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Spending Without Reform

 

June 2002 Interim report of the

Commission on the reform of public services

 

Reform established the Commission on the Reform of Public Services in February 2002. Its objective was to assess, with authority and non-party political objectivity, the best way to provide and fund high quality public services in a modern, prosperous society.

The Commission was asked to produce an Interim Report to analyse Britain’s reform programme and a Final Report to set out proposals for effective reform in the key public services.

Members

  • Sir Roger Douglas Minister of Finance (Labour), New Zealand, 1984-88

  • Ruth Richardson Minister of Finance (National), New Zealand, 1990-93

  • Sir Steve Robson Managing Director of the Finance, Regulation and Industry Directorate of HM Treasury until 2001.

    •

    The Commission has been supported in New Zealand by Bryce Wilkinson of Capital Economics and Bevan Burgess, and in the United Kingdom by Graeme Leach, Chief Economist at the Institute of Directors, Rupert Darwall and Andrew Haldenby.

     

    Contents

          Executive Summary

          Foreword

          Introduction

    1    The Government’s analysis

    2    Investment tied to reform

    3     Principles for public sector reform

    4     Reform of monetary policy

    5     New Zealand public sector reform

    5.1    Performance definition and managerial accountability
    5.2    Delegated authority
    5.3    Performance incentives
    5.4    Requirement for high quality reporting.
    5.5    Outcomes, outputs, inputs
    5.6    A model for Whitehall

    6     The Government’s approach: vision and reality

    6.1    Vision
    6.2    Reality – huge increases in public spending

    7    Machinery of public service management

    7.1    Four paramount principles
    7.2    National standards as a surrogate for choice
    7.3    Local leaders accountable for conflicting objectives

    8     The failure of central targets and agreements

    8.1    Public Service Agreements
    8.2  Role of Service Delivery Agreements in Government’s accountability mechanism
    8.3    Systemic design defects

    9     Public sector reform and vested interests

    9.1    Inefficiencies independent of staff skill, commitment
    9.2    Catch-up or capture by vested interests?
    9.3    Role of interest groups in inefficiency
    9.4    Negative attitude of NHS to potential competition

    10    Conclusion

             Appendix

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