Experience with Public Service Systems in Germany
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1 Konrad-Adenauer-Stiftung e.v. REDE Experience with Public Service Systems in Germany FACHBEITRAG ZUR KONFERENZ "BUILDING UP PUBLIC SERVICE SYSTEMS IN " VOM 08. BIS 09.JULI IN HAIKOU/HAINAN The experience given in this article presents the general concepts on public service systems, which are translated into practice since more than twenty years in Germany and Europe. A special focus is on the experience of the state of Baden- Württemberg. Within Baden-Württemberg, the department Stabsstelle für Verwaltungsreform of the Ministry of Interior is responsible for reforming the state administration. The speaker is deputy head of this department. Decisions of state reform are made by the State Cabinet (i.e. the governor and the ministers of Baden-Württemberg) and the parliament of Baden-Württemberg. 1. More Information about Baden- Württemberg and the Author Baden-Württemberg is together with Bavaria economically the strongest region of Germany. It s leading in Europe. Located in the heart of Europe and Germany, its in a glorious natural setting and endowed with rich and diverse cultural highlights (e.g. Heidelberg, Stuttgart, Black Forest, Bodensee). It s the home of Daimler Chrysler (Mercedes Benz), the Bosch company and SAP. Germany is a federal republic and Baden- Württemberg is one of it s states. Baden- Württemberg is governed by a cabinet with a governor, eleven ministers and a parliament. The population of Baden- Württemberg is 10,7 Mio citizen. It s annual state budget in 2005 amounted to 31,6 Billion. The workforce (employees and officers) of the state administration equivalents to about full-time employees. In fact, the total number of employees is much higher because of part-time contracts. As local government provides some working environment (for example for the teachers), the state administration uses about Personal Computer (PC) work places in the state administration, about PC are used in local government (cities, municipalities, counties). The states still hold about 600 authorities; 350 were dissolved in 2005 during the state administration reform All authorities and the subsidiaries (about 1600 in total) are connected to the state administration network with a total transfer capacity of about 1 Gigabit. The local government consists of about 1600 authorities. There are about 200 state laws and several hundred other regulations based on these laws. The author of this article, Georg Schäfer, a mathematician, entered public service in 1981 after 7 years in industry. During the first 3 years he was responsible for data privacy in the public sector. He then became head of the development of information and communication technology (IT) for local government in Baden-Württemberg and later deputy head of a research unit of clinical research and documentation. In 1988 he became head of the IT co-ordination team of the state administration of Baden- Württemberg. Since 2003 he acts as head of the division IT technology, IT law of the department for reforming the state administration, which is part of the Ministry of Interior of Baden-Württemberg. This depart-
2 ment organized and co-ordinated the prominent administrational state reform of 2005 in Baden-Württemberg. Georg Schäfer is member of the administrative council of the Datenzentrale Baden- Württemberg, which is an IT service company for the local authorities of Baden- Württemberg. He is responsible for the coordination of IT with the European Union, the federal government of Germany and the other states in Germany as well as with the local government of Baden-Württemberg. Georg Schäfer is the author of three books. 2. Principles of Public Service in Germany The traditional state organisation consists of the parliament, the governor s office and the ministries, an independent financial auditing authority. The core service units are responsible for people become older, health care becomes more complex and expensive, the composition of the society and the request of the different groups of the people become more heterogeneous (pluralism) and the awareness and acceptance of bureaucracy changed a lot. 3. Changes in the Understanding of Public Services Where people in the past accepted delays, decisions and procedures of authorities, they now dispute the costs, the speed and much of the complexity around administrational procedures. People now see private service units as an example for the public administrations. They now expect more than in the past from the administration, especially efficiency, perfection, determination and a retreat to areas, where nonprivate structures are needed by unanimous consent. budget and fiscal activity national and public security As the administration is responsible for governing in a sustainable way, it is necessary for public service to create especially research education social security esp. pensions, welfare, health care environment protection, consumer protection, data protection and for setting a frame for private activities. The objectives and the services of a state organisation depend very much on what citizen and enterprises expect and request from the public service. This is why a lot of change had to be mastered during the last 20 years: The demographic development shows, that low-cost structures with good efficiency, good responsiveness (respond rapidly to changes) and forward-vision, anticipating future problems and attitudes. The following services are no longer understood as necessarily to be provided by sovereign authorities as public services (examples only): telecommunication & media road and power management, land surveying employment and job search support
3 car park management of the national defence forces pension funds fire and flooding insurance. Hospitals, schools and universities become private! Citizen and enterprises do not expect oldfashioned administration but flexible, fast, equal, liability regulations (e.g. The company checking the x-ray-machines is liable for the qualitiy of the machines and their services.) implementing authorities with regulatory tasks (e.g. media, telecom, power, toll collect) conditions and penalties imposed on private activities (e.g. telecom) quality improving measures like awards, benchmarking (e.g. e- gov) giving tasks to local government (e.g. state administration reform). fair, economic service. So new regulation is no longer derived from sovereignty but from support of the customers of the administration. This becomes more and more true for most service areas. 4.Legal Changes All actions should be applied equally and only based on the law. Transparency demands that laws do not serve only a regulatory purpose but also have a documentary aspect. The changes described above lead to legal changes. These are sometimes rather fundamental. Restricting our view here to public service, we find: Old-fashioned state supervision of production methods As social cohesion has to be maintained and a heterogeneous society has to be served, a sensitive, equal and prudent approach has to be taken. 5. Models of Public Service Units and the Transfer to Private Service Units The public service units are all faced with a request for reform. The way this reform is carried out depends very much on the type of service unit. The main organisations used for public service units are the following: Authorities of General Administration These authorities are the classical authorities e.g. for registration of cars, passports. These authorities remain part of the state or local government administration. Reforms may e.g. change the way people get access (e.g. via telephone or the Internet) and services are delivered or reduce the number of questions asked and forms requested. support activities Authorities of Specialized Administration social and health precautions, etc. is going to be substituted in important areas by self help (e.g. health insurance, fire insurance) Specialized administration is e.g. forest management, management of rural areas and agriculture, waste disposal, water management. These authorities may be centralized or decentralized. The state of Baden- Württemberg decided, to divide the tasks of specialized administration between the general administration of the state and local
4 government and to reduce the costs by 20% ( new efficiency ). Public Institution defined by Law Law defines these institutions. So the way they work, their efficiency, the restrictions of their work and the social and economic considerations are documented and regulated in the law. In Baden-Württemberg these institutions are responsible for administration measures that are best dealt with by central organisation. State Owned Firm When the state sees the need to keep a job within its organisation, but it wants this job to be done much like a private company, it uses the model of a state owned firm. This might be a transition of tasks to privatisation. It may be a fallback solution or a partial solution for tasks that are mostly privatized, so the state doesn t completely loose the ability to handle these tasks itself. Give the public service units autonomy and create a competition situation with strong reporting requirements (e.g. clinics as part of a university, water and power supply, waste disposal). Models of PPP: Co-Operation: Create one or many companies with the government as share-holders (e.g. water and power supply, waste disposal). Grant Licences: Define expectations in service level agreements, penalties. Out-Sourcing: Contracting follows public tendering: Service level agreements are mandatory and a renewal (e.g. every 10 years. e.g. regular water quality checks, egovernment, delivery of articles to hospitals, telephony) of the tendering is recommended. Granting Rights and Concessions 6. State Administration Reform 2005 This model already shows the way to public private partnership. Public Private Partnership denotes a variety of solutions to use private service units instead of public service units in order to deliver a service to the public. To start a PPP-project it is recommended to define objectives, to work out a risk analysis and a cost benefit analysis. The result is an action and finance plan with a time schedule. To find the best solution, a public call for tender is recommended. In the end, some of the options are: Sell the public service units on the market to private companies! This can be done e.g. with hospitals, if a social and legal framework guarantees, that all citizen are treated well and the quality of service of the private hospital is outstanding. Public service units can be brought to the share market. If necessary, regulating authorities (e.g. telecom, railroad) should be established. The State of Baden-Württemberg started with a new administration in authorities were dissolved at the end of 2004 and a 20% efficiency gain was imposed on the remaining authorities. The heads of the authorities concerned accepted and supported the reform. This was the final act of a reform process with - among others - the following milestones: The reform was anticipated on a smaller scale some years ago. Whenever new regulation was prepared, the privatisation of public services, the reduction of bureaucracy and the possibilities to provide e-government services were carefully investigated. These steps achieved much progress. So on this basis, the tasks of specialized authorities were integrated as indicated into the general administration.
5 This makes a lot of sense: Derived from the motives of administration reform, mentioned above, main problems could be solved: Ressources (e.g. budget, natural water resources) are used more economical. The inevitable conflicts (e.g. environment vs. industrial development), administrations have to deal with in a heterogeneous society, can be solved within one authority. Cross-authority communication or even escalation up the hierarchy is no longer necessary. The hierarchies of responsibilities (e.g. 3-level-state : district counties city & village) could be maintained. The diversity of customers (e.g. small, medium, big enterprises, citizen) can be dealt with considering state-wide and local aspects. The same holds for local and wide area evolutions (e.g. air pollution). Advantages were gained, too: Local government is the unique access point for citizen and enterprises. Fast and unique decision processes are possible within small service units with complete responsibility. Rules of subsidiarity (what can be done on a low-level, should not be done on a higher level) will be applied. One E-government portal is the unique access point in the Internet. The head of the authority is soothing conflicts. Cheaper administrations (e.g.: May be with reduced standards, if locally necessary) are possible. 7. Public Private Partnership Public Private Partnership (PPP) is not a substitute to the reform of public administration services. Both have to be managed in parallel. Like reforming public service units, PPP is no easy job. The job demands the creation of sustainable, efficient and socially acceptable organisations, which are fit for the competition in a heterogeneous society, In short, the overall objective of PPP is to gain the flexibility and cost-effectiveness of a private company to accomplish public tasks. If PPP is well designed on the basis of a complete analysis and with adequate experience with PPP, the advantages over public service units can be the following: It works faster and is often much more accepted by the citizen and enterprises. One reason is, PPP-organisations resemble more the daily known private companies than the oldfashioned counter-based authorities. For tasks, that change rapidly, e.g. due to technology, PPP is more efficient. PPP-organisations get money not via the time-consuming procedures of the parliament and the ministry of finance, but via market mechanisms. Hiring personnel is easy, the pay is better and - in case of unexpected changes in the amount of work to be done - personnel can be dismissed more easily. Success prevails only, if the organisations created act like private organisations in a competitive market. Administrative thinking should be reduced. The objectives, which were well defined during the creation process, are under regular and adequate control.
6 8. Reform of the Federal System in Germany Re-designing state governance happens on a federal level in Germany as well. This report must be limited to a few highlights. Currently efforts are under way to make decision processes easier, to get consent on changes in federal law. As a trade-off, both the federal state and the states will get advantages. The states shall be involved in future in only about 50% of new federal laws. As service in return, the states got more autonomy for universities and education and for the legal framework for public servants. Especially the strong states appreciate that more competition between the states becomes possible, too. helps not only citizen and enterprises but the public servants, too. We found that cost-reduction becomes possible through online-services on all levels. An E-Government check of all new regulation is due before deciding on new regulation. For the next step of federal reform, the states wish the right to impose a state tax by state law. 9. E-Government as Public Service The change of public service systems will continue, as the driving forces for change remain strong or get even stronger. The administrative units and the way, private service units work in the interest of the public, will be affected. Citizen and enterprises cannot become experts on how public services are performed. Nevertheless they shall be able to use them in a unique and efficient way. So the information about the public services and as much of the services itself have to be made transparent to everyone. Online-services shall allow all citizen and enterprises to settle their duties (e.g. pay tax, request a licence or a permission) and to get the desired result within hours or minutes instead of days. This can be done with e-government electronically and through the internet. An e-guide for local, district, state and federal government and all service units designed as an all-in-1 service is state of the art. (e.g. Our practical experience shows, that a complete and reliable description of all administrative procedures
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