LGA submission to the Levelling Up, Housing and Communities Committee inquiry into the Office for Local Government

The Local Government Association (LGA) is the national voice of local government. We are a politically led, cross party membership organisation, representing councils from England and Wales.

Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems.

We welcome the opportunity to respond to the Committee’s questions and request the opportunity to give evidence in person in due course.

The LGA calls for opportunities for local government to collaborate and help shape the work of the Office for Local Government in capturing and sharing good practice, building on current work and expertise of the sector.

We are concerned that the creation of Oflog’s Data Explorer provides poor value for money for the taxpayer given the pre-existence of the LGA’s award-winning benchmarking platform. There is a need to ensure that Oflog’s ‘early warning conversations’ and potential peer reviews do not duplicate the LGA’s work in this area.

Oflog is not an independent body, and this lack of independence has potential implications for public trust in its work.

1.What is Office for Local Government (Oflog)’s intended purpose and is it on-track to achieve it? 

The Levelling Up White Paper identified three objectives for Oflog: to empower citizens with information about their local area, to strengthen local leaders’ knowledge of their services and to increase central government’s understanding of the local government sector.

It appears that Oflog’s focus to date has been more on the latter objective. We have not seen evidence that Oflog’s activities will add value to existing services which provide information about local government performance, share best practice, innovate and drive self improvement.

2a)  What problem is Oflog seeking to resolve?

Oflog has cited a small number of examples of serious failure in local authorities, as part of the wider context of local government’s critical role in providing essential services at a time of increasing global challenges and successive waves of devolution.

It is right that there should be clear accountability and effective assurance of local government. The LGA is currently working with the sector to map the improvement and assurance framework for local government, seeking to improve understanding of how all the various elements of assurance work together and identify whether any improvements are required.

The UK has a highly centralised system of governance focused on Whitehall.This work has identified many existing elements which contribute to assurance of the sector, and through which local authorities are held to account. Oflog is an addition to a crowded field of inspectors and regulators of local government services whose activity is not coordinated. More worryingly, there are market failures in terms of external audit.

Oflog has repeatedly stated that data about local government is dispersed, needs to be brought together and made comparable. However, DLUHC already funds the maintenance of LG Inform, a tool which performs exactly these functions.

2b)   What, for example, can Oflog contribute to data and local government that is not already being done by bodies such as the LGA?

The Levelling Up White Paper, announcing the government’s intention to create ‘an independent data body’ stated:

‘we will co-design this proposal with local government to ensure that it reflects and supports local ambitions.’

Oflog’s policy paper (July 2023) stated:

Oflog will work closely with inspectorates, regulators, agencies and other bodies in the local government data ecosystem. Oflog does not want to duplicate or add further unnecessary complexity to this ecosystem, so is committed to collaboration with these organisations to ensure its work complements and enhances their efforts to best promote a holistic understanding of the sector’s performance. 

DLUHC did not engage with repeated efforts by the LGA and colleagues in the wider local government sector to co-design the body with them.

Data and data analysis

LG Inform, the LGA’s award-winning benchmarking tool created more than ten years ago, already provides a way of comparing the performance of councils and addresses many of the issues that Oflog suggests are problems in its policy paper. The service:

• brings together dispersed data in the form of over 12,000 metrics from more than 200 data collections made available by over 40 data publishers, including all the metrics that are in Oflog’s Data Explorer;
• makes the data comparable through a selection of more than 30 comparison groups (including CIPFA’s ‘nearest statistical neighbours’);
• is free to use and available to the general public;
• includes updates within five working days of data being put on the relevant publisher’s website, so the data is always up to date;
• receives over 500,000 page views every year. 

There are more than 85 readymade reports bringing together metrics on a theme (for example, waste), which can be tailored to any local authority in three clicks. Councils use LG Inform to create reports for their own use, and many embed these reports into their own performance management reporting. 

The LGA offered Oflog the opportunity to use LG Inform or the LG Inform data feed to keep their own tool up to date automatically.  We have offered to work with Oflog to develop the platform or make available our data in ways which would meet the needs of both Oflog and the sector. These offers have not been accepted.  Instead, Oflog created their own dashboard (Data Explorer), described as ‘clumsy’ by some commentators (see Appendix 1 for a comparison of the charts in the two tools). 

Some of the data in Data Explorer is already out of date, in contrast to the data in LG Inform. This is despite Oflog’s stated intention to detect early signs of failure in councils.

We are therefore concerned that not only are users of Oflog data being potentially misled due to an incomplete picture of the data, some of which is out of date, but the creation of a new infrastructure where a robust tool already exists provides poor value for money to the taxpayer.

We have identified the following ways in which Oflog could add value to activities already underway in the sector:

i. Data about other local public sector partners in an area. Councils are responsible for shaping their places and need data about their local areas to do so (see also Question 4). We have consistently made the case that Oflog should not just focus on council data but include data about other parts of the public sector, including central government, in each local authority area. 

Earlier this year, (then) Minister Rowley asked the sector via the LGA to identify a ‘fifth metric’ that the sector would like Oflog to add to their dashboard. Following consultation with council leaders, the LGA suggested – and continues to propose – that the fifth metric should be local area expenditure data from other parts of the public sector. Having a complete picture of the local spend of all public sector organisations and the aim of that spend will enable councils to bring partners together to target that resource on shared priorities for the benefit of their communities, as part of their place-shaping role. 

While we know that collecting this data will take some effort, we believe that such work would be highly worthwhile and have shared examples with DLUHC and Oflog of similar research that has been done in the past. 

ii. Work to give access to data which is currently unavailable to local authorities (for example, health and social care data, where it is currently published by trust rather than authority; or local data for nationally-run services, such as Universal Credit and other benefits). 

Support for improvement

Local authorities are responsible for their own performance and improvement and are primarily accountable locally for this.

At any one time, each local authority will be at a point on a spectrum. At one end are authorities which have a strong awareness of their strengths and areas for development and are proactive in seeking opportunities for improvement and delivering best value (even where performance is strong). At the other end, a small minority of authorities have entered statutory intervention.

The LGA (through the IDeA) is funded by central government to deliver programmes of sector support to all local authorities at every point on this spectrum, on behalf of the local government sector. The LGA uses its deep insight into the needs and challenges of each local authority, informed by longstanding relationships at political and managerial levels and methodologies developed over many years to plan, deliver and facilitate peer-led support.

Oflog has stated its intention to hold ‘early warning conversations’ and associated peer reviews, targeted to local authorities which Oflog’s analysis of performance data suggests are at risk of non-statutory or statutory intervention.

As part of a wide ranging suite of sector improvement support, the LGA already provides peer reviews, and continues to develop and strengthen these in response to needs of the sector.

It is essential that improvement activity for local government is coordinated and not duplicated. The LGA stands ready to work with Oflog to do so, for example by:

• ensuring that a council which has agreed to receive a Corporate Peer Challenge from the LGA is not targeted at the same time for an Oflog peer review following an early warning conversation.
• focusing Oflog’s attention, where the data identifies performance concerns, in councils which have not fully engaged with sector-led support.

3. What degree of independence does Oflog have from DLUHC and how will this impact its work?

Oflog is not an independent body but is effectively part of a department of government directly accountable to ministers. Oflog is therefore subject to political direction, rather than informed solely by independent analysis of data. This has potential implications for public trust in Oflog.

This is of concern especially given Oflog is intending to have “early warning conversations and carry out peer reviews in areas where they have concerns”. How could Oflog carry out a truly independent peer review for example in South Cambridgeshire, given the Minister’s view about that council’s 4 day working week pilot?

4. Should the Government ensure that Oflog supports the Government’s set aims of levelling up and if so, how?

While local authorities will set their own priorities for delivery, making ‘levelling up’ a reality in local areas will be a feature of many local authorities’ strategic plans. 

The Levelling Up missions can only be achieved by local authorities working together with partners in each place. The Levelling Up White Paper states: 

‘The lack of a singular, shared view of delivery in places, supported by robust and comparable data, curbs the ability to make evidence-based decisions.’

The Government should ensure that local authorities have better access to data about delivery and expenditure by other public sector agencies in each place, to support local authorities to work with partners to achieve these aims. 

5. How should Oflog engage with local authorities and other stakeholders? 

Oflog has taken steps recently to establish a Political Advisory Group with representation across all political groups in the LGA and special interest groups representing different types of English local authority.  We understand that the intended aim of the Group is to enable Oflog to regularly consult with and receive feedback from political leaders in the sector and that it will be supplemented by forums for regular engagement with local government officers.

We welcome these initiatives, which follow earlier informal discussions. To be effective, however, there must be meaningful consultation, leading to transparent action by Oflog in response to feedback. 

These initiatives do, however, stop short of the co-design which was originally promised. Given the scale of expertise in the sector already, this is a missed opportunity.

6. How can the Government ensure Oflog is not an additional resource pressure for local authorities? 

The Secretary of State has said that Oflog is not an attempt to micro-manage councils or establish an expensive compliance regime.  Oflog has previously stated that it does not intend to create additional reporting requirements, analysing existing data instead. The Government should ensure that this position is maintained and, further, should keep under close review the reporting burden for local authorities so that authorities are only required to report data which adds value to their own activities and assurance.  

As stated above, however, Oflog has entered an already crowded field of regulators and inspectors.  A requirement for councils to engage in conversations with Oflog in addition to engagement with all of the others working in this field will inevitably add to the burden for local authorities.

7. Will Oflog make it easier to identify financial problems further in advance? 

To date, the Data Explorer only contains a very limited set of metrics relating to local government finance, which may be replaced by the four capital risk metrics proposed in the Levelling Up and Regeneration Bill (LURB) consultation. 

In our response to the consultation on the LURB, we highlighted serious concerns about the proposed capital risk metrics, including the potential for encouraging perverse behaviours.

For the current set of finance indicators, we have shared with Oflog our concerns in relation to the components of debt metrics used, the use of metrics which do not include the most up-to-date information and some difficulties in clarifying the sources of Oflog’s data.

The LGA estimates that councils in England face a £4billion funding gap over the next two years and has identified that a significant minority of leaders and chief executives think it likely or fairly likely that their chief finance officer will need to issue a s114 notice this year or next.

It is possible to identify risk through use of data, but not to predict in detail which set of circumstances will lead to failure in a particular place at a particular time.

While it is possible that Oflog may have access to data before DLUHC publishes it, thereby enabling an earlier view of some content before other agencies, the identification of financial problems ahead of time requires consideration of many factors, including insights which are not captured through data metrics.  The LGA, working closely with councils and professional bodies, has the relationships and intelligence in place over many years to understand where challenges are arising and to offer timely support.

8. The Government has suggested that there will be an annual report for Oflog.  How should this data be verified and by who?

Please see our response to question 3. Aside from our position on the independence of Oflog, we have no position on who should verify Oflog’s annual report, on the assumption that there should be no implications for councils’ data reporting arising from this.

It is however essential that Oflog is transparent about its budget, staffing and the cost-benefits of its activities.

9. What data should Oflog collect and why? 

Oflog should not collect data. There is a wealth of data already gathered by government from local authorities, and Oflog should not add to that burden. 

Rather, Oflog should publish metrics about the spend and activity of other parts of the public sector including central government. This would be helpful for leaders of councils and councils themselves, given their legitimate place-shaping role for their communities.

In addition, Oflog should have a role in making other bodies’ data available to the sector where it would be useful (such as health data currently published for health geographies). 

10. How can the Government ensure Oflog collects data as efficiently as possible? 

Please see questions 2b) – Data and analysis, and 9 above. The most efficient solution would be to use the platform for local government metrics which already exists or, at the very least, use the data from that platform to populate the Oflog Data Explorer. 

11. How should Oflog select the data sources that it uses to develop outcome measures? 

It is for democratically elected local authorities to determine their own priority outcomes for each place. 

Outcomes are only achieved – and therefore can only be measured - in the long term.  Performance measures are by their very nature focused on processes and outputs, and not outcomes. Moreover, Oflog’s approach must recognise the impact that multiple stakeholders have in shaping and contributing to outcomes. While local government’s contribution is key, this will often be through coordinating multi-sector approaches to improve local outcomes. A focus on using data to compare outcomes must identify how an outcome is influenced and by whom (both nationally and locally), as well as identifying what data is required to measure an outcome.

Oflog should engage fully and meaningfully with the sector.  Oflog’s approach to date has been to present a set of metrics and invite responses, rather than the co-designed approach which we have been seeking from the start. Some of the adjustments which were subsequently required to draft metrics could have been avoided through earlier engagement with the LGA.

12. Which areas of Oflog’s focus currently lack adequate published indicators? 

More than 12,000 metrics related to council areas are already contained in LG Inform, so most service areas are already very well covered. A co-designed approach would allow Oflog to identify which metrics would be most useful to the sector as a basket of indicators. 

13. Could Oflog support cross-departmental approaches to policy solutions and initiatives? 

Oflog could usefully support DLUHC to convene cross-departmental approaches to policy solutions and initiatives. Understanding the performance of other parts of the local public sector is crucial to delivering outcomes at local level. For example, failures in a local hospital can have a very negative impact on the local adult social care service.

Analysis of performance challenges in local authorities where the engagement of other bodies is necessary for success would support this, as well as the publication of spend and activity of other parts of the public sector.

We would welcome Oflog’s support to ensure the availability of data to inform local priority-setting across public sector bodies, in recognition that most local outcomes require multi-sector working. We would also welcome Oflog’s help to develop more meaningful outcome frameworks. Councils are measured against multiple outcome frameworks and indicator sets from different government departments which often do not connect together, and the measures/priorities for other local partners differ from those for local government, which can make collaboration difficult.

14. How can the Government explore how Oflog might support the NHS and other anchor institutions locally? 

It is important not to extend Oflog’s remit or focus in a way that impacts its ability to deliver its purpose in relation to local government. 

The publication of expenditure and activity of other parts of the public sector will support local authorities in their place-shaping role, working with other agencies and will support coordination of shared outcomes or performance measures between councils and other public sector bodies.

15. How will Oflog support central Government’s understanding of local areas and the challenges communities face?

To understand local communities, it is necessary to look at data across a range of agencies in each place in light of data from other comparable places. Focusing solely on local authorities and not on the wider landscape of public service delivery in each place will only deliver a partial perspective of local areas and their challenges.