Does the public sector need a more demand-driven approach to capacity management?

Abstract

There have been many recent examples of the failure of public services to provide the appropriate levels of capacity to meet demand. This article explores whether or not part of the problem lies in differences between public and private sector approaches to demand and capacity planning. The case study evidence shows that some public services are ‘resource-driven’ rather than ‘demand-driven’ in the planning of resources to meet demand. This perspective has a number of observed detrimental effects on the effectiveness of the way that resources are allocated, especially in the medium term. The practical effect is failure to understand demand patterns and how to deal with them, creating unnecessary queues or wasting the resource and to set up avoidable system dynamics. The general conclusion is that pubic services should adopt private sector capacity planning practices to a much greater extent. Culturally, this will require a significant mindset within many public bodies and also changes to the ways that government policies and targets are set.

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