Magazine article Public Finance

Performance Anxieties

Magazine article Public Finance

Performance Anxieties

Article excerpt

The timing could not have been better. Just one day after Chancellor Alistair Darling s Budget and two days after the Treasury's Operational Efficiency Team set out its programme to achieve ?15bn in savings, Public Finance convened a round table debate on performance management in the public sector.

Hosted in association with Oracle, the debate brought together practitioners, regulators, politicians, consultants and academics to consider how good the public sector is at performance management, what it could do better and whether the approaches currently deployed are the right ones.

The Budget and the OEP report provided not just a topical backdrop to the discussion, but a frequent point of reference for contributors as they turned their minds to getting the most out of the public services in the context of severe spending restraint.

Chaired by local government expert Tony Travers, the event heard contributions from John Thornton, executive director of e-ssential Resources and author of Oracles paper on performance management; Tom Gash, a fellow at the Institute for Government and lead author of its Performance art report; Nick Sloan, director of per formance measurement at the National Audit Office; John Kirkpatrick, director of studies at the Audit Commission; Max Moullin, director of the Quality Management and Performance Measurement Research Unit at Sheffield Business School; and Tony Wright, chair of the Commons' public administration select committee.

Discussion ranged across central-local government relations, the balance between top-down and bottomup measures, the role of the media and the lessons of high-profile performance failures, such as in the Baby P case and at Mid-Staffordshire NHS Trust.

Tony Travers started the debate with the observation that performance management is an issue that perplexes governments of all parties in the UK. 'Even more than other countries, we're under pressure to make every service deliver £110 worth of service for £90 worth of tax. It's a long-term problem.' But the possibility of 30 years of spending squeezes made the short to medium term even more interesting than normal'.

John Thornton took up this theme in his opening presentation. He observed that static or reduced funding of public services would be accompanied by yet greater public expectations and demands as well as pressure to produce efficiencies. Cuts were a crude solution and did not work, he added. 'The only way forward is dramatic improvements in performance management.' He offered a definition of performance management: 'Proactively managing the relationship between resources consumed, activity and outcomes'. This was even more important in the public sector, which had to grapple with complex and sometimes competing objectives.

The public sector had made a decent start, but there was room for improvement, he added, particularly in three areas: using performance management to support collaborative working across organisational boundaries; instilling a stronger performance management culture; and developing a golden thread' to link organisational objectives to individual ones.

Gash said that progress on NHS waiting times and the success of Comprehensive Performance Assessments in local government were examples of performance management measures that had worked. He observed that, however, there was lots of confusion in the system, particularly over financial drivers of performance and whether they should be used or not 'You can't yet lock performance management into the budgeting process and it seems to me that's very important in the context of the current fiscal squeeze,' he said.

'At the moment, the ties between Public Service Agreements, the Budget process and the Comprehensive Spending Review are pretty loose. I think the same is true of Local Area Agreements, exemplified by the fact that LAAs were agreed after local government budgets were settled,' Gash added. He ventured that performance management in the public sector was poised to take any one of a number of directions. …

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