Memorandum by Professor Steve Martin (LGB
The Local and Regional Government Research Unit
at Cardiff University is engaged in research on a number of the
key elements of the modernisation and performance improvement
agenda in local government. Our programme of research includes
the long-term impact of the Best
Value regime (commissioned by the Office of the Deputy Prime Minister)
the impact of inspection (undertaken
with colleagues at Warwick University and funded by the Joseph
partnership working (commissioned
by the Welsh Assembly and the National Youth Agency)
the future role of elected members
(funded by the Association of Public Service Excellence), and
the emerging scrutiny and overview
function in local government and Regional Assemblies (funded by
the Economic and Social Research Council and the English Regions
Sections 105 and 106 of the draft Bill propose
the categorisation of English authorities by reference to their
performance and the exercise of powers by the secretary of state
by reference to these performance categories. A "Comprehensive
Performance Assessment" (CPA) framework, designed to enable
judgements to be made of authorities' overall performance, has
been developed by the Audit Commission and piloted with a number
of "pathfinder" authorities. The Commission plans to
announce its verdicts on the overall performance of all single
tier and county councils by December 2002 and of district councils
The proposal to categorise authorities' performance
represents only a very minor part of the draft Bill and there
is really very little evidence to draw upon in evaluating its
Our research has however highlighted a number
of concerns about the operation of Best Value inspection during
the first 18 months of the Best Value regime. These are described
in the report "The impact of inspection on local government:
driving improvement or drowning in detail?" however a summary
of which is available on our website (www.cardiff.ac.uk/carbs/research/lrgru).
The Audit Commission's Best Value annual statement, published
in the autumn of last year, echoed many of these concerns and
proposed a more differentiated regime of regulation and inspection
as a means of addressing them. These proposals are in turn reflected
in the Local Government White Paper published in December and
in sections 105 and 106 of the Draft Bill.
There are grounds for believing that this approach
may help to alleviate some of the problems that have been highlighted
by our research. In particular, it should reduce the "burden"
of inspection on authorities whose performance is deemed to be
relatively good. There are also signs that it may enable the six
separate inspectorates with responsibilities for Best Value inspection
to develop more integrated and co-ordinated approaches. Whether
the proposals succeed in promoting overall performance improvement
within English local government will though depend upon the extent
to which the CPA framework is able accurately to reflect authorities'
overall performance and their capacity to improve, and how councils
respond to the categorisations.
We believe that there are at least five key
areas that will need to be kept under review as the framework
1. Analysis of BVPIs and inspection reports
suggests that very few authorities are uniformly "good"
or uniformly "poor" performers. Most have a combination
of efficient and effective services and some functions that appear
to be under-performing. The proposal to judge an authority's overall
performance therefore requires a weighting system and the resulting
categorisations will depend crucially on the weightings attached
to different service areas, and the Audit Commission's judgements
about an authority's "corporate capacity".
2. These weights are likely to have important
practical implications since authorities that wish to enhance
their chances of being allocated to one of the top two categories
are likely to need to focus particular attention on improving
services that are weighted as the most important within the CPA.
This is not a problem if the same services are seen as priorities
by local people but could pose real difficulties in areas where
the local community attaches more importance to other services
3. The process of CPA is likely to take
up valuable staff time that might otherwise be devoted to the
task of improving front-line services. This implies that changes
in categorisations should be kept to a minimum so as to avoid
the need for repeated rounds of CPA. However, because the Best
Value regime is still relatively new with many services not yet
having been inspected, the Audit Commission is currently working
with an incomplete evidence base. This implies the need to re-visit
the initial categorisations within a fairly short period of time
to take account of new information provided by subsequent inspections
and performance data. The case for regular review of the categorisations
is strengthened by the fact that the performance of those services
that have already been inspected could change significantly (for
better or worse) over a two to three year period and, if the process
of categorisation is to act as a spur for improvement, authorities
will presumably want to have the prospect of rapid "promotion"
as their services get better (and should perhaps face the threat
of "relegation" should they deteriorate).
4. The Commission has developed a model
that it considers encapsulates the key determinants of an authority's
capacity to improve. However, it may be that there are other routes
to improvement that it has not yet recognised. It will therefore
be important to assess the extent to which inspectors' judgements
of capacity to improve are reflected in real changes in service
standards over time and for the Commission to adapt the criteria
it uses to judge capacity to improve in the light of new evidence.
In particular we would argue that there is a need for a much better
understanding of what actually drives performance improvement
across the very different kinds of services provided by English
local authorities and in the varied socio-economic contexts in
which different councils operate.
5. Finally, it is not clear how authorities
will respond to being categorised. There is anecdotal evidence
to suggest that some may be content to be judged as "fair".
Moreover, it is not inconceivable that "naming and shaming"
and tighter regulation of the poorest performers may have a disabling
effect upon some of these authorities. It could for example lower
staff morale (some councils report that their workforces have
been de-motivated by adverse inspectors' reports on individual
services) and/or make it more difficult for these authorities
to retain and recruit staff.
In summary then, the principle of tailoring
the kinds of inspection and level of central regulation to authorities'
current performance and their perceived capacity to improve is
to be welcomed. Finding a way of implementing this approach that
accurately reflects current overall performance and future capacity
and that avoids the risk of cutting across local priorities is
though a major challenge. In our view it will therefore be important
to monitor whether this new approach does promote tangible improvements
in local authority performance and, if so, how and at what additional
Director, Local and Regional Government Research
Unit Cardiff University