By David Williams
14 July 2010
The government’s spending watchdog has urged ministers to learn the lessons of the old Public Service Agreement regime, which failed to link spending to performance assessment.
PSAs were set up by the Labour administration in 1998 and scrapped by the new coalition government last month. The system was used to evaluate how well departments were performing, with targets on flagship policy objectives such as reducing child poverty and improving health care outcomes.
But the National Audit Office, whose final report into the regime is published today, found that financial information was ‘poorly linked’ to PSA indicators. This meant that PSAs ‘[hindered] informed decision making’, said the NAO, because it was unclear what the best use of resources would be to achieve desired results.
The study found that in 36% of cases, the ‘basis for claiming success was unclear or contestable’, while for 9%, the PSA system was not measuring vital information.
PSA indicators generally did not distinguish between the policy outcomes and changes in society that would have happened anyway, making it hard to track the effectiveness of government action.
The NAO said that the government should keep the lessons of the PSA system in mind as it draws up a new performance measurement system. Any new regime should have unambiguously expressed objectives and a clear ‘business model’ linking resources to the impacts on society, the report concluded.
NAO head Amyas Morse said: ‘Measuring government performance is vital. It shows whether the taxpayer is getting value for money and lets government learn from experience.
‘Any new performance metrics need to be clear, measurable and directly related to the resources used to deliver them.’
