By David Fellows

I have no medical training or hospital management experience. I have from time to time had fleeting involvement in health development issues and I have been a hospital patient but I make no claims in writing this except that I am a general client of the NHS. Like millions of others I am simply concerned with the state of play: the lack of GP availability, the quality of some diagnostic services, the management of outpatient services and the speed of hospital referrals.

In exasperation the not-so-wealthy are paying privately for GP services, specialist consultations and surgery. The problem predates COVID. Heavy demands are placed on all health care systems by increasingly sophisticated diagnostics, medical procedures, patients care and medication. Add to this an increasingly elderly population and the country faces the prospect of a colossal financial burden for a less than satisfactory service.

The once acceptable approach of throwing money at the NHS is very obviously not working. Whatever sum is requested and provided is almost immediately decried as insufficient.

The motivation behind the current nurses pay dispute raises a further issue. The demands made are potentially destructive of the NHS, public services in general and the economy.  This raises the question as to whether nurses leaders are actually voicing a profound dissatisfaction with the NHS. Has its vastness and complexity come to alienate the very people on whose dedication it depends?

Hitherto the international direction of travel has been towards comprehensive national health services but none has gone so far with integration as the UK. Of course the NHS is not the sole UK provider. Private medicine is available in all fields. The scale of core state provision is around 70% of total medical service expenditure in the UK, similar to core provision in many other developed countries.

But elsewhere the core is often extensively disaggregated. For instance, multiple providers for commissioning (eg not for profit insurance schemes for core provision), hospitals and primary care. Levels of integration may be available. Core services may receive public and private financial contributions and provision may be made for equalising insurance costs of those with poor health. Services for children, unemployed and elderly may be financed by the state. There are many variants including discretionary aspects.

The weakness of the UK system is that the core is massively integrated and almost entirely state driven. The UK has broad geographic and localised divisions of the service but this does not overcome the fact that the centre has overarching responsibility and control. Government is commonly accepted as responsible in all respects. Complaints ultimately rest with Government, shortcomings usually blamed by officials and the media on lack of funds.

With respect to core provision the state is singly charged with operational responsibility for contributing vision, strategy, management, procurement, facilities, personnel, training , medical record development and patient communication. Personal dedication and compassion are valued but the organisational architecture is deficient in drivers for efficiency, innovation and flexibility of reward.

A state with more limited responsibility for delivery obtains a better vantage point from which services can be judged and structural refinements made. Where ultimate operational responsibility is distributed there are more active voices to explain the difficult issues that beset service delivery, more partnering choice for providers and more provider choice for patients.

The bait noire in this alternative universe is the US health system. It is becoming more comprehensive but remains unsatisfactory by the standards of many developed countries and is far too expensive. It is not the starting point for any new health provision model. Other developed countries offer more varied systems as Federico’s review of OECD countries[1] demonstrates.

Frederico is an advocate of progress by marginal refinement for health service development. I suggest this precept that should be readily embraced. The NHS is too exposed to cope with promises of major reform.

My proposal, therefore, is for the Government to affirm the benefits of a more diversely operated health service having both public and private sector counterparts with common regulatory and performance oversight. Where appropriate, public and private sector providers could share facilities perhaps with initial cost borne by the private counterpart and medical expertise could be shared too. Collaboration could also be relevant in the development of management and medical information systems. Private hospitals could qualify as teaching hospitals. It would be a gradual evolution.

The initiative could commence with a call for proposals covering all aspects of potential development within the themes of evolutionary change, service improvement, learning from diversity and providing the prospect of an affordable outcome to exchequer and citizens. These would become the criteria for success on which progress would depend. This is more specific and extensive than the reference to public service reform and the Integrated Care Board review contained in the Chancellor’s Budget Statement.

The outcome could embrace a variety of organisational arrangements. Taxation aspects may require phasing in to avoid any initial net cost to the exchequer. Ultimately there would be a reduction of cost and demand on public provision.

The development process could add significantly to the UK’s innovatory record in the fields of medical service delivery, information and medical technology. Opponents would charge the Government with developing a two tier health service but this would be difficult to sustain given the proposed criteria for pursuing the development.

The public can see the cracks widening and know that the solution is not just more state funding.  Any Government that had the courage to tackle the problem honestly and openly could be met with sighs of relief, particularly if the approach was subtle, gradual and sensitive to the dedication of NHS personnel. There are always reasons to postpone a difficult journey but surely the time has arrived.

David Fellows worked extensively in UK local government, was a leader in the use of digital communication in UK public service and became President of the Society of Municipal Treasurers. He was subsequently an advisor on local government reform in the UK Cabinet Office and an international advisor to the South African National Treasury. He is a director of PFMConnect, a public financial management consultancy, and a regular commentator on public financial management issues at home and abroad.

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[1] Comparative Health Systems – A new Framework by Federico Toth, Cambridge University Press

The public–private partnership (PPP) mechanism is often proposed as a means of delivering public services, particularly complex construction projects, in developing countries. This study, published in September 2022, developed a performance framework to evaluate the application of PPP projects based on 10 key performance indicators and 41 performance measures. The framework was reviewed by experts for coverage and relevance, then validated through two Pakistani road construction case studies.

By David Fellows and John Leonardo

Introduction

The Public Expenditure and Financial Accountability (PEFA) programme provides a framework for assessing and reporting the strengths and weaknesses of public financial management (PFM). The current 2016 Framework refines the previous 2011 Framework and is structured under a hierarchy of 6 Pillars, 31 Indicators (PIs) and 94 Dimensions. The PEFA Field Guide explains the components of the 2016 Framework and describes how an assessment team should score each dimension on a scale of A to D, a D score representing the lowest level of performance.

An initial assessment of the latest PEFA reports for countries published under the 2016 Framework suggested that many countries were not getting the PFM basics right. This led to a comparison of recent results with those from earlier PEFA reports prepared under the 2011 Framework to examine performance over time and the lessons for PFM improvement that such a comparison may offer (termed the ‘dual study’). It was decided to focus on dimension scores since the demands of PFM can change markedly depending on the aspects of the subject matter under consideration and the evident variations of score for the same country at dimension level within a range of PIs.

It was decided to confine this initial study to the analysis of D scores at the dimension level given the frequency of D scores, the very poor performance they represent and the importance of raising performance to a higher level. The Field Guide requires a D score when: ‘the feature being measured is present at less than the basic level of performance or is absent altogether, or that there is insufficient information to score the dimension’.

For the purpose of this study, D scores include dimensions marked D*, NR and some NA scores where evidence suggests a breakdown in PFM activity. It seemed evident that these attributions are often applied inconsistently and serve to obscure the extent of the poor performance of some countries by avoiding the use of justifiable D scores. A summary of all scores for the 2016 Framework and the dual study evaluations, as discussed in this report, can be accessed at Annex 1.

2016 Framework analysis

The 2016 Framework analysis consisted of the latest published evaluations for the 63 countries for which there were published reports at the time of this study. The D scores represent 32% of all dimension scores in this data set, 39% amongst low-income countries.

D scores were widely distributed throughout the framework with 45 of the 94 dimensions having an above average number of D scores.

The study also defined and assessed the key factors (termed descriptors) that contributed to PFM performance. The results, summarised at  Annex 2, suggested that most D scores can be explained by the absence of ‘Management Effectiveness’, ‘Integrity’ and in one case of ‘High Level Technical Knowledge’ although poor “System Design” was another potentially important contributing factor.

Annex 3 provides a full list of the 2016 Framework dimensions and D score data together with the descriptors contributing to each dimension.

Dual framework

Following the results of the 2016 Framework D score study it was decided to undertake a review of 45 countries that have undertaken at least one PEFA evaluation under both the 2011 and 2016 frameworks (the earliest and the latest studies we used for countries with more than two studies). This enabled a country’s performance to be compared over a five-year period.

The 2011 and 2016 PEFA frameworks differ in many respects. An equivalence table published by PEFA suggests that the two frameworks can be aligned to 37 “equivalent” dimensions on the basis that the respective dimensions were either “directly comparable” or “indirectly comparable”.

The PEFA equivalence table identifies 28 dimensions (or in some cases subsets) from the 2011 framework as “non-comparable (subject only)” to 2016 counterparts suggesting that the dimension descriptions and scoring routines differ markedly while the general area of relevance to the dimensions are similar. This leaves only 37 pairs of comparable dimensions.

On examination, the study team decided that 26 of the 28 pairs of dimensions judged “non-comparable (subject only)” were in fact very similar to the 2016 counterparts, the main difference being the way in which the later guidance is translated into clear-cut scoring criteria but that a good PEFA evaluator should have made reasonably similar judgements for both frameworks when reviewing all but two of these dimensions.

This exercise, therefore, recognises 63 equivalent dimensions while also providing results for PEFA’s 37 equivalent dimensions. It is suggested that the D score characteristics of both data sets are sufficiently similar to provide a reasonable validation for the larger 63 dimension equivalence thereby extending the usefulness of inter-framework comparisons. Details of the PEFA and PFMConnect equivalence tables are set out at Annex 4. The dual study of 2016 and 2011 Framework with D score data at dimension level is set out at  Annex 5.             

The dual study is highly concerning in terms of the lack of improvement amongst those dimensions receiving D scores. These data are further summarised and commented on below.

The dual framework study reveals a deteriorating performance with most dimensions exhibiting a greater number of D scores in the later evaluations. Only 13 (35%) of dimensions from the 37 dimensions study and 16 (25%) from the 63 dimensions study experienced reductions in D scores between evaluations.

When the dual evaluations for the same country were compared, see Annex 6, it was noted that most countries recorded a higher proportion of D scores for the same dimension in both evaluations demonstrating a reasonably consistent poor performance. A few countries displayed less consistent results.

Few countries in the 63 dimensions set recorded reductions in the number of D scores in 2016 framework results compared with the 2011 framework results. The top performers where significant PFM reform activities had been undertaken between the dual framework studies included: Philippines, Maldives, Mongolia and Tajikistan.

The results for the proportion of dimensions with above-average D scores that are common to both framework dimensions sets is concerning. Approximately one third of all dimensions had above-average D scores that were common to both frameworks for the same country for both datasets. In addition, over 70% of the above-average dimensions in both datasets were common to both frameworks showing limited improvement in the worst scoring areas over a five-year period.

Dimensions with regular poor performance are widely distributed (titles in red at Annex 6). This suggests pockets of poor management that remain in place without effective challenge and this is consistent with the descriptor analysis.

Conclusions

This study offers a range of findings that pose questions about the approach, effectiveness and sustainability of PFM reforms instituted by national and subnational governments often in collaboration with development agencies. The concerns about management effectiveness and integrity highlighted in this study must be seen to question the most basic aspects of any organisation.

The study focusses on D score analysis, but it could be useful to extend the analysis to C-level scores where the performance of countries still remains below good international standards. This could reveal new characteristics of national PFM performance and extend the range of analytical techniques applied to performance data.

The data analysis evidences the credibility of PFMConnect’s extended 63 dimension equivalence model that offers significant potential for more detailed studies of specific countries or regions.

Further work on descriptors to reveal contributory factors to variations in performance seems worthy of further development.

The failure of some governments to publish PEFA studies in full reinforces concerns about the need for greater attention to integrity. Another improvement that could be readily and widely implemented is legislative scrutiny of audit reports (PI 31).

Recommendations

We recommend that country-specific studies should be undertaken based on PEFA assessment reports (both 2016 Framework studies for the full 94 dimensions and dual studies where the data are available) examining D scores at dimension level to establish potential causes of poor performance and identify ways in which performance may be improved. Issues to consider with respect to areas of poor performance, include:

• The commitment to personnel development and support, including: in-service training, management development, oversight, feedback on performance, and system design.
• The adequacy of transparency and accountability and evidence of corrupt activity.
• The quality of relevant communication and support levels among different departments and units of the finance ministry.
• The reasons for persistently poor or erratic performance and the fit with other findings.
• The observations of managers and staff on reasons for poor performance and barriers to improvement.

We recommend that country studies should be designed as the initial phase of PFM development programmes. In this context, a report by the Swedish International Development Cooperation Agency (SIDA) offers some observations about the conditions for effective PFM reform. These include the importance of change agendas being aligned with Government priorities and the need to treat PFM reform as a learning process with strong emphasis on coordination and systematic evaluation of the activities performed by teams responsible for delivery.

Groups of countries or subnational bodies may wish to collaborate in reform programmes enabling challenges and learning to be shared and systems of mutual support developed. We have previously advocated the use of digital communication as a cost-effective and time-saving way of sharing knowledge and ideas between nations (incl. expert advisors).

Any country, region or development institution wishing to participate in further work in this field is invited to discuss their interest with the authors.

An article based on this study has been published by the IMF’s PFM Blog.

PFMConnect is a public financial management consultancy with a particular interest in the use of digital communication to support learning and sharing expertise amongst the international development community.

David Fellows began his career in UK local government where he became President of the Society of Municipal Treasurers and a pioneer of digital government. He has held appointments in the UK Cabinet Office and the National Treasury of South Africa (david.fellows@pfmconnect.com).

John Leonardo is a PFM expert with extensive worldwide experience. He has undertaken PFM assignments in Africa, Asia, the Caribbean and the Pacific where he undertook PEFA assessments. Both authors are directors of PFMConnect, a public financial management consultancy (john.leonardo@pfmconnect.com).

By David Fellows

The successful PM candidate will face a series of conundrums as he/she ascends to the highest political office in the UK. It will be a daunting task and the contest has provided opponents with so much ammunition.

Ten key issues

The battle for leadership could have been more useful if it had addressed models of government or economics or service delivery or even styles of leadership but it was rarely about any of these. So let us examine ten of the key issues the new PM will face, some already in play and some that remain largely unspoken.

PM & Cabinet

We’ve got a collegiate cabinet system with cross-government working facilitated by cabinet colleagues and overseen by a PM who clarifies direction, adds impetus, refreshes the machine and does the communication thing.

So ideally the new PM brings in people who are good at learning, have interesting ideas, knowledge, drive, practical insight and of course a collegiate mindset and a willingness to help others integrate and develop. How to create the right team?

Strategy & Delivery

The contestants will no doubt be discussing with potential ministerial candidates their vision with reference to a selection of portfolios. What about new or refined models of cabinet government, the civil service or the health service. The latter two are clearly in deep organisational and professional trouble of all kinds. Some bold and honest thinking is required (see later for health). What about radical views on deregulation, service efficiencies and service reductions.

Sometimes the strategy is right and delivery needs sharpening. Delivery is a perpetual problem. The idea that outsourcing or agency status eliminates Government responsibility is nonsense, even managerial responsibility rests with government if things start to go seriously wrong. If we embrace this how could it change things?

Growth & Innovation

Growth-directed investment incentives are mentioned from time to time including infrastructure projects that could be part of the solution. Of course the Government are already buying innovation in many fields: health, defense, power generation, electronics. We in the UK are not necessarily benefiting from the growth potential of this spending because we often buy from specialist companies in other countries. We tend to believe in going to the market but not market shaping. So we reduce taxes or invest in public services and expect spending to take place here when it actually it ends up taking place somewhere else, not always but perhaps too often. But who is keeping the score and thinking through the results?

Resilience & Trade

We do trade deals to broaden our markets to generate business for the UK and provide a diversity of suppliers for imports offering price competition and resilience. To an extent it offsets the hostility of EU countries to our departure from the EU but its purpose is much broader than that.

We also talk about internal resilience but resilience in what? The security services think we have Huawei sorted and can buy non-critical products. Of course if you don’t make PPE then in a pandemic, PPE becomes a critical product. In fact anything you don’t make to some extent is a vulnerability because, as we begin to see, almost anything that comes from outside our borders can be denied us through deliberate or chance logistical problems, skill shortages or scarcity of commodities that we left others to grow or source. So we become entirely self-sufficient? No, but we must energetically encourage diversity in UK business activity giving us a greater readiness to understand and respond to opportunities and threats.

We pride ourselves on our innovation but entrepreneurship is the key to development and it is development that gets the wheels spinning and produces a virtuous cycle with iterations of product innovation leading at some point to a commercial breakthrough. It is entrepreneurship that keeps the cycle going and nurtures the vision of generating a major business. We probably don’t appreciate and encourage entrepreneurship enough.

I haven’t mentioned agriculture, do we really want it? The lack of interest in the development of this sector is astonishing, a point Jeremy Clarkson makes only half in jest.

This whole field needs clarity about how we see growth being created and how the state may help or hinder a successful outcome. Are we prepared to engage in such thinking or are we frightened to be charged of attempting to create a command economy?

Tax Cuts & Modelling

The cost of petrol is astronomic and is hitting some people and businesses more than others in a haphazard manner. Without time to adjust this can be catastrophic (we are a highly mobile society). Is it not sensible to take some of the tax off petrol given that the soaring price draws in more revenue than could have been expected even six months ago (there may be some progress on this as I write but what is the economic plan behind it?).

If we are to achieve economic growth about which we are all so keen, why deter the relocation of businesses into the UK and the retention of businesses here by increasing the current rate of corporation tax (lowering it would be preferable but let’s not get carried away). Instead we seem to be set on raising it with the intention of reducing it almost at once (unless I misunderstand the intention).

Borrowing is an alternative to taxing but we already have huge debts, inflation is causing havoc, more borrowing means even higher interest rates and a mounting debt pile. Supply chains are still stretched and could get tighter, we are financing an indefinite war, a recession looms in the EU, trade hostility is brewing with the EU and even the US (Federal rather than individual states), spending pressures abound, so what scale of economic stress, deficit and debt burden we are walking towards? What are the tolerances envisaged in the various iterations of the BoE and Minford economic models, are they all reassuring in their results?

Health & Defense

This is the coming issue and the secret is…we have enough money for neither.

Health is literally infinitely expensive and everyone involved needs someone to blame and that is always going to be the Government unless the system can embrace other sources of authority and cash to share the pressure. Most alternative systems involve insurance schemes and privately run hospitals. There are some very good systems no more expensive than our own, some less expensive. Ours is not amongst the best by any means and is on the verge of breaking the state politically and financially.

The problems include explaining the situation rationally and calmly, choosing the right model, managing the transition and defining the state’s role and residual financial responsibilities. The Opposition, supported by the BBC, will go to war over this which is why the PM must prove to be a hugely effective communicator. The Opposition will secretly hope that the Government  (I am assuming the current Government stays in power long enough to do this of course) succeeds in making an effective and radical change but is mortally wounded in the process. This is the challenge!

Assuming we capitalise on the new arrangements to renew UK medical practice, and goodness knows it needs it, we could generate a boom in UK-based medical innovation. Good for health, good for business, good for UK-based international trade if done well.

Similarly we do not have much extra money right now for defense. But could we do more to grow our advanced engineering, telecommunications, artificial intelligence, UAVs, technical skills and products out of the defense budget with the resulting economic growth supporting our defense aspirations? It is not a total solution but perhaps it needs to be more of the way forward.

Housing Targets & Birthrate

Well the plan seems to be to abandon targets. Housing will just appear where it is needed. Basically Opposition seats. No effective policy, rapidly declining birth rate/tax payers.

Regions v Greater South East

Is the next government going to tackle regional economic growth in a concerted manner or just call everything in the regions levelling up and allow the golden triangle to roar away into the sunset as the appendix to the Levelling Up White Paper suggests (see previous note[1]). Levelling up opportunity for future generations (see previous note[2]) through economic growth is the only game for the regions. Will Government ever be prepared to accept such an anti-establishment path? Probably not.

Boris the Good v Boris the Bad

Brilliant communicator, great hair, short on hard truths, short on strategy, short on focus, difficult to control, easily led astray – but with the right support he was probably unbeatable. Yes it was a big ask. It’s virtually calling for grown-ups to exist in politics and the civil service at the same time and in the same place … hence we are where we are. With all this in mind and reflecting on the earlier issues, the PM really does need to think practically not just politically about his/her appointments from the perspective of creating a functioning government that compensates for their own shortcomings. Sage and impartial advice required.

So

The world is not in a good place. Apart from a multitude of global issues to address we need a government that has the courage to tell the country that it can never make all the right decisions for everyone all the time, or indeed at any time. At best it can tackle a limited number of things reasonably well and only then in the event that it makes the  best possible choices. Otherwise overload is always ready to destroy leadership and nothing will be done well. Our personal choices define us yet state dependency is a constant prospect. Is modern politics capable of drawing a line under its competency?

PMs expect to be shot at by all and sundry and are never disappointed. Their ambition is soon reduced to survival. It is tempting to assume that neglecting hard problems and hard truths is inevitable and this results in false promises. Is this really the only way forward? Can our next PM plot a different course?

David Fellows is an accountant. He worked extensively in UK local government, was an early innovator in the use of digital communication in UK public service and led a major EU project supporting the use of digital technology by SMEs. He became an advisor on local government reform in the UK Cabinet Office and an international advisor to the South African National Treasury. He writes on public financial management and digital communication particularly in relation to developing countries: david.fellows@pfmconnect.com 

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[1] See: http://blog-pfmconnect.com/levelling-up-white-paper-commentary-time-to-deliver/

[2] See: https://blog-pfmconnect.com/levelling-up-opportunity-for-future-generations