Scottish Government

13 January 2006

ISBN 0 7559 2968 3 (Web only publication)

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1. Introduction

1.1 Section 13 (Publication by Local Authorities of Information About Finance and Performance) of the Local Government in Scotland Act ( LGiSA) 2003 introduced a duty on Scottish local authorities to make arrangements for public performance reporting, and provides for measures to support it. As a result, it is for local authorities to decide how, what and when to report to their local stakeholders subject to:

• the statutory Best Value Guidance: Measures to Support Public Performance Reporting (published by the Scottish Executive in March 2005); and
• any regulations describing specific information which must be put in the public domain.

1.2 The underlying principle is that a local authority that secures Best Value can demonstrate accountability through its public performance reporting: stakeholders are aware what quality of service is being delivered, and what they can expect in the future.

1.3 A regulation was laid in 2003, specifying the annual local publication of statutory performance indicator information.

1.4 Consultation and discussion on the scope of other regulations to support these measures began in late 2003 culminating in the publication of Performance and Improvement Circular 1/2005 in February 2005. The Circular provided that, pending introduction of regulations later that year, by 30 ^th April 2005 and annually thereafter, local authorities should:

• make public a statement of future plans for public performance reporting;
• publish a statement of progress against recommendations for improvement made to them since 1 April 2000 ( i.e. any recommendations they may have received from Audit Scotland, HMIE, Social Work Inspection Agency etc);
• make public their trading accounts, or an abstract thereof, for significant trading operations; and
• make public a summary of their capital and revenue expenditure.

1.5 At that stage some concerns were expressed by local authorities about the timescales for implementation, and the perceived burden involved in meeting the requirements of the proposed regulations. This led to the postponement of these requirements whilst further discussions with local authorities and other principle stakeholders such as COSLA and SOLACE took place.

1.6 Performance and Improvement Circular 2/2005 was then issued on 15 September, outlining simplified and streamlined proposals for the regulations in response to concerns raised, by:

• deferring introduction by one year to allow sufficient preparation time for the reduced requirements;
• reducing the effective date of the retrospective review period for 'progress against recommendations' from April 2000 to April 2003; and
• removing requirements to publish financial information (on the grounds that this requirement is already in place for local authorities under the provisions of the Code of Practice for Local Authority Accounting in the United Kingdom ( ACOP) issued by CIPFA).

1.7 The revised draft regulations were published for consultation between 30 September and 18 November 2005 ( http://www.scotland.gov.uk/Consultations/Closed). In total, the Scottish Executive received 28 responses to the consultation. This report summarises the responses received, and details of those who responded can be found at Annex A.

2. Draft Regulations

2.1 Regulation 2A (1) (a) and 2A (2) (a-c)

2.1.1 Taken together, these regulations provide that:

• all local authorities shall, by 31 October each year, publish a statement of progress against relevant recommendations for improvement by inspecting bodies; and
• the statement shall include recommendations from 1 April 2003 onwards, unless the person/body making the recommendation has agreed it need not be included.

Consultation Response

2.1.2 In total, 23 of the 28 respondents offered an opinion on draft regulation 2A (1) (a), and by extension draft regulation 2A (2) (a-c):

• 16 respondents were in favour of publishing such a statement of progress, although in many cases this was qualified as being 'in principle', subject to further direction or clarification concerning issues such as:
• • the range of bodies this might encompass;
  • the level of recommendations it might include; and/or
  • practical considerations such as how/when recommendations might be considered 'completed' and removed from the statement;
• 7 disagreed with the proposal - 6 of those in very strong terms. The need for such regulation was questioned, on the basis of the level of public interest and also in terms of duplication of information already available in the public domain.

2.2 Regulation 2A (1) (b)

2.2.1 This regulation provides that each local authority shall, by 1 April each year, make a statement detailing how and when they propose to fulfil their public performance reporting duties under Section 13 of LGiSA, for the coming financial year. The statement should be published by 31 October each year.

Consultation Response

2.2.2 22 of the 28 respondents offered an opinion on this regulation:

• 16 respondents were in favour of publishing such a statement. However, a number of respondents found the wording of the draft regulation confusing and therefore qualified their response as being 'in principle' subject to clarification of what was intended in practice, principally with regard to publication dates.
• 6 respondents disagreed with this proposal, mainly due to a perceived lack of public interest, or any 'added value' from such a statement.

3. Financial Information: Trading Accounts and Expenditure and Summary Accounts

3.1 The requirement for local authorities to make public their trading accounts, or an abstract thereof, for significant trading operations; and to make public a summary of their capital and revenue expenditure as set out in Performance and Improvement Circular 1/2005 was removed on the basis of discussions with stakeholders.

3.2 While these provisions around financial information did not therefore form part of the draft regulations, it is worthwhile noting for completeness that:

• all 15 of the respondents who offered an opinion on the disclosure of trading accounts etc.supported the proposal set out in Circular 2/2005 to remove the requirement for disclosure; and
• 12 of the 13 respondents who offered an opinion concerning the recommendation - as a matter of good practice - for local authorities to publish summary financial statements in line with the LASAAC model supported this suggestion;
• 1 respondent disagreed, offering the view that it should be for local authorities to decide on the style and content of reporting of this information.

3.3 A number of local authorities went on to say that they already have in place, or are working towards, arrangements for publication of this information, for example in annual performance reports.

4. Next Steps

4.1 The Scottish Executive is presently considering the options for the introduction of measures to support the public performance duties of local authorities in light of the response to the consultation. We hope to be in a position to inform local authorities and other principal stakeholders of the next steps in this process over the next few weeks.

4.2 Any enquiries in respect of this report should be addressed to Ray Wonnacott at the address on the front page of this report. Ray can also be contacted by phone on 0131 244 7588, or by email: ray.wonnacott@scotland.gsi.gov.uk .

Scottish Executive
Public Service Performance and Improvement Division
13 January 2006

Annex A

Introduction to the Consultation Responses

Summary