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Where does the coalition government stand on the New Public Management (NPM)?

Where does the coalition government stand on the New Public Management (NPM)?

With all the talk of cuts and fairness this does not perhaps seem to be the most important question to be asking. However, just as New Labour had a mantra of ‘invest and reform’, the Coalition government is pursuing a policy of ‘cut and reform’. We can only understand public sector cuts within the context of reforms to the management of the public sector.

Some background first; NPM has been the dominant approach to management within the public sector for several decades now. Broadly speaking advocates of the NPM argue that workers and managers are motivated by self interest. In the public sector this can mean that, if left to their own devices, managers in the public sector spend their time building little empires for themselves.

This has lead to an array of management techniques in the public sector from targets to bonuses to the outsourcing of public service delivery. In different ways each of these techniques attempts to counter-act the perceived deficiencies of public sector workers due to “x-inefficiency”.

Despite some flirtation with “digital era governance” the previous New Labour government was a firm believer in the NPM, notably in targets, performance related bonuses and outsourcing in various sometimes ingenious ways. The Coalition government has been critical of these techniques. Targets have been scrapped and bonuses criticised.

I would argue that what is emerging is a new approach but one that has only been made possible by the successes of the previous approach. Let me give you three examples;

just as New Labour had a mantra of ‘invest and reform’, the Coalition government is pursuing a policy of ‘cut and reform’ 

  • Innovation comes through freedom from central control
Targets and inspection regimes are being scrapped with the assumption that this will lead to innovative solutions (We wait to see if freedom includes allowing substantial local taxation, prudential borrowing or tax incremental financing). This is a direct contrast with the approach pursued from the 1980s onwards where central government was terrified that ‘freedom to innovate’ would mean ‘loony left’ councils being given more freedoms.

I would argue that this approach has been made possible because public agencies such as local authorities have internalised NPM. The Coalition government is not concerned about militant tendency or the People's Republic of South Yorkshire. Anyone who has worked in local government over the last few years would probably agree that the prospects of a great revolution in human affairs starting in local government is small.

  • Public sector managers are not in favour but commissioners and front line workers
The abolishing of Primary Care Trusts to be replaced by GP commissioners is the most extreme example of this but other examples would be the ability of staff to form new mutuals. The irony of the NPM was always that it employed hoards of managers and inspectors to enforce the NPM. The assumption here is that new institutional arrangements will perform the same function that managers and inspectors previously held.

  • Public sector will not generate its own league tables but will make data freely available
Naming and shaming of failing public services was a hallmark of the NPM approach. It was assumed that publishing league tables of, for example, school results, would lead to competition and increased performance. The Coalition government is not going to continue this practice but it is going to compel agencies to publish huge amounts of data. This will allow private organisations to publish their own lists.

In all three of these examples the Coalition’s approach is distinct from the previous approach but is still based on the assumptions which underpin the NPM. It is a new iteration rather than a complete break with the past.

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