What does best value really mean?

14 December 2000
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14 December 2000

The Audit Commission is scrutinising the best value efforts of every council. David Arminas considers the obstacles for purchasers

Salford City Council's purchasing manager, Terry Harrisson, is full of praise for the councillors' decision to move to an SAP system and centralise procurement. It will help Salford's purchasing department meet the council's "best value" targets, he told SM.

Harrisson understands purchasing is an integral part of overall business strategy as local governments drive forward best value, now enshrined in law. But there remain many questions over best value: what does it mean? How can it be achieved? When will the questions be answered?

The questions themselves are moot points. Purchasers should recall Geoffrey Filkin's influential 1999 report, Achieving Best Value. It was a clarion call for the culture change needed for better procurement. "Best value is not about processes but results," he wrote. "The result that matters is improved services in ways that the public notice and value."

The defining characteristics of best value - desired results - will likely be different for each authority. Examples include street cleaning and refuse collections. For the money spent, do the people in the borough get the streets as clean as they require them?

Throughout last year, SM reported on how best value would change the way councils operated. The new regime kicked off on 1 April, by when all authorities in England and Wales had to - and did - submit a plan of how they were going to achieve best value in their operations, including purchasing and contracts to the Department of Environment, Transport and Regions .

Furthermore, from 2001 authorities are legally obliged to publish plans, every year, showing their past performance and to implement rigorous audits and inspections.

Around 20 of the Audit Commission's reviews have been done so far, and published on its website. It hasn't pulled any punches. Derbyshire County Council's £30 million-spend purchasing operation is described as "a fair service", though it merited just one star in the commission's 0-3 rating (three being the highest). It concludes that the service will improve if it pays attention to partnerships with the private sector, developing longer contracts and makes better use of e-commerce. The commission was impressed by Derbyshire's "commitment to change through best value".

Hackney Borough Council didn't fare so well in a review of corporate governance. The council is in dire financial straits, politically adrift, and leadership is sorely lacking. With few exceptions, said the commission, it does not have the skills to raise its poor standards.

So how are authorities doing in general, and are there any specific problem areas?

"That is difficult to say," according to an Audit Commission spokesperson. "Generally the reports have been good, but it needs time to develop enough reports on similar areas for comparisons to be made and improvements to be considered."

Best value is, as the spokesperson remarked, "constantly developing". That must be the essence of best value for procurement professionals. Something is never fixed only once in its life, but processes and results must be constantly monitored to ensure that it meets changing needs.

But this is more easily said than done. "Best value has been embraced more enthusiastically than the compulsory competitive tendering it replaced," the Greater London Authority's recently appointed procurement officer, Emmanuel Bartels-Kodwo, told SM. "But in terms of best value reviews, it was hit and miss for us in Hackney."

Bartels-Kodwo sat on the incomes and payments best-value review at Hackney where he worked as a procurement officer before joining the GLA last month. He agrees with the commission about lack of leadership at the top as a big factor in failing on best value.

Also absent was an understanding of what was expected of the review panel despite instruction in how to go about it. This will take time. Before the Local Government Act came along, many authorities didn't even have a procurement strategy and a method to evaluate the strategy. To many purchasers, reviewing a strategy is just as new as developing one, he added.

Best value should not depend on how an Audit Commission review turns out, but how the people using services decide their worth. Procurement is now duty bound to play a big part in achieving these results.

• The Audit Commission's best value site is: www.bestvalueinspections.gov.uk.

SMdec2000

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