18 January 2008
The 'use of resources' element of the Comprehensive Performance Assessment has led to a dramatic improvement in council services. But it won't be stopping there. In fact, it's set to play an even larger role under the new area assessments. Cliff Dalton explains
There is little doubt that the Audit Commission's focus on local government's use of resources has spurred real improvement in performance over the past few years. Concentrating on the five main themes – financial reporting, financial management, financial standing, internal control and value for money – has given rise to a positive environment of challenge, review and innovation in authorities, which would surely not have happened otherwise.
Local government has transformed its performance to such an extent that four out of five single tier and county councils now have three or four stars under the Comprehensive Performance Assessment. In the 2006 results, published in 2007, almost a third of councils achieved a higher 'use of resources' score than in the preceding year.
But councils cannot afford to rest on their laurels. From 2009, the CPA will give way to Comprehensive Area Assessments. Under the CAA, the scope of the 'use of resources' judgement will be widened to reflect the public's experience of service delivery, regardless of whether the provider is from the public, private or third sector or a mixture of all three.
There will also be a broader definition of resource use, to include natural resources, people and information technology, and an added emphasis on sustainability and the council's approach to managing and minimising its environmental impact.
This restructuring will include the rationalisation of the five main themes to three – managing money, managing the business and managing other resources. The chances of poor performance going unchecked by the commission will become much less likely with the potential for a more complete assessment through joint working with other watchdogs, including education and children's inspectorate Ofsted and a new health regulator.
In such circumstances, it's important to know how councils have handled the process so far. Some authorities have been demanding of their staff (and members) to do whatever is necessary to achieve the top score of four across all themes; others have set their sights a little lower – perhaps to ensure the minimum standards of level two are met; a few have been looking simply to improve on the previous year's score and help show some real improvement in performance; while a handful have aimed for a suite of scores that will allow some bragging over a neighbour or other authority family group.
But whatever the approach, those most involved at the sharp end are aware that the inspectors continually aim to raise the bar. Last year's consultation for the 2007/08 assessment year perhaps best makes this point. The spring review of the 2008 assessment included proposals to toughen the minimum standards at levels two and three. It was planned to move some level four requirements down to level three, with a similar migration from level three to two.
Post-consultation, the commission has agreed to postpone these plans, but many look likely to find their way back under area assessments, as the proposals show a clear signal of intent for the future.
Indeed, it is not just in the scoring thresholds that the bar is being raised. Individual standards have been evolving over the years to ensure a more challenging baseline. For example, detailed plans are now expected, rather than simple monitoring and reporting, and named individuals are now cited to monitor and resolve issues, where simply accepting corporate responsibility was previously enough. In addition, actual compliance with policies is now the minimum, instead of simply having policies. There is also a much greater emphasis on consultation and governance – especially in relation to partnership working, where simply identifying significant partners was previously enough. And so it goes on…
Certainly, it is difficult to argue against the merits of these rising baselines in performance. We are a world away from what was considered acceptable in 2002 when the CPA first broke on to the scene. The challenge now is more about how sustainable this current drive in improvement will prove. Last year's Comprehensive Spending Review has given authorities very little in terms of real-terms growth for the next three years and organisations are unlikely to have new money to drive further improvement. Indeed, with more challenging cashable efficiency targets shadowing the settlement, the priority for many might simply be to keep current funding levels up.
So further and continuous improvement in performance will need to come from existing resources at best, and it is this realisation that many authorities and practitioners are coming to terms with. It's a tough demand, yet one that becomes more achievable once you look around at what is being done elsewhere. It is not simply about ticking an auditor's assessment box – it is about taking a fresh look at what your authority does, challenging the status quo and considering more innovative ways of doing things in the future.
Perhaps the best starting point for anybody needing help in this area is to solicit other authorities' views and experiences. It's five years since the earliest 'use of resources' assessment and there are plenty of examples of good practice that others can learn from. And, given the new common assessment base, there will never be a better time to share these messages across the whole of local government (and beyond).
No one person or authority has the answer for everything but you would be amazed by the improvements that might come from a slight change in approach, process or reporting arrangement suggested from elsewhere.
We have been working on this area within CIPFA's Finance Advisory and Performance Improvement networks and have come across examples of innovation that are worth sharing. A leading light is St Helens Council, which has developed an in-house financial system to aid early closedown through the use of electronic working papers, document imagery, hyperlinks to council reports and a dedicated section of the authority's database that gives a clear audit trail between ledger entries and source documents.
St Helens is very clear on how to maintain standards when considering its staffing structure. It has a high proportion of qualified accountants across the devolved accountancy function, who take part in monthly network meetings; undertake regular training on technical changes; have annual Statement of Recommended Practice reviews and attend away-day exercises to keep up to date.
West Devon Borough Council is another authority that does well with early closedown and benefits from close working with external auditors. It has found that clear electronic working papers and remote access to the authority's database enable much of the audit work to be done off-site. This speeds up the audit process and also helps to reduce audit cost and officer time on the process. Like St Helens, West Devon also insists on high-calibre staff, with all senior officers being qualified accountants.
And then there is Wigan Metropolitan Borough Council, which, among other things, gets top marks for managing performances against budgets. Members are fully trained in a scrutiny role. They carry out regular risk-based reporting, understand the main cost drivers and work closely with neighbouring and other top-class authorities, most notably East Riding of Yorkshire & Salford City. Wigan is particularly good with regards to regular and clear communication, typically involving unions, managers and even the Chamber of Commerce.
What we found, then, is that if you're looking for some quick wins in performance, or even something a little longer term, a phone call or two to other authorities might prove a very small price to pay. A visit is better still, as it will reveal the culture and environment that drives good performance and will enthuse you to push through any changes that might be warranted.
Whatever comes in the months and years ahead and however high the performance bar might be set, there has never been a more appropriate time for practitioners to take that leap of faith and look towards their peers for help and support. Certainly, CIPFA's networks will continue to help in this area. They might not find all the answers, but they'll get more from the exercise than they would have expected. And if it leads to a better relationship with other authorities, the private and third sector, they will not only be truly buying into the current improvement agenda but we might also all get a better deal as council tax payers.
Cliff Dalton is the senior manager of CIPFA's Policy and Performance Networks
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