Magazine article Government Finance Review

Best Value and Performance Management: Lessons Learned from the United Kingdom

Magazine article Government Finance Review

Best Value and Performance Management: Lessons Learned from the United Kingdom

Article excerpt

In 1999, the United Kingdom introduced a new agenda aimed at modernizing local government. At the heart of this agenda is the British government's new performance management initiative--"Best Value." Local governments in North America can take some of the early lessons learned from Best Value and adopt them to their own governments.

In 1999, Britain's Labour Government introduced an agenda to modernize local government. It is a far-reaching program designed to enhance democratic governance and improve the quality of services. It includes five key commitments, three of which are particularly relevant to the performance of local government services:

* forward-looking policy-making: policy-making needs to be more 'joined-up' and strategic; not reactive to short-term pressures;

* responsive public services: public services should be responsive to the needs of citizens, not to the convenience of service providers; and

* quality public services: public services must be efficient and of a high quality.

The program laid out for 'Modernising Government' is the basis on which the Labour party's re-made performance measurement effort, Best Value, is built.

Best Value is the term used by the United Kingdom's (UK) national government for its performance management initiative. Broadly defined, it is an ongoing process of assessment and improvement involving stakeholders throughout. It is broader than performance measurement, but performance indicators are at its heart. The focus is clearly on changing the culture of organizations and assessing the overall performance of local governments in providing services.

Local Government in the UK

Local governments in the United Kingdom provide the following local services:

* social services,

* housing services,

* land-use planning,

* economic development,

* transport and roads,

* local environment,

* trading standards,

* leisure and recreation,

* fire service, and

* voter registration and elections.

City and county local authorities do not provide education or police services, rather these are provided by independent education and police authorities. Health care (including ambulance services) is a national program administered by the National Health Service.

A major responsibility of UK local authorities is the provision of housing services, including acting as major landlords for nearly five million housing units nationwide, both subsidized and nonsubsidized rental properties. They are responsible for collecting rents and maintaining and repairing properties, as well as playing a strategic role in assessing local housing need. Many of the national performance indicators are geared toward this housing function.

A Strong Central Government. UK local authorities derive their authority from parliamentary legislation. As a result, the Central Government has significant control over their internal affairs. In addition to determining which services it will provide, the salaries and wages of local authority staff are negotiated centrally to provide some uniformity among wage rates nationally. More important, the Central Government provides more than 80 percent of the revenue that local authorities collect to fund their services. Further restrictions apply in the form of a cap on how much Council tax (i.e., a local revenue based on the value of domestic property) it can raise. The formula for business property tax also is set by the Central Government.

In its oversight role, the Department of the Environment, Transport, and the Regions (DETR) not only imposes a system of measurement on local authorities, but also specifies performance indicators and targets. It assesses local performance and takes remedial action where necessary to ensure high-quality local services. It also requires local authorities to publish their results. …

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