Decentralisation and performance

1
Decentralisation andperformance

• Mark Exworthy
• CPSO seminar
• School of Management
• Wednesday 15 February 2006

2
Presumed benefits of decentralisation

• Freedom to manage
• Less rule-bound
• Flatter organisational structure
• Leaner, cheaper organisations
• Greater responsiveness
• Accountability
• Democracy
• Innovation
• Greater opportunity for risk-taking

3
Presumed costs of decentralisation

• Fragmentation
• Lack of coordination
• Higher costs
• Duplication of activities
• Dilution of managerial capacity skills
• Recruitment retention of senior managers
• Calibre of managers
• Loss of strategic perspective
• Loss of specialisation

4
Benefit versus costs

• Many of the arguments used in support of
  decentralisation are the same as used to support
  centralisation
• Hence, it is important to look deeper into
  policies introducing decentralisation and their
  impacts
• De Vries, M. (2000) European Journal of
  Political Research, 38, pp.193-224.

5
Organisational change in the public sector

• Ebb and flow from centre to locality
• Decentralisation versus Centralisation
• Once more through the revolving door
• Klein, R. (2003) J. Health Services Research
  Policy, 8, 4, pp.195-186

6
Decentralisation back in fashion

• Foundation Trusts
• Autonomy for high-performing providers
• Primary Care Trusts
• 80 of NHS budget controlled by PCTs
• Patient Choice
• Choice of 4 or 5 hospitals upon referral
• Private sector involvement
• To provide 15 of elective surgery by 2008
• gt1 private provider, under Patient Choice

7
Size matters but bigger or smaller?

• Police authorities
• Fire brigades
• Local government
• County and District Councils
• Universities
• National Health Service (NHS)
• Primary Care Trusts
• Hospitals (including Foundation Trusts)

8
An imaginary conversation

• Department of Health policy-maker
• We have given you 3 stars. You have earned your
  autonomy. Get on with it.

9
An imaginary conversation

• Department of Health policy-maker
• We have given you 3 stars. You have earned your
  autonomy. Get on with it.
• Hospital Chief Executive
• We are still constrained by other local
  agencies and by national targets. It doesnt feel
  like freedom to us.

10
A new Labour government would devolve power to
local NHS organisations.Source Health Service
Journal, 28 April 2005
11
Decentralisation Arrows Framework
Centralisation

• International
• National
• Regional
• Organisational
• Individual

Decentralisation
12
Arrows Framework I-P-O configuration
Inputs
Outcomes
Process

• International
• National
• Regional
• Organisational
• Individual

13
Arrows Framework Organisational transect
Inputs
Outcomes
Process

• International
• National
• Regional
• Organisational
• Individual

14
Arrows Framework Example Primary Care Trusts
Inputs
Outcomes
Process

• International
• National
• Regional
• Organisational
• Individual

GP Outcome Frwork
Patient Choice
Budget devolution
15
Performance dimensionsPeckham et al. (2005)
Decentralisation as an organisational mode for
health-care in England. London NCC-SDO

• Equity
• Efficiency
• Adherence to targets evidence-based protocols
• Process measures
• Outcome measures
• Staff morale / satisfaction
• Humanity
• Accountability

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1. Equity

• Inter-area / group
• Decentralisation might reduce equity by enabling
  greater variations between areas or social groups
• Intra-area / group
• Decentralisation might improve equity within
  areas or social groups by responding better to
  the needs of minority interests (whose
  preferences has previously been ignored or
  overlooked)

17
Equity key findings

• Impact of decentralisation on equity
• weak evidence
• Inequality between areas / groups
• increased
• Inequality within areas / groups
• decreases

18
2. Efficiency

• Allocative efficiency
• Services become more responsive and accountable
  to patients limited evidence
• Decentralisation leads to more innovation weak
  evidence

19
2. Efficiency continued

• Technical efficiency
• Decentralisation increases or decreases costs
  mixed evidence
• Scale and size influences organisational
  performance mixed evidence

20
Performance in public services Boyne et al.,
Public Management Review, 2004,6, 2, 189-210

• Performance influenced by
• Organisational structure
• Organisational culture
• Policy processes
• Policy content

21
Four chances simple linear model Adapted from
Boyne et al., Public Management Review, 2004,6,
2, 189-210
Structure
Culture
Policy x
Performance
Process
Content
22
Four chances model plus lucky dipAdapted
from Boyne et al., Public Management Review,
2004,6, 2, 189-210
Structure
Culture
Policy x
Performance
Process
Content
?
23
Policy content model Adapted from Boyne et
al., Public Management Review, 2004,6, 2, 189-210
Structure
Culture
Policy x
Policy content
Process
Performance
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Decentralisation performance

• Does decentralisation improve organisational
  performance?
• It depends upon
• The source destination of power
• The property being decentralised
• The impact of centralisation
• And

25
Decentralisation performance continued

• And
• The context in which decentralisation is
  introduced
• Organisational structure
• Organisational culture
• Policy processes
• Policy content

26
In summary

• Decentralisation
• Is not a panacea
• Is a process, not an event
• Consists of 3 streams - inputs, processes and
  outputs
• Has mixed impacts upon organisational
  performance
• Has centralising tendencies
• Is context-dependent