Wednesday, October 18, 2006

Meeting the demand for improved public services

An article I received from McKinsey: Meeting the demand for improved public services. It is an interesting topic quite relevant to those involved in public administration. An extract of the article is appended below.

Our government has been struggling with active non-intervention lately, and is defending herself using the small government approach. The models in the article provide a mix of strategies on the provision of public services. Small is not necessarily always better. It is the right choice of mode of service delivery that commands effectiveness. LegCo members are hard to please. They are screaming for command and control approach whenever a problem arises, while at the same time reluctant to agree to additional resources. A quasi-market approach is often accused as collaboration between government and business sector. For the third model, government is often to take the blame of insufficient supervision wherever there is a crisis.

I agree that a right choice of an appropriate model for particular services is a way to reform the public service effectively. In any case, the government cannot provide all services by herself. In many occasions, business-like operation is often more efficient, effective and economical. However, the choice of the right model will require great wisdom.

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Meeting the demand for improved public services, by Michael Barber, October 2006

The UK government's public-service reforms have been at the center of media controversy in recent months... In every developed country, the central issue is the same: people want higher standards and better customer service, but they do not want to pay higher taxes. Governments therefore face a productivity imperative, and three models for meeting this challenge have emerged.

The first model is command and control: primary school education and health care waiting times are illustrations. This approach is often essential for a service that needs to improve from awful to adequate. For a government, this is a big achievement, but the public wants services to go from good to great. While you can mandate adequate performance, you cannot mandate greatness. It has to be unleashed. This is why other models of reform are required.

The second model is to create quasi-markets, by devolving responsibility to schools, general practitioners, and foundation hospitals; giving more choice to parents and patients; and introducing alternative providers of schools and health services. The aim is to recognize that while these services are different from a business in that they are universal and equitable, they involve similar management challenges, which governments do not always meet with similar success.

The third model, which combines devolution with transparency, applies in circumstances where neither command and control nor quasi-markets would be appropriate. Under this model, the government contracts with (or delegates responsibility to) service providers and holds them accountable.

Many public-sector reforms around the world combine elements of the three models. This makes sense when a service varies widely in performance: a struggling hospital with a large deficit needs command and control, whereas a successful, well-led foundation hospital is best left to the disciplines of the quasi-market.

If this is the right approach, why the controversy? Partly because performance started from a low base and was slow to shift. People's expectations have been raised... But there is more to the current challenges than that. The health and education reforms are at a critical stage of transition away from command and control, and this requires sophisticated strategic leadership. A common error is to believe that moving to a quasi-market from command and control involves "letting go." In fact, as Ted Gaebler and David Osborne put it, governments must learn to "steer rather than row," so the role of officials has to change.

Furthermore, even as power and responsibility are delegated, it is clear that the public will hold the government to account when things go wrong. This places governments in a huge dilemma. When they are under pressure, command and control always looks attractive, but if this approach is adopted as a reflex, achieving good or great services will not be possible. For this reason, leaders need excellent risk and performance management systems.

Whichever model of reform prevails, public-service professionals must have the mind-set and ability not just to lead radical change but also to manage the transformed services... Reform in the UK public sector is heading in the right direction, but unless government departments and public services have the necessary leadership and capabilities, the results will be disappointing... Reform is all in the execution.

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