Made for Measure: Understanding Local Public Productivity, a collection of essays published by the New Local Government Network, argues that improving productivity in local services should be integral to modern service delivery. However the publication warns against a ‘one size fits all’ method of measuring productivity, arguing that the outlet of some local services is difficult to measure conclusively.
The collection of essays, written by key figures in local government, think tanks and academia, assessing the challenges facing local authorities in delivering services that offer value for money, greater accessibility and more choice. It argues however that local authorities should grasp the ambition of increased productivity as proof to a sceptical electorate that they can deliver even better services to their constituents.
It speculates that local authorities could be offered specific productivity objectives, incentives to deliver services at a lower cost and formal incentives or penalties for inefficient local services.
The publication is supported by Deloitte.
In the publication, Natalie Tarry, Director of Research, SMF argues that:
Productivity in the UK is comparably low when compared to its competitors due to deficiencies in competition, capital investment, innovation and skills
People are becoming ever more distrustful of politicians and performance data, but expect more efficient services. Therefore more conclusive ways of measuring public sector efficiency are required.
Rob Whiteman, Chief Executive, London Borough of Barking and Dagenham & Clare Montagu argue:
- Like their private sector counterparts, public sector managers should see driving down unit costs as intrinsic to delivering a high quality service.
- The greatest challenge for local authorities is seeking to promote productivity in the delivery of their services.
- Just as the car manufacturer examines the labour and capital input of each component part to see whether it can be provided or produced more cheaply, so local authorities need to examine every input in the production of services to ensure they are cost effective.
- However, outputs are not just quantitative but can also be qualitative and complex, meaning that not all public sector productivity can be measured on private sector guidelines, i.e. care services, housing benefit. For example, it is hard to see how you apply this principle of reward for reducing the running costs of social care provision for children with special educational needs.
- One possible way of raising productivity in local authorities is to give managers a specific productivity objective as well as service delivery requirements, as the bread and butter of their performance appraisal and development process. If and when appropriate, this should be supported by financial incentives or rewards.
- Another would be an explicit attempt to bring private sector disciplines into the public service, so that local authority managers will be personally incentivised to raise productivity in service delivery.
- Local Area Agreements have a potentially significant role to achieve public management efficiencies in an area.
Ed Mayo, Chief Executive, National Consumer Council argues:
- The drive for productivity in public services needs to deliver value for the people that use, and pay, for them.
- Public services have to ask – and keep asking – the people that use services what matters to them.
- Satisfaction is often dependent on the person’s relationship with the service, for example whether they are a user of that service. Where people have actually used a service they tend to be more satisfied than non-users.
- Local authorities should use feedback loops, where change in one part of the system brings about change in another, are the building blocks of all systems.
- Every user has different needs and wants as well as different current and potential value to you in relation to the public service and policy objectives you have. You therefore have to divide your customer base into groups, ranging from the high value, with whom you should broaden and deepen relationships, to the least value or negative value, whom you may not aim to serve at all.
Professor Patrick Dunleavy and Simon Bastow, LSE Public Policy Group argue:
- Local managers need accurate ways to measure quality and satisfaction, not just volume of units turned out
- Value for money is the bigger issue, of which efficiency is only a part, given wider quality considerations too.
- Next year’s Comprehensive Spending Review will see a tapering off of budget growth, which will force local politicians and chief executives to be alert to this agenda, and to devise their own ways of motivating teams to deliver greater productivity.
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Notes for Editors:
The New Local Government Network (NLGN) is an independent think tank, seeking to transform public services, revitalise local political leadership and empower local communities.