Technical Notes 2022, Issue 50 - Local Government Benchmarking Framework 20/21 Publication

1. Background

1. 1.1 The Local Government Benchmarking Framework (LGBF) provides evidence of trends in how councils allocate resources, the performance of key council services and levels of public satisfaction with the major services provided and commissioned by councils. The rich data supports evidence-based comparisons between similar councils and over time, providing an essential tool for policy makers and the public.
2. 1.2 The Framework was introduced in the 2010/11 financial year in recognition that local authorities are best placed to set their own meaningful measures of benchmarking, a departure from the previous approach of performance indicators assigned by Audit Scotland. The framework is regularly refreshed and agreed by SOLACE and the Improvement Service facilitates the delivery of the framework.
3. 1.3 This revised approach to benchmarking was intended to shift from a culture of league tables to provide more added value through the sharing of best practice and providing a more formal framework to inform Best Value and improvements around service delivery. As such, the indicators are intended to be used as a “can opener” to inform discussions around service improvement and efficiency, while at the same time recognising that there can be no “one size fits all” approach for all local authorities who will have varying local needs and priorities.
4. 1.4 The key criterion applied to the final suite of indicators was that any one of the indicators must be able to be collected on a comparable basis by all 32 councils. The indicator set is not static but intended to evolve alongside the needs of local authorities and regular revisions are made to the indicator set. Due to these revisions, an annual like for like analysis of the overall performance of the dataset is not possible as individual indicators are introduced and retired from the suite on an annual basis.
5. 1.5 The data comprises of a range of Cost, Satisfaction and Performance indicators. The principal source of finance data continues to be the Local Financial Returns (LFR,) which all councils submit to the Scottish Government. For satisfaction measures, the Scottish Household Survey (SHS) is the primary source used. The remainder of the data is sourced from other statutory returns to eliminate any extra workload for councils. However, for a certain number of indicators that are not covered in other returns, the Corporate Performance and Research team submits a dedicated return to the Improvement Service.
6. 1.6 2020/21 Benchmarking Figures were published on the 4th March on the Improvement Service website accompanied by a national overview report outlining the trends over time at a national level. This report is available on the Improvement Service website
7. 1.7 Following the initial publication there will be a refresh to the dataset to include looked after Children data and satisfaction data, which is unavailable at the time of publication. This updated data is expected around May 2022.

2. Key Findings – The National Overview Report

2.1      This year’s report introduces data from 2020/21 and provides an evidence-based picture of the impact of the first year of COVID-19 on local government services. Against this challenging backdrop, the evidence in this year’s LGBF highlights the extraordinary effort and achievements delivered across local government during this exceptional period. The workforce has adapted quickly to meet new demands, maintain essential services and implement new ways of working.

2.2       The significant upheaval resulting from the COVID-19 pandemic has introduced new complexity in relation to the 2020/21 LGBF dataset which will be important when interpreting the data and making comparison with previous years; and with other councils. The key complexities to take into account when considering 20/21 data are listed below:

2.3      Altered delivery and operating landscapes- The delivery and operating landscape for councils altered significantly during 2020/21 as a result of COVID-19. Councils were at the fore front of delivering the emergency response to their local communities which required huge remobilisation and redeployment of resource at pace. The COVID-19 emergency response and business critical activities were prioritised during this period, impacting on resourcing and service levels for those less business critical areas.

2.4       Data timeliness- The report covers the period up to and including 2020/21 and does not therefore reflect the challenges and pressures facing Local Government currently, nor the longer-term impacts of COVID-19.

2.5       Methodological issues and data gaps- COVID-19 and the measures put in place in response have resulted in important methodological changes for some national datasets, which has impacted on the LGBF. This creates a break in the time-series for some measures and caution should be applied when drawing comparisons with previous and future data trends.

2.6       Additionally, this year’s initial publication is notable for the omission of public perception data from the Scottish Household Survey (SHS). In 2020, changes were required to be introduced to the standard SHS methodology as a result of COVID-19 restrictions, and this has delayed publication of SHS data.

2.7       Adjusting for the impact of inflation- In the LGBF, expenditure and unit costs are presented in ‘real terms’. Due to the way real terms costs are calculated, the increased public spending related to COVID-19 means that (in the short term) annual GDP growth rates, and therefore GDP deflators, are forecast to be volatile. To ensure consistency with the previous approach, this year’s LGBF report continues to apply GDP deflator. Due to the volatility described, it will be important to consider the impact the applied rate of inflation may be having on the true scale of movement over time when interpreting this year’s data 

2.8       Impact of additional Covid funding streams- In 2020/21, councils faced exceptional conditions as a result of COVID-19 which led to significant additional costs, loss of income and undelivered savings. As a result, Scottish Government made additional funding available to councils directly to help mitigate the financial impacts of COVID-19, with funding for the year totalling £1.5 billion, with a significant proportion of this announced late in the financial year.

2.9       Total revenue funding for councils in 2020/21 increased by 13% in real terms. However, when non-recurring COVID-19 funding is excluded, the increase in funding is 1.1%. Scottish Government funding has reduced in real terms over the last ten years, falling by 4.2% since 2013/14 and 6.0% since 2010/11

2.10    Impact on communities- The evidence highlights that the impacts of the pandemic on our communities have been, and are likely to continue to be, borne unequally. LGBF data from 2020/21 reveals growing levels of poverty, financial hardship and inequalities. This is evidenced, for example, in the widening attainment gap in literacy and numeracy for primary pupils, and in positive destinations; increasing rent arrears and reducing Council Tax payments; and increasing levels of benefit claimants, particularly in 18-25 year olds.

2.11    Local variation - While the COVID-19 pandemic has had an unprecedented impact on all councils, local areas experienced the impacts of this pandemic differently. There are very few areas of the framework where the trend was universal for all 32 authorities in 2020/21, and even within those, there is significant variation in the scale of movement. Beyond these measures, there lies even greater variation between authorities across the other areas of the framework. The full extent of this variation is set out in the report

3.         National Trends

3.1       In 2020/21, local government revenue expenditure increased by 3.2% in real terms. When looked at in totality, despite reductions in funding from Scottish Government during this period, local government has largely sustained real-terms expenditure levels since 2013/14 however there has been a relative shift of expenditure towards national priorities.

3.2       Through legislation and Scottish Government policy, expenditure within Social Care and Education continues to be sustained and enhanced. While these “core areas” make up 70% of the LGBF indicators other areas have seen a significant reduction of funding, including real terms reductions of spending               

• 27% Reduction in Culture and Leisure
• 26% Reduction in Planning
• 13% Reduction in Economic Development
• 27% Reduction in Corporate services
• 25% Reduction in Roads
• 34% Reduction in Trading Standards and Environmental Health
• 13% Reduction in Environmental Services

3.3       A number of key findings from the national report for individual service areas have been listed below;

Children’s Services

• During the COVID-19 pandemic, levels of attainment have continued to increase. However, it is not possible to fully determine the extent to which this is due to the pandemic and, more specifically, the certification methods used
• In 2020/21, education spend has increased in real terms by 0.6%
• The percentage of funded early years provision graded ‘good or better’ has improved slightly in 2020/21, from 90.2% to 90.9
• Pupil attendance rates fell by 1pp to 92% with a larger reduction for those councils serving the most deprived communities
• Numeracy and literacy attainment levels for primary pupils decreased  from 79.1% to 74.7% and from 72.3% to 66.9% respectively
• Positive Destinations fell from 95.1% to 93.3% in 2020/21
• Expenditure on Children who are looked after reduced by 5.2%

Adult Social care

• Council expenditure on social care increased in real terms by 1.6%
• In care at home, hourly costs increased by 1.5% from £27.25 to £27.65. These trends likely reflect the interplay between several factors occurring during the period, including pressures on frontline services and staff; the increase in care and support provided informally by families and access to care and support via Care Homes/Hospitals
• There has been continued progress in shifting the balance of care between acute and institutional settings to home or a homely setting
• The level of delayed discharges reduced by 37%
• The rate of readmissions within 28 days increased by 14.7%
• The % of Adult Care services graded ‘good’ or better in Care Inspectorate inspections increased from 81.8% to 82.5%, counter to the previous declining trend

Corporate Services

• Expenditure on Corporate Support services reduced in real terms by 3% in 2020/21
• Council tax collection rates reduced by 1p, counter to the previous trend, while the cost of council tax collection continued to fall (-5% in 2020/21). All 32 authorities saw their council tax collection rates reduce in 2020/21, while two thirds saw costs reduce. During this time, councils purposefully stepped down collection follow-up activities in recognition of the financial challenges facing communities
• Staff absence (non-COVID-19 related) reduced sharply in 2020/21, reducing by 35% for teachers and by 18% for non-teaching staff. Beneath the high-level data, the picture that emerges during this period is one of lower short-term absence (presumably driven by the increased flexibility delivered through home working) but increasing incidence of long-term absence (including mental ill health and stress).
• In 2020/21, the Gender Pay Gap has widened slightly, by 0.%
• The percentage of invoices paid within 30 days increased by 0.1% to 91.8%. This is counter to the small dip in performance observed the previous two years and may reflect the reduced number of invoices received and paid during 2020/21 as a result of COVID-19

Culture and Leisure

• COVID-19 restrictions have seen visitor numbers decimated across culture and leisure services, reducing by 91.3% for sports and leisure facilities, 68.4% for museums and galleries, and 33.8% for libraries
• Overall gross revenue expenditure on culture and leisure services has fallen by 6%
• These trends have seen unit costs for visits to culture and leisure increase by over 1000% for sports, 35% for libraries, and by 191% for museums.

Environmental Services

• Overall spend on environmental services reduced by 4.5% in 2020/21

• Recycling rates dropped in 2020/21 by 2.9 percentage points to 42.8%. This is counter to the previous trend and is the lowest rate since LGBF reporting. This reflects the increase in residential waste in most areas due to lockdowns keeping families at home and increased homeworking; a drop in recycling due to contamination/capacity issues for households; and closure of Household Waste Recycling centres
• Expenditure on roads reduced by 6.6% in 2020/21 to £9,667 per kilometer (range: -48% to + 188%). This continues the long-term reducing trend in expenditure

Housing

• The level of rent arrears rose sharply, increasing from 7.3% to 8.2%. While this may in part be due to the temporary ban on enforcing eviction orders, introduced as part of the COVID-19 response, it also reflects that some people faced a significant loss of income during the pandemic.

Economic Development and Planning

• Economic development and tourism expenditure have reduced by 20% in 2020/21
• In terms of employment services, the % of unemployed people supported into work fell from 12.7% to 6.0% in 2020/21
• In planning services, there has been a 5.1% reduction in terms of efficiency in processing business and industry planning applications in 2020/21, increasing from 10.5 weeks to 11.1 weeks. Planning application processing was impacted by the move to home working, restrictions on travel and site access, reduced availability of agents and consultees, and staffing and resourcing issues due to the impact of the COVID-19
• In terms of infrastructure for business, Business Gateway start-ups reduced significantly from 16.4 to 11.2. This is an acceleration of the previous trend, and reflects increased levels of uncertainty in the economy, labour shortages and disrupted supply chains, and redeployment of council staff to distribute COVID support grants and advice for established businesses.
• Procurement spend on local enterprises has continued the upward trend, increasing from 28.7% to 29.1% in 2020/21
• Town vacancy rates increased to 12.4% in 2020/21 (range: -6.1pp to +6.1pp), the highest rate since LGBF reporting began
• The percentage of people in work earning less than the Living Wage reduced in 2020/21 from 16.9% to 15.2%

Financial Sustainability

• During 2020/21, overall levels of General Fund Reserves increased markedly, from 16.9% to 23.6%. This is due to the timing and nature of additional COVID-19 funding which has contributed to a significant carry forward of reserves.
• Uncommitted General Fund Balance as a % of council annual budgeted net revenue has remained stable at 3.5%, within the approved rate for such balances of 2% to 4%.
• The proportion of council revenue income being used to service debt has continued to fall, reducing from 7.2% to 6.2%
• Actual outturn as a percentage of budgeted expenditure has reduced from 99.4% to 97.4% in 2020/21 This is counter to the previous trend which had shown slight but steady improvement across the period and is now the lowest percentage since LGBF reporting began.

4.         Initial Findings for East Dunbartonshire

4.1       As with all local authorities the last few years have been challenging for East Dunbartonshire with budgets being been reduced year on year. Despite this, however, for East Dunbartonshire the majority of all the current indicators in the suite have demonstrated improvement since their baseline year. However, the impact of the pandemic has been reflected in performance in 2020/21 with comparable indicators overall declining slightly in performance and rank position from 2019/20. An initial analysis document has been provided as Appendix 1.

4.2      It is again worth emphasising that the dataset is not directly comparable with previous year’s initial publication given the impact of COVID-19 which has resulted in changes to indicator methodology and the omission of a number of key indicators that would usually be included in the initial publication and analysis, most notably in relation to satisfaction.

4.3       The Council’s overall performance against LGBF taking into account comparable indicators from the previous initial publication has declined from 2019/20, with 39% of comparable indicators showing improved performance from the previous year and 60% showing a decline in performance. Looking at rank, the council has maintained or improved in rank position in just over 49% of indicators and declined in rank in 51%, demonstrating a very marginal decline in rank placing from previous years. This overall position will change following the publication of the full dataset in May.

4.4       The Council’s rank performance upon initial publication when compared across Scottish Councils now reports 27 or 35% of our indicators in the top quartile, which is comparable to 2019/20 initial publication figures. However,  the number of indicators in the bottom quartile from initial publication in 2019/20 has risen from 8 to 16 or 10% to 21%. A breakdown of indicators in the Top and Bottom quartiles is included below.

4.5       Performance indicators with a significant improvement in rank (5 or more places) from 2019/20 included sickness absence days per employee, support services as a % of gross expenditure, cost per library visit and average number of days to complete emergency housing repairs.

4.6       Performance indicators with a significant decline in rank included cost per dwelling of collecting council tax, costs for primary and secondary school pupils, % of rent lost due to voids and % of procurement spent on social enterprise.

5.         Next Steps

5.1       A comprehensive report will follow the attached initial analysis once the full data set is published in May and this will be presented to Council for formal Scrutiny in June. This will provide further in depth information regarding individual LGBF indicators and analysis against trends at a national level including a focus on improvement for all bottom quartile indicators and those which have shown a significant decline in rank.

5.2       It is important to emphasise that this Technical Note summarises the current position. There may be changes to the data included in this first publication, and with the wider context and yet to be confirmed indicators that will be published in May, the final analysis may vary when it comes to Council in June.