasis in Government policy from absolute targets
to measures of progress in performance. In its white paper on
targets, we urge the Government to include plans to promote trend
measures showing clearly and graphically whether service providers
are making progress, standing still or going in the wrong direction.
Learning
from experience
125. For all the Government's warm words about localism
there remains a serious gap between the language used in Whitehall
and the reality on the ground. Pressed by Ministers to make the
machine work to deliver better services, civil servants are tempted
to dictate to local providers (although the NHS has much more
developed mechanisms for such control than local government or
the police). Equally, front line staff can fail to make good use
of targets and managers can treat them as boxes to be ticked rather
than opportunities to understand their organisation better. Such
skills deficits need to be addressed in the proposed white paper.
126. We therefore recommend that an action
plan on local performance measurement should be included in the
white paper. This would set out how the Government intends to
enhance the skills of local service providers in the setting and
monitoring of appropriate measures. This should emphasise measures
based on progress and long-term trends rather than absolute targets.
127. The action plan should also explain
how the Government intends to ensure that departmental officials
have an up-to-date understanding of service delivery, and front
line experience (see also the Civil Service Reform Programme).[84]
Improved
monitoring and reporting
128. Whatever improvements are made to the quality
of targets and the degree to which local service providers 'own'
them, there will continue to be a need for credible performance
reporting. As we noted in Chapter Two, there are doubts about
the soundness of the assessments made by departments. Action needs
to be taken to ensure proper accountability for performance.
129. We therefore recommend that the system
for reporting progress against PSA targets be made more consistent
and comprehensive, with detailed reporting requirements to be
issued by the Treasury. The reporting guidance should set common
reporting categories so that it is clear whether a target has
been judged as met, not met, partly met, or if there is insufficient
data to make an assessment. For current targets, the guidance
might introduce different reporting categories such as those that
the Scottish Executive uses: achieved, ongoing, on track, delayed
and may not be achieved.
130. The guidance should also require the
provision of adequate supporting evidence to back up assessments
made about target achievement. There should be thorough monitoring
of how adequately each individual department has discharged its
reporting requirements before reports are released, to ensure
that all departments provide relevant performance information
for both improvement and accountability purposes.
131. We noted above (paragraph 65) that, in reporting
on shared targets, it is often difficult to determine the exact
responsibilities of the relevant departments. This problem needs
to be addressed.
132. We recommend that the reporting on
shared targets should make clear the contribution that each of
the responsible departments has made towards achievement of the
target.
133. We also asked ourselves how independent validation
of departmental reporting could be assured. In evidence to us,
Nick Macpherson, of the Treasury, suggested that this task could
be undertaken by select committees.[85]
We consider that there is a stronger argument for asking the NAO
to carry out this function, given its expertise in the area of
performance monitoring, and in order to build on its work in validating
data systems. The resulting information could then be used by
select committees in their monitoring of departments' performance
reporting.
134. We endorse the conclusion of the ODPM Committee
that the credibility of the system for monitoring targets is undermined
by the lack of independent external validation of departments'
assessments about target achievement.
135. We therefore recommend that the National
Audit Office be given the responsibility for validating target
assessments as a logical extension of its existing duty to validate
the data systems for performance reporting.
136. We also see great virtue in a revival, in a
different guise, of the allegedly discredited Government annual
report. This was discontinued some years ago amid a wave of media
cynicism. The idea of increasing government accountability in
this way is a sound one. It is an innovation that should have
been built upon, not abandoned. The Government has pledged to
make use of PSAs as a continuing instrument of accountability,
saying in 1998 that "The publication of PSAs represents a
fundamental change in the accountability of government to Parliament
and the public".[86]
It went on to promise that: "The Government will report to
Parliament and the public annually on progress and individual
departments will publish further details in their departmental
report". It still needs to redeem that pledge.
137. The Scottish Executive has published a consolidated
performance report which sets out all of the Executive's targets
in one document. It contains a short progress report on each target,
as well as summary totals of how many targets have been met, are
on track, are delayed or which may not be achieved.[87]
For services controlled by Whitehall departments, this quality
of accountability to the public is not available. It is unsatisfactory
that the citizen is forced to wade through twenty or thirty departmental
reports to find out how services are doing. Our exercise has shown
that it is possible for performance information on targets across
Government to be brought together in one place. We have recommended
a proper validation of performance information. The Government
should therefore be able to produce an Annual Performance Report
on achievement against all its targets along the lines of the
Scottish Executive document on target achievement mentioned earlier,
in the form of a revived and revamped Government annual report.
This should be free of the spin that marred previous Government
annual reports, and should be easy to put together from existing
material.
138. We recommend that the Government publish
an Annual Performance Report on its overall performance that sets
out how it has performed against each of its PSA targets, based
on the existing performance reporting that departments are required
to undertake. The information should be independently validated
by the National Audit Office, the Audit Commission and the Office
for National Statistics.
Accountability
139. In promoting the 'new localism' the Government
is also inevitably opening up issues of local democratic accountability.
Although many of our recommendations have focussed on the professionals
who deliver services locally, they will also have important implications
for local councillors. We hope that the Government's white paper
will provide much more encouragement for councils to become involved
in their own target-setting.
140. At the national level, some Parliamentary select
committees have made good use of PSA targets in their scrutiny
of departmental priorities and performance, though equally there
are other committees that have barely considered their departments'
targets (if at all). Occasionally a select committee's monitoring
raises issues applying across the targets system as a whole, such
as the ODPM Committee's call for independent external validation
of departmental reporting against targets.[88]
We consider that select committees should continue to build on
the work of scrutinising PSA targets. Moreover, the scrutiny process
might be assisted by the development and promulgation of guidelines
for monitoring targets, which would improve the consistency and
rigour with which committees examine targets. Such guidelines
(which might cover matters like evaluating the quality of performance
reporting and checking the validation of performance data and
assessments) could be developed and issued by the recently established
central Scrutiny Unit within the Committee Office of the House.
141. More broadly, select committees and Parliament
could be more engaged in the scrutiny of PSA targets at an earlier
stage in their development. At present, PSA targets are formulated
almost entirely within Government as part of the biennial Spending
Review process.
142. We recommend that, as part of a wider
programme of consultation on target setting, targets in draft
form should be referred to their relevant departmental select
committee for comment and proposed revision. The Government may
also wish to consider devoting a debate specifically to the finalised
PSA targets resulting from this process, as an adjunct to the
debate that occurs on the biennial Spending Review.
Changing
the landscape
143. There is a further issue. Centrally imposed
targets are the expression of a centralised political system,
in England at least, in which the weakness or absence of effective
channels of accountability for services at other and more local
levels means that all accountability has to run through the single
channel of Westminster and Whitehall. This in turn reinforces
centralising tendencies. If we are unhappy with this, as we believe
we should be, then effective political responsibility for services
has to be developed at other levels. It is right for key national
standards to be set centrally, but there needs to be enough space
for local initiative and innovation. This presents a considerable
challenge, going beyond the immediate concerns of this report,
but at some point it will have to be faced if central target-setting
is really to be replaced by more local forms of political accountability.
144. We also call for a more mature political and
media debate about targets. If targets are understood as tools
to improve performance rather than rigid ends in themselves, then
judgement will be based on progress towards a target rather than
failure and success. Targets are valued in the private sector
for this reason. Government needs to be mature, not trumpeting
when it reaches targets and not trying to hide the facts when
it does not. Opposition should accept that, if targets are to
be meaningful, they must be challenging and therefore not always
met. This more mature political culture may, however, prove to
be one target too many.
79 'Public Services: meeting the productivity challenge'
HM Treasury April 2003 Back
80
NHS & Social Care Targets 2003-06 Department of Health 2003 Back
81
Q 846 Back
82
Q 706 Back
83
Q 124 Back
84
In 1999 the then Cabinet Secretary, Sir Richard Wilson, submitted
proposals for civil service reform to the Prime Minister. That
submission described a series of actions upon which the Cabinet
Secretary would report progress annually. Back
85
Q 611 Back
86
Op.cit. Back
87
Scottish Executive, Recording Our Achievements, 2002 Back
88
Op.cit. Back
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