7 National Value for Money studies
The studies programme
94. The Audit Commission has a statutory duty to
carry out studies into the impact of central government legislation,
regulation and direction on the ability of local authorities to
deliver value for money.[151]
In 2009-10 the Audit Commission spent about £5m on some 24
national studies—an average cost of approximately £200,000.
It has since scaled back its programme to around £1m for
2010-11. The studies have covered a wide range of topics in many
sectors as well as cross-sectoral studies. The topics include
those that would be readily recognised as value for money, such
as fraud and pensions, and those that, at least initially, might
not be, such as migration, domestic abuse and road safety. A small
number of studies have been undertaken jointly with the NAO.[152]
Their value
95. The Audit Commission's view is that "our
national studies define value for money and how it can be improved"[153]
providing valuable, in depth and independent research. The reports
are not primarily designed to pass judgements retrospectively
but to look for future improvement. The Commission's view is that,
particularly at a time of public sector spending cuts, the loss
of its expertise on value for money is "counter-intuitive"
and that other organisations will not be able to replicate it.
[154] Its Chairman
cited Are we there yet? and Tired of hanging around
as recent examples demonstrating that the Audit Commission was
prepared to criticise central government as well as local government.[155]
96. In its written evidence to our inquiry the Department
for Communities and Local Government noted the Audit Commission's
research programme but made no comment on its quality or usefulness.
In oral evidence, the Minister criticised the studies for being
overly prescriptive in their definitions of what constituted value
for money.[156]
97. The Local Government Association's observations
on the national value for money studies were critical. In particular,
it said that, despite consulting the Local Government Association,
the Audit Commission's programme had not sufficiently reflected
the needs of the sector and that "the Commission's apparent
desire to grab the headlines" had distorted the overall message
on occasions.[157]
98. Individual witnesses and organisations pointed
to specific reports that they felt had been of value in their
sector. APSE, for example, praised the report Positively charged
for highlighting the lack of corporate charging strategies in
a high proportion of councils.[158]
Age UK said how valuable Don't stop me now and Under
pressure had been. Age UK had produced similar reports itself,
but was concerned about accessibility of the information.[159]
A further constraint—for several of our witnesses—was
funding to undertake such studies.[160]
99. The TaxPayers' Alliance supported the approach
of diverse reports by non-governmental organisations; its CEO
did not feel the Audit Commission reports had the same impact
or themselves provided value for money. Professor Seddon argued
that value for money was a beguiling concept—hard to disagree
with yet difficult to define operationally. He was critical of
the Audit Commission for prescribing solutions which, though plausible,
had sometimes turned out to be wrong and excluded other approaches
which did not fit with their preconceptions. He pointed to the
2005 report on housing benefit[161]
which according to APSE, the Audit Commission revised in 2008.[162]
NAO to take on the role
100. The Government has proposed that responsibility
for VfM studies should pass to the NAO, which would be able to
undertake reports using its existing powers, once confirmed by
the Treasury.[163]
The Minister told us that the Government also expects to see research
undertaken by a wide range of organisations, and such research
could be more expert and powerful. He cited work by Shelter as
having had impact. He welcomed a plurality of views.[164]
101. The NAO has an existing annual programme of
around 60 VfM studies and a budget of around £20m.[165]
The C&AG saw no problem with the NAO taking on this additional
role although he said that he would need to assess the need for
additional resources.[166]
The C&AG was confident that the NAO already had expertise
in the local government sector and could strengthen its capacity
if required.
102. The Local Government Association would like
to have greater involvement in future value for money studies,
and for the programme to be smaller and of high quality. It suggests
that, instead of simply passing to the NAO, the studies should
be linked to the productivity programme of the Local Government
Group. They could be funded by top slicing of revenue support
grant or savings from abolition of the Audit Commission.[167]
103. Over the years the Audit Commission has produced
some of useful national value for money studies, but the programme
has become excessive and not sufficiently linked to the needs
of the sector. Not all the studies have proved helpful or, at
£5 million a year, themselves provided value for money. We
believe that a smaller, more selective programme would be better.
It would be wrong for one part of public expenditure—local
government—to be excluded from VfM assessment and the National
Audit Office should ensure that local government services and
expenditure are given due weight in its studies programme. Provided
that the National Audit Office has, or acquires, the necessary
expertise in local government matters, there may be some advantages
to having a more unified approach to reporting on public expenditure
across both local and central government. Additionally, we welcome
reports by a diverse range of organisations, including those from
outside government, and recommend that the National Audit Office,
Local Government Association and Department for Communities and
Local Government encourage collaborative working and seek to ensure
information is made available to all serious researchers. The
NAO and LGA should lead on devising a coherent programme that
adequately covers priority topics and avoids undue overlap.
104. The proposal for the National Audit Office
to take on this role is workable and, as we note above, may have
some advantages over the existing arrangements. However, the way
in which the announcement was made did not show a proper respect
for the constitutional position whereby the Comptroller and Auditor
General, the head of the NAO, is an officer of Parliament, and
the funding for NAO work is granted directly by Parliament, through
the Public Accounts Commission, rather than by Government. It
is not for the Secretary of State—any Secretary of State—to
transfer work to the National Audit Office without proper consultation
with Parliament first.
105. The transfer of responsibility for national
value for money studies to the NAO involves a transfer of costs
from DCLG to Parliament. We recommend that the Comptroller and
Auditor General make an assessment of what it will cost to ensure
that the NAO is able to carry out an adequate programme of VfM
studies of local government expenditure; that he discuss his requirement
for the necessary resources with the Public Accounts Commission;
and that DCLG make a clear transfer of the necessary resources
to the Public Accounts Commission from the savings from the abolition
of the Audit Commission.
151 Ev 161 Back
152
For example, A review of collaborative procurement across the
public sector, 21 May 2010. Back
153
Ev 167 Back
154
Ev 166 Back
155
Q 205 Back
156
Q 597 Back
157
Ev 139 Back
158
Q 346 Back
159
Qq 322-323 Back
160
Qq 325-328 Back
161
Q 342 Back
162
Q 335 Back
163
DCLG Consultation doc, para 1.28 Back
164
Q 597 Back
165
The NAO's Annual Report 2010 says that 24% of resources were used
on value for money work and 63 reports were published. The value
for money budget is not stated in cash terms but, on the basis
of 24% of a total budget of £94.6 million, this suggests
£22.7 million spent on value for money; divided by 63 reports,
this suggests an average of £360,000 per report. Back
166
Qq 500-501 Back
167
Ev 140 Back
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