Contemporary Governance and Local Public Spending Bodies
| Author | Paul Hoggett,Alan Greer |
| DOI | http://doi.org/10.1111/1467-9299.00216 |
| Published date | 01 September 2000 |
| Date | 01 September 2000 |
CONTEMPORARY GOVERNANCE AND LOCAL
PUBLIC SPENDING BODIES
ALAN GREER AND PAUL HOGGETT
This paper draws on recent research conducted by the authors to examine the nat-
ure of board/executive relations in three different kinds of Local Public Spending
Body (LPSB). Big variations are noted, between and within sectors, in the way in
which boards organize themselves and the degree of power they have in relation
to executives. In all organizations studied the executive played a crucial role both
in managing day-to-day operations and in setting the organization’s strategic direc-
tion. Chief executives exercised considerable influence over the recruitment of board
members and the maintenance of consensual relations between board and executive.
The dilemma of the voluntary board member with limited time and a lack of inside
knowledge of the organization he/she is accountable for is examined. It is argued
that the most effective boards contain members with a strong sense of their own
legitimacy and enjoy a membership with a diverse range of interests and experi-
ences. It is suggested that such models might combine the merits of greater demo-
cratic responsiveness and enhanced organizational effectiveness.
THE EMERGENCE OF ‘QUASI-GOVERNMENT’
In the UK, for more than a decade now, elected government has been with-
drawing from the delivery of public programmes and services. There are
no signs of reversal of this process. While, as we shall see later, the new
Labour government is introducing some minor reforms in this area, there
will be no renaissance in the delivery responsibilities of elected authorities
of the traditional type. In the UK we are therefore witnessing a relatively
stable paradigm shift in terms of the organization of the state. As a conse-
quence a contrast is now often drawn between old-style government – ‘the
conventional institutions of the public sector’ – and governance, which is
a ‘more general term for providing direction to society’ (Peters 1997, pp. 51–
2). Much of this direction is provided by an increasingly large tier of ‘quasi-
governmental organisations’ (Skelcher 1998) made up of a variety of public,
private and voluntary agencies which have been entrusted with the
delivery of the policies of a strong but lean state. In fact, conventional dis-
tinctions such as public, voluntary and private are breaking down, ‘mar-
ginal cases, intermediate types and hybrid organisations variously labelled
as quangos or para-state organisations, proliferate haphazardly’ (Metcalfe
1993, pp. 176–7).
There is now a growing literature on the nature and operation of such
Paul Hoggett is Professor and Director of the Centre for Social and Economic Research at the
University of the West of England, Bristol. Alan Greer is Senior Lecturer in Politics at UWE.
Public Administration Vol. 78 No. 3, 2000 (513–529)
Blackwell Publishers Ltd. 2000, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street,
Malden, MA 02148, USA.
514 PAUL HOGGETT AND ALAN GREER
non-elected organizations in the health, education, employment training,
urban development and housing sectors (see for example, Greer and
Hoggett 1997a; Ferlie et al. 1995; Painter, Isaac-Henry and Rouse 1997; Pollitt
et al. 1997; Rouse 1997). Referred to as ‘local public spending bodies’
(LPSBs) by the Nolan Committee, these are public service providers – often
in the private or voluntary sectors and usually at the local level – ‘which
are wholly or largely publicly funded . .. their decisions are in many
respects part of public policy. Their actions may have a significant impact
upon their local communities, going beyond those who are directly
involved in the organisations themselves’ (Committee on Standards in Pub-
lic Life 1995b, p. 5). A key feature of LPSBs and other non-elected organiza-
tions which have become drawn into the delivery of public services by
successive waves of public sector reform is that, at least in theory, they are
governed by boards of largely lay members to which the organization’s
management is accountable. As Ferlie et al. (1995) note, ‘often such reforms
have involved incorporating a “board of directors” model into the public
sector whereby traditional “member” roles evolve into those of “non-execu-
tive directors”’ (p. 377).
Rhodes (1997, p. 47) identifies several uses of the term ‘governance’
including governance as the minimal state, as corporate governance, as the
new public management and as a socio-cybernetic system. This paper
focuses primarily on the (internal) corporate governance of LPSBs, drawing
upon research into board-management relations and the processes of
organizational decision making in housing associations (HAs), further edu-
cation corporations (FECs) and training and enterprise councils (TECs).
CORPORATE GOVERNANCE AND LPSBs
Perhaps unsurprisingly, the 1990s have witnessed a marked increase in con-
cern with such forms of corporate governance, prompted by controversies
about probity and performance in both the public and private sectors
(Cadbury Committee 1992; Committee on Standards in Public Life 1995a;
Ferlie et al. 1995; Hodges et al. 1996; NFHA 1995; Parkinson and Kelly 1999).
These concerns focus primarily upon the hegemony of the executive – typi-
cally the chief executive or managing director and senior management –
over the ‘non-executive directors’ (Lorsch and McIver 1989). At first sight
this may seem odd given that these smaller, new-style boards, whose mem-
bers’ freedom to act was largely unhampered by questions of their own
democratic accountability to wider groups of stakeholders, were expected
to behave in a strategic and business-like way and be more challenging of
executive domination than had been the case in either local government or
the health authorities of the past (Ferlie et al. 1995, p. 378).
Corporate governance focuses on the way in which organizations –
whether public, private, voluntary or hybrid – are directed and controlled,
albeit within a wider environment of external relationships. For Ferlie et al.
corporate governance ‘directs our attention to the study of behaviour at the
Blackwell Publishers Ltd. 2000
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