Contacts: Gary Smith, ext 7402/ Paul Carey-Kent ext 7525

1 Summary

1.1 The CPA (Comprehensive Performance Assessment) framework for measuring and comparing the performance of local government is changing. CPA is being replaced by CAA (Comprehensive Area Assessment) which will judge the delivery of outcomes in an area, spanning both local authorities and other partners. The Audit Commission and other inspectorates are consulting on the CAA proposals broadly and on the proposals for a revised Use of Resources assessment in detail. This report contains Hampshire County Council's draft response for consideration by Cabinet.

1.2 As a top performing Four Star authority others look to Hampshire County Council to provide leadership, this places the Council well to exert positive influence on the development of CAA. This response will be submitted to the inspectorates and used to inform the Council's input to the CAA Action Learning.

2 Recommendations

2.1 The following decision is sought:

That Cabinet approve the use of appendices one and two as the County Council's response to the CAA and Use of Resources consultation, subject to any final changes in consultation with the Leader to address any further issues arising in the course of the Action Learning.

3 Background and overview

Following the enactment of the Local Government and Public Involvement in Health Act 2007, the performance regime for local government and its partners is changing. The Audit Commission's CPA (Comprehensive Performance Assessment) is being replaced a joint inspectorate CAA (Comprehensive Area Assessment) from 2009. A joint inspectorate consultation paper¹ has been published which sets out the broad principles of CAA.

3.1 The emerging CAA has three main elements: Use of Resources², Direction of Travel and Risk Assessment. Of the three, the Risk Assessment is the least developed and, therefore, presents the greatest opportunity for influence. The other two elements are more developed, particularly the Use of Resources block, as this is built on the existing CPA regime. A little more detail about each element is listed below.

3.2 Use of Resources: This is an annual judgement for the organisation - examining financial and corporate management - assessing organisational effectiveness and how well resources are used to support priorities and service improvements. This will now be a common assessment carried out individually on all public sector partners. This CAA Use of Resources block builds on the current CPA Use of Resources block but as it includes many elements from the old CPA `Corporate Assessment' as well. It takes a much wider interpretation of `resources' and in its expanded form has an increased emphasis on sustainability, use of resources across partnerships, commissioning, procurement and use of natural resources. It is proposed that it will be scored. The assessment will use the following themes which are intended to give an overall judgement on value for money in the use of resources:

· Managing Money - how effectively does the organisation manage its finances to deliver value for money?

· Managing the Business - how well does the organisation govern itself, manage its business and commission services to deliver better outcomes for local people?

· Managing Other Resources - how well does the organisation manage its natural resources, physical assets, people and technology, to meet current and future needs and deliver value for money?

3.3 Direction of Travel: This is an annual judgement for the organisation which will assess the effectiveness of each local authority in driving continuous improvement - the pace of improvement and the likelihood it will continue. It will be based on the councils' own track record of improving outcomes. It is proposed that it will be scored and address the following key questions:

· How well is the authority delivering improvements?

· What are the prospects for future improvement?

3.4 Risk Assessment: This is an annual judgement for the area which is intended to be forward looking; considering risks to outcomes in an area and whether these are being effectively managed. The shift to a greater emphasis on judging outcomes in an area and assessing performance across partnerships mirrors the evolution of local government working, particularly in relation to the LAA (Local Area Agreement). The Risk Assessment will consider performance against the 198 NIS (National Indicator Set), focussing on the up to 35 LAA improvement priorities, 16 DCSF (Department for Children, Schools and Families) indicators and any local indicators. The Risk Assessment is likely to address the following key questions:

· How well does the partnership understand and assess the needs of its communities now and in the future?

· Does it use this understanding to inform its local priorities?

· Does the partnership organise itself and ensure it has the capacity to deliver these priorities?

· Has it secure and effective arrangements to identify and manage the risks to achieving successful outcomes?

· Are improved outcomes likely to be achieved ?

3.5 Taken together, these three elements along with the NIS will form the new Comprehensive Area Assessment - which will replace the Comprehensive Performance Assessment, Children's Services Joint Area Reviews, Annual Performance Assessment of services for children and young people and star ratings for adult social care - from March 2009.

4 Consultation Response

4.1 It is important to ensure that the County Council seeks to influence the development of the new performance framework to ensure that it is proportionate, transparent, equitable, simple, helps to drive improved outcomes, acts as a catalyst for better partnership working, is not overly burdensome and - ultimately - adds value. In addition, the role and input of Members and the community needs to be acknowledged. As part of this, recognition needs to be given to the importance of local issues and outcomes (from user consultation, elected Members or local circumstances) that may, from time to time, identify issues which are very important for the local area but may not appear in any national or local indicator set. It will also be important to highlight that the speed of travel would be different around the country depending on the model of organisation of public services. CAA will need to recognise this, particularly noting the complex partnership arrangements in two tier areas which provide a richness of outcome but may take longer to develop.

4.2 The CAA performance regime is likely to impact on the County Council and its partners for a number of years.

4.3 Appendix one contains the draft response to the joint inspectorates' consultation on the key principles of the new CAA which will take effect from 1 April 2009.

4.4 Appendix two contains the draft response to the Audit Commission's consultation on the detail of the Use of Resources block (one of the three main elements of the CAA model).

4.5 It should be noted that Hampshire has also been selected as one of four national `Action Learning Areas' which will be used to inform the development of the CAA. Hampshire is the only Action Learning Area in the south, outside of London, and is the only two tier area. This places Hampshire County Council in a unique position to provide national leadership and influence the new performance framework whilst it is still in an early stage of development. Appendix one and two will also be used to inform the Council's input to the CAA Action Learning.

5 Equality Impact Assessment

5.1 No adverse impacts have been identified in terms of the Race relations (Amendment) Act.

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.

N.B. The list excludes:

1. Published works

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

Appendix One - CAA Consultation Response

Hampshire County Council's CAA consultation response to: `Comprehensive Area Assessment' - published November 2007

Hampshire County Council welcomes the opportunity to comment on this consultation document. Please find below some overall comments as well as responses to the individual questions in the consultation document.

Overall comments

We are pleased that it has been recognised that CPA, as it currently exists, is no longer fit for purpose and that the time has come to fundamentally review the framework, to retain the best parts but to move us to something more suited to the operational context. The move to CAA and the committed principles of a greater focus on outcomes, partnerships, value for money, forward looking and a reduction in burden is strongly supported. Having said that, we do have some issues and concerns that we feel it is important to raise - we would welcome the opportunity to discuss these further:

· Proportionality is widely regarded as a good principle of performance management and external assessment but we would argue that it is not currently apparent in CAA. There is no obvious reduction in the weight or frequency of CAA on those that demonstrate competence and good performance. In CPA the higher the score the longer the period between Corporate Assessments. We would like to see something similar in CAA.

· There is no obvious reduction in burden in terms of expectation and requests on the audited organisation, particularly as we move from some elements of CPA being periodic and all the elements of CAA being annual. It is felt that the case has not been made as to the value added of all three elements of CAA, and sections thereof, being annual.

· There remains the tension that some partners will continue to have separate performance frameworks and even where they will face CAA judgements they will not all undergo all of the elements of CAA. It is essential that these different judgements and frameworks inform one another to ensure they act effectively as a catalyst for improved performance across partners with a focus on the improvement priorities in the LAA.

· It is important to continue to stress the primacy of outcomes over process. We should be judged on how we deliver and not on how we go about it - there is little room for `one-size-fits-all' best practice.

· The role and input of Members and the community needs to be acknowledged. There needs to be sufficient flexibility to recognise the importance of local issues and outcomes (from user consultation, elected Members or local circumstances) that may, from time to time, identify issues which are very important for the local area but may not appear in any national or local indicator set.

· It should be noted that the speed of travel would be different around the country depending on the model of organisation of public services. CAA will need to recognise this, particularly noting the often extremely complex partnership arrangements in two tier areas which provide a richness of outcome but may take longer to develop. This context needs to be reflected in the assessment process and final judgement.

· It was accepted that one way for inspectorates to work smarter was to create a local government inspectorate gatekeeper which would coordinate the work of the separate inspectorates and share information between them. This was intended to prevent inspectorates repeatedly asking for the same information in slightly different formats. This has now been `watered down'. It is currently proposed that there will be three gatekeepers for local government (Audit Commission, Ofsted and Care Quality Commission from April 2009). It is essential to have a single gatekeeper for local government and the original proposals should be revived.

· It is important that any moderation process is transparent, simple and open. This is particularly important in the first year of CAA to ensure the assessment model is applied evenly.

· Overall, the new performance framework needs to ensure that it is proportionate, transparent, equitable, simple, helps to drive improved outcomes, acts as a catalyst for better partnership working, is not overly burdensome and - ultimately - adds value.

Response to the specific questions

Q1. Do you agree with the key questions for the risk assessment, as the basis for the area risk assessment. Are there others that should be added?

_ We do not agree that the risk assessment should be annual. It is felt that the proportionate approach taken with the Corporate Assessments should be used - whereby authorities where performance (or risk management) is not a concern should have fewer assessments than those local authorities where there are performance issues. Depending on how the Risk Assessment is presented a formal timeframe could be set out for those areas with a low or high Risk Assessment judgement being reassessed between one and five years. This would be the simplest and most transparent way to operate.

_ Alternatively, the Risk Assessment itself could remain annual but not all elements of it. For instance, it does not make sense to assess each year how well the partnership understands the needs of the community or how this informs local priorities. It is more useful for CAA to align with the timetable for development and review of Sustainable Community Strategies and consider these first two Risk Assessment questions at those times. In addition, which other elements of the Risk Assessment would be looked at each year could be decided via round table discussions with the CAA Lead. The presumption would be that some elements would carry forward from the previous year(s) and only areas that have emerged as a risk or that have not been reviewed for a while be considered. This could operate in a similar way to the current Audit Programme which focuses on the areas that the Audit Commission's Relationship Manager feels need to be reviewed in order to provide assurance, subject to discussion.

_ We are concerned about the apparent overlap between the Risk Assessment and the Direction of Travel Assessment, particularly in relation to the question `are improved outcomes likely to be achieved?' See our comments to questions seven and eight.

_ We feel it is important to further stress that the focus of the Risk Assessment should be on the improvement priorities within the LAA. Attention should only extend to the performance of the 198 indicators which are not in the LAA where significant concerns exist - and there should be a clear trigger point for this.

_ It is important that the Risk Assessment does not deter innovation. Its emphasis needs to be on risk management not risk aversion which will stifle innovation and trying new things.

_ A point to note: if the Risk Assessment is not scored the focus of attention will be drawn on the Use of Resources and Direction of Travel assessments which are scored. This will inevitably lead to a lower profile for the Risk Assessment and render it of less importance than the scored assessments, which, given it is the only area/partner based judgement, should not actually be the case. It will be important for the Risk assessment to be presented in a way that ensures it is not undermined in this way.

_ A few points that will need clarification in the final CAA guidance: How will survey data be used in the risk assessment? What approaches will CAA inspectors take to organisations that are not coterminous with top tier authorities (eg the Police and Fire Services in Hampshire cover a greater area than that of the Hampshire County Council area)? How will statutory consultees as well as other partners be involved in CAA, eg Sport England?

Q2. Do the proposals address the concerns raised in the earlier consultation about areas with county and district councils?

_ The proposals are still unclear as how district councils and smaller areas will inform the Risk Assessment and how the Risk Assessment judgement will reflect district councils. In large county areas it will be important to recognise distinct local circumstances between districts.

_ It is felt evidence should be collated and then reflected in the judgement down to at least district level as well as perhaps along thematic lines.

_ It is suggested that the local LAA (Local Area Agreement) structure should be used as the basis for CAA rather than a `one-size-fits-all' model. Although this is recognised to a degree in the proposals, this does not always continue in the detailed guidance which fails to appreciate that there are many different local structures with varying numbers of LSPs (Local Strategic Partnerships) and relationships between them.

Q3. Should we adopt the term `the prospects for the area and the quality of life for local people' instead of `risk assessment'?

_ We prefer the simple term `area prospects' instead. (The wording above is

too long. The term `Risk Assessment' is too negative and even alarming).

Q4. How should we report on the national indicator set for local authorities and their partners?

_ It is important for area data across partnerships to be held locally so that any appropriate remedial action can be taken speedily. In the same vein it will be important for local partners to have real time access to national data - any lengthy delay in the publication of performance results devalues the use of the information for management purposes.

_ A number of the indicators are percentage change from previous years (eg NI 185 on percentage reduction of CO2 emissions), where this is the case these ought to be presented alongside the actual figure to provide the context and help to avoid inappropriate comparisons. Clearly big percentage reductions are harder/not possible the better you are - giving just the percentage reduction would mean a low percentage figure, on the face of it, indicated poor performance whereas the actual level of CO2 emissions may be the lowest in the country.

_ Many of the indicators are not really performance indicators because the same absolute level will equate to differing levels of achievement depending on the urban/rural mix, deprivation etc. Reporting against them and outcomes in the area is fine but they are not suitable for benchmarking/league tables in the same way (eg NI 167 on congestion or 198 on children travelling to school not by car). We would prefer that these indicators are only reported alongside specific `family' or 'neighbour' comparator groups which bring together similar areas for purposes of judging relative performance.

_ It is suggested that the public is consulted to ensure that the use and presentation of the NIS (National Indicator Set) is meaningful to them.

Q5. What is the most helpful way of comparing the performance of local areas?

_ Performance comparison should allow flexibility, where possible. For example there should be the option to view performance by, nearest neighbours, comparator groups, or against all those submitting data. Timeliness is also key to the nature of the reporting. It is very helpful to allow those submitting data immediate access (anonymous if necessary) to data being submitted by others. Bar chart presentation (as has been facilitated by the Audit Commission's EDC system) is extremely helpful. This should be downloadable and printable to be of most use.

Q6. How should we ensure that the performance information we publish is relevant and accessible to councils and their partners, local people and central government?

_ The nature of the information and the way that it is presented will need to vary depending on the audience. Those running services are likely to need more detailed and sophisticated information than that required by the public.

_ Local authorities and their partners should be given discretion as to how they make this information available to local people and how they share it across their partnership.

_ A consultation process with the public would assist in ensuring the information was relevant and accessible to them.

Q7 & 8. Do you agree with our proposals for direction of travel assessments? Are there any aspects of these proposals you would like us to change?

_ We are unconvinced, given the expansion of the Use of Resources block and the new Risk Assessment which judges risks to future outcomes (albeit for the area as a whole), the distinctiveness and value added of the Direction of Travel assessment. This is particularly the case where the same evidence is being used for the assessments - which could lead to double counting if we get two judgements. We believe that the separate Direction of Travel element of CAA should be scrapped and included in the two other main elements to avoid a separate industry. In an extension of the argument that all partners ought to be subject to the same performance framework, a point that strengthens the discontinuation of the Direction of Travel assessment is that Primary Care Trusts and Police Authorities will not have one.

_ The timing of publication of the Risk Assessment, Use of Resources and Direction of Travel judgements needs to be coordinated to avoid public confusion.

_ It is currently unclear the extent to which separate Direction of Travel assessments for different organisations will combine and feed into the Risk Assessment for the area (and the same for Use of Resources).

Q 9 & 10 Do you agree with the proposals for the use of resources assessments? Are there any aspects of the proposals that you would like to see changed?

_ The title `Use of Resources' should no longer be used.  It gives the impression of continuity from previous Use of Resources assessments, and given the changes it is inappropriate.  This new assessment brings in issues previously covered in the Corporate Assessment together with elements given considerable additional emphasis (partnerships, HR, IT etc) and a quite new approach on natural resources.  A title such as `Corporate Management Practice' would be more suitable.

_ Although in principle we have no problem in scoring the Use of Resources (whatever it is called), it is felt it is unhelpful to provide a score for the Use of Resources if the Risk Assessment evaluation is to take a purely narrative form.  That will inevitably skew interest towards the scored element.  It is suggested that the Use of Resources should take narrative form until there is confidence that the importance of the area Risk Assessment is not undermined.

_ As with the Direction of Travel assessments, it is currently unclear the extent to which separate Use of Resources assessments for different organisations will combine and feed into the Risk Assessment for the area.

_ For our further comments, on the proposed KLOEs (Key Lines of Enquiry), see Appendix 2 -our separate detailed consultation response on the Use of Resources proposals.

Q11 Should there be an overall CAA score?

_ There should not be an overall CAA score at this stage.

Q12 Should the national indicator set be scored

_ The national indicator set should not be scored.

Q13 Are the proposed labels / scoring arrangements for use of resources the right ones?

_ As the `bar has been raised' for the Use of Resources, the proposed labels may need adapting eg achieving level four probably now reflects more than `performing strongly'. `Performing exceptionally' may be a better label.

Q14. What is the best way of scoring the direction of travel assessments?

_ We propose that the current scoring arrangement is retained. This is familiar and in any case there are some language issues with the alternative suggested scoring. For instance, the label for a level two score of `uncertain prospects for improvement' is felt to have negative connotations despite the fact that a level two score is meeting minimum expectations and in the current system is described as `improving adequately' - this is a significant shift.

Q15 How should we ensure that the reporting and scoring of the area risk assessment is relevant, accessible and meaningful to the council and its partners, local people and central government.

_ It is important, particularly in two tier areas, to engage individual partners in the Risk Assessment both in terms of informing and being reflected in the judgement. In large county areas it will be important to recognise distinct local circumstances between districts. It will also be important, if there are failings across partnerships, to be clear what or who is causing this.

_ It is felt evidence should be collated and then reflected in the judgement down to at least district level as well as perhaps along thematic or service lines.

_ Clearly, an assessment about an area will be inextricably linked to outcomes from not just partnerships but specific services. For example the prospects for adults with learning disabilities may be improving strongly based on the work that Adult Services are doing in a specific service across the county area. It would therefore be important that any area assessment is not separate from, or ignorant of, an aggregation of service outcomes.

_ It is suggested that the local LAA (Local Area Agreement) structure should be used as the basis for CAA rather than a `one-size-fits-all' model. Although this is recognised to a degree in the proposals this does not always continue in the detailed guidance which fails to appreciate that there are many different local structures with varying numbers of LSPs (Local Strategic Partnerships) and relationships between them.

Q16 What is the best way to report CAA in two-tier council areas?

_ We agree that a map-type display is very useful, ideally, with the facility to be able to `drill down' by both service type and by geographical area (ie district). The use of the word `council' in figures three and four should be replaced with a list of services against the picture of the town / county hall eg `other council services: environmental health etc - for figure three. In Figure four the word `councils' should be replaced by `Other council services: housing, trading standards, care services for the elderly'. References to `children's homes' should be removed given small national number and thought is needed on how to present results for unitary councils that lie within the county boundary but are not part of the county council administrative area, eg Portsmouth and Southampton.

Q17 How can we try to make sure that our reporting is equally accessible to all people in communities?

_ A variety of media will be needed to ensure accessibility eg local free newspapers, websites, etc. Decisions regarding how to report to local communities, should be at the discretion of local authorities and their partners.

Q18 Do you agree with these proposals about the purposes, principles and benefits of inspection and the circumstances in which inspection might be suitable?

_ It was accepted that one way for inspectorates to work smarter was to create a local government inspectorate gatekeeper which would coordinate the work of the separate inspectorates and share information between them. This was intended to prevent inspectorates repeatedly asking for the same information in slightly different formats. This has now been `watered down' and it is currently proposed that there will be three gatekeepers for local government (Audit Commission, Ofsted and Care Quality Commission from April 2009). It is essential to have a single gatekeeper for local government and the original proposals should be revived.

_ All inspections and regulatory activity needs to be covered by this gatekeeper function.

_ We would need to know more about what and the extent of other `rolling programmes of inspection' that are being considered before we could comment fully on this (paragraph 79).

Q19 Will the approach (to inspection) described be an effective and efficient way of working with councils and their partners to deliver CAA?

Further detail is required before the effectiveness and efficiency of the proposals can be assessed:

_ It is still unclear how `activity will be reduced' (paragraph 85 and 91).

_ It is unclear how a "shared understanding both of the issues facing the local strategic partnership, and of the likely contents of the assessment" work in a two tier area where there are many local strategic partnerships to engage (paragraph 89).

_ The first bullet point of paragraph 91 says `no more rolling programmes', but all three parts of the CAA will now be annual. It is still unclear what assessment activities the other inspectorates (eg Ofsted and the new Care Quality Commission) will undertake.

_ The interaction and relationship between CAA and the separate performance frameworks and PIs for Health and Police is still unclear.

Q20 Have we explained sufficiently clearly the inspectorates' relationships with regional government offices?

_ No. It is unclear what the difference is between the CAA annual Risk Assessment of the LAA improvement priorities and the Government Office `Annual Review' of the LAA. This seems to represent a major overlap and duplication which needs to be resisted - CAA should provide the single performance judgement.

_ It is also felt that the role of "Government Offices to provide assurance to central government on the regularity and probity provided by councils in relation to the funds channelled through local Area Agreements" is odd (paragraph 98). The Audit Commission should cover this as part of the CAA process and report this to the Government Office rather than through a separate, duplicate process.

Appendix Two - Detailed Use of Resources Consultation Response

Comments on the proposals for Use of Resources 

Overall Comments

The elements brought together in the organisationally-based Use of Resources assessment are a sensible mix.  The move from 11 KLOEs (Key Lines of Enquiry) with 193 questions (2008) to 13 KLOEs with 160 questions (2009) represents  both a broader approach and a more focused use of questions. However: 

· The title `Use of Resources' should no longer be used.  It gives the impression of continuity from previous Use of Resources assessments, and given the changes it is inappropriate.  This new assessment brings in issues previously covered in the Corporate Assessment together with elements given considerable additional emphasis (partnerships, HR, IT etc) and a quite new approach on natural resources.  A title such as `Corporate Management Practice' would be more suitable.

· Although in principle we have no problem in scoring the Use of Resources (whatever it is called), it is felt it is unhelpful to provide a score for the Use of Resources if the Risk Assessment evaluation is to take a purely narrative form.  That will inevitably skew interest towards the scored element.  It is suggested that the Use of Resources should take narrative form until there is confidence that the importance of the area Risk Assessment is not undermined.

· An automatic annual process feels wrong. A proportionate approach would suggest a three yearly cycle in line with spending plans, with more frequent application only where there are known issues of performance. This factor, together with the raising of the bar and expansion of areas covered, makes it hard to believe that any 'lifting of the burden' has occurred.

Individual KLOEs

The best way of assessing the areas included in the Key Lines of Enquiry for Use of Resources may well be through the results of the Action Learning which is going to occur over the next month.  That said, the Council would make the following comments on the level three Key Lines of Enquiry (KLOE) put forward:

· KLOE 1.2 (1): It is good practice to consult external stakeholders on the financial planning process.  Whether it is good practice to actively "involve" them is another matter.  The Audit Commission, for example, consults with local authorities on its fee levels but quite clearly does not involve them in its financial planning - are we to expect that it will do in future?

· KLOE1.2 (2): Participatory budgeting should not be the only example given of engaging the public in spending decisions: consultation through citizens panels or regular surveys of views might usefully be mentioned as well.

· KLOE 1.3 (4): Whole life costing is an expensive process: it is suggested the requirement apply this "to major decisions" only.

· KLOE 1.3 (6): Similarly, the use of comparison and benchmarking within partnership arrangements either duplicates the previous points (KLOE 1.3 (3)) or is beyond the control of the organisation being assessed.

· KLOE 1.5 (3): There is no need to require in-year internal reporting to be on "accruals based": require it to be reliable - judgement can then be made as to whether reliability necessitates accrual. This is an example of the KLOE still seeming to be process focused, when the idea of the changes to the Use of Resources is that they should focus on outcomes.

· KLOE 2.4 (3): Again, the organisation can only embed risk management in its own approach to partnership working not force such embedding on its partners.  Better wording could be that `its dealings with partnerships' embed risk management etc.

· KLOE 2.5 (1): It is smugly inappropriate to attempt to "communicate progress made in improving the ethical culture to stakeholders and local people".  This is something better seen in actions rather than words. And again this is a process masquerading as an outcome.

· KLOE 2.5 (4) The publicising of successful fraud cases is not a straightforward good practice: it is as likely to encourage imitators and generate a misleading perception of the incidence of such cases as it is to prove a salutary deterrent.  And again it is a process not an outcome.

· KLOE 2.5 (5) The demonstration of a track record of achievement for a counter-fraud and corruption strategy is likely to be highly speculative.  The Council suggests this is dropped.

· KLOE 3.2 (4): Better to evaluate alternative options for the use (rather than "management and ownership") of assets to derive wider community benefits.

· KLOE 3.3 (1): Good workforce planning would not in itself solve recruitment problems.  The second half of this sentence should be deleted.

Raising the Bar

Quite apart from the substantial number of new requirements, the levels at which some requirements are set has changed - 'raising the bar'. Some of this appears reasonable, though it does reinforce the discontinuity between the two assessments labelled 'Use of Resources' (and such raisings of the bar may need to be more carefully labelled, eg by the Audit Commission presenting national results along the lines 'almost all authorities improved last year, x% by maintaining their ratings against the background of more stringent requirements to obtain a given rating, with x% going further by improving their rating category').  The bars raised furthest in level three or four requirements now being expected at level two appear to be:

· integrated corporate planning and the use of scenarios in financial planning within that

· communication of financial plans to stakeholders

· external reporting of environmental footprint

· value for money in the use of assets

The Council would suggest that the Commission checks through the Action Learning process that the bar is not raised too high in these cases.

Implied Criteria for Level Four

In the absence of any level four criteria other than 'better than level three' it is not clear that there is always sufficient 'headroom' above level three. Take final accounts: an unqualified opinion is required for 'adequate' performance, which seems right, but if level three is 'any errors are 'clearly trivial' and the 'supporting documentation and analysis is thorough', that seems both a big jump from level two and to leave no room for improvement unless it is the counsel for perfection of no errors at all, however trivial - and even if that were possible, the resource required to attain it would almost certainly be poor value for money.

The Council suggests that for each of the level three statements, the Commission might ask itself: would it be sensible to aim for more? In quite a few cases, the answer would seem to be 'no', in which case level three has been set too high. For example, almost all of the 'risk management' and 'ethical behaviour' statements seem of this type.