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					                                                             Agenda item no. 3

BEST VALUE

To:   Policy Committee
Date: 12 October 1999
From: Chief Executive


1        PURPOSE

1.1      Update on developments with Best Value.

2        BACKGROUND

2.1      The Local Government Act received Royal Assent on 1 July and from
         April 2000 the Council will have a new duty of best value. The Act
         requires local authorities to review their functions, publish annual
         performance plans showing past and projected performance and
         introduces a rigorous programme of audit and inspection linked to
         significant powers of intervention by the Secretary of State.

2.2      The Council is already relatively well advanced in preparation for best
         value. A five year review programme was agreed last year, and first
         year reviews are underway, with most due to report to the next round of
         Performance Review Panels/PRAP. In June the Council produced its
         first local performance plan.

2.3      The Government has recently published two consultation papers: on
         draft guidance and, jointly with the Audit Commission, on best value
         performance indicators. The closing date for comments on both papers
         is 4th November. Given this timescale this report briefly describes the
         two consultation papers with some initial comments. It is proposed
         Group Leaders endorse the Council's detailed response.

3        IMPLEMENTING BEST VALUE - CONSULTATION PAPER ON
         DRAFT GUIDANCE

3.1      DETR have issued draft guidance with the intention of issuing guidance
         in its final form as a departmental circular in November. The guidance
         covers all aspects of the best value regime:

       The timing of reviews; the required elements for successful reviews,
        the 4Cs, partnership processes and outcomes
       Performance plans: the purpose of plans and the audience they
        address. Form content and publication issues.
       Audit and accounting: Audit reports, the role of auditors and proper
        accounting practice
       Inspection: arrangements under best value and the role of
        inspectorates


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       Tackling failing services: The scope of the Secretary of State’s powers
        where authorities do not deliver best value
       Fair employment: The Government’s agenda for fair employment and
        its relationship to best value

3.2      The starting point for best value is a community strategy which sets out
         the broad objectives or vision for the local community in the area. This
         is a rather stronger statement than in the Green Paper Modernising
         Local Government - Improving local services through best value which
         does not makes specific reference to a strategy.

3.3      The guidance is based on the performance management framework
         set out in the Green Paper. The guidance emphasises the importance
         of a clear audit trail demonstrating that the Council’s review programme
         flows from a community/corporate vision and an assessment of current
         performance.

3.4      Poorly performing services should ordinarily be reviewed first. Reviews
         should be built around a mix of service specific and cross cutting
         reviews. The expectation seems to be that each authority should have
         at least one cross cutting review.

3.5      Comparison: Reviews must have continuous improvements targets
         around quality and efficiency, including:
          Quality targets that are as a minimum consistent with the
            performance of the top 25% of all authorities
          Cost and efficiency targets over 5 years that, as a minimum, are
            consistent with the performance of the top 25% of authorities and
            consistent with the overall target of 2% per annum efficiency
            improvement set for local government as a whole.(although this
            does not mean every review must identify 2% efficiency savings
            year on year).

3.6      The guidance commends quality accreditation schemes, but warns
         they are insufficient in themselves to deliver best value. The Council is
         using the Business Excellence Model as part of its approach to best
         value, and two services have applied for Charter Mark this year.

3.7      Consultation: the guidance proposes that authorities should take a
         strategic approach to consultation –including co-ordination with other
         consultation exercises. The Council has already begun to address this
         through the Listening and Involving Strategy.

3.8      Competition: The guidance seems to take a firm line on competition
         saying that where there is a developed market for a service, retaining
         work in-house will rarely be justified unless the authority can show the
         in-house provision is competitive with the best alternatives, through
         market testing all or part of the service or in some robust manner. The
         guidance also suggests the fact that a service is currently provided
         externally through a contract won through a competitive process is not


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       in itself sufficient to demonstrate best value, particularly where the
       contract is of long duration and has been in operation for several years.

3.9    Best value performance plans The Best Value Performance Plan is
       the principal means by which an authority is held to account for the
       efficiency and effectiveness of its services, and for its proposals to
       improve upon them. The guidance specifies the different elements to
       be included in the plan.

3.10   Authorities must publish the plan by 31 March each year.
       The document will have to be comprehensive yet accessible and clear.
       The Council produced its first performance plan in June, a 16 page
       document and a 4 page summary. This plan does not meet all of the
       specification set out in the draft guidance and next year's plan is likely
       to be substantially more detailed.

3.11   The guidance expects local authorities to make every effort to send a
       summary of the plan to each local household and be made available
       through the press and local libraries. It is proposed to cease publication
       of the Annual Review from next year and distribute a summary plan
       instead. Performance Indicators will be published in a local newspaper
       as per the legislation and posted on the Website.

3.12   An audit report on the plan will have to be submitted by 30 June to the
       Council, Audit Commission and DETR. The Council will have 30 days
       to respond to any recommendations for action.

3.13   Inspection: All functions will be subject to inspection. Those services
       not already covered by an Inspectorate (OFSTED, SSI, HMI) will be the
       responsibility of the Best Value inspectorate in the Audit Commission.
       There will be a Best Value Inspectorates Forum to ensure joint working
       between the different inspectorates.

3.14   Tackling failing services: The Secretary of State has powers to act
       where authorities are failing to deliver best value. The powers are
       flexible and wide ranging covering failures of process, for example
       failure to consult, and failures of substance, for example failure to
       deliver a nationally set standard of service. Any intervention will be in
       accordance with the protocol agreed with the Local Government
       Association.

3.15   The guidance has changed little from the Green Paper. Individually,
       much of what is proposed is good practice and to be welcomed,
       including the need to take a strategic view of consultation and
       procurement and the list of issues to cover in reviews. However, taken
       overall the guidance represents potentially a significant pressure on the
       Council – in the management of best value overall or the conduct of
       reviews – especially if the audit and inspection requirements are
       applied bureaucratically and inflexibly. It is also the Council’s
       experience that some areas such as procurement and information


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       management are best handled as part of a review programme not as
       preparation.

3.16   In some sections of the guidance detailed comments are contradictory
       or not in keeping with previous pronouncements, for example,
       on competition, statements imply wholesale market testing across a
       very wide range of services when the aim of Best Value has always
       been portrayed as offering local authorities more discretion over the
       use of market testing.

4      BEST VALUE AND LOCAL AUTHORITY PERFORMANCE
       INDICATORS FOR 2000/01.

4.1    The Government has issued a joint consultation paper with the Audit
       Commission describing proposals for a set of national best value
       performance indicators (BVPIs), and amended complementary Audit
       Commission Performance indicators (ACPIs).

4.2    Best value performance indicators will be the main yardstick against
       which the authority's performance will be judged. The Audit
       Commission intends to retain some of the existing PIs and to specify
       others which provide contextual information for BVPIs. It also intends to
       develop indicators for cross cutting issues, such as racial harassment
       and domestic violence.

4.3    The County Council will have an estimated 151 indicators under these
       proposals (105, BVPIs and 46 ACPIs). The Council will need to set
       targets against the majority of the best value performance indicators
       and publish performance against them in the annual performance plan.
       Authorities are also encouraged to develop and use local performance
       indicators

4.4    The BVPIs cover five aspects of each strategic function:
        Strategic objectives
        Cost and efficiency
        Service delivery outcomes
        Quality
        Fair access

4.5    It is proposed that the Council publishes each both BVPIs and ACPIs
       by the end of September each year. The consultation paper makes no
       mention of the form publication will have to take.

4.6    The new regime will therefore comprise 4 types of indicator:
        BVPIs
        Locally set PIs
        those set by government departments
        ACPIs




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4.7    Part of the new regime will be a set of corporate health indicators to
       enable people to judge the performance of the Council overall. These
       are listed at appendix one. A further set of corporate health indicators
       are being piloted for possible introduction in 2001/02.

4.8    In similar fashion to the best value guidance, much of the detail of what
       is suggested is to be welcomed: new indicators wherever possible use
       existing data sets and there has been editing of old indicators which
       were generally regarded as not helpful or concentrated too much on
       inputs. There is much greater emphasis on outcomes and user
       satisfaction, obtained by opinion polls, as a measure of quality. The
       Council has some expertise in this area via the Citizens Panel and
       more specific surveys.

4.9    However, the regime will be very different as, for the first time, targets
       for performance will be set across the range of services, as opposed to
       targets for particular services such as Education and Social Services.

4.10   The total number of indicators to be collected is not significantly more
       than currently. However, it will be a challenge to the Council's
       management information systems to deliver all these indicators, and to
       ensure results are used to set targets and manage services effectively.
       The information management best value review is addressing these
       issues.

4.11   We will also need to develop local performance indicators which in the
       past the Council, like almost every other authority, has struggled to
       produce or use in a meaningful way. The Council is beginning to make
       progress in developing local indicators for some areas of activity such
       as the State of the Environment Report and the Local Transport Plan.

5      CONCLUSIONS

5.1    The two consultation papers set out more clearly Government
       expectations of local authorities under best value. The Council has
       made a good start in introducing the different elements of best value.
       However, it will have to continue to improve if it is to meet all of the
       requirements set out in the two documents, and more importantly use
       the new regime to improve the quality of services for people in
       Cambridgeshire.

6      RECOMMENDATIONS

6.1    The Committee is asked to:
       i) Note the report
       ii) Authorise the Group Leaders to consider and endorse the Council’s
       response to the two consultation papers.




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Bibliography

Source                         Location Contact
Draft guidance on Best Value   Rm. 116 Julian Bowrey
                               Shire Hall Chief Executive's Dept.
Consultation paper on                     Cambridge (01223) 717607
performance indicators for                Julian.Bowrey@ceu.camcnty.g
2000/01                                   ov.uk




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