MIDDLESBROUGH COUNCIL

Balanced Scorecards – 2016/17 model and Quarter One 2016/17 performance

Executive Member for Finance and Governance: Councillor Nicky Walker

Strategic Director of Finance, Governance and Support: James Bromiley

21 October 2016

PURPOSE OF THE REPORT

  1. To propose a revised model for Balanced Scorecards within the Council, present Quarter One 2016/17 performance using the new model, and outline next steps.
SUMMARY OF RECOMMENDATIONS
  1. That the proposed revised model for Balanced Scorecards is agreed, and Quarter One 2016/17 performance and the response of Outcome Areas to the issues arising noted.
  1. That, to further enhance performance monitoring and management, an integrated Finance and Performance report is presented to Executive from Quarter Two 2016/17.

IF THIS IS A KEY DECISION WHICH KEY DECISION TEST APPLIES?

/ It is over the financial threshold (£150,000)
It has a significant impact on 2 or more wards
Non Key / X

DECISION IMPLEMENTATION DEADLINE

  1. For the purposes of the scrutiny call in procedure this report is:

Non-urgent
Urgent / X

BACKGROUND AND EXTERNAL CONSULTATION

  1. On 7 October 2014, Executive approved the introduction of Balanced Scorecards across the Council, to replace the previous ‘top-down’ performance management framework for local government, prescribed by Central Government.
  1. Balanced Scorecards are central to the Council’s Performance and Risk Management Framework, subsequently approved by Executive on 14 July 2015. They provide a single view of performance across four perspectives – Customer, Business, Finance and People – at the corporate level and at the Council’s three senior management levels.

Level / Descriptor / Owned by…
1 / Whole service level (i.e. the outcomes that an Executive Director oversees) plus service specific items with corporate relevance. / Executive Director
2 / Individual service area level (i.e. an outcome that an AD oversees) plus single unit items with a departmental relevance. / Assistant Director
3 / Individual unit level (i.e. an individual contributor to an outcome – local use only, not reported to members). / Head of Service
  1. Balanced Scorecards at each level will be supported by an appropriate delivery plan and risk register. Formal reporting on Scorecards to Overview and Scrutiny Board and to Executive will over time replace previously separate reporting on business performance, revenue and capital budget outturns and other such updates.

Progress to date

  1. Balanced Scorecards were piloted during 2015/16 on a post-quarter basis, reporting to Leadership Management Team and Overview and Scrutiny Board. Executive Members were briefed on progress by Executive and Assistant Directors.
  1. In summary, the pilot progressed in line with plans, was generally well-received internally, and received positive feedback in the recent Corporate Peer Review, though there is a clear recognition that more needs to be done to refine and embed the approach. In particular there needs to be a transition in 2016/17 from focusing performance measurement to performance management (i.e. clearly demonstrating that effective action is being taken to address the issues identified in Scorecards).
  1. As such, consultation with Leadership Management Team, Overview and Scrutiny Board (29 March 2016) and Corporate Affairs and Audit Committee (30 June 2016) was undertaken to review progress in embedding Balanced Scorecards and consider potential changes to the current model. The issues identified in these discussions are set out below:
  • Appropriateness and numbers of measures / targets – whether the measures and targets included within current Scorecards fully ‘capture’ the Outcomes targeted within the Council’s Strategic Plan and tie back to the Vision for Middlesbrough, and also whether there are too many measures within Scorecards, mitigating against the intended ‘dashboard’ effect.
  • Scoring and weighting mechanism – whether the scoring and weighting mechanism used in the pilot model, which resulted in an indexed, traffic-lighted, ‘league table’ for departments and Outcome Areas, is too complex and potentially offers a ‘perverse incentive’ to ‘hedge’ the model.
  • Continued lack of alignment between different reporting regimes – the pace of movement to a fully integrated approach to the monitoring and reporting of performance was considered too slow, with separate processes still being maintained, though Overview and Scrutiny Board requested that any fully-integrated report should not be too complex or lengthy.
  • Embedding the approach – it was noted that the focus to date has naturally been on developing Scorecards at the Outcome Area, but more needs to be done to embed the approach at all levels. In addition, appropriate training, coaching and support for members, managers and employees was requested.

Changes for 2016/17

  1. In response to the above issues, the following changes have now been implemented:
  • Detailed briefings on the corporate performance and risk management framework have been delivered to Outcome Areas. Outcome Areas are now developing business change plans to ensure that improved practice is embedded across the Council, and these are being implemented via a Performance and Risk Management Officer Steering Group.
  • LMT has re-assessed key performance indicators and targets for 2016/17 to ensure that they fully reflect the priorities of Outcome Delivery Plans. This will ensure a clear focus on strategic priorities within corporate performance management. Other performance indicators will sit within subsidiary Scorecards.
  • A single, integrated quarterly clinic process is being implemented, which will ultimately produce a single report covering performance, financial and risk performance that is reported to LMT, Executive and Overview and Scrutiny Board.
  • An ongoing programme of member training in relation to performance and risk management is being delivered. In addition to the regular briefings already provided to Executive Members by LMT members, quarterly performance briefings will in future be offered to Scrutiny Panel Chairs in advance of presentation of the Balanced Scorecard report to Overview and Scrutiny Board.
  1. Finally, the Balanced Scorecards scoring and weighting model has been simplified for 2016/17, and made bespoke to the differing priorities in each Outcome Area. The proposed model (using illustrative data) is set out at Appendix 1 for approval.

Performance in Quarter One 2016/17

  1. Using the proposed model, the Council’s performance is summarised in the table below, and sits just under the corporate target of 75% of KPIs achieved. The complete set of Outcome Area Scorecards is at Appendix 2.

Performance / 10 / 20 / 30 / 40 / 50 / 60 / 70 / 80 / 90 / 100

Council overall / 
Outcome 1 / 
Outcome 2 / 
Outcome 3 / 
Outcome 4 / 
Outcome 5 / 
Outcome 6 / 
Outcome 7 / 
Outcome 8 / 
  1. Explanations of major variances from target and mitigating activity are set out below[1]. A Performance Improvement Plan in respect of these issues is attached at Appendix 3. This plan will be reviewed and updated on a quarterly basis to ensure that under-performing measures improve to target as quickly as practicable. An update on the plan will be provided at the end of Quarter Two.

Issues identified and mitigating activity

  1. Outcome 1: The number of new homes delivered was under the quarterly target of 150 at 127, though a higher proportion of these than projected were Council Tax Band D or above. This was due to delays to the development of the Hemlington Grange site, and this delay in effect means that the (aspirational) 2016/17 target is unachievable. As such, the 2016/17 target will be amended to 450, and this will be reflected in future quarterly updates. Revenue assumptions from housing growth were set lower than these figures, so the Council’s MTFP is unaffected by this change.
  1. Four major projects within this Outcome Area were projected to overrun agreed end-dates at Quarter One. Middlehaven Dock Bridge was in delay due to continued negotiations around land acquisition and associated project planning issues. Similarly, negotiations in relation to the planned Commercial Quarter have been extended to ensure potential benefits are fully realised. The Housing Growth Strategy was under review and replanning as part of Phase 3 of the Council’s Change Programme, and will be restated in the next iteration of the Strategic Plan. The LED Streetlight replacement scheme continued to underperform. The Outcome Area will re-plan these projects, securing appropriate change controls to ensure that the impacts of slippage are mitigated. The target date for this work is Quarter Three 2016/17.
  1. Outcome 2: The number of people of households accepted as homeless was slightly over target, which though marginal, is illustrative of a perceived increase in people presenting as homeless. The Outcome Area will monitor trends closely with the contractor for this service to ensure the correct preventative support is in place.
  1. Outcome 3: A number of population health metrics (including male life expectancy and early deaths) are showing a worsening position, and some PIs for commissioned Public Health services are continuing to under-perform. The Outcome Area is developing an Adult Prevention Strategy and progressing discussions on joint initiatives within the South Tees to improve key Public Health outcomes. Targets for commissioned services will be reviewed and amended as appropriate to reflect behaviour trends (e.g. it is thought that emergence of e-cigarettes may have impact on attendance at traditional smoking cessation events).
  1. Outcome 4: Permanent exclusions and persistent absence in secondary schools continue to rise. Schools are exploring options to address absence, and alternative models to support vulnerable children in order to reduce permanent exclusions via the Middlesbrough Achievement Partnership (MAP), and supported by the Council.
  1. While currently under target, pupils attending a school judged ‘Good’ or better by Ofsted has continued to improve from August 2015, with more secondary schools meeting this target. The Outcome Area will propose a new model of school improvement support to Executive in Quarter Three.
  1. The proportion of Education Health and Care Plans completed within 20 weeks increased to 59% at Quarter One, and it is expected that current processes will enable performance to rise to targeted level over the coming year.
  1. Outcome 5: Demand with the Outcome Area continues to rise, impacting on LAC and Child Protection Plan numbers, and as a result, costs. It is recognise that the overall culture and practice of the Outcome Area needs to change, and plans are being developed to move to an ‘asset-based social work’ model. Also adopting a less risk-averse approach and diverting families to Early Help as the initial point of contact will help the Outcome Area to reduce numbers in the longer term. A range of actions to support this transition are set out in the Council’s Post-Ofsted Improvement Plan. An interim target to maintain the gap to national average for LAC and Child Protection Plans has been set for 2016/17 and will be tracked throughout the year.
  1. Outcome 6: The rate of permanent admissions to residential / nursing care homes far exceeded target during Quarter One. Though the rate is expected to move towards target during the year, the Outcome Area is taking steps to steps to enhance oversight of residential placements / high-cost care packages, which will provide greater assurance of performance to targeted level in future.
  1. Outcome 8: The average number of days for process a change of circumstances for Housing Benefit was 16.7 against a target of 13. This was due to ongoing potential data protection issues with self-serve modules for this transaction, resulting in these being made unavailable to customers for extended periods, and processing of changes being undertaken manually. It is anticipated that this issue will be resolved in Quarter Three, and bulk changes for social housing tenants later in the year will see this measure meet its target.
  1. Collection of both Council Tax and Business Rates were under target at the end of Quarter One. The Council will agree remedial actions with its service provider (Kier) in Quarter Two with the aim of minimising uncollected revenues in-year.
  1. The new HR / Payroll system project within this Outcome Area was projected to overrun agreed end-dates at Quarter One. The Outcome Area will develop a mitigation plan within Quarter Two to ensure the system is implemented and operational by the planned ‘Go Live’ date of 1 April 2017.
  1. Overall: Sickness absence per FTE was off target in several Outcome Areas. This is likely to be due to several factors, including the management of staff absence by Middlesbrough Managers. The Council will review its sickness absence processes, propose appropriate amendments and develop a bespoke action plan for each Outcome Area by the end of Quarter Four.
  1. Similarly, there are apparent issues in several Outcome Areas relating to the completion of employee appraisals and performance against the Middlesbrough Manager and Employee Competency Frameworks. The Council will review its corporate appraisal process and propose appropriate amendments to address these issues by the end of Quarter Three.

Strategic Risk Register

  1. The Council’s Strategic Risk Register was reviewed during the development of the 2016-20 Strategic Plan (approved by Council in July 2016), and is attached at Appendix 4 for information. The register will be reviewed again as part of the development of the next iteration of the plan, which is scheduled to be reported to Executive in November 2016. As part of the Council Improvement Plan, risk registers are currently being reviewed and strengthened across the organisation, and progress on the delivery of identified mitigation activity will be reported from Quarter Three 2016/17.

Next steps

  1. In line with the ongoing restructuring of the Council and review of Outcome Delivery Plans, Balanced Scorecards and the KPIs included within them will be subject to change during 2016/17, with changes reported in future iterations. It is expected that customer measures, in particular, will be revised in line with the embedding of the Council’s Customer Strategy.
  1. The Performance and Risk Management Framework commits the Council to the development of fully integrating monitoring and reporting of performance and financial information. To achieve this, and further enhance performance monitoring and management within the Council, it is proposed that a single, integrated Finance and Performance report is presented to Executive from Quarter Two 2016/17.
  1. In addition, a Management Information Improvement Plan, that will move the Council towards ‘real-time’ and full integration of operational management information and Balance Scorecards, will be developed and presented to LMT, with associated costs, by end October 2016.

IMPACT ASSESSMENT

  1. Not applicable.

OPTION APPRAISAL / RISK ASSESSMENT

  1. As part of the Duty of Best Value, the Council is legally required to put in place arrangements to manage its performance, though there is wide discretion over how this can be achieved. The Council’s Performance and Risk Management Framework, approved by Executive on 14 July 2015, commits the organisation to the implementation of Balanced Scorecards. The approach outlined in this report is recommended for 2016/17 and its effectiveness will be reviewed on a six-monthly basis.

FINANCIAL, LEGAL AND WARD IMPLICATIONS

  1. Financial – there are no financial implications from the proposed actions.
  1. Ward Implications – there are no ward implications from the proposed actions.
  1. Legal Implications – the approach outlined is consistent with and will promote the achievement of the Council’s legal duty to achieve Best Value.
RECOMMENDATIONS
  1. That the proposed revised model for Balanced Scorecards is agreed, and Quarter One 2016/17 performance and the response of Outcome Areas to the issues arising noted.
  1. That, to further enhance performance monitoring and management, an integrated Finance and Performance report is presented to Executive from Quarter Two 2016/17.
REASONS

To enhance performance and risk management at both a member and senior officer level to enable the effective delivery of the Council’s targeted strategic outcomes.

BACKGROUND PAPERS

07/10/14ExecutiveBalanced Scorecards

14/07/15ExecutiveCorporate Performance and Risk Management Framework

06/09/16ExecutiveRevenue and Capital Budget 1st Quarter Review 2016/17

CONTACT: Paul Stephens, Head of Performance and Partnerships

TEL NO: 01642 729223

EMAIL:

______

Address: Civic Centre, Middlesbrough, TS1 2QQ

Website: www.middlesbrough.gov.uk

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Appendix 1: Balanced Scorecards model 2016/17

How KPIs are identified

  1. The Customer and Business quadrants of Balanced Scorecards comprise primarily performance indicators prioritised for improvement by Outcome Areas, in line with their Outcome Delivery Plans, which set out how the Outcome Area will develop in the medium-term to support the achievement of the 2025 Vision for Middlesbrough. Several standard measures are also included within all relevant Scorecards, particularly within the Finance and People quadrants, to ensure that key priorities are delivered. These are as follows:

Standard measure / Associated corporate priority
Major programmes and projects projected to complete within target date / Improvement in programme and project management
Risk mitigation activity projected to meet milestones / Improvement in risk management
Projected expenditure of revenue budget and attainment of savings targets / Balancing the budget by delivering agreed savings
Projected expenditure of capital budget / Improvement in programme and project management
Employees with appraisal for current financial year, and managers and employees scoring average of satisfactory or better in appraisal / Embedding the Middlesbrough Manager and Employee Frameworks
Sickness absence (days per FTE) and employees satisfied with working in their service area / Improving employee health and wellbeing

How targets are set

  1. Targets are set by Outcome Areas, in view of (i) position against regional and national averages, where relevant, and (ii) ambitions for the development of services as set out in Outcome Delivery Plans. All targets must be SMART (Specific, Measurable, Achievable, Realistic and Time-bound).

How performance is RAG-rated

  1. Performance against target is traffic-lighted as follows:

At or better than targeted performance / Green
Within 5% of target / Amber
More than 5% from target / Red
  1. The following table shows this applied using targets within the Customer quadrant of the Outcome 2 Scorecard:

Measure / Last / Target / Current / Period / Trend / Benchmark
C / Number of households accepted as homeless / 15 (Q4 15/16) / 21.25 / 25 / Q1 16/17 /  / N/A
C / Troubled Families w/ sustained and measured positive outcomes / New PI / 30 / 50 / Sept 15 / - / N/A
C / Children in Need referrals resulting in CAF step-downs / 61 (Q4 15/16) / 25 / 37 / Q1 16/17 /  / N/A
C / Children meeting Early Years ‘good’ measure – gap to national average / New PI / New PI / -9% / 2016 (Prov.) / New PI / N/A
C / 16-18 year olds not in education, employment or training (NEET) / 7.7% (2014/15) / 8.7% / 6.9% / 2015/16 /  / ENG: 4.2%
C / Anti-Social Behaviour incidents – gap to national average / New PI / New PI / Due Q2 / Quarterly / New PI / Due Q2
C / Domestic Violence incidents – gap to national average / New PI / New PI / Due Q2 / Quarterly / New PI / Due Q2

How the Scorecards are developed