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Local Area Agreements and Local Public Service Agreements
[Archive CMO Feature - Last updated: 25/07/05]

  • Last modified date:
    14 May 2007

Local Area Agreements (LAAs) and Local Public Service Agreements (LPSAs) are policies created by the Office of the Deputy Prime Minister. LPSAs began in 2001and LAAs followed in 2004.

These policies form part of the developing agenda for local government. Whilst the local government role has previously included quality of life, the enthusiasm for taking forward policies to improve the health of residents has increased in recent years. Under the local government power of wellbeing, coordination of local service delivery and joined-up working by local partners have become key  contributions to the promotion of health.

Aim of these policies

LPSAs and LAAs aim to improve local public service delivery, by providing a new framework for the relationship between central and local government.  

The relationship is one in which local authorities, alongside other local partners, define and propose a set of priorities for service delivery in their own area, which are then negotiated and agreed by central government.

Outline of Local Area Agreements policy

Local Area Agreements are agreements, covering the area of one or more local authorities, which focus on a collection of goals across a range of services and which can relate to either national or local priorities. 

The local authority liaises with a range of bodies with an interest in joined up delivery to set these priorities.

In particular, the policy aims to promote a high level of engagement of Local Strategic Partnerships. Funding for achieving these priorities comes from the respective bodies involved, through the pooling or alignment of existing budgets.

The relevant government office for the region, e.g. North West, London, handles the negotiation of the LAA with the local authority and partners.   Health is represented at all levels of government office handling, with Regional Directors of Public Health (RDsPH) on the senior steering boards.

Once agreement is reached, the LAA is sent to ministers in central departments for sign-off. Proposed LAAs are sent to the Secretary of State for Health accompanied by an assessment by the relevant RDsPH of the health content and a view as to whether or not the LAA should be agreed. 

An example of an LAA is provided below, laid out under headings that are standard to all LAAs. These headings are broad themed categories, or functional blocks, under which specific agreements can be placed. The 'functional blocks' are:

  • healthy communities and older people;
  • children and young people;
  • stronger and safer communities.

Example 1. The health content of an existing Local Area Agreement

Local authority: Barnsley Metropolitan Council
LAA agreed March 2005

Healthy communities and older people:

  • decrease in smoking prevalence of 3% by 2008;
  • all NHS premises and schools to be smoke free by April 2006;
  • 10% reduction in prevalence of smoking in people with chronic diseasee;
  • decrease the number of people dependent on incapacity benefit;
  • decrease the number of older people requiring hospital admissions as a result of a fall to 1.9%;
  • 10% reduction in the number of people aged 75 or over who have a fall resulting in a fracture of the femur;
  • 10% reduction in the number of admissions to residential or nursing care as a result of a fall.

Children and young people:

  • increase take up of school meals by children who are entitled to free school meals;
  • local prevalence of obesity not to exceed 15.5% for children aged 2 to 10 years;
  • meet the national targets for sport and fitness related activity for young people;
  • promote parental and child emotional wellbeing and self-esteem through coordination of children's centres, sure start, family centres and family support;
  • learning centre to cover drugs, smoking and sexual health.

Safer and Stronger Communities:

  • increase people's satisfaction with the quality of cleanliness and public open space in their neighbourhoods.

Outline of Local Public Service Agreements Policy

Local Public Service Agreements provide a framework through which local authorities and other local organisations agree challenging targets with central government. These include twelve targets for specific improvements in performance, and these can run across the full range of local services. Financial rewards, paid directly by the government, are associated with the achievement of these targets. 

Negotiation of LPSAs is currently carried out by the Office of the Deputy Prime Minister (ODPM) in liaison with other government departments. The Department of Health (DH) is consulted on all social care and public health related targets, the details of which are negotiated by the DH LPSA team.DH sign-off for LPSAs is performed at ministerial level.

An example of a LPSA is provided below. Only those areas of the twelve agreed stretch targets that relate to health are listed. 

Example 2: The health content of an existing Local Public Service Agreement

Local authority: Sunderland City Council
LPSA agreed March 2001

Target 9: To improve the health and participation in physical education and sport through:

  1. the establishment of additional specialist sports colleges;
  2.  increased number of schools attaining Sport England's Sports Mark or Active Mark Quality Standards;
  3. implementation of a city-wide learn to swim programme to assist schools to meet the Key Stage 2 Standard.

Indicators for this target include:

  • between 10% and 20% increase in the proportion of young people in the LPSA family of schools participating in at least 30 minutes physical activity a day;
  • number of young people taking part in one extra curricular sports session or sports activity per week;
  • 85% of children to achieve the National Standard for Swimming 25m at Key Stage 2.

Target 10: To improve nutritional levels by improving free school meal take-up and identifying good eating habits.

Indicator for this target:

  • Increase take up of free school meals from 77.4% in primary schools to 83.4%, and from 43.5% in secondary schools to 69.7%.

Target 11: To increase opportunities for young people to access leisure facilities in the city.

Indicator for this target:

  • increase visits to leisure facilities by young people from 397,000 per annum to 480,000.

Target 12: To reduce the number of people killed or seriously injured in road accidents.

Indicator for this target:

  • Reduce road accident casualty numbers by 40% for adults and 50% for children by 2010 (from baseline of 1998 four-year average)
Pump Priming Grants for all Targets:
  • £100,000 for sports facility development;
  • £25,000 for sports training centre;
  • £40,000 for primary school sports facility development;
  • £60,000 for sports equipment.

Maximum Overall Performance Reward Grant:

  • £6.977 million (2.5% of net budget of Sunderland City Council, £279.079 million)

Financial Agreements related to targets

As Local Area Agreements only involve the alignment or pooling of funds already in existence, the financial agreements within the first round of LAAs were concerned with these budgets. 

The Department of Health is ahead of most departments in devolving spending decisions to the front line in a single funding stream. The types of subject areas covered, whose funding has been either pooled or aligned in the 1st round of LAAs include:

  • Smoking cessation
  • Teenage pregnancy
  • Child and adolescent mental health
  • Substance misuse
  • Sexual health
  • Falls prevention
  • Physical Activity
  • Obesity

Unlike Local Area Agreements, which either pool or align existing funds, Local Public service Agreements provide additional funds for the area concerned.

The financial rewards are divided into Pump Priming grants and the Performance Reward Grant (PRG). 

Pump Priming grants

Pump Priming grants are sums of money made available to local authorities at the beginning of LPSA programmes to improve services. An example would be a grant for staff training to skill the workforce to deliver a programme. The need for a pump priming grant is assessed for each component of the LPSA and an overall Pump Priming Figure is agreed. This figure is assumed to be £750,000 plus £1 per head of population (subject to a maximum of one-third of their agreed PRG).

Performance Reward Grants

Performance Reward Grants are the main financial reward for achievement of the agreed outcomes, and are worth 2.5% of one year's net revenue expenditure of the local authority. This reward is evenly distributed across all twelve agreed targets. 

Allocation of this final payment is based on the number of targets achieved.  These are large sums and act as a significant incentive for local authorities to deliver.

Current direction of LAA and LPSA policy

The pilot stage of LAAs involving 20 local authorities was completed in March 2005.  Following this, the Office of the Deputy Prime Minister announced the rollout of LAAs to a further 40 authorities. 

In March 2005 the Secretary of State for Health agreed to ODPM's proposal to integrate the LAA and LPSA processes. This decision rationalised these processes and brought negotiation of the policies together in Government Offices - where the first round of LAAs were negotiated. The next 40 LAAs will therefore include LPSA negotiation. Work is currently underway in preparation for the transfer of these negotiations to Government Offices.

The next round of LAAs will, in addition, include a fourth category - enterprise and growth.

Benefits of engagement in these policy areas:

  • Local government engagement in the public health agenda has potentially significant benefits across the broad spectrum of wider determinants of health. The mechanisms provided through LPSAs and LAAs are levers for the engagement of local government, and are evidence of central government's commitment to local priority setting and delivery.
  • By offering an element of reward for achieving outcomes, combined LPSAs and LAAs will offer further incentives for the outcomes to be achieved.
  • By bringing together a range of separate programmes that share many of the same goals, authorities have greater flexibility over the means of achieving those goals, and should accomplish more for any given total of grants.
  • Rationalisation of the method of distributing funding for many small separate programmes should improve running of those programmes.

Strategic Aims for this policy area:

  1. Assisting the development of performance management of LAAs and LPSAs to maximise public health input.
  2. Developing DH central and regional understanding and capacity for promoting the regional policy and programmes associated with LAAs and LPSAs.
  3. Developing supporting documentation to aid the inclusion of evidence based health related targets in LAAs and LPSAs.

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