Dada Adefolami

In many countries, for example, children’s education is one of the tasks devolved to local authorities. This is because local authorities are usually in possession of the particular statistics and needs analyses that are necessary for effective planning of education services. So if a large new housing project is planned, it will be typically be the local authority that ensures that a school is located nearby for children in that area to attend. Similarly, local demographic trends and particular educational needs may be better understood by subnational authorities than by national government. In such cases, individual schools must report to the local authority on selected metrics, which might include budgetary compliance, teaching quality and exam results.

In many cases, subnational public sector organizations are led by elected representatives in a similar way to national governments. These are supported by permanent officials in a similar manner to civil servants in national governments.

Supranational bodies are a little more complicated. When national governments form supranational bodies, they do so for a shared purpose and they are often subject to significant pressures as a result. This is often because national governments do not agree with each other, as each one is subject to pressure from its own people to prefer one outcome to another in the supranational organization. Many European countries, for example, are members of the European Union, with offices in Strasbourg and Brussels, whilst similar bodies exist elsewhere in the world. The United Nations (UN), based in New York, expresses the collective opinion of many countries in different parts of the world, on a range of international issues.

The UN employs many thousands of people both at its headquarters in New York and around the world through its various agencies e.g. in the World Health Organization, in its refugee agency, environment programme, etc. Similarly, the World Trade OrganizationWTO, formerly the General Agreement on Tariffs and Trade meets every few years in ‘rounds’ named after the city they meet in, in order to help with reducing barriers to international trade in terms of reducing or removing tariffs (import taxes) and quotas limits on imports of certain goods and services.

Assess and evaluate the strategic objectives, leadership and governance arrangements specific to public sector organizations as contrasted with private sector.

Because of the nature and the ways they are funded, there are major differences between public and private sector organizations.

The private sector is the part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the State areas of the economy, controlled by the state being referred to as the public sector. The public sector is the part of the economy concerned with providing various governmental services

Strategic objectives
While most private sector organizations are independent in that they are ‘stand-alone’ companies answerable to their shareholders, most public sector organizations are part of a larger public sector structure. A defense force, such as an army, cannot act alone and as it sees fit. Rather, it is funded by government and is tightly controlled in what it is asked to do and how it achieves its aims. Likewise, a school in the public sector will rarely have the freedom to do as it likes in terms of what and how it teaches, who it appoints and where it locates itself. In each case, the public sector organization is helping to achieve and implement a set of higher government policy objectives.

This is not to say that individual public sector organizations do not have strategic objectives, however. Each one must work out how it will achieve what it is asked to do but the autonomy given to individual organizations varies. Each public sector organization must be strategically effective in that it must achieve the objectives established for it in carrying out government policy. Because they are funded by public money, they must also be efficient and make the most of whatever resources they are provided with. Finally, they must also be economical in that they must work within specified budget and deliver desired outputs within that budget. Accordingly, there is an emphasis on value for money and service delivery. When public sector organizations are occasionally criticized in the media, it is usually because they have either overspent, underperformed, or both.

Governance arrangements
There is no single way in which public sector organizations are governed. Accountability is gained in part by having a system or reporting and oversight of one body over others, Because there is no market mechanism of monitoring performance as there is with listed companies, for example, other ways must be found to ensure that organizations achieve the objectives and service delivery targets established for them.

But Policy analysis is “determining which of various policies will achieve a given set of goals in light of the relations between the policies and the goals.” However, policy analysis can be divided into two major fields. Analysis of existing policy which is analytical and descriptive—i.e., it attempts to explain policies and their development.

In some cases, a head of service or a board of directors must report to an external body of oversight. The oversight body may be a board of governors, a council of reference, a board of trustees, and an oversight board or similar. In each case, its role is to hold the management of the service to account for the delivery of the public service and to ensure that the organization is run for the benefit of the service users, because public sector organizations are not held to account by shareholders as with business companies.The oversight body is often put in place as a means of holding the management to account. In this respect, oversight bodies are acting in the interests of service funders usually taxpayers in making public sector organizations accountable.

Typical and general roles of oversight bodies include the following, although their roles do vary substantially depending on jurisdiction and government policy. Firstly, they are there to comply with government rules on whichever public sector governance applies. So a school may have a board of governors in order to comply with the local authority or education department/Ministries rules on school governance. A hospital’s management may likewise report to a superordinate body possibly overseeing several other hospitals at the same time.

Second, it is their role to ensure the organization is well-run and meets the performance targets established for it by higher levels of government. It may receive internal or external audit reports to help achieve this or make visits and other interventions to ensure that the organization is performing to expectation. Third, the oversight body may be involved in budget negotiations and then in monitoring performance against budget and any number of other agreed financial measures in a similar way that a management accountant might in a conventional business.

Fourth, it is likely to be involved in making senior appointments to the public sector body and in monitoring the performance of management on an ongoing basis. In many cases, boards of governors in schools or universities, for example have the power to remove a senior manager perhaps a head teacher if they believe he or she is underperforming and not delivering the quality of services required. Finally, they are sometimes required to report upwards, perhaps to local or central authorities, on the organizations they have oversight over.

There is an increasing move in some situations to run some public services along similar lines to private companies. This means they may have an executive board and also some non-executive membership on the board also.

Discuss and assess the nature of democratic control, political influence and policy implementation in public sector organizations including the contestable nature of public sector policy’

One of the curious and fascinating features about public sector organizations is that there is sometimes a debate about how they should be operated and even whether they should exist at all. Because, in many democratic countries, public policy is debated in the public arena, there is a public debate about how the state sector should be constituted. This includes debates over the size of the state and the role of its institutions.

In a democracy, political parties argue over the nature of public policy and they do so from a particular set of underlying assumptions. Some of these underlying assumptions influence the way they argue for particular outcomes and the way in which they guide a government when they achieve political power. It tends to be the case with exceptions that left-leaning governments prefer a larger state sector, with more state spending and more public sector employment, while right-leaning governments prefer more to be achieved in the private sector and less by government.

The debate is often intense and enduring. In the case of health services, for example, some believe that health should always be entirely within the public sector and entirely funded by the taxpayer. This means that, for the service user the patient, everything is free at the point of use. Others strongly believe that this is a misuse of public funds and that people should pay for health services in other ways, such as through an insurance or subscription scheme. Likewise with university education: some believe it should be paid for by the state and others believe that students should pay. In each case, debates are complicated. If there were easy and convincing answers, there would be less debate, but public opinion is split on most areas of public debate and this fuels political debate and in turn, how public sector organizations are configured in line with particular political influences.

One of the ways in which some countries have restructured their economies in recent years, is through the process of privatization. This means taking a service that was previously delivered through public sector organizations and then allowing it to be provided by private sector organizations. In some cases the previous public sector monopoly supplier of a service is transferred into the private sector by making it into a public listed company so that people can buy shares in it. Those in favour of privatization tend to argue that services can be delivered more efficiently in the private sector where management have a profit motive and competition. This in turn, delivers better value to the customer.

This process is not without its critics; however Opponents of privatization sometimes argue that some strategic services such as utilities, water, etc, are too important to be subject to the market forces of private enterprise. Others believe, perhaps from a position of personal ideology, that the state should control much more of the economy rather than less. So transport and airlines should also be under state control. Perhaps Privatized businesses, once transferred from the state sector, are often subject to a great deal of internal change including changes in culture, structure, and governance. Focusing in particular on issues of changing governance, we can see that changes in opinion influence public sector organizations in many ways.

Finally: A public–private partnership (PPP or 3P or P3) is a government service of
government and one or more private sector companies. PPP involves a contract between a public sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project.

The tertiary sector of the economy also known as the service sector or the service industry is one of the three economic sectors, the others being the secondary sector approximately the same as manufacturing and the primary sector agriculture, fishing, and extraction such as mining

In addition, changing policy objectives mean that some public sector organizations are required to change over time, both in size and in what they are asked to do. As governments change, some public sector organizations grow in size and become more important, and others become small and less important.

Dada Suraju Adefolami, Professor of Finance, School of Business Administration, UNEM University Costa Rica, is a Finance / Management Consultant and Certified Forensic Accountant. You can reach him via: [email protected]; 08052043855