Local public service agreements and performance incentives for local government

This paper provides an overview of Local Public Service Agreements (LPSAs) as they have developed in the UK. The LPSA is a scheme in which a local authority commits itself to achieving a range of demanding targets, agreed with central government, that reflect national and local priorities. An important purpose is to force improvement by 'stretching' performance beyond the norm, with additional financial rewards and additional freedoms being made available to successful authorities. The background, context and policy objectives associated with the introduction of LPSAs are reviewed, and the basis of LPSA agreements and the freedoms and flexibilities that accompany them described. Piloting and the wider rolling out of LPSAs in both the first and second generations are considered in the light of the experiences of two very different authorities: Kent County Council and the London Borough of Tower Hamlets. Reactions to the LPSA process at the local and national levels are assessed in relation to the high expectations placed upon this new programme.