Performance Detailed Report

February 2006




Performance
Management
Liverpool City Council


Audit 2005-2006
External audit is an essential element in the process of accountability for public
money and makes an important contributi...
Performance Management │ Contents 3




Contents
Summary report                                                           ...
4 Performance Management │ Summary report




       Summary report
       Introduction
1    Organisations with effective ...
Performance Management │ Summary report 5




     Audit approach
4   The purpose of the audit was to follow up the previo...
6 Performance Management │ Summary report




       Main conclusions
7    Liverpool City Council has continued to make go...
Performance Management │ Detailed report 7




      Detailed report
      Corporate performance management framework
11  ...
8 Performance Management │ Detailed report



17   Arrangements around value for money are underdeveloped. Whilst performa...
Performance Management │ Detailed report 9



23   Staff feel involved in improving services for customers. Most staff hav...
10 Performance Management │ Detailed report



29   There is regular monitoring of performance at a service level. The dep...
Performance Management │ Detailed report 11



35   Reducing the level of private sector vacancies poses a significant cha...
12 Performance Management │ Detailed report



41   There is a good involvement of staff in improving services. Staff had ...
Performance Management │ Detailed report 13



46   The change in approach of making managers more accountable for sicknes...
14 Performance Management │ Detailed report



    Recommendations
    R1 The Council develops and implements it approach ...
Performance Management │ Appendix 1 – Action plan 15




Appendix 1 – Action plan
Recommendations                     Prio...
16 Performance Management │ Appendix 1 – Action plan



   Recommendations                    Priority   Responsibility   ...
Performance Management │ Appendix 1 – Action plan 17



Recommendations                  Priority   Responsibility   Agree...
18 Performance Management │ Appendix 1 – Action plan



   Recommendations                 Priority   Responsibility   Agr...
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Performance Management

  1. 1. Performance Detailed Report February 2006 Performance Management Liverpool City Council Audit 2005-2006
  2. 2. External audit is an essential element in the process of accountability for public money and makes an important contribution to the stewardship of public resources and the corporate governance of public services. Audit in the public sector is underpinned by three fundamental principles: • auditors are appointed independently from the bodies being audited; • the scope of auditors' work is extended to cover not only the audit of financial statements but also value for money and the conduct of public business; and • auditors may report aspects of their work widely to the public and other key stakeholders. The duties and powers of auditors appointed by the Audit Commission are set out in the Audit Commission Act 1998 and the Local Government Act 1999 and the Commission's statutory Code of Audit Practice. Under the Code of Audit Practice, appointed auditors are also required to comply with the current professional standards issued by the independent Auditing Practices Board. Appointed auditors act quite separately from the Commission and in meeting their statutory responsibilities are required to exercise their professional judgement independently of both the Commission and the audited body. Status of our reports to the Trust/Council The Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit Commission explains the respective responsibilities of auditors and of the audited body. Reports prepared by appointed auditors are addressed to non-executive directors/members or officers. They are prepared for the sole use of the audited body. Auditors accept no responsibility to: • any director/member or officer in their individual capacity; or • any third party. Copies of this report If you require further copies of this report, or a copy in large print, in Braille, on tape, or in a language other than English, please call 0845 056 0566. © Audit Commission 2006 For further information on the work of the Commission please contact: Audit Commission, 1st Floor, Millbank Tower, Millbank, London SW1P 4HQ Tel: 020 7828 1212 Fax: 020 7976 6187 Textphone (minicom): 020 7630 0421 www.audit-commission.gov.uk
  3. 3. Performance Management │ Contents 3 Contents Summary report 4 Introduction 4 Background 4 Audit approach 5 Main conclusions 6 Detailed report 7 Corporate performance management framework 7 Securing improvements in under-performing services 8 Housing benefits 8 Adult assessments 9 Housing re-let times and private sector vacancies 10 The next steps 13 Appendix 1 – Action plan 15 Liverpool City Council
  4. 4. 4 Performance Management │ Summary report Summary report Introduction 1 Organisations with effective performance management arrangements know what they need to do and how to do it. Therefore, they are more likely to be able to improve services to local people. Managing performance involves more than just setting up a system. It is also about getting the right leadership and culture in place, and focusing on what matters most. Background 2 During 2003/04, we undertook a review of performance management at the Council. Our review found that the Council had made good progress in developing its performance management framework since the corporate assessment in 2002. The approach had resulted in service improvements in a number of areas. Whilst there are were still large challenges facing the Council in addressing areas of weaker performance, there were positive indications of progress, including: • a new Corporate Plan; • improvements in performance in a number of areas; • a consistent approach to service planning and performance monitoring; and • strong leadership around performance management. 3 The report highlighted the key areas to address as being: • tackling the persistent number of performance indicators in the worst quartile; • consistent implementation of performance development reviews for all employees; • developing clear targets, milestones and the clear allocation of responsibility for the delivery of the corporate performance plan; and • continuing to improve councillor involvement in the scrutiny of performance management. Liverpool City Council
  5. 5. Performance Management │ Summary report 5 Audit approach 4 The purpose of the audit was to follow up the previous audit with a particular focus on how the Council is managing performance in weaker performing areas. We focused upon: • planning and service review - the arrangements to improve performance including target setting, resource allocation and planning to address areas of weaker performance; • performance management - how managers monitor performance and use information to improve service delivery; • leadership and communication - how managers provide leadership to motivate staff and gain commitment to improvement and the effectiveness of two way communication within service areas; • people management - how individuals are supported and developed to support improvement in performance; and • executive and scrutiny involvement - the role of councillors in the performance management process. 5 Our approach to the review included the following: • an appraisal of key documents including the best value performance plan, corporate plan and service plans; • an evaluation of performance indicators in terms of achievement of targets and improvements; • interviews with portfolio holders and select committee chairs; • interviews with key officers at a corporate level; • interviews with key officers in specific service areas; and • focus groups of frontline employees in specific service areas. 6 It was agreed that the main focus of this review was housing benefits (focusing on how recent improvements were achieved), housing (re-let times and private sector vacancies) and adult social care (assessments) as these areas have remained in lower quartile area or areas that have been identified by the Council as priorities for improvement. In addition to this, we looked at how the Council manages sickness absence at a corporate and service level as the levels of sickness was comparatively higher than other areas. Liverpool City Council
  6. 6. 6 Performance Management │ Summary report Main conclusions 7 Liverpool City Council has continued to make good progress in embedding a performance management culture. Since our last review, there has been a more consistent implementation of the performance development review system (PDR) and there are clearer targets and accountabilities for delivering corporate plan priorities. 8 Performance management arrangements are more proportionate to risk. There is a greater focus on those service areas that have comparatively low performance. There is a good commitment to improvement at a corporate, departmental, employee and councillor level. There is a clear commitment and good involvement from the Chief Executive downward in ensuring that improvements in services are effectively delivered. Whilst significant improvements in performance have not yet been achieved in some areas, building blocks are being put in place in order to ensure that improvements are sustainable in the medium to long-term. The general direction of travel for service improvements is good. 9 Better arrangements to secure value for money have still to be put in place. Cost and performance indicators are not considered alongside each other and this inhibits the Council's ability to demonstrate improvements in terms of economy, efficiency and effectiveness in all areas of its work and decision-making. 10 To help with making improvements, we would make the following recommendations. • The Council develops and implements it approach to value for money for all of its service areas. • Build upon good practice in housing benefits and adult assessments to help improve work in 'Supporting People'. • Ensure that a consistent approach to using comparative information for housing is agreed and implemented. Liverpool City Council
  7. 7. Performance Management │ Detailed report 7 Detailed report Corporate performance management framework 11 The Council continues to make good progress in developing its approach to managing performance. Monitoring against the corporate plan is good and there is a good mix of outputs and outcomes aligned to the Council's aims. Targets and projected yearly out turns are identified. There is good reporting on progress in meeting targets. However, arrangements around value for money are underdeveloped. 12 Performance reports to Councillors have improved but there are still inconsistencies in the frequency of reporting. The Council recently developed quarterly reports for Executive Management Team and Councillors (through overview and scrutiny and committee leads) which identify low performing performance indicators. This allows Councillors to focus on the areas where a significant improvement in performance is required. For example, there is greater corporate support and scrutiny being provided for adult social care. However, reporting cycles for performance are not consistent. For example, the Resources and Children's Services Select Committees have performance monitoring programmed on a four-monthly basis this may increase the risk of low performing areas not being identified by councillors early enough. 13 Performance appraisal is improving. The Council has a process to monitor whether performance review and development (PRD) meetings take place with employees. Service compliance is monitored and there have been improvements since the last review. Most employees receive a PRD and training is linked to their personal developments. 14 A good training programme for councillors on performance management has been developed. The programme covers issues relating to performance management in the national and local context and the role that councillors need to play in the process. Generally these sessions are well attended. 15 The general direction of travel continues to be positive with more than two thirds of performance indicators showing improvements over last year. It still has to tackle areas of poorer performance and pick up the pace of improvement as there are now 32 per cent of performance indicators in the bottom quartile compared to 28 per cent last year. 16 The Council has continued to improve many of its key services, including education, children’s social care, benefits, community safety and street cleaning. However, there has been slow progress in other areas including housing, waste management and recycling, adults social services and in the ‘Supporting People’ initiative. Liverpool City Council
  8. 8. 8 Performance Management │ Detailed report 17 Arrangements around value for money are underdeveloped. Whilst performance information is generally known and understood, the Council does not consider the cost of services alongside performance information. Therefore, it is very difficult to assess whether it is achieving value for money. A more rounded view of the economy, efficiency and effectiveness of its services and compared to others will support improvements in this area. Securing improvements in under-performing services 18 Our work focused on a number of previously under performing areas. Our findings and conclusions are set out below. Housing benefits 19 Plans to improve housing benefits are robust. The service plan for housing benefits shows a clear link to the corporate priority of a 'top quality, value for money services, while keeping the council tax as low as possible'. There are clear and measurable targets in the corporate plan and the benefits service plan to improve the processing time of new claims, dealing with changes in circumstances and ensuring the accuracy of processing up to 2007/08. The benefits service plan also contains good targets for improving claimant satisfaction in dealing with claims. 20 Housing benefits has developed a good performance management culture. The service has recognised the need to manage performance rather than just monitor performance and has clear principles to achieve this including engagement with staff, clarity of purpose, self-assessment, team and individual targets and sharing best practice. There is a weekly analysis of performance and regular meetings of managers at different levels to identify how and why service performance can be sustained and improved. The service has gone through a significant period of business process re-engineering to make improvements to the service it delivers to make it more efficient and effective. 21 There are good processes in place to communicate with benefits staff. A series of structured meetings occur each week at prescribed intervals starting with the Service Management Team. Information from Liverpool Direct Limited and Liverpool City Council management teams is also cascaded across all service areas. A weekly news sheet goes to all staff and referenced series of staff briefing notes is also used. Regular meetings are also held between staff and managers to review team and individual performance. 22 Information submitted to councillors on benefits performance is excellent. It is clear on what performance level it is currently at, whether it has improved or deteriorated, what action helped to achieve this and further action to be taken. Liverpool City Council
  9. 9. Performance Management │ Detailed report 9 23 Staff feel involved in improving services for customers. Most staff have received performance review and development meetings and training is aligned to staff needs. There are good opportunities to make suggestions to improve service performance and to work in groups to solve problems. Good performance is generally recognised and celebrated by senior managers - for example, the Liverpool Direct customer focus awards. This kind of recognition is appreciated by staff. 24 These developments have contributed to improvements in the service. It is making decisions on claims within national standard times (33.5 days compared to national standards of 36 days) and paying 100 per cent of claims within seven days of determination (compared to national standards of 90 per cent). 25 One current gap is an analysis on whether value for money is being achieved. Whilst information on cost and performance is gathered, this is not brought together to conclude if the service is providing good economy, efficiency and effectiveness overall. This is also a current weakness in the Council's approach to value for money. Adult assessments 26 There are improving arrangements to manage performance but these have still some way to go to become embedded. The service plan for delivery and improvement in adult services shows a clear link to the corporate priority of a 'well service, safe and sustainable neighbourhoods with optimum local accountability and influence over service management'. There are clear and measurable targets in the corporate plan and service plan to improve acceptable waiting time for assessments and care packages up to 2007/08 with key actions outlined. The service plan also states the need to embed a performance management culture within the departments and there are overall actions to make improvements in performance. This has been a weakness identified by the Commission for Social Care and Inspection. 27 There is a clear focus on improving performance. This takes place at a number of levels. The first level are regular meetings between the Council's Chief Executive and senior managers of the services as part of the Council's overall improvement agenda. This group oversees progress on improvement plans and how this can be achieved both at a service level and what corporate support is required. Action plans are produced and monitored on a regular basis. 28 Corporate support to re-engineer the way adults assessments are being provided is in place. This builds upon the work carried out in the housing benefit service. For example, there are proposals for initial assessments to be undertaken over the telephone by trained staff through Careline. The purpose of this is to avoid delays caused by inappropriate referrals to other services. Liverpool City Council
  10. 10. 10 Performance Management │ Detailed report 29 There is regular monitoring of performance at a service level. The department have introduced 'performance clinics' to look at performance indicators one by one to explore and challenge why performance is improving in some areas compared to others. This is supported by good information - for example, assessment waiting times can be broken down to individual team level. Consideration is given to see if good practice in one section can be transferred to another and what additional support and assistance is required to make this happen. 30 Processes to engage staff are in place. The service holds bi-monthly workshops which bring together staff from different sections and levels to discuss performance and changes taking place. Most staff have received performance review and development meetings and this is linked to their training requirements. There are good opportunities to get involved in making suggestions to improve service performance but staff feel that this may some times be seen as too focused on performance figures. Good performance is generally recognised and celebrated by senior managers for example, team awards have been introduced. 31 Reports and information for councillors are good. Reports clearly state where performance is strong and where it is weak and this information is used to improve performance. For example, a dedicated project was set up by officers focusing on ten specific performance indicators. This resulted in improvements which have delivered much better levels of case reviews, increased numbers of carers having their needs assessed and better performance in undertaking assessments on time. There is a clear understanding by councillors on the challenges and improvements that need to be addressed in the assessment process. 32 Whilst there is a range of activity taking place to improve performance, it is unlikely to impact significantly upon the performance in undertaking assessments in 2005/06. However, the approach being adopted has the potential to improve performance in the longer-term. 33 There is a gap in the analysis of whether value for money is being achieved. Whilst information on cost and performance is gathered, this is not brought together to conclude if the service is providing good economy, efficiency and effectiveness overall. This is also a current weakness in the Council's approach to value for money Housing re-let times and private sector vacancies 34 The service plan for housing shows clear links to the corporate priority of a 'well serviced, safe and sustainable neighbourhoods with optimum local accountability and influence over service management. There are clear and measurable targets in the corporate plan and housing plans. There are also action plans arising from service improvement priorities for particular services, for example, on repairs and maintenance. Liverpool City Council
  11. 11. Performance Management │ Detailed report 11 35 Reducing the level of private sector vacancies poses a significant challenge which the Council has developed a good approach to address this. There are approximately 13,000 empty properties across the City. In many of the areas, the demand for housing and the areas themselves are still experiencing a period of decline. The Council has good intelligence and information about housing in the city. It works in partnership with others such as through the housing market renewal programme to address the problem through a range of measures such as demolition. The 'living through change' programme tries to maintain the local environment by tackling graffiti, fly tipping and anti-social behaviour. Additional investment of £500,000 has also been introduced to help support these measures but the scale of the problem means that significant improvement is unlikely in the short to medium-term. 36 Investments in improving housing re-let times are beginning to show improvements. For housing re-let times, one of the biggest problems that the Council faced was the poor performance of the previous contactor. In 2004, a new partnering contract was agreed with another organisation and the Council has worked alongside the partner to improve services. A project to re-engineer the service to ensure that properties are re-let more quickly is currently underway. This is beginning to have an effect on improving housing re-let times. 37 For both private sector vacancies and housing re-let times, the Council have put a great emphasis on developing its approach to neighbourhood management. Information on performance such as the level of voids and re-let times to identify how different neighbourhood teams are performing. 38 There is regular monitoring of performance at a service level. The Regeneration Portfolio have introduced performance forums which look at performance indicators at corporate, departmental and service level. The information presented includes a good mix of outcome and satisfaction information. The approach seeks to understand why particular performance is at the level it is, identify actions to improve this and other issues that need to be taken into consideration. 39 There is good monitoring of housing repair contracts. Performance of the repair contractors is formally reviewed on a monthly basis at a joint Performance Review Meeting. This is also reported on a quarterly basis to the Building Maintenance Scrutiny Panel, which is a sub-committee of and the City Council Housing Select Committee. 40 Information presented to councillors for scrutiny is comprehensive but there are inconsistencies in showing how performance is when compared with others. For example, in some cases metropolitan councils are used for comparison and in others 'nearest neighbours' are used, but no rationale is given for this. It is not clear, therefore, how performance comparison is used by the Council to determine if value for money has been achieved. Liverpool City Council
  12. 12. 12 Performance Management │ Detailed report 41 There is a good involvement of staff in improving services. Staff had received performance review and development meetings and this is linked to their training requirements. There are good opportunities to get involved in making suggestions in improving service performance but this may some times be seen as too focused on performance figures. Good performance is generally recognised and celebrated by senior managers, for example, through departmental and corporate magazines. 42 With the changes in the delivery of housing re-let times coupled with a greater focus and scrutiny, the systems to support performance improvement are in place. There needs to be a sustained focus on making sure these are achieved. Sickness absence 43 The Council has an overall target to reduce its levels of sickness absence to a level that would be in the top quartile when compared to others. There are a weaknesses in the approach in that: • no milestone targets have been set to achieve improvement year-on-year to 2007/08; and • there are no targets in service plans to improve levels of sickness from their current levels. This leads to a perception in services that as long as their current rate of sickness is below the Council average and national top quartile there doesn't need to be a focus on making reductions. 44 The one exception to this is the Supported Living and Community Safety portfolio. The levels of sickness absence are at the highest level when compared with other Portfolios. This must performance must be put into the context of the level of sickness absence amongst social workers generally tends to be higher than for other council employees nationally. 45 There has been a good focus at a corporate and departmental level to reducing sickness absence in Supported Living and Community Safety. The Council's Chief Executive takes a direct interest in ensuring that sickness absence is reduced in the Department and additional support is also being provided by the Human Resources and Payroll team. At a departmental level, sickness absence is being managed through a multi-faceted approach. This includes reviewing sickness levels and trends on a monthly basis with the information reviewed at a team and personal level. Managers are accountable and are required to explain the current position in their service and to identify what will be done to improve and if any further support is needed. Liverpool City Council
  13. 13. Performance Management │ Detailed report 13 46 The change in approach of making managers more accountable for sickness absence is being developed across the Council. A new sickness absence policy and procedures have been agreed by the Council. All managers are required to attend the 'Liverpool Way' management training and this programme includes people management. Reviews are also being undertaken of people on long-term absence to ensure that they are effectively managed and supported. The renewed emphasis and improvements in managing sickness, both through managerial responsibility and corporate support, have been recognised by managers. The Council also offers employees an additional two days leave per year for a 'perfect attendance record' as an additional incentive. 47 One recent change is that individuals who have had three or more periods of sickness would not be considered for new positions in the Council. Some managers were not aware of this nor is it reflected in the revised sickness absence policy. There is a risk, therefore, that this may be inconsistently applied and may open up the Council to challenge if it is not formally agreed. 48 The Council is trying to improve monitoring processes for sickness absence and overcome weaknesses that we have previously identified in auditing the best value performance indicator. For example, the implementation of the Oracle manager self-service is a new technology system for recording sickness absence which should help to ensure more reliable information is gathered and will be up-to-date. However, the Council still faces challenges in having accurate information around absence in schools which is part of the definition of the best value performance indicator. 49 Councillors are aware of the current sickness absence levels overall and that the Supported Living and Community Safety Department have the highest levels. Regular reporting of the Council's approach is submitted to Councillors and progress against targets are monitored and reviewed. 50 Whilst some services have been managing sickness absence effectively, the overall approach is still being embedded. However with improved information, monitoring and management, the Council's information shows a reduction in sickness absence levels. The next steps 51 Liverpool City Council has made good progress in embedding a performance management culture. There are still a number of challenges to address to ensure that performance management is consistently applied which was highlighted through the recent Supporting People re-inspection. 52 There is a good focus on the low performing areas within the Council and a commitment to make improvements. To help with making improvements, we would make the following recommendations. Liverpool City Council
  14. 14. 14 Performance Management │ Detailed report Recommendations R1 The Council develops and implements it approach to value for money for all of its service areas. R2 Build upon the good practice in housing benefits and adult assessments to help improve work in 'Supporting People'. R3 Ensure that a consistent approach to using comparative information for housing is agreed and implemented. Liverpool City Council
  15. 15. Performance Management │ Appendix 1 – Action plan 15 Appendix 1 – Action plan Recommendations Priority Responsibility Agreed Comments Date 1 = Low 2 = Med 3 = High R1 The Council develops and 3 Executive Yes The Council is reviewing its Start implements it approach to Management comparative performance with its May 2006. value for money for all of its Team ‘nearest neighbours’ based upon the service areas. latest performance indicator data (ie 2004/05) as the basis for identifying those service areas where it is providing comparatively poor value for money services. Those service areas identified will then be considered for specific value for money reviews during 2006/07 and 2007/08 with the target objectives of improving performance and reducing costs. In addition, service performance will be monitored over time to ensure that there is continuous improvement. Liverpool City Council
  16. 16. 16 Performance Management │ Appendix 1 – Action plan Recommendations Priority Responsibility Agreed Comments Date 1 = Low 2 = Med 3 = High R2 Build upon the good practice 3 Robert Pickering Yes Benefits service is happy to help November in housing benefits and adult to discuss with promote its good practice to SP – 2006 for assessments to help improve Ian McFarlane however, SP is currently agreeing further review. work in 'Supporting People'. project plan with ODPM intervention team and the AC to ensure the SP programme puts the correct foundations in place to ensure sustainable improvement. It is not envisaged that the SP programme will be in a sufficiently robust position before November 2006 at the earliest, at which time the offer from the Benefits service will be further reviewed to consider when it would be best factored in to the SP improvement plan. Liverpool City Council
  17. 17. Performance Management │ Appendix 1 – Action plan 17 Recommendations Priority Responsibility Agreed Comments Date 1 = Low 2 = Med 3 = High R3 Ensure that a consistent 2 Tony Caul Yes Subsequent reports will be amended April 2006 approach to using to include clearer explanations on comparative information for the source and application of housing is agreed and benchmarking information. This will implemented. be applied consistently applied across the Portfolio and in reports/ briefings for members. Reports will include the latest met council performance data – although as it is published eight to nine months after year is finished it can appear out of date. Where appropriate, comparisons with core cities and ‘nearest neighbours’ will used so that colleagues can position Liverpool against councils with similar demographics. For example, where LCC has acknowledged that national decency standard targets will not be delivered, then we can show that the most viable option is a move towards stock transfer of housing stock. Liverpool City Council
  18. 18. 18 Performance Management │ Appendix 1 – Action plan Recommendations Priority Responsibility Agreed Comments Date 1 = Low 2 = Med 3 = High We are seeking to obtain comparative data for ‘local indicators’ (such as housing repairs) through benchmarking forums such as ‘Housemark’ – this will give readers a sense of the operation on the ground. Although there is limited BVPI benchmarking information on expenditure, we are will be exploring ways of obtaining data on ‘value for money’ for inclusion in future reporting. Liverpool City Council

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