Government in transition

Name of the Game – Best Value

‘Down-Under’

Gothenburg, October 2010Dr Peter Demediuk, CPAVictoria University, AustraliaReims Management School, FranceUniversity of Gothenburg, Sweden

Research Interests• Demediuk, P. 2010 (forthcoming). Modernity and

tradition: critical success factors in small Italian wineries. International Journal of Economics & Business Research.

• Demediuk, P. and Burgess, S. 2010 (forthcoming). Ends before means: unravelling the functions of community engagement by governments. BE&SI Anthology of Business.

• Demediuk, P. 2010. And What Do You Want for the Future? The Journal of Knowledge, Culture and Change Management. V.10. N.1. pp 537-548.

• Demediuk, P. 2010 (forthcoming). Waking Up the Sleeping Town. International Journal of Interdisciplinary Social Sciences.

• Demediuk, P. 2010. Not Just an Innocent Flock of Sheep. The Journal of Learning. V.17. N.3. pp 51-65.

• Demediuk, P. 2010. A Subject to Get You Off the Couch. The International Journal of Diversity in Organisations, Communities and Nations. V.10. N.1. pp 397-407.

What’s in a name – yours?

What´s in a name? That which we call a rose by any other name would smell as sweet.

Question – meaning of the reform name (reform-mark): ’best value’

Solli, Rolf; Demediuk, Peter & Sims, Rob. 2005.

The Namesake: On Best Value and outher reformmarks.

in Czarniawska, Barbara & Sevón, Guje (eds).

Global ideas : how ideas, objects and practices travel in the global economy

Liber & Copenhagen Business School Press. Malmö

Note references on website: metaphors article; NPM figures; Global is local; Cultural values

Down Under (or over) – hit Asia then turn right

Accidents happen*nearly Australie or New Holland*nearly a ‘banana republic’ – federation 1901*still OHMS - on her majesty’s service

A wide brown land22.1 million people

Australia is the 6th largest country by area

• Russia - 17,075,200 sq km • Canada - 9,984,670 sq km • USA - 9,631,418 sq km • China - 9,596,960 sq km • Brazil - 8,511,965 sq km • Australia - 7,686,850 sq km

• Kazakhstan - 2,717,300 sq km Eg France fits into Australia around about 14

times

Her beauty & her terror• Ularu (ayres rock) to Coral Bay• Sharks, snakes, spiders, jellies, crocs … scorpions• Taipan - world’s most potent snake venom (250,000

mice)

No worriesContradictions• Good sense of humour – it’s a big ad• Uncomplicated & open• Irreverent• Rule abiding – helmets, seatbelts, voting!

Quiz1. Initial “small talk” before a business meeting begins?2. Punctuality?3. Bringing presents?4. Contact the level you want directly?5. Ceremony? – cards protocol6. Eye contact; handshaking?7. Openness - how direct in what you say and how react?8. Playing a ‘tall poppy’?9. Trust? - do what you say you will do

The lucky country

Doing business or living in Australia• 5 states; 2 territories; capital Canberra; woman

PM• 3 tiers of government: federal, state & local• Local gov’t ‘r’s – rates, roads, rubbish, recreation,

resources (eg libraries), regional development• Best performer in GFC• Currency AUD = .7 Euro = .9 USD• Strong banks willing to lend• Aggressive business & skilled migration• High ownership; high spend V save• Healthcare & other social benefits• Most ‘liveable’ cities• Political sameness & stability

The Question!!Ideas travel and are translated &

named• The name of Reforms• Public sector reforms• NPM!• Examples: CCT & Best Value

Sweden, England and Victoria it seems different but same name?!?

Have you ever regretted any travelling?

10 random sample of persons

8 answers unconditionally ‘no regrets’1 give the story of when he was running away – buts was glad they did it

1 said yes, regretted it, but didn't want to explain

We learn by travelling© Rolf Solli

8/1023 answered No regrets!

Inspiration

Gabriel Tarde

1843-1904

Ideas travel too!

Opinion – of influential people &/or fashion Tradition – of change or risk takingRational – its seems to do something

Two conditions should be in place!

(Tarde)

Implementation of an idea

© Rolf Solli

Practice at

A

Story about A

B:s Problems

Conditions

Institutions

Practice at

B

Even if the name is the same, practice at A will always be somewhat, quite or very is different from practice at B due to the context! – if you take a careful look

Societal/ cultural norms or values as contextual factors that affect the travel & translation of ideas

Power

Distance Individualism

Masculinity

Uncertainty Avoidance

Long-term Orientation

USA 40L 91H 62H 46L 29L Germany 35L 67H 66H 65M 31M Japan 54M 46M 95H 92H 80H France 68H 71H 43M 86H 30L Netherlands 38L 80H 14L 53M 44M Hong Kong 68H 25L 57H 29L 96H Indonesia 78H 14L 46M 48L 25L West Africa 77H 20L 46M 54M 16L Russia 95H 50M 40L 90H 10L China 80H 20L 50M 60M 118H Australia 36L 90H 61H 51M 31L Four key elements, or "dimensions", of culture

Power distance, a measure of the inequality between bosses and inferiors, extent to which this is accepted Uncertainty Avoidance, the degree to which one is comfortable with ambiguous situations, can tolerate uncertainty Individualism v. Collectivism, degree to which one thinks in terms of 'I' versus 'we, either ties between individuals are loose or people are part of cohesive in group throughout their lives Masculinity v Femininity. Also known as achievement- versus relationship- orientation - cultures high on masculinity rate achievement and success more than caring for others and the quality of life. Confucian Dynamism - the long or short term orientation of different cultures.

Transferred and translated changeThe case of Best Value –

a duty to deliver service in clear standards covering both quality and costs

First - background to different management structures & processes - lenses that can help with your assessment task…

The New Public Management (NPM) is a generic term for reforms to the structures and processes of government which stress a rationality of economic efficiency in servicing what the State perceives are the needs of ‘customers’

Demediuk, P. and Burgess, S. 2010 (forthcoming). Ends before means: unravelling the functions of community engagement by governments. BE&SI Anthology of Business.

Figure Error! No text of specified style in document.-1 Eras of local governing: a continuum

for policy and administration reform

Continuum of paradigms/source

Traditional public > NPM > Community governance management

Key objectives the governance system (Kelly 2002)

Managing inputs, delivering services in a welfare state context

Managing inputs & outputs in a way that ensures economic efficiency & responsiveness to consumers

Greater effectiveness in tackling problems that the public cares about and greater local democracy

Dominant ideologies (Denhardt 2000)

Professionalism and party partisanship

Managerialism and consumerism

Managerialism and localism

Source of public interest (Aulich 1999b)

Defined by politicians/experts.

Aggregation of individual preferences demonstrated by customer choice.

Individual & public preferences resulting from complex process of officials & community interaction.

Public servants respond to (Denhardt 2000)

Clients & constituents Customers Citizens

Goal of managers (Kelly 2002)

Follow political direction

Meet agreed performance targets.

Meet citizen/user preferences & renew trust through quality services.

Role of government (Denhardt 2000)

Steering and rowing Steering, and unleashing market forces

Serving by brokering and negotiating community interests

Performance objective (Kelly 2002)

Managing inputs. Managing inputs and outputs.

Multiple objectives: service outputs & outcomes satisfaction, trust & legitimacy.

Rationality (Considine 2006)

Laws & rules Management plans & competition

Relationships, co-production & co-operation brokered

Performance information implied by objectives (Stoker 2004)

Resource usage budgets Resource usage budgets Output indicators

Performance measurement: resource usage budgets output indicators outcome information about

services, trust, legitimacy etc. Achieving objectives - preferred service deliverer (Kelly 2002)

Hierarchical administration of programs through existing professional departments

Private sector or tightly defined arm’s-length government or non-profit agency contracts and incentive structures.

Menu of alternatives (e.g. public sector agencies, private companies and community groups as well), selected pragmatically with an increasing role for user choice

Organisational structure (Denhardt 2000)

Bureaucratic organisation with top-down authority

Public sector organisations are decentralised

Collaborative structures with internal and external participants

Management discretion (Denhardt 2000)

Allowed little discretion. Wide latitude in meeting goals

Constrained and accountable discretion

Dominant model of accountability (Stoker 2004)

Upwards through administrative and service departments to politicians, councils and parliaments.

Upwards through performance contracts and outwards to customers via outcomes & market mechanisms.

Multiple: citizens as users & overseers of

government taxpayers as funders.

Role for public participation Kelly (2002)

Limited to voting in elections and pressure on elected representatives.

Limited – apart from use of customer satisfaction surveys.

Crucial – multifaceted (the community as customers, citizens, and key stakeholders).

Management motivation (1 (Denhardt 2000)

Pay, benefits and security

Entrepreneurial spirit and desire for smaller government

Serve the public and contribute to society

Public service ethos (Kelly 2002)

Public sector has monopoly on service ethos and all bodies have it.

Sceptical of public sector ethos (leads to inefficiency and empire building) – favours customer service.

No one sector has a monopoly on ethos and no one ethos always appropriate – but the ethos is a community resource and needs to be carefully managed.

Relationship with ‘higher’ tiers of government

Partnership with other agencies involved with service delivery

Upwards through performance contracts and meeting key performance indictors

A complex mix of flexible relations negotiated with national and regional governments

Demediuk, P. and Burgess, S. 2010 (forthcoming). Ends before means: unravelling the functions of community engagement by governments. BE&SI Anthology of Business.

Figure Error! No text of specified style in document.-1 Eras of local governing: a continuum

for policy and administration reform

Continuum of paradigms/source

Traditional public > NPM > Community governance management

Key objectives the governance system (Kelly 2002)

Managing inputs, delivering services in a welfare state context

Managing inputs & outputs in a way that ensures economic efficiency & responsiveness to consumers

Greater effectiveness in tackling problems that the public cares about and greater local democracy

Dominant ideologies (Denhardt 2000)

Professionalism and party partisanship

Managerialism and consumerism

Managerialism and localism

Source of public interest (Aulich 1999b)

Defined by politicians/experts.

Aggregation of individual preferences demonstrated by customer choice.

Individual & public preferences resulting from complex process of officials & community interaction.

Public servants respond to (Denhardt 2000)

Clients & constituents Customers Citizens

Goal of managers (Kelly 2002)

Follow political direction

Meet agreed performance targets.

Meet citizen/user preferences & renew trust through quality services.

Role of government (Denhardt 2000)

Steering and rowing Steering, and unleashing market forces

Serving by brokering and negotiating community interests

Performance objective (Kelly 2002)

Managing inputs. Managing inputs and outputs.

Multiple objectives: service outputs & outcomes satisfaction, trust & legitimacy.

Rationality (Considine 2006)

Laws & rules Management plans & competition

Relationships, co-production & co-operation brokered

Performance information implied by objectives (Stoker 2004)

Resource usage budgets Resource usage budgets Output indicators

Performance measurement: resource usage budgets output indicators outcome information about

services, trust, legitimacy etc. Achieving objectives - preferred service deliverer (Kelly 2002)

Hierarchical administration of programs through existing professional departments

Private sector or tightly defined arm’s-length government or non-profit agency contracts and incentive structures.

Menu of alternatives (e.g. public sector agencies, private companies and community groups as well), selected pragmatically with an increasing role for user choice

Organisational structure (Denhardt 2000)

Bureaucratic organisation with top-down authority

Public sector organisations are decentralised

Collaborative structures with internal and external participants

Management discretion (Denhardt 2000)

Allowed little discretion. Wide latitude in meeting goals

Constrained and accountable discretion

Dominant model of accountability (Stoker 2004)

Upwards through administrative and service departments to politicians, councils and parliaments.

Upwards through performance contracts and outwards to customers via outcomes & market mechanisms.

Multiple: citizens as users & overseers of

government taxpayers as funders.

Role for public participation Kelly (2002)

Limited to voting in elections and pressure on elected representatives.

Limited – apart from use of customer satisfaction surveys.

Crucial – multifaceted (the community as customers, citizens, and key stakeholders).

Management motivation (1 (Denhardt 2000)

Pay, benefits and security

Entrepreneurial spirit and desire for smaller government

Serve the public and contribute to society

Public service ethos (Kelly 2002)

Public sector has monopoly on service ethos and all bodies have it.

Sceptical of public sector ethos (leads to inefficiency and empire building) – favours customer service.

No one sector has a monopoly on ethos and no one ethos always appropriate – but the ethos is a community resource and needs to be carefully managed.

Relationship with ‘higher’ tiers of government

Partnership with other agencies involved with service delivery

Upwards through performance contracts and meeting key performance indictors

A complex mix of flexible relations negotiated with national and regional governments

Figure Error! No text of specified style in document.-1 Attributes of local governing

Economic efficiency ------------------------------------ Local democracy Technocratic (control by experts) ----------------------------- Pluralist (diversity) Political & professional domains ----------------------------- Public domain Developed after Aulich’s (1999a, p. 20) mix-processes-values model with Considine’s (2006) sources of rationality and Hendriks and Tops’ (2000) domains.

Community governance NPM

Dominant process

Rationality source

Dominant values

What are we after - better services or better community

Community engagement initiatives as a ‘package deal’

Democracy orientation/actor Service delivery orientation/actor X Visioning meetings rationale

X

Vision meetings actual

Developed from the case study data

Good ideas Good connection for policies and programs for involving citizens with the kommun and civil society

Government and governance

• http://corporate.bangthetable.com/2010/10/01/having-your-say-baby

best value - process of creation

Benchmarking

Total Quality Management

Performance indicators

MBOSurveys

BudgetingLeadership

Efficiency

costs

Democracy

Ethics

Inspectionsetc

etc

etc

Twelve principles

Four Strategie

s

Get rid of Thatcherism(eg CCT)

best value – UK story, 2000 replaces CCT

Twelveprinciples

Four Strategie

s

BenchmarkingCostsEthicsTotal Quality ManagementPerformace indicatorsEffiencyMBOSurveys LeadershipDemocracy InspectionsBudgeting etc

best value: 4 CCompare

Compete

Challenge

Consult

Implicit = Cooperate

best value: twelve principles Performance plans should be drawn up The Government decide about the model Auditors should audit the relevance of

information Auditors should report publicly about Best Value

and if goals are achieved Secretary of State can intervene after Audit

Commission advise etc

Appoint auditors to all local government and NHS-units in England and Wales

Decide about standards for auditors and auditing recommendations

Do countrywide value for money auditing Define comparable performance indicators

and publish them on a yearly basis

BV82a

BV82b

BV82c

BV82d

Percentage of the total tonnage of household waste arisings which have been recycled.

Percentage of the total tonnage of household waste arisings which have been composted.

Percentage of the total tonnage of household waste arisings which has been used to recover heat, power and other energy sources.

Percentage of the total tonnage of household

waste arisings which has been landfilled.

BV indicators 1/177

BV88

Dudley Metropolitan Borough CouncilWaste Management

Summary Report - September 2000

Scoring Chart1064 inspections (%)

Prospect for improvment?

Poor Fair * Good** Excellent***

Excellent 1 5 5 1Promising 2 23 22 1

A good

Uncertain 2 21 11 0 service?

Poor 1 3 1 0 2000-09-11 2002-09-10

Harrow Refuse Collection

Harrow – Refuse Collection Service

”Fair”

96/97 97/98 98/99 99/00Harrow 2467 1036 752 779Top 25% 24 23 20 20

Missed cans per 100.000

Harrow – Refuse Collection Service

“Unlikely to improve”Dispose to little money – cheapest in the London area

Good argument, said the in-house manager, the rating gave us 8% extra

© Rolf Solli

Appoint auditors to NHS and local authorites in England

and Wales;

Decide about standards for auditors

Produce value for money (VFM) reports through

inspections

Collect and publish performance information on councils

www.audit-commission.gov.uk

best value in England

Keywords

The StatePerformance indicators

InspectionsWWW

Resources

best value - comments

Lots of medicine at one time

MBO, performance indicators, bench marking, TQM, surveys etc

All known for not working

- but maybe they do together

best value?

Mark state-local government relations

Mark the relation between Audit Commission and local government

Yes!

© Rolf Solli

Has it hit someone else?

Best ValueVictoria 1990´s - now

Amalgamations and boundaries 210 to 78

CCT mandated …around 70% of operating expenditure

Words like “customers”, “competition” & “accountability”

CCT - It should work?

“You can get to the moon using lowest price contractors…you can certainly manage a park!” –Bayside CFO, 11/98.

CCT - Did it work?

“Under CCT the council managers have lost the plot and see parks in terms of a facility to maintain rather than a community resource – they are quite different things”  - Rob Sims, Public Sector Research Unit.

A sad story of parks

CCT - Did it work?

• Too often the process of competition became an end in itself

• CCT distracted attention from need, fit and priority of services that were provided

• Where CCT worked it looked a lot like Best Value• Hard to go back• Misplaced metaphor paper – decimated rural towns -

atomic bomb V aromatherapy• A pivotal force in the government losing the election

Summary

Victoria 1999Unexpectedly win the elections

Decision on the run

NPM-policy out!!

Hell - What to do?

Stole UK BV label and concept & legislated and implemented before UK

Best Value

Victoria now

• No new CCT contracts.• Best Value principles mandated for

ALL expenditure.• No rate cap.• Words like “community”, “co-

operation” and “accountability”.• Words like “PPP´s” (private/public

partner-ships).

Six principles

1. All services must meet quality and cost standards.In developing standards councils must:• Review the best on offer in the public and private

sectors• Assess value for money• Consider community values and expectations• Balance affordability and accessibility• Foster opportunities for local employment growth

and retention• Make service standards publicly available

Six principles

2. All services must be responsive to the needs of the community

3. A service must be accessible to those for whom it is intended

4. A council must achieve continuous improvement of its provision of services

5. A council must regularly consult with the community about services

6. A council must report regularly, at least yearly, on its achievements to its community in relation to the Best Value Principles.

Australia - Victoria

City of Maribyrnong

The Best Value Framework contains the following stages:

UNDERSTAND

CONSULT

COMPARE

IMPROVE

DELIVER

The Review Process - Key Steps

STEP 7Review &Analysis

STEP 2Initial

Scope of Project

STEP 3Review of

Current Service

STEP 4Strategic Review

STEP 5Develop Scope for

Consultation

STEP 6DETAILED

CONSULTATIONPHASE

STEP 8Prepare &

seek feedback on

Draft ServiceProfile

STEP 9Adoption

of New

Service Profile

STEP 1Form

Review Team

CONSULTATION WITH STAKEHOLDERS

SHARE LEARNING - ISSUES/FEEDBACK

Output of Each Step is submitted to the Best Value Consultancy Group for ratification

BV Victoria

• Best Value is nothing but good management, we will make it a part of our business plan … the Best Value Act is still there but people use names like Continual Improvement and Community Engagement now”

(Shire of Yarra Rangers,)

Marigyrnong Library Service

UNDERSTAND CONSULT COMPARE IMPROVE DELIVER

Best Value Victoria

No inspectionsNo performance indicators

No WWWActions for new identity

But the name BEST VALUE

That means

SwedenLocal Governments (290)

•Day Care Centres•Schools (6-18)•Social welfare•Care for disabled•Library•Refuse Collections and disposal•Streets•etc

Local Governments in Sweden

(Average)Turnover: 1 Billion SEK

Employees: 2200Inhabitants: 31000

Must• care of the elderly and the disabled citizens• primary and secondary education, childcare• refuse, water, sewerage, streets, planning and

building matters, emergency preparedness, rescue services, public health protection and environmental matters

Typically• leisure, culture• housing, street maintenance• energy provision• share with regional governments tasks relating to

local public transportAutonomy • local governments are dependant on transfers

from the State• significant autonomy accrues from their ability to

raise taxes

Best Value Sweden

InspectionsPerformance indicators

WWW

But NOT the name BEST VALUE

Comparison

England Victoria Sverige*Label Best Value Best Value NonePerformance idikators Yes No YesInspektions Yes No NyesResources Much Litle LitleInternetdriven Yes No YesState Control Yes Nja Yes

*Most of it is a discorse in Sweden

That means!

Mathematics!

Sweden + Victoria = England

England - Victoria = Sweden

England - Sweden = Victoria

Sweden - Victoria = India?

An interpretation

England

SwedenVictoria

Low

High

Benefit

Lott

Effort

Compare The tableYour job!

England Victoria Sweden* Your CountryLabel Best Value Best Value None ?Performance indikators Yes No Yes ? Inspektions Yes No Nyes ?Resources Much Litle Little ?Internetdriven Yes No Yes ?State Control Yes Nja Yes ?

*Most of it is a discorse in Sweden

Participation Budgeting some some some ?