- Public, Thursday 22 October 2009 11.28 BST
Governments around the world are going to have to come up with their own balancing acts in order to survive
Monitor, anticipate, adapt: that's what governments are going to have to do as they re-assess their roles, capabilities and vulnerabilities in the wake of the economic crisis.
Governments around the world are going to have to change how they function, according to a new report from the OECD. They will need to cut back on staff, outsource more services and expand the use of online communications in what the OECD describes as a "significant shift in core public service values".
The Paris-based economic development organisation today published Government at a Glance, the first of what is intended to be a biennial review of government spending.
It examines how international governments are responding to the public policy challenges posed not just by the economic downturn, but also by issues such as climate change, poverty and migration.
It looks at regulation, budgeting and procurement, as well as public sector revenues, spending and employment and says information on managing workforces, budgeting, regulatory management, integrity, e-government and open government can allow countries "to begin to examine the effects of recent reforms and identify new strategies to improve productivity".
This may not always be popular - the OECD calls for governments to be more flexible in hiring, firing and promoting personnel, in order to ensure their staff have the "needed skills".
It's a detailed and fascinating insight, from a body that of course takes for granted the need for economic development. But it sheds light on other areas, too. For instance, the number of countries that now see transparency as a core public service value has doubled in the past 10 years, to 90%.
This has had some interesting ramifications: more OECD member countries have developed ways in which public officials can more easily expose misconduct and almost 90% of them provide some sort of protection for whistleblowers. And a few countries, including South Korea, have also introduced financial incentives to facilitate whistleblowing.
The report also demonstrates that it's not just the UK that is struggling to meet policy challenges such as increasing the diversity of senior public managers.
In almost all OECD countries, there are fewer women at senior levels of central government than in the wider labour force. There are wide variations: more than a third of all senior central government staff in Greece, New Zealand, Mexico and Portugal are women, but in South Korea and Japan, less than 5% of senior managers are women.
The UK lies ninth in the table, after Sweden, Australia and Spain, but ahead of the United States and Italy.
All governments, except South Korea, also face the task of an ageing public sector workforce. In 13 OECD member countries, more than a third of the central government workforce will retire in the next 15 years.
In their relationship with citizens, OECD members are increasingly using online technology to make their public services more transparent, accountable and accessible and this has come to the fore in dealing with the downturn, according to the report.
"The current crisis has forced governments to make urgent and swift decisions with limited engagement of the public in the decision-making process," it says.
If governments are to maintain public trusts, they must be accountable and responsive and the report says "e-government readiness is. .. a prerequisite for a high-performing and innovative public sector that delivers integrated services".
Scandinavian countries lead the world in this respect, followed by the US, the Netherlands and Canada. The UK comes 10th in the list of e-government-ready countries, but is one of the leading countries, along with Austria and Portugal, when it comes to mature online services.
Delivering services in the face of rising debt levels
But the biggest challenge of all for governments is how they are going to deliver services in the face of rising debt levels. On average, more than half of all spending in OECD countries now goes on social programmes, including health, education and unemployment. "Any efforts to curb spending may affect the delivery of these programmes," points out the report.
Closely related is the issue of who delivers public services. The size of the workforce directly employed by the public sector varies enormously, from just over 5% in Japan and South Korea to nearly 30% in Norway and Sweden, but the report says the proportion of the labour force working for the government has been relatively stable overall in most countries.
It also says that outsourcing, coproduction and public/private partnerships have affected almost all government sectors, including weapons development, care for the elderly, running prisons and delivering foreign aid.
The UK, along with the Netherlands, Germany and Japan, is one of the countries relying most extensively on private companies to deliver public goods and services.
Another look at outsourcing is also out today. In the latest issue of the Economic Journal authors Emmanuelle Auriol and Pierre Picard argue that most outsourcing decisions raise the question of why governments contract out in non-competitive markets.
They say government outsourcing to the private sector is most cost effective in advanced economies when it is used to deliver high technology products or to cover low-profitability parts of public utilities. In very poor countries, outsourcing can be of benefit in leading to the creation of an infrastructure or service that would not otherwise exist.
