Councils join audit forces

24 Sep 98
Three North Yorkshire local authorities are setting up a combined internal audit service as part of the latest phase in the government's best value initiative.

25 September 1998

Scarborough Borough Council and Ryedale and Selby District Councils will combine their internal auditing teams from April 1999. The consortium is one of six best value 'partnership network' pilots announced by the government on Thursday. It is estimated that 'six-figure savings' will be made from the consortium approach, mainly through reductions in labour costs.

The three audit departments currently employ ten people with three posts vacant. It is likely that the vacant posts will not be filled and that 'natural wastage' will reduce numbers further. But longer term, the consortium hopes to expand its activities and take on more staff.

'We will also be looking to offer our services externally,' said Martin Drydale, Scarborough's financial adviser and consortium spokesman. 'We have to think about moving into county and unitary authorities and possibly even beyond local authorities.'

The North Yorkshire Audit Partnership is one of six pilot schemes that the government hopes will encourage local authorities to be more innovative in providing services. They are additional to the 37 best value pilots announced at the end of last year.

'I want to create conditions where the private and voluntary sectors can work with local government to deliver quality services at a competitive price. The best value pilots and the partnership networks will together play an invaluable role in shaping the framework to ensure just that,' said local government minister Hilary Armstrong in launching the schemes.

The best value approach is Labour's answer to the Conservatives' compulsory competitive tendering regime. Number Ten argues that the approach, aimed at council service delivery, will place an emphasis on providing quality.

Some pilots make use of the 'hub' approach, which emphasises joint provision of services and sharing of assets to reduce costs and improve quality. In North Yorkshire this process involves existing public-sector staff, but in others it requires outsourcing to the private sector.

The most obvious example of the latter is the partnership between computer company ICL and management consultants Barony. They will be establishing franchises with local authorities to manage large-scale administrative processes such as the collection of council tax and business rates. No contracts have been signed as yet, but ICL and Barony are in negotiation with several local authorities.

A hub approach has also been taken by the Crossing the Boundaries project, a collaboration of trading standards departments involving seven local authorities in the West Midlands. They will share resources, information and expertise, although it has not been decided whether this will involve joint provision and management.

The three other pilots are: Public Sector Plc, a consortium of companies which aims to 'use the market to enhance the value of local authority in-house resources'; the Institution of Civil Engineers taskforce, a collaboration of 11 consultants, three contractors and 27 local authorities; and the payroll partnership network involving three unitary councils in the south west.

According to Ms Armstrong: 'We have identified projects that are proposing a variety of different approaches to partnership in service delivery and in establishing best practice. This will enable us to judge what works and what lessons can be learned.'


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