News analysis CPAs show most councils are improving

15 Dec 05
In the end, the fear and trepidation proved to be largely unfounded.

16 December 2005

In the end, the fear and trepidation proved to be largely unfounded. The 2005 Comprehensive Performance Assessments, compiled using a new methodology, did not lead to the downgrading of councils that had maintained their performance over the past 12 months.

The Audit Commission's decision to consult exhaustively throughout the year on the new regime, launched under the banner 'CPA: the harder test', proved to be a wise move.

As it has turned out, the success story of previous years has in the main been repeated and most councils are broadly happy with their results. This is despite the concern, often expressed in advance, that authorities would go down a category if they merely sustained service levels rather than making further strides forward.

In the event, 106 of the 150 top-tier authorities were deemed to be 'improving strongly' or 'improving well', while 102 received four or three stars under the new two-part scoring system.

Click here for a list of CPA results at a glance (this will open up a new browser window)

But, while the headline figures will please ministers, one area of concern has emerged. For the first time, the new CPA methodology explicitly examines authorities' use of resources, and within that block, the value for money of the services they provide. The commission's sobering conclusion is that 46% of authorities are either below or just meeting the minimum standard required.

Speaking to Public Finance before the publication of the CPA scores on December 15, commission chair James Strachan emphasised that councils were going through a transition period as they adjusted to being judged against these criteria for the first time. 'These standards are needed and we've had a very positive reaction to them. Some authorities said they would find them difficult to meet in one year, but everyone agrees they can meet them over two,' he explained.

Which is just as well, since the commission will be launching a new consultation in the spring on whether CPA 2006 should include a new rule stipulating that an authority cannot achieve the top four-star rating if it does not score at least three out of four for value for money.

The watchdog had originally intended to include this rule in CPA 2005 but held back after strong opposition from councils.

Now Frances Done, the commission's managing director for local government, says it is 'minded' to go down this route for 2006. This year's results on value for money were 'cause for some concern', she says, adding that the commission would be emphasising high performance in this area in future.

'The key financial management issues, such as internal control and financial standing, need to be the concern of the chief executive and the leader of the authority,' she says. 'Financial management needs to have “kingpin” status within each authority.'

Done's comments are a pretty clear indication that from next year there will be a direct link between the value for money of services and a council's overall star rating, a link that will no doubt focus minds across local government.

But there are concerns about the methodology used to measure value for money this year, and these are sure to figure prominently in next year's consultation.

John Bolton, director of community services at Coventry City Council (improving well, two stars), told PF he has written to the commission to outline what he sees as the flaws. He cites the example of care for elderly people, where his authority places only a small number with complex care needs in residential homes. The commission's model takes no account of that, Bolton said.

'The concept is based on unit costs rather than the money that is actually spent, so if you have high unit costs but low volume you are penalised.'

Elsewhere, there is praise for the overall methodology used in this year's CPA.

Cheryl Coppell, the chief executive of Slough Borough Council (improving well, three stars), says that the new regime, which places greater emphasis on community engagement and partnership working, better reflects the experiences of councils that serve diverse communities with complex needs.

'It's a harder test but it's a fairer test, as it captures the added value that councils add to their communities,' she explains. 'For councils in challenging circumstances that's more favourable.'

One complaint from authorities, however, has not gone away and that is about the bureaucracy involved in the inspection process.

Steve Bundred, chief executive of the Audit Commission, told PF that the purpose of the regime is to 'promote self-awareness within local government'.

'We don't collect any information that is not used for other purposes,' he says. The information we use for CPA should be part of the normal performance management system for the council.'

Peter Rogers, chief executive of Westminster City Council (improving well; four stars), has a rather different view.

He says that the inspection regime has generated significant extra costs for his authority, in the region of £300,000 per year, including diverting staff from their core task of improving services. 'Either you give it a lot of attention and adopt the tick-box mentality, or you focus on service delivery and pay scant regard for what the inspectors say,' he says. 'Service delivery is where we should be focusing our efforts, not concentrating on ticking boxes.'

Strachan, though, insists that the CPA continues to be crucial in driving forward improvement in local government. 'This is a good news story. If you look back to 2002 when CPA started you will see just how many councils really have transformed themselves.'

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