|
Further supplementary memorandum from Communities and Local Government (DAR 09 - 04)
Introduction
We are grateful to the Committee for their written questions on the Department's 2009 Annual Report. We have considered the Committee's questions carefully and provide our responses below. Please note that an answer to question 32 will follow. We look forward to the Annual Report Inquiry hearings in October and November.
Q1: What are the Department's latest intentions in respect of the publication of a combined DAR and Resource Accounts?
A1: Our intention continues to be to produce a combined Annual Report and Resource Accounts from 2010 onwards. We are currently considering the format and timings for a combined publication, and would be happy to update the Committee on our conclusions later in the year.
Q2: The DAR does not give an individual assessment for progress against each DSO or PSA indicator. In future Reports can the Department provide a clear assessment of the performance against each individual PSA and DSO indicator, including whether no baseline has been set, or no data are available, if this is applicable?
A2: The Annual Report reflected HMT guidance, and performance on individual indicators was not assessed in the same way as summary assessments for a DSO as a whole. We did make clear for each indicator whether there had been a genuine and meaningful improvement from the baseline position. As requested, a more explicit assessment of progress on each individual indicator will be provided in the 2009 Autumn Performance Report and other future reports.
Q3: There are a number of indicators that require a Statistically Significant Increase or Decrease against the baseline in order for improvement to be reported. How has the Department defined 'Statistically Significant' for this purpose?
A3: Statistical significance is an important concept for sample-based surveys. A difference between two figures is said to be statistically significant if it can be attributed to something other than chance. As stated in Annex D of the Annual Report, the Department follows the generally accepted and established view that, for a difference to be regarded as statistically significant, it must have no more than a 5 per cent probability of occurring by chance
The actual size of the change required varies according to the sample size.
The DSO measurement annexes set out what this means in practice for all of the relevant indicators and we keep these updated as new survey figures become available. The DSO measurement annexes are attached at Annex A.
Q4: Who are the members of the Leadership Coalition Stakeholder Forum referred to at para 2.49 of the DAR? What is the purpose of the Forum and what work does it do?
A4: The Leadership Coalition reflects our commitment to working with our delivery partners on the design and delivery of policies and programmes. Its purpose is to bring together senior local and central government officials to discuss how local authorities, their local partners and central government can work together to ensure the delivery of better outcomes for people in their local areas, by embedding the local performance framework as the basis for a new relationship between central and local government.
The Coalition provides a forum to discuss issues arising from the implementation of Local Area Agreements, Comprehensive Area Assessments and the Local Government performance framework more broadly, to ensure progress towards delivering the Government's Public Service Agreements. The Coalition will also consider future iterations of the performance framework.
The specific objectives of the Coalition are to:
§ Discuss and resolve strategic cross cutting issues relating to the delivery of better outcomes and PSA targets. § Discuss and resolve issues and specific problems relating to the implementation of CAA. § Discuss and resolve issues around alignment of performance frameworks, data handling and presentation, and improvement activity. § Act as champions for the new performance framework among relevant stakeholders. § Champion and monitor progress against Government's ambitions to reduce the performance monitoring and reporting burden on local areas, in line with the aspirations of the Local Government and Public Involvement in Health Act. § Shape policy development work on the next iteration of the framework. § Link up to learning and development activity in individual departments and local authorities.
The Leadership Coalition comprises Director Generals from Government Departments, Directors from Government Offices and the Audit Commission, and Local Authority Chief Executives and other senior representatives from the Local Government family. The current members are:
§ Adam Sharples Department of Work and Pensions § Alexis Cleveland Cabinet Office § Andrew Campbell Communities and Local Government § Bronwyn Hill Department for Transport § Campbell Robb Office of the Third Sector § Corin Thomson Local Government Association § David Behan Department of Health § David
Cook § Derek
Campbell § Felicity
Everiss Government Office § Gareth Davies Audit Commission § George
Garlick § Graham Allardice Department of Energy and Climate Change § Helen Bailey HM Treasury § Ian Carter Audit Commission § Jill Rutter Department for Environment Food and Rural Affairs § John
O'Brien § John Ransford Local Government Association (Co Chair) § Jon
Coles Department for § Irene Lucas Communities and Local Government (Co Chair) § Mark
Hammond § Mike Anderson Department for Environment Food and Rural Affairs § Mike
More § Moira Wallace Department of Energy and Climate Change § Paul Roberts Improvement and Development Agency § Phil
Coppard § Philip Rutnam Bussines, Innovation and Skills § Ray Shostak HM Treasury § Rob Whiteman LB Barking & Dagenham § Robert
Dyson § Sara Williams Improvement and Development Agency § Stephen Jones Local Government Association § Tom
Jeffery Department for § Tyson Hepple Home Office
Q5: What progress have you made with the review of your approach to communication strategy and stakeholder engagement referred to at para 2.52 of the DAR? What action have you taken so far as a result of the review, and what further action is planned?
A5: The review referred to in the Annual Report led to a new Stakeholder Engagement Strategy. There are 4 key elements, summarised below:
Cycle of regular meetings to discuss stakeholder engagement In July 2009 a cycle of regular meetings began between the stakeholder engagement unit and four pilot directorates where stakeholder engagement is particularly important. The purpose is to improve our performance through a focus on the benefits of stakeholder engagement for the policy team and their stakeholders, to help ensure that policy is developed and delivered strategically and is focused on implementation. We then intend to roll out the new cycle across all policy directorates from the end of October.
Embedding stakeholder awareness in performance management The Department has completed its pilot of a new 360 feedback tool and has started rolling this out to all SCS and G6/7 staff. There is a required section on stakeholder engagement which will be a valuable source of insight for the department.
We are embedding stakeholder awareness in our core performance management objectives. All staff will now be expected to complete a 360 degree exercise, which includes how well they maintain stakeholder relationships and we will be publishing a model objective.
We expect these moves to encourage take-up of the stakeholder engagement training offer detailed below.
Continuing Research Programme In 2008 we conducted 23 qualitative interviews with some of our key stakeholders. They gave us a good indication of the areas we might want to improve, such as reducing working in silos and involving stakeholders earlier in policy discussions. Key findings from the interviews were included in the Annual Report 2009 (at paragraphs 10.72 and 10.73) and were shared in a letter to key stakeholders, with a follow up face to face discussion.
This work was a catalyst for a more in-depth piece of research that is currently underway and will report its findings later in the Autumn.
Training Stakeholder engagement is a key part of the new learning and development strategy with the following training opportunities for staff at all levels:
§ The core management skills programme modules aimed at EO's / HEO's will cover stakeholder engagement; § The Developing High Performance Behaviours programme for SEO-SCS ("Partnership Working") on influencing, negotiating and face-to-face people skills; § The programme of Rapid Development Workshops targeting specific skill gaps and responding to identified development needs includes a session on "Delivering tough messages to external stakeholders"; § 300 members of staff will attend the new Programme & Project Management training this calendar year which includes a module on stakeholder engagement developed by the central unit.
Since the beginning of 2009, the stakeholder engagement team has delivered a presentation at all four CLG staff induction sessions held for new staff joining CLG.
The stakeholder engagement team hosts lunchtime seminars where external stakeholders and/or officials speak and take questions about their experiences. Since January 2008 there have been 13 seminars, attended by 546 people. A further three are planned by the end of 2009.
Q6: The narrative states that the baseline was
185,000 net additional homes in 2005-06: annual housing supply in
a. On what basis has the Department assessed this indicator as showing improvement, when the latest data suggests there will be deterioration in 2008-09?
A6 [a]: PSA 20 Indicator 1 (DSO 2.1) measures the number of net additional homes delivered per annum. Finalised data is available in February/March each year for the previous financial year. It is derived from the number of new build permanent dwellings; plus the net gain from dwelling conversions; plus the net gain of non dwellings brought into residential use; plus net additions from other gains and losses to the dwelling stock (such as mobile and temporary dwellings); less any demolitions during the financial year.
We do not have statistics for the number of net additional homes delivered in 2008-09. The assessment provided in the Annual Report is based on the latest finalised data published in February 2009 covering the period 2007-08. It showed that there were 207,500 net additional homes delivered in the period 2007-08, which was an improvement on the 199,000 delivered the previous year.
b. Is the net additional homes figure for 2008-09 now available, and if so, what does this reveal?
A6 [b]: The net additional homes figure for 2008-09 will be available in February/March 2010.
As set out in the Annual Report, we expect the next data to confirm that levels of net additional homes will be lower. The position on this will be reported in the 2010 Annual Report.
Q7: As at 1 April 2009, 10 per cent of necessary Development Plan Documents had been adopted compared to an 80 per cent target by March 2011. The Department states that according to Local Authority plans a significant number are due to be adopted over the next two years, although it is aware of slippage and believes that achieving the final target will be very challenging. What measures does the Department have in place to ensure that a greater proportion of Local Authorities adopt their Development Plan Documents by March 2011?
A7: For PSA 20 Indicator 6 (DSO 5.2), the Department remains focused on meeting the target to have 80 per cent of Development Plan Documents (DPDs) in place by March 2011. As stated in the Annual Report, the Department is aware of some slippage and is working with local authorities to identify and resolve any issues.
The focus of Department support is on priority local authority areas (where higher housing growth is proposed) to ensure both that there is minimal further slippage and that support is in place to ensure that DPDs developed are sound. We have embarked on a programme of actions to support delivery of these particular DPDs. A number of these actions will be of benefit to all local authorities preparing DPDs and we will ensure that this learning is shared. CLG is providing the funding and has been working in close liaison with partners to monitor effectiveness.
Guidance to improve understanding of DPDs and the confidence of planners: § CLG funds and authors the Plan Making Manual (PMM), which is the primary source of guidance on DPD preparation. The PMM is undergoing continuous development to reflect changes brought about through EU & UK legislation and Planning Policy Statements; has practitioners' forums (for officials and elected members) to share questions and answers; and has case studies that highlight good practice. § Planning Together - an updated guide for Local Strategic Partnerships and Planners that encourages better joint working between partners in the delivery of each area's overarching Sustainable Community Strategy and LAA through plans in Local Development Frameworks (LDFs). The aim is to ensure that all local partners who have a spatial interest in the SCS understand the processes necessary to deliver it - e.g. how their capital budgets are linked to local development. § Planning Inspectorate: 'Lessons Learnt' review is due to be published in the autumn for local authorities that will highlight lessons learned from the 100+ documents examined since the original publication in 2007. This will help local authorities avoid certain pitfalls and gain confidence as they prepare their DPDs.
Incentives and resources: § Housing and Planning Delivery Grant - an element of grant is given for up-to-date plan making. Year two (2009-10) of Housing and Planning Delivery Grant will see an overall investment of £135 million to local planning authorities. Of this total, £60 million is available for the planning element of the grant of which £24 million rewards local planning authorities for either submitting or adopting a core strategy or a development plan document which allocates more than 2000 dwellings. § Grant to certain Local Planning Authorities (with larger Regional Spatial Strategy housing allocations) following the statutory publication stage of their Core Strategies - to assist with programme management and Examination in Public work. § In certain local authority areas delivering higher housing growth or where several authorities are working across boundaries, additional bespoke support has been agreed, in liaison with Government Offices, which aims to speed up DPD preparation.
Support packages to tackle slippage and quality of plans and to improve the capacity and skills of local authorities:
i) Government Offices: GOs are providing extensive support and challenge at all stages of DPD preparation over slippage and unnecessary slack in their proposed DSO 5.2 DPD timetables, including workshops with utility companies.
ii) Planning Inspectorate: PINS, in liaison with GOs, are providing a pre-publication review of Core Strategy DPDs which are at a fairly advanced stage, typically 6 months away from submission for the Examination in Public. This involves an experienced inspector looking at the strategy and key pieces of underpinning evidence to provide an initial without-prejudice assessment of the approach taken, particularly in relation to the generation of convincing and appropriate strategies and ask probing questions for consideration
iii) Planning Advisory Service: PAS are providing three key support mechanisms at an early stage: § A diagnostic review of the foundations for, and management of, the production and implementation of the local development framework as an effective spatial plan. § Training modules including option forming and selection, sustainability appraisals, member training, and project management. § A Spatial Planning Peer (an experienced and practising planner from an authority with a good track record) available to provide support, constructive challenge and mentoring in any chosen area of the LDF process.
iv) CABE: CABE, in liaison with GOs, provides informal workshops where local authorities can get independent informal advice and support from a CABE expert panel on how to develop a spatial vision within draft strategies.
Q8: On page 43 of the Departmental Report the Department discusses how it is providing significant investment to support local authorities to achieve continued efficiency gains, including £185 million for the Regional Improvement and Efficiency Partnerships (RIEPs) and the £115 million capital Efficiency Transformation Fund, along with funding for the Improvement and Development Agency. The Department reports that in their first year, RIEPs have helped councils to deliver over £100 million of efficiencies and supported 36 councils facing particular difficulties.
a. How much will the Department need to spend on RIEPs in future years, and does it anticipate them paying for themselves in terms of efficiencies generated?
A8 [a]: The £185m and £115m referred to relate to spending during the CSR07 period. It is difficult at this stage to provide a definitive answer on the amount of future investment beyond the CSR07 period as any additional investment will be considered as part of a future spending review. In helping local authorities to deliver £100m of efficiency savings by the end of their first year (against a year one investment of just under £50m), the RIEPs are already well on their way to repaying the total core investment from CLG of £185m proposed for the CSR07 period.
b. Can the Department provide more details of the type of work done by RIEPs to help councils achieve efficiencies, and of how these efficiencies are measured and verified?
Examples of the type of projects pursued by RIEPs to help local authorities achieve efficiencies are set at Annex B. Further examples can be found in the RIEP annual reports, available at: www.idea.gov.uk/idk/core/page.do?pageId=9367552.
Guidance on calculating and reporting efficiency savings has been signed off by all RIEPs and shared with CLG. This refers to the key principles set out in the measurement advice that the Department provides for local authorities, which is attached at Annex C.
The guidance recommends that each RIEP should define its own specific process for obtaining independent verification for its arrangements for calculating its efficiency savings, for example by a local authority treasurer within the region. In addition, 7 of the 9 RIEPs use the Mietool (Measuring Improvement and Efficiency tool) that was developed by CLG and the RIEPs to project and track the costs and benefits of different projects. The other two regions use alternative methodologies that were developed with and approved by the RIEP partners.
Q9: This indicator has not yet been assessed because the baseline year will be 2008-09 and data is not available until July 2009. Why has 2008-09 been chosen as the baseline year when other indicators that draw on the same source of data (the Citizenship Survey) have 2007-08 as their baseline year (e.g. indicator 1.2)?
A9: The reason 2008-09 was chosen as the baseline year for DSO indicator 1.1 rather than 2007-08 is because the Citizenship Survey did not ask the relevant question until 2008-09, whereas the other Citizenship Survey questions that are used in our DSOs and PSAs were already being asked in 2007-08. We recognised that a new question would be needed to assess progress on this indicator, which was agreed in the first year of the CSR period. The 2008-09 baseline data for this indicator was published on 16 July 2009.
Q10: The Department will be developing new targets to replace the existing definitions and measures in both these indicators because the Comprehensive Performance Assessment (CPA), which is currently used, was last carried out in 2007-08. Appropriate baselines will be taken from the new Comprehensive Area Assessments (CAA) reports that replaced the CPA on 1 April 2009, the first of which are expected by the end of the year. There will be no direct read-across between what is measured under the two systems (para. 3.58). How will progress against indicators 1.4 and 1.5 be tracked across the entire CSR07 period if the Department is completely revising these indicators after just one year of assessment, with no direct read-across to the new indicators?
A10: Progress on DSO indicators 1.4 and 1.5 will be tracked across the CSR07 period using the combination of indicators supporting DSO1, notably, those based on independent assessments provided by the Audit Commission and other inspectorates of local public services. The inspectorates' approach to their assessments has changed so the indicators have to change too. They are still a good measure of performance.
When the DSO indicators were developed, the new Comprehensive Area Assessment (CAA) was still in development and the Department has been clear throughout that these would need to be reviewed and possibly amended once the framework for CAA was finalised. CAA was developed in response to a broad consensus that a new approach to assessment and inspection was needed, but when indicators 1.4 and 1.5 were being developed and adopted, CPA remained the most robust measurement of local government performance available. As there will be no direct read-across between the CPA results and CAA results, consideration of progress will need to recognise the fact that data for years prior and post 2009 will not be comparable.
The Department, as previously stated, will need to develop new indicators aimed at measuring local government performance, to replace both indicators, with measures developed in the light of baselines from the first CAA reports.
Although the judgements are less complex for Fire and Rescue Authorities (FRAs) than for local authorities, the same issue does arise for DSO 6.3. CLG will explore with the Audit Commission whether it is possible to consistently compare CAA judgements for FRAs with the Direction of Travel and Use of Resources assessment outcomes currently used in DSO 6.3; but if this is not possible a similar re-basing exercise will be necessary.
Q11: Paragraph 3.62 of the Departmental Report outlines how the NAO recommended that the Department needs to put processes in place to ensure that data submitted by local authorities are accurate. The Department' s view was that this was covered by the work of the Audit Commission and that to undertake further verification separately would duplicate their work at considerable cost to provide no greater benefit. What further discussion has taken place with the NAO on this conclusion, and has the NAO accepted the Department's view that the work of the Audit Commission already provides the necessary assurance over the data used to measure progress against this indicator?
A11: No further discussion has taken place with the NAO on this conclusion for DSO indicator 1.7. As set out in paragraph 3.63 of the Annual Report, the NAO intends to consider the extent to which the new CAA assessments address the accuracy of value for money figures reported by local authorities as part of a follow-up review.
Q12: Can the Department provide a table which sets out clearly funding for key areas covered by the Housing Package, such as Decent Homes, homes for social rent, etc, and where this funding has come from, such as spending that has been brought forward, additional funding, or transfers from other departments?
A12:
Building
· £756 million to extend the existing affordable housing programme to enable RSLs to deliver up to an additional 12,500 affordable homes. · £504 million to expand the Kickstart programme announced at Budget 2009. The programme aims to unlock stalled housing sites, and this additional investment will enable the delivery of 13,000 additional homes, of which 4,000 will be affordable. · £240 million for direct development of 3,000 new council social rented houses by expanding the programme announced at Budget. · £16 million for the development of public sector land owned by the Homes and Communities Agency to deliver an additional 1,250 units of which 500 will be affordable.
Up to £930 million towards the cost of this package will come from underspends in other Government departments, including access in 2010-11 to up to £340 million of anticipated capital underspends in Communities and Local Government, the Department of Health and the Department for Children Schools and Families, and any available capital underspend from 2009-10 in Communities and Local Government.
It is proposed that the remaining funding (£586 million) will be switched from a number of CLG and HCA capital spending programmes, as follows:
HCA programme savings will be derived from a combination of effective project management, bearing down on grant rates and cost efficiencies, targeting investment in areas that produce the most cost effective outputs and slippage on a range of programmes.
Q13. The Committee received a letter from the Minister for Housing and Planning dated 17 July 2009 which raises several questions:
a. The letter says that £930 million will be contributed from underspends in other departments. i. Were these other departments intending to utilise those underspends in future years, by rolling them forward under End Year Flexibility arrangements? ii. How have the programmes of these other departments been affected as a result of this transfer of funds?
In large part, this has been achieved by the reallocation of anticipated underspends - for example, from the Department for Transport and Home Office. Through careful financial management, these funds have been released and redirected to new priorities. For example, some departments had planned to use underspends to co-finance PFI projects; in the event, changing market circumstances have enabled some projects to reduce their costs, enabled some projects to deliver with less been better than expected for some projects releasing these resources for other priorities.
There is no automatic right for Departments to draw down any EYF entitlement generated by underspend, which is subject to normal Treasury scrutiny on the basis of need, realism, and the wider fiscal position.
b. The letter refers to a capital underspend in the Department itself - how did this underspend arise and what mechanism will be used to make it available in future years?
The
package is mainly funded though reprioritisation of CLG capital
c. The letter says that capital funding allocations from the Growth Fund will be re-profiled by £128 million in 2010-11 to £167 million. iii. What does it mean to 're-profile the Growth Fund by £128 million in 2010-11'? iv. What would these funds have originally be used for and will the Growth Fund get them back in subsequent years? v. The Department states that it is discussing the impact of this change with local authorities - what was the outcome of these discussions? vi. What local authority programmes will need to be cut back?
The Growth Fund provides unringfenced funding to support the delivery of infrastructure in the three newer Growth Areas and the Growth Points. To fund the Pledge the Government is diverting £128 million from the fund to support the direct provision of new affordable housing in 2010-11. Availability of funding beyond 2011 is subject to the outcome of the next spending review.
The Department will be consulting with local authorities in the Growth Areas and Growth Points on proposals to reduce their provisional 2010-11 capital funding allocations. It is for local authorities to prioritise how the funding is used in their area with performance monitored through the indicators in the Local Performance Framework. Reprioritising in this way does mean that local authorities will - in the short term - have less to spend on the types of projects supported by the Growth Fund. However, they may also benefit from both the increased funding for local authority building of social homes and generally increased levels of affordable housing in their area as a result of the Housing Pledge. In addition, it is important to recognise that the sharp decline in housing market conditions has had a significant impact on new housing supply in these areas resulting in a greater short term supply of sites with planning approval that are available for future development. The focus has been switched to facilitating development of as many of these sites as possible, primarily through the new RSL and Kickstart programmes.
d. The letter says that planned funding for Arm's-Length Management Organisations (ALMOs) will be reduced by £150 million in 2010-11 to £609 million. vii. Why has funding for ALMOs been reduced by £150 million? viii. How will this cut be achieved, and which ALMOs will be most affected?
The Decent Homes Arms Length Management Organisation (ALMO) programme provides supplementary funding to the Decent Homes programmes for local authorities who set up an ALMO, on achievement of a two-star standard. The Government remains committed to completing the Decent Homes programme in the long term and fully intends to build on the very significant achievements of the past few years. However the current priority is to maintain and enhance the provision of new housing in the short term whilst maintaining our long term commitment to decent homes.
£150
million of funding is therefore being deferred from the funding planned for
Decent Homes 2010-11. This will affect those ALMOs that have not yet met the
Audit Commission's two star standard. ALMOs do not receive any Decent Homes
funding until they reach this standard. All those ALMOs with inspections in
the remainder of 2009-10, and in 2010-11, have been notified that funding is
not likely to be available until 2011-12 if they are successful and reach the
two star standard. This potentially affects 12 ALMOs, 8 of whom are in
This will not affect those ALMOs we are already funding, although the HCA will be holding discussions with a number of those on the programme to ensure their funding profiles are still appropriate as the complex nature of the Decent Homes programme can result in programme delays and slippage .
e. £75 million will be switched from the Private Sector Renewal budget in 2010-11. ix. What programmes was the Private Sector Renewal Budget to be applied to? x. How will the £75 million reduction in budget affect the outcome of these programmes?
The Private Sector Renewal programme seeks to increase the proportion of vulnerable households living in decent homes in the private sector. Over £1billion has been made available to local authorities through the Regional Housing pot over the period 2008-09 to 2010-11 to help improve housing conditions for the most vulnerable in the private sector.
The Government focus is to continue to target the 1.4 million vulnerable private sector households (those on income and disability related benefits who are least able to change their housing circumstances) living in non decent homes. It is important to recognise that maintaining privately-owned homes is primarily the responsibility of the owner. Nevertheless, local authorities have powers to assist vulnerable households living in the very worst conditions. Since the 2002 Regulatory Reform Order, local authorities have had increased discretion to develop their own approaches for improving housing conditions in the private sector.
It is therefore expected that local authorities will target the available resource to those most in need and offer homeowners a range of options to ensure that resources can be used more efficiently. The process for determining individual local authority Private Sector Renewal allocations for 2010-11 through the Regional Housing Pot will begin later in the autumn and officials will be writing out to the regions at this time. Although the reduced level of funding will mean that fewer homes will be improved than originally anticipated, the diverted money will support the provision of much needed affordable housing.
Q14. The Homes and Communities Agency (HCA) has been set an efficiency target of three per cent in operational efficiency savings in 2009-10 and 2010-11 plus a requirement to find £183 million through efficient and flexible management of its housing and regeneration programmes.
a. What has led the Department to believe that further efficiency gains can be realised from the HCA? b. How will the HCA achieve the more stringent three per cent efficiency target?
A14 [a&b]: The HCA, as with all Arm's Length Bodies, has a key role to play in delivering across the Government's efficiency agenda. It is right, therefore, for Government to set stretching but achievable efficiency targets for HCA that recognise its increasingly effective organisational and delivery model.
It was always anticipated that as part of its ongoing standard operating procedures, the HCA would work to deliver efficiencies across all categories of operating expenditure. In some cases this has already resulted in the ability to accommodate additional work streams, such as the Housing Stimulus Programme, with the same core resources.
CLG business planning process for the next three years will involve the HCA making a further 3% operational efficiency saving in each of the years. This will be achieved by a mixture of elements including process improvement, collaborative procurement savings, applying government space standards to accommodation changes, the consolidation of office space and subletting of surplus space, reduced travel and subsistence costs and an in depth review of all operating costs to consider how those costs can be reduced.
In addition to efficiencies arising from the merger of back office functions and other operational efficiencies, it is anticipated that the main benefits arising from the creation of HCA will flow from the more effective delivery of housing and regeneration at the regional and sub-regional levels through improved and more effective frontline support from the HCA. The Department is already working closely with HCA to further increase the efficiency and flexibility of its funding and delivery arrangements. The HCA is also working to identify how these new flexibilities, once established, will allow it to secure new and innovative funding models which will, in turn, drive value for money.
Since December 2008, the HCA has supported Government in the delivery of a range of interventions in the housing market, including Kickstart, that would have been difficult or impossible to achieve through HCA's predecessor bodies. In this, HCA has already demonstrated its ability to work more effectively and efficiently than its predecessor bodies. This, alongside its performance from creation to year end, has given Government confidence in the HCA's abilities to deliver.
c. Can the Department provide further detail of the 'efficient and flexible management' of housing and regeneration programmes that will generate £183 million in efficiencies?
A14 [c]: From the beginning, one of the key reasons for creating the HCA, was to provide a more efficient and effective organisation that would both identify synergies which would allow more streamlined delivery and create the space for new programmes and initiatives within the existing budgetary envelope to be developed. For example, a subsidiary benefit of adopting this approach has been our ability to develop the Housing Pledge.
HCA programme efficiencies will be derived from a combination of effective project management, bearing down on grant rates, targeting investment in areas that produce the most cost effective outputs and slippage on a range of programmes. Furthermore, more widely, benefits are likely to flow from HCA's ability to achieve economies of scale, to utilise a wider skills base across the whole spectrum of its activities, and the application of commercial logic from HCA's predecessor bodies (English Partnerships and the Housing Corporation) into HCA's wider programmes.
Q15: On page 67 of the Departmental Report the Department discusses the recent independent review of the private rented sector (the Rugg review). What progress has been made in implementing the recommendations made by the review since the publication of the Government's response to it in May?
A15: The Government response to the independent review of the private rented sector, published for consultation in May 2009, set out a comprehensive package of measures designed to support the important role that the private rented sector performs, while delivering against the key objectives of greater professionalism, enhanced consumer protection and improved stock condition. The response presented detailed questions on how these measures might be implemented. The further engagement of key stakeholders was secured through a series of "Task and Finish" groups focusing on the key aspects of the consultation.
We have now received the results of the consultation which are being developed into proposals that will be put to Ministers with a view to announcing the outcome before the end of the year.
Q16: The Department reports that for the 2007-13 ERDF Programmes, changes in the exchange rate mean that an additional £144m will be available to these programmes over 2009-10 for project activity, even though the Euro value of the programmes remains the same (para. 5.34). What measures does the Department have in place in case future exchange rate movements reduce the anticipated additional money available in 2009-10?
A16:
The European Commission fixes the overall value of the ERDF Programmes together
with their annual minimum spending targets in Euros. However, Regional Development Agencies
(RDAs), who manage the programmes in
RDAs
monitor their ERDF spend and commitments carefully to ensure that any changes
in exchange rate between Euro and
Based on H M Treasury's exchange rates for forward planning purposes the overall value of 2007-13 ERDF programmes in sterling has gone up from £2.24 billion in December 2007 to £2.973 billion now. Since exchange rates can move in either direction the Department has been prudent in limiting the revaluation of the programmes in sterling to the budget allocations for 2009 and 2010 only.
Q17: This
indicator covers overall employment rate amongst the working age population at
neighbourhood level in deprived areas, and success will be demonstrated by
narrowing the gap within WNF authorities compared to the rest of
A17: We are very aware of the risk to DSO indicator 3.7 and worklessness and skills are a priority for this Department - as they are for the rest of Government at the moment.
Deprived neighbourhoods - by their very nature - are especially vulnerable to the macro-economic pressures that the current recession is causing. The areas where we are seeing the highest percentage rise in unemployment are those same areas that have long struggled with their industrial legacies and that were hit particularly hard by the last recession.
The funding Government has concentrated on these areas in the last decade recognises these vulnerabilities and the very decision to concentrate Working Neighbourhoods Fund funding here demonstrates an understanding and acknowledgement of the challenges they face. While analysis of benefit claimant data suggests that the most deprived areas are seeing particularly high job losses, this does need to be considered in the context of a sudden and far reaching global economic slow down. The gap between the worst performing areas and the rest is no wider than it was in 2004 and we are still a long way from the disparities we saw in 2000.
This does not mean that we are complacent about the problem. We have provided, and will continue to provide - extra support to councils that are experiencing the highest rises in unemployment. We have taken on the recommendations from the Houghton Report on worklessness - which highlights the vital role local government have to play in tackling the downturn and the effectiveness of locally tailored schemes. These arguments have also been more recently rehearsed in the Audit Commission report 'When it comes to the crunch' and we are increasing funding to local authorities to build capacity in tackling worklessness and increasing freedoms and flexibilities at the local level to ensure that local areas can respond quickly and effectively to the specific problems they face. This work complements and supports the decision to provide Working Neighbourhood Fund and Local Enterprise Growth Incentive funding through the area based grant - neither is ring-fenced, allowing local partners a unique opportunity to respond innovatively, flexibly and quickly.
Support that has been put in place to tackle unemployment in our most deprived neighbourhoods and respond to the downturn includes:
§ One third of the 150,000 Future Jobs Fund (FJF) jobs will be focused on areas that have traditionally struggled with high unemployment. The FJF - launched earlier this year - is targeted towards helping young unemployed and others facing disadvantage in the labour market. The first successful bids to this fund were announced in July already promising 47,000 additional jobs across the country. Local authorities have played a vital role leading and coordinating successful bids and will continue to do so. § We are providing £3m to the Regional Improvement and Efficiency Partnerships to work with local authorities and their partners to support the delivery of improved employment outcomes locally. § We are taking legislation through Parliament which, subject to passage of the legislation, the provisions of which will require local authorities to strengthen their evidence base and strategic approach by developing worklessness assessments (as part of the local economic assessment duty). § We are working with local authorities on Work and Skills Plans and a National Worklessness Forum to ensure that best practice is developed and shared effectively and quickly.
Q18: The baseline for this indicator at 2007-08 is 75 per cent. The latest data shows no statistically significant movement from the baseline, with the measure currently at 77 per cent (para. 6.31). The Department, however, is recording this as improvement against the indicator (page 187), whereas it does not count the two other indicators that show no statistically significant improvements (DSO 4.2 (para. 6.28) and DSO 4.5 (para. 6.35)). Why has the Department assessed this indicator as an 'improvement'?
A18: The 'Progress against DSO 4 indicators' box on page 120 of the Annual Report describes the targets for DSO 4 indicators. For indicators 4.1 and 4.3 the target is for no statistically significant decrease from the baseline. Citizenship Survey data for April to December 2008 showed no statistically significant movement from the baseline for these indicators, thus currently meeting the target of no significant decrease. In contrast, the target for indicator 4.2 is a statistically significant increase and for indicator 4.5 it is a statistically significant decrease. These indicators are currently not being met, as April-December 2008 data showed no statistically significant movement from the baseline.
Q19: The DSO is that annual housing provision in Regional Spatial Strategies (RSSs) should reflect the target of 240,000 new homes a year by 2016, and the target was for seven out of eight RSSs to be in place by the end of 2008-09. This has not been achieved, as only five full revisions of RSSs were completed. Why was this target was missed, and what impact has this miss had on annual housing provision in RSSs?
A19:
The target for DSO indicator 5.1 was missed because the RSSs for the South East
and the South West were not published by the March 2009 target date as
expected. The South
This delay to the publication of the South East and South West RSSs is not expected to affect the aim of having overall targets of 240,000 homes pa in Regional Strategies by 2016. The only other outstanding RSS is the Phase (2) West Midlands RSS which has just finished its examination in public and its final publication is planned for 2010. The Phase (1) West Midlands RSS was published in January 2008.
The production of RSS (in future Regional Strategies) is an open-ended process; as these plans are subject to further rounds of revision. When the current round of RSS revisions started in 2004 the total number of houses contained in the plans was 150,000 pa, this figure has subsequently risen to 210,000 pa and future rounds of revisions will aim to achieve 240,000 pa in Regional Strategies by 2016. Eight out of the nine Regional Planning Bodies are preparing project plans or already bringing forward the further revision of their RSSs and the London Plan.
Q20: The Autumn Performance Report 2008 suggested that this indicator, which is that 90 per cent of local planning authorities will have identified a five-year supply of ready-to-develop housing sites by 1 April 2010, had already been met, and that the Department was checking the data. The Departmental report states that research on local authority data made it clear that many had not taken the delivery of housing sites fully into account and the Department has now issued best practice guidance to authorities. Local authorities will provide revised data by July 2009.
a. How did this problem with the data arise? b. What is the current situation with regards to revising the data?
A20: For DSO indicator 5.3, we reported in the 2008 Autumn Performance Report that 90 per cent of local authorities had identified a five year supply of ready-to-develop housing sites. This figure was based on local authority returns, provided in April 2008, about their housing land position for 1 April 2007 to 31 March 2012. However, there were risks over the integrity of this figure; first because policies within Planning Policy Statement 3: Housing had not fully bedded in and; second in the light of additional difficulties local authorities experienced in assessing the deliverability of sites due to the economic downturn.
We assessed the extent of this risk by checking a sample of the data provided and are implementing a range of mitigating measures that recognise the difficulties being faced by local authorities and developers alike. This includes publishing best practice guidance and refiguring the Housing and Planning Delivery Grant in year 2 and year 3.
The land supply data was updated in April 2009. This data shows that 86 per cent of local authorities report they have identified a five year supply of ready-to-develop housing sites. We are again managing the risk regarding the accuracy of this figure by carrying out a further sample of checks and we will publish additional best practice guidance to support local authorities. In year 3 we intend to carry out comprehensive checks of the data provided by local authorities and we have reserved the right to withhold money from local authorities.
Q21: Both the Killian/Pretty review of planning permissions and the NAO have recommended that this target, which is that 80 per cent of all major applications nationally be processed within 13 weeks, should be changed because the 13 weeks only represents a small part of the overall planning progress and it ran the risk of distorting behaviour. The Department reports that it accepts the need to revise the target and aims to have a new approach in place from April 2011. Does the Department plans to continue monitoring the existing target until the new approach is in place, and if so how will it ensure that behaviour is not distorted by retaining the existing target?
A21: The Department plans to continue to monitor the existing 13 week target for DSO indicator 5.4 because timeliness remains important. The Department is working on the development of a new indicator which is likely to be composite in nature and will retain an element of timeliness. There has been a large increase over time in the percentage of major applications that are dealt with within 13 weeks; currently this improvement has levelled off at 70 per cent. Planning Delivery Grant is no longer used as an incentive to perform against this target. The bottom performing 10-20 local authorities against this indicator will be offered support by the Planning Advisory Service to improve their services.
Q22: The target is to reduce the overall percentage of planning applications that are subject to appeal by the end of the CSR period, but latest data indicate that in fact the situation is getting worse.
a. What the reasons are for this upward trend in planning applications that are subject to appeal?
A22 [a]: For DSO indicator 5.6, we believe that the apparent modest increase in the proportion of planning applications subject to appeal earlier this year was due to the time taken for planning applications to work their way through to appeal, given the six month period in which applicants are able to appeal a planning decision, during a period when the number of planning applications is falling. Consequently, a decline in planning application numbers could take up to six months to impact upon appeal numbers, and to distort the picture around the proportion of applications subject to appeal during this period. The latest data indicates that appeal numbers appear to be reducing. We currently expect to determine around 18,000 in 2009-10 compared to over 20,000 in 2008-09.
b. What is the Department doing to redress the situation?
A22 [b]: Since 2004 we have taken a number of initiatives to improve and manage the appeals process as well as to reduce the number of appeals. Key initiatives have been:
§ The householder development consent review to reduce the number of minor planning applications on domestic dwellings and thereby reduce appeal numbers; § The introduction of the Householder Appeal Service to fast track domestic appeals and deal with them more proportionately, therefore releasing LPA and Planning Inspectorate resources for more complex appeals; § A range of measures through the Planning Act 2008 to provide an improved service to appellants and deliver efficiencies, such as enabling the Planning Inspectorate to determine the appeal method to ensure that the most appropriate procedure is used for each case, and changing the nature and content of appeal documents which is delivering process savings and reducing complexity.
In addition, through the programme of actions to be taken forward through the Killian Pretty Recommendations, we are taking action to further reduce the number of small scale proposals that need planning permission (by increasing permitted development rights) and strengthen the process of engagement at the pre application stage.
Q23: The NAO noted that the indicators selected for DSO 5 involved "no explicit consideration of the infrastructure delivery, economic development and climate change referred to in the DSO beyond the extent to which these may be addressed within individual authorities' planning activities" (para 7.45). Does the Department have any plans to address this point, and if not, why not?
A23: We do not have plans to include indicators in this DSO that directly address the outcomes in respect of infrastructure delivery, economic development and climate change because these are captured in other targets and indicators in the suite of PSAs and DSOs across Government (for example PSA 2 on regional economic development and PSA 27 on climate change). In addition while planning is an important lever in achieving these outcomes other factors tend to be more important which is why these indicators are best addressed in the relevant PSA or DSO where all these issues (including planning) can be considered.
Q24: What progress has been made with the risk assessment and development of written procedures in relation to indicator 5.2 referred to in paragraph 7.47?
A24: Significant progress has been made on both the risk assessment and the development of written procedures. A set of risk assessment criteria have been drawn up and a workshop involving officials from CLG, Government Offices, and PINS is being planned shortly to discuss these, which will inform the final risk assessment. The text below sets out the written procedures for DSO 5.2 using LDF database information supplied by local authorities to Government Offices as the source data.
It
should be noted that since March 2008 several DSO 5.2 DPDs are no longer being
taken forward at the discretion of local authorities. This may be a result of
local government reorganisation or a decision to produce a joint strategy (e.g.
Newcastle upon Tyne and
Q25: The Department reports that it has concluded that there is a continuing need to drive Fire and Rescue Service (FRS) procurement efficiency at a national level and that a national procurement body represents the best way to deliver fire-specific procurement (para. 8.25). A revised National Procurement Strategy for the FRS is due to be published in the summer of 2009.
a. When will the revised National Procurement Strategy be adopted?
A25 [a]: The National Procurement Strategy for the Fire and Rescue Service 2009-12 was published and came into effect on 7 August 2009.
b. How does the Department plan to monitor whether national procurement efficiency is improving?
A25 [b]: CLG monitors procurement efficiency in the FRS delivered through the take-up of national contracts let by the national procurement body for the FRS. These are reported annually to individual fire and rescue authorities (FRAs) and are monitored collectively by CLG as a key performance measure of the national body. In addition, FRAs report individually on efficiency targets and better procurement forms part of this.
The Operational Efficiency Programme (OEP) has set collaborative procurement targets for central government and the wider public sector. The target for the FRS, as part of the wider public sector, is that by March 2011 50 per cent of spend should be channelled through professional buying organisations (PBOs) or other collaborative channels. The Department will be establishing monitoring arrangements and reporting regularly to the Office of Government Commerce. It is also working with the FRS to establish a common basis for the recording and categorisation of expenditure. This is in line with OEP recommendations and will help to identify future opportunities for collaborative procurement and efficiency savings.
Q26: The Department reports that Fire and Rescue Authorities delivered efficiency savings for 2008-09 totalling approximately £35 million (paras. 8.27, and 9.9 to 9.11).
a. How have these efficiency savings been achieved?
A26
[a]: The efficiency target for the FRS (
A significant proportion of efficiency savings have been achieved through the revision of shift patterns/crewing arrangements and an increasingly risk-based approach to the deployment of resources. Savings have also been achieved as a result of the FRS proactively working to reduce sickness levels and ill-health retirements, collaborative working, better procurement and increased efficiency in the delivery of HR and corporate services.
b. How did the Department validate the reported total before it was publicised on Council Tax bills?
A26 [b]: A robust procedure is in place to ensure that reported efficiency savings are accurate prior to publication on council tax bills. CLG systematically analyses the data to ensure they are consistent with previously reported figures and are in line with the Departmental Annual Efficiency Statement (AES) guidance. Any anomalies are challenged and an FRA will be invited by CLG to amend its AES where relevant prior to publication of the FRA's total on the council tax bill. CLG's internal audit team provide a further check and assurance that the data analysis process is robust.
In addition to the Department's validation process, the Audit Commission considers FRAs' AESs as part of the work supporting their value for money judgements and will, by exception, report on whether they consider the methods and approaches used by an FRA in calculating and assessing their AES are appropriate.
Q27: Success for this indicator will be shown by 'continued reductions' in the numbers of primary fires, fatalities and injuries. In the Departmental Report, 2007-08 data have been compared to the 2006-07 baseline. Both the number of primary fires and the number of non-fatal casualties declined, but there were more fatalities from primary fires.
a. How does the Department define 'continued reductions'?
A27 [a]: For DSO indicator 6.1, although the Department monitors trends for the Annual Report on the basis of available annual data, 'continued reductions' means an overall downward trend over the CSR07 period as a whole (see answer below).
b. Does the increase in fatalities from primary fires in one year mean that this target cannot now be achieved?
A27
[b]: The data in the Department's 2009
Annual Report, showing a one per cent increase in the number of fire deaths in
2007-08 compared with 2006-07, were provisional. Revised 2007-08 data will be
included in the Fire Statistics Monitor,
CLG continues to work with a range of organisations to support the delivery of the target. This includes: the "Fire Kills" media campaign and a range of targeted and tactical activity to maintain awareness of fire prevention measures, particularly among those most vulnerable to fire; supporting the work of the Arson Control Forum; and by working with the FRS to deliver support to their business communities to ensure they comply with the Fire Safety Order.
Q28: This target is for the delivery of a co-ordinated Fire and Resilience Programme, and the Department says that success will be demonstrated by achieving planned milestones and deliverables for New Dimension, FiReControl and Firelink projects. The Department has not reported this indicator as showing improvement, yet the narrative states that progress has been made against these projects. Can the Department clarify how it is defining 'improvement' for this indicator?
A28: The common success criteria adopted for DSO indicators based on project milestones would require all the milestones to have been met for DSO indicator 6.4 to show improvement. Two of the eight targets had not been met by the March 2009 milestone: transfer of New Dimension assets to FRSs; and Firelink Phase A - Network infrastructure completed in nine regions. The remaining three targets for New Dimension were met, as were both targets for FiReControl and a second target for Firelink. We now expect FRAs to sign up to the transfer of New Dimension assets by the end of December and that the actual transfer will take place early in 2010. Firelink Phase A was completed in June 2009.
Q29: The NAO noted that the indicators selected for DSO 6:
Ø "do not consider the 'other agencies' referred to in the DSO except to the extent that these agencies may be involved in the fire and resilience programme referred to indicator 4"; and Ø "focus exclusively on emergencies to which the Fire and Rescue Service would respond, rather than other types of emergency (such as medical emergencies) that may also impact on community safety"(para 8.41). Does the Department have any plans to address these points, and if not, why not?
A29: The objective of DSO6 is to ensure the delivery of the necessary capability for the FRS to work effectively, to prevent and respond to emergencies, including working with other agencies. These other agencies have targets within other PSA/DSOs against which their performance is assessed in delivering, for example, other aspects of community safety.
The performance of public service bodies in working together to meet the needs and priorities of local communities will receive a new level of scrutiny through Comprehensive Area Assessment. When the first outcomes from this process are published in December, it may be appropriate or necessary, in the light of its conclusions, to re-consider current DSO Indicator 6.3.
Q30: The total value for money savings identified by the Department is only equal to the target of £887 million, so there appears to be no contingency in case one of the strands fails to deliver the expected savings. The risk of this policy is shown by the impact of the downturn in the housing market on progress on delivering affordable housing (para. 9.8).
a. Does the Department still expect to deliver value for money savings totalling £887m by 2010-11?
A30 [a]: The Department is committed to achieving the maximum vfm savings that are possible. It is clear that the target to achieve £887m vfm savings by March 2011 is challenging due to the downturn in the housing market. It is apparent that some planned efficiency gains to be delivered by Registered Social Landlords surpluses from sales of low cost home ownership and developer contributions via Section 106 (S106) agreements will not now materialise. As a consequence, we are currently undertaking analysis to determine what new Affordable Housing vfm savings are achievable in current market conditions against our £734m target. In the mean time, our departmental target of £887m by 2010-11 remains unchanged.
b. From which sources does the Department expect to make up any shortfall caused by the downturn in the housing market on the target of £734m value for money gains from new affordable housing supply?
A30 [b]: The Department is currently undertaking analysis to determine the level of Affordable Housing vfm savings that are likely to be achievable in current market conditions and for the remaining period of CSR07. The conclusion of this analysis will indicate whether there will be a shortfall in expected vfm savings against our overall £887m vfm savings target. When the analysis has been completed the Department will discuss with Treasury how it should respond.
Q31: The Department has identified additional value for money savings worth £100 million, which is the Department's share of £5bn additional savings announced in the 2008 Pre-Budget Report. Details of three sources from which the Department plans to deliver this are provided in HM Government, 2009 Value for Money update (April 2009). As with the original value for money target, the Department appears to have only identified further savings which total the £100 million target. What contingencies does the Department have in place should the three identified sources of value for money savings not deliver the expected £100 million?
A31: The Department is confident of achieving the £100m of vfm savings by 2011 to contribute to the additional £5bn savings across Government that were announced in the PBR. Effective financial controls will ensure cash-releasing savings are achieved. The Department is continuously seeking new ways to deliver policies and programmes more efficiently and to ensure that every pound is spent wisely. As circumstances change, our plans to achieve efficiency evolve. In this way the Department aims to achieve the maximum vfm savings that are possible.
Q32: According to Core table 6 (DAR Annex C, p.217) the Department's permanent staff numbers increased from 1,942 on 31 March 2008 to 2,148 on 31 March 2009, an increase of 11 per cent. The Department plans to reduce staff numbers to 2,041 in 2009-10, based on a five per cent reduction target set by Cabinet Office.
a. Why did staff numbers increase by so many in 2008-09?
b. Where are the staff cuts in 2009-10 going to be made, how they will be achieved, and what effect this will have on the work of the Department?
An answer to this question will follow.
Q33: Three of the SR04 PSA targets have been subsumed into CSR07 PSA or DSO indicators, so the Department is no longer reporting on them as part of the SR04 PSA target set. This means that there will be only a partial final assessment of the SR04PSA target set. Why does the Department not intend to report fully on its final performance against all its SR04 PSA target set?
A33: Of the three SR04 PSA targets, SR04 PSA 2 is subsumed into the CSR07 PSA 7 on which the Department for Business Innovation and Skills now leads and which was covered in their Departmental Annual report. SR04 PSA 3 on fire continues to be reported on through DSO indicators 6.1, 6.2 and 6.3 whilst SR04 PSA 7 is reported on through DSO indicators 2.7 and 2.8. This reporting will include final SR04 assessments against indicators where and when appropriate; however the Committee will already be aware that changes in the way decent homes in the social sector are measured will mean we are unable to report a final position on this indicator in relation to the SR04 PSA 7 target.
Q34: The NAO reported that it has validated the data systems underpinning the Department's reporting of its performance against the CSR07 PSAs (NAO, para. 1.13, p.10). It found that the systems underpinning PSA 21 were broadly fit for purpose, but that those for PSA 20 were broadly appropriate but did need some strengthening. How has the Department strengthened the data systems underpinning PSA 20 in response to the NAO's findings?
A34: Indicator 1 - Number of net additional homes provided The NAO observed that there are no formal written procedures for some aspects of the process of calculating the indicator, such as the imputation of figures where a local authority has not provided housing flows return data to its regional assembly, and that the Department has not sought to verify the quality controls operated by regional assemblies. On the former point, returns to regional assemblies tend to have a 100 per cent response rate in practice, and instructions on validating and imputing data on the housing flows return are now in place. On the latter point, the Department is in discussions with the regional monitoring officers responsible for the "joint returns" on the best way to verify quality control procedures and put in place a formal revisions policy.
Indicator 3 - Number of affordable homes delivered (gross) The HCA system which provides most of the data for the indicator is used in the calculation and payment of grant and therefore strong documented procedures exist to ensure the accuracy and reliability of this information. Validation of this data takes place at the bidding, delivery and completion stages of a project. The final validation is the Compliance Audit, where a random sample of completed schemes is checked to ensure reporting accuracy. The NAO also has responsibility for auditing the HCA and this process includes a sample check on their systems and the robustness of the Compliance Audit.
Information from local authorities on affordable housing is supplied through P2 (Housebuilding returns) and the Housing Strategy Statistical Appendix. There are on-line validation checks that are performed prior to data submission and records of these checks, failures and bypasses are maintained.
Furthermore, CLG undertake additional validation checks on the data to identify outliers and implausible data items and these are verified with local authorities. These processes have recently been reviewed for the latest returns.
Indicator 6 - Local planning authorities to have adopted the necessary Development Plan Documents in accordance with their Local Development Schemes, to bring forward developable land for housing in line with PPS 3 Following discussions with HMT, discrepancies between the two indicators have now been resolved. The wording of Indicator 2 of DSO 5 has been agreed as the common measurement for DSO 5.2 and PSA20 Indicator 6. The Department has amended the PSA 20 Delivery Agreement to reflect this and is taking steps to ensure that necessary Development Plan Documents are defined in the PSA 20 measurement annex.
A risk assessment is in progress, the department has committed to a workshop with Government Offices to look at database risks.
Written procedures setting out how the indicator is calculated have been produced. The department is taking steps to conduct an independent review within the department to ensure that the calculation of performance against the indicator has been undertaken accurately.
The Department will ensure that "necessary development document" is clearly defined in future performance reports.
The NAO also noted that the data systems for Indicator 5 (energy efficiency for new homes) had yet to be fully established. Have these now been established and has the Department had any feedback from the NAO as to whether these are appropriate and fit for purpose?
The baseline for this indicator has now been set and work is underway to develop a trajectory.
Q35: Can the Department provide the Committee with information relating to the following questions arising from the Resource Accounts:
a. As part of the explanation (page 13) given for the under-spend of £48.2m for Central Administration, the Department has stated that £31 million of this was due to the cost of capital credit. The accounts go on to say that "this is very difficult to forecast accurately as the amount depends upon the final credit balance in the accounts, over which we have no control". Why do you have no control over the final credit balance? Are you not able to forecast accurately what this is likely to be?
A35[a]: Year-end payment arrangements with hundreds of local authorities create volatile large scale working capital fluctuations between asset and liability balances (for moneys held and owed before payment) which can give CLG this cost of capital credit. The bulk of the credit relates to programme working capital but as it is a notional charge/credit and not available to spend elsewhere, it is credited to the administration budget for simplicity. This situation will end in 2010-11 when the cost of capital charge is abolished.
b. Could you please provide the Committee with an explanation for the following movements:
i. income from £3,206 million in 2007-08 to £1,566 million in 2008-09; ii. other debtors from £439.2 million in 2007-08 to £93.5 million in 2008-09; iii. accruals and deferred income from £1,556.4 million in 2007- 08 to £530.8 million in 2008-09; iv. early retirement and pension costs provision from £21.8 million in 2007-08 to £32.2 million in 2008-09.
A35[b] (i) £1,047 million of this difference is attributable to Recovery of Grants, and specifically the replacement of Local Area Agreements with Area Based Grants, which have a different accounting treatment. There is a matching reduction in grant payments (Note 10). £144 million is attributable to the reduced activity on the 2000-2006 ERDF programme which is now being wound up. £340 million is attributable to a reduction in Pooled Housing Capital Receipts arising from reduced local authority housing sales receipts because of the recession which was offset in part because the Housing Revenue Account Subsidy moved into surplus nationally in 2008-09.The remaining £109m difference is due to normal fluctuations across a range of programmes.
(ii) In 2007-08 revised arrangements were introduced for payments and receipts of National Non-Domestic Rates (NNDR). This resulted in an increase in other debtors in the 2007-08 accounts of about £410m in comparison to 2006-07 and a matching increase in creditors. The accounting treatment has been revised in 2008-09 to eliminate these matching balances. The balance on other debtors is now closer to that reported in 2006-07.
(iii) The 2007-08 balance included a large accrual (£755m) for overhanging debt relating to housing transfers. No such accrual was required in 2008-09, and with the addition of the NNDR change mentioned above the balance on accruals and deferred income has returned to a level closer to that reported in 2006-07.
(iv) The £10.4M increase in early retirement and pensions provision in 2008-09 in comparison to 2007-08 is due to the £12M cost for early releases arising from restructuring in Government Offices. The net increase is reduced to £10.4M because of release of prior years' provision.
c. Could you please confirm why the following were not included in the Contingent Liabilities note in the 2008-09 Resource Accounts when they were in the 2007-08 Resource Accounts and the Contingent Liabilities section of the 2009-10 Main Estimate Memorandum: i. The two local authorities (Corby and ii. Liability to pay grant in future years relating to annual gap- funding agreements for negative value transfers of council housing stocks.
A35[c]: The differences between the Contingent Liabilities reported in the Main Estimate Memorandum and those reported in the Resource Accounts are partly due to timing differences and partly due to the different boundaries covering the Estimate and the Accounts. The CLG Estimate covers the CLG budgeting boundary that includes all of its Arms Length Bodies. The CLG Resource Accounts boundary includes only the central Department, one Agency (The Planning Inspectorate), the Government Offices and small tribunal and advisory panel bodies. The timing differences arise because the Estimate Memorandum is produced more than a month before the Accounts so misses later information that is included in the final phase of Accounts production. The Resource Accounts should therefore be taken as the definitive disclosure of contingent liabilities for bodies within the resource accounting boundary as at the end of March 2009. The Department's ongoing reviews of its procedures for preparing the Estimates Memorandum ensure that the most up to date information is included.
Specifically -
i. By the year end the outstanding legal actions had been settled or withdrawn thereby removing the contingent liability.
ii. The GAP Funding Programme was run by CLG until 1 December 2008 when it was transferred to the Homes and Communities Agency (HCA, which publishes its own Resource Accounts). No direct liabilities remained with the department at the year end and so there was no contingent liability to disclose in the CLG Resource Accounts. The CLG Estimate covers the wider departmental budgeting group (including its Arms Length Bodies such as the HCA) so it was appropriate to disclose this contingent liability in the Memorandum.
Q36: The Estimate Memorandum shows that the Contingent Liabilities in respect of the European Regional Development Programme (ERDF) for 2009-10 is £88.9 million. This is a fall of £126.2 million from the figure reported in the 2008-09 Resource Accounts, but no reason for the reduction has been given. Why has there been a reduction in the ERDF Contingent Liabilities?
A36: As mentioned above this arises from a timing difference between the date the Estimate Memorandum was prepared and when the Resource Accounts were finalised. During this period the ERDF Contingent Liabilities were reviewed in depth and additional amounts disclosed. Details are given in Note 29 to the Accounts - the disclosure at 29.10 was not recognised at the time the Estimate Memorandum was prepared.
Annex A consists of the following Department Strategic Objectives and can be found at CLG's website: http://www.communities.gov.uk/corporate/publications/
DSO 1- To support local government that empowers individuals and communities and delivers high quality services efficiently
DSO 2 - To improve the supply, environmental performance and quality of housing that is more responsive to the needs of individuals, communities and the economy
DSO 3 - To build prosperous communities by improving the economic performance of cities, sub-regions and local areas, promoting regeneration and tackling deprivation
DSO 4 - To develop communities that are cohesive, active and resilient to extremism
DSO 5 - To provide a more efficient, effective and transparent planning system that supports and facilitates sustainable development, including the Government's objectives in relation to housing growth, infrastructure delivery, economic development and climate change
ANNEX B: Examples of the type of work undertaken by RIEPs to help local authorities achieve efficiencies
October 2009
|