Performance Management in Local & Regional

Government

Version 1.1 June 5th, 2003

Graham Hasting-Evans Concept Leader Local & Regional Government

Executive Summary Local and Regional Government is aiming to continuously improve its services and provide community leadership to the local area. It wants to perform well and also receive external recognition for its efforts. Sound performance management linked to a coherent and robust corporate or medium term plan, based on a single approach (such as an adapted Balanced scorecard) is the foundation for this. This document is intended to introduce ideas and best practice for implementing performance management and internationally recognised techniques such as Balanced Scorecard (BSC) in regional and local government. This document will focus on the design and practical implementation for performance managers and designers. Regional and local government are complex organisations providing a wide range of essential services to their communities. As community leaders in their locality they want to:

• Set a clear vision, objectives and direction for improving their area and service; • Continuously improve the services to match the needs of their citizens; • Provide customer (citizen) focus and improved delivery of local and region

services; • Improve effectiveness and efficiency; • Demonstrate transparency and accountability; • Learn for experience and adapt this to the achieve further improvements; and • Encourage their people to be innovative.

This means that they need to manage performance from the long term vision through to service delivery on the ground:

Vision

Objectives

Medium Term Strategic Plan

Improved Service to the Community

PerformanceManagement-

Measures & Action Plans

RiskManagement

Processes & Waysof Working

Communication &Staff Commitment

UsingScorecard& BPR toconnect &improve

In order to bring these together to provide a coherent management framework there needs to be:

• Clarity of where the local or regional authority is going and how it intends to get there;

• A single technique and structure to support this; and • Robust technology to make the implementation achievable.

Single Technique Supported by Robust Software The Local & Regional Government ScoreCard Template allows the organisation to:

• Manage the services from vision – objectives and critical success factors; • Manage this on the organisational view of Departments and Units; • Provide the focus for the elected ‘politicians’; • See what is happening in different parts of the geographical area; and • Assess performance against international scorecards such as Balanced Scorecard

and EFQM. Everything is based upon a central repository of performance measures, which can be linked to form an infinite number of slice and dice views on performance. Giving the individual the information they need to manage. It is easy to add more views on the data such as your own ways of wishing to look at performance.

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Example views to Government Scorecards. 1 QPR ScoreCard Model called ‘LG Template.smf’ available from QPR LG Concept Team Members. Please con act graham@gclconsultancy.co.uk for further information.

The Local & Regional Government ScoreCard Template provides the following functionality for the organisation:

• Templated for local & regional government • Performance management – vision – objectives, measures, targets, actions • Action plans – managing the actions/tasks and projects for improvement • Strategy mapping - - clear line of sight • Risk management – of the major challenges facing the authority

• Reporting – on screen and for publication • Customer surveys input • Exception reporting and alerts • Lessons and learning for staff • Link to all the necessary documents, intranet and web sites

When applying, for example, the international BSC in local government, some modifications to the original scorecard structures suggested by Kaplan and Norton can be made. The most common approach is to add a fifth perspective called ‘Governance’ in order to embrace the aspects associated with an elected body which is accountable to the local people. Local & Regional Government Scorecards Local and Regional Government provide a wide range of services and objectives:

Benefits Community Safety Consumer Protection Education Economic Development Engineering Environmental Health

Fire Health and Promotion Highways & Transport Housing Leisure, Sports & Arts Libraries Museums & Archives

Parks & Gardens Planning Police Refuse & Recycling Street Care Social Care Water

The examples given in this white paper are based upon a large local authority providing key services such as Benefits, Education, Housing, Highways & Transport, Leisure, Libraries, Planning, Refuse & Recycling and Social Care. In this example the Council’s primary way of assessing performance is against its Vision and key Objectives. How it is performing can be communicated internally and externally by published reports.

Hierarchy of ScoreCards Council Vision & Objectives As the council in the example is a large one the performance structure has been broken down into a hierarchy of linked scorecards. These start at the top level with the Overall Vision then cascade to each objective and then to each Critical Success Factor.

Typical Hierarchy of Scorecards

Top Level (SC) Key Objectives (SC) Critical Success Factors (SC) Vision & Objectives Environment • Getting around easily

• Good public health • Collection and disposing of all waste • Planning a good physical environment

Education • Ensure pupils can achieve in the schools • Providing good adult and community

learning • Promoting good skills for work and the

local economy Economy • Encouraging businesses to be

successful • Creating the environment for

investment • Providing good leisure and cultural

facilities • Supporting the disadvantaged through

benefits Crime & Security • Reducing crime and disorder

• Reducing the impact of alcohol and drugs

• Reducing accidents on the roads • Reducing accidents at home and work

Health & Well Being • Good provision of adult social care • Good provision of social care to children • Encouraging healthy life styles • Ensuring a balanced housing market –

ownership and rental Governance • Sound community leadership - good

election turnout • Good direction and decision making • Developing the people in the

organisation • Sound financial and asset management

Sample – These can be easily amended, added to etc.

Council Directorates (Departments) The template also provides a way of mapping performance to the organization structure.

Typical Hierarchy of Scorecards

Top Level Directorate (SC) Unit (SC) Directorates Community Services • Adult Services

• Children’s Services • Housing Services

Chief Executive’s • Civic and Democratic • Human Resources • Marketing & Communications • Policy, Performance and Partnerships

Development & Environment

• Highways & Transportation • Environmental Regulation • Planning & Design • Economic Development

Education & Leisure • Libraries • Lifelong Learning & Leisure • Resource Management • Standards & Quality

Resources • Finance • ICT • Asset & Property Management • Capital Investment

Sample – These can be easily amended, added to etc.

Areas (Geographic) The template also provides a way of mapping performance to geographic areas the organization is responsible for.

Typical Hierarchy of Scorecards

Top Level (SC) Second Level (SC) Critical Success Factors (SC) Area North • Customer

• Financial • People • Process

South • Customer • Financial • People • Process

Sample – These can be easily amended, added to etc.

Political The template also provides a way of mapping performance to political management responsibilities.

Typical Hierarchy of Scorecards

Top Level (SC) Second Level (SC) Critical Success Factors (SC) Political Management Executive • Leader/Mayor

• Community Safety & Local Affairs • Education • Leisure & Heritage • Transport • Planning & Environment • Social Services • Housing

Local Strategic Partnerships

Regulatory & Other Committees

Local & Advisory Panels Sample – These can be easily amended, added to etc.

International Scorecards (Balanced ScoreCard and EFQM) The template also provides a way of mapping performance in a Balanced Scorecard or EFQM. The BSC has been adapted for a public body and includes a ‘Governance’ perspective.

Hierarchy of Scorecards

Top Level Second Level SC Critical Success Factors International Scorecards Balanced scorecard • Customer

• Financial • Learning & Development • Process • Governance

EFQM • Enablers • Results

Sample – These can be easily amended, added to etc.

National Scorecards The Template has been further configured for local Nation Scorecards for example in the United Kingdom there is the Comprehensive Performance Assessment Scorecard (CPA) and the Scorecards associated with the Public Service Agreements (PSAs). Measures Measures are typically derived from the critical success factors. They are held in the Data ScoreCard area. In the example some sample data has been included for Libraries.

In the Model the measures are grouped based upon the Balanced Scorecard. This is readily adaptable to other approaches. Value settings are configured for:

• Maximise • Minimise • Stabilise • Yes/No

Within these the series are set up for:

• Actual • Budget • Comparators • Forecasts • Target and tolerances

The traffic lights operate on the basis of a target and tolerances either side of this. In this model within tolerance is represented by ORANGE better than tolerance is GREEN and worse than tolerance is RED Forecasts allow the user to set assumptions and potential outcomes of actions they are planning, to see what would happen to overall performance.

A typical Local Government view has been set for the graphs. This shows the target as a line and the comparators set against the target, tolerance and actual performance in one single simple picture.

NOTE : Example only - graphs are user configurable

Action Plans Action plans are linked to elements at all level – Scorecard, Perspective, Critical Success Factor and Measure/sub-measure. They give the Manager Clear links from the targets they are trying to achieve to the actions they are responsible for. These action plans are set up in the web portal and linked to the various levels through ScoreCard designer. They are formed into a hierarchy to match managerial responsibilities.

Set up links to your key documents

Strategy Maps The organisation needs to think through its objectives in a clear and focused way. Strategy maps then help to work through the complex inter-dependencies and building blocks needed to successful implement strategies and achieve goals,

Example Strategy Map for Local Government.

Consolidating Performance Consolidation inside the scorecard is usually done with range values. Each traffic light gives a score (range value) for the measure. These values have the same unit, so they can be used in consolidating measures with different units. Performance is calculated based upon a ‘Range’ value (in effect ‘Performance Points’). The Range values used are:

Excellent Better than the upper tolerance 10 Green Smiley face

Good/Fair Within tolerance or on target 5 Amber Straight face

Poor Worse than the lowest tolerance 0 Red Sad face In the case of Yes/No settings Yes is 10 and No is 0. This approach gives an overall average score for the whole scorecard as the value for the top element of the scorecard and allows drilling down inside the scorecard to the root-cause measure for poor performance.

Period Settings The Model is set to the financial tax year. It can readily be configured for a different ‘year’. The Model, through the use of sub-measures can also deal with School Terms as well as fiscal quarters.

Linking Key Documents A structure is set up to link all the key documents so managers and staff have a full picture to help them improve services. This is done through Linked Elements which represent the relationship of other Council information and documents to Elements. The following are in the Model, but more can be added by clicking on New and following the instructions.

Reports Live information is always available within the system. However the Model uses Briefing Booklets and the Crystal Reporting Tool to produce a set of reports for publishing to other people in the Council, such as Senior Managers and Elected Councillors or externally.

Strategic Risk Management The major risks facing the Regional or Local Authority can be managed along side the performance management and action planning aspects of Scorecard. This provides a complete management tool for the organisation.

Customer Surveys ScoreCard can be set up to input customer survey information. This can be from survey sheets, survey databases or by allowing customers limited access to the web portal to input their views. Information alerts can be set up to message the relevant people in the organisation to respond to these customer comments.

Configuring the Home Page to Link to the Intranet Many users find it useful to be able to move freely between the ScoreCard and the orgnisation’s intranet. Here the home page has be set to link directly to the intranet site facilitating ease of working.

Conclusions The use of a standard approach such as Balanced Scorecard can be adapted for local and regional government and can provide the basis for managing a complex organisation providing a wide range of local services. It brings together in a single clear structure:

Vision and Long Term Plan – 10 years vision and aims; Corporate or Medium Term Plan – 3 years rolling; Performance management; Action planning; Strategic risk management; and Service improvement on the ground.

The use of software makes this achievable in a way that spreadsheets and paper reports cannot.