Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by Professor Steve Martin (LGB 06)


  The Local and Regional Government Research Unit at Cardiff University is engaged in research on a number of the key elements of the modernisation and performance improvement agenda in local government. Our programme of research includes studies of:

    —  the long-term impact of the Best Value regime (commissioned by the Office of the Deputy Prime Minister)

    —  the impact of inspection (undertaken with colleagues at Warwick University and funded by the Joseph Rowntree Foundation)

    —  partnership working (commissioned by the Welsh Assembly and the National Youth Agency)

    —  the future role of elected members (funded by the Association of Public Service Excellence), and

    —  the emerging scrutiny and overview function in local government and Regional Assemblies (funded by the Economic and Social Research Council and the English Regions Association).


  Sections 105 and 106 of the draft Bill propose the categorisation of English authorities by reference to their performance and the exercise of powers by the secretary of state by reference to these performance categories. A "Comprehensive Performance Assessment" (CPA) framework, designed to enable judgements to be made of authorities' overall performance, has been developed by the Audit Commission and piloted with a number of "pathfinder" authorities. The Commission plans to announce its verdicts on the overall performance of all single tier and county councils by December 2002 and of district councils next year.

  The proposal to categorise authorities' performance represents only a very minor part of the draft Bill and there is really very little evidence to draw upon in evaluating its likely impact.

  Our research has however highlighted a number of concerns about the operation of Best Value inspection during the first 18 months of the Best Value regime. These are described in the report "The impact of inspection on local government: driving improvement or drowning in detail?" however a summary of which is available on our website ( The Audit Commission's Best Value annual statement, published in the autumn of last year, echoed many of these concerns and proposed a more differentiated regime of regulation and inspection as a means of addressing them. These proposals are in turn reflected in the Local Government White Paper published in December and in sections 105 and 106 of the Draft Bill.

  There are grounds for believing that this approach may help to alleviate some of the problems that have been highlighted by our research. In particular, it should reduce the "burden" of inspection on authorities whose performance is deemed to be relatively good. There are also signs that it may enable the six separate inspectorates with responsibilities for Best Value inspection to develop more integrated and co-ordinated approaches. Whether the proposals succeed in promoting overall performance improvement within English local government will though depend upon the extent to which the CPA framework is able accurately to reflect authorities' overall performance and their capacity to improve, and how councils respond to the categorisations.

  We believe that there are at least five key areas that will need to be kept under review as the framework evolves.

  1.  Analysis of BVPIs and inspection reports suggests that very few authorities are uniformly "good" or uniformly "poor" performers. Most have a combination of efficient and effective services and some functions that appear to be under-performing. The proposal to judge an authority's overall performance therefore requires a weighting system and the resulting categorisations will depend crucially on the weightings attached to different service areas, and the Audit Commission's judgements about an authority's "corporate capacity".

  2.  These weights are likely to have important practical implications since authorities that wish to enhance their chances of being allocated to one of the top two categories are likely to need to focus particular attention on improving services that are weighted as the most important within the CPA. This is not a problem if the same services are seen as priorities by local people but could pose real difficulties in areas where the local community attaches more importance to other services and functions.

  3.  The process of CPA is likely to take up valuable staff time that might otherwise be devoted to the task of improving front-line services. This implies that changes in categorisations should be kept to a minimum so as to avoid the need for repeated rounds of CPA. However, because the Best Value regime is still relatively new with many services not yet having been inspected, the Audit Commission is currently working with an incomplete evidence base. This implies the need to re-visit the initial categorisations within a fairly short period of time to take account of new information provided by subsequent inspections and performance data. The case for regular review of the categorisations is strengthened by the fact that the performance of those services that have already been inspected could change significantly (for better or worse) over a two to three year period and, if the process of categorisation is to act as a spur for improvement, authorities will presumably want to have the prospect of rapid "promotion" as their services get better (and should perhaps face the threat of "relegation" should they deteriorate).

  4.  The Commission has developed a model that it considers encapsulates the key determinants of an authority's capacity to improve. However, it may be that there are other routes to improvement that it has not yet recognised. It will therefore be important to assess the extent to which inspectors' judgements of capacity to improve are reflected in real changes in service standards over time and for the Commission to adapt the criteria it uses to judge capacity to improve in the light of new evidence. In particular we would argue that there is a need for a much better understanding of what actually drives performance improvement across the very different kinds of services provided by English local authorities and in the varied socio-economic contexts in which different councils operate.

  5.  Finally, it is not clear how authorities will respond to being categorised. There is anecdotal evidence to suggest that some may be content to be judged as "fair". Moreover, it is not inconceivable that "naming and shaming" and tighter regulation of the poorest performers may have a disabling effect upon some of these authorities. It could for example lower staff morale (some councils report that their workforces have been de-motivated by adverse inspectors' reports on individual services) and/or make it more difficult for these authorities to retain and recruit staff.

  In summary then, the principle of tailoring the kinds of inspection and level of central regulation to authorities' current performance and their perceived capacity to improve is to be welcomed. Finding a way of implementing this approach that accurately reflects current overall performance and future capacity and that avoids the risk of cutting across local priorities is though a major challenge. In our view it will therefore be important to monitor whether this new approach does promote tangible improvements in local authority performance and, if so, how and at what additional cost.

Director, Local and Regional Government Research Unit Cardiff University

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Prepared 8 July 2002