Modernising Government

4. Quality public services:

We will deliver efficient, high quality public services and will not tolerate mediocrity

1. This Government believes in the public service and public servants. But that does not mean the public service at any price. The British public has grown accustomed to consumer choice and competition in the private sector. If our public service is to survive and thrive, it must match the best in its ability to innovate, to share good ideas and to control costs. Above all, the public service must deliver efficiently and effectively the policies, programmes and services of government. Some of our public services achieve this now. But others do not. We intend to bring them up to the level of the best, and make the best even better, by modernising the controls under which they operate, by encouraging new ways of working and wherever practicable by giving the public the right to choose.

Identifying the problem

2. Governments have not always looked closely enough at the link between spending and what the public is really getting in the way of results. Sometimes they have cut resources in one area without being fully aware of what the consequences across the system will be. At other times, resources have been increased with no real certainty that this is leading to improvements in services as experienced by users. The checks and controls that should drive improvement have been allowed to act instead as barriers to innovation. The incentives to modernise have been weak. And without having a clear enough picture of the outcomes on the ground, it has been difficult to identify lessons and share learning about how to do things better.

What must change

3. The Government needs to ensure that public bodies are clearly focused on the results that matter to people, that they monitor and report their progress in achieving these results and that they do not allow bureaucratic boundaries to get in the way of sensible co-operation. We must make clear that additional investment comes with strings attached and is conditional on achieving improved results through modernisation. We must encourage a commitment to quality and continuous improvement, and ensure that public bodies know how to turn this commitment into results. And we must work in partnership with the independent audit bodies and inspectorates, so that we all focus on the goal of improving the value delivered to the public.

4. Too often in the past, the tendency in the public service has been to stick with the traditional. The world is changing too fast for that to be an effective approach. The best public bodies have shown an ability to innovate and improve. We need to encourage others to follow the example of the best, and to make a step change in the general standards of public services.

5. We must not assume that everything government does has to be delivered by the public sector. The last Government adopted an approach to competition in the public sector which favoured privatisation for its own sake and damaged the morale and ethos of the public service. This Government will adopt a pragmatic approach, using competition to deliver improvements. This means looking hard but not dogmatically at what services government can best provide itself, what should be contracted to the private sector, and what should be done in partnership.

Making a start

6. The Government has developed a number of levers to drive up standards in public services:

  • The Comprehensive Spending Review established a new approach to improving service delivery. We provided significant additional resources for key services and made it clear that this money would be used for modernisation and investment in reform.

  • The new Public Service Agreements (PSAs) for the first time set out in detail what people can expect in return for this substantial new investment. In some areas, such as criminal justice and action against illegal drugs, results will only be delivered effectively if different organisations co-operate. Cross-cutting Public Service Agreements define what needs to be achieved through joint action.

Key manifesto pledges on service standards incorporated in PSA targets

  • to cut infant class sizes to 30 or under for 5, 6 and 7 years olds by September 2001.

  • to reduce the time taken from arrest to sentence for persistent young offenders from 142 to 71 days.

  • to cut NHS waiting lists by 100,000 over the lifetime of the Parliament and to deliver a consequential reduction in average waiting times by May 2002.

  • to get 250,000 under 25 year olds off benefit and into work by using money from the windfall tax.

  • The Government has developed a new approach to public expenditure planning and control. In place of annual plans, we have wherever possible set firm three-year spending plans for Departments. To bring an end to the rush to spend money at the end of the financial year, we have increased the scope to carry forward unspent provision. The introduction of resource accounting and budgeting will replace the archaic use of cash-based accounting. This will mean better linkages between the resources we put in and what we achieve, and will increase the incentives for assets to be managed effectively.

  • The Government is doing more to develop its commercial skills, so that we can work more productively in partnership with industry to get the best deal for users. In the defence field, our Smart Procurement Initiative will transform the way equipment is procured. Independent reviews of central government procurement and the Private Finance Initiative will together strengthen our performance by making better use of public-private partnerships and closer collaboration between organisations. In construction, we have put in place a three-year strategy for achieving excellence as a client, and are working jointly with the construction industry to re-think and improve our management of public sector projects. Altogether we are sharpening up co-ordination of government's commercial activities, making better use of our skills, and exercising more influence with suppliers.

  • Ministers and their Departments will be held to delivery of the priorities set out in the PSAs. The Government will ensure that these priorities are cascaded through the targets and measures which will be set for all public bodies, in consultations with those who receive services. On both targets and inspections, we will focus on key outcomes and strike an appropriate balance between intervening where services are failing and giving successful organisations the freedom to manage.

The new mechanisms for managing delivery

  • Comprehensive Spending Review, setting out for the first time a co-ordinated set of objectives covering all public spending.

  • Public Service Agreements, setting out for the first time firm targets for improving services over the next three years. Shifting the focus decisively from inputs to the outcomes that matter.

  • New Cabinet Committee (PSX) monitoring progress on a regular basis with relevant Secretaries of State.

  • New Public Service Productivity Panel bringing together public and private sector expertise to help Departments achieve the improvements necessary.

  • Annual Report summarising progress for Parliament and the public.

Four principles for performance management and inspection

  • Encourage a whole systems approach. We will put the focus on assessing improvements in the effectiveness and value for money of a whole system, such as the criminal justice system, not just in its constituent parts.

  • Move from counting what goes in, to assessing what is being delivered. We will keep a tight rein on the management of resources. But we also need to know what is being achieved with the money spent. The targets for government Departments, as far as possible, are expressed either in terms of the end results or service standards, and we are working to develop measures for all levels of government which support this approach.

  • Intervene in inverse proportion to success. The Government is not afraid to take action where standards slip. But we do not want to run local services from the centre. Where services deliver results we will give them greater freedom to innovate.

  • Use the right information at the right level. We want managers to use performance measures to monitor and improve their organisations. We do not want them to feel swamped by information overload or bureaucratic requests for irrelevant data. We will use new technology to take a more streamlined approach to managing information in the public sector.

7. The Government is also determined to encourage innovation and share good practice. To do this:

  • we are working closely with the Public Audit Forum which represents all the national audit agencies to find ways of encouraging more modern and effective forms of service delivery at local as well as central level. Auditors are rightly interested in whether organisations obtain value for money. We want them to be critical of opportunities missed by sticking with the old ways, and to support innovation and risk-taking when it is well thought through. We welcome the Forum's statement that the national audit agencies will respond positively and constructively to our Modernising Government initiative. In future, people will no longer be able to use audit as an excuse for not delivering more co-ordinated and efficient services.

The Auditor's approach to Modernising Government initiatives

Statement by the Public Audit Forum

"Modernising Government represents a significant change in the public service environment, and its successful implementation will require new ways of working. The goal of achieving more efficient and effective delivery of public programmes is one that is shared between public sector managers and auditors, and the Public Audit Forum do not want fear of the risks of change to stifle worthwhile innovation designed to lead to improvements. So we encourage auditors to respond constructively and positively to Modernising Government initiatives and support worthwhile change.

Public sector managers are of course responsible, as stewards of public resources, for assessing and managing the risks associated with innovation and increased flexibility, and for ensuring the proper conduct of public business and the honest handling of public money while pursuing innovative ways of securing improvements in public services. It remains important to ensure proper accountability but this must not be approached in a rigid way which might mean missing opportunities to deliver better value for money. And auditors will respond to this new environment positively and constructively by:

  • adopting an open-minded and supportive approach to innovation (including the use of techniques tried elsewhere), examining how the innovation has worked in practice and the extent to which value for money has been achieved.

  • in the process, supporting well thought through risk-taking and experimentation.

  • consistent with their independent role, providing advice and encouragement to managers implementing Modernising Government initiatives by drawing on their audit work in this area, seeking to identify and promote good practice so that experience can be shared and risks minimised.

In these ways, we believe auditors can support and encourage worthwhile change, while providing independent scrutiny and assurance, and fulfilling effectively their statutory and professional responsibilities."

  • we plan to get rid of unnecessary or outdated statutory burdens on public services, which prevent them delivering a modern service. We propose to extend the Deregulation and Contracting Out Act 1994 to make it easier to remove burdens from public sector organisations. We will also streamline the collection and sharing of data so that we can better manage government information, for example to help target efforts in tackling social exclusion.

  • we will identify organisations which would benefit from being given additional scope to innovate, and consider how to give them appropriate freedoms. We will do this in central government through the regular reviews of agencies and Non-Departmental Public Bodies (NDPBs). In local government, the second stage of the beacon councils initiative will involve giving additional freedom and flexibility to those councils which have shown an ability to excel. The Local Government Association's New Commitment to Regeneration Pathfinders are also considering what types of freedom and flexibility would support their aim of regenerating local communities. We will build on these approaches with other ways of allowing local service delivery units to explore new ways of working. We will encourage staff to come forward with suggestions for how services can be improved.

    GEMS Scheme The Ministry of Defence's staff suggestion scheme is the largest in the country. It offers cash awards of 25 to 10,000 or more to staff in the Ministry of Defence and the Armed Forces who have ideas that can improve the management and delivery of defence. The scheme generates ideas saving 15 million per annum and demonstrates that staff are full of good ideas.

    8. When things are being done well, we need to share good ideas across the great range of organisations delivering different public services. To that end:

    • we have launched a Public Sector Benchmarking Project to spread use of the Business Excellence Model across the public sector. The Model is widely used by leading private sector companies, but for the public sector this project is the world leader in scale and ambition. It is helping to spread best practice across boundaries, not just within the public sector, but between public and private users of the Model and internationally. Take-up of the Model has already reached 65% of central government agencies and 30% of local authorities. Over 90% of users report that their rate of improvement has increased as a direct result.

    • in the health sector, we are setting up the National Institute for Clinical Excellence to provide a single focus for guidance to clinicians about which treatments work best for which patients. Good practice in NHS Trusts and primary care will also be identified through the new NHS beacon services initiative.

    • in local government, we have set out our plans to establish centres of excellence by introducing the beacon council scheme, designed to promote and recognise innovation in areas of cross-cutting work. In addition, the Local Government Improvement and Development Agency will act as champion of a best practice culture in local government.

    • in education, beacon schools are piloting a range of initiatives to share ideas and approaches to teaching, and to pass on expertise in a host of subjects.

    • we have developed principles of good regulation and enforcement. These recognise that regulations should be necessary, fair, effective, balanced and enjoy a broad degree of public support. The primary function of central and local government enforcement work is to protect the public, the environment and groups such as workers. But at the same time, we need to ensure that enforcement functions are carried out in an equitable, practical and consistent manner in order to promote a thriving national and local economy.

    Images -

    University Hospital Birmingham NHS Trust.

    Birmingham Cty Council Neighbourhood Advice & Information Service.

    Future action

    9. The Government is committed to achieving continuous improvement in central government policy making and service delivery. To achieve this we have devised five principles: challenge, compare, consult, compete and collaborate. We will use these to build on our Best Value approach to local government and complement the existing scrutiny of central government carried out by the National Audit Office and by Parliament. We will offer these approaches as models for the devolved administrations to consider in developing their own approaches to continuous improvement.

    Best Value is currently being introduced to replace compulsory competitive tendering in local government. It is a rigorous system for delivering high quality, responsive services based on locally determined objectives and underpinned by performance measurement and independent inspection and audit in order to achieve continuous improvement.

    10. Improving the quality and efficiency of public services requires a new approach to the question of who should supply services. In recent years, the application of compulsory competitive tendering and market testing has led too dogmatically to the use of private sector suppliers. Although it delivered savings and efficiencies, this was sometimes at the expense of quality. This Government will not make the mistake of rigidly preferring private sector delivery over public sector delivery, or vice versa. Instead, we will develop an approach based on the straightforward idea of best supplier, retaining an open mind about which supplier, public, private or partnership, can offer the best deal.

    11. Over the next five years, we will review all central and local government department services and activities by consulting widely with users, by benchmarking and by open competition to identify the best supplier in each case. The focus will be on end results and service standards, rather than simply on processes. The aim will be to secure the best quality and value for money for the taxpayer. We also want clarity and certainty about the treatment of staff, and wherever there is a change of service provider we will support staff by presuming TUPE protections (Transfer of Undertakings Protection of Employment regulations) apply. Winning suppliers will need to offer improved quality, as well as better productivity and lower costs. And because public service needs do not stand still, we expect best suppliers to prove they can manage change and offer the public continuous improvement. We will mount a co-ordinated programme across the public sector based on common principles, embracing the Better Quality Services initiative for central departments and agencies, and Best Value in local government.

    12. To make sure we get the best supplier, competition will be considered seriously as an option in every case. Where internal restructuring without competition emerges as the preferred solution, then for larger central government services, this will be subject to prior scrutiny by the Cabinet Office and Treasury. The Government will take decisive action to deal with failing services, whether supplied by the public or the private sector. A Committee of Ministers (PSX) will monitor the performance of Departments in delivery of Better Quality Services, ensuring that reviews are robust and generate continuous improvements in quality and cost.

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    Premier Health NHS Trust Children's Centre.

    Dyfed Powys Community policing.

    13. The Government will take other steps to raise the quality of public services to the standards of the best, and to make the best better. We will:

    • encourage public sector organisations to adopt one of the main quality management schemes. They deliver real improvements, whether in customer service (Charter Mark), the skills and motivation of staff (Investors in People), services and processes (ISO 9000), or to the complete organisation (the Business Excellence Model).

    Quality schemes

    Barnsley Community and Priority Services NHS Trust have 1998 Charter Mark, accreditation to ISO 9001 and IiP. These enable objective and independent evaluation of the Trust's services. Having the three awards enables the Trust to focus on different aspects of quality across the entire organisation.

    The London Borough of Southwark uses four quality tools extensively. ISO 9000 is employed to improve processes and Charter Mark for units dealing with the public. The quality of service of Charter Marked units has noticeably improved. IiP is used to help staff achieve overall objectives; while the Business Excellence Model has been adopted to provide a strategic overview.

    The Land Registry's mission is to be recognised as the most professional, efficient and courteous public service in the UK. It monitors progress through the Business Excellence Model, Charter Mark and IiP which collectively provide a comprehensive 'health check' a rigorous set of standards which help planning and direct the drive for continuous improvement.

    • ask the new Modernising Government Quality Schemes Task Force to report by the end of this year on how the different quality schemes can work together in the public sector to enhance their overall impact.

    • establish a new scheme to encourage Charter Mark holders and high-scoring users of the Business Excellence Model to stage open days for peer organisations building on the new beacon approach.

    • change central government's approach to reviewing its agencies, and NDPBs (quangos). All such reviews will in future focus on outcomes, will take into account the views of customers, and look at the scope for improving services through collaboration. We will publish guidance on the new approach in the autumn.

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      Hereford & Worcester Fire Brigade.

      Lancashire Ambulance Service NHS Trust

    • collaborate with the Audit Commission and inspectorates to develop principles of public inspection. These principles should make clear that inspection has a positive role to play in supporting improvements in services as well as in providing assurance about standards.

    • set up a new Best Value Inspectorate Forum in the summer as a means of encouraging more co-operation between inspectorates. We will encourage the Forum to look at whether inspectorates take sufficient account of joint working between the bodies they inspect; at the scope for involving users more in the inspection process; at the scope for co-ordinating their programmes and sharing information; and at how best to target their resources on those areas where the risks involved are greatest intervention in inverse proportion to success. And we will encourage those inspectorates not involved in Best Value to act on lessons learned.

    • launch a sponsored competition this year, based on the criteria of the Business Excellence Model, to encourage good practice in partnership working.

    • bring together front-line staff from across the public sector in a regular forum with senior policy makers at the centre of government to ensure that policies can take better account of operational experience.

    • set up a new website for sharing best practice which will include a database of good practice examples.

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    Prepared 30 March 1999