The 'Next Steps' agency model in UK central government 1988-1998 with special reference to the Benefits Agency
The research explores three related questions about the 'Next Steps' agency model and agencification processes in the UK central state between 1988 and 1998. First, how did the creation of agencies, or agencification, work in the period and was the reform a substantial change. Second, why was the reform adopted and did agencies bring about benefits in the delivery of services. Third, what is the likely course of future developments in the use of agencies. The first question is explored in Part One. The agency model is identified as a set of institutions, or structures, for delivering public services proposed by government actors who developed the 'Next Steps' reform. The UK central state made extensive use of the agency model in the period 1988 to 1998. Over the period, 155 agencies were created. By 1998, 65 per cent of civil servants worked in 138 agencies. The 'Next Steps' reform was predominately mitigated agencification, where there was already some separation of activities prior to the reform. This type of agencification accounted for 69 per cent of cases. There was pure agencification in 14 per cent of cases, in which the reform was an even more significant reorganisation; the case of the Benefits Agency was an example of this form of agency creation. However, in 14 per cent of cases, there was nominal change and the reform was largely a relabelling exercise. New function agencification was found in only 2 per cent of cases. The second question is explored in Part Two. The official justifications for the reform were fragmented and, at some points, inconsistent. The public interest model, based on official accounts, suggests that senior officials and politicians had the goals of delivering public services in an efficient and effective manner with maximum economy, expressed through minimising transaction costs associated with delivering services. Agencies promoted this goal in handling routine, executive activities rather than non-routine, policy activities. However, the public interest model does not seem to be consistent with disputes between parts of the central state, the bracketing of nominal changes with more significant ones under the overall 'Next Steps' reform banner, and use of the agency model for non-routine policy work were inconsistent with the model. The performance of agencies did not match all the expectations of the public interest model. The institutional rational choice approach, through Patrick Dunleavy's bureau-shaping model, makes a substantial contribution to understanding why the reform occurred. But the original model is inadequate for explaining the 'Next Steps' reform. The mark II bureau-shaping model overcomes the inadequacies of the original model and is an important theoretical advance. The model is supported by evidence about developments during the period. Senior officials in the departments saw their role primarily as policy work rather than the direct, hands on, management of executive activities. Entrepreneurial officials in the Cabinet Office Efficiency Unit had career incentives to come up with innovative organisational solutions to problems of public service delivery that were successfully implemented. They provided senior officials in departments with the agency model as a piece of bureau-shaping technology, enabling them to respond to politicians by passing on executive work to agencies. In departments with agencies, 70 per cent of senior officials ended up working in the parent department after the creation of agencies. The third question is explored in Part Three. The mark II bureau-shaping model suggests that bureau-shaping strategies will continue to be an important influence on reform in the future as will entrepreneurial officials in central units who have incentives to come up with new mechanisms for improving public services. The most likely future for most agencies appears to be continued use of the agency model with closure of implementation gaps. These developments are likely to be supplemented by additional mechanisms in agencies with moderate performance problems. In a few cases of very poor performance more radical changes are more likely. Partial dismantling of the agency model may occur in the Benefits Agency.