WILL THE PRIVATIZATION OF PUBLIC ENTERPRISES SOLVE THE PROBLEM OF CONTROL?

The Government's privatization programme has acquired such momentum that hardly any public enterprise is exempt from action or proposals. Evaluation of the programme must recognize the diversity of privatization policies, and the tensions inherent within their objectives. Ideological motivation has been supported by the inability of policymakers to design a viable framework of economic and financial control over public enterprises. This has led to a view that it is impossible to manage business efficiently within the public sector, the constraints of which can only be escaped by ‘setting the enterprise free’. However, decisions now will close future options, only be escaped and may be prohibitive to reverse. A list of unanswered questions remain about future relationships between hybrids and governments, the costs and benefits of the regulatory systems which will replace public ownership, and the balance between public policy and private interests. Can the market succeed where the state has been judged to have failed?     

PATTERNS OF GOVERNMENT FUNDING TO THIRD SECTOR ORGANIZATIONS AS REFLECTING A DE FACTO POLICY AND THEIR IMPLICATIONS ON THE STRUCTURE OF THE SECTOR IN ISRAEL

The treatment of the Third Sector and its organizations by governments in Israel has been characterized by a lack of a declared, knowledge based and centrally planned policy. It takes a haphazard form of politically driven bargains, personally attained benefits, and reactive crisis intervention solutions. Paradoxically, the lack of planning and coordination in policymaking in issues involving the Third Sector is accompanied with an elaborate system of public funding to Third Sector organizations, a system that has developed incrementally over the years. These funding patterns have accumulated to a persistent de-facto policy towards that set of organizations.

Findings on public funding to Third Sector organizations from two major research projects—the Johns Hopkins Comparative Nonprofit Sector Project and the Israeli Third Sector Database—served to analyze that de-facto policy towards the Third Sector in Israel.

The large-scale funding of Third Sector organizations and specifically service providing organizations in the fields of “Education” and “Health”, alongside with the meager support of other types of organizations imply a conception of the Third Sector as a complementary organ of government. The statist ideology this funding pattern reveals results in a non-deliberate yet unmistakable policy. It is geared towards utilizing the Third Sector to replace and complement the public sector in providing different essential services, and at the same time minimizing or ignoring other roles of the sector altogether (advocacy, innovation, development of civil society).

This policy has concrete consequences. Since government funding is the major funding source of the Third Sector in Israel, these preferences influence the nature and the composition of the sector. It strengthened the service provision tendency and increased the major role religion plays in the sector on the one hand. On the other hand it undermines the development of foundations as a significant alternative to public funding and the development of civil society.

The findings point out to some of the social origins of the Israeli Third Sector. Among these we discuss the major role these organizations played in the pre-state era, the centrality of religion in the Jewish State, the centralist and statist ideologies of the first Israeli governments and some political arrangements which still are in effect after decades. Our data show that despite the structural changes that the Israeli society and polity underwent since the 1970s, the economic structure of the sector and its public funding patterns have basically stayed the same. That is in spite of the drastic growth and diversification the sector enderwent since the 1980s. Third Sector policy too still carries a strong statist flavor, as it completely ignores the rising element of civil society.

The clear consequences of that unplanned de-facto policy raise various questions regarding the roles of the Third Sector in Israel, the necessity of a systematic public debate on these roles and the desired government policy towards the sector in light of these roles.     

CHANGE IN THE MANAGEMENT OF PUBLIC SERVICES

This article identifies the main themes in recent changes in public sector management and shows the extent of the challenge to past organizational assumptions. While recognizing the objectives of the changes could bring benefits if realized, it argues that there are a series of issues that are unresolved. The language of consumerism, the development of government by contracts, the form of performance management and the use of quasi-markets are seen as creating problems. These are seen as deriving from an attempt to apply approaches drawn from the private sector to the public domain. It is argued that they need to be balanced by approaches that recognize the values of the public sector.     

ECONOMIC DISCOURSE AND THE MARKET: THE CASE OF COMMUNITY CARE

The UK government has introduced fundamental reforms into the provision of social care. The'community care'programme, which was fully implemented in 1993, requires local authorities to assess the needs of potential users, to design an individual package of care that reflects those needs, and to purchase the package from a range of statutory, voluntary and private providers. Thus the new arrangement introduced a'quasi-market'in community care, along the lines of those already operating in other areas of the UK public sector, such as health and education. Hitherto, much analysis of the functioning of such markets has been conducted within a neo-classical economic framework. This article examines the relevance to the complex new community care market of three alternative theoretical perspectives: the transaction costs literature, the Austrian school and the new economic sociology. It is concluded that, although neoclassical economic discourse has been influential in shaping policy, no single perspective can capture all the issues relevant to analysing the market in community care. Therefore, in evaluating the reforms, an eclectic theoretical approach will be required which draws upon a variety of economic discourses.     

THE PUBLIC MANAGEMENT CHALLENGES OF CONTRACTING WITH NONPROFITS for SOCIAL SERVICES

ABSTRACT

States and municipalities increasingly pursue privatization as a way to deliver public goods and services because of two expected outcomes, reduced costs and quality improvements. Several reasons are frequently cited for these anticipated benefits ranging from market competition to increased management flexibility and discretion to fewer rules and regulations. One policy area in which government has privatized many services through contracting with nonprofit organizations is social services. Contracted services are as diverse as providing shelters for the homeless, vocational education and job retraining, domestic violence services, refugee esettlement, child and elder abuse services, and food banks. A proliferation of public administration and nonprofit organizational scholarship has examined a range of issues associated with the government-nonprofit social service contracting relationship, not the least of which are topics related to management, measurement, and accountability. This article examines the public management challenges and implications of contracting with nonprofit organizations for the delivery of social services.     

‘THE GREAT DOCK AND DOLE SWINDLE’: ACCOUNTING FOR THE COSTS AND BENEFITS OF PORT TRANSPORT DEREGULATION AND THE DOCK LABOUR COMPENSATION SCHEME*

Deregulation of the port transport industry was predicted to bring much needed jobs and investment to Britain's ailing dockland areas, lower prices for port users and consumers, and improved international competitiveness. These benefits were anticipated to far exceed any attendant costs. But the benefits have failed to materialize, largely because the government failed to appreciate the non-competitive structure of the industry or the effects of the National Dock Labour Scheme on the economic performance of the ports, while the costs were substantially underestimated. Consequently, the costs of deregulation have exceeded the benefits. As in the past, current industrial policy has been dictated by the apparent‘labour problems’of the docks, but the new system of deregulation, founded on the mass redundancy of exregistered dockers and a re-assertion of managerial prerogative, has exacerbated rather than resolved the underlying structural weaknesses of the industry. In particular, deregulation has ushered in a new era of casual employment on the docks. Unless, or until, public policy addresses these problems the costs of deregulation will continue to accumulate.     

DOES THE EU STIFLE VOLUNTARY POLICY TRANSFER? A STUDY OF THE INTRODUCTION OF FREEDOM OF INFORMATION IN PORTUGAL AND IRELAND

Traditionally, policy transfer within Europe has taken place in the form of bilateral voluntary transfer within ‘families of nations’. The creation of binding international regimes, in particular the adoption of binding EU policies, has increased instances of multilaterally obligated transfer in Europe. However, very little research has been carried out on the interaction between these two types of transfers. This paper starts from the assumption that a binding EU policy of ambiguous nature and/or with a limited scope of application creates policy space for additional voluntary transfers in member states. Evidence on the implementation of the 1990 Access to Environmental Information Directive in Portugal and Ireland is used to illustrate that three different modes of combining voluntary and obligated transfers may be used. There is, however, no ideal solution since the three modes (hybridization, fragmentation and sub‐regimes) create different types of costs and benefits.     

THE ARCHITECTURE OF THE BRITISH CENTRAL STATE, PART I: FRAMEWORK FOR ANALYSIS

In the bureau-shaping model of bureaucracy rationally self-interested officials are primarily concerned to maximize their agencies' core budgets, equivalent to their running costs. They are much less interested in those parts of their overall budget which are allocated as transfer payments to the private sector or passed on to other public sector bodies. The varying importance of core budgets and other spending yields a typology of public sector organizations into delivery, transfer, contracts, regulatory and control agencies. In addition, the bureau-shaping model is developed in this article to provide an exhaustive classification of government agencies, and to refine the analysis of spending over and above core budgets.
The methodological issues involved in applying this typology empirically to the central state apparatus in Britain are explored. Previous attempts at 'bureaumetrics' have failed to mesh with 'ordinary knowledge' views of Whitehall. By contrast, the bureau-shaping model provides a framework which is theoretically sophisticated, easily operationalizable, and intuitively understandable. The scale of prospective hiving off from the UK civil service organization over the next decade indicates the value of adopting a framework which can respond methodologically to such changes, and offers a powerful theoretical account of their dynamic. Part II of the paper [next issue] presents the empirical data demonstrating that the bureau-shaping model is highly effective in systematizing and extending our knowledge of how Whitehall and its attached agencies are structured.     

ASSESSING THE PERFORMANCE OF DEPARTMENTAL CHIEF EXECUTIVES: PERSPECTIVES FROM NEW ZEALAND

This article examines the new approach to specifying and assessing the performance of departmental chief executives in New Zealand introduced in 1988 by the fourth Labour government (1984–1990). Drawing on the findings of a series of interviews with ministers, chief executives and other senior public servants conducted between late 1989 and late 1991 by a number of researchers, the article outlines the origins and implementation of the new policy framework, and evaluates its strengths and weaknesses. From the evidence available to date, it appears that the new model has won the support of most of the parties directly affected, and that it has enhanced the accountability of chief executives to their portfolio minister(s). However, the implementation of the new regime has highlighted the inherent problems of assessing the performance of senior personnel in the public sector and of imposing sanctions in the event of substandard performance. In addition, various issues of a constitutional nature have arisen concerning the roles and responsibilities of chief executives, the balance of power between chief executives and their portfolio minister(s), and the proper role of the Prime Minister and Cabinet in the new accountability framework.     

TOWARDS STANDARDS FOR THE PUBLICATION OF PERFORMANCE INDICATORS IN THE PUBLIC SECTOR: THE CASE OF SCHOOLS

Since the 1990s, the media and public authorities in many developed countries have published data on the quality of public services such as schools, hospitals and police. In the education sector the publication of performance indicators and league tables generated considerable debate. In this article, the policy context of this development in the education sector is analysed in conjunction with the problems associated with the public reporting of school performance indicators. This is followed by a discussion of the need for an accepted set of publication standards. The aim of this article is to initiate a debate about whether international consensus can be reached on the content of such a set of standards, and whether a particular set of standards, developed in the Dutch context, is applicable in and relevant to other countries. These Dutch standards have been applied to a variety of English, American and Dutch publications. The results of the analysis suggest that if the Dutch standards were applied, school performance publications could be significantly improved.     

A NEW EPOCH OF INDIVIDUALIZATION? PROBLEMS WITH THE ‘PERSONALIZATION’ OF PUBLIC SECTOR SERVICES

The paper discusses the role of the concept of ‘personalization’ in New Labour policy on the reform of public sector services. The analysis points to the contradictory ways in which the concept has been used in both policy statements, in the work of various authors, and in the think tank Demos, which has been closely associated with the diffusion of the concept. The correlative uncertainties with respect to implementation are discussed and related to the use of ‘epochal’ forms of argument in the justification of this latest instalment of public sector reform in the United Kingdom.     

PUBLIC EXPENDITURE AND POLICY IMPLEMENTATION: THE CASE OF COMMUNITY CARE

This article explores the contention that the conventions of public expenditure accounting conceal, rather than reveal, the real nature and implications of resource trends. A benchmark — a constant level of service output — is established as a basis for examining the relationship between trends in expenditure inputs and service outputs. Changes in unit costs are identified as the major source of deviation between expenditure and output trends. The impact of resource constraint on policy and policy-implementation is then examined in relation to one, essentially stable, area of policy in the personal social services: community care.
The meaning of the term'policy' is far from straightforward and community care is best understood as the interaction of relatively independent streams of policy, towards service outputs and resource inputs, extant in both central and local government. Mechanisms by which policy streams could be reconciled are of particular interest and an innovative example — joint finance — is examined in some detail.     

THE LIMITS OF KNOWLEDGE MANAGEMENT FOR UK PUBLIC SERVICES MODERNIZATION: THE CASE OF PATIENT SAFETY AND SERVICE QUALITY

This article assesses the contribution of management of knowledge across organizational and professional boundaries towards improved public services. We empirically investigate the potential for knowledge sharing within the context of the NHS modernization agenda, taking as our focus the current ‘patient safety’ policy agenda. Specifically, we evaluate the introduction of a knowledge management system, namely the National Reporting and Learning System (NRSL) and its impact in the area of operating theatres within a university teaching hospital. We suggest that government policy in this area needs to reflect more upon limits to the management of knowledge and issues of the nature of knowledge, professional cultures and institutional power and politics.     

THE ARCHITECTURE OF THE BRITISH CENTRAL STATE. PART II: EMPIRICAL FINDINGS

Part I of this paper (autumn issue) explained the need to improve existing research into the British central state, outlined the bureau-shaping model, and tackled a number of methodological issues involved in applying this framework. Part II demonstrates that the bureau-shaping model is highly effective in systematizing and extending our knowledge of how Whitehall and directly attached agencies are structured. The main types of organizations identified share many similarities, so that the model's categories have a clear intuitive meaning. As a result the bureau-shaping model can effectively cope with analytic problems that have constrained previous 'bureaumetric' research, such as the extreme variations in the size of central state agencies. The model also illuminates both the distribution of bureau-types across policy sectors, and the effects of different patterns of administration on public expenditure trends under the Thatcher government.     

CONTINUITY AND CHANGE: THE ROLE OF THE HR FUNCTION IN THE MODERN PUBLIC SECTOR

As the public sector has modernized and sought to become more efficient and cost‐effective, the effective and strategic management of people has received increasing prominence and there have been calls for the Human Resource (HR) function to play a more strategic role. However, not much is known about whether the role of the HR function has changed substantively. In this paper, we present empirical evidence from six matched‐pair public sector organizations in the UK to assess whether HR functional roles have changed, as envisaged, into a model more akin to the private sector. The findings highlight the complex and often contradictory nature of HR functional roles, and suggest that new and more strategic roles have not replaced traditional approaches but, rather, have been grafted on, giving rise to a variety of hybrid HR forms.     

COMPUTERIZING THE SOCIAL SECURITY SYSTEM: AN OPERATIONAL STRATEGY IN LIEU OF A POLICY STRATEGY?

The operational strategy for social security — how to computerize one of the largest manually-dominated ‘sort, act and file’ operations in the country — is the emerging product of work which began in 1977 and has thus far produced a discussion document (DHSS 1980), a strategy proposals document (DHSS 1982), a high-level seminar (DHSS 1983) and a wide range of consultations. A ministerial response to the strategy — likely to be the go-ahead with only marginal amendments — was due before now but was delayed because of the general election. What are the insights which the development of this strategy provides for those interested in public policy analysis? What are the questions which its nature and prospects poses for public administration? This paper is concerned not with the technical issues involved in the development of feasible database strategies but with the issues to which the strategy gives rise. After a brief outline of the main features of the operational strategy, it discusses the possible implications of the strategy for clients of the social security system, and then examines some issues of policy co-ordination, inheritance and flexibility thrown up by the exercise.     

REPRESENTING CUSTOMERS’INTERESTS: THE CASE OF THE PRIVATIZED WATER INDUSTRY IN ENGLAND AND WALES

Privatization has been one of the most important and controversial policy initiatives to emerge in the UK over the last decade. However, to date there has been little attempt to assess the impact of privatization on customers, despite the fact that much of the justification for the privatization of the public utilities was couched in terms of the benefits it would bring for customers. In the case of the water industry opportunities for competition are virtually non-existent, and the ten regional water authorities were privatized with their monopoly position intact. Consequently customers’interests have been represented and protected through new regulatory arrangements operated by the Office of Water Services. The purpose of this article is to offer some provisional assessment of the effectiveness of these new regulatory arrangements. In doing so, the article regards the model of private sector consumer sovereignty as inappropriate given the continued absence of competitive arrangements for the representation of customers’interests against some of the criteria currently being discussed in the development of more consumer-oriented approaches to the delivery of public services.     

REFORMING PUBLIC SERVICES IN THE UK: BRINGING IN THE THIRD SECTOR

In the UK, the government continues its project to reform public services. Earlier projects have focused on the modernization of public sector organizations; in the latest round of reform, New Labour has focused on widening choice and the personalization of services. To this end, the government has been working with Third Sector (TS) organizations to expand their role in shaping, commissioning and delivering public services. The government’s vision is predicated on a normative assertion, that, unlike traditional public sector organizations, TS bodies create public value by being more innovative, are inspired by altruistic aims and values, and have greater commitment to their clients. This paper reviews recent policy and questions whether the government’s policy is flawed, contradictory and risks damaging the attributes of the TS admired by New Labour.     

POLICY MAKING AND THE DEMONSTRATION EFFECT: PRIVATIZATION IN A DEPRIVED REGION

The aims of public policies are not always clearly articulated by ministers. Further the aims that are stated may not reflect all – or indeed the most important – aims. In some cases declared policy aims bear little relationship to the real intentions of ministers in undertaking an initiative. In other cases policy decisions are intended as symbolic statements, demonstrating government attitudes on a range of issues beyond the specific matter under consideration. These ideas are explored in the context of the privatizations of Harland and Wolff and Shorts, two major industrial government-owned companies in Northern Ireland. The article concludes that government sought to use the privatizations as a symbolic statement, namely to demonstrate that the heavy dependence on the public sector within Northern Ireland had to be reduced.     

PUBLIC SECTOR PAY BARGAINING: COMPARABILITY, DECENTRALIZATION AND CONTROL

Public sector pay, as a key component of public expenditure, has been a major issue for government since the mid-1970s. This article analyses public services pay bargaining since 1979 and examines the continuing tension between the control of public sector pay levels on the one hand and the wish to make pay levels more responsive to external market forces on the other.
The article concentrates on the changes in pay bargaining in the public services. It does not purport to provide a detailed economic analysis of the outcomes of the various phases in public sector pay policy, but does attempt to explain the process implications of the political contingencies and rationale driving government policy on pay determination. In particular it notes the resilience of national pay-setting arrangements and pay comparability throughout most of the period under review, despite the political rhetoric, emphasizing the pragmatism of government policy. The latter section of the article reviews the current policy, with its emphasis on decentralized pay determination, and considers these new developments within the context of private sector collective bargaining theory.
The evidence from the private sector suggests that pay determination in the private sector is complex and that levels of bargaining relate to various factors. Decentralization is neither a panacea for poor performance nor necessarily problem free. Devolved pay determination can lead to problems of control over costs and, in the context of high levels of trade union organization, to pay'leapfrogging'. The article concludes that there is a continuing contradiction between the role of the government as an employer, keen to devolve pay decisions to local level, and that of economic regulator with responsibility for the wider economy. This continuing tension indicates that decentralized pay bargaining in the public sector will be limited in its scope by some form of central government control.