Essays: Efficiency and value
From Future of Local Services to the Public
Efficient local government. A collection of essays published by the SOLACE Foundation Imprint, edited by Mike Bennett and Robert Hill.
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The collection of essays in this pamphlet shows the breadth and depth of the commitment to efficiency and effectiveness in local government. Since Sir Peter Gershon’s 2004 report Releasing resources to the front line provided a renewed focus on quantifying efficiency, local authorities have already recorded more than £3 billion of savings. This reflects the application of increasingly rigorous management in local government. However, while the demand for community services continues to rise, public spending has started to slow. Moreover, it is clear that the financial position is going to tighten further in coming years and that wider economic challenges are likely. With demand for services growing faster than available resources efficiency is becoming a crucial issue for local government’s politicians and managers.
While this combination of rising expectations and tightening financial position forms a common backcloth against which our contributors have written their approaches are wide, varied and imaginative. The range of issues covered roams from the moral imperative of maximising the impact of public resources to the importance of new institutional arrangements; from service innovation to customer insight and from commissioning to charging. Across these issues our contributors’ outlook is positive and creative. The challenge is real, but the ambition is too.
As Robert Hill’s opening essay outlines, there remains considerable scope for efficiencies through better use of technology and through service re-design. But efficiency is not a question of the technocratic fix or of finding the one of best way to organise services. Efficiency involves issues of purpose and strategy, as well simply getting the best balance between inputs and outputs. A concern for managerial efficiency in government goes back at least as far Adam Smith. However, while we all know about Smith’s concern for the allocative efficiency of the market we tend to talk less about his concern for the ways in which appropriate institutions contribute to efficiency through the productivity and motivation of people – which was of primary importance to Smith. These essays show that all the agencies concerned with local service delivery, whether in the public, private or voluntary sectors, will need to contribute. Indeed it is clear that efficient and effective service delivery will depend critically on all parts of the supply chain working together around shared objectives and approaches.
Efficiency concerns managers, institutions and people but it is also a means to a greater end. In Peter Drucker’s famous distinction efficiency presupposes purpose. “Effectiveness is the foundation of success – efficiency is a minimum condition for survival after success has been achieved.” No amount of efficiency would have enabled the manufacturer of buggy whips to survive.
Efficiency is concerned with doing things right. Effectiveness is doing the right things. As local government becomes increasingly concerned with commissioning community wide outcomes and joining up local public sector agencies to secure those broad based outcomes, combining effective delivery of the outcomes while ensuring efficiency becomes a ever more complex task. The development of local government’s community commissioning role highlights a key theme of these contributions: the connections between political purpose and managerial method run right through the efficiency agenda. Without efficient organisation the scope for political choice and democratic energy is reduced. Without political direction efficiency lacks the focus on social and economic outcomes to be achieved. This interdependency of the political and the managerial is characteristic of local government and the most effective strategy will recognise the necessity of both approaches.
This is a timely collection from leading figures in the field.
