Review of Public Service Regulators - Sustainable Development ...

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Review of Public Service Regulators - Sustainable Development ...

Review of publicservice regulators


The Sustainable Development Commission (SDC) is the UK government’s ‘watchdog’ for sustainabledevelopment, reporting to the Prime Minister and the First Ministers of Scotland and Wales and theFirst Minister and Deputy First Minister of Northern Ireland.As part of our watchdog remit, we are undertaking thematic reviews of important government policyareas that are likely to have a significant impact on the government’s aim of achieving sustainabledevelopment. 1In this, our fourth thematic review, we have undertaken a review of public service regulators toexplore ways of regulating effectively for sustainable development in the wider public sector.The review concentrates on three sectors – health, education and local government – and assessesthe work of the Audit Commission, the Office for Standards in Education, Children’s Services and Skills(Ofsted) and the Healthcare Commission / Care Quality Commission (CQC) in England.


Contents1 Executive summary 62 Introduction 112.1 The purpose of the review 122.2 Public services and sustainable development 132.3 Policy context: sustainable development 142.4 Public service regulators 152.5 Policy context: ‘better regulation’ and sustainable development 163 Methodology 194 Audit Commission: a solid start 234.1 Sustainable development challenges set by the SDC 244.2 Progress made 244.3 Key issues for the future 294.4 SDC’s recommendations to the Audit Commission and other CAA Inspectorates 295 Ofsted: learning by doing 355.1 Sustainable development challenges set by the SDC 375.2 Progress made 375.3 Key issues for future 395.4 SDC’s recommendations to Ofsted 406 Healthcare Commission / Care Quality Commission: healthcheck required? 456.1 Sustainable development challenges set by the SDC 466.2 Progress made 466.3 Key issues for the future 526.4 SDC’s recommendations to the CQC and Department of Health 527 Conclusions 577.1 Future assessment of impact 59AnnexesAnnex 1 – Sustainable Development Lens 60Annex 2 – Child Wellbeing Indicators 62Annex 3 – Expert Advisory Group and Government Reference Group membership 64Endnotes 65Glossary 68Separate reports available on the SDC web site: www.sd-commission.org.uk/pages/watchdog• Think piece on regulation – Better regulation for sustainable development• Interim report• Sector reports – these contain full details of the SDC’s engagement with the Audit Commission,Ofsted and Healthcare Commission/Care Quality Commission.


1 Executive summaryThe Sustainable Development Commission (SDC) is the UK government’s ‘watchdog’ forsustainable development. As part of its watchdog role, it has undertaken thematic reviewsof those policy areas likely to impact on the government’s aim of achieving sustainabledevelopment.This, the fourth thematic review, turns thespotlight on public service regulators; and morespecifically on the three main regulators of localgovernment, education and health in England – theAudit Commission, Office for Standards in Education,Children’s Services and Skills (Ofsted) and theHealthcare Commission/Care Quality Commission(CQC).IntroductionPublic services and sustainable developmentThe public sector has a pivotal role to play indriving sustainable development in the UK. Publicsector organisations can use their employment andpurchasing muscle, their ability to influence others,and the way they commission and deliver servicesto impact positively on the community, environmentand economy.If public services operate in sustainable ways,they will be investing in the environment, socialjustice and the quality of life of their communities. Ifthey fail to carry out their functions in a sustainableway, they will be creating a disbenefit; councils,schools and hospitals will be contributing toenvironmental, social and economic problems bothnow and in the future.The government’s commitmentThe UK government has recognised this. Its 2005Sustainable Development Strategy, Securingthe Future, says the principles of sustainabledevelopment should form the basis for all policy inthe UK and the public sector should be a “leadingexponent” of them.A range of policies have been developed toadvance sustainable development in the publicsector. For example, sustainable procurement policieshave been developed for both local governmentand health, and all schools should be sustainableschools by 2020. There is also an increasing focuson the ‘place shaping’ agenda, which requirespublic sector partners to work together to achieveeconomic, social and environmental aims.Regulation and sustainable developmentAt the same time, the government has sought togive public service organisations more autonomyand to increase their diversity. As more serviceshave come to be provided by semi-independentor independent bodies, the role of their regulatorshas grown.The bodies that register, inspect and auditpublic services now influence the way that councils,education bodies and hospitals are run. This reviewstarts from the premise that public service regulatorsshould be exponents of sustainable developmentand that they should use their influence andactivities to encourage the bodies they regulate tobe the same.Methodology/engagementWe formulated challenging goals for each regulatorto direct them towards the progress we are seeking.We then worked with them to integrate sustainabledevelopment into their assessment frameworksand to build capacity amongst their staff.A strong relationship has been built with the AuditCommission and to a significant extent with Ofsted.There has been a disappointing failure on the partof the CQC to engage with the review. The differinglevels of engagement reflect the differing progressthat the three regulators have made to date.6 Review of Public Service Regulators Sustainable Development Commission


Findings/the regulators todayThe Audit Commission: a solid startThe Audit Commission has made much progresson sustainable development, driven by strongleadership from its chair and senior managementteam. The framework for progress has been set by itsSustainable Development Approach, backed up by aninternal implementation plan. The Audit Commissionhas made solid progress in building its organisationalcapacity on sustainable development and is aleader among its inspectorate peers in embeddingsustainable development across its work.Ofsted: learning by doingOfsted has made some good strides towardsembedding sustainable development in its work. Ithas developed a Sustainable Development ActionPlan (SDAP), is recruiting a head of sustainabledevelopment, and is working on a ‘stimulusdocument’ to help its teams incorporate sustainabledevelopment into its inspection frameworks. Ofstedhas also agreed to include elements of sustainabledevelopment in its survey work, monitor thedevelopment of its value for money work and tomeet with the SDC on a regular basis in 2009/10 toreview progress.The Healthcare Commission/CQC:healthcheck required?The CQC was only established in April 2009, takingover the work of three other bodies. This may be onereason that it has significant ground to cover if it is tomatch the progress made by the other public serviceregulators. However, the CQC has yet to confirmthat it accepts that sustainable development fallswithin its remit, has failed to pursue a sustainabledevelopment agenda, and has done little to inspireconfidence that action will be taken in the future.Meanwhile, Department of Health (DH) hasshown less leadership on this issue than it mighthave done. An Action Plan to deliver its SustainableDevelopment Framework includes no meaningfulaction to include sustainable development withinthe CQC’s performance assessment framework. DHhas given low priority to the carbon indicator in itsown performance framework (putting it in Tier 3 ofthe ‘Vital signs’ where trusts can choose whetherto use it or not and the CQC has no inspection role).Sustainable development is also mostly missing fromthe World Class Commissioning (WCC) programme.A new way of regulatingThe Comprehensive Area Assessment (CAA)The CAA is a new way of assessing public services inEngland that is area based and focused on outcomesdelivered by councils working either alone or inpartnership. There are two parts to the CAA: the areaassessment and organisational assessment. The areaassessment will assess how well local services aredelivering better results for local people across thearea, focusing on how well local priorities are beingachieved and how likely they are to improve in thefuture. The organisational assessment will focuson the performance of individual public bodies,including as assessment of value for money througha Use of Resources judgement.The CAA will be delivered by six inspectorates,including the three on which we have focused inthis review. As such, it represents an important newopportunity to embed the principles of sustainabledevelopment into their work and that of the councilsand other bodies being assessed.The Audit Commission and the CAA regulatorsThe Audit Commission has been open to inputfrom the SDC on the development of the areaassessment. Sustainable development is one offour underlying themes for the area assessment,and the CAA framework and guidance reflects this.The organisational assessment’s Use of Resourcesjudgement also includes elements of sustainabledevelopment, including a section on whetherorganisations are making effective use of naturalresources. This will become more stretching overtime.Ofsted has appointed 12 CAA Lead equivalentsand the CQC has appointed 42. This is another goodstart. However, the CAA regulators will need todevelop a common understanding of sustainabledevelopment and incorporate this into their trainingso that their individual inspectorate assessmentscontribute to well-rounded judgements in the areaassessment.Sustainable Development Commission Review of Public Service Regulators 7


RecommendationsBig winsThis review has contributed to some ‘big wins’. Withsupport from the SDC, the Audit Commission hasbuilt sustainable development into its organisationalstructures and an economic development andenvironment knowledge network is helping toshare learning across the organisation. The AuditCommission’s senior management has had a ‘masterclass’ on sustainable development; its CAA Leadshave received sustainable development training;and most of its staff have now had at least basiclevel training on sustainable development.Sustainable development has currencywithin Ofsted and is understood as a key agendafor children and young people, and not justenvironmentalists. We have had less engagementwith the CQC, but have at least had discussionsraising the issues and will seek future co-operation.In our recommendations we have focused on anumber of issues which we consider each of thepublic service regulators should address.The Audit CommissionThe Audit Commission should continue its good workwith continued high-level leadership from the chairand senior management team and the continuedrecruitment and development of a central team forsustainable development.It should also ensure that basic level trainingis rolled out for all staff involved in audit andassessment work by October 2009 and that morein-depth expertise is developed among enoughstaff to ensure that appropriate expertise is alwaysavailable to help form effective judgements. Itshould also look for ways of sharing its approachwith organisations responsible for public sectorimprovement, those involved in developing andpromoting the Local Sustainable Development Lens(discussed in Annex 1), and the bodies it inspects.OfstedOfsted should monitor the impact of the completed‘stimulus document’ on its inspection frameworks asthese are developed or revised, to make sure theygo beyond a small number of questions or promptson self-assessment forms. It should work with theAudit Commission to identify a practical way to applythe CAA Use of Resources assessment to schools andother institutions. It should also research, internaliseand advocate that there is a role for institutions inpromoting the wellbeing of children in their localarea, for example by promoting a child welfareindicator (as set out in Annex 2).The CQCThe CQC should sign up to the NHS Carbon ReductionStrategy, allocate a board level champion forsustainable development, develop a SustainableDevelopment Action Plan and work to build staffunderstanding of and capacity to work withsustainable development.It should carry out a special review in 2010 ofhow far and how well NHS trusts are promotingsustainable development. It should publish data onthe Tier 3 ‘Vital Signs’ indicator on energy efficiencyand carbon emissions in the periodic review; and DHshould include this in Tier 2 from 2010 so the CQChas a scrutiny role.The CQC should also implement therecommendations of the Healthcare Commission’spreliminary work on sustainable development carbonmetrics with the NHS Sustainable Development Unit(NHS SDU). It should work in partnership with thatbody to develop a suite of sustainable developmentindicators for the health sector that could be usedfor special review, for CQC assessments and by DHover time; and it should align these with metrics inother sectors.It should extend the sustainable development8 Review of Public Service Regulators Sustainable Development Commission


elements of the CAA Use of Resources judgement toall health and social care bodies and it should workto align this with other performance frameworks.We also recommend that DH should include robustreferences to sustainable development in the WorldClass Commissioning agenda and that it shouldinclude public health in the registration requirementsfor bodies regulated by the CQC.The Audit Commission and the other CAA regulatorsWhile the Audit Commission has made goodprogress on the CAA, our review has raised questionsabout whether the CAA regulators as a whole havedeveloped a co-ordinated and complementaryapproach to sustainable development within it.The real test will come when the first round of CAAjudgements are made in December 2009.The Audit Commission has already agreed todevise a cross-inspectorate mechanism to coordinatethe approach to sustainable developmentwithin the CAA. Key tasks should be to develop ajoint understanding of sustainable developmentand to ensure that training is consistent acrossthe CAA regulators. It will also be important toensure that the joint inspectorate quality assurancearrangements involve a balanced range of expertsand peers from economic, social and environmentalbackgrounds (and that environmental interests arenot under-represented).Work should also be undertaken to identifypractical ways to extend the CAA Use of Resourcesjudgement to other regulated organisations,including schools and further education collegesand health and social care bodies not covered at themoment.Going forward, we also recommend thatsustainable development interests are properlyrepresented in the review and evaluation ofthe CAA and that the SDC is invited to be part ofthese arrangements. It should be recognised thatembedding sustainable development into the CAAwill mean a new way of working for the AuditCommission, other regulators and regulated bodies.Effective leadership by CAA regulators and thesharing of good practice will help to make the CAAan effective vehicle for driving improvement acrossthe board and achieving genuinely sustainableoutcomes at a local level.ConclusionsCommon issuesThere are key issues that are common to all publicservice regulators under review:Leadership and consistent messagesThere is a critical role for central government indelivering the sustainable development agenda. Itmust act as an example for public sector regulatorsand deliver clear and consistent messages aboutpolicy and practice.Clarity over the role of regulatorsIt is important that public service regulators are givenclear powers and duties in respect of sustainabledevelopment, preferably in their statutory powersand regulatory frameworks as well as in guidance,so they have the tools to do the job.Consistency between regulatorsAll of the public service regulators must contributeto the area assessment, and this will require themto develop consistent understanding, methods andlanguage. In the longer term, a shared approachwould help to integrate the planning and deliveryof local services and to improve outcomes for localpeople.Improved skills and understandingAssessors need sufficient depth of knowledge toenable them to gather and process the informationthat will allow them to capture the complexities ofsustainable development. Expanding the skills andknowledge base within each of the regulators isessential.Future assessment of impactThis report represents a snapshot of the status quo.The SDC welcomes the opportunity to work closelywith all three public service regulators in the future.It also hopes to carry out a further light-touch reviewof progress towards the end of 2010.Sustainable Development Commission Review of Public Service Regulators 9


Introduction2


The UK Sustainable Development Commission (SDC) has undertaken a review of the role ofpublic service regulators in promoting sustainable development. This report explains whyand how we conducted the review and what we found. It considers the implications for policyand practice in future and sets out recommendations.The review has been a dynamic exercisein a shifting policy environment. While it wasbeing conducted, climate change became anincreasingly prominent concern for policy makersacross government. The SDC worked closely withthe regulators under review, helping them tomeet the challenges of incorporating sustainabledevelopment into their work and to build theircapacity for understanding and promoting it.2.1 The purpose of the reviewThe review aimed to establish how far it is possiblefor public service regulators to promote sustainabledevelopment in the local government, healthcareand education services they regulate. It also assessedwhether they are using their powers and resourceseffectively for this purpose.The remit and practice of the regulators wereassessed against the principles of sustainabledevelopment set out in the 2005 UK SustainableDevelopment Strategy, Securing the Future. Theseprovide a framework for ensuring a strong, healthyand just society within the limits of the naturalenvironment, through achieving a sustainableeconomy, promoting good governance and usingsound science responsibly (see below).It is the government’s stated intention that theprinciples of sustainable development should formthe basis for all policy in the UK. The strategy callson the public sector “to be a leading exponent ofsustainable development”. 2In the rest of this introductory section, we lookfirst at public services and how their aims andfunctions relate to current policies on sustainabledevelopment. Next, we consider the role of publicservice regulators in the light of current policies onregulation, and the implications for regulating forsustainable development.Living within environmental limitsRespecting the limits of the planet’s environment,resources and biodiversity – to improve our environmentand ensure that the natural resources needed for life areunimpaired and remain so for future generations.Ensuring a strong, healthy and just societyMeeting the diverse needs of all people in existing andfuture communities, promoting personal wellbeing, socialcohesion and inclusion, and creating equal opportunity.Achieving a sustainable economyBuilding a strong, stable and sustainableeconomy which provides prosperityand opportunities for all, and in whichenvironmental and social costs fall on thosewho impose them (polluter pays), and efficientresource use is incentivised.Using sound science responsiblyEnsuring policy is developed and implementedon the basis of strong scientific evidence,whilst taking into account scientific uncertainty(through the precautionary principle) as wellas public attitudes and values.Promoting good governanceActively promoting effective, participativesystems of governance in all levels ofsociety – engaging people’s creativity,energy and diversity.12 Review of Public Service Regulators Sustainable Development Commission


2.2 Public services and sustainable developmentPublic service organisations can help or hinderprogress towards sustainable development in threedifferent but related ways. One is through theimpact of the services they commission or deliveron individuals, neighbourhoods and communities(for example, improving health, promoting learning,recycling waste, encouraging active travel). Anotheris through influence and leading by example to helpchange attitudes, expectations and behaviour. Andlast but not least, there is the impact public serviceorganisations can have through their corporateactivities (such as employment and resourcemanagement), where they can be a formidableeconomic and social force.As public services have become increasinglyindependent or semi-independent, regulationhas become more important and the regulatorsthemselves are taking a more prominent role indeveloping and communicating both minimumstandards and pathways towards improvement. Theimportance of the role of public service regulators isexpanded on below.In the UK, the public sector employs 20 per centof the workforce, with health, local governmentand education services accounting for 15 per cent. 3Public services have significant purchasing power,with the three sectors under review together buyingmore than £88 billion worth of goods and servicesin 2005/06 across the UK. 4 Their impact on theenvironment is substantial.For example, the National Health Service (NHS)in England accounts for 18 million tonnes of carbona year – 25 per cent of UK public sector total and3 per cent of the total for England. Some 800,000meals are served in hospitals every day, each withimpacts from food production, processing andtransportation. 5 The carbon footprint of schoolsis more than 10 million tonnes per year 6 and theeducation sector produces almost 700,000 tonnesof waste per year. 7 Local government in Englandowns 11 per cent of the housing stock and collectsmore than 29 million tonnes of household wasteper year. 8Public service organisations can deploy theirpurchasing muscle, their role as employers,their ability to influence the general public, theirengagement with their local communities, and theservices they deliver in ways that impact positivelyon society, environment and the economy,safeguarding and improving the well-being of localpeople in the medium and long term.This is sustainable development in action: itcan help to contain or even reduce demands forservices over time, because it prevents needsarising by tackling their ‘upstream’ causes, such asmaterial disadvantage, social exclusion, depressionand anxiety, unsafe communities and unhealthyenvironments. This is expressed as a ‘virtuous circle’.The illustration below is for NHS organisations, butthe idea applies no less to other public services.NHS resourceswhich influenceLevels of demandfor health services,which impacts onLocal economic, social andenvironmental conditions,which impact onThe health of local populations,which can help reduceThe health of local population,which can help reduceThe NHS’s capacity toprovide quality services,which affectsLevels of demandfor health services,which impacts on13


2.3 Policy context: sustainable developmentPublic services and their regulators operate withina policy framework that shapes what they do, howthey do it, and how they are financed and managed.Key aspects of sustainable development have risenup the political agenda in recent years, with directimplications for public sector organisations.Action on climate change andenvironmental sustainabilityAction to tackle climate change is now recognisedas a core responsibility of government. The 2006Stern Report emphasised the importance of takingurgent action to reduce greenhouse gases in orderto avoid potentially catastrophic climate change,the effects of which could require costly and highlydisruptive responses. 9 The Climate Change Act puts alegal framework in place for tackling climate changeacross the UK. It will set legally-binding targets forreducing the UK’s carbon emissions by at least 80per cent by 2050 against a 1990 baseline.One of the enabling powers of the UK ClimateChange Act will be to introduce new tradingschemes through secondary legislation. In England,the Carbon Reduction Commitment (CRC) is cominginto effect from April 2010. This is a mandatorycap-and-trade scheme covering energy useemissions from certain kinds of organisation. TheCRC will target emissions from energy use by largeorganisations whose annual mandatory half hourlymetered electricity use is above 6,000MWh (annualelectricity bills above £500,000) and which are notincluded in Climate Change Agreements or the EUEmissions Trading Scheme. In the public sector thiswill include, for example, large local authorities andNHS trusts.Further policy initiatives designed to promoteenvironmental sustainability include the eco-townsinitiative; 10 the Code for Sustainable Homes; 11 thePlanning Policy Statement on Climate Change; 12the Sustainable Communities Act 13 and newnational indicators for local areas on climate changemitigation and adaptation. 14Sustainable procurementThe UK Sustainable Development Strategy seta goal for the UK to be recognised as a leader insustainable procurement in the European Union(EU) by 2009 and established a business-led taskforce to develop a National Action Plan to deliverthis goal. The Sustainable Procurement Task Force(SPTF) report, Procuring the Future, was publishedin June 2006 and its recommendations apply to thewhole of the UK public sector. 15 The UK governmentresponded to the task force report by producing theSustainable Procurement Action Plan 16 and createdthe Centre of Expertise in Sustainable Procurement(CESP) which sits within the Office of GovernmentCommerce (OGC).The local government sector published theLocal Government Procurement Strategy outliningits commitment to spend its £40 billion a year inways that achieve both value for money on a wholelife cycle basis, and wider economic, social andenvironmental benefits. 17 The Department of Health(DH) published a sustainable procurement policy,strategy and action plan, 18 and a formal responseto the SPTF, Procuring for Health and Sustainability2012, for the whole of the health and social caresector. 19 The DH has also set energy and carbontargets for the NHS 20 and is providing a £100 millionfund to improve energy efficiency and to encouragethe generation of renewable energy. The Departmentfor Education and Skills (DfES), now Department forChildren Schools and Families (DCSF), incorporatedsustainability requirements in the Building Schoolsfor the Future programme, which aims to rebuild orrenew every secondary school in England over thenext 10-15 years.Sector-related policiesA range of policy developments offer opportunitiesand drivers for advancing sustainable developmentthrough public services. The DH now has a sustainabledevelopment strategy and action plan; the NHShas a Sustainable Development Unit (NHS SDU)and a carbon reduction strategy. Local governmentpolicy now has a strong focus on ‘place-shaping’and strengthened local partnerships to pursueenvironmental, social and economic objectives in amore integrated way. 21Statutory guidance strengthens the requirementto put sustainable development at the heart of theSustainable Community Strategy, with the LocalArea Agreement (LAA) as its delivery mechanism. 2214 Review of Public Service Regulators Sustainable Development Commission


The government now aims for all schools to beSustainable Schools by 2020, and provides dedicatedresources, such as the Sustainable Schools NationalFramework. 23Against this background of an increasinglysupportive policy environment, two questionsarise. The first is how far are public serviceorganisations promoting sustainable developmentin their day-to-day practice? The second,which is the key concern of this review, is howfar are the public service regulators helping andencouraging them to do so?2.4 Public service regulatorsOur review focused on the work of three regulators,the Audit Commission, the Office for Standards inEducation, Children’s Services and Skills (Ofsted),and the Healthcare Commission/Care QualityCommission (CQC), all of which share key objectives.They aim to prevent harm to service users, tomaintain and promote improvements in the qualityof outcomes for service users, to ensure consistentstandards across the country, and to see to it thatresources are used effectively and efficiently toachieve these objectives.The Audit Commission’s remit was establishedunder the Local Government Finance Act 1982 toappoint auditors to all local authorities in Englandand Wales. Subsequent acts of parliament havemodified and consolidated the Commission’s remit,including the Audit Commission Act 1998, the LocalGovernment Acts 1999 and 2003 and the LocalGovernment and Public Involvement in Health Act2007.The Commission now defines itself as anindependent public body responsible for ensuringthat public money is spent economically, efficientlyand effectively in the areas of local government,housing, health, criminal justice and fire and rescueservices. Its mission is to be a driving force in theimprovement of public services. It aims to promoteproper stewardship and governance and to helpthose responsible for public services to achievebetter outcomes for citizens, with a focus on thosepeople who need public services most. It aims toencourage continual improvement in services tomeet changing needs and to stimulate better qualityand use of information. 24Ofsted inspects and regulates “to achieveexcellence in the care of children and young peopleand in education and skills for learners of all ages”.It aims to “raise aspirations and contribute to thelong term achievement of ambitious standards andbetter life chances for service users” and is requiredby the law that extended its brief from 2007 “topromote service improvement, ensure servicesfocus on the interests of their users, and see thatservices are efficient, effective and promote valuefor money”. 25The CQC brought together the regulation ofphysical and mental health and adult social care fromApril 2009, aiming to “regulate services to ensurequality and safety standards, drive improvement andstamp out bad practice, protect the rights of peoplewho use services, provide accessible, trustworthyinformation and independent public accountabilityon how commissioners and providers of services areimproving the quality of care and providing valuefor money”. 26The regulators operate separately to assessperformance in their own sectors. They also worktogether in a parallel exercise known as theComprehensive Area Assessment (CAA). This isa new performance framework for assessing localservices that was launched in April 2009. It isconcerned with people’s experience of place, ratherthan just with the quality of individual services.The CAA is led by the Audit Commission andinvolves six regulators (the Audit Commission, CQC,Ofsted, Her Majesty’s Inspectorate of Constabulary,Her Majesty’s Inspectorate of Prisons, and HerMajesty’s Inspectorate of Probation). It takes awhole-systems approach, looking across councils,health bodies, police forces, fire and rescue servicesand others responsible for local public services,reflecting a growing expectation that these “workin partnership to tackle the challenges facing theircommunities”.‘Sustainability’ is one of four underpinningthemes for the CAA, along with ‘inequality’, ‘peoplewhose circumstances make them vulnerable’ and‘value for money’. CAA guidance states that it is “asmuch about long-term social and economic benefitas it is about respecting environmental limits. It isabout building a strong, healthy and just society”. 27Sustainable Development Commission Review of Public Service Regulators 15


2.5 Policy context: ‘better regulation’ and sustainable developmentThe present government’s ‘better regulation’policy aims “to eliminate obsolete and inefficientregulation, create user-friendly new guidelines andtackle inconsistencies in the regulatory system”,while reducing “public sector data burdens” by 30per cent by 2010. 28There are enduring tensions between thecommitment to reduce regulatory ‘burdens’ and theneed to ensure that public funds are put to properuse and that risks to public safety and well-beingare effectively managed. According to the BetterRegulation Commission, “calls for government actionare just about balanced by calls for government tostop interfering”. 29 The ‘better regulation’ agendapromotes five principles, which stipulate thatregulation should be ‘proportionate, accountable,consistent, transparent and targeted’. 30Regulation has become increasingly importantas more services are provided by independent orsemi-independent bodies. 31 The regulators areresponsible for promulgating (and sometimes fordeveloping) minimum standards and pathwaystowards improvement, helping to ensure that theyare agreed, articulated and understood, for assessingperformance against them and for publishinginformation to show how far standards are metand improvements achieved. Where services areprovided by independent organisations, theregulators complement the commissioning processand sometimes regulate the process itself.Risk-based assessmentAt the same time, the balance of regulatory activitieshas shifted from direct enforcement, through auditand inspection, to risk-based assessment. Regulatedbodies self-assess their performance and outcomesagainst standards set by government and/or theregulators: this assessment is then cross-checkedby the regulators against information from othersources. 32 Closer scrutiny and inspection arereserved for organisations that appear to be underperforming;all the findings are made public.This approach depends on clear understandingbetween regulators and regulated bodies about whatis to be complied with, what constitutes complianceand how compliance is demonstrated. 33 It reliesheavily on gathering and processing information,and on effective communication with service usersas well as with providers. It is intended to be ‘lighttouch’and collaborative, minimising administrativeburdens and costs, and generating trust betweengovernment, regulated bodies, service users andthe wider public. It aims not just to enforce specificrequirements, but to encourage creativity and topromote behavioural and organisational changesthat improve outcomes.Regulating for sustainable developmentIn the context of ‘better regulation’, is sustainabledevelopment an appropriate subject for regulationof public services?Essentially, sustainable development is aboutsafeguarding the interests of future as well as currentgenerations. Society, environment and economy areheld in trust by the present generation, members ofwhom are both trustees for future generations andbeneficiaries of past ones. 34 There may be conflictsof interest between generations which cannotbe resolved by market choices or other means.Regulation can therefore be seen as an importantway of safeguarding the interests of citizens yetunborn or too young to stand up for themselves. 35In addition, as we have seen, there is a clearpolicy framework for sustainable development,which specifies that the public sector should be aleading exponent. The principles of sustainabledevelopment are consistent with the goals of publicservice organisations and following them will helpto achieve those goals.It has been argued, on the other hand, thatsustainable development is too broad and loose aconcept to be effectively assessed; that regulationcould lead to superficial ‘box-ticking’, stifleinnovation and impose unreasonable burdenson the regulated bodies; that regulators lack thenecessary knowledge and skills; and that there arebetter ways of managing risks. These arguments areexplored in the background paper Better regulationfor sustainable development prepared for thisreview, which makes the following observations:• It will be important to select componentsof sustainable development that can beclearly specified and scrutinised, and to testthese in practice, amending them whereappropriate and developing further indicators16 Review of Public Service Regulators Sustainable Development Commission


incrementally, customised to the services inquestion• Regulators should be able to gather andprocess qualitative as well as quantitativeknowledge, in order to capture thecomplexities of sustainable development• It should be recognised that sustainabledevelopment cannot be reduced to what ismeasurable and that regulation is unlikelyto cover all aspects of sustainabledevelopment effectively• Regulation must be developed with andanchored in the experience, understandingand support of service users and thewider public• Regulators should work collaborativelywith regulated bodies to develop meaningfulindicators and compliance criteria, usingmethods that complement performancemanagement and encourage creativityand innovation• Risk-based regulation, using self-assessmentand cross-checking, is likely to be a moreeffective way of promoting sustainabledevelopment than regulation based only onaudit and inspection. It should be designedto generate useful information, promoteimprovement and contain costs• It should always be clear to regulatedbodies - as well as to service users and thewider public - where responsibility lies forpromoting sustainable development andhow responsibility is distributed between theparties involved, as well as what the goalsand indicators are, and how compliance isdemonstrated• Regulation is one of many levers forpromoting sustainable development.Others include public pressure, individualusers’ choices, locally-generated initiativesand strong management towards clear goals.Regulation must be carefully calibratedto strengthen other levers and workproductively with them• Because of their status in the field, publicservice regulators can encourage actionand shape attitudes and priorities in favourof sustainable development, not onlythrough direct application of their regulatoryfunctions but also indirectly, throughleadership and influence• Regulators and regulated bodies must haveresources to build their capacity, in terms ofknowledge and skills, to promote sustainabledevelopment directly through public servicesand indirectly through regulation.We have noted that sustainable development isintegral to the core purpose and functions of publicservices – both because they have a key role to playin promoting the government’s policy on sustainabledevelopment and because they can only meet theirservice-related objectives effectively if they doso sustainably. It follows that it is an appropriatesubject for public service regulation. If the pointsabove are taken fully into account and acted upon,the benefits of regulation in this field are likely tooutweigh the costs by a comfortable margin.This review therefore starts from the premisethat public service regulators should themselvesbe exponents of sustainable developmentand should use their powers and influenceto encourage the bodies they regulate to dolikewise. In the rest of this report, we exploretheir potential for doing so, obstacles andopportunities, and their performance so far.We also set out recommendations for policyand practice.Sustainable Development Commission Review of Public Service Regulators 17


Methodology3


This review has been managed by the SDC’s Watchdog team and directed by a steering groupcomprising members of the commission and secretariat. Throughout the review, the SDC’spolicy and Watchdog teams worked with the regulators in the three sectors under review tohelp build their capacity to meet the challenges posed by sustainable development.The contextual information and analysis set outabove helped to shape our methodology, whichwas designed to balance the need to achieve UKwideand sector-wide coverage with a sufficientlyrigorous and in-depth assessment of key regulators.With this in mind, the review has been structuredaround three stages:Mapping stageThe review started in July 2007 with a mappingexercise of 11 public regulators of education,healthcare and local government across the UK(summarised in the table below). It looked at theextent to which the regulators’ remit enabled themto judge performance on sustainable development,how they interpreted their remit and what theopportunities and barriers were to further promotingsustainable development. It identified cases ofbest practice and some opportunities to advancesustainable development. An interim report, datedFebruary 2008, details these findings and wasshared with the regulators and key stakeholders.It is available on the SDC website.Table showing mapped local government, education and health sector regulators for the United KingdomRegulator Country SectorAudit Commission England Local GovernmentOfsted England EducationHealthcare Commission/CQC England HealthcareRegulation and Quality Improvement Authority Northern Ireland HealthcareNorthern Ireland Audit Office Northern Ireland Local GovernmentEducation and Training Inspectorate Northern Ireland EducationAudit Scotland Scotland Healthcare, Local GovernmentHer Majesty’s Inspectorate of Education Scotland EducationWales Audit Office Wales HealthcareWales Local Government Wales Local GovernmentEstyn Wales Education20 Review of Public Service Regulators Sustainable Development Commission


Engagement stageFollowing the mapping exercise, we decided tofocus on the three main English regulators; the AuditCommission, Ofsted and the Healthcare Commission– which was shortly replaced by the CQC. Ourdecision was based on wanting to make the bestuse of limited resources, and on the fact that wehad an opportunity to work closely with theseorganisations. We left open the option of workingwith regulators in the devolved administrations ata later date.We worked with the regulators to identify ways tointegrate sustainable development into assessmentframeworks and to build capacity in their staff onsustainable development. This included workingwith the CAA development group and providingadvice to the Healthcare Commission and DH onsustainable development metrics.We were assisted in this task by an ExpertAdvisory Group and a Government ReferenceGroup (details of groups included in Annex 3). Theengagement with the regulators has been constantthroughout the review and has included a numberof meetings and capacity building events, as wellas a constructive process of receiving feedback andcomments on draft documents.We formulated challenging sustainabledevelopment goals for each regulator, which wediscussed with them, in order to direct them towardsthe progress we were seeking.A sector report for each of the health, educationand local government regulators was produced inDecember 2008. These described our engagementwith the regulators, set out the sustainabledevelopment goals for each of them, and assessedtheir progress both against the goals and moregenerally in engaging with sustainable development.These reports are available on the SDC website. 36We have been able to build strong collaborativerelationships with the Audit Commission and to asignificant extent with Ofsted. These have helpedboth organisations to make considerable progress.Engagement with the health regulator has beenless productive. In part, this can be attributed tothe demise of the Healthcare Commission and itsreplacement by the CQC, but there has also beenfar less progress generally. There has been adisappointing failure on the part of the CQC (at thetime of writing) to engage with the review. Generallevels of ambition and practical commitment appearto have been significantly lower than in the case ofthe Audit Commission and Ofsted.To address broader policy questions, a jointseminar was held with the Improvement andDevelopment Agency (IDeA) and the Local AuthorityResearch Council Initiative (LARCI), invitingrelevant experts and stakeholders. This consideredissues surrounding regulation and sustainabledevelopment, in particular the principles of‘better regulation’, questions about the ‘burdenof regulation’ and the implications of what maybe perceived as ‘new’ regulation. A policy paperwas subsequently produced that is summarised inthe introduction above and is available on the SDCwebsite. 37Evaluation stageThe final stage of the review included assessinghow well each regulator has taken up the challengeof engaging with sustainable development, sharingthe sector reports with the regulators and otherstakeholders, receiving and working throughfeedback, developing recommendations andproducing this report.Sustainable Development Commission Review of Public Service Regulators 21


4The Audit CommissionA solid start“Sustainable development is fundamental to our work at the Audit Commission and weare working to embed its principles throughout our work. Sustainable development nowunderpins our approach to performance assessment and supports our aim for CAA to providea catalyst for better outcomes, more effective partnership working, more responsive servicesand better value for money. As such, we will be looking at whether local organisationsand partnerships are planning for the long-term, fully integrating economic, social andenvironmental factors into decision-making and considering impacts beyond the local area.”Steve BundredChief Executive, Audit Commission


England’s 354 local authorities spent more than £154 billion on day to day services in 2007/8.They employ more than 1.8 million people and deliver 700 different services. Through these,local government has the potential to deliver long-term, sustainable solutions to localchallenges. Creating more sustainable communities will not only benefit today’s residents bydelivering a better quality of life but also, crucially, help to secure similar benefits for futuregenerations. Local authorities have a central role to play in creating sustainable communities,through providing effective leadership, setting an example and making it possible for localpeople to play their part.The 2006 Local Government White Paper,Strong and Prosperous Communities, set out a newperformance framework for local services. The newframework placed increased responsibility on localauthorities to bring together local partners to improveservices and to shape the places where we live.Central to these new arrangements are LocalStrategic Partnerships (LSPs). According to thegovernment’s statutory guidance, LSPs “providethe forum for collectively reviewing and steeringpublic resources, through identifying priorities inSustainable Community Strategies and Local AreaAgreements”. 38 To do this, LSPs are asked to takea sustainable development approach: sustainabilityshould be at the heart of the overarching plan forthe local area, the Sustainable Community Strategy,and in turn, the Local Area Agreement.Together, local authorities and their partnersare therefore pivotal to achieving sustainabledevelopment. By working with key public sector,business and voluntary partners, local authoritiescan help to coordinate an integrated approachto planning and delivery at a local level, in orderto maximise the benefit of any initiative to thelocal community, avoid unnecessary conflicts andstrengthen ties between local social, economicand environmental interests. In order to deliveron sustainable development at a local level, localauthorities, their partners and their regulators needto have the relevant tools and mechanisms in place,with the principles of sustainable developmentfirmly embedded in them.4.1 Sustainable development challenges set by the SDCThe original review goals, as set by the SDC at theoutset of this review, were:• CAA: sustainable development provides theframework for the area assessment, mirroringthe government’s draft statutory guidancewhich puts sustainable development at theheart of new statutory arrangements for localgovernment and its public sector partners• CAA: the focus on sustainability in the2008/09 Use of Resources judgementis retained and the Audit Commission iscommitted to increasing the expectationson sustainability performance in futureUse of Resources judgements• Capacity-building: the Audit Commissionhas systems in place to build its capacityon sustainable development throughoutthe organisation.4.2 Progress madeThe area assessmentWe have been pleased with the progress made sofar towards embedding sustainable development inthe CAA’s area assessment. The Audit Commissionhas been open to input from the SDC on thedevelopment of the area assessment and has showngenuine commitment by ensuring that sustainabledevelopment is reflected in its methodology.Although sustainable development does notprovide the overarching framework for the CAA, itis now one of four underlying themes for the areaassessment. CAA guidance outlines to staff whatthey should look for to demonstrate that areas are24 Review of Public Service Regulators Sustainable Development Commission


Key messages• Overall, the Audit Commission hasmade much progress on sustainabledevelopment since the start of this review,kick-started by strong leadership from itsChair, Michael O’Higgins, and members ofits senior management team• The framework for progress has beenthe Audit Commission’s SustainableDevelopment Approach, a publicstatement of intent on sustainabledevelopment, backed up by an internalimplementation plan outlining a rangeof actions for embedding sustainabledevelopment across the organisation• The Audit Commission has made solidprogress in building organisationalcapacity on sustainable development, andis a leader amongst its inspectorate peers.This capacity creates the depth and scopeof knowledge required to make successfuljudgements on sustainable developmentin the CAA and its importance shouldtherefore not be underestimated• Sustainable development is now partof the methodology for the CAA’s areaassessment, where sustainability is oneof the four underpinning principles, asdiscussed above. This is very welcome,although the real test of how wellsustainable development is embedded willcome when the first round of judgementsare made in December 2009. Theregulators involved in the CAA (termed CAAInspectorates) will need to work togetherto ensure that sustainable developmentprinciples are applied consistently inreaching them• Good progress has also been made inintegrating sustainable development intothe CAA’s organisational assessment.The Use of Resources judgement, a keypart of the organisational assessment,now includes a range of sustainabledevelopment elements, including a sectionexamining whether organisations aremaking effective use of natural resources• We are pleased that the Audit Commissionhas confirmed to us that the sustainabilityelement of Use of Resources will becomemore stretching over time• We are concerned, however, that, unlikeother organisations assessed throughthe Use of Resources judgement, NHSprimary care trusts (PCTs) won’t be scoredon their performance on procurementand commissioning (Key Line Of Enquiry(KLOE) 2.1), including whether they areusing procurement and commissioningto support wider economic, social andenvironmental outcomes. This tension willneed to be resolved in the future to avoidinconsistencies in the assessments ofdifferent organisations• Whilst the Audit Commission has madegood progress, our review has raisedquestion marks about the degree towhich the CAA regulators as a wholehave developed a coordinated andcomplementary approach to sustainabledevelopment. Failure to do so couldundermine efforts to deliver well-roundedjudgements that are informed by asustainable development approach. Inparticular, it will be important that theother CAA regulators develop their owncapacity on sustainable development,particularly within the teams responsiblefor feeding into the CAA• Finally, it should be recognised thatembedding sustainable developmentsuccessfully into the CAA will be a journeyfor the Audit Commission, the other CAAregulators and the organisations they areassessing. It will be a learning process forall involved. It will therefore be importantto accept that mistakes will be made alongthe way and to learn from those mistakesto make sure that the CAA is an effectivevehicle for driving improvement acrossthe board and for achieving genuinelysustainable outcomes at a local level.Sustainable Development Commission Review of Public Service Regulators 25


sustainable, explaining that “delivering sustainabledevelopment involves planning for the long-term,delivering economic, social and environmentalprinciples in harmony, integrating them in decisionmakingand considering impacts beyond the localarea”. 39Good foundations have been laid, but there isstill some way to go before the Audit Commissionand the other CAA regulators can demonstrate thatsustainable development is fully embedded in thearea assessment. As stated previously, the real testwill be when the first round of CAA judgementsis made in December 2009. This will be the firstopportunity to examine whether sustainabledevelopment really is underpinning the CAA.To do this, the CAA inspectorates will need toensure that sustainable development principlesare applied consistently in all judgements. Theinspectorates’ own CAA Trials Evaluation, forexample, found that in the CAA trials “there werevariations… in the treatment of some of theunderpinning principles of CAA, such as sustainabledevelopment or inequalities, and the application ofthese in reaching judgements”. 40As a solution, the evaluation proposed thatthe CAA guidance would need to provide clearerdefinitions of sustainable development and set outhow it will be addressed within the assessments.However, it will take more than guidance to addressthe inconsistencies highlighted by the evaluation.A programme of capacity-building will berequired across the CAA inspectorate staff. TheAudit Commission has made a good start in thisregard but, as discussed below, there is as yet littleevidence that the other regulators have begun tofollow suit with their own CAA staff. Robust internalquality assurance processes that involve sustainabledevelopment experts will also be needed.The Use of Resources judgementPreviously, the Use of Resources judgements havenot taken sustainable development into account.Within this context, we are pleased with a numberof developments in relation to the 2008/09judgement, including:• Broadening the judgement to include a widerrange of ‘key lines of enquiry’ (KLOE)• Including sustainable development inthe ‘governing the business’ theme, suchas “reviewing the competitiveness ofservices and [achieving] value for money,while meeting wider social, economic andenvironmental objectives”• A key line of enquiry (3.1) dedicated toexamining whether organisations are makingeffective use of natural resources• Including elements of sustainability inassessing how well organisations aremanaging their assets, such as how wellan organisation “works with partners andcommunity groups to maximise the useof its assets for the benefit of the localcommunity”. 41These changes mark significant progressin monitoring performance on sustainabledevelopment within the estates and operations ofthe organisations assessed.Furthermore, the Audit Commission hasconfirmed to us that in future years, the Use ofResources judgement will require more stretchingevidence of good performance on sustainabilitythan is the case for 2008/09. This is welcome andthe Audit Commission will need to ensure that thisambition is realised so that the Use of Resourcesjudgement helps to drive improvement onsustainable development performance over time.The review has raised a number of issues,however, including:• The separation in KLOE 2.1 of ‘sustainableoutcomes’ and ‘value for money’ in relationto commissioning and procurement, theimplication being that these are not viewedas one and the same thing. The danger isthat this separation could lead to trade-offsbeing made. The Audit Commission hasconfirmed to us that it views sustainabilityas an essential component of value formoney and that this is reflected in its trainingand guidance and training for staff. This isreassuring, although it will be important tomonitor whether this is reflected in the Useof Resources judgements when they arepublished later this year• Concern that, unlike all other organisations,PCTs won’t be scored on their performanceon procurement and commissioning (KLOE2.1), including whether they are using26 Review of Public Service Regulators Sustainable Development Commission


procurement and commissioning to supportwider economic, social and environmentaloutcomes. This tension will need to beresolved by the Audit Commission and theCQC in the future to avoid inconsistencies inthe assessments of different organisations.Building the Audit Commission’s capacity onsustainable developmentBuilding organisational capacity and understandingon sustainable development is critical if sustainabledevelopment is to be consistently and effectivelyapplied in CAA judgements. We are pleased withthe overall progress the Audit Commission seemsto have made in building capacity on sustainabledevelopment among its staff. It has taken the taskof training its staff on sustainable developmentseriously. Tailored training on sustainabledevelopment, supported by the SDC, has beenrolled out to approximately 80 per cent of its staff.Far less progress has been made, however, withthe external auditors used by the Audit Commissionfor the value for money judgements in the Use ofResources assessment.The Audit Commission has created a new centralsustainable development team. We are pleased thatsustainable development is now recognised formallywithin the Audit Commission’s structure for the firsttime. There are potential risks with the creation ofthis new team, which will have to be managed,such as ensuring the team is not pigeonholed asthe ‘environment’ team. It will also be importantto build on the momentum the team has alreadycreated and ensure that the resources and expertisewithin the team are maintained and enhanced,particularly in the face of increasing public spendingpressures.Other positive developments in terms of buildingcapacity for sustainable development include:• The establishment of the EconomicDevelopment and Environment (EDE)knowledge network, which provides a forumfor debate, policy development, qualityassurance and knowledge sharing. It links allthe people with responsibility for, or interestin, economic development, environment andsustainable development wherever they arein the organisation• The inclusion of personal performanceobjectives on sustainable development for anumber of staff, including senior personneloutside of the sustainable development team.Overall, the Audit Commission has madesolid progress in building organisational capacityon sustainable development, and is a leader inthe field. It will be important for this progress tocontinue, however, and this is reflected in ourrecommendations.Wider progress on sustainable developmentThe Audit Commission has also made progress inembedding sustainable development across itsorganisation. In the summer of 2007, it publishedits Sustainable Development Approach, a high-leveldocument that set out its ambitions to incorporatesustainable development into the CAA. This wasaccompanied internally by an implementation plan.Other positive developments include:• A number of speeches from the AuditCommission Chair and other key personnelsupporting sustainable development. Thechair’s support for sustainable developmenthas been critical to kick-starting progress onsustainable development throughout theorganisation• The creation of accountability structuresfor sustainable development within theorganisation, including a sustainabledevelopment board• A national study looking into reducing carbonemissions from domestic energy use, whichwill be published later in 2009 42• A commitment from the national studiesteam to carry out a study on climate changeadaptation• The secondment of a member of the AuditCommission’s national studies team to theSDC. The studies team hopes to use thelearning from the secondment to providefurther consideration and challenge toincorporating sustainable development in thenational studies programme• The development of its own internalsustainability action plan, outlining how it willreduce its environmental footprint.Sustainable Development Commission Review of Public Service Regulators 27


The CAA regulators: joining-upWorking together is not something that theregulators have had to do much in the past, but thearea assessment will require shared judgementsby all six regulators involved in the CAA. To do thiseffectively, they will need not only to learn how tocome to agreement on the judgements made, butalso to coordinate the organisational assessmentsthey make individually, so that the evidence thatthey produce and share enables them to make wellroundedjudgements in the area assessment.Overall, we have found that progress onsustainable development within the CAA has beenpredominantly led by the Audit Commission. Asdiscussed above, we are pleased with the outcomeso far. However, there is little evidence that this isthe result of a concerted effort by all the regulatorsto develop a coordinated and complementaryapproach to sustainable development.There is no clear mechanism for coordinatingsustainable development activity across theregulators and ensuring that their approaches areconsistent. Other CAA regulators still have someway to go to develop their own thinking about howthey can contribute to a sustainable developmentapproach in the CAA. The danger is that this willlead to gaps in the judgements that are made in thearea assessments.As an example, if the Audit Commission gathersevidence on a local authority’s performance in cuttingcarbon emissions on its own estate, but there is noequivalent evidence from the CQC relating to healthand social care organisations in the same locality,there will only be a very patchy understanding ofthe area’s performance as a whole.Nevertheless, it is encouraging to learn that theCQC and Ofsted have now recruited, respectively, 42and 12 CAA lead equivalents. This will be a key factorin determining the success of the CAA, dependingon how effectively sustainable development isincluded in the training and delivery of these roles.“The CAA is already helping to focus work within the Council and Birmingham, our Local StrategicPartnership, on key sustainable development issues. Whilst Birmingham is a recognised leaderon sustainable development, the CAA is further developing the sustainability agenda in partsof the Council and the LSP that hadn’t previously been engaged. In particular the organisationalassessment’s use of natural resources Key Line of Enquiry (KLOE) has already helped make real the‘living within environmental limits’ objective of ‘Securing the Future’, the National Strategy forSustainability Development. We hope this will lead to greater local collaboration between assessedpublic sector organisations to improve performance and reduce costs.Delivering meaningful CAA judgements that lead to quality action will now be vital in thelong term sustainability of an area. In addition, knowledge of Sustainable Development amongstinspectorate staff and the ability of inspectorates to work closely together will be integral to ensuringthe CAA fulfils its potential.”Keith BuddenHead of Sustainability, Birmingham Strategic Partnership28 Review of Public Service Regulators Sustainable Development Commission


4.3 Key issues for the futureThere has been much progress in embeddingsustainable development within the AuditCommission and the CAA and our engagementwith the organisation has been very positive. Wehave established good links at all levels of theorganisation. This engagement has led to new waysof collaborative working between the SDC and theAudit Commission.As stated above, the real test will be thejudgements that are made under the CAA: the areaassessment and the organisational assessment. Howfar these take account of sustainable developmentwill depend on building the regulators’ organisationalcapacity and understanding of the relevant issues.In particular, the other CAA regulators will need todevelop their own capacity to make effective sharedjudgements on sustainable development in the areaassessment.Finally, it should be recognised that embeddingsustainable development into the CAA will meana new way of working for the Audit Commission,other regulators and regulated bodies. Effectiveleadership by CAA regulators and the sharing ofgood practice will help to make the CAA an effectivevehicle for driving improvement across the boardand achieving genuinely sustainable outcomes at alocal level.The SDC will be glad to continue its engagementwith the Audit Commission and the other CAAregulators in the future, to help ensure that thishappens.4.4 SDC’s recommendations to the Audit Commissionand the other CAA inspectoratesThe Audit Commission has made excellent strides forward in embedding sustainabledevelopment in its work through the CAA. The SDC believes that the following elements havebeen integral to this success and we therefore encourage the Audit Commission to continueits work in the following areas:• Central sustainable developmentteam: continue with the recruitment anddevelopment of a central team for sustainabledevelopment of sufficient size, capacity andinfluence. This should build on the knowledge,enthusiasm and skills of the current team toensure that momentum is not lost• Quality assurance: continue to ensure thatinternal quality assurance processes includestaff with sufficient sustainable developmentexpertise to be able to provide constructivechallenge to emerging judgements, forexample on the area assessment and Use ofResources judgement• Use of Resources judgement: ensure thatthe focus on sustainable development inthe Use of Resources judgement (includingelements such as the use natural resourcesand sustainable procurement) is applied on aregular basis beyond the current commitmentof 2009/10. We are pleased that the AuditCommission has confirmed to us that thesustainability element of the judgement willbe made more stretching over time• High-level leadership: continue with highlevelleadership from the Chair and seniormanagement to help keep sustainabledevelopment a key organisational priority.Sustainable Development Commission Review of Public Service Regulators 29


We recommend that the Audit Commission• In partnership with the CAA regulators,commissions the SDC to work with it toundertake a review of a sample of CAAfirst round judgements. The review wouldexamine the consistency and effectivenesswith which the underpinning principles ofsustainable development have been applied• Ensures that the roll out of basic (Level 1)training for sustainable development toall staff involved in the relevant audit andassessment work is completed byOctober 2009• Develops more in-depth sustainabledevelopment expertise for a sufficientnumber of staff across the organisation,so that appropriate expertise is alwaysavailable to help form effective judgements• Develops ways of sharing its approachto, and understanding of, sustainabledevelopment with:—— Organisations responsible for publicsector improvement, such as IDeA andthe Regional Improvement and EfficiencyPartnerships (RIEPs). This will help toensure that these bodies effectivelyincorporate and integrate sustainabledevelopment into their improvementprogrammes—— Organisations involved in developingand promoting the Local SustainableDevelopment Lens (full details in Annex1), including the SDC, IDeA, Departmentof Environment Food and Rural Affairs(Defra) and others, by sharing thelessons learned from using the Lens as ananalytical tool for the area assessment—— The bodies it inspects, pointing themtowards good practice and support forimprovement, recognising that the CAAwill be a collective learning process.We also make the following recommendations to the CAA regulators• Develop ways of ensuring that sustainabledevelopment training is consistent acrossthe CAA regulators and that experience andknowledge is shared as much as possible. Inparticular, it is important that:—— Ofsted ensures that sustainabledevelopment is incorporated into thetraining programme for its 12 CAA Leadequivalents—— Similarly, the CQC ensures sustainabledevelopment is incorporated into thetraining programme for its 42 CAA Leadequivalents• Ensure that the joint inspectorate qualityassurance arrangements 43 involve a balancedrange of experts and peers from economic,social and environmental backgrounds.Environmental interests are often underrepresentedon LSPs and it is important thatthe new quality assurance arrangements donot reflect or reinforce this imbalance• Ensure that sustainable developmentstakeholder interests are sufficientlyrepresented in the review and evaluation ofthe CAA. 44 In addition, invite the SDC to bepart of these arrangements to ensure thatthere is continued challenge and scrutiny onsustainable development• Work to identify practical ways to extend theCAA Use of Resources assessment to otherregulated organisations not already covered,to ensure they are not excluded from basicenvironmental performance assessment. Suchorganisations include:—— Organisations regulated by Ofsted such asschools and further education colleges—— All health and social care bodies that arenot covered by the CAA.30 Review of Public Service Regulators Sustainable Development Commission


We are pleased that the Audit Commission hasalready agreed to the following• To devise a cross-inspectorate mechanismto co-ordinate the approach to sustainabledevelopment within the CAA. A key task forthis mechanism should be to develop a jointunderstanding of sustainable developmentacross the CAA regulators and to help takeforward the recommendations outlined above.Local Governmentcase studyAudit CommissionTraining ProgrammeSustainable Development Commission Review of Public Service Regulators 31


Local GovernmentCase StudyAudit CommissionTraining ProgrammeIf sustainable development is to be consistently and effectively applied within CAAjudgements, it is critical that organisational capacity and understanding on the subject isbuilt up within the Audit Commission. The SDC supported the Audit Commission in developinga tailored training programme to bring the staff up to speed on sustainable development.This training programme focused on outlining the key principles of sustainable developmentand encouraging staff to apply these to their individual work areas.Current Situation• The Audit Commission has currently trainedapproximately 80% of its employees to Level1 in Sustainable Development. This includesall performance staff• Sustainable Development now also featuresin the induction process for all new staff.The Training Programme• The training programme has been builtupon a standard training pack which is thenadapted to the specific needs of each group• It highlights key messages about the AuditCommission’s approach to SD, includes keydefinitions and principles of SD and theirapplication within the context of the AuditCommission’s works• The training programme has been rolled outin key regions and staff in each region havebeen split into a number of smaller groups toadminister the training.32 Review of Public Service Regulators Sustainable Development Commission


Key Successes and Lessons Learned• It was certainly important that a standardisedcore training pack was used and adapted tothe specific needs of each group. However,what made the training a success wasthe significant amount of time spent inworkshops contextualising SD within theeveryday work of individuals. This was key totruly embeding the concept of SD within theAudit Commission’s work• The training programme was most successfulwhen administered in smaller, more localisedand therefore focused groups. Although thiswas more time consuming than using largergroup sizes, the individuals in smaller groupscould contextualise SD more successfullywithin their local area. This placed them ina better position to make the connectionsrequired to genuinely understand and applythe holistic nature of SD• It is felt that the importance of a rigoroustraining programme such as this will bedemonstrated by the judgements madewithin the CAA. For the judgements togenuinely have SD at their heart and to beeffective at delivering on the holistic natureof the CAA, they must be both outward facingand focused on outcomes. To deliver qualityjudgements, inspectors need to understandthe wider implications and relevance of thejudgements they make and appreciate howthey fit into local, regional and nationallevels. The rigorous and well targeted natureof the training programme was of criticalimportance in working towards this outcome.Sustainable Development Commission Review of Public Service Regulators 33


5Ofstedlearning by doing“Ofsted inspection is highly significant for schools andit is difficult to justify action that does not contribute insome way to an improved Ofsted rating. At present youhave to work really hard to see what Ofsted is trying toachieve with sustainable development, and inevitablythis holds back progress with sustainable schools.An explicit focus on sustainability would help usdrive school improvement, deliver Every Child Matters,and set the perfect direction for 21st century schools.This would be of huge value to education.”David DixonHead Teacher of Bowbridge Primary school in Newark


Sustainable development is underpinned by the concept of intergenerational justice.Educating children (and more broadly seeking improvements to all aspects of their wellbeing)is therefore central to delivering sustainable development. Indeed, in the face of challengessuch as climate change, obesity, poverty and technological change, we must ensure that theservices experienced by children prepare them for uncertain times ahead.Schools are particularly important places inwhich to achieve this. They are one of the fewexperiences shared by almost everybody growingup in the UK, and are therefore an appropriateplace to start people thinking about sustainabledevelopment. They can also exemplify goodpractice. In order for sustainable development to beembedded in the education system and in schools,the principles that support it must be central to theway we define school improvement, and hence tothe inspection process.Key messagesHaving engaged with Ofsted extensively, andhaving examined its role in challenging andimproving the performance of institutionswithin its remit, we have found that Ofsted canmake an important contribution to sustainabledevelopment in three main ways:• By making institutions aware of theirresponsibility to prepare children andyoung people for life in a sustainableworld• By identifying and disseminating toinstitutions practices that show howsustainable development can deliverenhanced outcomes for children andyoung people, often by adding anenvironmental context to existingpriorities• By encouraging institutions to take abroad view of their role in improving childwellbeing (rather than a narrower, moreservice-centred view of their contribution),principally by understanding the need ofchildren and young people to have qualityplaces in which to grow up.Furthermore, we have come to two primaryconclusions about how and where Ofsted is bestable to support these aims:• The first is in its regulation of theeducation sector. Ofsted has the potentialto change fundamentally the way thatsustainable development is understood- from something that is outside theeducation system, to something thatis absolutely central to it. It can do thisacross the full range of learning providersthat it regulates, so the way that successis defined, measured and judged in allthese institutions takes explicit account ofthe principles of sustainable development• The second is in its regulation ofservices for children, from childcare andchildren’s social care, to the inspectionof local authority children’s servicesand court advisory and support servicesfor children and families. Ofsted has anopportunity to encourage everybodywho works with children and youngpeople to recognise the importance ofsustainable development to children’shappiness, health and wider wellbeing,and to promote sustainable developmentas a means of tackling entrenchedproblems such as health and achievementinequalities. The quality of places wherechildren and young people grow up is asignificant factor in their wellbeing, withsuccessive surveys confirming that childrenwant to see improved access to greenspace, safer routes to visit their friendsand local amenities, and better designedroads and housing developments.36 Review of Public Service Regulators Sustainable Development Commission


5.1 Sustainable development challenges set by the SDCAt the start of the engagement stage, the SDChighlighted some initial challenges for Ofstedrelating to sustainable development. These providedthe focus for much of our engagement with theregulator:• All new inspection frameworks usesustainable development principles toprovide a balanced view of children andyoung people’s well-being across their social,economic and environmental needs• The value for money assessment in schools(and other inspected services) incorporatessustainable development principles (forexample through eco-efficiency, whole-lifecosting and sustainable procurement)• Inspectors are able to identify and supportprogress with sustainable developmentamong the institutions they visit, basedon a firm grasp of the reasons why it is anessential direction for public services• Ofsted conducts biennial national studies ofsustainability performance in schools (andultimately other inspected services), withquantitative results that draw on the DCSF’ss3 evaluation method (sustainable schoolself-evaluation) 45• Ofsted publishes a Sustainable DevelopmentAction Plan that covers both core business andinternal operations within its scope, and setsout the governance and delivery arrangementsnecessary to meet its objectives.5.2 Progress madeInspection frameworksDuring the course of the review, Ofsted has madesome significant commitments towards embeddingsustainable development within its inspectionframeworks. This was particularly notable withinOfsted’s Sustainable Development Action Plan,which was published in September 2008 andincluded the following commitments:• “Ensuring that our interpretation of thecommon evaluation schedule for differentsettings takes appropriate account ofsustainability, such as through the effectiveand efficient use of resources”• “Being explicit in our inspection guidanceabout the evaluation of sustainabledevelopment, in different settings”• “Promoting provider self evaluation/selfassessment that considers sustainabledevelopment issues”.Ofsted has since committed to embeddingsustainable development thinking within theinspection frameworks for each of its remit areasthrough the creation of a stimulus document(currently in draft) for use by specialist inspectorsinvolved in the design process of the frameworks.This is a move in the right direction, but the testwill be whether the new frameworks that emergefrom this process are explicit and visible about therole of sustainable development in performanceimprovement, and so can be expected to have anappreciable impact on the ground.Value for moneyAs set out in previous sections, the linkage betweenvalue for money and sustainable operations is amajor government priority, with the promise ofvery clear financial and environmental benefits.A reference to this linkage is included in Ofsted’sSustainable Development Action Plan and this wasfurther confirmed in correspondence with the chiefinspector, Christine Gilbert. Both are welcome, butwe are concerned that while Ofsted has clearlyunderstood the link in terms of its own corporateperformance, it has yet to confirm how this area willbe built into inspection.The importance of this link has been highlightedwithin the Audit Commission’s Use of Resourcesjudgement for 2008/09 which covers: the useof natural resources (energy, water, waste and soon); reducing the impact on the environment; andmanaging environmental risks. Disappointingly,however, this only applies at a whole-authority levelrather than at the level of individual institutionssuch as schools.With this in mind, the SDC is concernedSustainable Development Commission Review of Public Service Regulators 37


that, as of now, major sources of public sectorenvironmental impact will go unassessed – andpotentially unguided – by both Ofsted and the AuditCommission. While we understand that the work ofboth organisations is inevitably constrained by theresources they receive from government, the gapthat we have identified is especially worrying inview of the unique potential of schools and otherproviders of learning to set an example for children,young people and their families.There is notable energy and resource waste inpublic sector organisations. Whilst it is acknowledgedthat that there are significant barriers to progress interms of ownership, accountability, skills, budgetsand knowledge, 46 this nonetheless representsa large inefficiency in public spending. Morepractically for Ofsted, it also presents an opportunityto highlight good practice among better performinginstitutions in diverting budget from wastefulpractices to improving outcomes for children andyoung people.Inspectors’ ability to identifyand support progressAt the start of this review, the SDC expressedconcern that a lack of understanding of sustainabledevelopment among inspectors could compromisetheir ability to distinguish and recognise goodpractice, or challenge underperforming institutions.It was therefore reassuring that during the courseof this review Christine Gilbert committed Ofstedto ensuring that the “contribution that providersare to make to a sustainable future is recognisedby improving guidance so that our inspectorshave a deeper understanding of how sustainabledevelopment can raise standards and improve livesin the different settings we inspect and regulate”.The SDC understands that a considerable amountof work has now been undertaken by Ofsted to buildinspector confidence in the benefits of sustainabledevelopment through seminars, the development ofan e-learning tool and the identification of providergood practice. A range of additional actions tostrengthen understanding are being considered forthe next iteration of Ofsted’s 2009/10 SustainableDevelopment Action Plan. These include training forCAA leads and raising awareness about the DCSF’ss3 tool.Including sustainable developmentin the survey programmeOfsted has been active in exploring the relationshipbetween improvement and sustainable developmentin one remit area only: schools. The studies ofsustainable schools undertaken by Ofsted in 2003and 2008 were well received by the educationcommunity and welcomed by the SDC. However, thegovernment has still not met its 2005 commitmentto establish an effective means of evaluatingnational progress on sustainable development ineducation (a national indicator) as promised inSecuring the Future.With this in mind, we take the view that Ofsted,with appropriate support from the DCSF, shouldensure that England is in a position to understandits progress on sustainable schools within thetimeframe of the United Nations Decade of Educationfor Sustainable Development, 2005/14. Also, that itshould do this through a regular survey programmeusing the DCSF’s own evaluation tool for sustainableschools, s3.We believe that two areas are particularlyappropriate for survey work. One is value for moneyin the context of energy and resource efficiency,sustainable procurement and whole-life costing. Wewere encouraged to hear of the Audit Commission’sproposal to Ofsted that the two bodies should worktogether on this, and also to hear that specificassessments of value for money are being pilotedas part of Ofsted’s inspection work.The other is to explore in more depth the roleof institutions in championing the wellbeing of allchildren in their local areas, for example throughraising issues through children’s trusts, giving voiceto children’s needs, and engaging positively incommunity activities. Annex 2 contains a basketof indicators drawn from the National Indicator Setthat we have collated to guide this form of inquiry.Sustainable Development Action PlanWe were glad to see Ofsted publish this document,which sets out its commitments over the followingtwo years and represents genuine progress. Thatsaid, in future iterations we would like to seegreater emphasis on how Ofsted is embeddingsustainable development within its inspectionframeworks and core functions, ensuring that thisis linked to parallel developments in the CAA andthe work of other regulators.38 Review of Public Service Regulators Sustainable Development Commission


“Our new inspection frameworks take account of different dimensions of sustainability.For example, we focus our judgements on outcomes for children and learners using theEvery Child Matters headings - these include making a positive contribution and beinghealthy. We review how well leaders and managers use resources to support learningand deliver value for money. We also encourage providers to consider sustainabledevelopment in their self evaluations. It is, after all, vital to our core purpose of raisingstandards and improving lives.”Melanie HuntDirector, Learning and Skills, EAUC 13th Annual Conference, Warwick University, 31 March 20095.3 Key issues for the futureOur engagement with Ofsted has been positivethroughout this review, and we have beenencouraged by the quality of the dialogue. Whileconsiderable progress has been made, our overalljudgement is that Ofsted is really only just startingto use its influence on institutions to show howconsistent and effective uptake of sustainabledevelopment can improve outcomes for children.Take the example of schools. Ofsted’s ownanalysis in Schools and Sustainability: A climatefor change? highlights a lack of consistency andawareness about sustainable development inschools – both in relation to the impacts of theschool itself, and the opportunities to drive schoolimprovement. Ofsted now has a clear opportunityto support the government’s Sustainable Schoolsstrategy by signalling the importance of sustainabledevelopment to schools through every inspectionvisit. It is also important to extend this thinking toother remit areas.One of these areas is further education. Thegovernment has made it clear that it wants thissector to be a leading exponent of sustainabledevelopment through its management of resources,the learning opportunities it delivers and itsengagement with communities. Inspection can andshould play a powerful role in bringing good practiceto the attention of colleges and this opportunity isalready recognised by Ofsted.It is entirely appropriate to view sustainabledevelopment as a ‘non-negotiable’ in public servicedelivery. A similar transition has occurred withjudgements on equality and diversity, which are nowrequired in all Ofsted remits. An absolute minimumshould be for an institution to be integratingsustainable development into its business, whilegood and outstanding institutions should be placingit at the heart of their mission and ethos. Childrenwant this and deserve it.We are not suggesting that Ofsted ask theinstitutions within its scope to take ownership ofglobal sustainable development, or to singlehandedlytake on serious local challenges such as poverty,litter/vandalism, pollution, and lack of green spacefor children. However we would like Ofsted to workwith its institutions to make sure that they regardthemselves as champions for children and youngpeople’s needs in such areas. We would also like itto make sure they work with each other and withlocal partners to seek necessary improvements. Thisis an important cultural shift in which regulation canplay a vital role.Sustainable Development Commission Review of Public Service Regulators 39


5.4 SDC’s recommendations to OfstedOfsted has made some good strides forward in embedding sustainable development in its work.It has already accepted recommendations in the following areas• Agreement for the SDC to comment onthe proposed ‘Stimulus Document’ whichis designed to enable Ofsted teams toincorporate sustainable development withininspection frameworks for different remit areas• Build on its successful survey work inschools by carrying out its proposed studieson (a) capital investment in schools andcolleges and its impact on learning (ensuringsustainable development is included as acritical element of this); and (b) the inclusionof sustainable development practices acrossOfsted’s wider remit• Continue with implementing judgementson value for money within the new school’sinspection framework drawing on actionspresented to us by schools, for examplein the areas of energy efficiency, wasteminimisation and sustainable procurement.Proceed as previously indicated to monitorand review these judgements during the firstyear of the new inspection framework• Continuing with its recruitment of a head ofsustainable development• Agreeing to meet with the SDC on a regularbasis in 2009/10 to review progress withits Sustainable Development Action Plan,and considering future opportunities to usesustainable development as a guiding factorand direction of service improvement.We recommend that Ofsted• Monitor the impact of the stimulus documentas successive inspection frameworks aredeveloped or revised to ensure they harnesssustainable development for service usersin a way that goes beyond having a smallnumber of questions or prompts in selfevaluationforms• Work with the Audit Commission to seekto identify a practical way to apply the CAAUse of Resources assessment to schools and,where possible, other institutions (such asfurther education colleges) to ensure theyare not excluded from basic environmentalperformance assessment• Researches, internalises and advocates therole that institutions can play in promoting thewellbeing of all children in their local area,with a particular focus on the Children’s Planaim of improving the quality of places wherechildren, young people and families grow up(for example through the promotion of a childwellbeing indicator set as set out in Annex 2).40 Review of Public Service Regulators Sustainable Development Commission


Education case studyBirdham Church of EnglandPrimary School and the‘Engauge’ programme


Education case studyBirdham Church of EnglandPrimary School and the‘Engauge’ programmeSustainable development is an important priority for Birdham CE Primary School in West Sussex,underpinning its ethos and values. It has brought about a notable improvement to the qualityof provision for pupils, and contributes across the five Every Child Matters outcomes. Currentlyfive of the DCSF’s sustainable schools ‘doorways’ are of particular interest to the school:Energy and WaterInitiatives include an eco-friendly toilet cloakroomthat harnesses rain-harvesting, micro-generationand solar thermal heating, which the childrencommonly refer to this as “Going Green to Spenda Penny”, and a solar water system that heats thelearner swimming pool. Being able to access watermeters to monitor whole school consumption hasencouraged more responsible attitudes towardsnatural resource use and energy efficiency in theeveryday lives of the pupils.Food and drinkPupils are involved in ‘Grow it, Cook it and Eatit’ activities within the curriculum, with a highpercentage of lessons based outdoors. The healthyeating ‘five a day’ initiative is well supported bychildren and their parents, and has delivered realchanges in eating habits; feedback from parentssuggests the children are now amenable to eating awider range of fruit and vegetables.Local wellbeingThe children’s strong sense of responsibility towardseach other, and for the environment and wildlife, isreinforced by its work on sustainability. It does notsuffer from anti-social behaviour such as graffiti andvandalism, and the behaviour of the children hasbeen judged very good.42 Review of Public Service Regulators Sustainable Development Commission


Global dimensionThe children demonstrate their support for globalsustainability and international development bysponsoring a variety of charities, including ‘Oxfam’sSend a Cow‘ Africa-based initiative and others.Parents have told the school that attitudes andlife style choices at home have been influenced bycurriculum initiatives on Fair Trade and the use ofsustainable materials.Travel and trafficThe school serves a large rural community, andpoor public transport links mean that many parentswere bringing their children to school by car,leading to congestion and safety issues outsidethe school gate. As a result of measures introducedby the school (including a travel plan, free safetytabard scheme, new cycle storage facilities, andencouragement of car sharing), these problemshave been considerably reduced.Birdham CE School is at the top of a league setup by West Sussex County Council, which allowsschools to measure, monitor and comparetheir performance on sustainability themes.Participating schools are ‘audited’ by the WestSussex team through interviews with the headteacher and senior staff, before a measurementis generated. One hundred and thirty WestSussex schools have signed up to the schemesince it was launched in October 2008.Inspection has played a part in shapingthe school’s thinking about sustainabledevelopment. In the words of head teacher,Peter Johnson: “Some years ago I would nothave highlighted this work to Ofsted for fearthey would consider it a distraction from corebusiness. Now all that has changed. Firstly I amconfident that our work in this area has madea direct difference to my pupil’s achievement,behaviour and health, and I’m therefore proudto discuss it with inspectors. Secondly I amaware that Ofsted and the DCSF themselvesare increasingly keen to see schools pick upthis agenda, and hence will regard our effortshighly. Without doubt sustainable developmenthas helped our children to develop a greatersense of care towards each other, the naturalenvironment and the wider community ingeneral. That in itself speaks volumes of theimportance it plays in preparing children forthe future”.Sustainable Development Commission Review of Public Service Regulators 43


Healthcare Commission,Care Quality CommissionHealthcheck required?6“Sustainable development is such a fundamental issue forthe health of the population now and in the future, and theNHS must lead not follow. In order to achieve real change ithas to be built into the way we deliver services, and includedalongside other core issues in the regulatory framework.”Andrew CashChief ExecutiveSheffield Teaching Hospitals NHS Foundation Trust


This review took place during a period of transition for health sector regulation, with theCQC taking over the work of the Healthcare Commission (as well as that of the Commissionfor Social Care Inspection and the Mental Health Act Commission) from April 2009. We havetherefore engaged with both the Healthcare Commission and the CQC, as well as with DH,recognising their key role in setting some of the frameworks which influence the way theNHS is regulated. Monitor (the regulator for foundation trusts) has been outside the scope ofthis review. However, the SDC has consulted with it at key points.6.1 Sustainable development challenges set by the SDCThe original review goals as set by the SDC at the outset of this review were• The Healthcare Commission’s Annual HealthCheck 2008/09 to include:—— Voluntary application of the Use ofResources judgement for acute trusts a—— A study of how well sustainabledevelopment is being taken up inNHS trusts using the Good CorporateCitizenship model—— An element of Good Corporate Citizenshipmeasurement within the public healtharea of assessmentb• The CQC:—— To support future registrationrequirements, which are set by the DH,to include sustainable development—— Future compliance criteria set by CQC toinclude sustainable development—— To apply the sustainable developmentelements of the Use of Resourcesjudgement to all health and socialcare bodies—— To carry out a performance review,at the earliest opportunity and no laterthan 2010, of how well sustainabledevelopment is being taken up byNHS trusts• Recognising DH’s role, we have asked that:—— The CQC’s remit in the Health and SocialCare Bill 2007/08 includes a duty topromote sustainable development—— The DH Sustainable Development Strategycontains commitments to regulate forsustainable development in health andsocial care bodies—— The NHS Operating Framework’s VitalSigns includes environmental indicators.6.2 Progress madeThe Healthcare CommissionThe SDC was in contact with the HealthcareCommission from the inception of this review untilit was succeeded by the CQC in April 2009. Duringthis time there were numerous engagementswith the Healthcare Commission, leading to somepromising developments such as a SustainableDevelopment Roundtable in May 2008. However,it is not apparent to us that the regulator’s seniorleadership has been prepared to build on this inany meaningful way. The sole development wasthe commissioning of a report from the NHS SDU todefine potential carbon indicators for the NHS. Thisa) The Use of Resources element of the CAA process incorporates sustainable development, but within the health sector is only currentlyapplied to PCTs. See section 3.6 for further detail.b) Recommendations to the CQC relate to health and social care, although the frameworks shaping social care regulation have been lesscomprehensively considered, due to the initial focus of this review on the Healthcare Commission.46 Review of Public Service Regulators Sustainable Development Commission


• The CQC has significant ground to coverin order to match the progress onsustainable development made by otherpublic service regulators. There are usefullessons to be learned from Ofsted and theAudit Commission• The government has made it plainthat sustainable development is withinthe remit of the CQC. The CQC’s owndefinition of ‘high quality care’ and itsmission statement are consistent with theprinciples of sustainable development andindicate their relevance to its remit andfunctions. Unfortunately, the CQC doesnot believe that sustainable developmentis a key part of their remit and as suchhas failed to pursue the sustainabledevelopment agenda beyond the scale ofits own direct operations• DH’s decision not to include a duty topromote public health in the registrationrequirements for health and social carebodies represents a narrow interpretationof the core functions of the NHS anda missed opportunity to pursue thegovernment’s sustainable developmentobjectives• Although the DH Sustainable DevelopmentStrategy includes a commitment to“include sustainable development in theCQC’s performance assessment frameworkfor the NHS,” 47 the Action Plan to deliveron this strategy includes no meaningfulaction to deliver this• It is regrettable that DH includes thecarbon indicator as a low priority in tier3 of the NHS performance framework’s‘Vital Signs’, where trusts have the optionto use it or not, and where the CQC has noscrutiny role• The World Class CommissioningProgramme offers a substantialopportunity to promote sustainabledevelopment, but this is not currentlyreflected in its vision, competencies,assurance system, or support andKey messagesdevelopment framework. DH hasexpressed willingness to improve thisposition, and has made public referenceto this intention, as well as organisinga meeting with the SDC to discuss theopportunity• Sustainable development is anunderpinning principle of the CAA, andit is important for the health and socialcare sector to contribute fully to theprocess. The CQC has appointed 42 CAAleads, which is a positive development.However, it is not yet clear what trainingthese leads with be provided with toenable them to support the sustainabledevelopment elements of the CAA• Within the CAA organisationalassessment, the application of sustainabledevelopment principles is demonstratedwithin the Use of Resources judgement.However, this applies only to PCTs• DH and the NHS have made significantprogress on sustainable development(through the NHS SD Unit, the DHSustainable Development Strategy andthe NHS Carbon Reduction Strategy).However, without strong centralleadership from DH backed up byregulation by the CQC, there is a dangerthat this agenda will remain marginal tohealth-related policy and practice• It is important to clarify the respectiveresponsibilities of DH and the CQC inrelation to sustainable development,to avoid the danger of each looking tothe other to act and neither taking theinitiative• We are encouraged to hear that Monitoris consulting on requiring foundationtrusts to produce a sustainability reportas part of the overall public reportingprocess. The recognition by Monitor thatwell-governed organisations shouldconsider the sustainability of healthcaredelivery is welcomed.Sustainable Development Commission Review of Public Service Regulators 47


piece of work was, however, published just weeksbefore the organisation was dissolved, and the CQChave indicated that they feel it is beyond their remitto pursue this.From discussions between DH and the HealthcareCommission, it seems that the relationship betweenthe two bodies may have been another barrier tofurther action on sustainable development. TheHealthcare Commission indicated that some of itskey levers of influence (for example the criteria andstandards for assessment) were subject to directionfrom the Department. The Department, meanwhile,cited light-touch regulation and devolution ofresponsibilities as the rationale for not pushingthe sustainable development agenda in the healthsector’s performance framework.The Healthcare Commission’sAnnual Health CheckThe Annual Health Check formed the main mechanismfor the Healthcare Commission to assess whetherNHS organisations were meeting the government’sstandards and to encourage improvement byhighlighting excellence and tracking progress overtime. In March 2008, the SDC’s response to theHealthcare Commission’s consultation on the AnnualHealth Check 2008/09 set out the case for includingsustainable development.Disappointingly none of these recommendationswere taken on board, and in the SDC’s view the finalversion of the Annual Health Check, published onthe Healthcare Commission’s website in June 2008,was a missed opportunity. It seems impervious toevidence-based warnings that “climate changeis one of the greatest threats to our health andwellbeing”. This has left the CQC with a significantamount of ground to cover to match the progress ofthe other public service regulators.The CQC: role and remitThroughout 2008, the SDC sought to help thegovernment fulfil its own sustainable developmentstrategy, which states that it “would like to continueto apply sustainable development duties on newbodies as they are created, as appropriate to theirrole and remit…” 48The SDC’s Chair met with the Secretary ofState for Health early in 2008 to present the casefor sustainable development to be written intothe remit and operations of the CQC. The HealthSecretary indicated that he was keen to promotesustainable development in the health sector andthe meeting was followed up with written advicefrom the SDC to ministers and officials and meetingswith their DH counterparts on the subject.Despite initial positive signals from ministers,the government did not support a sustainabledevelopment duty for the CQC. This is disappointing.The most ministers were able to commit to was astatement by Baroness Thornton during the Lordsdebate on the Health and Social Care Bill (30April 2008). She said: “I take this opportunity toput on record our intention to require the CQC topublish information about the performance of NHSorganisations and others in this vital area, relatingto how individual organisations are contributing tosustainable development”. 49Her statement indicates that the governmentconsiders sustainable development to be within theremit of the CQC, and this view was reinforced bya meeting with the Secretary of State for Health inApril 2009.The CQC: registration requirementsThe registration requirements establish, throughlegislation, the essential requirements of safety andquality that health and adult social care providersare expected to meet in order to be registered andtherefore to be allowed to deliver services. They areindependently enforceable by the CQC.In its response to the government’s consultationin the summer of 2008 on a Framework for theregistration of health and adult social care providers,the SDC highlighted the opportunities that this offeredfor progressing the government’s commitment tosustainable development. Its recommendationsincluded a registration requirement that recognisedthe importance of the role of the NHS in promotinggood public health as well as treating illness.Public health is not included in the registrationrequirements. The response to the consultationstated that the important role for registration isensuring that providers protect the health andwellbeing of “individuals who use their services”,and a wider community of service users only inresponse to emergencies. We consider that thisoffers an extremely narrow interpretation of thecore function of the NHS.48 Review of Public Service Regulators Sustainable Development Commission


The government also rejected the case forsustainable development principles being part of theregistration requirements, responding that was notan appropriate mechanism. This represents a missedopportunity to promote sustainable development,and makes it more critical that it be comprehensivelyembedded in the rest of the regulatory framework,in order to satisfy the government commitment asset out above.The CQC: regulatory frameworkBeyond the registration requirements, health andsocial care regulation under the CQC consists ofthree main elements:• Reviews of health and social carecommissioning by PCTs and local authorityadult social services departments. Thisreview process is informed by the World ClassCommissioning Framework (discussed below• Periodic reviews of providers of health andsocial care services, such as hospitals, andmental health services. This review process isinformed by the ‘Vital Signs’ within the NHSOperating Framework (discussed below)• Special reviews and studies of aspectsof health and social care, separately andtogether.The CQC regulatory framework focuses primarilyon the quality of care, although will take forwardthe public health agenda in some ways, for exampleincluding monitoring of how commissioning andprovision of services contribute to prevention ofillness, reducing health inequalities and healthprotection. While this framework is in part constrainedby DH policies such as the ‘Vital Signs’ and theWorld Class Commissioning Framework, plenty ofopportunity remains for the CQC to take action toensure sustainable development is incorporated.In November 2008, the SDC’s lead Commissionersfor this review met with the Chair and Chief Executiveof the CQC to explore further opportunities to embedsustainable development in the new regulatoryframework for health and social care. The SDC feltthat the discussion was promising and held out thepossibility of a longer term consideration of thisrole, although no formal commitment was made. Afurther meeting with the Director of Regulation andStrategy in March 2009 also indicated some potentialfor progress. However, in a formal response receivedin July 2009 the CQC said that it does not believesustainable development to be a key part of theremit, and as such could not commit to deliveringany of the proposals, with the exception of ensuringthat the direct operations of the CQC were assustainable as possible. The CQC feel that it is notvalid to compare their performance on sustainabledevelopment with that of the Audit Commissionand Ofsted, because the CQC is ‘not the regulator ofall aspects of health and social care services’.In carrying out this review, the SDC have beensubject to some conflicting messages as regardsthe remit of the CQC. If the remit is as narrow asinterpreted by the CQC, then there is an unfortunategap in regulating for sustainable development. Werecognise the scale of the task of setting up the CQC,and the bringing together of diverse organisationsand responsibilities that it entails. However,sustainable development should be viewed asa vital cross-cutting theme, to be woven into theregulatory framework as it is developed, and not asan afterthought, bolted on at a later date. As withthe Audit Commission and the CAA, the CQC hasa real opportunity provided by the establishmentof a new regulatory framework to engage withsustainable development from the outset.DH: Sustainable Development StrategyIn October 2008, DH published a sustainabledevelopment strategy to underpin its decisionmakingon sustainable development in the future.This is a notable achievement and Taking the longterm view: the Department of Health’s strategyfor delivering sustainable development 2008/11sets out some fine ambitions for the Department’scontribution to sustainable development. Forexample, on page 6 it says: “We want to lead thisagenda by example. We want to make sure thatthe principles of sustainable development underpinour approach to leading the health and social caresystem, and to leading for government on publichealth and well-being”.The challenge is to ensure that the strategy gainstraction and directly influences the decisions andactivities of the Department so that it fully realisesits ambitions for sustainable development in healthand social care. In the context of this review, it isimportant that DH commitments are backed up withstrong action. A case in point is the Department’sSustainable Development Commission Review of Public Service Regulators 49


sustainable development within the programmeand the only explicit reference to sustainabledevelopment is used in a context meaning financialstability.The World Class Commissioning Programmerepresents an important opportunity for DH toinfluence the way in which the NHS is regulated,and unfortunately this too has been wasted so far. Itis disappointing within the current guidance to seethe term sustainable development misconstrued bythe very government that set out an authoritativedefinition in the UK Sustainable DevelopmentStrategy, Securing the Future. DH has expressed awillingness to consider a more robust reference tosustainable development during the current reviewof the World Class Commissioning competencies; andhave publicly expressed this intention in addition toorganising a meeting with the SDC to discuss theopportunity. We have yet to see what this will entailin practice, but are pleased to note these recentdevelopments.The Comprehensive Area AssessmentCurrently the Use of Resources element of the CAAprocess incorporates sustainable development byincluding assessment on sustainable procurement,and in other sections such as managing naturalresources. However, PCTs are currently the onlyhealth bodies to whom this Use of Resourcesjudgement will be applied. The SDC takes the viewthat it should be extended to all NHS organisations,and we are still seeking the opportunity to discusswith the CQC how this could be implemented . Weare also concerned that performance on the naturalresources KLOE will not be assessed each year.Another key element of the CAA is the areaassessment. This offers opportunities for the CQCbecause sustainable development will be integral tothe area assessment. Judgements on how sustainablean area is will be made using evidence from allthe CAA regulators, including the CQC. There is anopportunity, therefore, for the CQC to ensure that theevidence it submits helps to build a well-roundedpicture of performance on sustainable development.In particular, the CQC will need to ensure thatsufficient evidence is gathered to assess how thehealth sector is contributing to sustainability.The appointment of 42 CAA leads is a promisingdevelopment, but only if sustainable developmentis an integral part of their role. This opportunity isparticularly important if, as we have been led tobelieve, the CQC is unlikely to take any early stepsto incorporate sustainable development into itsown regulatory framework. The CQC has committedto working closely with the Audit Commission inthe future.“Good Corporate Citizenship is very important to us. As a major employer in the county, and asignificant user of energy, goods and services, we recognise the wider contribution which we canmake to Gloucestershire and over the years we have worked hard to reflect sustainable developmentprinciples in our activities. A key achievement was to establish “Route 99” – a collaborative venturewith a local bus company which offers a free staff shuttle bus between our two hospitals and a localPark and Ride site, and which also helps to reduce local congestion and reduce emissions. To reducetravelling for some of our cancer patients we have also introduced a new mobile chemotherapy unit,taking the service to them. Wherever possible we try to support local businesses - using seasonalproduce and purchasing 30% of our catering supplies locally. In our new buildings and refurbishmentschemes we take active steps to minimise the environmental impact, and the introduction of a newTrustwide waste segregation system enables us to dispose of our waste responsibly and to seizeopportunities for recycling. We hope very much to be able to continue to build on this work andformal recognition by the Care Quality Commission of the importance and relevance of this agendain the NHS would really help in maintaining momentum.”Dr Sally PearsonDirector of Clinical Strategy, Gloucestershire Hospitals NHS Foundation Trust.Sustainable Development Commission Review of Public Service Regulators 51


6.3 Key Issues for the futureDespite some early positive signs of progress onsustainable development in health and social careregulation, there has been a disappointing lack ofengagement by the CQC to date. After more than ayear of focussed efforts to engage on these issues,the SDC is concerned that neither the governmentnor the regulator is sufficiently pro-active in usingthe levers at their disposal to turn statements ofinterest and intent into meaningful action.The role of government is not to beunderestimated in ensuring that sustainabledevelopment is backed by regulation. However, inthe case of DH, many of the available levers havebeen poorly utilised. For example, the governmentdid not use the opportunity of legislation to fulfila commitment in its own sustainable developmentstrategy to include sustainable development dutiesfor new bodies.DH did not support the case for promoting thecarbon indicator in the Vital Signs from tier 3 to tier2. Instead, it left carbon as a locally-determinedindicator, thereby jeopardising the good leadershipintentions expressed in the NHS Carbon ReductionStrategy, Saving Carbon, Improving Health. It hasalso so far failed to incorporate meaningful referenceto sustainable development within the World ClassCommissioning Framework, another powerful lever.However, recent developments indicate a genuineintention to improve this position.While government has clearly expressed theintention to require the CQC to “publish informationabout the performance of NHS organisations andothers in this vital area relating to how individualorganisations are contributing to sustainabledevelopment” (see section 3.3), this has not, to ourknowledge, been formally communicated to theCQC. This points to a worrying disconnect betweenDH and the CQC. The CQC believe that much of thesustainable development agenda lies beyond itsremit, such that it cannot commit to delivering anyof the recommendations within this report. In spiteof precedents set by other public service regulatorssuch as Ofsted and Audit Commission, the CQC doesnot see this as relevant to its own remit.The contrast with local government regulation isstriking, and the CQC and DH have a long way to gobefore the health sector can be seen to “lead thisagenda by example”.6.4 SDC’s recommendations to the CQC and DHWe recommend that the CQC• Carries out a special review in 2010 of howfar and how well NHS trusts are promotingsustainable development• Seeks permission from DH to publish dataon the tier 3 Vital Signs indicator on energyefficiency and carbon emissions in theperiodic review, as an interim measure,hopefully anticipating its inclusion in tier 2from 2010• Implements the recommendations of theHealthcare Commission’s preliminary workon sustainable development carbon metricswith the NHS SDU, which sets out possibleindicators for the NHS based on current data• Works in partnership with the NHS SDU andthe SDC to develop a suite of sustainabledevelopment indicators for the healthsector, using existing national indicators anddeveloping new ones as necessary. Thesecould be used by the NHS for performancemanagement as well as by the CQC fora special review and for developing itsassessment framework over time. Theexercise could build on the HealthcareCommission’s preliminary work on carbonmetrics, and on the Good CorporateCitizenship assessment model. Care shouldalso be taken to ensure alignment with SDmetrics in other sectors, for example theLocal Sustainable Development Lens for localgovernment (see Annex 1)• Extends the sustainable developmentelements of the Use of Resources judgement,which currently applies to PCTs through theCAA, to all health and social care bodies• Takes into account any progress made inembedding sustainable development intothe World Class Commissioning framework52 Review of Public Service Regulators Sustainable Development Commission


and works to ensure that PCTs’ contributionto the CAA regarding commissioning andprocurement is fully aligned with the Use ofResources commissioning and procurementkey line of enquiry (KLOE 2.1) in terms ofthe emphasis on sustainable developmentoutcomes• Builds staff understanding of, and capacityto work, with sustainable development• Signs up to the NHS Carbon Reduction Strategy• Develops a Sustainable DevelopmentAction Plan• Allocates a board-level champion forsustainable developmentWe recommend that DH, in its contribution to the regulatory framework• Includes carbon indicators in tier 2 of theVital Signs in the Operating Framework2010/11. Initially, this would relate to directcarbon footprint, but it should be expandedto include the full carbon footprint asappropriate indicators are developed. Untilthis is done, the CQC will have no scrutiny role• Includes robust references to sustainabledevelopment in the World ClassCommissioning framework andaccompanying guidance• Includes public health in the registrationrequirements for regulated bodies, withcompliance criteria which refer to GoodCorporate Citizenship measures.Health case studyNottingham UniversityHospitals NHS TrustSustainable Development Commission Review of Public Service Regulators 53


Health Case StudyNottingham University Hospitals NHS TrustTwice winner of the Good Corporate Citizenship HSJ awards, 2007, 2008 and currentlyshortlisted for 2009, Nottinghams University Hospital NHS Trust (NUH) has been recognisedfor their holistic approach to sustainability and innovative initiatives. As one of the largestacute trusts in the country, and in an area of high social exclusion, NUH understands thepositive role it can play in the local community.TransportRecognising the multiple health benefits of activetravel, NUH launched Medilink, a free, direct busservice linking Nottingham’s two hospitals (Queen’sMedical Centre and Nottingham City Hospital) andincorporating all of Nottingham’s public transportservices. In addition to the health benefits of usingpublic transport (increased levels of active traveland mitigation of climate change), NUH is makingsavings by reducing the number of taxis used andhas cut staff car journeys by approximately 600,000every year. This initiative also encourages socialinclusion and helps with recruitment and retention.54 Review of Public Service Regulators Sustainable Development Commission


Food procurementNUH has integrated local/seasonal produce intothe hospital’s menu, thereby increasing nutritionalvalue, stimulating local economy and reducing foodmiles. This has been achieved by engaging withlocal and regional suppliers, 95% of NUH’s meat isnow sourced from local regional suppliers and allmilk, nearly 1000 pints a day, is supplied from afarm 11 miles away from the Trust.Community engagementUnable to find a sustainable partner, NUH set up itsown chain of Community Social Enterprise Cafés,“Coffee City”. By providing local employment andbusiness opportunities, NUH contributes to thehealth of its community, whilst providing Fair Tradecoffee and locally-sourced products.Sustainable Development Commission Review of Public Service Regulators 55


7Conclusions


Our findings for each of the sectors and our appraisal of regulation policy point to key issuesthat are common to all public service regulators under review:Leadership and consistent messagesThere is a critical role for central government indelivering the sustainable development agenda. Itmust act as an example for public sector regulators– both in the clarity of its commitments and inthe consistency of its messages about policy andpractice. These messages should be accurately andconsistently reflected within the policies of eachgovernment department and should underpinsector-specific guidance to the regulators.The government has set out its position onsustainable development in Securing the Future. Itis important that this is widely understood, so thatthe whole of the public sector and the general publicknow who is leading and taking responsibility forpromoting sustainable development and throughwhat mechanisms it will be delivered.Need for clarity over the role of regulatorsWithin their sectors, public service regulators playa critical role and can lend substantial weight toencouraging action and shaping attitudes andpriorities in favour of sustainable development.They can do this not only through their regulatoryfunctions, but also indirectly, through leadershipand influence.It is important therefore that public serviceregulators are given clear powers and duties inrespect of sustainable development, preferably intheir statutory powers and regulatory frameworksas well as in guidance. They should be providedboth with a clear direction of travel on sustainabledevelopment and with the necessary tools to drivechange.As we have noted, this would be consistent withthe government’s own sustainable developmentstrategy, Securing the Future. It states that thegovernment: “Would like to continue to applysustainable development duties on new bodies asthey are created, as appropriate to their role andremit…” 51Consistency in language and approachbetween regulatorsPrior to the move towards co-operation andjoint working required by the CAA, the publicsector regulators worked largely separately anddeveloped different and not always compatibleterminology and forms of measurement. Now,the CAA process requires them all to contribute tothe area assessment. Consistency in language andmethod will be important to ensure quality withinthe overall area judgements. For the longer term,working together to establish a shared approachacross all their assessments would help to integrateplanning and delivery of local services and toimprove outcomes for local people.Improved skills and understandingIt is critical that each regulator builds capacity,knowledge and skills to promote sustainabledevelopment across all its functions. Leadershipfrom the top is important, but of equal importanceare the individual assessors’ knowledge ofsustainable development and their ability to applyit comprehensively to their work. Assessors willneed sufficient depth of knowledge to enablethem to gather and process the qualitative aswell as quantitative information that will allowthem to capture the complexities of sustainabledevelopment.So far, the Audit Commission is the only regulatorunder review to have put in place a detailed trainingprogramme. Sustainable development is a complexand wide-ranging concept, which makes it achallenging one for assessors to interpret correctlyand apply within the regulatory framework. AuditCommission assessors are given an understandingof the five principles of sustainable development asa foundation; and are subsequently encouraged tospend a significant amount of time exploring theapplication of these to real world situations and inparticular their everyday work. A rigorous approachto training will be extremely important under the58 Review of Public Service Regulators Sustainable Development Commission


new CAA which seeks to form a well-rounded viewof each area under assessment.Expanding the skills and knowledge base withineach of the regulators will be no less important.This will enable them to plug existing gaps intheir assessments (for example by considering theenergy efficiency of schools) and also understandthe relationship between sector-specific issues andthe wider environment and community.7.1 Future assessment of impactThis report represents a snapshot of the status quo.The SDC welcomes the opportunity to work closelywith all three public service regulators in the future.All of them have undergone recent organisationalchanges. The Audit Commission, through the CAA,and Ofsted, through the Stimulus document, haveset out in new directions and the SDC welcomestheir invitations to be involved in their internalreview mechanisms. The SDC hopes to carry out afurther light-touch review of the progress made byeach regulator towards the end of 2010.Sustainable Development Commission Review of Public Service Regulators 59


Annex 1: Sustainable Development LensLocal Sustainable Development Lens (LSDL) is a voluntary basket of local indicators developedby the SDC and IDeA that can be used to guide and track area-wide progress towardssustainable development at the local level. The SDC proposes that the LSDL should act inthree main ways:A As an interactive tool for local authoritiesand their partners for tracking area-wideprogress on sustainable development at theLocal Area Agreement (LAA) area level.B As a tool for the Audit Commission and theother Comprehensive Area Assessment(CAA) inspectorates to frame and informtheir understanding of progress towardssustainable development at the local level.C As a means of providing the UK Governmentwith a better understanding of local progresson its ‘litmus test’ priorities for sustainabledevelopment. It could also be used by theGovernment Offices in future rounds of LAAdevelopment to prompt thinking about howLAA proposals contribute to the achievementof sustainable development. The governmenthas already agreed to adopt the Lens to tracklocal progress against Defra’s DepartmentalStrategic Objective on sustainabledevelopment.Key characteristics of the SD LensThe LSDL provides a foundation for tracking localarea progress towards sustainable development.SDC proposed that the LSDL should consist of up tothree layers, depending on its use:1. A ‘core’ set of 19 indicators from theGovernment’s National Indicator Set (NIS).These are the only indicators in the LSDL againstwhich local authorities’ performance, alone or inpartnership, can be reported to, or performancemanaged by, Central Government. Taken together,these can be used to measure progress at thelocal level against Defra’s Departmental StrategicObjective (DSO) on sustainable development.NI 17NI 198NI 2NI 4NI 3NI 186NI 188NI 191NI 197NI 158NI 187NI 199NI 175NI 167NI 172NI 152NI 116NI 119NI 163Perceptions of anti-social behaviour% of children walking or cycling to school% of people who feel that they belong to their neighbourhood% of people who feel that they can influence decisions in their localityCivic participation in the local areaPer capita CO2 emissions in the LA areaAdapting to climate changeResidual household waste per headImproved local biodiversity – active management of local sites% of decent council homesTackling fuel povertyChildren and young people’s satisfaction with parks and play areasAccess to services and facilities by public transport, walking and cyclingCongestion - average journey time per mile during the morning peakVAT registered businesses in the area showing growthWorking age people on out of work benefitsProportion of children in povertySelf-reported measure of people’s overall health and wellbeingWorking age population qualified to at least Level 2 or higher60 Review of Public Service Regulators Sustainable Development Commission


2. Three ‘additionally recommended’ voluntaryindicators that the SDC believes should also formpart of a holistic baseline assessment of sustainabledevelopment at the local area level. Taken togetherwith the ‘core’ set, these form a small numberof key environmental, social and economicindicators, based on the Government’s definitionof a sustainable community which could be usedto provide a more rounded picture of local progresson sustainable development. Unlike the ‘core’ set,these are voluntary indicators and, as such, can onlybe determined and performance-managed locally,for example through the Sustainable CommunityStrategy or as additional local LAA indicators. Weare recommending that these are used as part ofany tool for local authorities and their partners,and by the CAA inspectorates to provide contextualinformation on local progress towards sustainabledevelopment.3. A ‘supplementary database’ of indicators,which could provide users with the flexibility tobuild on the foundation of the core and additionallyrecommended sets. These could be used to form amore locally-relevant, flexible and innovative LSDL.This is yet to be developed and so we recommendedthat this idea is explored as the LSDL is developedfurther by the different user groups, particularly bythe IDeA and the CAA inspectorates.Sustainable Development Commission Review of Public Service Regulators 61


Annex 2 Child Wellbeing IndicatorsChild wellbeing indicators(selected from the national indicator set)The DCSF’s Children’s Trusts: Statutory guidanceon inter-agency cooperation to improve wellbeingof children, young people and their families,(2008) outlines local responsibilities to ensurethe needs of children and families are reflectedin local priorities. It advocates that Children’sTrusts champion child safety in the wider LocalStrategic Partnership, including wider issues suchas, preventing accidents, traffic calming, access togreen spaces and providing opportunities for safeoutdoor play. Similarly, the Children and YoungPeoples Plan (CYPP) Guidance (2009) advises thatthere is a real need to embed sustainability thinkingin leadership and management across children’sservices. The guidance advises that CYPP’s havean important role in consulting on and addressingchildren’s concerns about their local areas as wellas preventing accidents, introducing traffic calmingmeasures and providing opportunities for safeoutdoor play. CYPP priorities should not just drivethe work of the Children’s Trust but flow into widerplanning activity to address local health, social andincome inequalities.There is strong evidence that road traffic, lackof green space, noise and air pollution have adetrimental effect on child health and wellbeing.The indicators below (that SDC has selected fromthe National Indicator Set) can help to judge howwell a place is responding to these challenges, andhence how positive it is for children. Whilst LocalStrategic Partnerships have agreed their Local AreaAgreements with government for 2008-2011, theycan agree local level indicators at any stage.NI 1 % of people who believe people from different backgrounds get onwell together in their local areaNI 2 % of people who feel that they belong to their neighbourhoodNI 3 Civic participation in the local areaNI 4 % of people who feel they can influence decisions in their localityNI 17 Perceptions of anti-social behaviourNI 48 Children killed or seriously injured in road traffic accidentsNI 110 Young people’s participation in positive activitiesNI 50 Emotional health of childrenNI 56 Obesity among primary school age children in Year 6NI 167 Congestion - average journey time per mile during the morning peakNI 69 Children who have experienced bullyingNI 116 % of children in povertyNI 175 Access to services and facilities by public transport, walking and cyclingNI 187 Tackling fuel poverty - % of people receiving income benefits living inhomes with a low energy efficiency ratingNI 194 Air quality - % reduction in NOx and primary PM10 emissionsNI 197 Improved local biodiversity – active management of local sitesNI 198 % of children walking or cycling to schoolNI 199 Children and young people’s satisfaction with parks and play areasOfsted could draw on this area-level informationwhen assessing institutions, both as a factor inassessing current performance, and as a pointer towhere institutions should cooperate and influencelocal partners to achieve improved outcomes forchildren, young people and families. This informationcould be annexed to Ofsted inspection reports; inthe case of schools, it could be included within theSchool Report Card.We believe that all institutions workingtowards the outcomes of Every Child Mattersshould recognise the essential links to ‘place’ and62 Review of Public Service Regulators Sustainable Development Commission


champion improvement in a much more deliberateand challenging fashion on behalf of children,young people and their families – and as a startingpoint make sure they are doing everything withintheir own power to lead by example. In remit areaswith established self-evaluation procedures, suchas schools, the self evaluation form (SEF) is anappropriate place for Ofsted to assess such efforts.That said, the current SEF does not give sufficientfocus on ‘place’ and this should be addressed aspart of a wider drive to improve the wellbeing of allchildren in a locality.Similarly, where institutions have an interestor responsibility to assess the perceptions of theirusers about the quality of services offered, or otherfactors affecting the well-being of users, we believethat questions should be asked about the quality oflocal places – taking their environmental, social andeconomic characteristics into account – rather thanpurely the quality of specific services offered by theinstitution.Sustainable Development Commission Review of Public Service Regulators 63


Annex 3Expert Advisory Group and Government Reference Group membershipExpert Advisory GroupJohn BenningtonMartin WheatleyRay MorganKeith BuddenTed CantleRich HurstSusan Falch-LoveseyLaura McFarlaneDavid PencheonSue RichardsJohn RhymerNeil McKayKate HinksLois JonesJim TaylorWarwick Business SchoolLocal Government AssociationWoking Borough CouncilBirmingham City CouncilIDeAThe EWE CentreNorfolk County CouncilLambeth CouncilNHS Sustainable Development UnitNational School of GovernmentBishops Wood CentreNHS East of EnglandCalderdale and Huddersfield NHS Foundation TrustTameside Metropolitan Borough CouncilTameside Metropolitan Borough CouncilGovernment Reference GroupAndrew SargentAndrew SpencerClaire BrialeyVanessa TillingMary NewmanDavid KnightRob SmithRichard EllsworhDCSFDCSFCLGGoEastDHDHDHDefra64 Review of Public Service Regulators Sustainable Development Commission


Endnotes1 HM Government (March 2005) Securing theFuture: delivering UK sustainable developmentstrategy. www.sustainable-development.gov.uk/publications/pdf/strategy/SecFut_complete.pdf2 HM Government (March 2005) Securing theFuture: delivering UK sustainable developmentstrategy. www.sustainable-development.gov.uk/publications/pdf/strategy/SecFut_complete.pdf3 Office of National Statistics (December2006), Labour Market Trends, ‘Public SectorEmployment 2006’. www.statistics.gov.uk/articles/nojournal/PSE_2006.pdf4 Her Majesty’s Treasury (April 2007), PublicExpenditure: Statistical analysis 2007. www.hm-treasury.gov.uk/media/E/B/pesa07_complete.pdf5 SDC (2004) Healthy Futures: food andsustainable development. www.sdcommission.org.uk/publications.php?id=716 Sustainable Development Commission (April2006) Schools Carbon Footprinting. www.sdcommission.org.uk/publications/downloads/SDC_Carbon_Footprint_report_to_DfES.pdf7 Waste Watch (2005) Resource Management inthe Education Sector.8 www.lga.gov.uk/9 Sir Nicholas Stern (October 2006) Stern Review:the economics of climate change. www.hm-treasury.gov.uk/Independent_Reviews/stern_review_economics_climate_change/sternreview_index.cfm10 Communities and Local Government(July 2007) Eco-towns Prospectus. www.communities.gov.uk/publications/housing/ecotownsprospectus11 Communities and Local Government(December 2006) Code for Sustainable Homes:A step-change in sustainable home buildingpractice. www.planningportal.gov.uk/england/professionals/en/1115314116927.html12 Communities and Local Government(December 2007) Planning PolicyStatement: Planning and climate change.www.communities.gov.uk/publications/planningandbuilding/ppsclimatechange13 Sustainable Communities Act 2007. www.opsi.gov.uk/acts/acts2007/pdf/ukpga_20070023_en.pdf14 Communities and Local Government (October2007) The New Performance Frameworkfor Local Authorities and Local AuthorityPartnerships: Single set of national indicators.www.communities.gov.uk/publications/localgovernment/nationalindicator15 Sustainable Procurement Task Force (2006)Procuring the Future. Sustainable ProcurementNational Action Plan: Recommendationsfrom the sustainable procurement TaskForce. www.sustainable-development.gov.uk/publications/procurement-action-plan/documents/full-document.pdf16 Department for Environment, Food andRural Affairs (2007) UK GovernmentSustainable Procurement Action Plan:Incorporating the Government Responseto the report of the SustainableProcurement Task Force. www.sustainabledevelopment.gov.uk/publications/pdf/SustainableProcurementActionPlan.pdf17 Centre of Excellence North East, Improvementand Development Agency and the LocalGovernment Association (November 2007)Local Government Procurement Strategy.www.lga.gov.uk/Documents/Publication/sustainableprocurement.pdf18 www.pasa.nhs.uk/PASAWeb/NHSprocurement/SustainabledevelopmentPolicyStrategyandActionPlan20069.htm19 NHS PASA and Department of Health(November 2007) Procuring for Healthand Sustainability 2012: Sustainableprocurement action plan. Availableat www.pasa.nhs.uk/PASAWeb/NHSprocurement/Sustainabledevelopment/PolicyStrategyandActionPlan20069.htm20 www.dh.gov.uk/en/Aboutus/HowDHworks/Servicestandardsandcommitments/Sustainabledevelopment/DH_410587521 Communities and Local Government (October2006) Strong and Prosperous Communities– The Local Government White Paper.www.communities.gov.uk/publications/localgovernment/strongprosperousSustainable Development Commission Review of Public Service Regulators 65


22 Communities and Local Government(November 2007) Creating Strong, Safe andProsperous Communities Statutory Guidance:Draft for Consultation. www.communities.gov.uk/publications/localgovernment/statutoryguidance23 www.teachernet.gov.uk/sustainableschools/index.cfm24 www.audit-commission.gov.uk/aboutus/25 www.ofsted.gov.uk/Ofsted-home/About-us26 www.cqc.org.uk/pdf/CQC%20manifesto%20November%202008.pdf27 www.audit-commission.gov.uk/caa/guidance/index.htm28 Making it simple, 2008 annual review of theBetter Regulation Executive (p4) www.berr.gov.uk/files/file49780.pdf29 Risk, Responsibility and Regulation – whoserisk is it anyway? (October 2006) BetterRegulation Commission archive.cabinetoffice.gov.uk/brc/upload/assets/www.brc.gov.uk/risk_res_reg.pdf30 archive.cabinetoffice.gov.uk/brc/publications/principlesentry.html31 Ayres, I. and Braithwaite, J. (1992) ResponsiveRegulation Oxford: Oxford UniversityPress; Baldwin, R. and Cave, M. (1999)Understanding Regulation: Theory, Strategyand Practice Oxford: Oxford University Press,chapter 10; Ogus, A. (1995) ‘Re-thinking selfregulation’in Oxford Journal of Legal Studies15, 1:97-108: Scholz, J.T. (1991) ‘RegulatoryEnforcement and the Politics of AdministrativeEffectiveness’ in American Political ScienceReview 85, 1: 115-136.32 Hood, C., Scott, C., James, O., Jones, G.W.and Travers, T. (1999) Regulation InsideGovernment: Waste-Watchers, Quality Policeand Sleaze-busters Oxford, Oxford UniversityPress; James, O. (2000) ‘Regulation insidegovernment’ in Public Administration 78,2: 327-343.33 Baldwin, R. and Cave, M. (1999)Understanding Regulation: Theory, Strategyand Practice Oxford: Oxford University Press,ch 6; Rothstein, H., Irving, P., Walden, T., andYearsley, R. (2006) ‘The risks of risk-basedregulation: insights from the environmentalpolicy domain’ in Environment International32, 8: 1057.34 Brown Weiss, E. (1984) The Planetary Trust:Conservation and Intergenerational EquityEcology Law Quarterly. Brown Weiss, E.(1989) In Fairness to Future Generations:International Law, Common Patrimony andIntergenerational Equity.35 Sunstein, C. (2006) Irreversible andcatastrophic’ in Cornell Law Review91: 841-898.36 www.sd-commission.org.uk/pages/watchdog.html37 www.sd-commission.org.uk/pages/watchdog.html38 HM Government, Creating Strong, Safe andProsperous Communities: Statutory Guidance,July 2008. p1539 Audit Commission et al. Comprehensive AreaAssessment: Guidance for inspectorate staff,April 2009, p1540 Audit Commission et al, ComprehensiveArea Assessment Trials Evaluation,February 2009 p1041 Audit Commission, Use of resourcesframework: overall approach and key lines ofenquiry, May 2008 (updated 2009), p1342 Audit Commission, Reducing CO2 emissionsfrom domestic energy use flyer, www.auditcommission.gov.uk/SiteCollectionDocuments/Downloads/co2emissionsflyer.pdf .43 Audit Commission, CAA Framework,April 2009 p45. www.audit-commission.gov.uk/SiteCollectionDocuments/MethodologyAndTools/Guidance/caaframework10feb09REP.pdf,44 Audit Commission, CAA Framework,April 2009 p65. www.audit-commission.gov.uk/SiteCollectionDocuments/MethodologyAndTools/Guidance/caaframework10feb09REP.pdf45 www.teachernet.gov.uk/sustainableschools46 Sustainable Development Commission (April2009) The Big Energy Shift -Public SectorUptake of Low Carbon and Renewable EnergyTechnologies, Stakeholder Engagement. www.sd-commission.org.uk/pages/watchdog.html47 www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_08904966 Review of Public Service Regulators Sustainable Development Commission


48 HM Government (March 2005) Securing theFuture: delivering UK sustainable developmentstrategy. Chapter 7, section 2, pp 156-7. www.sustainable-development.gov.uk/publications/pdf/strategy/SecFut_complete.pdf49 Lords Hansard text for 30 April 2008. Foundat: www.publications.parliament.uk/pa/ld200708/ldhansrd/text/80430-gc0004.htm50 www.sd-commission.org.uk/publications.php?id=81651 HM Government (March 2005) Securing theFuture: delivering UK sustainable developmentstrategy Chapter 7, section 2, pp 156-7. www.sustainable-development.gov.uk/publications/pdf/strategy/SecFut_complete.pdf,Sustainable Development Commission Review of Public Service Regulators 67


GlossaryAcute trustsHospitals are managed by acute trusts, which makesure that hospitals provide high-quality healthcare,and that they spend their money efficiently. Theyalso decide on a strategy for how the hospital willdevelop, so that services improve.Building Schools for the Future (BSF)programmeBuilding Schools for the Future is a programme forinvesting in school buildings. It aims is to rebuild orrenew nearly every secondary school in England.Comprehensive Area Assessment (CAA)Comprehensive Area Assessment is a way ofassessing local public services in England. Whilst ledby the Audit Commission, it is a joint assessmentcarried out by the CAA Inspectorates (see CAAinspectorates) that examines how well councils areworking together with other public bodies to meetthe needs of the people they serve. It is intendedto provide an annual snapshot of quality of life inthe area.CAA InspectoratesThose organisations working together under theCAA process: Audit Commission, Care QualityCommission, Ofsted, Her Majesty’s Inspectorate ofConstabulary, Her Majesty’s Inspectorate of Prisons,Her Majesty’s Inspectorate of Probation.CAA RegulatorsSee ‘CAA Inspectorates’.Cap and trade schemeIt is a scheme whereby the CO2 emissions of thoseparticipating in the scheme are limited and canthen be traded using purchased or granted carboncredits.Carbon Reduction Commitment (CRC)The Carbon Reduction Commitment is a climatechange related energy saving scheme for the UK.It aims to encourage improvements in energyefficiency which can save organisations moneyand is also a central part of the UK’s strategy forcontrolling carbon dioxide (CO2) emissions. Thescheme will start in April 2010.Climate Change ActThe UK’s Climate Change Act is the world’s first longterm legally binding framework to mitigate againstand adapt to the dangers of climate change. TheClimate Change Bill was introduced into Parliamenton 14 November 2007 and became law on 26thNovember 2008.Climate Change AgreementsClimate Change Agreements are negotiatedagreements between energy-intensive industry andgovernment for CO2 reduction targets. In return,companies meeting these targets receive an 80%discount from the Climate Change Levy. They coverten major energy intensive sectors (aluminium,cement, ceramics, chemicals, food & drink, foundries,glass, non-ferrous metals, paper, and steel) and overthirty smaller sectors with agreements to-date.Code for Sustainable HomesThe Code measures the sustainability of a new homeagainst categories of sustainable design, rating the‘whole home’ as a complete package. The Codeuses a 1 to 6 star rating system to communicate theoverall sustainability performance of a new homeand sets minimum standards for energy and wateruse at each level. It replaced the EcoHomes schemeand a mandatory rating against the Code wasimplemented for new homes from 1 May 2008.Common Evaluation Schedule (CES)The common evaluation schedule for schoolsis currently under development by Ofsted andaims to change aspects of the existing CommonInspection Framework and become operationalfrom September 2009.EU Emissions Trading Scheme (EU ETS)The EU Emissions Trading Scheme is one of the keypolicies introduced by the European Union to helpmeet the EU’s greenhouse gas emissions reductiontarget of 8% below 1990 levels under the KyotoProtocol. It sets an overall ‘cap’ on the total amountof emissions allowed from all the installationscovered by the scheme. This is converted toallowances - 1 allowance equals 1 tonne CO2. Theallowances are then distributed by Member Statesto installations participating in the scheme.68 Review of Public Service Regulators Sustainable Development Commission


Foundation trustFoundation trusts are a new type of NHS hospitalrun by local managers, staff and members of thepublic, which are tailored to the needs of the localpopulation. Foundation trusts have been givenmuch more financial and operational freedom thanother NHS trusts and have come to represent thegovernment’s commitment to de-centralising thecontrol of public services. These trusts remain withinthe NHS and its performance inspection system.Good Corporate Citizenship (GCC)The Good Corporate Citizenship model describeshow NHS organisations can embrace sustainabledevelopment and tackle health inequalities throughtheir day-to-day activities. It focuses on using NHSorganisations’ corporate powers and resources inways that benefit rather than damage the social,economic and environmental conditions in whichwe live.Improvement and Development Agency (IDeA)The IDeA supports improvement and innovationin local government and focuses on issues thatare important to councils. It works with councils todevelop and share good practice and supports themin partnerships.National Indicator Set (NIS)The Single Set of 198 National Indicators (the Nationalindicator set) was announced by CLG in October2007, following the government’s ComprehensiveSpending Review 2007.It came into effect on 1 April 2008, and representsthe only set of indicators which central governmentwill use to performance manage local government.It covers services delivered by local authoritiesalone and in partnership with other organisationslike health services and the police.Key Lines of Enquiry (KLOEs)Key lines of enquiry represent sets of questionsand statements in the CAA outlined by the AuditCommission around service or judgement specificissues. These provide consistent criteria for assessingand measuring the effectiveness and efficiency ofhousing services.Local Area Agreements (LAAs)Local Area Agreements set out the priorities for alocal area agreed between central government anda local area (the local authority and Local StrategicPartnership (see below)) and other key partners atthe local level. LAAs are also aimed at devolvingdecision making from central government to localauthorities.Local Authority Research Council Initiative(LARCI)The Local Authority Research Council Initiative sitsbetween local authorities and Research Councilsand assists local authorities in responding to therequirement for evidence-based policy making.Through its role, LARCI brings local authorities andResearch Councils into closer partnership, leading tobetter informed research, policy and practice, andfacilitating knowledge exchange at a strategic andoperational level.Local Strategic Partnership (LSP)A Local Strategic Partnership is a partnership thatbrings together organisations from public, private,community and voluntary sectors in a local authorityarea. The key objective of the LSP is to improve thequality of life in that area.NHS Carbon Reduction StrategyThe NHS Carbon Reduction Strategy for Englandrepresents the NHS’s contribution to a move towardsa low carbon society. The strategy shows the scale ofreduction in carbon required for the NHS to progresstowards the Climate Change Act requirements andrecommends key actions for the NHS to become aleading sustainable and low carbon organisation.NHS operating frameworkThe operating framework sets out a brief overviewof the priorities for the NHS in the year to come. Itincludes the ‘Vital Signs’ which is a list of indicatorsagainst which performance management is carriedout. See section on page 24 for more detail.Primary Care Trust (PCT)An NHS primary care trust provides some primaryand community services or commissions them fromother providers, and is involved in commissioningsecondary care. PCTs are now at the centre of theNHS and control 80% of the NHS budget. PCTswork with local authorities and other agencies thatprovide health and social care locally.Sustainable Development Commission Review of Public Service Regulators 69


Regional Improvement and EfficiencyPartnerships (RIEPs)Regional Improvement and Efficiency Partnershipsare partnerships of councils and other localservices that work together to deliver services andachieve greater efficiency. The priorities and workprogrammes of each RIEP are based on and reflectthe needs and challenges of authorities in the regionor sub-region.Strategic Health Authority (SHA)Strategic Health Authorities manage the local NHSon behalf of the Secretary of State. There are 10across England.Stern ReportIn October 2006, the Stern Review on the Economicsof Climate Change provided a report to the PrimeMinister and Chancellor assessing the nature of theeconomic challenges of climate change and howthey can be met, both in the UK and globally. It wasled by Lord Stern, the then Head of the GovernmentEconomic Service and former World Bank ChiefEconomist.Sustainable Communities Act 2007The Sustainable Communities Act received RoyalAssent on 23 October 2007. The aim of the Act is topromote the sustainability of local communities. Itis a means by which local authorities can ask centralgovernment to take action which they believe wouldbetter enable them to improve the economic, socialor environmental well-being of their area.Sustainable Community StrategyA sustainable community strategy is prepared bylocal strategic partnerships as a set of goals andactions which they wish to promote in the interestsof a local area.Sustainable Schools National FrameworkThe National Framework outlines eight ‘doorways’that schools can utilise to initiate or extend theirsustainable school activity. It focuses on ways inwhich sustainable development can be embeddedinto whole school management practices andprovides practical guidance to help schools operatemore sustainably.Sustainable Development Action Plans (SDAPs)‘Securing the Future’ (http://www.defra.gov.uk/sustainable/government/publications/ukstrategy/)requires all government departmentsand their Executive Agencies to produce SustainableDevelopment Action Plans (SDAPs) and reportprogress on them annually. These plans set out thecontribution of each organisation to the delivery ofthe government’s commitments and goals as set outin ‘Securing the Future’. The SDC provides guidanceon the content of SDAPs, undertakes assessmentsof them and monitors the annual SDAP progressreports.UN Decade of Education for SustainableDevelopmentThe United Nations Decade of Education forSustainable Development (2005-2014, DESD) is ledby UNESCO and aims to integrate the principles,values, and practices of sustainable developmentinto all aspects of education and learning.Use of Resources (UOR) judgementUse of Resources is an Audit Commission assessmentunder the CAA of how well organisations aremanaging and using their resources to deliver valuefor money and better and sustainable outcomes forlocal people.Vital SignsSee ‘NHS Operating Framework’.World Class Commissioning (WCC) programmeWorld Class Commissioning aims to deliver a morestrategic and long-term approach to commissioninghealth and care services, with a clear focus ondelivering improved health outcomes. It comprisesfour key elements; a vision for world classcommissioning, a set of world class commissioningcompetencies, an assurance system and a supportand development framework.70 Review of Public Service Regulators Sustainable Development Commission


Published by the Sustainable Development Commision © August 2009This report is the outcome of a review chaired by Tess Gill – Commissioner for work and skillswith Anna Coote – Commissioner for health.Report prepared by Jaime Blakeley-Glover, Jake Reynolds, Maria Arnoldand Susannah Senior – SDC Secretariat.With special thanks to Commissioners Ann Finlayson, Alice Owenand previous chair of the Commission, Jonathon Porritt;secretariat members Minas Jacob, Jennifer Crees, Kay West, Rhian Thomas, Mariam Saleemi,Jayne Ashley, Andrew Lee, Denny Gray, Sara Eppel and Tamar Bourne;from Exeter University Claire Dunlop and Oliver James.Art Direction and Design – Awake ImagingPhotography © Jerome Dutton – Cover and pages, 11, 19, 34, 54, 55© DH, Crown Copyright, 2008 – page 43© Sussex Image Library - West Sussex County Council (WSCC) – pages 40, 41, 56© Family Housing Association – pages 23, 32, 33

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