Audit Commission Annual Report
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English
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Year ended October 2002Annual reportiThe Auuddiitt CCommission pprroommotes the beesstt uuse of public mmoonneey by ensurinngg tthhe proper stewwaarrddship of publliicc ffiinnances and byy hheelping thoseresponnssiibblle for public sseerrvviicces to achievvee eecconomy, efficiieennccy and effectiivveenneess.The Commission was established in 1983 to appoint and regulate the external auditors of local authorities in England and Wales. In 1990 its rolewas extended to include the NHS. In April 2000, the Commission was given additional responsibility for carrying out best value inspections ofcertain local government services and functions. Today its remit covers more than 15,000 bodies which between them spend nearly £125 billionof public money each year. The Commission operates independently and derives most of its income from the fees charged to audited bodies. Itsfindings and recommendations are communicated through a wide range of publications and events.The Audit Commission is firmly committed to providing value for money across all its regulatory and watchdog activities. Through its emphasison Strategic Regulation the Commission believes that all audit and inspection activity should be proportionate to risk, and tailored to meetassurance and improvement requirements in a costffective way. All regulators should work together to maximise the benefit to the public andservice users, and to minimise the cost of regulation and compliance for those whose ...

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Year ended October 2002
Annual report
iThe Auuddiitt CCommission pprroommotes the beesstt uuse of public mmoonneey by ensurinngg tthhe proper stewwaarrddship of publliicc ffiinnances and byy hheelping those
responnssiibblle for public sseerrvviicces to achievvee eecconomy, efficiieennccy and effectiivveenneess.
The Commission was established in 1983 to appoint and regulate the external auditors of local authorities in England and Wales. In 1990 its role
was extended to include the NHS. In April 2000, the Commission was given additional responsibility for carrying out best value inspections of
certain local government services and functions. Today its remit covers more than 15,000 bodies which between them spend nearly £125 billion
of public money each year. The Commission operates independently and derives most of its income from the fees charged to audited bodies. Its
findings and recommendations are communicated through a wide range of publications and events.
The Audit Commission is firmly committed to providing value for money across all its regulatory and watchdog activities. Through its emphasis
on Strategic Regulation the Commission believes that all audit and inspection activity should be proportionate to risk, and tailored to meet
assurance and improvement requirements in a costffective way. All regulators should work together to maximise the benefit to the public and
service users, and to minimise the cost of regulation and compliance for those whose performance is audited and inspected.
For more information on the work of the Commission, please contact:
Sir Andrew Foster, Controller, Audit Commission, 1 Vincent Square, London SW1P 2PN
Telephone: 020 7828 1212 Textphone: 020 7630 0421 Website: www.audit-commission.gov.ukContents
Chairman’s foreword 2
1 Introduction 3
2 Cross cutting 5
3 Local government 8
4 Housing 12
5 Health 15
6 Criminal justice 18
7 Wales 21
8 Resources 24
9 Audit Commission members 26
10 Summary financial statement 28Chairman’s foreword
The reform and improvement of public services is now firmly in the spotlight. The
public rightly demands high-quality, value-for-money services that meet its needs.
The Audit Commission has a broad remit across local government, health, housing
and criminal justice. We play an important role in helping to secure improvement,
while providing assurance about value for money.
Last year saw some notable achievements as our responsibilities increased. We
completed the comprehensive performance assessment (CPA) of all 150 upper tier
local authorities and we are now putting in place CPA for district councils. The
Government has added the inspection of housing associations to our remit. The
Bain Report has recommended a leading role for the Commission in reforming
inspection of the fire service to deliver improvement. We are working to ensure that
successful strategic partnerships are forged with the new specialist regulators in
health and social care.
All public service regulators need to maximise the value that they add by focusing
their work on improving public services. Our response has been to develop
strategic regulation. Keeping bureaucracy to a minimum, strategic regulation
focuses on capacity, improvement and the needs of the service user, while
continuing to provide assurance about public expenditure. It targets regulatory
resource where the room for improvement is greatest. CPA in local government is a
good example, and in the coming year we plan to apply the principles of strategic
regulation across our entire remit.
This is a time of change for the Commission. Andrew Foster is preparing to hand
over to his successor and I pay warm tribute to his outstanding contribution to the
Commission’s work. The Commission is only as good as the quality of its people
and we have an outstanding team. We want to maximize the impact we have on
improving public services. I am confident we will meet this challenge.
James Strachan, Chairman
21 Introduction
Our aim in 2001/02 was to build on our existing strengths of independence, rigour In 2001/02 we proposed changes in some areas of our work, which were widely
and evidence-based findings and recommendations. We continued to stress the supported in the responses to our consultation on our strategy Delivering
importance of sound stewardship and governance as the bedrock of effective Improvement Together. Over the year we shaped our work around the key themes of:
public service delivery, and our local audit and assurance work remained targeted
• Focusing on users and the public. We aimed to reflect the needs and views
on that end.
of users in our work, and to increase our focus on users’ actual experiences of
public services and their outcomes.
Independence is fundamental to the Audit Commission’s role, so that we speak
• Promoting improvement. Our aim was to help improve public services by
without fear or favour. Independence also underpins our public interest role. We
designing and deploying our services differently and by using our considerable
work to ensure that there are appropriate checks and balances to safeguard the
resources of knowledge and expertise more effectively.
public. We must also ensure that public services are of an appropriate quality, that
tax payers money is being well spent and that organisations meet the needs of the • Streamlining regulation. We led the growing debate on safeguarding the
public, and not vice versa. public interest by working with other regulators to maximise the benefit and
minimise the burden of regulation and accountability.
With a cross-cutting role across the NHS, local government, including education,
And, very much in the mode of practising what we preach, we set out to modernise
culture and social services, the criminal justice system, probation and fire, we are
our own approach and delivery of more customer-focused services, and to build
well placed to provide a perspective that no other organisation can. As public
that thinking into the way that we met our key themes above. We saw these strands
services develop new forms of delivery and partnerships with the voluntary and
as mutually supporting.
private sectors we will assist them to meet the challenges of maintaining
accountability, probity and public confidence.
We have continued to build on these foundations as we develop our strategic focus
for 2002/04. Our key themes will be:
The Commission’s strengths are its track record in resource management, looking
at economy and efficiency alongside service quality and effectiveness, and its wide
and growing remit to review performance across the public sector. The
Strategic Regulation
Commission acts in the public interest and uses its body of knowledge, information
The Audit Commission is firmly committed to providing value for money across all
and expertise about resources and management systems as a firm foundation to
of its regulatory and independent watchdog activities. The Commission believes
help deliver beneficial changes in the way services are delivered and the way that
that regulation should be proportionate to risk and tailored to meet assurance and
they are experienced by users. Constructive change stems from focusing firmly on
improvement requirements in a cost-effective way. All regulators should work
what matters to service users, and on making joint working deliver benefits and
together to maximise the benefit to the public and to minimise the cost of
stimulating innovation.
regulation and compliance. The Commission is working to reduce bureaucracy,
improve co-ordination and remove duplication.
3Improving public services
It is no longer enough for regulators to identify problems. The Commission must
help public bodies to find solutions and to implement them so as to improve
services. The Commission is targeting its efforts so that support for improvement is
directed where it is needed most and where it will have a direct impact.
Service user involvement
The Commission exists to act in the public interest. Its prime purpose, to ensure
economy, efficiency and effectiveness of public services, can best be realised by
reference to the needs and views of those who use and depend upon the services
and who fund services through taxation.
Included in this Annual Report are the headline priorities for 2002/03 in each of our
main work areas. Full details are shown in our holding strategic plan for 2002-2004.
4Cross cutting
2Cross-boundary working between agencies is essential to provide a
Impact
coherent service to users and to tackle inter-related social and economic
Integrated Services for Older People: Building a Whole System Approach in
problems, such as regeneration and community safety. Users want services
England concluded that services for older people are not well co-ordinated
to be organised around their needs, not around separate bureaucratic
between councils, the NHS and other agencies. Preventative services, that aim to
structures. One of the Commission’s major strengths is its ability to look
promote independence, are particularly underdeveloped. Early feedback suggests
across the traditional boundaries between local government, health,
that the report is being used locally as a framework for building
housing and criminal justice.
whole-system working.
Forget Me Not 2002: Developing Menta

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