Northern Ireland Executive

Briefing paper - Public Service Reform

 

 

Public Service Reform – a comparative analysis

Why are Anglo-American countries the centre of the reform universe? How do the reforms fare when they are taken from that context and placed into different political and administrative environments?¹³

Public service reforms in the international arena have been captured by the term New Public Management. The term originated in New Zealand and is used to describe a comprehensive public service reform programme which started there in the 1980s. New Public Management is now a generic term understood as a reforming ideology with international import. At the heart of this ideology is the notion that public service provision tends to be inefficient and poor quality. Public service providers, it is argued, have a limited understanding of whether their services actually produce effective outcomes. In the Northern Ireland context, for example, the topical debate over the Burns proposals in education is grappling with the question of whether preparing children to sit the 11+ examination is the most effective way of producing a better educated society of young people capable of contributing to the economy. The inevitable consequence of poor public sector performance is spiralling public expenditure, declining standards of public services and a dissatisfied electorate who feel disempowered to make changes and hence become apathetic. This is evidenced in the declining turnouts at elections, particularly in Great Britain.

The response to these problems is to turn to the private sector. Their core business is the provision of goods/services and ultimate survival depends on meeting consumers’ demands. Advice should be sought on how private sector management might inform the public sector. Crudely the emphasis is to emulate the best of private sector practice which demands a complete change in mindset for public service providers. Hence, erstwhile social security ‘claimants’ have become ‘customers’ or ‘consumers’.

Large state-controlled service providers in countries such as New Zealand, Australia, the UK and Sweden embraced these changes mainly through the construction of market mechanisms. Contracts were used as the basis for public service provision rather than a reliance on old-style monopolistic bureaucracies. This movement also gained considerable momentum in the USA where two prominent writers (Osborne and Gaebler¹⁴) described the bankruptcy of bureaucracy and the need for entrepreneurial government. They advocated an American perestroika in which government was reinvented to secure ‘better for less’.

In summary form therefore New Public Management sought to tackle four key weaknesses in public service provision:

• Traditionally organised and managed public services do not effectively control costs, and hence the need for competition between service providers through quasi-market arrangements. Providers that are more expensive or unable to control costs will secure fewer contracts and efficient service providers will increasingly emerge.
• Traditionally organised and managed public services do not effectively improve quality. Competition will similarly lead to providers who innovate to secure better practices and in so doing, win more service provision contracts.
• Traditionally organised and managed public services do not effectively meet the standards of service expected by ordinary citizens. One way of addressing this is to give service users a charter of rights to standards of service which they can legitimately expect. Those organisations which meet the needs of users, defined through their citizen’s charters, will earn public and political support for their service by comparison to those which fail in this regard. This becomes important, for example, when public investment is needed in services.
• Traditionally organised and managed public services have given too much power and influence to special interest groups representing nationally organised workforces, on whom service provision depends. This demands a reduction in the power of public sector trade unions and professional associations such as doctors and teachers. Legislative restrictions on industrial action, an appeal to ethical codes of practice and the threat of privatisation have the potential to change working practices for the better.¹⁵

The response to these weaknesses has been ‘a kind of shopping basket for those who wish to modernise the public sectors of Western industrial societies’¹⁶ comprising: hands-on professional management; explicit standards and measures of performance; greater emphasis on output controls; a shift to disaggregation of units in the public sector; greater competition; a stress on private sector management styles of management practice; and greater discipline and parsimony in resource use.¹⁷ This is shown in Table 1.

The general lessons emerging from a comparative study of New Public Management are that reforms were initiated in response to political challenges, particularly ever-increasing demands on public expenditure and poor economic performance. The particular mix in the ‘shopping basket’ of reforms depended on the political circumstances which each country faced. ‘Sometimes New Public Management was introduced to save money, sometimes to fight the loss of legitimacy of public administration and, on other occasions, to deal with the dissatisfaction of their public managers and politicians or the opacity of the bureaucracy’.¹⁸ We now consider reform programmes in a number of countries.

Table 1: New Public Management - Key Components¹⁹