Open to the public

Star ratings have succeeded in opening up
services to public scrutiny and judgement, writes Lisa Harker, but
whether performance can actually be improved by such systems
remains unclear.

The phone rang as I was writing this article.
It was my GP. I had complained about the treatment that I was
receiving at my local hospital and was there anything she could do
to help?

Similar conversations echo across
the land. Rather than put up with shoddy public services, we are no
longer reticent about speaking out. There has been a profound
decline in public deference. Boundaries between professionals and
citizens have been stripped away. Deference, ignorance and
powerlessness are giving way to dialogue, discovery and,
occasionally, defiance.

An
explosion in the use of performance measures – league tables,
benchmarking, Best Value and now star-rating systems – has driven
this transformation. Once we judged public services on local
reputation. Now facts and figures abound. The successes and
failures of services are exposed, public scrutiny is encouraged and
the balance of power in the relationship between citizens and
services has shifted.

But
for government, performance measures are not only about enhancing
public accountability. Alongside increased investment, they are
seen as key to achieving improvements in public services. By
providing information about the quality of services, along with
greater choice, it is argued that citizens will be able to select
the best, thus driving up standards. In addition, public measures
of performance may themselves have a direct effect, providing
incentives for services to improve (or be shamed into doing
so).

Do
they work? The evidence is mixed. First, there are concerns about
their fairness. There is an unavoidable trade-off between
simplicity (necessary for public accountability) and
comprehensiveness (necessary for robustness). Measures such as
star-rating systems, which favour simplicity, inevitably suffer
from a lack of precision. Last year, the NHS Confederation strongly
criticised the health service star ratings, arguing that they were
too reliant on inadequate data and failed to take account of
whether NHS trusts were improving.

Simple
classifications of public services blur the distinction between
differences in performance. The meaningfulness of the star-ratings
system was questioned when more than half of English local
authorities were awarded a one-star rating.

But
there are also concerns about the impact that performance measures
can have on practice. In truth, we still don’t know enough about
the relationship between measurement and performance. But there are
some worrying signs. Aside from the impact on staff recruitment and
morale (not to mention the implications for communities who are
having to rely on zero-rated services), there is some evidence of
perverse effects. In the US research suggests that although
external evaluation can lead to improvements in services, it can
also encourage services to select their clients with their rating
in mind. Hospitals, for example, have been found to select patients
for treatment in line with enhancing their performance
rating.

Another perverse effect is much
in evidence: the impact of school league tables on house prices.
You only have to glance at house property websites to be convinced
that school league tables are distorting the housing
market.

Such
effects are worrying, but they will be marginal if public sector
performance improves across the board. This may be as much
determined by how government chooses to act on performance ratings.
Increasingly, policy makers are favouring a system of reward and
punishment: earned autonomy and extra resources for those who do
well; special interventions (and the threat of being taken over by
private sector) for those who do not.

Meanwhile, the search continues
for the holy grail of public sector performance measurement. But
while simple, fair and effective performance measures may well
remain elusive, the role of better public information about the
performance of public services should not be overlooked.

Regardless of whether performance
measures prove to be the key to achieving a step change in the
quality of public services, they have the potential to continue to
change the relationship between citizens and services. And in the
end this may prove more important in shaping the future of our
public services than anything else.

Lisa Harker is deputy director of
the Institute for Public Policy Research.