Contact: Karen Murray Ext: 7876

1. Introduction

1.1 This report concludes the second phase of the Regulatory Services review which focuses on Trading Standards and the Scientific Service. The review project brief was agreed by the Policy and Resources PRC on 15 April 2002. The conclusions of the review and options for improvement are presented. Details of the review process are given in Appendix 1. This report invites members to choose an option from the five presented and on the basis of this decision an improvement plan will be developed and brought to the next meeting.

1.2 The vision for the review had as its main features:

· Hampshire's residents as confident and well informed consumers

· A Trading Standards Service which focuses its efforts on supporting businesses and targeting rogue traders

· Accessible services that are responsive and work in partnership with others to improve the quality of life

· Access to the best Public Analyst and scientific services to meet County Council requirements.

1.3 The vision has underpinned this Best Value Review which has sought to address the following key issues:

· To develop a strategy for delivering services which best protect the public and effectively support the needs of businesses within Hampshire.

· To develop a customer/stakeholder consultation strategy which ensures that services meet, and are kept aligned with, local community needs and expectations including hard to reach groups.

· To recommend the most cost effective and efficient arrangements for the delivery of services.

· To develop a performance framework for service delivery, with clear and appropriate performance measured targets that promote continuous improvement and innovation. In particular, this should meet the requirements of the new National Performance Framework for Trading Standards.

1.4 The output from the review activities have been analysed against the vision, key strategies and objectives and are presented in the matrix given at Appendix 2. The appendices provide the more detailed supporting information:

Appendix 1 - The review process, how the 4 C's were approached.

Appendix 2 - Analysis of information collated during the review cross

referenced to the County's Corporate Aims and Best Value

Review Options.

Appendix 3 - Summary of the EFQM self-assessment.

Appendix 4 - Analysis of data gathered from consultation, comparison

and compete reviews.

Appendix 5 - Summary of the Challenge Event

Appendix 6 - Options for new projects.

2. Summary of Findings

2.1 The following is a summary of the main review findings:

· Strong links between the services provided and the County Council's Corporate Aims (shown in Appendix 2).

· High levels of satisfaction recorded from consultation with the public, Hampshire businesses and Scientific Service customers.

· Low levels of public awareness of the size and scope of the consumer advice service and trading standards activities.

· The top three concerns of the public are:

o Cowboy traders

o Dealing with consumer complaints

o Food quality and labelling

· The top three concerns of businesses are:

o Falsely described goods and services

o Underage sales

o Responding to consumer complaints

· In view of these public concerns, the review concluded that current resources are not used to best effect to target local community requirements.

· Costs and staff numbers per head of population for the Hampshire Trading Standards Service are within the lowest quartile for all County Authorities.

· Current service projects and delivery methods compare well with other `best practice' authorities (Devon - Beacon Status; Dorset, Surrey and Warwickshire - Office of Fair Trading Awards ). While much of the services are of a statutory nature, stakeholders value these proactive projects and continued innovation.

· Improvement in moving toward planned targets for inspections of high and medium risk business premises out-performing other authorities.

· There are well established service planning processes in place but these have not previously been informed by consultation with the public, users and other key stakeholders.

· Good examples exist of working with others (e.g. with Age Concern; the South East Trading Standards Authorities; the Hampshire/Kent Scientific Service Agreement), but there is scope to further develop and enhance partnership working.

· The Scientific Service has demonstrated competitiveness against other similar Public Analyst laboratories winning new and repeat contracts for work. The review has demonstrated that there is an opportunity to further reduce and balance the service's portfolio of tests to exploit areas of expertise and better target resources.

· The retention and development of in-house services is preferred by stakeholders (i.e. Trading Standards discretionary services and the Scientific Service Laboratory), but various service improvements are necessary.

2.2 The following five options were identified and these are expanded further in section 4:

1. Maintain current standards of service provision

2. Develop current services within current resources

3. Refocus current resources

4. Alternative service provision

5. Stop services

An improvement plan based on options 2, 3 and 4 (which are not mutually exclusive) is recommended by the Review Team.

3. Progress in phase two

3.1 The review process has included wide ranging consultation with stakeholders including members, service users, the general public, Hampshire businesses, Scientific Service customers and staff focus groups. An EFQM exercise was carried out and a Challenge event held in June focused on current service priorities and performance. In-depth comparison studies were conducted with other `best practice' local authorities and external organisations to compare approaches to innovation and service delivery methods. Statistical data was also reviewed to ascertain levels of performance against other similar services.

3.2 Consultation

3.2.1 Prior to the Best Vale Review, only limited consultation was carried out with stakeholders and users of services in targeted areas. Feedback from the County's Citizens Panel and from the Challenge event, indicated that awareness of the scope and achievements of services was low. to non-existent. During the review, more emphasis has been placed on producing press releases about appropriate project outcomes, and several articles have appeared in `Hampshire Now'. A focus on continued improvement of public and business awareness of services is required.

3.2.2 The independent interviews held with businesses suggest that the Trading Standards Service is valued as an approachable source of help and advice. Another survey of businesses confirmed they were satisfied with the treatment they received from officers and that it was always made clear to them what they were required to do by law, and what was being recommended as good practice. Equally, there are high satisfaction levels with the quality of advice provided by the Consumer Advice Service. 75% of users gave the telephone as their preferred means of contacting the service. A new software system is being implemented to better manage calls, provide taped information for peak times and out of hours, and generally help to reduce the incidence of missed calls that have previously been the source of complaints.

3.2.3 The issues of concern to the local community (given in appendix 4) have now been identified through the Citizens Panel and can be built into the service planning process and resulting projects targeted accordingly. In order to do this current resources need to be re-allocated to increase capacity in the areas needed. One way of doing this is to look at `how' resources are currently used. It has long been apparent that the majority of resources of the Fair Trading team are swallowed up responding to individual consumer and business complaints. An alternative approach is called `intelligence led' enforcement. This approach was seen to be working successfully in Devon (a Beacon Status authority visited as part of the comparison studies). Devon claims it has reduced the number of complaints concerning the car trade by 12% in the first year of using intelligence led methods. Hampshire's current approach means that, while individual complaints are pursued, these stretch resources and do not target the issues that are of concern to the local community. It is believed that a change in approach and refocusing of resources will:

· improve standards of trade in a planned and wider manner than can be achieved as a by-product of resolving individual complaints and enquiries;

· protect and assist legitimate businesses and consumers by taking firmer action against dishonest traders and those who persistently act to the detriment of their customers.

3.2.4 A change to intelligence-led methods will have greater impact but runs the risk of increased complaints against the service from individuals whose personal concerns are not followed up.

3.2.5 Feedback from Scientific Service customers was mainly positive. Due to the more long term association of the service with its customers, it has had the benefit of building good relations and reputation with them. Customers appreciate the service's responsiveness, quality of reporting and scientific advice. For many customers, although price is important, it is speed of delivery that is crucial. Some customers have been disappointed with this aspect of the service and, over the last few months, particularly since a new Laboratory Manager has been appointed, targeted efforts have been made to streamline working methods and focus on reducing reporting times. For example, Public Analyst food work has improved from only 6% being reported within 4 weeks in April 2002, to 40% within 4 weeks in October 2002.

3.2.6 The outcome from the staff focus groups suggested that internal communications are still in need of improvement although several mechanisms are already in place to involve and encourage two-way flow of information and communication.

3.2.7 In view of the concerns raised by the public, management and staff were tasked with highlighting projects they felt would have most impact on these areas. Six projects were put forward and these are outlined at Appendix 6:

1) Purchase and staffing of a roadshow trailer.

2) Set up a `House of Horrors' similar to that used by Surrey Trading Standards.

3) Acquire and develop use of `Image Gen Software Reporting' to identify unscrupulous traders illegally posing as private individuals.

4-6) Develop new projects to focus on protecting the vulnerable in society. The three projects proposed for development include:

A project with emphasis on the older person to further develop work already carried out.

· A new project, linked to the Youth Strategy and Health agenda, to Protect young people in respect of age-restricted goods e.g. alcohol; tobacco; solvents etc.

· Develop the Lifesmart Educational Package for key stage two children.

3.3 Challenge

3.3.1 The Challenge event demonstrated strong support for the retention of existing services but emphasised the need for their improvement in regard to better meeting users' needs and requirements and increasing efficiency. Some of these issues have already been discussed above. The report at appendix 5 outlines the many useful comments made by participants that are incorporated into the proposed options given in section 4 below.

3.3.2 Several Central Government departments were represented at the event (Food Standards Agency (FSA), Department of Trade and Industry (DTI), Local Authority Co-ordination of Regulatory Services (LACORS), Laboratory of the Government Chemist (LGC), and Department of Food and Rural Affairs (DEFRA). It was clear that both the Trading Standards and Scientific Services were recognised for their contribution at a national level and were described as `leading light' `exemplar' and ` national experts' and strongly encouraged to continue in this way. It was recognised that this important role at national level not only influenced legislation but resulted in greater in-house knowledge and expertise. An example of this includes a sampling project carried out last year into colouring in icing on children's celebration cakes. Hampshire objected to the high levels of colour in individual cake decorations. This resulted in the EU changing the legal limits for colours in cake decorations - a positive outcome of this project for safety of children.

3.3.3 A key question was whether or not to retain the in-house Scientific Service. This was freely debated and it was felt that the County Council had built a market leading laboratory that should be retained for the following reasons:

Focused on Hampshire Aims: Services are customised to address County Council priorities, particularly relating to Food Safety Testing, Legionella control in old-persons homes and asbestos management in schools.

Cost competitive. The Service regularly wins contracts in open tender from private sector laboratories. It has become the market leading UK Public Analyst laboratory and generates over £500,000 of income from external clients. Net costs would inevitably rise if the laboratory was closed and statutory services were bought in. Therefore the review concludes that the most cost effective way to provide scientific services to the people of Hampshire is via the in-house provision.

Leading Quality: Fully accredited and highly performing in external performance assessments. Benchmarking exercises failed to identify laboratories offering such high quality at such competitive prices.

3.4 Comparison

3.4.1 Comparison carried out against other `best practice' authorities, e.g. those who had won Beacon Status or achieved the Office of Fair Trading Award for Trading Standards Excellence, and other private organisations, suggested that Hampshire was performing as well as these authorities and organisations, and apart from the success of Devon's approach to intelligence led enforcement, outlined above, few new ideas for service projects or delivery methods were learned. For example, the following table shows the initiatives found at the other authorities and gives Hampshire's response.

3.4.2 Using data from the 2001/2002 CIPFA (Chartered Institute for Public Finance and Accountancy) statistics, the cost per head of population at £2.23 for the Hampshire Trading Standards Service is low compared to the national average for English counties at £2.51. Similarly, staffing levels are also low at 5.5 per 100,000 population for Hampshire compared to 7.1 per 100,000 population for the average of English counties.

3.4.3 The same statistics show that Hampshire receives less complaints and enquiries at 15.25 per 1,000 population compared to an average 20 per 1,000 population for English counties. This could reflect the low level of awareness of the service that was found during consultation exercises.

3.4.4 High risk premises (1,165 in Hampshire) must be inspected every year and Hampshire has succeeded in visiting 90% compared with an average of 41% of visits made by other County authorities. Visits to medium risk premises are required every two years and Hampshire has achieved 27% of visits compared to the 23% national average. Hampshire's policy has been to meet the targets set by central Government in regard to visits and inspections of its high risk premises and it has moved closer to achieving this year on year and has outperformed other authorities in this respect.

3.4.5 The CIPFA data shows that Hampshire issues less cautions and has a lower number of prosecutions than the national average:

	Hampshire	County National Average
Number of formal warnings/cautions per 10,000 business premises	11.3	25.0
Number of prosecutions per 10,000 business premises	14.2	23.4

3.4.6 It could be argued that this lower level of cautions and prosecutions is a result of the Trading Standards Service's effectiveness in deterring non-compliant trading practices within Hampshire. However, no such claims can be made and previous comparison work on Hampshire's lower prosecution levels has shown that those authorities with high rates take more minor, `absolute offences' for example road traffic overloading cases. Such cases are relatively simple and inexpensive to process. The lower figure for Hampshire is also partly due to its Enforcement Policy, endorsed by members, that puts prosecution as the last resort.

3.4.7 Review studies highlighted high levels of food sampling by Hampshire Trading Standards compared to other authorities and similarly high levels of food analysis and reporting by the Scientific Service compared to other public analysts. While this was applauded by the Food Standards Agency and held up as `best practice', there was criticism from others attending the Challenge event some even suggesting having an in-house laboratory gave a bias for Trading Standards work. While Hampshire does not wish to lose its good reputation, nor the impact that it has enjoyed from high profile projects (e.g. work with the butcher trade) this review has concluded this is another area that could benefit from refocusing resources.

3.4.8 Studies of the performance of the Scientific Service show that it is in a good financial position and has consistently met budget requirements over recent years. Working on a full cost recovery basis, the additional work carried out by the service for other authorities showed it was the second highest income earning laboratory in the comparison group, almost achieving break even point. The service has the highest number of staff compared to the other laboratories.

3.4.9 Research found that `reliability of results' is a critical success factor for laboratories and the Scientific Service has focused on this over the years with a fully externally accredited quality management system and consistently good results in external proficiency trials. It was found the service takes part in more external proficiency trials than other laboratories and is also more highly automated.

3.4.10 As found from the consultation exercise, the Scientific Service's main weakness concerns turnaround times for reporting samples, an area it is currently working hard to improve by better work scheduling, increased monitoring and streamlining processes.

3.5 Competition

3.5.1 The review took the decision not to focus on statutory services in regard to competition. All Trading Standards enforcement work is statutory and currently entirely provided by the local government sector - although there are staffing agencies that provide trading standards officers at enhanced salaries. Opportunities for competition are not generally available as a result and the focus is more on partnership working between authorities in regional areas. For example, Hampshire has a strong role to play within the South East Trading Standards Authorities (SETSA) group and contributes and leads in many functional areas. SETSA has its own business plan and has recently set up a web-site: www.setsa.org.uk.

3.5.2 There are a few areas of Trading Standards work that are currently operated on a commercial fee paying basis and these include:

· Hampshire's Weighbridge Test Unit and driver, and the Bulk Fuel Test Unit, that are each hired by a number of other authorities.

· Hampshire is an Approved Body for EC Verification and, although there is a very limited market for this work, the service verifies and stamps scales for Reading, Southampton, Portsmouth and Isle of Wight authorities.

· Animal health services (including animal passports) and Nurses Agency work are provided for Southampton City Council.

· Assistance with Petroleum enforcement for Portsmouth.

· Auditing of weighing and measuring companies as part of an audit team

Bids have also been made for verification work for Surrey, Wiltshire and a scale company operating in Reading. The former found that in-house verification was a more cost effective option and the scale company continued to use Crawley, which offered a discounted service.

3.5.3 It could be argued that some areas of work such as animal health and consumer advice could be better provided by voluntary organisations. In theory, the Royal Society for the Prevention of Cruelty to Animals could take over the animal welfare aspects of Trading Standard work and the Citizen's Advice Bureau provide consumer advice alongside their current portfolio. However, these organisations are each struggling for survival without the additional work and there is no evidence that the Hampshire community would benefit from such a change. In the same way that increased partnership working is advocated for enforcement services, closer working with other private and voluntary organisations is recommended for these discretionary areas of work that have been seen to be held in high regard (Challenge event).

3.5.4 A new national initiative called `Consumer Direct' will be launched by the Government in 2003. This initiative, a similar concept to NHS Direct, will provide the public with another source of basic consumer advice. The full impact of this new service on Hampshire's Trading Standards Advice Service will be assessed once the Government reports on the outcome of its consultation phase.

3.5.5 In January 2002 a new 5-year partnership arrangement between Hampshire and Kent County Council's laboratories was signed. This partnership began in 1995 and brought together two leading Public Analyst laboratories to provide services to other Trading Standards Departments in the UK. By specialising on each site, avoiding duplication and pooling resources, the partnership has been able to improve efficiency, broaden the range of services on offer and win contracts from other authorities in open tender.

3.5.6 In 2001/02 the partnership shared approximately £250,000 of income from joint clients. In 2002/03 this will increase to £300,000 by targeting local authorities via competitive tenders, negotiations and targeted campaigns. Appendix 4 gives the results of recent tendering. Currently the joint Hampshire-Kent partnership is appointed as Public Analyst to 25 other authorities making the partnership the UK market leader. This success has been praised by central government as a good example of joint working in local government.

3.5.7 In addition to its Public Analyst role, the Hampshire laboratory carries out a range of other work including asbestos surveys, sampling and testing primarily for Hampshire's own Property Services department. This is a highly competitive area of work and the review has investigated other suppliers to test the validity of out-sourcing or sub-contracting this work.

3.5.8 The disadvantages of outsourcing have been found to include:

· The difficulty of identifying a supplier with sufficient capacity to deal with the County's requirements.

· Losing control of a major part of the asbestos management system.

· Accepting that the County Council will not have first call on resources for emergency work - at present all of the Scientific Service asbestos team work on County priorities.

· Property Services would need to absorb the management and asbestos register administration currently delegated to the Scientific Service.

3.5.9 However, the potential to work in partnership with other competitive laboratories on different aspects of the work to cover peak workloads (for example during the school holidays) is particularly promising.

3.5.10 Talks with various microbiology laboratories in the private sector have also indicated opportunities to save money by establishing partnership arrangements.

4. Identified review options

4.1 Option one : maintain current standards of service provision

This Best Value review has identified that services are well regarded at both a national and local level. Customer satisfaction levels are high. On the whole, comparisons against other authorities have been favourable.

This option would continue this good work but would not help Hampshire to target the issues that are of concern to the local community nor meet ever-changing central Government targets. There would also be the risk that other authorities would move ahead with innovative approaches to service delivery gradually eroding Hampshire's current good reputation and achievements for both its Trading Standards and Scientific Services.

The review team has recognised that, without this Best Value review, the degree of challenge, comparison and consultation work would not have happened and it is essential that these good practices are continued and built into future service planning cycles. It is essential therefore that current standards of service provision are further improved.

4.2 Option Two - develop current services within current resources

Appendix 2 highlights a number of areas for improvement as a result of this Best Value Review. This option recommends an improvement plan that addresses all of these issues. Improvement areas include:

· Services benefited greatly from the re-structuring that took place in October 2001 establishing specialist functional teams. Following the first year of consolidation, these teams need to focus their efforts on meeting the issues of concern to the public. The service planning process needs to build on the lessons learned from the review particularly how service priorities and objectives are determined.

· The Challenge and Consultation exercises demonstrated there is low awareness of services and this mitigates against the vision for Hampshire of there being confident and informed consumers and businesses.

· Many ideas have been put forward by stakeholders for how services can be developed particularly through more joint working with other authorities, the private and voluntary sectors.

· There is a need to develop better performance monitoring and management systems with the Trading Standards Service to respond to Central Government targets and position the service to meet the requirements of the new National Performance Framework.

· Other management improvements arising from the EFQM and Equalities Assessments.

4.3 Option Three - refocus current resources

Three opportunities have been identified by this review to better utilise current resources:

1. Move to intelligence-led enforcement in order to target the issues of concern to the local community.

2. Develop new projects to focus on protecting the vulnerable in society. A new post of one full-time Trading Standards Officer would be required.

3. Fund the new project in 4.3(2) by reducing the food sampling budget by 10% (releasing approximately £30,000 per annum).

The first was discussed under 3.2.3/3.2.4 and is the case for moving to intelligence-led enforcement for fair trading work. This approach means that intelligence in the form of stakeholder feedback (e.g. Citizen's Panel), consumer and business complaints, and information from officers, will be used to target the top problem areas within Hampshire. Refocusing resources in this way can be very effective (as found by Devon). But conversely it means reducing resources for reactive work such that individual consumer complaints are not investigated but recorded until trends suggest there is a problem to target. This may run the risk of increased complaints against the service.

The second is to develop and implement one of the six proposals given at Appendix 6. Of these proposals the review team felt that a new post to focus on protecting the vulnerable, with initial emphasis on the older person (proposal 4), would be of most value. Proposals 5 and 6 would also be developed at a later stage.

In order to fund this proposal, it was felt that resources could be diverted from the food sampling budget. The review has concluded that this budget could be reduced by 10% releasing £30,000 per annum to use in other priority areas. The Scientific Service has been tasked with finding ways to continue to process the current number of food samples for Hampshire within this reduced budget.

4.4 Option Four - alternative service provision

This option would involve putting some or all of the services out to external providers. Following review, it is recommended that further partnership arrangements are developed instead.

The competition exercise concluded that outsourcing was not a viable option in regard to statutory services as these are currently wholly provided by local authorities.

Again, outsourcing was not recommended for discretionary Trading Standards services. The point was made at the challenge event that, if Hampshire did not carry out these essential services, then who would? While some services such as the Advice Service could be taken over by external providers, there is no guarantee that Hampshire residents would receive the quality of service they currently enjoy. Central Government, through the Department of Trade and Industry, is currently developing a national approach to consumer advice through the new initiative `Consumer Direct'. When the outcome of the Government's consultation phase is known, if it appears there will be benefits for Hampshire, then participation in pilot exercises will be pursued.

There was strong support at the challenge event for retention of the in-house Scientific Service. Although the service has weaknesses (primarily relating to poor delivery times), it still has an excellent reputation with internal and external customers and this is demonstrated through its success in winning new and repeat contracts. Its partnership with Kent County Council is the first of its kind and has been held up as a model for public analysts. The point was made at the challenge event that `you cannot develop what you do not own'. There are only a small number of qualified Public Analysts in the UK and there are cases of other laboratories closing. There is also concern that although external providers may be found in the short term, there could be no guarantee that Hampshire would continue to receive the quality and level of service it needs in the future.

The Scientific Service is an integral part of the Property, Business and Regulatory Services department primarily servicing the Property and Trading Standards services. No other laboratory investigated offered the capacity or the range of service and the County would need to split the work between different suppliers. Sub-contracting opportunities (to cover peak workloads and non-core business areas) and other partnership arrangements are recommended and are being actively pursued.

4.5 Option Five - stop services

It is an option to stop providing some or all of the discretionary services offered by Trading Standards (for example work concerning consumer and business advice, education and community projects). However, while these are non-statutory services, they are essential to achieving the vision for Hampshire. They were services highly valued by the Challenge Event participants; contribute to the County Council's Corporate Aims; and are also included as good and best practice in the new National Performance Framework for Trading Standards services.

5. Conclusions

5.1 The review team has identified the above five options based on the outcomes that are set out in the various appendices attached to this report.

5.2 The review team and the evidence throughout the review suggests that Options one and five are not realistic.

5.3 Options two, three and four are not mutually exclusive and advantages from each of them could be selected. The benefit of the proposed mix of service provision is a more flexible service geared to priorities identified through this Best Value review. Appendix 2 shows the links between these preferred options and the vision and key strategies.

6. Recommendation

That the Best Value Review Team develops an improvement plan based on:

· implementing the service improvements that can be achieved within existing resources as identified in option two;

· refocusing the resources within the wider organization of Regulatory Services, so that they meet the greatest priorities for improvement identified in option three;

· developing effective partnerships to explore further improvements, as identified in option four.