Hampshire County Council

Cabinet

Item 6

26 June 2006

Value for Money Strategy and Corporate Review Programme

Report of the Chief Executive

Contact: Jenny Heath, ext: 7402 Email: jenny.heath@hants.gov.

1 Summary

1.1 This strategy was initiated following the new emphasis on value for money within `CPA 2005 the Harder Test', as well as specific comments in the Annual Audit and Inspection Letter. The general approach to the renewed value for money agenda has been to integrate it within existing processes. By setting out the approach in a separate strategy it makes it more visible, given that fully integrated approaches can become invisible. A Performance Support Network workshop on 16 November 2005 brought together Members and Officers to consider the outline approach, initially agreed by the Corporate Performance and Efficiency Steering Group (CPEG) at its meeting in July 2005.

1.2 This strategy will also support the development of the Corporate Business Plan, recognising the role of value for money and efficiency targets in that plan.

1.3 Cabinet approved the Corporate Review Programme for 2005/06 at its meeting on 27 June 2005, focussing review activities on strategic areas that were likely to generate efficiency gains. Progress with the reviews is shown in Appendix Two, along with an indication of how Members have been engaged. This year it is proposed that the revision of the Corporate Review Programme doubles up as the action plan for improving value for money.

2 Background

2.1 Hampshire County Council has recognised for a long while that providing economic, efficient and effective services is key to meeting the needs of the people of Hampshire. In this regard, the Council has consistently strived to provide value for money.

2.2 CPA 2005, which represents a significant `raising of the bar', introduced for the first time an explicit assessment of value for money within the revised Use of Resources block. As part of this, local authorities are required to submit a self-assessment of the extent to which the Council provides value for money. Whilst confident that the Council on the whole provides good value for money the challenge is identifying and collating the necessary evidence.

2.3 In 2005 the self-assessment was produced under an extremely tight timetable following the late release of the CPA framework and with some elements of the guidance only emerging a couple weeks before the submission deadline. The information was pulled together on an ad hoc basis from a vast array of sources. A more systematic approach is needed from 2006 and departments have already been asked to make returns on the extent to which they provide value for money as part of the now routine corporate performance reporting.

2.4 In the 2004/05 Annual Audit and Inspection Letter the auditors made the formal recommendation that the Council should seek to "understand high-cost areas through better integrated cost and performance information and a more consistent approach to reviewing value for money". The auditors highlighted the need to:

2.5 Whilst this and the other formal recommendations have been responded to -through a report agreed by Cabinet on 23 January 2006 - it further highlights the need to tighten Integrated Planning and Reporting processes and the Corporate Review Programme to address this new focus on value for money.

3 Value for money strategy

3.1 A draft Value For Money Strategy is attached at Appendix One. It has been developed with reference to the current Corporate Strategy, the forward looking Annual Efficiency Statement (strategy section and Government guidance), the CPA Use of Resources block guidance and key lines of enquiry (KLOE) and Best Value statutory guidance. The Corporate Performance and Efficiency Group (CPEG) have considered the outline approach and areas for potential review at their meetings, while a special Performance Support Network workshop brought together Members and officers in November 2005 to consider the approach and general understanding of efficiency and value for money.

3.2 The CPA Use of Resources block KLOE in relation to value for money highlight a number of essential elements to demonstrate and further improve value for money. These provide a useful set of criteria on which to base any value for money strategy:

3.3 In order to move the agenda forward it is important to `mainstream' the principles of value for money and efficiency as much as possible and clarify what is expected from everyone at all levels of the organisation. Value for money needs to be integrated within the Council's priorities/vision, planning and accountabilities, deployment of resources, monitoring and assessment and awareness/guidance - these are considered below.

3.4 Priorities/vision

3.5 Planning & accountabilities

3.6 Deployment of resources

3.7 Monitoring and assessment

3.8 Awareness/guidance

4 Developing the Corporate Review Programme

4.1 While mainstreaming value for money into planning and monitoring processes will ensure it features in day-to-day operations, it will not create opportunities to challenge and fundamentally review the way services are delivered or improvement achieved. To do this, Value for Money must also become a main element of the Corporate Review Programme.

4.1 The single review programme approach is also fundamental to complying with the continuing statutory requirement to have a (best value) review programme, while minimising potential bureaucracy. It enables the corporate programme to focus on strategic or cross-cutting areas and allows service reviews to be covered by the service planning regime.

4.2 The programme is based on the premise that there are several reasons for review activity which may cause them to be included in the Council's corporate review programme:

4.3 At the end of each financial year, progress with corporate reviews must be published in the statutory Performance Plan, following reporting through the agreed Member channels.

4.2 Last year the 2005/2006 corporate review programme was presented to focus on Gershon efficiencies, clustered by the categories for improvement defined by Government. It is recognised that efficiency is only part of the primary aim to achieve value for money and so the 2006/2007 corporate review programme take a wider `value for money' perspective as the rationale for selecting areas to review and has removed the artificial categorisation of reviews.

4.3 The Corporate Review Programme is attached at Appendix Two. It is split into two sections:

5 CPA and the Value for Money self-assessment

5.1 The value for money self-assessment is required by the Audit Commission at the end of July as part of the CPA process. A small Value for Money steering group will manage this process looking to build on the 2005 self-assessment and seeking approval from Cabinet in July.

5.2 As well as returning the Corporate Performance Results, finance and performance officers in departments will need to submit commentaries on the value for money comparative data (county council profiles). The value for money self-assessment timetable is shown in appendix three.

Recommendations

1 That Cabinet approve appendix one as the Council's Value for Money Strategy.

2 That Cabinet approve appendix two as the Council's (Best Value) review programme for 2006/07 and its publication in the statutory update of the Performance Plan on 30 June 20056

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB the list excludes:

None.