THE INFLUENCE OF NEW PUBLIC MANAGEMENT ON THREE ONTARIO MUNICIPAL GOVERNMENTS AND ITS IMPACT ON POVERTY REDUCTION AND SOCIAL SERVICE PROGRAMMING

 

Zac Spicer
University of Western Ontario

 

 

 

 

ABSTRACT

 

 

 

 

 

 

INTRODUCTION

            Municipalities are, for the most part, the first line of defense for those on the brink of poverty. They are federal and provincial program administrators as well as policy crafters. As such, Canadian municipalities are both makers and takers of policy in poverty reduction programming.

            Municipalities, though, do not have the same fiscal tools at their disposal that the federal and provincial governments do. The revenue bases of municipalities come largely from three sources property taxes, user fees and development charges and are routinely subject to cost downloading from senior levels of governments. As such, municipalities have gone through a significant amount of internal restructuring to increase efficiency and address budget shortfalls in the wake of provincial service downloading and re-organization, which largely began in the mid-1990s. One of the main tools that municipalities have utilized to address their diminishing fiscal conditions has been New Public Management (NPM), a philosophy of cost-cutting and efficiency maximization to increase the productivity of governing structures. Through many years of practice, at several levels, NPM has been seen to have a negative impact on social services programming.

            Some academics, practitioners and commenters though, have stated that New Public Management at all levels of government is waning. This paper seeks assess the influence of New Public Management at the local level and gauge the impact of this fiscal philosophy on poverty reduction and social services planning. Those who have required social service programming have routinely felt the cost-cutting results of NPM at the local level and this project will aim to discover if such trends are to continue, as municipalities generally plan programming five to ten years in advance, and to gauge what affect this will have on poverty and hunger reduction programming.

 

NEW PUBLIC MANAGEMENT IN THEORY

            New Public Management is a philosophy and practice that was created from a specific desire to curtail the costs of operating government. The proponents of New Public Management began to view government as bloated and inefficient, with not enough of an emphasis upon fiscal prudence and respect for taxpayers contributions. Inspired by neo-conservative principles and a desire to see smaller, more effective government, supporters of New Public Management set out a number of criticisms against current governing structures.

The ideological base of NPM came from David Osbournes and Ted Gaeblers 1992 book Reinventing Government (Murray 2008:416). Although the ideas behind NPM have been around for decades, Osbourne and Gaebler popularized the concept and introduced it to mainstream public administration studies (Murray 2008:416). Those influenced by Osbourne and Gaeblers work criticize government on three separate counts. First, they state that governments had become too large and intrusive (Tindal and Tindal 2004:288). Essentially, government has grown dramatically since the Second World War and, without checks, will continue to grow. Without any sort of effective downsizing, government will become ineffective. Secondly, governments had begun to act as monopolies in service provision and, as such, without competition and rationale to become fore efficient, are ineffective in delivering services to residents (Tindal and Tindal 2004:288). The third and final criticism results from abuses of government power. Critics state that there is a lack of accountability in government and controls against abuses have been largely ineffective (Tindal and Tindal 2004:288).

            Based on these criticisms, the proponents of New Public Management have laid out a set of core principles that help guide its implementation. First, under the NPM paradigm, innovation and risk taking are promoted over administrative prudence (Nelson and Patten 2005:157). As such, bureaucracies are expected to be flexible and creative institutions that place emphasis on individual customer satisfaction over standardization (Nelson and Patten 2005:157). Secondly, New Public Management has a commitment to the politics/administration dichotomy (Nelson and Patten 2005:157). In other words, politicians and the administrations most senior bureaucratic advisors are expected to focus on policy writing, not administration (Nelson and Patten 2005:157). Finally, the New Public Management philosophy holds a commitment to, what authors Marcia Nelson and Steve Patten refer to as, flatter and more flexible organizational structures in which hierarchical process-oriented accountability is replaced by established performance measures and accountability by results (Nelson and Patten 2005:157).

            This guiding paradigm has brought a number of new trends to the governing structures of Canadas cities. First and foremost is an emphasis on Alternative Service Delivery, which involves the transfer of services traditionally administered by the city to private-sector providers, non-profit organizations, or new public service organization forms, such as special operating agencies or foundations (Nelson and Patten 2005:157). Secondly, New Public Management has lead to the importation of private sector management techniques. For example many city administrations have included business plans in their policy reports (Nelson and Patten 2005:158). Finally, there is an emphasis on fiscal prudence and spending tax dollars responsibly. This has placed a newfound emphasis on spending cuts, downsizing, and reorganization.

            With these practices in place, a number of trends have emerged from the implementation of New Public Management at the local level. First and foremost, municipalities have seen an increase in cooperation and co-production between cities and various local bodies, such as the private and volunteer sector (Tindal and Tindal 2004:288). Additionally, the voluntary sector is being utilized more under the New Public Management paradigm (Tindal and Tindal 2004:189). For a long time, municipalities utilized the voluntary sector extensively, but this practice was discontinued (Tindal and Tindal 2004:189). New Public Management has brought the voluntary sector back into service provision and policy work in municipalities (Tindal and Tindal 2004:189). Much like the voluntary sector, the business sector has become more directly involved in municipal services under New Public Management, with new private-public partnerships being forged through various municipal projects, such as sanitation services (Tindal and Tindal 2004:290). Finally, the amount of services being contracted out by cities, such as garbage collection and parks maintenance, is increasing (Tindal and Tindal 2004:290).

            Lynne Weikart tracked these changes in three cities in the United States  - Indianapolis, New York and Los Angeles in order to gauge the effect of NPM regimes. In Indianapolis, Weikart found that Mayor Stephen Goldsmith reduced the amount of front-line city works, including social service staff and shelter workers, by 18.5% and reallocated resources from public services, such as public housing and support, to public safety (Weikart 2003:43). In New York, Mayor Rudy Giuliani privatized 75 of the citys 82 shelters to for-profit operators, whereby the city paid a set fee to private shelter operators per occupant encouraging the operator to reduce the cost of operating the facility to increase private profit, and cut or contracted out nearly $5 billion in social services funding in order to reduce the citys budget (Weikart 2003:43). Additionally, Giuliani sold 15,137 low-income affordable housing units to private developers and attempted to privatize public hospitals - that is hospitals that provided medical care to mainly low-income residents who utilized the American Medicaid program - leading the City Comptroller to state that the privatization would, hurt uninsured patients (Weikart 2003:44). In Los Angeles, Mayor Richard Riordan shifted expenditures from social services to public safety, adding nearly 3,000 police officers to the citys police force (Weikart 2003:48). Overall, Weikart finds a number of trends in these case studies of American NPM regimes, namely that social services were cut, shifted or privatized, leading to a decrease in both the quality and quantity of low income and impoverished city residents. Each Mayor was also subsequently re-elected to multiple terms, leading many to comment that municipal voters endorsed their implementation of NPM.

            Despite the popularity of New Public Management, some are expecting its influence to wane. Author Laurence Lynn writes that the New Public Management paradigm is on its decline and states four specific reasons for this trend. First, the conditions which brought New Public Management to popularity fiscal imprudence, large government, and over-spending are beginning to be corrected, leaving little room for criticism from New Public Management proponents (Lynn 1998:232). Simply put, governments have largely corrected the problems that spurred on the creation of NPM, such as such as massive deficits and over spending, and, as such, many do not see the need for the ideology to continue. Second, reforms in many countries have taken on different forms, which highlight the differences in the ideology as opposed to its similarities, leading to the distortion of the original concept (Lynn 1998:232). Separate practitioners have used differing practices to address their financial and efficiency problems, which has blurred the original ideals of the paradigm. Third, the term new will become tired and worn and, finally, political debate will require a fresh theme to attract attention to new forms of administration reform (Lynn 1998:232). These reasons lead Lynn to state that, most of us could write the New Public Managements post mortem now (Lynn 1998:232). This paper will test Lynns hypothesis at the local level and attempt to gauge the effect, if any, on social service programming.

 

NEW PUBLIC MANAGEMENT AND SOCIAL SERVICES PLANNING

            Addressing social service needs is essential to the health of any city. In Canada, the problem of poverty is increasing. For example, in Canada, 1.7 million households live below the poverty line (Lorinc 2006:76). On any given night 35,000 to 40,000 people sleep on the streets in Canadas cities (Lorinc 2006:76). One in six Canadian children live in poverty (Lorinc 2006:63). Across Canada, the number of families forced to use hostels of temporary residences spiked 76 percent between 1988 and 1996 (Lorinc 2006:61). While addressing these problems, it should also be noted that nearly 80 per cent of Canadas population live in Census Metropolitan Areas with more than 100,000 residents (Lorinc 2006:99). In Ontario specifically, 478,480 children, one in every six, are living in poverty (Campaign 2000:2006). In 2006, Ontarios child poverty rate was 17.4%, an increase from 15.1% in 2001, while an average low-income single parent family lives approximately $9,500 below the Low Income Cut Off (LICO) line (Campaign 2000). In 2005, 11.7% of Ontario families were living below the Low-Income Cut Off (Trillium Foundation[a] 2006:41). In Toronto, the amount of families living below the LICO (as calculated for Toronto as a family of one making less than $19,261) was 20.6%, significantly higher than the provincial average. (Trillium Foundation[b] 2006:39). In Hamilton, the amount of families living below the LICO (as calculated for Hamilton as a family of one making less than $19,261) was 14.3%. In Sudbury, the amount of families living in poverty (as calculated for Sudbury as a family of one making less than $16,521) was 9.2%, below the Ontario average of 11.7%, but as a large city in Northern Ontario, they have distinct challenges in regards to homelessness, housing and hunger (Trillium Foundation[c] 2006:52).

Ontarios cities have not been oblivious to these statistics. They have responded with poverty reduction programming and this paper seeks to assess the influence of NPM in their social programming planning. To properly address the needs of city residents, municipalities usually present their priorities over a number of years and chart a path to properly implement those priorities. As such the social planning documents of cities are useful indicators of the prevalence of New Public Management. Traditionally, cities will present planning documents for a five to ten year time span and attempt to adhere to it, with little deviation.

            For this paper, the social planning documents were retrieved and analyzed for four municipalities in order to assess and examine the influence and impact of New Public Management at the local level. In each municipality, a set of criteria is put forward to examine each planning document: 1) the rationale for developing the plan, 2) the municipal departments and agencies that were involved in the planning process, 3) the relation of the Human Services Plan to other growth management strategies, 4) the range of services covered under the Human Services Plan, 5) the implementation process of the plan, and, finally, 6) other community partners or stakeholders included in the plans implementation or planning components.

The four cases examined below are those of Toronto, Hamilton and Sudbury. While these cities are not the only ones in Ontario that have detailed social services planning and implementation documents, they provide a good basis for comparison. Each city has differing population  - ranging from well over 1 million in Toronto to over 500,000 in Hamilton to close to 200,000 in Sudbury allowing for an apt comparative model of different poverty reduction strategies for different sized populations.

           

TORONTO

            In 2001, the City of Toronto created an overarching social planning document entitled A Social Development Strategy for the City of Toronto. The report sets out a case for NPM. Toronto states that declining revenues from senior levels of government, coupled with property tax freezes, provincial downloading and forced amalgamation have backed the city into a corner, fiscally. A Social Development Strategy notes that, the cumulative effect of the recent changes is that the city is faced with growing needs but has fewer resources and less flexibility with which to deal with them (City of Toronto 2001:7). Even with that noted, the City understands its role in service provision and delivery, but sets out a number of recommendations going forward.

            One such recommendation is the creation of strategic partnerships with the community. A Social Development Strategy notes that the city must, actively foster the participation of all sectors of the community in the decision-making process (City of Toronto 2001:13). The community would be involved in not only the final decision-making, but also prioritizing areas of investment, a principle of NPM. The report states that, in consultation with the community, the city must determine the key areas of investment will significantly improve the health and well-being of individuals and communities (City of Toronto 2001:15). In this initiative, Toronto is inviting a wide-array of voices to a sector of public policy that requires specific, informed voices. A second recommendation is program evaluation. A Social Development Strategy notes that, monitoring tools such as report cards should be used to inform policy and budget decisions and to guide system and service planningthe effectiveness of programs and services must be assessed on the basis of these expected outcomes (City of Toronto 2001: 15). These recommendations would see social policy in the City of Toronto created by a diffuse number of voices, some uninformed and with motivations that could exist outside of concern of the welfare of the poor and hungry, and evaluated by a narrow focus on effectiveness.

            The emphasis placed upon partnership and community collaboration in A Social Development Strategy was present in the citys assessment of aboriginal homelessness, Dealing Effectively With Aboriginal Homelessness In Toronto, whereby the report recommends that the city partner with differing agencies to improve service delivery effectiveness (Ward 2008:25). The same partnerships were evident in the 2000 food security report Planting the Seeds which recommended that the city partner with groups such as the Red Cross, food banks and health centers to effectively respond to hunger issues within the city (Food and Hunger Action Committee 2000:39).

 

SUDBURY

Beginning in 1992, the District of Sudbury Social Services Administration Board appointed a task force to examine emergency shelter use and to identify if there was a need for additional shelter space (City of Sudbury 2000:12). A subsequent report was released in 2000, which indicated that there were not enough spaces in Sudburys shelters and that because of high demand some people were turned away (City of Sudbury 2000:13). At this point, the homelessness report was issued and expanded to look into affordable housing, homelessness outreach and domestic abuse centers, in addition to emergency shelters.

A number of community partners were brought in to assist with the implementation of the plan, such as the Salvation Army, the YWCA, and Participation House, as well as Francophone and Aboriginal cultural groups (City of Sudbury 2000:14). What is unique about these partners is that Sudbury received financial assistance from these groups rather than simple consultation, advice or collaboration. The total amount allocated by Sudbury itself was $232,000 while the citys partners both community based and senior levels of government marched those funds entirely (City of Sudbury 2000:15). This situation is entirely unique, as Sudbury was actually able to have the volunteer and non-profit sector help fund their policies, a key principle of New Public Management in action.

Additionally, the coordination of these services is directed by the Advisory Committee on Emergency Shelters (ACES), which is a body comprised of both municipal employees and representatives from local social services groups (City of Sudbury 2000:1). In fact, the local government and the volunteer sector in Sudbury have such a close relationship that the ACES actually operates out of the YMCA district office (City of Sudbury 2000:1).

In Sudbury, one can see a very unique relationship between the city government and the non-profit and volunteer sector. Their relationship is so close and so connected that city administrative offices share space with volunteer groups and mutually fund projects designed by the city.

 

HAMILTON

            In 2002, the Caledon Institute prepared a report for the City of Hamilton entitled, A Social Vision for the New City of Hamilton, which aimed to create a safer and healthier community (Torjman et al 2002:2). A Social Vision sets a number of goals for Hamilton, with the ultimate goal being that, there is no individual or family without a roof over its headno child goes to school hungryno person suffers from abuse or violence without having a safe place to go (Torjman et al 2002:2). In this document, there are a number of references to NPM principles, specifically the relationship building with non-governmental actors and the establishment of delivery targets.

            The Caledon Institute states that the City of Hamilton needs to reach out to community partners to establish a positive service delivery relationship with those in need. Specifically, the report notes that relationships need to be established with several governmental and non-governmental actors to implement the Social Vision addressed in the document: [City Council] should expand the network of stakeholders involved in social issues to include citizens, businesses, educational institutions at all levels, health organizations, the arts community, the recreation sector and the federal and provincial governments (Torjman et al 2002:11).

            A Social Vision also recommends that Hamilton implement a number of targets and indicators in their task of reducing poverty and improving community spirit. The report notes that, one of the key tasks in undertaking a Social Vision is to identify clear goals and measurable targets that City Council strives to achievea set of indicators also is required to determine if action is being take in the right direction and, if so, whether it is moving quickly enough (Trojman et al 2002:11). This is a continuation of the efficiency argument addressed by the proponents of NPM. If targets cannot be met, efforts can be easily abandoned or refocused into other areas.

In 2007, the City of Hamilton released a more specific homelessness strategy entitled Everyone Has A Home, wherein they addressed several strategies for reducing homelessness in Hamilton. In this document there are several references to New Public Management, specifically private-public partnerships and seeking out additional sources of funding for the project from community groups.

            Everyone Has A Home mentions a number of collaborative strategies with either community groups or the private sector. First, Hamilton seeks to partner with social housing providers and private sector landlords on building and eviction issues (City of Hamilton 2007:5). Additionally, Hamilton wants to partner with the Local Health Integration Network, a provincial body, to coordinate health services (City of Hamilton 2007:5). Here we see private-public partnerships volunteer sector partnerships, and partnerships with different levels of government, all principles of New Public Management.

            The city also has a plan to fund their strategy. Specifically, Hamilton will turn to what it calls, community funders (City of Hamilton 2007:8). The Everyone Has A Home document does not mention specifics about community funding, though. Additionally, Everyone Has A Home notes that, the community services department will work with other funders regarding sustainable funding to maintain key programs (City of Hamilton 2007:8). Once again, the city will look towards community partners for both short-term and long-term project funding.

            The City of Hamiltons homelessness strategy contains key principles from the New Public Management philosophy. Hamilton will partner with the private sector, the volunteer sector and other levels of government to coordinate and deliver services. Additionally, the city will seek out community partners for both short-term and long-term funding goals. The influence of New Public Management is clearly seen in this one project by the City of Hamilton.

 

NEW PUBLIC MANAGEMENT TRENDS AT THE LOCAL LEVEL

            The cases of Toronto, Sudbury and Hamilton have provided interesting case studies on the effect of New Public Management at the municipal level. As such, five trends have emerged which we can identify as continuing impact points of NPM.

 

1) Volunteer Sector Partnerships

            The New Public Management philosophy has called for diverse partnerships with government. In nearly every case, weve seen partnerships with different groups. Most notably, the inclusion of the voluntary sector is of interest. Political Scientist Karen Bridget Murray states that the trend to partner with the volunteer sector is increasing at the provincial and federal level (Murray 2008:419). Through an examination of various social policy planning documents, it is clear that this trend is now reaching the municipal level. The example from Sudbury is particularly interesting as we can see government not only partnering with a variety of volunteer sector partners for policy implementation, such as the Salvation Army, YMCA, and Participation House, but also going as far as to match government funding. The volunteer sector in Sudbury is contributing over $232,000 in program funding for the citys homelessness policy. The same trend is evident in Hamilton, which is looking for funding partners in their homelessness strategy.

            The concern regarding such relationships is that it blurs the lines between both actors. The volunteer sector, groups such as the YMCA and Salvation Army, which once acted independently of government, is now acting interdependently with government. This trend may lead municipal partners to retreat entirely over time from program delivery, relegating their role to merely setting program guidelines. Such a scenario would place an undue burden on the volunteer sector, which would inevitably create service gaps and decreasing services for those who need access to them.

           

 

2) Increased Transparency

            Additional partnerships, with the volunteer sector especially, can bring with it additional transparency. While both groups may be working interdependently, there is a chance for increase transparency of funding and delivery on the part of the government. An excellent example of this is the Advisory Committee on Emergency Shelters in Sudbury, which has representation from both the municipal government and the volunteer sector. Decisions are made collectively and information is more readily available to the volunteer sector and the public. Traditionally operating as closed shops, publishing only small amounts of information about targets and progress in social services planning, municipal governments will have to operate with more transparency due to their partnerships. This can enable the public and other concerned parties to have increased information about programming direction and delivery.

 

3) A Renewed Emphasis on Delivery

            Under NPM, there is a renewed focus on delivery. Specific targets are created and monitored to ensure that the necessary resources are directed and delivered efficiently. Hamiltons A New Social Vision document addresses this point as well, indicating that specific targets and indicators need to be put in place, rigorously monitored and adjudicated in order to determine if plans are, moving quickly enough. Such focus has been an aspect traditionally lacking from municipal social service planning.

            While this constant evaluation process can be beneficial to poverty and hunger reduction projects, as it could lead to a more frequent appraisal of projects and subsequent corrections, increased accountability and a delivery-focused mentality could lead to program withdraw if targets are not met on the schedule outlined by the city. If, for instance, a specific project, such as the City of Torontos Aboriginal homelessness strategy, did not deliver the results hoped for within the time frame hoped for, the city may simply declare defeat and direct resources to other areas, disregarding the progress achieved. The NPM paradigm advocates using a set amount of resources to tackle as many problems and services as possible. If one project is not producing desired results, resources can easily be shifted to a project that is producing wanted results, which would fit neatly into the NPM philosophys emphasis on efficiency. 

 

4) Targeting of Resources

            Each case study and subsequent social services plan addresses the dire fiscal state of municipalities. As such, there has been a push to target resources into areas in which they are perceived as being in the most need. Toronto provides a good example of resource targeting at the municipal level. Because of the negative financial condition they found themselves in, Toronto found it necessary to stretch budget allocations to their maximum allowable limit. This  budget maximization has lead to the targeting of resources and a narrow focus on certain policy areas deemed priorities. The problem with resource targeting and prioritization is that municipal policy makers may overlook or miss certain areas that are also in need.

 

5) Outsourcing of Policy Implementation

            Hamiltons homelessness document calls for it to be nearly entirely outsourced to community, volunteer and for-profit partners. Local health and tenant tribunals would be utilized for policy implementation and senior levels of government will be looked to for funding. Karen Bridget Murray states that this is a trend at all levels of government, leaving governing bodies with responsibility for little more than setting policy guidelines (Murray 2008: 426). In this case Hamilton can be seen as a mere policy setter and not an implementer. This can cause service gaps and confusion in regards to accountability.

 

CONCLUSION

            From the assembled human services planning documents, five clear trends have emerged: volunteer sector partnerships, increased transparency, a renewed emphasis on delivery, targeting of resources and the outsourcing of policy implementation. Each trend is the result of the influence of New Public Management at the local level and each can be seen as impacted poverty reduction and social services planning.

            The outsourcing to various partners, such as the volunteer and for-profit sector, can be seen as being positive, as the volunteer sector can bring an additional knowledge base to social service delivery, yet it may have the effect of over-burdening the volunteer sector and the increased interdependence of both groups, which can decrease the accountability surrounding social services planning. A renewed focus on delivery is able to ensure services are readily available for those who need them, but the targeting of resources may leave certain areas under-serviced. Overall, the practitioners of New Public Management approach poverty and hunger as they would nearly every other municipal policy area, be it parks and recreation or sanitation. They view efficiency and budget maximization as priorities and view poverty and hunger as problems that can be solved through the limitation of resources. Poverty and hunger are problems that mark nearly every urban centre in the world and can only be alleviated through the full dedication of municipal efforts. 

            New Public Management has lasting qualities, despite Lynns predictions. Its affect can be seen in recent human services planning documents and its guiding ideals are being put into practice in poverty reduction and social service planning. Such ideals can be seen as having a continued detrimental affect on social services planning.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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