1. Nottingham Trent University Alternative Futures Conference 2014 The strategic positioning of Public Value in the theory, policy and practise of public management in England. Pete Murphy Nottingham Business School Public Management and Governance Research Group 26th February 2014

2. Literature Review Williams and Shearer (2011) “the field of public value is marked by a shortage of empirical research…. ……while others have noted the confusions around the multiple interpretations of the concept (Crabtree 2004 Morrell 2009)”….. ……… “there is as yet little concrete evidence to suggest that Public Value can be operationalized”,

3. Academic background Public Services in the UK, America, Australia and Europe have historically been predominantly viewed and analysed in academic literature through the theoretical prisms of the – Traditional Principal Agent Theory; – New Public Management Theory (NPM), – Public Choice Theory – Institutional Theories With the recession and the new coalition governments’ avowed preference for neo-liberal and market solutions to public service reform and delivery, the NPM perspective in particular was expected to dominate the development of public policy, service delivery and public management.

4. Why we need to revisit Public Value To demonstrate its explanatory power and relevance ‘Localism’; inadequate new performance management frameworks; NHS reforms and the coalition governments’ generic proposals for public service reform, all demonstrate that an alternative interpretations or explanation of the development of policy and practice in UK public services over the last sixteen years is needed. Applying a public value perspective can also explain some of the widening differences in approach within the UK itself, as devolved governments in Wales and Scotland are developing very distinctive alternative approaches to the government in Whitehall both in terms of public policy and management and in the improvement of public services. The use and application of Public Value concepts may be anathema to Coalition Whitehall but in the rest of the world, academics policy makers and public managers continue to develop both theory and practice particularly as austerity and reactionary cut-back management is replaced by more long term strategic thinking.

5. 2013 Alternative Future -Applied this type of analysis to the new Health and Wellbeing Boards under the 2012 Act.

6. 2013 Alternative futures - Applied this type of analysis to the development of the 2012 National Framework for Fire and Rescue Services We concluded they were: Endangering the public more than they should Sub-optimizing emergency service provision Compromising the long term provision of economic, efficient and effective emergency services, and Confusing the public and the emergency services

7. Policy confusions - alternative conceptions of politics and public managers explanatory approaches Leaving aside Institutionalism there are 3 Broad indicative approaches A spectrum that ranges from a fairly straightforward relationship of top down influence between politician and public managers to greater reciprocity and complexity in the relationship. Principal Agent Theory Public Choice Theory New Public Service Theory Which one best fits the constitutional settlement or situation in which a particular local public service operates – compare China, USA, UK.

8. Principal-Agent Theory Regards governance structures as simultaneously enabling and constraining the actions of public managers. Politicians create static and bureaucratic governance structures in a top- down fashion and hold managers accountable for mandated results. Politicians, as primary drivers of change, ultimately control public managers as agents through constitutional powers such as oversight, appointment, budgeting and legislation. Democracy takes the form of governance structures that ensure public managers actions reflect the mandates of elected officials.

9. Examples of the application of Principal Agent Theory ‘Process’ services delivery by Local Authorities Electoral Services, delivery of Housing and Council Tax Benefit ‘Regulatory’ services e.g. Building Control, Trading Standards, Health and Safety, Food and Hygiene Standards.

10. New Public Management or Public Choice Theory This assumes the need for a more entrepreneurial approach to governance – emulating the responsiveness of the private sector. Highlights the need for efficient and effective performance, although this can also encompass equity, responsiveness and accountability. Governance structures are the product of on-going competition and compromise and the public interest is no more than an aggregation of individual self interest. Public managers are not mandated but rather constrained, supported or vetoed by elected representatives through a complex process of negotiation. However the flexibility can conflict with popular preferences about the provision of services and changing demands of accountability to the public

11. New Public Management From studies of policy to studies of management with quantitative methods of appraisal and performance management rather than qualitative’ judgement and experienced based Hierarchies were breaking into semi-autonomous delivery units with outsourcing and incentivised managers moving towards a marketing approach rather than producer dominated. Many issues but one key issue was the failure to differentiate the improved tools and techniques of ‘management ’(applicable and improvable in any theoretical paradigm) from differences in the situational parameters (constitutional, political and/or organisational) the policy issues or agenda and the espoused values and interests of the public services being studied. What is managerialism, what is public management, what is private sector management and what is third sector management? (Jones)

12. Public Value and Public Service Theory Drawing on notions of democratic citizenship, community and civil society it focuses on governance with citizens at the centre - citizen centred public services not provider centred. Public managers have to help build a shared notion of the public interest, and not merely aggregate individual preferences. Policies and programmes that effectively meet public needs are achieved through collective and collaborative processes that emphasis the importance of citizens over customers and people over productivity. Public managers are accountable to a much wider set of demands than just the market or local politicians – but must also respond to “statutory and constitutional law, community values, political norms, professional standards and citizens interests”.

13. 5 Overlapping discourses Differentiating between Best Value and Public Value. Joined up and Integrated policy and delivery. Operationalizing Public Value in Performance Management Regimes at local and national levels. The evidential base and the commitment to evidence based policy making. Population, area or community based service delivery.

14. Differentiating Best Value and Public Value Best Value A duty to achieve best value for public expenditure and help facilitate service improvement in terms of economy, efficiency effectiveness It is measured in terms of the objective of the policy, service or target via the three e’s. It does not set objectives per see, (although its introduction was confusingly complemented by national targets and later requiring community plans that did set objectives) Public Value The creation of value through the expenditure of public resources for the public in an area, community or population, (whether measured individually or collectively). PV is what value has public expenditure created to either the general public and/or targeted (and definable) sections of the general public in an area or community or (in public health terms) a ‘population’ It includes Social Returns on Investment as well as the Financial Returns on Investment

15. Joined up and Integrated Policy and Delivery PV concepts emerged in central government in 2001/02 in DTLR and Cabinet Office and where demonstratively evident in central/local multiple agency strategies from this time Articulated and enshrined in performance management regimes with their public reporting arrangements. Creating public value focussed on outcomes and long term entrenched community problems not amenable to single agency amelioration. Its pursuit also created service, organizational, sector, and/or systemic innovations that were widely disseminated through the improvement infrastructure and its networks.

16. Operationalizing Public Value Public Value concepts were increasingly incorporated in the Performance Management Regimes for locally delivered public services (Comprehensive Performance Assessments, Comprehensive Area Assessments, World Class Commissioning) These regimes and their national and local reports and databases, provide the empirical evidence for the creation of Public Value as well as its use conceptually. In order to optimise the creation of public value and to stimulate service, organizational, sector and cross sector innovation; increasingly mandated inter-agency co-operation or collaboration and encouraged, supported by financial ‘rewards’ operational flexibility through reductions in regulations and proactively piloting and ‘pathfinding’ of new initiatives. A parallel process of understanding and operationalization was evident in central government with the development of Comprehensive Spending Reviews and Public Service Agreements.

17. The evidential base and commitment to ‘evidenced based policy making and performance appraisal’ Publicly available ‘quality assured’ data and information, was an integral part of demonstrating the creation of public value and public service innovation. A commitment to ‘evidenced based policy making’ (as opposed to policy based evidence making). Real time, remotely accessible, quality assured, data and intelligence from multiple public organisations freely available to the public and to external scrutiny. Mandated collaborations and partnerships (CDRPs Childrens’ Trusts LAAs) had the creation of public value or mitigation of adverse community impacts as core objectives (with demonstrable and measurable targets to facilitate operationalization on the ground and public reporting of their outcomes). Economy, efficiency and effectiveness were joined by equity and sustainability.

18. Population, area or community based service delivery Multiple and several statutory responsibilities reintroduced from 1998 CDRPs to LAAs and MAAs (in 2013 Scotlands’ Single Outcome Agreements). Public Health and Health Inequalities since the Black Report to the 2005 and 2008 WHO and the Marmot Report of 2010. Attainment levels in education; levels of crime and disorder in criminal justice. Needed to demonstrate in measurable terms both objectives (and targets) and publically available evidence bases – Observatories, LAA tracker; Joint Strategic Needs Assessments

19. Conclusions Reconciliation of the interdependencies and imperatives of bureaucracy and democracy frames or facilitates the strategic positioning and operational environments of public services and potential and opportunity for creating Public Value. Conceptualization between 2001-2010 – were able to demonstrable add value or mitigate adverse impacts on populations, communities, areas (often local authority boundaries) or identifiable groups of citizens through the use of public resources. Evidence that public value and public service innovation was achieved is in the reports of the performance management regimes and the multi – agency agreements that characterised the era. The robustness and of the concepts explanatory power and its enduring use is shown by an analysis of the establishment of Health and Wellbeing Boards (Murphy 2013, 2014) and my the recent Single Outcome Agreements system in Scotland (Piper 2013).

20. The 2012 Health and Social Care Act From white paper to enactment An example of theoretical confusion and small ‘p’ politics From the July 2010 White Paper to the Listening Exercise to the draft Bill and finally to the Act to be implemented in April 2013 The shifting influence over the agenda – changing fortunes of Alan Lansley and Sir David Nicholson From new public management in the White paper to new public service theory in the Act Some key milestones along the journey

21. Key Tipping Points or Developmental Breakthroughs in Health and Social Care The requirement to achieve Best Value, facilitate continuous improvement and enable collaborative working (1999 Health Act and Local Government Act) CPA, and Standards for Better Health; inclusion of the Health “block” in LAA pilots (2003) and the Duty to Cooperate in Community Strategies and LAAs (2007 Act). The increasing awareness of public health issues, the adoption of the World Health Organisation “social” or “wider” determinants of health and the health inequalities agenda (2005 onwards The 2008 Quality Innovation Productivity and Prevention challenge issued by Department of Health to the NHS and the Nicholson Challenge in 2010. The Health and Social Care Act 2012 NHS reform and Public Health England.

22. Health and Social Care Act 2012 Explanatory Developmental Model