Measuring and Improving Government Performance Joe Grice Office for National Statistics Measuring and Fostering the Progress of Societies OECD World Forum June 2007, Istanbul

The Importance of Measuring Government Output and Performance(1) The contribution to whole economy productivity: –A fifth or more of the economy –As large or larger than manufacturing –Under direct government management

The Importance of Measuring Government Output and Performance(2) Public sector performance: –The ever-present challenge – “more for less” –Demands for greater accountability –Increased urgency because of the ageing population –NB This aspect involves transfers as well as final consumption. Around as big again.

1. Contribution to overall productivity Clear articulation with National Accounts necessary and unavoidable In default of, needs a principled framework Key principle proposed by Atkinson Report to carry over basing measurement on added value, as in the market sector.

Measuring Added Value Quantity dimension. Relatively straightforward: no. of patients treated; no. of pupils taught etc. Quality dimension. Much less straightforward: - traditional national accounting differentiation fine but - needs to be supplemented by reference to outcomes achieved. (Less traditional but key area for advance)

2. Public sector performance: accountability and value for money No one measure can ever summarise performance of complex public services In any case, range of aspects of performance of interest, whatever the aggregate outcome Accessibility/distribution issues of importance. National accounts measures ignore these.

Two Key Tasks: (i) Melding public services performance into measures of well-being Need to combine: rigour of the national accounts with greater freedom to take into account additional considerations not relevant to NAs. But what does the resulting framework look like? Role for SAMs and satellite accounts?

Two Key Tasks: (ii) Harnessing the growing effort Many agencies now working in this field in Europe and around the world: NSIs finance ministries academic/research communities supra-nationals (not least and especially OECD) So how do we coordinate all this work and use it to meet the growing policy demands?

Can we rise to the challenge? If this conference proved a catalyst to taking forward and dealing with the two key tasks, it would be a major advance.