PAPER B2

 

Committee :     ECONOMIC DEVELOPMENT, PLANNING, TOURISM AND LEISURE SERVICES SELECT COMMITTEE

 

Date :               22 APRIL 2002

 

TITLE : BEST VALUE REVIEW OF ECONOMIC DEVELOPMENT SERVICES

 

REPORT OF THE STRATEGIC DIRECTOR, EDUCATION AND COMMUNITY DEVELOPMENT

 

 

SUMMARY/PURPOSE

           

The Council has a statutory duty to subject all services to a Best Value review. The Economic Development review forms part of the 2001/02 programme of reviews. This report provides the Select Committee with an executive summary of the outcome of the review and the improvement actions proposed. The review will be subject to independent scrutiny by the Audit Commission.

 

This report should be read in conjunction with the Best Value Review Summary Report and the separate Service Improvement Plan (both attached as appendices).

 

BACKGROUND

 

As part of the Government=s Amodernising local government@ agenda, all local authorities have been placed under a duty of ensuring Abest value@ in the provision and delivery of services. This duty requires authorities to deliver their services to clear standards by the most efficient, effective and economic means available.

 

Essentially the process involves applying the A4Cs@ of best value :

 

C     Challenge : why and how a service is provided

C     Compare : comparing performance with other authorities and agencies

C     Compete : who is best placed to deliver the service

C     Consult : what are the views of key stakeholders & the wider community

 

The Service

 

In April 1999 the Council determined to deliver its economic development services through a Service Level Agreement with the Isle of Wight Partnership which brought together a number of agencies into a single organisation. As part of its contribution the Council seconded the staff of the Economic Development Unit together with a cash contribution of ,60,000 pa.

 

Financial difficulties arising from changes in Government policy in the delivery of training and business support services have required a reorganisation of the service during 2001/02. Now re-named the Isle of Wight Economic Partnership (IWEP), the agency has been re-focused upon 2 main areas of activity B inward investment and area regeneration. The Policy & Strategy Team of Council secondees has now returned to the authority (as the Economic Development Unit) taking on executive responsibility for strategic matters, research and bid development.

 

The Review

 

The Best Value Review involved extensive consultation with stakeholders and partner agencies - key findings from that part of the process included :

 

C     70% of stakeholders are satisfied with the service provided by the IWEP

C     72% of the Citizens Panel regarded economic development as Avery important@ and a further 23% as Afairly important@.

C     The top 4 regeneration priorities identified by the Citizens Panel were social issues, attracting new jobs, support for existing businesses and support for training and education.

 

Set against this, however, stakeholders did identify a number of areas where improvements were required :

 

C     Inadequate monitoring and evaluation arrangements (56%)

C     Insufficient Council spend on economic development (26%)

C     Insufficient business involvement (22%)

C     Insufficient promotional activity (21%)

C     Insufficient support for accessing external funding (21%)

C     Poor relationship and working methods with partner agencies (20%)

C     Insufficient attention to social exclusion issues (20%)

 

The review also involved a comparison of the service with other similar areas. Key findings included :

 

C     Council expenditure on economic development (as at 1999/2000) equated to ,3.99 per head of population (49% below the average for England & Wales). It should, however, be noted that since publication of these figures, the Council has almost doubled its expenditure on the service. In addition, the figures can be misleading B some authorities, for example, include expenditure on tourism within the economic development heading. The figures for the IoW, however, exclude the ,1 million spent on Tourism Services.

C     The cost per job created by the IWP is ,121, the third lowest amongst the group of 9 authorities examined.

C     SRB funding equivalent to ,118.25 per head has been secured compared to the regional average of ,47.

C     ESF funding equivalent to ,14.32 per head has been secured compared to the regional average of ,4.75.

 

Future Delivery Model

 

As part of the review, a number of service delivery options were considered :

 

C     Option 1 : cessation of the service

C     Option 2 : continued delivery through IWEP (the Ano change@ option)

C     Option 3 : transfer of the service to another external provider

C     Option 4 : bringing the service back in-house

C     Option 5 : joint Council / IWEP delivery of the service.

 

These were all subjected to a formal assessment against a number of strategic,       operational and legal criteria.

 

Key conclusions from the appraisal are as follows:

 

1.   Cessation of the service is not an option.   Public and stakeholder support for the service is high and the case for intervention strong on socio-economic grounds.

 

2.   Stakeholder support for service delivery through the IWEP is also high although some Council members have expressed concerns about perceived deficiencies in the authorities scrutiny role.

 

3.   Transfer of the service to another external provider was not considered to be feasible or desirable.   In a small Aclosed@ community alternative providers are virtually non-existent and the IWEP has an established and recognised presence and track-record.

 

4.   Bringing the service back in-house was also not considered to be desirable.   Delivery through an arms-length agency was considered to offer a range of benefits to both stakeholders and service users. The independent partnership model is also the preferred Government approach for delivery of grant-funded programmes.

 

Option 5 was, therefore, considered to be the preferred model. From the assessment process it was concluded that there were benefits in a functional separation at an executive level of the delivery and strategic elements of the service.   Thus whilst the IWEP Board will have overall responsibility for both strategy and operational matters, the Council=s Economic Development Unit will take on the executive responsibility for advising the Board on strategic issues, bid development and research matters.

 

The Service Improvement Plan

 

A central aim of the BV process, as established by the Government, is to achieve a continuous improvement in service delivery. As part of the review, a Service Improvement Plan has been developed setting out 42 specific actions which the Council and the IWEP will carry out. These actions are grouped into 3 broad areas :

 

1.   Establishing a sustainable organisational structure for service delivery

C     Implementation of the IWEP Arecovery plan@

C     Securing additional funding for the service from the Council and other agencies

C     Development of a Partnership Protocol to support service delivery under the new Afederal@ delivery model

 

2.   Maintaining & Improving Performance

C     Sharpening the strategic focus of the service

C     Improved work programme management to ensure a better match between stakeholder expectations of the service and available resources

 

3.   Establishing an effective monitoring & evaluation framework

C     Revision of the Service Level Agreement between the IWEP and the Council

C     Development of a Monitoring & Evaluation Strategy

C     Development of an annual work programme

 

Delivery of the Improvement Plan

 

Responsibility for implementation of the actions set out in the Improvement Plan will be shared jointly by the IWEP and the Council. Regular reports will be brought to the Select Committee detailing progress.

 

FINANCIAL IMPLICATIONS

 

Financial implications relating to the recommended individual improvement actions are set out in the Service Improvement Plan.  A key consideration in this respect is the case for increased financial support for the service; although the service is a corporate priority, Council expenditure in 1999/2000 on economic development was 49% below the average for England and Wales. It should, however, be noted that since publication of these figures, the Council has almost doubled its expenditure on the service. In addition, the figures can be misleading B some authorities, for example, include expenditure on tourism within the economic development heading. The figures for the IoW, however, exclude the ,1 million spent on Tourism Services.

 

DISTRICT AUDIT PARTNERSHIPS REVIEW

 

Towards the end of the Best Value review process, the District Audit office have also undertaken separate reviews of both the Isle of Wight Economic Partnership and the Tourism Partnership. The draft report is currently the subject of discussions with the Council.

 

This review has not, however, examined service performance issues B rather the emphasis was upon the partnership arrangements ie. is the Council achieving its objectives through the partnerships, how are they managed, is the Council a Agood@ partner, etc. A number of the recommendations do, though, overlap with the findings emerging from the BV review. The final BV report and Service Improvement Plan is currently being amended to incorporate the findings from the District Audit report.

 

CONCLUSION

 

Notwithstanding the recent difficulties experienced by the IWEP, the service has continued to perform to a high level over the past year. The Review has provided a welcome opportunity to step back from operational pressures and put in place a Service Improvement Plan which will secure continuous improvement in delivery and service outcomes.

 

RECOMMENDATIONS

 

THAT the Select Committee comment upon and commend the Executive to approve the Economic Development Best Value Review

 

 

Background papers

 

Economic Development Best Value Review (detailed report)

Service Improvement Plan

 

Contact point : John Bentley, Head of Economic Development Tel. 823346

 

 

ALAN KAYE

        Strategic Director

   Education & Community Development