House of Commons - Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions

Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Minutes of Evidence

Memorandum by the Office of the Deputy Prime Minister (AR 01)

RESPONSE TO COMMITTEE QUESTIONS ON ANNUAL REPORT 2005-06

PSAS, TARGETS AND EXPENDITURE

1. Please provide a table setting out and linking:

— the Departmental priorities;

— the SR 2004 PSAs;

— the programmes and activities underpinning and supporting each PSA;

— the resources allocated to each programme and activity; and

— the targets against which progress in the activity/achievement of the PSA will be measured.

A table setting out the priorities and PSAs is at Annex A, with the resources allocated to each. Our Business plan for 2005-06 (published in September 2005) sets out the main milestones and targets for each. A copy at Annex B.

Within the context of the Office's high-level objective of creating sustainable communities, we regularly assesses our priorities and targets to meet shifting challenges and evidence of the impact of our policies. This is particularly relevant in the period running up to spending reviews, where departments undertake a fundamental assessment of the investment they have made.

2. Why was a new "Liveability" PSA added in 2004? What effect will it have on Departmental strategy and outputs, and how is it reflected in the Department's spending allocations?

(i) Why was a new "Liveability" PSA added in 2004?

Delivering improvements in the quality of public spaces and the built environment is a national and local priority. Delivery of these priorities, however, requires co-ordinated and complementary action across Whitehall to support local authorities and their partners in improving their performance in addressing liveability issues that affect their localities.

The PSA8 (Liveability) target was therefore introduced to provide visible national leadership and focus cross-government action on liveability issues and enhance collective outcomes. It was also introduced to encourage local and public authorities to show similar leadership and close partnership working at the local level.

(ii) What effect will it have on Departmental Strategy and outputs?

The PSA8 (Liveability) target provides a set of clear objectives against which performance can be measured for the first time. These include specific targets for delivery in deprived areas. Through its delivery plan, there is a strategy for delivery based on a better understanding of the levers, workstreams, and resources available to achieve tangible outputs.

(iii) How is it reflected in the Department's spending allocations?

The PSA8 (Liveability) Delivery Plan sets out our strategy for achieving cleaner, safer, greener communities. It recognises that local authorities are essential to this delivery, both as providers of services themselves and in their community leadership capacity and that priorities will vary between local areas. A range of sources of funding are available to address liveability issues at local level, aligning their priorities to increase the outcomes delivered. The plan therefore sets out our approach to help local authorities prioritise and make better use of existing resources, in particular, the rationalisation of funding streams through the Stronger, Safer Communities Fund (SSCF) and Local Authority Agreements (LAAs).

It also recognised that there is already a wealth of good practice and innovative approaches that can be used to achieve more, so through the "How To" programme we will be supporting the sharing of learning and wider application of good practice.

EFFICIENCY SAVINGS—CENTRAL

3. How does the department expect to deliver £620 million of efficiency savings by 2007-08?

As part of its programme of efficiencies ODPM plans, by 2007-08, to:

— achieve savings in administration costs of £25 million, including the rationalisation of back office functions;

— deliver efficiencies gains in Regional Development Agencies (RDAs) of £120 million;

— improve social housing procurement methods by introducing new partnering arrangements, achieving efficiencies of £160 million in the delivery of new social housing;

— realise efficiencies of £195 million in the Registered Social Landlord (RSL) sector on capital works, management and maintenance and commodities;

— continue the modernisation of the Fire and Rescue Service (FRS) to provide efficiencies to fund further enhancements in the effectiveness of the service reaching £105 million;

— deliver savings of £10 million on sustainability work associated with existing FRS radio schemes; and

— add contingency to the efficiency programme to reduce the level of homelessness and households living in temporary accommodation to achieve efficiency savings of £66 million.

4. What efficiency savings have been made to date?

ODPM is confident it will achieve its efficiency targets. The efficiency savings are planned to be delivered over the next three years and we are on track to deliver them. Recent performance in workstream areas demonstrates reinforces our confidence. For example:

— RDAs—efficiency plans for achieving savings of £139.5 million (£120 million for ODPM) by 2007-08, were submitted on 25 April 2005 and have been signed off by the Department of Trade and Industry and the Office of Government Commerce;

— New supply—Housing Corporation strategy for investment partnering for new affordable housing launched. On track to exceed the target of £130 million for 2005-06 for new supply (savings to be realised on practical completion of construction).

— RSL capital works—national change agent now in place to establish network of local procurement consortia to maximise efficiencies throughout the supply chain. £33 million Efficiency Challenge Fund launched to facilitate consortia set up (three consortia have already won funding).

— RSL procurement of commodities—national collective agent launched last year offering savings through joint procurement of commodity goods and services (telecoms, gas, office supplies etc). It has achieved well over 60% coverage of the RSL sector.

— Fire and Rescue Services—Integrated Risk Management Planning is now firmly embedded in all FRAs. The Audit Commission's Fire CPA reports were published on 28 July. CPA improvement planning now underway and providing major opportunity to reinforce efficiency messages and share good practice.

— Firelink operational continuity—99% of all Phase 1 high-risk replacement work is now complete. As a result of negotiations the work has been completed for £1.5 million less than budget.

Sustainable Communities—settled homes; changing lives

— Admin: Our corporate modernisation programme includes projects on shared HR services with HM Treasury and Cabinet Office, the outsourcing of IT, rationalisation of ODPM accommodation and an end to end review of finance.

In line with expectations and trajectories, main efficiency gains are anticipated in 2005-06 and 2006-07.

5. What is the cash savings element to date?

Please see question 4 above. By 2005-06, we expect to have delivered some £279 million in efficiency savings, of which £212 million will be cashable.

6. What are the implications for the Department if it does not reach its target for efficiency savings? What penalties will be applied? What contingency arrangements are being made in the event that the savings are not delivered?

The Office's budgets received as part of the 2004 Spending Review settlement assumes that the efficiency targets will be met. The penalty therefore, if ODPM were not to meet its targets, would be reduced outputs.

Substantial contingency has now been included within the programme such that efficiency forecasts are now above SRO4 targets. An area of recent progress for the programme has been the formal inclusion of the new Homelessness workstream which is expected to deliver efficiency gains of £66 million by 2007-08. Contingency plans to deliver additional efficiency gains are in development and as plans become firmer will be added to the programme.

7. ODPM has committed itself to achieving £835 million of efficiency gains by 2007-08 covering social housing, capital works, management and maintenance. How does the Department expect to achieve this target with no reduction in outputs and outcomes?

The delivery of the efficiency gains in social housing will involve the following actions:

New Supply: the Housing Corporation is committed to making efficiency gains in the procurement of new social housing supply both through improvements to procurement and the allocation of investment, including promoting the use of supply chain partnering in the RSL sector. The Corporation published its strategy for procurement in August 2005. The Housing Corporation also launched in March an innovative scheme to extend social housing grant to non-registered bodies. By widening the competition for grant, this should encourage better value for public money.

Capital Works: a National Change Agent is in place to establish a network of local procurement consortia to maximise efficiencies throughout the supply chain through "work smoothing" programmes, collective purchasing of materials and services, setting standard specifications, and expanding the local labour pool through training. A £33 million Efficiency Challenge Fund is in place to facilitate consortia set up. Three consortia have already won funding. These include 28 LAs, ALMOs and RSLs in London and South Yorkshire covering 340,000 dwellings. They plan to set up arrangements to procure jointly over £2 billion of capital works by 2010. There is evidence that these type of arrangements can produce net savings of at least 10%.

Management and Maintenance: ODPM have commissioned a review of "systems thinking". This is an approach, originally developed by Toyota, that involves (a) looking at a whole process from the point of view of the customer in order to identify the parts that add value for the customer and the parts that do not; and (b) redesigning the system to eliminate the waste. It has produced impressive results in manufacturing and ODPM commissioned Northern Housing Consortium to work three pilot organisations to test its potential application to social housing. The results are encouraging, and the report is due to be launched in September.

The Audit Commission have been commissioned to identify and disseminate innovation and good practice in management and maintenance and will be publishing a series of "efficiency packs", containing case studies and guidance, in October 2005.

Procurement of commodity goods and services: A national collective agent for the RSL sector, Procurement for Housing (PfH), was launched last year offering savings through joint procurement of commodity goods and services (telecoms, gas, office supplies etc). It has achieved well over 60% coverage of the RSL sector and is now offering its services to local authorities and ALMOs. Savings reported by members on office supplies range from 7% to more than 40%. Additional efficiency gains are derived from the centralisation of the OJEU tendering process, enabling members to avoid the costs of tendering for PfH offerings, and the administrative gains derived from the central billing system.

Progress on efficiency gains will be monitored by the Housing Corporation. They require lead regulated RSLs to submit an Annual Efficiency Statement (AES), similar to that required of local authorities. The RSL AES will set out their plans to deliver efficiency gains over the coming year and a self-assessment of progress in delivering efficiency gains. The AES provided by lead regulated RSLs will be signed off by its governing body. The Housing Corporation will scrutinise and cross-check RSL AESs against the results for the published performance indicators and the operating cost indices. This will include a review of the AES by the RSL's Lead Regulator. The Corporation will confirm the completion of the AES in the Housing Corporation Assessment (HCA) of that association.

EFFICIENCY SAVINGS—LOCAL GOVERNMENT

8. Why has the SR2002 requirement for "overall annual improvements in cost effectiveness of 2% or more" been removed from the equivalent PSA for SR2004?

SR2004 set all local authorities a target to make annual efficiency gains equivalent to 2.5% of their 2004-05 baseline. This superseded the previous target on cost effectiveness of 2% per annum. The new PSA reflects this change and recognises the fact that our aims in this area have been strengthened and have a wider scope than previously. It also links to the changes in the arrangements for CPA, which will use local authorities' annual efficiency statements as part of the assessment of "Use of Resources".

9. What assurance can the Department give that the local government efficiency plans will deliver the target efficiency savings of £6.45 billion?

Real progress has been made since local government was set efficiency gain targets. Hard evidence that local authorities are more than capable of meeting their share of the £6.45 billion target has been provided by the first Annual Efficiency Statement submissions, which demonstrate that local authorities are already expecting to deliver £1.9 billion efficiency gains by 2005-06 against a target of £1.0 billion.

It should be remembered that a large proportion of the £6.45 billion relates to efficiencies in schools (approx 40%), DfES has put in place separate structures to support this target.

A structure is also in place to help local authorities share and develop their experience in identifying and making efficiency gains, and also how to measure and report those gains. Central to this are the nine Regional Centres of Excellence, which are hosted by local authorities and funded by the ODPM. Each centre is supported by a governance structure covering the authorities across their region and therefore they understand their needs and have built good local relationships. Following local consultation, they have produced individual business plans that set out the projects they intend to undertake to support the achievement of efficiencies in their region.

At a national level, ODPM has set up cross-departmental groups to co-ordinate the activities of government departments to ensure that local government bodies receive clear and consistent messages about what they are required to do and what support is available to them. Working with partners in the local government community, we have built awareness in the efficiency agenda and engagement with the goal of demonstrating real improvements in the efficient delivery of better public services. Together, we have also been able to implement a measurement approach that meets the needs of both local authorities and central government.

10. Now that local authorities' first annual efficiency statements are in, what analysis has been undertaken to see what areas the bulk of the efficiency gains will come from?

The Annual Efficiency Statements have been reviewed by the ODPM and each section of the statements has been reviewed by the relevant government department. The analysis that has been undertaken suggests that the areas where local authorities expect to make the biggest gains are in crosscutting corporate services (£307.1 million by the end of 2005-06) and in the delivery of adult social services (£289.6 million). Together, these comprise nearly one third of the total value of efficiency gains expected by the end of 2005-06.

11. Please give a breakdown of where the local government efficiency savings will be made.

The table below shows the total value of efficiency gains reported by local authorities in each service sector or crosscutting workstream in the 2004-05 Backward Look Annual Efficiency Statement (ie gains achieved in 2004-05) and 2005-06 Forward Look AES (ie gains expected in 2005-06). The final column shows the total of these two figures.


Local Authority Efficiency Gains (£):	Achieved in 2004-05	Expected in 2005-06	Total Expected by end 2005-06

Service Sector
Adult social services	112,590,284	177,003,948	289,594,232
Children's services	52,194,220	75,040,111	127,234,331
Culture and sport	28,405,732	47,497,316	75,903,048
Environmental services	53,427,480	83,842,499	137,269,979
Homelessness	15,747,417	10,880,209	26,627,626
Local transport	46,196,936	78,951,293	125,148,229
LA social housing	88,804,525	71,213,109	160,017,634
Non-school educational services	35,639,433	50,941,977	86,581,410
Supporting people	20,982,436	39,115,163	60,097,599
Crosscutting Workstream
Corporate services	102,764,111	204,309,953	307,074,064
Procurement	56,727,282	112,470,043	169,197,325
Productive time	55,266,564	64,899,764	120,166,328
Transactions	36,499,953	38,429,459	74,929,412
Miscellaneous efficiencies	52,358,304	125,469,899	177,828,203

Total	757,604,677	1,180,064,743	1,937,669,420

12. What issues were raised by the Audit Commission and the NAO following their scrutiny of the Department's efficiency technical notes, which support the efficiency statements?

The Audit Commission assisted in the development of the Efficiency Technical Notes and recommended that the approach set out should be as simple and flexible as possible, with the onus placed on the councils to justify the quantification and identify the supporting evidence. In addition, the Audit Commission confirmed its willingness to provide what it sees as an adequate level of assurance on the backward-look Statements produced by councils based, as with all Commission audit work, on a review of the arrangements in place to underpin and produce the Statements.

13. What other bodies reviewed the notes? What were the results?

ODPM consulted with a number of bodies in developing the notes. These included CIPFA, the Society of County Treasurers, the Society of District Treasurers, the Society of London Treasurers and the Society of Metropolitan Treasurers. In addition, ODPM commissioned a study from the Institute of Local Government of the University of Birmingham which assessed the views of a range of councils.

In the light of these consultations, ODPM developed a note that sets out a Self-Assessment approach to measuring efficiency in local government. It also undertook to co-ordinate future work to provide assistance to councils in completing their Statements.

A full process of consultation on issues raised by the notes has been undertaken with the instigation of a Measurement Taskforce to advise ODPM. The members of this Taskforce are representative of a full range of local government bodies. The Taskforce was created so that issues relating to the measurement of efficiency gains can be discussed and resolved in a co-operative manner, ensuring that the needs of both local authorities and government departments are met.

DELAYED SPENDING REVIEW

14. How will the delay in the spending review affect the ability of ODPM, and organisations in receipt of ODPM funding, to plan their budgets and activities?

The announcement of a 2007 Comprehensive Spending Review will allow ODPM (with its delivery partners) to undertake a more extensive examination of the effectiveness of its programmes to date—and how to respond to future challenges—than would be possible under the normal Spending Review timetable.

The announcement included a decision that departmental budgets for 2007-08 will not be re-opened.

15. The Government's response to the Committee's Fourth Report of Session 2004-05, on the ODPM Annual Report and Accounts 2004, notes that evidence is being drawn together to support transport scheme proposals that will be put to Government as part of the (now delayed) spending review. What will be the impact on the Northern Way programme and the work of the relevant RDAs if these transport schemes are not agreed until 2007? When, at the earliest, would the Department expect transport schemes agreed in 2007 to be fully implemented?

The decision by Government to delay the spending review process and undertake a comprehensive spending review will not affect the formation of the Northern Way Transport Compact. As the Northern Way Business Plan (published June 2005) states, the Compact will be formed to provide a unified voice on pan-regional transport priorities. The delay of the spending review will not affect this role but will provide the Compact with more time to collect their evidence and decide upon priorities in order to make a more effective case should they wish to the comprehensive spending review.

The Northern Way Business Plan also referred to a number of "early win" interventions that would be supported to demonstrate the economic impact of transport investment. These interventions will be unaffected by the decision to delay the spending review as they are being funded with resources from the Northern Way Growth Fund. This is a £100 million fund established by the three northern RDAs and the Office of the Deputy Prime Minister (£50 million provided by ODPM and £50 million jointly provided by the three RDAs). It will allow the Northern Way to pump-prime and pilot innovative ways of working to achieve their objectives, which is unaffected by the spending review decision.

STAFF

16. What are the revised corporate identity, brand and brand values of ODPM (page 48 of the DAR)? What has been the cost of introducing these changes?

The revised corporate identity was launched on 1 April 2004. The cost of developing and introducing the revised identity was £52,117.

17. In October 2004, Dame Mavis McDonald told the Committee that the Department intended to conduct a staff survey in early 2005 (HC 1115-L, Session 2004-05). Can the Committee see the results, and any analysis which has been conducted of them?

The 2005 ODPM staff survey was rescheduled from March to July. We are currently awaiting the survey results and their full analysis.

18. Page 45 of the DAR notes the requirement for ODPM to achieve a reduction of 400 posts in overall staffing by March 2008 of which 250 will be in HQ and Government Offices. Table 6 on page 121 of the report suggests that the Department will just meet its target for reductions in HQ and Government Office posts, but notes also that "Figures [for staff] may differ from those in previous years due to adoption of a new definition". What has been the change in definition, and does it impact at all on the achievement of the target?

19. Can the Department provide projections equivalent to those in Table 6 (see q18 above) for staffing in its NDPBs?

The baseline figure against which the reduction of 400 Full Time Equivalent (FTE) staff will be monitored was set in June 2004. The baseline figure was defined as permanent staff, staff on inward loan and secondment and staff on Fixed Term Appointments (sometimes referred to as casual). Figures shown in the DAR 2005 are all on this basis and therefore the reference to a change in definition has no impact on the achievement of the target. Figures published in previous reports were produced and reported on a less consistent basis than that established for the setting and monitoring of the baseline and target reductions. The footnote to Table B6 in DAR 2005 was therefore a health warning that the figures in DAR 2005 are not necessarily comparable with figures (both actuals and forecasts) published previously.

The table in DAR 2005 omits both the baseline figure for HQ, Government Offices and Agencies and does not include the projected staffing figures for the financial year 2007-08, which is the end date for the target reductions.

A table attached below shows the baseline, reported staffing (expressed as FTEs) at 31 March 2005 and planned staffing for 2005-06, 2006-07 and 2007-08 for ODPM (HQ), Government Offices, Agencies and NDPBs. Although there is inevitably uncertainty attached to forward projections, the table indicates that on current plans ODPM (HQ) and its associated bodies will more than deliver against the target. However, the figures for NDPBs and agencies are initial estimates.

Table 1

STAFF1 IN POST IN ODPM(C), GOS, AGENCIES AND NDPBS IN 2004-05 AND PLANNED STAFF FOR 2005-06 TO 2007-08


Year	ODPM(C)	Govt Offices	PINs	QEII	FSC 3	Executive NDPBs	Total staff	Annual Change	Cum change

June 20042	2,431	968	758	88	208	3,773	8,226
2004-05	2,408	987	748	52	305	3,637	8,136	-90	-90
2005-06	2,456	916	748	54	289	3,336	7,800	-337	-426
2006-07	2,292	861	768	54	289	3,374	7,639	-161	-587
2007-08	2,239	828	788	54	289	3,361	7,560	-79	-666
Total reduction by organisation	-192	-140	30	-34	81	-412

1	Includes permanent staff, staff on Fixed Term Appointments (FTAs), staff on inward loan and secondment, but excludes agency staff and contractors. Excludes vacancies and staff temporarily out of the office, eg on maternity leave, secondment.
2	Baseline figures set as part of the Gershon review and against which the target for reductions in posts will be monitored.
3	Figures for June 2004 are thought to be an underestimate and are currently being checked. If correct there may be a small reduction in headcount rather than an increase.

20. Can the Department provide a full progress report on the relocation of NDPBs outside of London, and the savings to date?

English Partnerships, Housing Corporation and the Audit Commission have submitted their relocation proposals to Ministers. On current planning assumptions, 126 posts have been identified as suitable for relocation outside of London by 2007-08, of which 34 posts have already been moved. We are working to collect more information on savings from our NDPBs and will report back to the Select Committee when we have more information.

21. Please explain why the 2004-05 estimated out-turn for housing demand and supply—under "consumption of resources" in the table for total public spending—is lower than the previous year (see p116 of DAR).

The main variances relate to the following programmes:

SPEND


		Amount £000
Programme name	Category	2003-04	2004-05	Comments

Starter Home Initiative	Resource Investment	172,282	6,436	This was a £250 million programme aimed at assisting key workers into home-ownership over a three year period. The difference between the two years figures is that the 2004-05 spend reflects payments made in a fourth year where key workers had exchanged contracts on house purchases but were unable to complete the legal transactions before 1 April.
Planning Delivery grant	Resource Consumption	50,313	96,653	PDG was set up in 2003-04 and it was agreed as part of the implementation process that there would be a phased increase in resource provided to local authorities in subsequent years.
English Partnerships—CNT	Resource Consumption	-74,151	12,595	In 2003-04 a high level of receipts from the disposal of land exceeded expenditure

Total		148,444	115,684

22. Please explain (a) why capital expenditure for housing supply and demand has doubled in 2004-05 and (b) why planned expenditure reduces by half in subsequent years.

(a) The main variances in expenditure relate to the following programmes.

SPEND


		Amount £000
Programme name	Category	2003-04	2004-05	Comments

Housing Housing Market Renewal	Capital	21,102	169,985	In 2003-04 we had not allocated funding to all of the pathfinders. By 2004-05 eight of the nine had received funding and begun delivering on the ground. Therefore, we fully expected spend to be much higher in 2004-05 than 2003-04. Note: On an annual basis the programme's resource is switched from Resource Investment to Capital. The switch in resource category is not taken into account in the table to the ODPM Annual Report.
UPD English Partnerships— Urban Renewal Agency	Capital	60,015	311,500	The answer in the case of English Partnerships (EP) is simply as a result of a change to accounting procedures, and due to the annual report figures being expressed in resource accounting terms. As a result of the change, EP's expenditure on acquiring and developing land now scores as capital DEL, which it did not before. As this is EP's main business, HMT provided additional DEL cover for the classification change in 2004-05. In addition, surpluses and deficits from disposal of land have scored, from 2004-05 as both a hit on resource consumption and on capital—so double-counting in line with resource accounting rules, again counting for additional DEL. These differences would not have made any difference if the annual report had been expressed in terms of cash income and expenditure, but in Resource Accounting Budgeting terms they were instrumental. Note: For years beyond 2004-05 no additional DEL cover has been provided by HMT to cover for the change in accounting treatment for land acquisition.

Total	81,117	481,485

(b) The Capital DEL budget for English Partnerships is 2004-05 was significantly higher, reflecting the impact of changes to the accounting treatment for land acquisition. The increased resource cover provided by HMT was to compensate EP for the Resource Accounting and Budgeting implications for completed transaction up until the point of the change in accounting policy.

In addition, the budget figures in the Capital table for 2005-06 and beyond are understated, as they do not include a switch of resource for the Housing Market Renewal programme from Resource Investment to Capital.

23. What steps has the department taken to reduce the backlog of local authority repairs, what is the backlogs' current value?

The work to homes carried out under the decent homes programme is also work that will help reduce the repairs backlog.

From the 2003 EHCS we estimate that the value of the Local Authority backlog of repair and improvement work was around £15 billion at 1997 construction prices.

24. Please provide an update on progress by local authorities in addressing slippage against the target for reduction of non-decent housing by 2010 together with a breakdown of those authorities where such slippage has occurred.

With work completed and existing plans in place we expect to have met 90% of the target by 2010. We are concentrating on delivering the remaining 10%. By early 2006, we expect that all Option Appraisals will have been submitted, with the possible exception of one authority.

However, LAs do not have intermediate individual targets set by ODPM. Intermediate milestones for the Decent Homes programme are set based on an estimate of what would be achieved at the national level. Low initial progress in terms of reducing non-decents in individual LAs can occur for a number of reasons including:

— Many Local Authorities now have better data which has increased the number of non-decents reported in their stock from their early estimates, this does not mean that these LAs are at risk of meeting the 2010 target.

— Some Local Authorities are choosing to adopt a strategy of tackling their worst dwellings first. Others are taking an element based approach, for example tackling all their roofs, followed by all their windows, with their dwellings only becoming decent after all the work on them is complete. Both of these strategies will mean that delivery against the target will increase as we approach the 2010 target, this does not mean that these LAs are at risk of meeting the 2010 target.

— Some Local Authorities are unable to meet the target through their own resources. These will need to obtain additional funding through ALMO, transfer or PFI which will increase their rate of progress to the target, these LAs will be at risk of not meeting the 2010 target if they do not get plans in place for additional funding.

When local authorities have put a plan in place to deliver Decent Homes they set out what they expect to achieve on an annual basis. We are putting in place a system to monitor progress against these plans.

25. What is the ODPM's estimate of the cost of the infrastructure required to promote the Government's housing development programme in the Growth Areas?

26. What provision has the ODPM made to cover those infrastructure costs over the next 15 years, and what provision has been made by other Government Departments?

Government continues to support work to assess overall infrastructure requirements for growth as in the approach taken in the Milton Keynes Prospectus and in other growth location business plans. Inevitably this is a complex and evolving process as both the detailed layout of development and new approaches in the nature of service provision affect what is needed. Government's aim is to provide as much information as it can on likely future levels of support but this needs to be made in the context of the public expenditure cycle. However, infrastructure lies at the heart of the Government's Sustainable Communities Plan and our commitment to public investment in the growth areas is clear. For example, between 1998-99 and 2002-03 public spending in the South East and Eastern Regions increased by over 17% in real terms per head of population.

We are working closely with other Government Departments to ensure that planned investment in schools, hospitals, green infrastructure and other facilities supports new housing in the growth areas. Good progress has been made but it is important that this continues in the future as the plans for the growth areas develop.

This progress is reflected in current spending plans, which include:

— Around £1.25 billion by ODPM to support projects in the growth areas and lever in over £3 billion from other public and private sector partners.

— Around £3.5 billion committed or planned by Department for Transport to infrastructure investment in the growth areas.

— A £200 million Community Infrastructure Fund to support transport infrastructure projects linked to housing growth.

— The Department of Health have included a Growth Area Adjustment to revenue allocations for PCTs in the Growth Areas. Amongst other factors, this led to the PCTs in the Growth Areas receiving funding increases of £860 million in 2006-07 and £970 million in 2007-08 (an increase over the two years of 20.8% compared to a national average of 19.5%).

— An additional £20 million of capital resources in 2005-06 to be allocated to Strategic Health Authorities in the growth areas and an extra £20 million revenue funding per annum for 2004-05 and 2005-06 for Primary Care Trusts in the growth areas.

— Increased funding for affordable housing to reflect the needs of growth areas and affordability pressures—Housing Corporations' Approved Development Programme for 2004-06 to provide £396 million for projects in the growth areas, funding 9,700 homes.

— Recognising the pressures on local authorities of rapid growth, the Local Government Finance Settlement for 2005-06 has abolished grant ceilings. Also, as part of the three-year settlement process ODPM are consulting on the use of forward looking population data, which will be beneficial to LAs experiencing significant levels of growth.

27. What grounds does the Department have for "assume[ing] that we will reach RPG9 delivery levels [for additions to dwelling stock in the South East] by 2007-08, and have recouped previous shortfalls [for additions to dwelling stock in the South East] by 2007-08 and have recouped previous shortfalls by 2011-12" (p64 of the DAR)?

The area covered by Regional Planning Guidance for the South East, 2001 ("RPG9") is the whole of the London and South East Regions and the southern part of the East of England.

Net additions to the housing stock across the RPG9 area as a whole (that is, new build adjusted to take account of conversions and demolitions) are estimated to be running above an overall annualised planning allocation of 58,000 units. Running above the overall annualised planning allocation has helped recoup the backlog in the early years of RPG9.

The trajectory against which ODPM assesses progress on housing delivery across the RPG9 area is one of the indicators of performance against PSA5.

The trajectory was developed using a set of assumptions including the then-current Regional Planning Guidance (RPG) targets and the need to make up the deficit in housing delivery in the early years of the 2001-16 period. The trajectory also reflects the additional homes to be built by 2016 in the Thames Gateway and the other three Growth Areas, insofar as they will fall into the RPG9 area (ie excluding the northern end of the London-Stansted-Cambridge-Northampton Growth Area).

The starting point for the RPG9 trajectory was a three year average of housing delivery up to 2001-02. This level was below the required "target" annual rate for delivering the housing numbers in RPG9, which it was assumed would be being met by 2006-07.

The assumptions made in developing the trajectory have proved robust in practice and net annual additions to the housing stock across the RPG9 area as a whole are above trajectory.

Recent housing industry statements that it would be capable of delivering a 10% compound increase in housing delivery year-on-year suggest that capacity should not be a barrier to future delivery. The Mayor's recent London Capacity Study also provides a positive assessment of the potential for delivery in London.

An assessment of the current position therefore suggests that housing delivery remains on track to meet the planning allocations set out in RPG9, although changes in trends in housing delivery in future years cannot be ruled out.

FIRE AND RESCUE

28. What steps are being taken to reverse the slight increase in sickness levels for full-time firefighters and control room staff noted on DAR p103, and to promote progress towards the SR2000 SDA target?

Sick absence management is an issue for which fire and rescue authorities have direct responsibility in their role as employers. ODPM is aware that some authorities have introduced policies which are beginning to have a direct impact on sickness absence within their organisations. Where good practice is identified ODPM is encouraging fire and rescue authorities to share their policies with colleagues across the service.

ODPM has undertaken to provide good practice guidance to help those fire and rescue authorities which are struggling with this issue As a first step towards the provision of this guidance ODPM, in partnership with HSE, is undertaking a study into sickness absence in the fire and rescue service to establish the causes, establish what measures authorities are taking to reduce sickness absence and to identify and disseminate good practice.

The scoping study for the project is currently being undertaken and it is envisaged that the research will begin in April 2006. The study should be completed and the report issued by March 2007.

CIVIL RESILIENCE

29. Have any changes in allocation of resources been made/are changes projected in light of the London bombings in July 2005 (p107 of the DAR)?

Current allocation of resources was made after the events of 11 September 2001. We will be reviewing the lessons arising from the recent emergencies and will be considering options for future allocation of resources.

30. Has the Contract Award for the Firelink radio system been made? What steps are being taken to bring the programme back to its original schedule?

Revised Final Offers were received from the two bidders EADS Defence and Security Systems and Airwave 02 Ltd on 31 August. The current plan is to award the contract by the end of November 2005, with a view to rolling out the Firelink system England, Wales and Scotland by 2009.

31. Have the regional delivery plans been agreed? When is implementation expected to be completed?

Regional Delivery Plans (now termed Delivery Priorities) have been agreed in all nine Government Office regions. The Priorities represent the agreed views of regional resilience forums on the priorities for emergency planning in the region, and are based on an assessment of risk and current response capability. The agreed Priorities drive the work of Regional Resilience Forums and are under continual review.

Current key priorities in each region include developing generic capabilities to respond to an infectious disease outbreak, and for dealing with a mass fatalities incident.

32. Can the Department explain how it expects that a "smaller number of authorities will be classified as either poor or weak and a higher number as excellent" when more exacting standards have been applied in the CPA (comprehensive performance assessment) methodology for 2005?

33. How does this expectation by the Government correlate with the evidence noted on p100 of the DAR that "the level of [customer] satisfaction with local authorities overall has declined on average by 10 percentage points over the past three years"?

The performance indicator quoted is for PSA4 against the SR 2002 PSA target. It was agreed before the development of new methodology for CPA to be implemented from 2005, which will apply a more stringent test to the performance of local authorities. This will include more emphasis given within the methodology to the council's focus on users and their satisfaction with the services delivered.

Analysis suggests that the key drivers of satisfaction are the quality of service provision, communication—the more informed people are about the council the more likely they are to be satisfied with overall performance (90% of people who felt the council kept them very/well informed were very satisfied); value for money, liveability and deprivation—people living in the most deprived areas are less satisfied. The new methodology will include an assessment of how well the council meets users' needs, including those in more deprived areas, and a greater focus on value for money. The "Harder Test" is likely to mean that some councils will move down a CPA category. However, the Government believes it is right that CPA recognises the need for continuous improvement in councils' delivery of services to local people.

We are currently considering performance indicators for the SR 2004 PSA target to take account of the likely impact of the new methodology on overall CPA scores.

34. Is the content of the IEG (implementing electronic government)statements audited (p93 of the DAR)? If so, by whom?

The content of annual IEG statements produced by all local authorities is subject to examination and verification by independent assessors, as well as being assessed by ODPM officials. IEG statements also form prima facie evidence for auditor certification of IEG capital grant expenditure, by auditors appointed by the Audit Commission.

ADMINISTRATION AND OTHER COSTS

35. Please explain the 13% in administration costs in 2004-05 (see page 120 of DAR).

As in earlier years, the 2004-05 figures in the Departmental Annual report are an estimate of outturn. These estimates are entered on to the Treasury database in January/February in advance of year end and the production of audited accounts. The estimates do not take into account a credit against the capital charge for the Office of £14,879,000. The credit is the result of a large negative working capital balance (total creditors significantly exceeding debtors) producing a credit on costs of capital (a negative charge). The Office has now refined procedures for calculating the charge during the year which will result in a more accurate estimated outturn. The administration costs outturn for 2004-05, recorded in the audited accounts, was £310,743,000, some 7% higher than in 2003-04.

The increase in expenditure is across a number of areas; additional work being undertaken by the Government Offices on behalf of sponsor departments (£7 million); extra resources for staff and projects in major policy areas in tackling disadvantage, urban policy and civil resilience (£3 million); an increase in Office-wide costs (£9 million) including IT services provided by Department for Transport for the main headquarters buildings (£3 million), a rise in the number of staff leaving on early retirement (£2 million) and major initiatives to produce efficiency savings across the spending review period.

36. Please give a breakdown of the capital employed or projected for employment in "Plant, equipment and other" from 2003-04 to 2006-07 (p119 of DAR); why is such a significant increase required?
(a) a breakdown of the capital employed or projected for employment in "Plant, equipment and other" from 2003-04 to 2006-07:

ANALYSIS OF PLANT, EQUIPMENT AND OTHER CAPITAL EMPLOYED/PROJECTED FOR EMPLOYMENT


	Year-end of 2003-04	Year-end of 2004-05	Year-end of 2005-06	Year-end of 2006-07
	£m	£m	£m	£m

Total	94	143	224	283
of which Corporate (Central Admin and the Government Offices):	26	48	69	76
and Non-Corporate (Programme):	68	95	155	207
comprising: Civil Resilience New Dimensions Programme and Fire Projects	67	91	150	203
Social Housing Database	0	3	4	3
Other Programme	1	1	1	1

(b) why such a significant increase is required:

The vast majority of the £189 million increase (£139 million) is in the major projects delivering nationwide capabilities for the civil resilience and fire programmes. Of the £50 million increase in corporate capital employed, most is planned for electronic transformation projects.

TECHNICAL

37. Why, in the top pie chart on p40 of the DAR, does PSA 4 not appear?

In 2004-05 there was no expenditure on this PSA in ODPM main DEL (RfR1). Expenditure fell in the Local Government DEL (RfR2).

38. Is Table CR (p127) set out in thousands, or millions, of pounds?

The table is in millions of pounds. The table was wrongly annotated to be in £'000.



© Parliamentary copyright 2006	Prepared 26 January 2006