Managing the New Public Services Also by David Farnham PERSONNEL IN CONTEXT THE CORPORATE ENVIRONMENT EMPLOYEE RELATIONS UNDERSTANDING INDUSTRIAL RELATIONS (with John Pimlott) PUBLIC ADMINISTRATION IN THE UNITED KINGDOM (with Malcolm McVicar) Also by David Farnham and Sylvia Horton MANAGING PEOPLE IN THE PUBLIC SERVICES THE NEW PUBLIC MANAGERS IN EUROPE: PUBLIC SERVANTS IN TRANSITION (with John Barlow and Annie Hondeghem) Managing the New Public Services Second Edition Edited by David Farnham and Sylvia Horton MACMILLAN Selection, editorial matter and Chapters I, 2 and 13 © David Farnham and Sylvia Horton 1993, 1996 Individual chapters: Chapter 3 © Howard Elcock 1993, 1996; Chapter 4 © Richard Tonge and Sylvia Horton 1996; Chapter 5 © Richard Christy and Jill Brown 1996; Chapter 6 © David Farnham 1993, David Farnham and Lesley Giles 1996; Chapter 7 ©Christine Bellamy 1996; Chapter 8 ©·Sylvia Horton 1993, 1996; Chapter 9 ©Howard Elcock 1993, 1996; Chapter 10 ©Graham Moon and Ian Kendall 1993, and Ian Kendall, Graham Moon, Nancy North and Sylvia Horton 1996; Chapter II ©Malcolm McVicar 1993, 1996; Chapter 12 © Stephen P. Savage and Frank Leishman 1993, 1996 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1P 9HE. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First edition 1992 Reprinted 1994, 1995 Second edition 1996 Published by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world ISBN 978-0-333-66435-3 ISBN 978-1-349-24723-3 (eBook) OOI 10.1007/978-1-349-24723-3 A catalogue record for this book is available from the British Library. 10 9 8 7 6 5 4 3 2 I 05 04 03 02 01 00 99 98 97 96 Copy-edited and typeset by Povey-Edmondson Okehampton and Rochdale, England Contents List of Figures and Tables vii Abbreviations Vlll List of Contributors XI Preface to the Second Edition Xlll PART I THE CHANGING CONTEXTS OF MANAGEMENT 1 The Political Economy of Public Sector Change 3 David Farnham and Sylvia Horton 2 Managing Private and Public Organisations 25 David Farnham and Sylvia Horton PART II MANAGERIAL FUNCTIONS 3 Strategic Management 49 Howard Elcock 4 Financial Management and Quality 71 Richard Tonge and Sylvia Horton 5 Marketing 94 Richard Christy and Jill Brown 6 People Management and Employment Relations 112 David Farnham and Lesley Giles 7 Information and Communications Technology 137 Christine Bellamy PART III CASE STUDIES 8 The Civil Service 155 Sylvia Horton 9 Local Government 177 Howard Elcock 10 The National Health Service 200 Ian Kendall, Graham Moon, Nancy North and Sylvia Horton v vi Contents 11 Education 219 Malcolm McVicar 12 Managing the Police: A Force for Change? 242 Stephen P. Savage and Frank Leishman PART IV CONCLUSION 13 Public Service Managerialism: a Review and Evaluation 259 David Farnham and Sylvia Horton Bibliography 277 Index 296 List of Figures and Tables Figures 1.1 Government expenditure and percentage of GOP 1890 to 1990 7 3.1 Rational model of strategic management 50 3.2 Managing uncertainty over time 53 4.1 Financial responsibility and accountability flow system 73 4.2 Financial management planning and control system 74 4.3 Incremental budgeting model 76 Tables 1.1 General government expenditures as a percentage of GOP 1900 to 1997 5 3.1 Varieties of management strategies 68 6.1 UK employment by sector 1961-94: selected years, by headcount (thousands) 114 6.2 Employment in the UK public services 1979-94: full time equivalents (thousands) 116 6.3 Employment in the UK public services 1993-94: sex and employment status (thousands) 117 11.1 Categories of LEA expenditure under LMS 229 vii Abbreviations ACPO Association of Chief Police Officers ADP Automatic Data Processing AHA Area Health Authority ARP Appraisal Related Pay BMA British Medical Association BSUs Basic Command Units CBI Confederation of British Industry CCT Compulsory competitive tendering CPRS Central Policy Review Staff CPU Central Planning Unit esc Civil Service College CSD Civil Service Department CTC City Technology College DES Department of Education and Science DGM District General Manager DHA District Health Authority DHSS Department of Health and Social Security DMT District Management Team DSO Direct Service Organisation ECJ European Court of Justice ER Employee relations ERB Executive responsibility budgets EU European Union FE Further Education FEC Further Education Corporation FHSA Family Health Service Authority FMI Financial Management Initiative FMU Financial Management Unit FPC Family Practitioner Committee FTA Fixed Term Appointment FTE Full-time equivalent FPS Family Practitioner Service GCHQ General Communications Headquarters (Cheltenham) GDP Gross Domestic Product GGE General Government Expenditure GLC Greater London Council GLEB Greater London Enterprise Board GMS Grant-maintained Schools GMTS General Management Training Scheme viii Abbreviations ix GP General Practitioner HC Health Commission HEA Health Education Authority HEC Higher Education Corporation HMI Her Majesty's Inspector HMIC Her Majesty's Inspectorate of Constabulary HRM Human Resources Management HSSB Health Services Supervisory Board lAC Interim Advisory Committee IBM International Business Machines ICTs Information and Communication Technologies IHSM Institute of Health Services Management INLOGOV Institute of Local Government Studies (Birmingham) IT Information Technology JMU Joint Management Unit LEA Local Education Authority LGMB Local Government Management Board LMS Local Management of Schools MBO Management by Objectives MINIS Management Information System for Ministers MIS Management Information System MPO Management and Personnel Office MPS Metropolitan Police Service MSC Manpower Services Commission NALGO National and Local Government Officers' Association NATFHE National Association of Teachers in Further and Higher Education NHS National Health Service NHSCC National Health Service Community Care NMS New Management Strategy (Ministry of Defence) NPM New Public Management OPS Office of Public Service OSPRE Objective Structured Performance Related Examination PAR Policy Analysis Review PBO Policing by Objectives PCEF Polytechnic and Colleges Employers Forum PCFC Polytechnics and Colleges Funding Council PES Public Expenditure Survey PI Performance Indicator PMCA Police and Magistrates Court Act PPBS Planned Programme Budgeting System PRB Pay Review Body PRP Performance Related Pay PSBR Public Sector Borrowing Requirement