Tag Archives: new public management

Guest Blog: User Charges and Marketization in Higher Education

By Oladipo Osuntubo, Doctoral Researcher at Queen Margaret University, Edinburgh

Higher Education in most countries has experienced remarkably consistent reforms in management and finance in the past few decades. These reforms are remarkable because they follow consistent patterns in countries with very different socio-political, welfare and economic systems and university traditions. Furthermore, they can be seen in countries at very different stages of technological and industrial development. This is a relatively global phenomenon with countries such as Nigeria, Chile and the UK (particularly England) adopting practices which include:

  • reduction of, or total elimination of, subsidies by the state;
  • introduction or increase in tuition fees paid by students;
  • encouragement of competition between universities as a way of improvement;
  • deregulation of university sectors to allow private-for-profit providers.

My research involves a comparative examination of contemporary reforms in Higher Education as described above in the context of new public management (NPM) reforms and human capital theory. A cross-national study between Nigeria and Scotland is being conducted because in the context of tuition policies for undergraduate study, these two countries appear to operate policies at two ends of the continuum: with tuition charged for most Nigerian students and none charged for home /EU students in Scotland.

A key focus is the implications of user charges for access by considering the tuition element of undergraduate study as well as the theoretical and practical justifications for reforms. Other themes to be explored include drivers of reforms in Higher Education funding including potential influences of international bodies like international financial institutions and a critique of some of the rationales for market type reforms.

A qualitative approach is being adopted within this study. Currently I am conducting interviews with academics, university finance officers and government policy-makers from both Scotland and Nigeria. Interviews typically take no longer than 40 minutes.
It is hoped that the findings will inform ongoing debates in the reform of Higher Education in Nigeria and Scotland including:

  • the implications of user charges or reduction of subsidies for access;
  • challenges of policy transfer;
  • rationales for state investment in Higher Education; and
  • a critique of theoretical and ideological justifications for reforms.

If you would be available and willing to take part in this research study please contact me directly at OOsuntubo @ qmu.ac.uk

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Innovation

Recently I met someone with the word innovation in their job title. This struck me as quite interesting. I wondered, how innovative do they need to be in their job? Do they do all the innovation in their workplace or are others explicitly involved? Now I don’t want to question the work of this particular individual – which I actually know to be really important and valuable work. But rather I think there is a broader issue about the current fascination with all things ‘innovation’ within public service organisations.

Innovation as a contemporary issue

Current examples of how innovation is being promoted in the planning and delivery of public services include,

Innovation vs invention

The first thing to note about innovation is that it is not about experiments and people in white coats. The easiest way to think about innovation is about applying existing ideas or products in a new setting. That is what makes innovation different to invention-which is the creation of new ideas or products.

In this sense there is a long history of innovation in public services (although it may not always have been labelled as such). For example, where one local authority uses an example of good practice from another local authority that would be an example of innovation.

Innovation as a ‘good thing’

But is innovation a good thing in public services? Well yes, sometimes it can be. When people refer to innovation there is an implicit assumption that it is linked to some improvement – and so it should be. What it is not is doing everything you did before but with fewer staff and resources. There are many other words for that sort of thing.

In this regard it is unfortunate that the word innovation is becoming ambushed within some circles, along with other approaches such as lean public services, by those with alternative motives. Therefore it is important to understand exactly what innovation is and how it may help deliver better public services.

At the same time innovation may not be a ‘good thing’ and does not necessarily deliver better public services. Taking into account that innovation can be easiest understood as the implementation of an existing idea or product in a new setting we must ask, is it always appropriate for a public service to experiment with a new approach? Inevitably this will often involve some investment and success cannot be guaranteed. Do we (the public) want more risk-taking in the planning and delivery of public services? And are we willing to accept failure as a ‘learning experience’ when things go wrong?

Implementation of innovation

Ultimately, as with all change activity an innovation must be implemented properly and sensitively. Those who are charged with implementing the innovation (public service workers) must be engaged and should feel a degree of ownership of the change. The public must be willing to support more risk-taking and scope for mistakes in the delivery of public services. Finally it is important that the public recognise and support the improvement that will come from the innovation. Otherwise what’s the point!

The final point to note about innovation is that those companies who are particularly well known for it, say Dyson, Google, WL Gore, all invest heavily in it, are committed to innovation in the long-run and give their employees the autonomy to make changes where they see fit. For example, at W.L. Gore employees are given 30 minutes per week for ‘dabble time’ – time to do their own projects outwith their day to day duties. In other words innovation may lead to cost savings, or it may generate new revenue streams, but it is certainly not something that can happen on the cheap or during an away day. Nor is it something that can ever be the responsibility of a single person or “innovation centre”. Where it works well it is a common thread through everything the organisation does – from recruitment of staff to delivery of the business. It must be an integral part of the organisational culture.

Conclusion

There are lots of examples from across the private, public and Third sectors where innovation has delivered real improvement in the delivery of services. This does not need to be a particularly large project to count as innovation and nor does innovation necessarily require huge investment. However, those organisations that are known for innovation tend to invest in innovation, encourage their staff to experiment (and learn from mistakes) and they all take long-term view of innovation. One of the complexities of public service organisations is the nature of being accountable to the public. Unless your ‘public’ are bought into the idea of innovation there are always going to be huge risks involved. What’s more, if you have an organisational culture where “computer says no” is the automatic default or where budget cuts are the primary agenda item then you will need to change your culture or your financial situation first before thinking about whether innovation is for you.

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Lean Public Services

I was recently asked by a student on our PgCert Public Services Governance course to provide a brief account of the advantages and disadvantages of applying lean management systems in the delivery of public services. This is my quick attempt at a brief answer!

First of all, what is Lean Management? This is actually a rather difficult question as terms such as continuous flow manufacture; stockless production; lean manufacturing; Lean thinking; Toyota production system and systems thinking have all become associated to a greater or lesser extent with ‘Lean Management’. However, for me, this short advert for Honda (a key proponent of lean management) encapsulates the essence of lean management:

Key points from this clip:
  • there is no waste;
  • every part of the process has a purpose;
  • everything happens in a fluid sequence;
  • everything happens ‘just-in-time’;
  • everything ‘adds value’ to the process.

First of all I think there is a lot to be said for a Lean Management way of thinking. Within public services perhaps the key text in this area is John Seddon’s Systems Thinking in the Public Sector. Now, there are probably some who would automatically switch off at the very mention of Lean Management. It could be dismissed as ‘just another management fad’. But actually there is something to it and it is worth considering the positive aspects of Lean.

In my view, Lean is predominately about creating a learning organisation with empowered and autonomous workers. This is encapsulated in Mr Ohno, the Toyota executive who has been credited with the development of lean management, refused to have any of the lean management approach written down as then it would become crystallised and difficult to change – and would then stifle innovation. For Mr Ohno it was important that lean management continuously change and development. Consequently one should always be wary of any text or consultant who claims to be prescribing a lean approach (NB: that’s not to say that some books or consultants may have interesting things to say on the subject).

Nonetheless, there are some basic principles which can help with understanding a lean management way of thinking. The main focus of lean is on finding efficiencies in production through the elimination of all waste. Importantly the definition of waste is very broad in this area and has nothing to do with bins or recycling. Waste, in a lean management perspective, is any activity that does not directly contribute to satisfying customer needs. That is a quite radical way of thinking. Take a moment to consider the tasks you perform in an average week and ask yourself how many directly contribute to the satisfaction of your ‘customers’?

This is a useful way of thinking. So, for example, how is attendance at any one particular meeting going to directly enhance your customer’s satisfaction? Also, how does your organisation reward attendance at meetings vs delivery at the front line? However, this line of thinking when applied indiscriminately can be completely inappropriate; for example, empty hospital beds could be viewed as waste under this approach. Overall though there are undoubtedly many things that all businesses and organisations do that do not directly serve the needs of customers. As such this is a valuable mind-set to have.

It is workers at the front line of operations who are best placed to identify areas of waste and so the Toyota approach to lean management was to empower workers to identify areas of waste and to take responsibility for the inspection and quality control of their own work. A key argument being that failure, in the form of defective goods, represents a form of waste. Therefore a lean approach requires a commitment to ‘zero defects’.

In the public services John Seddon argues for the abolition of the Audit Commission, stating,

People’s work should not be inspected; people should be their own inspector.

Seddon (2008: 63-64).

However, this seems like a rather unrealistic goal within public services, even where the current UK Government may be working towards abolishing the Audit Commission there will always be a need for auditing and scrutiny of public services – hence the development of a new auditing regime. This is due to the demand (what John Seddon would describe as ‘failure demand’ for accountability in public services when things go wrong). This is heightened by the extent to which public services are often dealing with life-or-death situations with highly vulnerable groups. As the case of Mid-Staffordshire NHS Trust shows, where failure does occur in public services it is important that lessons are learned and there is some accountability for the mistakes that have happened.

At this point it would be wrong to conclude that Lean is something that can only work within a manufacturing setting. As this article from the Harvard Business Review illustrates there is some relevance to the service sector. However, public services, which have their own distinct challenges, have particular characteristics that make a lean approach more difficult to achieve.

To some extent a lean management way of thinking is important in public services today. Public services are increasingly expected to be responsive to ‘customer’ needs and continuous improvement (and efficiency savings) have become an accepted part of how we plan and deliver our public services. However,  we are still accountable to the public and therefore good governance mechanisms are key. To an extent, when things go wrong in public services, we (the public) tend to fall back on bureaucracy – what policies and procedures were in place?; how was the service audited and inspected?; where does accountability lie?

There are in fact some positive aspects of bureaucracy which are important not to forget. As the former Cabinet Secretary, Sir Gus O’Donnell, has put it,

In this country you can renew your car tax if you can prove you own the vehicle, it is roadworthy and it is insured. In other parts of the world all it takes is knowing which palms to grease. Bureaucratic systems are colour-blind, gender-neutral and they don’t care what you sound like. That brings fairness in a way more discretionary systems can never match.

Sir Gus O’Donnell, ‘There is no shame in being a bureaucrat’, Financial Times, 2013.

Finally, what I have found in speaking to those who have experienced the ‘implementation’ of lean management in public services is that there is a fairly piecemeal approach. Those aspects that are seen to deliver cost savings are pushed through with some gusto whilst aspects of empowering and developing staff (where investment may be required) are quietly forgotten. Yet the successful delivery of a lean management approach is totally dependent on a committed and empowered workforce. It is, in many respects (as highlighted by John Seddon) the very opposite of a traditional command and control form of management. So as soon as someone tells you to implement lean management – and dictates how it is to be done – you should consider what they are actually meaning.

There is lots more I could say on this topic but I was trying to keep this short so I’ll leave it for now. If you have any further questions please use the comments box below.

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Guest Post – Public Sector Bonuses

I am taking some annual leave in August and so am delighted to have my first guest post!

This post comes from Professor Eddie Frizzell, Visiting Professor in Public Service Management at Queen Margaret University, Edinburgh.

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Public Sector Bonuses – gone forever?

Bonuses for public servants are a hot issue – so hot that they appear to have fallen out of favour not only with the Scottish Government, but also at UK level where the Coalition Government has ordered a review, and clamped down on the senior civil service bonus “pot”.  Are public sector bonuses destined for the bin and is there any prospect of informed debate about the pros and cons?

As Will Hutton notes in his Review of Fair Pay in the Public Sector published last year, part of the reason for this is that “public sector managers have been caught up in the backlash to the remarkable growth of the earnings of the top 1 per cent over the last thirty or forty years and in particular in the last ten. Bank bail-outs with scarcely checked bonuses have dramatised these concerns…[but]…only one pound of every hundred pounds earned by the top one per cent of earners is earned by public sector employees.”[1]

The Scottish Government’s public sector pay policy for senior appointments in 2012-13, which applies to Chief Executives of Non-Departmental Public Bodies (quangos in media-speak) and Public Corporations as well as NHS Scotland top managers, specifically suspends “access to non-consolidated pay” in 2012-13, ie bonuses for exceptional performance in 2011-12. The pay policy for other staff in public bodies and for the Scottish Government’s own civil servants similarly suspends all access to non-consolidated pay, either as bonuses or as pay for staff on their range maximum.[2]

This may be a reasonable enough response to austerity and is consistent with the general freeze on public sector pay, but “the policy expectation…that any bonus arrangement in a Chief Executive’s contract will be removed when an appropriate opportunity arises (on new appointment or following a review)”[3] goes further and suggests a more fundamental rejection of the bonus concept.

Would the end of bonuses for public servants in Scotland cause problems in terms of employee motivation and performance?  The answer to this is by no means clear. Bonuses for public servants arrived with performance-related pay in the civil service reform agenda in the 1980s and 1990s, before spreading out to some, but by no means all, other parts of the public sector. They became part of the “New Public Management”, inspired by the proposition that public services could be made more efficient by adopting commercial practices and disciplines, and by importing private sector managers to run them.

Performance related pay, unconstrained by the limitations of public sector pay scales, and the availability of bonuses, were seen by Ministers of the day as necessary to recruit such managers. They were also key tools in the kit of “reforms” needed to make all public servants work harder and focus on results; but there are a number of still unresolved problems with this in the public sector. First, “performance” needs to be assessed in relation to a relatively small number of well-defined measures and targets which may not reflect the complexity of the work, and are often difficult to determine without the financial and shareholder value-related metrics available to the private sector.  Second, individual achievement may partly depend on the performance of others, in other organisations, pursuing other priorities. Third, performance assessment needs rigorous individual performance appraisal by managers who in the public service frequently have neither the appetite nor aptitude for the difficult conversations with staff that implies.  Fourth, in the absence of such rigour, performance-related pay drives up the wage bill as well as future pension costs.

The classic response by Governments to the last problem is to restrict the amount of “consolidated” (ie pensionable) performance pay, and to put more emphasis on non-consolidated one-off bonuses. In the civil service this approach has been accompanied by central control over the proportion of the overall paybill which can be devoted to the bonus element.  The consequence tends to be consolidated pay increases in which the difference between the reward for exceptional as opposed to acceptable performance is marginal, and bonuses whose modest size is more likely to promote cynicism than enhance motivation. As Hutton notes in his review, in the UK public sector non-consolidated bonuses are parsimonious compared with other OECD countries.

There are therefore probably few public servants who would shed tears over the disappearance of non-consolidated bonuses, if they were to be replaced by reward arrangements that offered the opportunity to improve pensionable pay. This is however not likely to happen, as one-off bonuses help Governments to bear down on future pension costs – always part of the rationale, and even more important now than previously.  Indeed the pressure to keep the public sector pension “burden” of the future under control implies more, not less, emphasis on bonuses as a reward, with a larger proportion of individuals’ remuneration in the form of one-off non-pensionable payments.

It would be premature therefore to conclude that performance pay and bonuses in the public sector are destined for the dustbin of history. Hutton considers that there are compelling reasons why performance pay for senior staff should not be abandoned, on the grounds that there should be differentiation in financial rewards for the good and poor performer. However, he also considers that there is a much stronger case for linking pay to performance at the senior levels of public organisations, as opposed to the rest of the workforce, a view with which many public sector managers and staff would probably agree.

They may be less inclined to agree with his suggestion that performance pay systems might be reconfigured to include an element of base pay which was “at risk”, to be “earned back” through good performance, though his advocacy of team based incentives, and a sharing of rewards from productivity gains, would receive some support. Not that the latter suggestion is new: thirteen years ago the then Labour Government committed to “looking for new ways of rewarding organisation performance and success-sharing, for example …. by linking pay, bonuses or other rewards to the achievement of performance or efficiency improvements”.[4]

No doubt the long search will be resumed at some point. But two important underlying questions remain unanswered:  first, are public servants really motivated by money? And second, if so, is there any prospect of any system of performance pay for public servants being well enough funded to make it a real motivator  and – in that event – of its being acceptable to the public? The answer to the first is that it is highly doubtful, and to the second, a resounding “no” on both counts.  So perhaps the controversy over bonuses is less a hot issue than just so much hot air.


[1] Hutton Review of Fair Pay in the public sector: Final Report, March 2011

[2] Public Sector Pay Policy for staff pay remits 2012-13, The Scottish Government, September 2011

[3] Public Sector Pay Policy for senior appointments 2012-13, The Scottish Government, September 2011

[4] Modernising Government, CM4310, March 1999

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What is Public Governance?

Focus and purpose

Queen Margaret University has recently developed the first ever Postgraduate Certificate in Public Services Governance. This is due to commence in September 2012. But what is Public Services Governance?

In later posts I want to look at the question of why public services rather than, say, public sector governance. But right now I am going to look at the question of governance.

Why governance and not administration or management? And what does this mean for the philosophy and content of our programme?

The purpose of this blogpost is to outline how our Public Services Governance programme differs from the more commonplace Masters in Public Administration (MPA) or Public Management courses.

Definitions of Public Governance

One of the challenges in developing a programme in Public Services Governance is that there are a number of differing definitions and even a number of different labels such as Public Governance / Responsive Governance / Network Governance / Public Services Governance. I’m not going to try to provide a comprehensive overview of Public Governance within this blogpost. There are many excellent academic texts, some of which are listed at the end of this post, that are worth reading for a more comprehensive understanding of the subject.

In terms of policy the term started to gain prominence in the 1990’s within a number of World Bank reports (1989; 1992; 1994). In this context the term was used to refer to the importance of good governance in international development. The World Bank defined the term as “the manner in which power is exercised in the management of a country’s economic and social resources for development” (World Bank, 1992). What is interesting here is that the term is not specific to government or the public sector but involves all those with a role to play in international development.

From Public Management to Public Governance

The term public management, or New Public Management (NPM), is now a familiar term across academia and the public services. This term came to prominence within academia and policy-circles in the 1980’s and 1990’s. This period saw the fall of the Berlin Wall, publication of Francis Fukuyama’s (1989) End of History thesis, and the rise of a neo-liberal consensus across many western States. It was within this context that New Public Management emerged as a set of management tools (largely borrowed from the private sector) to improve efficiencies. Typically this consisted of:

  • emphasis on performance management
  • more flexible and devolved financial management;
  • more devolved personnel management with increasing use of performance-related pay and personalized contracts;
  • more responsiveness to users and other customers in public services;
  • greater decentralization of authority and responsibility from central to lower levels of government;
  • greater recourse to the use of market-type mechanisms, such as internal markets, user charges, vouchers, franchising and contracting out;
  • privatization of market-orientated public enterprises.

(OECD, 1993 as cited by Bovaird and Löffler, 2003: 17)

In education this led to the development of many public sector specific MBA’s (Masters in Business Administration) and MPA’s (Masters in Public Administration – though perhaps not so much in the UK.

Invariably these degree programmes consist of a number of generic management subjects such as human resource management and strategic management with some public sector examples tagged on. I certainly wouldn’t downplay the value of many of these degrees. But at Queen Margaret University we wanted to offer something distinctive which reflected the most recent debates in public service development and delivery[1].

Rationale for Public Services Governance programme

There are three key factors which have contributed to the design of our public services governance programme:

  1. There is an increasing recognition within policy and academia that public services are particularly complex. I will be posting more on the nature of public services later. In the meantime see this excellent blogpost;
  2. The prevalence of ‘wicked problems’ such as climate change, childhood obesity and population aging has led to the need for a notably different approach to the design and delivery of public services. Increasingly public sector organisations are working in collaboration (rather than in competition) with private and third sector organisations;
  3. Increasingly academics and practitioners alike are questioning the limits of private sector management techniques to address these ‘wicked problems’.

Elke Löffler summed up the rationale for a distinct public governance programme when she stated,

‘public agencies no longer only have to be good at getting their internal management systems right – financial management, human resource management, ICT and performance management – but they also have to manage their most important external stakeholders as well’ (Löffler in Bovaird and Löffler, 2003: 163).

This is not to say that NPM is no longer relevant. I share Bovaird’s view that the realms of public management and public governance are separate but interconnected (2003: 11). Nonetheless, in line with Osborne (2010), I do think public governance is worthy of study in its own right. It was this belief that led to the development of our Postgraduate Certificate in Public Services Governance – the first ever postgraduate course with a focus on public governance[2].

Programme Aim and Contents

Within our programme the key aim is to enable learners to:

  • Build on their professional experience by engaging critically with, and reflecting on, themes and issues in public services governance in order to better deliver public service outcomes

Modules are focused on themes and issues within public services governance – rather than focusing on managerial functions. Modules include:

  • Public Services Governance: Themes and Issues
  • Engendering Policy and Practice
  • Internal Communications
  • Leading Change in Public Services
  • Managing Customer Complaints
  • Public Finance

More to follow on these modules in later blog posts. In the meantime you can read about the rationale for inclusion of Engendering Policy and Practice.

UPDATE (Posted 04/02/2016)

Since first publishing this blog we have successfully delivered the PgCert Public Services Governance to many students. We have worked with Academi Wales to offer the programme to public service officials from across Wales (more on that here).

Subsequently it has become clear that there is significant demand from an international audience for Masters level programmes with a governance focus. Much of this experience has informed our development of the new Master of Public Administration (MPA) programme. For more on this programme see ‘What is an MPA‘; the course leaflet; and some further resources via FindaMasters.com.

Some Useful References:

Bovaird, T. and Löffler, E. (eds) (2003) Public Management and Governance. Routledge: London.

Fukuyama, F. (1989) ‘End of History?’, National Interest, No 16, pp. 3–18.

Osborne, S. (ed) (2010) The New Public Governance. Routledge: London.

Pierre, J. and Peters, B.G. (2000) Governance, Politics and the State. MacMillan Press: Hampshire.

Rhodes, R.A.W. (1997) Understanding Governance. Open University Press: Buckingham.

Stoker, G. (2004) Transforming Local Governance. Palgrave: Hampshire.

World Bank (1989) Sub-Saharan Africa: From Crisis to Sustainable Development. World Bank: Washington, DC.

World Bank (1992) Governance and Development. World Bank: Washington, DC.

World Bank (1994) Governance: The World Bank Experience. World Bank: Washington, DC.


[1] We also have an excellent MBA and MSc International Leadership and Management for those who are looking to develop their  understanding of generic management and leadership: http://www.qmu.ac.uk/assam/PostGradDegrees.htm.

[2] The LSE does have a MSc Public Management and Governance.

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