Assessing Alternative Service Delivery Arrangements

Discussion Paper

Introduction

The government is moving to create more and more alternative service delivery (ASD) mechanisms. These may be defined as the provision of public services through arrangements other than the traditional departmental structure; a wide variety of approaches are being used both within and outside the public sector. There is parliamentary interest in being able to assess these new arrangements on some consistent basis.

In one sense, ASDs are not new: the federal government has long used more autonomous agencies and Crown corporations as an alternative to departments, and transferred programs and services to other levels of government. However, what is new is the increasing use of ASDs to deliver programs and services, which have been traditionally delivered through departments.

Privatization has been used to transfer services from the public to the private sector, as in the sale of the air navigation system to Nav Canada. Partnering arrangements with the private sector include community enterprises and non-governmental organizations (NGOs). Partnering arrangements with other levels of government are increasingly being used, such as those with provinces to deliver labour market training. In addition, new service agencies are being created such as the Canadian Food Inspection Agency, which consolidated functions from three departments, or proposed, in the case of the Canadian Parks Agency (before Parliament in Bill C-29) and the Canada Customs and Revenue Agency.

Within the federal government, ASDs range from special operating agencies (SOAs) to "single windows", where several departments provide services to the public in the same location. The diagram (Possibilities for Service Delivery Arrangements) shows the range of possibilities for service delivery alternatives.

Purpose and Scope

The purpose of this note is to provide parliamentarians with issues and questions they may wish to consider in assessing new service delivery arrangements. These issues and questions are based on experience with these arrangements, and a review of the relevant literature.

This note focusses on two of the most prominent types of new arrangements:

• Service agencies; and
• Partnering arrangements.

It should be noted that alternative service delivery arrangements may be considered by Parliament at different stages:

• As a proposal—if the new arrangements require legislation, as is the case for service delivery agencies;
• When up-and-running—the agency has completed the transition phase from the previous arrangements, and has been in operation for a number of years.

At the proposal stage, the issues relating to success in a public sector context need to be thought through and well articulated, taking into account all relevant points of view and leading to the key stage of parliamentary consideration of draft legislation. When the ASD is up-and-running, and is measuring and reporting results, the extent to which objectives have been achieved should become apparent.

Preliminary Questions

At the proposal stage, parliamentarians may wish to ask some basic policy questions about new service delivery arrangements:

Rationale for the Arrangement

Should the government continue to be involved in the basic line of business to be undertaken? Is it a function that only governments should perform?

Assessing Service Delivery Arrangements

Once a new service delivery arrangement has been decided upon and agreed to, there are a number of general issues relating to the public sector that can be used to assess its success. One would expect that a successful service delivery arrangement (1) meets its objectives relating to public purposes (i.e. public objectives), (2) is accountable, (3) is transparent and (4) protects the public interest:

1. Achieving objectives. The new arrangement should provide better service to Canadians, meet its public objectives without undue negative impacts, and do so in a cost-effective manner ^Footnote1.
2. Accountability to Parliament. The new arrangement, in its use of public funds and authorities, should ensure that adequate provision is made for accountability to the minister, and through the minister to Parliament.
3. Transparency. The new arrangement should ensure the availability of key information to Parliament and the public.
4. Protection of the public interest. The new arrangement should serve the public interest.

1. Achieving Objectives

The establishment of an alternative service delivery approach is usually linked to the desire for better, more affordable service, in which case its design should reflect these goals and facilitate their attainment. Over time, its objectives and specific performance expectations should be accomplished.

Thus in proposals, one would expect to see:

Clear performance expectations

Are public objectives and performance expectations for the service delivery arrangement clearly stated, indicating what results are expected, when, and at what cost?

• Is there a publicly reported strategic framework designed to guide activities, including a vision, mission statement and guiding principles?
• Are the overall objectives, which explain the use of public sector means of service delivery, clearly stated?
• Is it clear what specific results are expected to be accomplished by when in providing services and programs to Canadians?
• Have the planned ways of achieving better, more affordable service been explained, such as
  • by eliminating overlap and duplication?
  • through the introduction of new technology?
  • by harmonization of standards between federal and provincial governments?

Once up and running, one would expect to see evidence that

Objectives and performance expectations met

Are objectives being met in a more effective way?

• Has the new arrangement provided better service for Canadians?
• Has the new arrangement succeeded in meeting its public objectives?
• Have costs been reduced? Are cost reductions based on good cost information that clearly identifies and quantifies key costs?

2. Adequate Accountability to Parliament

New service delivery arrangements typically operate with greater autonomy and flexibility when compared with the conventional departmental structure. For example, they may not be subject to the human resources management regime that applies to departments in the rest of the public service. As a result, particular care needs to be taken in setting up the accountability arrangements involving ministers, Parliament, and senior officials.

For accountability arrangements to be effective, a number of requirements need to be met. The necessary elements may be described as principles. To the extent that these principles are in evidence, there is a greater likelihood of an effective accountability arrangement. The principles, outlined below, embody the characteristics of accountability relationships that seem most often associated with managing for results, where organizations are continuously learning from experience.

Proposals for new service delivery arrangements should reflect these principles:

Clear roles and responsibilities

Are the roles and responsibilities of the parties involved, including the minister, clearly defined? Is the role of the Auditor General clear?

• Has the relationship with the minister, and then through the minister with Parliament, been made clear?
• In the case of service agencies,
  • Are the role and level of authority of the board clearly established?
  • Are the chief executive officer responsibilities for day-to-day management clearly stated?
  • Is adequate provision made for ministerial direction to the CEO?
• In the case of partnering arrangements, are roles and responsibilities of the parties involved adequately specified and made clear in agreements?
• Is the Auditor General’s role adequately spelled out?

Balanced expectations and capacities

Is the capacity to get the job done balanced with expectations?

• Have the adequate authorities and resources (both financial and human) been granted?
• Will the granting of financial and human resource management flexibilities to agencies, or greater flexibility through partnering, likely enhance the ability to provide services, and meet objectives?
• Have full transition costs been adequately considered?

Adequate reporting mechanisms

Is adequate provision made for reporting to ministers and Parliament on the results achieved, based on the public money and authorities granted?

• Are there adequate requirements for reporting to ministers and Parliament, in annual reports and corporate or business plans, on what the agency or partnering arrangement is expected to accomplish, at what cost, and the extent to which expectations have been accomplished?
• How will the credibility of the reports be established? Is there need for a role by the Auditor General?

Reasonable review and adjustment

Are appropriate mechanisms in place to ensure that the arrangement continues to be the best way to achieve the desired results?

• Is adequate provision made for review of the arrangement, such as a sunset clause?

Once up and running, one would expect to see

Credible reporting

Are realistic plans and credible reports of performance against those plans being made available to Parliament on a timely basis?

• Do annual plans clearly describe what is to be accomplished by agencies and through partnering arrangements, by when and at what cost?
• Do annual performance reports provide credible evidence on what has been in fact accomplished and at what cost?

Effective accountability to Parliament also requires that appropriate mechanisms be in place to review performance, and make adjustments if Parliament or the government finds problems and weaknesses. This has been described as "closing the loop." It includes the scrutiny of business plan summaries and annual reports by parliamentary committees.

3. Transparency

New service delivery arrangements break out from the traditional mold of departments, through greater autonomy and flexibility, and often involve new partnering arrangements and a desire to be more business-like. Parliament and the public may wish the new arrangements to be publicly transparent as a way of enhancing accountability and ensuring good public management. The principles already discussed under accountability have addressed two key components of transparency:

• clarity in roles and responsibilities, and
• adequate reporting on plans and accomplishments.

In addition, one might expect:

Public transparency in agreements made

Are any agreements made by or with the new service delivery arrangement appropriately transparent to Parliament and the public?

• Are clear procedures in place to ensure transparency in reporting and for agreements entered into? Does access to information apply?
• Are there any special confidentiality or third party concerns that should limit transparency for the service delivery arrangement

4. Protection of the Public Interest

Any new service delivery arrangement, while seeking to operate flexibly in a more efficient and businesslike manner, must serve public objectives and operate in the public domain. In our view, the public interest relates to three aspects of its design and operation: an appropriate focus on public objectives; maintaining public service values; and adequate controls over public funds and assets.

Serving public objectives

• Has the service delivery arrangement ensured that its operations reflect public objectives, including the requirements of the government as a whole, in making use of the increased flexibility that comes from more businesslike operations?

Public service values

• Are public services administered in a way that respects due process, impartiality, fairness and equity, in the face of pressures to be more businesslike?
• Have laws and regulations been adhered to, in serving ministers and providing services to the public?
• Does the public service, acting in the public interest, meet high standards, including being professional, non-partisan and merit-based?
• Have these values been clearly and credibly articulated through the service delivery arrangement?

Controls over public funds and assets

Are appropriate controls over public funds in place? Where assets have been transferred, did the government get value-for-money, and pay the right price?

• Have changes in controls been clearly and credibly specified?
• Has the service delivery arrangement allowed for greater flexibility than was the case in departments, in terms of financial management and controls? Are the new controls effective?
• Have public funds and assets been safeguarded, including the sale of any public assets?

Conclusion

This note has identified several lines of questioning related to the new service delivery arrangements. The factors discussed are suggested as a way for parliamentarians to assess alternative service delivery arrangements.

Selected References—More about Alternative Service Delivery Arrangements

Aucoin, Peter, 1995, The New Public Management: Canada in Comparative Perspective, Institute for Research on Public Policy, see: chapters 6 through 9.

Ford, Robin and David Zussman, eds., 1997, Alternative Service Delivery: Sharing Governance in Canada, KPMG Centre for Government and the Institute of Public Administration of Canada.

Lindquist, Evert and T. Sica, 1995, Canadian Governments and the Search for Alternative Program Delivery and Financing: A Preliminary Survey, KPMG Centre for Government and the Institute of Public Administration of Canada.

Privy Council Office, 1996, Report of the Deputy Ministers’ Task Force on Service Delivery Models.

Seidle, Leslie, 1995, Rethinking the Delivery of Public Services to Citizens, Institute for Research on Public Policy, see: chapters 4, 6 and 7.

The Alternative Network, a bimonthly newsletter on alternative service delivery. A joint initiative of the Institute of Public Administration of Canada, the KPMG Centre for Government Foundation, and the Centre for the Study of State and Market, Faculty of Law, University of Toronto.

Treasury Board of Canada, Secretariat, 1996, The Federal Government as ‘Partner’: Six Steps to Successful Collaboration.

Treasury Board of Canada, Secretariat, 1995, Framework for Alternative Program Delivery.

Treasury Board of Canada, Secretariat, and Office of the Auditor General of Canada, 1994, Special Operating Agencies: Taking Stock.

¹ Cost-effectiveness can improve if the same service is provided at less cost or better sevice is provided at the same cost. However, it is common to expect both types of improvements for new service delivery arrangements. Return to reference 1