Appendix 2 The Local Government Boundary
Commission for England: 2011-12 to 2015-16 corporate plan
Summary
1. The Local Government Boundary Commission for England
(the Commission) was established on 1 April 2010 in a reorganisation
of arrangements for overseeing local government boundaries. It
aims to fulfil its mission, "to create the foundations for
effective and convenient local government in England", through
electoral reviews, addressing local authorities' internal boundaries,
and boundary reviews, which focus on authorities' boundaries with
each other. Electoral reviews have been the core work of the Commission
and its predecessors for many years, while boundary reviews have
not been conducted since 1992.
2. The Commission has achieved much through 2010-11:
- establishing itself as a free-standing organisation,
with services previously delivered by its predecessor's parent
organisation now provided through its own corporate staff and
support contract;
- running working groups and public consultations
to challenge past practice and seek efficiencies in processes;
and
- committing to a plan for 2011-12 to 2015-16 that
combines cost reductions of the type proposed widely across the
public sector with large increases in output compared to recent
years.
3. We report annually on value for money to the Speaker's
Committee on the Electoral Commission, which oversees the Commission
on Parliament's behalf. This first report provides an overview
of how well placed the Commission is to deliver its corporate
plan for 2011-12 to 2015-16. We will return in more depth in future
reports to issues raised here, informed by our discussions with
the Speaker's Committee.
4. This report is based on our analysis of the Commission's
published and unpublished documents, interviews with senior staff,
and requests for further data. Our financial analyses are all
expressed in 2010-11 prices to aid comparison.
KEY FINDINGS
On managing demand and quality
5. The level of demand for electoral and boundary
reviews is inherently uncertain. Nevertheless, over the period
2011-12 to 2015-16, the Commission aims to reduce an accumulated
backlog of requirements of reviews, and to respond to predicted
new requests for boundary and electoral reviews, while improving
quality. The need for electoral reviews is driven by the Commission's
assessment of imbalances in ratios of electors to councillors
within local authorities, arising from changes in populations
eligible and registered to vote, and by local authorities' own
requests for reviews to change the number of their wards or councillors.
Demand for boundary reviews is driven by local authorities requesting
reviews in order to move their boundaries with other authorities.
6. The Commission expects potential demand to exceed
its delivery capacity, so it has developed mechanisms to select,
prioritise and streamline its work. The mechanisms carry potential
quality risks, including to stakeholder satisfaction, which are
not addressed fully by current assurance arrangements.
a. The Commission proposed, in a consultation in
November and December 2010, not to alter its existing criteria
to assess electoral imbalance, which it regarded as working reasonably
well. It plans to complete electoral reviews at a rate sufficient
to halve, over five years, the number of local authorities in
electoral imbalance.
b. The Commission, in the same consultation, proposed
criteria for assessing preliminary requests for boundary reviews
from 2011-12. It expects discussions with those local authorities
that make requests to result in only a quarter proceeding. The
Commission plans to allow the backlog of requests to grow slightly
before reducing, implying over four years from request to completion
in some cases. It recognises that its planned approach to processing
requests implies a need for careful handling to avoid stakeholder
dissatisfaction.
c. The Commission has developed the flexibility to
switch effort between its two review types if relative patterns
of demand vary from expectations. Strong demand from local authorities
could create pressure to switch effort from electoral reviews,
so numbers of authorities in electoral imbalance would not fall
as planned, implying a lower quality service than planned in tackling
imbalance.
d. The Commission is proposing to streamline processes,
shortening electoral reviews by between a third and two-thirds,
in order to improve quality by removing unnecessary delay and
potentially completing more reviews. However, reduced consultation
times and higher staff workloads might also create risks to quality,
which the Commission is seeking to manage through consultation
with staff and stakeholders in developing its proposals.
e. The Commission has not developed quality assurance
arrangements to meet all new risks and challenges presented by
its corporate plan. To assess stakeholder satisfaction, it uses
submissions from people who have taken part in reviews, mainly
members of the public and staff at local authorities. It does
not currently have plans to seek feedback from local authorities
about its consideration of their requests for reviews. There is
no internal or external peer assessment.
On understanding and reducing costs
7. The Commission plans to reduce its annual funding
requirements by 20 per cent in 2010-11 prices over five years
from a self-defined baseline. This is a reduction of 15 per cent
from estimated outturn in 2010-11, Over the same period, it plans
to increase its output of reviews by around a half. This implies
a reduction of 42 per cent in the average cost of each electoral
and boundary review, from £200,000 to £116,000.
8. The Commission has made progress in understanding
its costs, and has a broad strategy to reduce many of them, but
its plans are not yet sufficiently detailed to provide confidence
that it can achieve planned cost reductions while maintaining
projected outputs.
a. The Commission has adjusted its expected outturn
significantly during 2010-11 as its understanding of its costs
has developed. To set realistic and challenging forward budgets,
the Commission needs a robust baseline for 2010-11 informed by
a reliable outturn, allocated across cost categories. Its projected
outturn of £2.46 million is provisional until final accounts
are audited, and its self-assessed baseline of £2.61 million
and ongoing budget must be regarded in the same way at present.
b. The Commission does not have a detailed analysis
of historic cost data on which to build its understanding of current
costs and future budget needs. It is now establishing systems
which should, in time, provide the necessary information, including
staff costs for each review. In the absence of more detailed management
information, we have undertaken our own broad analysis of the
Commission's requirements to reduce costs.
c. The Commission has specific plans to achieve some
reductions in direct review costs, but they are incomplete. It
intends staff to increase the extent to which they work on reviews
concurrently, reducing the average salary cost for each. It plans
to reduce review or corporate staff numbers by one in 2014-15
and a further one in 2015-16 if it cannot find alternative additional
savings elsewhere. It aims to reduce average mapping and printing
costs for each review, to £15,000 in 2015-16 from £24,000
in 2010-11, by using fewer and smaller maps.
d. The Commission has plans to achieve reductions
in indirect corporate costs, but again with incomplete coverage.
It intends to reduce the cost of accommodation and shared services,
to £529,000 in 2015-16 from £632,000 in the 2010-11
baseline, by reviewing the scope of its contract. It intends to
reduce other corporate costs to £122,000 in 2015-16 from
£224,000 in 2010-11 but has no specific plan to achieve this.
9. Our findings on demand, quality and cost can be
linked to our core management cycle (Figure 1). The Commission
has made significant progress but is well aware that challenges
remain.
Figure 1
The Commission has made progress in establishing a core management cycle
| Stage | Progress
| Challenges and opportunities
|
| 1 Strategy | The mission and objectives link directly to the two types of reviews planned for the future.
| Insight into stakeholders' wishes will become increasingly important as future demand is driven more directly by them.
|
| 2 Planning |
The plan for future review throughput is designed to reduce the backlog of demand progressively.
| The balance of work between the two types of review will become a significant issue for the Commission to manage.
|
| 3 Implementation |
New processes and governance arrangements have been established.
| A changing environment may require further process refinements.
|
| 4 Measurement |
Systems to measure delivery, quality and costs are being improved.
| New systems will provide data for analysis. Wider stakeholder satisfaction measures may be required to address new quality risks.
|
| 5 Evaluation |
The Commission has little historic information for evaluating past practice.
| Information collected since the Commission's creation will give new opportunities for evaluation.
|
| 6 Feedback | The Commission is using the results of consultation with all local authorities to develop new guidance on the conduct of all electoral and boundary reviews.
| Evaluation of progress in implementing the current plan, and the views of local authorities, will help to inform future planning.
|
Source: National Audit Office analysis based on
our guide: A short guide to structured cost reduction, June 2010
CONCLUSION ON VALUE FOR MONEY
10. The Commission has started to put in place the
right types of systems to enable it to achieve value for money
and has made encouraging progress in its first eleven months.
It recognises that it needs to overcome major challenges but its
plans, particularly on stakeholder engagement and cost management,
are not yet sufficiently developed to demonstrate how it will
deliver change of the magnitude implied by its ambitions, particularly
in the later years of its corporate plan.
RECOMMENDATIONS
11. In the light of our findings, we make the following
recommendations.
a. The Commission's stakeholders are critical
in shaping the demand for its reviews. The Commission should
develop its engagement further to deepen its understanding of
stakeholders' needs and views about the relative priorities of
the different reviews and the thresholds that determine the need
for reviews.
b. The Commission's quality assurance arrangements
do not involve peer review or feedback from authorities about
the new process for discussing boundary review requests. The
Commission should undertake an assessment of potential additional
arrangements, including the scope for internal and external peer
review. It should put in place arrangements to obtain feedback
from local authorities following discussions about requests for
review, whether or not these requests are then taken forward.
c. The Commission risks not securing the full
financial and quality benefits from its streamlining proposals
because its understanding of its existing and future review processes
is not yet sufficiently detailed, particularly in terms of cost
allocation. The Commission should continue to link its work
on costing and processes to increase its understanding of both,
making this a key priority.
d. The Commission does not have clearly defined
plans for securing the required significant savings from mapping
and printing, accommodation and shared services, and other corporate
costs. The Commission should develop plans for savings in
these areas in order to ensure that it achieves them.
Part One
THE NEW COMMISSION
1.1 This part of the report sets out:
- the role, stakeholders, aims
and activities of the Local Government Boundary Commission for
England (the Commission);
- what the Commission has done to establish itself
during 2010-11, its first year in operation; and
- the Commission's plans for the period 2011-12
to 2015-16.
The Commission's role, stakeholders, and activities
1.2 The Commission was established under the Local
Democracy, Economic Development and Construction Act 2009. Its
mission is to create the foundations for effective and convenient
local government in England. Its objectives are:
- to provide equity and fairness
in local electoral arrangements; and
- to ensure that local government structures, and
the map of English local government, reflect communities and support
efficient and effective service delivery.
1.3 The Commission began operations on 1 April 2010,
taking on the functions of the Boundary Committee for England,
which had been a statutory committee of the Electoral Commission
(Figure 2). Its restructuring as an independent, stand-alone body
was a result of recommendations made by the Committee on Standards
in Public Life.[78]
It is independent from central and local government and political
parties, and is accountable to, and funded by, the Speaker's Committee
on the Electoral Commission in Parliament.
Figure 2
There have been three reorganisations in overseeing English local government boundaries since 1972
Source: National Audit Office
1.4 The Commission seeks to satisfy the different
demands of a range of stakeholders in carrying out its review
work (Figure 3). Its principal interactions are with local authorities,
including through their lobbying organisation the Local Government
Association. It also engages frequently with the Department for
Communities and Local Government (the Department) as well as the
Speaker's Committee.
Figure 3
The Commission aims to satisfy a range of stakeholders
Source: National Audit Office
1.5 The Commission plans to carry out its mission
by conducting two main types of review in future (Figure 4). It
expects electoral reviews, which address local authorities' internal
boundaries, to continue to be the staple element of its work.
It does not expect to carry out further structural reviews, which
had formed an unusually large part of the workload between 2006
and 2009, disrupting other work. It is reintroducing boundary
reviews, which focus on authorities' boundaries with each other.[79]
Figure 4
The Commission plans to conduct two types of review in the future
| | Electoral Reviews
| Boundary Reviews |
Structural Reviews |
| Purpose |
To consider whether boundaries within a local authority need to be altered to take account of changes in electorate numbers and to consider the appropriate number of councillors.
| To review boundaries between local authorities, ranging from a full merger of neighbouring authorities to correction of minor boundary anomalies.
| To consider whether one or more single, all-purpose councils, known as unitary authorities, should be established in an area instead of the existing two-tier system.
|
| Conducted over last ten years?
| √ | X |
√ |
| To be conducted over next five years?
| √ | √ | X1
|
| Instigated by | Instigated by the Commission in the past but expected also to be requested by local authorities in the future.
| Expected to be requested by local authorities, although can also be instigated by the Commission or the Department.
| Instigated by the Department.
|
| Characteristics | Have formed the staple workload of the Commission and its predecessors over the past decade.
| Have not been completed since 1992, so demand is uncertain.
| Have proved costly, contentious and disruptive of other review work.
|
NOTES
1. The Commission expects no demand for structural
reviews over the next five years.
Source: National Audit Office
Establishing the Commission during 2010-11
1.6 The Commission has accomplished much during 2010-11,
its first year as an independent, stand-alone body. It has:
- recruited a chief executive
and finance director, two new Commissioners and 13 further staff
members so it now has six Commissioners, including a chair and
deputy chair, supported by 26 staff of whom 12 occupy new posts
(Figure 5);
- moved to a new office in London and entered into
a shared services outsourced contract with its landlord, the Local
Government Association;
- established a new corporate centre and developed
new financial controls, management information and corporate governance
arrangements;
- negotiated improved terms with some key suppliers;
- completed 12 electoral reviews and started work
on a further 14;
- set up working groups to challenge how reviews
can be improved and made more streamlined and efficient; and
- launched and completed public consultations on
proposed new arrangements.
Figure 5
The Commission has 26 staff equating to 25 full time equivalents
NOTES
1. The Commission pays to use a support services
contract that its landlord, the Local Government Association,
has with Liberata. This includes finance, facilities, information
technology and human resources.
Source: National Audit Office analysis of figures
provided by the Commission
Planning for 2011-12 to 2015-16
1.7 In February 2011, the Commission submitted to
the Speaker's Committee its first five-year corporate plan as
an independent body, for the period 2011-12 to 2015-16.[80]
The plan is supported by a budget proposal that the Commission
submitted to the Committee in October 2010. The plan involves:
- increasing the number of reviews
completed each year by around a half;
- reducing the Commission's annual non-capital
funding, from its self assessed baseline of £2.61 million
for 2010-11 to £2.10 million in 2015 16 at 2010-11 prices,[81]
representing a real terms decrease of 20 per cent; and
- improving the quality of reviews, as measured
by stakeholder satisfaction.
1.8 We have assessed how well placed the Commission
is to deliver its corporate plan. We analysed the Commission's
published and unpublished documents, interviewed its senior staff
and requested further data. We undertook a range of financial
analyses, all expressed in 2010-11 prices to aid comparison. Our
findings cover the challenges the Commission faces in:
- managing demand and quality
(Part 2); and
- understanding and reducing costs (Part 3).
Part Two
MANAGING DEMAND AND QUALITY
2.1 The Commission's five-year plan for 2011-12 to
2015-16 sets out its proposed programme of review work. The plan
includes an objective to make substantial inroads into the backlog
of demand for electoral and boundary reviews while improving quality
and increasing stakeholder confidence.
2.2 The future level of demand for reviews is inherently
uncertain, but the Commission expects it to be greater than its
planned capacity. The mechanisms the Commission uses to select,
prioritise and streamline its work carry inevitable quality risks,
including to stakeholder satisfaction. This part of the report
assesses the Commission's arrangements for:
- setting review selection criteria;
- deciding review completion rates;
- building in flexibility;
- streamlining processes; and
- assuring quality.
Setting review selection criteria
2.3 Under the terms of the Local Democracy, Economic
Development and Construction Act 2009, the Commission has a statutory
duty to carry out a programme of reviews that delivers electoral
equality in English local authorities. In discharging this duty,
the Commission sets criteria to determine which authorities have
high levels of electoral imbalances and which therefore require
electoral reviews. It also has to manage demand from local authorities
for electoral and boundary reviews, as well as the expectations
of those local authorities that meet the criteria for electoral
reviews but do not see them as priorities and are resistant to
them. The Commission is improving its consultation with stakeholders,
in particular local authorities, to obtain a better understanding
of their wishes, but has had to develop its 2011-12 to 2015-16
programme without this new insight.
Electoral reviews
2.4 The Commission can be called upon to carry out
different types of electoral review. The main type it expects
to carry out during the corporate plan period is to correct significant
electoral imbalances where there are large variations in the number
of electors represented by each councillor within an authority.
It also expects to respond to requests from local authorities
that want to change ward or councillor numbers.[82]
2.5 The Commission uses its own analyses, of data
collated annually by the University of Plymouth, to identify imbalances
that have arisen since completion of the last round of reviews
of all authorities between 1996 and 2004. Imbalances can be caused
by population movements as well as changes in the proportions
of populations registering to vote. The Commission has to decide
whether an imbalance is large enough to warrant an electoral review.
It uses two thresholds, set in 2005 by the Boundary Committee
for England, to assess imbalance. One measures general imbalance
across the whole of an authority, while the other looks for localised
instances of particularly high imbalance. Local authorities with
imbalances breaching either threshold are considered for review.
The Commission proposed, in a consultation in November and December
2010, not to alter its existing criteria to assess electoral imbalance,
which it regarded as working reasonably well.
2.6 The Commission considers that it has set the
thresholds of electoral imbalance at levels where, in its own
judgement, it must intervene to meet its statutory duties. It
also aims to manage electoral imbalances in a way that minimises
the need to review all local authorities periodically in a single
programme of work, as it considers this would hinder it from accepting
requests for reviews and would require it to conduct reviews where
imbalances are small. Its chosen thresholds are: more than 30
per cent of wards with electorate numbers that vary by over 10
per cent from the average for the authority; and any one ward
with numbers varying by over 30 per cent from the average (Figure
6). After regenerating the information it used for its corporate
plan, the Commission concluded that 64 local authorities were
in imbalance on 1 April 2010. This calculation allowed for 20
authorities that breached both thresholds, two that had already
had reviews completed and two that raised doubts about data quality.
2.7 The Commission has carried out sensitivity analysis
on the effect of altering the thresholds. It found that changes
to the thresholds, in either direction, would have a significant
impact on the number of potential reviews. For example, if it
relaxed the variance from average under the general imbalance
threshold, from 10 per cent to 12.5 per cent, then the number
of authorities in imbalance would reduce from 39 to 15. Conversely,
if it tightened the threshold to 7.5 per cent then the number
of authorities in imbalance would increase to 185. Changes to
the localised imbalance threshold would have a similarly large
impact.
Figure 6
The number of authorities defined to be in imbalance varies depending on thresholds
Number of authorities in imbalance under the general
threshold
The threshold is set at 30 per cent of wards in a
local authority having an imbalance of more than 10 per cent from
the average for the local authority: 39 authorities breached this
threshold in December 2009.
Percentage of wards with specified variance
from average
Variance from average
| | 40%
| 35% |
30% | 25%
| 20% |
| | 15%
| 1
| 1
| 1
| 6
| 12
|
| | 12.5%
| 1
| 6
| 15
| 26
| 58
|
| | 10%
| 11
| 23
| 39 |
87
| 127
|
| | 7.5%
| 93
| 140
| 185
| 217
| 263
|
| | 5%
| 223
| 269
| 292
| 316
| 329
|
Number of authorities in imbalance under the localised
threshold
The threshold is set at one ward in an authority
having an imbalance of more than 30 per cent from the average
for the local authority: 49 authorities breached this threshold
in December 2009.
Number of wards with specified variance
from average
Variance from average
| | 3
| 2 |
1 |
| | 40%
| 1
| 3
| 18
|
| | 35%
| 1
| 5
| 31
|
| | 30%
| 1
| 10
| 49 |
| | 25%
| 7
| 25
| 84
|
| | 20%
| 29
| 70
| 150
|
NOTES
1.The Commission's analysis found that 19 local authorities
breached the general imbalance threshold alone, 29 the localised
imbalance threshold alone and 20 both thresholds. This meant that
68 local authorities had electoral imbalance, of which two were
in the process of being corrected by reviews completed before
1 April 2010 and two raised concerns about data quality, leaving
64 still requiring attention.
Source: The Commission's December 2010 analysis
of December 2009 data
2.8 Although not explicit in its corporate plan,
the Commission has applied its thresholds after rounding, to the
nearest whole percentage, data that are expressed as percentages.
For example, a 10.4 per cent variance in one ward from average
electorate numbers would be rounded to 10 per cent, and the ward
would therefore not count in assessing the proportion of wards
exceeding the 10 per cent variance. The same process applies in
relation to the 30 per cent threshold for proportion of wards
exceeding the 10 per cent variance, and for the 30 per cent threshold
for variance from average electorate numbers in any single ward.
Applying the thresholds without rounding the data would alter
overall results substantially, increasing the number of local
authorities in imbalance at 1 April 2010 by 23.
2.9 There is a risk that basing thresholds on proportions
of wards in imbalance, rather than on absolute numbers of wards,
may have an impact on the types of authorities classified as being
in imbalance. For example, it may potentially lead the Commission
to identify more imbalances in small authorities than in large.
There is also uncertainty about the extent to which stakeholders
agree with current arrangements for assessing imbalance, with
the Commission taking an absence of complaints to indicate broad
acceptance.
Boundary reviews
2.10 The Commission expects local authorities to
request boundary reviews for various reasons, including efficiency
savings through potential mergers. The unpredictability of demand
makes the Commission's forward projections less certain for boundary
reviews than for electoral reviews. The Commission intends to
manage demand in the first instance by setting criteria for agreeing
to conduct reviews. Proposed criteria include the level of public
support for a review and the strength of the business case. The
Commission expects discussions with local authorities requesting
reviews to result in only a quarter proceeding, so it recognises
the need for careful handling to avoid stakeholder dissatisfaction.
It has taken early steps to manage the risk of dissatisfaction
by consulting authorities on the proposed criteria.
2.11 The Commission expects additional demand for
large numbers of much smaller reviews of minor anomalies in boundaries,
for example cases affecting few properties. These minor reviews
do not yet feature in the Commission's future work programme but
it intends to carry them out when capacity allows.
Deciding review completion rates
2.12 The Commission has a backlog of electoral and
boundary reviews, which it plans to reduce over five years by
increasing the number of reviews it completes each year (Figure
7). Although the planned output each year is high compared with
recent years, there was higher output in the past before disruption
caused by structural reviews.[83]
Figure 7
The Commission plans to tackle the backlog of demand for both types of review
| | 2010-11
| 2011-12 | 2012-13
| 2013-14 | 2014-15
| 2015-16 |
| Electoral Reviews
| | | |
| | |
| New cases of electoral imbalance1 (a)
| 8 | 10
| 10 | 10
| 10 | 10
|
| Authorities with electoral imbalance at start of year (b)
| 64 | 64
| 61 | 51
| 46 | 41
|
| Electoral reviews planned for completion to address imbalance (c)
| 8 | 13
| 20 |
15 | 15
| 15 |
| Authorities with electoral imbalance at end of year (backlog) (a + b - c)
| 64 | 61
| 51 | 46
| 41 | 36
|
| Proportion of local authorities with electoral imbalance at end of year
| 18% | 17%
| 14% | 13%
| 12% | 10%
|
| Electoral reviews planned for completion for other reasons
| 4 | 2
| - | -
| - | -
|
| Boundary Reviews
| | | |
| | |
| Preliminary requests (estimated)
| 322 | 7
| 8 | 8
| 9 | 10
|
| Requests likely to proceed to review (a)
| 5 | 2
| 2 | 2
| 2 | 2
|
| Requests outstanding at start of year (b)
| 0 | 5
| 7 | 8
| 7 | 6
|
| Boundary reviews planned for completion (c)
| 0 | 0
| 1 | 3
| 3 | 3
|
| Requests likely to proceed to review but uncompleted at end of year (backlog) (a + b - c)
| 5 | 7
| 8 | 7
| 6 | 5
|
NOTES
1. The Commission's projections are based on trends
over the past 5 years, but the Commission believes new cases of
inequality may increase significantly more than projections as
a result of changes to the electoral system, particularly the
introduction of individual electoral registration in 2014.
2. This figure is based on expressions of interest
to a 2009 consultation. The Commission expects most not to translate
into review requests as authorities made their expressions of
interest before receiving further information on the criteria
and likely resource requirement for boundary reviews.
Source: National Audit Office analysis of figures
provided by the Commission
2.13 The Commission intends to focus its initial
efforts on electoral reviews, with its plans implying a reduction
in the proportion of local authorities meeting the imbalance criteria
from 18 per cent at the end of 2010-11 to 10 per cent at the end
of 2015-16. It intends to prioritise local authorities with the
highest imbalances, after considering the likelihood of self-correction
through expected housing development or migration. The implied
reduction in imbalance is slightly slower than in the corporate
plan because we have excluded any impact from six electoral reviews
undertaken for reasons other than electoral imbalance. The Commission's
plans to conduct some future electoral reviews at the request
of local authorities, rather than primarily to correct electoral
imbalance, could potentially further reduce the speed at which
to the Commission can tackle the backlog of electoral imbalance.
2.14 The Commission will not commence any boundary
reviews until May 2011, once authorities requesting reviews have
been able to test local opinion and satisfy other criteria for
undertaking reviews. The Commission anticipates the backlog growing
until the first reviews are completed by 2012-13 at the earliest.
Its planning assumptions imply that some local authorities will
have to wait four or more years, including the time taken to plan
and conduct reviews, before the Commission is able to satisfy
their requests. The Commission recognises that it will need to
engage with local authorities to manage expectations and provide
clarity over timescales.
Building in flexibility
2.15 The Commission's projections of future review
demand cannot be precise, so it may face the challenge of adjusting
its workload between review types to meet unexpected trends in
demand. It believes that electoral and boundary reviews will have
similar resource requirements, and can therefore be substituted
for one another in the work programme in order to manage demand.
Strong demand from local authorities could create pressure to
switch effort from electoral reviews, so numbers of authorities
in electoral imbalance would not fall as planned, implying a lower
quality service than planned. The Commission must manage the impact
of any change in the balance of its work on quality and stakeholder
satisfaction, and it has told us it would consult the Speaker's
Committee before any substantial rebalancing of its programme.
If the Commission decides that it cannot meet demand after rebalancing
its programme, it would have the option of seeking guidance and
direction from the Speaker's Committee.
Streamlining processes
2.16 The Commission completed public consultation
in January 2011 on proposals to streamline the stages and processes
involved in electoral reviews. The primary reason was to improve
quality for local authorities by removing unnecessary delay, although
the Commission believes that streamlining will also bring cost
reductions additional to those implicit in the five-year plan,
potentially increasing its capacity to complete more reviews.
The Commission has not yet established processes for boundary
reviews but considers there will be substantial similarities to
electoral review processes.
2.17 The proposals involve reducing the duration
of electoral reviews by between one-third and two-thirds: from
an average of 61 weeks to between 22 and 51 weeks depending on
the complexity of the review (Figure 8).The Commission plans to
achieve this through an initial assessment in which, following
research and discussions with stakeholders, it would establish
the scale of change likely to take place and tailor the review
process.
- Type A reviews would apply
where there is no clear need or desire for significant change
to the number of councillors. They would dispense with the consultation
phase on councillor numbers that is currently a feature of all
electoral reviews.
- Type B reviews would apply where a small change
to the number of councillors may be desirable but opinions on
the proposal could be sought during the consultation on draft
recommendations rather than separately.
- Type C reviews would apply following a council
request for a substantial change to the number of councillors,
establishment of a new authority following structural change,
a boundary review involving a large change or merger of whole
councils, or where, following initial assessment, it appears that
a proposed change in the number of wards or councillors may be
contentious.
2.18 Changes to processes carry two particular risks:
stakeholders could find them unacceptable; and staff might find
them unworkable. The Commission has taken action to manage these
risks by consulting local authorities and by including review
staff in the development of proposals. It accepts that the new
procedures will require it to develop its skills in managing programmes.
Figure 8
The Commission is consulting on proposals to shorten the duration of electoral reviews
NOTES
1.The Commission has expressed the timescales for
many of the stages as ranges. This graph uses the midpoints of
those ranges, for example giving a total duration of 48 weeks
for type C reviews to represent a range from 45 to 51 weeks.
2. Type C reviews have the same stages as current
reviews, but with generally shorter durations. Type B reviews
omit the consultation on numbers of wards or councillors and the
stages are further shortened. Type A reviews omit the stage of
further information gathering and data analysis but could have
an additional, more targeted, stage of 6 weeks consultation and
4 weeks analysis before the preparation of final recommendations:
the graph does not show this potential additional stage.
Source: National Audit Office analysis of the
Commission's proposals
Assuring quality
2.19 The Commission's quality assurance arrangements
have not developed to meet new risks and challenges presented
by its five-year plan:
- some authorities' requests
for boundary reviews may not proceed, while others may have to
wait;
- stakeholder consultation times may be reduced;
and
- review staff could have higher workloads.
2.20 Review quality is currently tested through feedback
from participants. The Commission's predecessor achieved in 2009-10
a rate of 56 per cent of respondents describing quality as 'good'
or 'very good', which suggests that a substantial minority of
those involved in a review thought it could have been done better.
The Commission considers that the response rate to feedback is
too low, hampered by a long questionnaire. From January 2011,
it has introduced an opinion survey on its website to allow online
feedback submission.
2.21 The Commission does not currently have plans
to collect feedback from local authorities about how it considered
their review requests but it recognises that it needs to understand
its stakeholders' demands and requirements better.
2.22 The Commission does not have formal internal
or external peer review procedures, during or after review completion,
to help assure itself of the quality of work done.
Part Three
UNDERSTANDING AND REDUCING COSTS
3.1 The Commission is planning to reduce its funding
requirements over the course of its 2011-12 to 2015-16 corporate
plan while at the same time increasing substantially its output
of reviews. This part of the report examines the four challenges
the Commission needs to address to achieve its ambitions:
- understanding overall costs;
- understanding detailed costs;
- reducing direct review costs; and
- reducing indirect corporate costs.
Understanding overall costs
3.2 As a new organisation, the Commission has had
to develop its understanding of its overall costs. It has revised
its budget and expected outturn figures substantially throughout
its first year of operation in the light of its monthly tracking
of actual expenditure. In order to set budgets for 2011-12 and
future years which are realistic and challenging, the Commission
needs to have a good understanding of what its actual costs would
have been in 2010-11 had that been a year of normal operation
rather than an opening year. This baseline has to provide detail
across the main cost categories. The Commission has faced difficulties
in setting it because of fluctuations in its expected outturn
for 2010-11 in the early part of the year. As a consequence, the
outturn and budget figures discussed in this report must be regarded
as provisional, and it is not possible to assess whether the baseline
is reasonable.
3.3 The Commission expects to spend £2.46 million
in 2010-11, with staff salaries accounting for half of total costs
(Figure 9). This is less than the £3.33 million spent in
2009-10 by the Boundary Committee for England within the Electoral
Commission, although that was on a rather different workload which
included structural reviews. The Commission regards some savings
from its £2.85 million initial budget as permanent and other
differences as temporary first year anomalies. Temporary differences
include savings in salary costs before all staff were recruited.
Based on its assessment of permanent and temporary differences,
the Commission has defined a baseline budget of £2.61 million
for 2010-11. The Commission intends to reduce its costs, expressed
in 2010-11 prices, by 20 per cent from this baseline over five
years, equivalent to 15 per cent from expected 2010-11 outturn
(Figure 10).
Figure 9
i) 
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| ii) NOTES
iii) This chart is based on the Commission's projected outturn of £2.46 million, excluding £0.10 million that the Commission considers are one-off costs incurred in establishing itself and £0.16 million transferred from the Electoral Commission that the Commission intends to write off.
iv) The first year distribution of costs may not represent the ongoing position. The 2011-12 budget shows corporate costs reduced to 45 per cent of the total, with all categories of review costs taking a greater share of the total.
Source: The Commission
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Understanding detailed costs
3.4 The Commission does not yet have a thorough understanding
of review costs, so it has needed, during 2010-11, to put in place
systems that will provide this understanding over time. It has
historical data on overall costs and the numbers of reviews completed
each year, but not on the costs of individual reviews. In response,
the Commission has established cost codes for each review and
requires staff to record time spent on each review. Over time,
this has the potential to provide valuable information to inform
the Commission's budget-setting and cost planning.
Figure 10
The Commission plans to reduce its resource costs in 2010-11 prices over its five-year plan
| £000 | 2010-11
original budget
| 2010- 11
expected outturn3
| 2010-11
baseline4
| 2011-12 | 2012-13
| 2013-14 | 2014-15
| 2015-16 |
| Salaries (including Commissioners)
| 1,350 | 1,085
| 1,300 | 1,327
| 1,236 | 1,204
| 1,140 | 1,080
|
| Accommodation and shared services
| 519 | 640
| 632 | 605
| 592 | 558
| 543 | 529
|
| Mapping and printing |
423 | 266
| 350 | 341
| 334 | 302
| 285 | 264
|
| Travel and subsistence |
553 | 34
| 108 | 105
| 108 | 111
| 104 | 101
|
| Other corporate costs |
| 2825
| 224 | 195
| 189 | 164
| 150 | 122
|
| Planned write off |
| 1566 |
| | | |
| |
| Total | 2,845
| 2,463 | 2,614
| 2,569 | 2,450
| 2,327 | 2,208
| 2,097 |
NOTES
1. Resource costs exclude capital expenditure.
2. The Commission's figures for 2011-12 to 2015-16
have been adjusted to 2010-11 prices in line with the Treasury's
GDP deflator using inflation rates of 2.5%, 2.2%, 2.7%, 2.7% and
2.7% for 2011-12 to 2015-16 respectively.
3. The Commission's projected outturn, as at December
2010.
4. The Commission has defined the baseline budget
by adjusting its original budget for what it regards as permanent
savings.
5. Includes £102,000 of costs linked to the
establishment of the Commission.
6. £156,000 of costs transferred from the Electoral
Commission that the Commission intends to write off.
Source: National Audit Office analysis of figures
provided by the Commission
3.5 In the absence of more detailed information from
the Commission, we have established our own estimates of the average
cost of reviews, overall and for key elements of expenditure,
through two calculations.
- We have converted the number
of reviews the Commission expects to carry out each year into
estimated annual workloads (Figure 11). In forming our estimates,
we have recognised that reviews typically take fifteen months
at present, so work on most straddles two or more years. Workload
across years would be smoother than output, with large fluctuations
unlikely under conditions of steady staff numbers. The Commission
expects its new processes to shorten review durations, so fewer
might span multiple years.
- We have calculated average review costs taking
projected resource outturn, excluding one-off first year costs,
for 2010-11 and budgeted resource costs for 2011-12 onwards, dividing
these costs by projected workload.
3.6 Our calculations indicate that the Commission
plans to increase its work on reviews by around a half in 2010-12
compared to 2010-11 levels, and that the combined effect of budget
reductions and increased output implies the average cost of each
review falling by 42 per cent over the corporate plan period at
constant prices, from £200, 000 to £116, 000 (Figure
12). These estimates depend critically on what, at this stage,
is necessarily an approximate conversion from numbers of reviews
completed each year to implied annual workloads.
Figure 11
The Commission's projected review workload will increase by over 50 per cent in one year
| | 2010-11
| 2011-12 | 2012-13
| 2013-14 | 2014-15
| 2015-16 |
| Reviews completed | 12
| 15 | 21
| 18 | 18
| 18 |
| Implied workload | 11
| 18 | 18
| 18 | 18
| 18 |
NOTES
1. The 12 reviews completed by the Commission in
2010-11 include two reviews in which the final recommendations
were made in 2009-10 but the changes to legislation were made
in early 2010-11. These are not included in Table One of the Commission's
corporate plan 2011-12 to 2015-16.
2. The estimation of implied workload recognises
that work on most reviews straddles two or more years, so workload
is not the same as the number of reviews completed, and that steady
staff numbers make fluctuations in workload unlikely.
Source: National Audit Office analysis of figures
provided by the Commission
Figure 12
The Commission's plans imply a 42 per cent reduction over five years in the average cost of reviews
NOTES
1. Adjusted to 2010-11 prices.
2. The average cost for 2010-11 is based on the Commission's
projected outturn excluding £102,000 that the Commission
regards as a temporary opening year cost and £156,000 of
costs transferred from the Electoral Commission that the Commission
intends to write off.
Source: National Audit Office analysis of figures
provided by the Commission
Reducing direct review costs
3.7 The three main elements of review costs are:
the salaries of review staff; mapping and printing costs; and
travel and subsistence.
3.8 The Commission is expecting to reduce review
costs associated with staff salaries by having staff continue
to increase the extent to which they undertake reviews concurrently.
It plans to reduce review or corporate staff numbers by one in
2014-15 and a further one in 2015-16, if it cannot find alternative
additional savings elsewhere, and it has assumed there will be
no salary increases over the five-year plan period. The proposed
increase in staff workload has been developed in conjunction with
review staff, and the Commission has told us that staff welcome
the change and believe it is achievable. Current proposals to
streamline processes (discussed in Part 2) may lead to further
reductions in staff costs for each review, but this will not be
clear until the Commission has developed further its understanding
of processes and their associated costs.
3.9 In 2010-11 the Commission negotiated an improved
deal with suppliers of mapping and printing services. The increased
number of reviews planned over the next five years implies a reduction
of 39 per cent in its mapping and printing costs for each review
(Figure 13). The Commission believes there is potential to use
fewer and smaller maps on each review but does not yet have a
clear plan by which to make these changes. It intends to review
the arrangements for mapping and printing in 2011-12 and tender
competitively, using procurement support from the Local Government
Association.
Figure 13
The Commission plans to reduce mapping and printing costs for each review by 39 per cent over five years
NOTES
1. Adjusted to 2010-11 prices.
Source: National Audit Office analysis of figures
provided by the Commission
3.10 The Commission expects travel and subsistence
costs for 2010-11 to be much lower than it previously projected
in September. As a result, its budget for 2011-12 represents an
increase of 90 per cent in average costs for each review, followed
by a decline of 4 per cent over the next four years (Figure 14).
The Commission considers the low 2010-11 costs to be the result
of postponing review work, although this is not obvious from achieved
output levels. The lack of a model for travel and subsistence
expenditure for each review means the Commission cannot yet plan
precisely this aspect of cost, which is projected to grow from
2 per cent of total spend in 2010-11 to 4 per cent in 2011-12.
Figure 14
The Commission is planning a significant increase in travel and subsistence costs for each review from 2010-11
NOTES
1. Adjusted to 2010-11 prices.
Source: National Audit Office analysis of figures
provided by the Commission
Reducing corporate costs
3.11 The three main elements of corporate costs are:
the salaries of support and managerial staff; accommodation and
shared services; and other corporate costs.
3.12 As set out under review costs, the Commission
plans to reduce review or corporate staff numbers by one in 2014-15
and a further one in 2015-16, if it cannot find alternative additional
savings elsewhere. For all staff, it assumes that there will be
no salary increases over the five-year plan period.
3.13 The Commission intends to review its accommodation
and shared services contract in summer 2011 in order to meet a
planned real-terms reduction of 17 per cent by 2015-16. It plans
to reassess possible relocation to achieve further savings.
3.14 The Commission considers that its other corporate
costs have been significantly lower in 2010-11 than would be expected
in a normal operating year because of low spending on training
and stakeholder engagement. As it expects 2011-12 and future years
to be more typical, its plans imply that savings of 36 per cent
will be required over the last four years of the corporate plan
period (Figure 15). The Commission has not identified specific
actions to make these savings, or to manage the potential impact
on stakeholders and review quality.
Figure 15
The Commission intends to reduce other corporate
costs by 36 per cent from 2011-12 to 2015-16
NOTES
1. Adjusted to 2010-11 prices.
2. 'Other corporate costs' are combined with travel
and subsistence costs to give 'other costs' in the Commission's
budgets.
3. The 2010-11 figure excludes £102,000 of costs
linked to the establishment of the Commission and £156,000
of costs transferred from the Electoral Commission that the Commission
intends to write off.
Source: National Audit Office analysis of figures
provided by the Commission
78 The Committee concluded, in January 2007, that the
Electoral Commission would benefit from refocusing on its principal
duties of regulating party finance and campaign expenditure and
electoral administration: Committee on Standards in Public Life,
Eleventh Report - Review of the Electoral Commission, January
2007. Back
79
Between 1992 and 2007, legislation specified that only the Secretary
of State could initiate boundary reviews. The Local Government
and Public Involvement in Health Act 2007 returned the power to
initiate to the Boundary Committee for England. Back
80
The Commission's five-year corporate plan for 2010-11 to 2014-15
had been developed in autumn 2009 by the Electoral Commission. Back
81
These and other figures in the report are presented in 2010-11
prices, converted in accordance with the Treasury GDP deflator.
In current year prices, non-capital expenditure in 2015-16 would
be £2.38 million. Back
82
Other types of electoral review include a review of a new unitary
authority and, in the past, periodic reviews of all authorities. Back
83
The Commission's records indicate its predecessors completed 386
periodic electoral reviews between March 1996 and October 2004:
35 at county council and 351 at district council level. There
were also 15 reviews similar to current electoral reviews completed
in 2006-07. Back
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