IN PUBLIC SPENDING MUST BE MATCHED WITH HIGHER PRODUCTIVITY
Ways of raising
public sector productivity to get the best services for the extra
resources invested are set out in a report published today by
the Public Services Productivity Panel; a group of public and
private sector top managers chaired by the Chief Secretary to
the Treasury, Andrew Smith.
one percent public services improve their productivity, over £2
billion is generated to reinvest in better services. But in order
to raise productivity, public services need to ensure effective
performance management is embedded in their culture and values,
and involves everyone in improving the service they deliver.
Public Services Productivity: Meeting the Challenge;
also highlights the need for:
to Meeting the Challenge, the Panel has published 12
other reports focusing on a wide range of strategies to tackle
these issues. Recommendations of these studies which are being
the Challenge highlights the wider application of many of
these specific issues, and recommends action for example to:
Andrew Smith, Chief Secretary to the Treasury, endorsed the findings of the Panel:
for our public services must now be tied to results. I want to
see this excellent settlement for our public services achieve
real benefit for the public. This report tackles this challenge
head on, and all public services should make good use of the Panel's
advice in improving their organisational productivity. A productivity
gain of just 3% could result in over £6 billion to reinvest
in services - making performance improvement a critical issue
as the Government's spending plans are implemented.
revolution in the way public services are managed is needed. The
Panel's study programme has highlighted the urgent need to reform
performance management arrangements, which are generally not functioning
effectively. In particular, stronger leadership and improved accountabilities
and incentives for all public servants must be developed. I am
determined to see our public service organisations motivate staff
better and ensure they have proper ownership of their objectives.
And I want all public servants to be clear about which government
objectives they are delivering and why; so if they reach or outperform
their targets, they get the praise and reward due."
of the Panel, Byron Grote, who co-ordinated the development of
Meeting the Challenge, commented:
services can and should aspire to be world-class organisations,
but to do so will need better performance management systems,
the right structure, and critically, a performance oriented culture.
headway has already been made in developing new PSAs, but the
performance oriented culture needs to cascade through the whole
management is not an add-on extra. The best companies have performance
systems at the heart of their business, affecting every activity.
The same approach in the public sector can deliver much better
services at lower cost"
1. The Public
Services Productivity Panel was established at the end of 1998
to help Departments deliver improvements in productivity, efficiency
and the quality of services. In the March 2000 Budget the Panel's
work was extended for a minimum of a further two years.
of the Panel are: Baroness Noakes, who is a partner with KPMG
John Makinson, Group Finance Director of Pearson Plc; Andrew Foster,
Controller of the Audit Commission; Clare Spottiswoode, formerly
Associate Partner at the PA Consulting Group; John Mayo, Finance
Director of Marconi Plc; John Dowdy of McKinsey and Byron Grote,
Executive Vice President of BP Amoco, Lord Sainsbury of Turville,
Minister of State at the DTI and Lord Simon of Highbury. Panel
members contribute their time and expertise for free and are independent
of the Government.
3. The 12
reports completed by the panel are available on this site. See
in Outpatient Performance
sets out a comprehensive strategy for improving waiting times
for consultant appointments through a combination of improved
management, long-term planning and new booking systems. The approach
was developed by the Department of Health and the National Patients'
Access team with advice from Panel member The Baroness
Noakes, a partner in KPMG.
in the Driving Seat?
Andrew Foster, Controller of the Audit Commission, has reviewed the quality of customer service in three of the large transport agencies. His report sets out a number of practical recommendations that would be of interest to all public sector organisations that want to improve their front-line services to customers.
John Makinson, Group Finance Director of the media company Pearson PLC, led a team examining performance incentives for the 150,000 front-line staff who work in the Benefits Agency, HM Customs & Excise, the Employment Service and the Inland Revenue. Although the specific proposals in his report are tailored to those four agencies, the basic principles are potentially capable of much wider application. The report also contains a wealth of comparative data on how performance is rewarded and incentivised across both the public and private sectors.
Improved Performance (published: 3-Apr-00)
John Dowdy, a Principal with McKinsey, has reviewed the performance management systems of the newly formed Defence Logistics Organisation against a model developed by the Productivity Panel. The report describes the particular challenges facing the DLO and the considerable progress it has made to date. It also describes in detail the integrated performance management model developed by the Panel and since adopted by the Civil Service Management Board for use throughout the Civil Service.
Police Performance (published: 17-Apr-00)
Spottiswoode, formerly Associate Partner of PA Consulting,
has identified a new way to measure the efficiency of the police.
She has identified a way of using information which is already
collected by the police service to make a more meaningful analysis
of which forces are doing the most to prevent, solve and reduce
crime within available funding. More importantly, the report outlines
a means by which police forces can better understand their relative
strengths and weaknesses. This will help raise the level of performance
of all police forces to the level of the best, within the framework
of the Best Value initiative. The report makes an important contribution
to the Government's crime reduction strategy and its approach
has wide potential application across all public services.
Grote, Executive Vice President of BP Amoco, has worked
with staff in the Energy Group of the DTI to refresh its performance
management system by drawing on the system used by BP Amoco and
the model developed by the Productivity Panel. The report shows
how such a system can be applied in a complex public sector organisation.
A practical description of how managers can tackle difficult issues
marks a step change in the way the NHS manages its estate. Developed
with guidance from The Baroness Noakes, the report
sets out a new national framework designed to root out more surplus
estate, accelerate sales and cut red tape. Not only can the approach
save and generate additional finance but through modernising the
estate management process it can free up resources to increase
the focus on patient care. It is hoped that the report will also
provide useful ideas for other public services with large property
with guidance from The Baroness Noakes, this
report tackles the difficult issue of achieving joined-up working
at a local level, particularly when it comes to developing joint
IT systems. The report has a strong practical edge, highlighting
the key issues that organisations will need to tackle as they
begin to plan across organisational boundaries. It includes a
simple self-assessment tool which other public services might
find valuable in helping them to develop local service partnerships.
in the Open
Baroness Noakes guided the development of this report
which proposes improvements to the commissioning of services for
older people. Schemes in four local authority sites have been
piloted, demonstrating how significant efficiency gains can be
achieved by developing care services which move away from reliance
on expensive (and often inappropriate) residential and nursing
care. The report also highlights how direct intervention, rather
than written guidance, can be a more helpful and effective role
for central government.
your House in Order
Panel member Andrew Foster, Controller of the
Audit Commission, looked at particular ways of improving the quality
of service provided to customers. This, his second report for
the Panel, looks at how to get best value for tenants from the
£4 billion invested each year in improvements to social housing
stock. Based on detailed research carried out by tenants themselves,
his report stresses the importance of involving tenants at every
stage to ensure that public money is spent in ways that deliver
real quality of life improvements.
Value for Money
For some time,
major capital investment projects in the NHS have involved the
development of Strategic Outline Cases (SOCs) at an early stage
of developing plans for investments in new facilities, involving
the various major stakeholders.
This report - developed with guidance from The Baroness
- examines the potential role of the SOC as an important element
of planning for information systems and change management initiatives
which involve a large number of stakeholders, are novel, risky
and complex, or where the objectives and scope may be ill-defined.
Reporting in Education (published: 28-Jul-00)
Mayo, Finance Director of Marconi plc, has looked at
how performance reporting arrangements in schools and further
education colleges could be further developed to support the Government's
radical agenda for raising standards in education and training.
The report's recommendations for focusing performance reporting
on the Government's key targets, for explicit reporting on planned
improvement in those key areas and for cross-segmentation to identify
patterns of good practice will be of interest to all organisations
facing the challenge of delivering improving performance and value
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