One Sigma Limited, 25 Moorgate, London EC2 6AY

Transcription

1 Strengthening Civil Service Accountability and Performance Consultation Paper on Programme for Government Commitments Submission by: One Sigma Limited, 25 Moorgate, London EC2 6AY 1

2 Introduction 1. This submission is made in response to the invitation by the Department of Public Expenditure and Reform for submissions on the paper published by them on January 9 th, We make this submission arising from our particular interest in supporting successful transformation of public services, how best to assign accountability for its implementation and achievement, and the tools needed to measure and report progress. We have a particular interest in developments in the Irish Public Service, arising from our work in the local government and prison sectors over many years. 2. The message behind the Consultation is well made and accepted, namely that effective accountability is central to managing and delivering good performance. Without a comprehensive management system, at the core of which is an effective accountability tool, it is impossible to incentivise and measure performance improvements, whether judged by the quality or quantity of targeted outputs, or by some measure of productivity. 3. One of the s t a t e d a n d primary aims of this Consultation is to assess how greater clarity, certainty and common understanding may be achieved regarding who is accountable to whom for what. The suggested elements of any new accountability model, set out in Sections 10 and 11, include:- reform of the legislative framework to provide greater clarity and certainty as to the roles and responsibilities of ministers and civil servants including accountability to parliament; development of a governing entity for the civil service; more effective accountability of senior management including exploring the publication of specific objectives; review HR practices including contractual arrangements for senior officials. 4. While these elements in any new accountability model may be important, it is the principle submission of this Response, that in line with the traditional approach, both academic and as conducted by the main OECD governments, they are secondary 2

3 measures, because they lack the necessary multi-layer specificity. When seeking an answer to the question: Who is accountable to whom for what?, it is necessary to be able to define the What at all levels of the public service in an entirely concrete way. 5. Such a definition needs to have at least three elements: identification, description, and targeted measurement. Moreover these need to be accounted for at all responsible management levels. Without these, departmental accountability and, within this, individual responsibility, cannot be allocated and, in the context of a political and managerial hierarchy, delegated. The traditional approach, as illustrated by the language quoted from the Consultation Introduction in paragraph 3 above, is abstract. It is this level of abstraction which makes the task of improving accountability, when approached by the traditional analytical methods, extremely difficult; so much so that it is hard to avoid circularity. 6. Indeed, the Consultation document quite rightly states: The Programme for Government commitments strongly imply that under present accountability arrangements the contribution of individuals to particular outcomes both positive and negative - is very difficult to identify. What would constitute a Concrete Approach to Improving Accountability? 7. The recommendations below address ways to increase the effectiveness and greater efficiency in carrying out, primarily, o n e of the civil service s core functions, namely operational delivery, more than those parallel functions of policy development and policy advice, (while recognising that the distinctions are not entirely clear cut). They also support other well established objectives for public sector reform, namely meeting the public s expectation of public service; enhancing the civil service s capacity to work effectively across departmental boundaries; widening and deepening its skills base to ensure necessary organisational capability; 3

4 The type of accountability addressed in this Response is that which seeks to ensure value for money and safeguard the interests of the taxpayer, alternatively described as the economy and efficiency in the use of the Department s resources by the Mullarkey Report. We endorse a key recommendation of the 2008 OECD review of the Irish Public Service, reflecting experience across its membership, that improved management reporting tools rather than legislative change is where improvement in overall performance can hopefully be found. The former will lead to cultural change rather than the other way round. 8. The essential starting point is to have data outputs within the management reporting systems, at all levels of the public service, which can define and measure the real life What in totally concrete terms, being the inputs utilised and outputs delivered at each level of task performance and public service activity, from the Minister to the local authority office or prison cell or hospital ward floor. 9. This is needed to bridge the current mismatch and disconnect between the National and Sectoral budgets, which are of course top down, and the task level activities as performed by teams and individuals, which is where the resources are spent or utilised, and which make up the near totality of the accountable headcount. 10. This gap means that those setting the budgets cannot pull the levers, to use a mechanical analogy, to test the direct and indirect results or consequences of managerial decisions (whether imposed or taken on local initiative) to change, for example, organisational arrangements or working practices, in response to, say, budget cuts or new forms of centralisation. 11. This gap could and should be filled by new and improved management tools. Are these available and, if not, from where might they be taken? There seems no theoretical reason why such tools could not be developed. There are, however, identifiable historic reasons why they are not yet widely on offer commercially. 4

5 12. There is plenty of evidence in Reports prepared by the Irish and other OECD governments that no such management tools currently are available in the market of management consulting or software as a service providers to the public sector. There are Business Improvement software sets, which have been modified from private sector manufacturing applications. However, given this provenance, the relevant elements of the latter are too different from being able to handle the identification, description, and targeted measurement of the provisions of services in the public sector. 13. The private sector has been de facto in a very much easier position to develop a series of cost accounting and accountability tools for the management of services provision. This relies ultimately on the fact that the commercial and market driven framework, within which the private sector by definition operates, easily generates the data readily available from the market or sales value of the outputs. Direct costs are readily tracked. Algorithms can work back to sales values to assemble and allocate indirect costs. 14. Services provided by the public sector in obvious contrast have no sales value. The principal test of success for private sector firms is profitability, by reference to the return on capital utilised. Improving productivity may be a means of improving profitability, but this is one of a number of statistical management accounting tools for doing so. Improving productivity, on the other hand, as a measure of how well directed and for what outputs, taxpayers money is being spent, is, or rather should be, if the appropriate management tools were available, a primary focus of accountability for the entire public sector. 15. It is further submitted in this paper that the necessary components of a concrete accountability management system for the public sector would need to meet the following criteria. Such a system should: Provide a detailed description of each service activity at the task level for each individual officer within a Ministerial area of responsibility; for example there are some 120 distinct service elements offered by a local authority at County level, and some 40 service elements with the Irish Prison Service. These descriptions must pass the following tests: 5

6 o They should be expressed in normal managerial language so that managers and staff can review, and if necessary, amend them. o They should encompass all the elements required to place the activities within the actual policy, governance and IT environment within which they are being conducted. o They should be capable of translation, without distortion, into an IT systems analysis suitable for the IT engineers to encode. o They should be expressed in terms of inputs (in the form of pay and non-pay budgets) and outputs (in terms of volumes or value delivered). The resulting Application will be custom built for the particular service element for which it has been designed. This Application must itself be capable of taking data feeds from all relevant operational specific IT applications already used and needed for management of the service. If correctly designed, it should also be capable of o linking the current top annual down budget to the activities of each individual officer executing the tasks, and o reporting on the inputs and outputs at that level and the levels above. Ideally these reports will be available, with the necessary training, to management in real time. Ideally the attributed direct costs and output reports can be aggregated up through the higher levels of management to the level of Secretary General and Minister. Indirect costs can be added at whatever levels management policy determines. 16. The company submitting this Response has developed, under a series of R&D projects with elements of the Irish Public Service, an Accountability system referred to as a Performance Improvement Framework, which it believes is capable of meeting the above criteria and has been successfully trialed within two quite separate services. It comprises three elements: Organisational Consulting, the development of Custom Software Applications and the provision of Custom Training and Support. Subject to the agreement of our clients, we are happy to provide further information on the learning to date and to share the emerging results as projects proceed. 6

7 Answers to Key Questions Q1. What are the hallmarks of a system of effective civil service accountability? What would such a system look like? See paragraphs 7-15 above. Absent these criteria, we submit that there can be no confidence for politicians or civil servants that at least one of the Programme for Government commitments, which include We will pin down accountability for results at every level of the public service from Ministers down with clear consequences for success and failure, can be delivered. In plain terms, an effective system must be capable of: Describing the outputs and / or outcomes for which each public servant is accountable, in terms that are measurable and verifiable; Linking the work done at each level of the Public Service, from the activities of frontline employees (nurses, teachers, prison officers, general operatives, engineers, etc), through their managers within each organisation (hospital, school, prison, local authority, etc) that in turn are organised into sectors (health, education, justice, local government, etc), culminating in a whole-of-government view of performance. In this way, the implications of the strategic objectives of government (as expressed in the programme for government, annual budget, etc) for the work of every public servant can be described, and their contribution to the achievement of those objectives can be measured, reported and rewarded; Encompassing all of the principal components of work and working, namely organisation structures, working arrangements, measurement / reporting, information systems and governance; Applying the same approach to the measurement, reporting and management of performance across all sectors of government. This will, inter alia, facilitate the linking of disparate outputs in various sectors to the achievement of cross-sectoral, wholeof-government strategic outcomes. This is a key objective of the recently published Public Service Reform Plan

8 Q2. Do you think civil servants are sufficiently accountable? If not, what are the main weaknesses in the system? To whom should civil servants be directly accountable and what form should this accountability take? The main weakness is the lack of tested accounting and reporting tools linking top down budgets to the individual task and public sector officer level. Civil servants should be accountable to their line managers for the delivery of the outputs, designated at local levels within the framework set by the political policy setters, for the cost and resource limits set within central budgets. Q3. To what extent do current arrangements for civil service accountability meet the following four principles of accountability? clarity of accountability; sufficiency of control; clarity of consequences; and sufficiency of information? The current arrangements lack adequate management tools to meet these criteria. The introduction, proposed in this Response, of improved tools for accountability would provide a hard core of objective data, with which to carry out internal managerial accountability, for example through the Performance Management and Development System (PMDS). Giving detailed input/output reports to managers at all levels, whether at the task or sectoral levels, will also, for example, encourage local experimentation and an entrepreneurial approach to trial improved operational working practices under fully controlled conditions. An additional benefit would be the clarity it could bring to a significant problem identified in the Consultation document, when it refers to specific performance failures frequently taking place against the backdrop of serious shortcomings in organisational performance overall reflecting weak or ineffective governance at all levels (i.e. systemic failure). Consequently, attempts to attribute blameworthy conduct to a single individual may not address the underlying problem. This benefit can be achieved, provided the description of the work activities meets all the tests summarised in paragraph 15 above, such that all the 8

9 organisational dimensions, formal and informal, are fully incorporated within the system. Q4. How could civil service accountability be strengthened? Could such mechanisms be expected to lead to a significant improvement in civil service performance or are there additional measures that would be more effective in achieving this goal? Accountability could be strengthened by introducing accountability systems meeting the criteria set out in paragraphs 7-15 above. These would in the first instance lead to significant improvements in civil service performance. Their use would also clarify areas, where changes in management culture, style, practice and training could further enhance performance. This is because such a system would be built on work activity descriptions, which are understood in normal managerial language and are not hidden or distorted by software engineering concepts. Q5. What could be the likely impact, including the practical changes, in strengthening civil service accountability? What could be the impact on the civil service, Ministers, the overall political system, and on individual civil servants? Consideration could be given to any possible unintended consequences. The impact would be of huge political importance and would be greatly appreciated by (i) members of the public, because of the improved clarity and transparency of what public money is spent on; and (ii) those working in the public service. This would be, because it would significantly enhance the quality and value of communication between all levels and ranks within the public service, and all interested parties including politicians and trade unions, about what is done at the individual level and how this impacts on the measurements of cost, time, headcount and quality, which are the concerns of management. Consideration for the consequences of simplifying and clarifying the roles of some layers of middle management would have to be looked at carefully, because it is likely that much of their time could be freed up for new deployment. 9

10 Q6. What, if any, are the implications of the measures proposed in this Paper for traditional civil service values such as honesty, impartiality and integrity? Are there other measures that could usefully be taken to reinforce such values? It seems that the measures proposed, provided they were based on the type of new systems advocated here, would support and reinforce the traditional values of the civil service by introducing greater objective clarity of function and performance at all levels of operation. Q7. What are the main advantages and the main disadvantages of the specific reform options set out in Section 11 of this Paper? What options merit further consideration and what options could be discounted? How would the different elements of the reform options be likely to influence each other? The main disadvantage of all ten reform options set out is the one identified at the beginning of this Response, namely that they are too abstract or removed from where resources are spent. Consequently none of them addresses the weakness in all previous reform initiatives, both within Ireland and across the OECD, as reported by the OECD, for enhancing the performance and productivity of the public sector. To achieve effective reform, it is necessary to answer to the following question: How can you make any individual accountable for anything he or she does locally in an organised and strictly hierarchical work place delivering services, and/or managing the delivery of those services, which have been prescribed by national legislation and further defined by central government policy, which have no sales value and are paid for by public money collected and budgeted for at the centre? We respectfully submit that you cannot find the answer to that question by further legislation or exhortation or management slogans or the advice of gurus. You do it by introducing a sound management information system, customised for each service element of each sector of public service provision, connecting central budget setting with local measurement of the inputs used in measured local output delivery, all as defined by the latest political interpretation of the relevant legislation. 10

11 Q9. Would legislative change, in particular to the Ministers and Secretaries Act 1924 and the Public Service Management Act 1997, be an effective way to strengthen the accountability of civil servants? Legislative change is not needed. The effectiveness of the Public Service Management Act (PSMA) 1997 could be enhanced with the introduction of the tools advocated here without legislative change. We agree with the point noted in the Mullarkey Group Report that formal review mechanisms, to evaluate the extent to which Secretaries General is achieving their objectives, are still relatively underdeveloped. These could be made much clearer and more objective within the operational aspect of their responsibilities. T here w i l l o f c o u r s e r e m a i n aspects of a Secretary General s functions, such as giving advice to the Minister, that do not lend themselves readily to objective external review and evaluation. Sharper accountability tools would also offer a more structured framework to underpin the very distinct duties of an Accounting Officer, which are outside the normal system of civil service delegation, without new legislation. An Accounting Officer is personally answerable to the Committee of Public Accounts (PAC) for regularity, propriety and value for money by means of rigorous post factum examination of the manner in which Accounting Officers have discharged their responsibilities by means of independent audit and examinations by the Comptroller and Auditor General and scrutiny by the PAC. Current management tools in the civil service make it difficult both for the PAC and for the Accounting Officers themselves to carry out these responsibilities objectively. Q10. What is the appropriate balance between the accountability of civil servants and the maintenance of the traditional doctrine of ministerial responsibility? Use of the type of management tool advocated here will not address the fundamental challenges of Ministerial responsibility, which derive from the fact that Ministerial responsibility was created to reconcile the work of a burgeoning bureaucracy, a p p ly ing incre a s ing ly c om p le x leg is lat ion, with the scrutiny functions of the democratic parliamentary system. Since the 19 th and 20 th centuries, the degree of specialisation of public service functions and the complexity of relationships has 11

12 increased very substantially, and the physical limits of one ministerial person s oversight have not increased. However, the addition of layers of input/output data from the Ministerial budget down to variances at the individual task level, will make that personal and political oversight considerably more effective, and sharpen the scope of parliamentary accountability. Q12. Is there any scope for extending the accountability model for Accounting Officers to other aspects of the role of Secretaries General and also to other senior-level civil service personnel? Yes, see answer to Q9 above Q15. What are the lessons to be learned from the experience and practices of accountability and corporate governance in the private sector that could be examined and considered? The principal lesson is the necessity to develop a management information system which measures outputs against inputs relevant to the legal and policy constraints and requirements of each service. The private sector uses very different performance criteria such as profitability measured against capital employed, which can be applied, in well run organisations, to many layers of management accountability perfectly successfully. The public sector has much simpler measures, namely basic productivity measuring inputs against outputs, but its needs are sui generis, and it has not to date developed the necessary management reporting systems with which to apply real accountability. Q16. If delegating greater individual accountability to civil servants, does the delegation of greater authority also need to be considered? To what extent could this involve changes in the current allocation of decision making authority between ministers and civil servants and/or between individual departments and those departments exercising central controls? Greater delegation and autonomy regarding execution s h o u l d o n l y go hand in hand with the introduction of a management information system which provides appropriate performance data at the delegated levels, and so ensures matching accountability. As noted in the Consultation document, greater delegation would be likely to result in 12

13 the need for a more formalised mechanism for inputting political perspectives and directions in relation to the delivery of policy priorities as well as additional governance arrangements to underpin the integrity of the devolution. For example, civil servants with greater delegated authority would require better quality and more concrete data, when giving evidence to Oireachtas committees, so that their performance can be tested against the requirements set by Ministerial policy. Although they are restricted from commenting on the merits of government policy or the merits of an objective of government policy under the Houses of the Oireachtas (Inquiries, Privileges and Procedures Act 2013), they could only carry out these greater delegated powers in an accountable way, if both they and the Oireachtas committees had access to the full range of data covered and provided by a fully effective accountability system.. Q17. Should differentiated accountability arrangements apply depending on a civil servant s role e.g. providing advice to a Minister, execution of agreed policies and programmes etc.? If so, in what way? Yes, this can be done by defining in a concrete and objective way, what outputs the civil servant is accountable for at his or her level and what other performance criteria of e.g. quality and timing are also required. Where only subjective criteria are appropriate these must also be used, although there will clearly be more scope for disagreement, than where measurement of performance is concrete. Q18. What aspects of previous reform elements were successful and what were not? What lessons can be learnt from these reform experiences? The 1985 White Paper Serving the Country Better emphasised the need to install management systems based on personal responsibility for results. This needs to be readdressed, as no such systems have fully emerged, and a reliable management accounting tool would need to be introduced to implement those proposals. The Co-ordinating Group of Secretaries General, which prepared the Delivering Better Government (DBG) Report in 1996 containing the recommendation to review the existing outmoded accountability mechanisms, recommended legislative change to clarify the allocation of authority, accountability and responsibility in the civil service 13

14 system to ensure that individuals know and recognise the extent of their responsibility, and the ways in which they are answerable for the exercise of that responsibility. This can only be effective, if all levels of management can share an integrated management information system reporting on the identifiable and measureable inputs and outputs, for which they are individually responsible. Neither the substantive analytical 2008 OECD report, nor the follow-on action plan prepared by the high-level Task Force, contain recommendations that directly address the specific issue of where tools can be obtained to deliver full civil service accountability. Q19. Does the summary assessment of the legal/constitutional basis to the doctrine of ministerial responsibility presented in this Paper encompass all relevant considerations? No, it does not adequately address the scope and necessity, which should be central, for developing improved management information systems. Q20. What organisational and operational reforms would be necessary including additional supports to ministers and civil servants and safeguards - to ensure the effective implementation of the reform options set out in this Paper (see Section 11), if they were to be adopted? Our submission has a different starting place, which it is our recommendation should precede the introduction of the proposed reform options, and could, we believe, result in recognising a reduction in the requisite scope of those reforms 14

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