Examination of Witnesses (Questions 60
- 77)
TUESDAY 25 JANUARY 2000
MS INES
NEWMAN AND
MR DAVID
SPENCER
Mr Benn
60. Just on that very point, do you think that
the approach that the Audit Commission is going to adopt to inspecting
Best Value will be sufficiently flexible to accommodate the fact
that local authorities are going to approach Best Value in different
ways on the evidence so far?
(Mr Spencer) From what we hear, from what the Commission
is saying, that gives hope that might actually transpire. There
is some evidence from the Best Value pilot that those authorities
have sometimes had difficulty putting across why they are doing
things in a particular way. One authority feels that it is adopting
a thematic approach to improving the quality of life for older
people and the inspectors being somewhat bemused because the grounds
maintenance service was foremost in the authority's review programme,
to make those connections between what contributes to that thematic
approach. I think it is going to require a certain openness on
the part of the inspectorate that there are going to be these
sorts of challenging approaches that people are taking and it
is not always going to be very straightforward about why an authority
is doing X and not Y, why it is reviewing things in this particular
way.
(Ms Newman) Our particular concern is with the cross-cutting
issues, a concern really that the Audit Commission will not always
have the expertise to judge. It is very simple when it is one
service and you have got clear output targets but when you are
going into cross-cutting issues it does become much more complex
to judge and it requires a wide range of skills. We have seen
it to some extent in economic development where they have just
produced a report on A Life's Work and it is an excellent
report on how lots of local authorities have not clearly specified
what they are trying to achieve and have not gone down the line
of being very clear about their processes. The report itself falls
back, in a way that inspections tend to, on measurable efficiency
type targets and fails to deal with things within economic development
like relationships with employers to generate new tasks, the role
of the public sector as an economic development agency, the importance
of social inclusion. If you start getting into those sorts of
complex issues that is where it will struggle in this process
much more than potentially has been realised in the guidance.
It is in that context where we feel there needs to be a better
relationship—going back to Louise Ellman's question—between
the local authority and the Audit Commission and the balance of
inspection between the two. There does need to be some recognition
that sometimes the local authority will have the expertise on
which to judge some of these issues and the Audit Commission's
view is helpful and can judge certain aspects. We are concerned
about how that will all pan out in reality.
61. Do you think that the local electorate,
local people, are sufficiently aware of the results of the audit
work on individual local authorities that the Commission is currently
undertaking? Is enough done to publicise that locally?
(Mr Spencer) I think we would say that they are probably
not as aware as they might be.
62. Is there any advice you might give your
member authorities as to how they might make the public more aware?
(Mr Spencer) It is always going to be helpful if inspectors
can find it in their hearts to say "we have inspected this
authority and we have found it to be good".
Chairman
63. But if they said that would anyone report
it to the newspapers?
(Mr Spencer) I think a lot of newspapers would report
that. Coming back to what people have said as a result of the
field trials, some have been somewhat disappointed to find that
the main outcomes seem to be a list of criticisms which the authority
was fully aware of and had plans in mind to deal with. It was
not being given credit in the way that it thought it should have
been, the emphasis was more on finding criticism.
(Ms Newman) I think one of the things we are very
keen on is that the Audit Commission in their inspection should
not rerun the reviews. We would not want them to go out and do
a full public consultation exercise, for example, "Here we
are, we are inspecting this service. Come and tell us how it should
be run", I think that would be inappropriate.
64. Provided the authority had done that already?
(Ms Newman) Yes, and it should be encouraging the
authority to do such a thing.
65. Do you have any particular views on the
process by which individuals are able to challenge a local authority's
accounts and audits? There have been various cases of long-running
battles. Just the process from your local authority's point of
view.
(Mr Spencer) To be honest we have not gone into the
financial auditing aspect of it. We have been more concerned about
saying it is the role in terms of Best Value and service delivery
rather than financial auditing.
66. Because one of the issues we have been discussing
today is to what extent the verdict of the electorate is the thing
that counts in the end as opposed to an audit, do you think local
authorities are finding it difficult to accommodate those two
different pressures, those two different sources of accountability?
(Mr Spencer) They seem to be preparing themselves
for what they expect auditors to be asking. I guess in a sense
they are looking away from what the electorate is saying outside
the context of inspection but looking to the outcome of the inspection
and how that might be presented, almost getting their retaliation
in first.
Mr Olner
67. A couple of things. Could I ask whether
your organisation represents any parish councils?
(Ms Newman) No.
(Mr Spencer) No.
68. Fine. Performance indicators have been with
us now, with the Audit Commission, since their introduction in
1992. What impact do you think they have had, real or imagined?
(Mr Spencer) Imagined largely. The criticism has been
that they have not really got to the heart of what quality of
service is. It has been a number crunching approach saying "how
many, how often, what sort of frequency?", not "is this
a quality service?" It predated the emphasis on the cross-cutting
approach saying what matters is people's perception of what they
are receiving in total rather than in individual chunks and, therefore,
what that indicator is measuring. I think it is a difficulty now
with the Best Value performance indicators that there are quite
a large number of them but authorities are also being encouraged
to develop their own local indicators. The fear we have is that
there is not the space for authorities to develop those and those
are the crucial ones.
69. So you are really saying that the performance
indicators are not really relevant, it just depends what they
pick up, that there are too many issues there the local authority
cannot control and make it up?
(Mr Spencer) The difficulty with indicators is if
you have too many and too much emphasis given to them then it
becomes overburdensome and you spend your entire time dealing
with the information to report on those. If you do not have as
many and you have greater latitude to decide on what you think
is important, what should be reported, you can get too sketchy
a view of the performance of that body and you are lumping too
many differing bodies together, making judgments about a small
district council and a metropolitan authority all in the same
breath.
70. As you have said previously, Best Value
is still very much in its infancy, it was only introduced in April.
In view of what you have seen and read about Best Value do you
think that the Best Value indicators are going to be as outdated
as performance indicators? Do you see any difference between the
two?
(Ms Newman) If they are local, I think that is the
fundamental difference we see, if there is space there for people
to develop what they feel is an important local indicator. The
problem is you cannot compare local indicators and there is always
a tendency to push down a set of national ones so that you can
do these comparisons. We feel it is important to have a focus
on outputs and outcomes and to have some qualitative and quantitative
measures of what you are actually achieving. I do not think we
are opposed to indicators as such.
71. Seeing as your organisation represents a
diverse number of different local authorities, do you think the
Audit Commission should criticise central government on its distribution
formula to various local government authorities?
(Ms Newman) I do not really see that as its role.
Mr Olner: But a lot of what it audits stems—
Chairman: Nuneaton has some special problems
in this area.
Mr Olner
72. As does Warwickshire, I have to say, a shire
county. I know your Unit is made up of both shire counties and
metropolitans.
(Ms Newman) Yes.
73. Surely what they are able to achieve and
deliver is based on the money that is available to them from central
government and how it is distributed within the formula? Surely
the Audit Commission should have a view on that?
(Ms Newman) It is quite invidious but I would not
like for them to have a view on it. There would be a legitimacy
in them having a view that a particular service was under-funded
and therefore could not achieve its outcomes because of funding
problems.
Chairman
74. It is fairly fundamental, is it not, the
variations that local authorities get in the amount of money they
have to spend and if you do not make that somehow into the formulae
when you are measuring it is fairly difficult? Can I ask you,
Value for Money and Best Value, two processes, can you justify
both of them?
(Mr Spencer) I think as it develops the Best Value
regime ought to become the predominant one if that has a more
rounded view of what the outcome should be.
75. Should Value for Money stay on as an historic
relic of something which is done or just scrap it?
(Mr Spencer) I would have thought an inspection in
the context of Best Value ought to take into account Value for
Money. I cannot see how you can escape having a view on that as
an inspector.
(Ms Newman) But only as one factor.
76. As far as industry is concerned, over the
years you go from a process in which you measure output continually,
start paying piecework and all those sorts of things, and then
suddenly that goes out of fashion and you look at a day rate,
overall performance. Do you think we are going far too far down
the way of spending money, measuring what local government is
doing rather than looking at what the electorate thinks it ought
to be doing?
(Ms Newman) We are not in favour of money being distributed
to local authorities according to performance. We feel that very
strongly. We feel that money has to be distributed according to
need, not performance. I do not know whether this comes back to
your question as well. The function of the Audit Commission and
the IDA is to ensure that a local authority spends that money
well, it is not to penalise it if it spends that money badly.
We are concerned that there is an increasing move towards special
grants, money being allocated for specific purposes, discussions
around money being allocated according to performance which we
feel is not the way it should be going through the local authorities.
77. So you think there is still a role for local
government rather than local administration, central government
grant?
(Ms Newman) Definitely.
Chairman: On that note, can I thank you very
much indeed.
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