#2914 - Topic 3 Reading Beyond The Managerial Model - Accounting in the New Public Sector

A sophisticated system of ABC will encourage keen awareness of resource use at all levels in the hierarchy

Dynamic, performance-oriented management assumes centre stage, displacing older traditions of rule-following generalist administration

1979 – increasing emphasis on indicators of ‘performance’

• Launch of the Financial Management Initiative (FMI) in May 1982

  • ‘performance’ was a frequently-deployed buzz-word

  • More performance-related staff appraisal and reporting procedures, performance incentives (including merit pay) and new procedures ‘for dealing with inefficiency and poor performance’

• Moves affected every government department

The first national package of performance indicators (PIs) was promulgated by the DHSS in September 1983

• A more ambitious set was unveiled in 1985

• Evidence is that use of the first (1983) package was patchy

  • Few District or Regional Health Authorities found the indicator data particularly reliable or relevant to their key flows of decision-making (Pollitt, 1984)

A growth of understanding that underfinancing was not necessarily the main problem with the services in question

Perceived failures in public services programmes had shaken public confidence in professional competence, and this left professional groups poorly-placed to resist externally-imposed tests of economy, competence and achievement

Conservative gov. of 1979

• Was for private sector management techniques, for public expenditure cuts, and against inefficiency in public bureaucracies

The performance that is most fervently sought is the economical performance, the public emblems of which are ‘savings’

Michael Heseltine: ‘Efficient management is a key to the (national) revival’

During the 1980s

• Performance assessment systems – especially if linked to carrots and whips such as merit pay, in-service training or redeployment – could strengthen the controls available to the upper echelons

Computers obviously didn’t produce the wave, but they allowed it to flow more swiftly and to deposit less paper

In the context of politics and management, performance is a very attractive term

It exudes an aroma of action, dynamism, purposeful effort

Even the most primitive discussion of public service ‘performance’ soon disaggregates the notion into component parts of ‘effectiveness’, ‘efficiency’ and ‘economy’ – the virtuous ‘three Es’ which figure in the title of so many recent government publications

• The ‘three Es’ do not always march together

Clarke (1984) – ‘awareness’, ‘extensiveness’, ‘acceptability’

• One could add ‘quality, ‘fairness’, ‘degree of equity’, ‘predictability’, ‘degree of democratic control’

Goodin and Wilenski (1984) have shown that – philosophically speaking – other, more fundamental principles lie beneath the apparently neutral criterion of efficiency

Given that performance is such a rich, multifaceted concept, which aspects are current assessment systems actually attempting to capture?

The Bexley Annual Review of Service Performance 1983/4 focused 61% of measures on Efficiency, 14% on Economy, 1% on Effectiveness

The DHSS/NHS 1^st line PIs, July 1985 focused 43% on Efficiency, 11% on Economy, 5% on Effectiveness

The FMI white papers themselves constantly emphasize efficiency and value for money over other dimensions of performance

North East Thames Regional Health Authority, asked to ‘test’ the 1985 DHSS/NHS PI package

• ‘The near absence of indicators of quality was considered a serious omission’ (North East Thames Regional Health Authority, 1984)

Of the virtuous ‘three Es’, it is the first two on which the bulk of measures are concentrated

A danger that this question will get lost under a welter of generalizations about the ‘need’ for all public services to justify their existence, pursue value for money, monitor their standards of provision and so on

1) The general public

2) The public’s elected representatives

3) Clients or consumers of the services in question

4) Groups claiming to represent clients

5) External experts

6) Internal...