Government reform achieves firmer footing

Overning in developed countries is getting tougher. Demands from aging populations for better social services are on a collision course with budgetary constraints. Information technology advances are forcing public agencies to go digital and offer a raft of new services. All this at a time when governments are under pressure to tax less.

A common response has been to seek structural reforms and greater efficiency by turning to the private sector for ideas, assistance and capital. After more than a decade of experimentation, this reform is and entering a new phase. Outsourcing is becoming more innovative; contracts are becoming bigger and more complex to manage; and the private sector relationship with government is evolving from supplier to partner.

Despite remarkable progress, publicsector reform in many developed countries remains ad hoc. Given the multitude of demands and choices facing governments, the time is right to put reform on a firmer foundation with a more integrated approach.

Most governments in the industrialized world appear to be heading toward a smaller and leaner organizational model. That is a key message of Vision 2010: Forging Tomorrow's Public Private Partnerships, a new study published by the Economist Intelligence Unit, in co-operation with Andersen Consulting.

In developing a vision, the focus must be on citizens and their requirements, pushing governments to focus on their core purpose - policy making - and to determine to what extent government should provide services. Unlike policy making, some services can be outsourced to the private sector, where they can often be done better and more inexpensively But a vision for public sector reform should not be driven by cost savings.

First and foremost, reform should be based upon an understanding of what constitutes "core government" - those functions that only government can and must continue to perform. Most would agree that this should include frontline services, such as defense, law enforcement, immigration/ border control, central banking, financial markets regulation, and diplomacy.

The second prerequisite is that the vision for meaningful public sector reform take into account government's core competencies. Every government agency must manage debts, and each dedicates resources to this function, which is essentially the same across agencies. Therefore, it is reasonable to believe that one core group could manage debt collection for all agencies.

The third element in defining a vision is balance. Reform objectives inspired largely by the corporate world - such as improved efficiencies and customer-focus - must be weighed against traditional public sector values, such as accountability, probity@ public service, and fairness.

The fourth element involves interaction of horizontal, shared-services agencies with vertical single-focused agencies. After the vision comes the strategic plan: a detailed roadmap for reaching the government's chosen destination. The plan's key objective is to integrate public agency reform activities, which have been fragmented as a result of government decentralization scenario.

A strategic plan would not undo individual agency successes or reverse the trend toward decentralization. Rather, it would recognize and applaud achievements, striking a balance between central government guidance and agency autonomy.

Yet visions and strategic plans lack credibility if they do not rest on a firm foundation. One way of building credibility is to ground visions In reality, taking into account government practices, each country's conditions, and agency advice.

A coherent vision and strategic plan also would guide government agencies on how to use technology most effectively, how to retain their best people, and how to cope with uncertainty The best practices within individual agencies could be transferred to other agencies.

By David R. Hunter

The author is based in Sydney, Australia as the global managing partner of Andersen Consulting's government practice.

Copyright Plesman Publications Ltd. Jan 2000
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