Use of resources

2008/09

Briefing

Response to UoR consultation

• 203 responses from all types of organisation, auditors, stakeholders • 61% agreed with overall proposals • Support for individual KLOE ranged from 67% to 89% • Support for new KLOE generally lower • Support across sectors differs

Respondents welcomed…..

• Generic framework • Greater emphasis on VFM, achievements and outcomes • Move to descriptors, rather than criteria • Assessment of UoR in a broader way

But had significant concerns about….

• Proportionality of proposed approach • Fit with other parts of CAA and other assessment frameworks • Preliminary scoring rules

Final UoR framework

Final KLOE

Theme 1 1.1 Financial planning & financial health Theme 2 2.1 Commissioning & procurement 1.2 Understanding costs & performance 2.2 DQ & use of information Theme 3 3.1 Natural resources 3.2 Asset management 1.3 Financial monitoring & reporting 2.3 Good governance and ethical behaviour 2.4 Risk management & internal control 3.3 Workforce planning

Approach

• Proportionate – not all KLOE assessed annually • For 2008/09: – 8 KLOE at districts, Fire, Police, PCTs – 9 KLOE at STCCs • KLOE specified by Commission each year

Specified KLOE for 2008/09

KLOE Managing finances 1.1 Planning for financial health 1.2 Understanding costs and achieving efficiencies 1.3 Financial reporting Governing the business 2.1 Commissioning and procurement 2.2 Use of information 2.3 Good governance 2.4 Risk management and internal control Managing resources 3.1 Natural resources 3.2 Strategic asset management 3.3 Workforce STCCs √ √ √ √ √ √ √ √ √ X Districts √ √ Police √ √ √ √ √ √ √ X X √ √ √ √ √ √ X X √ Fire √ √ √ √ √ √ √ X X √ PCTs √ √ √ X √ √ √ X √ √

1.2 Does the organisation have a sound understanding of its costs and performance and achieve efficiencies in its activities?

KLOE focus The organisation: • understands its costs, including whole life, transaction and unit costs, the main factors that influence these and how they link to performance; • takes account of this understanding of its costs and performance in decision making and commissioning; and • identifies the scope for making efficiencies and is on track to achieve planned efficiencies.

2.1 Does the organisation commission and procure quality services and supplies, tailored to local needs, to deliver sustainable outcomes and value for money?

KLOE focus • • • • • • The organisation: has a clear vision of intended outcomes for local people which shapes its commissioning and procurement, and is based on an ongoing analysis and understanding of needs; involves local people, partners, staff and suppliers in commissioning services; seeks to improve the customer experience, quality and value for money of services through service redesign, making effective use of IT; understands the supply market and seeks to influence and develop that market; evaluates different options (internal, external and jointly with partners) for procuring services and supplies; and reviews the competitiveness of services and achieves value for money, while meeting wider social, economic and environmental objectives.

3.1 Is the organisation making effective use of natural resources?

KLOE focus The organisation: • understands and can quantify its use of natural resources and can identify the main influencing factors; • manages performance to reduce its impact on the environment; and • manages the environmental risks it faces, working effectively with partners.

The use of resources assessment will use the Commission’s current four point scale

• Level 2 only at minimum requirements – adequate Performance • Level 3 consistently above minimum requirements – performing well • Level 4 well above minimum requirements – performing strongly

Link with the VFM conclusion

• UoR framework will be fully integrated with the VFM conclusion • UoR KLOE will form: • the ‘relevant criteria’ for the VFM conclusion • the scored KLOE for the UoR assessment

Conclusion

• Genuine consultation, listened carefully, responded positively • Maintained a rigorous framework, integration with statutory audit, meeting Government expectations • Responded to criticisms about proportionality, burden, corporate assessments

Next steps

• Publish framework for 2008/09 including KLOE and consultation response in mid May • Prepare guidance supporting KLOE by summer 2008 • Further joint CAA consultation in July 2008 • Further consultation on UoR scoring rules