Audit Commission - Annual Audit and Inspection Letter to Thurrock Council

Audit Commission

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Annual Audit Letter

February 2006

 

Annual Audit and Inspection Letter

Thurrock Council

 

Audit 2004-2005

 

                   

  External audit is an essential element in the process of accountability for public money and makes an important contribution to the stewardship of public resources and the corporate governance of public services. Audit in the public sector is underpinned by three fundamental principles: • auditors are appointed independently from the bodies being audited; • the scope of auditors' work is extended to cover not only the audit of financial statements but also value for money and the conduct of public business; and • auditors may report aspects of their work widely to the public and other key stakeholders. The duties and powers of auditors appointed by the Audit Commission are set out in the Audit Commission Act 1998 and the Local Government Act 1999 and the Commission's statutory Code of Audit Practice. Under the Code of Audit Practice, appointed auditors are also required to comply with the current professional standards issued by the independent Auditing Practices Board. Appointed auditors act quite separately from the Commission and in meeting their statutory responsibilities are required to exercise their professional judgement independently of both the Commission and the audited body.  

Status of our reports to the Council Our reports are prepared in the context of the Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit Commission. Reports are prepared by appointed auditors and addressed to members or officers. They are prepared for the sole use of the audited body, and no responsibility is taken by auditors to any member or officer in their individual capacity, or to any third party. Copies of this report If you require further copies of this report, or a copy in large print, in Braille, on tape, or in a language other than English, please call 0845 056 0566. © Audit Commission 2006 For further information on the work of the Commission please contact: Audit Commission, 1st Floor, Millbank Tower, Millbank, London SW1P 4HQ Tel: [phone] Fax: [phone] Textphone (minicom): 020 7630 0421 www.audit-commission.gov.uk 

Annual Audit and Inspection Letter │ Contents 3 

Contents Key messages 5   Council performance 5   The accounts 5   Financial position 5   Other accounts and governance issues 5   Action needed by the Council 5   Performance 6   CPA scorecard - ‘Improving well’ 6   Direction of Travel report 7   Other performance work 12   Other Audit Commission inspections 14   Working with other inspectorates and regulators 14   Accounts and governance 19   Audit of 2004/05 accounts 19   Report to those with responsibility for governance in the Council 19   Matters arising from the final accounts audit 19   Financial standing 20   Systems of internal financial control 22   Standards of financial conduct and the prevention and detection of fraud and corruption 23   Legality of transactions 23   Use of resources judgements 24   Other work 25   Additional voluntary work 25   Grant claims 25   National Fraud Initiative 25   Looking forwards 26   Future audit and inspection work 26   Revision to the Code of Audit Practice 26  

Thurrock Council

4Annual Audit and Inspection Letter │Contents

Closing remarks Availability of this letter

Appendix 1 – Background to this letter The purpose of this letter Audit objectives

Appendix 2 – Audit reports issued

Appendix 3 – Audit fee Inspection fee update

 

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Annual Audit and Inspection Letter │ Key messages 5 

Key messages

Council performance 1 Thurrock Council is making good progress against its priorities and improving the quality of life for local people. It has improved its community leadership role and established some key partnerships, including the strategic support services partnership with Vertex.

The accounts 2 audit opinion on the Council's 2004/05 accounts.We gave an unqualified 3 corporate governance arrangements are satisfactory in most keyYour overall areas.

Financial position 4 The Council’s financial position is adequate. For the first time in many years the Council has been able to make contributions to reserves from its General Fund activities.

Other accounts and governance issues 5 We have not identified any significant weaknesses in the overall control framework.

Action needed by the Council 6 should continue to implement the learning gained from the audit andThe Council inspection work set out in this letter. The recommendations that form part of the individual reports should help to further improve the Council's performance in key areas. These recommendations will be followed up in the coming audit year. 7 to develop its approach to analysing the costSpecifically, the Council should look and performance of the services that it provides to better demonstrate the value for money that it is providing to local people.

Thurrock Council

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Performance  The Council is making good progress against its priorities and improving the quality of life for local people. It has improved its community leadership role and established some key partnerships, including the strategic support services partnership with Vertex.

‘ ’ CPA scorecard - Improving well 8 The Council is making good progress against its priorities and improving the quality of life for local people. It has improved its community leadership role and established some key partnerships, including the strategic support services with the Customer Contact Services, which has improved telephone access. 9 The Council has made significant improvements in priority areas. Children and Adult Services are judged as serving most people well, with excellent capacity for improvement. In community safety, more people now feel safe after dark. Satisfaction with cleanliness improved following investment for additional staff. 10 Whilst some service performance is improving; there is below average satisfaction overall. More than half of service performance targets were missed but of these 37 per cent did improve. Overall service performance indicators show mixed quality services: benefits is below average, although improving and pupils are making greater progress in secondary schools than primary schools. The Council has improved its approach to financial management, although procurement is not yet fully effective. 11 portfolios were amended, reflecting priorities alongside a revisedCabinet directorate structure. The Council is establishing clear and specific plans to improve the organisation and performance.  

Thurrock Council

Annual Audit and Inspection Letter │ Performance 7 

Table 1 CPA scorecard  

Element Assessment Direction of Travel judgement Improving well Overall Fair Current performance   Children and young people 2 out of 4 Social care (adults) 3 out of 4   Use of resources 2 out of 4 Housing 4 out of 4 Environment 2 out of 4 Culture 2 out of 4 Benefits 3 out of 4 Corporate assessment/capacity to2 out of 4 improve (not reassessed in 2005) (Note: 1 = lowest, 4 = highest) 12 The CPA judgements this year have been made using the revised methodology set out in the Audit Commission's publicationCPA - the harder test. As the title implies CPA is now a more stringent test with more emphasis on outcomes for local people and value for money. It also now includes a new dimension, a Direction of Travel judgement that measures how well the Council is improving. Under the new framework the Council is 'improving well' and its overall CPA category is 'fair'.

Direction of Travel report What evidence is there of the Council improving outcomes 13 The Council is making progress against priorities which are improving the quality of life for local people. It has improved its community leadership role and established some key partnerships. External judgements are showing a positive direction of travel. However the Council has missed more than half of its own targets and performance indicators show a mixed quality services. The Council has improved its approach to financial management, although procurement is not yet fully effective.

Thurrock Council

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14 The Council continues to have clear priorities. These are clearly understood by staff and reflect the six themes of the Community Strategy. Following a formal review which included stakeholders, these have been refreshed into five Council priorities: • excellence and achieving value for money; delivering • children young people and lifelong learning; • safer environment; • people; and including • and greener environment. cleaner 15 Community leadership has improved. The Council instigated a review of the Local Strategic Partnership which resulted in the partners agreeing a revised more focused structure of key members on an LSP Board, which oversees the work of four action orientated executive groups which are working to deliver the shared priorities A partnership director has also been appointed to drive forward the LSP. This structure is already starting to show outcomes for example with the work in crime reduction. 16 The Council has had some significant improvements in priority areas. In community safety the number of people now feeling safe after dark has increased from 51 per cent to 57 per cent. This has been as a result of focused funding and joint initiatives, such as contribution to police overtime to increase police presence on the streets, £50,000 for additional CCTV and a sharper focus on anti-social behaviour. In environment, recycling has increased by 4 per cent and 98 per cent of households now have a kerbside recycling collection. The Council focused on street cleaning with £300,000 invested in additional staff, together with £100,000 on additional planting. This led to improved satisfaction with cleanliness in the Borough. 17 In education, relationships with schools and performance has improved. Attainment in the local education authority (LEA) varies between phases, with pupils making greater progress in secondary schools than primary schools. Children do not meet national expectations on entry to secondary schools and the relatively low standards reached at the end of the Key Stage 1 mean that most children have a significant amount of ground to make up in later years. The quality of education provided for 14 to 19 year olds is satisfactory but the proportion of young people progressing to higher education and training is low. While many of the issues impacting on children and young people’s achievements are long standing and deep seated, over the last two years the strategies to address these problems have been fundamentally re-appraised. Significant improvements have been made in the way the Council is working with its schools. Actions to promote child protection have increased significantly over the past two years, for example, the numbers of conferences, in-year registrations and the increase in total number of children on the child protection register. There are also no longer any schools in special measures.

Thurrock Council

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18 Accessibility to services and focus on diversity has improved with the Council reaching Level 3 of the Equality Standard for Local government. The Council has entered into a significant partnership with a private sector company to deliver a range of support services, including the introduction of a new Customer Contact Centre. This is already having a significant impact on the customer experience, such as 91 per cent of customers’ calls being resolved at the first contact and opening hours being extended to 8.00pm at night and Saturday mornings. The Council’s website was judged as ‘transactional’ (four out of four) by SOCITM for its accessibility and information available. Much of the consultation and engagement with users is being undertaken at service level. Whilst corporately it knows about work and is learning from it, it has yet to take a fully joined up cross-cutting approach and have a clear analysis of the needs of the community as a whole. The Council has recognised this need and has established the Corporate Consultation Working Group and the appointment of a lead councillor for user engagement, communications, and diversity. 19 Value for money is improving. The Council has got a strong focus on budgetary control and financial management, with 2004/05 having achieved a balance budget for the first time as a Unitary with £114,000 being contributed to reserves. Ofsted reported that ‘the LEA continues to provide highly satisfactory value for money in exercising its SEN (Special Education Needs) functions’. The Council also has Service Level Agreements for the significant grants to voluntary organisations.  20 not using strategic procurement effectively to obtain value forThe Council is money. A recent report found that whilst there is a strategic procurement framework in place, with a sound strategy and associated action planning, progress has been slow and action planning ineffective. The Council has made some progress towards meeting the requirements of the national procurement strategy but significant gaps remain. For example, there is no regular measurement of strategic implementation. The implementation of contract management has been weak. Since that report, the Council has transferred the procurement function to the Support Services Partnership (SSP). A procurement manager is being employed to focus on improving the procurement function, give support and advice and produce a new strategy. A corporate Procurement Board is also being established to ensure the opportunities for procurement are maximised. 21 External judgements have shown a positive direction of travel. • housing service was found to be a ‘good service with promising The prospects for improvement’. The Council has reduced the time families spend in bed and breakfast accommodation and increased the range of temporary accommodation available. • The Annual Performance Assessment for Adult Services said that Thurrock continues to make impressive progress. It also concluded that they were ‘serving most people well with excellent prospects for improvement’. • The Ofsted report in January 2005 said that the Thurrock LEA has made satisfactory progress since the previous inspection and it is now effective.

Thurrock Council

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• Children’sServices have been judged to be serving most people well and  now with excellent capacity for improvement. • The BFI has judged the Benefits Service as Good. However, whilst some performance is improving it is below average when compared to others. 22 however there is below average satisfaction ofPerformance is improving; residents with overall services. Between 2002/03 and 2004/05 61 per cent of performance indicators (excluding satisfaction indicators) improved. However, in 2004/05 55 per cent of the Council’s indicators were below the median. The Council also missed 43 per cent of its CPA targets, 61 per cent of its LPSA targets and 64 per cent of other key indicators in 2004 /05. How much progress is being made to implement improvement plans to sustain future improvement 23 The Council is establishing clear and specific plans to improve the organisation and performance. A new directorate structure has successfully been implemented along with a reorganisation of portfolios to reflect the priorities for delivery. The performance management system and service planning structure is in the process of being changed for 2006/07 with clearer links to the priorities and a revised MTFS has strengthened the links to budgetary allocation. The Council has also entered into a significant partnership which has delivered improved customer services and capacity for procurement and contract expertise. However, whilst some performance has improved this has yet to show sustained improvement across all services. 24 organisational structure in light of the priorityThe Council has reviewed its changes and amended it to maximise focus on improving service delivery. This included the establishment of a children, education and family’s directorate. Cabinet portfolios have also changed, with portfolio responsibilities cutting across directorates and priorities. Whilst this places an emphasis on members to work across departments and priorities as part of their portfolios, there has been some lack of clarity as to which member has responsibility for some areas. 25 The link between budgets and priorities continues to be clear and is improving. To reinforce the delivery of the Council’s priorities the Medium-Term Financial Strategy (MTFS) was approved on 19 October 2005 at Cabinet and articulates the relationship between local taxation, expenditure, costs and performance, taking account of priorities.

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Annual Audit and Inspection Letter │ Performance 11 

The performance management system is improving. The Council is changing its performance management system to reflect the links between the Community Strategy, the new corporate priorities and service delivery. Departmental plans are also being introduced to link service improvement plans to priorities to ensure a clearer focus. Mechanisms to review performance are being introduced. An IT system has been purchased which will produce comprehensive performance information which will be available to all staff and members. A Scrutiny Committee Performance Commission looks at performance issues and receives reports from its performance champion members who have been appointed to monitor performance, identify areas of concern and commission scrutiny reviews where appropriate. A new performance column has been introduced in the quarterly staff magazine and Thurrock News, the Council’s magazine for residents. The existing performance management system has led to some focus on weaker performance, for example the planning service has significantly improved and come out of being designated a Planning Standards Authority and now receives Planning Delivery Grant of £740,000. The Council is using partnerships to enhance its capacity and deliver improved services. The Council was integral to the establishment of an Urban Development Corporation, known as the Thurrock Thames Gateway Development Corporation (TTGDC). A Regeneration Framework is being established which is due to be consulted on in December 2005 and when published will feed the revised Community Strategy which is due to be published in the summer of 2006. The TTGDC has powers for strategic planning and the Council powers for non strategic planning. However the Council reviews all planning applications by virtue of its SLA with the TTGDC. The strategic partnership with Vertex has been considered a success. It has delivered improved customer contact services and enhanced capacity for procurement and project planning. It is also expected to contribute to delivering efficiency savings for the Council in 2006/07. The Council has introduced a number of initiatives to enhance the borough. For example it has introduced Be Smart, which is a campaign to clean the borough and improve the environment. The Council has Environment Action Days which target a particular area to deal with issues including crime reduction, graffiti, fly tipping and littering through a multi-agency approach. The Council has key strategies in place for delivery, such as the Housing plan and business plan which are judged to be fit for purpose, an anti-social behaviour strategy, in association with the Safer Thurrock Partnership, a Fostering Investment Strategy working with other agencies and a cultural strategy. Some services are not performing effectively. The Council has significantly increased its capacity to deliver improvements however these have not yet led to consistent improvements across all services. For example the benefits service is not performing effectively and payment of invoices are below average, but both are improving. The Council has not yet got specific plans for the key actions supporting priorities. Target setting is still weak and some service plans are too long and not focused. The five-year strategy for Supporting People lacks an appropriate action plan and there are no details of the level of spending required to achieve the programme.

Thurrock Council