Executive Summary

By increasing productivity by 3%, the public sector can free up over £6 billion per annum to re-invest in services, making a significant contribution to Britain’s economic performance. But this will not be achieved without a step change in the management of public services. Better performance management is the key to world-class public services, but current systems are often not functioning effectively. We therefore propose the use of the performance management framework outlined in this report, to help develop existing systems and processes. Working within this central recommendation, we have also drawn out and discussed the need for:

• Strengthened leadership to ensure clarity and focus on service improvement;

• Better techniques and strategies for tackling variations in performance;

• Measuring what matters, by prioritising and rationalising public sector targets;

• A sharper focus on customers, who rightly expect better public services;

• Improved rewards and reinforcements for public servants.

Within these five areas we recommend a number of more specific actions, including the need to:

• Build much greater organisational capacity for performance management, to help leaders develop effective systems and achieve the necessary supporting cultural change;

• Engage in an open debate about the respective roles, responsibilities and accountabilities of top managers and politicians. The Government should work to establish fresh ground rules and spread good practice;

• Develop active intervention models that rely less heavily on the traditional guidance and circulars, and more on face-to-face contact with practitioners;

• Ensure all targets and measures in public services flow from Public Service Agreements and Service Delivery Agreements (PSAs and SDAs). The range of performance measures and targets in the public sector can contradict each other, and confuse both staff and customers;

• Ensure stretching targets are set for raising the productivity of all public services, and where possible, differentiating targets to ensure performance is raised towards the standards of the best;

• Implement incentive schemes, which include financial rewards for exceeding PSA/SDA targets.

  The Government should provide the financial freedoms necessary for such incentives to work effectively.

This will require a mayor commitment from both politicians and top managers. But the prize will be lasting and genuine service improvements, and the opportunity to modernise public services for the benefit of all.

Source: Public Services Productivity Panel:

A joint report-Meeting the Challenge