Clearer view

In September 2007, Professor Lorne Crerar, chairman of Harper Macleod LLP reported to the Scottish Government, having been commissioned 14 months before to review the systems of external scrutiny and complaints handling for public services throughout Scotland. Four years on, the fruits of the review are becoming apparent.

The importance of external scrutiny of service providers is undeniable, as it provides reassurance to the public over the quality and efficiency of the services they receive, and enables weaknesses to be identified and improved on. However, lack of trust in the provision of services meant that with every new risk identified, scrutiny increased, often it seemed without thought to the long-term consequences. Over time, this created an unrelenting, indomitable scrutiny machine, which could interrupt providers from delivering the high-quality service required, as well as affecting their ability to engage with the public and make improvements – largely outweighing the benefits we had sought to secure.

Crerar harboured considerable aspirations for the role of external scrutiny in our society. He proposed that: “In Scotland, we can create a leading-edge public scrutiny model and function, linked to a revised complaints handling system, that is not just more satisfactory than currently exists, but mirrors a public service delivery culture of excellence.”

Five principles were identified to underpin the future for scrutiny reform: independence, public focus, proportionality, transparency and accountability. Forty three recommendations were put forward, to achieve a scrutiny system providing independent assurance over the management of services, to ensure that:

(1) they remain fit for purpose and make wise use of public money;

(2) they reflect public and user interest; and

(3) they ensure accountability and place an emphasis on self-assessment.

In the future, it was hoped that the success of these proposals would result in the creation of a single national scrutiny body within Scotland.

Government support

The publication of the review was warmly welcomed by the Scottish Government, which set up five scrutiny review action groups to implement the proposals.

It was recognised that for the reforms to succeed, primary legislation would be necessary. There followed the Public Services Reform (Scotland) Act 2010 (PSR Act) and the Scottish Parliamentary Commission and Commissioners etc Act 2010.

During parliamentary debate in October 2008, the Government agreed to a presumption against the creation of any new scrutiny bodies. Furthermore, it endorsed the proposal to move away from cyclical inspection activity and enacted a process called the systematic scrutiny check, to assess risks and permit scrutiny which is increasingly proportionate and targeted. In line with the Crerar review, it agreed to reducing the number of scrutiny bodies by 25%. To date, 42 of the 43 recommendations have been adopted, and the Government has committed itself to continued simplification – to streamline public bodies, reduce costs and bureaucracy, and deliver a better service.

While the review covered the whole of the public sector, it focused on the key areas of public service delivery in Scotland: health, local government, social care and social housing.

Core areas

April 2011 saw the creation of a new organisation responsible for external scrutiny and improvement of both the NHS and the private healthcare sector – Healthcare Independent Scotland (HIS). HIS combines the functions of NHS Quality Improvement Scotland (QIS) and part of the Care Commission. Crerar identified concerns over independence and transparency of scrutiny in health, and this new corporate body seeks to provide better quality assurance over these services in an independent way.

The former QIS had committed itself to reducing cyclical scrutiny of health boards, and enacted a new protocol with Audit Scotland to share information and avoid duplication. Under HIS, it is anticipated that inspections of independent healthcare services will be reduced to one every three years. Higher risk services will be subjected to a higher frequency. These changes should reduce the administrative burden and allow HIS to focus its resources on the areas that require it most.

April this year also saw the establishment of a single scrutiny body responsible for social care and social work, Social Care and Social Work Improvement Scotland (SCSWIS). It combines the functions of the Social Work Inspection Agency, the Care Commission, and HMIE’s child protection responsibilities, and will be the most significant scrutiny body in terms of budget and volume of services covered.

SCSWIS recently published its inspection plans, which provide for a more proportionate, targeted and risk-based regulation as per Crerar’s recommendations. This will, in time, lead to a reduction in the level of scrutiny given to well-performing service providers and help deliver a planned 21% reduction in SCSWIS costs over the next three years. SCSWIS will take over the joint programme previously arranged between the Care Commission and HMIE for inspection of local authority fostering and adoption services which, in line with Crerar, prevents duplication of scrutiny.

Following the Housing (Scotland) Act 2010, the Scottish Housing Regulator (SHR) became an independent body with the power to safeguard and promote the interests of current and future service users. This Act entrenched SHR’s post-Crerar approach to making scrutiny of registered social landlords (RSLs) more risk based and proportionate. Having halved the number of inspections and moved away from cyclical inspections, SHR relies more on self-assessment. The future direction of its regulation is underpinned by the five review principles. SHR now undertakes an annual risk assessment of all RSLs, from which it plans the level of engagement it willl have.

Since publication of the review, scrutiny services within local authorities have also seen a stark improvement. Often thought of as the most heavily scrutinised public sector activity, much of that scrutiny was identified as being unco-ordinated and unnecessary. We have seen a 36% reduction between 2009 and 2011 in the length of contact time for corporate-level inspection, and 33% fewer scrutiny events across Scotland, with significant impact on costs and burden for local councils. Following the review’s proposals, there has been a shift to a tailored and proportionate approach to inspections, based on the circumstances of each council. This summer, a Local Government Strategic Group will consider how best to add value, continuously improve the public sector, and align local and national scrutiny. This reflects the duty to co-operate placed on all public services by the PSR Act and should decrease unnecessary duplication of regulation.

The complaints picture

Despite not strictly amounting to scrutiny, Crerar also assessed complaints handling in Scotland, as a critical support mechanism to any external scrutiny.

During recent reforms, the Scottish Public Services Ombudsman (SPSO) established the Complaints Standards Authority (CSA) to provide support in improving handling procedures. The SPSO is now the final stage for all public service complaints, with only appeal to the courts thereafter. This should ensure complaints handling is undertaken more effectively and consistently across public services in Scotland, simplifying the system for service users while being more cost-effective.

Under the PSR Act, the SPSO devised the Statement of Complaints Handling Principles, which gained parliamentary approval in January 2011, and published “Guidance on a Model Complaints Handling Procedure” on the basis of these principles in February. This initiative will provide the foundations for developing model complaints handling principles for all areas of public services.

Working in partnership with local authorities and the housing sector, the CSA aims to produce model procedures for these sectors by March 2012. Already both SCSWIS and HIS have published complaints procedures which are almost a carbon copy of the structure suggested in the SPSO Model Procedure. These models place a heavy emphasis on frontline resolution of complaints, and prevent unnecessary escalation caused by frustration over the handling of complaints. Early resolution will, in turn, lead to early detection of service system failure.

Another key feature will be a two-tier complaints handling system as compared to the current three tiers. An Audit Scotland report stated that a complaint dealt with at the first tier is 40% cheaper to resolve than one taken to the third.

The wider landscape

As the public sector faces the deepest budget cuts in generations, the Crerar review recommendations pave the way for a more proportionate, risk-based approach, and for more effective allocation of limited public funds. Despite these cuts, there has been an improvement in the services provided by public bodies, demonstrating that better scrutiny does lead to better services. Successes such as these are making Professor Crerar’s vision of a single national scrutiny body much closer to realisation, as amalgamation will minimise inefficiencies.

Having noted the recent changes to the external scrutiny landscape, it is interesting to consider the effects these will have on the legal profession. In acting for customers of service providers, the new and more understandable public services complaints procedure should enable quicker redress and better client satisfaction. The model complaints handling procedures will also provide legal advisers with codified standards on which to base their clients’ claims and achieve reparation. Cyclical inspection regimes will prove to be a methodology of the past.

In some cases, funders of service providers may have misgivings about the lighter touch, self-assessment-based regime (for example funders of RSLs had apprehensions about the level of scrutiny the new SHR system would provide). Consequently, it is crucial that legal advisers to regulators of service providers in the public and private sectors, appreciate the lighter touch, outcome based regime; and that the effectiveness of the new scrutiny system is conveyed to funders.

Government support has proved instrumental in the success of the Crerar review, and has allowed for a visible reduction in external scrutiny. The new Government has a strong appetite for pursuing the reform of external scrutiny, and it seems likely that improvements will be delivered at a quickening pace. This approach ultimately leads to consumers of public services enjoying the benefits of a safer, improved and more efficient public sector. Whether Professor Crerar’s final recommendation comes to fruition remains to be seen, but with the volume of scrutiny declining alongside growing recognition of the review’s success, there is hope that we will see his proposed single national scrutiny body in future years.