To what extent has the public sector become more or less accountable as a result of the changes since 1980s in the way in which the public sector is organised and managed?
The following will discuss whether the public sector has become more or less accountable as a result of changes in its organisation and management since the 1980s. There have been at face value some profound changes to the public sector since the 1980s yet whether those changes have had a great impact on the public sector’s accountability, or have been merely cosmetic changes will be examined below. As will be outlined below, the public sector was greatly affected by privatisation, de-regularisation, or greater central government scrutiny, as well as changes in the ways in which it was organised and managed. The differences and similarities in the methods in which both Conservative and Labour governments have wanted to change the way the public sector is organised and managed has been critical for the levels of accountability within the various parts of the public sector.
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The public sector accounts for a major share of the economy, the majority of government spending, alongside the bulk of the provision of public goods and services to the majority of the British population. The public sector had a tradition of not being readily accountable to the people it supposedly served, even though it could be held to account by government ministers and Parliament (Comfort, 1993 p. 491). The public sector was widely seen as being provider-centred rather than citizen-centred, an attitude, that still persists even if the emphasis of public sector organisation and management has changed (Watmore, 2005 p. 32). Since the 1980s, the aim of successive governments was to make the civil service as efficient as it is politically impartial. Central government would also focus its attention on local councils, which were responsible for a quarter of public sector spending and service provision. Councils were also accountable to the electorate, facing local elections every year besides being accountable to central government their performance and reliant on central funding. However, local councils have the ability to raise their own revenue from local taxation which is crucial for their organisation and management, whilst causing conflict or debates with central government. Ultimately, local councils would believe that their accountability to central government takes precedence to their accountability to the local electorate. After all, central government can abolish any council it wants, as Margaret Thatcher did (Savage and Atkinson, 2001 p.17).
In 1979, the public sector was larger in size and scope than at present. The public sector did not just comprise of government departments, the civil service, or the services provided by central and local government. The public sector also included nationalised industries such as the railways, coal and steel, as well as ailing private sector firms such as British Leyland that were nationalised to keep people employed and factories open. Margaret Thatcher came to power with the intention of radically altering Britain’s economy and society, alterations that reshaped the public sector. Thus, changing the organisation and management of those parts of the public sector that unlike British Telecommunications that could not be quickly privatised, or those parts that unlike the coal industry were not left to go into extinction. The Thatcher government’s adoption of neo-liberal monetarist economic policies was intended to change the ethos and management of the public sector almost as much it was intended to change the private sector (Fisher, Denver & Benyon, 2003 pp 7 –8).
Thatcherism could not dismantle the public sector, nor could it reverse the welfare state. However, the parts of the public that could not be privatised were opened to internal markets to make their organisation and management more efficient, if not more accountable (Jenkins, Independent, 2 April 1987). The enterprises that left the public sector became less accountable to the general public through Parliament, although their organisation and management became more accountable to their new shareholders. By the time the Conservatives left office in 1997, public owned enterprises produced only 2 % of gross domestic product. That compares to 12% in 1979 (Bannock, Baxter & Davis, 2003 p. 309). The remnants of the public sector would become more accountable by spending budgets more effectively, reducing waste and error whilst cutting unnecessary expenditure. Government departments were set more stringent budgets, whilst both Conservative and New Labour governments have set performance standards for the public sector to achieve to improve efficiency if not directly increasing or decreasing accountability. The Conservatives wished to make high spending councils more submissive to central government and were rate capped if they refused to curtail their spending. Organisation and management had to be changed to avert the punishment from Westminster rather than being more accountable to the public (Coxall, Robbins & Leach, 2003, p. 43).
Local government was probably the segment of the public sector that has had its accountability increase the most since the 1980s. Higher unemployment and the perceived unpopularity of cutting spending on the NHS meant that welfare spending could not be cut as much as Thatcher had intended. On the other hand, the Conservatives were able to maintain tight control of local government. Funding was reduced or made conditional on working “with other public and private agencies” (Stoker, 1999 p. 1). Conversely, whilst elected local authorities were made more accountable to central government, more functions were being transferred to unelected bodies known as quangos. These quangos were spending £ 40 billion of public money annually by 1996 with little or no accountability compared to local government or central government departments (Fisher, Denver & Benyon, 2003 p. 263). Councils lost some of their greatest capital assets with the increased sales of councils during the 1980s. Thatcher had promoted these sales to increase the number of homeowners and reduce the size of the public sector without much concern about the dwindling supply of affordable housing for the poorest members of society. Conservative success in promoting home ownership through selling off council houses was shown by the 15 % increase between 1979 and 1997 (Coxall, Robbins & Leach, 2003 p. 42).
Councils were made more accountable for the way the remaining council houses were organised and managed, even though they had far less control of budgets, sales of council housing, and the proceeds of those sales than ever before. The Conservatives were also keen in promoting the transfer of council housing to social landlords and housing associations. Since 1997, New Labour has not tried to reverse any of those transfers of housing stock back into the public sector. In fact, New Labour has tried to expand joint public and private schemes in its efforts to increase service provision and efficiency rather than accountability (Fisher, Denver & Benyon, 2003 p. 272).
Accountability within the public sector for the way it is organised and managed has increased since the 1980s due to the increase in inspection and intervention from central government. The Conservatives were as enthusiastic about inspecting schools, councils and hospitals as they about greater consumer or citizen choice, market approaches and selling off what public sector assets they could. Whilst individual schools and hospitals were given greater opportunities for self-management, they were also faced with meeting performance targets, and more frequent inspections. Not only did the government want greater accountability; Parliament increased its ability to scrutinise government departments and the public sector through the expansion of the select committee system. These committees have been able to uncover much that both Conservative and New Labour government ministers would have liked to have left unknown, whilst gaining greater information from the public sector. Ministers have wanted more information from public sector management when going before select committees, increasing the pressure for public sector organisation and management to be fully accountable to the minister (Coxall, Robbins & Leach, 2003 p. 245). New Labour has extended the roles and remits of inspectorates such as Ofsted, the Audit Commission and the Benefit Fraud Inspectorate. All these inspectorates have increased the accountability of public sector organisation and management, often in its attempts to meet or exceed government targets (Seldon & Kavanagh, 2005 p. 77). New Labour put most of its inspectorates together under the auspices of the Office of the Deputy Prime Minister and the Department of Work and Pensions to assess local councils under the Comprehensive Performance Assessment scheme, to make them accountable for their failings or to praise them for their successes. Poor performing councils can face greater levels of inspection whilst the best performing councils can have their inspections reduced. The Benefit Fraud Inspectorate has had considerable success in making Housing Benefit and Council Tax Benefit more effective and councils more accountable (DWP, 2003 pp. 38-9).
The 1980s not only witnessed the growth of inspection and scrutiny, it also witnessed the emergence of New Public Management to make public sector administrators more efficient by forcing them to work along private sector lines rather than more traditional public sector ones. Operating along the principles of the market economy did not make public sector organisation and management more accountable, hence the increasing use of inspectorates and nation wide performance standards (Davis, 2005 p. 11). Advances in IT have provided the basis for the public sector to improve its organisation and management, and allow for the collection of greater levels of management information for its various scrutinisers. Of course, more advanced IT allows the public sector to become citizen focused and offers the possibility of decentralised decision-making and even online benefit claims or queries from the general public. Improved IT and technology can raise the public expectation of better services. The NHS for instance has to ration new treatments that everybody wants as it has a limited budget. Accountability has to be amended to adapt to changing circumstances and technologies. New Labour has attempted to make both private and public sector companies and organisations more accountable for the electronic data they hold through the Freedom of Information Act and Data Protection Act (Watmore, 2005 p.33). The government has another motivation for developing better IT within the public sector, it can reduce the infrastructure, resources, and staff needed to provide public services. Better management of resources has allowed the Treasury to gain £6 billion a year between 1999 and 2004 from the disposal of public sector assets. Gordon Brown also believes that greater efficiency means that 84,000 civil servants were no longer needed, a decision that provoked anger from public sector trade unions (Davies, 2005 p.11; Simpson, 2005 p. 14).
Therefore, it can be successfully argued that public sector organisation and management has become increasingly accountable since the 1980s. The Thatcher and Major governments made the public sector more accountable, or at least the parts of it that could not be privatised. Thatcher’s changes were not primarily concerned with promoting accountability, that was just a consequence of her aim of reducing the public sector, curtailing trade union power and increasing control over local councils. The Major government did introduce the Citizens Charter to make public service providers more accountable to the public. New Labour has continued the trend of increasing the accountability of public sector organisation and management, although more for reasons of efficiency than any ideological attack on the public sector. The public sector has become increasingly accountable to central government, although its accountability to the general public is less obvious despite legislation such as the Data Protection Act, which gives the public greater rights to information and making complaints. The culture within the public sector has also changed to some extent from being provider-centred to being citizen-centred.
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Department for Work and Pensions (2003) – Departmental Report 2003, The Stationary Office, London
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Jenkins P, “Waking Up From the Long Communist Nightmare”, Independent, 2 April 1987
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