Bridgend County Borough Council

1. Appendix 1 Bridgend County Borough Council Audit of the Corporate Improvement Plan Auditors’ Report 30 September 2005

2. Index • Introduction • This document contains our Auditors’ report to Bridgend County Borough Council (“the Authority”) on its Corporate Improvement Plan which was published in June 2005. It also sets out our observations and recommendations under the three key themes as set out by the Wales Audit Office. • Contents of Statutory report • Auditors’ Report • Observations and Recommendations on the Plan - Updated Risk Assessment/Joint Risk Assessment - Corporate Improvement Plan - Implementation of Previous Years’ Recommendations • Note on recommendations • All formal recommendations contained within this document are prefixed by the letter R eg R1. Recommendations from prior years are prefixed P eg P2.

3. Marlborough House Tel +44 (0) 29 2046 8091 Fitzalan Court Fax +44 (0) 29 2046 8201 Fitzalan Road Cardiff CF24 0TE ABCD • This was supplemented by further guidance on how the Wales Programme for Improvement (WPI) will be implemented under Sections 3, 5 and 6 of the Local Government Act 1999. Under this guidance, the statutory Best Value Performance Plan has been replaced by a statutory Improvement Plan (the Plan) which must be published by 30 June of the financial year to which the Plan relates. • The Authority is responsible for the preparation of the Plan and for the information and assessments set out within it. The Authority’s future work programme set out in the Plan should connect to the outcomes of the updated risk assessment. The Authority is also responsible for establishing appropriate performance management and internal control systems from which the information and assessments in its Plan are derived and for ensuring that it provides sufficient capabilities and capacity needed to manage change and improvement. The form and content of the Plan are prescribed in Section 6 of the Act and statutory guidance issued by the Welsh Assembly Government. • As the Authority’s auditors, we are required under Section 7 of the Act to carry out an audit of the Plan, to certify that we have done so, and: • To report whether we believe that the Plan has been prepared and published in accordance with statutory requirements set out in Section 6 of the Act and statutory guidance and, where appropriate, recommending how the Plan should be amended so as to accord with statutory requirements • To recommend: • - where appropriate, procedures to be followed in relation to the Plan; • - whether the Wales Audit Office should carry out an Inspection of the Authority under Section 10 of the Local Government Act 1999; and • - whether the Welsh Assembly Government should give a direction under Section 15 of the Local Government Act 1999. IK Lewis Esq Chief Executive Bridgend County Borough Council Civic Offices Angel Street Bridgend CF31 4WB 30 September 2005 Dear Mr Lewis Auditors’ report to Bridgend County Borough Council on its Corporate Improvement Plan published June 2005 Certificate We certify that we have audited Bridgend County Borough Council’s Improvement Plan in accordance with Section 7 of the Local Government Act 1999 (“the Act”) and the Audit Commission in Wales’s Code of Audit Practice. We also had regard to supplementary guidance issued by the Wales Audit Office. This report is made solely to Bridgend County Borough Council (“the Authority”), in accordance with Section 7 of the Act. Our audit work has been undertaken so that we might state to the Authority, to the Wales Audit Office and (where necessary) to the Welsh Assembly Government those matters we are required to state to them in such an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Authority, the Wales Audit Office and the Welsh Assembly Government for our audit work, for this report, or for the opinions we have formed therein. Respective responsibilities of the Authority and the Auditors Under the Local Government Act 1999 (the Act) the Authority is required to prepare and publish a Best Value Performance Plan summarising the Authority’s assessments of its performance and position in relation to its statutory duty to make arrangements to secure continuous improvement to the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

4. Basis of report We planned and performed our work so as to obtain all the information and explanations that we considered necessary in order to report and make recommendations in accordance with Section 7 of the Act. For the purposes of our report, we have interpreted compliance with the statutory guidance issued by the Welsh Assembly Government in the Wales Programme for Improvement: Guidance for Local Authorities as being sufficient to meet the statutory requirements under Section 6 of the Act. In giving our opinion we are not required to form a view on the completeness or accuracy of the information or realism and achievement of the Plan published by the Authority. Our work therefore comprised a review and assessment of the Plan and, where appropriate, examination on a test basis of relevant evidence, sufficient to satisfy ourselves that the Plan includes those matters prescribed in legislation and statutory guidance and that the arrangements for publishing the Plan complied with the requirements of the legislation and statutory guidance. Included in the Plan are the Authority’s performance estimates for the year ended 31 March 2005. Actual results for the year may be different from the figures reported, because events and circumstances frequently do not occur as expected and the differences may be material. To the extent that the figures included in the Plan are estimates, our audit work comprised an assessment as to whether the estimates made by the Authority had been properly compiled in all significant respects on the basis of the assumptions stated by the Authority, as at the date at which the Plan was prepared. For the purpose of determining whether or not to make recommendations on procedures to be followed in relation to the Plan, our work included a review and assessment, and where appropriate, examination on a test basis of evidence relevant to the adequacy of the systems set in place by the Authority for collecting and recording specified performance information; and the testing of specific Performance Indicators (PIs) selected by the Wales Audit Office (“WAO”) and ourselves because of the inherently higher risks of their mis-statement. The work we have carried out in order to report and make recommendations in accordance with Section 7 of the Act cannot be relied upon to identify every weakness or opportunity for improvement. In particular, it has not necessarily covered the same areas as an Inspection. Many of the issues identified by this work as requiring further attention have already started to be addressed by the Authority through their inclusion in improvement work programmes. Others are currently being discussed with the Authority. There are, nonetheless, a number of important issues that are fundamental to the delivery of the Council’s improvement agenda that are raised as formal recommendations in pages 6 to 12 of this report. During the year, the Authority undertook a Corporate Culture Review with the Wales Audit Office. This identified a number of matters needing to be resolved to facilitate performance improvement, and an action plan has been drawn up to deal with them. In September 2005, the Social Services Inspectorate Wales identified serious concerns over the Authority’s performance in the delivery of Children’s Services, and consequently have implemented the protocol for securing performance improvement. Our recommendation on referral (set out below) is on the basis that these significant issues have been identified, appropriate action plans are being prepared and will be successfully implemented. We will review the position during our 2005/6 audit.

5. Unqualified Opinion • In our opinion Bridgend County Borough Council has prepared and published its Corporate Improvement Plan in all significant respects in accordance with Section 6 of the LGA 1999 and the statutory guidance issued by the Welsh Assembly Government. • Recommendations on referral to the Wales Audit Office / Welsh Assembly Government • We are required each year to recommend whether, on the basis of our audit work, the Wales Audit Office should carry out a Best Value Inspection of the Authority or whether the Welsh Assembly Government should give a direction. • On the basis of our work and subject to the issues referred to in the final paragraph of page 4 : • We do not recommend that the Wales Audit Office should carry out a Best Value Inspection of Bridgend County Borough County Council under Section 10 of the Local Government Act 1999. • We do not recommend that the Welsh Assembly Government should give a direction under Section 15 of the Local Government Act 1999. • Appointed Auditor’s signature: • Date: • The Authority must consider this report and formally respond to the statutory recommendations contained within it, within 30 working days.

6. Implementation of previous years’ recommendations • During the course of the year the Authority has made progress in addressing some of the recommendations made in the prior year audit; there remain, however, a significant number of issues that have yet to be fully addressed (as set out in the table below). It is crucial that the Authority endeavours to address these recommendations, as many of them are fundamental in determining whether or not the Authority will be able to meet its objectives going forward.

7. Implementation of previous years’ recommendations (continued)

8. Implementation of previous years’ recommendations (continued)

9. Joint Risk Assessment • A key element of the Wales Programme for Improvement process is the requirement for each Authority to undertake a Whole Authority Analysis on a five yearly basis, which should be revisited annually. The Authority updates its self assessment and agrees the results with the regulators in the Joint Risk Assessment Process. The Authority’s risk assessment for the current year considered, among other things; • the corporate and service priorities as detailed in the 04/05 Corporate Improvement Plan • the WAO Risk Assessment Template • the Relationship Manager’s Annual letter and the Authority’s Improvement Journey • the Authority’s Risk Register and individual service risk assessments • The Authority adopted a more formal approach to measuring corporate risk in this year, using a scoring system based upon impact and likelihood. We look forward to seeing this develop further in future years. • The final risk assessment exercise was undertaken in May 2005 by the Cabinet and Corporate Management Team Working Group and agreed with the regulators. The comparative risk assessment for the 2004/05 CIP took place in March. We considered that the risk assessment process undertaken was robust but would encourage the authority to diarise meetings for the 2006/09 risk assessment process as soon as possible.

10. Corporate Improvement Plan • The Authority’s Corporate Improvement Plan was produced and published in accordance with statutory timetables. The consultation exercise involved using a variety of methods to ensure that as many stakeholders as possible are given the opportunity to comment on the draft CIP, such as notices in the local press, and distribution to key partners and the Bridgend citizens panel. • The document is well laid out and seeks to set out clearly the relationship between the Community Strategy and the Corporate Objectives. There is also an explanatory section on the Authority’s risk assessment process. There are, however, some key headline messages for the Authority that do not emerge from the published document. For example, the risk assessment highlights some 22 risk areas but does not provide readers of the CIP with sufficient detail to understand the nature, complexity and extent of the issues facing the Authority. This level of detail is important as the CIP should provide the foundation for the budget and resource allocation process for the following year. • The authority has recorded and reported a selection of performance indicators set by the National Assembly for Wales (NAWPIs). Of the NAWPIs disclosed in the Corporate Improvement Plan: • 6%(2%) had not been recorded • 7%(2%) were adjusted following audit • only 5%(6%) of indicators were considered to be materially misstated or not supported. The overall trend in performance as measured by the PIs reported in the Corporate Improvement Plan was positive in 2003/04, by comparison performance appears to have deteriorated in 2004/05. Of the readily comparable PIs, 50% showed improvement in 04/05 (65% reported in 03/04); and only 46% (57%) met or exceeded their target. The authority also has a duty to produce a summary CIP. This was published and distributed to all householders in the September version of the Bridgend quarterly bulletin. The summary CIP should seek to ‘present a fair and balanced picture of performance’ The authority’s summary plan includes a sample of 9 performance indicators, all of which demonstrate an improvement in performance. We accept that it is important for the Authority to record and report areas where it has improved, but the CIP needs to strike an appropriate balance. The authority has not used NAWPIs in the CIP summary to illustrate the areas where improvement is required, and as previously discussed the CIP is intended to drive better performance in the future.

11. Recommendations • (R1) Developing and Monitoring the Community Strategy • The authority should review the Community Strategy with a view to making the desired outcomes mores specific and measurable. The Local Strategic Partnership (LSP) currently monitors only 6 of the 26 objectives. Other objectives fall within the action plans of groups that lie within the LSP, but there is not a process in place to monitor them at the LSP level. We understand that a coordinators group is currently being developed to address this particular issue. The authority should encourage the Local Strategic Partnership to have measurable outcomes for all the objectives of the Community Strategy and monitor them regularly. (R2) Recycling of Resources The authority is now beginning to quantify resource requirements at the risk mitigation and action planning stages of projects. Many of the action plans reported in the CIP are expected to be funded ‘out of existing budgets’. This may miss the overall objective of recycling resources, which is to identify savings across the Authority, and then recycle them corporately to the areas of highest priority and risk. The base budgeting exercise recently undertaken by the Authority may help to identify opportunities for recycling, but in order to be effective they should be owned by the Authority as a whole, and not by the service areas. As stated previously, while the preparatory work for the CIP started in Autumn 2004, much of the strategic input was secured relatively late (the Joint Risk Assessment was performed in May as opposed to March in the previous year). The Authority should seek to ensure that the new timetabling arrangements set out in the CIP are managed effectively in order to make a strong link between planning and budget allocation. This would provide a real opportunity to consider where resources would be best placed. Some staff who contributed to the Corporate Culture Review said they had not understood the differences between the budgets they had submitted, and the ones finally approved. We recommend the Authority adopts a strong communication policy as part of this year’s budget process. (R3) New action plan format – focus on outcomes The new action plan format should provide the authority with a consistency it has previously lacked in the formulation of plans. In order for this initiative to deliver improvements successfully, the action plan emphasis needs to be on outcomes. These should be specific and measurable. In many of the action plans cited in the CIP, outcomes are not quantified. The authority should seek to ensure that where necessary, staff are trained in how to formulate action plans in order to achieve optimal results and increase accountability.

12. Recommendations: Corporate Improvement Plan (R4) Use of Performance Indicators The Authority should continue to support the development of PI processes and encourage their use as a tool in the performance management process. As part of the performance management project the Authority intends to raise awareness of the Performance Management Unit. With the recent merger of the Policy and Performance Units, this is an excellent opportunity to review the ways in which the new unit can best contribute to the overall improvement agenda. (R5) Summary Corporate Improvement Plan The authority should use a balanced set of PIs in the 2006/09 summary CIP, illustrating both good and poor performance and presenting a balanced picture of the authority’s position. (R6) Cascading of CIP We urged the Authority to reconsider how it engaged with staff for the 2005/08 CIP, to consider a more proactive way of engagement to ensure that objectives are embraced as widely as possible across the Authority. The consultation process for 2005/08 was through the intranet and internal newsletters (as in the prior year), although adverse timetables meant that details could not be included in Bridgenders. We would recommend consideration of a more interactive method going forward. (R7) New Performance Management Framework As noted previously, the Authority recognises that it currently lacks a cohesive performance management framework and is in the process of developing a revised framework and this was adopted as a flagship project following the Corporate Culture Review. The framework and associated action plan should be reviewed carefully to ensure they are robust and will deliver the necessary solution required by the Authority. We would recommend that the PIG reports progress on the action plan to Cabinet on a quarterly basis. (R8) Highlighting of Key Messages The CIP should provide the reader with a concise picture of the authority’s performance over the previous year, set out the key risk areas and clearly illustrate how the authority intends to address risks and improve performance. The 2005/08 CIP sets out the 22 risk areas, but does not prioritise them or explain them clearly. As a result it is difficult to understand where the authority intends to focus its resources over the coming year. The 2006/09 CIP should clearly highlight key issues and set out how the authority intends to address them.