New Labour was famous for its use of centrally imposed targets to improve public services e.g. no school in Britain should have less than 40% of students gaining %A*-C including English and Maths. Other examples include A&E waiting times of less than 4 hours and GP appointments within 48 hours. The problem is that when performance (and pay) of public servants (teachers, doctors etc) is based on meeting these targets, these public servants might respond in a way that is not in the intrests of the public (i.e. they are subject to perverse incentives).
An example of that would be a school entering all its students for English and Maths GCSE in January so that they can retake in June if they miss out on a C. The problem is that a student who might have got an A in June is forced to settle for a C in January. The school has met its target, but the student suffers. The same is true for A&E departments making ambulances wait outside with their patients so that they can hit the 4 hour target, GP surgeries only taking appointments on the day, and police forces failing to report crimes which don't suit thier figures.
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