Taxpayers are increasingly conscious of how public money is spent. But how can people be confident of receiving high-quality public services in return for their taxes? How can service providers compare their performance with others and encourage a culture of continuous improvement? How can governments be sure that public services are effective, efficient and equitable? Without good answers to these big questions, we can’t guarantee good public services; people who claim otherwise are peddling snake oil.
These questions are important whether services are centrally managed, or controlled locally; some form of performance measurement is inevitable and, done well, it can be extremely valuable. Performance measurement per se is neither good nor bad, and can have either beneficial or counterproductive results. It can provide useful information and support innovation; or it can become part of a heavy-handed central control system that stifles development.
After my children were born, they were weighed regularly to provide evidence on their health. They may have looked healthy and toddled around happily, but we knew that measurement can identify problems that aren’t obvious, or provide an encouraging proof of progress.
Under the coalition, the trend is to argue that transparency renders measurement, league tables and formal targets unnecessary in the delivery of public services; but it is wrong to see a tension between these two approaches. Of course we should have open public services, but we still need proper evidence to know how well they’re doing. Drive behind a truck, and you may see a sticker on the back asking how well it’s being driven. Sometimes, you’ll spot the driver performing a dangerous manoeuvre and gather a piece of anecdotal evidence on their driving skills; but if you were to use your speedometer to observe the truck breaking the speed limit, that would in some ways be more convincing evidence. Transparency and measurement should be friends, not opponents; and transparency without measurement would be a very strange beast indeed.
Critics of performance measurement in public services point to the negative effects of heavy-handed, target-driven performance management. Indeed, measurement as part of performance management is often experienced as rigid central control, complete with tick boxes and targets, based on a lack of trust between service providers and funders. But there should be much more to performance measurement than backward-looking audits or such heavy-handed management.
Measuring performance can be more difficult in the public than in the private sector, because most public bodies have multiple objectives that cannot be reduced to a simple cash sum. Getting good exam results is important for a school, for example, but it’s not the only reason that we educate our children: we’d like them to grow up as healthy, well-adjusted citizens who contribute to our national life. Financial measurements matter, but they’re only part of the story.
Performance measurement can have perverse side effects if badly done. This doesn't mean it should never be done, but that indicators and systems should be designed with this risk in mind. Perhaps the greatest dysfunctionality occurs when measurement is introduced for monitoring and control, or for allocating resources among competing groups. When this happens, the old adage will always apply: what gets counted will count. Successful performance measurement is likely to be based on three foundations: it needs to be done properly or not at all; it should not be regarded as a fad, but something for the long haul; and it should be multi-dimensional, reflecting the complexity of what ‘performance’ really means.
The current financial challenges mean thoughtful measurement is more important than ever – not as a stick with which to beat organisations or a means to ratchet up the pressure, but as an opportunity to bring in effective change for the right reasons, and to demonstrate real value and need for investment. ?
Professor Pidd’s book Measuring the Performance of Public Services: Principles and Practice was published last month by Cambridge University Press