In recent years the government has favoured target setting as a technique for improving the efficiency of public services. The flaw in setting rigid targets is that it simply makes public organisations good at keeping central government happy, not at satisfying the real needs of the local community.

Target setting can hinder innovation because if an employee comes up with a proposal to improve their service, the first question that management are obliged to ask is, "Will it help us to meet our targets?" I suspect that many good ideas in the public sector are still born because they don't make any impression on target statistics. Working to targets that staff see as at odds with their real job also lowers moral and suppresses the enthusiasm and commitment that drives innovation.

The key idea behind this innovation theme is to switch some of the emphasis from monitoring outputs to monitoring inputs. If the money and the staffing that we put into our public services are being used effectively, then the chances are that the outputs will be satisfactory as well.

The fiercest guardians of the public purse are not auditors and accountants but the public themselves and other stakeholders such as employees and trade unions. Stakeholders should be given sufficient information, so that they can check that public funding is not being frittered away by bureaucrats but is being used for our direct benefit in putting doctors and nurses on the wards, teachers in classrooms and coppers on the beat.

In order to provide the public with the information which is their entitlement, all government departments and publicly funded bodies should publish detailed management accounts of their income and expenditure on the Internet.

A specific example-hospitals:

a) A Hospital Trust's published accounts would reveal how much it had spent on pay for doctors and nurses, "golden hand-shakes", business consultants, public relations etc.

b) The public also need to be given information on the outcomes of the different institutions, so that they can compare efficiency ratios. - Throwing extra money at a problem does not guarantee that more patients will experience an improvement or stabilisation in their condition. *

If this information is released on the internet in a standard format, it will be possible for the public to track changes in expenditure and outcomes over time and use data comparison software, to compare the working efficiency of their local hospital with the national average.

*[Evidence from America suggests that for older patients at least, investment in health care does not correlate well with increase in health benefits. "When too much care can be bad for your health" New Scientist, 17 August 2002.]

Government departments tend to give public institutions lump sums of money for them to use freely, in a manner of their choosing, to cover their costs. In principle, having financial freedom at a local level improves efficiency, because it allows funding to be spent on what the local community wants. But it also causes a hidden problem because in financial terms, human resources and physical resources age in different ways. Most physical resources, such as desks, computers and motor vehicles depreciate with time, so the more years they are kept in service, the more cost effective they become as an investment. In contrast, salaried career staff, who are paid on a scale according to the number of years they have spent on the job, become more expensive to employ as they grow older.

This tends to cause stagnation within organisations, because as professionals enter the second half of their career, their experience counts against them, when they apply for new posts with a different employer. Employers prefer to appoint young staff when filling vacancies, because their salary costs are lower. It also tempts employers to retire experienced staff early and lose their skills, in order to keep the wages bill down.

Basic minimum professional staffing levels should be set according to nationally agreed formulas. So for example a school would have its minimum staffing levels set according to its number of pupils. The funding body would then directly pay the full salaries of the minimum number staff irrespective of their age and experience. The school would also receive a cash grant related to its pupil intake, which it could spend as it wished, including hiring more staff, above national minimum levels.

This revised method of staff salary funding would assist in creating a balanced age range of staff which combined youthful enthusiasm with older experience. It would also boost total skilled staff resources, because staff would tend to spend more years at work before retiring. Freeing up staff, so that they can easily move between posts in the second half of their careers would reduce stagnation and help to disseminate best practices.

10.6 N.H.S. Waiting Lists

A large part of the stress of being on any waiting list is not knowing how fast you are climbing up the list combined with the underlying worry that you may be accidentally crossed off the list. International  package courier companies solved a similar problem some years ago when they introduced internet tracking systems, which allowed customers to track the progress of their delivery via the courier companies web site. A similar system could be used to allow N.H.S. patients to track the progress of their pencilled in hospital admissions. The information could be presented visually in the form of a ladder or timeline. Patients who are not members of internet savvy families could gain access to their progress report though their local GP's surgery.

Central government should replace national mandatory targets with lists of aspirations which they would like individual institutions to meet. Representatives of stakeholders in schools, hospitals etc., would then draw up lists of targets to satisfy local needs. Where an institution's proposed targets differ from national aspirations, the differences should be explained in the annual report to stakeholders. This report would be made publicly available via the internet.