CCT has attracted widespread criticism from private and public sectors and has been deemed responsible for the poor quality of services delivered by local authorities. So, a new initiative, and a taskforce, has been announced by deputy prime minister John Prescott. Civil servants will be urged to avoid simply opting for the lowest price.
The best value initiative can be seen as an attempt to improve the delivery and quality of public services. It is a moderate and non-confrontational system, based on a balance between quality and price. However, there are certain dangers ahead.
Case law and litigation has proved that CCT was heavily abused, although the principles of transparency and competition were among its strongest points. Best value needs to be free from the ideological, protectionist and preferential practices that haunted its predecessor.
Where did CCT go wrong?
CCT introduced competition to the delivery of public services and, in theory, resulted in savings for the public sector. Furthermore, it has been seen as a safeguard for public accountability and a guarantor of openness and transparency in public purchasing.
Unfortunately, these merits have often been counterbalanced by disadvantages. For example, the compulsory element in tendering and the award of contracts to the lowest bidder created a hostile environment between the public and private sectors.
Under CCT, savings for the public sector often materialised at the expense of quality. In my opinion, the failure of CCT can be blamed on the strict budgetary constraints imposed on local authorities by Whitehall. However, local authorities bear some responsibility for the myopic interpretation of CCT, particularly the lowest offer mentality.
Best value pledges genuine value for money for the public sector. It intends to deliver target-driven results that are quality benchmarked and subject to external controls. Best value will build and capitalise on a consensus among the stakeholders – local authorities, service users and the private sector. Competitiveness, however, is expected to play a major role in the new regime, as it is the prerequisite for efficiency and effectiveness.
How best value works
Best value aims to emulate intelligent procurement systems, such as partnering, public/private sector partnerships and framework agreements, which would usually stretch public funds. It emphasises qualitative rather than quantitative considerations and at the same time maximises the flexibility available to local authorities by introducing elements of advanced supply-chain management systems.
For example, under best value, the compulsory element of tendering for public services will be replaced with a selection process that can give real value for money. This system could result in savings of 2% for local authorities and, at the same time, improve the quality of the deliverables.
Under best value, the compulsory element of tendering will be replaced with a selection process that can give savings of 2% and improve the quality of the services
The best value regime imposes a statutory duty on local authorities to deliver public services in an effective, efficient and economic way. It claims that it will modernise the management systems responsible for the delivery of public services through the following key features:
To deliver best value, local authorities need to determine whether a particular service is required, and the relevant form for its provision; to compare performances between authorities, taking into account all relevant indicators and the views of end users and suppliers; and consult with local taxpayers, service users and the wider business community in setting specific performance and efficiency targets.
In addition, authorities should demonstrate the optimal procedure for delivering the service to the public through a competitive process that guarantees openness, transparency and public accountability.
Best value is expected to make an impact on the system local authorities use for delivering public services. However, there are many uncertainties in relation to the thrust of best value, which have not yet been addressed by the government.
The proposal was rushed through in the last minute of the Queen's Speech (December 1998), and both the public and private sectors need a detailed and concrete framework of rights and obligations.
In particular, the forthcoming legislation would benefit from authorities addressing some important issues, including the detailed procedural delivery and the process of competitiveness.
Also important is best value's relationship and compatibility with the European Union Procurement Directives; the Acquired Rights Directive and TUPE Regulations; the National Health Service (Private Finance) Act 1997 and the Local Government Act (Contracts) 1997; and the private finance initiative.