The StatRes project - more performance transparency in the public sector

1
The StatRes project - more performance
transparency in the public sector
Morten Strømgren Workshop on Measurement of
non-market output in education and health October
3, 2006
2
Situation Significant performance gaps in Norway
EXAMPLE EDUCATION

• In school (grade 8-10), spending per pupil is 40
  above OECD average
• International comparisons show that skills are
  only average

EXAMPLE HEALTH (1)

• No. 2 in OECD in health expenditure per
  inhabitant
• Life expectancy is lower in Norway than in
  countries spending much less - such as France,
  Italy and Sweden

EXAMPLE HEALTH (2)

• Along with increased spending in our hospitals,
  cost efficiency is reduced
• The effect is even stronger if the spending
  increase is high
• On average, for each 1 extra spending,
  production increases only 0,3

• Need to improve public-sector performance in
  Norway - performance transparency is
  important "driver"

3
Challenge Many information systems, low
availability

• Different information systems covering government
  activities

Examples
National accounts
Sector-wise web sites
National statistics
"Top-down" - Basic info. web sites, activity
focus
"Bottom-up" - Detailed systems, input focus

• Limited access to data
• Presented in many ways
• Lack of comparability
• Low impact on performance

Impact
Publicity
4
Example (1) The KOSTRA system for municipalities

• Performance indicators and measures for spending,
  activities, output, outcome
• Covers all 431 municipalities
• Updated annually in March, plus one revision

Cost per home-help receiver in Oslo townships
(NOK, 2005)
Example Cost benchmarking
Municipality
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
AVERAGE
5
Example (2) Performance of hospitals in SAMDATA

• Performance indicators for health enterprises
• Spending, through-put, availability and
  efficiency
• Benchmarking among health enterprises and
  hospitals

Health enterprise (hospital)
Operating costs per stay, adjusted
Relative cost level
Operating costs per day
Relative cost level
Example Operating costs per stay and per day
Level2004
Change 2003-04
Level2004
Change 2003-04
Sykehuset Østfold
Sykehuset Asker og Bærum
Akershus universitetssykehus
Aker universitetssykehus
Ullevål universitetssykehus
6
Example (3) Results from schools in Skoleporten

• Performance measures for higher and lower
  secondary schools
• Levels School, municipality, region, national
• Actively used by schools in efforts to improve

Example Through-put measures
Through-put
School facts
Resources
Learning envir.
Learning results
STATISTICS
Share of applicants for higher secondary school
admitted by their first choice among the schools
Share of pupils completed higher secondary school
on schedule
Share of pupils completed h. sec. school on
"overtime"
Share of pupils dropped out of higher sec. school
7
Analysis Fragmented information, need for easier
access

• Mapping of some important sources of data

High access (Internet, easy)
Medium access (Internet, hard)
Low access (internal data)
Outcome
Input
Activity
Output
8
StatRes Web site showing performance indicators
First preliminary draft
9
StatRes Features what's special?

1. Operated by Statistics Norway, ensuring
   independence
2. Indicators are defined in co-operation with
   sector specialists
3. Common framework for central government, linking
   'input' with 'output' and 'outcome'
4. Accessible for everybody, not only experts
5. Allowing for comparisons, also internationally

ABC
10
Example Possible indicators, pilot "higher
education"
Input
Activity/unit
Output
Outcome
KEY FIGURES

• Costs
• Employees
• Man-years

• Students
• Average annual student progress
• PhDs in progress

• Ranking
• Alumni employment
• Average grades of applicants from higher sec.
  school

• Degrees
• PhDs completed
• Papers (rated)
• Grades?

KEY RATIOS

• Alumni salary compared to total cost of degree
• Quality ranking over spending ranking (e.g.
  share of GDP)

• Cost per degree
• Share graduated on time
• Papers per academic staff

• Cost per student per year
• Students per academic man-year
• Share of exchange students

• Share academic man-years
• Cost per academic man-year
• Share of non-govt. financing

11
Final remarks Effects, assumptions
Anticipated effects

• More attention to public spending and results
  (output, outcome)
• Speed up the use of performance indicators in
  public sector
• Improve desicions, resource allocation,
  motivation -? better performance

Assumption strong efforts needed

• Most countries in the same situation much
  relevant data, low accessiblity
• Strong efforts needed to make performance
  indicators and data available to a larger
  audience -? increase use and impact

12
Thank you
13
Back-up slides
Will not be used, unless detailed questions
14
Outline Performance, transparency, the StatRes
project
Public-sector performance

1. Performance gaps, examples
2. Need more transparency, examples
3. One approach The StatRes project
4. Some challenges and our response

15
Possible approach Efforts along two dimensions
Performance transparency
Support to agencies in performance improvement

• Measure performance
• Display results
• Comparability

• Incentives and follow-up
• Build right competence
• Structures, technology etc.

16
Now establishing new system 'StatRes' for central
government

• Need easily available fact base to evaluate
  effects of public spending, on various levels

Why?

• Internet publishing of statistics and indicators
  for central government sectors - based on
  existing data, not new reporting

What?

• Ministry of Government Administration and Reform
  (idea, financing)
• Statistics Norway (system development)

Who?

• Developing framework, recruiting pilot areas,
  planning implementation
• Pilot areas and system design starting next month

How?
When?

• Planned lauch in 2007, thereafter include more
  sectors continuously

17
KOSTRA system for municipalities on activities
and output
Brief facts - KOSTRA
Examples of applications
(1) Unit costs (index) - municipal services

• Developed from 1995 and onwards
• Covering all 434 municipalities
• Annual publication on 4 levels- Counties-
  Municipalities- Townships (Oslo)- Institutions
  (secondary el. schools)
• Covers inputs, activities, outputs, some outcomes
• Challenges - Counts expenditures, not costs-
  Not very user friendly- No direct link inputs -
  outputs

Primary school
Elderly care
Total
Kinder-garden
(2) Share of elderly at nursing homes that have
single rooms
B
C
D
E
A
Municipality
18
Effects of StatRes, some questions
Anticipated effects

• We believe StatRes will
• attract more attention to the use of public
  funds, and the results (output, outcome)
• speed up the use of performance indicators in
  public sector
• provide a common framework for assessing the
  results of public spending
• be a tool used by both politicians, managers,
  employees and citizens
• help improve desicions, resource allocation and
  performance in public sector

Questions we have asked ourselves

• Wait for better measures (costs, indicators,
  etc.) before displaying results on web?
• How to select relevant performance indicators,
  avoiding unintended behavior?
• Much overlap with existing sector systems for
  displaying performance?
• How to ensure a sustainable system somehow beyond
  political control?
• Who will be the users of StatRes - politicians,
  managers, employees, citizens?
• Are parts of the public sector not suited for the
  input-output-outcome logic?
• Should StatRes include all public spending, also
  transfer payments to private sector?

19
Final remarks Key questions, assumptions
Key questions
How to ensure a sustainable, consistent, credible
and relevant system? How to avoid a sense of
competition from existing performance-information
systems? Which government expenditures should
be included?

• Statistics Norway develops and operates the
  system
• Close co-operation with sectors in defining
  indicators
• Loyalty to a fixed framework, trying to link
  spending and results (transformation model,
  COFOG)
• Stressing that StatRes will show the totality for
  central government, a supplement to local systems
• Only showing data that exist already, but in a
  structured way
• Including only central-government spending
• Not including general transfers (pensions etc)
• Mainly expenditure, not cost

Assumption

• Most countries in the same situation - large
  amounts of relevant public-sector performance
  data not easily available to the public
• Strong efforts needed to make such data available
  to a larger audience increasing the use and
  the impact of the data

20
Display meaningful information about input,
output, outcome
Politicians
Media, organisations
Public sector employees
StatRes
USERS
Main challenge Select indicators and secure data
quality
Scientists, students
Citizens, voters
STATISTICS AND INDICATORS
21
Current scope for discussion

• StatRes has initial focus on uncomplicated
  sectors, for showroom effect
• At an early stage show avaliable results and
  facts, rather than wait for a "perfect" system
• StatRes will display results "as is" to trigger
  - new sectors - new indicators - better
  quality - quest for relations (between inputs
  and results)
• Many useful indicators are not dependent on
  national accounts

22
National accounts development in Norway vs.
StatRes

• BACK-UP

• Some observations
• Relatively high quality in national accounts
• COFOG adapted in national accounts
• Strong regulations resulting from
  cooperation/agreement with EU
• Some challenges
• Outsourcing makes it hard to determine input
  (resource) mix
• Partial public financing og certain services
  difficult to treat
• How to measure real costs, and not only
  expenditure - include depreciation etc.
• Eliminating correctly for transactions within
  public sector (tracing)
• Considering creation of satellite accounts for
  StatRes use

23
System framework Making all of central
government displaying results according to a
common framework
Effectiveness
Efficiency
Input
Activity / unit
Output
Outcome
Other determinants
Other measures - Prioritisation, coverage,
quality1)
Objectives

• Displaying data for all agencies according to
  this framework will be a major step towards
  public-sector transparency
• No ambition to estimate economic value of the
  outputs2)

1) Many indicators may fall into several possible
groups/classifications2) Unlike the national
accounts, wich estimates prices for outputs
24
Introducing performance based financing in the
health sector

• BACK-UP

Average number of days on waiting list
Number of days on wating list reduced
1998
1999
2001
2000
2002
2003
2004
2005
Source Norsk Pasientregister
however no signs of increased cost efficiency
1) Per manyear2) Per NOK
25
COFOG

• BACK-UP

• 01 - General public services
• 01.1 - Executive and legislative organs,
  financial and fiscal affairs, external affairs
• 01.2 - Foreign economic aid
• 01.3 - General services
• 01.4 - Basic research
• 01.5 - RD General public services
• 01.6 - General public services n.e.c.
• 01.7 - Public debt transactions
• 01.8 - General transfers within government
• 02 - Defence
• 02.1 - Military defence
• 02.2 - Civil defence
• 02.3 - Foreign military aid
• 02.4 - RD Defence
• 02.5 - Defence n.e.c.
• 03 - Public order and safety
• 03.1 - Police services
• 03.2 - Fire-protection services
• 03.3 - Law courts

• 04.4 - Mining, manufacturing and construction
• 04.5 - Transport
• 04.6 - Communication
• 04.7 - Other industries
• 04.8 - RD Economic affairs
• 04.9 - Economic affairs n.e.c.
• 05 - Environmental protection
• 05.1 - Waste management
• 05.2 - Waste water management
• 05.3 - Pollution abatement
• 05.4 - Protection of biodiversity and landscape
• 05.5 - RD Environmental protection
• 05.6 - Environmental protection n.e.c.
• 06 - Housing and community amenities
• 06.1 - Housing development
• 06.2 - Community development
• 06.3 - Water supply
• 06.4 - Street lighting
• 06.5 - RD Housing and community amenities

• 08 - Recreation, culture and religion
• 08.1 - Recreational and sporting services
• 08.2 - Cultural services
• 08.3 - Broadcasting and publishing services
• 08.4 - Religious other community services
• 08.5 - RD Recreation, culture and religion
• 08.6 - Recreation, culture and religion n.e.c.
• 09 - Education
• 09.1 - Pre-primary and primary education
• 09.2 - Secondary education
• 09.3 - Post-secondary non-tertiary education
• 09.4 - Tertiary education
• 09.5 - Education not definable by level
• 09.6 - Subsidiary services to education
• 09.7 - RD Education
• 09.8 - Education n.e.c.
• 10 - Social protection
• 10.1 - Sickness and disability
• 10.2 - Old age

26
Norway has three administrative levels,
relatively decentralised
Public sector consumption, 22 of GDP
EUR billion
Main tasks
Key features

• General public services
• Housing and community amenities
• Education (primary school)
• Social protection
• Recreation, culture, religion

• Limited outsourcing most tasks performed by
  public sector- E.g. few independent schools
• Ongoing redesign of regional level (counties)
• Decentral desicions and responsibilities
  (municipalities)

Municipalities 40

• Environmental protection
• Education (sec. elementary)

Counties 7

• Defence
• Public order and safety
• Economic affairs
• Health
• Recreation, culture, religion
• Education (higher)

Central govt. 53
Source Statistics Norway