News from the New Party

Sunday, February 11, 2007

Why public services fail

The Child Support Agency has a long and dismal record of incompetence and failure. It is probably unfair to blame the great majority of current CSA staff for this state of affairs - the failings of the institution may well have more to do with the underlying concept of the organisation than the degree of competence of the staff (as the Department for Work and Pensions has claimed) , but it nevertheless does seem rather odd that £25 million in bonuses has been paid to CSA employees over the past five years. The New Party does not subscribe to the view that public service bodies are employment agencies - any public sector organisation should concentrate first and foremost upon delivery of service to the public. On this basis, the payment of bonuses to the staff of an organisation which has failed to collect Â£3.5 billion in child support payments can only be viewed as rewarding failure.

Unfortunately similar attitudes are common across the public sector generally. The NHS has been the beneficiary of quite extraordinary largesse under the current government, and yet NHS Trusts across the country are running huge deficits. Part of the reason for this is the total separation of the payment of NHS employees from any particular commitment to productivity. Where there has been such a connection made, such as with the recent GP contracts, it has led to massive increases in GP's pay because the performance of family doctors has greatly exceeded the expectations of government. More generally, the increase of funding to the NHS has greatly encouraged public sector trade unions to seek relatively large salary increases for their members, and has also seen the expansion of NHS management with a wide range of managerial and monitoring posts, at the expense of front-line medical staff.

The fact of the matter is that government run public services tend not to provide value for money, as they have a captive clientele who in many cases are not in a position to obtain the services they need elsewhere. There is therefore little incentive from within the public services to improve the situation of customers, who tend to be seen as supplicants rather than part-owners of the system. Citizens do not truly own the monopolistic public services such as the NHS. Rather, the NHS and similar bodies own our citizens. Large scale, monolithic public services will never be as efficient as private sector organisations for this reason. Commercial pressures will always improve efficiency by driving costs down and increasing capacity within the system, and they will always offer the consumer greater choice and control over the services they need.

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Why public services fail