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Tough judgment on value for money...
Tough judgment on value for money

By Mark Smulian

Efficiency statements will form a key part of councils' comprehensive performance assessments under a new Audit Commission approach.

It has announced how it will assess councils' use of resources, including a new value-for-money category that will be tied closely to the statements.

The government has ordered each council to produce an efficiency statement showing how it will make savings of 2.5% each year over three years.

An analysis by LGC of top-tier council statements has shown they plan for savings totalling£1.25bn (LGC, 26 May).

A commission spokesperson said: 'Value for money and the proper use of public funds are the key aspects of the revised use of resources framework.

'A council will receive a scored judgment on its track record in managing its finances and providing value-for-money services for residents.'

Commission guidance said the value-for-money assessment would complement rather than duplicate the work done to prepare the efficiency statements.

Surrey CC executive director for performance and resources Mike Taylor said the new approach would make it harder for councils to gain high grades.

He said: 'The government is right to want to drive-up performance but you don't do that by raising the bar at which you designate people as good or not.'

Nathan Elvery, Croydon LBC finance director, said: '[Auditors] will be running into it with their eyes closed, and there's a danger they won't see the bigger pictures.'

Use of resources timetable

17 June 2005 Value for money profiles on commission website

31 July Deadline for single tier and county councils to submit value for money self assessments

August-September Assessment fieldwork

30 September Deadline for district councils to submit value for money self assessments

December Scores published for single tier and county councils

January 2006 Assessment fieldwork for districts completed

March 2006 Scores published for districts

Comment - the bar must be raised

If the new use of resources methodology is to have credibility, it must be robust, it must be transparent and councils must feel they have been involved in how it will work. However, there is a danger it fails on all three counts.

The perception that overall ratings hinge on a single highly subjective assessment - value for money - is extremely damaging. The delay in setting out how the framework will work means councils fear they will be marked down or held back on the judgment of an auditor who hasn't had time to get up to speed.

If the number of excellent councils is to decrease, it must be because the bar of excellence has been openly raised, and not because of a messy fudge in one of the methodology's component parts.

There is a clear political context to the way local government improvement is judged. But council performance is too important to become a vagary of national electoral cycles.

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