Target practice

The UK government has set around 600 targets for the public sector. Why?

Victor Smart

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Topics Politics

Is it fanciful to liken UK chancellor Gordon Brown to Joseph Stalin?

Of course – but that hasn’t prevented recent unflattering comparisons between the Treasury’s direction of public services and the Soviet despot’s vain attempts to cudgel the command economy into performing.
Under Brown there are around 600 targets, mostly Public Service Agreements (PSAs) that extend into 2002 and beyond. Covering exhaustively the activities of Whitehall’s big spending departments, PSAs augment the raft of existing targets, goals, and performance indicators for health, local government, and so on, that are evaluated by the likes of the Audit Commission.

But now economist Professor John Kay thinks Britain’s experiment with targets is doomed. ‘If targets work, then the Soviet Union would have worked’, he states bluntly (1).

‘Hardly a day passes without some new control mechanism being rolled out’, adds Kay. ‘But these mechanisms won’t work because both the balance between the objectives and the best means of achieving them constantly change, and because the centre has no way of knowing what local targets are really achievable.’ The consequence, he continues, is that ‘targets proliferate as those initially specified fail to achieve their purpose, while the people who run the services become cynical and demoralised’.

Thus critics charge that Labour is target crazy and that the targets are really about centralising power. During the election campaign UK prime minister Tony Blair sought to cast aside charges of control freakery by remonstrating that ‘devolve, diversify, deregulate’ would be the watchwords for public services in his second term. ‘We need to mobilise the small battalions and give them freedom to innovate and change’, he said. ‘I want local managers and professionals to be entrepreneurs.’ (2)

Really, prime minister? But since when did entrepreneurs have to conform to the goals set out by some remote central authority? Their strength is an intuitive capacity to spot unsatisfied consumer demand, very often departing from what existing businesses do.

Above all, entrepreneurs are encouraged to go through the messy process of mostly unsuccessful experiment, in the fashion of the ill-fated wave of dotcoms. That is patently a model inappropriate to most of the public services, most startlingly in the NHS, where professionals are understandably being given less and less latitude to cock-up. But no doubt Soviet tractor factories were exhorted to innovate too.
Still, since the naturally frugal chancellor is committed to splurge more on public services in the next few years than he can actually tell in advance will be in the state coffers, it is no surprise he insists the cash is well spent. And since the chancellor is ambitious, very ambitious, it is no surprise that he wants his department’s writ to run across Whitehall.

It is probably facile to claim a rift here between Blair and Brown – the PM is doubtless as gung-ho as his chancellor about targets as a means of forcing the public sector to perform. But there is no denying that the Public Service Agreements bolster Brown’s power.

The PSAs, of course, are ‘agreed’ between spenders in Whitehall, such as health, and Brown’s lieutenants. Whether the Treasury would ever go so far as to withhold money from a failing department is a moot point. But the iron chancellor’s men undeniably have the big departmental spenders by the short and
curlies.

We as outsiders are not privy to the discussions on target agreements between departments and the Treasury. And the government also refuses an external audit of how well they are met. This opens the targets to further criticism that they lack credibility. The select committee of MPs whose job it is to monitor the Treasury says that independent scrutiny of a department’s performance against their targets is essential. It calls for the government to set up an external audit by a body such as the National Audit Office, the watchdog for central government.

That is common sense. But so far the Treasury shows no sign of budging. Indeed, further pressure to ape the precise sciences is being exerted. For the government is determined to move from inputs (say, how much is spent annually on hip replacements) to outputs (how many hips are replaced each year) to outcomes (how many patients have not been readmitted a year on).

According to Colin Talbot of Glamorgan University, two-thirds of the latest round of targets now comprise outcomes. Some of these stretch a long way into the future. For example, there are precise numerical commitments to reductions in mortality rates from heart disease and cancer by 2010.

‘The most important problem Labour faces in its second term concerns the management of public services’, concludes Kay. ‘In education and health voters want better results and the government is ready to pay for them. But in government there is the fear – even sickening certainty – that the money will disappear down a black hole. Five years from now, spending will be higher, but dissatisfaction with what is provided will be just as great.’

Targets are the government’s chosen instrument to extract sound performances from the public services. But despite the man-hours put in by Treasury mandarins codifying the schemes, by officials crunching the numbers and by frontline workers hoovering up the raw data, it remains unclear if the process actually functions effectively. The suspicion lingers that the government clutched desperately at the targets regime by default.

Victor Smart is a writer, broadcaster and journalist.

(1) Prospect, June 2001

(2) Announcing a new taskforce to cut red tape within the public sector to an election 2001 meeting in Gravesend

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