The UK Experience by Malcolm Morley*
In 2009 it is vital that the whole of the public sector looks to work together to ensure that it delivers value for the communities that it serves.
The starting point for this approach is for all public sector organisations to ask themselves two fundamental questions:
- improving community
value – what can we, acting
individually and in
partnership, do to improve
the quality of life for
individuals and the wellbeing
within the local communities
that we serve? - improving economic value –
what can we, acting
individually and in
partnership, do to improve
economic value from our
activities and investments
to facilitate/support
improvements in local
community value?
As is often the case when considering public sector investment, there is sometimes a conflict between the desirability of pursuing economic value and the need to be locally responsive to create community value. This is an issue that needs to be explored and resolved with recognition that in the service sector, whether in the private or public sectors, value is created at the point of contact between the customer and the service provider.
It is argued that large scale activity brings the potential to improve economic value through unit cost reduction and volume benefits from procurement. While this can be true for back office transactional services or commodity procurement it is not the case for frontline services at the interface with customers.
The standardisation of frontline service provision specifications to accommodate volume related economic benefits militates against the personalisation of services at the interface with the customer and the ability to respond to the diversity within/between communities. It delivers economic but not community value.
Community value creation is about the ability to recognise and to respond effectively to the diversity of needs between/within communities. It requires the engagement of local communities in the development of strategies, priorities, investment plans and performance review. It also requires the ability of public sector organisations to work synergistically in partnership to develop differentiated resource investment and service commissioning/delivery at the local level.
The challenge, therefore, is for improvements in economic value to be created at the local level while ensuring that community value is created in the context of the local community through personalisation and differential responses to diversity between/within communities. This can only be realised through a more sophisticated approach to public sector investment and performance.
This approach requires a fundamental review of the roles of councils and other public sector organisations in service provision and the relationships between national, regional and local public sector organisations.
It is likely that the emphasis in 2009 will increasingly be on models of service commissioning with options for different models of service provision being explored.
Councils in England have led the way in delivering efficiency gains in the public sector. They now need to lead the way in 2009 to move beyond individual organisational economic value creation to sectorwide economic and community value creation.
*Malcolm Morley is Chief Executive of Harlow District Council and can be contacted via the Editor, email info@lgfocus.com.au The views expressed in
this article are not necessarily those of
his employer.
