Contact: Paddy Hillary Ext. 7391/Jill Lovelock Ext. 7591

1. Summary

1.1 This report updates Members on the arrangements for monitoring the County Council's local public service agreement and the progress to date after the first 6 months of operation in terms of performance and spending for each of the 13 targets.

1.2 Overall, all the targets have made a good start in implementing the action plans for achieving the performance stretch, although some of the actual PI results are not available at this stage, and arrangements are in place to monitor pump priming spending.

2. Introduction

2.1 Members will recall that the County Council concluded negotiations for the local public service agreement with the Government in January 2002, for an agreement covering the period April 2002 to March 2005. The agreement covers 13 targets which are a mix of 7 national targets, as prescribed by the Office of the Deputy Prime Minister, and 6 local targets. A full list is attached as Appendix 1.

2.2 As part of the LPSA, the County Council will receive £2,002,000 in pump priming funds. It is expected that this will be received towards the end of this financial year (2002/03). In addition, the Performance Reward Grant, of up to £22m, will be payable at the end of the agreement on a sliding scale assuming that at least 60% of the individual targets has been achieved.

3. Monitoring arrangements

3.1 The Government does not specify any monitoring arrangements or reporting mechanisms for the LPSA. The County Council has devised its own pro forma for departments to use on a 6 monthly basis in reporting progress in terms of the actions needed to deliver the targets, the performance indicators specified in the agreement and the spending of pump priming. The monitoring includes issues relating to progress with the freedoms and flexibilities negotiated into the agreement with Government.

3.2 Departments have set up procedures to monitor progress and systems to collect the necessary data, some of which is already standard PI data for national BVPIs. This exercise will be repeated in 6 months (March 2003) when more information on performance indicators will be available.

3.3 There is an issue about the identification of County Council spend in relation to the targets. Different approaches are required to monitoring spending depending upon the nature of the service and the actions proposed to achieve PSA targets. In some cases pump priming grant has been allocated to financing particular activities or initiatives, progress on which can be monitored directly. In other cases pump priming grant may be supplementing resources in current budgets in a way that makes it difficult to differentiate either between spending which is contributing to the target and other spending or between the use of pump priming grant and other resources on PSA related spending. In these circumstances the emphasis will be on monitoring the overall level of investment on the activity. Where resources have been devolved to schools, who set their own budgets, monitoring of spending financed from PSA pump priming grant as distinct from spending from other revenue streams, is not proposed and reliance will be placed on other forms of monitoring. 2002/03 service cash limits are being adjusted for planned use of pump priming grant in the first year of the PSA.

4. Progress to date

4.1 At this stage, 6 months into the agreement, some PI data is not yet available i.e. education results, but all targets have reported progress with implementation. Members will note that the forms include factors relating to implementation which may influence the ability to deliver and which need to be monitored. For example under Target 10, the department needs to confirm with Department for Transport the arrangements for disaggregating the passenger information supplied by the commercial operators. Full details of all targets are in the attached pro forma monitoring sheets.

4.2 The main problem relates to target 13 on cost effectiveness. No progress has been made in agreeing this indicator as discussions are still continuing between the ODPM, The Treasury and the pilot authorities. The basic principle of the indicator has been long established - the construction of an index of performance which can be compared with an index of the authority's costs, in order to measure changes in cost effectiveness. The devil is in the detail of how you measure both performance and cost for the authority as a whole in a way that is both statistically robust and fair. However it seems possible that an agreement with the pilot authorities is imminent and that the parameters of the agreement will then form the basis for negotiation with other authorities. It seems likely that the cost index will be set in a prescriptive way which will require improvements in performance outcomes very substantially in excess of 2% per annum, to achieve a 2% increase in cost effectiveness.

Recommendation

That progress on the Local Public Service Agreement be welcomed and that a further report be prepared in April 2003 on the progress after one full year of operation.

Background Information

Section 100D - Local Government Act 1972 - background papers

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

NB the list excludes:

1. Published works.

2. Documents which disclose exempt or confidential information as defined in the Act.

File Local

PSA Correspondence Chief Executives Department

Appendix 1

SCHEDULE 1: PERFORMANCE TARGETS

Summary table