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rethinking public management

Alexander Hogendoorn
Alexander Hogendoorn

1) The Bronx faces high poverty rates and social issues as many residents live in low quality housing supplied by "slumlords" and struggle to escape poverty. 2) Bronxworks helps the homeless but finds that 40-60% return to shelters as the conditions in slumlord housing are unsafe and do not provide stability. 3) NYC's procurement system incentivizes lowering wages and costs, which impacts staff quality and stability at Bronxworks as they can only attract inexperienced social workers due to low pay.

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Rethinking public management, a matter of value chain management A Dutch Orange and a Big Apple (2) Alexander Hogendoorn MSc Rotterdam, 25 September 2010 During my holiday in New York City I had the chance to meet Scott Auwarter, Assistant Executive Director at Bronxworks, and working on a better Bronx. He is rowing upstream with passion for the people he works with and with remarkable perseverance. He delivered me some insights and let me think about our practice of creating public value. The Bronx is one of the five boroughs of NYC and with almost 1,4 million inhabitants on 109 km2 the third highest in density of population. To compare: in Rotterdam do 2.923 people live on a km2 , in the Bronx 12.844. The Bronx is still struggling with the sharp decline in the residents quality of life that started in the mid-1960 to the mid-1970s. In 2008, 27,3% of the Bronx population lived below the poverty line, versus 13,7% in NYC. To compare: between 2004 and 2007 in Rotterdam 13% lived below the poverty line, versus 7% in The Netherlands. The difference between the Bronx and Rotterdam is not primarily determined by the
numbers, but by the institutional context. NYC government is steering in a way that looks smart at first sight. Bronxworks gains 75% of their shelter budget by the number of families they accommodate with housing as a follow up of the shelter. They perform well because of that. To succeed they work together with landlords. So far, so good. But you have landlords and slumlords, Scott explains. The landlords do check their potential renters and a lot of homeless families and individuals will not pass these tests. Slumlords have different interests. They supply low quality housing and place as much people in it as they can. Their houses are therefore a collecting of low-income and social less competent families. After a few years we see them back in the shelter, but than as an extended family. I think that between 40 and 60% of those who entered the shelter in the first place returns to our shelters. They are not able to survive those pools of social lag. And, in shelters we provide medical care, child support and stability. For them the shelter is a much safer place than their slumlord-owned house. That is one of our problems and I do not see an upcoming institutional change, unfortunately. Another problem that arises with they way NYC government steers is caused by the procurements (in Dutch: aanbestedingen). You have to compete with others on price. Therefore we have to cut expenses and that is only possible when we lower the wages of the staff. That has a big impact on quality. We believe that we need a high-educated staff to work with the most vulnerable persons, and we do so. You need at least a bachelor degree to work here. But we attract only recently graduated social workers. They are young and do miss the experience you need to work with people with such complex problems as our clients. The wages are that low that you hardly can afford medical insurance. They get a lot of experience working with us and leave after a few years. You can question yourself if this brain drain is cost-effective on the longer term. It is much easier to lose than to gain, socially and economically. That is often the case for individuals, but for city making it works the same. A decline in urban quality goes faster than the improvement. Institutional context is extremely important for social and economical wellbeing. Changing it has long-term consequences and not always for the good. New Public Management (NPM) - the introduction of procurement is one example of NPM - did improve the delivery of public services on first sight, but we should look deeper and look at the effects in the whole supply chain. The steering practice Scott explained is a good example. The need to innovate our public service practice is evident, but the focus on cutting inputs of public serves on itself will harm a lot if we do not combine it with a strong focus on the impact of the whole value chain. That is in my opinion one of lesson that can be learned from the practice of NYC.

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rethinking public management

  • 1. Rethinking public management, a matter of value chain management A Dutch Orange and a Big Apple (2) Alexander Hogendoorn MSc Rotterdam, 25 September 2010 During my holiday in New York City I had the chance to meet Scott Auwarter, Assistant Executive Director at Bronxworks, and working on a better Bronx. He is rowing upstream with passion for the people he works with and with remarkable perseverance. He delivered me some insights and let me think about our practice of creating public value. The Bronx is one of the five boroughs of NYC and with almost 1,4 million inhabitants on 109 km2 the third highest in density of population. To compare: in Rotterdam do 2.923 people live on a km2 , in the Bronx 12.844. The Bronx is still struggling with the sharp decline in the residents quality of life that started in the mid-1960 to the mid-1970s. In 2008, 27,3% of the Bronx population lived below the poverty line, versus 13,7% in NYC. To compare: between 2004 and 2007 in Rotterdam 13% lived below the poverty line, versus 7% in The Netherlands. The difference between the Bronx and Rotterdam is not primarily determined by the
  • 2. numbers, but by the institutional context. NYC government is steering in a way that looks smart at first sight. Bronxworks gains 75% of their shelter budget by the number of families they accommodate with housing as a follow up of the shelter. They perform well because of that. To succeed they work together with landlords. So far, so good. But you have landlords and slumlords, Scott explains. The landlords do check their potential renters and a lot of homeless families and individuals will not pass these tests. Slumlords have different interests. They supply low quality housing and place as much people in it as they can. Their houses are therefore a collecting of low-income and social less competent families. After a few years we see them back in the shelter, but than as an extended family. I think that between 40 and 60% of those who entered the shelter in the first place returns to our shelters. They are not able to survive those pools of social lag. And, in shelters we provide medical care, child support and stability. For them the shelter is a much safer place than their slumlord-owned house. That is one of our problems and I do not see an upcoming institutional change, unfortunately. Another problem that arises with they way NYC government steers is caused by the procurements (in Dutch: aanbestedingen). You have to compete with others on price. Therefore we have to cut expenses and that is only possible when we lower the wages of the staff. That has a big impact on quality. We believe that we need a high-educated staff to work with the most vulnerable persons, and we do so. You need at least a bachelor degree to work here. But we attract only recently graduated social workers. They are young and do miss the experience you need to work with people with such complex problems as our clients. The wages are that low that you hardly can afford medical insurance. They get a lot of experience working with us and leave after a few years. You can question yourself if this brain drain is cost-effective on the longer term. It is much easier to lose than to gain, socially and economically. That is often the case for individuals, but for city making it works the same. A decline in urban quality goes faster than the improvement. Institutional context is extremely important for social and economical wellbeing. Changing it has long-term consequences and not always for the good. New Public Management (NPM) - the introduction of procurement is one example of NPM - did improve the delivery of public services on first sight, but we should look deeper and look at the effects in the whole supply chain. The steering practice Scott explained is a good example. The need to innovate our public service practice is evident, but the focus on cutting inputs of public serves on itself will harm a lot if we do not combine it with a strong focus on the impact of the whole value chain. That is in my opinion one of lesson that can be learned from the practice of NYC.