21 June 2001
While councils grapple with what 'best value' means in practice, the first reviews of the authorities' purchasing are providing few answers. David Arminas reports
Rumblings of discontent among local authority purchasers about the qualifications of best-value inspectors and the conclusions of the best-value reviews are surfacing after the poor result of Birmingham City Council. Brighton & Hove City Council and Mendip District Council now anxiously await their Audit Commission reports.
Reviews can be unfair, claim purchasers, because procurement departments are still getting to grips with the end of compulsory competitive tendering (CCT) and introducing best-value procurement, in all its fuzziness.
Are the reviews reaching the wrong conclusions and causing irreversible damage to morale within procurement departments with comments such as "not likely to improve", or is there a hidden political agenda at work as believed by Dudley Metropolitan Borough Council? Some purchasers claim there is a parallel with the education regulator Ofsted's initiative to introduce performance measures for teachers. The government is messing with sectors that are "different" from normal businesses and can't be measured or controlled as such.
The Audit Commission began its best value reviews last September and, by 2005, every council must have put all aspects of its work, including procurement, through a review. Few procurement functions have been scrutinised so far - perhaps a dozen out of the 570 reviews completed. This means it is early enough for purchasers to step back to recall the objective of a review.
"Best value must be about results, not processes. The result that matters is improving services in ways that the public notice and value," said Geoffrey Filkin at the very beginning of his July 1999 report, Starting to Modernise: Achieving Best Value. Best-value reviews consider the processes in light of how well they deliver the goods.
While the report questioned whether in-house processes are always best, it did not say outsourcing is a panacea. What it did say is, get the best of both worlds through a sound business plan that will deliver improved services for the public.
If Blair's Labour government, clutching its mandate from a second landslide victory at the polls, has a political agenda, it certainly hasn't hidden it. Indeed, its ethos of melding public and private sectors is as strong as ever.
There are two ways of viewing the commission's best-value inspections. One is to consider the commission as a watchdog for Labour to ensure that councils outsource, whether or not there is a good business case. The other view is to take best-value reports as a positive starting point for moving forward.
However, a report's recommendations are not binding, which means it leaves buyers with choices rather than prescriptions.
It's a cop-out to blame the commission for a poor best-value review, according to Steve Gilbey, head of county supplies and contract services at Hertfordshire County Council. "Ultimately the result of an inspection should be to raise the profile of procurement within the council," he said.
Hertfordshire got a good report overall, yet there were many "could do better" areas. These included a lack of performance measures, poor whole-life costing with no corporate disposal policy and no co-ordinated risk management.
Gilbey says the council has moved forward and he now chairs a procurement board of department assistant directors, set up as a result of best-value recommendations. The report gave him strong backing to be proactive and get senior management buy-in for purchasing to have a bigger say on council strategies - something that is eagerly sought by many progressive local government purchasers.
The Audit Commission readily acknowledges that it is on a learning curve for procurement reviews and is sensitive to being effective. Wendy Thomson, its director of best-value inspections, says formal complaints about its service are investigated.
Thomson, who was chief executive of Newham Council in London before she joined the commission, points to two major difficulties for procurement inspections. The profession is going through a transition from CCT and so many best practices are not yet well defined. Also, the great difference in council sizes, and therefore budgets, makes it hard to do inter-authority comparisons.
However, she notes that a recent independent survey of chief executives showed that 80 per cent believe services improve after best-value inspections.
Best-value reviews will continue - and by the end of this month the Department for Transport, Local Government and the Regions' report by Sir Ian Byatt on procurement in local government will finally be out. The two should go a long way to clearing the fuzziness of best value.