Agencies most commonly use historical performance and an as sessment of what would be a realistic and achievable incremental im provement as a basis for setting targets.
Agencies adopt a range of approaches to ensure that their targets are sufficiently focused on their client’s needs. Customer feedback was often used by agencies to negotiate with their sponsor departments the level of service to be provided, the resources needed, and the targets against which performance would be measured. The extent of reliable and comprehensive information was variable.
Agencies were able to demonstrate that almost three quarters of the targets reviewed in 2001–02 were achieved, with the targets checked and verified by internal auditors.
Many agencies used established quality standards (such as the Charter Mark50) to evaluate service delivery. All agencies used several approaches to evaluate service, with complaints from clients being used most often to improve service.
While all agencies generally have systems in place for identifying and monitoring costs, these are not linked to key outputs and outcomes and hence, productivity is not often measured or monitored.
In the late 1990s Canada created three legislatively based service agencies – Canada Customs and Revenue Agency (CCRA), the Cana dian Food Inspection Agency (CFIA)51 and Parks Canada. These agen cies enjoy increased financial, administrative and human resource flexi bility. For example, the CCRA has significant financial flexibilities for the raising, retention and efficient spending of resources; is its own em ployer; can establish its own regimes; and is not covered by central government wide human resource and administrative policies of the Treasury Board. In addition, the federal government has established Special Operating Agencies (SOAs), which are not separate legal enti ties but operate within the legal framework of their respect departments Comptroller and Auditor General. Improving Service Delivery: The Role of Executive Agencies. London: The Stationary Office, HC 525, Session 2002 03: 28 March 2003.
http://www.nao.gov.uk/publications/nao_reports/02 03/0203525es.pdf This is a standard which has been put in place to assess the service delivery systems of the agencies.
See http://www.inspection.gc.ca/english/corpaffr/publications/prog/agence.shtml (e.g., the Passport Office52 within the Department of Foreign Affairs and External Trade). SOAs are given increased management and adminis trative flexibility in return for agreed levels of performance and results.
Sometimes various organizational models evolve to meet the chang ing requirements of the business. For example, the Canadian Tourism Commission, created as a Special Operating Agency in 1995 was made into a crown corporation in 2001 allowing it more policy and administra tive independence from the federal government. The commission is an industry led and market driven, with the objective to sustain a vibrant and profitable tourism industry in Canada. The commission has a strong and very active board of directors that sets strategic direction, ap proves corporate and strategic plans and allocates resources. By law, 17 of the 26 positions on the board of directors are reserved for the pri vate sector53.
It is normally not initially clear whether a separate agency or some other type of alternative service delivery arrangement such a public private partnership or contracting to the private sector is the most effi cient and cost effective method of delivery. This normally requires an objective and comprehensive analysis of the options. For example, the City of Toronto is currently assessing its Forestry Field Services (which maintains a stock of three million trees and is responsible for planting, pruning, maintenance and removal of trees in city parks and within the public right of way) to determine if the service should be provided through a separate operating agency of the city, delivered through a public private partnership or contracted out to the private sector54.
Governments in different countries are applying the concept of agencies. Each does so for its own reasons. Some governments set up agencies to empower managers and to give them greater authority, others to emphasize service delivery, and still others to remove finan cial, personnel, and other administrative constraints. Whatever the mo tives, the underlying belief is the same – a department centred model of government no longer meets the organizational needs of modern government.
Allen Schick, in his provocative work on agencies notes that:
See http://www.ppt.gc.ca/passport_office/about_e.asp See http://ftp.canadatourism.com/ctxuploads/en_publications/whoweare.pdf See http://www.city.toronto.on.ca/asd/forestry.htm “Every democratic government must both connect and separate its political and administrative organs. It must connect them so that man agers and other service providers comply with the policies and rules laid down by political leaders. But it must also disconnect administrative matters from direct political involvement so that managers are free to act in a fair and efficient manner, without regard to political considera tions. No democracy can abide (by) governing arrangements which free managers to disregard the policies made by duly elected leaders, and no democracy can allow politicians to intrude in administrative mat ters without regard to the rights of interested parties. The first criterion justifies the placement of operating units within departments headed by ministers or by senior managers appointed by them, the second dic tates the operational independence of administrative units. Striking the right balance between co ordination and subordination on the one hand and independence and flexibility on the other require that politicians and managers be both empowered and restrained”55.
Striking and maintaining this appropriate balance has proved difficult for governments who have moved along the agencies route. Govern ments have granted independence without either clarifying roles and re sponsibilities, or putting in place the machinery of accountability. In many countries, agencies have been poorly developed at the outset and it is not likely that these initial missteps will be corrected, since the agencies have acquired independence without paying for it in the form of in creased accountability. Few countries have replicated the care with which the British examine each candidate for next steps before deciding whether and how to proceed. In the “Next Steps” process, agencies go through a life cycle that typically consists of eight stages (See Annex 2).
The UK experience suggests that developing strong, efficient and independent service delivery agencies is one thing. But having depart ments with the incentive and opportunity to both effectively guide the agencies responsible to them and to oversee their performance is quite another. Under the agency model too much attention is often given to the operational independence of the service providers and not enough on the behaviour of departmental overseers. For the agencies to com ply with the policies and targets set by departments it is not enough that Allen Schick. Agencies in Search of Principles. 29–30.
they be free; their departments must have the capacity and the incen tive to guide and vigorously monitor what agencies do.
Under the Blair government, while “Next Steps” agencies have not been abandoned, the focus has significantly shifted. This reorientation, under the “Modernization Agenda” is one in which service agencies are clearly subordinated to departments and departments are responsible for the performance of their service agencies. The theme is set out in “Wiring It Up”, the manifesto on integrated service delivery published by the Cabinet Office in 2000 with the revealing subtitle of “ Whitehall’s Management of Cross Cutting Policies and Services”. Where “Next Steps” saw an agency model promoting the break up of the public ser vice into separate administrative units, “Wiring It Up” suggests public servants should be able to work across organizational boundaries.
Similar challenges are found in New Zealand where most funds and key services, such as health care and education, are provided by Crown Entities, non departmental bodies that have broad operational respon sibility. There are about 70 Crown Entities, plus 2,600 school boards.
Despite policy making boards and accountability frameworks for the Crown Entities, studies by the Treasury and the State Services Com mission have found serious deficiencies in the relationship between government and its Crown Entities. According to Schick these include:
uneven and inadequate monitoring by departments; inattention by min isters to the Crown Entities for which they are responsible; unrespon siveness or disregard by Crown Entities to government policies; incom plete and inconsistent accountability requirements; and inadequate government arrangements, along with confusion over the legal status of some entities56.
Devolution Devolution has been used extensively in Canada as a means by which one level of government transfers the responsibility for delivering a service to another level of government. For example, the federal gov ernment has devolved responsibility to provincial and territorial gov ernment for the delivery of labour market training programs to assist unemployed workers in receiving training and therefore increase their prospects of finding and maintaining jobs. The Province of Ontario has Allen Schick. Agencies in Search of Principles.
devolved responsibilities for municipal property assessment services from the provincial government to a municipal corporation, the Ontario Property Assessment Corporation.
In both these cases significant financial and human resources were transferred as part of the devolution. In the case of labour market train ing, the principal advantage to the devolution was the increased flexibil ity afforded to provincial and territorial governments to delivered labour market training programs to meet the unique needs of their provincial and local labour market conditions and to ensure a closer coordination with provincial programming. In the case of municipal property assess ment, the devolution allowed the service to be provided at a level that was more sensitive to local needs while avoiding a fragmented ap proach across hundreds of municipalities and realizing certain econo mies of scale in property assessment through the creation of a munici pal corporation.
Devolution in Canada has also occurred from government to not for profit self funded industry corporations. For example, the Province of Ontario government has transferred:
- Motor vehicle dealers to the Ontario Motor Vehicle Safety Industry Council, - Real estate agents to the Real Estate Council of Ontario, - Electrical safety inspections to the Electrical Safety Authority, and - Safety programs related to fuel safety, elevators, amusement de vices, boilers and pressure vehicles to the Technical Standards and Safety Authority.
In 1995 a new non profit organization was created in Canada, call NAVCAN to which the federal government transferred responsibility for providing air navigation services in Canadian air space57. This transfer to a non profit organization resulted from concerns by the federal gov ernment about the excessive costs of providing this service through the federal Ministry of Transport and concerns by the airlines about the poor service they were receiving and the little influence they would have over a profit making monopoly enterprise. NAVCAN has a board of di rectors consisting of five members selected by users of the system (the airlines), two by the employee unions, and three by the federal govern See http://www.navcanada.ca/navcanada.asp ment. The ten select four additional members. NAVCAN sets its own rates and is expected to breakeven.
Another form of devolution that has been undertaken by the Cana dian federal government is the establishment of non governmental “in dependent foundations” which have received substantial lump sum en dowments of public money to invest and spend over several years in areas that are clearly the business of government. The two most signifi cant and widely known are the Canadian Foundation on Innovation to provide support to research and the Canadian Millennium Scholarship Foundation to provide financial assistance to post secondary students.
Each was established under separate legislation.
The major issue raised by these various forms of devolution is that of public accountability. In the case of labour market training programs the Auditor General has raised the “accountability challenge” emphasiz ing that such devolutions and collaborative arrangement involve “shared accountability for overall results”. He notes that government is ultimately responsible:
“The partners are collectively accountable for the success and op eration of the collaborative arrangement. The federal government re mains accountable to Parliament for the use of federal funds and au thorities. It must organize and manage the relationships with its part ners (be they other levels of government or non governmental organi zations) so that it can obtain necessary information, effectively monitor progress, make adjustments as required, and appropriately report on results”58.
The use of independent foundations has been particularly troubling with respect to ensuring proper public accountability for the use of pub lic funds. In a recent article, Peter Aucoin59 explains how the organiza tional design of these foundations is contrary to the principles of re sponsible government as well as the government’s own policy on alter native service delivery structures. At the heart of this major accountabil ity deficiency is the organizational structure that has been put in place Denis Desautels. “Accountability for Alternative Service Delivery Arrangements in the Federal Government: Some Consequences of Sharing the Business of Government”. 27.
http://www.ipaciapc.ca/english/research/PAGE023.PDF Peter Aucoin. “Independent Foundations, Public Money and Public Accountability:
Whither Ministerial Responsibility as Democratic Governance”, The Journal of the Institute of Public Administration of Canada. Spring 2003, 46, 1, 1–26.