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Syllabus B. Governance B6. Public sector governance

B6d. Agency in the Public Sector

Agency in the Public Sector

Public sector organisations (agents) work on behalf of taxpayers and those that use the services (principals e.g.pupils in a school, patients in a hospital, etc).

Funders/principals (tax payers and service users) are sometimes the same people (i.e. taxpayers placing their children in state school) but sometimes they are not, and this can give rise to disagreements on how much is spent and on what particular provisions. 
In general, however, public sector organisations emphasise different types of objectives to the private sector.

Whereas private companies tend to seek to optimise their competitive positions, public sector organisations tend to be concerned with social purposes and delivering their services efficiently, effectively and with good value for money.

A common way of understanding the general objectives of public sector organisations is the three Es:

Economy, Efficiency and Effectiveness

  • Economy represents value for money and delivering the required service on budget, on time and within other resource constraints.

  • Efficiency An efficient organisation delivers more for a given level of resource input than an inefficient one.

  • Effectiveness describes the extent to which the organisation delivers what it is intended to deliver.