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Strengthen the chain! Experiences from twenty analyses of state steering and organisation (About the public sector)

In this report, Statskontoret presents experiences and observations of steering and organisation within the State. The report is aimed at two aspects of steering and organisation: the Government's steering of agencies and the internal steering and organisation of the analysed agencies. These two aspects shall not be seen as isolated from one another; both are part of a chain of governance in which the links are instructions, appropriation directions, the organisation of activities, monitoring and performance reporting. The title of this study is Strengthen the chain! This may be seen as a rather strong imperative, but our intention is to convey the importance of politicians and officials of the State alike viewing steering as a whole and realising that there is more to do in this respect.

The basis of our report consists of the 20 agency analyses performed by Statskontoret over the last four years as commissioned by the Government. Agency analyses are carried out using an evaluation model developed by Statskontoret. An analysis of this nature is to provide an overview and analysis of an agency's circumstances, activities, performance and challenges. The model used in the analysis is broad and flexible and can be adapted to accommodate various factors.

The Government's context adapted steering has had an impact on the steering documents …

A review of the agency analyses reveals that the context adapted steering (verksamhetsanpassad styrning) – which has been one of the objectives when making alterations to the agency steering – has had an impact. In practice, the Government has always steered agencies in different ways, but now this practice also manifests itself in the various steering documents. Some agencies have comprehensive and detailed instructions, whilst others do not. Some agencies have target formulations in their appropriation directions, others do not. Some agencies are steered via a number of commissions, others are not. Some agencies are financed entirely by appropriations, others have a mixed financing that includes grants and/or charges. Different agencies are therefore steered differently, but are these adaptations always the result of a conscious, well thought-out and strategic view of the form of steering in the individual case or is there another explanation? Another related issue linked to this matter of adaptation is whether the agencies are steered "correctly"? It is not possible to answer these two questions within the scope of this report, but the review on which the report is based seems to suggest that the answer is somewhat more complex than a mere yes or no.

… and yet there are problems with the steering

The agency analyses indicate a number of deficiencies in the Government's steering of its agencies. Several of these deficiencies are in one way or another related to the fact that there is a lack of consistency in the steering of individual agencies and activities. This applies irrespective of whether the steering takes the form of targets, feedback, instructions and appropriation directions or commissions and financing. The agency analyses have provided examples of the different ways in which instructions and appropriation directions can be formulated and have indicated an inconsistency between the formulation of the instructions and the importance of the commission. They have also revealed that there is sometimes a poor balance between the commission and the corresponding operations initiated by an agency, and between tasks laid out in appropriation directions and those commissioned at regular intervals during the year. We have also seen examples in which there is a lack of criteria governing when commissions are to be financed and when they are not, in the scope of the administrative appropriation, and where there is no cohesive principle for how agencies are to be financed via appropriations, grants and/or charges.

The agency analyses also provide examples where there is a lack of consistency in terms of the division of responsibility and tasks between agencies. This has led to an overlap of certain commissions and an unclear division of responsibilities among agencies. An explanation for this is that it has proven difficult to facilitate an overview of the commissions and division of responsibilities in different spheres of activity, especially in cases where the agency is steered from different sections of the Government Offices.

The agencies utilise their delegated right to make decisions …

For a long time, the state agencies have had a great deal of freedom to steer and organise their own operations. Much of the responsibility for conducting these operations within the scope of allocated funds has been delegated to the agencies. The delegated right to make decisions has been trialed on a number of occasions and has essentially been found to work well. When authority is delegated to agencies' management, the responsibility for internal steering and organisation of activities increases. This responsibility includes ensuring the agencies' follow-up and performance reporting functions are up to scratch.

… and yet there are problems with the internal steering

The deficiencies in the internal steering noted in the agency analyses are not thought to be a result of a lack of different types of steering documents. On the contrary, the analyses show that the work to develop steering documents is in many cases a priority. The problem is rather that the agencies produce too many steering documents and devote too little time and attention to implementing plans and strategies. In some cases, there are also deficiencies in the implementation itself.

Several of the agency analyses also indicate that there are problems relating to the agencies' monitoring of activities. For example there are agencies that have difficulties operationalising the political goals of their activities. In some cases the agency does not have a breakdown of their goals and lacks indicators, which means that it is difficult to monitor and report on its activities. The agency analyses also suggest that there may be a need to develop the performance reports, since it is difficult to determine the results achieved by an individual agency based on the information in the report. When there are deficiencies in the follow-up and performance report, it is difficult for the Government to determine if an agency is running its activities in an efficient and appropriate manner or if the Government needs to change the way it steers the agency.

The agency analyses also reveal a need to improve the monitoring of agencies' market activities — a need which has also been observed in the Public Administration Bill, in which the Government calls for a clearer structure for agencies' monitoring of sales activities on the market. Such basis is valuable, not least when the Government examines the alignment and scope of the agencies' market activities. The agency analyses indicate that there may be cause for the Government to regularly carry out such examinations.

Calls for more strategic steering …

In summary, our review of the agency analyses shows that there is a need for more strategic steering, from the Government and the Government Offices as well as within the agencies. The chain of governance should be linked together. When there are deficiencies in the Government Offices' strategic steering, this affects the agencies' internal steering and when there are deficiencies in the agencies' monitoring and reporting, this affects the Government Offices' opportunity to steer the agencies strategically.

In the Public Administration Bill, the Government also states that the steering should be more strategically focused. According to the Government, this means that "individual decisions should be made from a holistic perspective of all government policies, an assessment of political considerations across sector boundaries, not forgetting to observe stipulated prioritisations and the State's combined resources, etc." Judging by the public sector analyses, the Government's ambition to steer agencies and activities in a more strategic manner has not yet been fully realised.

…as well as greater clarity

Studying the observations of the agency analyses, there is one theme running throughout which cannot be associated with a particular category of general observations. What we are referring to is the recurring desire in the reports for greater clarity on the Government's part. This could relate to several different aspects of the steering. According to the analyses, the Government may need to clarify the focus of the commission, or describe in greater detail the agency's tasks, or formulate clear overarching principles which determine the tasks that an agency shall have. In addition, the Government may according to Statskontoret need to clarify when an agency is to receive special financing or clarify the division of tasks between agencies. Sometimes a clearer instruction and/or clearer signals are desired in the agency analyses.

The fact that an evaluating agency such as Statskontoret highlights the need for greater clarity is hardly surprising. We also feel that the desires for clarity put forth are reasonable. There may however be cause to put further consideration into the relationship between the desire for greater clarity and the Government's steering.

The fundamental question which must then be asked is 'why?' Why is the Government not clear in its steering? Here, we feel it is necessary to differentiate between the different components of the steering. The fact that goals are not always clearly formulated from the political level is something that agencies will have to live with in the future. There are several reasons for the overarching political goals not always being clear; for example, they can be a result of political compromises. The same can apply to principles for financing, which may also be a result of political compromises. Ensuring that the instruction clearly states the agency's commission should however be fully achievable without needing to affect the Government's ability to steer its agencies. The Government also states in the Public Administration Bill that the instruction should be the fundamental instrument in steering agencies. According to the Government, the instruction must clarify the individual agency's commission; i.e., its tasks. The level of detail in the instruction may however vary. With a starting point in the Government's altered focus on steering, where the instruction constitutes a more central steering instrument, it is therefore important that this document is as clear as possible when defining the agency's commission.

If the starting point is the fact that the Government rarely formulates its overarching goals for a certain activity in a clear manner (and this is not expected to change), the Government Offices' duty as "translator" of the political will to bring about concrete agency steering becomes all the more important. Statskontoret's repeated wish for greater clarity indicates that the Government Offices do not always fully succeed in this task. The Government Offices' problem in this respect also makes it difficult for the agencies in turn to translate the Government Offices' steering into concrete activities to steer towards and thereby fulfil their task.

It should however be noted in this context that the agencies have been delegated the responsibility to steer and organise their activities. This also inevitably means a responsibility and space for the individual agency to interpret the Government's steering. The Government cannot, and shall not, manage agencies' activities in detail. The ambition to bring clarity here reaches its limits.

… and a holistic approach to steering and organisation in the State

In this report, we have analysed steering and organisation in the State based on the agency analyses performed by Statskontoret. To sum up, our analysis indicates that there are deficiencies in the chain of governance from the Government to the Government Offices, on to the agencies and back. However, it has not been possible to look deeper into the problem in this report. Our recommendations for the upcoming in-depth studies will therefore be: adopt a holistic approach to steering in the State; analyse how well the chain of governance holds together. Our view is that each link in this chain affects the steering and organisation as a whole, and indeed, no chain is stronger than its weakest link.