|
APPENDIX 6
Memorandum by Mr Des McConaghy
COMMENTS ON Cm 4181, Cm 4315 and "THE GOVERNMENT'S MEASURES
OF SUCCESS" (HMT: 31 MARCH 1999)
In 1999-2000 UK
Government Departments will produce their first sets of audited Resource
Accounts and their first set of Output and Performance Analyses (OPAs). This
marks a fundamental change in the way the Government reports to
Parliament and the public.
The innovations
are therefore of major constitutional importance. The process was initiated
in 1994 but the new Administration has added fresh determination to the
definition of its priorities and measuring outcomes. There is no doubt the
Government wants to be judged by this initiative when next going to the
country. So the reputation of the Government and a major
constitutional innovation both hang on getting it right.
Why then has it
not attracted commensurate public interest? Certainly there has been
widespread concern about the centralisation of power and the associated
fragmentation of public agencies; a concern amounting to a "crisis of
legitimacy". Some may now see the Treasury's new interest in outcomes
as simply an extension of central diktat - with devolution as a
somewhat unresolved anomaly. Then, too, Public Service Agreements and
their OPAs have for the most part been presented to us as
technical instruments to improve "the economy, effectiveness and
efficiency of services". While these remain important objectives
the enormous potential of OPAs for bulwarking democratic accountability has
been either underestimated or played down.
It is viewed
primarily as an internal departmental process. Thus "formal external
validation is not required" but departments "should be able to
justify the figures to Parliament or the NAO as part of any value for money
study"[5]. My paper attempts to redress this
imbalance. In the meantime OPAs already face profound technical dilemmas
which will continue to threaten progress (paras. 1-7) The only way
through these endemic technical problems is to assert the primacy of the
validation process in the rules for the operation and control of OPAs. My proposals
therefore unite the technical and political definitions of OPAs by:
- "customising"
OPAs in a manner analogous to the private sector retail market; ie by
ensuring the disaggregation of expenditures to the point of delivery and the
continuous feedback of local and/or sectoral impacts (paras.8-11).
- promoting
user-friendly programmes whereby Parliamentary Committees, Elected Members,
public authorities and citizens can all access OPA information across
departmental boundaries at any appropriate level of aggregation (paras.12-15).
TECHNICAL PROGRESS
1. The
original 1994 Green Paper on Resource Accounting advanced simplistic
proposals for output and performance measures (Cm 2626). Many commentators
pointed to the conceptual and practical difficulties; it is traditionally a
problematic area of work because it is not wholly amenable to static
analysis. The NAO echoed this concern, warning that departments would
have" great difficulty in achieving meaningful measures" in the way
then set out by the Treasury (HC 123 1994-95).
2. That
concern must be set against the wider anxieties expressed by the Treasury
and Civil Service Committee about loss of detail in the reformatted Supply
Estimates. It was part of their ongoing and very serious worry that
Parliament and the public would have insufficient information following the
shift from the traditional cash based system of government accounting to
resource accounting.
3. Then,
in 1995, the White Paper (Better Accounting for the Taxpayers' Money; Cm
2929) allocated just one paragraph to output and performance measures. It
seemed as if Treasury staff were becoming overwhelmed by their topic; a
fair reaction given the intractable nature of a purely technical approach. In
any event while the earlier Green Paper had shown objectives against costs
there was now some distancing of output and performance measures from formal
accounts. OPAs were and are threatened by any isolation of performance data
from financial data.
4. At
this point your Committee's Specialist Adviser Professor Heald warned,
"The provision of improved performance data is the quid pro quo
for Parliament's acceptance of a reduction in the amount of detail traditionally
presented within the Estimates cycle. Concrete improvements in the
quality and consistency of output data are necessary if fashionable
rhetoric about buying outputs rather than inputs is to be anything more than
a good line in rhetoric" (HC 186 (1996-97), page 36).
5. Much
remains unresolved. The recent Treasury publication "The Government's
Measures of Success" confirms the constitutional centrality of OPAs;
they "provide the basis for the Government to report its performance to
Parliament and the public annually". But this "work in
progress" still resembles a large shopping bag of diverse outputs
(specific and abstract) or codes. It begs questions about the need for
robust principles for operation and control, about the precise
"read-across" to the financial data and about the validation
process.
6. We
should beware, too, of tendencies to concentrate on programmes that seem
more obviously measurable. As in the closely associated "electronic
government" initiative, "progress" is mainly made in agency
business applications (where the management criteria seem relatively
clear) or in the field of personal transfers (where delivery
principles appear to raise no conceptual problems). The danger here is
of creating a serious imbalance in the overall corporate response. It can
lead to a progressive loss of the core competencies for dealing with the
great mass of governmental business where decision-making is more subjective
and inherently complex[6].
7. Any
important new system of public accountability should respect these
complexities. The limits of a purely technical approach will also become
clearer when judging the impact of government policies on local or semi-autonomous
levels of government and those that are directly elected-as well on private
sector industrial and commercial interests. In general, therefore, one must
conclude that a very robust validation process is required as an integral
part of the OPA methodology. We now turn to this solution.
CUSTOMISATION OF OPAS
8. Customisation
means disaggregating expenditures to the point of delivery so that the
continuous feedback of local or sectoral impacts becomes an integral part of
the measurement exercise. This "continuous assessment process" is
efficient and flexible - and both are essential requirements of modern macro
management. But the greatest merit of this approach is its compatibility
with positive scrutiny styles of government and the necessarily subjective nature
of the political process.
9. It
is already normal practice in there tail market. Of course the private
sector analogy breaks down if you push it too far; the word
"customer" cannot possibly encompass the great variety of
relationships between government and the public. What cannot be denied,
however, is the relevance of the model for combining sensitive communication
and effective action - and that seems to be the whole ethos of the new
Public Service Agreements.
10. Of
course it is "transparency" which distances the public sector
model from the private sector model. Fortunately the technology which can
now facilitate the disaggregation and feedback of data can also,
simultaneously, facilitate the widespread dissemination of this information.
This then opens up OPAs to a framework of debate in a very objective and
informed way. It is worth repeating these objectives as a principle for the
operation of OPAs: The framework of debate is just as important as the
measurements used and successful validation depends on this interaction. This
is where IT now offers us all a truly "customised" solution.
11. Does
the innovation imply significant additional costs? In the first place modern
information technology has made the process a fairly simple operation - as we
found in a voluntary pilot project over a decade ago[7]. Secondly it is difficult to see
how individual departments will be able to devise a better way of testing
results rather than validating existing bureaucracies. Thirdly any marginal
extra costs in dissemination and in feedback will be progressively
reduced with the inevitable adoption of Electronic Data Exchange at
all levels of the public sector[8].
USER-FRIENDLY PROGRAMMES
12. Other
important benefits follow. Automated systems which disaggregate expenditures
to the point of delivery can just as easily aggregate or disaggregate them
by function. This is a godsend for "joined up government". Governments do
need a capacity to co-ordinate action when and where co-ordination is
absolutely necessary and the machinery to decide when that is the case. The
Cabinet Office has taken the lead in this but the provisional answer still
seems to be new special purpose units or quangos (eg, SEU, RDAs). The danger
is that to co-ordinate for one thing is to unco-ordinate for another. But
the above principles ensure effective staff work across jurisdictional or
territorial boundaries whenever that is required.
13. These
principles were tested in a pilot project between 1983 and 1986 which
disaggregated the then Supply Estimates (England). This gave a unique
picture of overall public services for any one area. User-friendly
interactive programs were also devised whereby any lay-person could access
information in their local area or in comparison with other areas across
the country. Anyone could cross geographical and departmental boundaries at
will and this was such an exceptional facility that it was also accessed by
numerous public and private sector agencies-including your House of Commons
Library[9].
14. New
rules imposing a departmental duty to seek the maximum financial return on
official data put an end to voluntary efforts to cover a wide range of
national programmes. But the experience generated useful insights on the
potential for official initiatives. Since then there have been many
examples of local community networks, resource centres and local
community-based IT projects. But they all lack a national framework. They
are handicapped because local government and community based
information projects rarely have access to the data of central
government departments (or their appointed agencies). Yet it is the
central government which controls most public action and all
"life-chance" services[10].
15. OPAs
should provide this national framework. If and when they do then both
Parliament and the public will be able to enjoy user-friendly access
throughout the system. Recently the Chief Secretary referred to the great
importance of public participation in this venture and he specifically
mentioned "citizen's juries"[11]. The citizen's juries - and the
"Peoples' Panel" - will have their uses. But the first obligation of
"external validation" is for Parliamentary scrutiny and for
innovations commensurate with a major constitutional reform.
25 April 1999
notes:
5
Treasury OPA Guidance, December 1997, para 3.2. Back
6 The
parallel loss of core competencies in pursuit of
"electronic government" is well detailed in "Information
Technology in Government", Helen Margetts, Routledge 1999. Back
7 "Connect:
Area Information" (AIS) was funded by the MSC&Rowntree Charitable
Trust under the charitable umbrella of Charities Aid Foundation. Back
8 The
"Modernising Government" WP usefully extends the arbitrary 25 per
cent target for the introduction of electronic government. In 1986 AIS
disaggregated to LA district only but, for example, by 1992 the DES (now
DfEE) was using EDI for the transmission of teachers' individual school
records to the ministry using Dialnet. AIS coverage of financial data could
now similarly be extended to individual schools, housing associations,
etc. Back
9 AIS was
a small voluntary project but disaggregation of national programmes across
the board encouraged access by diverse agencies including Government
departments, Audit Commission, AMA and local authorities, the Housing
Corporations and associations, HC Library and the media. A one year coverage
of NI was also completed before the Whitehall charging policy halted ongoing
access to official data. Back
10 The importance
of national information framework is highlighted in my evidence in Third
Report from the Public Administration Committee, Session 1997-98, HC 398-II,
pp 150-152. Back
11 The Rt Hon Alan Milburn, Speech to the TUC (IPPR), 3 March
1999. Back
|
return to main page