NPM and accountability

Accountability expresses the simple idea that where one person acts on behalf of another, he or she should be prepared to ‘account for’ his or her activities.^[1199] For the purposes of analysis, it is usually best to think in terms of ‘mechanisms’ of account­ability—the practical manifestation of accountability—rather than accountability as a desirable but vague goal.

An accountability mechanism should generally involve four components: setting standards against which performance can be judged; collecting information about performance; judging the performance against the agreed standards; and applying any consequences such as incentives for good performance or sanctions for poor performance.^[1200] There are many factors involved in creating a successful account­ability mechanism. Firstly, and most obviously, the respective roles of the caller to account and the body being called to account must be clearly defined. Otherwise, the parties may become distracted by disputes about the operation of the account­ability mechanism itself. Secondly, the standards set must be realistic: otherwise the person discharging the responsibility may ignore them or seek strategies for ‘creative compliance'.^[1201] Thirdly, it is important that the person calling to account is more powerful than the person being called to account. If the sanctions for a poor performance are weak, the accountability mechanism will not work effectively.^[1202]

Accountability mechanisms can be grouped in various ways. A popular classifica­tion focuses on the nature of the standards being applied.^[1203] This divides accountability mechanisms into categories such as legal, financial or political. So, for example, audit is a financial accountability mechanism, concerned with the efficient use of the public body's resources, whereas judicial review is a legal accountability mechanism con­cerned with the lawfulness of the public body's actions.

This chapter is particularly concerned with the accountability of those at the ‘front line' of public service delivery, so for our purposes a more helpful approach is to divide accountability mechanisms into those which are ‘internal' and ‘external' to the public body.^[1204] ‘Internal' mechanisms are those that enable people at the top of the public body in question (senior managers, councillors, ministers and so on) to call to account those who are directly involved in service delivery at the ‘front-line'. ‘External' mechanisms are those that enable interested parties outside the public body (MPs, citizens, service users) to call it to account.

External mechanisms can be sub-divided into two groups according to whether or not they are dependent on internal mechanisms for their effectiveness. So, for example, a complaints procedure for aggrieved service users allows members of the public to call the service provider to account for its performance directly, whereas when an MP asks the minister a question in Parliament, the answer will be fed to the minister through internal accountability mechanisms. It is sometimes tempting to suggest that failures in internal accountability mechanisms can be offset by direct external accountability from the service provider to service users: through com­plaints procedures, consultation exercises and citizens' panels, for example. Indeed, the idea of accountability up through the organizational hierarchy to ministers or councillors can sound rather old-fashioned. Nevertheless, it is an important aspect of the democratic governance of public services and should enable a broader perspective than just that of service users to be brought to bear on the evaluation of those services.

The difficulties surrounding NPM and direct external accountability mechanisms have been well-documented. A key feature of NPM was the more-or-less enthusiastic contracting out of public services. But once a service has been contracted out, it can often be unclear whether the contractor is subject to judicial review or Human Rights Act review at the suit of an aggrieved service user.^[1205] Where a service is pro­vided in-house by a public body (in the traditional hierarchical way that prevailed prior to the emergence of NPM) public law scrutiny is, of course, always available.

However, from the perspective of internal accountability, NPM could be regarded— up to a point at least—as a positive development.^[1210] The shift from hierarchical management structures to contractual or pseudo-contractual relationships arguably introduced a more effective mechanism of accountability. The contract offered the potential to state in a clear way what standards were expected of the provider (an important starting-point for any accountability mechanism) both in terms of the contract price or budget for the services, and the quality of performance. Mechanisms for obtaining information from the contractor about performance could be specified in the contract. The prospect of deductions from the contract price offered new leverage for the public body in terms of ensuring compliance. And, in extreme circumstances, the possibility of losing the contract altogether to a competitor could act as a motivating force, although the extent to which com­petitive markets have emerged in practice for public services has varied consider­ably between sectors. In conceptual terms, the contractual or pseudo-contractual relationship slotted into the place vacated by the managerial hierarchy, but with potential advantages in terms of clarity and enforceability.

Of course, there were problems. Any division of roles creates opportunities for blurred boundaries and the shifting of blame from one party to the other. In the central government context, one of the best known examples of this was the well-documented dispute between the Home Secretary and the head of the Prison Service Agency as to who was responsible for a series of prison escapes.^[1211] The Home Secretary blamed the agency head as the person with operational responsibility; the agency head blamed the government for failing to provide sufficient resources. This was exacerbated by the government’s initial promotion of a very market-orientated version of NPM without recognizing that public service delivery contracts might not share all the characteristics of a contract for the supply of paper-clips.^[1212] Public bodies were encouraged to keep their suppliers at arm’s length, and to assume that competition for contracts would offer the main mechanism for ensuring good performance. In practice, contracts for public service delivery are highly complex and are likely to be awarded for relatively long periods of time. They are ‘relational’, not ‘discrete’.^[1213] Over time, it was recognized that public bodies needed to invest in contract management and in building good relationships with their contractors as part of the ongoing contractual accountability process.^[1214] Where problems arose, it was seen as more important to work together to find solutions, instead of trying to blame each other for what had happened.

With these modifications, it is possible to give a cautiously optimistic assessment of the effect of NPM on internal accountability and, indirectly, on some aspects of external accountability. The obvious culture clash between the public sector and the market was mitigated, but some of the advantages of contract over man­agerial hierarchy were retained. Although purchaser/provider splits inevitably involve some blurred boundaries, it was reasonably clear who was responsible for what. And public bodies were in charge of public services: they could specify what they wanted and they could get rid of poorly-performing contractors. Against this backdrop, we are now in a position to examine some of the latest trends in public service delivery.

C.