GUEST COLUMN.
IT DEPENDS ON WHAT YOU MEAN BY "EFFICIENCY"
By Shahrzad Habibi, Research and Policy Director, and Donald Cohen, Executive Director, In the Public Interest
Government efficiency has been in the news lately, but even before a “Department of Government Efficiency” was created, smart and dedicated public servants at every level of government have always sought ways to deliver goods and services in the most logical, cost-effective way possible.
Efficiency is generally a meaningful goal in any operation or any organization, public or private, but public institutions at every level, with their outsized missions and democratic mandates, have a particular responsibility to taxpayers to use their dollars wisely. That sensibility has, in fact, animated many of the efforts of In the Public Interest’s work over the last decade and half to press government to be more responsive to the needs of the public
Setting aside the hype around the idea of efficiency, it’s worth defining what it is – and what it isn’t.
Efficiency typically refers to doing more with less -- having a greater output with fewer inputs. But it’s the input part, in the form of cutting costs, that often garners the most attention. For private businesses, increasing profits is the driving goal. That can be accomplished in effective ways through such things as engineering and technology advancements, and training or hiring more experienced workers.
Since there is no profit and loss statement in the public sector, the goal is getting the most benefit out of each taxpayer dollar.
This is easy enough to accomplish if the quality of the work isn’t part of the equation. But for public services, the effectiveness of the program or operation in serving the public must be the driving goal. Effective efficiency seeks to solve a problem or provide a service for which it was designed, and to do so in the best way possible without causing unintended consequences elsewhere, such as poorer service delivery, shoddy work, unsafe work environments, and so on.
In fact, “efficiency” centered only around cost savings, without consideration of effectiveness, doesn’t lead to “more and better” service, especially within public agencies.
For example, in 2015, Chicago Public Schools contracted with the Aramark company for custodial services, lured by its promises that it would lead to cleaner schools at a lower price, and free the schools up for more time on instructional issues. But the promised “efficiencies” turned out to be unrealistic and unattainable. In fact, Aramark billed the school district $22 million more than the agreed upon price for year one of the contract. District officials stated that one factor was that Aramark significantly miscalculated how many custodians would be needed for certain buildings. In a survey of principals in the school district, the vast majority reported that schools were dirtier since Aramark and another contractor took over the custodial services.
Smart efficiencies, by contrast, are those that look at a wide variety of factors to ensure that the public agency is providing quality service.
The City of Fort Wayne, Indiana, found these types of smart efficiencies when the city ended its fleet maintenance contract in 2018, believing that it could improve operations while saving the city money.
By focusing on increasing the effectiveness of its operations, the city was able to meet that goal. For example, the in-house maintenance team was able to complete more maintenance work on vehicles than the contractor did. One strategy the department uses is checking for other issues while the vehicles are being repaired to prevent future trips to the shop for minor issues.
The department also chooses higher-quality, longer-lasting parts over the generic parts that the contractor used and maintains a higher level of parts inventory, which allows for quicker turnaround times and fleet availability. The city invested in additional laptops, so each technician has their own laptop and workstation to complete work orders efficiently. The department also restructured management staffing, which allowed for an increase in the department’s technician budget, including higher wages, a performance bonus, and a $1500 tool allowance for each technician.
Within the first year of bringing fleet maintenance in-house, these smart efficiencies were able to save Fort Wayne $700,000, while improving operations. The city saved $1 million in the second year and an estimated $400,000 in the third year.
Whether you’re running a public school system in Chicago or maintaining a fleet of vehicles in Fort Wayne, maximizing value in providing public goods and services is a nonpartisan issue. But public servants must be vigilant that they don’t let the shiny object of a lower price tag dangling before them distract from the ultimate goal: assuring that public needs will be met.
The contents of this Guest Column are those of the author, and not necessarily Barrett and Greene, Inc.
#StateandLocalGovernmentManagement #StateandLocalGovernmentPerformance #StateandLocalGovernmentEfficiency #CityGovernmentEfficiency #CountyGovernmentEfficiency #InThePublicInterest #CostReductionVsEfficiency #StateandLocalGovernmentPerformanceManagement #PublicSectorEfficiency #PublicSectorEfficiencyOutcome #ServiceCutsMaskedAsEfficiency #EfficiencyAndEffectiveness #EfficiencyHype #CostCutttingVsTrueEfficiency #DefiningEfficiency #ConflatingCostCutsWithEfficiency #FortWayneAndSmartFleetEfficiency #ChicagoPublicSchoolCustodialContract #ChicagoPublicSchoolEfficiencyMisstep #PublicSectorAndEffectiveEfficiency #AssessingStateandLocalEfficiency #DonaldCohen #Shahrzad Habibi #BandGGuestColumn #BarrettandGreeneInc
