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VALUE FOR MONEY STRATEGY

SEPTEMBER 2006

CONTENTS

Page

Management Summary 1

Appendices:

1 Value for Money Definitions 2

2 Strategic, Service & Financial Planning 4

3 Budgetary Control & Project Management 7

4 Benchmarking 9

5 Competitive Tendering & Procurement 32

6 Minimising Waste & Efficiency Improvements 34

7 External Accreditation 39

8 Performance Indicators 41

9 Partnership Working 44

10 Feedback 46

11 Equal Opportunities 47

VALUE FOR MONEY STRATEGY

MANAGEMENT SUMMARY

Introduction a) The Strategic Plan states that “the Council seeks continuous improvement and value for money”. This is re-iterated in its Best Value Performance Plan. b) By ‘Value for Money’ the Council means the optimum balance between economy, efficiency and effectiveness. (See Appendix 1).

High Level Strategy c) Under this strategy the Council proposes to achieve VFM by:

 Ensuring that its limited resources are allocated to its priorities through a rigorous strategic, service and financial planning process (Appendix 2)

 Hitting budgetary targets through tight budgetary control and good project management (Appendix 3)

 Systematically reviewing services for VFM by benchmarking them for efficiency using comparative data from the private and public sectors (Appendix 4)

 Maintaining the policy of competitive tendering and adopting best procurement practices (Appendix 5)

 Minimising waste and achieving efficiency improvements year on year (Appendix 6)

 Measuring service quality against external objective quality standards such as:-

Charter Mark, Investors in People & other external accreditations (Appendix 7)

Nationally published Best Value Performance Indicators and locally determined performance indicators (Appendix 8)

 Working with the Local Strategic Partnership and other partners (Appendix 9).

 Listening to the views of residents, service users, and businesses, and by dealing efficiently with complaints so that problems can be put right quickly (Appendix 10).

 Promoting equality of opportunity (Appendix 11).

This Document d) The remainder of this document contains the appendices referred to above which provide further information and evidence, or pointers to evidence, that the Council is achieving VFM.

1 APPENDIX 1 VALUE FOR MONEY – DEFINITIONS

1.1 Value for Money is the relationship between economy, efficiency and effectiveness. The Council has adopted a simplified version of a model prepared by the Audit Commission:-

VALUE FOR MONEY

Economy Efficiency Effectiveness

COSTS INPUTS OUTPUTS OUTCOMES The price e.g. Cost e.g. Units The impact paid for per Unit of service achieved services provided

Economy is represented by the cost, i.e. the price paid for services.

Efficiency is a measure of productivity – how much you get out (outputs) from what you put in (inputs).

Effectiveness is a measure – qualitative or quantitative – of the impact (outcome) achieved. Outcomes should include aspects of equity.

The Council’s Approach

1.2 Value for Money is high when there is an optimum balance between relatively low costs, high productivity, and successful outcomes.

1.3 Whilst the Council aims for economy, low cost does not in itself guarantee VFM. It has to be considered in the light of the quality achieved.

1.4 High productivity is achieved when outputs are high in comparison with inputs. A cost can be made comparable with other authorities if it is expressed as a unit cost, e.g. cost per head of population or cost per property. For measuring productivity the Council will start by expressing inputs in terms of unit costs. In terms of outputs, there are many statistics collected nationally, e.g. best value performance indicators that can provide a comparative measure.

2 1.5 Most outputs do not provide good measures of successful outcomes. To illustrate this and explain the Council’s approach, let us look at how VFM might link to the Council’s Strategic Plan.

1.6 The Strategic Plan is set out in a hierarchical manner under five headings – safe, sustainable, prosperous and healthy communities, plus corporate governance. At the top level (Level 1) are outcomes, e.g. we want to conserve resources. At Level 2 are objectives which the Council needs to achieve in order to realise the outcomes, and at Level 3 are activities that the Council undertakes in pursuit of the objectives.

1.7 There are then a number of day to day services / tasks that contribute to the activities in the Strategic Plan. (There may be more than one service / task for each activity). These services / tasks are normally associated with a cost centre for accounting purposes.

1.8 Shown below are two activities contributing towards the achievement of the strategic plan:-

Service / Task Strategic Plan Cost Input Output Strategic Plan Outcome Activities Measure Measure Outcomes Measure (Level 3) (Level 1) The provision Ref: 1.3.2.1 £20k Cost per %age of We want to Quantitative of free Increase p.a. number of targeted reduce the assessment of swimming to all attendance at a targeted youths number of the reducing under 18 range of youths attending incidents of numbers of children during facilities, free swims violence violent incidents school holidays activities and committed by events youths. Waste Ref: 2.1.1.1 £2.8m Cost per Recycling We want to Qualitative Collection & Optimise p.a. head of Rate conserve assessment that Disposal recycling and population (BVPI) resources the Council is waste reduction good at opportunities conserving resources achieved by MORI research.

The table illustrates how an outcome measure will vary from an output measure.

1.9 The Council’s Corporate Development Unit will collate data on outcomes. This may be qualitative (e.g. satisfaction levels from a customer survey or MORI poll) or quantitative (e.g. a measurable quality of life indicator).

1.10 There may be a number of Level 3 activities contributing to the high Level 1 outcome in the Strategic Plan. Evidence of their efficiencies might be used to inform a qualitative survey on outcomes.

1.11 Council will:-

 aim to drive down costs subject to acceptable quality

 Measure inputs against outputs to determine efficiency

 Collect qualitative and quantitative information to assess outcomes.

3 APPENDIX 2

STRATEGIC, SERVICE AND FINANCIAL PLANNING

Value for Money Considerations in the Annual Strategic, Service and Financial Planning Process

The Council adopts annually strategic, service and financial plans that cover a three-year medium-term planning horizon (1).

The purpose of these plans is to clearly set out:-

 what the Council intends to achieve,  how it will do it  what resources are required and how they are targeted toward priorities  how the Council will measure its achievement.

The process explicitly links strategic, service and financial planning and follows the Budget and Policy Framework Procedure Rules set out in the Constitution (2) which ensure that appropriate consultation takes place.

Planning starts from a clear understanding as to the Authority’s statutory services and the range of discretionary services it provides (3). Whilst recognising that the Council has a duty to perform its statutory functions it will not apply resources to these before discretionary activities if it considers that value for money has not been demonstrated.

The Council’s principal discretionary service is leisure. Expenditure is comparatively low when compared to nearest neighbour authorities.

For the 2005/06 revenue budget officers prepared a base budget capable of supporting existing services, applied the efficiency gains that had been identified and provided members with proposals for additional expenditure to either achieve an outcome included in the strategic plan, improve a best value performance indicator, or achieve a service improvement (4).

During 2005/06 the Council concentrated on developing eighteen service plans so that, for the period 2006-2009, every outcome in the strategic plan was allocated to one of the service plans (5), which also included the operational outcomes expected from the service. They included best value or local performance indicator targets, a workforce plan and a risk assessment, enabling estimates to be prepared to achieve the service plan over the three year period. These estimates formed the base budget and the variances to it for consideration by members. Forecasts take into account inflation on pay, interest rates and other economic factors over the three year period (6).

The extent to which higher spending is in line with stated priorities

The Council allocated new funding from its budget in 2005/06 for leisure concessions (e.g. free swimming), and the extension of leisure services and play schemes for young people as diversionary activities. It froze the cost of concessionary bus fares, and ensured that disabled facility grants would be available. All these measures were designed to putting extra resource into priority areas (7).

In 2006/07 the Council targeted expenditure at priorities as follows:

4 Community Revenue Capital Investment Programme Priority Safer Extend the free swim scheme for Play Areas (£48k) Communities young people to all school holidays at Security measures for council and Sir James Altham Pool and William other properties (£178k) Penn Leisure Centre (£27k) New bus shelters (£5k) Extending the opening arrangements at the Croxley Skate Park (£17k) Healthy Implement the leisure improvement New investment in swimming Communities plan (£40k) facilities (£3.1m) Operate Watersmeet as a community Leisure schemes (£190k) hall and to hold the annual pantomime DDA works to pavilions (£931k) (£120k) Cycle tracks (£50k) Big Lottery Play Application Research (£20k) Access to mainstream leisure facilities for young disabled people (£3k) Sustainable Additional grounds maintenance Aquadrome algae (£40k) Communities (£20k) Nature reserves and similar sites Additional planning resources to (£103k) protect the environment (£19k) Waste minimisation (£103k) Prosperous Youth Housing Service Project for Highway Improvements (£75k) Communities homelessness prevention (£29k) Renovation and disabled facility Additional funding for citizens advice grants (£368k) bureaux (£12k) Retail parades (£10k) Additional funding for the implementation of the new concessionary travel scheme (£313k)

Policy Decisions

Reports to members seeking policy decisions are prepared using a standard template (8) the main features of which are:

Detailed financial implications in order that members may understand the full short and long-term costs of their actions. These included the costs, cashable and non-cashable savings over the three year medium term and an annual cost or saving thereafter. Bids for capital investment have to include any on-going revenue consequences (costs and savings).

Staffing, legal, environmental , equal opportunities, community safety, customer services centre, and website implications

A full risk assessment in accordance with the Council’s risk management strategy (9).

The extent of long term cost considerations with major investments or partnerships

The Council’s capital programme is linked to its priorities. The process is set out in the Capital Strategy (10). Capital spending decisions are always taken with full information on the revenue implications and financial forecasts of the longer term implications. The council is improving the management of its capital programme which has experienced ‘slippage’ in recent years. Most projects are now completed on time and on budget (11).

The Council requires a detailed financial appraisal and risk assessment to be carried out for new capital schemes (12). The Capital Strategy and Asset Management plans (13) are overseen by an officer team who validate bids for capital funding to ensure that they contribute to the Council’s objectives and have measurable outputs. That group also recommend a basis for prioritising schemes competing for scarce resources. 5 References: (1) Council – 140206 – Budget Recommendations http://www.threerivers.gov.uk/Default.aspx/Web/FullCouncil14February2006 (2) Constitution Part 4– Budget and Policy Framework Procedure Rules http://www.threerivers.gov.uk/GetResource.aspx?file=constitution %202003%20(14)%20(2006%2007%2024).doc (3) Executive Committee – 060206 – Strategic, Service & Financial Planning – 2006-2009 http://www.threerivers.gov.uk/GetResource.aspx?file=06%2002%2006%20EX%20i%20- %20(4%205%206%207%208%209%20and%2010)%20strategic%20service%20and%20financial %20planning.doc (4) Executive Committee – 310105 – Strategic, Service & Financial Planning – 2005-2008 http://www.threerivers.gov.uk/GetResource.aspx?file=05%2001%2031%20EX%20i%20- %2004,%2005,%2006,%2007%20And%2008%20-%20service%20planning.doc (5) Service Plans (6) Executive Committee – 040906 – Strategic, Service & Financial Planning – 2007-2010. See particularly Appendix 4 http://www.threerivers.gov.uk/GetResource.aspx?file=06%2009%2004%20EX%20i%20- %20(08)%20strategic,%20service%20and%20financial%20planning.doc (7) Your Council Tax Bill – TRDC – February 2005 (8) Committee Report Template (9) Risk Management Strategy http://www.threerivers.gov.uk/GetResource.aspx?file=Risk%20Management%20Strategy %20Statement%20-%20July%202006.pdf (10) Capital Strategy (11) Resources Policy Panel – 150606 – Setting a Capital Programme http://www.threerivers.gov.uk/GetResource.aspx?file=06%2006%2015%20RS%20i%20- %20(08)%20setting%20a%20capital%20programme.doc (12) Template for Project Initiation Document (13) Asset Management Plan

6 APPENDIX 3

BUDGETARY CONTROL AND PROJECT MANAGEMENT

Monitoring Costs – Budgetary Control

The Council’s aim is that there should be no significant unintended high spending and that where minor overspends have been identified they are addressed and managed. There should be plans in place to address overspends .

Monthly Budget Monitoring

Over the past three years, the Council has strengthened its budget monitoring processes:-

 From April 2004 it introduced monthly, as opposed to quarterly, monitoring reports to Executive Committee and policy panel members (1).

 With effect from April 2005 the monitoring reports were amended to allow tracking of the cashable and non-cashable efficiency gains targeted by the Council (2).

 And from April 2006 following consultation with cost centre managers, they are provided with more detailed information on spend to date and projected expenditure.

The budget monitoring reports update the three year medium term financial plan for variances to the budget and propose remedial action where overspends are reported. Service managers have access to the financial information system and are supplied with a ‘key budget indicator’ report (3) highlighting the high spending elements of the budget and those risk assessed items most likely to vary (e.g. income affected by economic or climatic factors). Budgets are profiled on the financial information system and key budgets varying from their profile highlighted in the ‘key budget indictor’ report. The Accountancy Section prepares the composite report and keeps a record to ensure all responsible budget holders produce an individual monthly exception report (4).

In the light of under-spends experienced by the Council in recent years reports have been produced for members on the improvements being made (5) and reports extracted from the financial information system to highlight those budgets particularly affected in order that further investigation may take place at ‘star chamber’ meetings with cost centre managers (6).

Project Management

The Council has actively addressed the management of its capital investment programme which, whilst being delivered within budget has in recent years experienced delays in completion (7) (8) (9). Most projects are now completed on time and within budget. The Capital Strategy & Asset Management Team of officers regularly meet to consider and monitor the progress on achieving all of the Council's capital programme.

Project Initiation Documents are prepared for all major projects (10) and progress monitored by the Management Board (11).

7 References:- (1) Financial Position Statement & Budget Monitoring Report – August 2005 (Month5) - TRDC (2) Revenue Budgetary Control Return (3) Key Budget Indicators (4) Schedule of Budgetary Control Returns (5) Resources Policy Panel – 150606 – Setting a Capital Programme http://www.threerivers.gov.uk/GetResource.aspx?file=06%2006%2015%20RS%20i%20-%20(08)%20setting %20a%20capital%20programme.doc (6) Extract from Financial Information System (7) Delivering the Capital Programme – Project Plan Update – Capital Strategy & Asset Management Team (8) Management Board – 060905 – Delivering the Capital Investment Programme (9) Financial Position Statement & Budget Monitoring Report – July 2005 (Month 4) - TRDC

8 APPENDIX 4 BENCHMARKING

Introduction

The purpose of benchmarking is to compare the Council with other organisations so that it can learn from them how to improve its economy, efficiency and effectiveness.

Statistical Tools - The Use of Regression

Linear regression is a statistical tool used to determine whether two (or more) variables are linearly related. Suppose you want to determine the relationship between council expenditure and the number of properties in a district, and you have the data from a number of authorities (observations). The general form of the relationship is:

Yi = a + bXi + errori

Where

Yi = value of Y (expenditure) for observation i a = average value of Y (expenditure) when X (number of properties) is zero b = average change in Y (expenditure) given a one unit increase in X (number of properties) Xi = value of X (number of properties) for observation i errori = portion of Y (expenditure) that is unrelated to X (number of properties), i.e. due to other factors.

One statistic resulting from the regression, called the “Adjusted R Square” determines how strong the relationship between expenditure and the number of properties is. The nearer to 1 the adjusted R square figure is, the stronger the relationship. A value of 0.4 would indicate that about 40% of expenditure is determined by the number of properties and 60% by other factors.

The Council’s Approach

In the first instance, the Council will use regression techniques to help it benchmark its efficiency against other public and private sector organisations.

This can be done at authority level (headline comparisons), for a group of services, or at service level.

The process will be that:-

a) In all cases an input measure will be determined. This must include as a minimum the cost of the service, but should ideally reflect a cost per property, per head or other appropriate unit determined as being appropriate through linear regression techniques. The input measure should be capable of benchmarking with other organisations.

b) An output measure will be agreed which could be the number of units of service provided or a best value performance indicator capable of benchmarking with other organisations.

It should then be possible to plot the Council’s position in respect of other authorities, and carry out a further regression to determine whether the measure of efficiency is appropriate e.g.:-

9 ) £ (

n o i t a l u p o p

f o

d a e

InputH (Y)

(Y)r e p

t s o C

Line of ‘Best Fit’

Three Rivers X Authority A X Direction of Travel

Output (X) BVPI (%)

Note that whilst Authority A’s costs per head of population might be less than Three Rivers this has to be considered in the light of the output achieved. (In this case a best value performance indicator measured as a percentage).

Note also that Authority A, whilst being cheaper than Three Rivers might not be achieving the output expected of an authority incurring its level of expenditure, whilst Three Rivers is performing well in that respect.

The Council should be driving costs down and outputs up to improve efficiency. The direction of travel over a period of time should demonstrate this.

Best Value and Internal Reviews

Selected services have been subject to Best Value Reviews carried out in line with Best Value legislation. BV Reviews have been carried out into charging (10), procurement (11), property (12) and operational planning (13). Recent reviews include Transportation (14) and Information Communication and Technology Services (15). A review into Social Inclusion and Working with the Voluntary Sector is on-going.

Service Reviews into Leisure provision (16) and the waste collection service (17) (18) have been carried out within the two last years. Refuse collection is an area of high cost for the Council and is to be the subject of a further VFM review in 2006/07.

Other sources of information and benchmarking are also used, for example:- 10  the Legal section’s hourly rates are 25% less than comparable law society rates (123).

 the Building Control Section is required to breakeven and a measure of how effectively the section has controlled its costs is that its charges have been increased by less than the rate of inflation (124).

11 Headline Comparisons

Data Sources

In headline terms it is difficult to compare the Council with the private sector. Measures of profitability (e.g. share price/earnings ratios) simply do not exist in the context of local authorities. Nevertheless there are plenty of data sources that enable comparisons between councils. a) CIPFA Finance and General Statistics (1)

IPF Ltd, a company owned by the Chartered Institute of Public Finance and Accountancy, publish annually general demographic and geographic statistics and financial information based on councils’ budgets. The financial information is in the format prescribed by the ‘Best Value Accounting Code of Practice’ and the ‘Code of Practice on Local Authority Accounting in the United Kingdom: A Statement of Recommended Practice’. This means that support costs should be allocated to front line services and that costs for support services, e.g. accountancy, legal, ICT are not shown separately. b) Best Value Performance Indicators

Local authorities are statutorily obliged to report BVPIs as defined by the Department for Communities and Local Government. These cover most of the activities of local authorities (See Appendix 8) c) Benchmarking Groups

The local government community has voluntarily set up a number of benchmarking groups. The Council belongs to the following:-

CIPFA Accountancy Benchmarking Group CIPFA Human Resources Benchmarking Group District Surveyors Association (Building Control Quality Performance Matrix) Hertfordshire Benefits Managers Group Hertfordshire Building Control Benchmarking Club Hertfordshire Chief technical Officers Association Hertfordshire Local Land Charges Group Hertfordshire Personnel Officers Group Hertfordshire Revenues and Recovery Group Hertfordshire Waste Partnership's Waste Strategy Implementation Group (WSIG) Inter Authorities Group IPF Asset Management Planning Network SOCITM (Society of IT Management) KPI Database Sports England National Benchmarking Group d) Council Websites

Increasingly, information can be obtained from council websites. e) Hertfordshire Local Authority Finance

This is prepared by the Hertfordshire Chief Financial Officers’ Association and gives comparative financial data for the ten districts and county council. f) The Index Of Multiple Deprivation 2004

12 This is used by government to rank areas of the country in order to identify priority areas for improvement. The overall index combines data from a range of sources covering income, employment, health and disability, education, skills and training, barriers to housing and services, crime and living environment. (Using the IMD 2004 average scores, the Three Rivers district is the third least deprived district in Hertfordshire. It falls in the 20% least deprived districts in the East of England Region, and in the 20% least deprived districts in England as a whole. However this positive view masks smaller pockets of significant deprivation within the district). g) Other Sources

Authorities publish their budgets, accounts and best value performance plans. Three Rivers officers often obtain information from other councils by direct contact.

Who should comparisons be made with?

Benchmarking is best carried out against similar organisations. For example, a headline comparison which benchmarked Three Rivers with a county council would almost certainly be misleading. Some options are given below. a) Hertfordshire District Councils

Comparisons are frequently made with the other 9 district councils in Hertfordshire. There is a danger in limiting the sample to this relatively small size. The authorities vary in character:- |------Range ------| Lowest Three Rivers Highest Population (LA’s estimate at June 2006) ‘000s 79.300 84.000 138.700 Area (Hectares) ‘000s 2.142 8.882 47.567 Population Density (Persons per Hectare) No. 2.8 9.5 37.0 Domestic Properties ‘000s 33.230 34.010 57.695 Non-Domestic Properties ‘000s 1.609 1.770 4.039 Budget Requirement £000s 10,104 12,264 18,780 b) Eastern Region Authorities

The Council is situated in the Eastern Region for the purposes of regional government. Data is readily available for the 44 district councils within the region. Whilst this provides a larger sample size there is a significant range of characteristics:-

|------Range ------| Lowest Three Rivers Highest Population (LA’s estimate at June 2006) ‘000s 59.700 84.000 166.500 Area (Hectares) ‘000s 2.142 8.882 142.877 Population Density (Persons per Hectare) No. 1.0 9.5 37.0 Domestic Properties ‘000s 20.198 34.010 71.356 Non-Domestic Properties ‘000s 1.609 1.770 7.450 Budget Requirement £000s 8.235 12,264 28.788 c) Nearest Twenty ‘Neighbours’

IPF Ltd have developed a model which mathematically determines those council’s with the most similar characteristics. The IPF Website explains the methodology as follows:-

“Comparative analyses between 'subjects' can be drawn by means of a number of data reduction techniques.

Nearest neighbours is one of them and it follows the traditional 'distance' approach. Each of the variables is standardised (with a mean value of zero and standard deviation of 13 one) and Euclidean 'distances' between all possible pairs of local authorities is calculated.

To arrive at the final distance measure between authorities, these distances are then summed across for every single indicator and 'rebased' by assigning a distance of 1 to the farthest neighbour. Therefore, all overall distances will then lie between zero and one.

The output returned by these calculations is a simplistic way of presenting a fairly complex underlying idea. Broadly speaking results and common sense go hand in hand reasonably well. Nevertheless, the outcome relies on the indicators and mathematical procedures used.”

The nearest twenty neighbours group of authorities (also referred to as “the family group”) is unique to Three Rivers. The variables (see above) that are used are:-

Population % of population aged 0 to 17 % of population aged 75 to 84 5 of population aged 85 plus Enumeration district based density Enumeration district based sparsity Taxbase per head of population % unemployment % daytime net inflow Restaurants per 1,000 population Shops per 1,000 population Housing Benefit Caseload (weighted) % of people born outside UK, Eire, EC, Old Commonwealth and USA % of households with < 4 rooms % of households in purpose-built flats rented from LA or HA % of persons in lower socio-economic classification Standard morbidity ration for all persons Authorities with coast protection expenditure Non-Domestic rateable value per head of population % of properties in Bands A to D % of properties in Bands E to H Area Cost Adjustment (other services block)

The Council’s nearest twenty ‘neighbours’ (together with their CPA rating) are:

1 Hertsmere Hertfordshire Fair 2 Epping Forest Essex Good 3 Reigate and Banstead Surrey Good 4 Brentwood Essex Good 5 St Albans Hertfordshire Fair 6 Tandridge Surrey Good 7 Sevenoaks Kent Good 8 Runnymead Surrey Excellent 9 Epsom and Ewell Surrey Good 10 Spelthorne Surrey Excellent 11 Waverley Surrey Good 12 Guildford Surrey Excellent 13 Woking Surrey Good 14 Elmbridge Surrey Excellent 15 South Bucks Buckinghamshire Fair 16 Chiltern Buckinghamshire Excellent 17 East Hertfordshire Hertfordshire Good 14 18 Mid Sussex West Sussex Fair 19 Horsham West Sussex Excellent 20 Broxbourne Hertfordshire Good

The majority are distributed around the M25 corridor. In terms of CPA scores there are 6 ‘Excellent’, 10 ‘Good’ and 4 ‘Fair’ authorities. Whilst there is still some variation in characteristics this provides a larger sample size. |------Range ------| Lowest Three Rivers Highest Population (LA’s estimate at June 2006) ‘000s 62.200 84.000 133.400 Area (Hectares) ‘000s 3.407 8.882 53.028 Population Density (Persons per Hectare) No. 2.4 9.5 20.0 Domestic Properties ‘000s 25.628 34.010 54.910 Non-Domestic Properties ‘000s 1.638 1.770 4.106 Budget Requirement £000s 7.815 12,264 18.780

The council ranks 16th in size of population, area and number of (domestic) properties.

It is suggested below that the most appropriate comparisons are those with the ‘nearest twenty neighbours’ group of authorities.

Nevertheless when carrying out any benchmarking exercise using these authorities caution has to be applied because:-

Of the nearest twenty neighbours only eight retain council housing stock.

Of the nearest twenty neighbours five, do not have parish councils. The district councils’ budget requirement figure includes parish precepts.

Input Measures

The Council’s approach to benchmarking is described above. The process demands that in all cases an input measure will be determined. a. Absolute Costs

Comparing absolute costs can be misleading since they are likely to be affected by the size of authority, e.g. the number of properties served or the resident population. (More appropriate input measures are suggested below). Nevertheless, an understanding of the Council’s cost base is important to ensure that resources are being allocated to the authority’s priorities and that the reasons for different levels of expenditure can be explained.

The Council’s estimated expenditure in relation to its nearest twenty neighbours is shown at Annex 2.

An analysis of the Council compared to its nearest twenty neighbours reveals:-

 The Council’s estimated expenditure on services is:-

Total Service Expenditure 2004/05 2005/06 2006/07 Three Rivers £000s 12,632 12,788 14,086 Neighbours – High £000s 19,052 19,797 21,493 Neighbours – Low £000s 7,835 8,342 8,984 Three Rivers Rank 13th 15th 12th

The Council currently has the 12th highest level of expenditure on services of its nearest neighbours, i.e. slightly lower than median expenditure.

15  That the council’s budget requirement is ranked 10th most expensive in absolute cost terms.

 Three Rivers‘ highways expenditure is the second most expensive of the twenty-one authorities. It includes parking services – where at £153k we are the second most expensive in a range from £157k (expenditure) to £4,310k (income). This reflects the fact that the Council has taken a positive decision not to charge for short term shoppers’ car parking. By not imposing these charges the Council is trying to improve economic vitality under the ‘prosperous communities’ theme of its Strategic Plan and ensure that town centres are accessible to all. The Council has the fifth highest expenditure on public transport (concessionary fares). As part of the ‘prosperous communities’ theme the Council also wants to work towards equalising opportunities for access to transport across the district and is prepared to spend a little more than comparative authorities on concessionary fares (2).

 Waste collection is Three Rivers’ highest costing service but shows an improving position in comparison with our twenty nearest neighbours.

Waste Collection 2004/05 2005/06 2006/07 Net Expenditure £000s 2.739 2.307 2.142 Net Expenditure Rank 3rd 4th 10th

The Council carried out a benchmarking exercise in 2004 with other authorities on BVPI 86 (waste management costs). This is to be repeated during 2006/07 with cross reference to other performance indicators against cost. The Council will take factors such as local costs and geography into account when considering the costs of this and other individual services. For example, the semi-rural nature of the district will be taken into account. The cost per head of population will feature too. Derived from the absolute costs above these are:-

Waste Collection 2004/05 2005/06 2006/07 Cost per Head £ 33.20 27.50 25.50 Cost per Head Rank 1st 2nd 5th

The Council recognises that its spending on waste collection is relatively high, but this is driven by its stated aim under its sustainable communities theme of wanting to conserve resources by minimising waste (2).

 The nine authorities from Surrey within the nearest neighbour group are all ranked as most expensive on social services (and this will have something to do with their relationship with the county council). Their costs range from £394k to £1,770k. Of the remaining authorities only four incur social services expenditure and this ranges from £100k to £316k. This will skew total expenditure figures.

 The government applies an area cost adjustment to authorities’ formula spending shares (for grant purposes) as follows – Essex 1.0890: Hertfordshire 1.1054: Surrey 1.1323. This implies that the government believes that costs vary depending on location. Demography does not add significantly to the Council’s costs (particularly in relation to its neighbouring authorities) but the Council’s geographical location outside London does. Of particular significance is the cost of housing. Property prices are the highest in Hertfordshire.

 The Council’s central services are relatively inexpensive (ranked 13th). The Council’s VFM profile report produced by the Audit Commission in 2005 confirmed that it allocates 100% of its central overheads to services. The Council has always attempted to do this as it believes that not to do so creates an uneven playing field 16 when comparing the costs of in-house front line services to those of the private sector. This could mean that decisions are based on false assumptions when services are put out to competitive tendering. Not all councils allocate all of their central overheads to services. This can explain why service costs may appear to be at odds to those of the other ‘comparable’ councils. Of the 16 ‘nearest neighbours’ included in the Audit Commission’s profile report 10 do not fully allocate these costs.

 The Council has the fourth highest revenue contribution to capital.

The council’s largest support service budget is for its information and communication technologies. Consequently the Council carried out a Best Value Review of these services during 2004/05 and prior to the renewal of its facilities management IT contract and is to review the situation during 2006/07.

Comparative costs may be affected by the way pension costs have been accounted for. Three Rivers was one of only 25 authorities nationally to have returned figures on an FRS17 basis (2005/06) b. Cost per Property

i) Council Tax Requirement per Council Tax Base (Band D Council Tax Charge)

As publicly the level of Council Tax is regarded as being significant, the Council needs to know how it compares with other authorities.

Total Council tax levels in Three Rivers (i.e. including county council and police authority precepts) are marginally higher when compared to national figures but on a par with regional levels:-

Average Band D Council Tax Charge 2004/05 2005/06 2006/07 £ £ £ Three Rivers 1,181 1,235 1,292 East of England 1,186 1,232 1,290 South-East England excluding London 1,169 1,218 1,275 England and Wales 1,151 1,197 1,250

In comparing district councils within a two-tier structure it has to be borne in mind that 85% of the Council’s total council tax charge derives from the precepts of the county council and police authority.

To enable proper comparison, however, the band D council tax charges for county councils, police and fire authorities included in the total council tax charge, should be excluded to leave just the district council element. This is shown at Annex 2.

The level of council tax charged is wrongly regarded as a measure of VFM because it takes no account of the outputs and outcomes achieved by an authority. However it could be used as an input measure – proxy for cost per property. Annex 1 provides more information of the variables included in the council tax calculation and the influence of government grant on the council tax.

The correlation between the Council Tax Requirement and the Council Tax Base is shown below:-

17 Dependant Variable Independent Variable Adjusted (Y) (X) R Squared Council Tax Requirement - Hertfordshire Council Tax Base - Hertfordshire 0.646 Council Tax Requirement - 20 Neighbours Council Tax Base - 20 Neighbours 0.867 Council Tax Requirement - Eastern Region Council Tax Base - Eastern Region 0.636

With regard to the twenty nearest neighbours, this demonstrates a close relationship between net expenditure (after government grant) and the number of properties represented by the council tax base. Of the twenty-one authorities, fifteen have a lower band D council tax charge.

ii) Council Tax Requirement per Property

The correlation between the Council Tax Requirement and the number of properties is shown below:-

Dependant Variable Independent Variable Adjusted (Y) (X) R Squared Council Tax Requirement - Hertfordshire No of Properties - Hertfordshire 0.584 Council Tax Requirement - 20 Neighbours No of Properties - 20 Neighbours 0.781 Council Tax Requirement - Eastern Region No of Properties - Eastern Region 0.510

This shows that statistically the council tax requirement is more closely related to the council tax base (see a above) than the actual number of domestic properties.

iii) Budget Requirement per Property

The correlation between the Budget Requirement and the number of properties is shown below:-

Dependant Variable Independent Variable Adjusted (Y) (X) R Squared Budget Requirement - Hertfordshire No of Properties - Hertfordshire 0.706 Budget Requirement - 20 Neighbours No of Properties - 20 Neighbours 0.884 Budget Requirement - Eastern Region No of Properties - Eastern Region 0.772

The Council has the second highest budget requirement per property when compared to its nearest 20 neighbours. As opposed to the council tax requirement above, the budget requirement ignores the impact of government grant. These statistics show that it is the number of properties that has the greatest influence on the budget requirement. c. Cost per Head of Population

i) Council Tax Requirement per Head of Population

The correlation between the Council Tax Requirement and Population is shown below:-

Dependant Variable Independent Variable Adjusted (Y) (X) R Squared Council Tax Requirement - Hertfordshire Population – Hertfordshire 0.559 Council Tax Requirement - 20 Neighbours Population – 20 Neighbours 0.765 Council Tax Requirement - Eastern Region Population – Eastern Region 0.503

Population is not as great an influence on the council tax requirement as the council tax base or the number of properties.

18 ii) Budget Requirement per Head of Population

The correlation between the Budget Requirement and Population is shown below. Whilst the council’s budget requirement is ranked 10th most expensive in its nearest neighbour group in absolute cost terms it is the 6th most expensive per head of population.

Dependant Variable Independent Variable Adjusted (Y) (X) R Squared Budget Requirement – Hertfordshire Population – Hertfordshire 0.677 Budget Requirement – 20 Neighbours Population – 20 Neighbours 0.874 Budget Requirement – Eastern Region Population – Eastern Region 0.732

These statistics show that population has nearly as great an influence on the budget requirement as the number of properties. d. Other Input Measures

Other measures have been considered but discarded, e.g. the correlation between budget requirement and area (hectares):-

Dependant Variable Independent Variable Adjusted (Y) (X) R Squared Budget Requirement – Hertfordshire Area – Hertfordshire 0.358 Budget Requirement – 20 Neighbours Area – 20 Neighbours 0.240 Budget Requirement – Eastern Region Area – Eastern Region -0.022 e. Correlation

All data above relates to the 2006/07 financial year. The tables above show that the strongest relationships occur when the ‘nearest twenty neighbour’ group of authorities is used. Within that group the highest correlations suggest that the number of properties and population are good determinants of budget requirement. The budget requirement per property or head would therefore seem to be the best headline input measure.

Output Measures

There are few output measures applying to the Council as a whole. a. Comprehensive Performance Assessment (CPA)

The Council achieved a ‘good’ rating in May 2004.

Under CPA 2005 it is aiming to achieve:-  a positive direction of travel statement annually  Level 3 of Use of Resources by March 2007.

CPA is not, however, a measure of value for money, although the rating might be used as a proxy for an ‘outcome’. b. Best Value Performance Indicators

The latest published Best Value Performance Indicators (2004/2005) of the Council’s twenty nearest neighbours have been collated and a headline measure of performance calculated (See Appendix 8). Three Rivers was ranked equal 11th of the twenty one nearest neighbour authorities.

19 Efficiency Measures

From the above information an efficiency measure at headline authority level might be budget requirement per property or head of population (input measure) tested against CPA Rating (output measure) for the nearest twenty neighbour authorities. However this gives an adjusted r square result of only 0.041, i.e. there is little evidence of a relationship between these measures.

The hypothesis that a good efficiency measure at headline authority level might be budget requirement per property (input measure) against BVPI scores (output measure) was tested. This gives an adjusted r square result of -0.04, i.e. there is little or no evidence of a relationship between these measures.

Conclusions

VFM should not be judged on input measures alone, output measures are also required. Given the limitations of the efficiency measures at headline authority level, the Council should judge VFM at service level.

The Council should aim to achieve high performance across the range of its priority services whilst driving down overall costs and unit costs compared to others. Areas of higher spending should be in line with stated priorities and the investment should result in improved services.

Action Required

Each service should be reviewed for VFM in turn. The Executive Committee has requested that Waste Collection and ICT services are reviewed for VFM during 2006/07 on the basis that they are the most expensive front line and support services respectively.

For each of its principal services, the Council should identify the costs and the ‘Level 3’ activities in its Strategic Plan to which that service contributes.

The relevant Head of Service should be asked to:- a) determine an input measure, which must include as a minimum the cost of the service, but should ideally reflect a cost per property, per head or other appropriate unit determined through linear regression techniques (see above) and be capable of benchmarking with other organisations. b) determine an output measure which could be the number of units of service provided or a best value performance indicator capable of benchmarking with other organisations. c) collect the relevant local data and that of comparative organisations and report the outcome in their service plan.

20 References: (1) BV Review - Charging (2) BV Review - Procurement (3) BV Review - Property (4) BV Review - Operational Planning (5) BV Review - Transportation (6) BV Review - ICT Services (7) Leisure & Community Policy Panel – 081204 – Leisure Review (8) Public Services & Health Policy Panel – 080704 – Comparison of Waste Collection Costs with Other Authorities (9) Public Services & Health Policy Panel – 111104 – Comparison of Waste Collection Costs with Other Authorities (10) Legal Hourly Rate Calculation 2005/06 & www.hmcourts- service.gov.uk/publications/guidance/scco/appendix_2.htm (11) Building Control Account – Annual Monitoring Return to ODPM. (12) CIPFA Finance and General Statistics 2005-2006 CIPFA Finance and General Statistics 2006-2007 (13) Strategic Plan - TRDC

21 Annex 1

The Council Tax Calculation & Government Grant

The Band D Council Tax is calculated as follows:-

Band D Council Tax = Budget Requirement – Government Grant +/- Collection Fund Adjustment Council Tax Base

Where:

Budget Requirement is an Authority’s expenditure, including parish precepts and revenue contributions to capital, after accounting for income from sales, fees, charges and some specific government grants and after contributions to or from balances

Government Grant Comprises a distribution from the National Non-Domestic Rate Pool and a revenue support grant. The former is calculated as an amount per head of population and the letter as a formulaic grant.

Collection Fund Adjustment is an adjustment made for any variance in the under or over collection of council tax from the allowance made in the council tax base figure for non-collection.

Council Tax Base Is a figure expressed in Band D equivalents of the numbers of properties from which council tax is collectable.

Council Tax Requirement Is the Budget Requirement less Government Grant plus or minus the Collection Fund Adjustment, i.e. the numerator above.

The Band D council tax charge is widely used for comparison nationally. It should be noted, though, that in some authorities, Three Rivers included, it is not the most common property banding. Also, the bill received by the resident may include charges for county council, district and parish councils, police authority and fire authority. An individual’s bill may also be reduced for single occupancy or inability to pay.

It can be seen from the calculation above that council tax is influenced by grants received from the government. Grant is a function of population, council tax base, and other adjustments for deprivation, visitors, fixed costs, capital financing, and costs in different parts of the country. The government grant calculation for 2006/07 is shown below and demonstrates the complexity of the grant system and the factors affecting grant. The grant calculation is included in the VFM Strategy, to demonstrate that, as an input measure, the council’s ‘budget requirement’, i.e. expenditure unadjusted by grant, is more appropriate than the ‘council tax requirement’.

22 Revenue Support Grant Settlement - Key Data for Three Rivers

The Local Government Finance Settlement distributes formula grant of £25b in 2006/07 and £26b in 2007/08. Three Rivers formula grant is made up of revenue support grant and redistributed business rates.

The Government announced its proposals for formula grant in early December 2005 and after a period of consultation confirmed the arrangements in early February 2006. Figures were announced for two years - a final allocation for 2006/07 and an indicative allocation for 2007/08. From 2008/09 the announcement will give figures for three years at a time in line with spending reviews.

A new system was introduced to distribute formula grant from 2006/07. This was determined wholly by the Relative Needs Formulae, The relative Resource Amount, the Central Allocation and the floor damping scheme.

The Relative Needs Formula calculates relative need rather than the actual amount needed to provide services. It comprises a number of service 'blocks' with a separate formula for each. The blocks are Children's Services, Adults' Personal Social Services, Police, Fire, Highway Maintenance, Environmental Protective & Cultural Services and Capital Financing. The Council's needs relate to the last two of these blocks only.

The Relative Resource Amount is negative and takes into account the fact that areas that can raise income locally require less government support.

The Central Allocation is shared out on a per head basis.

In order that councils are protected from detrimental grant changes the government sets a guaranteed minimum increase in grant, called Floor Damping. For districts the minimum increase is 3% for 2006/07 and 2.7% for 2007/08. The cost of achieving the floor increases is met by scaling back increases above the floor.

2006/07 2007/08 Change £ £ % Relative Needs Amount 2,024,520 2,034,939 0.5 Relative Resource Amount -3,050,822 -3,194,583 -4.7 Central Allocation 5,528,832 5,890,128 6.5 Floor Damping 898,973 807,913 -10.1 Formula Grant 5,401,503 5,538,397 2.5

Redistributed Business Rate Income 4,527,529 tba Revenue Support Grant 873,974 tba Total Grant 5,401,503 5,538,397

Council Tax Base for Grant Purposes 37,393 37,150 -0.6 Mid-Year Resident Population Projection 85,858 86,461 0.7

The table below shows the percentage of budget requirement met by grant and council taxpayers nationally and in Three Rivers

Nationally Three Rivers 2005/6 % % Amount met by Government Grant 70.1 42.5 Amount met by Council Taxpayers 29.9 57.5

23 Relative Needs Amount = £2,024,520

From the total of ODPM Formula Grant of £20,878,123,134, 70.99% or £14,821,379,613 will be paid with respect to the relative needs of authorities a) Projected Population in 2006 85858.00000000000000 multiplied by the sum of: District Services EPCS Basic Amount 11.54240000000000 District Services EPCS Density Top-Up Population Density 3.547990 multiplied by 0.8756 0.8756 3.10662004400000 District Services EPCS Sparsity Top-Up Population Sparsity 0.091100 multiplied by 6.2512 6.2512 0.56948432000000 15.21850436400000 1306630.34768431000000 b) District Services EPCS Additional Population Top-Up Net In-Commuters 0 multiplied by 4.6563 4.6563 0.00000000000000 plus Day Visitors 3778.08219178082000 multiplied by 3.9530 3.953 14934.75890410960000 plus District Services EPCS Deprivation Top-Up Incapacity Benefit & Severe Disablement Allowance 1853 multiplied by 37.4247 37.4247 69347.9691 plus Income Support/Jobseekers Allowance/Pension Credit Claimants 3594 multiplied by 25.3006 25.3006 90930.3564 plus Older people on above 1707 multiplied by 37.4247 37.4247 63883.9629 plus Unemployment Related Benefit Claimants 616 multiplied by 25.3006 25.3006 15585.1696 plus Country of Birth residents 5178.2479 multiplied by 3.4112 3.4112 17664.03924 257411.49723648000000 272346.25614059000000 24 c) a + b 1578976.60382490000000 multiplied by Area Cost Adjustment for EPCS 1.09300000000000 1725821.42798062000000 d) c 1725821.42798062000000 multiplied by scaling factor for these services 1.00001023005825 1725839.08323436000000 e) d 1725839.08323436000000 divided by 10,000,000,000. 10000000000 f) District Level EPCS 0.00017258390832 multiplied by 1,000,000 and 1,000,000 divided by projected population in 2006 85,858 0.00201010864827 g) the minimum for all authorities of the result of f 0.00179051333898 h) the result of f minus g 0.00021959530929 i) Mixed-Tier service relative needs formula 0.00000524614826 multiplied by 1,000,000 1,000,000 divided by projected population in 2006 85,858 0.00006110261432 j) the minimum for all authorities of the result of i 0.00000369451412 k) the result of I minus j 0.00005740810020

Capital Financing Relative needs Formula 0.00000856683337 multiplied by 1,000,000 1,000,000 divided by projected population in 2006 85,858 (l) 0.00009977909304 (m) the minimum for all authorities of the result of (l) 0.00000930743633 the result of (I) minus (m) 0.00009047165671

The sum of: the result of (h) 0.00021959530929 the result of (k) 0.00005740810020 the result of 0.00009047165671 (n) 0.00036747506620 divided by 1,000,000 1,000,000 25 multiplied by projected population in 2006 85,858 (o) 0.00003155067423

(p) the sum for all authorities of the result of (o) 0.23098045438443

the result of (o) 0.00003155067423 divided by the result of (p) 0.23098045438443 multiplied by £14,821,379,613 14,821,379,613 Relative Needs Amount 2,024,520

26 Relative Resource Amount = £-3,050,822

The total of ODPM Formula Grant is adjusted by -24.57% or £-5,129,754,854 with respect to the relative resources of authorities

Taxbase 37,393 multiplied by lower tier share of taxbase 0.15846187 divided by projected population in 2006 85,858 (a) 0.06901354218489 (b) The minimum for all authorities of the result of a 0.04077972954826 (c) The result of a) minus b) 0.02823381263663 multiplied by projected population 85,858 (d) 2424.098685

(e) The sum of all authorities of the result of d 4,075,872.830654

The result of d) 2424.098685 divided by the result of e) 4,075,872.830654 multiplied by -5,129,754.854 -5,129,754,854 Relative Resource Amount -3,050,888

Central Allocation = £5,528,832

From the total of ODPM formula grant which the Secretary of State proposes to pay £11,186,498,375 relates to the Central Allocation

(a) From the Relative Needs formula, the sum of: the result of (g) 0.00179051333898 the result of (j) 0.00000369451412 the result of (m) 0.00000930743633 0.00180351528943 divided by the result of (p) from the relative needs formula 0.23098045438443 multiplied by 14,821,379,613 divided by 1,000,000 1,000,000 115.72660904893200

(b) the result of (b) from the Relative Needs formula 0.04077972954826 divided by the result of (e) from the Relative Needs formula 4,075,872.830654 multiplied by -£5,129,754,854 -5,129,754,854 -51.32397998821470

(c) the result of (a) 115.72660904893200 plus the result of (b) -51.32397998821470 64.40262906071730 multiplied by projected population 85,858 5,529,480.9259 divided by the sum for all authorities of the result of (d) (c) 11,192,576,891 multiplied by £11,205,498,375 11,205,498,375 5,535,865 minus critical ordinary watercourse adjustment 7,033 Central Allocation 5,528,832

27 Floor Damping = £898,973

The sum of the Relative Needs Amount, the Relative Resource Amount and the Central Allocation (the Formula Grant) is adjusted to ensure that authorities receive at least a minimum grant increase (called the 'floor')

(a) the previous year's grant support after adjusting for changes in function 5,244,178 (b) the amount of grant originally announced for 2004/2005 4,765,470 (c) the amount in (b) adjusted for Amending Report 2006 4,767,479 (d) either (b) minus (c ) = £-2,009 or 0 whichever is the greater 0 (e) the amount of grant originally announced for 2005/2006 4,908,351 (f) the amount in (e) adjusted for Amending Report 2006 4,910,553 (g) either (e) minus (f ) = £-2,203 or 0 whichever is the greater 0

(h) the sum of (a) plus (d) plus (g) 5,244,178 multiplied by 1.03 1.03 5,401,503 (i) the sum of Relative Needs Amount 2,024,520 Relative Resource Amount -3,050,822 Central Allocation 5,528,832 4,502,530 (j) minus (h) -5,401,503 Floor Damping -898,973 multiplied by 0.49038101 0.49038101 -440,839 plus (h) 5,401,503 4,960,664

Total Grant - The Greater of (h) or (j) 5,401,503

28 Annex 2 Nearest Twenty Neighbours 2006/07 Three High Low Rank Rivers 1-21 Estimated Expenditure & Income 2006/07 Highways, Roads & Transport Services £000s 1587 1703 -2837 2 Social Services £000s 0 1770 0 15 Housing Services £000s 1252 2490 882 14 Cultural Environmental & Planning Services £000s 7560 14512 5417 13 Central Services £000s 3732 5655 1963 13 Services £000s -45 664 -876 15 Total Service Expenditure £000s 14086 21493 8984 12 Housing Benefits: RA & non-HRA RR Mandatory Payments £000s 6661 24127 4986 18 Housing Benefits: RR to HRA tenants Mandatory Payments £000s 7318 11300 0 5 Housing Benefits: Subsidy Limitation Transfers from HRA £000s 0 0 -600 1 Housing Benefits: Transfer to/from HRA transitional measures £000s 0 0 -208 1 Housing Benefits: Contrib to HRA shared by whole community £000s 0 233 0 3 Parish Council Precepts £000s 1004 2919 0 11 External Trading Services - Net Surplus / Deficit £000s 0 70 -757 4 Internal Trading Services - Net Surplus / Deficit £000s 0 129 -539 6 Net Current Expenditure £000s 29069 44762 18342 14 Local Taxation: CTB pd to Collection Fund & ND Rate Relief £000s 3953 6630 2177 13 Debt Finance, Leasing, Capital Charges & Bad Debt Provision £000s -885 1825 -2509 18 Capital Expenditure charged to GF revenue account £000s 711 7488 0 4 Interest & Investment Income: External Receipts & Dividends £000s -1102 -118 -4853 10 Pensions Interest Cost & Expected Return on Assets £000s 133 1000 -194 12 Specific Grants outside AEF £000s -18191 -10376 -29699 7 Revenue Expenditure £000s 13688 24925 9180 12 Specific Grants within AEF £000s -363 -296 -1404 2 Net Revenue Expenditure £000s 13325 23521 8756 11 Reorganisation transfer £000s 0 0 -7 1 Appropriations to/from other earmarked & unallocated reserves £000s -1083 854 -5857 15 Appropriations to/from pensions reserves £000s 22 1281 -1970 7 Budget Requirement £000s 12264 18780 7815 13 Revenue Support Grant £000s -874 -469 -1396 7 Redistributed Non-Domestic Rates £000s -4528 -2429 -7231 7 GLA Grant & Other Items £000s 0 128 -198 6 Council Tax Requirement £000s 6862 11629 3568 13

Estimated Earmarked & Unallocated Financial reserves £000s 7197 26860 2145 9 Financial Reserves as %age of net revenue expenditure % 54.0 138.4 13.9 11 Estimated Pensions Reserves at 1 Apr 2005 £000s -11569 -45 -38653 4 Capital Charges £000s 4576 7386 1684 8

Estimated Expenditure & Income per Head 2006/07 Highways, Roads & Transport Services £head 18.89 19.29 -31.66 2 Social Services £head 0.00 18.04 0.00 15 Housing Services £head 14.90 20.31 8.03 11 Cultural Environmental & Planning Services £head 90.00 114.63 60.95 11 Central Services £head 44.43 63.11 24.02 6 Other Services £head -0.54 7.30 -6.92 15 Total Service Expenditure £head 167.69 169.77 117.69 3

Budget Requirement £head 146.00 151.40 111.64 6

29 Average Band D Council Tax including Parish Precepts 2006/07 Annex 3

Eastern Region £ % Nearest Neighbours £ % Hertfordshire £ % 1 (1) Broxbourne 100 4.9 1 (1) Broxbourne 100 4.9 1 (1) Broxbourne 100 4.9 2 (2) Breckland 106 5.3 2 (2) Runnymead 115 5.0 2 (2) Dacorum 154 4.3 3 (3) Great Yarmouth 135 4.7 3 (3) Epsom & Ewell 140 4.9 3 (3) Hertsmere 161 4.8 4 (6) Kynn’s Lynn & W Norfolk 138 0.1 4 (4) Spelthorne 148 5.0 4 (4) Stevenage 170 2.5 5 (4) Waveney 142 5.8 5 (5) Guildford 152 2.9 5 (6) Three Rivers 183 2.9 6 (5) Cambridge 142 4.0 6 (6) Horsham 157 4.9 6 (7) North Hertfordshire 187 4.5 7 (7) South Cambridgeshire 148 6.5 7 (7) Brentwood 158 3.8 7 (5) East Hertfordshire 190 6.6 8 (9) North Norfolk 149 4.2 8 (8) South Bucks 160 5.3 8 (8) St Albans 191 2.8 9 (8) Broadland 150 4.3 9 (9) Hertsmere 161 4.8 9 (9) Welwyn Hatfield 213 4.6 10 (11) Dacorum 154 4.3 10 (10) Reigate & Banstead 176 4.9 10 (10) Watford 239 1.0 11 (10) Tendring 156 6.3 11 (11) Mid Sussex 178 4.8 12 (12) Bedford 156 4.7 12 (12) Tandridge 178 4.9 13 (13) Brentwood 158 3.8 13 (13) Waverley 179 3.5 14 (15) East Cambridgeshire 160 4.0 14 (14) Woking 183 4.8 15 (14) Hertsmere 161 4.8 15 (15) Epping Forest 183 4.0 16 (16) Huntingdonshire 164 6.4 16 (17) Three Rivers 183 2.9 17 (17) Suffolk Coastal 164 4.9 17 (18) Chiltern 185 3.3 18 (19) Chelmsford 165 3.9 18 (16) East Herts 190 6.6 19 (18) Mid Bedfordshire 167 5.0 19 (19) Elmbridge 191 4.2 20 (22) Colchester 167 2.7 20 (20) St Albans 191 2.8 21 (20) South Norfolk 168 5.1 21 (21) Sevenoaks 206 4.7 22 (23) Stevenage 170 2.5 23 (21) Braintree 171 5.1 24 (25) Barbergh 174 2.8 25 (24) Mid Suffolk 175 4.1 26 (26) Uttlesford 180 5.9 27 (28) Forest Heath 181 2.6 28 (27) Epping Forest 183 4.0 29 (30) Three Rivers 183 2.9 30 (31) Maldon 187 4.9 31 (32) North Hertfordshire 187 4.5 32 (29) East Hertfordshire 190 6.6 33 (33) St Edmunsbury 191 6.8 34 (34) St Albans 191 2.8 35 (36) Norwich 196 3.5 36 (37) Castle Point 199 0.0 37 (35) Rochford 200 5.6 38 (38) Welwyn Hatfield 213 4.6 39 (40) Fenland 226 3.3 40 (39) Basildon 228 4.4 41 (41) Harlow 231 2.9 42 (42) South Bedfordshire 237 5.1 43 (43) Watford 239 1.0 44 (44) Ipswich 281 2.2

30 Annex 4 Eastern Region Domestic Budget Redistributed Govt Collection Council Tax Band D Including Herts Authorities Population Area Properties Requirement RSG NNDR Grant Adjustment Requirement Taxbase Tax No Hectares No £000s £000s £000s £000s £000s £000s No. £ Bedfordshire Bedford 152,500 47,639 61,649 21,828 -2,163 -11,206 -13,369 -91 8,368 53,548 156 Mid Bedfordshire 128,200 50,285 51,233 15,498 -1,191 -6,170 -7,361 0 8,137 48,697 167 South Bedfordshire 113,000 21,282 47,990 18,261 -1,326 -6,870 -8,196 0 10,065 42,410 237 Cambridgeshire Cambridge 117,000 4,068 42,962 17,196 -1,916 -9,924 -11,840 -87 5,269 37,005 142 East Cambridgeshire 82,100 65,125 30,995 10,434 -983 -5,091 -6,074 0 4,360 27,250 160 Fenland 86,700 54,646 38,709 14,800 -1,334 -6,913 -8,247 39 6,592 29,165 226 Huntingdonshire 163,200 91,249 65,196 20,179 -1,762 -9,129 -10,891 74 9,362 56,939 164 South Cambridgeshire 138,500 90,162 55,292 15,311 -1,151 -5,963 -7,114 82 8,279 55,954 148 Essex Basildon 166,500 11,003 71,356 28,788 -2,384 -12,352 -14,736 111 14,163 62,083 228 Braintree 140,600 61,168 57,854 17,905 -1,455 -7,537 -8,992 -170 8,743 51,186 171 Brentwood 68,000 15,312 30,337 9,933 -802 -4,153 -4,955 -50 4,928 31,207 158 Castle Point 86,800 4,508 35,777 12,062 -920 -4,763 -5,683 -105 6,274 31,457 199 Chelmsford 158,500 34,225 66,987 19,744 -1,524 -7,895 -9,419 55 10,380 62,850 165 Colchester 161,100 33,322 65,484 21,152 -1,888 -9,781 -11,669 -50 9,433 56,436 167 Epping Forest 123,500 33,898 51,669 18,374 -1,396 -7,231 -8,627 -5 9,742 53,141 183 Harlow 78,000 3,054 34,014 14,862 -1,368 -7,088 -8,456 11 6,417 27,797 231 Maldon 59,700 35,890 25,533 8,408 -618 -3,199 -3,817 -47 4,544 24,259 187 Rochford 79,100 16,951 33,073 10,598 -714 -3,697 -4,411 -45 6,142 30,707 200 Tendring 143,300 33,774 63,621 20,181 -1,983 -10,273 -12,256 -130 7,795 49,931 156 Uttlesford 70,000 64,120 29,103 9,527 -632 -3,285 -3,917 0 5,610 31,095 180 Hertfordshire Broxbourne 88,300 5,144 36,463 10,104 -1,052 -5,449 -6,501 -35 3,568 35,729 100 Dacorum 138,700 21,246 57,695 17,912 -1,497 -7,753 -9,250 -63 8,600 55,706 154 East Hertfordshire 131,000 47,567 54,456 18,319 -1,249 -6,469 -7,718 0 10,601 55,857 190 Hertsmere 94,000 10,114 38,495 14,097 -1,227 -6,355 -7,582 1 6,516 40,537 161 North Hertfordshire 119,900 37,538 51,197 16,279 -1,187 -6,147 -7,334 33 8,978 47,952 187 St Albans 131,200 16,118 54,910 18,780 -1,173 -6,074 -7,247 -198 11,335 59,446 191 Stevenage 80,500 2,596 33,230 11,912 -1,167 -6,046 -7,213 -38 4,661 27,356 170 Three Rivers 84,000 8,882 34,010 12,264 -874 -4,528 -5,402 0 6,862 37,399 183 Watford 79,300 2,142 33,904 15,270 -1,241 -6,427 -7,668 -203 7,399 30,997 239 Welwyn Hatfield 98,600 12,957 41,662 15,395 -1,086 -5,627 -6,713 -174 8,508 40,000 213 Norfolk Breckland 125,400 130,511 51,659 14,176 -1,598 -8,276 -9,874 15 4,317 40,914 106 Broadland 123,600 55,243 52,118 13,986 -1,187 -6,149 -7,336 -20 6,630 44,323 150 Great Yarmouth 92,100 17,398 43,518 13,954 -1,585 -8,209 -9,794 -20 4,140 30,651 135 King’s Lynn & W Norfolk 141,800 142,877 63,128 20,326 -2,150 -11,384 -13,534 -125 6,667 48,236 138 North Norfolk 100,400 96,546 49,303 14,215 -1,330 -6,888 -8,218 -39 5,958 40,042 149 Norwich 125,000 3,902 56,426 22,325 -2,375 -12,301 -14,676 -165 7,484 38,197 196 South Norfolk 114,300 90,771 49,218 14,600 -1,200 -6,214 -7,414 78 7,264 43,190 168 Suffolk Barbergh 85,500 59,521 36,123 11,080 -892 -4,619 -5,511 12 5,581 32,123 174 Forest Heath 60,600 37,770 20,198 8,235 -862 -4,464 -5,326 15 2,924 16,133 181 Ipswich 117,000 3,941 52,652 21,964 -1,786 -9,253 -11,039 25 10,950 38,920 281 Mid Suffolk 90,900 87,105 37,205 11,821 -946 -4,901 -5,847 -63 5,911 33,726 175 St Edmunsbury 100,500 65,696 42,530 13,601 -1,070 -5,545 -6,615 -15 6,971 36,441 191 Suffolk Coastal 120,300 89,169 53,703 15,411 -1,218 -6,308 -7,526 -81 7,804 47,688 164 Waveney 116,400 37,040 52,135 15,875 -1,654 -8,567 -10,221 -53 5,601 39,437 142

31 Nearest Twenty Neighbours Domestic Budget Redistributed Govt Collection Population Area Properties Requirement RSG NNDR Grant Adjustment No Hectares No £000s £000s £000s £000s Three Rivers 84,000 8,882 34,010 12,264 -874 -4,528 -5,402 Brentwood 68,000 15,312 30,337 9,933 -802 -4,153 -4,955 Broxbourne 88,300 5,144 36,463 10,104 -1,052 -5,449 -6,501 Chiltern 89,100 19,635 36,584 11,838 -608 -3,148 -3,756 East Hertfordshire 131,000 47,567 54,456 18,319 -1,249 -6,469 -7,718 Elmbridge 129,600 9,632 51,802 17,924 -993 -5,147 -6,140 Epping Forest 123,500 33,898 51,669 18,374 -1,396 -7,231 -8,627 Epsom & Ewell 68,000 3,407 28,160 8,277 -645 -3,343 -3,988 Guildford 133,400 27,094 52,025 16,515 -1,291 -6,690 -7,981 Hertsmere 94,000 10,114 38,495 14,097 -1,227 -6,355 -7,582 Horsham 126,600 53,028 53,228 14,813 -955 -4,948 -5,903 Mid Sussex 128,100 33,402 54,254 15,904 -995 -5,152 -6,147 Reigate & Banstead 126,600 12,913 52,682 16,418 -1,068 -5,534 -6,602 Runnymead 79,200 7,803 31,300 8,842 -819 -4,245 -5,064 Sevenoaks 109,800 37,032 45,667 16,123 -977 -5,064 -6,041 South Bucks 62,200 14,129 25,628 7,815 -469 -2,429 -2,898 Spelthorne 91,000 5,116 36,069 11,346 -881 -4,563 -5,444 St Albans 131,200 16,118 54,910 18,780 -1,173 -6,074 -7,247 Tandridge 80,800 24,818 32,252 10,458 -646 -3,346 -3,992 Waverley 116,500 34,517 48,187 15,341 -927 -4,801 -5,728 Woking 89,600 6,357 37,864 13,565 -1,024 -5,307 -6,331

32 APPENDIX 5

COMPETITIVE TENDERING AND PROCUREMENT

Corporately the Council achieves VFM through an embedded Corporate Procurement Strategy (1) and robust procurement procedures (2)

Significant and identifiable savings have been achieved through procurement and internal reviews without unintended loss of quality. Alternatively quality has been increased at no extra cost.

Part 4 of the Council’s Constitution (3) includes the Council’s ‘Contracts Procedure Rules’. These set out the procedures to be followed for procuring works, goods and services. The procedures aim to achieve VFM through sound competitive tendering. The Council tenders all contracts over £10,000 unless there is a valid VFM reason not to do so.

The Council has also used market research and working with prospective bidders to encourage competition. For example, with regard to the Leisure Facilities Management contract, a poor response was anticipated because of the relatively small value of the contract. Good market research and working with prospective bidders to make sure they had all the information they needed to make sound commercial decisions resulted in the Council receiving four bids of which three were within budget.

Since a best value review of procurement in 2002, the Council has employed a Procurement Officer to provide support to procurement activities across the Council.

The Procurement Officer:-

 has established a procurement strategy and effective procurement procedures that have become well established  ensures that the Council follows good practice  can demonstrate improvements in value for money from significant procurement exercises.  reports progress with procurement activities to members every six months at which time savings and outcomes are reported.  uses his expertise so that service managers know where the greatest benefits can be gained and act on these effectively.  regularly reviews strategic contracts and provides specific support to service managers.

Opportunities for joint procurement with partners are actively pursued. Additionally there is a long standing shared provision undertaken for utilities and vehicles with Hertfordshire County Council and other districts.

Procurement decisions are not based solely on lowest cost options but reflect the best combination of cost and quality. The Council uses tender evaluation models which provide a framework for balancing price and quality to ensure value for money is improved.

Continued VFM and continuous improvement is managed through regular contract management meetings with key contractors.

Taking a longer term view is an important part of our decision making process. The Council has moved away from awarding annual contracts linked to the annual budget cycle where appropriate to achieve better VFM. It has awarded capital contracts over longer periods to achieve economies of scale and reduce tendering costs.

A ‘whole life’ approach is basic to the procurement principles. A good example of this is the purchase of PCs. The Council could take the risk that it has to simply dispose of a faulty 33 machine and replace it, but in the light of its experience of faults and breakdowns and the price it can obtain, has decided it will take out maintenance contracts on PCs.

Purchase decisions have also been made taking into account the cost to the Council of outright purchase as against leasing or rental costs, e.g. purchase of refuse freighters. Such decisions have also taken into account maintenance of capital issues, i.e. how these vehicles might be renewed at the end of their life.

The in-house waste management service also tendered the maintenance of its vehicles in 2002. This contract takes into account the rise in maintenance costs associated with vehicles ageing over the term of the contract.

External funding is sought strategically to support local priorities. The Council has a successful track record of attracting external funding. It has successfully used Capital Challenge and SRB monies in partnership with the county council and Watford BC to regenerate South Oxhey. It has used lottery funding to upgrade its golfing facility at Rickmansworth, particularly aimed at providing more leisure opportunities for the young. More recently DEFRA funding of over £800k in 2004/05 and 2005/06, has been acquired in partnership with other Hertfordshire authorities to deliver the council priority of achieving statutory recycling targets.

Officers ensure that the on-going effects of external funding are recognised in forward projections or that ‘exit strategies’ are put in place.

Other Procurement – Leisure Services

The Council has always taken a pragmatic view on whether services should be provided in- house or by other partners (private or public sector). So when it commissioned an external review of options for the future delivery of leisure services in July 2002 the review’s terms of reference challenged all possible options for service delivery (i.e. private contractors, established or new in-house trust, status quo) and all major elements of the service were examined.

Reports to members set out the results of an options appraisal, which assessed the risk transfer and potential quality and cost benefits to be gained from each of the management options considered. It also recommended which elements of the service would benefit from outsourcing, and the NNDR and VAT benefits and risks of such an approach.

TRDC resolved in December 2004 to retain leisure development services in-house, and to put all leisure facilities out to tender over a phased programme, with bids being invited from both commercial operators and established NPDOs. The options of in-house management or the creation of a new NPDO were rejected on the grounds of cost and risk.

Consultants were retained to develop an output-focused specification for the resulting tender exercise, which sought to balance commercial attractiveness with appropriate quality assurance mechanisms. Four tenders were evaluated for cost (including risk transfer) and quality. A contract was awarded in October 2005, and the successful contractor began in the largest venue (William Penn Leisure Centre) in January 2006.

References: (1) See: http://trdcintranet/Searchable/Departmental/corporate%20dev/performance %20management/procurement/procurement%20strategy%20(2006%2001%2013).doc (2) See: http://trdcintranet/Searchable/Departmental/corporate%20dev/performance %20management/procurement/procurement%20procedures%20(2006%2001%2013).doc (3) See: http://www.threerivers.gov.uk/Default.aspx/Web/Constitution

34 APPENDIX 6

MINIMISING WASTE AND EFFICIENCY IMPROVEMENTS

The Council has set targets to improve efficiency and VFM. Resulting from the Gershon Report, the Office of the Deputy Prime Minister requires councils to achieve 2.5% per annum efficiency improvements on their ‘baseline’ expenditure, of which at least half should be cashable. By 2007/8, efficiency gains equivalent to 7.5% of the baseline should be achieved.

Efficiency Gains made in 2004/05 can count towards the target. Targeted gains in 2005/06 are measured against a baseline of 2.5% of the Council’s 2004/05 budget. Accumulative targeted gains to the end of 2006/07 (5%) will be measured against an updated baseline of the out-turn for 2004/05. It is anticipated that in subsequent years the baseline will be updated for another year’s out-turn.

The council has started to deliver on a robust efficiency plan to achieve more than the 2.5% target.

The Council’s baseline figures, prescribed in ODPM guidance, are:-

2004/05 2004/05 Budget Out-turn Applying Applying to to 2005/06 2006/07 Financial Financial Year Year £000s £000s Revenue Contribution to Baseline Total service expenditure (sum of net current exp by service) 12,632 11,248 Pensions interest cost 303 0 Appropriations to/from Pensions Reserves -254 0 Capital Contributions to Baseline 2,779 2,296

Total 15,460 13,544

2.5% of Baseline 387 - 5.0% of Baseline - 677

This leads to the following accumulative requirements:-

2005/6 2006/7 2007/8 £000s £000s £000s Cashable (at least 50%) 194 339 508 Non-Cashable (balance) 193 338 508 Total 387 677 1,016

The Council is required to produce an Annual Efficiency Statement (AES) comprising two parts. The forward looking part outlines the strategy for securing efficiency gains, the key actions that will be taken during the next year and the gains that are expected to result.

The backward looking part sets out the cashable and non-cashable gains achieved in the past year.

The AES is not a statutory requirement. Not to produce it, however, will count against the Council’s “use of resources” assessment under the Audit Commission’s Comprehensive Performance Assessment.

35 The Council produced backward looking efficiency statements covering 2004/05 and 2005/06 in June 2005 and June 2006 respectively. They showed cashable efficiency gains of £40,000 in 2004/05 and £442,000 in 2005/06. These gains are offset against the three year target.

The forward look for 2006/07 efficiencies was produced for the ODPM in April 2006. The Statement took into consideration the on-going efficiency gains identified from 2004/5 and 2005/6 and those identified as part of the budget setting process for 2006/7 and future years.

The table below shows the Council’s current position against its targets:-

2005/6 2006/7 2007/8 £000s £000s £000s Cashable Efficiencies Identified (and on-going) From backward looking AES for 2004/5 (Actual) 40 40 40 From backward looking AES for 2005/6 (Actual) 442 442 442 From forward looking AES for 2006/07 (Estimate) 0 157 157 Unidentified To be found for 2007/8 onwards (Estimate) 0 0 150 Sub-Total Cashable Efficiencies 482 639 789 Non-Cashable Efficiencies From backward looking AES for 2005/6 (Actual) 16 16 16 Approved by Council 14/02/06 as identified in service plans (Estimate) 0 158 158 Sub-Total Non-Cashable Efficiencies 16 174 174 Total Efficiency Gains 498 813 963

This table shows that the Council achieved the required efficiency gains in 2005/06 and can achieve the target in 2006/07. There is a shortfall in 2007/08 of £53k, however it is felt that this will be found in non-cashable efficiency gains.

The forecast budgets for 2007/08 and 2008/09 include sums of £150k and £300k respectively as efficiency gains yet to be identified. Future budget monitoring reports will details these gains as they are found.

Annual Efficiency Statement - Forward Look 2006/07

Strategy for securing efficiency gains

To achieve efficient, effective and economic services the Council has over the past three years:-

 Actively pursued proactive treasury management. The Council is debt free.  Secured reductions in NNDR on Council properties  Achieved savings through competitive tendering (e.g. waste collection)  Reviewed staffing requirements and ‘flattened’ management structures  Introduced new working practices and organisational arrangements using new ICT and the customer services centre to enhance services to the public  Made a one-off additional contribution to the Hertfordshire Pension Fund of £4.98m to reduce revenue costs by £0.407m in 2002/03 rising to £0.704m per annum by 2005/06  Maximised investment income (whilst safeguarding capital) or used surplus funds to generate on-going savings or improve quality  Developed an asset management plan for the effective use of the Council’s land and property portfolio  Controlled energy and other utility costs

This would suggest that the Council has the capacity to continually identify opportunities for improvement. However, many of the more simple efficiency gains have already been identified.

36 Key actions to be taken during the year

The Council will continue:-

 To maximise investment income (whilst safeguarding capital) or use surplus funds to generate on-going savings.  To procure services in the most effective and efficient way. The outcome of the Council’s best value review into procurement continues to bear fruit. The Council will continue to use competitive tendering whenever appropriate.  To further develop the asset management plan for the effective use of the Council’s land and property portfolio.  To control energy and other utility costs.  To retain its basic performance management approach whereby it seeks to ensure that all services perform on par with the best in local government and achieve continuous improvement. Performance indicators and benchmarking will continue to identify under- performing services.  To complete value for money reviews of the Council’s services and implement the efficiency improvements identified taking into account comparison with similar services in comparable authorities.  To improve the use of ICT and enhance services to the public through the customer services centre and the Council’s interactive web-site. The Council was a pathfinder in using IT to create better access to its services via its customer services centre and this is continuing. The land charges and building control service, in collaboration with NLIS, are looking to develop the Home Information Pack. This will enable the Council to attract a greater share of the house buying market.  To cash limit budget increases wherever possible.  To continually improve the skills and capacity of staff through training; improving efficiency; joint/partnership working  To tackle absenteeism.

The achievement of the efficiency targets are subject to monthly monitoring via the budgetary control process. A new committee report template details both the cashable and non-cashable financial implications of specific policy proposals.

Efficiency gains have traditionally been tracked as part of the council’s budget monitoring and its budget setting process. Budget monitoring has revealed under-spends which have either allowed the council to redirect resources (e.g. to improve PIs) or use sustainable savings to reduce future years budgets. Specific proposals for savings have been identified in budget papers and accepted by the Council.

37 Expected annual ...of which related to ...of which related to ...of which efficiency gains (£) capital spend (£) other spend (£) cashable (£) 0 0 Adult social Strategy: services Key actions: 0 0 Children's Strategy: services Key actions: 0 0 Culture and sport Strategy: Key actions: 183,630 103,710 Strategy: Review of staffing and service arrangements for: Development Control Waste Management Environmental Protection Environmental Health Environmental Democratic Services services Key actions: Smarter working by utilising in-house expertise in preference to outsourcing work. Using technology to improve information archiving and direct customer access. Rationalisation of staff and fuel economy measures. Flytipping enforcement absorbed within existing resources. New requirements for Animal Welfare, High Hedges, Gas Servicing, Licensing and Joint Committees absorbed within existing resources. 0 0 0 0 Local transport Strategy: Key actions: 30,100 0 0 8,100 Strategy: Review of staffing and service arrangements for: Residential Services LA social housing Gas Engineers Key actions Review of overtime working. Improve productivity per gas engineer for servicing completed. Non-school 0 0 educational Strategy: services Key actions: 0 0 Supporting Strategy: people Key actions: 0 0 Homelessness Strategy: Key actions:

38 Expected annual ...of which related to ...of which related to ...of which efficiency gains (£) capital spend (£) other spend (£) cashable (£) 29,180 29,180 Strategy: Review of staffing and service arrangements for: Property Services Corporate Customer Services Centre services Risk Management Key actions: Reduction in use of temporary surveying staff. Reduction in use of consultants. Reduction in staffing requirement 16,050 16,050 Strategy: Review external ICT contracts Procurement Key actions: Negotiation of increased support hours for ICT Negotiation of contracts 50,000 0 Productive time Strategy: Review of staff absenteeism. Key actions: Continual monitoring of absences and return to work interviews 6,000 0 Transactions Strategy: Review of performance for benefit claims Key actions: Improved speed of processing. 0 0 Miscellaneous Strategy: efficiencies Key actions: Total 314,960 0 0 157,040

Signed ______Leader of the Council Ann Shaw O.B.E.

Signed ______Chief Executive Dr Steven Halls

Signed ______Chief Financial Officer David Gardner

39 APPENDIX 7

CHARTER MARK, INVESTORS IN PEOPLE & OTHER EXTERNAL ACCREDITATION

The Government’s Charter Mark Scheme

The Building Control and Residential Standards teams hold Charter Marks. By December 2006 it is intended that all of the Council’s services will be accredited.

The timetable is:

Achieved Phase One – June 2006 Development Plans & Transportation  Environmental Protection  Customer Services Centre  Property & Facilities Management  Development Control  Phase Two – October 2006 Housing Services  Leisure Services  Accountancy Practice  Corporate Development Exchequer Services  Environmental Health  Phase Three – December 2006 ICT Services Personnel Services Legal Services Democratic Services DLE – Policy Services Housing Policy

The ‘corporate element’ of Charter Mark has been in place since March 2006.

Investors In People

The Council has held the Investors in People award since 1995. It was last re-awarded in February 2006 for a three year period.

The Council has an action plan resulting from the last re-accreditation which is monitored by the Management Board (1).

Achieving and improving value for money is being embedded in the council’s culture, for example, through the performance appraisal system (2)(3).

Other Accreditation

Through the work of the Personnel Section, the Council has been accredited under the Positive about Disability Scheme, better known as the "Two Ticks Scheme" which demonstrates we are being positive about employing people with disabilities and enabling continuing employment for those who suffer disabilities during the course of their work. We are now entitled to put this on our job adverts as well as our notepaper.

40 The Legal Section has the Lexcel accreditation from the Law Society. The Building Control service is also ISO9001:2000 registered and subject to the rigours of that scheme.

The Government’s regional office assessed the Capital Strategy and Asset Management Plan as ‘Good’ (4) and determined that the Housing Strategy and HRA Business Plan were fit for purpose (5).

Results of Inspections

The Council was deemed to be ‘Good’ in its CPA inspection (January 2004) (6).

The Audit Commission Cultural Service inspection in January 2005 found that TRDC offered a ‘fair service with promising prospects for improvement’ (7). The subsequent Leisure Improvement Plan was adopted by TRDC in July 2005 (8). It aims to strengthen TRDC Leisure’s knowledge of and contact with its users and other residents, with consequent improvements in service quality, and also anticipates the likely introduction of the Culture Block to the CPA regime, which will bring a wide range of new PIs with enhanced opportunities for detailed and objective benchmarking. The Plan also commits TRDC to adopting the CRE/Sport England Promoting Racial Equality Through Sport Standard. The Leisure Review, Facilities Management Contract and Leisure Improvement Plan will combine to reduce costs and improve quality from January 2006 onwards.

References: (1) IIP Improvement Plan (2) ‘Performance Criteria for Each Competency’ associated with the Senior Managers Scheme. This details the competency descriptions and performance criteria expected and includes VFM: http://trdcintranet/Searchable/Departmental/Personnel/senior%20managers %20scheme/2006%2002%2006%20-%20senior%20managers%20scheme%20-%20competency%20- %20performance%20criteria.doc (3) ‘Guidance to Key Performance Areas to be Assessed Annually’. This provides guidance as to the evidence required to prove a competence http://trdcintranet/Searchable/Departmental/Personnel/senior%20managers%20scheme/2006%2002%2015%20- %20senior%20managers%20scheme%20-%20guidance%20to%20key%20performance%20areas.doc Further evidence can be obtained from the Personnel Section demonstrating that these competencies are ‘embedded’. (4) Single Capital Pot Round III – Feedback – Letter from GOEast 28/11/03 (5) Housing Investment Programme 2002 – Fit for Purpose – GOEast (6) Audit Commission http://www.audit-commission.gov.uk/authority.asp?CategoryID=ENGLISH^576^LOCAL- VIEW^AUTHORITIES^108423&CPAOnly=True (7) Audit Commission Inspection - www.audit-commission.gov.uk - cultural services (8) Leisure & Community Policy Panel – 050705 – Leisure Improvement Plan 2005-2008

41 APPENDIX 8

PERFORMANCE INDICATORS

Measuring Quality and the Standards Achieved

The Council updates its three-year medium-term strategic, service and financial plans annually. Having set its objectives and targets within these plans, the Council’s performance management framework (1) allows it to measure, monitor and report progress against achieving them.

Best Value Performance Plan

Each June the Council publishes its Best Value Performance Plan (BVPP) (2). This includes details of a range of national and local performance indicators. The following information is published for each indicator:-

The national quartile its performance was placed in for the year before last (where applicable) The target for last year The result for last year, and Targets for the next three years.

The BVPP is structured in line with the Council’s Strategic Plan, i.e. performance indicators are allocated to the strategic themes.

The Council’s BVPPs for 2004/05 and 2005/06 (3) (4) included a 2-year programme of ambitious targets to ensure that by 2006, the performance of all our services to all sections of the community would be as good as or better than the national median. A distinction was made between indicators which were deemed to be indicative of progress against council priorities and those that are not (2) , so that where the Council had identified specific priorities a top quartile performance was targeted.

Quarterly Performance Monitoring Report

The Council produces a Quarterly Performance Monitoring Report (4) for officers and members that includes Best Value and local performance indicators. These are considered by the Policy Panels and are formatted by portfolio. Where appropriate, exception reports detail the action to be taken to remedy poor performance.

Other Progress Reports

In addition to the BVPP and Quarterly Monitoring Reports, summaries are prepared for the Management Board (5) and discussed at its quarterly meeting with the Audit Commission’s relationship manager and the external auditor.

Best Value Performance Indicators

One method by which the Council measures how it is performing in delivery of its services is by comparing its performance for Best Value Performance Indicators relative to its nearest twenty neighbour authorities and to other authorities across England.

An analysis of the Council’s performance in 2004/05 against its twenty nearest neighbour authorities follows at Annex 1.

The Council has carried out an analysis of its performance against all BVPIs since 2002/03 and against the national quartile performance measures (6). In summary the position is:

Quartile Improvement Target Achieved 42 No % No % No % Year

1st 18 32.7  n/a n/a  16 39.0 nd 2002/03 2 5 9.1  n/a n/a  25 61.0 3rd 18 25.5  n/a n/a n/a 18 - 4th 14 32.7 n/a n/a n/a

1st 32 40.0  31 55.4  35 52.2 nd 2003/04 2 15 18.8  14 25.0  32 47.8 3rd 16 20.0  11 19.6 n/a 20 - 4th 17 21.2 n/a 31 -

1st 11 21.2  20 34.5  24 40.7 nd 2004/05 2 15 28.8  11 19.0  35 59.3 3rd 13 25.0  27 46.5 n/a 6 - 4th 13 25.0 n/a 7 -

1st  32 69.6  35 63.6 nd 2005/06 2  7 15.2  20 36.4 3rd  7 15.2 n/a 30 - 4th n/a 39 -

There was a substantial improvement in 2003/04, which put 59% of indicators into the upper quartiles, with a dip, at least in comparative terms, in 2004/05. At the time of writing (September 2006) the Council is waiting to hear into which quartiles its performance fell in 2005/06. On the evidence of those BVPIs which improved and those which achieved the targets set by the Council we are anticipating a resumption of improvement across the board.

Locally Determined Performance Indicators

In addition to the Council’s internal quarterly performance monitoring report the Environmental Health section makes annual returns to the Health and Safety Executive (7), DEFRA (8) and the Foods Standards Agency (9). These, too, demonstrate high performance.

Remedial Action Taken on Failing Performance Indicators

In November 2004, the Executive Committee (10) agreed to allocate resources to areas of poor performance with a view to improving VFM. The results of this investment were subsequently reviewed (11). The majority of interventions were successful and lessons were learned where the required outputs were not achieved.

References: (1) Performance Management Framework – TRDC (2) Best Value Performance Plan 2004-2005 – TRDC (3) Best Value Performance Plan 2005-2006 – TRDC (4) Quarterly Performance Monitoring Report – Quarter 1, 2006/2007 (April – June) – TRDC (5) TRDC Management Board Meeting – 060905 – Item 10 – Performance Management Report (6) See shared folder: ‘Financial, Benchmarking and Comparative Data / BVPIs History’ (7) Health & Safety Commission – Local Authority Health & Safety Return (8) Local Authority Air Pollution Control Return - DEFRA (9) Food Standards Agency Monitoring Return (10) Executive Committee – 151104 – Budget Monitoring 2004-2005 – Month 6 (September) – Use of Surplus Funds (11) Management Board – 030505 – Underachieving BVPIs for which additional funding was agreed

43 ANNEX 1

h y y h t l t t t h h l t t a e e l l t t a f f k k e a a n n e a a n n e e H e e g g a s s

S S g g H a l t t H H n n l i i n n

R m m R i i y y a i i f f

a t t t e e n n l n n i i s s t e e e t t l n

Council o o n n n n u u n n n c a a a r r e i r r a a r i i e e e u u o o l l v o o e v v m r B B H H P P m m m v p p n n n e r r n m m E E o O S o o o r o o r i i C C v C C v n n E E % Rank % Rank % Rank % Rank % Rank % Rank % Rank % No. Sevenoaks 67 6 50 18 79 3 83 2 71 3 72 2 100 1 35 1 Chiltern 81 1 81 2 60 14 71 6 83 2 75 2 75 10 37 2 Runnymede 59 13 81 2 68 8 50 18 65 7 75 2 100 1 51 3 Epsom and Ewell 67 6 88 1 61 10 65 9 54 18 69 8 100 1 53 4 Elmbridge 77 2 53 16 79 2 38 21 71 3 69 8 100 1 53 4 St Albans 72 5 78 5 57 15 63 10 67 5 63 15 100 1 56 6 Horsham 55 18 78 5 70 5 63 10 60 12 66 10 100 1 61 7 Mid Sussex 73 4 66 11 70 5 88 1 58 14 47 17 50 13 65 8 Tandridge 56 16 81 2 71 4 55 16 67 5 66 10 50 13 66 9 Spelthorne 75 3 75 8 32 21 58 12 60 12 81 1 75 10 67 10 Three Rivers 56 16 59 13 64 9 75 4 61 11 47 17 100 1 71 11 Reigate and Banstead 55 18 66 11 64 9 75 4 58 14 75 2 50 13 71 11 Woking 64 10 78 5 39 19 67 8 65 7 66 10 50 13 72 13 Guildford 61 12 59 13 39 19 71 6 58 14 66 10 100 1 75 14 East Herts 67 6 75 8 61 10 50 18 50 21 72 2 75 10 75 14 Brentwood 45 21 50 18 64 9 79 3 52 19 75 2 50 13 85 16 Hertsmere 59 13 72 10 70 5 46 20 46 21 53 16 100 1 86 17 South Bucks 64 10 53 16 50 17 58 12 93 1 41 21 50 13 90 18 Broxbourne 66 9 59 13 50 17 58 12 65 7 44 19 50 13 90 18 Waverley 58 15 41 21 93 1 58 12 56 17 66 10 25 21 97 20 Epping 50 20 47 20 57 15 54 17 63 10 44 19 50 13 114 21

44 APPENDIX 9

PARTNERSHIP WORKING

The Council aims to achieve VFM by working with the local strategic partnership and other partners.

Local Strategic Partnership

The Council has explored options for joint procurement with the Local Strategic Partnership to improve value.

Examples include:-

 a joint procurement of the most recent Crime and Disorder audit undertaken in collaboration with HCC, Herts Constabulary, Herts Police Authority and the Watford and Three Rivers Primary Care Trust (1).

 Joint partner contributions to the Watford and Three Rivers Crime Prevention Panel to carry out property marking campaigns, purchase and fitting of shed bars and advice to car owners (2)

 Joint contribution towards the costs of extending the opening hours of the New Hope Trust Day Care Centre and the Night Shelter so they offer a dovetailed service ensuring vulnerable rough sleepers have some where to be (3).

 Joint contributions to Switch / Drug Intervention Programme (4).

 Joint training events such as Partnership Orientated Problem Solving Event to increase awareness and knowledge of best practice crime and disorder reduction initiatives amongst partners (5).

 Joint support for a central information source "MIDAS" - The aim of MIDAS is to provide a central repository for all crime, disorder, drugs and alcohol and community safety data, accessible through an Internet based platform to all partners (6).

Better VFM through joint working and procurement

There are a number of good examples of joint working and procurement.

At a strategic level the Council has a Memorandum of Understanding with Watford Borough Council (7) (8) regarding benefits that could be achieved for the citizens of both areas by looking for ways to work collaboratively.

Already this Council’s parking service is operated from the Watford Parking Shop (9). TRDC pays an annual contribution of 20% towards the running of the shop. This represents a significant saving compared to the cost of TRDC running a separate service.

The councils have worked together to attract external funding to create an Energy Agency (10). The building control functions are working collaboratively (11), and work is progressing towards joint leisure provision on the Northern boundary of the district (12).

HARI (the Housing and Regeneration Initiative) has seen the councils working in partnership with local registered social landlords to address the shortages of affordable housing (13).

Three Rivers, together with Hertsmere and Watford, is served by a jointly funded post of economic development manager. The three councils will pay £7,500 for three years (from April 2005 to March 2008) and this funding is matched by the Hertfordshire Prosperity Forum, giving an annual budget of £45,000. Since the appointment of the Economic Development Manager 45 they have secured a further £25,000 for the development of the service in 2005/6 from the Hertfordshire Together Fund (14).

With regard to local and strategic planning, and in a county-wide context, TRDC with the county council and other Hertfordshire districts engaged consultants to prepare key studies for the production of local development frameworks as required by the Planning and Compulsory Purchase Act 2004 (15). These studies were funded jointly thereby achieving cost savings for the councils. The joint studies include the following:-

Sustainability Appraisal/Strategic Environmental Assessment jointly with St Albans, Dacorum and Watford The total study costs approx £90,000 with this Council contributing a maximum of 25% of the cost.

Gypsy and Traveller site assessments jointly with Hertsmere, Watford, Dacorum, St Albans and Hertfordshire County Council, with this Council contributing £6,000 towards the total study cost (£36,000)

A Sustainable Design Guide with all Hertfordshire districts and the County Council. Sharing the costs represents good value for money.

The Council is contributing towards the cost of police community support officers jointly with the police authority and the county council (16).

The Council is also one of 48 authorities contributing to a regional study into the provision of the revenues and benefits service (17).

References: (1) Management Board – 210904 – Community Safety Consultation & Strategy Development – Crime & Disorder Audit (2) Executive Committee – 180705 – Community Safety Action Plan 2005/06 – Crime Prevention Panel (3) Executive Committee – 180705 – Community Safety Action Plan 2005/06 – New Hope Trust (4) Executive Committee – 180705 – Community Safety Action Plan 2005/06 – Switch / Drug Intervention Programme (5) Executive Committee – 180705 – Community Safety Action Plan 2005/06 – Partnership Orientated Problem Solving (6) Executive Committee – 180705 – Community Safety Action Plan 2005/06 – MIDAS (7) Collaborative Working with Watford Borough Council – Report to Watford BC – September 2005 (8) Collaborative Working with Watford Borough Council – Report to TRDC – October 2005 (9) Watford / Three Rivers Parking Enforcement Scheme (10) Energy Agency (11) Collaborative Working with Watford Borough Council – Report to Watford BC – September 2005 – Building Control (12) Executive Committee – 120905 – Woodside Leisure Complex – Joint Provision in North of District (13) ADP / SHG Allocations since formation of HARI (14) Executive Committee – 100105 – Economic Development Service (15) Management Board – 060905 – Strategic Environmental Assessment/Sustainability Appraisal of Development Plan Documents (16) Council – 080205 – Minute CL48/04 – Budget Recommendations – Police Community Support Officers (17) Correspondence with Centre of Excellence East

46 APPENDIX 10

FEEDBACK

The Council aims to achieve VFM by listening to the views of residents, service users, and businesses, and by dealing efficiently with complaints so that problems can be put right quickly.

The Council has drawn up and formally approved a corporate complaints policy and procedure (1). It has been communicated to all relevant staff, the public and other stakeholders and is regularly reviewed. The procedure is placed on the website (2) and the Summer edition of the Three Rivers Times provided a summary of complaints (3).

The procedure was re-written and approved by the Management Board on 24/08/04 (4). It was tested and a further report to Management Board on 28/09/04 (5) resulted in it being rolled out council wide in October 2004. There are trained designated complaints officers assigned within each directorate. A complaints module is held on the ‘Proactive’ computer system. Management Board receive quarterly reports co-ordinated by the Corporate Complaints Officer (6).

The Council carries out consultation on its budget (7) and customer surveys (8) to gauge opinion as to the level of costs it should incur, the quality of its services and where its priorities should lie.

Departmental examples are:-

 the Environmental Health section reports the high level of service satisfaction and the (few) complaints it receives from its quarterly customer satisfaction monitoring to the Public Services and Health Policy Panel (9).

 The Building Control section receives customer feedback through focus groups, an annual customer care survey and a VFM question on householder surveys (10).

 The housing maintenance section receives details from tenants on repairs that have been carried out (11).

 Customer comment cards are available at leisure facilities (12).

References: (1) Complaints Policy & Procedure (2) http://www.threerivers.gov.uk/Default.aspx/Web/ComplimentsComplaintsCouncil (3) Three Rivers Times (4) Management Board Notes 24/08/04 (5) Management Board Notes 28/09/04 (6) Management Board reports (7) Budget Consultation see Executive Committee Agenda 06/02/06 Item 8 Appendix 10 and Minute EX163/05 http://www.threerivers.gov.uk/GetResource.aspx?file=06%2002%2006%20EX%20i%20- %20(4%205%206%207%208%209%20and%2010)%20strategic%20service%20and%20financial %20planning.doc (8) BVPI General Survey 2003/4 – TRDC/MORI (Update due for 2006/07) (9) Public Services & Health Policy Panel – 090605 – Environmental Health Customer Satisfaction Report – Qtr 4 2004/05 Public Services & Health Policy Panel – 021106 - Environmental Health Customer Satisfaction Report – Qtr 2 2006/07 http://www.threerivers.gov.uk/GetResource.aspx?file=06%2011%2002%20PS%20i%20-%20(07)%20env %20health%20customer%20sat-qtr%202.doc (10) Building Control – Building Control Regulation Charges 2005/06 Three Rivers Building Control – Householder Questionnaire – Question 4 Planning Department Focus Group – Notes of meetings (11) Tenants Satisfaction Slips (12) Leisure Department - Customer Comment Card

47 APPENDIX 11

PROMOTING EQUALITY OF OPPORTUNITY

The comprehensive equalities policy commits to “provide fair and equal access to services by all citizens on the basis of need and to provide services in a manner which is sensitive to the individual”.

The 2001 census identified 82,848 residents in Three Rivers showing an increase of 5.6% from the 1991 figure of 78,457. 48% of the population were male and 52% female. 21.2% were aged over 60 years and 25.0% younger than 20 years (1). 14.3% of the population has life long limiting illness.

The minority ethnic population of the district more than doubled in the ten year period between 1991 and 2001. The total of non-‘white British’ residents is 10,687 (12.9%).

Such information is used to promote and monitor access to services and value for money for the whole community.

Under its themes of safe, sustainable, healthy and prosperous communities, the Council recognises the demand for activities for the increasing percentage of young people in the community, particularly the disaffected. Those over seventy five have also increased in percentage terms and the Council wants to promote an active and independent lifestyle for all elderly people. It also wishes to improve access to its services to the ‘hard to reach’ groups such as the ethnic minorities.

The Council achieved Level 1 of the Equality Standard for Local Government in March 2006. Lead by the Corporate Development Section it is the intention to achieve Level 2 by March 2007.

Actions are being taken to implement the comprehensive equalities policy and the corporate equality plan 2006-2009, e.g. impact assessment reviews, are detailed in each the Council’s service plans (3). The Corporate Development equalities action plan includes improvement actions for procurement procedures to address equalities issues.

The Resources Policy Panel on 14/09/06 considered a report seeking the Panel’s agreement to an addition to the Audit and Inspection Plan 2006/07 to include an ‘Access to Services Review’ by the Audit Commission (4).

Through the work of the Personnel Section, the Council has been accredited under the Positive about Disability Scheme, better known as the "Two Ticks Scheme" which demonstrates we are being positive about employing people with disabilities and enabling continuing employment for those who suffer disabilities during the course of their work. We are now entitled to put this on our job adverts as well as our notepaper.

References: (1) 2001 Census: www.statistics.gov.uk/census (2) Population Key Facts – TRDC – June 2005 (3) See example in folder: trdclgf1\grp share\Equalities Service Plans 2006-09 Appendix C (4)See http://www.threerivers.gov.uk/GetResource.aspx?file=06%2009%2014%20RS%20i%20- %2008%20access%20to%20services%20review.doc (4) Access to Services Review – Resources Policy Panel - 140906 http://www.threerivers.gov.uk/GetResource.aspx?file=06%2009%2014%20RS%20i%20- %2008%20access%20to%20services%20review.doc

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