Smith, who was speaking at a conference on best value, said the Public Services Productivity Panel would include leading business figures who could pass on lessons learned from managing change in large, complex organisations.
Smith said improvements in efficiency from best value procurement, which considers quality of service as well as cost, would deliver £1bn of savings in the next three years.
Best value procurement requires local authorities to secure continuous improvement in the way services are delivered. This includes delivery of public sector buildings and maintenance services.
Local government minister Hilary Armstrong admitted that local authorities were struggling to implement best value. She said: “The interim evaluation [of best value pilot schemes] by the Warwick Business School shows most pilots found best value a greater challenge than expected.”
The research shows that the kind of procurement across departments implied by best value is difficult to deliver because departmental fiefdoms are hard to overcome. Armstrong said less than 50% of local authorities had introduced a best value policy. The policy comes into effect officially in five months.
