The concept of public value is ensuring government deploys its services, capital and people to maximise the well-being and lifestyle of the community both in the short term and the long term in the most efficient and effective way. It requires business acumen and commercial acumen not to drive lowest cost but to drive maximum community benefit within the affordability constraints that the community expects us to operate. It means spending where it add the most value and looking for efficiencies where there is less value from a cost and non cost perspective.
Demonstrating public value is about government having the legitimacy to spend public money and building trust with the community that government have an evidence based approach to how it allocates resources. It is free from political ideology of left and right politics and focuses on what is best for the community.
It is central to trust the community has in government which I have explained in the table below:
(Customer Centric Evidence Based Approach)
- Allocating resources using an evidenced based approach
- Building infrastructure that meets the needs of the community at large
- Providing services that meets the needs of the community at large
- Keeping rates and taxes to a minimum balancing the need for new and renewed assets
- Maximising efficiency across government – doing more for less
- Ability to cut programs not just add them
- Reducing bureaucracy, back office costs and overheads which do not benefit the community
- Relentless pursuit of continuous improvement
- Performance based approach to recruitment and promotion of government leaders
- Having a customer centric approach to how government does business and goes about things
- Clear performance indicators that drive the right behaviours from government and their service providers
(Politically Based Approach)
- Allocating resources based on political agendas
- Building infrastructure and services that keep a minority happy
- Investing in infrastructure and services that are “feel good” or last minute reactive projects with no justification for public value spend
- Excessive internal processes, bureaucracy, overheads, etc. that don’t add value to outcomes
- Looking for new programs to implement without questioning what old programs are not adding value
- Complacency and doing things the way we have always done them
- Entitlement and job security for the public service which is not aligned to private sector engagement and nurturing the supply chain
- Politically based appointments of government leaders
- Having a master servant approach to the community or letting the ‘squeaky’ wheel drive priorities
- Either no performance indicators or excessive indicators which create confusion or misalignment
Core to the concept of public value is a focus on the customer and all of the community and not just getting influenced by political agendas, special interest groups or squeaky wheels. It is focusing on evidence based approach to decision making, commercial acumen and merit based recruitment and promotion.
For us to achieve public value and build trust between the community and government requires some changes in our current model. Some of which are easy and some of which are more systematic and require a change in mindset from all involved. These include:
- Starting from the top and having our political parties shift towards a merit based approach to selecting candidates who run for office rather than a political approach;
- Establishing independence of long term planning activities around infrastructure, service delivery and resource allocation between the political arm and the public service. Politicians should set the policy settings, but implementation of the policy settings should be done by the public sector on a evidenced based approach through organisations such as Infrastructure Australia (I am a big fan of the Reserve Bank Model for setting interest rates);
- Political independence in the appointment of CEO’s within government and controls which prevent politicians dismissing CEO’s on political grounds;
- Government agencies must require a long term financial plan which is evidenced based, is linked to their strategic plan and fits within sustainability guidelines and indicators set down;
- Business and commercial acumen made a core capability of senior leaders in government and they provided with training, mentoring and coaching to become stronger commercial leaders;
- Customer centric philosophy is adopted in each agencies strategic plan and a core element which underpins new initiatives;
- All new expenditure in capital or operating projects should be subject to a formal business case approval process and must align with the agencies strategic plan;
- Key performance indicators should be set for all government agencies which are linked to community outcomes as well as operational efficiency and these results should be transparent to staff and to the public through a benchmarking website to drive a culture of performance and continuous improvement;
- A more collaborative approach adopted to procurement and engagement with the private sector to encourage more efficient and outcome focused contracting models that save money and time for all parties involved;
- Government leaders are rewarded and promoted based on performance not their political skills;
- Individual performance indicators and performance objectives set for government leaders which are linked to community outcomes and regularly reviewed to promote accountability; and
- Service reviews undertaken on regular basis to identify alignment of service scope and performance to community expectations and also continuous improvement in efficiency.
One of the challenges with the concept of public value is that evidence based decision making, business acumen and merit based performance is often unfairly associated with economic rationalism. It also drives accountability which many current leaders would like to avoid.
In my opinion evidence based decision making, business acumen and merit based performance is very much about social outcomes and community well-being but is focused on delivering results in these areas and being smart where we invest resources. It may not save any money but it should drive greater public benefit from rates and taxes. Public value concept should leverage evidence based approach to decision making, business acumen and performance based approach to drive better healthcare, infrastructure, law enforcement, safety, social outcomes, education and well-being.
To be fair, many agencies are trying to drive this and there is an increasing focus on public value in government. However, it is not consistently applied across each government sector or across different levels of government. There is a lot that needs to be done if we are to leave our community in a better place for kids than what we have today.