Value co-creation in public services: towards an integrating framework

This is a theoretical paper. It addresses what we believe is a major gap in the conceptualisation of public services delivery - that is an appreciation of the dimensions of 'value' in public services delivery. This... [ view full abstract ]

This is a theoretical paper. It addresses what we believe is a major gap in the conceptualisation of public services delivery - that is an appreciation of the dimensions of 'value' in public services delivery. This appreciation is based within the Public Service-Dominant Logic (PSDL) framework (Osborne et al 2013, 2015) and draws upon the extant service management theory to help understand the nature of value creation and co-creation within public services delivery.

The paper is in four parts. The first part explores existing approaches to identifying the 'value added' in public services delivery. These include performance management, social audit, SROI, 'Best Value' and public value approaches. We argue that these are all partial, atheoretical, and/or flawed in their approach. This is partly because they operate primarily at the operational rather than strategic level, partly because they are only illuminate one dimension in their appreciation of value, and partly because they lack an over-arching framework to understand the true nature of 'value' in public service delivery and the processes through which it is realised.

In order to provide such an over-arching framework and to address these weaknesses, part two of the paper draws upon service management theory. This explores the relationship between service producers and service users and their respective roles that both play in creating value in a service encounter (Vargo & Lusch 2006, Gronroos 2010). A central element of this approach is that it is the service user who creates value in any service encounter, using resources provided by the service producer. This inverts the traditional public administration approach which conceptualises value as deriving from professional knowledge and expertise and its application to service users as 'clients'. Further it moves beyond the Product-Dominant Logic of the New Public Management which separates value production into two quite separate processes of production and consumption. In a service encounter these processes occur simultaneously and in interaction - and it is through this interaction that service users and producers both co-produce public services and co-create value.

Consequently part three of the paper considers the implications of this approach for understanding how value is added in public service delivery. Building upon Osborne et al (2016), it argues that the value of a public service is created by the service user, integrating resources provided by service producers and professionals. This can exist across a number of dimensions including individual welfare, social and public good, and individual and social capacity to create value in the future. A range of examples from public services delivery are used to illustrate and substantiate this analysis.

In the final part of the paper this holistic theoretical framework is then used to interrogate existing approaches to value. It argues that whilst each of these is partial, integrating them within this holistic framework provides a more sophisticated, strategic, and realistic understanding of how value is created in public services delivery for both the individual user and for society. It concludes by considering the implications of this for theory and practice.