Performance and efficiency measurement in local authority building organisations

Abstract

This work constitutes a study of the operations of local \nauthority building direct labour organisations (DLOs) \nduring the 1980s, \nAn overt aim of Part III of the 1980 Local Government, \nPlanning and Land Act was to improve efficiency in the \noperations of local authority building direct labour \norganisations (DLOs). Whilst the Act did not specify \nhow DLOs should be organised, the legislation on \naccounting and accountability clearly had Important \norganisational implications. \nEven prior to 1981, some DLOs already obtained the \nmajority of work via competitive tender, had control \nover their functions and had systems for demonstrating \ntheir efficiency. Others were not operated in such ways \nand fundamental changes were needed to successfully meet \nthe challenge of the new legislation. \nBy 1988, the Audit Commission admitted that DLO5 had \nvery largely been successful in meeting the competitive \nrequirements of the 1980 Act, but expressed concern over \nthe varying levels of effectiveness and efficiency of \noperation that existed amongst organisations. An objective of the study is to look at the problems \nassociated with efficiency and productivity measurement \nin the context of DLO performance. The Conservative \ngovernment of this period had a strong conniitment to the \nimprovement of efficiency of the public sector. In \nother areas of public services, various forms of \nperformance Indicator were being employed to monitor \nperformance, but for a DLO the sole measure of \nefficiency was the ability to meet the 5a target rate of \nreturn. The concern with efficiency produced new \ninterest in the application of quantitative techniques \nto provide methods of efficiency measurement. \nThis work undertakes a study of the problems associated \nwith efficiency and performance measurement In this \nsector of the U.K. construction Industry. \nThe availability of appropriate data at the Individual \norganisation level from 1981 onwards, enabled, for the \nfirst time, viable lnter-DLO comparisons to be \nundertaken at the micro-level and sectoral comparisons \nto be made at the macro-level. \nThe data used In the study were obtained over a five \nyear period from a variety of sources of published and \nunpublished sources. A unique database of expenditure \nand revenue Information from over 150 DLOs has been \ndeveloped, which in many ways is even more comprehensive than the 'official' statistics collected by the \nChartered Institute of Public Finance and Accountancy. \nMethods used for efficiency measurement \nWith the great emphasis placed on ensuring that the \npublic sector of the construction industry acts in an \nefficient manner, the data are employed In various \nmethods for the measurement of efficiency. \n1. At the sector level, total factor productivity \nneasurement is used to gauge the rate of growth of the \nDLO sector of the industry. \n2. At the organisation level, 'Farrell' measures of \nefficiency are used. \nA model for measuring the efficiency of Individual \norganisations is presented. \nData Envelopment Analysis I used to consider \ninefficiency that raises Costs above their feasible \nminimum.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 3 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.