BS2032 Public Services Management

1. BS2032 Public Services Management 7: Agencies, Quangos, Privatisation

2. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Next Steps Report (1988) proposes: • All the executive functions of government (paying benefits, issuing licences, collecting taxes) should be responsibility of agencies • Agency managers should have considerable freedom to manage their agency, leading to managerial efficiency • By 1998 there were 138 agencies operating

3. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Next Steps Report (1988) proposes: • Own Chief Executives (not Ministers) • Own internal accounting procedures • Own responsibility for ‘pay and rations’ within a fixed budget • A framework document to define responsibilities • Series of performance indicators to judge effectiveness

4. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Examples: • Employment Service  Meteorological Office • Prison Service  UK Passport Agency • Benefits Agency  Ordnance Survey • DVLA  Office of National • Highways Agency Statistics

5. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Has it worked ? [1] Survey by Karbhari & Pendlebury concludes: • Agency managers perceive they have more freedom • Argue for increased effectiveness, value-for-money • But accounting systems (annuality, virement) do not fit easily with agencification • Budgetary controls were restrictive

6. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Has it worked ? [2] • As the civil servants were previously unenthusiastic, this might be considered a good test • Respondents from trading fund agencies much more enthusiastic than others • Views of users has not yet been sought!

7. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Pessimistic view of Next Steps • Private sector working practices needed to pervade Whitehall • ‘Public service ethos’ does not exist • Not ‘what can we sell’ but ‘what must we keep’ • Accountability is fudged • All agencies should be considered for privatisation at least once every five years

8. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Optimistic view of Next Steps • Logical development from Raynor efficiency scrutinies • Move from a monolithic to a more federal structure • Benefits perceived for both Ministers and Chief Executives as well as the customer, the taxpayer, and agency staff

9. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Accountability [1] • Constitutional theory is that policy is decided by the Minister who is answerable to Parliament • Day-to-day operations are handled by the agency • A ‘framework’ document defines the responsibility of each to the other • Neither should ‘dabble’ in the affairs of the other

10. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Accountability [2] • But in the case of a large agency (e.g. Prisons) it is hard to divorce ‘policy’ from ‘operations’ e.g. is ‘locking up prisoners up all day’ a policy descision or an operational decision ? • In practice, accountability is weakened if chief executives cannot be questioned by Parliament • Small agencies now have no political control (because they are under control of civil servants)

11. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Recent Developments • Accent not on creating new agencies but developing performance initiatives within them • Two thirds of agencies are now engaged in benchmarking against the Business Excellence Model • Agency Performance and Efficiency

12. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations • QUANGOS (Quasi Autonomous Non Governmental Organisations) have a ‘role in the process of national government but at arm’s length from ministers’ • Officially Non-Departmental Public Bodies • Cabinet office maintains 1000, academics maintain there are far more

13. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations • Types of QUANGO • Judicial (e.g. BSE enquiry) • Advisory (e.g. Safety of Drugs) • Consultative (e.g. former NEDC) • Crown Bodies (e.g. British Museum) • Commercial (e.g. Public corporation) • Regulatory (Food Standards Agency) • Self-financing Regulatory agency (DVLC)

14. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations • Implications of QUANGOS • Is this a return to Plato’s guardians (i.e. experts run the state) • Now a massive ‘democratic deficit’ • Power of patronage enormously extended • Question becomes to get the right degree of ‘expertness’ and ‘accountability’

15. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Privatisations took place in three stages (HM Treasury) • Initial commercial phase (British Airways, BritOil) • Utilities phase (BT, British Gas, Water companies) • Third phase, involving companies that still require some subsidy from government for socially desirable purposes (Railtrack)

16. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations

17. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Regulators currently…

18. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Who regulates the regulators ? (Quis custodet custodes ipsos – who guards the guards ?) The dilemma is for a government to leave the market to itself but also to have a degree of control when necessary (Railtrack)

19. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations Who shaves the barber? Consider a town where there is a barber, and the barber shaves. The barber shaves all - and only - those people who do not shave themselves. Now, who shaves the barber? If the barber shaves himself, that can't be right because the rule is, 'The barber shaves all - and only - those people who do not shave themselves. ...but, if someone else shaves the barber that can't be right either because the rule is, The barber shaves all - and only - those people who do not shave themselves.

20. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations

21. BS2032 Public Services Management 7:Agencies, Quangos, Privatisations But note the following paper… Giulietti, Price and Waterson(2000) ‘Competition and Consumer Choice in the Residential Energy Markets’ Warwick Business School Centre for Management under Regulation http://www.wbs.warwick.ac.uk/cmur