Improvement Service
Item 2 concerns evidence on the work of the Improvement Service. Members should have received a copy of the briefing paper on that work. I welcome Colin Mair, who is the chief executive of the Improvement Service, and Clodagh Memery, who is the business and best-value manager. As usual, we will begin with some introductory remarks.
Colin Mair (Improvement Service):
Thank you for your kind invitation to come along this afternoon. I have advised the committee a number of times—it probably felt a lot more comfortable sitting here then than it does now. However, I look forward to hearing your remarks about us. By way of brief introduction, I will say a bit about what we are, what we are about, where we are and how we will progress.
The Improvement Service is a company that was established through a partnership between the Executive and local government in Scotland. Local government is represented by COSLA, for the politicians, and by SOLACE, for the chief executives. The establishment of our company was an unusual and imaginative development because we are also core funded by the Scottish Executive. It takes a significant amount of creativity and imagination to establish a true partnership that is accountable to a board but not directly accountable to ministers. The chair of the board in our first year has been Tom McCabe, the Minister for Finance and Public Service Reform. Pat Watters, the president of COSLA, is on the board, as are the chair and vice-chair of SOLACE. The way in which we have been set up has given us an unusual start in life and an unusual reporting mechanism but, as I will explain, it also slightly insulates us from parliamentary scrutiny. We welcome an on-going relationship with the committee so that we can have feedback from, and present our work to, Parliament.
The core purpose for which we were set up was to work in partnership with councils to improve the efficiency, effectiveness and accountability of local public services. Although that clearly implies a primary focus on local councils, I emphasise that we are interested in local public services rather than just local councils, because most councils work in partnership with other local partners in the public and voluntary sector and it is important that all those arrangements are properly accountable to service users and local communities.
Within that broad remit, we have focused on building up and developing a small number of business themes. One of those themes goes to one of our core purposes, which is enabling the 32 councils, their partners and their partnerships to learn more effectively and easily from good practice elsewhere and to share good practice with others. The slightly pretentious way of talking about that is to say that it is about knowledge management. Practice sharing is the essence of what we want to focus on. Some of that will be done by developing a significant web capacity—as we are doing—so that people can interchange ideas and learn from others online, and some of it will involve focusing on networks and communities of practice. We will work directly with groups of people who are trying to develop and share good practice with one another.
In capacity building, we are also commissioning two major development programmes—one for senior elected council members, who will provide council leadership in future, and the other for the executive leadership of councils. Members will be aware that, as 2007 hoves into view, a 50 per cent turnover of sitting elected members is expected, but a substantial turnover of chief executives and other senior corporate managers is also expected. Support is necessary to develop the next generation that will provide the leadership of local government.
A second focal theme is partnership and joint working. I know that community planning has been a recurrent theme and interest of the committee. Our focus is partly on sharpening the operation of community planning at board level, so that clarity about direction and accountability is developed, but it is also on shaping the major partnerships that deliver public services more tightly and in a more focused way as joint ventures, which they are, and ensuring that the collaborative gains that led them to be established in the first place are realised.
A third theme is efficient resourcing, as the committee would expect. We are moving into a period in which real growth in public budgets will slow in comparison with the situation since devolution. It is critical that we use all resources to the maximum. Efficiency is a core value that local government is increasingly beginning to articulate. If we waste resources in one area, we deny service users in other areas the quality and level of service that they ought to expect. I will discuss some of the work that we have done on that in the past year.
As the audit of best value has made its way round the first 12 councils to be audited, it has raised interesting questions about the robustness of performance management systems in councils. One of our key strands of work involves supporting councils in developing their ability to set clear targets and monitor the performance of their organisations and services against those targets. We are also interested in how that is fed through to elected members. Scrutiny is a key role of elected local politicians. We are working with them on whether they feel that they receive the type and quality of information that they need to interrogate the performance of their local services fully.
Another theme relates to 2007, which is a major system change point for local government. From 2007, a new electoral system will operate, members will be salaried for the first time and we will move to multimember wards in councils. For most people, all that will be new and virgin terrain, although we have had experience of multimember wards in the past.
We are working with COSLA, SOLACE and several member services organisations on how we can ensure that things hit the ground running in 2007, rather than with a large question mark over them. In collaboration with COSLA and the councils, we are working on developing standard induction material for new members. We expect 50 per cent of elected members to be new, so the induction pressure on councils will be much higher. The view has developed that having a common core of well-produced, sound and highly developed materials that councils can customise in their induction frameworks is much more cost effective and beneficial than materials being produced 32 times in different parts of Scotland.
We are examining tools and techniques that might allow more case-load sharing in multimember wards, because one of the opportunities that are offered by a multimember ward is that councillors can work together as a team. One of the challenges is that if they do not do that, they might find themselves competing with one another over the same complaints and end up buried in the volume of what comes through to be processed in the council. There is a big focus on 2007 because it is a key juncture for local government.
We want to do all this work in partnership with councils. One part of our operation, which we have called an innovation fund or innovation exchange, is to allow councils and their partners to come to us with ideas for innovation and improvement that they want to be supported. Rather than the work being directed all the time by us, our stakeholders can actively push us to channel our attention and resources towards certain developments. We will launch a prospectus for councils on that arrangement in December.
I have outlined broadly what we do and indicated the way in which we are focusing our attention. Over the past year, much of our work has been to develop the organisation. I am delighted to tell the convener that we are now located in Broxburn—a very sound place—in West Lothian, in East Mains industrial estate. A staff team has been fully recruited and in place for the past two months. In the past six months, much of our work has been nationally focused because I have been something of a one-man band and a national focus has been more manageable, but now that the team is in place, the challenge is to get ourselves out the door and round the councils. In the past year, we have visited every council in Scotland to discuss what they want from the Improvement Service. We are building the considerations that have been raised into our business planning.
My final point brings us back to where I started. Because we are set up as a company, we are not reported on to Parliament by the Auditor General for Scotland. Therefore, we would welcome an on-going relationship with the Local Government and Transport Committee, both to pick up on the committee's key agendas for improvement and to feed back all our corporate documents and reports. Members will be glad to know that those comments will satisfy for introductory remarks.
Thank you. I congratulate you on your choice of location; you could not have done much better.
It is not a bad location; it is where the Scottish National Party had its campaign headquarters during the by-election in Livingston. That is a good place to be.
Of course, the campaign completely failed.
It depends what you mean by failure and how you measure success. I guess that that is part of Colin Mair's job.
First place is success.
Colin Mair has laid out in his comments today and in his very useful submission the role of the Improvement Service, what it is doing and how it is set up. Is the fact that the Improvement Service exists not an indictment of local government? Why has local government—in particular through COSLA—not already done what the Improvement Service does? You will know that I am a former council leader as I have discussed these issues with you in the past. Why has COSLA not managed to bring together the work programme that is ahead of you? Why is the Improvement Service rather than COSLA undertaking the role? Is local government unable to do the work?
I emphasise that COSLA was one of the activating partners to the agreement. COSLA worked in conjunction with the Executive to push for the development of the Improvement Service as we move into a period of substantial change for local government, with the introduction of best value and the new electoral system. One option would have been for the service to have been housed physically within Rosebery House and to have reported through the COSLA council leaders meeting. However, there was a genuine desire for partnership, so it was agreed that it would not be right for us to report to the Executive as a non-departmental public body or as an agency. It was also agreed that it would not be right for us to be seen as part of the local government community and nothing else. Much of what local government does—the committee has reviewed the matter in relation to outcome agreements and so on—is done in partnership with the Executive and the Parliament.
One example is education, which accounts for half the total local authority budget. Clearly, some issues within education are properly decided on, managed and focused at the local level, but much of it is about the rights of citizens to receive a given standard of education, for which the Executive has a proper responsibility. The word "partnership" is meant to express the fact that there is no dichotomy or contradiction between the Executive and local government. The key challenge is to work out how both the Executive and local government—as the political leadership at each level in Scotland—can work together more effectively and efficiently to deliver improved public services. It was not that local government could not develop ideas about what was collectively needed but that it was seen as best to develop such ideas in partnership with colleagues in the Executive.
I ask that question because the issues that were raised in the "Code of Guidance on Funding External Bodies and Following the Public Pound", which was published by the Accounts Commission for Scotland in the mid-1990s, have been around for some time. Best value has also been around for some time—I was involved in one of the pathfinders for best value. Some of the key objectives that are laid out for the Improvement Service hark back to those issues. If local government had been successful in implementing some of the changes that were required, perhaps the Improvement Service would not be needed.
I will make two points in response. First, we have a system of 32 councils in Scotland, so some councils excel in some areas and other councils excel in other areas. The Improvement Service is predicated on the idea that sharing best practice rapidly, effectively and efficiently will raise the overall standard across Scotland. That will mean that no matter where or who a person is, they can expect the same high standards in the service that they receive from their council.
On following the public pound, in some ways each generation of change and innovation generates new challenges. As we evolve new types of arm's-length organisations, such issues do not go away but can reinvent themselves in new and sometimes even more challenging forms. However, we do not say that we are focusing on areas of failure because there are significant strengths in all areas. The issue, rather, is how we capitalise on those strengths to ensure that the whole local government community in Scotland benefits and learns from best practice.
That is useful. You have given a good example of how the issues to do with following the public pound move on, as people find new and innovative ways of funding things. I accept that.
Let me narrow my questions to focus specifically on best value. I agree that local authority performance management and monitoring have improved and that local authorities have probably improved their benchmarking, in that they are better at comparing their performance with that of others. However, it seems to me that little improvement has been achieved in the end result. When the work on how an authority's services compare with those of others is concluded and the authority moves to the next step to consider how it will make further improvements, it seems to me—perhaps I am now too divorced from things—that there are not many examples of how an examination under the best-value regime has resulted in a significant change to services. I may be wrong on that.
Unquestionably, the introduction of the audit system has sharpened up focus, but the fact that we have well-developed, elaborate and sophisticated performance management systems is of no interest to the public if such systems do not result in improvements to services. Therefore, the link between the management and measurement activities and the improvements to public services is critical. The audit framework—along with the self-assessment that councils are now carrying out as part of that—greatly sharpens that focus because it requires councils not simply to know what other authorities are doing but to state what they have learned from that and what they are doing with that knowledge. I agree that improvement must be the core end point of such systems.
Given the variation in the scale of councils—which range from large-scale sophisticated organisations operating with finances on a level of some transnational corporations down to organisations that are very small in terms of staff resources—it is also probably true that capacity and capacity sharing are an issue. One purpose of the Improvement Service is to equalise that capacity, both in advance of and after best-value audits, to ensure that the learning is available to councils that might not have the resources to go out and find it for themselves.
I agree that improvement should be the end result of best value, but I believe that the audit of best value is proving to be usefully challenging and is bringing about change. I have just spent five months working with Inverclyde Council and—believe me—the audit became a dramatic focal point during the summer months for discussion on how that council needed to change and develop. Some quite hard decisions about change and development were taken. There is a new dynamic there, which has followed from the audit process.
Your paper mentions
"involvement by the Improvement Service in driving forward required improvements"
in best value. What is the difference between what the Improvement Service will do and what the Accounts Commission might do?
It can be viewed as a division of labour. The job of the Accounts Commission is not to act as consultants and service providers, supporting the change and improvement that follows the audit; the commission's job is to undertake robust audits that challenge people on their current performance. The division of labour lies here: first, the commission identifies major issues; then, the Improvement Service will give support to those councils that need it.
That is a good explanation. Thank you.
I want to ask about the benefits that your organisation brings over the long term. Can we quantify the financial benefits stemming from the formation of your organisation? Substantial funding is being made available, comprising £1.7 million as well as payment in kind from COSLA. There must be something at the end of the process that allows the savings to be quantified.
That is one of the things that we are working on just now. We can take our substantial involvement with Inverclyde Council as an example. We need to monitor what follows from our work there in terms of change and improvement to services. How one cash-values some of those improvements is a more complicated matter. However, we are also working on some programmes and projects on procurement, and it will be entirely possible to place clear cash values on the benefits that flow from more co-ordinated and collaborative procurement between councils. The benefits from some of our programmes will definitely be identified and measured. Whether they are cash valuable or not is something that we will need to look into.
I would take the challenge that, wherever possible, we should seek to apply cash valuations. There will be projects that are clearly geared towards generating cash-releasing efficiency savings, which should be judged absolutely according to whether they deliver those benefits.
Are you proposing to report on the particular savings that might be achieved by organisations over time?
Clodagh Memery (Improvement Service):
I will mention a couple of good examples of projects. We are starting a project on national care procurement and the savings that can be made through a process that brings councils together and which has been cleared by COSLA leaders as being the way to move forward. That project will certainly consider what efficiency savings can be made. Through our investment of staff and funding, we can take forward such innovative projects. Then we can tap through what savings they gain as a project. Another project is examining how local government and the wider public sector recruit. There seems to be wastage in how recruitment is carried out and difficulty in getting staff into the public sector.
As far as our own spending plan is concerned, we are putting every project that we are currently dealing with through a benefits realisation process. We need to publish information on that in early January. In that process, we ask why we are doing a given project, what it will achieve for our partners and how it will make improvements for customers—both by identifying value improvements and by saying where services are provided through a shared service basis.
The final general point is that, as an organisation, we have declining core funding, which we have to manage across a three-year period. We will seek to gain our own 2.5 per cent efficiencies across our baseline. We are just starting out as a full organisation now, but we will seek to drive those efficiencies.
The point that I am getting at is that, as far as the investment in your organisation is concerned, you will definitely find that the benefits will equate to a sum of well over £1.7 million. Effectively, we can expect the investment to reap quite substantial benefits over and above that amount.
We will report on financial benefits on an annual basis. If the projects that we are working on realise the benefits that we estimate for them, a sum very substantially more than our total running costs over the three years will be generated.
I will make a point that links back to some of the questions that you raised with Professor Brown. We want to create the kind of public services that are got right first time, so that people do not have to use the complaints system, and we want to improve customer relations management. It is harder to put a cash value on that, but it is not hard to identify the value to the service user and the community.
The question has been useful in that it makes us think about how we can present clearly the different types of benefits that are associated with projects. We would welcome the opportunity to report back to the committee, perhaps annually.
Why did you set up the service as a private company? This is similar to Bruce Crawford's question, but was there an opportunity to set up a sub-committee or some kind of programme attached to the COSLA partnership?
The feeling was that we should have a true partnership. From the local authority side, had the Improvement Service been set up as a non-departmental public body, we would have been told, "You can have a joint board if you like, but ultimately it will report to ministers." Equally, had the Executive handed over the money to COSLA, we would have been told, "You can call it a partnership if you like, but it will report ultimately to COSLA's leaders." The company came out of the desire for a true partnership rather than a pretend partnership that reported one way or t'other to national and local government in Scotland.
We have established that you are not a standards body, that you are more of a consultancy, that you do not have enforcement powers and that you follow an agenda that the minister has set for local government to seek certain efficiencies. There are people out there whose job it is to manage change and to run effective, value-for-money services and who are controlled by elected members. They have been around for a number of years and were certainly there when I was in local government. I recall the McIntosh commission—
Is this a speech or a question?
I am setting the scene, as you do yourself, convener—I take you as my model.
I ask you to get to your question a bit more quickly, David.
The McIntosh commission covered much of what you said about building capacity and the skills of officers and elected members. Have you based your set-up on what was discussed by the McIntosh commission with COSLA and the Government?
Yes. McIntosh is a clear locus and starting point, although we have drawn on a range of subsequent discussions between Government and local government about developing and improving local public services. All those discussions came to a critical head around the question of what sort of partnership we should form to make it all happen and to support it happening. What we do can be traced back to McIntosh.
I was involved with the McIntosh commission on behalf of a council. McIntosh took a lot of evidence about the qualifications and suitability of people who put themselves up for election. You hinted at pre-election knowledge. How do you intend to tackle that?
We are in no sense advocating—we have no locus to do so—that people should hold qualifications before they can stand for election, which would be alien to our democratic system. However, as we move towards 2007, we will see a massive outflux of existing elected members, so we want to attract new and, perhaps, different people into the system. Where do those people go to get information about what on earth it means to be an elected member, particularly if they are not part of established political parties that have mechanisms for providing that information?
Pre-election, there is a need for honest representation of the nature, demands and possibilities of the role of an elected member, and for information about the serious time demands and liabilities that people face when they are elected. That would allow people to go into the process with their eyes open, having thought through why they want the role and what they might bring to it. Part of that process has to be a guarantee to give people good information in advance of their being elected so that they are well supported and resourced once they are elected. If a person is asked to sit on a planning committee, for example, he or she would be given high-quality training that is relevant to that committee; the same goes for committees on licensing, social work and child protection. That does not happen systematically at present. Furthermore, we would provide that training in ways that are appropriate to the elected member's work and family life so that if they want to learn online, rather than at seminars and so on, they can.
Would a council purchase such training modules for its members from your limited company or would the training be part of the package that you are setting up?
We are not selling training—we will develop it in partnership with councils and they will all be given it so that they can use it as part of their core suite of materials to support their elected members. My board has taken the view that we are not out to undercut the market and sell services; we have public funding to deliver on the core agenda.
Does that mean that you think that your organisation might not need to exist much beyond about 2010?
At my age, I could happily reflect on that, but my colleagues would probably wish for the company to exist somewhat longer.
About every five years, the type of challenge that local government faces shifts. The first phase of the new electoral system and, probably, the new political management arrangements that will flow from it will require quite a lot of support, but people will settle down and become clear about them. Some of the other issues that are connected with continual training and redevelopment will persist, and we wish to work with councils on those.
I suppose that we are set up on a shared-services model. The idea is that, rather than set up the service 32 times, we should do it once well and allow all 32 councils to participate. That is a possible direction for public sector reform: rather than reproduce services 32 times, we should use consolidated capacities as the support vehicles.
I will ask you about staffing. You mentioned your base in Broxburn and said that you were taking on staff. You are well known to us because you have worked with the committee a lot, but will you tell us what the other staff do and what their remit is?
I will do that with pleasure; it was maladept of us not to have fed back to you on that. Clodagh Memery—whom some of you might know from her days as head of best value at the Scottish Executive—is our business manager and will lead on our best-value work with councils. That work will not only be about dealing with councils that have had bad best-value audits; it will also be about determining how to get knowledge from councils that have very good audits out and round the system.
Dr Bonnie Cheuk will lead for us on knowledge management. Until three weeks ago, Bonnie was director of knowledge management in the British Council and operated globally in support of good practice throughout the council's operations. Paul Cowan, formerly of Scottish Widows and Glasgow City Council, will lead for us on organisational development and human resources issues, of which there is a not insubstantial amount as change rolls through. We also have Alison Jaap, who led on partnerships and joint ventures for PA Consulting. We brought her in to bring a sharper edge and a focused skill set to our approach to that area. Finally, Dr Mark McAteer will lead on performance management and governance.
It is a small core team, which we will augment through secondments from councils and elsewhere as we require expertise. Equally, we and partner councils will put resources into running the major programmes that we are undertaking together. We have tried to keep the core team small, but we will draw on a lot of other expertise as we go.
I could ask you many questions, but I will keep it to two. I voiced concerns about procurement when we talked about it the other week. What checks and balances do you have in place on that? For example, local firms could be accessed, but there might also be quality issues.
Secondly, a lot of people are asking where the evidence is that community planning partnerships are operating as they should. What are you doing on that?
I will address procurement first. There are linked concerns that we will begin to aggregate procurement across groups of councils, all 32 councils or the whole public sector. There are concerns about whether sustainable procurement will be lost in the drive for lower costs and there are concerns in respect of small and medium-sized enterprises. We are very clear—we have worked closely with COSLA's leadership board on this—that acceptable collaborative procurement will have to demonstrate that it accommodates all those elements. We have good examples of national contracts being set that require local delivery so that we get the benefits of scale on the one hand and the guarantee of activity in our local economies on the other. We are looking very closely at that.
In care procurement, for example, more than 50 per cent of all residential care is provided by very small providers. Therefore, a system of procurement must stabilise circumstances for small providers rather than exclude them from the market. Equally, however—care is a good example again—a fairly small number of very large-scale corporate providers have to deliver about 45 per cent of the market.
If they are operating throughout Scotland, we will find that aggregate contracts that get us full value for our purchasing power with them can be combined with local purchasing from the smaller players. We would never recommend a one-size-fits-all approach; the approach must be fairly subtle. We also have to ensure that the end-users of services do not have their choices restricted by how we go about aggregating procurement.
The issues that Dr Jackson raises are extraordinarily valid, and we have to be able to demonstrate that they are fully taken on board and that the systems are compatible.
I would like to say two things about community planning. We have had community planning partnerships for some time; some have a fairly focused identity, while others are probably still struggling to know precisely what they are about. Our sense is that almost a different language needs to be used. Community planning partnerships are boards, and boards need to be organised to have clarity about their purpose. A board has to set direction for what it has responsibility for, but it also has to be held fairly robustly to account for whether it is delivering. It is not clear to us that community planning partnerships have developed that board-level capacity yet. One part of our task will be to work with community planning boards to support them in developing board-level skills and a capacity to look across the range of delivery partnerships for which they have responsibility.
The second language that we use—which sometimes sounds a bit forced, but which usefully suggests something—is the language of joint ventures. Probably the most impressive discussions that I have had have been with the private sector on joint ventures. My learning has improved through those discussions.
It is interesting that much of what we say makes joint working difficult. The private sector thinks that properly set-up and robustly designed joint ventures are the answer. Therefore, one does not always have joint ventures with people whom one likes or with people whom one trusts. Therefore, we should set up joint venture vehicles that do not assume that the partners love and trust each other all the time. However, we in the public sector talk as if we cannot do anything until we all love and trust one another. A child or an older person does not think that the care and protection that they get should be contingent on whether people like or trust one another: the child or older person believes that people have a duty to deliver integrated services.
We want to look at how certain joint-venture design principles in the private sector can bring precision, clarity and leadership to delivery partnerships in the public sector. Our approach augments the approach of our various partners. Communities Scotland does very good work on ensuring community engagement, and we want to bring a distinctive slant to how we approach our work.
That brings us to the end of questions. Thank you very much, Colin and Clodagh, for adding to our understanding of the Improvement Service's role.
We could copy you into all our corporate documentation performance reports and we could meet the committee once or twice a year to share agendas to see whether you have identified issues that we ought to be building into our work.
That would be very useful. That brings us to the end of today's meeting. I thank members for their contribution and I thank members of the press and public who have attended.
Meeting closed at 16:05.