PAPER B1

Purpose : For Decision

Committee : EXECUTIVE

Date : 21 MAY 2002

Title : PUBLIC SERVICE AGREEMENT

DEPUTY LEADER

1. SUMMARY/PURPOSE

This paper sets out the draft Public Service Agreement for the Council in Schedule 1. It seeks the Executive’s approval before opening negotiations with the DTLR on the 1 July 2002.

1. BACKGROUND

2.1.1 The Government has invited 154 First Tier Local Authorities to enter into a Public Service Agreement to ‘stretch’ existing performance targets over a three year period.

2.2 The Isle of Wight has been asked to submit a draft agreement to the Department of Transport, Local Government & Regions (DTLR) by the 1 July 2002. The Council is expecting to have a series of detailed negotiations with the DTLR and other government departments before agreeing a final draft with ministers in September 2002.

2.3 Guidance issued to all Local Authorities sets out the details required. Each agreement should have a set of targets which stretch the Council’s performance in a number of different service areas. Each agreement must include at least one Education target, one Social Service target, one extra either Education or Social Service target and one Transport target.

2.4 The guidance sets out 12 national targets for which the Government is looking to improve Local Authority performance. Each agreement will also include, in the final targets, a majority of national targets and the remainder will be local targets.

2.5 In return for reaching an agreement and to help Councils achieve their targets the Government will let Local Authorities bid for pump priming money. This could be up to will be £875.000 for the Isle of Wight. The Government will also let Councils borrow extra money, but unlike normal credit approvals, the cost of repayments will not be met through the Revenue Support Grant system and will therefore represent a charge to future year’s budgets. The bid for unsupported credit approval amounts to £1m for the Isle of Wight, representing an additional revenue charge of just under £100,000 per annum in the early stages of repayment.

2.6 Successful performance will result in a further one-off allocation of ‘reward grant’. Each Council is eligible for this fund once 60% of the agreed improvements have been achieved up to a total of £3,325,000 for 100% performance. Achievement of less than 60% of the agreed target would mean that no reward grant was payable.

2.7 The targets have been selected from areas of where performance can be improved and/or where residents have identified them as local priorities.

3. ISSUES

3.1 The Council has been putting together a draft PSA since December 2001. Schedule 1 of the attachments sets out 15 draft targets. Each target shows what would have been achieved without a PSA; what is projected to be done with a PSA and what the added value of a PSA is expected to be. The local targets have been selected to help the Council tackle issues of poor performance and/or areas of concern raised by local residents during consultation exercises.

3.2 The DTLR has invited Council’s to bid for extra freedoms and flexibilities to help with the achievement of these targets. Details of these requested by the Isle of Wight Council are set out in Schedule 2.

3.3 Schedule 3 sets out the proposed bids for pump priming money, showing the amount attributable for each target area. It also sets out the bids for unsupported credit approval on a similar basis.

3.4 Schedule 4 sets out the basis for calculating any entitlement to Performance Reward Grant.

3.5 It is anticipated that the final agreement will consist of approximately 13 targets; 7 of which will be national targets. To give officers flexibility in the negotiations with Government departments, we are recommending a total of 15 initial targets, in anticipation that we will want to withdraw two, if we feel we are being pushed to achieve unrealistic targets.

3.6 Some targets rely upon the support of partner agencies to achieve them. In these cases, the relevant Council officer has negotiated the support of the partner agency.

3.7 The draft agreement will go to the Council on the 12 June 2002 and to the Local Strategic Partnership Board on the 25 June 2002, before being finally submitted to the DTLR on the 1 July 2002.

4 FINANCIAL IMPLICATIONS

4.1 Councils are expected to improve their performance continuously as part of Best Value. The PSA provides some opportunities for getting additional financial help to achieve this. Extra revenue costs not subject to bids for pump-priming funds are all to be met from existing budgets or from savings generated by the various initiatives.

4.2 Potential extra costs arise from the repayments of the Unsupported Credit Approval borrowings (£100,000 per annum) and from the excess of pump priming bids over and above the maximum sum available (£503,000 over the life of the agreement). It would be reasonable to expect offsetting savings from e-government developments to meet the loan charges, as the borrowing is for that purpose. The excess of pump priming bids would need to be met either by increasing the matched funding component made from within existing service budgets, or by accepting an addition to future years’ budgets.

5 LEGAL IMPLICATIONS

5.1 The PSA will not be a legal agreement between the Isle of Wight Council and the Government. The Performance Reward Grant will only be paid if it can be shown that the Council has met 60% or more of its performance targets.

6 RECOMMENDATIONS

The Isle of Wight Council’s Executive is asked to agree:

· The draft agreement as set out in Schedule 1

· The extra freedoms and flexibilities set out in Schedule 2, it is intended to negotiate with the DTLR to achieve the targets

· The proposals for allocating pump priming money bids and unsupported credit approval bids as set out in Schedules 2 and 3

· How to deal with the extra costs of unsupported borrowing, and the excess pump priming bids over the sum available (see para 4.2)

· The proposal to seek to approval of Council on the 12 June 2002 and the Local Strategic Partnership Board on the 25 June 2002

BACKGROUND PAPERS

Report to Executive in December 2001

Report to Directors’ Group dated the 8 April 2002 and 1 May 2002

Contact Point : Charles Waddicor , F 520600 ext 2225

C WADDICOR Strategic Director of Social Services and Housing

P HARRIS Deputy Leader