This report is about the contribution that corporate governance makes to the quality of public services, for better or worse. It builds on the interest in the private sector in investigating the positive contribution that corporate governance arrangements make to profit and greater trust. Poor public sector corporate governance is at the heart of many public service failures. We need a greater level of understanding of how good corporate governance can contribute to high-quality, appropriate services and greater community cohesion, health, safety and economic well-being.
This study describes some of the strengths in current governance arrangements in the public sector and some of the areas that are most in need of attention. Many of these themes have been visited before, but this report brings together elements of Audit Commission and others' work to show how good governance can provide both the means for public services to strengthen themselves and for regulators to ensure that regulation is proportionate to risk.
Research for this study
The principal aim of this study is to investigate the relationship between the quality of corporate governance arrangements in public sector organisations and the quality of the services that they provide. Given the enormous scope of research activity this question potentially involves, this study focuses on three areas of the public sector where the Audit Commission has audit responsibilities: health, local government, and police and probation in the criminal justice system. The study drew on audit and inspection data from the Commission and from other inspectorates, as well as on original research involving executives and non-executives in the public sector.
Included in this report:
- Understanding corporate governance
- The shape of corporate governance in the public sector
- Auditors' views on the quality of corporate governance in the public sector
- How corporate governance contributes to the quality of local public services
- Achieving good governance
- Recommendations