Memorandum submitted by the Audit Commission
EXECUTIVE SUMMARY
1. The Audit Commission welcomes the focus
of the Committee and is pleased to submit evidence to this inquiry.
The proposals as set out in the Green Paper, and further developed
in the Children Bill 2004, introduce a number of significant changes
which are aimed at improving outcomes for children and young people.
The Bill presents an opportunity for local public and voluntary
sector providers and commissioners to make a real difference to
children's lives.
2. We do, however, also note that there
are considerable risks involved in implementing the proposed legislation
which will need to be carefully managed to focus on outcomes rather
than processes in order to assure the well-being of children and
young people and deliver the new requirements fully.
3. There have been some notable achievements
in recent years through bringing together individual education,
social and health services, such as mental and physical health
advice and counselling services for pupils in schools. Much more
could be achieved by further service integration in different
areas. However, there are significant governance, cultural and
resourcing differences between these three sectors which can pose
obstacles to integration. These are practical implications on
further integration which needs to be overcome—risks need
to be reviewed and addressed and autonomy must be balanced with
ensuring robust public accountability and scrutiny.
4. The regulatory framework must be strategic,
targeted and proportional. We acknowledge that inspectorates,
including the Audit Commission, have made much progress in developing
a new methodology which is intended to replace a raft of existing
inspections. We believe it is right that it should be as integrated
as possible with the arrangements for corporate assessment over
the next few years. It is essential that new arrangements should
be subjected to early evaluation to ensure that the benefits of
the processes are commensurate with their costs and the burdens
placed on local councils and their partners.
5. The Audit Commission strongly believes
in active involvement of service users including children and
young people. We have made user focus and diversity key strategic
objectives for its audit and inspection work, both in ensuring
that audited bodies are engaging fully with users and that our
own work mirrors this. The fitness for purpose diagnostic that
we have developed challenges local bodies to show how effectively
they have involved users, including families and carers, and how
local communities are being involved.
BACKGROUND
6. The Audit Commission welcomes the opportunity
to make a submission to the Select Committee on this important
new legislation. The proposals as set out in the Green Paper,
and further developed in the Children Bill 2004, introduce a number
of positive changes which will help improve outcomes for children
and young people. The Bill presents an opportunity for local public
and voluntary sector providers and commissioners to make a real
difference to children's lives, through focusing on outcomes rather
than services, and to do this in partnership with children, young
people, their families and carers and local communities.
7. We do, however, also note that there
are considerable risks involved in implementing the proposed legislation
which will need to be carefully managed in order to assure the
well being of children and young people and deliver the new requirements
fully. Children's services in education and social care alone
make up about 70-75% of upper tier authorities' expenditure, making
the change a legitimate concern to auditors for their financial
impact alone. The Act also introduces significant organisational,
staffing and cultural changes, which pose their own associated
challenges to local authorities and their partners in health,
criminal justice, and the voluntary sector. The proposed move
to increased partnership working, while commendable, generally
takes time to set up as organisations and individuals change their
working practices. New structures for accountability and governance
will need to be developed to deliver the new agenda which will
need careful thinking through and time to bed down. There will
also be a number of areas where administrative processes and systems
will need to be changed. These include financial management and
controls, employment contracts, service procurement, and information
sharing arrangements. We see most of these changes as posing a
high risk in most children's services authorities. The Green Paper,
and subsequent Bill, addresses a wide and complex agenda, and
introduce an ambitious programme for change.
8. The Audit Commission is strongly committed
to the development of proportionate and strategic regulation,
which revolves around four key principles: focusing on users and
diverse communities; improving services; improving organisational
governance and capacity, and working in partnership with other
regulators.
9. All four of these principles are highly
relevant to the Children Bill proposals. The proposals for joint
regulation made in the Bill are being developed by a steering
group with representation from all 10 relevant inspectorates[1],
including the Audit Commission. We are working with our colleagues
to help deliver a methodology for regulation of children's services
which is strategic and proportionate to risk and does not develop
into a check list approach to compliance. We have made strenuous
efforts to seek to align, and as far as possible integrate, the
methodology to our Corporate Assessment. The Bill's commitment
to involving service users and addressing diverse local needs
is supported though the Joint Area Review Framework which will
involve users and lay youth inspectors.
10. Our commitment to service improvement
is consistent with the aim of the Children Bill to ensure that
children's life quality improves through the work undertaken to
deliver the five outcomes. We have worked with local authorities
and other public sector bodies to develop their user focus over
the last few years, and to ensure that services meet user needs.
We have also developed our work in relation to diversity, and
have supported different audited bodies in their journey to race
equality and meeting diverse needs within their local areas. Both
user focus and diversity are now addressed through corporate assessment
as part of the comprehensive performance assessment (CPA) and
are seen as part of the community leadership role of local authorities.
11. Governance and capacity assessment of
local authorities is undertaken through corporate assessment,
and the Audit Commission has developed longstanding expertise
in these areas, which are included within the new inspection block
for children's and young people's services. As the new arrangements
for children's service will account for a significant part of
upper tier local authorities' services and budgets, and a substantial
part of lower tier councils, the effectiveness of governance arrangements
for overseeing children's services will have a large impact on
the overall performance of each council.
12. Partnership working at service provider
level is a clear expectation of the implementation of the Children
Bill. Similarly inspection and regulation is required to be undertaken
in partnership. The joint inspectorate group has made much progress
in devising an approach to joint inspection but much detail of
how assessments will be undertaken has inevitably yet to be finalised.
Early evaluation of both the JAR and the way in which it works
alongside the corporate assessment is necessary to ensure that
it is both commensurate to need and can demonstrate that benefits
outweigh costs
THE PLACE
OF HEALTH,
SOCIAL SERVICES
AND EDUCATION
SERVICES WITHIN
INTEGRATED SERVICES
13. Each of these has a critical contribution
to make to the well-being of children and young people. There
is great potential benefit to be gained by bringing services together,
where there is clear evidence that this will improve outcomes
for children and young people, and where there may be increased
effectiveness and quality as a result. There have been some notable
achievements in recent years through bringing together individual
services, such as mental and physical health advice and counselling
services for pupils. Much more might be achieved by further service
integration in different areas.
14. However, there are significant differences
between these three sectors which can pose obstacles to integration.
There are large cultural differences between the professions and
employing organisations. These can affect the way that issues
and individual children, young people and families are approached,
and how their problems or concerns may be perceived, which can
make joint working challenging. Each profession has a different
set of legislative and professional drivers, which can work against
other sectors rather than supporting collaboration. This can be
the case at individual practitioner level; difference is also
embodied in the different government set performance frameworks
each sector works to, and can be reinforced by the different professional
languages used by each.
15. The governance arrangements for each
sector are different. Local government and health agencies are
accountable to different bodies, one democratically elected, the
other not, which can pose challenges in terms of accountability
and perceived legitimacy in relation to joint working. In addition,
health and education are both delivered by independent practitioners
(GPs) and organisations (schools). Either of these may legitimately
work to different objectives to those of local authorities and
Primary Care Trusts, introducing additional challenges to co-ordination
and to a common accountability framework. The absence of explicit
references to schools' responsibilities in the legislation and
regulations may be an impediment.
16. The Children Bill seeks to overcome
some of these differences by focusing on children's and young
people's needs and on how their lives can be improved. At a strategic
level, most public sector bodies also understand and support the
need for more integration. Achieving an integrated and co-ordinated
model of for planning and delivery will however take time while
different organisations learn about each others' ways of working
and adopt new approaches that support integration.
17. The lack of specificity on governance
arrangements for children's trusts reflects an opportunity to
accommodate local circumstances but does carry with it risks associated
with a variation of approach, practices, systems, participation,
competences and accountabilities.
18. As well as the three sectors noted by
the Select Committee, other agencies also make a significant contribution
to improving children and young people's lives, which will also
need to be included in joint working. These are classified as
relevant partners with a duty to co-operate in the draft legislation.
Police and the criminal justice system, in particular probation
and the Children and Family Court Advisory and Support Service
(CAFCASS), as well as Youth Offending Teams (YOTS), are all major
players in helping children and young people be safe and achieve
their potential. The voluntary sector is another important provider
of services to young people and children, often reaching groups
that others do not. Other parts of the voluntary sector play a
vital role as representatives of young people and children, their
families and their communities. While the voluntary sector is
not classified as a relevant partner for the purposes of the Bill,
the draft legislation makes a specific reference to the involvement
of the voluntary and community sector in partnership work.
THE PRACTICAL
IMPLICATIONS OF
THE DUTY
TO CO-OPERATE
19. The Audit Commission welcomes the duty
to co-operate within the legislation. Without a strong commitment
to partnership and co-operative working it will be difficult to
deliver the five outcomes which rely on the co-ordinated input
of several or all local agencies. Building a duty to co-operate
into the legislation will underpin stronger partnership arrangements
between agencies, and encourage closer working. More explicit
references should be made to schools.
20. As partners focus on how they can make
a difference to children and young people, there will be the opportunity
to review service design and impact so that resources are more
closely focused on delivering outcomes and increasing value for
money. Pooling and aligning budgets can provide a route to better
use of resources to deliver shared objectives. However, there
are many practical issues which can get in the way of budget pooling.
Different sectors work to different accounting arrangements eg
requirements to pay VAT, charging arrangements, and have different
budgetary cycles. Pooling budgets when the each partner organisation
is working to a different set of objectives can also lead to reluctance
to commit funds if these cannot then be used for other purposes
should priorities change. The experience of many local authorities
and NHS bodies, as well as our own experience as auditors, has
shown that pooling budgets often poses a range of challenges that
can be extremely time consuming to resolve. Partners need to be
very clear about the added value of budget pooling, and their
individual and joint commitment to the work before taking this
route.
21. Aligning budgets may be a simpler way
forward, which requires less work and formalisation, but is then
subject to uncertainty should organisations decide to withdraw
funding to meet other priorities.
22. Committing resources to a pooled or
aligned budget requires considerable trust between organisations
that agendas are truly shared and an understanding of the common
outcomes sought.
23. Our recent report on education funding
as it relates to schools and local councils (and which highlighted
the absence of suitable mechanisms for challenge and accountability
and accurate reporting currently in place) emphasises the very
great need to ensure that there is at an early stage of development
a clear expectation that autonomy will be counterbalanced by robust
accountability for resource management and delivery of value for
money.
24. The Children Bill's proposals for co-location
of services and staff cover a range of different models. As with
pooling budgets, co-location may often be productive, but each
case will need to be considered on its own merits in terms of
how it will improve local services and have an impact on improving
outcomes for children and young people. While extended schools
may well offer a rich opportunity for local children and young
people, local services will need to be relevant to local needs
and resources.
25. Many areas have already begun the co-location
of staff, although not always in a school setting. For instance,
joint commissioning teams are well-established in many local authorities
with health involvement, and other joint posts exist in a variety
of functions between health, social care, criminal justice and
education. These co-located teams have been established both to
improve services and access to service users, and also to improve
and develop co-operative working between professional and organisation
groups eg social work and primary care.
LISTENING TO
CHILDREN
26. Listening to children and ensuring that
they are actively involved in stating their needs and in setting
service objectives is central to the implementation of the new
legislation. The Audit Commission has made user focus and diversity
a key strategic objective for its audit and inspection work, both
in ensuring that audited bodies are engaging fully with users
and that our own work mirrors this. The fitness for purpose diagnostic
that we have developed (see below) challenges local bodies to
show how effectively they have involved users, including families
and carers, and how local communities are being involved.
27. The Children Bill's focus on involving
children and young people and ensuring that services meet their
needs also brings with it an expectation that the different needs
of different groups will be identified and ways of meeting those
needs found. The diversity of groups whose different needs should
be met include those identified as vulnerable eg looked after
children with learning difficulties and disabilities, asylum seekers,
but also children from different ethnic and faith groups. We would
encourage local authorities and their partners to ensure that
their consultation and needs assessment work fully addresses the
range of diverse needs within their local area.
28. The draft joint framework for inspection
(see below on inspection) sets out how children and young people
will be routinely involved in Joint Area Reviews. This will be
through web based surveys, the involvement of young people as
lay inspectors, and through challenging local authorities to show
how they have engaged with children, young people, their carers
and families in the course of their planning and review work.
INSPECTION
29. The Audit Commission welcomes the inclusion
of the requirement for a joint framework for inspection in the
draft legislation. Introducing a joint approach has the potential
to strengthen the quality of inspections, as well as ensuring
that they are well integrated with related inspection methodologies.
The Joint Inspection Group, which is developing the joint framework
and methodology for Joint Area Reviews, has members from all 10
relevant inspectorates, led by Ofsted. The Audit Commission is
a member of this steering group.
30. The purpose of the joint framework is
to ensure that relevant inspections "properly evaluate and
report on the extent to which services improve the well-being
of children and young people". The Framework provides a means
of organising coherent evaluation of service contributions to
outcomes for children and ensuring that information can be brought
together in a joint review of services in a children's service
authority area.
31. The Commission for Social Care Inspection
has developed a system for the annual performance assessment of
council social care services which feeds into the CPA; this system
is now the responsibility of CSCI. Information on the education
element of the CPA has been provided through a mix of performance
indicators and inspection judgements made by Ofsted, working with
the Audit Commission. At the same time, the DfES, through its
advisers, has carried out an informal annual stock take of education
services.
32. The Framework seeks to bring these systems
together and connects them with joint area reviews so as to create
a unified and efficient approach. The annual assessment rating
will directly inform the children and young people service block
in the redesigned CPA for 2005 onwards.
33. It is intended that performance assessment
and joint area reviews will be connected and complementary processes
designed to secure coherence and efficiency in monitoring and
evaluating performance. Annual performance assessment will play
a key role in determining the aspects which will be covered in
a joint area review. The findings of a joint area review (JAR)
will, in turn, be followed up in the annual performance assessment.
34. Although the JAR is intended to replace
a raft of existing inspections, it still is a significant assessment
for local authorities. We have been planning on the basis of it
happening jointly with the corporate assessment programme. Its
success however will crucially depend on it being as integrated
in a number of key aspects with the coverage of the corporate
assessment and in reporting at the strategic level. Councils and
their partners will be required to work with the National Standards
Framework for children, young people's and maternity services
(Department of Health) as well as the National Outcomes Framework
which is shortly to be rolled out by the DfES. We need to guard
against the JAR and annual performance assessment becoming a tick
box compliance exercise and rather focus on major drivers or omissions
which contribute to the quality of outcomes for children and young
people in an area.
LINKS WITH
THE COMPREHENSIVE
PERFORMANCE ASSESSMENT
(CPA)
35. Integrated performance assessment of
council education and social care functions will feed into the
CPA. The findings of the joint area review as far as they apply
to council services will largely comprise the annual assessment
in the year in which the review takes place.
36. The findings of assessments and joint
area reviews will link with the CPA in the following ways:
— from November 2005, performance assessments
and joint area reviews will provide the CPA judgements on the
service block for children and young people, as well as contributing
where appropriate to the Audit Commission's corporate assessment;
and
— the scheduling of joint area reviews
should reflect the immediate needs in relation to children's services
while ensuring the best use of inspection resources and minimum
disruption to councils' work.
37. Corporate assessments and joint area
reviews are planned to run concurrently. This should help to ensure
that the outcomes for children and young people are central to
the corporate assessment of local councils. It will also enable
coverage of aspects of management and governance in joint area
reviews and the corporate assessment to be co-ordinated to ensure
inspection activity is not duplicated, criteria are consistent
and documentation called upon is the same. It will be critical
to the success of the manageability of the process to achieve
as much integration as possible and that there is a demonstrable
impact on reducing the inspection burdens carried by local authorities.
38. Much progress has been made by inspectorates
but at the time of completing this submission some key issues
still await final resolution before consultation on the basis
of joint programming can take place. The Audit Commission needs
to be satisfied that joint running of the JAR and the corporate
assessment will result in the benefits for councils which we are
seeking. Key issues will be to ensure that the focus of the joint
area review results in a sensible balance between strategic and
operational enquiry; councils are able to have clarity about the
joint timetable; and there must be an unambiguous definition of
what will be the complementary coverage of the two assessments
to avoid both burden and conflicting judgement.
AUDIT COMMISSION
FITNESS FOR
PURPOSE DIAGNOSTIC
FOR CHILDREN'S
SERVICES
39. We have responded to the need to help
local authorities and others identify the risks of implementing
the Children Bill by developing a fitness for purpose diagnostic
to use with local authorities and their partners. The diagnostic
provides an overview of progress by the local authority in implementing
the requirements of the Children Bill and identifies the areas
of risk which require action. It is designed to be used between
autumn 2004-autumn 2007 to support local authorities and partners,
and help them to reduce and manage risks.
40. We have responsibility to audit local
authorities on their plans to implement the Children Bill because
of the risks and challenges outlined above. In addition, our wide
experience and commitment to cross cutting work, to value for
money and probity, to service improvement. Our commitment to user
focus and diversity enable us to offer an appropriate set of skills
and experience to local authority and partners.
41. Throughout its development, we have
ensured that the diagnostic is consistent with Comprehensive Performance
Assessment (CPA), the proposed Joint Area Reviews (JAR) for children's
services, and with the DfES Intelligence Gathering Matrix (to
be used by the DfES Regional Change Advisers). Its structure takes
account of the Intelligence Gathering Matrix, so that information
gathered during its completion can inform the Regional Change
Advisers' review of progress towards Children's Trusts. The Diagnostic
has also taken into account the 25 aims set out by the Department
for Education and Skills (DfES) in the National Outcomes Framework
for the Every Child Matters: Change for children programme.
42. We are developing the diagnostic in
partnership with the Local Government Association (LGA) and the
Improvement and Development Agency (IdeA).
CONCLUSION
43. The Children Bill has the potential
to make a significant contribution to improving children's and
young people's lives, and we fully support the intent and requirements
of the Bill. This legislation has opened up opportunities to transform
the way that public and voluntary sector services work together.
Most importantly, the legislation has a real commitment to putting
children and young people at the heart of provision and has a
focus on outcomes which will help break down current barriers
to improvement. All of this is to be welcomed.
44. The Audit Commission's research into
what makes public sector organisations excellent shows the importance
of:
— strong ambition and local leadership;
— talented, innovative and empowered
people;
— people who realise that often it
is better to work with others.
45. Given the scope of the Bill, the scale
of the changes required and the importance of the outcomes to
children and young people, the Audit Commission is keen to support
developments through a regulatory approach which aims to clarify
issues and identify risks and is undertaken proportionately. We
have drawn attention to the risks of the journey, the challenges
of change and the governance and resource risks. Above all, we
reiterate the importance in this period of change, of keeping
the goal in sight: the improvements in outcomes for children and
young people. The Audit Commission is committed to strategic and
proportionate regulation. This will lead us to ask a higher order
set of questions about the overall leadership, performance, risk
management and culture of the organisations we regulate and inspect.
We look forward to working closely with other agencies to develop
an integrated service for the well-being of children and young
people.
1 These include Ofsted, the Healthcare Commission,
the Commission for Social Care Inspection, HM Inspectorate of
Constabulary, Adult Learning Inspectorate, HM Inspector of Prisons,
HM Inspectorate of Probation, HM Magistrates' Courts Service Inspectorate
and HM Crown Prosecution Service Inspectorate. Back
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