Local Government - Research Paper Example

LOCAL GOVERNMENT The Impact of the Performance Management and Best Value Practices on the Council of North Tyneside Introduction The Council of North Tyneside is one of the councils in the City of Newcastle and one of the five metropolitan areas in the City. As a local government and as one of the representative governments of the City of Newcastle, the North Tyneside Council has the responsibility to design and provide policies for national government. Though as part of the City of Newcastle whose vision is to make a difference to the lives of its citizens, delivers essential services, and makes its communities a better place to live, the Council has a different vision. Its vision is “Working towards the promotion of the economic, social and environmental wellbeing of our area and striving to create a prosperous, healthy and safe place to live and work” (Audit Commission 2002: 4). Traditionally, the roles of the council are to design and formulate policies on behalf of the City and the national government. Yet, over the years, this responsibility becomes highly centralized at the national level and it affects the delivery of the goods and services. Decision-making becomes slow, creativity diminishes, and government is charged for inefficiency and is full of rigidity. With government reform, devolution becomes the solution to improve the efficiency and reduce rigidity in the bureaucracy. Devolution of Authority and the Change of Roles and Responsibilities of Local Authorities Both the City and the Council view that the devolution of decision-making process would make the councilors to perform at their most effective level. The devolution would help the councilors to promote high quality customer-focused local services, and through the commission, they ensure that resources are adequate and available to local authorities. The devolution of authority established as part of government reform causes the bureaucracy system of traditional paternal governance to become entrepreneurial governance or a mercantilist government and it is plaguing the country even the countries all over the world. Traditionally, as local government and local leader, the city performs the mandate of the national government and delivers public goods and services to the citizens. However, the devolution requires the transfer of the national responsibility directly to the councils. Councilors lead, coordinate, manage, direct the people, and guide them toward higher standard of living (Schwarz 1983). Strategic planning, that is usually done at the national level is now their routine. The citizens also have easy access to their representatives and equal access to the goods and services even have direct access to participate in public policy process. As a mercantilist government, the citizens are still the customers and the clients are the minority groups or the stakeholders, who, after the reform, have better access to the City officials through the councils. They represent the new elites who have taken control over the councils through commissions assigned by the national government. From leaders whose functions are to further national government mandate, councilors represent liaisons between City government and the community. They negotiate funding for community projects and arrange or chair city meetings. Even though Condrey (1998) emphasizes that, the management of private sector should not be transferred into public administration, the Lord Mayors or the Chief Executive Officers of the cities, the councilors, and public employees are mesmerized by this transformation – from the traditional management that is mission driven, their management now becomes result-based oriented. The council has now become consumerism style governance. A new mercantilist government has a corporate vision that promises the world but does not provide a clue as to how or why a transformation is feasible (Kotter 2001). Like that of the City, the vision of the council is more than a pipe dream (Ibid). Pascale, Millemann & Gioja (2000) argue that this transformation is similar to surfing the edge of chaos. At the same time, these communities’ representatives are required to guarantee best performance management and to provide the best value to the citizens or the customers at the least cost and most efficient method. This paper evaluates the impact of performance management and best value implication on the North Tyneside Council. The Impact of Performance Management and Best Value Practices on the North Tyneside Council Performance Management and Best Value Practices of the Council Performance management and best value practices, adopted from the supply chain management of business enterprises, are relatively a new concept (Ketchen & Hult 2007). It is meant to enhance the results and thereby improve performance and to elevate functions into strategic management (Ibid). Performance management and best value in private sector requires agility, adaptability, and alignment. Agility, says Lee in Ketchen & Hult (2007: 537) is “the ability of a supply chain to react quickly to unexpected or rapid shifts in supply and demand.” Adaptability is the “willingness to reshape supply chains when necessary, without ties to legacy issues or the way the chain has been operated previously” (Ibid). And alignment is to ensure “that the interests of all participants in a supply chain are consistent” (Ibid). The question is do the elected officials understand about public goods? Congleton (2004) answer that not many of the elected officials understand the real functions of the government (Congleton 2004) neither do they understand the true value of public goods. Public goods and private goods are not complementary goods and they have different characteristics. If private goods can be measured by agility, adaptability, and alignment, public goods are measured by the needs of the people and their consumption, the availability of the goods, and the equality of the goods. The demand for private goods is determined by consumers’ taste and life style, and it is inelastic. Its price and availability are determined by the market. On the contrary, the demand for public goods is determined by the needs. Its availability is perpetual. Its demand is elastic and it does not change regardless of market volatility. A person’s level of consumption does not affect the marginal consumption of other persons. Council is required to establish an agile administrative function, adapt to a continuous changing environment, and align its administrative process and practices to those of the partners. This requirement eliminates the true characteristics of the public goods. Councilors perceive that public goods are equal to private goods and in their management performance, they are required to manage strategically and plan strategically. To manage and plan strategically, the council is required to issue performance measurement, to have and independent audit that works through the commission to scrutinize its work, to allow the public or the stakeholders to participate actively in the process of public policing. In addition, the council should ensure that its performance is one that gives assurance of the quality and best value. Green (1996) argues that strategic management is a mantra of the capitalism. It relies on the government to create consumerism governance. On page 536, he writes, “strategic management is the corporation striking back at the flux of modern” capitalism. However, with the absence of planning, this strategic management would result in dissolution of management performance (Kotten 1997). For the government, the Audit Commission (2002: 2) describes, “Government has placed a duty of best value on local authorities to deliver services to clear standards - of cost and quality – by the most economic, efficient and effective means available.” In order to produce the best value, the Council should prioritize on the “environment and transport, safer communities, regeneration and social inclusion, health, lifelong learning, organizational capacity, communities, and e-society” (Ibid, 5). The Council should also perform with continuous improvement, involve the communities in planning, “deliver high standards in public life, reduce inequalities, and involve agencies and key players.” In addition, best value means the Council must show that in all their review, they have the four Cs. The four Cs are challenging, comparing, embracing, and consulting. It requires why and how a service is being provided, the council should be able to compare its performance with that of other organizations in the private and voluntary sectors, embrace fair competition to promote the efficiency and effectiveness of the services, and consult with others such as taxpayers, customers and business community. Similarly, government has decided that the Council must demonstrate that they are continuously improving their services as part of their performance management. In fact, the government encourages the stakeholders, particularly an independent Inspectorate, to scrutinize the Council to ensure that they do deliver best value. Impact of Performance Management and Best Value on the Council Performance management and best value practices are very challenging for the council because “they do not always provide value after they are put in place” (Laudon & Laudon 2005: 402). Denhardt, Denhardt & Aristigueta (2002) indicate that management differs across sectors. Public and private sectors operate in different paradigm, agree Shafritz & Russell (2000) and it is risky to equate them (Kramer 1998). As mentioned, Condrey (1998) also states that management of private sector should not be transferred to public sector. In private sector, performance management and best value have resulted in greater non-accountability, poor performance, inefficiency, and poor quality. According to Laudon & Laudon (2005), since the implementation of these systems, a five-year research has uncovered the difficulties in the implementation of these systems. Among others, insufficient resources, poor quality and high variability of content quality, lack of context, lack of initiative among employees and they tend to become more individualized or they prioritize more on individual ambition, and lack of capacity. The North Tyneside Council wants to promote the economic, social, and environmental wellbeing of its ward and strives to create a prosperous, healthy, and safe place to live and work but its vision just promises the world (Kotter 2001). The reality pictures the contrary. Accountability has been the greatest problem in private sector. The same may become the problem of the council. As the council is equalizing and generalizing between the public and private sectors, the more risky the system would be. Performance wise, Shafritz & Russell (2000) indicate that one cannot manage without leading. The traditional job of a public leader is to lead or direct, manage, organize, control, coordinate, and plan (Shafritz & Russell; Laudon & Laudon 2005). Leaders not only determine the vision but also lead according to the vision, know how to manage (Wick & Sutcliffe 2002), and lead by example (Shafritz & Russell 2000). Can the councilors lead if their roles and functions are to chair city’s meetings? Can they manage if they represent liaisons between the communities, stakeholders and the City government? Generally, performance management and best value are common in supply management of private sector, especially in management information system. Weick & Sutcliffe (2002) argue that many have adopted this performance management and best value even it has become the common buzzword for public service performance evaluation or also known as result-based performance. Unfortunately, result-based performance tends to make a person to become focus oriented. When a person is focus oriented, he becomes shortsighted and cannot see beyond the sphere (Simmons 2004). A preacher once said, “If we are too focused, we are blinded by the impact of our decisions. We are blinded by the suffering of the people around us because of our decisions.” The problem with result best performance or the best value is that people seem to know the end result but they do not understand how to get there. Pascale, Millemann & Gioja (2000) write that corporations seem to know that they want to be in China and are in China but they do not know how to get to China. When there is a problem, they do not know how to go back to where they come from and learn to fix the problem. According to the Audit Commission, as a performance management measurement, the council should compare its results with those of private sector or the nonprofit organizations. However, as previously mentioned by Denhardt, Denhardt & Aristigueta (2002), management differs across sector. What seems to be effective and efficient in private sector or in nonprofit organization does not necessarily effective and efficient in public sector. It is because they operate in different paradigm (Shafritz & Russell 2000) and they are different in many aspects (Reed & Swain 2001). Not only this generalisation or equalisation is risky but also it is leading the council, as previously mentioned, to surf the edge of chaos. For example, the street lightning projects in the North Tyneside do not conform to every aspect of the requirements. The schemes and maintenance work and upgrading do not meet the required specification and overall, the quality work is below the standards. The materials used are unreliable. As a result, the Council recycles all light fittings and gets the project replaced while the environmental impact of this project has never been assessed. The notion to purchase at lower cost with the best quality has turned out to be costly. It costs more than the initial price. Shafritz & Russell (2000) have indicated that what seems to be the best performance in private sector is based on quick thinking, quick decision, and it costs more to fix. In fact, Russell & Harshbarger (2003) also indicate that quick decision often produces more damage. According to Ketchen & Hult (2007), performance management and best result do not emphasise on the need for best quality, knowledge, skills and professionalism but in practice, there seems appear many of the “cutting corners,” which often pictures poor quality and poor workmanship. Green (1996) argues it seems absurd to compete and promise good performance and best value. This based performance management requires the Council to be competitive but competitive creates radical evil (Grenberg 2005). If the councilors are engaging in development projects as liaisons, cases of bribery and fraud may emerge such as happens in the national level. The council would also perform more politically rather than managing strategically. Its performance would be contrary to its vision. According to Green (1996: 538), this mercantilist governance “has led to pressure to provide an enhanced role for the users of services and their representatives and to the need to ensure greater value for money.” The competitive nature of public service is a market strategy to vogue government from its true roles and responsibilities. The competitiveness causes the national government to create commissions whose roles and functions are similar to those of the councils. In other word, the commissions duplicate the roles and responsibilities of the council. The difference is that while the councilors are functioned as liaisons, the commissions are working through their private partners to plan and promote goods and services according to the individuals’ ambition or the interests of the minority groups (Denhardt, Denhardt & Aristigueta 2002). Over time, it belittles the authority of the councilors and reduces their capacity to perform at their best. As roles and functions are overlapping, it is difficult to achieve accountability. Controlling public spending by giving the goods and services to be delivered by private sector in order to reduce inefficiency is another problem in performance management in this council. The example of lighting services stated above indicates that the council does not control spending but is nurturing waste. With their functions as liaisons, the Council has added to the burden of proof of market philosophy that says, “Civil Service has no particular distinctive competence relative to the private sector and should therefore do that which the private sector cannot or has no wish to do. The Civil Service is thus construed to be inferior and can only redeem itself through disappearing” (Green 1996: 540). According to his study, Green (1996) finds that private and public involvement in the management of the council causes the council to adopt their mandate and has changed the way they manage the council. The traditional hierarchy management of the council has been replaced by line department and it causes non-accountability and poor communication. The mercantilist competitive government has created an environment where the representatives are more concern about their status quo of staying in power while their staffs prioritize their individuality rather than serving the public. They tend to value their service based on the dollar value rather than “what best they could do to the public.” Even though a sophisticated IT system is implemented, if the bureaucratic design is poor, the result would still be inefficiency. The greatest charge against the government is inefficiency even though there is no apparent incidence that government is inefficient (Rosen, Bothe, Dhalby & Smith 1999). Shafritz & Russell (2000) argue that in a well design bureaucracy, even though the officials are not well trained in the field of public administration, the system would be very effective. Performance management and the best value have caused the North Tyneside Council to waste more of public resources – from the replacement work to the repurchase of the light bulbs, the poles, and the maintenance. Even the fast track repair project causes the cost of the project to become triple. Performance management requires comparisons but it is difficult to make a comparison because such project has never been installed in other councils, cities, private sectors, or has never been implemented by other councils, cities, private contractors, or the nonprofit organizations. The comparison requirements indeed show myriad of flaws. These flaws are difficult to be solved by the councilors whose main functions are to arrange City’s meetings or as liaisons. Kotter (1996) indicates this change would never work well unless the leaders know and understand what to be achieved. Accountability is difficult because much of the works of the council are conceptualized by private sectors (Green 1996). The involvements of the public or stakeholders add difficulty to the council to manage strategically. Professor Morreale of Walden University once said, “Too much public involvement in public administration would create a tremendous problem in the government.” Another impact of this modernization on the council is the continuous emergence of service fee schemes. The council staff or councilors are more interested in their ambition or may individualization their performance. With the increase of service fee schemes, and the involvement of the councilors as the agents of development or liaisons, the council is becoming vulnerable toward corruption, fraud, and bribery as contractors are competing to promote the gimmick of their highest quality goods and services. Local elites who consider they have greater stake in the council may take this devolution as an opportunity. Austin (2000) says that changing leadership, changing programs, but also brings opportunities. As they are involved in the management and planning through the commission, and in the policy making, they may be subtle in putting pressures on the councilors to bow down to their demand for the transfer of public property and ownership into their care. Changing the council into a supply chain will cause the council to rely heavily on its market partners’ recipes and best practices to guide its management activities. Prolong period of dependency on the stakeholders may eventually diminish local government officials’ capacity to manage the council. The changes of leadership roles and functions have resulted in leadership crisis as stated by Professor Danica. Conclusion Government is a complex system (McTigue 2004; Shafritz & Russell 2000; Greer & Hoogeit 1999). It represents a linkage of interdepartmental, agencies, crown corporations, and state enterprises (Shafritz & Russell 2000), which makes it works as a machine (McTigue 2004). 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