Changing service delivery

To respond to these changing demands on government, it is not practical to do more of the same. Instead, the focus is shifting to how public services can be delivered more sustainably and in a way that delivers better value for money.

Reflecting a need to do things differently, we see global and domestic trends in what services are being delivered and how these services are being delivered. In what is being delivered, the trend is towards:

• More targeted services: driven by government agencies to target their effort and services to where there is greatest impact and value for money, in particular to the citizens/clients who need the services the most or who will benefit the most.
• More tailored services: demanded by the citizens/clients of public services reflecting their needs and preferences, and recognising that citizens as consumers expect government to deliver services that are tailored to what they expect and need.

To meet both of these trends towards more personalised public services, four broad approaches are being employed:

• Inventive services.
• Contracting for outcomes.
• Co-production with stakeholders.
• Collaboration between agencies.

These trends and approaches overlap and, in many examples of changing public services, multiple factors will influence development and design. While these approaches are becoming more common, they are still the exception and tend to reflect a conscious effort and focus of dedicated resources by the agencies delivering the services. Over time, a more fundamental transformation in the public service will be required as these approaches become common-place. This transformation will not be automatic and later in this report we discuss some of the emerging challenges and opportunities.

Shift to targeted and tailored services

Targeted services

In many cases, ‘one size fits all’ is no longer delivering value for money. A focus on outcomes rather than inputs or outputs helps policy-makers focus on the parts of the system where public services can be targeted to have the most impact on the wider whole. Despite some criticism that ‘citizen-centred’ approaches focus too much on individuals and not on the wider whole³², targeted services typically involve a strong emphasis on achieving the greatest total impact.

A key example of the shift towards targeted services is the emergence of the ‘investment approach’. Investment approaches or frameworks are focused on targeting public services based on the degree to which they realise desired outcomes (achieving a return on investment) and subsequently reshaping how government agencies invest over time. This is often combined with a more preventative approach and a focus on ‘early interventions’ based on evidence-based analysis of the risk profile for cohorts of clients.

The Ministry of Social Development’s Investing in Services for Outcomes reflects an investment approach. At the centre of this approach is the Ministry’s Strategic Investment Framework which guides:

• defining the outcomes the Ministry wants to see and how the services they fund will help achieve these outcomes
• outlining a robust process for identifying what services communities are currently receiving and what is needed
• identifying funding priorities, including the mix of preventative and intensive services needed by communities
• identifying a reliable and consistent way of showing the positive difference services are making in people’s lives.³³

The shift to targeted services is to an extent being enabled better data and analytical capability allowing the public service to collect, retain, match and analyse operational information across agencies, gaining a much richer understanding of how what they do contributes to outcomes.  Investing in Services for Outcomes draws lessons from the insurance industry and ACC whose approach to reducing expected liability was shifting how it targeted investment, for example, through increased upfront investment in rehabilitation to reduce future costs of support. In particular, it seeks a long-term perspective to the financial management of the benefit system by valuing:

• the future cost of the system
• the life-time cost of segments in the system (e.g. those entering at age 16 and 17)
• the long term financial effects of changes to the system, including:
  • policy reform
  • operational changes
  • demographic changes
  • economic changes.
• key drivers which affect the future costs of the system, for example duration on benefits, age, etc.³⁴

This approach enables interventions to be targeted to the cohorts of clients where the expected return on that investment (measured primarily as a reduction in this liability) can be achieved, reflecting an evidence-based assessment of the likely impact of the intervention.  The approach demonstrates:

• the power of data and analysis when harnessed as an evidence base to generate expected impact
• a willingness to pilot and experiment in targeting services
• the importance of ensuring feedback loops and iteration, including through establishing strong evaluation and monitoring mechanisms at three levels – client, cohort and whole-of-New Zealand
• challenges for public finance with benefits accruing to individuals over a longer time than allowed for in budgets (different to the insurance company model)
• the importance of working across agencies on a common set of outcomes for target populations.

Tailored services

Citizens as consumers expect government to deliver services that are tailored to what they expect and need. As consumers, citizens do not tolerate services that do not suit them, they shop around and look to have services customised to their needs. Similarly, less tolerant citizens are creating demand for higher quality and more convenient public services that are tailored to their needs. As citizens know their needs better than government agencies, the emphasis of tailored services is often based on enabling citizens and communities to help prioritise and design the public services that they want.

Citizens increasingly expect public services that are designed around them and the whole of their requirements and needs.  They are less willing to accept a standard one-size-fits-all service that is a poor match to their need, and less willing to manage relationships across multiple government agencies to piece together the support they need.  Instead, they expect the public services to be coordinated and integrated so that they can receive a personalised, complete solution regardless of where they first interact with public services (e.g. a “no wrong door” approach).

A desire to better tailor services is at the heart of Scotland’s Digital Future strategy. This strategy has been developed in response to three drivers: growing the economy, responding to user expectations and reforming public services. The strategy defines success of a ‘digital first’ focus in terms of services that are well designed and usable, a choice of channels to access services, and assistance available to those that need it.³⁵

The RealMe service developed by the Department of Internal Affairs and New Zealand Post is driven from a need to make signing up for products and services on the internet faster, easier and more secure for citizens as customers. The output is an official government-endorsed, secure way to prove who you are online designed to be trusted by businesses and government agencies.³⁶

Shift to non-traditional avenues for service delivery

Inventive services

These drivers place a premium on innovation in the public services.  Inventive services vary in their focus (for example, targeted and/or tailored) but what they have in common is that they explore and apply new ways to deliver public services. These services are often ‘experimental’ in nature. The application of new technologies is often a central feature of inventive services.

At the heart of many inventive services is the drive to find new and better ways to deliver the outcomes sought, more efficiently and effectively. Innovation behind these services occurs when government agencies and their stakeholders are proactive and intentional about introducing novelty in order to adapt the system, product or process effectively.³⁷ A key challenge for these inventive approaches is to create sufficient space and freedom to innovate – so that a diversity of ideas can flourish – and to ensure strong monitoring and evaluation to learn lessons quickly, enabling good practice to be shared and applied.

Since 2011, sixteen Social Sector Trials have been testing innovative ideas to integrate the delivery of local social, health and educational services to achieve better outcomes. Specifically, they tested different approaches to leading the integration of cross-agency resources for a specific community or location, including where leadership was vested in a local organisation or with a specific individual.³⁸

More recently, the Treasury has used a formal Request for Information process to seek innovative ideas and proposals for improving the effectiveness of government service delivery, specifically in response to the Government’s challenge to tackle child poverty. This is an example of using technology to ‘crowd source’ ideas from outside the usual sources, to find ways to improve service delivery to vulnerable populations³⁹. Similarly, in 2010, the UK Government generated over 100,000 suggestions to deliver public services more efficiently through their Spending Challenge website.  Around two thirds of the ideas were generated from within the public service, the remainder came from the wider public.⁴⁰

Innovation can also respond to adversity and necessity. Internationally, innovations such as the Spending Challenge have been driven by the fiscal pressures arising from recession. Closer to home, the response to the Christchurch earthquakes has seen innovation flourish on the ground, as public services have worked together to overcome the challenges they faced. For example, HealthOne (formerly Shared Care Record View) is a secure on-line system for sharing patient information across health-care providers, and was developed in response to the fact that building damage meant that traditional records were no longer accessible.⁴¹

In the UK, local councils coming under fiscal pressures are ‘redesigning, reorganising and reforming’ how they operate. The focus is increasingly on bringing a deep understanding of local needs together with technological innovations to transform service experience for citizens. This is creating an environment that is encouraging out of the ordinary services. For example, Bristol City Council has provided staff with tablets that are geared up to enable them to report issues while out in the community, resulting in a reduction in the hours staff spend in the office while also increasing the reporting of local issues.⁴²

In many cases, inventive services are originating not within the public service but within the community sector. Starting out in Barnet, the Casserole Club initiative has created a new way of supporting people who would benefit from a home cooked meal by connecting them with vetted volunteers. This achieves similar objectives to what a public service might have but also has the effect of building and empowering the community sector.⁴³

Contracting for outcomes

The Better Public Services Advisory Group referred to the process of identifying when and how other providers may be better placed to deliver services as ‘best-sourcing’. The Productivity Commission similarly referred to ‘contracting for outcomes and innovation’ recently.⁴⁴

Despite many attempts to bring agencies and resources together to improve the impact of public services on particular outcomes, there is relatively little evidence of this delivering measureable improvements.  In the UK, a recent National Audit Office report reviewed 181 relevant publications and found that only ten had assessed impact on service-user outcomes, and only three found evidence of improved outcomes.⁴⁵

An evaluation of the Social Sector Trials that drew on local coordinators found that the trials made progress in achieving outcomes for young people and the wider community. Stakeholders involved in the trials identified changes in behaviour and attitude among the young people involved, as well as improved confidence and motivation. Views of the trials were that they were making a difference in the community and demonstrated to the community and government what can be achieved when communities are given the flexibility and power to reconfigure and influence the use of resources in their community.⁴⁶

The Social Sector Trial experience of this more place-based approach to public services is echoed in the UK’s Whole Place Community Budgets experiment that has been described as “a bold attempt to fundamentally redesign public services”. The four pilots were focused on wrapping public services around people and place, and involved partners from public, private and community sectors. The approach is now being rolled out more widely, after pilots demonstrated success in breaking down cultural and organisational barriers and creating space for innovation.⁴⁷

Contracting for outcomes comes in different shapes and forms. In the Department of Corrections, the focus has been on varying service to realise outcomes (such as rehabilitation and reduced recidivism) across the wider system. This was a key driver behind the decision for using private management for Mount Eden prison. Private management provided the opportunity to benchmark and improve prison services provided by the Department. Successful ideas and innovations that might come out of Mount Eden prison could then be tested and adopted at other prison sites across the country.⁴⁸

Co-production with stakeholders

In this new world of experimentation and co-delivery, traditional models of consultation and transactional approaches to stakeholders are increasingly inadequate. Co-production is becoming more common as a tool to empower citizens, communities and other stakeholders in the policy process, particularly in areas where policy is contentious. The matrix in Table 5 highlights that full co-production occurs when there is shared responsibility in both the planning and delivery of services between professionals (public officials) and the users or community.

Table 5 : User and professional roles in the design and delivery of services

		Responsibility for design of services
		Professionals as sole service planner	Professionals and service users/ communities as co-planners	No professional input into service planning
Responsibility for delivery of services	Professionals as sole service deliverers	Traditional professional service provision	Professional service provision but user/communities involved in planning and design	Professionals as sole service deliverers
	Professionals and users/communities as co-deliverers	User co-delivery of professionally designed services	Full co-production	User/community delivery of services with little formal/ professional input
	Users/communities as sole deliverers	User/community delivery of professionally planned services	User/community delivery of co-planned or co-designed services	Self-organised community provision

The trend towards co-production in a way can be seen as returning to the philosophical roots of democracy.  In its purest sense, it is a shift from ‘public services for the public’ to ‘public services by the public’.⁴⁹ Through the co-production of services, a wider range of stakeholders are becoming involved in co-planning of policy, co-design of services, co-prioritisation, co-financing, co-managing, co-delivery and co-assessment.⁵⁰

In Australia, the Department of Human Services are seeing co-design as being central to finding the balance between what is desirable, what is possible and what is viable (this model is illustrated in Figure 13).  With the goal of making co-design ‘business as usual’, the Department has been focusing on leveraging existing forms of community engagement while developing a more sophisticated understanding of co-design and methodology (this strategy is illustrated in Figure 14). This has led to the Department developing a ‘maturity model’ for co-design capability to help guide its development and implementation of co-design methodology over a five year period.⁵¹

Figure 13: Department of Human Services co-design model⁵²

Figure 14: Department of Human Services co design strategy⁵³

In New Zealand, the Land and Water Forum is widely recognised as an early example of a co-production process.  The Forum brought together nearly 60 stakeholders in water management (including environmental NGOs, councils, industrial and agricultural users) and tasked them with working through complexities to reconcile their differing positions and to make recommendations to government.  While this unconventional process was risky (Ministers acknowledged they were nervous embarking on the initiative) and took some time (the Forum operated from August 2009 to November 2012), it resulted in a series of three reports offering a realistic approach to managing fresh water within limits.⁵⁴ This result required significant, expert facilitation of the Forum and the time and space to build up the common processes and understanding – including working together on easier issues, before tackling the more contentious ones – to enable a consensus to be reached.

Collaboration between agencies

As in the case of the Social Sector Trials and the UK Whole Place Community Budgets, services targeted and tailored to citizens cut across traditional agency divides and demand more collaboration between agencies.  Public administration is increasingly focused on a range of new, flexible approaches to governance (‘network’, ‘collaborative’, ‘connected’, ‘holistic’ governance) to capture this shift to working across bureaucratic structure and across public, private and community sectors.

For public servants this is by and large a new way of working and different from the new public management model common since the 1980s.  New public management sought to create semi-autonomous organisations which could handle individual tasks easily within an organisation, leading to proliferation and fragmentation of government agencies.  This specialisation of government agencies delivered important benefits in terms of the focus and efficiency of public services.  However, it also weakened the ability and incentives to coordinate across agencies in order to tackle the big issues that society faces.  As a result, many recent public sector reforms have sought to emphasise this cross-agency dimension, while retaining the foundation of focused agencies.⁵⁵

The Better Public Services programme reflects an ambition to reconfigure public service in New Zealand government to achieve better collaboration around outcomes⁵⁶, including through:

• Specifying results to mobilise people and resource across government.  The premise being that by getting Ministers of the day more clearly narrow down and specify what matters most to them then government agencies can be more effective in working together to deliver these outcomes.  There are currently 10 Better Public Services targets focused on five priority areas that cut across government: reducing welfare dependence, supporting vulnerable children, boosting skills and employment, reducing crime and improving interaction with government.⁵⁷
• Ensuring flexibility within the public services to deliver results.  The Better Public Services Advisory Group found that agency accountabilities and work programmes made it difficult to prioritise staff to cross-agency work and suggested a broad spectrum of organisational arrangements.  These arrangements ranged from loose agency groupings through to fully integrated departments.  The amalgamation of agencies to create the Ministry of Business Innovation and Employment and the Ministry for Primary Industries are an example of the latter. The creation of a ‘water directorate’ to co-locate policy staff working on fresh water management through formal secondment was an example of a joint venture between the Ministry for the Environment, the Ministry for Primary Industries and the Treasury to achieve better collaboration.
• Achieving results through sector and functional leadership.  The Better Public Services programme also recognises the need to lift decision rights above the agency level to realise better collaboration between agencies.  Grouping agency chief executives into six clusters as part of the government’s Business Growth Agenda is an example where leadership is being lifted above the agency level to better drive collaboration.

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32: Grube, 2013

33: The Ministry of Social Development

34: Taylor Fry, 2011

35: The Scottish Government, 2012

36: Department of Internal Affairs, 2014

37: Thenint, 2010

38: Ministry of Social Development, 2014

39: The Treasury, 2014

40: UK Government, 2010

41: The case study at Appendix 1 provides more detail on HealthOne

42: Local Government Association, 2014

43: ibid; the Casserole Club

44: New Zealand Government, 2011; New Zealand Productivity Commission, 2014

45: National Audit Office, 2013

46: Centre for Social Research and Evaluation, 2013

47: House of Commons, 2013

48: Department of Corrections

49: Bovaird & Loeffler, 2012

50: ibid

51: Bridge, 2012

52: ibid

53: ibid

54: Eppel, 2013

55: UNDP, 2013

56: New Zealand Government, 2011

57: State Services Commission

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