performance agenda: an international government survey

Performance agenda: an international government surveyFocusing public sector performance

GOVERNMENT

KPMG INTERNATIONAL

Performance agenda: an international government survey 2

© 2007 KPMG International. KPMG International provides no client services and is a Swiss cooperative with which the independent member firms of the KPMG network are affiliated.

Foreword 3

Executive summary 4

About the research 6

Introduction 7

1. Focus on service, not thrift 8

2. Working smarter, or just harder? 11

3. The human capital challenge 15

4. Making it happen 16

5. Partnering with the private sector 17

6. Shaking up funding 21

7. The difficulty of reliable forecasting 23

8. Technology’s role in raising productivity 25

9. Getting the best from procurement 29

Conclusion 32

Contents

With the exception of the “foreword” and “KPMG perspective” sections, the views and opinions expressed herein arethose of the Economist Intelligence Unit and the entities surveyed and do not necessarily represent the views and opinionsof KPMG International or KPMG member firms. The information contained is of a general nature and is not intended toaddress the circumstances of any particular individual or entity.

Due to rounding, graph totals may not equal 100 percent. Unless otherwise stated, the analysis reflects total responsesfrom participating countries – individual country results may differ.

The Economist Intelligence Unit research provides insight into how senior government officials think. For anyone concerned about government, the results provide an interesting perspective on the deepening performance agenda around the world.

As the first in a new series of thought-provoking research commentaries,KPMG’s Global Government Services is proud to present the results of theEconomist Intelligence Unit survey. Our objective is to stimulate thought, contribute to knowledge about government, and to participate in the publicdebate on how governments can enhance their performance for citizens.

The Performance agenda indicates a number of areas where innovation is taking place. KPMG’s view is that in each area significant benefit can be created for citizens through enhanced performance, accountability and operational efficiency; we are pleased to learn that senior government leaders in Australia, Canada, Germany, the United Kingdom and the United States feelthe same way.

I encourage all readers of the Performance agenda to join in the discussion about how, just like organizations in other sectors, governments can strive towork better. I hope that KPMG’s contribution to this debate is a helpful one.

John HerhaltGlobal Government Services ChairKPMG LLP (Canada)

The information contained herein is of a general nature and is not intended to address the circumstances of anyparticular individual or entity. Although we endeavor to provide accurate and timely information, there can be noguarantee that such information is accurate as of the date it is received or that it will continue to be accurate inthe future. No one should act on such information without appropriate professional advice after a thoroughexamination of the particular situation.KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.

© 2007 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network ofindependent firms are affiliated with KPMG International. KPMG International provides no client services. Nomember firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis thirdparties, nor does KPMG International have any such authority to obligate or bind any member firm. All rightsreserved.

Foreword



John Herhalt

Governments in the twenty-first century are under pressure to operate better.This has been brought about by a wide array of societal and technological changes,ranging from globalization and the information technology (IT) revolution todemographic change and rising public expectations. As citizens the world overbecome more demanding, public sector organizations are being forced to focuson performance.

This white paper – based on a major international survey and in-depth interviewswith senior civil servants – reviews how governments in Australia, Canada,Germany, the UK and the US are working to improve their operational efficiency.It examines what the priorities are, where the main obstacles lie, and whatstrategies work best to overcome them.

Some of the key findings include:

1. Governments are focused on quality of services, ahead of value for money.Across much of the public sector, service quality and improved productivity are the imperatives. This is especially true for front-line services such aseducation or health. These priorities come in ahead of greater transparencyand accountability and better value for money – although all of these remainimportant. Given the overall focus on service quality, it is a surprise to discoverthat although many departments have a formal system for feedback, some donot, or don’t know if they have one or not.

2. Current efficiency projects may not be the ones that deliver the most benefits.The report highlights a possible mismatch between the initiatives currentlyunder way in the public sector, and those that executives believe provide thebiggest benefit. For example, much attention is paid to competitive sourcingand e-government schemes, even though these are perceived as providinglimited efficiency gains, whereas human capital management and process re-engineering are acknowledged to provide clear benefits.

3. IT can do much to boost productivity, but is held back by poor management and a lack of skills.Technology can enhance productivity, but the public sector suffers too manyproblematic IT projects. Poor management of IT initiatives, along with little orno choice of available technologies, is part of the problem. Another issue isthe ongoing difficulty involved in determining the true costs and benefits ofprojects. It does not help that only a limited number of technology vendors arebig enough to cope with the demands and scale of public sector projects.

Executive summary



4. Private financing and user fees are favored over direct taxation.As a clear signal that the revenue-side of government is also open toinnovation, respondents indicate that public-private partnerships and privatefinance initiatives are seen as more effective than direct taxation when itcomes to financing projects more efficiently. When user fees are added to theequation, more than half of all respondents favor a market-based approach toproject financing.

5. Forecasting the costs and benefits of new projects is a major challenge.Even though governments are keen to do more, they struggle to determinethe true benefits and costs of potential projects. Forecasting costs andpredicting benefits emerged as two of the top three challenges associatedwith the funding of projects. In turn, this has a direct impact on a department’sability to secure spending for new initiatives and ideas. Even where projectshave cost reduction as a specific objective, nearly eight out of ten respondentsadmitted that achieving cost reduction targets was a major/moderate problem.

6. The global skills shortage is hitting the public sector.The battle for skills is fast becoming a major problem for many public sector organizations, especially within specialist functions such as IT andprocurement. This is particularly vital, given that the strategic management ofhuman capital is regarded as the top measure for delivering efficiency andperformance gains.

Overall, government officials indicate their strong commitment toperformance, efficiency and innovation. The survey shows that governmentsare increasingly intent on operating more like the private sector, but in amanner that embraces and respects the unique responsibilities and constraintsof the public sector.

And much like their private-sector colleagues, the government performanceagenda is characterized by a tough competition for skills, improvement to project management, and a very strong focus on enhancing service delivery.



About the research


KPMG’s Global Government Services commissioned the Economist IntelligenceUnit to produce this report on the Performance agenda: an internationalgovernment survey. The report is based on the following research activities:

• The Economist Intelligence Unit conducted a global survey of 254 public-sector executives from five countries: Australia, Canada, Germany, the UnitedKingdom and the United States. The respondents represented every majorgovernment department. All had management roles, and 37 percent wereheads of departments, financial chiefs, directors, deputy directors or theirequivalents. About half of respondents came from departments with budgetsof up to US$500m, while another one-third represented departments thatspend US$1bn or more per annum.

• To supplement the survey results, the Economist Intelligence Unit conductedin-depth interviews with senior public sector officials from across the fivecountries surveyed.

Ursula Brennan, chief executive of the Office of Criminal Justice Reform, UK Ken Cochrane, chief information officer for the Canadian Government Tony Dean, secretary of cabinet, Government of Ontario, CanadaDr David Dombkins, national president of the Australian Institute of ProjectManagementDr Barbara Hendricks, parliamentary state secretary at the Federal Ministry ofFinance, Germany Ed Killesteyn, deputy president, Repatriation Commission Department of VeteranAffairs, AustraliaIan McPhee, auditor general of AustraliaPhillip Prior, chief financial officer, Department of Defence, AustraliaJohn Thomas, acting director of construction, Washington Metropolitan AreaTransit Authority, USSir David Varney, author of public service transformation report, UK Ian Watmore, head of the Prime Minister's Delivery Unit, UKDanny Werfel, deputy controller in the Office of Management and Budget Officeof Federal Financial Management, US Wayne Wouters, secretary of the Treasury Board, Canada

The Economist Intelligence Unit wishes to thank everyone who shared their timeand insights during the research.


Whether privatizing their probationary services or supplying online self-service formillions of citizens, governments of Western democracies are implementing anarray of measures to improve efficiency, value for money and performance. Manyare borrowing ideas from large commercial enterprises in an attempt to enhancethe service they provide. The two types of organizations have plenty in common:keeping thousands of “customers” satisfied, staying within budget, fighting toacquire and retain scarce skills, managing unwieldy IT projects and weighing upthe pros and cons of outsourcing certain services. But government agencies havefurther challenges of their own: the ebb and flow of political parties and greateraccountability to the public – not to mention the constant monitoring by a fiercepress corps.

The Performance agenda reports on the insights of senior civil servants on manyrelated issues. It highlights the major areas of focus, the tools of reform, and thechallenges governments can face in implementation. While these challenges areacknowledged openly, it is encouraging that senior government officialsrecognize opportunities for enhancement; these are further exploredin this white paper.

Introduction



What are the priorities of today’s public sector leaders when it comes to theoperational issues they face? This report, based on a survey of public sectorexecutives in five major Western economies, suggests that the majority placequality of services ahead of all other factors. This is especially pronounced in certain countries, such as the UK, and within smaller departments, such as thosewith budgets of less than US$500m per annum. Overall, 84 percent of surveyrespondents rated quality of services as either “important” or “very important”within their department. Improved productivity (75 percent), greater transparencyand accountability (68 percent), better value for money (67 percent) and improvedcitizen engagement (52 percent) all trailed the drive for quality improvement.

Where’s the focus?

Question: Rate the importance of the operational issues within your organization/department.

Source: Economist Intelligence Unit survey shows percentage respondents selecting

initiatives as “important” or “very important”.

“It’s about restoring public confidence in government,” says Tony Dean,secretary of cabinet for the Government of Ontario, Canada. By raising serviceand productivity levels, governments can strive to overcome the notion that the public sector, as a monopoly provider, is unresponsive and inefficient.

Overall, 61 percent of government executives agree or “strongly” agree that atight focus on performance targets is the best way to achieve the goal of betterquality services. The US government has made a particular thrust towardsperformance targets for its agencies, as part of its President’s ManagementAgenda strategy launched in 2001. The agenda covers five main areas, includingstrategic management of human capital, competitive sourcing, improved financialperformance, expanded electronic government, and budget and performanceintegration. It requires “clear, specific performance goals” to help directmanagement efforts, systems of accountability to motivate better performance

Focus on service, not thriftSurvey results point to a clear desire to improve the quality of services to thepublic and a strong focus on performance targets as a way to achieve this.

Performance agenda: an international government survey - Focus on service, not thrift 8


1.

Improved quality of services

Improved productivity

Greater transparancy / accountability

Better value for money

Improved citizen engagement

0 10 20 30 40 50 60 70 80 90

84%

68%

75%

67%

52%

and the development of “skills, disciplines, and information needed to achieveperformance goals”. “The strategy has been very successful,” says DannyWerfel, deputy controller in the U.S. government’s Office of Management andBudget Office of Federal Financial Management. “Without question, the mostimportant element in improving performance is an accountability framework –how to measure and hold agencies accountable.”

Efficiency targets

Question: To what extent do you agree with the following statement:A strong focus on performance targets is the best way to introduce improvements to the public sector.

Source: Economist Intelligence Unit survey shows percentage respondents who “strongly

agree” and “agree”, and “strongly disagree” and “disagree”.

The cost of accountability

Accountability is a major issue for the public sector. Crucial services, funded with taxpayers’ money, need clear chains of responsibility, yet charges of un-responsive bureaucracy are central to the sector’s lack of efficiency. In the UK, a combination of voter expectation and modern technological capability isshifting the emphasis from services answerable to management in London, to account-ability to citizens for the services they want to receive.

When it first came to power, the UK’s Labour government favored centraltargets to improve performance. The first wave of Public Service Agreements, in 1998, set 600 targets across 35 areas of the sector. The approach was notwithout success. Educational attainment for 16-year-olds is up 45 percent,overall crime levels are down 35 percent and there are nearly 400,000 fewerpeople on NHS outpatient waiting lists than in 1997. But top-down performancemanagement causes problems of its own.

Efficiency can be worsened as organizations pursue the specifics, rather thanthe spirit, of the goals.



Strongly disagree and disagree

Strongly agree and agree 61

17

The rules governing a £277m Crime Fighting Fund, for example, were relaxedafter complaints that the requirement to spend the money on more policeofficers was constraining forces’ ability to determine the best response to their local situation. In June 2006, the UK government launched a new strategy forpublic service reform, based on four parts: fewer targets, a greater emphasis oncitizen engagement and measures to address capacity and supply issues. “Thefirst phase had a lot of precise targets that organizations were accountable fordelivering against,” says Ian Watmore, head of the Prime Minister’s DeliveryUnit. “The new model has four components that, put together, create publicservices that are accountable to the people that are served rather than the people in the central agency or department.” The intention is to balance accountability with the continued requirement to promote efficiency and value for money.

The shift to more integrated, citizen-focused services sometimes creates newproblems. Different parts of a service, delivered by different organizations, raise thorny questions about who pays for what and where responsibilities lie.Sir David Varney, author of an influential public service transformation reportcommissioned by the Chancellor, says the problems must not be allowed todelay progress because citizens’ experiences as customers of the public sectorare vital to retaining support. “The service sector is now dominant in the UKeconomy and unless the government keeps up, the public service record willdeteriorate and with that will come less willingness to invest,” he says.

The Varney report includes recommendations for the development of agovernment-wide citizen identification system and the creation of a single pointfor citizens to change their details, both of which will come up against issues of blurred accountability and budgeting. The only way to find the answers is to tackle the questions in practice, and apply lessons learned from smaller projects.“You can sit down and have a theoretical discussion about potential problems, or you can visit local authorities who are already getting on with this stuff,” says Sir Varney.



Working smarter, or just harder? Results show that many tools for change exist, but these need to beimplemented strategically to have the best effect.

Performance agenda: an international government survey - Working smarter, or just harder? 11

2.

Even with the desire to improve public sector performance, the survey suggeststhat governments are not always focusing on the right initiatives to improveorganizational effectiveness. The survey suggests this mismatch is partly due tothe fact that, in general, performance and efficiency measures are most oftenintroduced as government-wide initiatives, rather than by individual agencies.

Overall, competitive sourcing and e-government initiatives are shown to be themost widespread programs for reform, having already been implemented by 60percent of government bodies. But when asked which efficiency measure waslikely to provide most benefit, executives rated both of these measures relativelypoorly, with e-government being cited by just 8 percent and competitive sourcingby a mere 5 percent. This suggests that often time and resources would be better invested in areas where there will be quicker or more substantial rewards.

By contrast, strategic management of human capital emerged not only as awidely implemented initiative, but also as far and away the most beneficialperformance measure. Canada’s Mr Dean is in no doubt about its merits: “Weneed to move HR to the front,” he says. “It’s about who we hire, how we keepthem, how we develop them. If we don’t have employees engaged, how canthey engage with the public?”

Of course, situations differ across countries. For example, human capitalmanagement is especially important in Australia, where the buoyant economyhas contributed to a major skills shortage. In contrast, Dr Barbara Hendricks,parliamentary state secretary within Germany’s Federal Ministry of Finance, saysher government has a large pool of highly skilled staff, especially within seniormanagement.

Outside of strategic management of human capital, which was selected by 28percent of respondents, process re-engineering was rated as the second-bestefficiency measure, in terms of the benefits it delivered – chosen by 16 percent.However, it lies seventh in a list of 12 performance initiatives when it comes toimplementation priority.

More encouragingly, there is no shortage of zeal when it comes to implementingperformance initiatives, although executives do flag the risk of “initiative fatigue”.The survey shows that more than half of government bodies have already implemented a wide array of performance improvement projects, or plan to do so within two years. These range from smarter procurement and joined-up (integrated) government to increased private-sector partnerships and improvedtransactional performance, as well as those aimed at improving financialaccountability and management, and financial performance; it is up to publicmanagers to choose the ones best-suited to their needs.



Strategic management ofhuman capital

Process re-engineering

Improved financialaccountability & management

E-government

Competitive sourcing

Headcount reduction

0 5 10 15 20 25 30

28%

10%

16%

8%

5%

2%

Where the effort is being made …

Question: Which of the following has your organization/department implemented, or plans to implement over the next two years?

… isn’t always where the benefits lie

Question: Which of the following performance/efficiency measures is likely to provide the greatest benefits?

Source: Economist Intelligence Unit survey. Shows six initiatives from a list of 10, including

top three.


E-Government

Strategic managementof human capital

Process re-engineering

Shared services

Joined-up government

Headcount reduction

0 10 20 30 40 50 60 70 80 90

Plan to implement Implemented

60%23%

55%19%

32%15%

39%21%

38%29%

28%29%


KPMG perspective

Share and share alike

The survey responses around the issues of human capital management come as

no great surprise. In the modern workplace, with skills shortages often in evidence,

the challenge is to make the most of the existing workforce, utilizing training and

development programs and making the more straight-forward business processes

as interesting as possible for employees. However, once an employer has gone as

far down this route as possible, then a shift towards a shared service arrangement

becomes much more likely.

The experience of KPMG firms closely matches the results of the survey in a

number of important areas. The survey signals quite clearly that officials are looking

to pursue initiatives such as process re-engineering, e-government and joined-up

government along with their attention to shared services. Our experience suggests

it is often the case that leading governments and organizations will pursue these

initiatives together: process re-engineering can make shared services much more

efficient; shared services are a tool to promote more joined-up government; and

e-government projects often lead to necessary investments in technology to

facilitate a move to shared services.

As one example of initiatives aimed at maximizing the value of human capital

in operations, our member firms' work internationally demonstrates to us that

organizations are ever more aware of the savings and service level improvements

that can be realized through strategic sourcing decisions. What the survey confirms,

is that while there is an understandable desire on the part of government officials

to focus first on shared service models within and across their organizations, there

is an emerging appetite for outsourcing and even off-shoring. One can only assume

that this attitude reflects officials' desire to improve the overall quality of public

services delivery, and they are willing to consider a variety of options to leverage

their complement of people and skills to its maximum advantage. If this requires

augmentation externally, and can be managed well, then there is a wide range of

possibility open to them.

With a more internally focused look, the growing popularity of shared services is

also apparent from the survey, and officials expect to see this growing still further

in the coming years. Increasingly large number of public and private sector

organizations now appreciate the value of using shared services, especially in the

area of basic transaction processing, a means to 'work smarter, not just harder'.

Available technology solutions are improving almost by the day. And perhaps most

importantly, as the success of well-managed shared services implementation grows

across governments, there is a real opportunity to learn from each other - shared

services indeed.

Written by KPMG



Quality or accountability?

Question: Which of the following operational issues do you think will be most urgent for each of the following areas of government in your country?

Source: Economist Intelligence Unit survey. Shows most urgent operational challenges

selected for five departments.

Departmental differences

Outside of their own departments, the survey also probed executives on whatoperational issues they believe are most urgent within other areas of govern-ment. Responses show a dramatic variation in priorities, and some mismatcheswith what executives from these departments are actually focused on.

The focus on quality of services is most acute within front-line services such as Health, Education, Transport and Social Services, as these customers arelikely to voice their concerns the loudest.

Other respondents think transparency should be the leading initiative withindepartments such as the Treasury, Home or State department and Citizenshipand Immigration. As regards the Treasury, this dominates all else, and is regar-ded as five times more important than improved service quality. But Treasuryexecutives think differently: they rated quality of service as second only totransparency in terms of what they’re focused on. Meanwhile, officials reckonvalue for money should be highest on the agenda within Transport, SocialServices and Health, while within those departments it vies with improvedproductivity for second place, but lies behind improved quality of services.Perhaps the overall lesson from this is that the definition of “working harder”varies by department – not a surprising result given the breadth ofresponsibilities delivered by governments.


Education / skills

Treasury / finance

Citizenship / immigration

Health

Transportation

0 10 20 30 40 50 60 70 80 90

Quality of service Accountability

6%55%

29%24%

47%9%

5%45%

10%44%

Performance agenda: an international government survey - The human capital challenge 15

To improve performance and service delivery, a depth of talent and skills isobviously critical. But the public sector faces two main barriers when it comes to “people issues,” neither of which is easily overcome: compensation,especially when competing against private enterprises; and skills shortages, insome cases connected again with the salaries that can be offered to attracttalent.

“People issues are very important,” says Wayne Wouters, secretary of Canada’sTreasury Board. “You can change business processes but won’t make progress ifyou haven’t got a very motivated and professional public service.” The Canadiangovernment, along with several others, is faced not only with an ageing publicservice, exacerbated by a long period of cut-backs in new appointments, but alsolow unemployment and a very competitive job market in the broader economy.“It’s a big challenge,” says Mr Wouters. “We need to brand the public serviceand sell it better to graduates and experienced hires. We don’t pay as high as the private sector but we can offer a varied and interesting career and the workis challenging.” He also advocates greater mobility between the private sector, government and academia. “It’s been a tradition to spend a whole career in oneor the other. That’s got to change,” argues Mr Wouters.

Ian McPhee, Australia’s auditor general, agrees that it is hard to vie with the privatesector but points out that job packages in Australia are competitive up to the levelof middle management. Even so, “at a more senior level, the gap opens,” he concedes. Management skills have meanwhile been eroded following higher staff turnover (some taking early retirement), and because more opportunities are available now for part-time and consulting work. Agencies are reviewingapproaches to retention, such as offering flexible working to provide better work/life balance, and the government has given them flexibility for setting salary levels.

When looking at ways to ease the problem, not as many are against outsourcingservices to foreign countries as might be imagined. True, more than half ofrespondents are against this, but about one in five disagree that outsourcingmust remain within the country and one-quarter remain neutral on the point.

In or out?

Question: To what extent do you agree or disagree with the statement that outsourced services should remain within the country?

Source: Economist Intelligence Unit survey.


The human capital challenge The search for talent is a competitive one and sometimes can be satisfiedby looking outside government.

3.



22

Faced with the range of challenges in implementing performance programs, whatis the best way forward? Executives are pinning hopes on several strategies, butskills development stands out far above the others. Worldwide, two-thirds ofexecutives back skills development as the best way to help realize their aims.The ratio is even higher within smaller departments with sub-US$500m budgets,at 70 percent. In the UK and Australia, skills development is seen as even morekey, cited by three-quarters of respondents.

Focus on skills

Question: Which of the following initiatives do you think will be the most effective in helping implement performance/efficiency measures?

Source: Economist Intelligence Unit survey. Shows top three from a list of eight.

Targets and incentives

On a different tack, 38 percent also believe that improving performance measureswould be highly effective in supporting better implementation of performanceprograms, while 35 percent see different incentive structures as the answer. The US government, for example, has decided to discard intricate performancemeasures that are baffling to the general public. Instead, it has introduced a simplegrading system of red, yellow or green for each agency. Each quarter, agencies are rated on their status on overall goals for stated initiatives and progress onimplementing action plans. The scorecard detailing each agency’s progress ispublished quarterly. If an agency is charged with disposing of a certain amount ofsurplus property or reducing improper payments by a certain date, it gets a red card for failing to do so – simple as that. Results indicate that this approach hassucceeded in concentrating the minds of agency chiefs.

What lies at the heart of successful efficiency measures, however, is “afundamental questioning of the business processes,” says Ed Killesteyn, deputypresident of the Australian government’s Repatriation Commission Departmentof Veterans Affairs. “You need to get to the core of the process and work outwhat value you can bring to the process, and what value other organizations canbring. Otherwise you’ll only tinker.” Mr Killesteyn points out that the objective of government departments is always “better services, but at what cost?”

Making it happenImplementing positive change requires skill, focus on performance, and the right incentives for success.


Performance agenda: an international government survey - Making it happen 16

4.

Increased skills development

Improved performance measures

Different incentive structures

0 10 20 30 40 50 60 70 80

66%

35%

38%

Performance agenda: an international government survey - Partnering with the private sector 17

Partnering with the private sectorPartnerships with the private sector remain a key area of focus, but so tooare strong connections directly with citizens.

5.

Another important finding relates to the growing importance of public-privatepartnerships. Nearly two-thirds of respondents are working with the privatesector, and 45 percent of respondents agreed that it needs to play a greater rolein driving public sector efficiency. Many joint projects are highly successful,although the relationship can be challenging at times.

One successful example comes from the Australian government, which hasgreatly increased the efficiency of its visa-processing by teaming up with localtravel agents in foreign countries, as well as tweaking existing software used byairlines. The previous processing system was far too slow for the rush of visitorsfor the Olympics Games in Sydney in 2000. In one fell swoop, the governmentboth cut back visa-processing offices around the world and dramatically speededup the visa process: important, as delays cause tourists to look elsewhere.Furthermore the quicker processing of visas was achieved without compromisingborder integrity.

KPMG perspective

Partnerships: the way forward for major projects?

The increased reliance on Public Private Partnerships (PPP) as a way of financing

major projects is indicative of the pressure mounting on governments around the

world to deliver improvements in public sector services, without necessarily

dipping into the public purse through income taxation.

It has been widely accepted that the private sector can deliver innovation, risk

management and cost efficiency on major infrastructure projects. The question

that governments have to ask is whether those efficiency gains are sufficient to

outweigh the fact that they (the government) can sometimes borrow money at a

lower rate if they were to finance the project themselves.

The evidence from the EIU survey that the “approval rating” for PPP appears to have

sneaked past direct taxation as the preferred financing route, indicates which way

governments are leaning. However, it is worth noting that the status of the debate

over the merits of PPP can vary from country to country, and is also coupled with

a country's willingness to introduce user-fees such as tolls (which rank as third-

preferred in the EIU study). This debate will be colored by how much experience a

country has with PPP financing, and while some countries have been running PPP

projects for many years, other major economies are only now getting their first taste

of it.

The relative preference for partnerships over taxation will ultimately rest on the

first-hand experience of how the partners – public and private sector – work

together. Significant improvements in structuring and managing large scale

infrastructure partnerships have been witnessed in recent years, even given some



fairly fundamental differences in the core objectives of public and private sector

organizations. Still, if there is one overall lesson that is emerging in the debate, it is

that whereas aligning objectives takes investment, care and effort, reconciliation

and true partnership can be achieved, and be achieved successfully.

Written by KPMG

Connecting with citizens

Given the general focus on improved quality – and on emulating and workingwith the private sector – one might expect citizen engagement to be somethingof a priority. In fact, about one-third of all executives polled admitted that theirgovernment department didn’t have a formal system for gathering and analyzingfeedback from citizens at all – or they didn’t know whether they did or not. In theUS and Germany, the total is even higher.

Those departments that have actually tried to embrace deeper engagement withcitizens say it has in fact helped them improve the service they deliver. “We nowhave more open engagement with stakeholders,” says Mr McPhee from theAustralian government. “It’s a better way of managing risk for many processes.The challenge now is to look at service provision through the eyes of thecitizen.” The Australian government is working to make it easier for a citizen to deal with a range of different agencies. In the process, however, each mustretain accountability, adds Mr McPhee.

Dr Hendricks says there is now more of a “service-orientation” in the Germangovernment, especially where it is in direct contact with the citizen. One exampleis for tax and passport offices to make opening hours more customer-friendly.There is also an effort for different departments to present a single face to theindividual citizen.

Canada has been working on an e-government program to put 130 of the mostcommonly used services online in both French and English. As well as buildingthe horizontal structures to get it to work across different departments and evenjurisdictions, input was gained from the public from the outset.

The results are a double-digit increase in user satisfaction with governmentservices between 2000 and 2005. “The project was client-centric from the start,”says Mr Wouters. “It started with the question: What’s best for the citizen? We set user satisfaction targets and regularly measure feedback from citizens.”



Getting feedback?

Question: Does your organization/department have a formal system for gathering and analyzing feedback from citizens who use your services?


Get engaged!

Question: To what extent do you agree with the statement that deeper engagement with citizens has helped you improve the services you offer?

Source: Economist Intelligence Unit survey shows percentage respondents who “strongly

agree” and “agree”, and “strongly disagree” and “disagree”.


No

Yes 59

26

7 Don’t know9

Not applicable

Strongly Disagree and disagree

Strongly Agree and agree

Deeper engagement with the citizens has helped us to improve the service we offer

62

15



15

The public v private debate

The term public-private partnership (PPP) covers a multitude of deal structures where a government service is funded or operated, or both,through a partnership between the public sector and private business. It iswidely used but still controversial in some settings.

The collapse of Sydney’s AU$680m Cross-City Tunnel scheme is held up bycritics as a classic example of why the PPP Private Finance Initiative (PFI) does not work. In PFI deals the company often expects a return on its capitalinvestment through service charges. In the case of the Sydney toll tunnel,which opened in August 2005, the revenue structure relied on assumed trafficvolumes that proved unrealistic. The operators anticipated initial throughput of35,000 vehicles per day, rising to 90,000 over the first year. But actual usagehovered around the 30,000-per-day mark and the Cross City Motorwaycompany went into receivership with debts of more than AU$560m inDecember 2006.

Reality is too complex for PFI, say critics. “The private sector wantsboundaries wrapped around the infrastructure for the duration of the deal, but in reality things change,” says Dr David Dombkins, national president of the Australian Institute of Project Management. Attempts to force vehiclesthrough the Sydney tunnel by changing street-level traffic systems worsenedboth congestion and public support. “PFI is financial engineering focused ongetting the deal done rather than serving the community,” says Dr Dombkins.

Despite problems, PPP is still popular with governments. Australia’sPartnerships Victoria scheme, for example, covers 16 projects worthAU$4.5bn. And the UK government PFI program is currently worth around£40bn. In Washington DC, a different model of PPP is gaining ground. Thecity’s US$102m metro station at New York Avenue used private funding as the crucial lever to get the plan off the ground. The scheme to regenerate alight industrial area by improving transport links was first raised in the citymayor’s economic development plan. But the scheme only went from the“wish list” to the “to do” list when local landowners agreed to pitch inUS$25m to get it started, according to John Thomas, acting director ofconstruction for the Washington Metropolitan Area Transit Authority. “Locallandowners knew the station would make their property more valuable andthat it was an investment that would reward them handsomely,” he says.

The New York Avenue deal included US$25m of cash funding and anotherUS$10m-worth of real estate donated for the site. The US$25m was providedup-front by the city, to be paid back through adjusted business property taxrates over the next 30 years. And as real estate values rise thanks to thearea’s improved transport links, so too will the rate of payback. The model hasproved so successful it is now being used for the scheme to extend a rail linkto Dulles airport. And the costs involved to expand the metro entrance servinga newly-built baseball stadium are to be shared between the city authoritiesand a local property developer building a new office block on the site.



Performance agenda: an international government survey - Shaking up funding 21

A striking finding is that tax instruments are generally ranked lower than market-based instruments when it comes to financing projects most effectively.While handling a mixture of funding sources, many survey respondents feel thatpublic-private partnerships and private-finance initiatives are better than taxationand direct funding from the national budget for effective delivery of public sectorprojects. About one-fifth also support user fees, such as toll roads, while long-term government bonds are seen as the least effective approach. Any alternatives to tax-based funding are usually decided on a case-by-casebasis, based on their individual merit. In the case of Australia, about one-third ofthe cost of the Department of Immigration and Citizenship is covered by visafees, whereas in other agencies the opportunities for this kind of independentfunding are far lower. Private financing is especially popular in Germany, whereless than one-quarter of respondents believe tax instruments are more important.There, levying for services is widespread in local government, and federalgovernment is now taking an interest. Early private-public partnerships have ledto ventures such as the construction of army barracks and road tunnels. Othersare simply much further behind the curve: Canada, geographically one of theworld’s largest countries, has just two toll roads.

Look beyond tax

Question: Assuming a mix of funding sources, which of the following types of funding approaches should be emphasized most for effective delivery of public sector projects?



Shaking up fundingReform and change are costly, but evidence is clear that taxes are not theonly source of funding.

6.

Public-private partnerships /private finance initiatives

Taxation / direct funding

User-fees, where applicable

Long-term government bonds

Other

0 5 10 15 20 25 30 35 40

36%

18%

9%

4%

33%

KPMG perspective

The revenue side: non-tax instruments and government reform

Governments deliver a broad scope of services, many of which exhibit strong

characteristics of private goods. In this context, the majority of senior officials view

non-tax instruments as the preferred method of funding in modern government.

Whether by the institution of consumption-based direct user fees, or through the

structuring of risk-based ventures with business through public-private partnerships,

KPMG recognizes the notion implied by the Economist Intelligence Unit survey:

development of a much stronger incentive system wherein the supply of public

service delivery is tied directly to its demand.

Controlling the cost side has long been a cornerstone of government efficiency and

performance reform. The Economist Intelligence Unit research suggests that the

revenue side to this equation is beginning to receive new attention. KPMG is

interested in this development for two main reasons.

First, attention to revenue-side reform implies a deeper connection between

demand and supply of public services – particularly in those policy fields

where services are provided along commercial lines. Introducing revenue-side

instruments such as direct user fees, or commercial revenue streams for state-

owned businesses and certain forms of public infrastructure, can introduce

market-based incentives to public service delivery.

Price is an exceptionally strong mechanism for resource allocation – both of time

and money. Even in situations of market failure, as in the presence of externalities,

pricing mechanisms can be used to introduce discipline on both the supply and

demand sides of public service provision. Volume-based environmental charges,

congestion pricing for toll roads, or variable pricing for time-sensitive service delivery

are just three examples of revenue-side instruments that governments can use to

introduce the strong form of incentives typically associated with private markets. And

so long as the social externalities are dealt with appropriately, evidence is growing to

support the conclusion that similar incentive mechanisms can be introduced through

revenue reform in government service delivery.

Second, revenue-side reform can act to lower the burden placed on individuals

through income taxes. This is a very simple argument, where revenue generated

through direct non-tax instruments can be used to offset reliance on income taxes.

The potential benefit from this is clear: reduced taxation burdens, and/or the ability

for governments to focus their tax-based revenues on the provision of public

services for which prices cannot be applied effectively. Just as cost-side reform

can lead to the “release of back-office resources to front-line service delivery,” so

too can the use of appropriate non-tax instruments allow for the re-investment of

tax revenues for the provision of public goods. It would appear that the revenue

side is truly emerging as the second side of the equation in government reform.

Written by KPMG


Performance agenda: an international government survey - Shaking up funding 22

Performance agenda: an international government survey - The difficulty of reliable forecasting 23

While the source or level of funding is important, it is not the only issue.Respondents suggested clearly that the main difficulty in financing and fundingprojects is the inability to determine the true costs of individual projects andprograms. That beats even the challenge of raising funds in the first place. Manyfeel they cannot communicate the true benefits of the program, and costs ofindividual projects often remain obscure. The best way to overcome theseproblems, according to respondents, is to integrate financial and performanceinformation. Some also cite a re-engineering of the reporting process and puttingin place comparative financial performance measures, but few believe that moreregular financial reporting will do the trick. A majority agree that, at the end of theday, funding for public services should be determined by their performance.

Financial challenges

Question: What are the biggest challenges your organization faces in the area of finance and funding?


Measuring financial performance is not a cure-all solution, however – particularlyin the case of cost-cutting initiatives. The survey shows that few efficiencyinitiatives are visibly successful at cutting costs. Indeed, achieving cost-reductiontargets is seen as one of the top challenges when implementing efficiencymeasures, especially within larger agencies. More than half of executives notedthat their department’s top-rated efficiency initiative either did not cut any costsat all or they did not know whether it did or not. Of course, unlike the privatesector, cost-cutting isn’t always a priority, as service delivery takes the upperhand. But it would be wrong to dismiss the value of initiatives in reducing costsout of hand: one in five executives say their best initiative has saved (or isintended to save) more than 10 percent, while a similar ratio puts the saving atbetween 4 percent and 10 percent – and a small core of executives havedelivered cost cuts in their departments of more than 25 percent.


The difficulty of reliable forecastingKnowing the costs and benefits of projects can be difficult, and can posefunding and implementation challenges.

7.

Inability to determine truecosts of individual projects

Raising funds for projects

Inability to outline truebenefits of projects

Lack of transparencyregarding costs

Incorrect transactions

Fraudulent transactions

0 5 10 15 20 25 30 35 40

39%

30%

27%

7%

6%

31%

Performance agenda: an international government survey - The difficulty of reliable forecasting 24

Although most agencies (59 percent) have a formal system for gathering andanalyzing feedback from citizens, the fact that a significant number of executivesdo not know if an initiative has succeeded in saving costs suggests that moreneeds to be done to measure internal return on investment.

KPMG perspective

The importance of being informed: Linking financial andperformance data

The results of the Economist Intelligence Unit survey demonstrate the importance

senior officials place on being informed about the quality of services they deliver,

the levels of productivity they achieve, and the ways that value for money can be

delivered. The results also show that these same senior officials suggest one of

the most significant challenges they face in securing funding and approval for

major projects is their inability to determine – and by implication to communicate –

the costs and benefits of initiatives.

KPMG’s experience in Government Services supports our understanding of the

challenge faced by officials in clearly defining and communicating benefits and

costs of public projects. At the same time, we fully understand that elected

sponsors, citizens and clients demand clarity and transparency about the core

rationale for public investments.

Our experience suggests that responding to this challenge requires creation and

integration of appropriate financial and performance data about the implications of

public programs and projects. This can be achieved through:

• Investment – in creating the requisite data, in addressing the strategic objectives

of projects and programs, and in analyzing fully the expected financial and

performance outcomes over time

• Communication – of the business case for public investment internally within

government departments, externally across various departments, with elected

sponsors, and most importantly directly with citizens, stakeholders and clients

• Management – of project implementation over time, which is most strongly

facilitated by being able to link financial and performance data about the outputs

of government efforts, and the outcomes they deliver to an ever demanding

public.

Being informed helps government officials be better managers, more attractive

employers, and deliver better quality services. Understanding the financial and

performance dimensions of their decisions – and investing in and linking together

the requisite data over time – is one of the strongest tools they have at their

disposal.

Written by KPMG


Performance agenda: an international government survey - Technology’s role in raising productivity 25

A classic example of a productivity initiative is investment in IT projects. Just astechnology has played a major role in boosting productivity in the private sector,so it is expected to do so in government. Apart from allowing public sectoremployees to carry out tasks more efficiently and faster, IT can also lift much ofthe work out of their hands altogether if the public goes online to interact withgovernment departments. In fact, 41 percent of interviewees put “accessibility topublic” as the point where IT can make the biggest impact in improving publicsector services, more so in the UK and Canada, where there have been major e-government programs. Many also believe IT can both cut operational costs andimprove collaboration between units and departments, making government morejoined up. Some also view IT in terms of improving HR functions and in reducingprocurement costs.

The US government’s Mr Werfel says that many of the improvements inagencies today revolve around technology “and the ability to leveragecommercial technology to get the job done.” For example, agencies areincreasingly using business intelligence tools to supply managers with the criticalinformation they need to make smarter decisions. Take expenses: without havingto invest in technology, customized reports on employees’ charge card accountsare now supplied by private-sector companies to supervisors to track trends.“Technology provides greater access to reliable data,” Mr Werfel says. This alsoleads to more accountability and insight into what works and what doesn’t –something not always welcomed by government departments.

In another example, the Canadian health service is using Internet-basedvideoconferencing to enable more than 20,000 clinical “encounters” per year inthe province of Ontario. Getting patients and specialists together can often bevery difficult, and costly, given the local geography: Ontario covers an area largerthan France and Italy combined. After diagnosis, local medical staff can workwith specialists at remote locations to treat patients.

The pitfalls

But the problems encountered securing IT benefits are legion. Unlike someprivate-sector firms, which can force their customers to deal with them online –Amazon®, eBay® and others – the public sector must guarantee accessibilityacross all channels, which reduces the scope for efficiency gains, as suggestedearlier. Beyond this, the sheer scale of many IT projects causes problems. In many countries, the public sector is dogged by projects that arrive late and do not meet expectations. In the UK, a parliamentary question in October 2006exposed the fact that, together, IT projects ordered by the Treasury were runninga total of 17 years late. Poor IT management, particularly in the UK and Germany,emerges as the main problem facing public sector IT programs, far above otherissues, such as a poor choice of vendors or lack of clarity over objectives.

Technology’s role in raisingproductivityTechnology can provide significant benefits for governments, butmanagement matters very strongly to achieve success.


8.


And of course, finding and retaining relevant IT skills is tough going, given thedemand for and relative scarcity of such workers in many markets.

Skills issues can equally apply to inadequate post-launch management as muchas system development and planning. The UK government’s multi-million-poundJobcentre Plus Customer Management System, which handles claims forincome support and other benefits, had a significant failure rate on claimsprocessing after implementation. The result was not just due to poor projectmanagement, but was also related to inadequate staff training and systemdesign. A stronger focus on project management may well have preventedimplementation “growing pains.”

The picture isn’t entirely gloomy, however. The survey suggests that althoughinformation silos have often been cited in the past as a stumbling-block to inter-departmental communications, few now describe them as problematic. And despite the challenges associated with giant IT projects, many successfulprojects are regularly implemented. One recent success is the switch to anonline “money-back service guarantee” service for birth certificates in Ontario,Canada. All online birth certificates now have to be delivered within 15 businessdays, compared with up to 19 weeks previously, when the system was fraughtwith backlogs and delays. “We brought together all the levers of change –people, processes and technology,” says Mr Dean. As of December 2006, 99.7 percent of requests had been met on time: a good start in life.

Where technology helps

Question: Where do you think technology will have the biggest impact improving public sector services?

Source: Economist Intelligence Unit survey. Shows top five from a list of eight.

Respondents shown selected either “moderate impact” or “major impact”.


0 10 20 30 40 50 60 70 80 90

Reducing operational costs

Improving productivity

Improving collaboration between units & departments

Improving the accessibility of the services to citizens

Improving management insight & decision making

86%

81%

79%

79%

82%


IT headaches

Question: Which of the following do you think are the main problems facing public sector technology programs?

Source: Economist Intelligence Unit survey. Shows top five from a list of 14.

Holding hands:

the dream of integrated government

Integrated or “joined-up” services are designed around citizen conveniencerather than the, often purely historic, organizational structure of thegovernment. In the UK, a key priority is the Criminal Justice System (CJS). Not only is the CJS made up of six agencies and three departments, but thesegroups are themselves fragmented – the police service alone comprises 42 independent local forces. As a result, justice is often painfully slow andexpensive. “If we want the process speedier and more effective, with victimsand witnesses kept better informed, then we have got to be really joined up,”says Ursula Brennan, chief executive of the Office of Criminal Justice Reform(OCJR).

Some of the links can be technological. The £2bn Criminal Justice IT programhas created an automatic system for updating agencies as trial details change,and a national electronic case file system is currently being developed. But themain focus is business processes, such as cutting the number of times a caseappears in court before the trial starts. Solutions may be deceptively simple – better sharing of information such as evidence requirements and strictcommitment to a timetable, for example. The OCJR claims some success: the total number of offences brought to justice rose by more than 300,000 per annum between 2002 and 2006. But there are still significant challenges,


Poor management oftechnology projects

Poor choice or lack of choice of technology vendors or systems integrators

Lack of clear defined objectives

Lack of skills

Insufficient investment

0 5 10 15 20 25 30 35 40

37%

19%

17%

17%

21%

most notably funding. “It is difficult when we need the investment in agencyA but the gain is in agency B, because government is just not structured fortrading on that basis,” explains Ms Brennan.

In Canada, the growing take-up of online services is helping make thebusiness case for cross-departmental initiatives. Canada spent CA$880mdeveloping online services, including common infrastructure, a government-wide secure network, a citizen identification system, and three Internet portals – the customer, business and international – for accessing joined-upservices, such as the My Tax Account system or Service Canada’semployment and pension services. Citizen feedback suggests the effort hasbeen worth it. Annual surveys show satisfaction with government services up 12 percent over the first five years of the program, against a target of 10 percent.

The question now is how to make the common systems pay for themselves.“With joined-up services the challenge is sustainability,” says Ken Cochrane,chief information officer for the Canadian government. The aim is for avirtuous circle of investment using a user-pays model. As citizen take-up ofonline services grows, departments make more services available, reap morebenefits and are willing to pay for common systems, which further drives upusage. “The two sides work together: departments begin to see that onlineservices are valuable to them so they invest,” says Mr Cochrane. The modelis taking off and Canada’s Secure Channel network is now maintained andupgraded using money paid by departments according to how much trafficthey receive through it.



Performance agenda: an international government survey - Getting the best from procurement 29

Getting the best from procurementGovernments are responsible for massive amounts of spending every year -procurement reform can have huge pay-offs.

9.

Nearly half of all government organizations suffer from a dearth of skills andspecialist knowledge. This is particularly noticeable in the key area ofprocurement and sourcing. Instances that leak to the press as a result of thisreflect badly on agencies’ management of taxpayers’ money. There is muchmoney at stake here: the UK government, for example, expects to spend £150bn in 2007 buying goods and services. As a result, the Confederation ofBritish Industry believes that professional skills must be at the heart of publicprocurement, and that procurement specialists need the right incentives toimprove performance.

The biggest issue, after the lack of skills, which 43 percent selected as the main problem, is simply an insufficient sharing of information between differentfunctions and departments (41 percent). This allows repeated use of poorcontractors and suppliers to slip in, while missing out on gains from sharedresources.

“[Procurement] doesn’t have to be all about aggregation, lowest price orsqueezing suppliers,” says John Oughton, former head of the UK Office ofGovernment Commerce, responsible for government procurement. “It’s aboutpursuing the idea of intelligent aggregation: collaborating on a national scale, andacting as a single purchaser and customer where using the combined buyingpower of the public sector makes sense.” Research by the Office of GovernmentCommerce showed the value of sharing procurement information in the UK:there was a £110 difference between the lowest and the highest prices paid for similar computer monitors. “It doesn’t take a genius to work out there is amassive missed opportunity here,” says Mr Oughton. To encourage best practiceand help develop procurement skills, the Office of Government Commerce issponsoring a scheme to create a virtual community of public sector procurementprofessionals.

The most popular measures for rectifying these problems include sharedprocurement initiatives and the setting up of cross-departmental procurement (35 percent), improved procedures for evaluating public and private sources (28 percent) and e-procurement portals (17 percent). The Canadian government is working at aggregating its enormous demand on various commodities, andleveraging this demand to get better prices on a range of products, from officesupplies and furniture through to vehicles and computers. In general, however,government agencies mostly appear disconnected in their approach toprocurement and sourcing.



Procurement problems

Question: What are the biggest challenges your organization faces in the area of procurement and sourcing?

Source: Economist Intelligence Unit survey. Shows top five from a list of 14.

Better buying

Question: Which of the following initiatives would be the most effective in helping to overcome these challenges?

Source: Economist Intelligence Unit survey. Shows top five from a list of seven.


43%

41%

Lack of sufficient procurementskills / specialist knowledge

Insufficient sharing of informationbetween functions and /

or departments

Minimal / no use of e-procurement

Insufficient provision of tenderprocurement information

to private sector

0 5 10 15 20 25 30 35 40 45

15%

13%

Shared procurement initiatives /establishing a procurement hub

Improved procedures for evaluatingpublic and private sources

Create e-procurement portal

Better promotion of activitiessubject to competition

Framework contracts and catalogues

0 5 10 15 20 25 30 35 40

35%

17%

15%

13%

28%

KPMG perspective

Buying smarter: modernizing through procurement reform

The sheer scale of government procurement suggests that ensuring efficiency

and effectiveness ought to be a major focus for officials. The survey demonstrates

this is true, but it also highlights challenges stemming from skills access,

insufficient sharing of information, and an opportunity for modernization through

program reform and increased use of technology. The results of the survey also

substantiate two key findings of another recent KPMG study entitled Rethinking

Cost Structures: that on average organizations achieve only 59% of the savings

they expected; and that only 8% ever meet or exceed their targets for cost savings

initiatives.

Successes in government procurement reform come from three main types of

initiatives: the consolidation and leveraging of buying power through shared

services; the alignment of consistent, common processes and controls; and active

collaboration between all the involved parties, including partners in the private sector.

When careful attention is paid to procurement policy, our experience is that a

cost-driven supply chain strategy can help government operations reduce or

redeploy budgets. Achieving success is tied to a focus on:

• Better Value for Money - achieving efficiencies by applying category-specific

knowledge and advanced procurement techniques

• Capability Enhancement - building a procurement infrastructure - people,

processes, and technology - that adds value by enhancing management

effectiveness

• Risk Management - managing exposure to procurement risks through an

improved understanding of pitfalls in sourcing and purchasing

The primary concerns resulting from the EIU research centre on building the skills

of those involved in procurement and delivering a high quality of service to the

public. Government bodies will need to address these issues by focusing on

improving organizational visibility and understanding, while leveraging technology

to effectively manage expenditures.

Written by KPMG




As this research makes clear, public sector organizations are strongly committedto improving their overall performance. Moreover, with new technologies and a greater openness to progressive approaches, there is no shortage ofopportunities to do so. To achieve success, however, governments will need to be open to fundamental changes to the way public services are delivered –notwithstanding what Mr Werfel describes as “the human instinct to protect thestatus quo.”

Improving public sector performance is a worthy goal, but one that depends onovercoming a number of obstacles. Three challenges in particular stand out. The first comes down to selecting the right projects to deliver performanceimprovements. The survey indicates that there are sometimes too many projects running concurrently, and that investment and resources are not alwayschanneled into the areas that would deliver the greatest benefits. This is at least partly because public sector organizations are not good at analyzing thecost/benefit ratio across a range of prospective projects. With better projectanalysis and performance measurement, governments could channel resourcesinto those initiatives that are most likely to deliver the greatest returns.

The second challenge relates to skills: with lower average levels of pay, thepublic sector faces an even greater challenge than its private-sector counterpartin attracting and developing top quality talent. In particular there is a shortage ofvaluable technology and project management skills, with the result that publicsector IT projects often under-deliver.

The third main challenge to arise from the survey is the need to find betterfunding models. Again, better cost/benefit analysis would help public sectordepartments to make the case for increased funding. However, governments ineach of the five countries covered by this research also recognize an increasingrole for the private sector in the modernization of public services. With anincreased reliance on private financing for public sector projects, the ability todevelop successful models for public private partnership will becomeincreasingly important.


Conclusion

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Leadership team

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