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

1. Summary

1.1 This report updates Cabinet on the arrangements for monitoring the County Council's local public service agreement and the progress to date after the first 12 months of operation in terms of performance and spending for each of the 13 targets.

1.2 Overall, this first year has been one of preparation for most of the targets and there is a clear time lag in relation to the actions being implemented and the results being achieved. There are concerns that some of the targets will struggle to achieve the necessary performance and in some cases even the 60% minimum of the stretch in performance needed for the performance reward grant. Departments have recognised this and are looking at spending and resources to maximise the ability to deliver.

1.2.1 In summary, while the following headlines from the first years monitoring indicate some real concern at actual performance levels at the end of 2002/3, this must be seen in the context of a high achieving authority with a high base line position for many of the targets.

Headlines

· The targets are stretching ones and for many we started at a high level of performance, so we must expect to find this a challenge.

· The targets are related to the key Cabinet priorities, so provide a base for delivering priority services.

· It is unlikely we will meet 100% of each of the 13 targets.

· Procedures are now in place but there is some time lag in availability of PI data.

· It is still early in the PSA time period, but there must be real improvements within the next six months to have confidence in reaching and stretching performance levels.

· Where targets are particularly high in education, even if we do not meet PSA targets by 2005 there will be continuous and sustained improvement through and beyond PSA period.

· Hampshire will still be a high performing authority even if the targets are not all met in full.

Summary assessment of each target (See Appendix 1 for schedule of targets):


1. Very little progress so far towards target figures but it is early in Key Stage 3 strategy.

2. Progress in designated schools is on track, but there is little progress countywide.

3. Good progress in Havant and Basingstoke schools, but concern at Andover data.

4. Good progress with 5 A* - C but fall in A* - G and an increase in exclusions but pump priming measures will impact this year.

5. Significant underperformance but issues need to be taken up with DOH on redefinition of the delayed discharge indicator. This should be done as a matter of urgency.

6. Increase in performance in 5 A*-G and Level 5 SATs in English but a fall in Level 5 SATs in maths and science.

7. The figures show a fall in performance in 5 A*- C.

8. Not on target but pump priming measures should impact this year.

9. Actual figure not yet available and performance assessment depends on agreeing baseline position and audit regime with ODPM.

10. Fall in performance, but pump priming measures should impact this year.

11. Fall in performance and concern over reliability of figures in short term.

12. Inspections on target to establish baseline.

13. Now we know how this target is to be measured it seems very unlikely we will perform to the necessary level to receive any reward grant.

2. Introduction

2.1 Cabinet 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 has received £2,002,000 in pump priming funds. 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 stretch in performance for the individual targets has been achieved. The reward grant is divided equally between the 13 targets and where multiple indicators are used to measure the targets, reward grant is divided equally against the indicators unless otherwise stated.

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. The completed pro formas showing the position as at end March 2003 are attached to this report.

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 (October 2003).

3.3 The County Council was awarded pump priming grant of £2.003m to assist in achieving the service improvements required to meet the PSA targets. This grant was paid to the County Council during April 2003. Though the grant has been paid in a single instalment the plans included in the budget envisage the grant being used over the three years of the PSA as follows:

£000
2002/03 1299
2003/04 338
2004/05 366
------
2003

This assumes that the pump priming grant towards the education targets (£985k) would be fully utilised in 2002/03 but in practice some of the grant is likely to be used in 2003/04 and 2004/05. Overall the spending financed by pump priming grant in 2002/03 is likely to be just below £1m leaving a balance of £1m for the remainder of the period.

3.4 In addition the County Council was authorized to incur unsupported borrowing of £2.250m allocated as follows:

£000
Bridgemary Community School - provision of IT suite 200
Brune Park Community School - extension of dining facilities 200
Social Care Information System 1850
-------
2250

All three are contributions towards larger projects. The Bridgemary and Social Care Information projects are in progress and the Brune Park project is due to start in the 3^rd quarter of 2003/4.

4. Progress to date

4.1 The first year of the PSA has been one of preparation, clarification and implementation. Most of the targets have had a period of putting in place the actions required to achieve the improvement in performance and there is a time lag in relation to the results especially in educational attainment. Some PI data is not yet available but all targets have reported or established baseline data. The pro formas include factors relating to implementation and achievement of the targets both internal and external which may influence the ability to deliver and which need to be monitored.

Overall, however, there are concerns about the ability to deliver on some of the targets and departments have recognised the need to review spending and resources to support PSA activities.

One issue is the achievement of at least 60% of the stretch in performance. This is calculated from the stated level of anticipated improvement in performance without the PSA to the level expected with the PSA. For many of the targets the incremental improvement from 60% to 100% is relatively small with most of the improvement in the change from the current level to the anticipated level of improvement without the PSA. This means that for some targets achieving even the 60% will be a struggle and to reach 100% even more difficult. The monitoring exercise in October, 18 months into the PSA, will be critical for assessing the progress and potential for delivery.

4.2 Education Targets (1-4)

Progress so far towards the targets is summarised in the tables below. The important point to bear in mind is that measures introduced to support the LPSA have had very little time to take effect: KS3 and GCSE results pre-date their introduction. EWA appointments have taken effect only from September. The LPSA period is, however, relatively short and for KS3 and GCSE targets, performance will be measured against results in summer 2004.

Target 1 - KS3

This target covers all Hampshire secondary schools. Performance is summarised below.

Key Stage 3 Level 5

The 2004 targets have been agreed between schools and Attached Inspectors. The LEA's aggregated targets for 2004 fall short of LPSA expectations. This is perhaps not surprising given the early stages of the Key Stage 3 Strategy, but it does highlight the need for an acceleration in standards. DfES data indicate that 2002 results represent progress from KS2 prior attainment that was at least as good as all LEAs with a similar starting point. However, 2003 outcomes will be an important further progress indicator in this respect.

Target 2 - GCSE

This has two components: a countywide target and an aggregate target relating to twelve schools in areas of relative deprivation.

The whole LEA aggregated figure of 61% currently falls short of the LPSA target, due in part to the cautious approach adopted by schools in target setting at KS4. By contrast, and aided by the way that the LEA grouped the schools, the progress of the designated twelve is on track.

Target 3 - Unauthorised absence

Current performance is based on autumn term statistics for a proportion of the schools. Full data will be available during the summer term. The picture in Havant and north Basingstoke looks promising, although only 50% of the schools in each area are represented. The Andover figure causes some concern.

Target 4 - Gosport Secondary schools

* 6 per school from 5 September 2002 to 6 March 2003

There is already good progress towards the 5 A*-C target, although A*-G has shown a fall. As many of the measures being introduced using Pump-priming grant are aimed particularly at this target, there should be an improvement this year. Unauthorised absence has also increased, although this figure is based only on data from Brune Park. With this target and that for reducing exclusions, it is still early to expect improvements, especially at Brune Park where the appointment of a new head caused some delay in implementation.

4.2 Social Services Targets (5-8)

Target 5 - Older People

This target covers 2 indicators measuring intensive home care and delayed discharges with a third monitoring indicator measuring admissions to nursing or residential care. Problems have arisen with the delayed discharge indicator due to redefinitions by the Department of Health (DoH) and changes to the structure of health authorities in Hampshire. Proposals are to be made to DoH to revise the target in line with these changes. Current figures in relation to the intensive home care indicator shows a significant under performance and additional spending and resources have been identified to try to address this and achieve at least the 60% mark.

Target 6 and 7 - Educational attainment of looked after children

The PSA has two targets in this areas; one national and one local. These targets measure educational attainment and so the results shown here are based on last years results.

Target 8 - increase number of children in permanent placements

This target includes the County Council's friends and family placements scheme and although performance is not on target currently the establishment of specialist permanence teams during the first year of the PSA is expected to have a significant effect on activity levels.

4.3 Environment Targets (9-12)

Overall for these targets 2002/03 has essentially been a year of preparation and some of this work has still to be completed including confirmation from ODPM of base line data and audit regimes for two of the targets. The work done so far has highlighted that some of the targets will be influenced by actions outside the control of the Environment Department in particular and the County Council in general.

While it is still too soon to judge the outcomes, it is clear that the targets are challenging and that consideration will need to be given to how to overcome some of the potential barriers to achieving even 60% of the targets. In particular this includes:

- establishing the baseline for NRI (T9)
- funding for Quality Bus Partnership Schemes (T10)
- avoiding the unintentional creation of new accident blackspots (T11)


Target 9 - Waste (HNRI)

Several freedoms and flexibilities were included as part of this target and it was accepted in early discussions with DEFRA that most could not be implemented within the timescale of the PSA but could be beneficial in the longer term. Discussions are continuing. The NRI approach to reducing waste to landfill is an innovative concept not currently the subject of the BVPI regime. Accordingly there are no audited or accredited systems in place to measure performance. Efforts have been made in the last year to devise a system and a protocol has been sent to ODPM for agreement.

Actual tonnage figures will not be available until mid 2003. The first year of activity has seen a number of projects launched including a demonstration project in the use of secondary and recycled aggregates in highway maintenance and construction.

Target 10 - Increased bus use

The Department for Transport (DfT) has been slow to respond to the freedoms and flexibilities agreed in this area. Although there is now commitment to introduce two key flexibilities with regard to the financial rules on tendering and maximum contract lengths this will require parliamentary approval and may come too late in the day to help with performance improvement. Pressure is being maintained on DfT.

Data has now been released by commercial operators on passenger numbers allowing a baseline to be established. Agreement is being sought from DfT to this baseline calculation and the methodology for measuring improvement. Data received shows a decrease for the period 99/00 -01/02 demonstrating the size of the task ahead. The task is not helped by the recent decision of Hart to withdraw concessionary travel tokens. However, the Quality Bus Partnership study has identified 10 routes which will be the subject of a targeted marketing campaign, using PSA pump priming funds, to build on improvements to services, vehicles and route infrastructure achieved in partnership with operators.

Target 11 - Reduction in fatal and seriously injured casualties

The case for increased safety camera deployment was accepted in April 2002 and implementation has begun of fixed and mobile safety (speed) camera enforcement across Hampshire. Although the 2002 figures are lower than for 2001, it is expected that this increased activity will have its full effect during 2004/05 when the PSA will be judged. There are concerns over the reliability of the figures over a relatively short timescale.

Target 12 - Condition of local roads

A survey protocol to tie in with the BVPI survey requirements has been agreed with the DfT. An initial baseline assessment has been carried out and the second round of surveys took place during April 2003. The 2002 road maintenance budget was set before the results of the initial survey were known and so there was limited opportunity to target work to influence the results of the second survey. It is proposed to make a further survey later in 2003 for the U roads only (should this prove necessary following the April survey).

4.4 Cost Effectiveness (T13)

At the time of the last monitoring report, agreement had still to be reached with the pilot authorities on the format of the compulsory cost effectiveness target, and thus none of the signed LPSA agreements included an agreed cost effectiveness measure. As it has proved impossible to reach agreement on a truly satisfactory measure, an interim measure has been put forward by the ODPM as the basis for negotiating a target in the first round of LPSAs.

The basis of the indicator is that the change in cost effectiveness is measured by dividing an index of change in performance by an index of change in cost. There are various criteria laid down about the calculation of the performance measure which has to be built up from between 25 and 45 performance indicators covering all the Council's activities, of which 75% have to be national indicators. Following some initial discussion with ODPM on how to define a national indicator it will not be possible to base the performance measure purely on the indicators contained in the other 12 PSA targets and some further work needs to be done to develop a performance measure which satisfies the ODPM's criteria and reflects the County Council's priorities.

The cost indicator is based on the change in the County Council's spending net of specific grant adjusted for the change in the Gross Domestic Product deflator. No adjustment is allowable for higher national pay awards, increased client numbers or new legislation and therefore this is not a very satisfactory index of cost from a local government perspective. To meet the proposed PSA target it will be necessary to increase performance over the 3 years of the agreement by 7.5% or 8% more than the increase in the cost index. Based on our initial cost projections, an increase of performance of over 20% will be required to earn any reward grant, which is a very challenging target particularly for the education indicators which will comprise up to 50% of the performance basket.

Recommendation

That Cabinet endorses continuing priority being given to activities in support of achieving the PSA targets.

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: Documents held by Chief Executive Location: Chief Executive's Dept.

Appendix 1

SCHEDULE 1: PERFORMANCE TARGETS

Summary table