Archived decisions

Contact: Gary Smith, ext 7691 email: [email protected]

With the concurrence of the Chairman under Section 100B (4)(b) of the Local Government Act 1972, this matter has been included on the agenda to ensure that the most up-to-date information is made available to Members.

1. Summary

1.1 Each year the District Auditor compiles an Annual Audit and Inspection Letter to Members which summarises the conclusions and significant issues arising from the Audit Commission's audit and inspection of the Council. The letter is extremely positive and reaffirms Hampshire County Council's Four Star (highest possible) rating. Higher scores were also achieved in both Environment and Culture.

1.2 The letter predominantly covers the 2006/07 financial year but significant evidence and changes since that time have, in places, been incorporated. In relation to the use of resources section the letter only refers to the 2006/07 financial year. This letter used to be presented to Cabinet in January following a CPA (Comprehensive Performance Assessment) score announcement in December. Since then the timetable has been put back with the CPA star rating now announced in February.

1.3 It is considered useful to have the Council's response at the same time. This paper highlights the main points from the 2007 letter and identifies areas for action. It is important to ensure audit recommendations are followed up as this forms an essential part of CPA and good management, in terms of responding to external feedback and evaluation.

2. Recommendation

That Cabinet approves this paper, and actions set out in appendix one, as the County Council's formal response to the Annual Audit and Inspection Letter 2007.

3. Auditors recommendations

3.1 The District Auditor recommended three specific actions for the Council to address:

1. Obtain assurances that the Council's workforce and related HR plans adequately provide the capacity needed for the successful management of change.

2. Continue to track the performance of the Council and its partners in improving the outcomes for local people in community safety and support the development of more effective collaborative working in this area.

3. Ensure that the Council has realistic plans for the achievement of level three of the Standard for Local Government in equality and diversity.

3.2 While Cabinet will continue to receive separate reports on these areas, this paper provides an overview bringing all the relevant areas of activity together in response to the Audit Commission's recommendations. Appendix one lists the specific actions, lead officer and timescales. The actions have not come from the Audit Commission, they identify actions the Council is already taking and which are coincidental to the auditor's recommendations - many of these are plans already in place.

3.3 Formally responding to audit and inspection recommendations is an important part of good management. Given all services scored four or three out of a possible four there are no service specific recommendations. Instead the recommendations mostly concern corporate issues for which a schedule of actions (appendix one) has been compiled.

3.4 However, it is also important to note the implicit areas for action which feature within the body of the audit letter in order to achieve continual improvement and increase the direction of travel judgement as well as maintain and improve service block scores. Chief Officers and departmental performance leads should consider the auditors' observations as part of their general planning and reporting cycle.

4. Conclusion

4.1 Overall, it is recognised that this is a very positive letter which ultimately assesses the Council as a top performing Four Star authority and this is welcomed. The County Council is, however, disappointed that it has not been recognised as `Improving Strongly'. The letter notes numerous service successes and improved outcomes. It also highlights that 65% of performance indicators (PIs) show improvement from last year (with 36% of these already in the best 25% of all councils). In addition the County Council has done extremely well in a number of other external audits and inspections undertaken during the year, including achieving top scores in the following:

_ Supporting People: `Excellent Three Star' - first county council to do so

_ Corporate Assessment: Four out of four - second county council to do so

_ JAR (Joint Area Review): Three out of four - `Good' with some areas `Outstanding'

_ Enhanced Inspection of the Youth Service: Three out four - `Good'

_ Children's services APA (Annual Performance Assessment): Three out of four - `Good'

_ Social care services APA: Three Stars - `Good' outcomes with `Excellent' capacity for improvement

4.2 With these accomplishments, combined with a passionate commitment from both Members and officers to continually strive for performance improvement and cost efficiencies, it is difficult to understand why this clear and strong direction of travel has not been recognised.

4.3 However, preliminary discussions with the Audit Commission's Relationship Manager and District Auditor have indicated that the opportunity to challenge the Direction of Travel judgement label of `Improving Well' has passed. The Relationship Manager has confirmed informally that the assessment is based on the Council's performance improvement in PIs relative to other Councils as well as other judgements through the CPA process. The issue that emerges is that the Council, whilst always wanting to maintain momentum in improving PIs and regulatory judgements, needs to consider the financial settlement and the relative benefit of attempting to improve against a moving average and how these compare to other political and community priorities locally. In this context, it should be noted that the Direction of Travel focuses on relative year on year performance and does not consider absolute performance. This fails to adjust for the difficulty of further improvements from a high starting base.

4.4 Given what is known about the next three year financial position it is unlikely that the Council will be able to invest solely to improve performance significantly in PIs across the entire range. In this situation the process of prioritisation becomes increasingly important - the Council will not get significant extra funding. To fund improved PIs across the board would require a reprioritisation of services, which is the other option, but this may be contrary to Member priorities and other community benefits.

4.5 These issues will return to Cabinet throughout 2008 in the lead up to the final CPA judgement and Annual Audit and Inspection Letter before the new (Comprehensive Area Assessment) is introduced.

4.6 The Council is determined to build on the successes noted in the letter combined with its renewed vigour to pursue greater value for money, performance improvements and efficiencies across Council Services and partnerships. The Council, however, reserves the right to place higher priority to service improvements that are important to Members and the local community rather than those covered in the Audit Commission's CPA.

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, it based and have 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.

None.

Appendix one - 2007 Annual Audit & Inspection Letter response