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Specialisation in government operations (On the public sector)

In the past few years, the Government has implemented a number of fairly comprehensive changes to the governmental structure in a number of fields. The aim of these changes has often been to increase the specialisation of different government agencies in order to achieve a more efficient and legally secure administration.

Statskontoret has investigated to extent to which operations have been transferred to separate, specialised agencies and the motives behind this change. We have also carried out a comprehensive analysis of the benefits and drawbacks of this specialisation.

According to its instruction, Statskontoret (the Swedish Agency for Public Management) is to assist the Government by means of documentation for the development of public administration. This assistance includes follow-up and regular description of trends in the public sector. This report on specialisation of government operations is part of that assignment.

Supervision and analysis are most commonly specialised

Our investigation has shown that specialisation of operations is most commonly done in connection with a larger review of the government agencies involved in a specific sector. In some sectors, the restructuring has taken place in one go, while in others the changes have been gradual over a longer time period.

During the studied period, 16 government agencies have been specialised according to the definition used in the study. Of these, 6 are supervisory authorities and 6 are analysing authorities.

The Government's aim has been to create a well-functioning division of responsibility between the agencies found in a specific sector and clarifying their separate roles and duties when it comes to contributing to overall goals. The specialisation is almost always a result of the Government wanting to separate development functions from follow-up functions.

There is an underlying ambition for a structure's government structure to be "complete", i.e. consist of a certain set of agencies. This is often an underlying argument when supervision or analysis agencies are created or specialised.

The motives are often formulated on a general level

Statskontoret notes that the Government has often explicitly stated the motives on a general level when specialising operations, and in connection with the creation of new government agencies. The formulations combine an ambition for increased efficiency with goals regarding increased legal security.

One reason for the general nature of the motives may be that there is an administrative policy position which promotes specialisation of roles. The position has its roots in an increased market orientation of the public sector. Adopting this perspective entails a risk of overlooking the possibility of allowing operations to remain in their original government agency or transferring them to another existing agency.

The Government has rarely spoken in detail about the effects that the change is intended to bring. This sets organisational reforms apart from most other reforms. There has also often been a lack of reliable information about the costs of operations, which can make it hard to correctly dimension a new specialised agency and afterwards assess if the efficiency has increased. The specialisation has often meant an increase in ambition, both in the form of demands for more efficient operations and through actual increases in resources allocated. Overall, this results in the organisational changes being hard, or even impossible, to evaluate.

It is therefore also hard to gather the required information to reassess the government agencies' operations in a given sector. Statskontoret has also noted that there is a need for a knowledge base regarding major reorganisations and their consequences.[1] Such a knowledge base could provide guidance on how future organisational changes can be evaluated and thereby supplementing the Government Offices' handbook on organisational changes in this respect.[2]

The aim of the specialisation is often to clarify roles

It is commonplace for the Government to create new or restructure existing government agencies based on the need to keep roles separate, mainly between supervision and assessment on one hand and funding and standardisation on the other.

However, we can note that the Government's reasoning on role allocation differs to some extent between sectors. The Government has in some cases argued that standardisation and supervision shall be handled by the same government agency. The reason for this can be that a separation would result in agencies that were too small.

There are examples of boundaries being blurred in connection with specialisation measures, and there being an overlap in responsibilities. This can lead to both duplicate work and certain activities not being carried out. An overlap in responsibility can also be intentional and be motivated by the Government wanting a certain competition or having certain operations viewed from several perspectives.

Governance and resource allocation decisions are elevated one level

The prioritisation of resources in a sector, between for example supervision and standardisation, is elevated to the Government when these operations are carried out in independent agencies. This increases the Government's ability to govern and dimension the operations.

When operations are specialised in an independent agency, it is given its own instruction and appropriation directions, meaning that the new agency is required to report the results of its operations in its own annual report. To prioritise well, the Government must ensure that the reporting provides enough information to be able to prioritise between, for example, developmental and follow-up operations.

Governance becomes easier in specialised agencies. When different operational forms are gathered in one agency, there is a risk that the governance that is applied is best suited to the biggest (or strongest) operational form, despite possibly being less well-suited for other operations within the same agency. In a separate agency, the governance can be better adapted to the operations.

The advantages and disadvantages of specialisation

In summary, we have found the following advantages and disadvantages with specialising operations in separate agencies.

Advantages

  • Specialisation can help make operations more visible to citizens and other actors.
  • The Government's control of the operations can be made clearer by the agency being given a separate instruction and separate appropriation directions. The operations are given their own resources, meaning the size and scope of the operations can be adjusted to the Government's wishes.
  • In an independent agency with a narrower assignment it is easier to adjust the control methods to suit the operations. The operations can be more efficient when everyone is working toward the same goal.
  • Transparency increases as the agency has to produce various documents, such as budget documentation and annual reports. The operations become easier to monitor and follow up on.
  • Specialised standardisation and supervision in various agencies helps present different perspectives on the same operations. This can give the Government a better basis for making decisions.
  • After the organisational change, cooperation between different functions in a sector, such as between standardisation and supervision, becomes external and therefore visible to other actors.
  • A new agency has incentive to show that its operations contribute to the goals within the sector.
  • Organisational changes which lead to more or new agencies in a sector also makes demands of the Government's ability to control and allocate assignments and resources between the agencies.
  • Costs increase as the creation of each new agency means that certain functions are duplicated.
  • A new agency has to justify its existence. This can lead to demands for extra resources which exceed the added utility, for example in supervision.
  • There can be problems with role allocations. More parties need to cooperate which entails a risk of lacking dissemination of knowledge and duplicate work. Extensive cooperation between agencies risks becoming bureaucratic and resource-intensive.
  • There is a risk that standardising agencies and supervisory agencies disagree on how regulations should be interpreted.

Disadvantages

It is most likely harder to maintain a collected expertise within the subject area in a specialised agency with a narrower assignment.


[1] Vägen till en lärande och effektiv förvaltning – utvecklingsområden och prioriteringar 2015-2016, Statskontoret, ref 2015/45-5, 10/06/2015. [The path to adaptable and efficient administration – development and prioritisation areas 2015-2016

[2] Riktlinjer för Regeringskansliets arbete med organisations-och strukturförändringar, 2003. [Guidelines for the Government Offices' work with organisational and structural changes]