26 May 2006
Providing choice in local services can improve financial efficiency rather than add extra costs, the Audit Commission is claiming.
The local government watchdog's report, Choosing well, published on May 24, cautions that choice must not be achieved at the expense of other policy objectives, such as value for money or social equity. But the commission argues that they can co-exist.
It cites direct payments, where clients are given the money to buy care services themselves, as an example where choice could improve service and efficiency.
According to the commission, direct payments lead to greater efficiency by cutting the cost of administration and staff, while providing appropriate advice and support to users can safeguard service quality and equity.
Choice-based housing lettings, as an alternative to the traditional waiting list approach, can similarly improve value-for-money by reducing the amount of time properties lie empty, the report said.
But Sir Michael Lyons, the commission's acting chair, warned that authorities needed a clear 'understanding [of] the economics of choice and competition' before moving in that direction.
The commission is sharpening its focus on authorities' effective use of resources after last year's Comprehensive Performance Assessments found the performance of many was not up to par.
But Lyons told Public Finance the watchdog would not assess authorities' performance against choice criteria. 'In an era of less inspection-led activity, we think this is broadly an area for citizens themselves to decide if authorities are offering enough choice and to have that debate,' he said.
PFmay2006
