Performance and efficiency measurement in local authority building organisations

Ruddock, L

Abstract

This work constitutes a study of the operations of local
authority building direct labour organisations (DLOs)
during the 1980s,
An overt aim of Part III of the 1980 Local Government,
Planning and Land Act was to improve efficiency in the
operations of local authority building direct labour
organisations (DLOs). Whilst the Act did not specify
how DLOs should be organised, the legislation on
accounting and accountability clearly had Important
organisational implications.
Even prior to 1981, some DLOs already obtained the
majority of work via competitive tender, had control
over their functions and had systems for demonstrating
their efficiency. Others were not operated in such ways
and fundamental changes were needed to successfully meet
the challenge of the new legislation.
By 1988, the Audit Commission admitted that DLO5 had
very largely been successful in meeting the competitive
requirements of the 1980 Act, but expressed concern over
the varying levels of effectiveness and efficiency of
operation that existed amongst organisations. An objective of the study is to look at the problems
associated with efficiency and productivity measurement
in the context of DLO performance. The Conservative
government of this period had a strong conniitment to the
improvement of efficiency of the public sector. In
other areas of public services, various forms of
performance Indicator were being employed to monitor
performance, but for a DLO the sole measure of
efficiency was the ability to meet the 5a target rate of
return. The concern with efficiency produced new
interest in the application of quantitative techniques
to provide methods of efficiency measurement.
This work undertakes a study of the problems associated
with efficiency and performance measurement In this
sector of the U.K. construction Industry.
The availability of appropriate data at the Individual
organisation level from 1981 onwards, enabled, for the
first time, viable lnter-DLO comparisons to be
undertaken at the micro-level and sectoral comparisons
to be made at the macro-level.
The data used In the study were obtained over a five
year period from a variety of sources of published and
unpublished sources. A unique database of expenditure
and revenue Information from over 150 DLOs has been
developed, which in many ways is even more comprehensive than the 'official' statistics collected by the
Chartered Institute of Public Finance and Accountancy.
Methods used for efficiency measurement
With the great emphasis placed on ensuring that the
public sector of the construction industry acts in an
efficient manner, the data are employed In various
methods for the measurement of efficiency.
1. At the sector level, total factor productivity
neasurement is used to gauge the rate of growth of the
DLO sector of the industry.
2. At the organisation level, 'Farrell' measures of
efficiency are used.
A model for measuring the efficiency of Individual
organisations is presented.
Data Envelopment Analysis I used to consider
inefficiency that raises Costs above their feasible
minimum.

Citation

Ruddock, L. Performance and efficiency measurement in local authority building organisations. (Thesis). University of Salford

• Thesis Type: Thesis
• Deposit Date: Sep 23, 2011
• Publicly Available Date: Sep 23, 2011
• Award Date: Jan 1, 1994