Creating Public Value

Creating Public Value

Governments around the world are facing intense pressure to deliver better public services while taxpayers, understandably, do not want to pay more tax. How can leaders respond to this bind? Sir Michael Barber outlines the UK’s Public Value Framework and how it focuses spending and performance on outputs.

Enhancing public sector productivity

To borrow a judicious phrase from Prime Minister Theresa May: focus on ‘the good that government can do’.

Take the United Kingdom: it spends over £800 billion every year, around 40% of GDP. If the government were able to maximise the ‘good’ this sum delivered, if public services were consistently high quality, if markets were always effectively regulated, if opportunities for innovation were more often seized, if risks and threats were well-managed, then social mobility would be enhanced, opportunity would be expanded, the country as a whole would be more productive, and many more people would lead fulfilling and productive lives.

And these gains could be delivered without raising or spending a single extra tax pound.

Inputs vs outcomes

Among other factors, the Treasury has historically placed greater emphasis on inputs rather than outcomes. Ministers’ performance is judged on the size of the budget they negotiate, rather than how much they deliver. Civil servants get bigger rewards and more status for managing more people or bigger budgets. Departments rarely, if ever, go to the Treasury with ideas for spending less, even if, through innovation, doing so could improve outcomes.

Shifting to an outcomes-based budgeting culture

Of course, it is right that the Treasury should count the pennies—someone has to—but that should surely not be its only focus, even in hard times.

Sir Michael Barber's review for the UK Treasury, published in 2017, was undertaken explicitly to try to address these longstanding flaws. It had been commissioned precisely because Treasury ministers and officials, to their credit, recognised that radical change was needed. Since then, the National Audit Office has added its powerful voice to the demand for greater focus on, and clarity about, outcomes as well as inputs.

While one report cannot solve profound historic problems at a stroke, it does propose clear practical steps in the required direction of travel.