Scotland's local government spending watchdog rolls out best value audit

12 Jun 17

Scotland’s local authority spending watchdog has rolled out a new kind of audit, designed to give the public clearer and more systematic assurance about the progress their councils are making to improve their leadership, governance and effectiveness.

The Accounts Commission’s first Best Value Assurance Report (BVAR) found a generally positive performance at Inverclyde Council, but said the authority needed to do more to relate improvement and partnership activities to outcomes.

Five more councils will be BVAR-audited this year, and every one of Scotland’s 32 authorities will go through the process at least five-yearly.

Councils are already audited annually on the Commission’s behalf by Audit Scotland. Following the adoption last year of a new code of practice the annual process will now include elements of Best Value alongside the more traditional financial assessments, and the results will appear in the annual audit report for each authority.

The BVAR audit comes on top of that regular process, and will take a closely focused look at issues such as leadership, governance and performance against a range of improvement measures.

Ronnie Hinds, the Commission chair, told Public Finance that the new approach had been developed in consultation with local authorities, and was generally welcomed by them. “We think it’s quite a significant change,” he said.  “Best Value was introduced in 2003, and a lot has changed since then.”  

Changes include growing pressures on councils to adapt to tighter resources – for example,  through more partnerships, joint working, and preventative spending – and to engage more directly with the public. Questions of governance have also moved up the public agenda.

Best Value places a statutory duty on councils constantly to improve their performance, and the definition is currently under review to reflect changing circumstances.

“These new reports will give local people a detailed and rounded insight into how their council is performing,” Hinds said. “We hope this provides each council with an important foundation to help shape and improve services for the future.”

Hinds said that the Commission was determined to audit for Best Value more systematically than in the past: “The previous approach was to follow the failings,” he said.

“If someone got a bad report, we would follow it up.  That meant that some councils were missed out for a decade.”

The new approach would make better use of Audit Scotland’s own resources, by integrating Best Value assurance with the more routine audit process, instead of “sending in the Praetorian Guard” where Best Value performance was in doubt.

“This is not intended to be an additional burden to local authorities,”  Hinds insisted. “”It will feel more joined-up to the councils as well as giving us better use of our expertise.  And we will continue to refer back to previous reports.”

Commenting on the specific Inverclyde report, Hinds noted: “Even a council that we regard as performing well does struggle with making a connection between the work they’re doing to improve services and the investments they’re making on the one hand, and on the other hand how that’s impacting on the broader outcomes for citizens.”

The outcome agreements system of setting objectives for councils has had its critics, with some arguing that the goals can be woolly and ill-defined.  Hinds acknowledged: “That is one of the things we are talking to councils about.

But he added: “It would be wrong for the Commission to tell them what they should look like.  It’s is for [the councils] to work that out, and then demonstrate it back to the Commission. If you’ve got the right measures, you should be able to show that you have improved the outcomes.”

Asked whether councils did not have enough to do just managing austerity without having to adapt to new audit procedures, Hinds said he hoped it would not be a burden: “We have undertaken pretty extensive consultation with councils and the feedback we’ve got from them on developing this new report was generally very positive.

“I think what they feel is that it’s increasingly relevant to what they are doing.”

  • Keith Aitken
    Keith Aitken

    covers Scottish affairs for Public Finance from Edinburgh. He was formerly economics editor and chief leader writer on The Scotsman and now has a busy freelance career as a writer, broadcaster and event chair.

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