This research, via case study investigation of the Islington Educational Psychology Service (EPS) examines the applicability of Performance Indicators (PIs) in the management of a professional service in the public sector. The research explores the theoretical and political basis for the introduction of PIs and tests their use by examining their strengths,w eaknessesa nd applicability within a local context. PIs are examined in relation to their usefulness in improving the efficiency and effectiveness of service delivery within an inner city service. Key issues investigated include: performance requirements linked to Special Educational Needs (SEN) resourcing, PIs generally in the SEN area, and clients/stakeholdersd emandso n the service. PIs are examined in relation to their impact on the short and long term delivery of the service. The investigation covers the period 1992-1999, though draws on data from 1990 and extension work undertaken in 2000. Utilising concepts from economic theory the research examines the psychological service input to schools, SEN input from the schools themselves and school output measures. LEA PIs are analysed to gain an overview of the strengths and weakness of the organisation and to determine priorities for the development of the EPS. The research includes the active participation on the part of the researcher/manager to generate and learn from the use of PIs. This exploration includes the attempt to construct a managerial model for PIs. The research is pursued by the generation of a series of case study questions. The experience of the researcher/manager is included as source data within the analysis. The research finds that PI systems are needed to measure `output' and `value added' as well as `input' factors. Also demonstrated is the need for the EPS to be more clearly linked to the meeting of national targets for raising achievement. PI systems are shown to be needed to facilitate team working, commitment and professional ownership, ensure appropriateness of tasks and to support professional re-alignment within the organisation. The research identifies the need for a local political as well as a professional framework for the consideration and selection of PIs. The research proposes a model for generating and selecting key PIs. At a wider professional level the researchd emonstratesw eaknessesin managerial as well as traditional professional control systems. Also shown is the limited potential of relying on client/stakeholder feedback to determine successful functioning of systems. The research demonstrates the need to address managerial, professional as well as client requirements. Key areas of concern are identified in relation to national and local policy. To address this, recommendations are made regarding policy at a national and local level in the use of PIs to assist planning, priority setting and control functions in order to deliver quality professional services in the short and longer term.