The Crerar Review: the report of the independent review of regulation, audit, inspection and complaints handling of public services in Scotland

02 PUBLIC SECTOR CONTEXT

2.1 There are thousands of organisations providing public services in Scotland:

• 32 local authorities;
• 2,000 primary schools, 400 secondary schools, 200 special schools, and around 42 colleges, responsible for the direct delivery of education;
• 14 regional health boards and 8 special health boards/organisations, and 35 independent health care providers;
• More than 60 other public bodies, including Non-Departmental Public Bodies ( NDPB) and executive agencies, responsible for the delivery or monitoring of public services;
• More than 15,000 organisations delivering care services;
• More than 250 Registered Social Landlords ( RSL) delivering housing services;
• More than 19,000 registered charities.

2.2 All of these organisations may be subject to some form of external scrutiny from one or more of the scrutiny organisations we have identified.

Changes in the public service landscape

2.3 The landscape of government and accountability changed significantly with devolution. The devolved administration in Scotland has resulted in more Ministers and elected representatives with an interest in the delivery of public services, and accountability arrangements under the new system are still evolving. Devolution has also led to a greater level of awareness amongst the public and the media about public services, resulting in more public reporting, more Parliamentary debate and more media coverage.

2.4 The public service delivery environment in Scotland is also changing with increasing emphasis on partnership working and joint delivery across organisational boundaries and more focus on meeting the needs of service users. All of these changes have implications for the nature of the information and assessment that is required from external scrutiny and the kinds of arrangements that are needed to deliver corresponding objectives.

The relationship to internal scrutiny and performance management

2.5 When defining the role of external scrutiny, we have to take account of its relationship to internal scrutiny and performance management. The Scottish Government wishes to reduce centrally imposed bureaucracy associated with planning, performance reporting and funding. However, in return providers must take greater responsibility for monitoring and evaluating their own performance and tackling poor performance when it occurs. This requires robust performance management arrangements across all public services. A constraint to date has been a lack of baseline performance information, coupled with poor performance management capacity in some places and arguably, because of a wider lack of trust between the Scottish Government and service providers.

2.6 Improvement frameworks are now in place in most services. Best Value has been an important constituent and is currently a statutory responsibility for local authorities and a non-statutory duty for Accountable Officers of public bodies. It places a responsibility on service providers to demonstrate continuous improvement focusing on effective decision making, use of resources and performance management.

2.7 The Scottish Government is working with providers to develop performance management arrangements, to make these more outcome focused, and to build a greater degree of self-assessment. For example, the performance management framework for local government is being developed in conjunction with Audit Scotland, COSLA and the local government Improvement Service. In education, HM Inspectorate of Education ( HMIE) is working closely with providers to develop self-assessment. In the health sector, health boards are required to undertake an annual accountability review with the Cabinet Secretary. The ambition, which we support, is to have all providers operating effectively within these frameworks.

2.8 Service providers in all sectors have argued in their evidence to the Review, that the capacity of public organisations to take on responsibility for their performance has improved and that robust internal audit and performance management will address areas of weakness. Information from scrutiny regimes is also beginning to suggest that more reliance can be placed on the capacity of service providers to manage services and account for failures. For example, the 2007 Review of Best Value in local government, commissioned by the Accounts Commission, found that the Best Value regime has been a driver of modernisation and improvement in local government and that the Best Value audit process is increasingly challenging under-performance as well as identifying success. The Best Value Review also suggested that future Best Value audits should adapt to reflect the performance, capacity and challenges facing each council and that the existence of baseline performance audit information should enable more reliance to be placed on self-assessment and more proportionate approaches to Best Value audit and other scrutiny processes. For example, by 2008/09 baseline information should be available from the following:

• Social Work Inspection Agency ( SWIA) social work services inspections;
• HMIE's INEA and INEA2 and child protection and children's services inspections;
• NHS Board Accountability Reviews;
• Best Value audits of local government.

Chapter summary and recommendations

• There are thousands of organisations in Scotland delivering public services which are subject to external scrutiny by one or more of the scrutiny organisations we identified.
• Devolution has led to increased levels of external scrutiny.
• As service delivery becomes more complex, through partnership working across organisational boundaries, external scrutiny has to adapt.
• Ministers are promoting a culture of continuous improvement for all public services and wish to reduce unnecessary bureaucracy, but in return providers must take greater responsibility for monitoring and evaluating their own performance. New performance management arrangements are developing, which will mean that more reliance can be placed on the capacity of service providers to manage services and account for performance.
• Baseline performance information should become available across all services, which should enable the development of new approaches to external scrutiny.