Meeting documents

1 THE ISSUE

1.1 The Council is due to conclude its first Local Public Service Agreement (PSA) on 31st March 2006. The Government has announced a "second generation" of Local PSAs (PSA2) and invited councils to signal their intentions to negotiate a new 3-year agreement as part of the scheme, which would start in 2006-07. This report sets out proposal for using this process to attract additional funding to the area and to improve outcomes for the local community by working in partnership, linked to the Corporate Plan improvement priorities and the Community Strategy.

2 RECOMMENDATION

1. Request officers to begin the process of engaging with service areas and partners to build a PSA2 proposal to meet Bath & North East Somerset's 30^th September 2005 date for initial submission

2. Agree that this submission be driven by local priorities as set out in Paragraph 4.9, and in particular the Corporate Improvement Priorities and Community Strategy ambitions

3. Agree the suggested process for developing the PSA2 submission, as set out in Paragraph 4.11

4. To note the financial implications set out in Paragraph 3, and earmark up to £50,000 of the PR Grant to fund any additional work required.

3 FINANCIAL IMPLICATIONS

3.1 There are significant financial implications for the Council and its partners in pursuing PSA2. PSAs provide the potential to lever-in significant sums of "up-front" pump-priming funds (£919,000) - as well as Performance Reward Grant towards the end of the process- potentially up to £3.5m.

3.2 There are also some resource implications in developing and implementing PSAs, mainly in leading the project and working with partners. The Corporate Projects Team will take the lead in developing PSA2, with any additional resources required allocated from expected Performance Reward Grant money as a result of PSA1, up to a maximum of £50,000.

4 THE REPORT

4.1 Local Public Service Agreements (PSAs) are voluntary agreements between the Government and the Council whereby the Council commits to `stretch' targets to achieve over a period of three years. "Stretch" targets are over and above what might otherwise be achieved without a PSA. PSAs provide up-front money from the Government to help deliver those targets. If those targets are met, this generates a financial reward for the council

4.2 PSA can therefore:

B7 Provide an opportunity to focus on key local priorities and deliver Council improvement priorities

B7 Unlock 93step changes94 to service delivery through improvements to partnership working and by addressing 93fault lines94 between agencies

B7 Provide incentives to deliver improved performance

4.3 PSAs are not only an important source of funds, but also provide a focus for improving performance, supporting improvement priorities, developing the work of the Local Strategic Partnership and enhancing the Council's community leadership role.

4.4 Bath & North East Somerset's first PSA was for 3 years to 31st March 2006. £1,872,000 of borrowing approval was made available by Government. In addition, £919,000 was provided for "pump-priming" schemes. If the Council were to achieve all "stretch" levels of performance it will receive a Performance Reward Grant of £3,577,950. No Performance Reward Grant is payable unless the Council achieves 60% of the stretch target. On achieving 60% of any stretch target, a proportional amount of the reward grant will be awarded. Reward grants are independently awarded for the12 targets. Latest calculations presented to the Executive suggest a sum of £2,879,761 might be achievable from the Performance Reward Grants on current expectations and trends of performance. Recent improvements to local services brought about by PSA include the distribution of Public Transport maps to every Bath & North East Somerset residential address, new bus stops, and shelters, CCTV and other work in car parks to reduce vehicle crime and the installation of smoke detectors in the homes of vulnerable people. Working through the LSP, joint work with the PCT on health promotion initiatives is also being carried out as part of the PSA

4.5 The main change in PSA2 compared to the first round of PSAs is that councils no longer have to choose a number of targets from a central list. Councils are now free to select their priority outcomes: however, these must be based on robust evidence of local needs and priorities and be developed with partners such as the LSP. Other changes include

(1) A clear focus on significant and ambitious priority outcomes.

(2) A far greater emphasis on the role of LSPs and partnership working more generally

(3) An increased role for regional government offices

(4) The opportunity to work more closely with Government departments on joint PSA schemes

4.6 There are no longer Unsupported Credit Approvals available through PSA as this is now generally available to councils under the "prudential borrowing" arrangements of the Local Government Act 2003.

4.7 However, the main elements of PSA remain intact. Around £919,000 of pump-priming grant is expected to be available to Bath & North East Somerset across our themes. Freedoms and Flexibilities are still available, whereby the Government agrees to change an administrative or other burden imposed that is hindering improved outcomes. Finally, the performance reward grant- around £3.5m in Bath & North East Somerset- is still available to be allocated if targets are met.

4.8 PSAs also continue to be negotiated in "batches". For Bath & North East Somerset this means that by 30th September our key priorities and outcomes desired from the PSA will need to be presented to Government along with background details and supporting data. Government will be prepared to ask the council to justify its approach to priorities, and to suggest additional or alternative priorities and/or indicators. Once the overall priorities are agreed, there will be a period of negotiation on the exact "stretch" targets, with the PSA expecting to begin in 2006-2007 lasting for three years.

4.9 PSAs are expected address local priorities and community needs. Extensive work has taken place on these locally, e.g. through the Community Strategy and Corporate Plan work. It is envisaged therefore that the key drivers for the initial submission will be:

B7 The Council Corporate Plan Corporate Improvement Priorities, as set out in the Corporate Plan review reported to the Council Executive on 9th February

B7 The Community Strategy's ambitions and indicators

B7 Analysis of performance indicators and scope for improvement

B7 The CPA Improvement Plan

B7 Analysis of local information through developing an 93Area Profile94

B7 Surveys of local opinion and satisfaction with services

4.10 In some cases, it will be important to be clear that some local priorities are not appropriate to be addressed by PSA and are being dealt with in some other way. It will be important to learn from round one PSA about what works and to build on PSA successes.

4.11 Experience form PSA 1 shows that negotiations are time-consuming and complex, but that the rewards are substantial. Complexity will increase given the need to involve more closely partners and to engage in discussions about the use of Performance Reward Grant. It will be even more important therefore to involve elected members closely in the process. Initial thinking suggests the following process for consideration prior to the submission deadline of September 30th.

NOTE: It is envisaged that during the period of negotiation after September 30th there will be close linkages to the service planning and budget preparation process. The Council as part of its Financial Plan agreed the first PSA and it is envisaged a similar process would occur this time. Discussions will also take place with Trades Unions and other stakeholders, Key Partnerships and other potential partnership and delivery groups.

4.12 Issues for consideration during this process will include

5 RISK MANAGEMENT

5.1 A risk assessment has been undertaken in compliance with the Council's decision-making risk management guidance. Directors' Group has examined financial and risk issues in more detail. It will be important for example that PSA schemes develop "exit "or "continuation" strategies. The issue of risk-sharing with partners will also need to be addressed into eh recess, alongside clarity in how it is proposed that any Performance Reward Grant from PSA2 will be allocated.

6 RATIONALE

6.1 This report has been prepared because PSA2 provides significant opportunities to deliver both the Community Strategy and the Corporate Plan.

7 OTHER OPTIONS CONSIDERED

7.1 Local PSAs are not compulsory and the option remains of not submitting a proposal or entering negotiations. It is understood that few if any authorities declined to engage in PSA negotiation in round one.

8 CONSULTATION

8.1 This report was sent to the Trades Unions for comment on 14^th February 2005. Any comments received will be reported to the meeting. A full report is being prepared for the LSP meeting on April 13^th. There will be detailed engagement with relevant council officers and partnerships as part of this process, and it will be particularly important to engage the voluntary and community sector who have an important part to play in supporting the development of PSAs. It is not proposed that detailed consultation take place with local communities on the specific contents of PSA 2 as it is considered that consultation data is adequate and should now be acted upon. However, there will be opportunities for a wider discussion of priorities and issues arising from the PSA. The LSP's Business Plan, which will help set the context of PSA, is currently subject to consultation. The Corporate Plan has also been subject to recent review, engaging with partners including the LSP.