Wednesday, March 14, 2007


Can Governments Manage the Public Sector Efficiently?

My question sounds dry and obtuse but is central to so much of our politics as we move towards the next election. Labour has poured billions into the public sector yet much of it, according to critics, has been wasted. The current Private Eye includes a report on how 'this government is blowing £12.4 on useless IT for the NHS', adding to the horrific case files of such studies as David Craig's Plundering the Public Sector.

A friend of mine who used to be a senior manager in the media recently lambasted the 'consensual management' favoured almost as a religion in the public sector, citing the recent highly critical programmes by Gerry Robinson on the NHS. My mate's basic argument was that if you cannot tell people what to do as a manager- as is basically the case for the public sector- then you cannot manage efficiently. But it's not quite as simple as that is it?. For one thing, both sectors have differing objectives: the public seeks to provide (in the UK mostly free) services for the public while for the private sector the bottom line everything is directed towards making money. In the latter case, if someone has failed to maintain expected levels of profit, then he/she is smartly shown the door. In the public sector however, efficiency is hard to measure, failure is a hotly disputed concept and sacking people regarded as too cruel a punishment.

Importing private sector techniques into the the public encounters identical problems. This is a huge collection of problems of course and I make no pretence of knowing the answers. But to illustrate it allow me to recall a management course I attended as a head of department when working for the University Manchester. When asked what their biggest problem was virtually all those on the course, cited their inability to employ top quality researchers and to lose those who were not. In the private sector such a problem would not exist while in universities individual lecturers could hide behind their powerfully protected tenured contracts to ignore, should they choose, what managers wanted them to do. Moreover, when chances of promotion are limited, as they often have been in HE, heads of department have neither sticks nor carrots. The result was that they felt enormously frustrated and yearned to have proper managerial powers.

Is it possible to devise a managerial regime in the public sector which raises performance or should we just accept accept that the public sector is just different and necessarily less efficient than the private? Unfortunately on the national stage the problem is exacerbated by the fact that most politicians are almost wholly alien to the job of managing a department and in addition ignorantly embrace schemes- as the Eye report highlights- which were turkeys from the outset.

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