Managing in the Public Sector

Week 3
 Political Levels
• Global
• Regional
• National
• Sub-national
• Local
• Community
 Political Influences
Widdicombe McIntosh Kerley
Pluralism Proportionality Single Transferable Vote
(STV)

Participation Link between Councillor Councillor Ward Link

& Wards

Responsiveness Chance for Elected Larger Wards

Independents

Geographical Diversity Not Unanimous

Fit between wards and

communities
 Political: Westminster
• 650 MPs at next General Election
• 533 in England
• 59 in Scotland
• 40 in Wales
• 18 in Northern Ireland
• House of Lords 774 unelected Members
 House of Lords
Excepted
Party/group Life peers* hereditary Bishops Total
peers**
Bishops 0 0 25 25
Conservative 176 48   224
Crossbench 145 30   175
Labour 207 4   211
Liberal
97 4   101
Democrat
Non-affiliated 21 0   21
Other
Total 662 87 25 774
 Political: Westminster
Draft Bills
First Reading
Second Reading
Committee Stage
Report Stage
Third Reading
Lords Stages and Amendments
Royal Assent
 Political: European Parliament

• 785 MEPs
• 64 in England
• 7 in Scotland
• 4 in Wales
• 3 in Northern Ireland
 Political: European
Structure Role
Council of Members • Negotiates & adopts EU Laws
• Coordinates member states policies
• Develops common foreign & security Policy
• Concludes international agreements

European Commission • Proposing legislation

• Implementing decision
• Upholding EU treaties
• Managing day to day business of the EU

European Parliament • In conjunction with the above roles legislative function

of the EU

European Courts of • Deals with disputes between parties

Justice • Ensure EU law is interpreted and applied in the same
way in every member state.
 Political Holyrood
Matters Criteria
Devolved Controlled by Scottish Government e.g. health, education &
training , local government, law, social services, housing,
tourism & economic development and now TAX
Reserved Controlled by UK Government (for Scotland any matter not
explicitly listed in the Scotland Act 1998 is implicitly devolved
to Scottish Parliament) Reserved - Defence

Number Set Up
73 Constituency MSPs elected by a First Past the Post system (FPTP)
56 Regional MSPs elected by a propositional representation system known
as Additional Member List System (AMLS)
 Political: Local Government
Number Make Up
29 Mainland Councils
3 Island Councils
1222 Elected Councillor's

2007 Election introduced proportional representation in Scottish

local government elections (Single Transferable Vote System
(STV).
 Elections
• Returning Officer
• 4/5 Year Period between Elections
• Election Agent & Expenditure
• Turnout
The Financial System: (3 year settlement)
1. Westminster: C.S.R.: Decisions about English spending
programmes (Barnett Formula)

2. Scottish Executive: Decisions about spending programmes

L.A. Share

3. Cosla Distribution Committee (minus 4 LA’s)

4. Each Councils Share of Council Total (+ council tax)

 Local Government Budget 2017/18 (BP1)
Total: £10,252.9b (16-17: £10,303.3b)

General, Specific Grant & Non Domestic Rates:

£9,163.6b (16-17: £9,587.9b)

Support & Specific Grant: £1,089.3b

9.2% reduction in real terms funding to Scottish Councils

between 2010/11 and 2017/18

NHS Budget 2017-18 £13.2b (est -£2,500

per person) 2011/12 - £11.7b (BP Slide 2)
 Sources of Funding - Revenue
• 85% of revenue funding from central
government and the rest largely from council
tax
• Core Funding
– Aggregate External Finance
• General Revenue Grant
• Non-Domestic Rates Income
• Specific Grant
– Housing Revenue
 Sources of Funding - Capital
• LA’s can borrow for capital spent without government
approval
• Any borrowing applied for must be affordable and the
Prudential Framework is used to do that
– Capital Grants
• Specific
• General
– Other – Lottery, sportscotland
– Capital Receipts
• Sale or disposal of a fixed assets
• Fund Capital expenditure or payment of loans
 European Funding (BP 3)
• European Structural Fund
– SMART – Sustainable – Inclusive
– Focus on EU Priorities
• E.g. Employment, Innovation, education, poverty
reduction & climate/renewable energy
• European Regional Development Fund (ERDF)
– Thematic Concentration
• Innovation & Research, Digital, Support SME’s, Low
carbon economy
• European Social Fund (60th anniversary 2017)
– Investing in People
• Finding jobs, Disadvantaged, Better Education,
Improvement of Public Services
 Management Theory
• Organisations are systems of elements, each
of which affects and is affected by, the others.
– Goals are not the key to understanding the nature
and functioning of organisations, no more than
are the organisation’s origins, stakeholders,
structure, technology and environmental forces.
– To fully understand organisations you have to
consider all of these elements
 The Organisational Environment
(BP6)
Demographic / International
Political Forces
Cultural Forces Forces

Customers Distributor

Suppliers Organisation Unions

Government Competitors

Environmental Technological
Economic Forces
Forces Forces

General Forces Specific Forces

 Perrow’s Categories
Charles Perrow (1961 and 1970) identifies five categories of
goals.
• Societal goals are the goals as perceived by society this could be the
production of goods or the provision of services.
• Output goals are the end results of the organisations transformation
process.
• System goals focus on the process stage of organisational activity and
• Product goals relate to the characteristics of the output and may be
expressed in terms of quantity, quality or availability.
• Derived goals are goals often not incorporated in the organisation’s
mission statement but are pursued by organisational activity, examples
include the desire to exert political influence, charitable concern and
community involvement.
 Connectivity (BP7)
Organisations Strategy (Normally 3 years)
Sets Key Priorities for Operational Plan KPI’s
Monitor &
Review

Department Operational Plan (Annually) - SMART

KPI’s, Standards, Competencies, Resource
Sets Key Priorities for Sections/Teams
allocation
Monitor &
Review

Team/Individual Plan (Annually – Appraisal) - SMART

KPI’s, Standards, Resource Allocation,
Sets Key Individual Work Priorities
Competencies, Development Requirements

Values 20
 Approaches to Management
• Scientific Management (BP8- 9)
– Workforce Planning, Best qualified, Incentive
• General Administrative Theory (Bureaucracy) (BP10-11)
– Fayol Principals, Weber rationality, predictability, impersonality,
technical competence, and authoritarianism
• Quantitative Management (BP12)
– Relying on data, models & statistics
• Organisational Behaviour (BP13-14)
– The study of the actions of people at work, competencies, HR &
Organisational Development
• Systems Approach (BP15-20)
– System & process driven
• Contingency Approach (BP21-22)
– Situational, not one principle
 Competing Values Framework

Cameron and Quinn's (1988)

• Discuss how this relates to Public Sector
Management of today
• Then score each section:
– 0 = No value to 5 = Priority
• Prepare reasons for your scoring.
Back Pocket Slides
 Local Government Funding (BP1)
• The overall financial health of local government was generally good in
2015/16
• Significant challenges for local government finance lie ahead. Councils’
budgets are under increasing pressure from a long-term decline in
funding, rising demand for services and increasing costs, such as social
care & pensions.
• Councils need to change the way they work to deal with the financial
challenges they face. All councils face future funding gaps that require
further savings or a greater use of their reserves. .
• Long-term financial strategies must be in place to ensure council spending
is aligned with priorities, and supported by medium-term financial plans
and budget forecasts. Even where the Scottish Government only provides
councils with one-year financial settlements, this does not diminish the
importance of medium and longer-term financial planning.
http://www.audit-scotland.gov.uk/report/local-government-in-scotland-
financial-overview-201516
 NHS Funding (BP2)
• Since 2008/09, the health budget has increased in cash terms
and had small real-terms increases and decreases each year.
– Real-terms increase in the total health budget was five per cent
– the budget per head of population only increased by 1.6%
– the population aged 75 and over increased by 11.8%
– the number of patients waiting for an inpatient or day case
appointment increased by 5.6 per cent
– the number waiting for an outpatient appointment increased by 89
per cent
• 2015-16 Savings
– Target: £293.1m
– Achieved: £291.3m (- £1.8m 0.6%)
http://www.auditscotland.gov.uk/uploads/docs/report/2016/nr_161027_nhs_overv
iew.pdf
 European Funding (BP3)
• Scotland was due to receive £787m (€941m) in direct
European funding between 2014 and 2020, or more than
£110m a year.
• The Scottish Government said projects, running to 2018-19,
were “legally committed” and would be unaffected if Scotland
left the EU.
• However, organisations funded in the past were less sure.
Enable Scotland campaigns director Jan Savage said: “We
would be concerned that, if this funding were to disappear,
people would lose out on the opportunity to live as part of an
equal society.
http://www.scotsman.com/news/scotland-set-to-lose-200m-a-year-in-
funding-after-uk-leaves-eu-1-4167989
 Best Value Toolkit: Financial Management
Audit Scotland (BP4)
• Is there evidence that through regular testing of its financial systems, the
organisation reports outputs that are timely, accurate, reliable, clear, in a
convenient format and readily understood by their recipients?

• There is appropriate and timely reporting on key variances, and there is

evidence that these are acted upon.

• The organisation provides financial information and reports that is

accurate, timely, and meets the needs of users.

• There is a clear link between financial and performance reporting, and

does this demonstrate the effectiveness and impact of the organisation’s
use of its financial resources?
 Best Value Toolkit: Financial Management
Audit Scotland (BP5)
• Does the leadership of the organisation set the tone whereby financial
management and health is given due emphasis and financial skills are
value and developed?
• Is there evidence that financial management skills are widely distributed
throughout the organisation?
• Is there evidence of regular and high quality challenge of financial
matters?
• Is there a robust financial planning process, linking strategic objectives to a
well thought through financial strategy?
• Is there a medium to long-term financial strategy?
• Does the organisation have a clear understanding of the costs it incurs,
including its cost drivers and how costs change in response to changing
levels of activity?
 Organisations: Defined (BP6)

Organisations as Open Systems:

– This definitions identifies the interactions of the
internal organisation with its external
environments (Task and General).
 SMART Objectives (BP7)
Process Outcome

Impact
 Scientific Management (BP8)
• Fredrick Winslow Taylor
– The “father” of scientific management
– Published Principles of Scientific Management (1911)
• The theory of scientific management
• Using scientific methods to define the “one best way” for
a job to be done:
» Putting the right person on the job with the correct tools
and equipment.
» Having a standardised method of doing the job.
» Providing an economic incentive to the worker.
 Evaluating Scientific Management
(BP9)
• Methods greatly increased productivity and were widely
adopted
• Aspects of the approach are still common
– work measurement, bonus systems etc.
• Can incur high human costs:
– repetitive tasks alienate many people
– reinforces power of managers over workers
– focus on the individual ignores their social needs
• Are the assumptions valid in context? What alternatives?
What are their limitations?
 General Administrative Theory
(BP10)
• Henri Fayol
– Believed that the practice of management was distinct from
other organisational functions
– Developed principles of management that applied to all
organizational situations
• Max Weber
– Developed a theory of authority based on an ideal type of
organisation (bureaucracy)
• Emphasized rationality, predictability, impersonality,
technical competence, and authoritarianism
Weber’s Bureaucracy (BP11)
 Quantitative Management (BP12)

Modern interpretations of QMT:

– Better understanding of organizational processes
especially in planning,
– Decision-making and controlling.
– However, the quantitative techniques used do not
completely account for individual behaviours.
 Human Relations Models (BP13)
A reaction to scientific management and
bureaucratic approaches
– Focus on people as social beings with many needs
– Mary Parker Follett
• Observed creativity of group processes
• Advocated replacing bureaucracy with group networks
in which people solve problems
• Solving problems created integrative unity
 Evaluating Human Relations
Models (BP14)
• Influenced many management practices – modern
HRM practices stress teams, work – life balance etc.
• Aim to integrate needs of individual with needs of
organisation
• Critics claim these practices merely reinforce unequal
power relations – power is still with the organisation
• Effects on performance unclear – other variables
• Assumptions? Context? Alternatives? Limitations?
 View The Organisation as a Process (BP15)
DESIGN
What processes are in
place to improve /change
work procedures
/processes?
e.g. changes in legislation
STRATEGIC LEADERSHIP UNDERSTANDING
What is the aim of the CUSTOMERS
system?
How do you go about
What processes do you
knowing the customers’
have to create and revisit
requirements
the aims?

SUPPLIERS INPUTS MAIN PROCESSES OUTPUTS CUSTOMERS

SUPPLIERS INPUTS MAIN PROCESSES OUTPUTS CUSTOMERS
Who supplies What are the What are the key What are the Who receives
Whoinputs?
your supplies What are
things youthe What are that
processes the key What are
services thatthe Who
your receives
service?
your inputs? things
work you
on to processes
produce that
outputs? services
you that
provide? your service?
work on
produce anto produce outputs? you provide?
produce
output an
output
SUPPORT SERVICES OUTCOMES
What are the support WhatOUTCOMES
impact does
What
your impact
outputs does
have
services that enable the
main processes to function? onyour
youroutputs have
customers
on your customers
Transformation (BP16)
Open System (BP17)
 Open System (BP18)

Focus on links with the outside world on

which firm depends
– Subsystems add complexity – interact with
each other and the outside world
– Sociotechnical systems – need to align technical
and social systems
– Contingency theories also a systems view
Interacting Subsystems (BP19)
 Implications of the Systems
Approach (BP20)
• Coordination of the organisation’s parts is essential
for proper functioning of the entire organization.
• Decisions and actions taken in one area of the
organisation will have an effect in other areas of the
organisation.
• Organisations are not self-contained and, therefore,
must adapt to changes in their external environment.
The Contingency Approach (BP21)
• Contingency Approach Defined
– Also sometimes called the situational approach.
– There is no one universally applicable set of
management principles (rules) by which to manage
organisations.
– Organisations are individually different, face
different situations (contingency variables), and
require different ways of managing.
 Popular Contingency Variables (BP22)
• Organisation size
• As size increases, so do the problems of coordination.
• Routineness of task technology
• Routine technologies require organisational structures, leadership
styles, and control systems that differ from those required by
customized or non-routine technologies.
• Environmental uncertainty
• What works best in a stable and predictable environment may be
totally inappropriate in a rapidly changing and unpredictable
environment.
• Individual differences
• Individuals differ in terms of their desire for growth, autonomy,
tolerance of ambiguity, and expectations.