New Assessment Scheme to Focus in on Unit Costs

The Local Government Chronicle reported on 8th July:

"A renewed emphasis on unit costs and ministers’ fledgling transparency agenda will form the backbone of the new local government assessment framework, LGC understands. The new approach means that local area agreements (LAAs) will cease to exist from the end of this financial year, with some £340m of reward grant being clawed back by the Treasury.

While a stripped-down national indicator set might be introduced, news of the new approach caused council chiefs to voice concerns that the focus on unit cost could see a return to the “cheap is best” attitude to public services prevalent in the 1990s. One chief said councils would be judged on “the transparency agenda and value for money - for which you can read unit price.” He added: “It’s the antithesis of best value which said sometimes we can get better value from more expensive services. We seem to have gone back to 1996 in terms of cheaper is better.”

The move follows ministers announcing the end of the comprehensive area assessment and further underlines the coalition government’s intention to consign the previous regulatory regime to history.

Local government officials are moving swiftly to adapt to the new climate, with Local Government Improvement & Development (formerly the IDeA) managing director Rob Whiteman spearheading a sector-led programme to drive up efficiency in the sector.

The new national improvement and efficiency programme will appoint a range of champions in the coming weeks from the local government, business and voluntary sectors and from Whitehall departments to drive the programme. A key aim will be to create a “bank of productivity data” for local government which will provide better financial information with evidence on what works in reducing costs in practice. Other major work strands include better procurement, better data and analysis tools, promoting new providers such as social enterprises and means of ramping up workforce productivity. Mr Whiteman told LGC a robust benchmarking system would help councils avoid “sinking to the lowest common denominator”. He added that councils also needed to take ministers’ transparency agenda to heart. “Transparency will become as important over the next five years as league tables to the last government,” he said."