Best Value audit gets three stars

24 Feb 00
As the vague concept of Best Value turns into a full-blown audit and inspection regime, the reality of what awaits finance chiefs is finally being grasped. And they are not happy.

25 February 2000

Conversations with treasurers (as well as Public Finance's letters page) are filled with comments such as 'bureaucratic nightmare', 'CCT Mark II' and 'fundamentally flawed'. Some of the criticism results from confusion over the roles of auditor and inspector, but there is also genuine concern that the new system will dominate management time and effort.

This week the Audit Commission issued a report, Seeing is believing, explaining how the new inspection powers will operate in English local government. It clarifies the distinction between auditor and inspector, and describes how the new star rating system will work. But it will do little to dampen the criticism.

Sarah Wood, director of finance and performance review at Birmingham City Council, understands the concern over the volume of work involved. She stresses that Best Value should 'focus on outcomes and not on inputs'.

Chris Bilsland, deputy chief executive and corporate director (finance) of Somerset County Council, goes further. He claims that Best Value could be worse than Compulsory Competitive Tendering and could lead to flawed decisions.

'As far as the audit and inspection regime is concerned, my instinctive response is that it all seems too much,' he says. 'There is a tremendous industry of Best Value audit and inspection that's been driven up – it all seems out of proportion to the exercise.'

But Wendy Thomson, the Audit Commission's director of inspection, says there is no turning back. 'Doing nothing is not an option for local government. I am sure they will have recognised – and if they hadn't, they'd better – that they have a confidence problem. Best Value offers an opportunity to address that.'

Seeing is believing breaks down the roles of inspector and auditor. It describes how external auditors will publish their opinions on an authority's annual Best Value Performance Plan, including its programme of Best Value reviews. Inspections then follow in a programme agreed between the lead inspector and the authority.

The report describes some of the work undertaken with 22 Best Value authorities, which it says has produced positive feedback. This is confirmed by the experience of the London Borough of Harrow, one of the Best Value pilots, which has already completed 12 service reviews.

Chief executive Tony Redmond says that he is positive about the new regime. However, he can understand the criticisms voiced over the time and effort involved. 'That is as much to do with the Best Value Performance Plans as the reviews themselves,' he says. 'The requirement to produce a series of BVPPs by March 31 is a time-consuming and, some would say, bureaucratic exercise.'

The commission has dropped its earlier proposal for a five-star rating based on service levels and likelihood of improvement. It has now settled on a three-star system, similar to that used by hotels and restaurants, which does not take into account future performance. Zero stars represents poor performance and three stars equate to excellent performance.

A grid will also be published which does take into account whether or not a service is likely to improve. But Thomson defends the decision not to include this in the star assessment. 'We are trying to make it simple. You don't move to an area because the services might improve, you move because they are already good,' she says.

Previously, zero stars automatically signalled intervention, but this has also been diluted. Thomson emphasises that her department's role is to refer poor performers to the secretary of state. This could follow a zero-star attainment, but might follow a one-star award depending on circumstances.

But there is still a concern that any form of star rating is bound to be simplistic. Sarah Wood at Birmingham describes it as a 'gimmick', which works against Best Value.

'All of us know the value of a three-star hotel. But you can actually find a very good one-star hotel,' she says.


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