The point about McKinsey is that the reform assumed the
existence of a Westminster-style cabinet system and therefore
to the Hong Kong situation. from administration in advance
Its ideas also revived classical of many NPM prescriptions.
was not ‘context sensitive’ notions of separating policy
Public Sector Reform (1989)
Public Sector Reform (PSR) (Finance Branch, 1989) built upon the principles laid down by McKinsey some fifteen years previously. PSR was a finance branch initiative and although it was internally generated from within the bureaucracy, the British consultants, Coopers and Lybrand, also had a significant input. The report was basically a discussion document containing a number of principles for inancial management reform.
A chief concern of PSR was ‘getting the structure right’. In terms of overall resource planning it required that policy secretaries should look closely at the deployment of resources within their areas of responsibility. In terms of policy management, it also required that policy secretaries should increasingly become policy ‘managers’ responsible for establishing policy objectives as well as policy formulation. Policy secretaries were encouraged to decide on the ‘appropriate’ type of executive agency for service delivery in their departments. Apart from the traditional departmental model, funded on a cash accounting basis, PSR also proposed the commercialisation of government activities including trading fund departments, public corporations and non-departmental public bodies operating at arm’s length from government. The latter involved statutory organizations being subvented to provide government services such as the Consumer Council and the Hospital Authority. The drafters of PSR argued that these should be subject to annual policy reviews where the continued need for the organisation would be questioned. In addition, the organisational setting, the review of the annual corporate objectives and the financial management of these bodies would be scrutinised.
As well as centralising policy formulation and urging the use of alternative forms of agency, PSR suggested that policy secretaries be responsible for obtaining and
allocating should be
resources to agencies annual comprehensive
and evaluating the reviews of policy