PSL and the Supply Side (ii) – The Production of Public Services Delivery by PSOs and Value Creation

PSL requires a new approach to how we understand the production/ delivery of public services to local citizens and communities, whether these organisations are in the public, private, or non-profit sector. This approach needs to address four issues. First, traditionally, the focus of PSOs has been upon delivering ‘a service’ to citizens or local communities. This service might be designed as an entity (for example, a community learning resource centre) or as a level of production (for example, ‘X’ number of beds for elderly people in a residential home, per thousand population). Second, performance evaluation and management for PSOs has often focused upon organisational/service unit costs and internal measures of organisational efficiency. Even when the performance focus has moved beyond this, to explore external effectiveness, the emphasis has invariably been upon the outcomes of public service delivery in isolation from other forms of value, as we discussed earlier. Third, and particularly whilst NPM was the hegemonic model of public service delivery, the public service delivery process has been understood as a linear production process, more akin to manufacturing than to the reality of service delivery. Fourth, and related to this, the citizen and service user have invariably been situated at the end of this linear production process, receiving (frequently passively) public services that have been designed and created by PSOs. They have had only limited engagement in genuinely shaping and delivering these services. Despite over a half-century of the espousal of the importance of the citizen as the mainspring of public service delivery, top-down models of‘consultation’ and the tokenistic involvement of a small number of the ‘usual suspects’ in public service delivery and management continue to dominate (Flemig & Osborne 2019).

With respect to the first two issues, we do not argue that these are unimportant. The design of public services and the assessment of need and demand are, of course, essential. Similarly, PSOs must take heed of their organisational efficiency if they are to be economically sustainable, and outcomes for public service users are clearly of prime importance (Osborne et al 2015). Rather, our argument is that these issues only make real sense if they are understood in a context of external value creation - for citizens, service users, communities, and society. The performance of public services can only truly be assessed against measures of value creation, whilst, as discussed previously, outcomes are only one element of the value (if an extremely important one). These issues will be addressed further below, whilst those of the role of the citizen in public service delivery will be addressed in the next section.

To reiterate, PSL requires a novel approach to how we understand the nature, delivery, and management of public services. PSL requires that we shift the focus from the organisation (PSO) to the citizen and the service user. The task is not to establish public services to meet a predetermined need (‘elderly day care’), but rather to create resources that citizens can utilise to add value to their lives by integrating them both with other resources (of their own or provided externally) and with their own needs. This does not negate the role of the strategic and operational planning of PSOs, but it does require them to take a different view of the purpose of public services, concentrating on all the elements of value identified previously. Thus, PSOs and public service managers need to:

  • • Position citizens at the heart of the needs assessment and public service design processes as discussed previously, using tools such as service blueprinting (Radnor et al 2014),
  • • Understand public services not as ends in themselves, but rather as resources that citizens and public service users can access to create and co-create value in their lives,
  • • Shift the roles of public service professionals and staff towards an appreciation of how public services add value to citizens’ lives beyond outcomes alone (e.g. how they impact upon well-being and whole-life experience, create capacity to change in the future, and/or add value to society as a whole).
  • • Relatedly shift the culture of PSOs away from delivering services to supporting citizens in their creation of value in their own lives, and
  • • Evolve new models of evaluation and performance assessment that understand the purpose of public services as creating value rather than solely delivering services - these will incorporate measures of efficiency and outcomes, to be sure, but within a broader framework of value creation.

This is a challenging agenda for change and reform for public services, to be sure. It will radically re-position the citizen and the service user at the fulcrum of public service delivery, where these services interact with their needs and context. No other approach can truly create value either for citizens or for society. To do otherwise will continue to design public services that create no real value and which interact with the needs and well-being of citizens and public service users only in passing.

This agenda will also take time to implement. Organisational cultural change is a notoriously long process, whilst active engagement with citizens will be required to help them understand how their role in and relationship to public services will change. To take one example, a particular policy trajectory in the UK is currently the personalisation of social care services. The concept is simple and one that has much in common with the aspirations of PSL: rather than funding and providing pre-set services to vulnerable adults, budgets will be decentralised and allocated directly to vulnerable adults and their carers, who will then design and purchase services directly to meet their needs. As O’Rourke (2016) has indicated, the intent is both to empower service users directly and to seek to constrain the growth of social care budgets. The extent to which it is possible to achieve these policy objectives simultaneously, however, is questioned by critics who identify the ‘consumerist’ framework of personalisation as a real break on its ability to achieve empowerment - and notably in the era of the use of ‘Big Data’ by PSOs (Yeung 2018). Thus, the focus has been upon budgets rather than the needs of vulnerable adults. Yet, this does not have to be the case. Situating personalisation within a PSL logic framework would shift the prime focus from cost reduction to value creation, whilst also allowing service efficiency to be evaluated within a value creation framework.

Such a change in the organisation and culture of PSOs will not be easy. However, it is possible, as Gronroos’ (2019) work on the reform of the Finnish Tax Agency has suggested - as long as sufficient and realistic time is allowed. The key steps to enable this process are as follows:

  • A re-orientation of the need-assessment of citizens by government andI or PSOs, to focus on value creation rather than on pre-defined formulation of need (in terms of specific existing service configurations),
  • A cultural change within PSOs to understand the purpose of public agencies, to provide resources for citizens to use rather than fit citizens into existing service configurations,
  • The sustained training and development of public service professionals and staff to support this cultural change,
  • A public education programme, to support a change in public attitudes to public services away from a consumerist orientation and towards one emphasising value creation in their own lives and for society, and
  • The evolution of new and nuanced performance assessment and evaluation approaches, to capture the full range of elements of value creation in relation to organisational efficiency and equity.
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