The Role of the Efficiency Unit in the Civil Service
Mr Duncan Pescod, Head of the Government Efficiency Unit, was the Foundation's guest speaker on 28 January 2005. This is a summary of his remarks.
Mr Pescod said he was pleased to have the opportunity to talk in a more comprehensive way about the role of the Efficiency Unit. Normally, he took an understanding of the notion of efficiency for granted, but today he would explore it in more depth. First he would talk about the background of the unit, then look at public sector reform, and finally discuss some emerging issues for the future.
The Efficiency Unit was set up in 1992 reporting to Sir David Ford, the Chief Secretary. The unit's mandate was "to pursue the government's commitment to improve services to the community and achieve openness and accountability by formulating, securing support for and coordinating the implementation of a programme of public sector reform." The mandate had not changed much since then.
The focus of the Efficiency Unit was on means, not purposes. It was for the Civil Service to use means to achieve the given policy ends. And without the right means, the ends would not be achieved. So the mission of the unit was to help develop or select the right means. It was not a matter of quick fixes. Rather, the unit aimed to identify and implement long term solutions that would effect transforming change.
The Civil Service was difficult to change; it is a bureaucracy with a natural resistance to change. It was as Kafka had described - the typical bureaucrat was highly-educated but with a one-sided or narrow perspective, good in the silo, but not interested in the world outside it. It was his job, Mr Pescod said, to make them look outside the silo. With persistence, it was possible to effect change over time. It was an iterative process: the unit worked on something, let it run for a while, and then came back to it again.
During the 1960s and 1970s, government was primarily reacting to circumstances. In the 1980s, there was more emphasis on long-term planning. In the early 1990s, the Public Sector Reform initiative sought to engage the whole government in a strategic approach to reform. This led to the birth of the Efficiency Unit.
The unit was formed under the Chief Secretary and reports to him. This encouraged the unit to develop a broad perspective and to evaluate results against resources input. The unit sought to promote the four core principles of the government: Living within our means, managing for performance, developing the culture of services, and being accountable. Successive waves of reform had followed. Some of the highlights were the enactment of the Code on Access to Information, the establishment of Trading Funds, target-based management processes, the enhanced productivity programme.
To help improve service, the unit had been involved in such initiatives as the refurbishment of police report rooms, so that these presented a more welcoming and professional appearance to the public. The introduction of performance pledges also contributed to the development of the service culture.
More recently, E-Government initiatives sought to make government more efficient, and promote a more holistic approach to service delivery. The silos were broken down, and the e-facilities offered a one-stop shop. Examples included the electronic tendering system, the automated passenger clearance system, ESD-Life's service booking facilities, the digital mapping initiative.
Public-private partnership (PPP) was another recent theme of public sector reform. Moving away from the traditional areas of the Capital Works programme, PPPs are now being taken forward in areas such as Tourism, for example, the Tung Chung Cable Car, Hong Kong Disneyland, the AsiaWorld Expo, and the Marine Police Headquarters. Mr Pescod also highlighted some potential PPPs. These included the Sha Tin water treatment plant, regional poultry slaughterhouses, central hospital catering, solid waste management, sewage treatment, prison clusters, crematoria/columbaria, highways. Sports and recreation facilities were a further likely candidate. In Hong Kong these were run by the government, but in other places this was not the case.
Outsourcing was another important theme. In 2004, outsourcing amounted to a total of HK$46 billion - a considerable sum, notwithstanding that it was lower than 2002's HK$68 billion because of the decline in capital works.
As the Greek philosopher Heraclitus said, nothing is permanent except change. It was important to bear in mind that there have been considerable changes in the civil service system over the years. In 2000, starting salaries were modified, the performance management system was introduced. In 2000, the civil service provident fund was introduced, voluntary retirement came in 2003. Fourteen thousand senior civil servants were gathered together for four days to thrash out the core values that would underpin the ideal of supporting Asia's World City. Hong Kong needed public services of the standard to match the World City ideal, and reforms were needed to get there. The event came up with 200 initiatives to that end.
And the service had changed. It had reduced from 190 thousand to 165 thousand civil servants. Generally, departments were happy to change if it helped them improve their service. The vision was to facilitate work across departments rather than up and down within the silos. Shared services were needed, and more needed to be done by the private sector.
The unit took reference from the challenges faced by overseas governments.
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Globalisation was requiring governments to pursue multilateral cooperation and compete for businesses and knowledge workers.
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Customer expectations were rising: the marketplace had taught customers to expect compelling, convenient and personalized services.
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Technological innovation was another theme: waves of technological change were opening up opportunities to streamline procedures, adopt flexible skills and management systems.
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And resources were scarce: fiscal constraints were requiring governments to carefully guard resources and show proof of value for money.
Governments were responding to the global challenges by
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Decentralising authority within governments and to levels of government closest to the citizen;
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Re-examining what governments should do and pay for;
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Looking for more cost-effective ways of delivering services;
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Downsizing the public service and privatizing and corporatising activities;
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Emphasising customer orientation, including through the articulation of explicit quality standards for public services;
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Simplifying regulation and reducing costs;
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Benchmarking and measuring performance.
Hong Kong has learned from these trends. And it has faced many challenges of its own. There had been the Handover in 1997, the introduction of the Accountability System, the progressive democratization of Legco. Now there were concerns over unemployment, generally rising expectations, changes to the economy (e.g. through CEPA), greater public scrutiny of results, and the need for cross-departmental and cross-functional service delivery. Changing services required different skills. Budget deficits underlined the need to accelerate reforms.
The Efficiency Unit had started small, with some 15 people relying on external consultants. Now, following the merger with the Management Services Agency, it has 140 people, and could do its own consultancy work in many areas. The unit's role was to identify improvement opportunities, in service quality, use of technology, management and operational procedures. It facilitated change, applying external pressure to drive government to change. And it helped with implementation, examples being the establishment of a call centre, records management, e-Government, helping business, and the establishment of a licensing centre.
In approaching its work, the unit would try to tackle the fundamental obstacles to change. Typically, it would ask,
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What are the incentives or disincentives to change?
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How can we enable departments to implement changes?
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What can we do to give line managers more responsibilities and powers to manage?
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How can we best leverage technology?
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How can financial management help ensure that resources are used in the most effective manner?
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How do we integrate operations and processes to deliver better public services to the community?
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Are we making sufficient use of private sector skills and resources?
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What more can we do to achieve the desired results and performance?
The Efficiency Unit does not work alone, but works closely with other government units at both the policy level and the line level.
Mr Pescod said that when he joined the Efficiency Unit, his friends had joked that he now had a job for life. External circumstances and demands were always changing because of political development and the economic climate. The government's role changed too, through privatization and regulation or deregulation. And the public interest require a constant balancing of conflicting aims, for example speed of response and probity, transparency and confidentiality, low taxes and social welfare. Constant effort would be needed to find a new balance that would meet the new demands.
The above does not necessarily represent the views of the Foundation.