Public services largely depend on the resources a public organization has obtained and managed. While public organizations are rarely in a position to maximize profits as a strategy to enhance pecuniary gain, the rational public manager is motivated to maximize the organization’s budget. The budget is the single most visible indicator of an organization’s health and status. Reputation, salary, power, patronage, and output of the organization are all related to the organization’s budget. Therefore, to enable public organizations to fully fulfil their obligations and to provide sufficient and efficient services, resource management in the public sector tends to seek increases in the amount of resources, so as to have stable growth, and to maintain autonomy and control over resources.
In line with the idea of “new public management”, many reforms have been taken in the public sector, which have mainly been directed towards managing public resources and introducing market mechanisms to the public sector.
First, the cost recovery mechanism is an important way to resource public organizations. Services provided by government are not necessarily always financed directly from money in the general fund. User charges often provide some advantages by having people who benefit from a service pay for all or part of the cost of that service. Government services can be delivered to individuals and communities. As a general principle, cost recovery is based on services provided to distinct groups of beneficiaries rather than to the general public. Other principles in the cost recovery mechanism include (Hodgson, 1999, p.93-94):
Consultation – users should be able to participate by being regularly and freely consulted, not just being informed.
Allocation – costs should be fairly allocated to all beneficiaries.
Revenue – should not exceed costs for any particular user group.
Delivery characteristics – user charges should recognise the manner in which service is delivered.
Level of cost recovery – should recognise a group’s ability to pay.
User charges – should be structured so as to:
recognise the value of the service received
recognise operational differences
encourage certain practices, behaviours
The impact of charges – should be assessed before introduction.
Fees should be set on the basis of clear levels of service.
An effective dispute resolution mechanism should be established.
Second, some government services can be contracted out. While the major features of the service would still be determined by government, the actual delivery of the service may be provided by commercial organizations. This may have advantages such as to improve the competitiveness among service providers, to improve the quality of the services, to save public resources without decreasing levels of service, and to improve the efficiency and effectiveness of the services.
Moreover, public services may be privatised. Once the regulations are established by the government, the responsibility to deliver certain services can be transferred from the public sector to private companies. Costs associated with the delivery of services are borne by the companies or the customers.
In the maritime safety context, apart from policy and regulation, all the three reforms mentioned above have to be seen in the services provided by the maritime safety administration. Cost recovery may includes services such as ship registration, survey, inspection and certification of ships, training, examination and certification of seafarers, port State control (in case of detention), aids to navigation, and ice breaking. Examples of services, which may be contracted out, are statutory survey and inspection (delegation to classification societies), hydrographic survey, and dredging of channels. Services, which may be delivered totally by private companies, include pilotage, maritime communications, and salvage.
In conclusion, public administration has much flexibility with respect to the provision of services. This flexibility has principally two purposes, increasing incomes
or cutting down expenditures, and improving quality and efficiency of the services. Public services can be arranged into three categories, namely consolidated, contract and regulated, as shown in table 5.1. A consolidated arrangement is a service that is planned, financed, and delivered by the public administration itself. A common example
Table 5.1
Arrangements of public service provision
Arrangements Planning Finance Delivery
Consolidated X X X
Contract X X
Regulated X
in the maritime safety administration is regulation and investigation of casualties. In a contract arrangement, the services are planned and financed by public organizations, but they are actually delivered by other organizations, either non-profit or commercial bodies. Generally speaking, the maritime safety administration still has the responsibility for services contracted to other organizations. Furthermore, commercialised or privatised services will be financed and delivered by private entities. The public administration will only plan and regulate these kinds of service.
CHAPTER VI
EFFICIENCY AND EFFECTIVENESS
The desire to improve organizational performance has focused attention on the pursuit of greater efficiency and effectiveness, which has been regarded as paramount in both private and public organizations. This pursuit, which has dominated government thinking in the last two decades and continues in the new millennium, merits detailed scrutiny. In this chapter, firstly the definitions of the terms and how these concepts have been applied in the public sector will be examined, and secondly the efficiency and effectiveness of the maritime safety administration will be discussed from various perspectives.