Memorandum by the National Audit Office
(RG 103)
BACKGROUND
The Government announced in Budget 2005 that:
"an independent assessment, conducted by
the National Audit Office (NAO), based on the 2004 Initial Performance
Assessment of the London Development Agency, would be introduced
for Regional Development Agencies on a rolling basis during 2005-06.
The process would be part of a more transparent, efficient and
less bureaucratic system resulting in a net reduction of the audit
burden on RDAs".
The NAO were asked to undertake these assessments
in the light of their report to Parliament on the performance
of the Regional Development Agencies "Success in the Regions"
and their thorough knowledge of RDAs arising from their financial
audit work.
OBJECTIVES
Independent Performance Assessment (IPA) will
allow the Regional Development Agencies (RDAs), government, partners
and key stakeholders to understand the role and the performance
of the RDAs as strategic drivers of regional economic development.
IPA will provide each RDA with an assessment
of organisational performance, including capacity, and a plan
outlining the action the RDA is going to undertake to deliver
future improvements in performance. IPA will provide evidence
as to whether RDAs are organisations capable of managing their
own affairs efficiently and effectively and improving their performance
over time.
METHODOLOGY
The NAO have worked closely with the Audit Commission
to adapt the Comprehensive Performance Assessment (CPA) methodology
used in local government for the assessment of RDAs. The NAO IPA
methodology draws on the new streamlined CPA 2005 and the lessons
learnt from the Audit Commission's Initial Performance Assessment
of the London Development Agency.
The adapted methodology reflects the differences
between local authorities and the strategic leadership role and
economic focus of the RDAs. The development of the approach was
taken forward by a steering group on which the NAO, the Audit
Commission, the Treasury, Department of Trade and Industry and
the RDAs were represented.
The main elements of the IPA are:
— self-assessment by the RDA under
a structured set of themes;
— a review of the self-assessment and
supporting evidence by the NAO, leading to a focused period of
on-site work at the RDA and with stakeholders to validate the
evidence; and
— published assessment including a
mark under each theme and combined to give a final overall score.
KEY LINES
OF ENQUIRY
(KLOES)
KLOES are central to the IPA. They provide the
basis for the self-assessment and for the NAO assessment report.
The KLOEs provide a framework through which the NAO can gather
and assess evidence about how effectively the RDA is working.
The KLOEs measure how well RDAs understand their regions, how
this understanding transfers into ambitions and priorities, their
capacity and what the RDA is achieving.
There are five KLOEs and a number of sub questions
under the three over-arching headings of Aims, Activities and
Achievement:
Aims
What is the RDA, together with its partners,
trying to achieve?
Ambition
1.1 Through the Regional Economic Strategy,
has the RDA set clear and challenging ambitions for the region?
1.2 Are ambitions based on a shared understanding
amongst the RDA and partner organisations of regional needs and
opportunities?
1.3 Does the RDA provide strategic economic
leadership across the region and ensure effective partnership
working?
1.4 Does the RDA with its partners, have
an integrated and cohesive approach to improving regional economic
performance?
Prioritisation
2.1 Are there clear priorities within the
ambitions for the region?
2.2 Is there a robust corporate strategy
expressed within the Corporate Plan to deliver the priorities?
2.3 Is robust action taken to deliver the
Regional Economic Strategy?
Activities
How has the RDA set about delivering its priorities
for improvement?
Capacity
3.1 Is there clear accountability and decision
making to support delivery and continuous improvement?
3.2 Is capacity used effectively and developed
to deliver ambitions and priorities?
3.3 Does the RDA, with its partners, have
the capacity to achieve change and deliver its priorities?
Performance Management
4.1 Is there a consistent, rigorous and
open approach to performance management?
4.2 Do the RDA and partner organisations
know how well they and each other are performing against planned/expected
outcomes?
4.3 Is knowledge about performance used
to drive continuous improvement in outcomes and learning?
Achievement
What improvements has the RDA achieved/not achieved
to date?
5.1 Has the RDA delivered its contribution
to achieving the ambitions identified in the RES as set out in
the Corporate Plan for the timescales covered by the assessment?
5.2 Has the RDA made progress in achieving
its ambitions in sustainable development?
5.3 Has the RDA made progress in levering
investment into the region against the priorities set out in the
RES and has it influenced the resource allocation of partner organisations?
5.4 Has the RDA made progress towards achieving
its ambitions and priorities for its lead role?
SCORING
A score will be awarded for each theme on the
following scale:
1. Inadequate performance
The three questions attract equal weight and
this is achieved by doubling the score on achievement.
Each RDA will be given an overall score out
of a potential total of 24 points:
| Inadequate | Scores 6 to 8
|
| Adequate | Scores 9 to 14
|
| Performing well | Scores 15 to 19
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| Performing strongly | Scores 20 to 24
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OUTCOME
The overall assessment of each RDA will be accompanied by
a short report setting out the main findings of the assessment
team together with the strengths and areas for improvement. These
reports will be made public.
IPA is a means to an end. It informs improvement planning
which is a means to bringing about improvement to RDA performance.
Each RDA submits a draft improvement plan with its self-assessment,
and these are finalised when the final reports are published.
Each RDA will be expected to report in a transparent way
the progress it is making in implementing the improvement plan,
in building on the strengths and addressing the weaknesses identified
in the NAO's assessment. Each RDA will include progress in implementing
the improvement plan in its regular performance reports that it
puts to its Board, which are shared with Government and are placed
in the public domain every six months. Government Offices, as
the Government's representatives in the regions, will support
the RDA in their region in its continuous improvement and will
alert departments and Ministers to any issues of concern that
may arise.
TIMETABLE
The National Audit Office has been asked to undertake assessments
of all eight non-London RDAs in time for the findings to feed
into the Comprehensive Spending Round. The timetable is as follows:
Round 1—East of England Development Agency and Northwest
Development Agency has taken place between January and now. We
are expecting the reports to be made public in early June.
Round 2—South West Regional Development Agency, South
East England Development Agency and One North East will take place
between July and November.
Round 3—Advantage West Midlands, East Midlands Development
Agency and Yorkshire Forward will take place between November
and March.
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