Assessing the performance of local government

Methods of performance assessment for public sector organisations that do not take into account differences in the populations that they serve will produce biased results.

This is one of the conclusions of a study of the performance of local government. The study was conducted by Philip Stevens at the National Institute of Economic and Social Research. The study was part of the National Institute's ongoing programme of enquiry into the issues surrounding the assessment of public sector performance.

The study found that the background against which local authorities operate has an important influence on both the potential for cost savings and the relative performance of authorities. If we ignore the circumstances in which the local authority operates, we will overestimate seriously the level of inefficiency in the authority and hence the scope for reducing expenditure. The study also found that popular methods of assessing the efficiency with which local government provides services do not yet provide consistent enough results for anything more than broad comparisons authorities.