How Public Services Are Changing and What We Should Do About It

Public services are going through a large-scale transformation. We may feel overwhelmed by the complexity and speed of these changes. Our aim in this article is, with the risk of oversimplification, to set out the most relevant issues of the shift and their implications to the way we live, work and interact.

What is a public service? It’s not as simple as it may seem

You might think it’s obvious: of course, public services are those financed and delivered by the public sector.  However, while the state retains the ultimate responsibility, actors from parastate, private sector and civil society now compete for the right to deliver public services. If we take two countries and compare their public services, there is a high likelihood of finding out as many differences as similarities. This is valid not only for the delivery but also for the funding of public services.

A good example is the health sector. Who primarily delivers the services can differ – it would mainly be public agencies, but it can also be a hybrid of a public-private venture, or a mainstay of the private sector. The financial sources of public services are also varied, including taxes, fees, non-tax revenues from state-owned companies, and/or financing from external (foreign) sources.

Four key characteristics of a public service

So, what do public services have in common?

First, public services have an inherent policy consideration. A budgetary cut or austerity is an example of policy consideration that affects different services like policing, education, or waste management. The strong link that public services have with policy can be technical (e.g. quality, affordability, accessibility, standards); political in terms of how policy choices influence who has and retains power (e.g. health care debate in the US and the UK); and normative - value judgements in public services such as their desirability or how they should be provided.         

Second, public services are provided to the public or to all members of a society or country. Public value, a term widely used in public services, is mainly about providing public services for the common good – that is, to contribute to society. An example includes the responsibility to the citizens and fairness in service provision. Creating public value is the underlying purpose of the existence of public service providers.

Third, public services can also be redistributive. This means that those who pay are not necessarily those who receive the services. This makes public services, to a higher extent, non-excludable (everyone has access to them) and non-rival (use by one individual does not reduce the service’s availability to others).

Lastly, trust is a driving force that underlines the nature of public services. The success of public service delivery depends on the behavioral responses from the public, which will only be adequate if the public trusts the public service providers. Whether our trust is fulfilled or let down depends on what expectations we had. And here lies a problem: the expectations of today’s public are higher than ever. The public service providers, still mostly represented by the government, can’t always keep up, and we are witnessing increasing scrutiny by citizens.

Citizens are demanding for accountability of governments for what they achieve with taxpayers’ money (social contract). But the importance of optimizing the delivery of services through efficient use of public funds goes beyond saving money. It is directly linked to increased citizen satisfaction, public trust and quality of life through engaging citizens to ‘co-produce’ services and thus ultimately be ready to contribute to them.  

How emerging patterns affect public services

The future of public services is not a question of how they are delivered and to whom – a topic that wrongly dominates the discussion – but it is about understanding how to navigate a combination of emerging patterns and deliver effective and efficient services to all.

Demographic shifts – ageing population in some countries and the predominately young population in others – influence citizens’ need in public services. By 2050, it is projected that 1 in 6 people in the world will be over the age of 65, up from 1 in 11 in 2019. Migration of young people away from small towns to urban areas or other countries additionally “ages” some areas more than others. As the population in these areas becomes smaller and older, the tax base is affected. This, in turn, impacts how local and regional governments provide services to seniors.

Advances in technology (digital tools) and public-private partnerships (e.g. sourcing of services and affordability) also affect how public services are delivered.

Achieving the Sustainable Development Goals (SDGs) is dependent on effective, accountable and inclusive institutions. This was at the heart of the 2019 World Public Sector Report that emphasized the importance of making existing institutional arrangements more adequate and effective. Public policy problems faced by governments and citizens are increasingly becoming complex and global, rather than simple, linear and national in focus. There’s also mounting evidence that failures in ‘public service governance’ lead to the exclusion of large portions of society from public services and to resource waste, fraud and corruption.

Demographic change, employment, mobility, security, environment and many other complex issues compel improved responses while the economic and budgetary pressures push governments and other service providers to be ever more efficient. This is where new ways of developing and organizing public services become a timely issue. Service providers more and more map, understand and integrate citizens’ demands and needs in the design and delivery of public services.

The public sector can no longer act in isolation

There is no question that public services are evolving even though the transformation seems to be moving at a slower pace than changes in other areas. Navigating the changes is made difficult due to other complex problems like climate change, poverty and migration. The changes go beyond the capacity of any one institution or/and administration – the public sector can no longer act in isolation.

Successfully responding to or at least managing these problems calls for joint stakeholder collaboration among governments, businesses, knowledge institutions, societal groups and citizens. One complex area where public services need to adapt is ageing societies due to mounting social security, healthcare costs, high youth unemployment and weak public service infrastructure mainly in rural and remote areas.

Another area of great concern is climate change, a critical challenge that has been pushed into the background due to years of budget cutting (austerity). Public services can influence positive outcomes by contributing to a shift from a resource-depleting fossil fuel-based production model towards a zero-carbon sustainable economy. Yet, this can only happen if public services and their financing are geared towards ‘strong regulatory framework’ in the form of performance targets, standards, fees and penalties, but also mechanisms that influence market actors, such as taxes, incentives and subsidies’. There are emerging good cases: for example, in Kosovo, the Clean Environment Race and its successor the Performance Grant Clean Environment, implemented by GIZ and the Ministry of Environment and Spatial Planning, offered municipalities a financial incentive for improving their performance in waste management.

Beyond public service efficiency: embracing citizen’s rights

People demand better public services that are digitalized, personal and user-friendly at the same time. Yet, it seems that the whole discussion about the changing nature of public services is dominated by the efficiency argument – that is, responding to the needs of citizens for timely services and at a reasonable cost.  ‘While it is absolutely pivotal to provide cost efficient and effective public services,’ recognizes Jesper Lauridsen, who co-authored an article on the topic in this issue of Mosaic, ‘it is also equally important to provide the services in a more equitable manner to citizens as part of the democratic governance process.’

Conclusion

The way public services are delivered has evolved through decentralization (accessibility) then to industrialization (scale) followed by automation (efficiency) and digitization (connectivity). Put simply, automation and digitalization are not the end, but making the services responsive to citizen’s demands and priorities is. For this to happen in an improved way, public services will increasingly need to (i) adapt to and navigate complex issues and (ii) broaden the understanding of public service provision by several providers from efficiency and effectiveness focus to services as citizens’ rights.   

This article appeared in the March 2020 issue of Helvetas Mosaic.   

Jens Engeli leads the Eastern Europe unit at Helvetas.

Zenebe B. Uraguchi works as Programme Coordinator for East and Southeast Europe and Senior Advisor for Sustainable and Inclusive Economies at Helvetas.