EVALUATION OF THE CORPORATE PERFORMANCE MANAGEMENT FRAMEWORK

Appendix A EVALUATION OF THE CORPORATE PERFORMANCE MANAGEMENT FRAMEWORK 1. Introduction and Background 1.1 The County Council introduced a new corporate performance management framework in September 2002. The key components of the framework are as follows: Corporate and Business planning Priority/target setting Budget setting Performance Measurement and monitoring Performance culture (people management) 1.2 The stated outcomes and outputs of the framework include: Corporate priorities reflected in business plans at all levels Accountability for performance by members, managers and staff A top down and bottom up approach to business planning and delivery including priorities arising from LSPs Performance issues at the centre of resource allocation and a 3 year County Finance Strategy Clear targets and corresponding budgetary commitments All services and staff sharing ownership and responsibility for performance improvement A flexible approach that can be responsive to changing needs Regular performance review and action planning Prioritisation of activity using performance information, identification of national and local priorities and resource availability Business planning to deliver against priorities and targets involving members, managers and staff at all levels 1.3 The report of the Audit Commission s Corporate Assessment Team (CAT) published in December 2002 as part of the overall Comprehensive Performance Assessment (CPA) contained a number of recommendations in respect of the County Council s use of this framework as follows: Corporate priorities expressed at a broad level that do not yet link into other plans. Themes are visible in other plans but not described using consistent terminology Weak at defining outcomes and some plans at a very early stage Lack of corporate performance management of the three key outcome priorities Lack of local measures of performance for key priorities Performance against objectives not systematically measured 1

Focus on process goals rather than outcomes Inconsistent links between overarching corporate objectives and service activity Linkages between plans and integration of planning processes not fully developed Business planning not fully implemented Overall resource allocation is incremental rather than explicitly priority based Performance culture not yet embedded across the council 1.4 Actions to address recommendations relating to these issues contained in this report have been incorporated into the County Council s CPA Improvement Plan, which was signed off by the Audit Commission in April, and these can be seen at Annex 1 1.5 In order to deliver these improvements, an evaluation of the County Council s corporate performance management framework was undertaken during May and June 2003. This paper sets out the findings of that evaluation. It identifies the strengths and weaknesses of the existing framework, areas of good practice and recommendations for action. 2. Methodology 2.1 The evaluation of the framework was undertaken by reviewing existing documentation, holding discussions with senior managers from each directorate and DSO, and with the following people: - Leader of the Council - Chief Executive - Director of Resources and Deputy Chief Executive - Head of Policy - Head of Finance - Cultural Change Manager - Corporate Best Value Manager - Corporate Policy Manager - Community Planning Officer - Head of Democratic Services - External Audit Manager 3. Findings 3.1 Issues identified fall into 4 distinct categories as follows: Planning framework Financial Planning Performance measurement and monitoring Performance Improvement Culture 2

3.2 Planning framework 3.2.1 Community Strategy The wider Community Strategy should inform the County Council s overall vision and corporate priorities. The County has recently established a Lancashire Strategic Partnership, and has developed an action plan for the production of a Community Strategy, which will be informed by the State of Lancashire Report and a new baseline survey to be carried out in the autumn. It is anticipated that the Lancashire Community Strategy will be available by November 2004, although the Community Strategy objectives should be available by January 2004. It has not yet been agreed whether the plan will be for a 10, 15 or 20 year period. 3.2.2 Corporate Plan The County Council s existing Corporate Plan is for the period 2002 2005. It identifies 7 corporate objectives and 4 commitments, and provides the focus for everything we do. The 4-year corporate planning cycle is intended to mirror the County election cycle, and thus to enable incoming administrations to validate corporate priorities or to develop new ones for the period of their administration. The current plan was informed by the previous baseline survey and thus encompasses both national and local priorities. Each Corporate Objective is split down into a number of priorities supported by specific actions, but there are no performance measures against which success can be measured. Also it does not identify improved educational attainment as one if its priorities, despite the overarching objective in relation to learn and develop In addition, ownership of the objectives and priorities that support them has not been assigned at elected member or officer level. The Plan was developed before the overall vision for the County (the Community Strategy) had been agreed, and whilst it is unlikely that the corporate priorities will be inconsistent with the developing community vision, it is proposed that the development of outcome measures is held in abeyance until the wider Community Strategy objectives are finalised in January 2004. This will give sufficient time to develop key performance measures for the start of the 2004/05 financial year and for inclusion in the 2004/05 Corporate Performance Report. It is also proposed that each corporate objective is assigned an elected member and Director owner and that the priorities and key 3

performance measures (when identified) supporting each objective is assigned a senior officer owner. Assigning ownership in this way will create accountability at executive member and Director level, which in turn will raise the profile of and ensure compliance with proposed monitoring and reporting requirements (see paragraphs 3.4.2 and 3.4.3 below). 3.2.3 Business / Service Plans Business and /or service planning has been ongoing in directorates for a number of years, although this has only been a requirement since the introduction of the new integrated performance management framework in September last year. Despite the new framework, a systematic approach to planning does not yet exist. Most directorates have business plans and those that do not, at least have a draft plan. However, the timeframe for these plans varies. Some have developed 1-year plans at divisional / service as opposed to directorate level, whilst others have developed directorate plans for 2 and 3-year periods, underpinned by annual divisional / service or thematic plans. Where relevant, improvement activity arising from the CPA Improvement Plan and Best Value review service improvement plans have in the main been incorporated into these plans, thereby integrating all core activities into one directorate planning document. Business / service planning in the County Council s 3 DSOs has to date not been systematic. The Business Monitoring Group has requested these from the 3 DSOs for September 2003, although it is unclear whether these are intended to be plans for the period 2003/04 (late) or 2004/05 (early drafts). Terminology differs across the organisation, with some directorates referring to service plans, others to business plans and others to service or thematic business plans. This may cause confusion amongst some managers and staff. Although the performance management framework requires all business plans to identify how services will contribute to the achievement of the corporate priorities, to date this appears to have been done by linking existing activity to the corporate priorities rather than by changing activity in order to meet the challenges identified in the Corporate Plan. 4

Where business / service plans do exist, these have in most cases been signed off by relevant portfolio holders thereby validating the planned activities identified in them. It is recommended that a more systematic approach to business / service planning be applied, and common terminology be adopted throughout the County Council. As some directorates have adopted a thematic as opposed to a service-based approach to planning, it is suggested that the term business plans be used. Plans can therefore be referred to as Directorate / DSO Business Plans (but see below), Service Business Plans or Thematic Business Plans, depending on the preferred directorate / DSO approach. Whilst there is a need for overall objectives to be set at directorate level, it is not clear how the existence of an overall directorate plan which is then supplemented by divisional / service / thematic plans adds value to the process, especially in directorates that provide a diverse range of disparate functions or services. It is therefore proposed that divisions / discrete services within directorates and DSOs produce business plans which are aligned to overall directorate / DSO objectives, (taking into account existing statutory planning requirements where relevant) which are then brought together to become Directorate / DSO Plans (a top down / bottom up approach). It is proposed that these plans be for a 3-year period (1 year in detail and 2 years in outline), to mirror the County Council s Finance Strategy (see paragraph 3.3 below), although it is acknowledged that this proposed 3-year planning cycle does not align with the 4-year corporate planning cycle. As elected members will receive regular reports on performance, they should be involved in both the business and financial planning process, to ensure that the two remain linked and that plans reflect budget proposals (see paragraph 3.3). It is therefore proposed that the current approach of involving portfolio holders in the planning and signing off process be retained and applied systematically across all directorates and DSOs. Draft plans should be made available no later than the September of the planning period, to begin at the start of the next financial year. They should identify the resources needed to deliver existing policies and performance targets and the expected outcomes, to enable members to make informed choices about resource allocation and priorities for service delivery. Final plans may therefore need to be adjusted following the budget process, with final 3-year plans being available by the beginning of the financial year, to dovetail into the 3-year County Finance Strategy (see also paragraph 3.3). Phasing in the new approach between now and next April is problematic, as existing plans cover different timescales. The least 5

resource intensive approach is for directorates/dsos to work up a 3- year outline versions of their existing business plans, covering 2003 06, and containing detailed plans for 2004/05. This approach will also tie in with the publication of a new Corporate Plan in late 2005 / early 2006, following the next County Council elections, and it is therefore proposed that this approach be adopted. All plans will need to be available by November to feed into the 2004/05 budget cycle. The timetable at Annex 2 shows how this will operate. Business Plans should include key service outcome measures. These will typically be local measures, although any national PIs relevant to a particular service should also be included (see paragraph 3.4.1 below for further discussion on the development of performance measures and inclusion of key tasks). Risk Management should also be an integral part of business and team planning. Guidance, examples of good practice and templates will be made available (see action plan at Annex 3) although these will provide a standard framework for Directorates and DSOs to adapt to meet their own specific needs. 3.2.4 Operational / Team Plans Plans need to be made relevant at team level so that front line staff understand the contribution they can make and what is expected of them. There is evidence that this happens in many services, but the approach is not systematic across the organisation. Team plans should be produced annually, and should include measurable actions and performance indicators (national indicators where relevant and local measures developed by the teams themselves). As with business plans, guidance, examples of good practice and templates will be made available, in accordance with the action plan at Annex 3. 3.3 Financial Planning The development of the financial planning process to bring it together with performance management and drive forward priority-led budgeting was agreed by County Management Board on 18 th August. The overall aim is for the 2004/05 budget (and beyond) to be one where Members make decisions and set cash limits based on priorities, taking levels of performance into account as part of this process. 6

The County Council s budget, has, to a large extent, been based on quantifying the cost of service inputs without identifying the service outputs bought by that resource. There are no direct links at the moment between business / service plans and the budget process, which needs to be established as part of an effective decision making process. The intention is to begin to draw business plans and budgets closer together enabling CMB and Cabinet to understand what activities and outputs the budget is buying, and therefore enable more informed prioritisation between services at a political level. As an initial step, it is proposed to develop the following approach for the 2004/05 budget process, which will then be further developed over the following two years: For each service area, Directorate Management Teams (DMTs) be asked to specify the outputs to be achieved in 2004/05 based on no reductions in the level of resources available to Directorates, i.e. at current levels of service, adjusted to reflect approved policy changes. The outputs should indicate the outcome to be achieved and how such an outcome contributes to the County Council s Corporate Objectives. This approach will enable Cabinet to better understand the levels of service bought by the budget, and to move towards a commissioning approach. As part of a joined up performance management and budget process, the Cabinet would not only allocate cash limits to Directorates, but would, at the same time, agree certain levels of service to be bought by the budget from Directorates. This would then be reflected within Directorates Business Plans. Approval of output specified budgets will enable members to take a view about the contribution which different levels of activity make to achieving the County Council s Corporate Objectives. They would also help create a better level of performance monitoring and a view to be taken as to whether a budget underspend is indeed prudent financial management - or due to service levels not being delivered. The proposals in 3.2 and 3.3 above can be seen in the diagram below (figure 1). 7

Figure 1: Corporate Planning Process Community Strategy Corporate Plan 3-YEAR FINANCE STRATEGY Statutory Plans, BV Review Service Improvement Plans, CPA Improvement Plan actions Draft Divisional / Group / Thematic Plans (3-years in outline and 1 year in detail) Annual Budget Process Director s PDA (3 years in outline, 1 Directors year in PDA detail) Directorate / DSO Objectives & framework for Directorate Plan (3-years) Directorate / DSO Business Plan (3-years in outline, 1 year in detail MONITORING AND REVIEW Final Divisional / Group / Thematic Plans (3-years in outline and 1 year in detail) Team Plans (Annual) PDAs 8

3.4 Performance Measurement and Monitoring 3.4.1 Performance Measures Although we make use of and report performance against numerous national and some local performance indicators, we are not systematically measuring the things that matter locally using effective local measures of performance. Performance measures have been developed incrementally over time from a variety of different sources, and many are neither meaningful nor owned by the people responsible for their achievement. If we place too much emphasis on achieving targets for national indicators, we may become excellent at the wrong things, and thus become ineffective at meeting the needs of our communities. We therefore need to develop a balanced set of measures that put national priorities and targets into a local context. In doing this, there is a need to resolve some of the tension between competing national and local priorities, and to come to an agreed view about appropriate national and local targets. Where measures do exist (national or local) we do not have a systematic approach to target setting. Some targets are linked to clear action plans, but we have many targets that have been set without any clear idea about how we will achieve them, or indeed if the targets are still relevant to our priorities (see above). It is therefore suggested that we undertake a review of performance indicators at all levels, beginning with the high level outcome measures and targets being developed for the Community Strategy, high level outcome measures and targets for the Corporate Plan and Business Plans and key performance indicators and management information indicators at operational / team level. The most effective performance measures and targets are those that are owned by the people who are responsible for their achievement. It is therefore proposed that a qualitative approach to the development of these measures and targets is adopted, which involves relevant staff at all levels. The Policy Unit s Performance Management Team will lead this process, working with elected members, Directors, managers and staff across the organisation (see action plan at Annex 3) Performance indicators cannot measure all activities, and Business and Team Plans should therefore also include details of priority actions and projects to be undertaken by a service or team. 3.4.2 Performance Monitoring Performance improvement will not be achieved if performance is not monitored and supported by corrective action plans. 9

Performance against Business / Service Plans is currently only monitored by Directorate Management Teams, whereas performance against key performance indicators is monitored by CMB and the Cabinet Committee on Performance Improvement. Overview and Scrutiny Members are not directly involved in monitoring performance although this is currently being reviewed. To be effective, monitoring should take place at different levels and at different frequencies. Elected Members and CMB need to monitor performance in terms of its overall impact on the Corporate Objectives. To achieve this, there needs to be a joined up analysis of the things that contribute towards overall achievement of each objective. This can be done by developing a hierarchy of performance measures for each objective (taken from service and team plans), weighting each in terms of its overall impact and presenting information in a way that shows progress towards each objective. It is proposed that the Policy Unit s Performance Management Team undertakes this analysis on behalf of relevant executive member and Director owners (see paragraph 3.2.2 above), who will in turn report the information to CMB and the Cabinet Committee on Performance Improvement. As the impact of actions will take time to develop, this high level analysis and reporting can only be undertaken annually, although monitoring of the individual activities and measures that make up the whole will be monitored and reported to objective owners quarterly (and on an exception basis). Service managers and staff need to monitor the performance of their services at more frequent intervals. This will include monitoring key service and operational performance indicators. However, performance indicators cannot measure everything and it is important therefore that business and team plans incorporate a range of key actions and projects that are also monitored at appropriate intervals. Monitoring will only drive up performance if it is linked to corrective action planning, although this is currently not being done systematically. It is therefore proposed that corrective action plans be prepared for each key activity or target where quarterly or half yearly monitoring indicates a likelihood of the target not being achieved. Action plan templates will be made available in the guidance to be developed by the Policy Unit s Performance Management Team (see action plan at Annex 3). 10

3.4.3 Performance reporting Key performance data and action plans contained in business plans should be monitored and reviewed at appropriate intervals, and as a minimum by directorate management teams on a quarterly basis. CMB and the Cabinet Committee on Performance Improvement should receive quarterly reports on performance against key performance measures, and half-yearly reports on performance against business plans. Quarterly budget monitoring reports to Cabinet should include performance information to provide context to budget under and overspends. CMB and the Cabinet Committee on Performance Improvement should also receive annual reports showing the impact of the various activities and performance indicators on the corporate objectives and priorities (see also paragraph 3.4.2 above). There is currently no systematic process for auditing data collection and recording systems or the quality of performance data produced. Errors can therefore remain undetected until the annual external audit of national performance indicators. This could result in the County Council s Best Value Performance Plan being qualified on performance indicators, which in turn can have an adverse impact on the overall CPA result. A member of staff from internal audit has previously been seconded to District Audit to undertake the external audit of BVPIs, which provided a valuable insight into the Audit Commission s requirements for quality performance indicators, and this provides an opportunity for Internal Audit to review its approach to the audit of performance systems and data. It is therefore proposed that Internal Audit develop their approach with a view to undertaking a planned programme of systems audits and compliance testing. This could be done on a selective basis through an assessment of high risk areas based on Audit Commission requirements, past performance, identified control weaknesses and trends. 3.4.4 Management Information System An effective and comprehensive Management Information System (MIS) will enable us to address the issues identified above in a manageable way. The existing MIS produces vast amounts of data on a range of both high level and operational measures and is capable of producing management reports showing trends and comparisons. However, it is not based on a Microsoft platform and is not currently capable of downloading information from feeder systems. This results in some 11

large directorates having to manually input data from other systems, resulting in duplication of effort and the risk of errors. The existing MIS is not currently capable of applying tolerances and weightings to performance measures and it is thus difficult and extremely resource intensive to undertake a joined up analysis of relevant performance measures for CMB and elected members. It is also not currently capable of linking plans to outcomes and of sending alerts to managers when performance is falling short of targets. It is not yet clear whether the County Council s existing MIS is capable of development to meet our future needs at reasonable cost or within a reasonable timescale. Work is currently underway to evaluate the current system against systems that are capable of meeting our needs. This evaluation has involved users of the existing MIS at both operational and management level, and should be completed by the end of September. Whatever the outcome, resources will be required to meet our future management information needs, and this will be the subject of a separate report to CMB, containing detailed proposals and resource implications, in October 2003. 3.5 Performance Improvement Culture My evaluation of the County Council s performance management framework has identified many cultural differences across the County Council, including how staff are involved in performance improvement activities. Some directorates / DSOs involve staff in performance improvement through the use of Investors in People, Charter Mark, ISO 9000 and other quality marks yet do not have a formal planning framework, whilst others have excellent planning frameworks but have not paid as much attention to other aspects of performance improvement. Performance improvement will not be achieved without our staff. Staff need to know what they have to achieve and why, and should be involved in identifying what success looks like and how it can be measured. Figure 1 above shows how team plans should be used to make directorate objectives real to front-line staff. Another effective way to achieving performance improvement is to empower staff. Staff delivering services have a unique knowledge of what their customers want and can usually identify the barriers to success. If they know what their key results areas are they can be empowered to deliver these results using their own creativity, and to resolve problems in the most effective way. Managers can thus manage by results, which will help them to develop their service and continuous improvement activity. 12

Empowerment also releases and develops the often hidden potential of front-line staff, creating higher levels of staff satisfaction and motivation and thus improved performance. To be successful, it must be introduced and operated in a no blame culture. However, empowerment is often hampered by policies and procedures that prevent staff from developing innovative approaches to problem solving, which may need to be resolved by the Head of Human Resources. Staff should also be recognised and rewarded for their successes. Everybody wants to do a good job and reward can take many forms. In many cases, recognition for work done (i.e. reports in the author s name, report author s attendance at meetings to present reports, celebration of successes in newsletters, publication of quarterly performance monitoring reports to staff) can be key motivators as can a simple thank you from managers for a job well done. These issues have been recognised by the Audit Commission, which has recently developed its Performance Breakthrough Model. This model was the result of research into why so many organisations with seemingly effective performance management frameworks fail to achieve the improvements in performance they expect. The model identifies a number of key points that successful organisations have in common, many of which relate to the way in which performance management frameworks are applied in practice, and organisational culture. Breakthrough points are categorised into 6 themes, namely: Showing staff you think performance matters Join up thinking and learning Take action on what matters most Make national agendas work for you Sign up your staff Find your own framework Measure what matters Help people to perform Breakthroughs tend to result from several small steps forward rather then from an overnight transformation. To reflect this, the model identifies characteristics at 3 stages of development: starting, developing and consolidating. For each theme and for each stage of development, the model gives examples of what you might see in organisations (taken from the research and case study work). The examples help to get some sense of how well the organisation or 13

directorate can deal with some of the common barriers to managing performance. Although the Management Development Programmes linked to the Culture Change programme will help to deliver a shift in organisational culture to one that supports empowerment, reward and recognition, this may not in itself deal with all the issues identified in the Audit Commission research. It is therefore proposed that the Policy Unit s Performance Management Team works with directorates and DSOs in applying the Audit Commission model to their existing performance management arrangements, so that support can be targeted to relevant areas in each directorate or DSO. 3.5.1 Performance Development Appraisal (PDA) PDA is an integral part of our existing performance management framework. It is the mechanism by which individual goals derived from directorate business plans and team plans are identified for each member of staff. It also enables staff training and development to be aligned to team and individual goals. The deadline for full roll out of PDA across the organisation set out in the Human Resources Strategy Action Plan is 31 st March 2005, which is a realistic timescale based on the need to provide adequate training to managers and staff. To date only about 10% of managers and staff have been trained, and thus can use the system, although teams within some directorates are using their own PDA system (developed prior to the corporate one), which they have adapted to incorporate assessment against the core competencies. Existing PDA training tends to focus on assessing performance against the corporate competency framework, rather than on performance against key work goals, and this needs to be addressed in future training. To ensure that PDA is effectively linked to the corporate planning process, it is proposed to introduce broad corporate timescales for PDAs to be carried out. The table below proposes an approach to this. 14

Level of Staff PDA to be completed by: PDA review to be completed by: Directors March / April June / July * Senior / Middle Managers June December Other staff 6 monthly 6 monthly * (to inform the following year s service planning cycle see figure 1 above) Compliance with this approach could be monitored by introducing a compulsory standard quarterly management indicator e.g. % of PDAs / reviews undertaken within target. 3.5.2 Quality award, initiatives and tools Quality awards such as Charter Mark, ISO 9000, IiP and Beacon Council awards are used to varying degrees throughout the organisation. To date, the County Council has one Beacon Council Award, 32 Charter Mark Awards, 22 services / teams with Investors in People Accreditation, three ISO awards and 16 other awards and accreditations covering a diverse range of services. However, there isn t currently a corporate approach to this. As each directorate / DSO and service within it has different needs, it is proposed that the performance management framework should encourage the use of appropriate quality tools, without being prescriptive as to their use. However, as IiP supports the corporate performance management framework, it is proposed that IiP be made a corporate requirement for all directorates and DSOs. The Policy Unit s Performance Management Team will develop a corporate approach to the use of IiP and other quality accreditations and awards, to enable good practice and practical experiences to be shared across the organisation, and will develop and provide corporate guidance and support on a variety of quality tools and techniques. 4. Conclusions 4.1 The Council s performance management framework is generally sound. However, the County does not currently have a County-wide Community Strategy. Community Strategy objectives should be agreed 15

before further work is done to develop key performance measures for the Corporate Plan, and to assign owners to each of the Corporate Objectives. 4.2 The County Finance Strategy should be aligned with a new approach to business planning and the business-planning timetable should be aligned with the budget cycle. The new approach should be systematically applied across all directorates and DSOs in accordance with a corporate timetable. 4.3 Common terminology ( business plans ) should be used across the Council and Business Plans should be underpinned by team plans and individual work objectives for all staff. Guidance and training on the performance management framework and on performance improvement should be made available to managers and staff. 4.4 Existing performance measures should be reviewed at corporate, service and team level and the corporate MIS should be developed or replaced to meet future management information needs. 4.5 Performance monitoring should be developed to incorporate a joined up analysis of activities and performance indicators against corporate priorities, and corrective action planning should be introduced as a standard for all activities failing to meet targets. 4.6 Internal Audit should incorporate periodic systems reviews and compliance testing in audit plans, to improve the quality and accuracy of performance data. 4.7 Quarterly budget monitoring reports should incorporate performance information, to provide a context for budget under and overspends. 4.8 Elected members should be involved in joint financial and business planning activities, and in monitoring and scrutinising performance information. Members should receive half-yearly reports of achievements against business plans. 4.9 PDA should be used to assess achievements against team goals, and undertaken broadly within a corporate timetable. 4.10 A healthcheck against the Audit Commission Performance Breakthrough Model should be undertaken in each directorate / DSO, and the results used to help deliver the shift in culture needed to support empowerment. 4.11 A corporate approach should be taken to quality awards and accreditations in the future, so that good practice and practical experience can be shared throughout the organisation. 16

4.2 IiP should be made a corporate requirement for all directorates and DSOs. 5 Recommendations It is recommended that: (i) (ii) (iii) (iv) (v) The Corporate Plan is reviewed in the light of the emerging Community Strategy. This will also provide the opportunity to review and/or confirm the priorities associated with each objective. Each corporate objective be assigned an elected member and director owner ; Key performance measures to measure successful delivery of the Corporate Plan be developed; The County Council moves to a 3-year business planning cycle linked to the County Finance Strategy and annual budget process in accordance with the timescales shown in the timetable at Annex 2. All directorate business plans be supported by annual team plans at levels relevant to the particular directorate / DSO / service (vi) Common terminology ( business plans ) for planning at directorate, service and team level be adopted; (vii) (viii) (ix) (x) Sign off of final, resourced Directorate / DSO business plans by portfolio holders be applied across all directorates / DSOs; Directors / DSOs should report achievements against business plans to elected members on a half-yearly basis; The role of scrutiny in monitoring performance be reviewed; There be a review of existing performance measures at all levels across all directorates / DSOs; (xi) Quarterly budget monitoring reports should incorporate performance information to provide a context for under and overspends; (xii) Internal Audit should incorporate periodic systems reviews and compliance testing in audit plans; 17

(xiii) The existing MIS be developed or replaced to meet future information needs; (xiv) Performance Development Appraisal be rolled out across all directorates / DSOs at all levels, in accordance with a corporate timetable and PDA training emphasises the need to assess performance against key team and individual work objectives, in addition to the corporate competency framework; (xv) There be a healthcheck of performance management arrangements in each directorate / DSO using the Performance Breakthrough Model; (xvi) A corporate approach to quality awards and accreditations be developed. IiP should be made a corporate requirement for all directorates / DSOs (xvii) Guidance, training and support on the revised framework, business and team planning (including templates), target setting, action planning, quality awards and initiatives, be developed for managers and staff at all levels of the organisation; Detailed prioritised actions supporting these recommendations appear in the Action Plan attached at Annex 3. 18

Annex 1 ACTIONS IDENTIFIED IN CPA IMPROVEMENT PLAN General Implement the integrated performance management framework. Complete the review of the corporate working group structure and incorporate ways in which improvements can be shared. Review the role and objectives of DMTs Planning All service managers should ensure the description of priorities are consistent when revising plans and strategies Better align and plan service activity to deliver the desired outcomes. Ensure that information on performance, need, locality and existing provision is used to inform priority choices within plans Apply strategies and plans from relevant Steering Groups Financial Planning Identify what are not priorities from PLB Undertake a series of four pilot decision conferencing workshops Hold a series of meetings with CMB/Cabinet Review the effectiveness of the 2003/04 budget Produce 2004/5 budget Performance measurement and monitoring Develop measurable performance outcomes and targets for each of the Council s priorities. Set and monitor high-level targets for key outcome priorities. Monitor performance against high level targets regularly. Incorporate information on resources needed and how performance indicators will be used to better communicate achievement to the public 19

Review the structure, role and objectives of Overview and Scrutiny Performance Management Culture Clarify, prioritise and enhance staff involvement and continue to put into practice key elements of the culture change programme (implement the staff appraisal and implement management development programme) Continue to enhance encourage all staff to feel more involved Deliver the programme of management events and communications. 20

Annex 2 Action Responsibility Time June July Aug Sept Oct Nov Dec Jan Feb March April May Director s PDA Chief Executive Directorate / DSO Objectives Directors Draft divisional / group / thematic plans Heads of Service Preparation of continuation estimates DMTs Decision conferencing DMTs Budget forecast seminar Cabinet / CMB 21

Action Responsibility Time June July Aug Sept Oct Nov Dec Jan Feb March April May Finalise directorate budgets Cabinet / Director of Resources Final divisional / group / thematic plans Heads of Service Final directorate / DSO plans Directors Team Plans Service / team managers County Finance Strategy rolled forward Director of Resources 22

Action Responsibility Time June July Aug Sept Oct Nov Dec Jan Feb March April May Publication of Performance Report Policy Unit Quarterly budget / performance monitoring reports to Cabinet Director of Resources (lead) Monitoring directorate / DSO plans DMTs / CMB / Members Directorate / DSO responsibility Member / CMB / OCE / Resources Directorate responsibility 23

LANCASHIRE COUNTY COUNCIL PERFORMANCE MANAGEMENT FRAMEWORK Annex 3 ACTION PLAN Action Start Finish Responsibility Decision Planning framework / financial planning Finalise Community Strategy objectives June 03 Jan 04 PU (PB) LSP Review / validate Corporate Plan against Community Strategy objectives Jan 04 Feb 04 PU (JP/PB) - Assign elected member and Director owners to each corporate objective and commitment Jan 04 Feb 04 PU (JP) / PWG / CMB CCPI Develop / make available business and team plan templates / examples of good practice Oct 03 March 04 PU (JP) PWG 24

Action Start Finish Responsibility Decision Performance measurement and monitoring Develop high-level outcome measures for Corporate Plan Jan 04 March 04 PU (JP/PB) / PWG / CMB CCPI / Cab Identify owners for each measure March 04 April 04 PU (JP/PB) / PWG Dir / DSO / CMB Review existing service performance measures Oct 03 March 04 PU (JP) / Dir / DSO Dir / DSO - Workshops Evaluate existing / alternative MIS Aug 03 Oct 03 PU (JP) / Dir / DSO / CMB CCPI / Cab Develop detailed plan for implementation of revised / new MIS Dec 03 Jan 04 PU (JP) - Review audit approach to incorporate periodic systems reviews and compliance testing Oct 03 Dec 03 AM PWG 25

Action Start Finish Responsibility Decision Performance improvement culture Develop methodology for undertaking audit of directorate / DSO performance management arrangements using Audit Commission Performance Breakthrough Model Oct 03 Nov 03 PU (JP) PWG - Directorate / DSO workshops Dec 03 March 04 Dir / DSO - - Analysis Jan 04 April 04 PU (JP) - - Individual directorate / DSO action plans May 04 June 04 PU (JP) / Dir / DSO Dir / DSO Roll out Performance Development Appraisal October 03 March 05 CCM / Dir / DSO - 26

Action Start Finish Responsibility Decision Develop guidance - Performance management framework - Quality awards / initiatives / tools - Self-assessment process Nov 03 Nov 03 Nov 03 Jan 04 Jan 04 Jan 04 PU (JP) PU (JP) PU (JP) PWG PWG PWG Training - Performance management framework - Executive / Senior Manager Corporate Induction - Quality awards / initiatives / tools - Target setting March 04 March 04 March 04 Nov 03 Ongoing Ongoing Ongoing Ongoing PU (JP) PU (JP) / CCM PU (JP) PU (JP) - - - - Key to abbreviations: PU (JP)- Performance Management Team PU (PB) - Corporate Policy Team PWG - Performance Working Group CMB - County Management Board CCPI - Cabinet Performance Improvement Committee Cab - Cabinet CCM - Culture Change Manager Dir/DSO - Directorates and DSOs LSP - Lancashire Strategic Partnership HoF - Head of Finance AM - Internal Audit Manager 27