Economic Development

The cost of accountability

Our Editors

The Economist Intelligence Unit

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Accountability is a major issue for the public sector. Crucial services, funded with taxpayers’ money, need clear chains of responsibility, yet charges of unresponsive bureaucracy are central to the sector’s lack of efficiency. In the UK, a combination of voter expectation and modern technological capability is shifting the emphasis from services answerable to management in London, to account-ability to citizens for the services they want to receive.

When it first came to power, the UK’s Labour government favored central targets to improve performance. The first wave of Public Service Agreements, in 1998, set 600 targets across 35 areas of the sector. The approach was not without success. Educational attainment for 16-year-olds is up 45 percent, overall crime levels are down 35 percent and there are nearly 400,000 fewer people on NHS outpatient waiting lists than in 1997. But top-down performance management causes problems of its own.

Efficiency can be worsened as organizations pursue the specifics, rather than the spirit, of the goals. The rules governing a £277m Crime Fighting Fund, for example, were relaxed after complaints that the requirement to spend the money on more police officers was constraining forces’ ability to determine the best response to their local situation. In June 2006, the UK government launched a new strategy for public service reform, based on four parts: fewer targets, a greater emphasis on citizen engagement and measures to address capacity and supply issues. “The first phase had a lot of precise targets that organizations were accountable for delivering against,” says Ian Watmore, head of the Prime Minister’s Delivery Unit. “The new model has four components that, put together, create public services that are accountable to the people that are served rather than the people in the central agency or department.” The intention is to balance accountability with the continued requirement to promote efficiency and value for money.

The shift to more integrated, citizen-focused services sometimes creates new problems. Different parts of a service, delivered by different organizations, raise thorny questions about who pays for what and where responsibilities lie. Sir David Varney, author of an influential public service transformation report commissioned by the Chancellor, says the problems must not be allowed to delay progress because citizens’ experiences as customers of the public sector are vital to retaining support. “The service sector is now dominant in the UK economy and unless the government keeps up, the public service record will deteriorate and with that will come less willingness to invest,” he says.

The Varney report includes recommendations for the development of a government-wide citizen identification system and the creation of a single point for citizens to change their details, both of which will come up against issues of blurred accountability and budgeting. The only way to find the answers is to tackle the questions in practice, and apply lessons learned from smaller projects. “You can sit down and have a theoretical discussion about potential problems, or you can visit local authorities who are already getting on with this stuff,” says Sir Varney.

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