The Governance of Public and Non-Profit Organizations

Chris Cornforth

• Publisher: Routledge
• Year: 2002
• ISBN:
  9781134515097
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

Governing boards play a crucial role in ensuring that public and non-profit organizations are publicly accountable and perform well. Until now, there have been relatively few detailed empirical studies of what boards do in practice, but this book fills that gap by bringing together analyses based upon some of the best recent empirical studies.Using

Part I
Who governs?

1 Who governs North East England?
A regional perspective on governance

Fred Robinson and Keith Shaw

Introduction

An emphasis on governance – and governance agencies – has rapidly become a central feature of contemporary studies on the ‘architecture’ of the British State. Within this literature there has been a strong focus on the national level. The ESRC’s Whitehall Research Programme, for example, has charted the shift away from the Westminster model – in which a strong executive runs a unitary state – to a system of governance in which a range of non-governmental actors increasingly participate in public policy-making and delivery (Rhodes, 2000). As well as capturing the involvement of new structures, governance also refers to new processes and forms of co-ordination. For the Director of the ESRC Programme, governance refers to ‘self-organising, inter-organisational networks, characterised by interdependence, resource-exchange, negotiation and significant autonomy from the state’ (Rhodes, 1997). Recent studies of governance have also explored developments at the local level, emphasising the increasing fragmentation of institutional arrangements (Stoker, 1999), the continuing importance of local quangos (Skelcher et al., 2000) or Local Public Spending Bodies (Greer and Hoggett, 2000), and the consequences for local democracy of the growth of new governance networks (Skelcher, 2000).

In this chapter we focus instead upon a regional context, exploring the landscape of governance in the North East of England. Such a focus is timely, given both the growing importance of new institutional arrangements at the regional level of English governance (Mawson, 1997; 1998) and the – increasingly high-profile – campaign for a directly elected regional tier of government in the English regions, including the North East (Tomaney, 1999). The approach adopted in this chapter aims to provide a comprehensive picture of the different layers and forms of regional governance and consequently reveals the complexities, contradictions and biases in the whole range of structures and processes of governance within a particular geographical area.

This account is based on our study, ‘Who runs the North East . . . now?’ (Robinson et al., 2000). That study, the first of its kind in the UK, brought together detailed information about the complex array of organisations which manage and provide public sector services in the North East, looking especially at who runs them – who governs these bodies, how they attained their position and what interests they serve. Our analysis raises important questions about how we are governed and is also intended to provide citizens with the information they need to challenge organisations effectively. For, alongside the ‘democratic deficit’ (Weir and Beetham, 1999), there is a growing ‘knowledge deficit’ – most people have little knowledge or understanding of the structures and processes of governance. In our view, tackling that knowledge deficit is an important and necessary step towards building a more open, inclusive and democratic system of governance in which citizens can play an effective role in the running of their region.

The landscape of governance in North East England

The North East of England is a compact region of 2.6 million people. It is a region which has been through a painful and lengthy process of deindustrialisation resulting in high unemployment and deprivation. There is considerable dependence on public services, in relation both to the services they offer and the employment they provide. Indeed, a study for the trade union Unison indicates that the public sector accounts for nearly 30 per cent of jobs in the North East – a figure only exceeded in Northern Ireland (Unison, 2001).

Since the 1970s, the governance of public services has fragmented and there has been a shift from traditional forms of local government to a much more disparate ‘local governance’. Alongside a leaner or ‘hollowedout’ central and local government (Rhodes, 1994), there is now a bewildering collection of unelected, quasi-public organisations controlling and delivering public services funded by the taxpayer (Public Administration Committee, 2001). Such a change, which has also involved the development of a myriad of ‘partnerships’ that serve as alternative, collaborative structures of governance, has led Skelcher (1998) to refer to the emergence of the ‘congested’ state.

Through privatisation and the establishment of a plethora of agencies run by boards, central government has shed responsibilities, while local government has, unwillingly, been divested of responsibilities. In particular, local government’s control of education has been substantially reduced, as has its role as a provider of social housing. In the North East, contracting-out of local authority services, through such mechanisms as compulsory competitive tendering, has been very limited (Unison, 2001), but may well develop much further under the ‘Best Value’ regime and public–private partnerships. Nevertheless, it needs to be emphasised that, despite this ‘hollowing-out’, the institutions of central and local govern- ment continue to be very important providers of public services and do have a major impact on the economy and society of the North East.

Both central and local government comprise democratically elected institutions. The North East has thirty MPs representing the region’s constituencies in the House of Commons. Twenty-eight of them are Labour members, including the Prime Minister and several of his cabinet colleagues. Across the region there are twenty-five local councils, with altogether 1279 elected councillors, two-thirds of them Labour. There are also four MEPs (three Labour, one Conservative) representing the region in the European Parliament.

Important criticisms can certainly be levelled at the elected state, its operation and legitimacy. In the North East, central government is felt to be remote and insensitive to the region’s problems; hence, there is some support for devolution of power to a regional tier of government (North East Constitutional Convention, 1999). Indeed, it can be argued that the region can never win, whoever is in power, since a Labour government takes its North East heartland for granted, while a Conservative government – with little political support in the region – largely ignores it. And local government is seen as lacklustre and has been emasculated by central government which controls, and pays for, much of what it does. Its credibility is also undermined by low turnouts in local elections, symptomatic of public indifference. In the 1999 local elections in the North East, only fourteen out of 432 wards had turnouts over 50 per cent, with Sunderland (19.2 per cent) having the lowest turnout in the region and the second lowest in Britain (Rallings and Thrasher, 1999). Elections for the European Parliament also produce low turnouts – only 19.5 per cent of the North East voted in the last European elections in 1999 – and that Parliament has, in any case, very limited powers.

Politics and, more specifically, representative democracy are hardly thriving in the North East. Politicians and their parties are neither popular nor much respected. Moreover, given the difficult economic experiences of the region – such as the recent closures of Siemens and Fujitsu – it is well understood that these institutions cannot control damaging global economic forces; they can, at most, alleviate the consequences.

However, at least from time to time the electorate has the opportunity to go to the polls and remove politicians. This is an important principle although, it has to be said, elections bring few surprises or upsets in a region so strongly wedded to one party and where people are disinclined to vote, other than in general elections. Nevertheless, this point of principle is widely considered to be important, indeed there is a certain pride in ‘our democracy’. For many, it is fundamental, even if they do not vote, and is invoked right across the political spectrum.

But in the North East, as elsewhere in Britain, many public services – the services paid for by the taxpayer – are managed and provided by organisations which are not subject to local democratic control. There is a multitude of unelected bodies, governed by board members who are appointed by government ministers, or by other institutions, or who are selected by existing board members. Some of these are quangos, others quango-esque hybrids. Members of these boards cannot be removed by the electorate, however badly they are performing or however unpopular their actions. It is here where there is a serious ‘democratic deficit’.

At the regional level, central government has established a form of regional governance which falls well short of devolved regional government. Regional Development Agencies (RDAs) were set up in the English regions three years ago to co-ordinate and secure regional economic development and regeneration (DETR, 2001). The RDAs claim to represent their regions, speaking and acting on behalf of the region, but they are appointed, not elected, bodies which therefore have no mandate to represent their supposed constituents. One NorthEast, the RDA in North East England, like the other RDAs across the country, is run by board members – all thirteen of whom have been appointed by the Secretary of State for the Environment, Transport and the Regions. They are answerable to the minister and, ultimately, Parliament – not to the region’s people. However, at least the appointments process was more open, more considered and more meritocratic than had been the case, for example, of appointments to Urban Development Corporations in the 1980s. The selection of individuals to be appointed to the RDAs was conducted in various ways; in the North East, a panel was convened comprising the newly-appointed Chair, Dr John Bridge, senior officials from Government Office – North East and recruitment advisers from PriceWaterhouseCoopers. Over a period of nine months, the panel considered more than 100 candidates, then made detailed recommendations to the minister for his final selection and decision.

The lack of accountability within the new institutions of regional governance has, in a way, been recognised by the government which proposed the establishment of ‘regional chambers’ to work alongside RDAs. In the North East, the regional chamber, grandly titled the North East Regional Assembly, comprises forty-two local councillors, nominated by councils across the region (hence, thirty-four of them are Labour), together with twenty-one people from various organisations identified as ‘regional stakeholders’. It is this body which enthusiasts for regional devolution would like to see directly elected.

The third element of regional governance is Government Office – North East, a group of civil servants from various central government departments who are based in Newcastle upon Tyne; their role is to represent central government in the region and oversee the delivery of government programmes. Power rests largely with One NorthEast and the Government Office, which both have a degree of autonomy in practice, but are accountable to central government, not the region’s people. The Regional Assembly, a partially indirectly elected body, has a weak role, virtually no resources, and a questionable mandate. This whole structure is evidently messy and confusing and, of course, difficult to challenge or influence (Robinson, 1999). As a recent review of the role of central government at the local and regional levels argues, ‘there are too many Government initiatives, causing confusion; not enough co-ordination; and too much time spent on negotiating the system, rather than delivering’ (Performance and Innovation Unit, 2000: 6).

Most people in the North East know nothing about these regional bodies and will not come into contact with them. Their impacts on the region are considerable, widely felt, even crucial, but the provenance of these impacts is unknown. By contrast, everyone comes into contact with local unelected bodies and uses their services, although most will have little or no knowledge of the ways in which these bodies are structured and run.

The vast majority of people use and rely upon the National Health Service (NHS), yet have little idea of how it is run. In fact, it is made up of quangos and quango-esque bodies. The NHS in the North East is overseen by a regional office (NHS Executive, Northern and Yorkshire Region), staffed by civil servants and has a regional chair, a non-executive member appointed by the Secretary of State for Health. At local level, there are six Health Authorities, which have a strategic function, and seventeen NHS Trusts running and providing hospitals and other services. The boards of all these bodies have a majority of non-executive members, appointed by the Secretary of State. In 1999, the government introduced Primary Care Groups (PCGs), that purchase health services for groups of GP practices, replacing the former ‘fundholding’ arrangements. The twenty-five PCGs covering the North East are constituted as sub-committees of the Health Authorities and are made up of members nominated by GPs, by community/practice nurses, the Health Authority and local authority Social Services. There is also a lay member, whose role it is to represent the local community.

Gradually, PCGs are becoming Primary Care Trusts, set up like the other NHS Trusts, with appointed non-executive members. In addition, there are now three Health Action Zones in the North East, in Northumberland, Tyne and Wear and Teesside, which target deprived areas with poor health status. The structure of the NHS is difficult for outsiders, such as patients, to understand, and is probably little understood by many NHS employees. Moreover, responsibility is diffused; no wonder it is hard to discover where the buck stops and so difficult for a patient to pursue a complaint against the NHS. And, without democratic control, local people have found it virtually impossible to put pressure on NHS bodies when they have restructured services and closed hospitals.

Alongside health, the other big service not noted for democratic control is education, and the democratic deficit is especially apparent in higher and further education. All educational institutions have governing bodies, but the different sectors of the system have different arrangements and structures. There are five universities in the North East; the two older universities (Durham and Newcastle) are governed by a council comprising staff, student union representatives and individuals from outside the university, mainly people with business and professional backgrounds. The newer (post-1992) universities (Northumbria, Sunderland and Teesside) are governed by boards, which include few staff members and are predominantly made up of local business people. There are also seventeen Further Education Colleges, seven Sixth Form Colleges and two City Technology Colleges in the region which are run by boards of governors and are independent of the Local Education Authority. All these bodies have a tendency to be self-perpetuating cliques; most governors are selected by the existing governors and very few are elected (the student union representatives are the main exception). Schools, nowadays with more powers delegated to them and less under the control of Local Education Authorities, are rather more democratic. Their governing bodies include several members elected by parents, but the majority of governors are appointed. As with the NHS, it is difficult to influence, let alone change, the policies and practices of educational institutions, particularly in the higher and further education sectors where business-like governing bo...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Illustrations
• Contributors
• Acknowledgements
• Introduction: The Changing Context of Governance – Emerging Issues and Paradoxes
• Part I: Who Governs?
• Part II: What Do Boards Do?
• Part III: Roles, Relationships and Power
• Part IV: Continuity and Change