Public Services Management: Along the MBA way: Does the public sector need more masters in business administration? Sarah Hegarty investigates

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The Independent Online
FOR a health service employee Elenore Fuchter has a rather unusual pedigree. Before joining Central Middlesex Hospital Trust as a project manager she worked in the private sector as a geophysicist for BP.

Ms Fuchter, 42, made the move into the health service via an MBA, which she took in 1990/91 at Imperial College, London. 'I did it because I wanted to change direction and career,' she says. She was not aiming specifically at public sector work, but was interested in organisational development and the management of change and did her MBA project in the hospital where she now works.

If the pundits are to be believed Ms Fuchter is one of hundreds of public service employees who are studying for, or have completed, MBAs. 'It's true to say the numbers are rising,' says Roger McCormick, director general of the Association of MBAs. But firm figures are hard to find. And does having an MBA really count for anything in the public sector?

'An MBA is no longer a passport to megabucks - it isn't really a passport to anything,' says Ms Fuchter. 'And although many people do it to change career it very rarely happens that way. But I found it extremely helpful to my new job in terms of general awareness. Before, I was doing a highly technical job in a highly technical field. Although I was well read, I was not so well up on things like human resources management and organisational behaviour.'

According to a salary survey carried out for AMBA, 10 per cent of MBAs are employed in education or other parts of the public sector. The survey also found that in the public services there were 50 per cent fewer in-post than pre-post MBAs - suggesting that it is used as a way out of the public sector by some. But Mr McCormick counsels against leaping to that conclusion. 'MBAs in the public sector are a relatively new beast,' he says.

And some public service professionals are positively encouraging MBAs to join up. Jeff Simcox, chief business development officer with Teesside Development Corporation, says modern public services need the skills offered by MBA graduates. 'Local authorities no longer have the luxury of organising their operations along functional lines. And in the last few years, virtually all public sector organisations have moved towards doing something on inward investment and economic development. Both those changes bring a need for multidisciplinary people.'

As for salaries, he is confident that development corporations, at least, are comparable with the private sector. 'The public sector is becoming more like the private sector - it's no longer possible to have job security, but salaries will be better.' Although not an MBA graduate himself, Mr Simcox is clear about the qualities it imparts. 'It gives general management capability, awareness of figures, and an awareness of marketing.' But he has no illusions about the dearth of MBAs in public services. 'I've worked for three public sector organisations and been involved with dozens of others and I can't think of any that employ an MBA,' he says.

Local authorities are in fact currently debating the issue, says Helen Dawson, head of management practice and development at the Local Government Management Board. 'There is a level of debate, but it's not very public yet.'

The board recently published the results of its inquiry into the future of local government management. 'One of the big questions was (whether) a formal qualification, such as an MBA, was desirable for local authorities,' she says. 'The answer seemed to be no. Because local authorities are very different, management and training development is best developed in-house.' Another factor against local authority-funded MBA study would be the financial constraints, she adds. 'MBAs are very expensive, and local authorities are strapped for cash at the moment.' There is also the equal opportunities angle: an MBA might be seen as an option for too few staff.

The LGMB is more keen to see competence-based approaches to management development, such as the Management Charter Initiative's levels of achievement, says Ms Dawson. 'MBAs have a part to play, but don't tell you much about a manager's competence.'

But many public service employees see an MBA as a way of broadening their experience. For Keith Purvis, principal accountant with Gateshead council, opting for public service elements as part of an MBA would have seemed like 'more of the same'. He deliberately chose to study for a general management MBA at Newcastle University. 'I wanted to get a wider perspective,' he says.

Mr Purvis, 32, did a three- year course which cost pounds 1,500 a year - paid for by the council. He says the course was hard work. 'The first two years are day release, and the third year you submit a 15,000-to-20,000-

word dissertation.'

At the same time, he was coping with a demanding job. 'I was working on the 'community charge' at the time and the work commitment was immense. Something had to give. My wife didn't see much of me.'

Although Mr Purvis chose a general MBA, he found the lack of public sector understanding irritating. 'They could not seem to get to grips with the mechanism of decision-making in local government. But it was good for me to see how other organisations managed their production and operations.'

Interest in learning from the private sector is a major factor for public service employees pursuing an MBA, according to Professor Colin Carnall of Henley Management College. Research he carried out last year found that public service people wanted to do a general management MBA but with a public service stream. 'For example,' he says, 'accountancy systems are different.'

The college started offering a course with 25 per cent public service content last year, and currently has around 40 public service employees enrolled specifically on that stream. But Professor Carnall admits that it is difficult to know how far an MBA can take you in the public sector.

'There is some evidence that having an MBA will make some difference. But our graduates are typically 36 or 37, with a good track record anyway. It is difficult to untangle what actually gets them the job.'

And whether public sector employers are geared up for MBA graduates is unclear. 'A lot of senior managers don't know what it entails at all,' says Keith Purvis.

Elenore Fuchter thinks that is down to the culture of the UK: 'MBAs are much more recognised on the Continent,' she says.

Both graduates say that for the time being they will stay in public services. Mr Purvis, at least, is obliged to: his course fees have to be repaid if he leaves local government. And Ms Fuchter wants to stay in the NHS to build on her skills and experience.

But what after that? Despite the much talked-of need for mobility between public and private sectors there is still little evidence that public service employers recognise that need or embrace the skills offered by MBAs. It seems the growing numbers studying on courses across the country should be clear they are doing it for their own satisfaction, and not for speedy career progression.

Roger McCormick agrees, saying: 'The jury is still out on whether they will find room in the structure.'

(Photograph omitted)