25 February 2005
Government plans for super-inspectorates could be fast-tracked if the Audit Commission loses its appeal against a judicial review.
Last week, the review declared it unlawful to apply the decisions of other inspectorates to its Comprehensive Performance Assessments.
The review, brought by the London Borough of Ealing, found that the commission had acted unlawfully by automatically applying its rule that authorities with a zero rating for social services can score no higher than 'weak'.
Ealing argued that it had scored a 'good' rating but the imposition of the rule, without negotiation, unfairly pulled it down two categories.
Mr Justice Walker said the commission 'had not applied its own mind' to the zero-star rating, given by the Commission for Social Care Inspection, and a body without the appropriate statutory power had 'fettered' its decision.
In a statement, commission chief executive Steve Bundred said the ruling was 'legally flawed'. 'If left to stand, the judgment could require us to second guess the decisions of other bodies, thus duplicating existing inspections and adding to regulation at a time when the commission has been working hard to reduce it.'
The appeal will be heard within three to four weeks to prevent delaying the ratings being put before Parliament in mid-March.
Should they be upheld, the review findings will seriously weaken the CPA process and put in question the government's gradual move to more strategic regulation.
Last October, there were suggestions that the government planned to reduce 13 inspectorates to just four.
Sources claim this could be an opportunity for the commission to pitch for regulatory control over social services and education, and speed up the plans. 'The commission could argue that it lost the case because it's not responsible for all inspections, and this could undermine CPA in the future.'
But in the short term, the ruling could lead to a root-and-branch review of CPA just weeks before the new 2005 methodology is due to come into operation.
Stephen Cirell, head of local government at Eversheds, the solicitors' firm which acted for Ealing, said the case could lead to challenges from up to eight other councils.
He said the commission's 'hardline stance' had prevented councils from taking action earlier.
'This reticence has had the unfortunate consequence of the commission getting away with it when it has got things wrong and promulgates the problems with CPA,' he told Public Finance.
PFfeb2005
