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CCT is dead - long live Best Value

Mary Creagh

Best Value is at the heart of the government's agenda for radical change in local government. It is a strategic process for defining what the "core business" of local government should be and the relationship with local people. The aim is to do 25% of all council services each year (starting with the worst performing ones) so that by the end of a 4 year cycle the entire council has been reviewed. But it's not an OFSTED inspection where everyone gears up and collapses afterwards - it's an honest ongoing review that should point up weaknesses before they become crises and which looks for value for money, quality and efficiency across the board.

The Best Value mechanism has 4 steps:

Challenge - why do we provide this service - historical accident? commitment to the community? How does it fit with our strategic objectives and our vision of life in our communities?

Consult - with users, workers and taxpayers to see what the levels of (dis) satisfaction are around the service and what they want from the service.

Compare - what happens elsewhere - how do we rate? What can we learn?

Compete - how does the in-house provider compare with external providers? How can we make the service better? How do we monitor performance over time to ensure continuous improvement? What new forms of partnerships (voluntary sector, joint ventures, PFI) can we construct to deliver services better?

The Audit Commission will place a new requirement on local authorities to monitor their performance and report back to the local community - a powerful tool for reconnecting local government with the people.

Best Value replaces the bad old days of CCT where the Conservatives' ideological commitment to externalisation of services led to the lean and mean type of council personified by Westminster and Wandsworth; clean streets, low taxes but not much else in the way of services. It also means that those Labour councils who, for ideological reasons consistently awarded contracts to in-house bidders and DSOs now have a freer rein in deciding who provides their services and what form that provision should take. It is ironic that under a Labour government councils are at last being freed from the tyrannies of CCT where cost was the only factor that was allowed to be considered, and can now move towards a more varied range of service provision without necessarily sacrificing workers' pay and conditions. This is something that 19 years of conservative rule failed to achieve and represents something of a velvet revolution in local government terms.

There are dangers in the Best Value approach. The underpinning philosophy, much quoted by Hilary Armstrong, Minister for Local Government "What matters is what works" is music to the ears of council officials. It can be taken to mean a technocratic approach where performance measurement and public consultation remove much of the room for manoeuvre for local councillors. Where's the democracy if you rely on the new forms of consultation, be they citizen's panels, focus groups or large scale questionnaires and ignore what the councillors say? Well the point is that these two forms of consultation, the market research approach and political consultation through elections should be complementary not competing in the Best Value process. Whether that proves to be the case is up to the councillors who, ultimately, decide the mechanisms, monitor the technocratic process and make the final decisions around service provision. We have no-one to blame but ourselves if it becomes an officer owned, rather than council and community owned process.

Another obstacle is the lack of clarity around TUPE. Unions have seen their members suffer greatly under the CCT rules and are anxious that any new regime should place workers interests far higher than they have been. New cases are coming out of the European Court of Justice almost daily which muddy the waters around this complex issue. Although the Oona King Bill was kicked into the long grass during the last parliamentary session it should still reach the statute books in a couple of years, thus increasing workers protection. And Best Value allows for worker consultation and their conditions to be taken into account in any competitive process. But all employees should bear in mind that Best Value means putting the interests of the service users and tax payers at the top of the local government hierarchy - with the interests of service providers, whoever they may be (and they could be the private sector) necessarily coming second. Councils will no longer be able to justify keeping underperforming services in house on the grounds that CCT would be far worse and an ideological step too far.

Islington's Experience so far

Best Value kicked off formally this year in 15 pilot authorities around the country. Although Islington was not one of the selected pilots, we have made experimental progress in this area. A new strategic Best Value committee was established and 5 service areas had a Best Value review conducted. These included residential homes for older people, estate management, and the council's commercial property portfolio.

Lessons learned from this first phase are: the weaknesses of consultation methods even in a decentralised authority like Islington and the need for radical reevaluation of the formal consultation mechanisms; the power of organisational culture where self censorship and the "Islington way" (we could never sell off old people's homes) restricts choices being offered to councillors; staff uncertainty about what is expected of them and the need for a clear framework guidelines for conducting reviews; certain services which attract complaint actually being excellent value for money compared to private provision (the in-house computer help desk is an example of this); weaknesses in performance measurements due to outdated systems and equipment and lack of information on unit costs and on what people's perceptions are a baseline for measuring improvements; lack of clarity about what targets services should be setting themselves to demonstrate year on year improvement; lack of any sort of commercial approach in the areas where we are supposed to be commercial (the property portfolio includes a farm in Essex and pubs across one of the trendiest boroughs in the country which bring in peppercorn rents - why?).

It may sound like doom and gloom but the point is if we had known it all already then we wouldn't have needed to conduct the exercise. We don't understand what our councils do and what they do well and less well and we now have a framework which helps guide us towards sound, rational decision making. Islington's Best Value review also showed me how the law is still stacked against direct provision in some areas - if we were to transfer our residential homes to older people out to a private or voluntary sector contractor the council becomes eligible for 64 a week care allowance. Multiply that by 52 weeks of the year and 240 people and you have an 800 000 income stream on a service that costs 5 million. With those sorts of figures it is hard to argue that it should be kept in-house. It's still not a level playing field out there.

Mary Creagh is a councillor for Highbury