Magazine article Public Finance

The CPA's Achilles Heel

Magazine article Public Finance

The CPA's Achilles Heel

Article excerpt

In the High Court last month, a ruling was handed down that could have profound implications for the Comprehensive Performance Assessment. It involved a challenge by the London Borough of Ealing to its CPA categorisation as a 'weak' authority.

What happened was that in the 2004 CPA refresh round, Ealing scored three for its overall service block assessment and three for its corporate assessment. Under the normal matrix, therefore, it would have ranked as a 'good' authority.

However, the Commission for Social Care Inspection had just given it a 'zero star' rating for its social care function because, although its current performance was as good as a number of 'two star' authorities, its capacity to improve was assessed less favourably.

This presented the council with a particular problem. As well as the normal matrix for calculation of CPA scores, there is a further series of hurdles. Superimposed upon the methodology are three Yules' intended to hold authorities back, in specified circumstances, from the category they would otherwise attain under the system. One of the rules, the subject of the challenge in this case, provides that an authority must score at least two (one star) on education, social services and financial standing to achieve a category of 'fair' or above.

This meant that, notwithstanding substantial improvements in the authority's performance, evidenced by a superb 'direction of travel' progress from 'weak' through 'fair' to 'good', the authority was artificially and unfairly demoted. This would have a significant effect on the council, as the availability of freedoms and flexibilities (and indeed the imposition of more regulation) is dependent on CPA status.

Ealing was devastated. The facts led it to look carefully at what had been done and whether this could be sguared with the legal process of the CPA. They concluded that it could not.

The legal provisions underpinning the CPA are to be found in the Local Government Act 2003 but are rarely referred to. In short, there are three stages set down in section 99. First, the Audit Commission has to make 'findings' on the performance of local authorities. Then it has to use those 'findings' to 'categorise' councils into one of five bands and record that in a report.

Finally, the secretary of state has to make an Order using these categorisations, so putting them into law. Section 100 of the Act then sets down the provision linking exercise of powers to the CPA ratings.

So the statutory duty to make a holistic judgement on each authority is that of the Audit Commission alone. In doing so, of course, it can take into account the work of other key inspectorates, principally the CSCI and Ofsted, and use their findings as its own. …

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