Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witness (Questions 463-479)




  463. Can I welcome you to the Committee and can I ask you to identify yourself.

  (Mr Kirby) I am Paul Kirby, Director of Inspection of the Audit Commission.

  464. Do you want to say anything by way of introduction?
  (Mr Kirby) I would say something briefly which is to say that the Audit Commission welcomes the CPA partly because it thinks central/local relations need to be made much more effective and partly the regulation is too fragmented and could not work as well it should do and we welcome the CPA system to move it forward. The CPA gives us a chance to bring together lots of information across many inspectorates, hundreds of performance indicators, work done by auditors, plans which are assessed by government and it is the first time they have ever been brought together. Not only does that give a new picture of local government, but it actually shows the sheer scale and, to some extent, dysfunctionality of the current regulatory system and we think that is now prompting the pace of reform of regulation with recent new energy. In terms of our progress with the Comprehensive Performance Assessment, this year we are working on the upper-tier councils, the education and social services authorities and we are about half way through the process of gathering the information we will need to publish those judgments in December, but we are seeing this very much as a one-off process for this year that CPA is a means to an end. We are not looking to set up an institution and there has not been any additional cost. It has been done instead of other audit inspection work. However, if you are on the receiving end of it in these months, which is really May to September, a range of work has been brought together at the same time and that does put a temporary burden on councils, but really on the other side of this, we are very committed as a Commission to significantly reducing audit and inspection work around a large number of councils as a result of the Comprehensive Performance Assessment and I think we are in a temporary moment of extra burden. We are out to consultation at the moment with local government about how the different judgments should be brought together into the overall assessment for later in the year and we will take judgments on that in the autumn. We are also out to consultation on the approach which should be taken for shire district councils, including the timetable and whether doing it in a year is a sensible thing to do, but also whether a completely different approach to that we have in the upper tier. Lastly, in terms of CPA I think we are seeing it as a one-off exercise. I would not want anybody to think that the book is closed on how it will be handled in the future. This is particularly an exercise which is bringing together existing information, existing approaches with the purpose of reforming the regulation rather than continuing it.

  Chairman: Thank you very much.

Mr O'Brien

  465. We are told that the Government needs to move quickly to establish a new model of inspection for local government based on co-ordination, proportionality and effectiveness. How far have you got in introducing this programme?
  (Mr Kirby) Well, we are, I think, seeing the CPA as a means of doing that. The five or six inspectorates working on local government have run entirely separate programmes until now. The inspection work has been separate from audit work. The 40-60 statutory plans that people submit to civil servants to assess are separate again and separate people set performance indicators. This is the first time that we have brought those things together, so that, for example, in an area like housing it is the first time that the people who have set performance indicators, who determine inspection and who require strategies and plans to be submitted have come together and thought, "How can you form the right judgment around housing and how can we reform that for the future?", so there is debate going on in each of the service sectors about the right way forward. Secondly, there is a debate about what sort of audit inspection you would have with each category in the future. From an Audit Commission point of view, as one of the major inspectorates, we have said that there would be no inspection for three years with an excellent authority, and those authorities in the next category, on a five category model, in the good category, should expect to have about 50 per cent of what they have currently and that we recognise that even in poor performing authorities keeping up high levels of inspections does not necessarily address the problems. New proposals are being worked out with Government and with the Improvement and Development Agency to better support poorly performing authorities rather than just keep inspecting.

  466. How does that fit in with the Government giving various inspectorates until June 2003 to have the new inspection regime in place? In view of what you have just told us, why is it taking so long?
  (Mr Kirby) I think there is a real impetus given by the CPA that has not been given before. One of the commitments in the Local Government White Paper was that at the end of the CPA—so in this case at the end of the autumn—each authority would have a bespoke inspection plan for the first time produced by all the inspectorates working together. Currently we are piloting that with ten pathfinder authorities to roll out to all 150 upper tier councils this autumn. That really has two new dimensions to it. Firstly there is the categorisation, so for potentially ten or 20 per cent of councils there will not be any inspection at all, for a larger number a significantly reduced amount but, secondly, many of the issues which local government want inspecting actually are cross cutting across the inspectorate. So, for example, people are keen for us to look at their work with local partners on community safety, for example, it can include education, social services, environment and other factors. For the first time, what is coming out of CPA, we are talking with the councils about what they would like to see inspected and how the inspectorates need to get their act together.

  467. Why is it taking so long?
  (Mr Kirby) At the moment it is going with great pace. It is on target for being there for the end of this year.

Chris Grayling

  468. Have any councils actually asked you to inspect them which are not currently being inspected?
  (Mr Kirby) Yes.

  Chris Grayling: You are getting serious requests from councils for more inspection?


  469. No. What you are doing is you are doing the overall assessment, are you not, and what councils are saying is that in trying to score good points in the overall assessment they want the goal average to be taken into account as well as the things you are inspecting?
  (Mr Kirby) Yes, that is true.

  470. That is really why they want more inspections?
  (Mr Kirby) No, no, sorry. I am referring to councils who by the categorisation will quite probably either have no inspection that is mandatory or a reduced amount of inspection. A large number of councils welcome inspection. I am here arguing that inspection should be scaled down significantly, and it has grown out of proportion and it is fragmented, but eight out of ten councils say in polling that inspection makes a positive impact on service improvement.

Chris Grayling

  471. We have heard this morning evidence that suggests that the CPA will paralyse local authorities.
  (Mr Kirby) Okay.

  472. That has been reinforced by our previous witnesses. There is a slight contradiction in this exciting picture of councils begging for inspection and less regulation.
  (Mr Kirby) If I could address that point. There are two things. One is, I said in my introduction, there is a temporary burden at the moment which is that all councils are undertaking an inspection called a corporate assessment, which is to look at what is the council's corporate capacity to improve its services. That is very important because if councils have that capacity, and clearly many do, then there is not a need for the Government to keep going around, or inspectorates, looking at each of their service areas because they may be under-performing but they have the capacity to turn those services around themselves. All councils are having that. What that involves is the council filling in a self-assessment which is 20 pages long, and councils complain it is too short and that actually they were expecting something more bureaucratic. It asks four questions of the council. What are you trying to achieve in your own priorities? What strategies have you taken? What progress are you really making? Councils are saying that has been the biggest learning for them for many years, actually facing up to whether what they are doing is demonstrably having an impact, because people are working very hard but does it make a difference. Fourthly, in the light of what you have learnt about your real progress, how are you managing your priorities for the future? Everybody is going through that. The reason why people are putting big resources into it is because they feel very sensitive about the judgment. This is a judgment not just about the service area but in effect about the leadership of the council. Therefore, people are choosing to put huge amounts of time into preparing for this assessment. There is no requirement to do that, we are not asking people to prepare new documents or to do anything different but people clearly feel sensitive about it. My one point on that is this really is a one-off exercise. We are not looking to institutionalise this and as a result of this exercise a great many people, hopefully all to differing degrees, will get less inspection in the future. Many people do ask us to do particular inspections to get at issues.

Mr O'Brien

  473. Can I follow that through, Mr Kirby. If we have to have better institution and coordination of inspection will that need primary legislation?
  (Mr Kirby) Not necessarily. The approach which we are taking at the moment is a cooperative one between inspectorates. There is an Inspectorate Forum looking at these issues. Clearly individual inspectorates, particularly service inspectorates, have quite strong policy agendas set for them by ministers in the Social Services Inspectorate and Ofsted and it is a genuine question as to how that works through.

  474. Can we strengthen the institutional arrangements voluntarily or will we need something in the Bill?
  (Mr Kirby) In the White Paper ministers expressed the view that they were impatient for more coordination and for less fragmentation and that there was the chance for the inspectorates to get their act together around the CPA and if they did not do that they would look at institutional reform. I think that is something which ministers should keep under review.

  Mr Cummings: How many extra staff do you require and what are the associated costs of this exercise?

Sir Paul Beresford

  475. Can I add to that and ask what is the establishment of the Commission now compared with five years ago and who is paying?
  (Mr Kirby) Okay. Could I start with Sir Paul's question and work back then. The Audit Commission spending on local government in England is of the order of £130 million a year. That has doubled since 1998 so it has grown clearly to a large degree, and the establishment has grown pro rata. We are very conscious that the Commission will need to scale back its level of activity as part of reducing the over-burden of regulation and its fragmentation. The actual CPA activities involve no extra cost and no extra staffing. This year we have been reducing the scale of inspection. The actual cost of the corporate assessment, which I think is what many of your witnesses have referred to, the two week inspection, works out at about £12 million in total, so approximately one-tenth of the Commission's work this year with local government, but we have displaced other planned inspections to do this work so there is no increase in inspection, there is no increase in resources. Clearly the Commission has grown very significantly in the last few years.

  476. Have you any estimate of what it is costing local authorities?
  (Mr Kirby) I would go back to the point I made to Mr Grayling's question that we are not asking the authorities to put extra resources into this. Clearly there is time to meet us on site when we are there during a two week period.

  477. You are not going to tell me you think they just sit there and wait for you?
  (Mr Kirby) No. What we have been very conscious to learn from some of the bureaucratic difficulties around best value is not to specify processes by which people do self-assessments. We have literally just said "However you want to do this is up to you. We are asking for something short. We want to hear what your view is and we do not want more than 20 pages, if you produce any more we will not read it". Then we try to learn some of those lessons. What I am not disputing at all is that this is a very sensitive issue.


  478. It is often quite difficult to say things shortly and concisely.
  (Mr Kirby) Absolutely.

  479. Rather than take a long time and say very little.
  (Mr Kirby) I have probably just demonstrated that in some of my answers.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 30 August 2002