Value judgements

The Government is seeking to revolutionise local government with the
introduction of Best Value. Stephen Overell reports

The chances are that you will not have heard of the likes of BV 93, BV 66,
ACPIl, or BV11. They don’t have the resonance of the big New Labour D words –
devolution, decentralisation, directly elected mayors, democratic
decision-making at the appropriate level. But they have an important story to
tell, a story easy to miss in the noise of constitutional change.

These little codes make it absolutely explicit that central government is in
charge and it is up to local government to behave. And if they don’t, it will
be a Best Value Performance Indicator that betrays them. The percentage of
pavements containing dog fouling, the cost of highway maintenance per 100km
travelled by vehicle on principal roads, the number of senior management posts
filled by women – all will be there in a directory of statistical shame, or
glory, each one a potential splash in a local newspaper.

Welcome to the world of Best Value. It came into existence on 1 April,
representing the Government’s replacement for Compulsory Competitive Tendering.
CCT was first introduced by Margaret Thatcher in 1980 and initially covered
contracting services, but was gradually extended to manual services in 1988 and
white-collar services in 1991.

It was interpreted by trade unions as the Tory war on local authorities –
forcing them to make swingeing cutbacks to their activities and toss precious
services to the sharks in the private sector who profited through cuts to staff
costs. Despite initial euphoria, the private sector was not keen either. Even
after successful bidding, many contractors had to deal with perpetually hostile
clients, their very existence despised and mistrusted.

If CCT was always contentious in the areas it covered, the scale of Best
Value makes it look paltry. Best Value covers everything. Every five years
every single service provided by a local council will have to undergo a Best
Value inspection carried out principally by the Audit Commission, which will
compile some 192 performance indicators for each metropolitan, unitary or
London borough.

Each authority will have to issue an annual Best Value performance plan,
explaining to all its citizens how it hopes to improve services and reach its
targets. Ultimately, if a council persistently fails, the Secretary of State
can decide who should take over a particular service.

The centralising aspects of this system have not been missed. Jon Sutcliffe,
senior Best Value research officer at the Employers’ Organisation for Local
Government says, "The level of inspection is unprecedented, requiring by
statute what many local authorities already regarded as best practice anyway.
Dexter Whitfield, from research body the Centre for Public Services, goes
further: "The Government is standing at the back with a big stick, rather
than leading from the front. You do wonder if they really want to improve
services."

Under the Best Value regime, no council service will ever be doing fine.
Officers and members alike must be looking to foster a culture of continuous
improvement, aiming to find 2 per cent savings every year. Instead of the four
Ds of constitutional change, Best Value performance criteria operate through the
four Cs – local authorities must challenge why and how a service is being
provided, they must compare performance with others (including organisations in
the private and voluntary sectors), they must compete fairly as a means of
securing efficient and effective services and they must consult with local
taxpayers, customers and the wider business community.

And if a service is not up to scratch, the Department of the Environment,
Transport and the Regions’ guidance, published on 14 December last year, says
they can consider options including contracting it out, restructuring,
public-private partnerships, renegotiating the contract, repositioning the
service and so on.

Terry Gorman, president of chief personnel officers’ body Socpo and
assistant chief executive of Nottingham City Council, is under no illusions
about how serious the change will be. He says it is the biggest challenge in
his 30 years in local government. "The main pro is that we have moved from
the restrictiveness of CCT towards a regime of providing quality services that
people can have a direct impact on," he says. "It is a real
opportunity for people to understand what the council does and for us to ask,
‘Are these services really necessary?’ which is a very important question.

"But the risk is that local authorities become prisoners of
accountancy, spending their time ticking boxes. A number of the performance
indicators are quite crude, more about inputs than outcomes, but eventually
that will get better. It is a means of opening dialogue on services."

The performance indicators will perhaps have only a partial impact on
personnel – by its very nature hard to measure. They include a set of measures
on "corporate health", noting factors from the payment of invoices
and the number of complaints, to more gritty things like the number of sickness
absences, early retirements, percentage of ethnic minorities and the level of
conformity to the Commission for Racial Equality’s Standard for Local
Government.

With this in mind Socpo, in association with benchmarking company Saratoga
Europe, has developed a series of its own performance indicators as a
supplement to those run by the Audit Commission. One section is
questionnaire-based, seeking the responses of users of personnel services. As a
counterbalance, another questionnaire also seeks the views of personnel people
in the authority, the hope being that the two surveys yield answers that are
not too different. Socpo has produced a third part, of 20 performance
indicators, to which some 120 local authorities have now signed up.

Nicholas Dobson, partner, and head of local government law at Pinsent
Curtis, argues that while Best Value is likely to unlock the creativity of
staff in seeking the best way to deliver quality services, the burden of data
collection the regime requires could be profound. This point emerged from the
pilots conducted two years before the official start date of Best Value,
according to an interim evaluation by Warwick Business School. Nearly all the
40 local authorities and two police services invited to participate in the
pilots found it harder than they anticipated. Delivering a normal service while
the review process was going on meant rapid change and uncertainty, already a
feature of working life in the public sector and bound to increase.

"There is a danger that the regulatory aspects will kill the good
things," says Dobson. Jon Sutcliffe adds, "We have come across no
evidence that Best Value is likely to improve morale. In fact there is slight
evidence to the contrary."

In a clear parallel with the Ofsted regime in education, the bluntness of
some of the measures is a point of opposition to Best Value. Some experts argue
that performance indicators will never truly reflect the quality of a service.

"Whether they can actually do the job of demonstrating Best Value is a
moot point," says David Spencer, Best Value specialist at the Local
Government Information Unit. "They aim to strike a balance between cost,
efficiency and effectiveness but there is always a trade-off between cost and
quality. Whether something so essentially simple as an indicator translates
into something as sophisticated as a measure of quality is questionable. At
best they can do no more than give a rough rule of thumb." Needless to
say, great archives of statistics will never mean much to service users.

Local government union Unison goes further. It still sees the hidden hand of
privatisation as being the spur to Best Value. It dubs Best Value "son of
CCT".

While in theory the Best Value regime does not differentiate between public
and private-sector service providers and seeks only "quality
services", Unison and others see a privatising agenda.

Dexter Whitfield of the Centre for Public Services says government guidance
makes it clear that Best Value is a mandate for externalising services.
"Managers who are keen to keep well-performing services in-house will have
to battle like mad to do so. Those who want to privatise have it easy under
Best Value. If there is not an existing market in the service under review,
they will have to create one."

Malcolm Wing, the union’s head of local government adds, "There is a
worry that Best Value will be cost-driven. Councils are expected to deliver 2
per cent savings and while it is true they are getting extra money, much of it
is already earmarked. One of the biggest problems councils face is access to
capital for new equipment or vehicles. It seems as if the Private Finance
Initiative or public-private partnerships are the only way."

Nor has Best Value sorted out one of Unison’s key complaints about CCT – the
ability of private firms to make profit through attacking terms and conditions.
"Employment protection is still minimal," says Wing. "Private
contractors can afford to make a loss in the early months by taking on staff on
local authority terms and conditions, knowing that new staff will not be
covered by Tupe. But with 25 per cent turnover, that is where their profit will
come from. Over time, pay and conditions will decline."

And yet private contractors are also rather sceptical. "If a council is
determined to bring a service back in house, there is a concern that there is
very little meaningful redress for contractors," says a spokesman for the
Public Contractors’ Association. "The procedures are all much less precise
than CCT."

How councils can compare their costs

A key aspect of Best Value is cost comparison of service provision.

To help local authority departments with the process, Personnel Today and
MCG are offering a special bespoke service through its HR Benchmarker
initiative.

The HR Benchmarker database has more than 200 statistics on
personnel-related costs from over 50 councils – including those at the
forefront of Best Value, such as York City Council, Stockport and the London
Borough of Newham.

The service will allow you to compare your department’s costs with the
average for local authorities. You will also be able to compare them with an
average for the private sector.

Analysis already carried out for councils shows that the quality and value
of HR services in local authorities is often ahead of that achieved in the
private sector.

In addition, HR Benchmarker has developed a customer satisfaction and
effectiveness audit to help measure the output achieved by HR departments.

There have also been positive findings from councils where this has already
been carried out. For instance, training cost per employee and per training day
is generally lower than private-sector equivalents, while meeting the
effectiveness and satisfaction criteria demanded by the customer base.

Conversely, the time spent on non-productive, administrative matters is in
some councils alarmingly high when compared with similar sized private-sector
organisations.

But the most important fact is that those organisations which have
undertaken an HR Benchmarker study know where their strengths and weaknesses
lie. By learning from other professionals – accountants for audit; marketing
specialists for customer research – personnel practitioners are able to prove
where they have added value.

The cost of a bespoke comparison combined with a customer satisfaction audit
is £1,495 plus VAT. Contact Derek Burn direct on 020-7242 3665 for more
information, quoting HR Benchmarker Best Value service.

Southampton focuses on quality of life

Charlie Hislop, Southampton City Council’s Best Value project manager,
believes the reason it has been a positive experience is that the authority
approached it from the perspective of improving quality of life in the city.

"From the start, we did not want to do it to improve narrow service
measurements," he says. "We wanted to show that it could bring
tangible improvements in services."

He argues that, unlike most of the 40 authorities in Britain which began
Best Value pilots more than two years ago, Southampton has actually created new
services rather than cut, trimmed or reshaped existing ones. Of the three chief
aims of Best Value – improving services, achieving efficiency savings and
boosting competition for contracts – Southampton has definitely concentrated on
the first.

"In practice, most of the Best Value authorities have plumped for
improving services, rather than the other aims, which has meant the impact on
personnel over Tupe, pensions and redundancies has been softened."

Southampton concentrated on two areas in its pilot – housing services and in
the field of improving facilities for older people. The reviews identified
clear evidence that performance on housing was fairly poor. The council was
slow to re-let vacant properties and slow to carry out repairs due to a
cumbersome system of reporting faults and fragmented working practices among
its builders.

Rather than have tenants ring in a problem and then officials order a
specific, often unsuitable, repair, the officials now report a fault and let
the operatives decide who is best to carry out a repair. The council is also
developing a call centre for building repairs.

Similarly, on vacant properties, an existing system of repeat visits to
properties by officials and a practice of completing all repairs before tenants
could move in, explained the slowness of re-letting. Now the council is tougher
about enforcing notice periods through tenancy agreements, and agreeing a
schedule of repairs so that tenants can move in with the promise that repairs
will be carried out within an agreed time period. "If we let them down, it
will show in the indicators and we will have failed," says Hislop.

Meanwhile, the project looking at quality of life for older people included
a scheme to boost the use of libraries. Research identified that heavy shopping
bags dissuaded people from using the facility but the introduction of trolleys
has seen a significant rise in numbers.

Equally, research into care showed that people were often put on
high-intensity care packages for too long after an injury. Employing review
officers to do more regular reviews identified possible savings of £150,000.

A six-bed rehabilitation unit helped people with a period of intensive care
followed by support and therapy to help get them on their feet again and
prevent injuries re-occurring. This scheme has shown possible savings of up to
£2.5m which can be ploughed back into the council’s care budget.

"Best Value is in many ways not new. Councils were familiar with
performance management measures," says Hislop. "Provided councils
approach the regime with a view to using it to improve services, there is no
reason why Best Value should not be a positive experience for local
authorities."

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