Modernising Government. The Challenge for Local Government

Modernising Government The Challenge for Local Government

Contents Foreword by the Minister 2 1 Introduction 3 2 Local Government and SMI 5 3 New Directions for Local Government 7 4 Delivery of Services/Customer Service 8 5 Funding and Efficiency 9 6 Management Issues 10 1Modernising GovernmentThe Challenge for Local Government 7 Information and Communications Technology 11 8 Paying for Change 12 9 Conclusion 13 Appendix 15

Foreword by the Minister 2Modernising GovernmentThe Challenge for Local Government Modernising Government The Challenge for Local Government Since the launch of the Strategic Management Initiative and the publication of Better Local Government, progress has been made on different fronts in progressing the modernisation of local government. However, we all know that more needs to be done if we are to keep pace with the ever growing expectations that are placed on the system from various quarters: elected representatives, business, customers and staff. The challenges for local government are enormous. It must deliver on very important elements of the National Development Plan. It must lead local development. And it must strike out in new directions, taking a much wider view of its responsibilities as the local democratic institution. This booklet sets out where we are at now in the modernisation process and the challenges that lie ahead. It also sets out new guidelines for the preparation of corporate plans, which are required to be in place by September, 2000. I am now urging local authorities to build on the progress made and help to deliver a system which puts local government at the heart of the community and promotes the overall economic, social and cultural development of the community. Noel Dempsey, T.D., Minister for the Environment and Local Government.

1 Introduction 1.1 In the last five years there has been a major push to reform the institutions of the state. This booklet reviews the position in relation to local government and lays down some guidance for local authorities for the next phase of the Strategic Management Initiative (SMI). The booklet also describes the wider context of public sector reform which is the context of the modernisation programme in local government. 1.2. When the SMI was launched by the government the three key aims were: that public bodies should maximise their contribution to economic and social development that an excellent service should be provided to the public, and that resources (finance, staff etc) should be used effectively by public bodies. Delivering Better Government (May, 1996) set out certain key issues to be tackled, including delivering quality services to customers and clients 3Modernising GovernmentThe Challenge for Local Government reducing red tape delegating authority and accountability improving human resources management improving financial management and ensuring value for money enhancing the use of information technology, and improving co-ordination between government departments. 1.3 For central government, an important mechanism in facilitating change was the Public Service Management Act, 1997. It provided the statutory framework for the preparation of strategy statements by government departments and offices. These are to be prepared at least every three years or within six months of a new minister taking office. 1.4 The strategy statements concentrate on setting down broad objectives for the organisation. These are to be fleshed out through a system of business planning. Each department or office is required to prepare an annual business plan setting out the work programme necessary to achieve the objectives in the strategy statement. The plans describe how and when the various steps are to be taken, what resources will be applied and what indicators there are to assess performance. Government departments now produce annual business plans to support the strategic objectives of their strategy statements, and partnership committees are in place with the objective of facilitating the implementation of change. The next step is a process of performance management.

4Modernising GovernmentThe Challenge for Local Government 1.5 The 1997 Act provided the legislative framework to underpin this process. It provides for the devolution of authority, responsibility and accountability within the civil service and greatly enhances the personnel management functions of the secretary general of a department in relation to appointments, performance, delegation and discipline. As part of the SMI process, work is now being finalised at national level on a system of performance management in consultation with trade unions, management and human resource consultants. Performance management is a broad term to describe the way people s performance and development is managed in order to achieve the strategic and day-to-day targets of an organisation. The basis for performance management in the civil service will be the agreed business plans for the various units within departments. Progress is being made towards the introduction of a performance management system which will link objectives, responsibility and accountability. 1.6 One of the key aims of the SMI process is to improve the standard of service to clients of the public sector. In pursuit of this, customer service action plans, to be fully implemented over a two year period, have been produced as an integral part of the SMI process. Over the next three to five years, the overall aim is to radically overhaul the systems of contact between the citizen and government. Developments in information and communications technology (ICT) provide possibilities for improvement which could not have been contemplated heretofore. At the heart of all this is a much more integrated approach, focusing on the citizen/customer as the basis for service provision. 1.7 Progress is also being made on the development of a series of flanking policies which will facilitate the whole process. A new financial management system based on accrual accounting is being developed to support management and, in particular, to facilitate the decentralised decision making model envisaged in the 1997 Act. New IT management and human resources strategies are envisaged. A thorough examination is also currently underway of the extent of regulation by the state so as to reduce the regulatory burden to the minimum and to minimise red tape. All of these changes are taking place in the more open atmosphere of decision making generated by the Freedom of Information legislation; this in itself requires new ways of organising business. 1.8 Another important mechanism underpinning change within the civil service and the wider public service has been the national partnership agreements. Under Partnership 2000, partnership committees have been established at the organisation level, with the primary function of developing and overseeing the implementation of action programmes for change. The Programme for Prosperity and Fairness builds on this process. It will require intensified attention to customer service and standards, and it will require a performance management system to be developed. 1.9 This then is the backdrop against which the renewal process in local government must be seen. The paragraphs which follow set the scene for the next phase of corporate planning in local authorities. They outline the current state of play and the anticipated future direction of the renewal programme. Insofar as it s necessary, the Local Government Bill will give the legislative framework for the programme.

2 Local Government and SMI 2.1 Subsequent to its introduction at central level, the SMI process was extended to the wider public service - local government, health boards, defence forces, gardaí, prison services, education sector and so on. In the local government sector a modernisation programme is under way, differing in some important respects from the approach of central government in order to reflect the different organisation frameworks. For example, in local government there has been a well defined separation of policy and executive roles for many years; a programmatic accounting system with some accrual accounting has also operated. The current programme of local government renewal aims to significantly improve management and decision making structures and financial and human resource management. It aims to develop the role of local government in community leadership. Essentially, the same objective drives the reform process at central and local levels to put in place a first class service, efficient and responsive to its customer base. Local Authority Corporate Plans for the Future 2.2 Local authorities prepared their first strategy statements during the latter part of 1996 and early 1997; guidelines for this purpose issued in March 1996. The June 1999 constitutional referendum and the relevant consequent legislation provides for fixed intervals of five years between local elections. This period may no longer be extended. It therefore seems appropriate that in future local authority corporate plans should be prepared to coincide with this interval. 5Modernising GovernmentThe Challenge for Local Government 2.3 Local authority strategy statements will in the future be styled as corporate plans. This is to reflect differences in the SMI process between central and local government and to recognise the business ethos which must underlie the operation of local authorities. With this in mind the Local Government Bill, currently being drafted, will provide for corporate plans to be prepared within six months of each local election. It will also provide for yearly review by the council of performance in meeting the objectives of the plan. 2.4 Bearing in mind the statutory requirements which will apply, arrangements should now be put in place by each city and county manager so that the corporate plan to be produced for the 1999-2004 councils can be adopted by end September 2000. The corporate plan should reflect developments since the council s previous strategy statement and in the SMI process generally. New guidelines are set out in the attached appendix.

Policy Decisions/Accountability 6Modernising GovernmentThe Challenge for Local Government 2.5 One of the central planks of the local government renewal process is to develop new models of decision making in local authorities. The elected council will lead the process, but will enlist the help and support of sectoral interests in the formulation of policy. The executive will advise on policy formulation and carry into effect the policies decided by the elected council. This requires new decision making structures and new systems of reporting on executive action. 2.6 The strategic policy committees (SPCs) will develop the policies of the council under the various programmes (roads/transportation, planning, environment and so on). These committees include elected councillors and representatives of sectoral interests relevant to the programme concerned. They will be supported by a new and strengthened management structure. Both the chairs and the managers will have structured opportunities for briefings with the minister and the department. And the chairs of the SPCs will form a cabinet (corporate policy group CPG) to act as a clearing house for all major and cross-cutting policy areas of the council. 2.7 The corporate plan will be the overall framework to guide the policy making processes of the SPCs and CPG. There will also be an annual review of progress where the executive will report to council. The Local Government Bill will underpin this process. It will set out a structured framework within which the elected council can determine overall policy, and participate in the preparation of the corporate plan. Accountability and review mechanisms will also be provided for. 2.8 It is government policy that a performance management system, similar to that referred to at paragraph 1.5, should be developed across the broad range of the public service, including local authorities. Performance management will be a key element of human resource policy in the future. It will provide the basis for the organisation of work, effective training and development of staff and setting individual or team responsibilities.

3 New Directions for Local Government 3.1 The Task Force on the Integration of Local Government and Local Development has set a path which should enable local government to influence, to a much greater extent, the provision of public services locally. The new County/City Development Boards (CDBs) will be chaired by local government and serviced by a local government officer. They will have significant local government representation at both political and official levels and the County/City Strategy for Economic, Social and Cultural Development which they will produce, will be adopted by the local authority. Directors of Community and Enterprise have been recruited by local authorities and they are working towards the establishment of the CDBs early in 2000. The task force also envisages local authorities taking a specific role in combating social disadvantage through an enhanced community development role; for this they will be recruiting Community Liaison Officers later this year. This is reinforced in specific committments in the Programme for Prosperity and Fairness. Clearly, the corporate plan needs to take account of these developments. 7Modernising GovernmentThe Challenge for Local Government

4 Delivery of Services/Customer Service 8Modernising GovernmentThe Challenge for Local Government 4.1 BLG set out a menu of suggestions on how local authorities might improve services to customers. And progress has been made by local authorities, in particular the decentralisation of service delivery through area offices, the co-ordination of service delivery through one-stop shops and the improved use of information and communications technology. That said, considerable scope remains for public service organisations, be they local authorities or government departments, to further develop the customer service ethos. The Programme for Prosperity and Fairness lays down challenging requirements on the public service to develop new approaches to customer service in consultation with its client base. However, the primary impetus must come from within organisations themselves. This will require an ongoing focus on customers needs and requirements, informed by internal and external consultation. Customer service plans can then be developed and implemented as part of the SMI process. These plans can identify the customer service objectives along with the levels and standards of service which customers can reasonably expect. They should be developed and articulated in the corporate plans. The department will as far as possible respond positively to requests to assist in the funding of customer service initiatives. 4.2 Many local authorities are decentralising decision making to areas closer to the client. For example, much routine council business is now handled by area committees of county and city councils. Some local authorities have built on this by realigning organisation structures to reflect this new approach. Also, the concept of a local area office, sometimes catering for town and county services, and delivering the full range of local government services is taking root. In some cases, wider public services will also be delivered from these local offices. Developments in information and communications technology are greatly facilitating this process.

5 Funding and Efficiency 5.1 Considerable progress is being made in developing new financial management systems for local authorities; this is being achieved because of the full commitment which local authorities and their finance officers are giving the process. The key elements of the efficiency agenda are: the strategic decisions made to revamp the local authority accounting system to a full accrual basis; the development of better and consistent costing of services; a greater emphasis on value for money (VFM), including the audit system, and the harnessing of ICT in support of business objectives. Work has already started on two pilot projects on the implementation of these new forms of accounting. It is planned to have all local authorities fully operational using the new systems by June 2001. 5.2 The Local Government Fund, comprising the proceeds of motor tax/driver licence revenues and an Exchequer contribution, is proving to be a buoyant source of revenue. Significant increases in allocations have accrued to local authorities in the past two years. However, it is vitally important that distribution of the fund should be significantly improved to promote greater equity. The first results of the needs and resources project being led by the Galway local authorities are now becoming available. It is hoped to use these in the near future to effect changes in the distribution pattern and to build on this process for the future. 9Modernising GovernmentThe Challenge for Local Government

6 Management Issues Modernising Government The Challenge for Local Government 10 6.1 If the ambitious programme of renewal outlined in this booklet is to be translated into reality, and if local government is to measure up to the substantial challenge the National Development Plan poses, the right management structures will have to be in place. The system requires a management structure focused on performance, with clear lines of delegation of authority, responsibility and accountability drawing from the corporate plan and supporting operational (business) plans. 6.2 Management in local authorities will also have to be free to manage without unnecessary controls from the centre. An extensive programme of devolution has already taken place which has eliminated much of the need to refer matters to the department for approval. And, recent legislation has delegated to local authorities much of the recruitment carried out by the Local Appointments Commission heretofore. At the same time, the Local Government Staff Negotiations Board (now the Local Government Management Services Board) has had its remit broadened into wider human resources management and now has an active programme supporting the local authority personnel function. 6.3 A key required change is to strengthen the management structure through the creation of a corps of directors to lead each of the main services (or in some cases a combination of services). This system would allow unambiguous responsibility for delivering services and would provide significant career opportunities in local government. It would also provide better support for the elected members through the new strategic policy committees.

7 Information and Communications Technology 7.1 Information and Communications Technologies (ICT) are a powerful catalyst for change in an organisation. They can affect significantly how the organisation delivers services to its customers. Local authorities are no different, and will need to embrace such technologies with enthusiasm to stay abreast of expectations of service levels. Through ICT, local government can become more responsive and can interact with other public service agencies in the delivery of a wider range of services as part of the development of the information society in Ireland. 7.2 The recent draft consultative document on a vision for ICT for the local government sector, circulated by the LGCSB, provides a basis for developing a common way forward. Proposals are being developed to produce internet-technology based applications (intranets). These will be made available to all local authorities, and will form the basis for further developments over time. Of course, the new financial management systems will also be a major building block as local authorities begin to offer e-commerce options. In developing new corporate plans, local authorities will need to become ever more conscious of the impact of ICT. 7.3 It is of course critical that local authorities have strong IT skills in-house, and actively manage the retention of such skills. Strategic partnerships with local business on the provision of IT services will also be very important. The scarcity of IT skills generally is a very real problem which will need to be addressed both centrally and at individual local authority level. Strategies will have to be put in place to overcome such resource problems particularly as local authorities place increased reliance on IT systems to support critical functions. Modernising Government The Challenge for Local Government 11

8 Paying for Change 8.1 The agenda for change set out in this booklet is extensive. Its purpose is not change for the sake of change. Rather, the object is to have a local government system better structured in terms of decision making and management to face the higher challenges now facing the public service and to do so in a cost effective manner. Local government is faced with Modernising Government The Challenge for Local Government 12 delivering on a substantial part of the National Development Plan responding to greatly increased levels of activity in planning and other services arising from rapid economic growth striking out in new directions, in particular to lead the CDB process and to tackle social exclusion, and improving focus on customer satisfaction meeting its committments in the Programme for Prosperity and Fairness. 8.2 The agenda cannot be implemented without cost. The Local Government Fund is delivering additional resources for local authorities on a scale not witnessed in a generation. However, it must be appreciated that the object of the renewal programme is not to spend more, but to spend well. Local authorities now have much more operational freedom to recruit the necessary resources to meet growing volumes of work, and the Fund facilitates this in budgetary terms. But there are limits to the elasticity of the Fund. There must be an efficiency dividend. New management structures have to be seen in terms of recovering the initial costs in efficiency gains. 8.3 The Local Government Fund will continue to provide base level increases to contribute to ongoing costs arising from existing and new activities. However, the minister wishes to see a more aggressive approach from local authorities in achieving efficiency gains. Part of the Local Government Fund will therefore be earmarked for specific innovation/ efficiency projects funded on a bid basis. The object will be to reward the local authorities which demonstrate real commitment to innovation and efficiency. This approach was signalled in BLG (para. 5.28).

9 Conclusion 9.1 It is a key objective of this government to develop a modern, flexible and responsive public service capable of anticipating and meeting the challenges posed by a rapidly changing global environment. Local government must be part of this process. This booklet sets out the reforms currently underway under the SMI at national level to set the context in which local government must operate. It elaborates key areas of the current renewal programme for local government, acknowledges progress made to date and points to the next steps in the process. One of the first steps is for each local authority to draw up its corporate plan for the next five years. The change envisaged is significant and challenging. But change is inevitable. To successfully manage it will require the full commitment of all with a stake in local government councillors, managers, staff, and the department. Modernising Government The Challenge for Local Government 13

Appendix Strategic Management Initiative Guidelines for Local Authorities on the Preparation of Corporate Plans March 2000 Modernising Government The Challenge for Local Government 15

Introduction Modernising Government The Challenge for Local Government 16 These guidelines are to assist local authorities in preparing their corporate plans. Those plans will serve as the framework for action by the local authority in the future. It is important that the plans be designed to meet the circumstances of the individual organisation and preserve flexibility to meet the changing environment. Each local authority should decide on the format, style and content which best suits its own circumstances while addressing the key elements of content and structure set out below. Timescales The recent referendum on constitutional recognition for local government has provided for local elections to be held every five years. Accordingly, corporate plans should be prepared by each local authority on a five year basis, the term of each council. The Local Government Bill will make provision for the preparation of corporate plans on this basis. A time period of six months from the date of the annual meeting in an election year would seem sufficient for the preparation of the plan. A period of two months grace is envisaged, allowing a maximum of eight months for preparation and adoption. The corporate plan for the 1999 to 2004 councils should be completed by September 2000. Involvement of Elected Members Corporate plans should be endorsed and adopted by the council. In view of the importance of the issues to be addressed in terms of mission, objectives, strategies, resourcing and so on, it is recommended that elected members are involved in the process from the outset. One approach may be to set up a small committee of elected members with whom the manager will liaise. The corporate policy group (CPG) is envisaged as the appropriate forum. This approach will: harness elected members knowledge of the interests and needs of the customers of the local authority; enhance the role of elected members by providing direct input into strategy formulation; involve elected members so that they can give the corporate plan informed consideration when it is being adopted by council. If this approach is not adopted, it is recommended that other effective forms of regular consultation and feedback are put in place with the elected members in the course of the preparation of the corporate plan. Staff Participation and Consultation It is crucially important to involve staff at all levels, across all disciplines and services, in the preparation of the plan. This will encourage ownership of work objectives and of changes to be implemented by the authority.

In preparing corporate plans, managers should, therefore, adopt an approach involving comprehensive consultation and staff participation. In particular, partnership committees which are being put in place under Partnership 2000 should be fully involved in the preparation of the corporate plan. If partnership committees are not yet operational, other meaningful forms of staff consultation and participation should be put in place. Reference should be made in the corporate plan to the process used in its preparation. Regional, Town/County and CDB Issues Recognition of the relationship and inter-dependencies between urban authorities and county councils is important for the production of a holistic and cohesive corporate plan. This is essential when addressing issues of customer service. The objective must be to provide a fully unified service to the public, to whom town/county demarcations are often incomprehensible. It is recommended that, at an appropriate stage in the preparation of the corporate plan, the manager should consult collectively or individually with the urban authorities so as to ensure agreement and co-operation on the strategies to be adopted by the local government service as a whole. Similarly, the relationship and inter-dependencies between local authorities on regional issues needs to be recognised. Measures to ensure co-ordination of the delivery of services spanning more than one local authority need to be set out in the corporate plan. The new county/city development boards (CDBs) are intended to pull together the activities of the whole public sector operating at county/city level through a strategy for economic, social and cultural development. The corporate plan should therefore reflect the activities of the CDB and contribute to its aims. The 1999/2004 corporate plan will be completed in advance of the CDB strategy (due in 2002), but the plan should be amenable to change should this be necessary following publication of the strategy. Corporate plans subsequent to the 1999/2004 plans should reflect the strategies. Modernising Government The Challenge for Local Government 17 Linkage with the Department s Goals and Objectives The department s strategy statement (1998-2001) which was published in April 1998 sets out the underlying and sectoral goals for the department. These goals reflect government policy and, in particular, set the parameters guiding the department s policy towards local government, including funding of major programmes. It is important that local authorities ensure adequate linkage and continuity of policy between the department s goals and those set locally. The sectoral goals of the department relate to:

local government the environment road transportation and safety housing Modernising Government The Challenge for Local Government 18 planning and urban renewal the construction industry water services, and the electoral system. Local authorities should therefore consult the department s strategy statement during preparation of their plans. A copy is enclosed with these guidelines for that purpose. Use of Consultants As this is the second iteration of strategy under the SMI, the need for consultancy or outside expertise in preparation of corporate plans may not be so strong. However, certain facilitation may be required, for instance in the process used to enhance consultation with elected members and with staff. Assistance might also be useful in developing customer communications strategies. It is important to bear in mind that one of the more important benefits of strategic management is the impact of the planning process itself on the organisation. Strategies for the future of the local authority are more likely to be successful where there is meaningful consultation, participation and communication between management, elected members and staff. This dimension could be lost through overreliance on outside expertise and caution should be exercised to ensure it is used only where necessary. Publication Corporate plans should be published as soon as possible after final adoption by the council. It is recommended that each elected member and member of staff should receive a copy. Copies should also be forwarded to each town authority within the council area and to each county council/county borough corporation countrywide. Copies should be forwarded to the department. Local authorities should make a summary available in the local authority s public offices and libraries; to business and other sectors active locally; and arrange for appropriate publication in local media. The corporate plan should also be displayed on the local authority s website, if operational.

Annual Progress Report An annual progress report in respect of the corporate plan should be submitted to the elected members, perhaps in conjunction with the draft budget (estimates). The progress report should be subsequently detailed in the local authority s annual report. It is recognised that circumstances will inevitably alter during the period of the corporate plan for example, when the CDB s strategy is adopted. It is important therefore that the local authority respond to the changing environment. The annual progress report is the appropriate vehicle to signal changes in direction and emphasis. Key Elements of Content and Structure The corporate plan should be prepared on the basis of an organisation wide strategic approach. It should describe the principal activities of the local authority; the objectives and priorities for each of these activities; the manner in which the authority proposes to assess its performance in respect of each such activity, taking account of the need to work towards best practice in service delivery; the human resources activities (including training and development) to be undertaken for the elected council and the staff of the local authority; the organisation structure of the local authority, both elected council and staff, including corporate support and information technology; and the organisational changes and improvements proposed to promote efficiency of operation, to improve customer service and in general to support the corporate plan. Modernising Government The Challenge for Local Government 19 The following are key elements to be incorporated in the corporate plans: mission statement and mandate; core objectives and supporting strategies; operating environment; citizen/customer focus; internal capability to realise the goals; resource allocation/reallocation issues; implemention and on-going assessment strategy; monitoring, reporting and corrective action intended.

(i) Mission Statement and Mandate The mission statement is intended to express the raison d être and mandate of the local authority. It should be short and should describe where the local authority wishes to position itself, or what it aims to achieve, in the future. Modernising Government The Challenge for Local Government 20 In order to describe its overall mandate, the local authority should summarise its functions so as to ensure that its ongoing business is integrated in the corporate plan. (ii) Core Objectives and Supporting Strategies Having set out the council s mission, the next step is to translate this into a series of statements pointing to how the council proposes to go about implementing its mission. These should express in respect of each service grouping/programme or cross-cutting issue such as customer care what the council hopes to achieve. For example, to provide a good roads transportation system. It may be convenient to distinguish between core objectives (e.g. to promote sustainable development ) and supporting strategies (e.g. in the area of planning, environmental protection, roads policy etc). In general, core objectives: should be a direct consequence of the local authority s mission and mandate; should be expressed in terms of intended effects or outcomes; should be achievable. The necessary strategies to support the achievement of each of the core objectives should be set out in the plan, including major capital and other projects. (iii) Operating Environment Like any organisation, a local authority does not operate in a vacuum. The environment in which it operates has a large bearing on its ability to fulfil its mandate effectively. By and large, the core objectives will flow naturally from the mission statement. However, the capacity of the local authority to achieve those objectives through its various strategies will depend to varying degrees on its operating environment. It is important, therefore, to recognise and set out what factors, both internal and external to the authority, influence the extent to which the authority can achieve those objectives. This scanning of the environment should enable a more informed approach to be taken in setting achievable strategies. Examples of these factors are government/eu spending, environmental sustainability, information and communications technology, availability of skilled staff and so on.

(iv) Citizen/Customer Focus The developments referred to in paragraph 1.6 concerning citizen/customer issues must permeate the corporate plan. The plan should anticipate the potential of the new financial management system for fundamental new approaches to citizen/customer service. Similarly, organisation changes such as integrated delivery of services at area level should be addressed in the plan. The issues raised in Better Local Government (Chapter 4) are still highly relevant. These include: developing a continuous customer-oriented ethos and culture provision of one-stop shop facilities in conjunction with other public service providers decentralisation of service delivery design, appearance and functioning of public offices co-ordination of service delivery across the various functional areas in local authorities customer consultation and complaints procedures pro-active information dissemination to customers practical and comprehensive bilingualism operation of regulatory controls use of information and communications technology to improve customer service development of quality initiatives assessment of progress and service standards. Modernising Government The Challenge for Local Government 21 The corporate plan should set specific objectives, whether separately or as part of each service/programme, for improving customer service. Improving service delivery and overall customer focus requires consultation, planning and resource dedication. As part of this process, the local authority should consider setting out the level and standard of service that a customer can expect in their dealings with the local authority.

(v) Internal Capability to realise the Authority s Goals Modernising Government The Challenge for Local Government 22 Having set out the objectives and supporting strategies, the next step is to identify the issues which need to be addressed to realise the strategies set. Some of these issues will have been flagged in the analysis of the operating environment (see (iii) above). It may well be that changes to the organisation structure are necessary in the light of changing emphases. For example, does the environment programme now require to be de-coupled from other services with which it may be merged? Equally, is there need for a new approach to human resources, in the light of increased and new activities? A particular emphasis should be placed on the role of proactive human resource management policies, including staff training and development. In line with experience in private and public sector organisations world-wide, achieving the organisation changes identified will require specific budgets for training and development. Specific skill and expertise will be required, for example, to implement changes to the financial management systems and improve customer service. The starting point is that local authorities identify the resources which they require in implementing their plans. A reallocation of resources to priority areas within local authorities may be necessary. Local authorities should set out their general approach to this issue. (vi) Resource Allocation/Reallocation Issues An effective strategic management approach requires decisions on resource allocation and prioritisation. The new financial management system will enable local authorities to identify the costs of the provision of individual services in a far more systematic way than hitherto. It will also enable authorities to relate input costs to outputs. Value for money reviews and audits will also underpin this process by regularly assessing expenditure programmes in local authorities. These developments should provide a more rational and informed basis on which to make decisions for allocating available resources. Pending their full development, the crucial imperative is to allocate scarce resources to the priority areas identified. (vii) Implementing Strategy and Assessing Progress Given that corporate plans will span a five year period and will necessarily have high level core objectives and strategies, it is important to be able to assess progress on an ongoing basis over the term of the plan. The various strategies set out in the plan should therefore set indicators, if possible on a year by year basis. These will act as signposts towards full achievement of the objectives and will also allow for progress to be gauged by the elected members, at yearly review, and by the public. The indicators set for the relevant strategies should be included in the corporate plan.

Each strategy must be supported by internal management systems and target setting, to allow for effective management of performance and to facilitate the yearly review. Annual operational plans should detail the actions to be taken on a day-to-day or ongoing basis. These detailed plans will allow management to track performance and progress. The annual operational plans could also form the basis for annual review of progress by the elected members (probably at draft budget time). While these operational plans which of their nature will be amended annually - will be separate from the corporate plan, it would be useful if the corporate plan were to state the arrangements which will be in place to allow for such operational planning. The outcome of the annual progress review should be reported in the council s annual report. A focused, robust and comprehensive review and reporting procedure is strongly recommended if the process is to retain credibility among the wider community and other interested parties. (viii) Monitoring/Reporting/Corrective Action The ongoing framework for monitoring and reviewing progress should be described in the plan. So should the procedures which will be used for corrective action where monitoring indicates the possibility of only partial achievement of a major goal or objective. The local authority annual report will provide the mechanism to report publically on implementation of corporate plans. Inevitably, significant unanticipated demands, or matters of urgency not addressed in a corporate plan, arise during the course of the operational period of the plan. Measures adopted in response to these developments should be explained in the next appropriate report and the relevant issues should be incorporated in the next revision to the corporate plan. Modernising Government The Challenge for Local Government 23

SMI in Local Government Better Local Government 5 Year Corporate Plan Setting the Policies and Directions New Funding System for Local Authorities Annual Operational Plans Implementing Strategy Strategic Use of Information Communications Technologies (ICT) Customer Service Focus and Initiatives Management Structures New Financial Management Systems Implement Specifics and Targets set in Operational Plan Human Resource Management (including Performance Management) Other Financial Management Changes Annual Review of Progress against 5 Year Plan Partnership Committees Freedom of Information Local Government Bill Prompt Payments Act

SMI in the Civil Service Regulatory Reform IT Management New Financial Management Systems Strategy Statements Quality Customer Service Multi-Annual Budgets Delegation of Financial Authority Customer Service Action Plans Business Plans Partnership Committees Human Resource Management (including Performance Management) Performance Management Change Management Fund and Budgets Freedom of Information Prompt Payments Act Public Service Management Act C&AG Amendment Act

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