What Are Public Sector Reforms?

Mark Wollacott

Public sector reforms are where the government tries to change the way it operates. This tends to concern areas such as welfare, health care, government administration and other areas where the government has a stake. Such public sector reforms can be launched for a number of reasons. This includes budgetary reasons, political and ideological reasons, and because of an event that renders the service unfit for purpose. Reforms may cover the whole of government or specific areas of it.

The windfall elimination provision reduces retirement benefits if a retiree receives a pension from a job where Social Security taxes were not taken out of his pay.
The windfall elimination provision reduces retirement benefits if a retiree receives a pension from a job where Social Security taxes were not taken out of his pay.

There are multiple purposes for launching reforms. These reforms are often led by politicians, meaning that political ideology often plays a part. There are politicians who believe the public sector should be kept to the minimum and there are those who believe it should control everything; a good balance between the two is rarely found.

Ideologically-driven reforms in the public sector are designed to put the stamp of the political party or politicians in charge on the government’s services. For example, a government that believes in business would try to minimize public health care or would try to allow companies to control things such as wasteful spending, immigration and other areas of government. The reverse may also be true; a government might reform public services by creating a national health service or by nationalizing whole industries.

Governments need to operate within a budget. If the government, such as the Labour government in Britain between 1997 and 2010, borrows 25 percent of the money it spends, debt will eventually become unmanageable. Such public sector reforms tend to be focused on cutting as much waste as possible. The effectiveness of such reforms depends upon who is enacting them, their politics and what they aim to cut.

Cutting waste is the holy grail of public sector reforms. Such reforms tend to focus on reducing lavish pensions or increasing pension contributions, the reduction of red tape, more efficient tax regimens and the removal of highly-paid workers. In practice, however, such reforms tend to end up cutting needed jobs while protecting higher management and inefficiencies.

When a service or institution is not fit for purpose, it needs reforming. This happens because of a massive internal failure or because it has failed to modernize in line with society. Such reforms try to restructure a service, to add new elements to it and to make it better at its job. This includes new laws, budget increases, restructuring and new powers.

Public sector reforms of any kind are not easy. First, there is political opposition from other parties, and often from within the ruling party. Second, there is opposition from media opponents and interest groups. Vested interests within government will not want to have their privileges, wages or pensions cut. Such reforms often require a strong majority in government in order to force them through.

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