The Government's steering and follow-up of state agencies play an important role in how the public administration manages its task of implementing Government policies. In this report, The Swedish Agency for Public Management, Statskontoret, wishes to increase knowledge about how the Government's agency steering has changed since the Government decided in the 2009 budget bill and in the 2010 public administration bill that its steering needed to be developed . We also wish to stimulate discussion concerning important areas of development in order to improve the steering of the public administration.
The aim of the report is to describe the motives for the development of the agency steering that has taken place in recent years and to provide a picture of how the steering has changed in practice. The emphasis is on the development of the form of steering known as performance management or management by results. This involves focusing on how the Government uses the various steering instruments at its disposal within the scope of management by results – the agencies' instruction, the annual appropriation directives, special government commissions, informal contacts, annual reports and external evaluations.
An important part of the data on which the report is based consists of interviews, on one hand with the agency heads of seven agencies with different types of operations, and on the other hand with unit managers and agency officials in concerned parts of the Government Offices. In addition, we have used the results of previous studies of how the agency steering has developed. The report does not constitute an evaluation of the change that has taken place. With our example, Statskontoret wish instead to provide different perspectives of the Government's steering of its agencies.
Steering instruments have been reviewed and made context dependant
The development of the Government's agency steering in recent years has aimed to lay the foundations for a performance-oriented steering that is flexible from the perspective of agencies' activities and the Government's need to exercise authority. The Government has also stated that its steering should be more long-term and strategic in its nature and that it is important that the steering signals are fewer in number and clearer. In this way, the public administration is given the best possible conditions to implement Government policy and maintain fundamental values pertaining to, e.g., legal security and efficiency. In light of this, the Government Offices have reviewed how the various steering instruments can be used in order to provide better conditions for tailored steering of the administrative agencies.
The reviews have resulted in the streamlining of the instructions and the annual appropriation directives, and the clarification of the instructions' function as the underlying steering document. Throughout, the instructions have been somewhat more comprehensive, whilst agencies' annual appropriation directives have become shorter and less detailed. This pattern is evident in the The Swedish National Financial Management Authority's, ESV, and the Committee on the Constitution's extensive follow-ups of how agency steering has changed in practice, just as in the majority of the seven agencies that we have studied in this report.
The Committee on steering's, Styrutredningen, evaluation of the management by results constituted one of the grounds for the Government's position on how the various steering instruments should be used. The report's examination of the motives for the development of agency steering that has been carried out reveals that in some parts Styrutredningen's proposals went beyond what the Government has taken on board in the development. Despite the fact that the Government has not followed Styrutredningen's recommendations in all parts, our interviews with agency heads and representatives for ministries show that Styrutredningen's line of argument has had a great impact on how matters of steering are discussed. The interviewees referred more often to the Styrutredningen's line of argument than to what the Government expressed in, e.g., the 2009 budget bill and in the 2010 public administration bill. We hope that the review in this report can to some extent contribute to decreasing the uncertainty of what the Government has actually expressed about how the steering of agencies should be formulated.
Consensus on an improved structure for steering...
From our interviews, we see emerging a positive image of the development towards adaptation of the agency steering. When the operational structure with common goals and performance structure was done away with in 2009, we had momentum for reviewing and developing steering. The change provided the opportunity for an overall repositioning in the management by results. The majority of ministries also took the initiative to make more or less thorough reviews of the steering processes. Matters of steering became more of a priority and were discussed more within the Government Offices.
The ministries' reviews have focused on what the agencies are to achieve. Based on this picture of the operations' goals, the steering instruments have since been reviewed. Both ministries and agencies perceive that this more flexible model is a significantly better basis for steering than the previous common operational structure. The development also led to agencies and ministries beginning to talk to one another about steering.
In connection with the review of steering documents, the majority of ministries have also reviewed how the informal contacts between the Government Offices and the agencies take place. The focus has been to identify how the contacts can be a more complementary tool in the steering. If the formal steering is to work in practice, an effective exchange of information is also required. The contacts have been structured in terms of who speaks to who and about what. For the majority of agencies, scheduled and structured dialogue meetings are tighter than before. This development is also highlighted by both agency heads and ministry representatives as a very positive change that has contributed to clearer channels of communication and an improved flow of information.
For some of the agencies studied, the development has also entailed reduced requirements for feedback and more room for agency heads to take long-term responsibility for operations. But the picture differs greatly from one agency to the next. For the majority of the seven agencies we have studied, the adaptation does not appear to have entailed less steering on the Government's part. Several of the interviewees also feel that the more flexible model is advantageous. The Government Offices constitute a small part of the overall state administration. The steering effect must therefore be directed to the areas in which it is needed most. In areas where a great deal of steering is required by the Government, the model also provides opportunities for this. The nature and focus of the different agencies influence both how much and in what way the Government chooses to use its authority to steer the operations.
… but there are challenges
Whilst the development of agency steering towards a more tailored steering has led to a number of improvements, the changes can also entail a number of risks and problems. Our examples from the seven agencies studied reveal areas in which special attention may be required in order to enable the public administration to implement policies effectively. In some of these cases, the examples also show opportunities for solutions.
Four challenges for the Government's steering of the agencies are discussed in the following. These challenges are about:
- Long-term planning. The agencies require a foundation for long-term planning, even in cases where the Government's need to exercise steering is great.
- Informal contacts. The use of informal contacts between the Government Offices and the agency as a complementary tool in the steering requires a high level of awareness and competence in order to avoid the risk of going beyond the formal framework of the agencies' operations.
- Sectorisation. The tailored steering entails a greater degree of tunnel vision. This underlines the importance of the Government Offices and the agencies developing their working forms so that the operations have a foundation which also facilitates overall sectoral prioritisations.
- The Government's responsibility to the Riksdag The Government must develop the performance reporting to the Riksdag so that the gap can be bridged between the agencies' more limited performance reports and the Riksdag's demand for general accounts of the effects of government operations in relation to the political goals.
How can agencies be given a more long-term foundation?
One of the Government's motives for changing the agency steering was more long-term planning in the steering. This was to be achieved via the instructions, and the tasks stipulated there would constitute the basis of the ongoing steering. With less extensive annual appropriation directives, steering signals would be fewer and clearer. In this way, the steering would also be more strategic.
All interviewees agree on this premise. But for many of the agencies, the instruction plays in reality a more obscure role in the implementation of the operational activities. On the part of the ministries, it is emphasised that for operations of political importance, the focus on long-term planning expressed in the instruction cannot be seen as a guiding principle in the steering. The more short-term steering in the annual appropriation directives continues to play an important role for many of the agencies we have studied.
There appears to be a conflict of interests – in some cases, adaptation and long-term planning appear to be two different goals that are difficult to unify. The nature of the operations and the Government's need to exercise authority in the area are highlighted by many of the interviewees as a more appropriate basis than generally stating that there should be more long-term planning.
The Government's task of steering the nation means that the Government is also responsible to the Riksdag for the implementation of policies. With this as the starting point, long-term planning and strategic steering are not synonymous. In a changeable world, the Government must be able to quickly redirect operations in order to fulfil the political goals. The flexibility in the steering is then more important in the long-term planning. In such a context, the main focus of the steering is not to provide the agency with a foundation for long-term planning.
On the other hand, conditions for more long-term planning are also created in different ways for agencies that, for different reasons, the Government considers to require a high level of steering on an ongoing basis. Our interviews indicate two paths; one of which is in the Government's hands and the other within the agencies' playing field, should they take the initiative.
The first way to improve the conditions for long-term planning is a matter of the Government avoiding, wherever possible, decisions pertaining to special commissions alongside the appropriation directions. Here, the National Board of Health and Welfare differs from the other agencies. The Swedish Public Employment Service and the Swedish Environmental Protection Agency are not active in areas of high political interest, but the number of ongoing decisions on special commissions is notably fewer than in the case of the National Board of Health and Welfare. According to the agency head, the vast majority of commissions lead to displacement effects for the agency's tasks in accordance with the instruction. The Government's steering signals thereby contradict one another and the result is that the prioritisations are unclear. If the special commissions are given higher priority than the basic commission, the instruction should be reviewed so that it better reflects the Government's prioritisations.
The second way is for the agencies to be more proactive. With their vast knowledge of the operations for which they are responsible and of the development within the sector where they are active, the agencies have an excellent basis on which to identify important areas of development. As the operational structure has been done away with, there is now more room for the agencies themselves to establish the operational goals. The Swedish Schools Inspectorate is among the agencies that have taken their own initiative. The agency's analysis of chains of effect for how education policy goals can be fulfilled is an example of how agencies can ensure that they are one step ahead and thereby create room for improved long-term planning in the operations. As one of the interviewees expressed, this naturally gives rise to the need for dialogue with the Government Offices about the goals and means that the agency has identified.
Is there a clear boundary between information and steering?
The Government's steering of the agencies is based on Government decisions on instructions, annual appropriation directives, commissions, financial terms, etc. It is thereby a matter of a clearly formulated steering in which the steering is prepared and decided on in the form of a Government decision. The informal contacts are important, and necessary for the exchange of information and to clarify the signification of the Government's decision for the implementing agency. These clarifications of the steering may however never go beyond the formal decisions, as the Government's collective decision-making would then be disregarded, increasing the risk that relevant prioritisations and considerations are lost.
The Committee on the Constitution has also underlined that it is important that the contacts do not go beyond the formal framework for the agencies' activities. A further reason was that such contacts lack the documentation that characterises the formal steering, which renders subsequent monitoring impossible. It is also worth referring once more to the Committee's statement that irrespective of the contacts that have taken place, the agency bears the full and ultimate responsibility for the decision in each individual case.
In our interviews, however, we have found that the boundary between information and steering has in some cases been perceived as shifting. This places an emphasis on matters of skills provision. The employees of the Government Offices and the agencies must have both administrative skills and the ability to identify when the information and the exchange of knowledge should become part of a formal preparation of amendments or supplements to steering documents. Clear and distinct channels of communication were mentioned by one of the interviewees as a prerequisite if the matters are to be handled on the right level, which could partly ensure that the boundary with steering is not breached in the informal contacts. One of the ministries also stated that one of the purposes of the regular, structured meetings with the agency is to identify matters that need to be prioritised in the formalised steering.
Agency heads who lack experience of the Government Offices may have a lesser developed ability, both in terms of interpreting political signals and knowing where the boundary is between information and steering. Similarly, a newly appointed politician may have a vague perception of how informal contacts can and should be used and when formalised steering is required. Administrative skills and competence in matters of steering should therefore be prioritised by senior civil servants in both the Government Offices and the agencies. When all is said and done, it is the people in charge of the respective areas that need to stand for continuity, take responsibility for the quality assurance of the processes and ensure that the boundary between information and steering is not breached.
It is a delicate task for a civil servant to detect the boundary between information and steering. But there are yet more considerations that make agency steering difficult. A mutual understanding for the roles of the Government Offices and agency management require both the Government Offices and the agencies to have an equally high level of professionalism and competence in matters of steering.
The development programme for agency steering being carried out in the Government Offices has been mentioned during several of the interviews as an excellent forum, both for discussion of boundary-related problems in terms of informal contacts, and learning from one another in order to increase competence in steering-related matters. Similarly, matters of agency steering and the role of the civil servant are discussed within the agencies. In addition, the mutual understanding between agencies and the Government Offices can increase as a result of professional development initiatives that concern matters of steering.
How can room for overall sectoral prioritisations be made when the steering documents are streamlined?
Fewer and clearer steering signals was one of the motives for development of the agency steering. And of course, having many goals in one area means that what actually happens is prioritisations become less apparent. Where there are many of these steering signals, not one of them actually steers.
Performance management and management by results involves an inherent risk of sub-optimisation, as a great deal of importance is allocated to the individual agency's results in the area in which the agency's main commission lies. This can create boundaries with neighbouring agencies' areas of responsibility, and the greatest problem is faced by the political prioritisations that span many different areas. The risk of sub-optimisation further increases when the steering documents are streamlined to the respective agency's core commission. From our interviews, we have also noted that the developed meeting structure between departments and agencies is seldom used to handle general sectoral matters. There is a risk that the phenomena of tunnel vision and sectorisation will instead be more pronounced.
The development of the agency steering has not been focused on solving the fundamental problem with cross-sector collaboration. But the adaptation of the steering, together with the increased use of informal dialogue, means that specialisation and focus on the steering of individual agencies is pushed a step further. At the same time, this leads to a greater need for coordination and a holistic view. An effective public administration requires that the Government's overall sectoral prioritisations can also be handled by the agencies. Our interviews show no indication that the development of the agency steering has led to better ways of handling this type of matter.
In our interviews, it was stated that commissions alongside the annual appropriation directives, decided in the form of special government commissions, may be a way of highlighting prioritised sectoral issues of a general nature. But as underlined by one of the director-generals, this also requires that the commission dialogue with the concerned agencies is coordinated between the ministries involved. On this point, the Government Offices are often rebuffed.
The challenge thereby remains to find appropriate forms of work that provide a foundation for effective steering that is able to take into account overall sectoral prioritisations. Several forms of work within the Government Offices have been tested in order to ensure that prioritisations that do not fit within the defined area are removed. But collaboration between agencies needs to be further developed, both for reasons of efficiency and because citizens should quite reasonably be able to expect that the state appear well-coordinated.
Does the Riksdag get the reports it requires?
One motive for the changes in the Government's use of steering instruments was that the requirements for feedback to the agencies were to be reduced. This was to be achieved by means of the agencies' reports pertaining primarily to the performance in relation to the tasks specified in the agency's instruction. This seems both logical and reasonable based on each agency's commission. For the Government, however, the task remains to report on both the effects of the state's operations and the contributions that the state's resource initiatives have involved in relation to the goals decided on by the Riksdag.
Between the agencies' performance reports based on their commissions and the Government's reports on the effects in relation to the goals, there is often a certain amount of slack. The Government's task to report to the Riksdag on performance has also been tightened up with the introduction of the new Budget Act, and the new form of Government also emphasises the Riksdag's role to follow up and evaluate the decisions made by the Riksdag. There are therefore special work groups in the committee that work with follow-ups and performance. The environmental area is part of the areas in which the Riksdag's demand for performance reports is great in relation to the goals set.
In order to bridge the gap between the Government's responsibility to report on effects related to the political goals and the administrative agencies' reports on their respective performance in more limited areas, the Government Offices require access to complementary analyses. For many of the agencies we have studied, the feedback requirements have also increased again, and the requirements have been supplemented with various performance indicators which the agencies are to report on. This can be interpreted as a result of the feedback requirements being reduced in the initial stages to such an extent that the Government did not receive sufficient information on performance.
The Government's responsibility to the Riksdag includes assessing and reporting on performance in relation to goals on a general level. This requires competence within the Government Offices for ordering and using analyses that correspond to this requirement. In certain policy areas, there are specific analysis agencies tasked with providing overall performance assessments for their respective areas. However, not all analysis agencies have as clear a commission as this. The Government must ensure that the required weighted analyses are carried out and that necessary material is obtained from actors such as autonomous evaluation agencies, Statskontoret, researchers and consultants.
The Government is responsible to the Riksdag for both the steering of the government agencies and performance. And the Riksdag is the representative of the people; it must be able to examine the chain of responsibility between the Government and the administration. This can be done once the Riksdag has access to reliable information on performance and effects.
Agency steering is complex. Effective agency steering requires harmony between the various steering instruments, and the Government also has the challenge of finding a balance between general steering of all of or the majority of operations, and steering individual agencies. No two agencies can, nor should, be steered to the same extent and in the same manner.
Matters of steering belong to the areas that require continuous development and constant learning and reflection. And at the end of the day, the steering of agencies is perhaps more a matter of approach and constant learning within the Government Offices and agencies than finding an optimal model for how the Government should steer its administration.
In this report Government refers to the Cabinet, which acts as a collective body in steering the agencies and activities of central government.