If we think about a public service, the organisation involved in delivering the service comprises a number of departments and units which hold financial budgets for the services they are responsible for and the objectives they seek
CHAPTER 9 Public service strategy 159
to achieve. However, the other dimension of these departments and budgets concerns the expenditure programmes and client groups in society who use the services.
An example of this is illustrated in Figure 9.2 using a hospital as an example.
Programme analysis would involve disaggregating the expenditure of the organisational departments and units over the various health programmes shown and also assigning that expenditure to one or more of the identified client/ geographic groups. In this way the total expenditure of the hospital would be re- classified by programme and client group. Alongside the costs associated with each programme or client group, there would also be:
• The needs of the community being served and the role of the programme
• The goals and objectives of the programme
• The nature of the client groups
• The outputs of the programme
HOSPITAL EXPENDITURE
• Medical
• Nursing
• PAMS
• Pharmaceuticals
• Consumables
• Catering
• Cleaning
• Other Total = £200m PROGRAMME
• Cancers
• Respiratory
• Mental health
• Trauma
• Neurological
• Circulation etc Total = £200m
CLIENT GROUP
• Children
• Young people
• Women
• Elderly
• Disabled etc Total = £200m
GEOGRAPIC GROUP
• North
• South
• East
• West
• Central Total = £200m
FIGURE 9.2
Programme/client group analysis.
Now a word of caution is needed here. Conceptually this programme and client analysis is easy to define but much more difficult to do in practice. The data needed to undertake the analysis may not be available or difficult to access in the right format. Resort will have to be made to a variety of methods involving es- timation, statistical analysis and even data analytics as described in Chapter 13.
The results of the analysis need to be treated with caution and in some cases a complete programme analysis may just not be possible. However, the results of the analysis can make interesting reading. The Welsh Government ( 2019) analysed health spending in 2017/ 2018 over client groups and found the three largest areas of expenditure on patients with mental health problems ( 11.4%), circulation problems ( 7.4%) and cancers/ tumours ( 7.1%).
As well as undertaking a programme analysis of expenditure for one organ- isation ( a hospital) such an exercise could also be undertaken on a m ulti- agency basis as shown. In this case the expenditure of several agencies and services is disaggregated over a series of client groups as shown in Figure 9.3.
However, in spite of the caveats about the robustness of the analysis, pro- gramme and client group analysis can provide a useful strategic tool. Patterns of programme and client group expenditure could be compared over time peri- ods, and/ or with other organisations or multi- agency partnerships, to see what significant differences might exist and whether they are justifiable. This can provide a basis for developing future strategies.
Whereas programme analysis is a “ relatively” easy ( albeit time- consuming) task of analysis, programme budgeting has far more intractable problems.
Whereas programme analysis is limited to the production of information about programmes and client groups, there is no change in the budgeting process and the authority to incur expenditure. Under a true programme budgeting system,
Other Total = £150 million
Third sector Transport Social Care
Police Leisure Children’s services
Health SERVICES
West Total £150 million
East South North CLIENT GROUPS
Elderly Disabled Total = £150 million
Women Young people
Children CLIENT GROUPS
FIGURE 9.3
Client group analysis in multi- agency working.
CHAPTER 9 Public service strategy 161 the responsibility for incurring expenditure ( and the subsequent accountability) would shift from the service or departmental managers to a series of programme and client group managers who would hold the overall budget for services to the programme or client group. They would then commission ( and pay for) services from departments based on the overall needs of the programme and client group users. Similarly in the multi- agency example, the budgetary power would shift from the individual agencies in the partnership to a series of client group man- agers who would commission ( and pay for) services from the various agencies in the partnership again based on the overall needs of the client group.
Programme budgeting is not a new idea. It had great popularity in the 1960s and 1970s in the US Federal Government and in a number of public and local authorities in the United Kingdom ( Kluvers 2001). In spite of its great attractive- ness as a rational means of allocating resources according to the needs of client groups, it must largely be judged as a failure and by the mid- 1970s most of the eu- phoria about programme budgeting had disappeared, at least in the United King- dom. Clearly many of the earlier problems associated with programme budgeting concerned the complexity of the associated administrative and data handling procedures and the IT revolution and the existence of high- speed and accessible computing power have simplified the approach. However, the main obstacles are largely political ( small p) and cultural. Traditional service managers in public services are often very powerful and jealously protect the power that comes with responsibility for resources from ( what they would see as) interference of a group of programme and client group managers with different ideas about how funds should be spent. Furthermore, the spending power of these programme and client group managers would be spread across a number of different service units and it would probably be difficult for one programme manager working in isolation to affect the sorts of changes in service delivery that would be required by their client group. The past experience of programme budgeting suggests that it is dif- ficult to break into the “ silo” mentality that often pervades service departments.
In recent years the emphasis on public sector partnerships, service commis- sioning and joined up government has led to renewed interest in programme/
client group analysis and budgeting. These approaches would seem to lend themselves to the philosophy underlying partnerships working with the empha- sis on multi- agency delivery of services to identified client groups. However, as already noted, although modern IT can simplify much of the earlier complica- tions of programme analysis and budgeting ( e.g. programme costing), the politi- cal and cultural problems still exist. It is quite probable that considerable efforts will be put into the programme analysis of partnership activities, but it remains to be seen whether sustainable and effective forms of programme budgeting can realistically be achieved. Only time will tell.