The inefficiency of centralised control and political short-termism: the case of the prison service in England and Wales

A paradox of the New Public Management reform – an influential school of thought in the management of public services in some countries – is that, despite its rhetoric of discretion for public managers, governments frequently reassert direct input controls at the expense of managerial freedoms to deliver – and be held accountable for – agreed output/outcome objectives. The existing literature explains this by highlighting elite incentive structures and institutional norms, but often neglects the wider implications for public managers beyond the centre. Addressing this gap, we trace the effects of public spending control from allocation to delivery through a detailed case study of prisons in England and Wales. We show how ‘top-down’ public spending control, hyper-centralised governance arrangements and ministerial activism combine to subvert managerial freedom and undermine on-going service improvement. The overriding importance of year-by-year fiscal performance results in short-term, poorly evaluated, decision-making and limited capacity for strategic policy implementation. This case points to wider lessons regarding performance budgeting regimes in the UK and elsewhere.