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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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