Examination of Witness (Questions 463-479)|
THURSDAY 11 JULY 2002
463. Can I welcome you to the Committee and
can I ask you to identify yourself.
(Mr Kirby) I am Paul Kirby, Director
of Inspection of the Audit Commission.
464. Do you want to say anything by way of introduction?
(Mr Kirby) I would say something briefly which is
to say that the Audit Commission welcomes the CPA partly because
it thinks central/local relations need to be made much more effective
and partly the regulation is too fragmented and could not work
as well it should do and we welcome the CPA system to move it
forward. The CPA gives us a chance to bring together lots of information
across many inspectorates, hundreds of performance indicators,
work done by auditors, plans which are assessed by government
and it is the first time they have ever been brought together.
Not only does that give a new picture of local government, but
it actually shows the sheer scale and, to some extent, dysfunctionality
of the current regulatory system and we think that is now prompting
the pace of reform of regulation with recent new energy. In terms
of our progress with the Comprehensive Performance Assessment,
this year we are working on the upper-tier councils, the education
and social services authorities and we are about half way through
the process of gathering the information we will need to publish
those judgments in December, but we are seeing this very much
as a one-off process for this year that CPA is a means to an end.
We are not looking to set up an institution and there has not
been any additional cost. It has been done instead of other audit
inspection work. However, if you are on the receiving end of it
in these months, which is really May to September, a range of
work has been brought together at the same time and that does
put a temporary burden on councils, but really on the other side
of this, we are very committed as a Commission to significantly
reducing audit and inspection work around a large number of councils
as a result of the Comprehensive Performance Assessment and I
think we are in a temporary moment of extra burden. We are out
to consultation at the moment with local government about how
the different judgments should be brought together into the overall
assessment for later in the year and we will take judgments on
that in the autumn. We are also out to consultation on the approach
which should be taken for shire district councils, including the
timetable and whether doing it in a year is a sensible thing to
do, but also whether a completely different approach to that we
have in the upper tier. Lastly, in terms of CPA I think we are
seeing it as a one-off exercise. I would not want anybody to think
that the book is closed on how it will be handled in the future.
This is particularly an exercise which is bringing together existing
information, existing approaches with the purpose of reforming
the regulation rather than continuing it.
Chairman: Thank you very much.
465. We are told that the Government needs to
move quickly to establish a new model of inspection for local
government based on co-ordination, proportionality and effectiveness.
How far have you got in introducing this programme?
(Mr Kirby) Well, we are, I think, seeing the CPA as
a means of doing that. The five or six inspectorates working on
local government have run entirely separate programmes until now.
The inspection work has been separate from audit work. The 40-60
statutory plans that people submit to civil servants to assess
are separate again and separate people set performance indicators.
This is the first time that we have brought those things together,
so that, for example, in an area like housing it is the first
time that the people who have set performance indicators, who
determine inspection and who require strategies and plans to be
submitted have come together and thought, "How can you form
the right judgment around housing and how can we reform that for
the future?", so there is debate going on in each of the
service sectors about the right way forward. Secondly, there is
a debate about what sort of audit inspection you would have with
each category in the future. From an Audit Commission point of
view, as one of the major inspectorates, we have said that there
would be no inspection for three years with an excellent authority,
and those authorities in the next category, on a five category
model, in the good category, should expect to have about 50 per
cent of what they have currently and that we recognise that even
in poor performing authorities keeping up high levels of inspections
does not necessarily address the problems. New proposals are being
worked out with Government and with the Improvement and Development
Agency to better support poorly performing authorities rather
than just keep inspecting.
466. How does that fit in with the Government
giving various inspectorates until June 2003 to have the new inspection
regime in place? In view of what you have just told us, why is
it taking so long?
(Mr Kirby) I think there is a real impetus given by
the CPA that has not been given before. One of the commitments
in the Local Government White Paper was that at the end of the
CPAso in this case at the end of the autumneach
authority would have a bespoke inspection plan for the first time
produced by all the inspectorates working together. Currently
we are piloting that with ten pathfinder authorities to roll out
to all 150 upper tier councils this autumn. That really has two
new dimensions to it. Firstly there is the categorisation, so
for potentially ten or 20 per cent of councils there will not
be any inspection at all, for a larger number a significantly
reduced amount but, secondly, many of the issues which local government
want inspecting actually are cross cutting across the inspectorate.
So, for example, people are keen for us to look at their work
with local partners on community safety, for example, it can include
education, social services, environment and other factors. For
the first time, what is coming out of CPA, we are talking with
the councils about what they would like to see inspected and how
the inspectorates need to get their act together.
467. Why is it taking so long?
(Mr Kirby) At the moment it is going with great pace.
It is on target for being there for the end of this year.
468. Have any councils actually asked you to
inspect them which are not currently being inspected?
(Mr Kirby) Yes.
Chris Grayling: You are getting serious requests
from councils for more inspection?
469. No. What you are doing is you are doing
the overall assessment, are you not, and what councils are saying
is that in trying to score good points in the overall assessment
they want the goal average to be taken into account as well as
the things you are inspecting?
(Mr Kirby) Yes, that is true.
470. That is really why they want more inspections?
(Mr Kirby) No, no, sorry. I am referring to councils
who by the categorisation will quite probably either have no inspection
that is mandatory or a reduced amount of inspection. A large number
of councils welcome inspection. I am here arguing that inspection
should be scaled down significantly, and it has grown out of proportion
and it is fragmented, but eight out of ten councils say in polling
that inspection makes a positive impact on service improvement.
471. We have heard this morning evidence that
suggests that the CPA will paralyse local authorities.
(Mr Kirby) Okay.
472. That has been reinforced by our previous
witnesses. There is a slight contradiction in this exciting picture
of councils begging for inspection and less regulation.
(Mr Kirby) If I could address that point. There are
two things. One is, I said in my introduction, there is a temporary
burden at the moment which is that all councils are undertaking
an inspection called a corporate assessment, which is to look
at what is the council's corporate capacity to improve its services.
That is very important because if councils have that capacity,
and clearly many do, then there is not a need for the Government
to keep going around, or inspectorates, looking at each of their
service areas because they may be under-performing but they have
the capacity to turn those services around themselves. All councils
are having that. What that involves is the council filling in
a self-assessment which is 20 pages long, and councils complain
it is too short and that actually they were expecting something
more bureaucratic. It asks four questions of the council. What
are you trying to achieve in your own priorities? What strategies
have you taken? What progress are you really making? Councils
are saying that has been the biggest learning for them for many
years, actually facing up to whether what they are doing is demonstrably
having an impact, because people are working very hard but does
it make a difference. Fourthly, in the light of what you have
learnt about your real progress, how are you managing your priorities
for the future? Everybody is going through that. The reason why
people are putting big resources into it is because they feel
very sensitive about the judgment. This is a judgment not just
about the service area but in effect about the leadership of the
council. Therefore, people are choosing to put huge amounts of
time into preparing for this assessment. There is no requirement
to do that, we are not asking people to prepare new documents
or to do anything different but people clearly feel sensitive
about it. My one point on that is this really is a one-off exercise.
We are not looking to institutionalise this and as a result of
this exercise a great many people, hopefully all to differing
degrees, will get less inspection in the future. Many people do
ask us to do particular inspections to get at issues.
473. Can I follow that through, Mr Kirby. If
we have to have better institution and coordination of inspection
will that need primary legislation?
(Mr Kirby) Not necessarily. The approach which we
are taking at the moment is a cooperative one between inspectorates.
There is an Inspectorate Forum looking at these issues. Clearly
individual inspectorates, particularly service inspectorates,
have quite strong policy agendas set for them by ministers in
the Social Services Inspectorate and Ofsted and it is a genuine
question as to how that works through.
474. Can we strengthen the institutional arrangements
voluntarily or will we need something in the Bill?
(Mr Kirby) In the White Paper ministers expressed
the view that they were impatient for more coordination and for
less fragmentation and that there was the chance for the inspectorates
to get their act together around the CPA and if they did not do
that they would look at institutional reform. I think that is
something which ministers should keep under review.
Mr Cummings: How many extra staff do you require
and what are the associated costs of this exercise?
Sir Paul Beresford
475. Can I add to that and ask what is the establishment
of the Commission now compared with five years ago and who is
(Mr Kirby) Okay. Could I start with Sir Paul's question
and work back then. The Audit Commission spending on local government
in England is of the order of £130 million a year. That has
doubled since 1998 so it has grown clearly to a large degree,
and the establishment has grown pro rata. We are very conscious
that the Commission will need to scale back its level of activity
as part of reducing the over-burden of regulation and its fragmentation.
The actual CPA activities involve no extra cost and no extra staffing.
This year we have been reducing the scale of inspection. The actual
cost of the corporate assessment, which I think is what many of
your witnesses have referred to, the two week inspection, works
out at about £12 million in total, so approximately one-tenth
of the Commission's work this year with local government, but
we have displaced other planned inspections to do this work so
there is no increase in inspection, there is no increase in resources.
Clearly the Commission has grown very significantly in the last
476. Have you any estimate of what it is costing
(Mr Kirby) I would go back to the point I made to
Mr Grayling's question that we are not asking the authorities
to put extra resources into this. Clearly there is time to meet
us on site when we are there during a two week period.
477. You are not going to tell me you think
they just sit there and wait for you?
(Mr Kirby) No. What we have been very conscious to
learn from some of the bureaucratic difficulties around best value
is not to specify processes by which people do self-assessments.
We have literally just said "However you want to do this
is up to you. We are asking for something short. We want to hear
what your view is and we do not want more than 20 pages, if you
produce any more we will not read it". Then we try to learn
some of those lessons. What I am not disputing at all is that
this is a very sensitive issue.
478. It is often quite difficult to say things
shortly and concisely.
(Mr Kirby) Absolutely.
479. Rather than take a long time and say very
(Mr Kirby) I have probably just demonstrated that
in some of my answers.