INTERNATIONAL JOURNAL OF HEALTH PLANNING AND MANAGEMENT, VOL. 8,253-264 (1993)

MANAGING PUBLIC SERVICES IN THE 1990s PRESIDENT’S LECTURE: 1ST OCTOBER, 1993

Centre for Health Planning and Management, Keele University, MBA (Health Executive)

Alumni Association

HOWARD DAVIES Director General, Confederation of British Industry, Centre Point, New Oxford Street, London

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SUMMARY The management of public services in the 1990s raises a number of central issues which require to be resolved. On the one hand, efficiency and effectiveness require attention, as in the 1980s or indeed anytime. On the other hand, the distinctive nature of public (and governmental) services needs to be recognized or reasserted. This Keynote Address to the Keele University, Centre for Health Planning and Management MBA (Health Executive) Programme Alumni Association by Howard Davies, Director General of the Confederation of British Industry, sets out some key principles based on the ‘British Debate’ which are nevertheless generalizable in a number of cases to a wholly internatio- nal audience.

KEY WORDS: Public sector; Social market; Government; Competition

I think we may be approaching a new turning point in the management and funding of public services: One which will require us to take what is, on the one hand, a more rigorous yet, on the other, a more subtle approach to defining what we want from public services, and how we manage them.

But before I explain the nature of that turning point, as I see it, let us step back for a moment and consider some of the developments which have occurred over the last 15 years, developments which have changed the landscape of the public sector in many important ways.

Mrs Thatcher’s first government did not take office with a blueprint for change in its handbag. But some broad directions were clear. Wherever possible, public services would be simply privatized. But ‘wherever possible’ did not, outside the utilities, turn out to be all that frequent. And it took some time to develop other, more appropriate, policy options for those areas which were not susceptible to straightforward privatization.

Gradually a tool kit of techniques was developed to tame what was seen to be the public sector’s unhealthy appetite for ever-increasing injections of tax payers’ funds. First came cash limits, designed to impose top-down pressure

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on cost inflation and break the culture of indexation. Then came the introduc- tion of external agencies to promote value for money, whether run by the Efficiency Unit in Whitehall, the Audit Commission for Local Authorities and subsequently the National Health Service, or the National Audit Office for other parts of the public sector.

But this was not enough and gradually we saw two other complementary ideas emerge. First, competition, and second, the notion of a split between the roles of purchaser and provider.

The introduction of competition into the public sector took many forms. We have seen the introduction of compulsory competitive tendering (CCT) for many local-authority services. There is increasing competition for students in the higher-education sector, with universities required to put in bids for additional students. There is now greater competition between schools, too, with funding following the pupil on a largely per capita basis and increasing numbers of different varieties of schools, whether grant-maintained, city techno- logy college, or whatever. And in the NHS, competing providers both within the service, and outside it, vie for contracts.

Whitehall has not been immune to these competitive pressures. Just as local authorities face CCT, so Whitehall departments face market testing, with departments encouraged to look to the market to provide some of their traditio- nal functions, if the market can beat the price offered by inhouse staff. Even the Ministry of Defence is now subject to competitive pressures, and mainten- ance work in military bases is being put out to tender.

Many of these initiatives to introduce competition have been successful, though perhaps not all. Local authorities have achieved measurable savings through CCT-perhaps 7 per cent across the board, and even more on those contracts which have now come to be put out to tender for a second time. I know of one council refuse-collection organization which has reduced its bid by 30 per cent in real terms since 1988, in order to keep the contract for a second term. And there are also areas of the central civil service which have benefited from market testing.

There have, however, also been failures. The other big idea of the late 1980s was, as I have mentioned, the purchaser/provider split. This is, in a sense, a very simple notion. It is built on the idea that it is dangerous for the same organization, or people, both to specify the service and to deliver it. Where that is so, there is a gap in the structure of accountability. When things go wrong, who is responsible? Is it the people who design the service, or the people who deliver it? In a fully integrated system it is hard to answer that question and, as a result, the buck may be more easily passed in the event of system failure.

The purchaser/provider split, now put into place most vigorously in the health service, but emerging in other parts of the public sector too, makes it far clearer who is responsible for what. The district health authority decides on the stan- dard and volume of services it requires from its local hospitals, setting out the expectations in the form of a contract. Thereafter, the hospital is on the line to deliver those standards, at the agreed price. If things go wrong, it should,

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in principle, be possible to assess whether the fault lies with the specification of the service, or with its delivery. Clearly, in reality, things are more messy and complicated than this simple model implies. But the purchaseriprovider split can be a powerful tool for securing improvements in efficiency and produc- tivity at the provider level.

These three types of reform, privatization, the purchaser/provider split and the introduction of competition were-of course-not introduced only in order to improve the quality of public services. They were also expected to introduce a new culture of cost control in what were previously seen to be protected public-service monopolies with no interest in efficiency or effectiveness. They were seen as the answers to the conundrum of ever-growing demands on the public purse, which were resulting in an ever-higher proportion of gross dom- estic product (GDP) being devoted to non-wealth-generating public-sector activities.

During the latter part of the 1980s, this approach seemed to be successful. Public spending as a proportion of gross national product (GNP), which had risen to 45 per cent by 1980, fell back to around 40 per cent by 1990. It had been possible, it would seem, to roll back the frontiers of the state, to allow a lower level of taxation, to release the ‘animal spirits’ of the British entrepreneur into areas previously closed to him or her, and to introduce excitement and innovation into traditional public services.

Things do not look so simple in 1993. First, the trend of increasing public expenditure has reappeared. We have once again risen back to levels of public spending last seen in the very early 1980s. In spite of all the efforts to introduce new disciplines into the public sector, and indeed to reclassify some activities into the private sector altogether, public spending now accounts, once again, for almost 45 per cent of GNP. All that agonized activity and we are back where we started.

It is worth noting, too, that some of the political rhetoric of the 1980s has faded badly. No longer can the word privatization be guaranteed to set the blood coursing through the veins of every marginal voter in the land, as at one stage it seemed to do. The British Rail Privatization Bill, which still stutters its way through Parliament, seems a bridge too far for many people. Why this should be so is not entirely clear. Perhaps it results from the ‘natural monopoly’ characteristics of the railway system, or what people perceive those characteristics to be, even if they do not formulate the thought in that econom- ist’s way. Perhaps it is because water privatization has resulted in higher water charges-even if perhaps for the best of reasons in that the water infrastructure needed considerable reinvestment, which it was not getting when water authori- ties were part of the public sector. Or perhaps it is simply that the public have become bored with the idea after all this time.

And I detect an increasing level of concern, too, about where competition and contracting-out will end. The Government is having a difficult time selling the notion of contracted-out prison management, for example. There has been a slightly puzzled reaction to the idea of contractors handling some of our diplomatic effort overseas. There are worries about the idea of extending the

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contract principle into the professional areas of local government: architects, planners, lawyers, trading standards officers and the like. And against the back- ground of a public-sector borrowing requirement, which seems once again to have ballooned out of control, a question being asked is whether this whole approach has made sense, at all. It certainly does not seem to have delivered the kind of discipline over public spending which, it was hoped, would arise from the introduction of these new disciplines.

And there are worries about whether all this complex new management struc- ture is, itself, value for money. The Audit Commission reported recently that the cost of general management in the NHS had risen from El1 million in 1985 to &285 million in 1992. I would want to look hard at what is included in those figures. But there is no doubt that the whole question of management overhead is one which generates great public concern. And of course public bodies have an almost insatiable appetite for paperwork and bureaucratic pro- cedures. Even at the Audit Commission itself, I seem to recall, it took three of us to change a lightbulb.

It is interesting, too, to listen to what the opposition are saying. John Smith in his speech to the Labour Party Conference in September 1993, made much of the fact that the Government were turning hospitals and schools into busi- nesses, and clearly evoked a strong response from his audience. He evidently feels that this rhetoric will strike a chord with those who are concerned that the professional ethic and the public spirit have gone out of our public services. The Liberal Democrats, too, emphasize the importance of the notion of com- munity control rather than business management.

So what has gone wrong, and what needs to be done about it? I am afraid my answers will be somewhat disappointing to those who favour

a quiet life, or who would wish to put back the clock. I do not think that there is any possibility of moving backwards to the position where the public services were run by monolithic bureaucracies controlled from the centre, or where they could look forward to grants increasing in real terms from one year to the next. And that something quite drastic is likely to have to be done over the next few years to bring the public sector’s finances back into balance. But I would like to talk, first, about the structure and management of public services before touching on the awkward question of how they should be financed.

I see three important changes as being needed to overcome the difficulties which the Government’s public-service reform programme have undoubtedly encountered. To describe them very briefly, they are:

-First, the concept of public service needs to be woven back into the new competition-based market structures. I believe that the Government has in fact been working towards the creation of social markets, but the social element has not been properly spelled out, and needs to be if popular confi- dence in the fairness of the new structures is to be revived.

-Second, we need a new breed of public-service manager, something in between

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the administrators of the past and the red-blooded private-sector entrepre- neur who seems often to be the Government’s implicit model.

-Third, to allow our public services to prosper in the next century, we shall need to put them on a new and improved funding basis. That will almost certainly mean finding new sources of finance.

Let me try to explain what I mean by these three points. The first may seem a woolly observation, but I believe people are influenced

by the way in which politicians describe what they do, by the language they use. The Government has caused problems for itself by becoming carried away by its own, somewhat aggressive, rhetoric. It has seemed to argue that there is something inherently wicked about public-sector provision, something perma- nently second rate about state-run operations of any kind, something somehow old fashioned about the notion of public service. I do not believe that this Prime Minister, at least, wishes to create that impression. But we can see from the reactions of NHS employees, of teachers, more recently of policemen, that many people working in the public sector feel unloved. They have the impression that they are there on sufferance, languishing in the public-sector ghetto until such time as the Government can generate a plausible privatization plan and sell them off.

Where privatization is possible and on the agenda, that may be a price worth paying, for a temporary period. But we know that there are large parts of the public sector which will not be privatized, and where it would be wrong to consider that option. Those are the areas in which the Government has been seeking to introduce new market- and competition-based structures, and to institute purchaserlprovider splits. But it has done so, I think, without a clear conceptual framework of the sort of new system it wished to produce.

I made this charge in a pamphlet I published in 1992 called ‘Fighting Leviathan: Building Social Markets that Work’ (Davies, 1992).

It may be that-as William Waldegrave MP argued-the single uniting theme running through everything we are doing is the revitalization of a public service of which we can be proud, whether we work in it or use it. But I believe that there is a long way to go before that principle is understood in schools, universities, hospitals or police stations.

In my view, it will not be properly understood unless and until the Govern- ment puts in place a system of checks and balances which satisfy those who work in and use public services that the interests of the nation as a whole, and the reasonable aspirations of those who work in Government, are being taken into account.

I have already set out, in my pamphlet on building social markets, how I think that might be done. I do not propose to rehearse all the arguments in that paper, but I will just say briefly what I think the elements of a social market should be, since the concept is not as widely understood as it might be.

A social market is different from a pure, freely competitive market in a number of ways. It must take account of the fact that not all recipients of

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the service are able to pay for it. It must take account of the fact that some users may not want the service, or know that they want it, and that some who do want it may need assistance to get the best out of it. It must also take account of the fact that the normal pressure created by the profit motive to improve performance is generally absent and must therefore substitute other pressures to ensure a culture of continuous improvement and efficiency. It must, in short, adapt the beneficial principles of the marketplace to the provision of public or social services, without sacrificing the essential qualities of those services.

The Government has, I think, been groping towards the creation of social markets. It has understood that successful public-sector agencies need in some respects to adopt the same characteristics as successful private-sector concerns. They need to be responsive to their customers and constantly in search of efficiency gains and quality improvements. Government has understood, too, that these desirable characteristics cannot easily be imposed from the top-down. They are created by the operation of market systems which impose competitive pressure. We have certainly seen the impact of competition on the school system and, dare I say it, here, on universities who now think much harder about the way in which they attract students, and what happens to them when they leave than they did in the past. I have myself been the Chairman of Finance of a new university for the last 4 years and have felt the operation of these new pressures at first hand. We have increased our throughput, improved our space utilization and enhanced our measurable quality, all at the same time, because for the first time we felt we had to do so to survive and prosper.

But I do not think that in each case the Government has fully completed a social market. I suggested in my paper that ten key elements needed to be in place before the market could be said to be complete. I do not wish to rehearse these ten characteristics in detail, but let me give you an idea of their scope. They are, first, a rational financial framework which promotes efficiency and effectiveness. Sadly, I do not think that is yet in place in a number of areas of public service. Certainly it is not in the case of the police service, and there are still elements of university and health service funding which promote inefficiency or undesirable behaviour.

Secondly, we need to be clear about what the desirable outputs of the system are. Here I think the Government has created some difficulties by its insistence on simplistic league tables in education, for example. It is not a simple matter to determine the outputs required from an education system, or a health service. Yet it is essential to do so if one is to gain the confidence of those who operate within the system, and of those who use it. By making a little effort to add sophistication to the crude examination result data, for example by the use of value-added techniques to measure the success a school has in achieving above-expected results in the light of its intake quality, the Government has alienated many in the teaching profession who would otherwise support the publication of this sort of information for parents.

There have been similar problems in the health service too, as hospitals have found the waiting list data to be an unreliable guide to anything. Certainly,

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when at the Audit Commission, I found the early models of the NHS perform- ance indicators to be quite unhelpful in assessing the true performance of any part of the service. Yet the Government tends to react impatiently to any well- meant attempts to produce more meaningful measures, seeing them as sinister plots by professionals to obfuscate and hide their inefficiencies. Sometimes that is true, but sometimes not.

Thirdly, I do believe strongly in the idea of a purchaser/provider split, for the reasons I have set out. That is well in place in the health service and in the university sector to some degree, with the new Funding Council. It is not in place in the school system, or in a number of other areas, and it ought to be.

Fourthly, I do believe in competing providers. The university system has never had any difficulty with that notion. Certainly universities would not try to argue that everybody in the locality aged 18 should go to one place of higher education. Yet some of those who resist competition in the health service or the school system appear to believe that they should have an absolute mono- poly on teaching or healing in their area. I think some degree of competition, albeit competition managed in various ways, is an essential part of a social market.

Fifthly, I emphasize the importance of a contractual model. That is closely related, of course, to the definition of outputs. Public-sector providers need to know what they are required to produce, and there needs to be a methodology in place to monitor whether or not they do so. Wherever possible, a contract provides the appropriate form for that specification and monitoring.

Sixthly, and linked to the question of competition, I believe we need to expand customer choice. Once again, universities have no difficulty with this, but other parts of the public sector seem to find it hard to get used to. And that customer choice needs to be buttressed by a strong and realistic customer voice within the management of the organization itself.

This is an important, and rather neglected point. We do have to accept that in a social market not every consumer is competent to make choices on his or her own behalf. I do not believe that it is patronizing to say that; it is simply to reflect reality. We know very well that the middle classes do better out of the health service than do the poor, because they are better able to articulate their needs and press for good service. We need to have mechanisms in place to ensure that the public-sector institutions required to compete with each other do not do so at the expense of unfortunate and uncomfortable consumers. That is the case, for example, in the school system. While schools should compete to do the best they can for their pupils, a public service must make provision for difficult pupils and not allow schools in search of a higher place in the examination league table to increase their number of exclusions to remove awkward children. That is a feature of a social market to which the Government has, I think, paid too little attention hitherto.

A voice within the management structure, a sort of consumer non-executive director, should speak for the interests of consumers or users as a whole, includ- ing those less able to fend for themselves.

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The market should be buttressed by comparative data on performance, pre- pared by independent bodies. Without such data it is impossible for people to make informed choices. Here the Government has made some progress with the Citizen’s Charter, and more is underway. I applaud that. The data should also be validated by independent inspection and audit. Generally, that is in place in most of the public service these days, though not adequately in the school system, in my view.

There is no way we are going to find out, for example, how many people change the lightbulbs in grant-maintained schools, or city technology colleges. The Government has been assiduous in ensuring that some of its new creations are protected from the unsentimental gaze of auditors.

That is a big error, in my view. There are legitimate concerns about cost. And we should not fool ourselves into thinking that the markets being created in public services are rigorous enough to generate adequate cost provision on their own. They are far from freely competitive markets. Very many con- sumers are still the captives of their local school or hospital, without a realistic alternative. So there is a need for the bottom-up pressure from choice and competition to be reinforced by top-down pressure on cost from informed, independent inspectors and auditors.

My last characteristic of a fully operating social market is strong and informed lay management, which brings me to the second area I said I would cover, which is the need to think harder about what the characteristics of successful public-service managers will be in the future, and whether we have in place the arrangements we need to ensure that they can be found and developed.

There has been a tendency in recent years to think that the answer to all management problems in the public sector is to find a business person with a successful track record, put him or her in charge and-hey presto-all your problems are solved.

But not all private-sector managers are paragons. The importation of private- sector managers into the public sector has not always been an unqualified success. There have been two sorts of problems. First, what one might call the macho management problem. Some ‘hire ’em, fire ’em’ managers from the private sector have fallen foul of public-sector practices-some of them in themselves hard to defend-and have found that their attempts to import a more cavalier, outcome-oriented style has generated more problems than it solves.

The second type of problem is more subtle. In some cases the introduction of managers with relatively little knowledge of the underlying business, whether of education, healthcare or whatever, has paradoxically resulted in an unhealthy degree of control being exercised by the professionals, who have found them- selves effectively unsupervised as a result.

There is no easy instant answer to this conundrum. Certainly the answer is not to go back to the old administrator/school secretaryitown clerk model of public-sector management. What is needed is a novel amalgam of the best characteristics of private-sector management, with its focus on target setting, process monitoring and output measurement, with some of the more sensitive

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skills demonstrated by the best of traditional public-service managers who have shown great respect for professional integrity, care for the excluded, or poten- tially excluded, customer and concern for accountability. Sir Roy Griffiths for the health service, produced a new formulation of the appropriate model in hospitals in his report on general management in the health service in 1983. That has, where it was followed locally, proved quite a robust approach. But, even there, there has been too little effort to devise means of preparing such general managers and training them effectively.

It is equally, if not more, true in local government that the sorts of people needed to manage the new culture required by different approaches now being taken to the management of local public services, have not been quickly forth- coming.

As little as 4 years ago, 75 per cent of all chief executives of local authorities were still lawyers, who had come up the traditional town clerk route. Yet they are now required to manage actively what are sometimes very large organi- zations employing up to 40,000 people, many of them operating to tight con- tracts and providing a remarkably wide range of different services.

There have been rapid changes, too, in the type of management needed in the education service. Schools managing their own budgets have a need for quite different sorts of skills at the top. Universities, bidding for students and securing their funding from a wide range of different providers, are far more complex organisms than they used to be, from a management point of view.

We have moved into a position where we need to think more actively about how we form, and reform, our public-service managers. The new types of public service which have been developed have a lot of commonality between them. And, nowadays there is a lot more in common between health-service managers and local-authority managers and some Whitehall managers. In the past it was regarded as axiomatic that Whitehall civil servants were a breed apart, quite a different class of person from the type of individual who ended up in local government or the NHS. The latter went to red-brick universities, at best, and may even have displayed a distressing tendency to wear pens in his top pocket. Whitehall officials, by contrast, studded their memos with Latin and Greek tags. More seriously, in Whitehall the pecking order begins with policy staff (policy wonks, as they are known in the Clinton Administration) and straightforward management skills were definitely not part of the depart- mental culture.

Now all that has changed, and the types of skill required in Whitehall, town hall and hospital ward are coming closer together. Yet there is still remarkably little cross-over between managers in different parts of the public sector. As a result, Whitehall officials often find themselves organizing reforms of compli- cated management systems which they only dimly understand. Many of the problems we have seen in the last two decades have arisen from poor under- standing in central government of the dynamics of local public services. Time and again Whitehall has invested taxes, or grant mechanisms, or new manage-

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ment structures, which either did not work or which rewarded the wrong sort of behaviour.

This weakness must be corrected. In the first place we must work towards breaking down the barriers between central and local administration. Whitehall officials still tend to regard local-government officers and NHS managers as a lower form of life. The way in which the different cadres are recruited, trained and managed reinforces that distinction. There are surprisingly few links between the different sectors. An initiative a couple of years ago to bring together Whitehall officials and local-authority chief executives for a weekend discussion was remarkable, mainly because it had never happened before.

It is good to see universities, as well as public-service professionals, reacting to the changes in the public sector and adapting their course structures to take account of them. Keele, of course, is leading the way with an MBA specia- lizing in health management. But there are also other universities, in the UK and across Europe, which are developing their courses to appeal to managers from all parts of the public sector and the trading sector, aiming to attract a cross-section of students who will benefit from each other’s expertise. And more public-sector managers are getting the chance to partake of these opportu- nities. This year there were 122 new bursaries available to NHS staff undertaking management training, and most of them went on MBA students.

All of this is positive. I believe we should be working towards the creation of a single cadre of public-sector managers, whose careers would cut across institutional boundaries. One way to start would be to set up a new staff college for the public service, perhaps based on the Civil Service College, but covering the full range of central government, local government, next-step agencies and NHS units. And, in the short term, to emphasize a new direction, a large-scale programme of cross-secondment between Ministries, agencies, health and local authorities should be arranged.

There are far too many civil servants who have spent their whole working lives in the Department of Health, or the Treasury, and it shows. There are also many local- and health-authority officers who do not have a clue about the national policy framework within which they operate or about the economic constraints within which the public sector must work. All these misunderstand- ings and barriers will need to be broken down in the future, and management training plays an important part in doing so. It is not a quick-fix solution. But it is something which we need to put in place as soon as we can. I also believe that the right form of management training in the public service can help embed a new kind of value system which is needed to operate the new quasi-markets, or social markets as I would have it, which have gradually been invented over the last few years.

An initiative from Government in this area would also help to overcome the feeling of neglect I described at the start. It would reinforce the argument, which the Government often makes, that its reforms are designed eventually to create improved public services, an argument which is widely disbelieved by public-sector managers at present.

Lastly, I turn to the sad subject of money. Here it is as well to remember

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the economic background. We have a Public Sector Borrowing Requirement (PSBR) at the present time of around E50 billion a year. Some of that is undoubt- edly attributable to the depressed state of the economy and will disappear as we return to our trend rate of growth. But few economists think that more than half of the current PSBR can be attributed to economic recession. So, unless we are prepared to see very large increases in taxation, we have to accept that public services will face a tough financial prospect in the years to come. And why not, I hear you ask, envisage sizeable increases in taxation? Certainly, if people are prepared to pay for them and want the high-quality public services which they would bring.

Well, I am not one of those who believes that taxes may never go up. Certainly there are circumstances in which they can and should. But I have to say that we are already a relatively highly taxed nation, by international standards. In the UK the Government takes around 45 per cent of GNP off our hands for one reason or another. In the US it is 36 per cent, in Japan around 30 per cent. There are one or two countries in Europe in which it is higher, but in most of those they are already implementing severe budget restrictions. And my own long-term view is that it will be hard for us to remain globally competi- tive in the face of dynamic economies which operate at significantly lower levels of taxation. Business logic will impel companies to locate their manufac- turing capacity and headquarters in lower-taxed environments. So the extent to which we have flexibility in this country to alter our tax take radically in the next few years is somewhat limited, in my view.

I suspect, therefore, that we are going to need to think quite hard about the size and shape of the public sector, and the way in which it is funded, in the years to come. Indeed I note that all three political parties are, in their different ways, trying to come to grips with this question now. There are the Portillo reviews in the Treasury. And the Labour Part has set up a commission on social justice, whose thinly veiled agenda is to look at the affordability of the welfare state as it is currently devised, and how the spending programmes which the Government can afford might be better distributed to ensure that they reach people most in need.

My suspicion is that both major parties will move, crab-wise, towards the notion that we should refocus our free public services on those who really need them, and look to exact a higher contribution, one way or another, from those who can afford to pay. They will both conclude that this is generally preferable to a large blanket increase in taxation, in that it will bring the added benefit of a direct cash nexus between provider and user into the system, which will promote efficiency and qualify of service.

So I think that in all public services we shall be looking hard at the question of charging. That will be true in the university sector, where already the vice chancellors and principals have, to their credit, begun asking some awkward questions about how the desirable increase in higher-education participation, to which the Government is committed, can be financed. We all know that our student grant system is a very generous payback to relatively well-off fami- lies and to a restricted number of students who can expect higher than average

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earnings through their lives. Is this any longer justifiable? Other countries, such as Australia and Sweden, think not.

In the health service, are there ways in which we could introduce more charg- ing without destroying the principles on which the service is based? I know this is a very sensitive area but I have to say, simply as a detached observer, that it is bound to be on the agenda. And we also know, of course, that other health systems elsewhere in Europe seem to operate with a higher level of user charges, without obviously drifting into the kinds of problems which we know the Americans have experienced in the past.

What I hope is that in the health service, just as in the university sector, managers within the service will begin to think about sensible options and that the Government will listen to them, rather than springing some fully formed set of proposals, dreamt up by a Treasury Principal and a Department of Health Under-Secretary on a waiting world without consultation.

I have ranged quite widely in my discussion. And I acknowledge that I may not wholly have lived up to the specification, in that I have not set out a fully worked-out new set of criteria for public-sector managers in the 1990s. My only excuse is that I foresee a period of continued change and turbulence.

I suspect that if you wish to succeed in managing public services in the next decade, you will need to find a way of doing what it suggests. Because we are still a long way from a new, stable model of public-service management. My own inchoate thoughts on the matter, which is now something of a part-time hobby of mine, are merely one small, faltering step along the way.

REFERENCE

Davies, H. (1992). Fighting Leviathan: Building Social Markets that Work. London: Social Market Foundation.