Performance Measurement in Local Government – Concept and Practice

In most industrialized economies the services sector accounts for more than half the GNP. Moreover, the services sector, unlike other sectors, has grown steadily over the past two decades. The productivity of the sector, on the other hand, has remained broadly static over the comparable period. Thus service productivity improvement is one of the major challenges facing many managers today. Measurement is an integral component of any drive to improve productivity. Measurement of service performance is notoriously difficult but possible. Local authorities form a significant part of the service sector. Performance measurement in a local authority is a complex task because: local authorities offer a wide range of services with both tangible and intangible outputs; customers rarely pay an economical price for the services; there is no profit measure; and there is no apparent direct link between services and cost to electors. Examines the “performance measurement” concepts put forward by various influential organizations and the “performance measurement” procedures adopted by three different local authorities. Case studies demonstrate the difficulties of measuring performance, particularly effectiveness and the different strategies adopted by different organizations.