Select Committee on Public Administration Fifth Report

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.


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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