Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report :

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 2008 letter is extremely positive and reaffirms Hampshire County Council's Four Star (highest possible) rating.

1.2. The letter includes within it the Audit Commission's Comprehensive Performance Assessment (CPA) judgements. The County Council has been rated at the highest possible CPA rating of Four Star and with an Improving Strongly direction of travel. This is a significant achievement.

1.3. The letter highlights a number of strengths and specifically concludes that the Council's use of resources is now four out of four. The Council's record on value for money is specifically recognised with the letter stating that the Council currently "achieves very good value for money".

1.4. This report sets out the County Council's response to the 2008 Annual Audit and Inspection Letter which will enable continued improvement and fits alongside Driving Success. This paper also highlights the progress made on the recommendations from the 2007 letter.

1. Recommendations

2.1.It is recommended that Cabinet:

1. Welcome the extremely positive 2008 Annual Audit and Inspection Letter and take this opportunity to thank Members and staff for their contribution to this achievement.

2. Endorse the County Council's proposed response to the 2008 letter.

2. Background

2.1. With Driving Success (approved by Cabinet on the 24/11/08) the County Council has significantly strengthened its corporate improvement infrastructure. Driving Success and the Corporate Improvement Plan sets out an ambitious programme to ensure the continued delivery of value for money and the further improvement of Council services.

2.2. This will focus on delivering measurable improvements to services and highlighting and managing risks at an early stage. It is envisaged that this will provide a dynamic framework within which Hampshire can continue to make noticeable improvements even against the backdrop of its already strong performance.

2.3. The Cabinet have already approved the Corporate Services Review (a report on the outcomes is elsewhere on the agenda) which is aimed at improving performance of corporate services and their deployment in the most economic and effective way.

2.4. Some of the recommendations from the Corporate Services Review will now be taken forward into the three year efficiency review - the widest and most far reaching review of procurement and commissioning of services that the Council has so far undertaken. The objective will be to identify efficiencies (cashable and non cashable) that can be redeployed to meet frontline service pressures while aggregated within the Corporate Policy Fund to meet future pressures.

2.5. Taken together with Driving Success the Council therefore has a platform to develop its approach and further stretch its value for money achievements over the next three years. This fits with the Councils Medium Term Financial Strategy.

2.6. The Council has already altered the internal focus of the Corporate Performance and Efficiency Group (CPEG) to provide a County wide response and is focused on improvement efficiency and performance beyond that established by the external inspection regimes.

2.7. The Annual Audit and Inspection Letter contains the findings of the District Auditor, including judgements on the Council's overall performance, direction of travel and use of resources. The letter predominantly covers the 2007/08 financial year but significant evidence and changes introduced throughout 2008 and 2009 have been incorporated. In relation to the use of resources section the letter only refers to the 2007/08 financial year. For this assessment the Council promoted its own self-assessment and put more emphasis on this than in previous years.

2.8. It is useful to consider the County Council's response alongside the Annual Audit and Inspection Letter. It is also important to ensure audit recommendations are followed up as an essential part of good management, in terms of responding to external feedback and evaluation.

2.9. This will be the final Annual Audit and Inspection Letter in this format. From April 2009, Comprehensive Area Assessment (CAA) and CAA Organisational Assessment will replace CPA. This marks a significant change to the current assessment regime.

2.10. CPA focused on services provided by local authorities. CAA will look at the public services in an area delivered by councils and their partners including the private and voluntary sectors. CAA intends to provide assurance about how well-run local public services are and how effectively they use taxpayers' money.

2.11. CAA also aims to be more relevant to local people by focusing on issues that are important to their community. It intends to develop a shared view about the challenges facing an area, such as crime, community cohesion, a sustainable environment or public health issues such as obesity, and is supposed to create a more joined up and proportionate approach to public service regulation.

2.12. The CAA Organisational Assessment 2009 will focus on the organisation's effectiveness by looking at how well it delivers value for money through the Use of Resources assessment and how well it Manages Performance. There will no longer be a separate direction of travel assessment and the elements of the direction of travel that remain relevant to CAA have been incorporated in the new managing performance theme.

2.13. The Organisational Assessment is structured into four themes:

1. Managing finances.

2. Governing the business.

3. Managing resources.

4. Managing performance

3.14 The new CAA framework represents a different challenge and opportunity. Cabinet will wish to review throughout the year the Council's contribution to the CAA, consistent with maintaining the highest performance outcome for key services and local political priorities.

4. Annual Audit & Inspection Letter 2008

4.1. As Hampshire is rated as Improving Strongly and ranked amongst the highest-performing authorities with Four Stars, there are no specific formal recommendations. However, the letter does contain some areas where the Audit Commission suggest that the Council should consider action. These are found in paragraphs 5-8 in the Annual Audit & Inspection Letter, and are reproduced below:

4.1.1. The Council has strengthened its internal arrangements, has prepared ambitious plans centred on clearly articulated priorities and is well placed to take forward its challenging improvement agenda with confidence. It is therefore in a strong position to move forward. However, some of its plans are as yet unfulfilled and the Council needs to ensure that improvement plans remain on track to deliver the planned outcomes.(Para five)

4.1.2. Key to this is the quality of performance management and information systems. The Council has plans to enhance these to include improved use of corporate value for money indicators and service value for money scorecards as key drivers of value for money improvement. I would urge Councillors to support and prioritise the roll out of these arrangements over the coming months. (Para six)

4.1.3. The Council's plans involve the participation of other bodies, including the voluntary sector and other public sector providers. Successful outcomes will not only depend on the Council's performance alone as a self standing organisation but also on the combined contributions of each of the partnership bodies. Effective partnership working and strengthening engagement with key stakeholders remains a key challenge to the Council to make all partnerships work productively in Hampshire. This includes in community safety and crime and disorder reduction where new county wide partnership arrangements are developing. (Para seven)

4.1.4. Your auditor has expressed concern that the audit related functions of the Council's Governance Committee could be compromised due to the lack of independence of that Committee from the executive function. Councillors will wish to satisfy themselves that proper independence of the audit function is assured within the Council's governance framework. (Para eight)

4.2. The proposed County Council's response for each of these areas is set out in appendix i.

4.3. There are also a number of other areas mentioned in the body of the Annual Audit and Inspection letter which relevant departments and services will want to note and use to inform their improvement plans. These have been communicated to appropriate officers.

4. Annual Audit & Inspection Letter 2007

4.1. All recommendations from last year's Annual Audit and Inspection Letter have been actioned and all are on track for being met. Whilst some activities are ongoing, none of the areas identified are unlikely to be achieved at this point in time.

6. Conclusion

6.1. Overall, the 2008 Annual Audit and Inspection Letter is extremely positive. The achievement of Four Stars and an Improving Strongly direction of travel is an accolade and places the County Council as one of the top performing authorities in the country.

6.2. The Council is committed to continuing to improve and will carefully review the 2008 letter to take action, as appropriate, in some of the areas highlighted. This is consistent with the response to previous letters where strong progress has been made against recommendations.

6.3. For the Council the focus now turns to the development of Driving Success and further embedding it within the Council's processes, ethos and service deliver. This will position the Council well against the harder test posed by the new CAA national performance regime.

CORPORATE OR LEGAL INFORMATION:

IMPACT ASSESSMENTS:

1. Equalities Impact Assessment:

As this report covers a response to audit findings, and does not propose any specific actions, there are no equalities issues which need addressing at this stage. The impact on equalities will be considered in any action arising from the audit recommendations.

2. Impact on Crime and Disorder:

As this report covers a response to audit findings, and does not propose any specific actions, there are no crime and disorder issues which need addressing at this stage. The impact on crime and disorder will be considered in any action arising from the audit recommendations.

3. Climate Change:

a) How does what is being proposed impact on our carbon footprint / energy consumption?

As this report covers a response to audit findings, and does not propose any specific actions, there are no climate change issues which need addressing at this stage. The impact on climate change will be considered in any action arising from the audit recommendations.

b) How does what is being proposed consider the need to adapt to climate change, and be resilient to its longer term impacts?

As this report covers a response to audit findings, and does not propose any specific actions, there are no climate change issues which need addressing at this stage. The impact on climate change will be considered in any action arising from the audit recommendations.

Appendix i: Auditors comments (in italics) with HCC response (non-italics)

"The Council has strengthened its internal arrangements, has prepared ambitious plans centred on clearly articulated priorities and is well placed to take forward its challenging improvement agenda with confidence. It is therefore in a strong position to move forward. However, some of its plans are as yet unfulfilled and the Council needs to ensure that improvement plans remain on track to deliver the planned outcomes." (Para five)

Driving Success, with a focus on the things that matter most locally and doing something about performance and improvement when action is required, considerably strengthens the corporate improvement infrastructure. The implementation and continued roll-out of Driving Success will emphasise the delivery of valued, measurable improvements against the backdrop of the County Council's already strong performance

The new Corporate Improvement Plan identifies clearly the corporate improvement priorities for the Council and this will be the focus of strategic improvement activity and complements well the Council's partnership commitments.

"Key to this is the quality of performance management and information systems. The Council has plans to enhance these to include improved use of corporate value for money indicators and service value for money scorecards as key drivers of value for money improvement. I would urge Councillors to support and prioritise the roll out of these arrangements over the coming months." (Para six)

The Council already has an Integrated Planning and Reporting Steering Group¹ which proactively looks at strengthening the alignment and integration of service performance, finance and workforce issues. As part of this a number of initiatives have been developed/trialled over the last year including aligned reporting timetables; Integrated Service Planning template pilot; Value for Money scorecards; Driving Success; and Council Budget and Corporate Strategy priority links. As part of this ongoing work, frontline service departments are already working towards producing Value for Money scorecards at the 2008/09 year end.

The continued development of Corvu, the Council's performance management IT system, will also improve the corporate performance and information management capacity as part of implementing Driving Success.

Further information and reports will be received by Cabinet through Driving Success.

"The Council's plans involve the participation of other bodies, including the voluntary sector and other public sector providers. Successful outcomes will not only depend on the Council's performance alone as a self standing organisation but also on the combined contributions of each of the partnership bodies. Effective partnership working and strengthening engagement with key stakeholders remains a key challenge to the Council to make all partnerships work productively in Hampshire. This includes in community safety and crime and disorder reduction where new county wide partnership arrangements are developing." (Para seven)

The County Council is committed to working in partnership where this will deliver the best results locally. As part of this the County Council takes seriously its leadership role in relation to the Local Area Agreement and other strategic partnerships. The Council works closely with partner organisations with a focus on improving community outcomes.

The Council is focussed on ensuring partnership arrangements, particularly performance management arrangements, are robust and deliver the best results. As part of this the Council has been reviewing its working relationships with the voluntary and community sector (VCS), crime and disorder partners and others to ensure these arrangements are the right ones to optimise outcomes. This work will continue and further reports will be brought to Cabinet.

The Council is clear that at times this will mean a greater focus on organisation specific delivery. This recognises that whilst partnership working has an important and valued part to play, it will sometimes be more effective and efficient for the County Council to drive delivery alone.

The delivery mechanisms and performance management arrangements around the LAA and other workstreams (like shared services) of the Hampshire Senate will be a central driver to their continued development.

"Your auditor has reported that although the Council's Governance Committee operated

effectively during the year as regards its wider governance capacity, there is an

underlying risk that tensions could arise between the audit responsibilities of that

Committee and the executive function due to the fact that this Committee comprises

some Cabinet members." (Para eight)

Whilst noting the auditors recognise that the current Governance Committee has been acting effectively, the Council is minded to split the governance and audit functions in order to strengthen further the independence of the audit function. Proposals will be developed to establish a separate Audit Committee and a report on these constitutional changes will be prepared and presented to Full Council for approval.