Select Committee on Public Administration Appendices to the Minutes of Evidence

Memorandum by Dr Alan Lovell and Dr Mike Rowe, Department of Accounting, Nottingham Business School, Nottingham Trent University (PSR 16)


  This paper presents a summary of evidence drawn from a number of recent research projects examining changing forms of public management and financial control. The paper suggests the need to avoid simplistic assumptions about the impact of private sector-style disciplines on the public services. Rather, a more nuanced understanding of the context and specificity of each service might inform an assessment of both the flaws and value of such disciplines in each context.


  1.  The Committee's call for evidence identified a number of patterns and trends in the public services that have developed over the past twenty years and loosely associates these with declining standards and the undermining of the public service ethos.

  2.  This evidence draws on a number of research projects undertaken in recent years that have examined changing patterns of management, funding and accountability in the public services[2]. The paper will discuss the character of some of the changes introduced in recent years through the lens of the concept of accountability, a concept that lies at the heart of issues of fragmentation, ethos and principles. In doing so, this evidence will both challenge some of the assumptions that underpin the Committee's call for evidence and the value of both public and private disciplines and values.


  3.  This evidence hinges around the concept of accountability. The concept lies at the heart of what is distinct about public services. Indeed, it lies at the heart of the other six of the seven principles of public life developed by the Committee on Standards in Public Life: selflessness; integrity; objectivity; openness; honesty; and leadership. Yet, there is substantial evidence to suggest that, in practice, the concept has become ill defined in theory and almost meaningless in practice (eg Rowe, 1999a and 2001).

  4.  Traditional mechanisms of accountability, very much associated with traditions of public service, have been exposed as hollow and fairly meaningless both through their failure to hold the executive to account and their inadequacy as a form of redress for individual citizens. In recent years, and in part in recognition of the weaknesses of such traditional forms of public service and of accountability (Waldegrave, 1993), a number of private sector disciplines have been applied to the public services. The consequence has been to place greater emphasis on quasi-private forms of accountability (ie corporate governance), upon financial reporting and audit and upon choice for the individual. The weaknesses of these forms of accountability have also been exposed, both by cases of financial misconduct and by evidence that, in fact, choice is available to only a very few.

  5.  In recent years, the ideological debate about a "democratic deficit" (Stewart, 1992; Waldegrave, 1993) has been superceded by a form of value-free paper chase to apply all mechanisms equally to all public bodies, regardless of the evidence that the mechanisms themselves are flawed (eg Weir and Hall (eds.) 1994; Weir and Hall, 1995; Weir and Beetham, 1998).

  6.  At present, there is confusion surrounding what is a fundamental principle of public services: accountability. It is this confusion that, in part, taints and distorts debates about the role of private sector techniques in the public services and the decline of a public service ethos.


  7.  Private sector influence has a long history in the public sector, one that stretches beyond the past twenty years, though more clearly evident in recent years. The key features include not just people but also techniques, principally those associated with financial and performance management, audit, competition and other widely accepted private sector management techniques. These represent an effort to introduce informed control and oversight of previously opaque public services. As such, they are not in themselves a retrograde influence. However, they have introduced several features of concern in understanding and managing public services. The principal amongst these are briefly set out in the following paragraphs and expanded upon in the enclosed papers.

Organisational boundaries

  8.  While the concept of discrete organisations holds some relevance in the private sector, they hold less relevance in the public sector. Particularly in those services responsible for tackling some of the more intractable social problems, such as offending behaviour or ill health, focusing upon individual organisations can be to undermine collaboration.

Performance data

  9.  While simple measures of performance, such as profit and loss, represent meaningful concepts in the private sector, such measures miss much that is distinct and relevant to understanding public services. Performance information, such as waiting lists, might usefully indicate a problem requiring further inquiry. However, there is a tendency to manage in order to meet targets rather than using performance data to inform management decisions that might take into account other factors not capable of easy summary in a numerical form.

Performance Management

  10.  Performance management is stunted and constrained by an almost exclusive reliance upon an overly limited interpretation of audit and inspection. The extent to which performance management can be effectively operationalised, with organisational learning (continuous improvement in terms of Best Value) being genuinely operational, is extremely doubtful. To manage solely on the basis of such potentially distorted and distorting information is to minimise much of the central purpose of public service.


  11.  The transformation of recipients/users/beneficiaries into units or items to be processed rather than understood as individuals, particularly in a contractual environment, obscures the very human nature of many of the public services. Such attitudes permeate the language and culture of organisations concerned to achieve clearance time targets rather than to consider the merits of a case more carefully, perhaps calling for more evidence, in order to reach the best decision in the interests of all.


  12.  While these represent serious concerns, to argue that the influence of the private sector should simply be reduced is naïve. There is no golden age to which we might look to return. Indeed, evidence of failure in public services can be found in those services relatively unaffected by private sector techniques (Committee of Public Accounts, 1994; Harrow and Gillett, 1994) as much as those most clearly affected. Rather, we need to understand the specifics of each public service, how that service relates to others, the important elements and the way in which they might truly be held accountable, regardless of who is in charge or what organisation delivers the service (Rowe, 1999b).


  Committee of Public Accounts (1994), The Proper Conduct of Public Business, London: Her Majesty's Stationery Office

  Harrow, J. and Gillett, R. (1994), "The Proper Conduct of Public Business", Public Money and Management, Vol. 14, No. 2, pp.4-6

  Lovell, A. and Hand, L. (1999), " Expanding the Notion of Organisational Performance to Support Joined-up Government", in Public Policy and Administration, Vol. 14, No. 2, pp.17-29

  Lovell, A., Rowe, M., Harradine, D., Rees-Jones, M. and Ball, G. (2001), Internal Charging in the Public Sector: accounting for illusions, London: ACCA

  Rowe, M. (1999a), "Joined Up Accountability: bringing the citizen back in", in Public Policy and Administration, Vol. 14, No. 2, pp.91-102

  Rowe, M. (1999b), "The Accountability of Public Bodies", Public Administration Select Committee, Quangos, HC209-II, Vol. II, pp.209-212

  Rowe, M. (2001), Public Accountability: understanding through the accounts of others, unpublished PhD thesis

  Stewart, J. (1992), The Rebuilding of Public Accountability, London: European Policy Forum

  Waldegrave, W. (1993), The Reality of Reform and Accountability in Today's Public Service, London: CIPFA

  Weir, S. and Beetham, D. (1998), Political Power and Democratic Control in Britain, London: Routledge

  Weir, S. and Hall, W. eds. (1994), EGO Trip: Extra-governmental Organisations in the United Kingdom and their Accountability, London: Charter 88

  Weir, S. and Hall, W. (1995), Behind Closed Doors: Advisory QUANGOs in the Corridors of Power, London: Channel Four Television

Dr Alan Lovell and Dr Mike Rowe

November 2001

2   Among others, see Lovell et al. (2001), Rowe (1999a), Lovell and Hand (1999), copies of which are enclosed. Back

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