Benchmarking : What is it? Dr. Clive Grace Presentation to the Local Government and Regeneration Committee in relation to Strand 2 of its Inquiry into Public Services Reform Scottish Parliament 10 th September 2012

Benchmarking  What it is & why it matters  Varieties & Scope  Purposes  Issues  Theories of Change and Improvement  Politics, Politicians, and Benchmarking  An arrow not a silver bullet  Be systematic but not one ‘system’

What it is and why local performance matters  Comparison of services against an external standard  Matters because:  Cost and scale of services  Vertical fiscal imbalance  Public aversion to ‘postcode lottery’  Local representation and service delivery without (much) local taxation

 What is benchmarked?  Services  Corporate capacity  Inputs, outputs, or outcomes  How are the benchmarks set?  Financial benchmarks for economy  Productivity benchmarks for efficiency  Innovation benchmarks for excellence  Who does it?  Self regulation  Sector led regulation  External agency Taxonomy of Benchmarking

Variety and Scope  Benchmarking is ubiquitous  Service cost and technical comparison (APSE, CIPFA, WAO Benchmarking Clubs)  Statutory performance indicators  Whole authority & Whole area assessments  Excellence schemes  Peer review and challenge  ‘Communities of practice’  Improvement Plans? Outcome Agreements? BVA1 and 2?

Purposes Economy Efficiency Effectiveness Excellence Evasion?....Austerity?

Issues Definitions and units for comparison (Very little comparison of public services between England, Scotland and Wales) Data validity and consistency Time series Authoritative interpretation Action in response Context of Public Service Reform approach and operating ‘Theory of Improvement’

Theories of change and improvement Example: Aim Drive from ‘Awful to Adequate’ FundingLarge real terms increases Focus Corporate capacity and national standards Method Balanced scorecard Motivation External stimulus, naming and shaming, terror and targets Alternatives: self actuated improvement; consumer/user pressure; political accountability; etc

Example: PSR Approach and Theory of Improvement

Best Value PIs  200+ indicators for all frontline and corporate services  287 pages of guidance  Set centrally after consultation  Operated by the Audit Commission  Superseded in 2006 by a more outcome focussed national indicator set

CPA – single and upper tier

Comprehensive Area Assessment  Joint inspectorate assessment for each area  Individual ‘use of resources’ judgements for councils, police, health, fire and rescue authorities  Local performance against the national indicator set  Risk assessment linked to local area agreements

Peer review Aim Improvement from within Funding Getting tighter (£20,000 per review) FocusEFQM model with 12 criteria (incl. corporate effectiveness) Method Mixed review teams MotivationSupport and ownership

Risk regulatory regimes Controlcomponents Information gathering Standard setting Behaviour modification ContextType of risk Public attitudes Organised interests ContentSize Structure Style

Politics, Politicians, and Benchmarking  A marriage made in both heaven and hell?  Critical political accountability.... ...problematic political time horizons and public opinion drivers  Great benchmarking requires tremendous political self-discipline

An arrow not a silver bullet  Benchmarking is one arrow in the quiver, and not THE answer.... ...it is best applied from the ‘improvement end of the telescope’... ....in the context of a thought through policy of Public Service Reform and Improvement... ...and (ideally) a fair degree of political consensus... ...and the support of key stakeholders

Be systematic but do not impose one ‘system’  Working out and carefully designing the benchmarking approach does not guarantee success... ...but not doing so guarantees failure  Not ‘one benchmarking system fits all’.... ....different services in different situations call for different benchmarking solutions

10 TH SEPTEMBER 2012