Written evicence by Staffordshire County
Council
INTRODUCTION
Staffordshire County Council welcomes the opportunity
to contribute to this inquiry into the Audit and Inspection of
local authorities.
We are supportive of the move towards greater localism
and decentralisation. The developments that have already been
announced including the scrapping of the Comprehensive Area Assessment,
the replacement of the National Indicator Set and the move to
more local control over audit and performance are positive moves
in the right direction.
We would welcome the opportunity to be more closely
involved in further discussions that may take place in the future.
This submission reflects the views of the county council. It is
also supportive of the County Council Networks (CCN) submission
to this inquiry.
KEY POINTS:
— There
is a requirement for an audit regime for local authorities and
we are supportive in principle of a decentralised approach to
audit, albeit with a reduced burden on local authorities and the
removal of limitations to the current regime.
— A local
government, sector-led approach is the way forward for the oversight
of performance management. This will allow the sector to take
on responsibility for its own improvement whilst working with
central government to ensure that certain key services meet common
standards. This sector led approach will mean that local government
will be accountable to its communities through the democratic
mandate of locally elected members. Local elected members should
also have a role in assessing value for money within a local context.
— Value
for money studies are often subjective and therefore subject to
challenge, but they do provide a good starting point for discussions
about priorities and the services we commission and deliver.
— It
is important for central government to engage with and listen
to the experience of local authorities when designing value for
money studies and developing a single set of performance indicators.
This will ensure that the information that is captured is useful
to the local government sector and also to the locality itself.
AUDIT OF
LOCAL AUTHORITY
EXPENDITURE
Staffordshire County Council believes that there
is a requirement for an audit and inspection regime for local
authorities. The audit process does have a role to play in the
stewardship of public money. However, the current regime does
place an unnecessary burden on local authorities that needs to
be reduced in any new proposals.
There are limitations to the current regime which
are manifest as a result of the Accounts and Audit Regulations
2003. Staffordshire County Council acknowledges the essential
role undertaken by the Chartered Institute of Public Finance and
Accountancy in supplementing the statutory regulations with codes
of practice and other guidance. However the current approach aims
to adopt standard accounting practice but compromises this by
including in the accounts a range of adjustments which make the
accounts very difficult to understand. The county council urges
central government to re-consider whether more simplified accounting
standards for local government could be adopted.
Also the threshold of £1 million for smaller
bodies to produce a full set of accounts is burdensome and not
related to risk. This threshold has not been increased for a number
of years and it requires any authority, Joint Committee or other
partnership, to produce a full set of accounts and be subjected
to a full audit. The county council would support linking the
threshold in Regulation 2 of the Accounts and Audit Regulation
2003 with the small company audit exemption threshold in companies'
legislation.
The current legislation also includes a period of
public inspection of the accounts. The experience of this authority
over the past 5 years is that very few, if any, members of the
public come to inspect the accounts during this period. The recent
introduction of the Freedom of Information Act and the publication
of data required under the transparency agenda further negate
the requirement for a period of public inspection.
Under the current regime, it was the recently abolished
Audit Commission who appointed the auditors for Staffordshire
County Council and for a few years that contract has been given
to PricewaterhouseCoopers. The county council is fully supportive
of the general move towards localism and, as such, does support
a more decentralised approach to external audit in principle.
Clearly any revised arrangements will need to adhere to proper
procurement practice.
Staffordshire County Council is supportive of the
County Councils Network's (CCN) submission to the Committee in
terms of the solutions it proposes to implement a system of external
audit in which groups of authorities with shared characteristics
join together to procure external audit services. While the practicalities
of this approach would require some thought with the possible
need for a coordinating body and an agreement on which authorities
would work together, it is felt that this approach would provide
a move to decentralisation, whilst removing some of the potential
burdens. Some additional resource would however still be required.
Another proposal would be for councils to collaborate
with other public sector bodies to jointly commission a single
auditor on an area basis, linking into and supporting current
proposals around community budgets. It is felt that this would
be a logical approach as many local public sector organisations
within Staffordshire already use the same auditors within the
current system.
Finally, we would also like to reinforce CCN's point
regarding the important role of local democratically elected councillors
in determining how limited resources should best be spent according
to local needs and priorities, as opposed to external auditors.
OVERSIGHT AND
INSPECTION OF
LOCAL AUTHORITY
PERFORMANCE
Staffordshire County Council is fully supportive
of the view that local authorities are now capable of governing
and assessing themselves and ensuring that improvements in services,
performance and efficiency continue to be made. We also recognise
that there are certain areas where central government still has
an oversight role and will work with the Local Government Group
(LGG) and central government to ensure that this is delivered
in the most efficient, effective and proportionate manner.
The sector-led approach proposed by the LGG, which
aims to strengthen local accountability to local communities and
to give local councils more flexibility to pursue local priorities,
would help to reduce the burden upon local government and free
up central government resources. It is felt that this sector-led
approach should have local priorities at its core and should be
focused on outcomes. Consequently it would be helpful if there
were fewer top-down performance indicators introduced by central
government and instead, local government should be given the remit
to develop its own indicators of performance that reflect the
local priorities that are relevant and important to local communities.
It is essential that the new "single comprehensive
list" that will replace the National Indicator Set is reflective
of views presented by the sector regarding unreliable indicators
that are perceived to be not fit for purpose by local organisations.
There needs to be flexibility within this list for the development
of local indicators that are considered to be more robust locally
than some nationally imposed indicators. We do have some concerns
about the implications of some of the input and output indicators
in Departmental Business Plans, which could see the continuance
of some performance indicators that were felt to be previously
inappropriate included in the single list. It is essential that
Whitehall departments talk to local authorities about what does
and does not work at a local level.
In addition, performance management does need a benchmark
in order to allow robust measurement of our performance against
our peers. A sector led approach led by local government would
be one way of achieving this end and would deliver real localism
to our citizens and communities. The transparency agenda also
supports this and both will ensure local accountability through
local democratically elected members to local communities.
The abolition of the CAA does indicate that the government
is prepared to shift responsibility away from nationally imposed
regimes and towards the local government sector itself. However,
more needs to be done. We would like to see a reduction in the
quantity of special reviews such as those undertaken by the Care
Quality Commission which it is felt achieve very little but are
time consuming - for example the county council is subject to
one such review every 6 weeks/2 months.
The inspection regime also needs to be less resource
intensive and burdensome. As with audit requirements, a more risk-based
and proportionate approach is required. Inspection activity needs
to be co-ordinated amongst the individual inspectorates and not
over burdensome. Any inspection activity should also focus on
safeguarding services for vulnerable groups.
VALUE FOR
MONEY STUDIES
Studies have been widespread on how the value for
money of local authorities can be assessed. This is due to the
differing way local authorities are organised and subsequently
financed differently across the country presenting some difficulties
to the design of one approach. As such, value for money studies
are often subjective and the data within them subject to challenge
and difficult to compare. On the other hand, they do provide us
with a useful starting point for discussions about our local priorities
and services.
The Audit Commission tried to bring together a number
of different key services cost bases and compare them on a unit
cost profile through its value for money toolkits. However, these
were not used in a number of cases because the information did
not capture any related performance information, and secondly
the information (due to reporting frameworks) was generally out
of date when released.
In response to these pitfalls, the Chartered Institute
of Public Finance and Accountancy (CIPFA) have then subsequently
developed a free value for money toolkit which had been previously
independently developed by Somerset County Council. This model
has allowed local authorities to submit financial data (the most
recent year) and relevant timely performance information. The
model then uses the data to compare authorities within an agreed
comparator group and plots the authority on a matrix grid according
to "relative performance" so that comparisons can be
made easily. We believe that this model is a good start to assessing
value for money, although the data sets and their comparability
do still remain subject to challenge.
Internally to Staffordshire County Council, it has
been argued that we should not be monitoring budgetary position,
but the overall value for money position of varying services.
However, in trying to develop a set of value for money measures
it was deemed very hard due to its subjective nature.
In order to shape any future work, we would argue
that any value for money models should be developed with local
authorities. This would ensure that future studies would not only
capture information which would be useful, but ensure that information
is only collected once in a format that would be used by a number
of agencies.
Staffordshire County Council
January 2011
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