IT, productivity and culture

On the LSE Politics and Policy Blog there is an article highlighting how the productivity of the Department for Work and Pensions fell for much of the last two decades. The explanation is not the traditional Aunt Sally of allegedly lazy or incompetent public servants – it’s more complex than that as well as relevant beyond Whitehall.

Policy churn, organisational change and personnel turnover at ministerial change partly explain the dismal performance at DWP. More significantly, Patrick Dunleavy and Leandro Carrera suggest that a conservative mindset hindered the adoption of IT for improving productivity:

Three main organisational culture problems inside DWP prevented top officials even considering a shift to digital-era governance. First, senior officials with little or no IT background themselves did not believe that the poorer households and individuals receiving welfare benefits would ever get Internet access. However, in 2008 they discovered to their surprise that 51 percent of DWP ‘clients’ were already online with broadband Internet access.

Second, for years top civil servants saw the web as merely a place for posting static billboards of information and had no conception of creating a more interactive Web experience. Third, internal organisational power over policy on IT was concentrated among officials (aged in their 40s and 50s) running the big-budget mainframe computer systems, who saw web processes as a financially trivial (and hence organisationally irrelevant) sideline.

While these issues may be particularly acute in parts of central government, some of those attitudes can be found throughout the public and third sectors.

Pay and productivity: freezes and unforeseen consequences

On the Civil Society website there is a short article on XpertHr’s annual review of pay trends. It finds that for 2009-10 the highest median basic pay award was in the general manufacturing and food, drink and tobacco sectors with median pay rises of 2 per cent. However, in the charity sector the median pay rise was only 1 per cent. The median pay award for housing associations was nil.

On the Viewpoint blog of Centre for Market and Public Organisation a Bristol University there is a discussion of where public sector productivity is likely to go in the age of austerity.

Interestingly it suggests:

With the prospect of public sector pay freezes, quality decreases may arise through talented staff leaving for the private sector. Research suggests that remuneration over the lifetime is roughly similar in the public and private sector with a small public sector premium. Hence there is a risk, with public sector pay frozen, and if jobs become available, that quality will decrease if some of the most able employees go private.

This impact has been overlooked and/or ignored in the debate about public sector pay. Of course, the pay freeze is accompanied by the pension levy which will amount to a 3% pay cut for most public sector workers. Voluntary redundancy programmes may well allow some of the best staff to leave - the "muppet retention scheme" syndrome.

Whether deteriorating quality is reflecting in productivity yardsticks hinges on how accurately public sector productivity is and can be measured.