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Streamlining systems On prerequisites and opportunities for using the systems perspective to streamline the core activities of central government (2014:28)

In the 2014 appropriation directions, the Government commissioned Statskontoret (the Swedish Agency for Public Management) to identify opportunities to increase efficiency in the core activities of central government by means of various systems-related changes. We have also chosen to analyse incentives and barriers that affect the ability of the Government and administration to bring about future efficiency gains related to systems.

Assumptions and method

Our starting point is that systems refer to activities concerning at least two agencies. Thus, streamlining the internal activities of agencies has not been part of our work. By core activities of central government, we are referring to the activities stated in Ordinances with instructions to the agencies. We have assumed that the agencies' current range of services will also continue to be offered with the same goals and focus.

We have developed an analytical model to support the identification of areas in which systems-related changes could lead to greater efficiency. The model takes into account conceivable problems and measures for five indications of inefficiency. These are poor achievement of objectives, high costs relative to achieved effects, long processing times, inappropriately designed regulatory frameworks and new technology that is not fully utilised.

Six case studies

We have identified six areas in which we have strong reason to presume the existence of efficiency problems. The problems and conceivable measures to reduce them are summarised in the table below.

Table showing the six areas

We believe that all the cases described are good examples of the potential of systems-related changes to lead to greater efficiency. Our overview calculations show some examples of how streamlining could reduce the costs of activities. The examples suggest that this may involve considerable sums. However, streamlining may have other purposes than reducing direct costs, such as bringing about a better achievement of objectives. In order to assess the magnitude of savings and other effects that are possible in practice, there is a need for more in-depth analysis than what we have been able to perform within the framework of our commission. Before it is possible to convert our observations into proposals on concrete measures, additional light must also be shed on various consequences, including effects on legal security and the privacy of individuals.

Difficult to find low-hanging fruit

Our general impression is that there is scarcely any great number of central government systems where the opportunities to increase efficiency by means of systems-related changes are both obvious and easy to bring about. There are several reasons for this.

  • The Government has often noticed and tried to rectify efficiency problems in various systems.
  • It may be assumed that the instruments already used to increase the efficiency of these agencies are effective.
  • The core activities of central government comprise agency assignments decided on by the Government. Our commission has not included any reconsideration of the public undertaking in various areas.

Incentives and barriers

There are several instruments that motivate central government agencies to streamline their activities. In particular, these are certain provisions in the Budget Act and the Government Agencies Ordinance, price and salary indexing, and performance management. Agencies also have their own interest in greater efficiency, for example, to fulfil their assignment well.

Agencies have long conducted work to streamline their activities, especially as regards internal administration. Streamlining core activities might be more difficult. Especially with regard to more radical changes, agencies may need incentives other than general requirements for greater efficiency. These could, for example, involve strong criticism from external auditors, unacceptably long processing times, targeted extra resources or greatly reduced appropriations.

A goal of public administration is for the civil service to be collaborative. Sometimes, agencies have strong interests of their own to cooperate with other agencies, for example if they are faced with new or extensive issues that they are unable to resolve without outside assistance. Provided that all the agencies concerned have something to gain from this cooperation, the chances of them trying to apply a systems perspective are favourable.

However, the purpose of the systems perspective is to utilise the total resources so that they do contribute effectively to achieving the objectives of the system. How the costs and benefits are shared between the agencies concerned is of no account in this context. However, in the first instance, the different agencies must make sure they use their own resources so that they best contribute to achieving their own goals. If the systems perspective leads to an uneven distribution of the costs and benefits, it becomes difficult for some agencies to participate in the cooperation.

Against this background, we believe that the existing incentives are not sufficient for the agencies to be fully capable of harnessing the systems-related streamlining potentials that may exist. There may thus be reason for the Government to develop its steering of the agencies in order to facilitate the endeavour towards more efficient systems.

  • When there are strong indications that a systems-related streamlining potential exists, the Government can commission several agencies to take joint measures to develop and streamline their activities with a focus on a common goal.
  • If an agency's objectives are not fully compatible with the system's objectives, the systems perspective assumes that the agency will tone down the objectives of its own activities in order to invest a greater portion of its resources in achieving the system's objectives. However, an agency cannot independently prioritise the system's objectives ahead of its own. In such cases, the Government must adapt the agency's objectives so that they can be made compatible with the system's objectives.
  • The risk of conflicting objectives presenting a barrier to the application of the systems perspective increases with the number of agencies covered by the system. This is especially true if the agencies belong to different ministries. If the systems perspective is to have an impact, all the agencies concerned must give sufficient regard to the system's objectives. This requires Government steering to be explicit and coordinated in relation to the agencies.
  • One way to explicitly emphasise and support the systems perspective would be to organise joint dialogues with all the relevant ministries and agencies that are part of a system.

Experience of efficiency analysis in systems terms

Adopting a systems view of public activities entails taking a comprehensive approach to those activities. Viewing an activity as a system shifts attention to the overall picture and to the relationship between the system's various parts.

We believe that an area must have two fundamental characteristics for any added analytical value to be derived from viewing its streamlining opportunities in a systems perspective. The first is that the system's various parts form a distinct whole, the second that there are explicit functional relationships between those parts.

In areas that have these characteristics, both the activity's ultimate purpose and its streamlining opportunities are strongly linked to the system as a whole and to the relationship between its various parts. In such cases, it is appropriate to analyse streamlining potentials in systems terms. Of the cases we have studied, we believe that this particularly applies to the system for newly arrived refugees' establishment, the system for the handling of criminal cases and the system for zoonosis preparedness.

Our investigation has, however, assumed a very broad definition of systems. In consequence, some of the areas we have studied scarcely have the full characteristics that we believe should be required for a systems-based analysis to be meaningful. This might involve agencies in the area forming a distinct whole (for example, by working with similar issues and having to follow the same rules), but not otherwise having very strong functional relationships between them. Both the system for official statistics and the system for the administration of central government property are examples of this. It might also involve agencies in the area indeed having functional relationships (for example, that an agency is dependent on data from another), but without it otherwise being possible to say that the issue for which these relationships exist creates a whole between the agencies of the kind that constitutes a system. The system for the repayment of student aid is one such example.

This does not mean that it is unnecessary to analyse streamlining opportunities in cases other than when a certain area constitutes an explicit system. On the contrary, there are scarcely any central government agencies whose efficiency cannot be increased. The point is rather that the analysis approach chosen should be adapted to the conditions prevailing in individual situations.