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FINANCE SUPPLEMENT - RAISING THEIR GAME

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What next for inspection? Richard Harbord looks at the Audit Commission's often controversial past - and councils' ...
What next for inspection? Richard Harbord looks at the Audit Commission's often controversial past - and councils' hopes for a more streamlined future

We are at a turning point in the search for the best way to maximise councils' performance. It has been a long journey and one in which the Audit Commission has been a central player.

We are moving from the attempt to change councils' behaviour via one blunt instrument or another to the recognition that drivers of performance may come horizontally or bottom up, just as much as top down.

The Audit Commission was, of course, initially set up to secure a comprehensive and quality assured audit service for councils. Its remit was not extended to inspection until 1999.

In the early years, the commission caused some upset in councils, as its national studies produced eye-catching headlines about waste and inefficiency. It then masterminded the first publication of performance indicators - an early and somewhat clumsy attempt to improve council performance. There was great concern at the time about how the league tables would be interpreted and received and I was involved in careful briefing of newspapers on what the league tables actually meant.

The real impact of indicators was never achieved - mainly because of the astounding indifference of residents to the performance of their council.

Then came best value and the start of the intensive inspection regime. Best value never reached its true potential. It proved to be expensive in terms of time and resources, while the target savings rarely materialised because many services were in need of immediate investment to make them more relevant and cost efficient.

The quest for continuous improvement 'until all authorities are in the top quartile' came to a crescendo with comprehensive performance assessment. In future years, the introduction of CPA will be seen as highly significant. CPA has been extremely helpful in providing a common framework for improvement and many authorities have found this beneficial.

What next? This is the question addressed in the consultation paper on inspection reform.

At present, the resources used in assessing over 400 councils are considerable, and it is difficult to see how that effort can be sustained. Councils feel they are over-inspected. Not only are councils expending time and money on responding to inspections, but they feel they are not trusted to deliver their services.

As we move to more shared back-office services and more frontline services being delivered via partnerships, the assessment of one council's contribution to the service's performance will become difficult.

While we await announcements about the setting up of a local services inspectorate, the decision has been made to merge the Benefits Fraud Inspectorate with the Audit Commission. Not everyone has been happy about this, with many councils feeling the BFI understood the complexities of benefits administration and questioning whether generalist inspectors could do the same.

The consultation paper speaks of the need to involve the customer, user and citizens much more in the process and develops thoughts about how these views might be incorporated in future inspection. This will be difficult, because of the time and cost it will take to get genuinely comprehensive views. The other option - of the inspectorate becoming the champion of these interests - may be a more workable solution.

There are also questions about the advantages of pre-notified inspection against random unannounced checks and those triggered by poor performance. Although understanding the arguments for random inspection, I feel that the greater benefits are likely to come from a pre-programmed and properly planned inspection in a thorough fashion. A sound inspection regime allows the sharing of good experience from an independent viewpoint.

Other matters to decide include how to make inspection of partnerships workable and feasible and whether value for money and national reviews should be subsumed into the inspection regime or continue independently.

On funding, one of the options would be to have inspection grant funded whilst audit work remains on a fee basis. That seems the most palatable way of dealing with costs.

The important thing will be to build on the major steps forward on performance improvement made in the recent past and to develop a streamlined system which genuinely contributes to further improvement.

Richard Harbord Consultant

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