Interim evaluation of the Best Value pilot programme

Although this report was commissioned by the Office, the findings and recommendations are those of the authors and do not necessarily represent the views of the Office of the Deputy Prime Minister.

Research Summary by:

• Steve Martin - Warwick Business School, University of Warwick
• Howard Davis - Warwick Business School, University of Warwick
• Mike Geddes - Warwick Business School, University of Warwick
• Michael Lewis - Warwick Business School, University of Warwick
• Jean Hartley - - Warwick Business School, University of Warwick
• Ian Sanderson - Leeds Metropolitan University
• Phil Sapwell - London Borough of Redbridge
• Tony Bovaird - Aston Business School

Introduction

From April 2000 local authorities, police authorities and fire authorities will have a statutory duty to provide Best Value to local people, local tax payers and the wider community.In the meantime, forty local authorities and two police services have been invited by ministersto participate in a national pilot programme to test out a set of twelve 'Best Value Principles'. This report provides an interim evaluation of the programme. It highlights the progressmade and lessons learnt during the first twelve months of piloting (April 1998 to March 1999)by these authorities plus two Welsh local authorities and a Welsh fire service.

Almost all of the pilots have found implementing the Best Value framework to be more challengingthant they had previously anticipated. However, even at this early stage there is enough evidenceto suggest that the new regime had the potential to create conditions in which, over the longer-term, a culture of continuous improvement can be developed and sustained.

The first year of the pilot programme has marked the beginning of a period of transition duringwhich central government and many of the pilot authorities/services have also attempted to implementa range of other initiatives. In some cases far reaching changes in their political managementhave been considered.

Representatives of central and local government, the Confederation of British Industry (CBI),trade unions, the Audit Commission, and the voluntary and community sectors have devoted a greatdeal of time and effort to shaping the legislation and guidance, and overseeing the pilot programme.Equally, the individual pilot schemes have shown an extraordinary level of committment to developing the processes and structures that they believe are needed to implement the regime effectively.

Frameworks for implementing the Best Value framework

Pilot initiatives have tended to reflect one or more of the following emphases:

• increasing the quality and/or cost effectiveness of services provided by in-house teams;
• tackling 'cross-cutting issues' and/or cost effectiveness of services provided by in-house teams;
• integrating services in ways that meet the particular needs and preferences of local communities.

Each of these 'ideal' types has a number of distinctive characteristics which determine the approach which is taken to the 'four Cs' and, crucially, how and by whom 'value' isjudged.

The findings of the pilot programme would suggest that all four frameworks have the potentialto improve services. Community-focused approaches have been particularly well suited to housingand 'street services' and have enabled authorities to address the needs of relatively deprived areas. Contracting out has offered some rapid productivity gains and public-private partnershipshave released resources for new capital investment. Focusing on in-house service provision hasenabled many pilots to identify incremental improvements that they have been able to implement relatively rapidly. Concentrating on 'cross-cutting' issues or the needs of specific client groups has enabled a number of pilots to begin to develop more 'citizen-centred' services. A growing number of pilots believe that achieving Best Value will require them to adopt a combination of all of these approaches.

The role of elected members

Councillors with first hand experiences of the pilot initiatives have generally been enthusiasticabout the processes and outcomes. They report that they have been able to obtain new informationabout current performance and to gain better understanding of the public's priorities. Some believethat Best Value reviews could provide a means for them to develop a stronger 'scrutiny'role.

The involvement of members has been important in:

• ensuring that the authority has a clear sense of corporate and service priorities;
• setting the overall 'tone' and strategic objectives of Best Value initiatives;
• overseeing the progress of Best Value Reviews;
• supporting local communities participating in consultation associated with Best Value reviews;
• responding to the findings of reviews; and
• providing feedback to communities about the decisions that have been reached.

The role of managers and front-line staff

The pilot scheme has shown the importance of:

• combining detailed, operational management of individual services and service reviews with the management of broader strategic issues;
• managing rapid change and increased uncertainty- particularly in services that are being reviewed;
• managing the learning which emerges from reviews; and
• managing the on-going delivery of local services whilst new models are being developed and piloted.

Many of the pilots have stressed that whilst structures and processes have been important, thekey challenge facing them has been to find ways of developing a culture which supports and rewardsmanagers and front-line staff who are seeking continuous improvement. The first year of the pilotprogramme has demonstrated the need to manage the inter-relationships between the corporate centre and the individual services and departments. Many pilots have found it has also been important to develop organisation-wide strategies for reviews, consultation, procurement and performance management in order to make the most effective use of existing resources and to be able to address 'cross-cutting issues' and the needs of specific client groups.

Resources

It is impossible to quantify the costs of implementing Best Value. However, most pilot authorities have been surprised by the length of time and staff resources that have been required - both at the 'centre' and in service departments. Many pilots are concerned about the additional resource implications of responding to the new audit and inspection regimes, and of sustainingan on-going programme of reviews whilst also implementing and monitoring the outcomes of the action plans flowing from earlier reviews.

Corporate Approaches

Many of the pilots have concluded that they need more effective ways of co-ordinating theirBest Value initiatives in order to tap potential synergies between the otherwise separate activitiesof individual services and departments, and to maximise the scope for learning across the organisation.

In particular they emphasise the benefits of:

• a clear corporate strategy and vision for the authority informed by community planning;
• a corporate programme for performance review;
• corporate approaches to selecting and sequencing reviews;
• organisation-wide guidelines and protocols for conducting reviews;
• a corporate consultation strategy;
• competition and procurement strategies;
• a corporate approach to performance management and performance plans;

Performance Review

Pilots have started from very different points in terms of previous experience of performancereview. However, most have found that the Best Value framework is more rigourous than previous approached because it requires that reviews are:

• informed by corporate, strategic priorities;
• undertaken with a clearly defined timetable; and
• self-critical and 'challenging' - often seeking 'step changes' as opposed to incremental improvements in services.

Almost all the pilots have stressed the importance of the effective scoping of reviews, projectplanning, ensuring an appropriate balance of seniority, skills and personality types on review teams and effective leadership of the review process and the need for incorporating sufficient flexibility into the process/system in order that adjustments can be made as reviews progress.The pilot programme has also illustrated the need for findings from reviews to be fed into 'core'political, service planning and longer-term budgetary processes.

Challenge

Not all year one reviews have been sufficiently challenging, and most have focused on improvingexisting approaches rather than examining whether authorities need to take on new functions and provide new services in order to provide 'Best Value'. A growing number of pilots are reportingthat 'challenge' is less about using the right techniques and methodologies than about changing the culture of the organisation and individual services. Many stress the dangers of a 'tick-box' mentality to reviews and to audit and inspection. Pilots that have experimented withthe Excellence Model and similar frameworks have found that these have needed to be modified tomeet the requirements of the Best Value framework.

Comparison

Almost all of the authorities have been involved in some form of internal and/or externalbenchmarking. However the objectives of benchmarking exercises and the methodologies which havebeen adopted have varied considerably both within and between pilots.

In practice most pilots have found comparisons to be more difficult to make than they had originally anticipated. Many have become dissatisfied with simplistic measures but have been daunted by the time and resources involved in developing rigourous, like-for-like comparisons.Few businesses have been willing to participate in benchmarking. Nevertheless, there have been a number of instances where internal and/or external comparisons have brought to light under-performanceand persuaded policy makers of the need to make changes. Process benchmarking has helped some pilots to identify practical ways of making improvements.

Consultation

Most pilots have extended and deepened their consultation mechanisms and begun to develop more systematic and comprehensive approaches to public engagement. Many stress the importance of matching requirements of particular reviews and also of having an overall programme of on-goingconsultation.

Many pilots have had increased contact with non-users and 'hard to reach groups' and some havesought, often for the first time, to involve local people in determining future targets and priorities. The outcomes of consultation have had a significant impact on many year one reviews.Most pilots have, however, found that the duty to consult required more staff time and other resources had to be invested than they had previously anticipated.

Competitiveness

Many pilots have decided to give in-house teams the opportunity to improve and to use opencompetition only where they prove unable to meet the targets for improvement set out in performanceplans. The Best Value Framework is, though, leading to a more rigourous examination of alternativeapproaches to service delivery and some pilots have begun to develop more sophisticated approachesto market analysis and strategic procurment.

Several pilots claim to have identified scope for major improvements and/or cost savings through voluntary competitive tendering (VCT) exercises. Many other year one reviews are likelyin due course to lead to the use of a wider range of providers. Some authorities have attempted to 're-build' relationships that had been damaged under CCT. However, progress in developingnew forms of contracting has been slow.

Collaboration

Many pilots have sought to strengthen joint working with other local service providers. Indeed,some see partnership as the primary means of achieving Best Value. In most cases, pilots have beenprimarily concerned with working with other public bodies (in particular police and health authorities)to address 'cross-cutting' issues such as community safety and social inclusion. Many elected members remain sceptical about public-private partnerships (PPPs) and most businesses seem to be unwilling, at this stage, to commit themselves to joint working. Some pilots have argued for changes in existing legislation to enable them to develop new consortia.

Performance measurement and performance plans

The development of local performance measures and the legal requirement for authorities to produce annual Best Value performance plans attracted less attention in the first year of pilotingthan some other elements of the Best Value framework. A small number of the English pilots have,though, produced performance plans and other authorities in Wales have been required to publishplans in 1998 and 1999. Many pilots believe that producing performance plans will act as a major driver for change and may significantly increase the involvement of elected members in Best Value.Most do not though have sufficiently robust performance management systems. Many lack comparativedata and progress in developing local performance indicators (PIs) has been patchy. There are concerns among pilots about what is seen as a potential overlap between Best Value performanceplans and other statutory plans and performance regimes. It will be important to find imaginativeapproaches which combine the need for plans to be relevant to the public, useful for managersand in compliance with audit requirements.

Conclusions

The pilot programme reflects a new style of policy makign involving a greater emphasis on experimentation and policy learning. The experiences of the pilots have helped to shape the legislation and guidance. The success of the regime will now depend in large measure on the capacity of local agencies. The focus of learning must now therefore be shift to local implementation.

Many pilot authorities need to 'scale-up' their activities and to develop systems for monitoringthe implementation of action plans and the extent of improvements in services. Non-pilots needurgently to prepare for publication of their first performance plans and the start of performancereviews.

All of the national partners have an important role to play in developing a strategy for mainstreaming the lessons of the piloting process within their sectors. They will need to movebeyond providing general information about tools and techniques to providing practical support that is tailored to the specific needs of individual authorities and organisations. Particular attention needs to be focused on supporting cultural and organisational change.

Although this report was commissioned by the Office, the findings and recommendations are those of the authors and do not necessarily represent the views of the Office of the Deputy Prime Minister.