EPSU affiliates from the Nordic and Baltic regions met in Vilnius on 14-15 June in the second of three meetings that are part of a European Commission-funded project on productivity in the public services.
A report of the first meeting and background to the project can be read here.
Productivity – what it is and what it means for the public services
Christoph Hermann of the FORBA research organisation provided an introductory overview of the concept of productivity, how it is defined and the particular issues that arise when talking about productivity in the public services where markets and prices are absent or don’t work in the same way as the private sector. There is also the issue of defining inputs and outputs and for the public services it is more a question of outcomes – the numbers of patients that are cured rather than just the number of treatments carried out - than outputs.
Public sector productivity also had to take account of prevention and the “productivity” of fire, police and health services were as much about improving prevention (that could reduce “output”) as they were about increasing “output”. There was also the question of capacity and the impact of the SARS epidemic in Canada and the lack of available beds in what had become an apparently efficient hospital system, had exposed the limitations of a strategy based on cutting beds.
Users’ assessment of public services was also important and as surveys carried out in the PIQUE project had shown there were some very varied views on citizens’ expectations of public services. The question of the quality and output of public services was not simply a technocratic question but one very much open to debate.
Measuring productivity in the health sector
Christoph Hermann and Per Brøgger Jensen of the OAO group of public service unions in Denmark provided two perspectives on productivity developments in the health sector. Christoph explained in particular how government statisticians in the UK had put together a range of data in a new index to try to reflect productivity changes. The revised statistics showed some modest increases in overall productivity (total factor productivity) in the UK. However, it was clear that there had been a significant rise in labour productivity but this had not been highlighted in any of the studies.
The new indexes attempted to integrate data on outcomes and quality but this sometimes involved statistics, for example, on survival rates that were of limited value or survey information that might not be so robust.
Per outlined what had been going on in Denmark where health costs had been brought below the average in other countries according to data from the Organisation for Economic Co-operation and Development (OECD).
Health funding was now linked to productivity developments and based on diagnosis-related groups (DRGs) was used as part of the analysis of health care costs. DRGs classify hospital treatments into particularl groups and their use has spread across Europe although not without some controversial effects in some countries in terms of impact on allocation of health funding.
Hospitals had been under considerable pressure to improve productivity and reduce costs and there had been a significant reduction in staff. However, the trade unions were challenging this approach, arguing for a focus on quality outcomes rather than just on delivering more for less as part of a top-down strategy. This also raised questions about the relationship between the state, the regions and local authorities in their responsibilities for managing and delivering healthcare.
Denmark – public provision versus privatization: what are the facts
Per Brøgger Jensen explained how public and private sector trade unions had decided to work with the independent research centre, AKF, to examine the research on public and private provision of services. With government and private employers making claims about private sector efficiency based on a range of different research reports, the unions wanted a proper assessment of these studies to see which stood up to scrutiny and to find out also which ones provided positive conclusions about the public sector.
The project was continuing but had already reviewed a large number of articles and studies and found nearly half where the scientific basis of the conclusions could be challenged. While there were some mixed results there was also an indication that pay and conditions were the key factor in differentiating between the public and private sectors. If tenders were awarded on the basis of maintaining pay and conditions, as had been done specifically in a major transport tender, then this put the public and private sector on a level playing field and in this case the public sector bid won.
Finland – challenging the government approach to productivity
Antti Palola, president of Pardia, the Federation of Staff Unions in Finland, explained how state sector unions were now extremely critical of a productivity scheme that they see as nothing more than a mechanism for job cuts.
Public sector unions in Finland are well aware of the challenges facing the public services. With an increasing demand particularly for health and social services from an ageing society that will also mean a reduced pool of labour from which to recruit. So while there is a common understanding of the problems that need to be tackled, the unions argue the government has made a big mistake by trying to respond with a simple 2% productivity target and an attempt to simply translate the private sector concept of productivity into the public service environment.
By pushing through productivity improvements while ignoring the impact on working conditions, the government has created an atmosphere of insecurity and stress that only undermines attempts to improve performance and service quality. Even the official public sector watchdog, the National Audit Office, argues that the productivity scheme should be abandoned.
The unions now hope that they will be able to negotiate a new agreement once the new coalition government is in place. A key element of this deal would be recognition of the importance of the quality of working conditions and the idea that maintaining and improving wellbeing at work has to be part of any strategy to boost productivity.
The unions also make clear that it will be vital to make it a real co-operation agreement based on a workplace level of understanding of and commitment to the aims and objectives of the scheme. This grassroots approach was completely missing from the earlier productivity scheme.
Jari Vettenranta of the JHL public sector union provided a perspective from the municipal sector where unions were also addressing the issue of how to increase service provision while avoiding an increase in taxation and maintaining and improving services. As in the state sector, JHL was concerned that the basic input/output private sector definition of productivity could not and should not be applied to the public sector.
The union has been advocating a different approach based on the idea of a “balanced scorecard”. This is the idea that any sustainable improvement and increase in services has to be about a coordination of elements – the vision and aims of public service provision, how those services are to be delivered, the working conditions of the people providing the services, the response of service users and the effectiveness of service delivery.
There is still a debate about what productivity means and what can be quantified when it comes to public services. Survey evidence can give an indication of users’ satisfaction while measuring effectiveness can be a challenge, but could be possible if there was an acknowledgement that this has to assessed over the long term for some services.
Concluding remarks
Some of the key issues raised during the conference:
• Productivity is a private sector concept and there is a risk if it is imported into the public sector
• Public sector unions do need to respond on this and as part of a strategy both to defend public services and attack the notion that the private sector delivers higher productivity – trade unions couldn’t be passive on this issue
• Where countries are facing demographic and financial pressures, trade unions support initiatives to increase the level and quality of services but this has to involve a clear commitment to maintaining and improving wellbeing at work
• The public service mission, quality of services, capacity to deal with emergencies and workplace participation are among some of the factors that mean that the normal notion of productivity cannot be imported directly from the private sector
- Log in to post comments