Worked Better and Cost Less Christopher Hood Visiting Professor, - PowerPoint PPT Presentation

‘Reflections on “A Government that Worked Better and Cost Less”’ Christopher Hood Visiting Professor, Blavatnik School of Government, University of Oxford, UK www.christopherhood.net/ 26 April 2017

NAPA Brownlow prize 2015 PSA Mackenzie prize 2016

30 Years of UK Government Reforms 2

‘Progressive -era Public ‘New Public Administration’ Management’ Unbundled public Uniform/inclusive service public service Loosely defined Contracts/ Public sector provision marketization Distinctiveness vs similarity Public sector ‘Private sector’ style ethos/career Policy etc skills Hands-on management Implicit/qualitative Explicit performance Rules vs performance standards standards Discretion Process controls Output/ outcome controls Source: Martin Lodge and Derek Gill ‘Toward a New Era of Administrative Reform?’ Governance 24 2011, p.144

Two Aspects of ‘Good Administration ’ • Fair, careful, consistent, honest framing & handling of rules & cases Example: ‘Laws should not be anything but uniform and steadfast .’ (Han Fei Tzu.) • High-impact, low-cost government through cost-cutting management Example: ‘Thrift should be the guiding principle in our government expenditure .’ (Mao Tse-tung.) What is or should be the relationship between these two values? Can you have both at once?

Administrative Cost and Fairness/Consistency: The ‘No Free Lunch’ View Inconsistency and Unfairness Administrative Cost 6 6 6

Administrative Cost and Fairness/Consistency: The ‘Having it All’ View Inconsistency and Unfairness Administrative Cost 7 7 7

Administrative Cost and Fairness/Consistency: The ‘No Systematic Relationship’ View Inconsistency and Unfairness Administrative Cost 8 8

What We Found: Did UK Government End up Working Better and Costing Less between 1980 and 2010? WORKED BETTER? Change in incidence of claims Change in the ‘success’ rate about inequity, unfairness, (or strictly survival rate) of inconsistency, etc. those claims Complaints to Grew sharply despite efforts to Formal survival rate fell but ombudsmen develop other channels numbers of survivals grew Judicial review General JR applications doubled Formal survival rate fell but 1980s/1990s, immigration cases numbers of survivals grew grew throughout the period COST LESS? Change in absolute (constant- Change in relative costs price) costs Central government Grew markedly over the Decreased relative to TME, as administration costs period as a whole TME doubled over the period Civil service staff costs Cost about the same, with Decreased relative both to fluctuations TME and UK average earnings 9 numbers

Worked Better? UK PCA Complaints and Judicial Review Applications in England and Wales 14,000 Judicial Review Applications Complaints received by Parliamentary (England and Wales) 3,000 Ombudsman via MPs 12,000 2,500 10,000 All other causes 2,000 8,000 Immigration All other causes 1,500 6,000 1,000 4,000 500 2,000 0 0 1975 1980 1985 1990 1995 2000 2005 2010 1975 1980 1985 1990 1995 2000 2005 2010 Data from PHSO Annual Reports and Judicial Statistics 10

Survival Rates of UK PCA Complaints and England and Wales Judicial Review Applications (First-stage Filter) 50 90 Complaints to Parliamentary Ombudsman Cases Granted Permission to Apply for proceeding to Statutory Investigation 80 Judicial Review 40 70 60 30 Percentage Percentage 50 40 20 30 20 10 10 0 0 1975 1985 1995 2005 2015 1975 1985 1995 2005 2015 All Cases Immigration Other 11

Cost-Less? Real-terms Running Costs of UK Civil Departments Calculated from data in Public Expenditure Statistical Analyses 1986-2010 Figures are corrected for inflation by means of the GDP deflator, 2012-13 values.

Comparison of (English) Local and UK Central Government Gross Administrative Expenditure Relative to 1980-81 250 Spending relative to 1980-81 (real terms) 200 150 Local Government Central Government 100 50 Thatcher Major Blair 0 1980 1985 1990 1995 2000 2005 2010 Source of LG data: Local Government Financial Statistics Figures are corrected for inflation by means of the GDP deflator, 2012-13 values. 13

Gross and Net Running Costs Relative to ‘TME’ TME = Total Managed Expenditure (total government spending including social benefits, debt interest, and capital and current expenditure on services)

Where Did the Running-Costs Money Go? Real-Terms Civil Service Staff Costs

Relative Civil Service Staff Costs Per capita staff costs relative to UK workforce 6% 180% Staff Costs Relative to TME 160% 5% 140% 4% 120% 100% 3% 80% 2% 60% 40% 1% 20% 0% 0% 1980 1990 2000 2010 Staff Costs relative to TME Per capita cost/ average UK earnings TME = Total Managed Expenditure