The Crerar Review: the report of the independent review of regulation, audit, inspection and complaints handling of public services in Scotland

03 ROLE, PURPOSE, BENEFICIARIES AND PRINCIPLES OF EXTERNAL SCRUTINY

Role and purpose

3.1 We sought to clarify the role and purpose of external scrutiny, as an important starting point in developing a framework for external scrutiny. Stakeholders had a variety of perceptions about the role and purpose of external scrutiny:

• To give or provide assurance to a range of stakeholders including users, funders and taxpayers;
• To encourage and support, or be a catalyst for, improvement;
• To assess and ensure safety;
• To promote the economic, efficient and effective use of resources;
• To report to stakeholders (including the public) on performance, including financial performance and statutory requirements, in a fair and independent way;
• To contribute to the development and publication of standards;
• To support, assist and challenge organisations being scrutinised;
• To provide advice to Ministers;
• To investigate complaints and assess complaints-handling;
• To promote and contribute to sustainable improvements in standards, quality and achievements;
• To improve quality.

3.2 We argue throughout this report that external scrutiny is part of a wider framework of performance management and reporting for public services. The unique role that scrutiny plays within this framework, which is not performed by any other player, is to provide an independent assurance that public money is being used properly and that services are well-managed, safe and fit for purpose. It does this function by assessing both compliance with regulations and standards, and performance against targets.

3.3 Most scrutiny bodies argue that they also have a role in helping services to improve. We argue that the primary responsibility for improving services lies with the organisations that provide them, but recognise that external scrutiny can play a part in improvement where it influences the behaviour and culture of providers, leading to improvements in the way that services are delivered.
Beneficiaries

3.4 External scrutiny has a range of stakeholders that benefit from the assurance it provides and make use of the information in scrutiny reports:

• The public is the ultimate beneficiary of all scrutiny and should be able to take assurance that public money is being used properly and that services are well provided;
• Ministers require assurance on performance and information on the scope for improvements. They use scrutiny to account to the public that the services they have commissioned/purchased on their behalf are safe, use resources effectively and are of a certain quality; and to hold to account service providers and members of public bodies for their performance. Ministers and policy makers within the Scottish Government can also use scrutiny to evaluate policy impact and to develop future policy;
• Parliament requires assurance on performance and information on potential improvements. It uses scrutiny to hold Ministers, elected members, scrutiny bodies and service providers to account for their performance;
• Elected members in local government require assurance on performance and information on potential improvements. They use external scrutiny reports to hold their officials to account, but are also held to account themselves through reports on council performance. There is an increasing interest in developing the 'place shaping' role of local authorities and elected members which involves holding other local services to account, whether through Community Planning structures, outcome agreements or other emerging models;
• Public body boards and statutory officeholders also require assurance on performance and information on potential improvements. They use external scrutiny reports to hold their officials to account, but are also held to account themselves through reports on performance; and
• Service providers use scrutiny reports to account to a range of paymasters, such as local authorities, the NHS or the Scottish Government; and to provide validation of their own performance to their users.

Principles

3.5 There have been a number of attempts in recent years to codify the principles of good regulation in different contexts. These have many common features and we have drawn on these in formulating our view of the principles which should drive external scrutiny of Scottish public services. Our suggestions on what the core principles should be are below and should underpin how scrutiny operates and should develop in future. The analysis in the chapters that follow illustrates areas where the current system does not meet the principles, as well as considering efficiency and co-ordination issues.

Public focus

3.6 The needs and priorities of service users and the public must be the prime consideration in all external scrutiny. The public is the ultimate beneficiary of external scrutiny. As such, it is crucial that it is closely involved in both decisions about the use of scrutiny and any scrutiny activity.

Independence

3.7 External scrutiny must be independent and must not be constrained by any party in reaching its conclusions and publishing its findings. It must be free to make judgements about service delivery and report its findings into the public domain, and it must be able to decide how it discharges its responsibilities, once its focus has been agreed.

Proportionality

3.8 The use of external scrutiny within the wider public accountability system must be proportionate to the particular issue, policy context or environment. Proportionality must apply at two levels. Firstly, in deciding whether it is appropriate to use scrutiny, and secondly in deciding its nature, scope and duration.

Transparency

3.9 External scrutiny must be transparent in all its activities, its focus, decision making criteria, business processes, assessments and reporting. There should be a transparent decision framework for regulatory intervention. It is essential that the processes and mechanisms which support the use of external scrutiny are transparent, so that all parties understand the particular purpose for which it is being used at any given time. For external scrutiny to be credible, its reports must be clear, independent and consistent.

Accountability

3.10 External scrutiny must be accountable for its use of resources. It must demonstrate and report on the impact of its activities on services scrutinised, on the direct and indirect cost implications and it must demonstrate value for money. Its assessments and findings must be fair and capable of being defended.

Chapter summary and recommendations

• The core purpose of external scrutiny should be to provide an independent assurance that public money is being used properly and that services are well-managed, safe and fit for purpose.

• The principles of external scrutiny should be:
  • Public focus;
  • Independence;
  • Proportionality;
  • Transparency; and
  • Accountability.
• Responsibility for improving services lies with the organisations that provide them, but external scrutiny can influence behaviour and culture, and this can encourage improvement.