Written Answers. - Local Government Reform.
Alan M. Dukes
Question:
187
Mr. Dukes
asked the
Minister for the Environment and Local Government
the proposals, if any, he has to give effect to his assurance of 12 January 1998 that the impetus for improved effectiveness in local authorities will not be lost; the proposals, if any, he has to accelerate the trend towards a value for money approach in local authority operations; the consultations, if any, he has had with local authorities on the issue; and if he will make a statement on the matter.
[2478/98]
Value for money is an integral component in this Government's proposals for the reform of local government. I intend to link proven improvements in efficiency and effectiveness in the delivery of local authority services, with increased control for local authorities on how they spend the funds allocated to them. This link will actively encourage local authorities to pursue the value for money agenda. Some measures are already in place to achieve this aim.
In my visits to local authorities in the last six months, I have continually emphasised the importance of achieving value for money and quality of service to the customer. The reaction that I have received has been very positive.
On a more statutory and formal basis, the Local Government (Financial Provisions) Act, 1997 established on a statutory basis, a value for money unit in the Department and widened the role of local government auditors in auditing local authorities to examine economy and efficiency in the use of resources. However, there are barriers to comprehensive value for money audits which will deliver performance indicators which can, in turn, be used for fundamental decisions on resource allocations.
First of all, modern financial management systems, based on accrual accounting, must be in place in order to obtain a clear picture of the financial performance of local authorities, on a comparative basis. A project team has been established to carry out this task and work is under way. The first phase involves the creation of a high level code of practice to facilitate the introduction of accrual-based accounting. Work on this phase, which involved a short external consultancy exercise, is nearing completion. This is a complex project to implement and my Department is working closely with local authorities on all aspects to ensure that success is achieved. This is not just a consultative process, it is a partnership approach to fully involve local authorities in the process.
As one element of this project, a consultancy study on the costing of local authority services has recently commenced. The results of this study will form part of the impetus towards achieving value for money, through giving management and elected officials the true cost of delivering their services, measured in a standard way across the local authority system. The study, and the subsequent implementation of its recommendations, will underpin the development of a range of performance indicators. Local authorities will be required to publish their performance across a range of indicators, thus providing consistent comparative figures. An in-depth consultative process with selected local authorities will be a core activity in this study.
In the meantime, while these projects are under way, work will continue on the planning and completion of new VFM studies. In addition, local government auditors will continue to assess the performance of individual local authorities in implementing the recommendations of the studies already published. I also intend to review the value for money unit's work in order to maximise its potential in leading the way in the drive for increased effectiveness.
