Performance Indicators in Local Authorities

Nevertheless, in itself, a performance measurement system does not guarantee improved performance. To do so, there is a need to implement a performance management process that uses performance indicators to improve the efficiency of local government. Moreover, in order for indicators to be considered effective, they must be specific, measurable, realistic and unchanging in time. In addition, although performance indicators are also used to compare authorities, when examining differences between authorities policymakers and analysts must take into account their wide variance in terms of size, location and economic ability. Effective indicators consider differences in economic ability and in authorities between the various levels of government in the public sector; accordingly, performance indicators vary across countries as well as across authorities.

Objectives

The Ministry of Finance has commissioned the Myers-JDC-Brookdale Institute to conduct a study designed to

1. Identify the activity areas of local authorities to be measured using performance indicators
2. Suggest performance indicators for local authorities that can adequately express the quantity and quality of their performance on a variety of activity areas
3. Demonstrate the practical utility of the performance indicators by characterizing the leading local authorities.
4. To compare between the local authority and other authorities in its reference group, thus providing a more accurate estimate of its relative performance.

Method

The activity areas and performance indicators were selected through a review of the professional and academic literature in Israel and worldwide, with significant reliance on a comprehensive study conducted in Israel some twenty years ago.[1] In addition, consultations were held with professionals from the local authorities as well as with academics specializing in local government. In selecting the indicators, we emphasized the availability of data to ensure monitoring of performance indicators through time.

Findings

Thirty-six performance indicators were selected for nine local government activity areas: municipal services, education, welfare, planning and construction, city tax, administrative and general activities, budget, finance, and general indicators. The indicators express the local authorities’ performance, and the study presents a rating of the local authorities on each indicator, with comparisons to similar authorities, and illustrates the use of each indicator using a case study analysis of three local authorities.

Thirty-one out of the 245 authorities were defined as leading in a certain area, i.e., as among the five leading authorities in that area, with some authorities leading in several areas. Comparing the local authorities also indicates gaps between authorities of different kinds. For example, Jewish authorities are rated higher in the performance indicators: 27 (87%) of the leading authorities are Jewish, and four are Arab (whereas Jewish localities account for XX of all localities). In addition, local authorities rated high in the Central Bureau of Statistics’ socioeconomic economic scale are also rated higher on the performance indicators. Thirteen of the leading authorities are rated high in socioeconomic terms (eighth cluster and above); sixteen have a medium rating (4-7); and two are rated low (2-3). Finally, the geographic distribution of leading authorities is substantial: nine of the leading authorities are located in the Tel Aviv and Central Districts; 12 are located in the Haifa and Northern Districts; 5 are located in the Southern District; and 5 are located in Judea and Samaria. Overall, there is variability between the authorities leading the ratings in each area; nevertheless, there are also similarities between the leading authorities, as these tend to be Jewish and to belong to the upper socioeconomic clusters.

 Discussion

Israeli local authorities go to great length to provide optimal services and to improve the quality of services for their inhabitants. To do so, they need to measure the quality of services in order to determine whether they have been improved, both compared to a specific authority’s past performance and compared to others. Measuring local government performance provides information on the efficiency and effectiveness of public services. Measuring performance can help monitor the authorities – Are they doing what is required of them? Do they achieve results that can improve their inhabitants’ lives? This study offers several performance indicators that can be used by policymakers to improve the management of local authorities’ performance.

Performance indicators can be analyzed in various ways. First, naïve comparison between a specific authority and the local government average can provide an initial estimate of the performance abilities of that authority. A more focused comparison between the local authority and others in its reference group can provide more accurate estimates of its relative performance. Finally, examining each area separately will enable identifying the local authority’s main strengths and weaknesses. Examining each indicator separately also enables using the absolute data values, rather than just relative rankings.

The performance indicators presented in this study have various applications. First, administrators in the local authorities can use them to monitor the performance of the various departments. Second, central government ministries can use these indicators to monitor the effectiveness of programs to assist local government, as well as to focus their intervention plans on the authorities that need them the most. Finally, the inhabitants of the local authorities can use the performance indicators to monitor their local authority’s performance themselves.

Note that the performance indicators have several disadvantages: they do not refer to all local government activities, some refer to inputs rather than the results themselves, and they are liable to provide only a partial view of the authority’s actual performance. Therefore, we recommend applying them with caution.

Recommendations

• Increase the availability of additional data: Our consultations with professionals have suggested a shortage of data, particularly in the welfare area. We therefore recommend collecting and publishing data on the scope of welfare services in the local authorities, including services that are outsourced. For example, how many people are served in the community? How many programs does the local authority manage? How many services are provided by law (the local authorities’ minimum provisions)? We also recommend collecting data on the number of complaints from inhabitants on welfare issues that have resulted in cases being opened (i.e., have the individuals contacting welfare services actually been served)?
• Monitor performance indicators and publish the data: Given the importance of performance indicators for local authorities, we recommend regularly examining the performance of Israeli authorities to determine whether any improvement has been achieved, as well as making those data public.
• Help local authorities: The central government can use these indicators to monitor the effectiveness of programs to help local authorities, as well as focus its interventions on the local authorities that need them most.

[1] Ben Alia, N. (2006). A system of local authority performance indicators. Ministry of the Interior, Local Government Administration. (Hebrew)

Citing suggestion: Reingewertz, Y., Arad, A., & Zablotsky,  A. (2024). Performance Indicators in Local Authorities. RR-992-24. Myers-JDC-Brookdale Institute. (Hebrew)