Managing performance within a

17 Pages·2015·0.25 MB·English

by  Felicity Matthews

Managing performance within a ‘decentralised’ state – the
logic of targetry and the feasibility of target-free delivery

Paper prepared for the 65th Political Studies Association Annual
International Conference

30 March – 1 April 2015

Sheffield Town Hall and City Hall

Dr Felicity Matthews
[email protected]

Senior Lecturer
Department of Politics
University of Sheffield

***Draft in progress – please do not quote or cite without permission***

Since 2010, the Coalition Government has sought to pursue an agenda of localism,
based on the devolving of power down to local authorities and the communities that
they serve (HM Government, 2010, p. 11). A key aspect of the localism agenda has
been the abolition of the layers of targetry, audit and performance management that
had proliferated under the previous Labour Governments; and the 2010
Comprehensive Spending Review stated the Coalition’s belief that ‘attempts to micro-
manage delivery from the centre’ were ‘both wrong and doomed to fail’ (Cm. 7942,
2010, p. 34). However at the same time, the Coalition introduced a deep and wide-
ranging programme spending cuts across the public sector; and in this respect the
decision to jettison the machinery of targetry can be seen as not just a principled
commitment to the empowerment of front-line service providers, but also as a
pragmatic attempt to obscure the deleterious impact of the cuts upon service
provision.

Reflecting upon such tensions, this paper will seek to dig beneath the rhetoric that
surrounds the use of targerty in order to explore the utility of target-based
performance management in the delivery of effective and responsive public services
within a delivery landscape that is at once organisationally fragmented and
financially squeezed. In doing so, it considers the extent to which public service
delivery through the use of centrally mandated targets embodies an overly top-down,
interventionist approach to governing, and therefore asks whether such instruments
are politically feasible or desirable in an age of austerity. To do so, the paper
proceeds as follows. It commences with synopsis of the academic literature on the
management of public sector performance in order to highlight the rationale and
risks associated of target-based regimes. It then provides an overview of the previous
Labour Governments’ approach to performance management, setting out the range of
reporting mechanisms that developed, and in doing so, providing the context for the
subsequent changes that followed under the Coalition. The paper then moves on to
examine the logic of the Coalition’s localism agenda, the extent to which the rhetoric
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of decentralisation has been accompanied by a relaxation of reporting criteria.
Finally, the paper concludes by considering the implications of the Coalition’s
experiment with localism for our understanding of the role and utility of performance
management as a tool of public service delivery, and the directions in which future
research could travel.

Dials, tin openers and governance-by-numbers

Performance management has been described as one of the ‘most widespread
international trends in public management’ (Pollitt, 2006, p. 25); and whilst ‘the
definition of performance in a public sector organization is often elusive’, this ‘has
not prevented governments throughout the world from publishing an increasing
volume of data pertaining to various aspects of public sector performance’ (Smith,
1995, p. 278). In different jurisdictions, different elements of performance have been
measured, including processes, procedures; outputs; efficiency; outcomes; and,
various permeations thereof (Talbot, 2008, p. 1570). In turn, performance
management frameworks have been established to serve a range of purposes
including internal performance management and policy adjustment; external
oversight and regulation; citizen engagement and informed choice; and (electoral)
accountability through punishment and reward (James and Wilson, 2010, p. 10).
More broadly, performance management has been seen as ‘among the most
important tools by which governments structure relationships, state values, and
allocate resources with employees, third-party providers, and the public’ (Moynihan
et al, 2010, 141). The underlying rationale of performance management is therefore
one of ‘control’, and a distinction can be drawn between external political control and
internal managerial control (Smith, 1995, p. 278). It is clear, therefore, that the
measurement of public sector performance serves the interests multiple stakeholders,
including politicians; central government departments and agencies; auditors and
regulators; public service managers; and, interest groups and user groups (Jackson,
2011, p. 14; see also Hood and Dixon, 2010, for a detailed discussion of politicians’
payoffs).

Nonetheless, despite the apparent enthusiasm with which performance management
has been embraced, it has been subject to criticism from practitioners and observers
alike; and it is possible to identify different degrees of buy-in between the ‘true
believers’, ‘pragmatic sceptics’ and ‘active doubters’ (Norman, 2002), which both
reflects and fuels the challenges associated with measuring the performance of the
public sector. This synopsis will therefore delineate the core challenges identified
within the academic literature, focusing on the way in which targets are set and
measured and the perverse consequences in which this can result.

Many aspects of public sector performance management have travelled from the
private sector, and the pursuit of performance measurement is bound up more
broadly with the pursuit of rational efficiency associated with New Public
Management. A long-standing assumption within the management literature is that
targets are unlikely to be achieved if they are the subject of top-down imposition (e.g.
Drucker, 1954; Latham and Yukl, 1975; Likierman, 1993; Locke and Latham 2002).
In turn, It is widely accepted a smaller range of ‘SMART’ (specific, measurable,
attributable, realistic, timed) targets is more likely to provide service providers with a
clearer focus and sense of priority; and, conversely, that a groaning proliferation of
targets is likely to overload service providers and undermine attempts at
prioritisation (e.g. Chun and Rayney, 2005; Boyne and Chen, 2007). Yet whilst the
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language of performance management may assume an air of rational efficiency, the
way in which priorities are articulated and measured has a direct bearing on their
chances of success. Even the act of defining an aspect of service as a target priority is
fraught with risks, including the neglect of non-priority areas and the demoralisation
of staff that are not engaged in the delivery of target priorities. As Moynihan et al
explain, ‘in an environment where some goals and values are explicitly recognized as
important and essential to the organizational mission while other values are largely
ignored or denigrated as procedural barriers to performance, it is entirely predictable
that organizational actors will exert effort toward what is deemed culturally
appropriate’ (Moynihan et al, 2011, p. 150).

Moreover, in the pursuit of quantification, the risks exists that the focus shifts
towards the measurable at the expense of the important, resulting in a ‘naïve goal
oriented model’ which ‘not only defines and therefore constrains what is measured’
but ‘also ignores the long-established understanding that public sector goals are
ambiguous, multiple, complex and frequently in conflict with one another’ (Jackson,
2011, p. 15). As such, several scholars have questioned whether it is even possible to
measure public service performance with any meaningful degree of accuracy.
Jackson, for example, suggests that a distinction should be drawn between
performance measures and performance indicators, as whilst the former is
precise and akin to reading a number off a dial, it is the imprecise signals of
performance indicators that constitute the majority of information available about
public service performance (Jackson, 1988). In a similar vein, Carter el al suggest
that in the public sector, performance indicators are ‘tin openers rather than dials: by
opening up a can of worms they do not give answers but prompt investigation and
inquiry, and by themselves provide an incomplete and inaccurate picture’ (Carter el
al, 1995, p. 49). Moreover, it has been suggested that the vast swathes of information
to which such indicators give rise ‘results in overload and paralysis’, and actually
undermines effective decision-making (Jackson, 2011, p. 23).

Such risks are undoubtedly a product of, and exacerbated by, the uneasy relationship
between outputs and outcomes of public service delivery; and whilst the outputs
of public services are tangible and more easily captured within the SMART
framework (e.g. more teachers in schools; additional investment in medical research;
the increased installation of speed cameras), it is the outcomes of public services –
their contribution to human welfare – that are of primary importance (e.g. increased
educational attainment; enhanced quality of life; improved road safety). As Boyne
and Law remind us, ‘policies are a means to an end, rather than ends in themselves
and it is the outcome which should ideally be measured’ (Boyne and Law, 2005, p.
257). The challenges of outcome-focused performance management are well
documented, and Arvidsson’s argument that ‘finding indicators that are both relevant
and operational’ is a ‘general problem of performance evaluation of public activities’
(Arvidsson, 1986) remains of relevance today. Outcomes can be extremely difficult to
manage, as often government departments and service providers will not control all
the levers necessary to bring about societal change; indeed the achievement of an
outcome target could be coincidental to the effects of a policy or target, or even in
spite of them (Flynn et al, 1988; Carter et al, 1992). This argument is developed by
Jackson, who states that ‘public services are necessary, but not sufficient, for the
production of outcomes’. Citing the example of education, he explains that outcomes
‘depend upon the various activities that take place within the school and the
classroom plus the efforts of the student, the quality of support in the home
environment, and peer pressure. Very little is known about these co-production
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processes and, therefore, about the effectiveness of public services’ (Jackson, 2011, p.
16).

Reflecting on such risks, Boyne and Law suggested that an outcome focus may risk
the target being ‘viewed as a lottery ticket’, which could have the unintended
consequence of promoting complacency or inactivity: ‘whether the target is hit is
likely to be beyond the control of the organization, so service managers may as well
sit back and see if ‘their number comes up’ (Boyne and Law, 2005, p. 254); and
resultantly, Kristensen et al have suggest that an outcome-focused approach will
necessitate an even greater proliferation of information for formulating,
implementing and evaluating policies (Kristensen et al , 2002, pp. 9-10). Moreover,
if outcomes focus on the important, then defining ‘the important’ is in itself an
inherently political act, as an ‘appropriate performance measure will, in any event,
vary according to who is concerned with performance’ as ‘different interests lay
different emphases and it cannot be assumed that all have the same requirements of
performance’ (Stewart and Walsh, 1994, pp. 47-8). The political context therefore
matters, and will affect the way in which data is accrued and deployed (Jennings and
Haist, 2004; Bordeaux and Chitoko, 2008). As such, reflecting on the extent to
which evaluations of public service performance are inherently qualitative and
normative, Stewart and Walsh counsel against ‘placing total reliance on [targets] or
on one set of measures, but rather seeing them as a means of supporting judgement’
(Steward and Walsh, 1994, p. 48; see also Smith, 1995; Jackson, 2011).

It is clear therefore that performance management in the public sector entails many
risks which, if not carefully managed, can result in counter-productive consequences.
As Moynihan et al argue that ‘performance regimes that do not reflect the complexity
of governance will fail in some fashion. They run the risk of being ignored, discarded,
or manipulated. They may foster unanticipated consequences and undesirable
behavior at odds with traditional values of governance’ (Moynihan et al, 2011, p. 142).
Indeed, Smith suggests that it is the inherent uncertainty and complexity of the
public sector – and the stark contrast between the nature of public and private goods
– that renders it so uniquely prone to such perverse consequences, often at the
expense of securing control (Smith, 1995, p. 280).

Within the academic literature, it is possible to identify a burgeoning list of such
perverse consequences. De Brujin highlights: the discouragement of innovation; the
blocking of ambition; the obscuring of problems; the driving-down of performance
through complacency; and, the encouragement of ‘strategic behaviour’ (De Brujin,
2007). Similarly, Bevan and Hood identify three broad forms of perverse effects:
ratchet effects (‘bas[ing] next year’s targets on last year’s performance, meaning that
managers who expect still to be in place in the next target period have a perverse
incentive not to exceed targets even if they could easily do so’); threshold effects
(‘providing a perverse incentive for those doing better than the target to allow their
performance to deteriorate to the standard’); and, output distortions (‘[a]ttempts to
achieve targets at the cost of significant but unmeasured aspects of performance’)
(Bevan and Hood, 2006, p. 521). A similar typology is developed by Jackson, who
distinguishes between: ‘definitional gaming’ (where the definition of a target’s subject
or remit distorts what is being reported); ‘numerical gaming’ (where an organisation
presents their data in a way that exaggerates their performance); and ‘behavioural
gaming’ (where the changes in behaviour that allows a target to be met have adverse
effects on other areas of an organisation’s work) (Jackson, 2005). Building on this, a
fourth category of ‘fraud’ is advanced by Coulson, to capture instances of the
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knowingly false reporting or alteration of performance data (Coulson, 2009, p. 277).
A even more comprehensive list is developed by Smith, who identifies eight distinct
types of phenomena: ‘tunnel vision’ (an emphasis on the measured at the expense of
the unmeasured); ‘suboptimization’ (the pursuit of narrow local objectives at the
expense of the organization as a whole); ‘myopia’ (the pursuit of short-term goals at
the expense of legitimate long-term goals); ‘measure fixation’ (focusing on the
measure of success rather than the underlying objective); ‘misrepresentation’ (the
manipulation of performance data); ‘misinterpretation’ (the failure to adequately
account for the effects of the external environment); ‘gaming’ (the manipulation of
behaviour to secure strategic advantage); and, ‘ossification’ (organisational paralysis
brought on by excessive rigidity) (Smith, 1995, pp. 283-301).

The extent to which performance measurement can encourage such ‘strategic
behaviour’, ‘output distortions’ or ‘gaming’ has been subject to particular academic
attention (e.g. Hood, 2002; Propper and Wilson, 2003; Bird et al, 2005). Because
the measurement of public sector performance remains uncertain, incomplete and
unattributable, performance management may exacerbate – rather than reduce – the
risk of moral hazard (Jackson, 2011, p. 21); and the academic literature is replete with
examples of the way in which service providers have sought to cheat the system in
order to maximise their own interests. For example, in their study of the star ratings
system applied to all NHS hospitals and England and Wales until 2005, Dawson et al
reveal that many hospitals diverted resources to activities that would be awarded
good star ratings (e.g. waiting times and cleanliness), at the expense of other, less
quantifiable aspects of performance (e.g. the quality of treatment provided) (Bevan
and Hamblin, 2009). Indeed practitioner research presented in the British Medical
Journal suggested that for the most acutely ill patients, star ratings bore little
relevance to their chances of survival because ‘crude mortality data… ignore the fact
that higher rated trusts tend to be teaching institutions with patients who are less
severely ill on admission to critical care units’ (Rowan et al, 2003). Similar activities
were identified in the field of crime prevention, and Patrick (2009 cited in Coulson,
2009) presented a detailed dossier of the ways in which crime statistics were
manipulated in order to demonstrate improvements against targets, supported by
practices such ‘cuffing’ (the failure to record crime), ‘nodding’ (eliciting confessions
in return for favours to secure conviction), ‘stitching’ (the creation of false evidence to
secure conviction), and ‘slicing’ (the focusing of resources on crimes where
convictions were more easy to secure). Moreover, several studies have underlined
the way in which the dogged measurement of performance has actually entailed
potentially fatal consequences. In New York, for example, the regular publication of
unadjusted patient mortality rates by the New York State Department of Health had
prompted a reluctance amongst cardiac surgeons to take on high-risk cases, which
subsequently led to an increase in deaths amongst the most vulnerable at-risk
Medicare patients (Dranrove et al, 2002); and in England, the stipulation that 75%
‘immediately life-threatening’ emergency calls were responded to within eight
minutes encouraged ambulance trusts to concentrate their fleet in densely populated
areas at the expense of patients in rural areas (Bevan and Hamblin, 2009, p. 178).

Instances of such gaming behaviour owe as much to opportunity as to motivation,
and whilst it is a significant risk, its pursuit is not axiomatic universal. In order to
explore the extent to which individuals seek to cheat the system and to distinguish
between the different reasons for such behaviour, Bevan and Hood develop a four-
fold typology that draws on Le Grand’s (2003) ‘knights and knaves’ dichotomy.
Firstly, they identify ‘saints’ who ‘may not share all of the goals of central controllers,
but whose public service ethos is so high that they voluntarily disclose shortcomings
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to central authorities’. A closely-related second group is ‘honest triers’, who broadly
share the goals of central controllers, do not voluntarily draw attention to their
failures, but do not attempt to spin or fiddle data in their favour.’ Further down the
typology are ‘reactive gamers’ who ‘broadly share the goals of central controllers, but
aim to game the target system if they have reasons and opportunities to do so’.
Finally, they highlight the existence of ‘Rational maniacs’ who ‘do not share the goals
of central controllers and aim to manipulate data to conceal their operations’ (Bevan
and Hood, 2006, pp. 522-3).

It is, therefore, readily apparent that a clear disjuncture exists between intention and
reality, rhetoric and practice. The desire to develop systems of public sector
performance management rests on a normative assumption that the government is
insufficiently responsive, efficient and dynamic; and the growth of performance
management is therefore intimately bound up with the concomitant spread of
rational managerialism and New Public Management throughout neo-liberal
democracies. Yet, as this review has shown, the measurement of public sector
performance is beset by operational challenges; and it is clear that uniquely uncertain
and complex environment in which public providers function constitutes a
fundamental challenge to attempts to quantify performance in a meaningful and
attributable manner. As Moynihan et al underline:

Few public officials have the luxury of directly providing relatively
simple services, the context in which performance regimes work
best. Instead, they must work in the context of a disarticulated state,
with policy problems that cross national boundaries and demand a
multi-actor response. At the same time, traditional democratic
values must be honored (Moynihan et al, 2011, p. 141).

More broadly, as Wolf has argued, the ‘predominant and ineluctable source for
failures of government services lie precisely in those circumstances that provide the
rationale for these services being outside normal markets in the first place’ (Wolf,
1993, p. 65).

Against such a backdrop, important questions remain regarding the added-value that
performance management has brought in terms of public sector improvement.
Boyne and Chen, for example, suggest that the relationship between performance
management and service delivery is likely to be indirect, as whilst there is a positive
relationship between the setting of clear goals and organisational performance,
‘direct support for the view that targets lead to better public services is sparse’
(Boyne and Chen, 2007, p. 458). Similarly, Jackson, states that ‘little is known about
the factors that influence and shape public sector performance’ (Jackson, 2011, p.
23); and Moynihan et al argue that ‘as the most basic level we lack definitive evidence
about whether performance regimes ultimately improve public sector capacity and
outcomes’ (Moynihan et al, 2011, p. 151). Reflecting on this ostensible lacuna, several
scholars have highlighted potential lines of further inquiry. Johnsen, for example,
suggests that scholars focus on ‘why and when performance measures are developed
and promoted’ and ‘why and when performance information is resisted and/or
distorted’ (Johnsen, 2005, p. 15); and Moynihan et al provide a comprehensive list of
questions clustered around the themes of democratic value, collaborative governance,
global governance and performance regime effects (Moynihan et al, p. 144). More
specifically, Boyne and Chen suggests that ‘explicit measures of the presence or
absence of targets are missing from the empirical studies’, which in turn has meant
that ‘whether organizations with targets achieve more than those without targets is
unclear’ (Boyne and Chen, 2007, p. 458). This final point is of particular relevance
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for this paper, as the Coalition has swept away the layers of performance
management that developed under the Labour Government; and this new phase of
public service performance ‘management’ therefore constitutes an important
opportunity to examine the extent to which targets make a difference. However, in
order to tease out this difference, it is first necessary to set out the dichotomous
approach that developed under the Labour Governments of 1997-2010.

Whole-of-system control-freakery – The Labour Governments, 1997-2010

In 1997 the Labour Government came to power with an ambitious agenda of public
service reform, accompanied by even more ambitious tools of tightly-controlled
performance management. Certainly, attempts to foster effective performance across
government were nothing new. Measures such as the Financial Management
Initiative launched in 1982 and the Next Steps programme of 1988 had sought to
strengthen link between the funding of Whitehall departments and agencies to the
delivery of specific service outputs; the establishment of the Audit Commission in
1983 had brought the performance of local authorities under systematic scrutiny; and
the creation of tools such as the Citizens’ Charter in 1991 had mandated certain
standards that public service organisations must provide. Yet, what was different
about Labour’s approach was the scope and scale of the multiple reporting
frameworks established in quick succession, which left not a single area of state
activity untouched, and resulted in a brave new ‘targetworld’ redolent of the Soviet
regime (Hood, 2006). Labour’s approach to performance management was
expansive and multi-layered, including a national system of Public Service
Agreements (see James, 2004; Matthews, 2008; Matthews 2013); a plethora of local
authority targets (see Boyne and Law, 2005; Coulson, 2009); and, performance
regimes for specific sectors such as the star ratings given to all NHS hospitals in
England and Wales (see Bevan and Hood, 2006), or the Policing Performance
Assessment Framework to which police forces were subject (see Painter, 2012).

A fundamental principle of Labour’s overarching approach to performance
management was that all layers of government and the wider state would be united
around a set of top-level priorities that would be mandated by the centre and trickle
down to the vast flotilla of service providers on the ground. To this end the most
significant innovation within Labour’s toolkit was the (PSA) framework, which was
intended to act as the main driver, the starting point, of all government expenditure
and policy-making. In operation between 1998-2010, the PSA regime represented an
ambitious channel of governance, aiming simultaneously to increase the strategic and
leadership capacity of the core executive, while delivering joined-up public services
within a national framework of priority setting and accountability. The PSA
framework was introduced as part of the Government’s 1998 Comprehensive
Spending Review and established a series of targets within each Whitehall
department that mapped directly onto core public service priorities. Several
principles informed the new regime (for a detailed overview, see Matthews, 2013).
Fixing the public expenditure envelope for a three-year period was intended to enable
departments to manage their resources more effectively, and to sharpen the focus
upon tangible policy outcomes, as spending became linked to the achievement of
policy outcomes. Multi-year planning and a focus on outcomes was also intended to
promote greater co-ordination across all layers of government, which would be
united under a series of common objectives. Departments were also encouraged,
where appropriate, to work together to achieve policy goals that transcended
traditional Whitehall boundaries, with numerous shared frameworks being
established to promote collaboration. The monitoring arrangements in place to
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oversee progress towards the PSA targets reinforced the role of the centre as the
driver of the new regime, its system of sanctions and rewards intended to ensure that
the focus across government remained on the centre’s core objectives.

As well as fostering SMART working across Whitehall, the PSA framework also
sought to engage those responsible for delivering public services on the ground,
uniting the core and periphery around a set of shared goals. A stated intention of the
framework was to afford service providers with flexibility in deciding appropriate
delivery mechanisms in accordance with the principle of ‘earned autonomy’, which
would ‘ensure that public service providers have the discretion to innovate and
improve the services they provide, constrained by the need to reach high minimum
standards’ (Cm. 5570, 2002, p. 10). In order to cohere local authorities and other
service providers around its target priorities, the Government introduced a series of
mechanisms that were intended to complement the PSA framework. The
relationship between top-level PSA objectives and their on-the-ground delivery was
formalised in 2000 through the introduction of Local Public Service Agreement
(LPSA) targets, which were initially piloted amongst twenty upper-tier local
authorities. Targets were intended to form a ‘partnership agreement between
individual local authorities and the Government, intended to accelerate or surpass
key outcomes than would otherwise be the case, for people living in the authority's
area’; and brought with them a number of incentives including administrative
flexibilities, pump-priming grants and performance reward grants (ODPM, 2000, s.
1). By 2002 LPSAs had been rolled out to over sixty upper-tier local authorities, and
by 2003 all but three upper-tier local authorities had elected to negotiate an LPSA
(Cm. 5571, 2002, p. 1); and the second generation of LPSAs rolled in 2003.

In 2007, LPASs were superseded by Local Area Agreements (LAAs), three-year
agreements negotiated between central government and local authorities which set
out a series of targeted improvements that authorities were committed to achieving,
along with a detailed delivery plan. Whilst not explicitly linked to the PSA
framework, LAAs entailed up to 35 priorities for each local authority, underpinned by
‘a single set of about 200 outcome based indicators covering all important national
priorities like climate change, social exclusion and anti-social behaviour’; and the
Government insisted that ‘LAA targets will generally be negotiated to balance local
priorities and levels of performance with national improvement priorities’ (Cm.
6939-I, 2006, para. 6.39). At the same time, local authorities were confronted with
an additional, and entirely separate, performance management regime, as running
parallel to the LPSAs and LAAs negotiated with central government was the
programme of audit and inspection administered by the Audit Commission. In 2001,
for example, the Audit Commission launched the Comprehensive Performance
Assessment, which rated councils against an excess of 1,000 performance indicators,
using a five-point scale for each. This was replaced in 2009 by the Comprehensive
Area Assessment, which was intended to streamline the process by assessing local
public services against a total of 214 indicators (for an overview, see Coulson, 2009).

As this overview illustrates, the limited number of top-level targets at the national
level was not matched by a similar focus on the ground, as service providers became
subject to an explosion of performance indicators. Whilst the Labour Governments
espoused the rhetoric of flexibility and ‘earned autonomy’, the scope and scale of these
performance frameworks in place squeezed the capacity for local discretion.
Moreover, the complexities and contradictions of the Government’s raft of central
initiatives was seen to result in a lack of clarity regarding roles of central and local
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government. The Public Administration Select Committee, for example, suggested
that a ‘lack of proper integration’ between the simultaneous development of front-line
organisational capacity and a centrally-driven measurement culture had created
‘tension between those charged with centralised responsibility and those who are
responsible for dispersed delivery of public services’, undermining the centre’s ability
to realise its strategic leadership priorities (HC 62-I, 2003, p. i). Research similarly
revealed that local authorities and other service providers were overloaded with a raft
of central initiatives, which lacked sufficient co-ordination, and in turn impeded local
autonomy and service delivery. The setting of top-level targets often resulted in the
cascading of a proliferation of sub-targets further down the delivery chain, which
added to the burden faced by local authorities. Indeed, Local authorities were faced
with targets set at the national level through Local Public Service Agreements, and
later Local Area Agreements; whilst at the same time being required to report against
a vast number of indicators set by the Audit Commission through the Comprehensive
Performance Assessment, and later the Comprehensive Area Assessment. Moreover,
the link between the PSA framework and these parallel performance regimes at the
national and local levels was without clear explication.

In creating such a complex web of central-local relationships, which rested on an
inherent tension between top-down performance management and on-the-ground
autonomy, the Government’s commitment to ‘earned autonomy’ again appeared
questionable, with evidence suggesting that the Labour Government’s interactions
with the localities were based on command-and-control and an innate confidence in
the centre’s capacity to determine delivery on the ground (Matthews, 2013).
Research conducted on the ground revealed ‘scant evidence that other major
spending departments have much appetite for reducing the numbers of targets that
authorities are required to meet or the range of plans that they must submit to
Whitehall’ (Martin, 2005, p. 540); and that reasonable requests for further autonomy
were frequently rejected, suggesting that the ‘fear of setting precedents, anxiety about
local variation and risk aversion seemed to have discouraged officials, who found it
easier to say “no”’ (Sullivan and Gillanders, 2005, pp. 565-6). LPSAs, for example,
were criticised for failing to enhance autonomy, as the centrally-driven process of
‘upwards negotiation’ was one-way and only allowed local authorities to commit to
surpassing national targets, even if national targets failed to account for reflect local
challenges. This was attributed to the pervading culture of Whitehall, as ‘LPSAs were
introduced into a set of pre-existing relationships between local and central
government… informed by history, local context and the relative power and influence
of different government departments’ (Sullivan and Gillanders, 2005, pp. 559-70).
Whilst introduction of LAAs was intended to foster a greater sense of ownership of
target priorities amongst local authorities, the sense remained that targets were
government impositions; indeed it was suggested that much of the Government’s
rhetoric ‘treat[ed] local councils as if they were agencies of the national state,
required to implement a national plan, but given freedom as to how they actually
deliver it’ (Coulson, 2009, p. 279).

It was therefore unsurprising that evidence of gaming emerged, as local authorities
and other services providers buckled under the burden the competing pressures
emanating from Labour’s performance management framework. Evidence submitted
to the Public Administration Select Committee illustrated the prevalence of output
distortions or behaviourial gaming in the field of healthcare:

In my own area where I have worked for many years the ophthalmic
unit cancelled 19,500 follow-up appointments in a six-month period so
that new patients could be seen to reach the target for new patients
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being seen (HC 1259-i, 2002, Q. 2).

[I]f you have a lot of targets, you have a hierarchy of targets… You know
some are really important because you will get sacked for those and you
know others are targets which it does not really matter if you miss…
That is where all your resources go. It is not that you do not want to
deliver that target, but delivering the mainstream target takes priority
(HC 62-iv, 2002, Qs. 431-4).

Similar perverse consequences were also evidence amongst local authorities seeking
to achieve their household recycling targets. The creation of garden waste collection
schemes was highlighted by one senior official as a case of definitional gaming, as
local authorities sought to distort their performance, collecting something that would
otherwise not be collected, simply to provide an immediate boost to recycling rates.
Indeed, this was described by one official as a ‘fiddle’, stating that ‘if it’s not in the
waste stream now, why would it be in the waste stream in the future?.’ Other officials
spoke of the threshold effects experienced by high-achieving local authorities:
‘[t]here’s no incentive to overachieve, because there’s a limit on budgets so you need
to justify why you want to spend more money’ (Matthews, 2013).

Letting go and clawing back – The Coalition Government 2010-2015

Upon entering office in 2010, the Coalition Government swept aside this machinery
of performance measurement, consigning Labour’s era of top-down government-by-
numbers to history with a cursory statement tucked away in the 2010 Comprehensive
Spending Review (Cm. 7942, 2010, p. 34). The Coalition’s determination to
dismantle the machinery of target-based performance management was part of its
broader commitment to lean government and localism, as set out by Cabinet Minister
Francis Maude in July 2010, who stated that ‘there were many attempts to micro-
manage delivery from the centre, through targets, PSAs, monitoring, auditing,
endless guidance and regulation. This is both wrong and doomed to fail.’1

Instead the, approach of the Coalition was to be one of ‘radical decentralisation’,
which as the Deputy Prime Minister, Nick Clegg, explained:

means stripping away much of the top-down bureaucracy that
previous governments have put in the way of frontline public
services and civil society. It means giving local people the powers
and the funding to delivery what they want for their communities
(CLG, 2011, p. 1).

Similarly and, reflecting on the ‘historic opportunity to redress the balance’, the
Minister for Decentralisation, Greg Clark, stated that:

bureaucratic micromanagement of our public services is not only
inefficient but undemocratic. If central government is everywhere,
then local decision-making is nowhere – everything is subject to
national politics, with nothing left to community leadership (CLG,
2011, p. 1)

1 http://www.cabinetoffice.gov.uk/news/Francis-Maude-speech-to-the-civil-service, last accessed 15
September 2012.
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