Public Accounts Committee
PAC(4) 16-13 – Paper 2
Update to the Report of the National Assembly for Wales Public Accounts Committee on a Picture of Public Services
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PAC Report Recommendations
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Current Position |
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1 |
We recommend that the Welsh Government takes action to monitor, and make publicly available, its progress in driving up financial management across public services. We anticipate that this will incorporate good practice in financial management being shared across the public sector.
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The Welsh Government’s Finance Leadership Division (FLD) has been established in partnership with the Welsh Public Sector. The aims of the team are to improve financial management leadership skills for senior finance staff across the public sector in Wales and to build a public sector finance community of the highest quality, which will contribute to the transformation of public services in Wales. In taking this work forward, we are engaging regularly with the accountancy bodies in Wales.
To achieve this, the Finance Leadership Division (FLD) is
As part of the ESF funding conditions, the Finance Leadership Division is required to monitor the effectiveness of all its activities. This is reviewed on a quarterly basis by WEFO and is recorded via WEFO Online. The key deliverables and progress achieved against all activities are available on the Finance Leadership Network website which is a secure resource accessible by all Network members.
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2 |
We recommend that the Welsh Government takes further action to encourage local authorities to use reserves to support transformation, while ensuring that they maintain a prudent level of reserves to manage future risks and requirements.
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As set out in the previous response, local authorities are required to manage their reserves in line with statutory requirements and guidance and are accountable for the decisions they make about their use. Authorities are also accountable for, and best placed to make, decisions about the prioritisation of their financial resources, taking account of local needs and circumstances.
Nevertheless, the Welsh Government encourages authorities to invest in transformational activity. In March 2012, the Welsh Government commissioned the Wales Audit Office to undertake specific research into local authority reserves. The research was designed to improve the collective understanding of how local authorities manage reserves to support their financial strategies including transformation activities. The final report is published on the Welsh Government website (http://wales.gov.uk/topics/localgovernment/research/lareserve/?lang=en). It identifies scope for improved reporting on the management of reserves by local authorities. These findings have been circulated by Welsh Government to authorities and by the Wales Audit Office to their auditors. Local authorities have been encouraged to work with their auditors to improve their reporting on the management of reserves through such things as looking at examples of best practice.
The Minister for Local Government and Government Business has signalled a close interest in this work and will be seeking to engage further with Local Authorities on this issue.
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3 |
We recommend that, in line with the views of the National Assembly for Wales’s Finance Committee, the Welsh Government holds senior management within Local Health Boards to account for their statutory financial management responsibilities, following the end of the 2011-2012 financial year. In subsequent years thereafter, we recommend that the Welsh Government set out a financial accountability framework for Local Health Boards, to promote effective financial planning and delivery of services in accordance with statutory responsibilities. This should include information on incentives and sanctions for senior managers as appropriate.
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For the 2012/13 financial year arrangements to hold Local Health Boards and Trusts to account for their financial management responsibilities have been strengthened through individual Mid Year Reviews with all Chief Executives and further individual reviews throughout the period October 2012 to January 2013. Additionally the Delivery Framework and Performance Management arrangements have been updated to take a more integrated approach to cover quality, activity, performance targets and finance.
Whilst Local Health Boards and Trusts have been encouraged to work collectively to make a positive contribution, the Welsh Government has continuously reminded individual Chief Executives of their accountability for their own financial performance. The NHS Wales Chief Executive has written to all Chief Executives, highlighting that failure to meet statutory financial management responsibilities will lead to accounts qualification and escalation.
Furthermore the Welsh Government has been working on the introduction of a new financial regime for the NHS which sets out and strengthens accountability arrangements going forward. The work has focused on better medium and longer term planning with improved integration of financial, workforce and service elements.
The first stage of this integrated medium term planning approach has been implemented as part of the 2013/14 planning round. This process entailed a planning framework and timetable to include planning guidelines, templates and draft submissions, supported by Executive Director meetings to review and challenge draft plans and to support Health Bodies to finalise balanced integrated plans.
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4 |
We recommend that Local Health Boards are enabled to make more effective use of funding across financial years in line with Local Authorities. This would enable improved financial planning in the medium to long-term.
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To support the integrated medium term planning approach (referred to in response to recommendation 3) work has focused on increasing financial flexibility to support sound financial management across financial years. While changes to address the current annual financial constraints imposed by existing legislation will take some time, options are being considered that may be executed within the current legislative framework. These involve both longer term solutions (Planned Financial Flexibility) and shorter term solutions (NHS Brokerage Fund).
The Planned Finance Flexibility arrangement is being developed to support the longer term planning and financial cycle and will provide flexibility of resources linked to an approved balanced integrated medium term financial plan. It is envisaged that Planned Financial Flexibility would be sought by LHBs where LHBs forecast that they would experience financial peaks and troughs within a balanced 3 year financial plan. The Planned Financial Flexibility would be subject to robust evaluation and approval process, including consideration of available resource cover to support this flexibility.
Where there may be specific in year financial issues and short term challenges that cannot necessarily be planned or easily forecast shorter term flexibility arrangements will be in place. Therefore a more formal in year brokerage arrangement is being developed, to address those situations where unforeseen circumstances may cause difficulties for health boards to achieve financial balance and meet their existing statutory Resource Limit.
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5 |
We recommend that the Welsh Government ensures that individual NHS bodies make public the plans for service transformation and the analysis that underpins those plans, including the likely impact on patients and the wider community.
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WG has already issued guidance setting out expectations for how NHS organisations engage and consult on plans for transforming services. Included within the guidance is:
“When managing service changes, an NHS body should: set out a clear rationale for change, supported by a clinical case which demonstrates the benefits of change and the risks of remaining the same.”
The National Director for Together for Health is working closely with the National Director of the Community Health Councils, and Health Board Directors of Governance to ensure all processes align with the national guidance issued by the Welsh Government. The National Clinical Forum provides assurance the plans provide a basis for the safe and sustainable delivery of services and combine to create a realistic and ambitious way forward for healthcare in Wales.
Individual Health Boards will be responsible for implementation of local plans following extensive local engagement and once they are signed off through the appropriate Board governance processes. Progress will be closely monitored by the Welsh Government through existing performance management arrangements centrally.
Community Health Councils are playing a vital role in scrutinising and supporting the implementation of the plans locally.
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6 |
We recommend that the Welsh Government supports existing methods for disseminating good practice, such as promoting use of the Good Practice Exchange on the Wales Audit Office’s website, to systematically draw together the characteristics of good practice from all areas of the public sector, and to ensure that such practice can be effectively transferred to services at a local level. |
The Public Service Leadership Group[1], and its National Work Programmes, drive forward the promotion of good practice through a range of approaches. The Public Service Leadership Group is chaired by the Minister for Local Government and Government Business, Lesley Griffiths AM. It comprises senior leaders who represent public services and geographical areas across Wales (Annex 1 provides information on membership). To ensure political leadership and accountability, the Public Service Leadership Group works with the reformed, statutory Partnership Council for Wales, and its subgroup, the Reform Deliver Group. There are 4 national programmes of work led by the Public Service Leadership Group[2].
Promoting good practice is one of the key elements of our programme of public service reform. This starts with a strong leadership drive; members are committed to promote the dissemination of good practice, using their regional and local leadership positions, including promoting and reinforce the ethos of continuous improvement methodologies such as Lean, Six-Sigma, Kaftka, Systems Thinking. This remains a critical and continued feature of our collective leadership approach to identify and share good practice across the public sector, and in particular where delivery requires the involvement of more than one sector or organisation.
More specifically, the Organisational Development and Simpson Implementation work programme supports the work of the Continuous Improvement Community of Practice. Established in June 2012, this group is building a network across the public sector in Wales to develop collaboratively the capability to take forward continuous improvement activities, including Lean. They are currently developing a website including continuous improvement case studies from across the public service in Wales as well as providing links to relevant existing information from Wales such as the WAO’s Good Practice Exchange and the Good Practice Wales website.
The Effective Services for Vulnerable Groups (ESVG) work programme used the Local Service Board network to share learning on the ’10,000 Safer Lives’ work in reducing domestic violence. Local Service Boards took the opportunity to consider and discuss the work of this important project and consider how the learning could be considered in their own area.
The ESVG work programme has also used the Knowledge Hub to support practitioners to work collaboratively online. The Knowledge Hub is the successor to the successful Communities of Practice for Public Service hosted by the Improvement and Development Agency (IDeA) and now part of the LGA in England. Good Practice Wales, which is hosted by the Welsh LGA, is aware of the Knowledge Hub and is currently signposting to it rather than seeking to duplicate it in Wales. This programme has also made use of innovative communication channels, such as webinars (working with the Social Services Improvement Agency) to raise awareness of effective approaches in place or being developed across Wales.
The Welsh Government uses the Improving Public Services section of our website[3] to link to relevant websites promoting good practice, such as Good Practice Exchange. This portal signposts to over 2000 good practice case studies and receives between 6,000-10,000 hits each month.
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7 |
We recommend that the Public Services Leadership Group identify, learn from and promote examples of good practice implemented by the police and fire and rescue services to deliver services within budget, make good use of collaboration, and deliver transformational change. |
The Police and Fire & Rescue Services continue to play a leading role in the national work programmes and the regional leadership networks of the Public Service Leadership Group. As part of the Effective Services for Vulnerable Group work programme, we are developing an approach to share the experiences of the Fire Service in capturing the service benefits resulting from their preventative activities.
A representative for the recently appointed Police and Crime Commissioners has also joined the Reform Delivery Group. This addition will further strengthen the engagement of that political leadership with the work undertaken within the emergency services, since the emergency services co-ordinate their own collaboration through a Joint Emergency Service Group chaired by a Chief Constable.
The emergency services are also using their experiences to inform the development of good practice in the application of continuous improvement, playing an active role in the Community of Practice established under the Organisational Development and Simpson Implementation Work programme.
The recently established Regional Collaboration Fund has received a number of proposals involving the emergency services which involve collaboration across the wider public service. For example, North Wales has submitted an Anti Human Trafficking bid which involves the police, fire and rescue service, health board and local authorities. These projects will allow good practice models to be developed and shared more widely in order to redesign and integrate services to better meet people’s needs. This work, alongside that of the Effective Services for Vulnerable Groups programme, will highlight new approaches to other parts of Wales and to other areas of Safeguarding and Public Protection.
One specific example of where the emergency services have taken the lead is in Gwent where the Police have led a multi-agency project, launched in March 2013, to deliver a better way of responding to children and young people who repeatedly go missing. Not only does this project offer real benefits for service users, but there are financial benefits to this type of good practice - responding to one child repeatedly going missing can cost public services hundreds of thousands of pounds. The analysis undertaken in Gwent estimates an annual cost of over £2 million a year to public service organisations in Gwent, as it relates to missing persons.
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8 |
We recommend that the Welsh Government promotes the Wales Audit Office model for cost reduction to all public services to help mitigate the impacts of cuts and work collaboratively to take account of local and national priorities. |
Welsh Government is supportive of the WAO in their promotion of its cost reduction model. We have ensured links to the WAO’s Cost Reduction Guide, are available on relevant parts of the Welsh Government’s website, for example on the Improving Public Services webpage.
In addition the Finance Leadership Network, established by the Welsh Government, was set up to improve financial leadership across the public sector by working as a community to collectively learn and develop financial leadership techniques to transform public services in Wales, promote the WAO’s model sign posting it on their website. The Finance Leadership Network’s bi-annual national conference (taking place in October 2013) is being co-hosted with the WAO and provides another good opportunity to reinforce the use of this model.
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9 |
We recommend that the Public Services Leadership Group build on the progress of the Efficiency and Innovation Programme by ensuring that the good practice identified through the Lean/Systems thinking and the Kafka Brigade method is actively promoted across the public sector. |
Promoting continuous improvement methodologies is a key principle of the Public Service Leadership Group and its national work programmes.
The Kafka Brigade method directly informed the “10,000 Safer Lives” project, which built on the learning from the Kafka Brigade-led projects in RCT, Merthyr and Newport to identify best practice in the way public service organisations respond to potential victims of domestic abuse. The project identified a set of ‘minimum standards’ and key questions that front line staff should ask.
More broadly the principles of Kafka, improving services by looking at them from the service user perspective, are at the heart of the PSLG’s Effective Services for Vulnerable Groups work programme. Under this work programme there is a project specifically looking at encouraging the adoption of a ‘citizen directed support’ approach to delivery of services. Another project looking to improve the response to children that go missing undertook extensive engagement with service users (young people and their carers) to build a picture of current practice. The new approach has been strongly shaped by the young people’s perspectives including commissioning a new independent debrief service.
As set out in response to recommendation 6, the Organisational Development and Simpson Implementation work programme has encouraged the creation of a national community of practice for continuous improvement practitioners. This work, supported by Welsh Government’s Academi Wales programmes of learning involving expert practitioners from across the Welsh Public Service. The group are building a library of system interventions undertaken and developing case studies to clearly set out the outcomes and lessons learned from these interventions in order to promote learning and good practice. One such example of best practice already shared amongst the group is that from the Fire and Rescue Service. In conjunction with local authority partners, they redesigned their process for building regulations consultation. In doing so they managed to improve the service they offered, whilst reducing the cost of each intervention by around 75%.
Academi Wales are supporting the development of an accredited learning and development programme to support practitioners in developing their continuous improvement skills and competencies to deliver systems improvements. The Community of Practice are holding a national conference in September to further promote these methodologies.
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10 |
We recommend that the Welsh Government robustly monitor the performance of its model for regional collaboration. We believe that any model must ensure that councillors and citizens are central to discussions on the way that local services are delivered and that there is appropriate governance and accountability. |
The Regional Collaborative footprint is well established, and is reinforced through representative membership of Public Service Leadership Group and Partnership Council being on that basis.
Direct feedback has indicated that public service leaders, executives and officers alike have recognised the need to collaborate and are increasingly acting on this basis, actively seeking out opportunities to work together.
The Regional Collaboration Fund, announced in October 2012 reinforced collaboration on the footprint, by asking bids to be brought forward on the footprint map by the regional leads. Bids have come forward to deliver a range of genuinely collaborative projects across the public service, including health, police and the fire and rescue service along side Local Authorities. These projects are predominantly oriented on the footprint basis. Projects will be evaluated on an individual basis, and their impact as a whole will also be assessed to consider the effectiveness of the fund in driving a more collaborative agenda. The Regional Collaboration Fund has considered projects to improve services and resilience, as well as delivering financial benefits. For example, the Cardiff and the Vale project to remodel Adult Social Care Services and integrate them with health has identified indicative savings of around £2.5million in the first three years. This will allow the region to better meet the expected 4-8% increase in demand.
The work under the PSLG Organisational Development and Simpson Implementation programme has encouraged areas to consider the appropriateness of moving services to regional or national footprints. The Welsh Government continues to work with Local Government to ensure that appropriate governance models are put in place to support effective local, regional and national collaboration. Regulations that will allow the establishment of joint overview and scrutiny committees under the Local Government (Wales) Measure 2011are being put before the National Assembly in early May 2013, and, subject to Assembly clearance, will come into force in late May 2013. These Regulations will be supported by statutory guidance.
The Programme for Government includes a series of reforms and reviews to strengthen the delivery of efficient, effective and accessible public services. The Commission on Public Service Governance and Delivery has been established to provide external authoritative advice on how to move forward on governance and delivery of public services to respond to people’s expectations and needs. It will provide an opportunity for those who are involved in delivering services, those who are politically accountable for them and users of them to examine how public services are governed: that is, held accountable for their performance and delivered most effectively to the public.
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11 |
We recommend that the Accounting Officer provides us with an update within 12 months on the progress in delivering the recommendations made by the Auditor General and our own.
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This current response meets this recommendation. |
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AGW Report Recommendations
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Current Position |
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1 |
The Welsh Government is replacing the pan-public-sector Efficiency and Innovation Programme, with a new Public Service Leadership Group. The Efficiency and Innovation Programme had succeeded in bringing together public-sector leaders to identify and take ownership of various approaches to cutting costs and improving services. In developing the work of the Public Services Leadership Group, the Welsh Government should build on this commitment to ensure that it continues to fully involve all parts of the Welsh public service and key stakeholders.
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The Public Service Leadership Group and its associated work programmes and subgroups continue to drive forward the public service reform work. Representatives from across the public service play an active role in promoting service improvement, improved resilience and delivering cost efficiencies.
Stakeholders from across breadth of the public sector are involved in the work of the Reform Delivery Group and the Public Service Leadership Group and its work programmes and subgroups. This includes senior representation from Local Government; Health Boards; the Fire and Rescue Service; and the Police. In addition, the third sector are also partners in much of this work.
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2 |
Transformation is the sustainable response to funding cuts. All public services need to continue to find ways of changing the way services are provided so that they can improve quality and outcomes at lower cost. To this end, public services should look to the work that had been done by the Efficiency and Innovation Programme, particularly work on new service models and business transformation, as a source of practical methods for improving services. In particular: · The Efficiency and Innovation Programme has developed a national programme of work on business improvement techniques like lean/systems thinking. These approaches are being increasingly adopted across public services. Currently, many public services depend on support from external consultancies. In developing the work of the Public Services Leadership Group, the Welsh Government should examine options to develop the capacity and skills within the public sector in business improvement techniques, building on the work done to date, including the findings of the Lean Enterprise Research Centre (LERC) review jointly commissioned by the Wales Audit Office and the Efficiency and Innovation Programme. · Public services need to get better at learning from each other, and actually changing as a result. Such transfer of knowledge and practice would enable more widespread benefits to be secured from the work on New Models of Service Delivery. The Welsh Government should work with other public services to develop a clear national framework for identifying and exchanging good practice. There also needs to be a commitment from public services to actually change, through adopting or adapting new ways of working, and a framework for supporting organisations as they go through the process of change and experimentation.
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As referenced in the Welsh Government’s response to recommendations 6 and 9; the Continuous Improvement Community of practice, established under the Organisational Development and Simpson Implementation workstream, is driving this work forward. For example, they have established a Welsh network of continuous improvement practitioners, which has over 150 members from all areas of the public service. They are developing a Welsh library of system interventions to share lessons learned and develop skills from each other. This is supported by 'Best Practice in Action' programme visits where practitioners are able to visit and learn from work undertaken in other areas. The Community of Practice also offer a network of peer support where organisations can pair up to offer mentoring and support as organisations go through similar experiences.
In addition, Academi Wales are supporting the Community of Practice and are establishing an accredited learning and development programme to develop the skills of in-house practitioners therefore reducing unnecessary dependence on external consultants.
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3 |
Public services also need to take up opportunities to make transactional savings, particularly through better procurement and better management of land and buildings. All public services in Wales should support and engage with the promising approaches developed through the Efficiency and Innovation Programme, that now fall within the new Public Services Leadership Group.
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Two work programmes under the Public Service Leadership Group have been established to consider and address these areas specifically.
The Asset Management work programme, chaired by Helen Paterson (CE Wrexham), aims to identify, promote and support the development of collaborative approaches by adopting more effective and efficient management practices to release the savings potential from within the wider public sector estates. For example, the Group has developed the e-PIMS lite project – a central database of Government Central Civil Estate properties and land. Users are able to locate/view individual properties on an electronic map, access and amend their core property details online, and interrogate the system to identify vacant space. E-PIMS was used in the recent transfer of Y Lanfa in Aberystwyth. It resulted in the disposal of property surplus to the Welsh Government’s requirements, removing their financial liability of £1.6m over 6 years, whilst securing the Ministry of Justice a space to enable them to deliver a Justice Centre at an affordable cost.
The Land Transfer Protocol, developed by the Asset Management work programme, is a good practice guide for the transfer or disposal of land between public bodies. Over 30 instructions have been issued to date under the portal, with direct savings in fees estimated at £100,000.
The Group has also developed ‘Find Me Some Government Space’, which is a database of public sector meeting rooms. Its aim is to enable the sharing and booking of meeting and conference rooms across the Welsh public sector, making better and more efficient use of public sector buildings and facilities across Wales and helping to reduce costs. The Group is also looking at fleet management as a further area for efficiency savings. There is evidence that improved fleet management can offer significant financial savings with no detrimental impact on services. Initial work being undertaken in North Wales indicates savings of around £3m in the region alone.
The Public Service Leadership Group has championed collaborative procurement in Wales under its Procurement work-stream, led by Jon House (CE Cardiff). They developed a compelling business case for the creation of a National Procurement Service to buy common and repetitive spend ‘once for Wales’. The newly established National Procurement Service will be operational in November 2013. Over seventy public sector organisations will use the service, including Local Authorities, Local Health Boards, Universities, Colleges, Fire Authorities, Police Forces and the Welsh Government itself. It will set up and manage contracts to cover some 20-30% of total Welsh public sector expenditure, making best use of scarce skills and saving up to £25m per year. This will be achieved through leveraging the scale and combined buying power of the Welsh public sector and standardising specifications across users. As well as securing efficiencies it will identify opportunities to develop local supply chains.
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4 |
The short-term financial challenges are such that some public services may need to consider reducing the level or quality of some services. Public services across Wales should work together in planning cuts, and in monitoring and mitigating the impacts on service users, wider outcomes and other public services.
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The Public Service Leadership Group and the Reform Delivery Group bring together experienced leaders from across the public service to meet the financial challenge ahead. This approach is helping to make important progress, particularly in relation to Health and Social Care where financial pressures are exacerbated by the growing demands from demographic pressures.
Organisations are already working together in order to manage the financial challenge ahead. The Welsh Government is supporting their efforts through the Invest to Save Fund and Regional Collaboration Fund. These have supported proposals for innovative projects to mitigate the impact of financial pressures by transforming service delivery; achieving efficiency savings and/ or improving service resilience in areas such as health and social care and education.
In the past 12 months, Local Service Boards have strengthened their strategic role as the forum for cross-sectoral leadership on integration at the local level, providing a clear link to local democratic processes. All areas bar one have now adopted Single Integrated Plans, incorporating statutory health social care and well-being outcomes, premised on integrated strategic needs assessments commissioned across a number of public service organisations to inform their planning of service delivery together. The Local Service Boards provide a vital role in conferring local legitimacy on models of regional commissioning, ensuring they are informed by a robust analysis of local need, are placed in a wider context of integration through Single Integrated Plans (for instance with issues of community safety, and access to services) and that delivery is subject to scrutiny by elected members.
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Annex 1
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Public Service Leadership Group Membership Welsh Government |
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Minister for Local Government and Government Business (Chair) |
Lesley Griffiths AM |
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Director General, Local Government and Communities |
June Milligan |
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Director General, Education and Skills |
Owen Evans |
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Director General, Health, Social Services and Children |
David Sissling |
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Director General, Strategic Planning, Finance and Performance |
Michael Hearty |
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National Programme Chairs |
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Organisational Development and Simpson Implementation |
Jack Straw (Swansea) |
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Asset Management |
Helen Paterson (Wrexham) |
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Procurement |
Jon House (Cardiff) |
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Effective Services for Vulnerable Groups |
Andrew Goodall (Aneurin Bevan Health Board) |
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Regional Collaboration Chairs |
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North Wales Region |
Mohammed Mehmet (Denbighshire) |
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Mid and West Wales Region |
Mark James (Carmarthenshire) |
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Swansea Bay Region |
Steve Phillips (Neath Port Talbot) |
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Gwent Region |
Paul Matthews (Monmouthshire) |
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Cardiff and Vale Region |
Sian DAives (Vale of Glamorgan) |
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Cwm Taf Region |
Peter Vaughan (South Wales Police) |
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Public Service Reform Partners |
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General Secretary Wales TUC (Observer) |
Martin Mansfield |
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Auditor General for Wales (Observer) |
Huw Vaughan Thomas |
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WLGA |
Steve Thomas |
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SOLACE Wales |
Jeremy Patterson |
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WCVA |
Graham Benfield |
[2] There are 4 national programmes of work led by the Public Service Leadership Group:
· National Asset Management Working Group (Chaired by Helen Paterson, CE Wrexham)- Making more effective and efficient use of the multi-billion pound public service estate.
· Procurement (Chaired by Jon House, CE Cardiff) - Transforming the way public services procure and commission goods and services, currently worth £4.3 billion annually.
· Organisational Development and Simpson Implementation (Chaired by Jack Straw, CE Swansea) - Taking forward the recommendations from the Simpson Review and developing approaches to support change and broader organisational development across the Welsh public service.
· Effective Services for Vulnerable Groups (Chaired by Dr Andrew Goodall, CE Aneurin Bevan Health Board) - Promoting the mainstreaming of successful innovation and good practice.