Assessing Public Service Performance in Local Authorities through CPA-A Research Note on Deprivation

By Haubrich, Dirk; McLean, Iain | National Institute Economic Review, July 2006 | Go to article overview

Assessing Public Service Performance in Local Authorities through CPA-A Research Note on Deprivation


Haubrich, Dirk, McLean, Iain, National Institute Economic Review


The UK Government places ever-greater weight on performance assessment of local public bodies through comprehensive performance assessments (CPA). However, the CPA assessment framework has been criticised for its disregard of local factors that are beyond the control of local authorities but that affect their performance. In this article, the assessment framework is described and three different studies are appraised that have investigated the link between deprivation, as one of these external constraints, and CPA performance. Suggestions are developed as to how the analysis can be improved, by extending the choice of dependent variables and explanatory variables so as to be able to use panel data as the investigative method.

Keywords: Structure, scope, and performance of government; State and local government: Health, education, and welfare; Models with panel data; Regional government analysis--general

JEL classifications: H11; H75; C23; R50

Introduction

The UK Government places ever greater weight on performance assessment of local public bodies as a policy tool. In England, assessments are now an integral part of the policy of developing what is called 'earned autonomy', which links some freedoms and flexibilities with a certain level of assessed performance. Specifically, the distribution of central government grant assumes a dominant importance in a local government finance system in which Whitehall funding (currently in the region of 100bn [pounds sterling] per annum) accounts for 75 per cent of local government's financial base. The Audit Commission (AC) publishes comprehensive performance assessments (CPA) scores for all principal local authorities in England (counties, districts and unitary authorities) that aim to describe how effectively these funds have been used.

However, ever since the first round of CPA exercises in 2002, the assessment framework has attracted various criticisms. Should deprivation be taken into account when making a judgement about local authorities' performance in delivering public services? Does it constitute an external constraint on performance that the CPA framework does not adequately address? Is performance correlated with the desirability of areas for living and working? How well does CPA work as a way of granting earned autonomy? Are performance scores valid and reliable indicators at all? Does the CPA mechanism conflict with other government policies, such as targeting resources on the most deprived areas?

This paper evaluates the relationship between CPA scores and deprivation. It reproduces the development of the CPA framework since the Local Government Act 1999, summarises the research reporting on the framework, reviews the results of the first three CPA rounds in 2002, 2003 and 2004, outlines the Audit Commission's plans for future rounds, and finally, in section 4, outlines possible avenues of research.

1. The years 2000/1

1.1 Developing the CPA framework

During 2000 and 2001, the Audit Commission of England developed a new performance management for councils in England, called the Comprehensive Performance Assessment (CPA). It constituted a way of assessing councils' progress in continuously improving their services, a duty placed on them by the Local Government Act 1999. In a 2001 government White Paper (Audit Commission, 2001), CPA was first formally introduced to the public and consultations commenced to come up with the final framework.

The stated objective of the CPA framework was, and continues to be, to target support at those councils that need it most and to grant 'freedom and flexibilities' to the better performing councils. The incentives for the latter included:

* the elimination of 'ring-fencing' from most central governmental grants to the local authority, which allows the latter to spend money on those areas it (rather than the Government) deems most appropriate,

* a three year exemption from subsequent audit inspections,

* an exemption from having a 'cap' imposed on the authority's planned expenditure and the level of council tax it is allowed to raise from its taxpayers, and

* the freedom not to have to submit detailed service plans to central government for approval. …

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