REPORT ON THE
LOCAL GOVERNMENT
(BEST VALUE) BILL (NIA19/00)

The Committee for the Environment is a Statutory Departmental Committee established in accordance with paragraphs 8 and 9 of the Belfast Agreement, Section 29 of the NI Act 1998 and under Assembly Standing Order 46. The Committee has a scrutiny, policy development and consultation role with respect to the Minister of the Environment and has a role in the initiation of legislation.

The Committee has power to:

• consider and advise on Departmental budgets and Annual Plans in the context of the overall budget allocation;
• approve relevant secondary legislation and take the Committee Stage of primary legislation;
• call for persons and papers;
• initiate inquiries and make reports; and
• consider and advise on any matters brought to the Committee by the Minister of the Environment.

The Committee has 11 members including a Chairperson and Deputy Chairperson with a quorum of five. The membership of the Committee since its establishment on 29 November 1999 has been as follows:

• Dr William McCrea (Chairperson)
• Ms Carmel Hanna (Deputy Chairperson)
• Mrs Joan Carson
• Mr Arthur Doherty
• Mr David Ford
• Mr James Leslie
• Mr David McClarty*
• Mr Mitchell McLaughlin
• Mr Mick Murphy
• Mr Edwin Poots
• Mr Denis Watson

* Mr David McClarty replaced Mr Tom Hamilton on 26 February 2001, who had previously replaced Mr Tom Benson on 29 January 2001. Mr Benson died on 24 December 2000.

Introduction
Extension of Committee Stage
Consideration of the Evidence on the Bill
Summary of Key Evidence
Conclusion
Recommendation
Glossary of Terms

Appendix 1 - Minutes of proceedings of the Committee relating to the Report
Appendix 2 - Minutes of Evidence relating to the Report
Appendix 3 - Written evidence submitted to the Committee by Councils
Appendix 4 - Other written evidence considered by the Committee

1. The Local Government (Best Value) Bill was referred to the Committee for consideration in accordance with Assembly Standing Order 31 (1) on completion of the Second Stage of the Bill on 18 September 2001.

2. The Minister of the Environment (the Minister) made the following statement under Section 9 of the Northern Ireland Act 1998:

3. The stated purpose of the Bill is as follows:-

(i) repeal existing provision for the compulsory competitive tendering (CCT) of specified council services, as contained in the Local Government (Miscellaneous Provisions) (Northern Ireland) Order 1992;

(ii) give councils a duty to make arrangements for continuous improvement in all of their functions;

(iii) outline, in broad terms, a framework for delivering Best Value in the interests of transparency, consistency and accountability;

(iv) provide the Local Government Auditor (LGA) with statutory powers to conduct an independent audit of council performance;

(v) establish, within the Best Value framework, the areas where detailed guidance/directions on Best Value requirements will be delivered through Departmental circulars; and

(vi) make provisions enabling the Department to redefine, by order, present non-commercial considerations in the procurement process, in keeping with equality issues and in the interests of wider policy objectives generally.

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4. The Committee Stage of the Local Government (Best Value) Bill began on 26 September 2001. In light of the Committee's previously expressed concerns and the desire to consult widely and fully, the Committee agreed that the Committee Stage should be extended to 14 December 2001 in order to ensure due and proper deliberation on the Bill. The Committee agreed the following Motion seeking an extension to the Committee Stage of the Bill:-

The Assembly passed this Motion on 22 October 2001.

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5. The Committee had before it the Local Government (Best Value) Bill (NIA 19/00) and the Explanatory and Financial Memorandum that accompanied the Bill.

6. Although this was the first such Bill laid in the Assembly in respect of Best Value, this was not the first time that the Committee had considered proposals from the Department of the Environment (the Department) on legislating for Best Value.

7. On 30 November 2000 the Department sought the Committee's views on a Consultation Paper on Best Value, along with an outline of a proposed 19 Clause Bill. After taking written and oral evidence from Councils and a number of interested and relevant bodies, the Committee responded to the Department on 6 April 2001 in the following terms:

8. On 28 June 2001 the Department wrote to the Committee, enclosing a revised 11 Clause draft Bill, a revised Policy Memorandum and a revised Explanatory and Financial Memorandum. The revised Bill was introduced to the Assembly on 2 July 2001. (See Appendix 4 (c))

9. On 29 August 2001 the Department wrote to the Committee regarding the meeting of the Best Value Steering Group on 22 August 2001. The letter stated:

10. In view of the stance adopted by the Committee with the Consultation Paper of 30 November 2000 and the many concerns expressed by Members during the Second Stage debate of the Bill, the Committee considered it necessary to seek the current views of interested parties on the proposed legislation. (See Appendix 4 (a))

11. Accordingly, a letter was sent to the Chief Executives of all 26 Councils in Northern Ireland on 21 September 2001 asking for their views and any of their remaining concerns with the Bill. (See Appendix 4 (e))

12. In all, 17 Councils replied to the Committee's letter. All were promptly copied to the Department, as with other responses received and transcripts of oral evidence. While very brief responses from Craigavon and Newry and Mourne generally welcomed the Bill, the other 15 detailed a range of serious concerns with the Bill - although not every Council had similar concerns, the key issues raised by the Councils are summarised below:-

(a) the cost to small Councils and the very necessity for a Best Value regime within Northern Ireland where Councils have a very limited role compared to GB Councils;

(b) the benefits of awaiting the outcome of the proposed review of Public Administration in Northern Ireland;

(c) the failure to extend Best Value to all public services;

(d) as the voluntary implementation of Best Value was progressing satisfactorily despite the many new work pressures on Councils, there was no need at this time for a statutory framework for Best Value;

(e) the need for improved, effective and responsive consultation with the Councils to provide the required guidance, Performance Indicators, Standards and the audit process;

(f) the base Standard to be used for benchmarking local Performance Indicators and Standards and the need for the prescription of different Indicators for different Councils; and

(g) the absence of some of the provisions of the GB Local Government Act 2000, particularly those relating to giving Councils the power to promote equality and environment as well as the power to form partnerships in promoting Best Value.

(See Appendix 3)

13. On 4 October 2001 the Committee took oral evidence from representatives of Antrim Borough Council, Banbridge District Council and Belfast City Council. The following are indicative of the comments made at that session:

14. On 10 October 2001 the Minister wrote to the Committee to clarify some issues raised by the Committee. The Minister confirmed that 'there are no statutory requirements preventing the repeal of CCT without a replacement procurement process.' However, the Minister did feel that 'a statutory framework for Best Value was the only effective means of assuring local people that their Councils are obliged to act transparently.' The Minister accepted that some Councils had 'developed Best Value to a commendable level' but felt that 'the performance of many required considerable improvement if they were to demonstrate to ratepayers and local residents that they were being efficient and effective in the provision of services.' Finally, the Minister stated that while he was 'committed to avoiding the imposition of unnecessary bureaucracy on Councils,' he felt that 'the views of the Councils should not be given precedence over the rights and needs of ratepayers and residents.' (See Appendix 4 (h))

15. The Minister provided two enclosures with his letter to support his views. The first was a table, spanning two years, showing the response time of the Councils in regard to the submission of their Performance Improvement Plans (PIPs) to the Local Government Auditor. (While this appeared to highlight a deterioration in the response times, the Committee noted that the evidence put forward by the Minister to support his contention that the performance of many required considerable improvement showed that within 3 months of the required date for submitting Council PIPs, 22 had been submitted last year and 18 submitted this year.) (See Appendix 4(h))

16. The second enclosure was an extract from the LGA's Annual Report on the Audit of Local Authorities highlighting some deficiencies and concluding that it was important that any weaknesses were addressed. (See Appendix 4 (h))

17. The Committee considered this letter from the Minister to be extremely important. Not only did the Minister write at some length to argue the need for a statutory basis for Best Value but it contained a clear statement that the repeal of CCT and the introduction of Best Value were not inextricably linked - CCT could be repealed without the introduction of Best Value. Once and for all, this rebutted a belief generally held by many including Council Members and Officials, that one could not proceed without the other - this belief was typified in a letter of 15 October 2001 to the Committee from Mr Robert Gilmore, Chairman of the Society of Local Authority Chief Executives:-

18. In order to illustrate the failings of the voluntary arrangements for Best Value the Minister clearly relied on the evidence mentioned in the table in paragraph 15 above, that, by October 2001, some Councils had yet to provide PIPs. Also the LGA, in his Annual Report, had identified several weaknesses in the application of voluntary Best Value. The facts within the evidence have not been contested by the Councils. However, those Councils, appearing before the Committee on 4 October 2001 argued four principal reasons why the PIPs were not submitted by April 2001, namely:-

(a) the April submission date was not agreed with the Councils - it was a mandatory date imposed by the Department;

(b) many staff within the Councils had to be diverted to producing the budgetary reports required at the end of the financial year;

(c) elections were due in May 2001 and there was a lack of desire among Councillors to commit future Councils to PIPs that they may not agree to; and

(d) the Foot-and-Mouth disease outbreak severely hampered many Councils in both their everyday business and in taking forward Best Value.

The same Councils also addressed issues surrounding the alleged need for 'considerable improvement' in performance to date. They stated that Best Value has been a learning curve for both themselves and the Department with many of their staff diverted from the delivery of existing services as well as new challenges to implementation of Best Value. While all recognised the significant benefits of an effective Best Value system, they emphasised the need for partnership and co-operation in developing meaningful and acceptable guidance and standards before introducing prescriptive legislation. The Councils also questioned the role of the LGA, as stipulated within the proposed Bill, to perform audits purely on an accountability and efficiency basis without giving due weight to local public choice and quality, for example, Derry City Council's continuing support for the local airport. (See Appendix 3)

19. On 11 October 2001 Officials from the Department gave a short presentation on the Department's reasons for introducing this Bill, at this time, in this form. Some quotes from the Officials are given below:-

20. After the presentation, the Committee unanimously agreed that it remained totally unconvinced of the arguments put forward on the need for and timing of this particular Best Value Bill. The Minister was informed of this decision in a letter from the Chairperson on 12 October 2001. (See Appendix 4 (i))

21. On 18 October 2001, the Minister wrote again to the Committee. The Minister stated that he was 'at a loss to understand how this confusion has arisen' in relation to the need for back-to-back repeal of CCT and the statutory introduction of Best Value. The Minister also stated that he believes 'that the redrafted Bill strikes the appropriate balance between allowing councils some flexibility of approach, and assuring local people that council activity will be transparent and capable of independent scrutiny.' However, the Committee took particular note of the closing paragraph of that letter:-

22. On 18 October 2001 the Committee received a presentation from the Association for Public Service Excellence (APSE). This organisation has over 255 Public Authority Members throughout the UK including 19 of the Councils in Northern Ireland. APSE has been deeply involved with the implementation of Best Value since its inception and, as such, is considered to be one of the foremost authorities on the subject in the UK.

23. During its presentation APSE informed the Committee that it had recently held a meeting with representatives from 23 Councils and relevant Trade Unions in Northern Ireland on the subject of the proposed Best Value Bill and the evidence that it was to put before the Committee. A unanimous key recommendation of that meeting was that:-

APSE also expressed definite concerns about the lack of proper consultation with the Councils, the need for the proposed legislation to be strengthened in terms of equality and the environment and the absence of agreed guidance for the Councils plus the powers to form partnerships with non-public organisations to deliver services. In support of their contentions, APSE compared the extensive and lengthy consultation process used by the Scottish Executive, prior to the introduction of its legislation, to the minimum period imposed by the Department for its Consultation Paper that embraced the Christmas Holidays last year.

24. On 8 November 2001 the Minister of the Environment, Mr Sam Foster MLA, attended a meeting of the Committee with Senior Officials from the Department. Some quotes from the evidence given are detailed below:-

(This was the Minister's response to a question on the Minister's earlier suggestion in his letter of 18 October 2001 that he was prepared to explore options for a limited deferral of the implementation date of a statutory framework for Best Value.)

25. Many of the witnesses who came before the Committee made significant references to the review of Best Value in England and Wales and the Committee sought information on this. The Committee learnt that on 1 October 2001, Mr Stephen Byers, Secretary of State for Transport, Local Government and the Regions, had announced a three month review of Best Value aimed at improving the quality of services. He said:-

This review came as a result of the 'Changing Gear: Best Value Annual Statement 2001' from the GB Audit Commission in September 2001. In that Report, the Commission welcomed what improvements there had been in the delivery of services under Best Value but found 'over 60 per cent of inspected services are...poor or fair, and there are still substantial variations in performance across different councils.' With regards to their own inspection, the Commission found that 'it is clear that one-size-fits-all inspection is not the most effective means to support improvements' and 'we will introduce a tailored service...based on council performance and their capacity to improve.' The Commission felt that the Government needed to take stock as 'local authorities are required..to produce a wide range of plans..this system is fragmented and bureaucratic, and can hinder council's capacity to focus on what matters.'

26. On 15 November 2001 the Committee received a presentation from the Northern Ireland Public Service Alliance (NIPSA), the main Trade Union for non-industrial staff employed by the Councils. In the presentation, NIPSA expressed many concerns about the Bill, centring on the Bill's creation of an audit-driven process that will stifle innovation, the timing of the introduction of such legislation when the Scottish Executive is still working on how it will take Best Value forward in legislation and the 'Byers Review' in England and Wales has yet to report.

27. In light of the concerns from NIPSA, the Committee questioned the attendance and role of a NIPSA representative at the Best Value Steering Group meeting on 22 August 2001. The Department had written on 29 August 2001 to the Committee about this meeting, suggesting that everyone who had attended had endorsed the Department's proposals for Best Value - see para 9 above. NIPSA was not content with the Department's assessment of what had happened at that meeting and agreed to investigate the matter.

28. In a letter of 29 November 2001 NIPSA enclosed the minutes of the meeting of 22 August, 2001, and noted that there was no record of any unanimous agreement of all present to endorse Best Value or that each representative endorsed the revised draft legislation. (See Appendix 4 (p) )

29. At the Committee meeting on 15 November 2001, the Committee considered the Bill, clause by clause, in the light of the specific views received from the Councils and others on each respective clause. A wide range of concerns were expressed for virtually every clause, but especially clauses 1, 2 and 3. (See Appendix 4 (m))

30. Following this discussion, the Committee went on to consider a range of options on the way forward - these ranged from repealing CCT and only considering the introduction of a statutory Best Value framework as part of the outcome of the pending Review of Public Administration, to repealing CCT and accept the current Bill as drafted but to ask the Department for a commitment to produce its guidance only after effective consultation with the Councils. The Committee opted for the repeal of CCT with a consideration of the introduction of a statutory Best Value framework after the outcome of the GB Review of Best Value is known and then, only after full and effective consultation on any legislative proposals. The Committee also agreed that this consideration of a Best Value framework may well need to take account of the progress made on the Review of Public Administration in Northern Ireland. (See Appendix 4 (n))

31. The Committee asked for the Assembly Legal Advisors to consider its chosen option and to suggest how this could be best achieved in legislation.

32. At the Committee meeting on 22 November 2001, the Committee considered the amendments suggested by the Assembly's Legal Advisors that would produce the draft legislation to match its chosen option. These were agreed along with an outline draft recommendation, subject to the pending presentation by the Chief Local Government Auditor (CLGA).

33. On 22 November 2001, the Committee received a presentation from the CLGA. The CLGA told the Committee that, from an audit viewpoint, there were some issues pertaining to some Councils that will not be addressed in the absence of a statutory framework for Best Value - these included Council Member involvement, lack of fundamental reviews, lack of development in the areas of challenge and competition and many Councils' programmes containing numerous reviews aimed at narrow areas. As such, the CLGA considered that a statutory arrangement for Best Value was needed. The Committee noted the following comments from the CLGA:-

(This was in response to the Committee Chairperson referring to Clause 3, subsection 4 of the proposed Bill which states that the auditor may carry out an inspection of the Council's compliance.)

(This was in response to the Chairperson asking if the proposed Bill was flawed or perfect.)

34. The Committee noted that the LGA has extensive powers to audit each Council's accounts under the Local Government Act (Northern Ireland) 1972 and that audit reports are available to local electors. In 1985 new powers were introduced which allows LGA to carry out comparative studies across Councils - known as VFM studies aimed at improving economy, efficiency and effectiveness in service provision by Councils. The Committee would therefore contend that the LGA currently has powers to subject Council expenditure to arrangements which promote greater accountability, transparency and auditability. The LGA's VFM comparative studies can include past and anticipated future performance and these can form part of the LGA's reports, which are defacto independent audit opinion and are available to the local community. The Committee therefore sees no weakening of the auditability of Councils' service provision by LGA by not proceeding with statutory Best Value at this time. The Committee also concluded from the exchange of words between the Chair of the Committee and the Chief Local Government Auditor on the meaning of the word 'inspection' that the proposed Best Value statutory regime for Northern Ireland would be another form of auditing. This, the Committee would contend, would not satisfy or address the concerns of the many Councils that the proposed Best Value regime would adopt a narrow approach to the measurement of efficiency and economies and overlook more difficult measures such as outcomes.

35. On 22 November 2001, the Committee considered an article from the Autumn edition of the Contract Lines, a journal from the Public Service Network organisation. This article stated:-

36. On 29 November 2001, the Committee completed a detailed Clause by Clause consideration of the Bill.

37. The Committee agreed to recommend to the Assembly on each Clause as follows:-

The Committee is content with the Long Title subject to the Committee's proposed amendment:-

38. This has been a challenging and demanding task for the Committee that began over a year ago in November 2000 when the Department first issued its initial Consultation Paper and draft 19 Clause Bill. After an intensive round of consultation at that time, the Committee was of the opinion that the proposed Best Value regime was not what was needed, either in that form or at that particular time and rejected the Department's contention that the Treasury would exploit weaknesses if Northern Ireland did not match the GB regime.

39. In early April 2001, the Department was advised of the Committee's opinion and rejection of what was proposed. The Department's and Executive's response was to return with the present 11 Clause Bill in July 2001.

40. Throughout this entire exercise, the Committee has strived to separate facts from perception and to be constructive and positive in assessing the evidence before it. This has not always been easy. Virtually everyone who gave evidence to the Committee would agree that the Department's strategy appears to have been based on the following premises:-

(a) CCT must be repealed in April 2002;

(b) CCT has to be replaced by statutory Best Value at this time - based on the Councils signing up to Best Value in 1998;

(c) Voluntary Best Value is not working;

(d) The majority of Councils endorsed the Department's proposals;

(e) The proposed legislation is the best method to give ratepayers and residents some form of control over their Councils;

(f) Guidance would be prepared after the legislation came into force and, again, while Councils may be consulted, the Department would be the final arbiter; and

(g) The Ministerial review of Best Value in England and Wales is of such little consequence that Northern Ireland can proceed with its own version and adopt a "wait and see" attitude to the outcome.

41. The Department has told the Committee that its legal advisors have stated that the repeal of CCT by primary legislation must be effected from 1 April 2002. The Committee has no evidence to the contrary.

42. The introduction of statutory Best Value at this time is solely a policy decision based on a judgement by the Minister and his Officials and is not a legal necessity for the repeal of CCT - this was not made clear by the Department throughout its Consultation exercise. Although it was readily admitted when challenged, it is clear to the Committee that the entire consultation process was conducted as if it was such a necessity, thus giving rise to the "inevitability" felt by most Councils.

43. The Committee was particularly disappointed with the Department's unwillingness to consider and discuss with the Committee alternative ways to take forward the acknowledged successful work on Best Value on a voluntary basis. The Minister, in his letter of 18 October 2001, stated

The Committee saw this as a timely intervention and positive development by the Minister since it may well have led to a genuine and constructive discussion on the need for proper and effective consultation to take place with those who would be required to implement any statutory Best Value framework, namely, the Councils and other interested parties. The Committee was therefore genuinely disappointed when the proposal was unilaterally dismissed by the Minister without any real explanation when the Minister came before the Committee on 8 November 2001. This effectively stymied any constructive exchange of views between the Committee and the Department on agreeing a mutually acceptable way forward with this Bill.

44. Much has been made of the Local Government Auditor's comments in his Report on the operation of Best Value in 2000/2001 compared to 1999/2000. In particular, the late or non-production of PIPs has been used as the principal evidence to demonstrate that voluntary Best Value is not working. The Committee believes that, in this respect, the Department has been both narrow and selective in the evidence considered and produced, especially as it has been shown that in the year 2001, 18 Councils (and 22 Councils in the year 2000), had submitted PIPs within 3 months of the deadline imposed by the Department. The Councils of Northern Ireland have faced particular and difficult problems throughout the past year - Foot-and-Mouth disease being just one - and yet there is absolutely nothing to suggest that the Department, nor the LGA, has given any weight whatsoever to these. The workloads of Councils have been growing over the past years with more work being devolved from the 'Centre', for example, implementation of the equality provisions of Section 75 of the Northern Ireland Act 1998 and development of plans to implement the Waste Management Strategy. It is disappointing that one Audit Report of this nature has been used to justify a supposed need to abolish a temporary continuation of a voluntary framework for Best Value.

45. The Department has been keen in portraying not only the Councils' apparent endorsement of the Department's views on the way forward but also their willingness to co-operate in developing a statutory Best Value regime. For example, much has been made of the work of the Best Value Steering Group. It was only after the Committee wrote to every Council that the true picture of a "sense of inevitability" was revealed with the clear majority of 15 Councils having serious concerns about how the Department was proceeding with this Bill. The Committee was astonished at the depth of feeling against the Bill that came to light after just one inquiry as opposed to the message put forward by the Department of working in harmony with the Councils over a lengthy period of time. Yet, as with all the evidence submitted to the Department by the Committee, it appears that the views of the Councils have been ignored for the sake of an under-developed and therefore flawed policy. (See Appendix 4 (j))

46. As regards the Best Value Steering Group, this is a relatively small non-representative group that the evidence from NIPSA would suggest is not as welcoming about statutory Best Value as the Department would have the Committee believe.

47. Correspondence from the Department has consistently included the phrases of transparency, accountability, consistency and auditability as key objectives of statutory Best Value. The Committee considers that this does a disservice to the work of the Councils to date and suggests that they have been somehow lacking in all of these. Yet, in its own evidence, the Department accepts that the Councils have been doing all required of them in terms of public consultation and production of PIPs, regardless of Best Value.

48. It was noted that the CLGA wished to minimise his own role within the proposals and told the Committee that the major change in audit terms would be external rather than internal reporting. He did not see his role as one of inspection, despite the use of the very word within the legislation that he has been closely associated with since its inception. In fact, the CLGA could not explain its inclusion within the present Bill.

49. A consistent concern from the Councils has been the lack of genuine partnership and consultation by the Department on how a statutory Best Value regime would operate. Another primary concern has been that any guidance, standards and benchmarking targets could well be indiscriminately imposed on all, rather than a system that took account of the ratepayers current needs and past achievements of an individual Council. The guidance would be in the form of Departmental Circulars that Councils feared would not be formally open to comment. The Department has stated that it will consult on these issues but the Councils have remained sceptical - if the outcomes of the earlier Best Value consultations are to be the benchmarks, then the Committee feels that this scepticism is well justified. Both the Public's and Councils' confidence in the new framework needs to be established and developed and this can only be done by the Department showing a willingness to not just listen but to take full account of what stakeholders have to say. APSE quite rightly pointed to Scotland where the Executive has deferred introduction of Best Value legislation until everyone has had an opportunity to contribute to its development.

50. The Committee, and many others, fails to understand what seems to be the Department's ideological determination to introduce Best Value on 1 April 2002. While already convinced of the need to re-evaluate the Department's entire approach to date, the Committee has no doubt whatsoever that it is clear that the outcome of the current GB review will have a significant impact on how the framework is delivered. The Department has been almost dismissive of the GB review and has been supported by the CLGA who would have the Committee believe that it is only the inspection aspect being reviewed. This is not so. The Committee has no doubt that, despite the CLGA's reticence in acknowledging the fact, inspection is an integral part of the proposed Best Value framework. As the CLGA has identified that the inspection regime is part of the GB Review, then it is only right that any Northern Ireland plans for inspection must take account of the outcome of the Review.

51. Despite statutory Best Value being in place for a number of years in England and Wales, there is clear evidence that it is not producing the desired results among the majority of Councils with the Audit Commission using phrases such as "fragmented" and "bureaucratic" to describe the present system. It is widely accepted that the corresponding GB legislation could well be significantly revised as a result of the review. Yet, the Department remains implacable and determined in bringing forward legislation that could very likely need substantial amendment by the time of its proposed introduction.

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52. This Committee does not oppose a statutory framework for the implementation of Best Value within Northern Ireland and readily endorses the Best Value principles of transparency, auditability, accountability and value for money for Council services. However, the Committee must recommend the rejection of the Best Value clauses of this Bill on the grounds that it is very clear that the vital preparation and effective consultation with key stakeholders have not been properly undertaken, completed, or even agreed to, by the Department at this time.

53. The Department has argued that the Councils signed up to Best Value in 1998 and have been working it voluntarily since, some better than others. This is not in dispute. But what the Councils understood that they were signing up to on a voluntary basis included the expectation that there would be proper development of a framework and guidance in the coming years before the introduction of any statutory framework. The proposed legislation has been seriously flawed by the lack of consultation and agreement throughout and even further by its lack of commitment to do this in the future. The concerns expressed by the stakeholders within this Report are very real and, despite the Department's repeated acknowledgements of these, it is time that they were taken seriously and effectively addressed. There is no evidence on the ground that this has happened to date.

54. The Committee believes that everyone involved in this process, including the ratepayers and residents of Northern Ireland, deserves the best possible framework appropriate to Northern Ireland, even if this takes a little longer to achieve - it is notable that even the CLGA agrees with the vast majority of stakeholders when stating that the present Bill is 'far from perfect.'

55. A proper way forward can only be achieved by genuinely listening to those in Councils and others who do want to contribute and by taking on board the important lessons to be learnt from those who have been working with Best Value in GB and now recognise that what they have, must be and can be improved.

56. The Committee would wish to highlight that when it invited comment on this Bill from Councils and other interested parties, it did so with an entirely open mind and its approach throughout the Committee stage of this Bill has been to listen fairly and equally to all views and opinions. Indeed, when writing to all Councils on 12 October 2001, the Committee was led to believe from earlier correspondence from the Department that the majority would reply in favour of the Bill's proposals. Likewise, APSE is known to be strong proponents of Best Value. NIPSA proactively wrote to the Committee for an opportunity to present its views. The Committee considers it important to highlight this because the vast bulk of the evidence in this Report strongly opposes the Best Value legislation. While acknowledging that some may not agree with the ultimate stance taken by the Committee, the Report merely reflects the strength of the evidence received.

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57. The Committee is not content with the Bill brought forward by the Minister of the Environment and will be submitting a number of oppositions to and amendments of the Best Value clauses of this Bill to reflect the views of the Committee, as outlined and evidenced above.

APSE - Association of Public Service Excellence

CCT - Compulsory Competitive Tendering

CLGA - Chief Local Government Auditor

COSLA - Convention of Scottish Local Authorities

LGA - Local Government Auditor

NILGA - Northern Ireland Local Government Association

NIPSA - Northern Ireland Public Service Alliance

PIP - Performance Improvement Plan

SOLACE - Society of Local Authority Chief Executives

VFM - Value for Money

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Present: Ms C Hanna (Deputy Chairperson)
Mrs J Carson
Mr D Ford
Mr D McClarty
Mr M McLaughlin
Mr M Murphy
Mr E Poots
Mr D Watson

Apologies: Rev Dr Wm McCrea (Chairperson)
Mr A Doherty

In attendance: Mr J Simmons (Committee Clerk)
Mr J Beatty (Assistant Clerk)
Mr J Nulty (Executive Support)
Miss M Devine (Administrative Support)

In the absence of the Chairperson, the Deputy Chairperson took the Chair.

(Ms C Hanna, Mr E Poots, Mr M Murphy and Mr D McClarty declared an interest as Local Councillors before the following item was discussed).

The Committee discussed the decision of the Executive Committee on the options for the way forward on this matter.

Agreed: To write to the Department with the concerns of the Committee.

Present: Rev Dr Wm McCrea (Chairperson)
Ms C Hanna (Deputy Chairperson)
Mrs J Carson
Mr A Doherty Mr D Ford
Mr J Leslie
Mr D McClarty
Mr M McLaughlin
Mr M Murphy

Apologies: Mr E Poots
Mr D Watson

In attendance: Mr J Simmons (Committee Clerk)
Mr J Beatty (Assistant Clerk)
Mr J Nulty (Executive Support)
Miss M Devine (Administrative Support)

Dr W McCrea, Ms C Hanna, Mr D McClarty and Mr M Murphy declared an interest as Local Councillors before this item was discussed.

The Committee discussed the Bill introduced to the Assembly.

Agreed: To seek clarification on an issue identified by the Committee.

Present: Rev Dr Wm McCrea (Chairperson)
Ms C Hanna (Deputy Chairperson)
Mr A Doherty
Mr D Ford
Mr M McLaughlin
Mr E Poots
Mr D Watson

Apologies: Mrs J Carson
Mr M Murphy

In attendance: Mr J Simmons (Committee Clerk)
Mr J Beatty (Assistant Clerk)
Mr J Nulty (Executive Support)
Miss M Devine (Administrative Support)

The Committee discussed the forthcoming Second Stage reading of this Bill.

Agreed: For recent research on the Bill to be copied to Members today.

Present: Rev Dr Wm. McCrea (Chairperson)
Mrs J Carson
Mr A Doherty
Mr D Ford
Mr J Leslie
Mr D McClarty
Mr M McLaughlin
Mr M Murphy
Mr E Poots
Mr D Watson

Apologies: Ms C Hanna (Deputy Chairperson)

In Attendance: Mr J Simmons (Committee Clerk)
Miss J Adair (Assistant Clerk)
Mr J Beatty (Assistant Clerk)
Mr J Nulty (Executive Support)
Miss M Devine (Administrative Support)

The Committee considered arrangements for the Committee Stage of this Bill including a letter from the Minister of the Environment to the Chairman of the Public Accounts Committee. The Committee also considered responses from nine Local Councils on their views and concerns about this Bill.

Agreed: To write to the Clerk of the Public Accounts Committee seeking clarification on their involvement in the Committee Stage consideration of this Bill. To invite representatives from Local Councils to next week's meeting to discuss their concerns with the Bill.

Present: Rev Dr Wm. McCrea (Chairperson)
Mrs J Carson
Mr A Doherty Mr D Ford
Mr J Leslie
Mr D McClarty
Mr M McLaughlin
Mr M Murphy
Mr E Poots

Apologies: Ms C Hanna (Deputy Chairperson)
Mr D Watson

In Attendance: Mr J Simmons (Committee Clerk)
Miss J Adair (Assistant Clerk)
Mr J Beatty (Assistant Clerk)
Mr J Nulty (Executive Support)
Mr M McCourt (Administrative Support)

Dr Wm. McCrea, Mr D McClarty, Mr M Murphy, and Mr E Poots declared an interest as Local Government Councillors before the next two items were discussed.

The Committee considered written responses from 16 Local Councils on their views and concerns and a response from the Chairman of the Public Accounts Committee to the Minister of the Environment on this Bill. The Committee also considered options to extend the period of the Committee Stage of the Bill and possible amendments to the Bill.

They gave presentations on their views and concerns about this Bill and answered Members' questions.

Present: Rev Dr Wm. McCrea (Chairperson)
Mrs J Carson
Mr A Doherty
Mr D Ford
Mr J Leslie
Mr D McClarty
Mr M McLaughlin
Mr M Murphy
Mr E Poots
Mr D Watson

Apologies: Ms C Hanna (Deputy Chairperson)

In Attendance: Mr J Simmons (Committee Clerk)
Miss J Adair (Assistant Clerk)
Mr J Beatty (Assistant Clerk)
Mr M McCourt (Administrative Support)

Dr Wm. McCrea, Mr D McClarty, Mr M Murphy, and Mr E Poots declared an interest as Local Government Councillors before the next item was discussed.

They gave presentations on the legislative and policy issues raised by the Committee relating to the Bill and answered Members' questions.

Agreed: To write to the Minister highlighting the Committee's strong concerns about this Bill.

To put down an Extension Motion for the Agreement of the Assembly.

To invite representatives from SOLACE, NILGA and APSE to attend next week's meeting to present their views and any concerns about this Bill.

Present: Rev Dr Wm. McCrea (Chairperson)
Mrs J Carson
Mr A Doherty
Mr D Ford
Mr J Leslie
Mr D McClarty
Mr M Murphy
Mr E Poots
Mr D Watson

Apologies: Ms C Hanna (Deputy Chairperson)
Mr M McLaughlin

In Attendance: Mr J Simmons (Committee Clerk)
Miss J Adair (Assistant Clerk)
Mr J Beatty (Assistant Clerk)
Mr J Nulty (Executive Support)
Mr M McCourt (Administrative Support)

Dr Wm. McCrea, Mr D McClarty, Mr M Murphy, and Mr E Poots declared an interest as Local Government Councillors before the next item was discussed.

The Committee considered the way forward on this Bill and noted that a response from the Minister to the Committee's letter was awaited. Members also noted a letter from the Chairperson of SOLACE.

They gave a presentation on their views and concerns about this Bill and answered Members' questions.

Agreed: To invite the Minister of the Environment to attend next week's meeting to discuss the way forward on this Bill.

That the Secretariat will obtain a copy of the Scottish Local Council Tendering Bill to assist in the consideration of the Bill at next week's meeting.

Present: Ms C Hanna (Deputy Chairperson)
Mrs J Carson
Mr A Doherty
Mr D McClarty
Mr M Murphy
Mr E Poots
Mr D Watson

Apologies: Rev Dr Wm. McCrea (Chairperson)
Mr David Ford
Mr J Leslie
Mr M McLaughlin

In Attendance: Mr J Simmons (Committee Clerk)
Miss J Adair (Assistant Clerk)
Mr J Beatty (Assistant Clerk)
Mr J Nulty (Executive Support)
Mr M McCourt (Administrative Support)

The Committee noted the response from the Minister of the Environment to the Chairperson's letter dated 12 October 2001.

Members considered information provided on the Scottish approach to the repeal of CCT and the introduction of Best Value, and on the GB three-month review of Best Value.

Agreed: To invite the Minister of the Environment to the meeting on 8 November 2001 to discuss the way forward on this Bill.

Present: Rev Dr Wm. McCrea (Chairperson)
Ms C Hanna (Deputy Chairperson)
Mrs J Carson
Mr A Doherty
Mr David Ford
Mr D McClarty
Mr M McLaughlin
Mr M Murphy
Mr E Poots

Apologies: Mr J Leslie
Mr D Watson

In Attendance: Mr J Simmons (Committee Clerk)
Miss J Adair (Assistant Clerk)
Mr J Beatty (Assistant Clerk)
Mr M McCourt (Administrative Support)

Dr Wm. McCrea, Ms C Hanna, Mr D McClarty, and Mr M Murphy declared an interest as Local Government Councillors before this item was discussed.

The Minister of the Environment and Senior Officials, Mr Stephen Quinn, Permanent Secretary, Mrs Cynthia Smith, Deputy Secretary, Mr David Barr, Principal Officer and Mr Donald Starritt, Deputy Principal, joined the meeting at 11.27 a.m. The Minister gave a brief presentation on his position regarding this Bill and a lengthy detailed question and answer session followed.

Members held a short discussion on the way forward on the Bill.

Agreed: To invite representatives of the Northern Ireland Public Service Alliance (NIPSA) to attend next week's meeting to present their views on this Bill.

Present: Rev Dr Wm. McCrea (Chairperson)
Mr D Ford
Mr D McClarty
Mr M McLaughlin
Mr M Murphy
Mr E Poots
Mr D Watson

Apologies: Ms C Hanna (Deputy Chairperson)
Mrs J Carson
Mr A Doherty

In Attendance: Mr J Simmons (Committee Clerk)
Miss J Adair (Assistant Clerk)
Mr J Beatty (Assistant Clerk)
Mr M McCourt (Administrative Support)

Dr Wm. McCrea, Mr D McClarty, Mr M Murphy and Mr E Poots declared an interest as Local Government Councillors before this item was discussed.

Mr John Corey, Mr Paddy Casey and Mr Bill McLennon, Northern Ireland Public Service Alliance (NIPSA) joined the meeting at 10.42 a.m. They gave a presentation on their views about this Bill and answered Members' questions.

The NIPSA representatives left the meeting at 11.40 and the Committee discussed options for the way forward on the Bill.

Agreed: That the Secretariat would prepare a paper in consultation with the Assembly's Legal Services Unit, on one particular option agreed by the Committee.

Present: Rev Dr Wm. McCrea (Chairperson)
Mr A Doherty
Mr D McClarty
Mr M McLaughlin
Mr M Murphy
Mr E Poots
Mr D Watson

Apologies: Ms C Hanna (Deputy Chairperson)
Mrs J Carson
Mr D Ford

In Attendance: Mr J Simmons (Committee Clerk)
Miss J Adair (Assistant Clerk)
Mr J Beatty (Assistant Clerk)
Mr M McCourt (Administrative Support)

Dr Wm. McCrea, Mr D McClarty, Mr M Murphy and Mr E Poots declared an interest as Local Government Councillors before this item was discussed.

The Committee considered a paper on options for the way forward on this Bill including advice from the Assembly's Legal Services Unit.

Mr John Buchanan, Chief Local Government Auditor, and Mr Brian Kernoghan, Principal Auditor joined the meeting at 10.57 am. They gave a presentation and answered Members' questions on the impact of the proposed Bill on the role of the Local Government Auditor and how this role would be affected if Best Value continued on a voluntary basis.

Agreed: That the Committee would give Clause by Clause consideration to the Local Government (Best Value) Bill at next week's meeting.

Present: Rev Dr Wm. McCrea (Chairperson)
Ms C Hanna (Deputy Chairperson)
Mrs J Carson
Mr A Doherty
Mr D Ford
Mr J Leslie
Mr M McLaughlin
Mr E Poots
Mr D Watson

Apologies: Mr M Murphy

In Attendance: Mr J Simmons (Committee Clerk)
Miss J Adair (Assistant Clerk)
Mr J Beatty (Assistant Clerk)
Mr J Nulty (Executive Support)
Mr M McCourt (Administrative Support)

Dr Wm. McCrea, Ms C Hanna and Mr E Poots declared an interest as Local Government Councillors before this item was discussed.

The Committee gave formal Clause by Clause consideration of the Local Government (Best Value) Bill.

The question was put:

The question was negatived - Mr Leslie abstained from this vote.

The question was put:

The question was negatived.

The question was put:

The question was negatived.

The question was put:

The question was negatived.

The question was put:

The question was negatived.

The question was put:

The question was negatived.

The question was put:

The question was negatived.

The question was put:

The question was negatived.

The question was put:

The question was agreed to.

The question was put:

The question was agreed to.

The question was put:

The question was agreed to.

The question was put:

The question was agreed to.

Agreed: That the Secretariat would provide a draft Committee Report for consideration at next week's meeting.

Present: Rev Dr Wm. McCrea (Chairperson)
Ms C Hanna (Deputy Chairperson)
Mrs J Carson
Mr D Ford
Mr D McClarty
Mr M McLaughlin
Mr M Murphy
Mr E Poots
Mr D Watson

Apologies: Mr A Doherty
Mr J Leslie

In Attendance: Mr J Simmons (Committee Clerk)
Miss J Adair (Assistant Clerk)
Mr J Beatty (Assistant Clerk)
Mr J Nulty (Executive Support)
Mr M McCourt (Administrative Support)

Members considered a draft Report on the Local Government (Best Value) Bill.

Agreed: Members approved amendments and new text elaborating paragraph 47 (Conclusions) of the Report and agreed to give final consideration to the draft Report on 13 December 2001.

Present: Rev Dr Wm. McCrea (Chairperson)
Ms C Hanna (Deputy Chairperson)
Mr A Doherty
Mr M Murphy
Mr E Poots
Mr D Watson

Apologies: Mrs J Carson
Mr D Ford
Mr J Leslie
Mr D McClarty
Mr M McLaughlin

In Attendance: Mr J Simmons (Committee Clerk)
Miss J Adair (Assistant Clerk)
Mr J Beatty (Assistant Clerk)
Mr J Nulty (Executive Support)
Mr M McCourt (Administrative Support)

Dr Wm. McCrea, Ms C Hanna, Mr M Murphy, and Mr E Poots declared an interest as Local Government Councillors before the next item was discussed.

The Committee gave paragraph by paragraph consideration to its draft Report on the Local Government (Best Value) Bill and considered letters to accompany the copies of the final published Report which will be sent to the Minister of the Environment, witnesses who gave evidence to the Committee on this Bill and other interested bodies.

Agreed: Members agreed amendments and new text elaborating paragraphs 32 and 53 of the Report and agreed the letters to the Minister, witnesses and other interested bodies. That the Report be ordered to be printed.

Thursday 4 October 2001

Rev Dr William McCrea (Chairperson)

Mrs Carson

Mr A Doherty

Mr Ford

Mr Leslie

Mr McClarty

Mr McLaughlin

Mr M Murphy

Mr Poots

Ms C McFarland ) Antrim Borough Council

Mr S Magee )

Mr P Cumiskey ) Banbridge District Council

Mr W McFadden )

Mr P McNaney ) Belfast City Council

Mr J Millar )

1.

The Chairperson: Ms McFarland, gentlemen, thank you very much indeed for coming; we deeply appreciate your presence. I am sure you understand that, because of the presentation of the legislative programme for best value, we are anxious to hear the views of members and representatives of district councils. The three councils represented here were previously among a small number who replied. I can now tell you that we have had 16 replies from the 26 councils. The clear impression given to us at the time of the presentation to the Assembly was that there was practically unanimity of opinion between the Department and the councils that the substance of the Bill was a necessity. We were anxious to know whether that was true to help us in our deliberations. That is why our Clerk sought to ascertain your views.

2.

A number of views have been presented to us. We shall ask Belfast City Council first to make a short presentation, after which we shall come to Antrim and Banbridge Councils respectively. Please make the presentation; afterwards we can take any questions members may have.

3.

Mr McNaney: I am Peter McNaney, Belfast City Council's director of legal services, and I shall make a short presentation on its behalf. I am accompanied by my colleague, John Millar, who is our hands-on best-value implementation officer. We have already made a detailed written submission to the Assembly Committee in our letter dated 26 September. We also made a previous submission to the Committee in your first round of consultation on the draft Bill. We are very pleased to be given this opportunity to make a further presentation today.

4.

I wish to highlight a number of key issues, principally from the letter I sent to the Committee on 26 September. As was highlighted at the Bill's Second Stage, local government spending accounts for only £275 million of what, according to the Budget recently issued by the Assembly, was a Northern Ireland public expenditure of £6·6 billion. Large areas covered by the best value initiative in England and Wales are, therefore, obviously not addressed or covered by the present Local Government (Best Value) Bill, which applies only to local government and district councils.

5.

In the Assembly debate the Minister of the Environment stated that Central Government already operated under a value for money, or best value, framework. In the Hansard report of the debate he specifically refers to financial regulations, a requirement to operate resource accounting, business plans and Northern Ireland Audit Office scrutiny. There is no question that such scrutiny provides a rigorous regime, examining financial probity, value for money and lawfulness of expenditure.

6.

The key point I wish to make to the Committee is that such scrutiny does not address the primary directive of what best value is about. It is supposed to be about a more joined-up and integrated delivery of public services to local communities, which are responsive to their needs and co-ordinated in ways which minimise duplication and maximise effectiveness. It should present a concerted response to the cause of complex, "wicked issue" problems such as social exclusion, neighbourhood renewal and regeneration.

7.

Those points were certainly made by many Assembly Members at the Second Stage. However, I suggest to the Committee that it raises the key question of what catalyst presently exists to drive other statutory and public service providers, apart from district councils, to investigate the services they provide for the public and to collaborate with others to integrate and deliver them in more joined-up and relevant ways. That is obviously a matter which will exercise the Committee, just as it exercised the Assembly in the debate at the Second Stage, and provides a very valuable context for my next point.

8.

In the Local Government (Best Value) Bill there is an absence of any equivalent to sections 16 and 17 - covering partnership powers - of the Local Government Act 1999 which applied in England and Wales.

9.

There are two Acts implementing the Modernising Local Government agenda in England and Wales. The 1999 Act imposes a best value duty on district councils and local authorities. The 2000 Act gives district councils the power to promote the economic, environmental and social well-being of their district. They are both part of the modernising local government agenda which is driving change in England and Wales. In Northern Ireland this agenda is being addressed in a piecemeal fashion. While the review of public administration will seriously impact on the role of local government, that present piecemeal response will only serve to marginalise further the role of local government in Northern Ireland. The Department's failure, despite many representations made to it, to respond positively to the introduction of equivalents to sections 16 and 17 of the 1999 Act is a grave omission that will seriously hamper councils in identifying joined-up solutions to provide best value services to the public.

10.

At the Second Stage the Minister stated that any legislation that would impede the full implementation of the best value initiative would need to be examined and discussed in the first instance with the appropriate Department. If a decision were reached to change existing provision the relevant Department would be responsible for any amending legislation which would be channelled through the legislative process. What he is saying is that, as opposed to having one power for local government that can co-ordinate changes to service provision as a whole, what we are going to do is to take a departmental or silo-based approach which is inconsistent with the prime directive of best value - joined-up service delivery. Therefore we submit that in the best interests of collaboration and partnership there should be legislative provision for the removal of impediments to the delivery of best value, and the Local Government (Best Value) Bill is the legislative vehicle which should deliver that. We once again make a strenuous representation to the Committee to consider seriously proposing an amendment similar to sections 16 and 17 of the 1999 Act.

11.

Best value is defined in clause 1 as "a combination of efficiency, economy and effectiveness". It has been further suggested that the words "equality" and "environment" should be added to that definition. I understand the reason for that suggestion. However, local government as a public authority is already subject to the provisions of section 75 of the Northern Ireland Act (1998), which require it to promote equality of opportunity in pursuance of its functions. It would not add anything to put the word "equality" in a best value duty - we would have to do that anyway.

12.

With regard to the inclusion of the word "environment", it would be much better if the Minister and the Department were to indicate their intentions regarding the introduction of the power which would permit district councils to promote the economic, environmental and social well-being of its district, which is central to the community leadership role of district councils.

13.

We have made some detailed comments which I will go through quickly. Clause 2 contains a provision for performance indicators. In the original draft Bill it allowed for different performance indicators to be dictated for different councils. That power has now been removed, and we urge that it be put back into the Bill. If a council can make proper justification that its circumstances are different, the Department should have the legislative authority to accept differential performance indicators, although there should be some core performance indicators established for all councils.

14.

This is the final point that I strenuously want to urge upon the Committee. Clause 2(1) of the Bill states that the Department may issue guidance to councils as to the carrying out of their functions under the Act. The Minister has already committed himself to the development of that guidance in collaboration with local government, and local government very much welcome this commitment.

15.

The Bill, however, does not say that. It states that performance indicators will be established by the Department, and it goes on to say that they will be established in consultation with councils and other stakeholders, but it does not say that about the guidance. The Committee should seriously consider the inclusion of a legislative provision in the Bill that guidance must be the subject of consultation.

16.

There are many forms of consultation. On the one hand it is possible to have true dialogue, a meeting of minds and a natural consensus between policy-makers, implementers of policy and the public. On the other hand there may be an entitlement to make representations, which are often ignored. At present it is not known if representations are considered or if they are put in the bin or in a drawer. The reasons why they have not been acted upon are not given by the Department. The Committee's role in the scrutiny of the guidance is, therefore, absolutely vital. It should seek either some legislative provision, which means that the Committee must be consulted on the guidance, or some type of firm undertaking from the Minister that he will consult the Committee on the guidance. A situation can be envisaged where, if the Assembly and this Committee are not here in the near future, guidance may be issued where consultation may not be all that it could be.

17.

In the Assembly at Second Stage, there was reference to how best value had evolved in the Scottish context. My colleague Mr Millar has informed me that the Scottish Executive have produced a consultation document on how best value has evolved on a non-statutory basis. The Department has said that it cannot not legislate for best value because it had been deferred by subordinate legislation. I have not examined that. The Assembly has its own lawyers, and perhaps the Committee may want to look at the specific legislative provision in Scotland and in Northern Ireland. As a lawyer, I must say that there are varying shades of legal advice. There is a large difference between "You must not do something" and "It is inadvisable to do something". If someone says that it is impossible not to legislate it should perhaps be subjected to more detailed scrutiny, but that is a matter for the Committee to consider.

18.

The Scottish consultation document on best value included contributions from all unitary district councils in Scotland and also around 50 other public bodies. Those groups all came together to talk about how best value should be delivered in service provision for the public. It was not just district councils. A series of recommendations were produced. My concern is that there seems to be a complete lack of that joined-up approach in this Administration. The only focus on best value is coming from the Department of the Environment. There may be something happening in education, social services or housing, but I cannot tell you what it is. It does not seem to be integrated through the departmental provision, but that is for the Committee to decide. The scrutiny role of the Committee is vital with regard to guidance.

19.

I will conclude this submission with a quote. I am a great plagiarist - you should always steal what people say better than you do. The Audit Commission oversees the implementation of best value in England and Wales. The commission has reviewed the operation of best value in England and Wales in the last year in its report called 'Changing Gear'. It is worthy of serious scrutiny. The report's executive summary states that

" lasting and relevant service improvement to the public is rooted in dialogue, with services users and with the wider community."

There can be no argument with that. It concludes that

"This is a powerful lesson for us all. It is only be establishing a constructive dialogue between all of those with a stake in improved local services that we can hope to rise to the challenge of delivering excellent public services."

20.

That quote starkly contrasts the one-dimensional Local Government (Best Value) Bill that is now being presented that deals with £275 million out of £6 billion of public expenditure.

21.

The Chairperson: We will move on to Antrim Borough Council.

22.

Mr Magee: Thank you for the opportunity to appear before the Committee to give some thoughts on the Local Government (Best Value) Bill. There will be a lot of duplication in my submission with what was said previously, without any collaboration whatsoever.

23.

I state with reasonable confidence that all councils have embraced best value as a welcome successor to compulsory competitive tendering (CCT), which was thrust upon local government through undesirable legislation in an attempt to lower costs without adequate attention to quality of service. Antrim Borough Council is fully committed to the principles of best value and has proved its commitment even at this early stage by publishing two performance improvement plans. Because we are committed to best value we do not think that it is appropriate to introduce a Bill which does not fully embrace the principles of best value. Legislation is required to repeal CCT, but it is not understood why this must be done in tandem with best value legislation. Each could stand alone, thus extending time and trust for voluntary action by district councils.

24.

The Minister, Mr Foster, has stated

"experience to date of the voluntary implementation of best value to date indicates that a statutory framework for best value is essential if we are to deliver the transparency, accountability and consistency that council residents and ratepayers deserve."

25.

The statement is demoralising when one considers the immeasurable amount of work and unsocial hours that many council employees have devoted in order to meet target dates, while venturing up a steep learning curve. The Department was on a steep learning curve as well. Transparency is not apparent from the Minister's statement with regard to negative information that is being fed into Central Government without our knowledge, even at this early stage.

26.

I can state categorically that in order simply to meet targets during the past two years of voluntary implementation it has been necessary to direct attention away from service delivery. Many services are presently freewheeling simply to allow time for preparation of paperwork for audits and publications. The recent Audit Commission report 'Changing Gear' clearly states

"A more integrated regime is needed that targets work in a way which better differentiates between the needs of different councils. More fundamentally, it is clear that 'one-size-fits-all' inspection is not the most effective means to support improvements in local services."

27.

If problems are evident within the audit and inspection regime in the UK, why are we including an audit regime which is clearly problematic in our legislation? Councils recognise and accept that a statutory framework will eventually be necessary but one questions why mistrust must be directed at Northern Ireland when that does not appear to be the case in Scotland.

28.

I also remind the Committee that indications from press reports published this week are that a three-month review of best value in Great Britain has been agreed. It might be beneficial and advisable to await the outcome of such a review on the mainland.

29.

As a general duty one of the main issues is that best value is concerned not only with economy, efficiency and effectiveness but also with quality, equity and the environment. That is not reflected in the duty outlined in the Bill. The Bill currently applies only to 26 councils which account for less than 5% of public expenditure - a point that was well put by Peter McNaney. As you are aware, in England best value applies to local authorities which are responsible for services such as education, health, housing, planning. Those services are currently excluded from the legislation in Northern Ireland. If the Government are fully committed to achieving best value for the users of public services in Northern Ireland, why are those fundamental services excluded? Perhaps the review of public services, which we have talked about many times over recent months, would be an appropriate time to introduce an inclusive framework.

30.

District councils are not afraid to co-operate with or undergo scrutiny by auditors. Such measures have been with us for at least 30 years in relation to finances and value for money. However, the draft Bill sounds intimidatory tones, and displays mistrustful and schoolmasterly attitudes. The thrust concentrates on making sure that paperwork is in order without due care being given to quality of service, facilities and the consequent improvements.

31.

Our accountability must be to citizens and ratepayers, and not concentrated on meeting audit demands. It is more motivating to be a volunteer than to be a conscript. Partnership and co-operation can give rise to better accountability and transparency. It is important to recognise that audit, in itself, should meet best value principles. Hence, we should ensure that practitioners from local government audit - or indeed, private auditors as they have in England - should be engaged.

32.

It would be disastrous to have theorists, or persons dedicated to one discipline, scrutinising the work of experienced practitioners in local government. Councils recognise the rationale of using professional auditors. However, those undertaking the audits need to be suitably trained, qualified and to have the experience of local government necessary to properly analyse and audit the performance improvement plans. The recent advertisement for best value auditors in Northern Ireland concentrated on the three Es and added an accountancy qualification, indicating that there will be a narrow approach to the audit. Audits need to be carried out by those with an intimate knowledge of services.

33.

I want to outline a further fear I have, which was put to your Committee in the July memorandum. The Bill indicates that auditors and inspectors will concentrate on performance improvement plans. However, clause 3 of that document states that as a result of the auditor looking at the performance improvement plans, the auditor may, at his discretion, decide to examine in more detail any other aspect of a council's approach to best value. That means that the spirit of the legislation has been brought out, and the auditor can come in and start from day one of best value. I shudder to think what the cost of that would be, if an auditor decides to do it. He has the power under the legislation to look at everything, not just the performance improvement plans.

34.

That is all I wish to say at this time. I want to introduce my colleague Ms McFarland.

35.

Ms McFarland: Mr Magee has dealt with some of the general issues. I want to explore more fundamental matters under specific areas. The first that must be addressed is the guidelines. As you all know, the guidelines will be pivotal to the success of best value. The legislation should not therefore prescribe only for consultation but also for agreement with councils on the drafting of these guidelines. Consultation, as we have heard earlier, is not enough. We need agreement through a partnership approach.

36.

On a positive note, the councils applaud the fact that the draft Bill is a vast improvement on what was previously advocated. Councils can meet the challenges; we can meet the statutory obligations. However, we question the haste and the camouflaged messages, particularly on enforcement. An approach to the audit of best value that is open-minded, supportive, and which provides advice and encouragement to councils, and promotes good practice through shared experiences, should be clearly reflected in the legislation. This point is raised in the Audit Commission's report 'Changing Gear'.

37.

The next issue that must be addressed is that of performance indicators. We welcome the development of performance indicators in consultation with councils. However, we are all aware that this area has been problematic to date. We continue to be concerned that performance indicators will concentrate on cost, to the detriment of quality of service. It is essential, again, that there is not only consultation but also agreement with councils on the performance indicators.

38.

If we are to fully embrace the principles of best value, there are two other elements omitted from the current legislation. These points have been raised by Mr McNaney. The first is a duty of community initiative. The best value legislation in England gives a duty to enhance the social, environmental and economical well-being of a council area. That duty should be included in the Northern Ireland legislation to empower councils to take a lead role in community planning and local integrated strategies.

39.

The other element that is missing is what is commonly referred to as the Henry VIII clauses. The GB Bill includes at section 16 powers for the Secretary of State to give authority to councils to relax the rules constraining local government if a particular council finds a new way of delivering best value, such as public-private partnerships or other options. Those powers are currently missing from the legislation, and the absence of such could seriously undermine a council's ability to deliver on best value. This must be recognised.

40.

In summary, Antrim Borough Council is fully committed to the principles of best value, and we are happy to accept a legislative framework, but the legislative framework must fully embrace the principles. It does not do so in its current form. There are fundamental issues that must be addressed to make sure that best value can be delivered. After all, we are all working toward the same goal. Best value is about making real improvements to our services to benefit the citizens, the users and the customers. We cannot do that unless there are fundamental changes made to the Bill.

41.

Mr McFadden: On behalf of Banbridge District Council, we thank you for the opportunity to address the Committee regarding our concerns on the proposed Local Government (Best Value) Bill. My name is Wilfred McFadden, and I am chairman of the policy and resources committee. My colleague is Mr Pat Cumiskey, director of corporate services.

42.

In 1998 we welcomed the Government's initiative to replace CCT legislation with the best value initiative. As you are aware, best value has developed on a voluntary basis for over three years. Progress has been made, and our submission will highlight concerns about replacing a voluntary ethos by a legislative framework. Mr Cumiskey will give the council's presentation.

43.

Mr Cumiskey: I am also at risk of going over ground that my colleagues have already covered.

44.

Northern Ireland local authorities have been committed to the best value initiative for over three years on a voluntary basis. There is no need for specific legislation at this time. We are concerned that legislation may be a retrograde step in the much smaller local authorities here and that best value can continue to be developed on a voluntary basis.

45.

The committee has discussed the different economic and structural bases of local government in Northern Ireland, which undermines the possible justification for a legislative framework. These include the fact that we account for just under 3% of public expenditure in Northern Ireland, compared to local authorities in Great Britain that take up in excess of 25% of a much larger purse. GB local authorities are generally large, tiered bureaucratic organisations, whereas Northern Ireland councils are much flatter, medium- sized local businesses. In GB the relationship between the Department and local government has traditionally been strained. Here it is generally constructive and facilitated by joint working groups.

46.

It is suggested that for economic, political and structural reasons, a legislative framework may be justified in the GB context but that the smaller, more open local authorities in Northern Ireland lend themselves to creative voluntary partnerships. Our experience of the voluntary framework established in Northern Ireland by Central and local government stakeholders has been broadly positive.

47.

Based on the English and Welsh equivalents, the main stages of the framework include a corporate review to establish service performance; individual service reviews linking strategy to objectives; and service performance demonstrated in annual performance improvement plans which incorporate performance indicators, benchmarking information and reviews of consultation exercises.

48.

This year we published our second corporate performance improvement plan and completed service reviews of all major services. A great deal of work involving councillors and senior council staff has established a valuable body of information, which has been incorporated into a management review process. Councils therefore have wide experience of the four Cs methodology - challenge, comparison, consultation and competition - which is incorporated in guidance produced by the Department of the Environment. It is difficult to see how the proposed Bill will contribute to developments under best value.

49.

Bipartisan working groups are more likely to develop a best value approach suitable for the needs of Northern Ireland. In that respect some aspects of the four Cs methodology are more important in the Northern Ireland context than others. For example, in the wake of the failure of CCT it is no surprise that the 2000-01 report of the local government auditor mentions that there is limited evidence of councils carrying out fundamental challenge to the existence of the few significant services carried out by Northern Ireland councils. Given that customer surveys have indicated that members of the public are generally very satisfied with the quality of the services provided by councils, should this aspect of best value be so prominent in Northern Ireland?

50.

On the other hand, the development of properly facilitated benchmarking clubs may be key to the success of the best value process in Northern Ireland. Unlike the rest of the UK, we have a very underdeveloped performance measurement regime with little analysis of available information, which undermines attempts to identify best practice. In his opening statement of the Second Stage debate on 18 September 2001, the Minister gave two main reasons for introducing the legislative framework. The first is the repeal of CCT legislation. However, it is clear that while the Local Government (Best Value) Bill is a convenient mechanism for repeal, it is not essential for that purpose.

51.

The second reason given was that

"experience to date of the voluntary implementation of best value indicates that a statutory framework for best value is essential".

52.

We contend that the contrary is true. The Minister states that a statutory framework is required to provide consistency. There might be some merit in this if councils were in the habit of resisting Central Government guidance. In general, this is not the case. Councils are aware that best value is a complex and evolving concept, and they welcome guidance from the Department. However, the Minister cites the late submission of corporate performance improvement plans, which were requested by the Department for April 2001. Councils had not agreed this date, and - in the light of pending elections - it was considered more useful to publish corporate performance improvement plans after the elections, including information on the new councils. In future councils wish to have a say in the optimum timetable for such local publications.

53.

In my opening remarks I suggested that legislation might be a retrograde step in Northern Ireland. The proposed Bill is potentially detrimental for the following three reasons. First, it imposes a top-down approach to policy, with only a limited contribution from policy implementers. We suggest that the imposition of the proposed Bill is more likely to promote a monolithic, fit-all policy approach to best value, whereas a creative voluntary partnership could facilitate adjustments to suit the Northern Ireland context.

54.

Secondly, it emphasises the policing role of the Department through local government audit at the expense of a more collaborative approach to best practice. In this context it should be noted that although the local government auditor has little recent experience of value for money auditing, such audits could be conducted within the ambit of existing regulatory legislation.

55.

Thirdly, it excludes agencies and boards that provide the same type of services as the local authorities. Several customer surveys carried out by councils suggest that the public continues to identify roads, water, housing and other local services with councillors and the local council. Therefore it makes sense to align all local services with the best value regime.

56.

Banbridge District Council recognises that the Local Government (Best Value) Bill presented to the Committee by Minister Foster goes some way to mollify concerns expressed by councils at the consultation stage. However, we think that the Bill is unnecessary and that the current review by the Environment Committee presents the Assembly with an opportunity to determine an alternative approach more sympathetic to the Northern Ireland context. Such an approach might include maintenance of a voluntary ethos rather than a legislative framework; experimentation with best value methodology; improved central guidance and co-ordination; and the development of a guidance framework to suit all local government-type services, whatever organisation provides them.

57.

The Chairperson: Thank you very much for your presentations.

58.

Before we take any questions, can I formally request that members of the Committee who are also councillors should declare and record their interest.

59.

On 29 August the Committee received a departmental reply through the Assembly liaison officer. It stated:

"At the 22 August meeting members unanimously agreed that, unlike Compulsory Competitive Tendering, Best Value offered District councils the opportunity to provide quality services, with the emphasis on public consultation and with transparency, accountability and value for money as key components in procurement and service delivery. In discussing the revised Bill, local government representatives recognised the changes that had been made to the original Bill, and each endorsed the revised draft legislation as an acceptable basis upon which Best Value could be further developed."

60.

The best value steering group includes two representatives who are councillors and three representatives who are council chief executives, as well as officials from the Department. That causes the Committee concern because there seem to be two voices here. Are the two councillors or the three chief executives speaking on behalf of local government? Have they consulted local government? How have they unanimously agreed that best value offers district councils the opportunity to provide quality services, and so forth? They each endorsed the revised draft legislation as an acceptable basis on which best value could be further developed.

61.

Mr McNaney: Belfast City Council is not a member of that group. The council did not know that that group had been asked to comment on the Bill. The council was not asked to comment and therefore has not endorsed the Bill.

62.

Mr Magee: Antrim Borough Council had no input either. My fellow chief executives were not in contact with me about it. I do not disagree with everything contained in the report. However, I disagree with the last sentence which states that they endorsed the draft legislation. Too much may have been read into that.

63.

The Chairperson: If the Department were using that as a basis for presenting the Bill, and it had been found acceptable and had been endorsed it, that is being used against local government. We are hearing two different voices. One is supposed to speak on behalf of local government. However, councils are writing to us with a different voice.

64.

Mr Magee: May I ask who submitted that report.

65.

The Chairperson: Lesley Rooney, the Assembly liaison officer.

66.

Mr Magee: Had it come from SOLACE, I would have been embarrassed; but I am not embarrassed, because this concerns three people. There are four or five elements to the report, and I agree with all of them except for the final one - that the 26 councils could embrace the Bill as it stands.

67.

We all agree on the need for a statutory framework. Our evidence this morning outlined other ways of doing it. We have shown, I hope, that the haste that the Minister and some civil servants suggest is not required. CCT can be repealed in two lines. Best value itself does not necessarily have to be brought into the legislation. That can be done separately.

68.

The Chairperson: The Minister gave two main reasons why the Bill is needed. I quote from the Hansard report on the Local Government (Best Value) Bill, Second Stage debate in the House on 18 September 2001.

"First, the requirement for CCT has merely been deferred by subordinate legislation; it remains on the statute book. Legal advice is that it cannot be further deferred in that way."

69.

No one seems to disagree. However, the second main reason is

"Secondly, experience to date of the voluntary implementation of best value indicates that a statutory framework for best value is essential if we are to deliver the transparency, accountability and consistency that council residents and ratepayers deserve. That strongly suggests that a statutory framework is the best way of promoting the interests of local people."

70.

These are given as the two main reasons. Everyone agrees with the first one. The second, however, seems to call the voluntary approach into question.

71.

Mr Magee: That is where there is a lack of transparency. I am not aware of a good reason why the statutory framework is necessary. I can only think of my own council in Antrim and Pat Cumiskey's council in Banbridge, where the performance improvement plans have been prepared and published. If other councils are not doing that, I am not aware of it. Someone at central Government is working to a hidden agenda, and the Minister is quite right to take that up. He gives that as his second reason for introducing the legislation. Surely, however, this is taking a sledgehammer to crack a nut.

72.

Mr Cumiskey: I tried to examine the motivation behind this reason. The only thing I could find in the documentation is the implicit criticism of councils for not complying with the requirement to submit performance improvement plans by April 2001.

73.

That was a difficult date for councils because of the election and the financial year-end. Councils must go through a process in order to have such documentation approved. April simply was not an appropriate time. That is the only reason we can find for the Minister behaving in this way. Perhaps the Audit Office is concerned about it, and that is where the idea came from.

74.

Mr Millar: The local government auditor is based in Belfast city hall, and we have had discussions with him about the performance improvement plans. To my knowledge, all district councils submitted their plans. However, they were not all submitted by the April deadline because of the problems that have been outlined. It is difficult to submit the performance improvement plans in April because of the financial process within councils. It has already been recommended that June would be a more appropriate time. I am not aware of any council that is not voluntarily complying with the best value ethos in publishing the required documents.

75.

Mr Ford: I want to go over a point made by the Chairperson; it is one that I raised in the Second Stage debate. The Department tells us that everyone accepts that the current draft is better than the previous proposal. Councils therefore think the current draft is good, as opposed to better than disastrous. Having been consulted and having felt that some minor gestures were thrown their way, councils have felt that that is as much as they will get. However, they could consider working with the Committee to make a good Bill rather than a better-than-awful Bill. Would you agree that that is a valid interpretation?

76.

Mr McNaney: This is an opportunity to determine whether the Assembly will make legislation that is a good fit for Northern Ireland or if it will be railroaded into making legislation that follows the lead of England and Wales. That is the crux question that Members of the Assembly will have to answer.

77.

There should be a Northern Ireland solution for a Northern Ireland issue. In his submission Mr Cumiskey outlined the reasons why local government is different in Northern Ireland. It has had to develop a partnership approach because of the lack of functions and multiplicity of other service providers. If the partnership approach were practised more transparently in all levels of government, that would become official.

78.

Local government is accountable because its members are elected. They therefore have to explain to ratepayers how they justify expenditure. Do we want local government to continue to be accountable to its electorate through its politicians, or do we want the local government auditor - who after all is an accountant - to determine what local government should do and what the level of provision should be? I am a great believer in the representative nature of local democracy and I think that that is a retrograde step.

79.

Mr Poots: Unusually for me, I agree with most of what the council officers say. Have you taken legal advice on the implementation of CCT? We have received conflicting advice. The Scottish Parliament has proceeded with voluntary best value. Have you taken advice regarding something more akin to the Scottish version of repealing CCT and going for voluntary best value?

80.

Mr McNaney: No, and it is not usual for us to do that. If one had enough time, one might have contacted one's colleagues in the Scottish Parliament to ask them that question. However, the Department of the Environment takes advice from the Department of Finance and Personnel's solicitors. I am sure that that advice would state that it is improper to use subordinate legislation to frustrate something in primary legislation.

81.

Without seeing that advice, without subjecting it to scrutiny, and without assistance from someone more learned in the law than myself, I would not say the advice is incorrect. There are various levels of advice - if something is undertaken it will be challenged and criticised by the Examiner of Statutory Rules, and will put public administration into turmoil.

82.

Mr M Murphy: The Bill seems to be directed at the Department rather than being innovative or providing best value for ratepayers' needs. Have you made representation to the Department and the Minister about that, and if so, what was the response?

83.

Mr Magee: We have been in consultation with the Department. There are many forms of consultation, but one wonders if the engrossment has been prepared before the consultation document goes out. However, we have not been left out of the consultation process at any stage. Three chief executives and two elected members met with representatives from central Government.

84.

Central Government seem to be piggybacking CCT and best value. We do not see a need for that because if CCT had never existed, a legislative framework for best value might still have been required. I cannot see why CCT cannot be repealed and enough time still be given to putting the proper legislation into place. In that way not all powers will be vested in the local government auditor.

85.

The Chairperson: Would it not advisable for the three chief executives and the two council representatives to consult the bodies they are supposed to represent?

86.

Mr McNaney: Scotland has COSLA - although it is experiencing difficulties - whereas Northern Ireland does not have a local government association. That issue is being addressed and we now have a local government association in embryonic form. A united voice for local government, which would act as a centralised consulting mechanism for central Government, would be useful. It would also be useful for the Assembly to have a central body that speaks for local government.

87.

I appreciate that the Department may have had difficulties in consultation. We can only speak in relation to our input to that consultative process.

88.

The Chairperson: How were these councillors and chief executives appointed? Who appointed them? Did local government appoint them? Whom do they represent?

89.

Mr McNaney: I think the chief executives were nominated by SOLACE.

90.

The Chairperson: If they were nominated by SOLACE, should they not consult with SOLACE? It is not a large organisation. There are 26 district councils and if there are three chief executives whom they can consult, I am sure they have meetings now and again. This is an important matter for the future of local government, and what will be placed upon it through the Bill. Councils are one reason the Bill is coming through, so they have to answer questions. If there were more time, perhaps interested parties could be brought before the Committee in order to ascertain their views.

91.

Mr Magee: I do not agree with the final sentence you read out. I do not have difficulty with the remainder. The reduction in the number of clauses in the second draft is acceptable, but there is room for further change to get it absolutely right. I am not aware of having being told by SOLACE to take this lock, stock and barrel. We are pleased that the Department bent the knee from the previous disastrous piece of drafting.

92.

Mr McNaney: Following the introduction of CCT, certain defined functions had to be put out to tender to enable private competition for delivery of services such as refuse collection, grounds maintenance, and leisure provision. During the operation of CCT from 1992 to date, of all services put out to tender by 26 district councils, the only contract to the private sector was awarded by Down District Council. That contract ended after two years on the withdrawal of the private sector company.

93.

An objective examination should be made of the time, energy, money and resources expended on a CCT process balanced against the intended outcomes. The outcome was that no contracts were awarded to the public sector. Is that a proper objective for public policy? It seems that no such analysis was ever made. My fear is that we are going the same way with best value. We are looking at the minimal level with no proper policy appraisal.

94.

Mr A Doherty: Thank you for your presentation. It is obvious that there will be legislation. Unanimity on most of the points made today is important and encouraging, not only with local councils only but in the host of other bodies that deliver services in partnership with them. There is also agreement that the decision to remove different performance indicators for local councils would need reconsideration. It is important to get things right.

95.

In the feedback the Committee has had on the three Es, there is a case to be made for equality and environment. Mr McNaney suggested that equality was covered well enough elsewhere and did not need to be a major factor in the legislation.

96.

Mr McNaney: You might like to take your own advice about that, but equality is a duty for local authorities under section 75 of the Northern Ireland Act 1998. Environment on its own would not be as effective as it could be if it were supported with the power to promote economic and social well-being. Environment alone might dilute the need for the Department to legislate for the promotion of economic, social and environmental well-being. That is my opinion, but others may differ.

97.

Mr A Doherty: Mr McNaney has strong opinions about the implication of meaningful consultation. Catherine McFarland said that there is little point in consultation if agreement is not reached. We would agree with that. I will act as devil's advocate. The bureaucratic mind would put forward an argument that guidance to councils is one way. There have been suggestions that there may be a legal duty that would make it more a directive to councils than guidance.

98.

Ms McFarland stressed that agreement is essential. The bureaucratic mind in Government might suggest that it is highly unlikely that 26 disparate councils will ever agree. It is even less likely that they will reach complete agreement with the Government. Do you feel that, under those circumstances, consultation is critical? Could there be agreement regarding that?

99.

Ms McFarland: Consultation, as it has been up to now, has obviously not worked. It has been a problematic issue. Agreement is always possible. All of the councils that we have spoken to are in total agreement on the principles of best value. I therefore cannot see that agreement could not be reached on guidance. Including councils before the guidance is issued is of the utmost importance.

100.

Mr A Doherty: I must stress that the consultation up to now has not been very successful. There is an onus on councils to ensure that they work together. As a former councillor, I am concerned that eventually councils will emerge stronger and better and will provide a better service.

101.

Mr Leslie: It has been said that the democratic process should be the arbiter. The Bill, and the legislation in England, acknowledges that that does not work. How many councils have changed hands over ratepayer issues? The answer is just about none. Clause 1, subsection (2) acknowledges that. The ratepayers must be consulted.

102.

The crux of what you say - and I agree entirely - is that the first Bill was excessively prescriptive. That has been modified, but clauses 2, 3 and 4 are still quite prescriptive. It is arbitrary in that it is largely under the Department's power as to how that prescription manifests itself. If some sort of collective wisdom could be arrived at on how to set general benchmarks, and if that approach was reflected in the legislation, would the Bill work satisfactorily?

103.

Mr Magee: It would be the basis for achieving something better than the current arrangements. Many people have accepted the second draft as the be-all and end-all. One spoonful of sugar will not sweeten a bottle of vinegar. It has been sweetened a little, but we must go the extra mile to make something useful for the public service to be provided by district councils in the future. I can see the divide-and-conquer scenario coming in: the report has embraced what is before us and yet we are coming in with a different message.

104.

Banbridge District Council made a submission earlier. Mr Cumiskey was not speaking on his own behalf. I am sure that his chief executive had some input into the presentation. His chief executive is the chairman of SOLACE.

105.

Mr McNaney: I have one observation: politicians - not departmental officials or the local government auditor - should be the final arbitrators of how best value should be conducted. What we are expressing is a natural concern that if that guidance or the indicators were subject to the independent scrutiny of, for example, the Committee, we would be more confident that the guidance would properly represent and reflect the concerns that local authorities or councils would have. That is key to it.

106.

When asked whether we need best value, I would make a personal, quasi-legal point. Best value, and the duty of best value, sends out a positive message from local councils that they are dedicated to serving the people who elect them. In management terms, it can act as a catalyst for change. There are organisations that do not like change, and if councillors or officers want changes, they need a catalyst to address the way that they provide services and to look at whether it could be provided in a better way. They need to tell the trade unions and the workforce that best value requires them to do that. Best value, in that sense, is positive and necessary. The fact that it must be designed to give the public what they want, rather than what departmental officials think they want, must be built into it. That is my primary concern.

107.

Mrs Carson: It has been clearly shown that something that you are finding it difficult to grapple with, and we, as elected Members, are finding it difficult to grapple with, is that district councils are being made to jump through hoops to account for 5% of the public expenditure. Other public services that are the responsibility of councils in the rest of the United Kingdom are covered by best value legislation. However, there is a gap in Northern Ireland. What representation are you making to the Department to cover that? As elected Members, we must ask why that discrepancy in accountability exists in Northern Ireland.

108.

Mr Cumiskey: When we were presented with the consultation process, there was a feeling of the inevitability of legislation. Although some councils told the Department that they do not think that legislation should be brought in now and put the case that the councils represent a small part of the public purse, many responses concentrated on the detail of the consultation document. The result was that when the Bill was presented, with the changes included, there was a sigh of relief that at least it was not as prescriptive as it originally had been. However, several councils would support the case we have made this morning.

109.

Mr McNaney: I understand that other sectors are looking at best value voluntarily. Mr Millar mentioned that the education and library boards are looking at best value on a voluntary basis. I do not represent central Government and I cannot tell the Committee how it has integrated the delivery of best value. That is what concerns me. If there is transparency and accountability in the process, why are they not telling the Committee?

110.

The Chairperson: Are you expressing concern over the need for, and the timing of, the statutory legislative basis for best value?

111.

Mr McNaney: I cannot answer that because I do not know how compelling the legal advice is on whether it must be replaced. I do not believe that the Department would say that councils must put everything out to tender through CCT again. It would be misconceived.

112.

The Chairperson: It has not stopped Departments in the past.

113.

Mr McNaney: The existence of the Assembly may fundamentally change the way Departments do things.

114.

The Chairperson: What do you think the Department should do in the light of Stephen Byers's statement? When the Government announced a three- month review of best value he said: "It will aim to ensure that best value reduces bureaucracy . We will review the statutory guidance on best value to focus on higher standards and not just lowest cost."

115.

The Government acknowledge that best value has brought bureaucracy and they are now having a three-month review to reduce bureaucracy. Why would the Department rush ahead with that now when Minister Byers has said that it has created bureaucracy? This must be examined and there must be a focus on the guidance to best value. Surely it would be best to await the outcome of the three-month review rather than to go ahead without listening to and learning from the experience of others.

116.

Ms McFarland: We referred to that issue in our presentation. The Audit Commission report, 'Changing Gear', which was published on the web no later than last Friday, makes very interesting reading. It indicates that there are fundamental problems with the best value regime. A three-month review would make sense. It would certainly make sense to wait for the outcome of a review, particularly when it is considering the guidance. The information should be available before legislation is rushed through.

117.

The Chairperson: What do you think about an amendment suggesting that CCT should be repealed by 1 April 2002, and that best value should commence on 1 April 2003? That would give the Government an opportunity to get the guidance and process right before it becomes a duty of accountability.

118.

Mr Cumiskey: That undermines the potential for a creative voluntary approach. Inevitably, many people will wait to see what the Department produces. When there are no talks, something else fills the gap. Unfortunately, it will not be action.

119.

Mr Magee: I am inclined to go along with your suggestion. It gives a year's breathing space. However, it does not mean that the legislative framework must be in place by April 2003. The framework would be examined with a view to introducing it in April 2003. The argument is not just as compelling. If there was a statutory position that made people do it, it might encourage those who are not presently in line to become so.

120.

After a year we will all be better educated on best value. We will also know what is happening in GB. We are well aware of what appeared in 'The Irish News' yesterday. It was partly from the Labour Party conference, but if the Government are holding a review, they have obviously found mistakes. Let us take advantage of that.

121.

Mr McNaney: I have a mixed view - a lawyer sit-on-the-fence view. We need a best value Bill. I can understand the thought behind the delay in the implementation of the duty; that is helpful. I would prefer to see some political oversight of the implementation, which will be delivered primarily through the guidance. I would like to see the Bill addressing the role of the Assembly in overseeing the guidance. I do not know how that could be done, but stakeholders' views must be put in place. Mr Cumiskey put it very well: the view of the implementers is important. On a practical point, we are three years into our five-year best value review programme and we have learnt an enormous amount. We will continue to learn, and the best way to do that is to build flexibility into the guidance.

122.

The Chairperson: Are you concerned about what will be in the guidance?

123.

Mr McNaney: I am concerned about what is in the guidance in relation to how that is interpreted by the local government auditor. I do not want to criticise the auditor because he is doing what he is told in the context of the legislative provision. However, in the delivery of public services, especially at local council level, there are issues of public choice and quality that impact to a large degree on issues such as effectiveness.

124.

For example, I read a report in the 'Belfast Telegraph' two days ago about Derry City Council and the airport, which stated that a report by the local government auditor questions whether local authorities should be involved in airports. My view - a lawyer's view - is that in a local authority there is statutory provision, which states that airports can be provided. As long as the money is spent properly and there is no imprudence or fraud, surely it is a political choice for members to decide whether they want to spend their electorate's money on an airport? What has that got to do with an auditor? That is the issue, and that is my concern.

125.

The Chairperson: In a sentence, what is the last line that you want to leave with us?

126.

Mr McNaney: I want a Bill with a power which will permit councils to form partnerships, with Henry VIII powers and with powers in guidance, scrutinised by the Assembly or stakeholders.

127.

The Chairperson: The Minister has said:

"I am committed to examining this broader issue in detail. However, this will involve extensive consultation and I would not propose to delay the Best Value Bill pending the resolution of that free-standing, though related, issue."

128.

Mr McNaney: That is a matter for the Minister and the Assembly to work out. However, from my experience of seeking wider economic development powers for local councils, there was a political commitment given by the Minister in 1997 to find a suitable legislative vehicle to provide such power. Such a vehicle has not been found. My personal view is that that is departmental official intransigence rather than a formal policy position. Given that that is their view, I still want some oversight of the guidance at a very minimum.

129.

The Chairperson: Are you saying that you want the Bill now, or do you want a Bill that properly reflects the views of local government?

130.

Mr McNaney: I would prefer the repeal of CCT and a future Bill that looked at best value properly in the context of the review of public administration. If I cannot have that, I will take a Bill that at least gives a greater degree of political scrutiny over the guidance and a greater input by local government into the agreement of that guidance.

131.

Mr Magee: I fail to understand why there cannot be a marriage of the power of general competence and best value, as opposed to the marriage of CCT and the best value framework. I view the former as more important because we should have the power of general competence as quickly as possible. However, to get that right, we should get CCT repealed in the meantime and work on the proper framework.

132.

Mr Cumiskey: In principle, we have no objections to a Bill. However, it would add nothing to best value as it stands at present, and if it goes ahead in its present guise it will work against the progress of the voluntary arrangements we have worked out over several years. I agree with my colleagues that if there were to be a review of the Bill, it is something for the future. However, the existing Bill does nothing for best value.

133.

The Chairperson: Thank you very much. I trust that you think the Committee is taking this matter seriously and that it is attempting to examine the issue closely. I hope you are aware of the Committee's previous strong representations in negotiations with the Department on the original Bill. We shall take your comments this morning into consideration in deciding how we go forward.

Thursday 11 October 2001

Rev Dr William McCrea (Chairperson)

Mrs Carson

Mr A Doherty

Mr Ford

Mr Leslie

Mr McClarty

Mr McLaughlin

Mr M Murphy

Mr Poots

Mr Watson

Mr D Barr ) Department of the Environment

Mr D Starritt )

134.

The Chairperson: We welcome Mr David Barr and Mr Donald Starritt from the Department of the Environment.

135.

The Committee Clerk: Committee members have before them a letter dated 10 October from the Minister of the Environment to the Committee Chairperson. The letter is a response in relation to the need for a back-to-back introduction - the repeal of compulsory competitive tendering (CCT) and the introduction of best value within a statutory framework. The letter may be referred to during this morning's discussion.

136.

The Chairperson: Mr Barr, have you read the letter?

137.

Mr Barr: Yes, I have. I will give an introduction, and the Committee members may then ask questions.

138.

Thank you for the welcome and the opportunity to give further evidence on the Local Government (Best Value) Bill. I am the acting director of Local Government Division and Mr Starritt is from the Local Government Division. We are grateful for the information that the Committee has forwarded to us in the past few days as a result of its consultation with district councils. We received late last night the transcript of the presentation made to the Committee by the three district councils. We are grateful to the Committee Clerk for ensuring that we got that before today's discussion.

139.

I had hoped that Committee members would have had time to study the Minister's letter, but that has not been possible. Much of what the Minister has said will, no doubt, come up in the discussion, and there will be other matters that the Committee will wish to raise with us.

140.

I will read an extract from the Minister's letter which is fundamental to our discussion and which conveys the Minister's, and the Department's, views on the matter.

"Drawing on my experience as a Councillor, I believe that it would be right to promote further transparency and accountability in the use of Council resources and the provision of local services. Best Value is designed to ensure that ratepayers and residents are given the information to shape local service provision. Councils must ensure that they provide local people with all the relevant information they need to evaluate Council performance. A Best Value framework, enshrined in primary legislation, is the most effective way to provide local people with a local government service that is transparent and accountable.

I am mindful though of the need to allow for some flexibility to enable councils to address local conditions and I have already given the Committee and the Assembly my assurance that guidance resulting from Best Value legislation will address this important requirement.

Finally, I would like to emphasise that Best Value is designed primarily for the benefit of ratepayers and residents. While I am committed to avoiding the imposition of unnecessary bureaucracy on Councils, the views of Councils should not be given precedence over the rights and needs of ratepayers and residents."

141.

There are other issues addressed in the letter which are more specific to the queries raised. Do you wish me to engage on those now?

142.

The Chairperson: We are happy for your to address those issues now. However, before continuing, I would record that those members who are also district councillors have declared that interest.

143.

Mr Barr: Ideally, we would like to have had more time to consider the councillors' comments in full, as they are important, but we will endeavour to respond to your questions as best we can in the circumstances. We will continue to examine the councils' comments after this session, taking on board the views and comments of the Committee today.

144.

The Minister's letter addresses the key questions raised in the Committee Clerk's letter of 8 October. The Minister's letter sets the scene as to why we are proceeding with the Local Government (Best Value) Bill. I will address the Committee's specific questions. First, I refer to the Committee Clerk's letter at paragraph 4, where it states:

"The Department's response of 12 September 2001 to Dr Doran appears to conflate the issues - in particular, paragraph 4 of your letter. .The Department's response appears to suggest one of two things".

In response to that, the Minister says:

"As explained on previous occasions, CCT can only be repealed through the use of primary legislation, hence one of the main reasons for taking forward the Best Value Bill. Subordinate legislation was used to defer CCT so that Councils could immediately make arrrangements for Best Value without the statutory requirements to further procure services under CCT. Legal advice is clear that this arrangement cannot be sustained beyond 1 April 2002, as this would be tantamount to a repeal of the primary legislation of CCT by subordinate legislation."

145.

More specifically, paragraph 4(i) of the Committee's Clerk's letter raised a scenario. The response to that is:

"There are no statutory requirements preventing the repeal of CCT without a replacement procurement process."

That is quite clear.

"However, as I have indicated above, it is essential to the interests of ratepayers and residents that a statutory framework exists".

146.

That is why we are taking forward a best value Bill at the same time as we propose to repeal CCT.

147.

In paragraph 4(ii), the Committee Clerk suggested that by our saying that CCT had to be repealed by a certain date, we were perhaps using that as some form of lever. The Minister's response is:

"This is most certainly not the case. When District Councils signed up to Best Value in 1998, an agreed policy objective was the repeal of CCT at the earliest opportunity."

We are now taking that opportunity.

"It has to be remembered . that most key services are under contract within the CCT statutory framework until 31 March 2002".

148.

Paragraph 5 of the Committee Clerk's letter states:

"The Committee noted paragraph 6 of the Department's response of 12 September to Dr Doran. However, the main point of interest to the Committee for the moment is simply that CCT can be repealed using primary legislation. Could the Department confirm or clarify that there is no legal or legislative obstacle, in principle, to the introduction of primary legislation, which would have the sole purpose of repealing CCT (without reference to the statutory approach to Best Value)?"

149.

That has been answered in the earlier response at paragraphs 4 (i) and 4(ii).

150.

Paragraph 6 of the Committee Clerk's letter states:

"Furthermore, the Department is asked to comment on the following: (a) In the event of the introduction of a short Bill with the sole purpose of repealing CCT, Local Government could, in principle, continue to implement and develop Best Value on a voluntary basis".

The Minister's response is:

"In principle, this could be done. But, in practice, this would not serve the interests of ratepayers and residents who use Council services."

151.

It is the Minister's view, and our view, that

"A statutory framework for Best Value is the only effective means of assuring local people that their Councils are obliged to act transparently, and independent audit is a crucial part of that assurance. It also places an onus on Councils to meet key targets within the framework, where such consistency is fundamental to meaningful benchmarking with each other."

152.

We are all agreed that one of the main issues in best value is to engage local people meaningfully in the process, and that is what we have to achieve through the Local Government (Best Value) Bill.

"Any Council failing to act transparently is, in an important sense, failing its local community, and local people need an independent assessment of performance to help them exercise their democratic rights.

It has been claimed that the voluntary arrangements are proving successful."

153.

There have been many positive points in what has been achieved over the last couple of years working in partnership with district councils. We have a number of working groups where we have worked closely with chief executives and elected representatives to further promote best value through guidance, performance indicators and customer surveys. Those have proved very successful, although there is still a lot of work to be done. We also have a best value steering group, and its members include chief executives and district councillors.

154.

We appreciate the work of the various chairmen of those working groups - all are chief executives of councils. They have produced sterling work for, on behalf of, and with the Department. I want to commend the work of those chief executives through the auspices of the Society of Local Authority Chief Executives (SOLACE). They have been instrumental in this and have worked closely with the Department. With the creation of the recently formed Northern Ireland Local Government Association (NILGA), we look forward to further promoting the partnership approach. I spoke at the inaugural meeting of NILGA a couple of weeks ago, and I said that the Department looks forward to working with it. We hope to bring NILGA on board in further working groups and the best value steering group. That is essential.

155.

Paragraph 6(b) of the Committee Clerk's letter says:

"The introduction of Best Value (on a statutory basis) could, in principle, be delayed until a consensus is reached on how Best Value is to be integrated into the process of reform of public administration and, in particular, Local Government reform in Northern Ireland"

The Minister's reply states:

"Again in principle this could be done. But for the reasons stated under paragraph 6 (a) this would not be in the interests of ratepayers and local residents, particularly as implementation of the outcome of the Review of Public Administration is clearly some years away."

156.

It is outside the remit of the Minister of the Environment. It is for Ministers in the Executive to agree the shape and format of any review of public administration. At present we are not aware of what form that review might take, but it is clear that even if the review were to go ahead immediately, or in the next few months, it would be some time before its outcomes could be put in place. We feel that it would not be fair on the ratepayers to delay the Local Government (Best Value) Bill until a review of public administration takes place.

157.

Best value can apply regardless of the structures of local government and the number of councils in local government. The Bill should not, therefore, be delayed.

158.

Paragraph 7 is a summary of what the Committee Clerk was looking for the Department to respond to. The Minister is saying that he has responded to the issues in the earlier paragraphs. The Minister's general observations follow that, and I read those to the Committee earlier.

159.

The Chairperson: Thank you. Page 2, paragraph 4(i), of the Minister's letter states - and you have repeated it this morning - that

"There are no statutory requirements preventing the repeal of CCT without a replacement procurement process".

160.

You said that that was quite clear. Your two words "quite clear" are interesting because it has not been quite clear until now. The impression that was given to the Assembly and to this Committee was the opposite - it could not be done. It was not until we drew matters out - like drawing teeth - that we got a response, and it now turns around the impression that was clearly given on every other occasion that the question has been asked. It was not answered clearly before.

161.

Mr Barr or Mr Starritt, did you know this before? The question has been asked many times before and has never been properly answered. Did you know the answer, or are you only finding it out now? A very different impression has been given to this Committee and on the Floor of the House. You can see that if you look at the Minister's statement in Hansard. That was not the impression that was given clearly in the House when the matter was debated. I want to know if you knew the answer. Why was it not made clear before? It is clear now, but, in the whole of the discussion, this is the first time that we have a clear answer. We have had to press and press for it. The Committee Clerk was instructed to specifically bring you here on the answer to this question. It was hedged around until now, and I want to know if you knew, and why we were not told before.

162.

Mr Barr: I am not sure whether the question was directly asked of the Department - whether this could happen - until now.

163.

The Chairperson: Yes, it has been asked before.

164.

Mr Barr: The Department and the Minister have clearly indicated that it is in the interests of the ratepayers and residents that they should have a - [Interruption].

165.

The Chairperson: Mr Barr, that is not an answer to the question that you are being asked. When did you know that there was no statutory requirement preventing the repeal of CCT without a replacement procurement process? Forget about this political statement about whether it is in the best interests of ratepayers. When did you know that that was possible? Why were we not told before?

166.

Mr Barr: Neither the Department nor the Minister intended to suggest to anyone that we knew about this and that we were trying to disguise that fact. That is the line that we have taken all along. It has been discussed with district councils through the best value steering group. Chief executives were aware that there was no statutory requirement to replace CCT immediately with best value. It remains, however, that we were of the opinion that best value should be put in place at the same time as the repeal of CCT.

167.

We need primary legislation to repeal CCT. We were taking the opportunity in doing that to introduce a regime of best value, under primary legislation, that is essential to secure transparency and accountability within the best value procurement process. There was no intention to disguise that fact. Chief executives and others were aware of the situation.

168.

The Chairperson: I will open the discussion to the other members.

169.

Mr Ford: It is clear from the record of the Second Stage debate in the Assembly Chamber that a number of concerns have been floating around for some time and that these are only being addressed today. I want to raise paragraph 6 (a) of the Committee Clerk's letter. The response seems to be symptomatic of the Department's attitude. We asked why best value could not continue on a voluntary basis. The response was that it could be done in principle. That was followed by a set of unsubstantiated assertions as to why the Department does not see that as the best course.

170.

Attached to that is the report of the Chief Local Government Auditor. I assume that he did not issue a report on 25 May this year that was full of grammatical, spelling and typographical mistakes. It appears therefore that we have been given a badly scanned copy of it, and that nobody in the Department has had the decency to turn it into grammatical English for us. It is rather difficult to find any substantiation in that report.

171.

It is so bad that I only managed to read the first page. There is a reference to member involvement. I have previously raised that in relation to members' determination of priorities. There appears to be an assertion by the Department that the district auditor is unhappy about member involvement and that therefore we must have prescription. Some of us have asked whether it should not be for the councillors to set the priorities for their local authority rather than for the district auditor. To date that has not been answered.

172.

Mr Barr: I apologise for the standard of the extract from the auditor's report. We were asked to respond quickly to the Committee's letter, and we wanted to get the Minister's letter to you as soon as possible. We had to scan the document, and that resulted in some mistakes appearing.

173.

Mr Ford: There are mistakes that make the meaning of certain paragraphs unclear. The quality of the report is unacceptable, particularly when it has been with you, presumably, since 26 May.

174.

Mr Barr: The report is in the public domain, and it has been possible to view it since May. I will provide the Committee with a proper photocopy of the extract. We were pressed for time in getting the information to the Committee, and we did our best to do so.

175.

The Chairperson: You have not replied to the main point of the question.

176.

Mr Barr: The reference to the engagement of members is valid. It is essential that council members be engaged in best value in its fullest sense. That has always been the case in service provision by district councils. They have engaged councillors, and they have done an excellent job over the last 30 years, and longer. Nevertheless, there is also a critical role to be played by the public. Best value is about consulting local people about their opinions.

177.

Councillors can represent local people as well. There is no doubt about that. There are, however, many people who do not vote in local government elections and therefore do not have councillors representing their wishes fully - but that is their concern. They should be voting, but they are still entitled to have some say in how local government is run. They may not go to their local councillor for information, advice or representation but, as ratepayers, they are investing in their local council and are entitled to some say in how services are provided.

178.

I do not wish to speak on the Local Government Auditor's behalf, but he would not wish to set an agenda for any council in respect of performance improvement plans. It is up to each council to explore and come up with its own priorities and proposals as a result of consultation with the public. An auditor may examine the performance improvement plan to see whether the council has complied with direction provided by the Department, but in no way would he want to influence how a council goes about its business in terms of engagement of its members.

179.

Mr Poots: If on this issue the performance indicators of the Department's local government division were based on openness and transparency, you would be found wanting. The Chairperson has already raised an issue with you, but I want to mention the fact that this Committee was led to believe that virtually all councils were signed up to best value and supported what the Minister proposed. When the Committee carried out its own investigation, it discovered that this was not the case.

180.

What is the Department's fascination with performance indicators for local councils? Why should they be so highly accountable to the public? No other Government department has to do this. In this last week, we have heard about problems in the Health Service with regard to heart surgery and cancer and neurology treatments. This morning, we heard that chief executives and leading lights in the health trusts are giving themselves a so-called performance-related £500,000 pay rise.

181.

Councils are responsible for only 3% of the total spend in Northern Ireland, and yet your Department is forcing them to go into a difficult and repetitive scheme involving a lot of box-ticking. Indicators not applicable to all councils are causing confusion. You cannot lift bins in Moyle District Council for the same price as you can lift them in Lisburn or Belfast. A lot of this is irrelevant and will not tell the ratepayer much. What is your fascination with the local councils? Why are no other Government departments being subjected to this?

182.

Mr Starritt: The concept of performance indicators seems to be accepted by councils. The difficulty is in finding a set of indicators that apply across local government. We agree that the consultation process proved that it is very difficult, if not impossible, to get unanimous agreement on any performance indicator. We accept that councils will have their own local indicators that are of specific relevance to them, and we want councils to use those.

183.

However, the other point that must be made is that it is useful to have a common set of indicators that small councils in particular can use to measure its performance against others, without having to duplicate the efforts of bigger councils.

184.

Mr Poots: You have not answered the question. Why is it being imposed on local authorities alone? Why are the local authorities being affected by this and not every other department?

185.

Mr Barr: The Department of the Environment is open and transparent in what it does with local government. It is working in partnership with the various working groups and with the best value steering group. It has a good working relationship with the councils - I, personally, have a good relationship with the chief executives. The Department wants to promote that further, as I indicated earlier, through NILGA.

186.

The Department of the Environment is introducing a best value regime for local government and district councils - that is its remit. I know that the education and library boards, through the Department of Education, will also be engaging in legislation for best value. I am not sure of the timing of that, but I do know that the process is under way. District councils are not the only organisations that will be subjected to best value. Other authorities are undertaking best value, perhaps under a different guise or name, but we cannot speak on their behalf.

187.

Central Government Departments are subjected to a form of best value because they are accountable through such things as the Government accounting manual, audit scrutiny, resource accounting, a budgeting programme for Government, corporate and business plans and the Public Accounts Committee. Those in turn transcend down to individual performance improvement plans for each division and individual. Each Department is subjected to similar scrutiny, but we cannot speak on behalf of other Departments.

188.

You queried the fact that we had indicated that all district councils had signed up to best value. They did. There was a public consultation with all district councils in 1998. All of the councils signed up to it. I do recognise, however, that some councils have experienced difficulties with the best value process. We hope to address those difficulties through further guidance. Others too have expressed concerns with the Local Government (Best Value) Bill, and, again, we hope to address those.

189.

The Chairperson: Mr Barr, have you read any of the evidence that was sent to the Committee?

190.

Mr Barr: In the short time that was available, we read the evidence.

191.

The Chairperson: You gave the wrong impression in your statement by saying that all councils are supportive of best value. However, they do not believe that now is the time to introduce legislation for best value. They do not believe that they should be singled out and made different from others. They believe that it should work in a voluntary manner until many of the other challenges, such as waste management, which will be deviated from, are faced. The idea that all councils are for best value is not true. We can give you the Hansard report that shows the evidence from the Committee's last meeting.

192.

Mr Barr: I followed up my statement by saying that many councils still have certain problems with the context of best value and that some councils have difficulties with the Local Government (Best Value) Bill. I did not make a bland statement saying that they are all in favour of best value, full stop. Some councils have difficulties, and that is clear from the correspondence that we have received from the Committee. We hope to address the concerns that have been expressed.

193.

Mr A Doherty: It seems to me - and due to my untutored mind, I may have misunderstood or misinterpreted what I heard - that the Department sees itself galloping to the rescue of the public and the ratepayers to save them from the councils that are riding roughshod over them, ignoring their wishes and keeping them in the dark.

194.

Your Department claims that this approach is in the best interest of the ratepayer. Could you indicate how the alternative approaches, suggested by this Committee and most of the councils, are against the best interest of the community, and the ratepayers in particular? You are clearly not satisfied that the suggestions made by the councils or this Committee are worthy of consideration.

195.

Mr Starritt: We have looked at the letters from individual councils. Two points have been made. One is the idea of a general duty to promote continuous improvement, which, as councils see it, would give them a lot more freedom and flexibility to do their own thing. Balanced against that, another point is that best value can be extremely expensive, particularly for smaller councils.

196.

We feel there are clear benefits to be learned from councils working together and learning from one another. However, to create some element of a common approach you need at least a broad framework. The consultation marked up that the initial legislation probably created quite a prescriptive framework. The redrafted Bill has addressed that, diluting the framework to some extent. However, we still feel that councils need to be progressing in the same direction, more or less, particularly if councils are to learn from the lessons of others and avoid duplication of effort. That is why we need a common framework for best value.

197.

Mr Barr: We have been accused of not listening to responses from councils and this Committee, but the opposite is true. Originally the Bill had 19 clauses - it is now an 11-clause Bill. A substantial amount of change has been made in response to representations made, for which we are grateful.

198.

Mr A Doherty: The major concerns are still contained in the 11-clause Bill.

199.

Mr Barr: What are the major concerns?

200.

Mr A Doherty: Back-to-back repeal of CCT is a major issue. Nobody, including the Department, has given a satisfactory response to that, and the Chairperson has made that clear.

201.

Mr McLaughlin: There have been responses from the Minister, other officials and yourselves. I acknowledged that in the discussions at Second Stage.

202.

Back-to-back legislation clearly is the fundamental issue. The Minister, in his address, acknowledged that up to 60 MLAs have a dual mandate. He was recognising the degree of opposition - in some cases outright hostility - to the idea of best value legislation on the pretext of a necessity to repeal CCT and replace it with something else. That was the presentation. The view clearly expressed is that there is support for best value, and there is a well-established voluntary best practice regime. Nobody is arguing that this should continue to be voluntary. They simply argue that we should develop the experience and the partnership benefits arising and get a strategic perspective on how to deliver best value.

203.

The Minister, on a number of occasions, talked about transparency and accountability - and properly so. The Department and the officials made a fundamental mistake of deciding that they knew best, which possibly is part of the rollover from direct rule work practices. They thought they would get both measures introduced simultaneously. The fundamental contradiction is that in addressing local government we are talking about 5% of public expenditure.

204.

People do not believe that there is openness, transparency and accountability in the other 95% of expenditure. Therefore, we look to the review of public expenditure as an opportunity to create structures to deal with all public expenditure, including local government expenditure. That would perhaps include a review and restructuring of local government in order to deliver best value. That would be the practice of best value in itself. I cannot see any benefit in taking a piecemeal approach. Addressing best value for 5% of public expenditure would be horrendously inefficient, given that we are dealing with such a small percentage of the overall budget. We are committed to seeking an early opportunity to address the review of public expenditure in total.

205.

Mr Barr: All public expenditure is audited, regardless of whether it is local government or central Government. A robust auditing regime operates throughout the public sector. The application of best value to local government, that is to say district councils, is a new system and it requires time to bed in. The Department and the Minister feel that it is in the interests of residents and ratepayers that we proceed with a Bill that will replace CCT. The new framework will allow councils to recognise that it is their statutory duty to undertake consultation with the public, undergo reviews of services and produce performance improvement plans. Ultimately, it is good housekeeping. Councils do those things already, to a large degree. The Bill does not ask them to do anything that they are not already doing voluntarily. All we are asking is that their performance is improved.

206.

The annex to the Minister's letter suggests that some councils are performing well, others must work a little to catch up and a few are still struggling with the concept. The Department is not happy with that situation. It wants to work closely with councils to identify those which are not performing as well as they could, to discuss the problems that they are encountering and to try to deal with problems using guidance that will be produced. The Local Government (Best Value) Bill provides a framework, but the important thing is the guidance that would arise from it. The Department would work in total partnership with local government to produce guidance that we know we can both work with.

207.

Mr McLaughlin: I do not know any public representative who believes that the problems in local government are so horrendous that we must legislate immediately for it, or who believes that the checks and balances in the audit procedures for the remaining 95% of public expenditure are so effective that we do not have a problem with best value. I do not know anyone who is convinced by that argument.

208.

We could go into detail on the argument, and, if we must, we will do so. It may be in the interest of the Department to calculate whether they have any chance of getting this legislation through the Assembly. It is a totally unconvincing proposition. People want to see the whole problem addressed, and not a piecemeal approach.

209.

Mr Barr: I cannot speak for other sectors of central Government. I cannot speak about the review of the Administration. It is not in my remit - (inaudible due to mobile phone interference).

210.

We feel that the Local Government (Best Value) Bill is the best way to provide a framework for best value, so that councils can say "This is our statutory responsibility; let us work to it."

211.

The most important thing is the guidance that will flow from that framework. I stress that we will work closely with local government to ensure that the guidance will aid councils in their pursuit of best value.

212.

Mr Leslie: I wish to reiterate an earlier point I made. There has been a classic mistranslation, which happens quite a lot, in that because best value was introduced for English councils, it was assumed that it should be introduced to councils here, which are a completely different size and structure. The nearest equivalent here to an English council would be the Executive and the Assembly.

213.

I also sit on the Finance and Personnel Committee, where I am observing the ongoing procurement review and the code that is being drawn up. The Audit Reorganisation Bill is also coming to consultation soon, following the Sharman report. Those examples provide further evidence that the cart is before the horse here.

214.

I have no particular difficulty with clause 1, subsections 1 and 2, and possibly 3 and 4, of the Bill. The difficulty arises in clauses 2 and 3, where the Department is given considerable discretion to set parameters, and the Comptroller and Auditor General is also given considerable powers. Reinforcing what Mitchel McLaughlin said, the Comptroller and Auditor General is auditing anyway. Why does he need extra powers for best value? This is not all meshing together. It has started in the wrong place. Looking more widely at what is happening to accountability in Government expenditure generally, instead of starting at the bottom and driving up, there is enough going on further up that can be made to trickle down in a suitable way.

215.

My arguments reinforce the points that are being continually made that this legislation is coming in the wrong place at the wrong time. Elements of this may emerge in due course, but the timing is wrong. Could you not run with the first clause of the Bill, which sets out the general principles, without provisions to the same extent as in clauses 2 and 3?

216.

You said that the Department shall decide what guidance to issue. That is all very well as long as it is all right. The problem arises when it is not right. I can see why the Department might want a common parameter - that makes common sense - but different councils have different situations.

217.

Mr Starritt: On the extra powers for the Local Government Auditor, the legislation empowers him to audit council accounts. He has, in practice, gone beyond that with councils by looking at the performance improvement plans that they have prepared voluntarily. That has been done on a goodwill basis. As things stand, there is no legislation that specifically empowers the auditor to go beyond the accounts. That is the reason for taking specific powers for auditing.

218.

A point was made about a shortened Bill to give a general duty of continuous improvement. The Bill as it currently stands gives effect to what councils are already doing voluntarily. The Department made the point that some councils are better at that than others. However, the Bill does not impose anything on councils that they do not already do.

219.

With regard to the framework, we must establish a common approach so that councils can learn from one another. People have frequently made the point that guidance is needed. The absence of guidance might be part of the reason why some councils have not produced performance improvement plans. Councils might not be clear about what is expected of them. The Department accepts the need for guidance and the fact that the guidance must be developed in partnership with councils. That has always been the Department's intention and it has given that commitment to the best value steering group, which has accepted that.

220.

Mr Barr: In response to the Committee's criticism that the Department has followed what has been done in Great Britain, best value has been in place here since 1997 or 1998. Obviously, there was no local Administration at that time to discuss the matter. The Department discussed it with district councils, which were glad to see the end of CCT. No one disagreed with that process. Councils and the Department agreed that we should go down the road of best value, and that is being done. The Department is flexible enough to realise that there must be a Northern Ireland context for best value.

221.

I had an interesting discussion with a colleague from Scotland yesterday who confirmed that Scotland is following a similar route of legislation for best value. Indeed, Scotland's Bill might be more prescriptive than Northern Ireland's is at present. He wished that Scotland's Bill had been drawn up earlier because a statutory framework for councils in Scotland will make it easier than it is, in a voluntary situation, for them to benchmark with each other. That is because there is consistency in the production of performance improvement plans, and so on. The common approach and consistency should ensure that the councils that do not perform as well would be able to learn from the larger councils. That should ensure continuous improvement. I was interested in what my colleague told me and I am hopeful that, in time, the councils here that do not perform well will be able to network with those councils that do. That should result in improved performances.

222.

Mr Leslie: A Scottish council is a bigger entity than a Northern Ireland council. I am sure that Glasgow City Council needs a best value regime, and I am sure that the Scottish Parliament knows that Glasgow City Council needs quite a draconian best value regime. However, that does not necessarily translate into the situation here. That is my concern. It translates more readily further up the line. I acknowledge what Mr Barr has said, but we must be careful to consider that what might be appropriate for a council of that size over there might not be appropriate here.

223.

The Chairperson: The Bill that is before us is different from the first draft. The Committee appreciates the changes, but the question is whether the Bill before us is acceptable. The idea was expressed that the Bill was to be given the green light, having been considered by district councils and the councillors that were working with the Department and its officials. However, that is not representative of the views of all councillors or the chief executives. I will quote some of the evidence that the Committee heard. The evidence that was given to us says: "We think that this Bill is unnecessary";

"The proposed best value Bill is potentially detrimental";

"There is no need for specific legislation at this time"

- a statement made in the light of the reorganisation of local government;

"This draft Bill sounds intimidatory tones and displays mistrust and a school masterly attitude";

"Someone at central Government is working to a hidden agenda";

"It is taking a sledgehammer to crack a nut";

and

"The existing Bill does nothing for best value."

224.

Those statements come from evidence that we received from just three councils. Quite a number of other councils want to give representations here. However, we were given the impression that local government and councils, through their councillors and chief executives, were supportive of the legislation.

225.

I am glad that you said that you are flexible, for we will test that. You said that ultimately it is good housekeeping, and then you said "We believe". The letter to the Minister says:

"The views of councils should not be given precedence over the rights and needs of ratepayers and residents."

226.

Who is making that judgement? Do the elected representatives believe, and does their work in the Department convince them, that the Department, above the district councils, is best placed to judge the rights and needs of ratepayers and residents? Having listened to the debate in the House and the questions this morning, do you believe that you will get this Bill through?

227.

Mr Barr: It is not fair to ask me that question. We hope that we will be able to convince the Assembly that the Local Government (Best Value) Bill is in the interests of ratepayers and residents.

228.

The Chairperson: Has the Assembly commissioned the Committee to shadow your Department and to help with that judgement?

229.

Mr Barr: That is correct.

230.

The Chairperson: You wrote to another Committee to see if it could circumvent the decision of this Committee, because there was no support in the Assembly. After the debate in the Assembly, advised by his officials, your Minister wrote to another Committee to see if it could intervene.

231.

Mr Barr: It is correct to say that the Minister wrote to another departmental Committee. Accountability extends beyond the interest of the Department of the Environment - it extends to the Department of Finance and Personnel and to others with an interest in public accountability and procurement. Therefore, the Minister was entitled to sound out the views of other learned people.

232.

The Chairperson: The Department seems to think that it is the final arbiter on this matter. If this Committee ceases to exist, some officials could perhaps push this legislation through. However, when the Committee comes back into existence, it could seek to remove that legislation if it were seen as bad. I am asking you and your officials to take to your Minister and Department the fact that the fears of this Committee have not been allayed by anything that you have said. The Minister's letter acknowledges that CCT can be removed without taking forward the best value legislation, and that is surely the best way forward. The Assembly will take the matter seriously when it has the opportunity.

233.

Mr Barr: We will relay your comments and views to our Minister, and he will be given a copy of the transcript produced.

234.

The Chairperson: Thank you.

Thursday 18 October 2001

Rev Dr William McCrea (Chairperson)

Mrs Carson

Mr A Doherty

Mr Ford

Mr McClarty

Mr M Murphy

Mr Watson

Mr Des Murray ) Association for

Mr Jim Kennedy ) Public Service Excellence

235.

The Chairperson: We welcome Mr Des Murray and Mr Jim Kennedy of the Association for Public Service Excellence (APSE). We are examining the Local Government (Best Value) Bill, about which we have also heard representations from district council officials.

236.

Mr J Kennedy: Thank you for giving us a second opportunity to address the Committee on the Local Government (Best Value) Bill. I am an officer with Belfast City Council but I speak today in my role as the Northern Ireland secretary of APSE.

237.

Mr Murray is a full-time officer with APSE. He is based in the Glasgow office and is responsible for the Northern Ireland and Scotland regions of APSE. The Northern Ireland chairperson of APSE, Belfast City Councillor, David Brown, is unable to attend and sends his apologies.

238.

APSE has a membership of over 200 local authorities from throughout the United Kingdom. Nineteen of the 26 councils in Northern Ireland are members. APSE is unique as a forum in that it has equal membership of officers and members of local authorities throughout the UK. The association consults, develops, promotes and advises on best practice in the delivery of public services. It strongly supports the process of continuous improvement in service provision in local authority areas.

239.

I commend members of the Environment Committee on their contributions to the debate of the Second Stage of the draft Local Government (Best Value) Bill on 18 September. We were pleased by the relevant comments made by Committee members and other Members, reiterating the concerns that we expressed to the Committee some months ago. However, one point of concern, which I noted in Hansard, was the Minister's response to a question by the Chairperson of the Committee who asked whether all councils were happy with the redrafting of the Bill

"The draft Bill has been circulated to all councils, and they have not advised me of any particular problems. That does not surprise me, as the redrafted Bill addresses their key concerns." - [Official Report, Vol 12, No 4, p100].

240.

As a representative of 19 of the 26 local authorities, we believe that that statement is inaccurate, because several key concerns about the Second Stage of the Bill remain. Bearing in mind the time constraints on the Committee, I will hand over to Mr Murray who will outline those concerns.

241.

Mr Murray: As Mr Kennedy mentioned, I am responsible for the APSE regions of Scotland and Northern Ireland. I have a unique perspective, given my involvement with the development of best value legislation at the Scottish Parliament.

242.

APSE is committed to the development of best value and the association fully supports the drive for continuous improvement. We welcome the proposal to repeal compulsory competitive tendering (CCT) in Northern Ireland. As you know, CCT has already been repealed in England and Wales, and at present an extended moratorium is in place in Scotland. CCT will not be reinstated there until best value legislation is implemented.

243.

After carrying out detailed consultation with our members, we extended our consultation beyond the 19 member councils in Northern Ireland to include all councils and unions. Representatives of those bodies attended a meeting last week, which took the form of a full debate on the evidence that we are presenting to you today. A generally expressed opinion, and a key recommendation, was that the timing is not right for a best value Bill in Northern Ireland, in the light of continuing concerns about the legislation and the announcement of a three-month review of best value legislation in England and Wales.

244.

Yesterday we received information on the three- month review to the effect that indeed new best value legislation for England and Wales may be explored. It is therefore recognised that the legislation is flawed. That is important information, and I will pass it to the Committee Clerk after the meeting.

245.

Scotland carried out an open consultation on best value, involving the councils, the Executive and bodies such as the Convention of Scottish Local Authorities (COSLA). That resulted in the passing of the Scottish Local Authorities (Tendering) Bill earlier this year, a simple one-clause Bill that removed the date relating to the reintroduction of CCT for 1998 Act services. That allowed for an indefinite moratorium so that best value legislation could be developed to its full potential. The best value legislation was delayed; it was expected this year but a time extension was necessary.

246.

We propose that the Committee and the Minister consider introducing a similar Bill in Northern Ireland. That would ensure that future legislation is correct and that it meets its full potential. Also to be considered is the very important secondary issue of local government reorganisation in Northern Ireland, which must be taken into account when developing any legislation that affects district councils only. I ask the Committee to bear that in mind.

247.

We fully welcome the repeal of CCT. Councils across Northern Ireland have been working voluntarily to the ideals of best value under guidance from the Department of the Environment. There is no reason why that cannot continue until the concerns that remain are addressed. I am aware that you have a full copy of the APSE evidence, so I will not go through all the points individually. Should it be the case that a simple repeal of CCT is unacceptable to the Committee and the Minister, there are, as Mr Kennedy has said, continuing concerns about the legislation.

248.

Much of the legislation is supported, accepted and widely welcomed, but key areas of it need to be strengthened. There is a need to include equality and the environment in the general duty of best value - going beyond the three Es of economy, efficiency and effectiveness, and going beyond value for money. That would replicate what is happening in England, Wales and Scotland. It does Northern Ireland an injustice to not include those two factors in the legislation.

249.

Secondly, on the duty to consult, there is a need to go further than saying that the Department of the Environment will consult with district councils. Councils in Northern Ireland would like the legislation to include an obligation on the Department to consult them and to reach agreement with the majority of councils before issuing supplementary guidance on best value legislation.

250.

Thirdly, there is the complex but important area of section 16 and section 17 powers under the Local Government Act 1999 in England and Wales. Those powers allow councils and bodies involved in delivering services to the public sector more freedom to form partnerships, to deliver joined-up government, services, et cetera. There is no real reason why that cannot be included in the Bill for Northern Ireland. We expect those provisions to be included in the Bill for Scotland, and councils in Northern Ireland should have those powers. Such powers would, of course, operate under guidance from the Department of the Environment and, if you so wish, the Environment Committee itself.

251.

The Chairperson: Were you aware that there is nothing to stop the Minister from presenting the repeal of CCT without adding anything about best value legislation at this time? The impression given to us previously was that the two had to run in tandem - that CCT needed to be repealed and that we needed best value legislation in place. After we pressed the issue, we got a clear instruction that the two do not have to run in tandem at all. CCT can be repealed without the existence of best value legislation. Do you regard that as the preferable way forward?

252.

Mr Murray: That is very similar to the situation in Scotland. The CCT moratorium for services included in the 1988 Act, such as environmental services and those delivered by councils in Northern Ireland deliver, was due to end on 31 December 2001. We were never going to have best value legislation in Scotland by that date. The Minister is right to highlight that legislation is required to repeal CCT, but as demonstrated in Scotland, that can consist of a simple one-clause Bill to remove the date from existing legislation. That allows time for the further development of best value legislation. That is exactly what is happening in Scotland.

253.

The Chairperson: Before proceeding, I should say that Committee members who are also council members have recorded that interest. Do you feel that it would be detrimental to local government if the legislation for best value were implemented now?

254.

Mr Murray: There is a good reason why a three-month review is being carried out in England and Wales. There are problems with the current legislation and the guidance under which councils operate. The Government recognise that some areas need to be improved, hence the announcement of the review.

255.

Mr Kennedy: Local authorities are keen to have CCT repealed. However, that does not mean that best value legislation needs to be implemented post-haste. After the legislation was introduced in England and Wales, serious flaws became apparent. We might be well advised to hold back in Northern Ireland until we see how those flaws are ironed out, and what new legislation, if any, will be needed. Department of the Environment officials, notably John McConnell, have consistently applauded local authorities in Northern Ireland for voluntarily adopting and applying the principles of best value.

256.

For the past three years local authorities have been developing best value principles; they have been consulting with ratepayers to determine the type of services that they want. They have developed performance improvement plans and submitted them to Department of the Environment officials, who are currently scrutinising them and will then discuss the matter with the councils. The general belief is that local authorities have adopted the principles of best value very effectively. We do not therefore see a need to rush through legislation with the possible effect that it would be seriously flawed and in need of revision. APSE would prefer that the Department took its time and took care in developing legislation that will benefit those who use council services.

257.

The Chairperson: Why is the Department keen to rush through the legislation?

258.

Mr Kennedy: That is a difficult question. There was an apparent view that if best value legislation were not put in place we would have to revert to CCT, with effect from 1 April 2002. It has now become clear that that is not the case, because CCT could be repealed as a single exercise in a single-line Bill. The councils could then continue to proceed voluntarily with best value principles. We are following very closely the Local Government Act 1999 in England and Wales. However, APSE greatly prefers the Scottish approach, where, even at this point, the moratorium on CCT is being extended to create the opportunity to learn from the mistakes that resulted from the legislation that was enacted in England and Wales. We should sit back until we are fairly confident that the legislation is right and that it will deliver continuous improvement in public services.

259.

Mr A Doherty: You represent 19 of the 26 councils. Do any of those councils have a different opinion to yours, or are you unanimous in your opinion?

260.

Mr Murray: APSE is a member-based organisation. However, in the last two months we have opened up all information and correspondence on the development of the Bill in Northern Ireland to members and non- members. Our members include representatives from the Housing Executive, the boards, et cetera. We represent a wide cross-section of Northern Ireland. Over 40 representatives attended last week's meeting, and 23 local councils were represented. There was unanimity of opinion on the issues discussed. The document that you have before you was prepared as a result of those discussions.

261.

Mr A Doherty: Will you respond to the Chairperson's suggestion that the Minister and the Department seem to be intent on introducing the legislation back to back?

262.

You argued that a simple one-clause Bill would allow for the development of the proposed best value legislation. Do you envisage any stronger argument by the Minister or his Department in support of the introduction of the legislation back to back?

263.

Mr J Kennedy: There are several omissions in the current Bill. If we press ahead with the best value legislation, without taking those omissions into consideration, the legislation will be much more watered down. For example, local councils lack powers like those provided in section 16 of the Local Government Act 1999. That point has been raised by Members during the Second Stage of the Bill in the Assembly. The Bill, as it currently stands, makes it virtually impossible for local authorities to deliver proper best value because they are restricted in the formation of partnerships with private, voluntary and other sectors and in the delivery of efficient, cost-effective quality services to the ratepayers. We will not have proper best value legislation until those elements are included in the Bill.

264.

Several weeks ago someone from a private sector organisation called my council offices to ask if the council would be prepared to carry out grounds maintenance work on its football pitches. From the ratepayers point of view it would have made sense to agree to do it. We have the necessary equipment and employees, and we would have recovered all of our overheads. We could easily have taken on that work and generated additional income for the city council. Unfortunately I had to say to that individual that under the Local Authorities (Goods and Service) (Public Bodies) Order 1998, I cannot enter into any partnership or agreement to undertake that work. The city council was disadvantaged as it was unable to generate that additional income, and the private sector organisation was disadvantaged because it had to look elsewhere to get the work done. If we are to fully embrace best value and all that it entails, we must be able to enter into proper and effective working partnerships with a range of public, private and voluntary organisations, outside of local authorities. I have read Members saying time and again in Hansard that we must have the powers to deliver best value. Until then, our hands are tied.

265.

Mr Ford: I cannot find the papers to confirm this at the moment, but I certainly remember being told that the Scottish Parliament believed that voluntary arrangements were not working and therefore legislation was required. The impression that I got from Mr Murray's presentation was that Scotland is going down the legislative route very slowly and on the basis of full consultation. That is why Scotland has abolished CCT ahead of the introduction of best value legislation. Can you confirm that that is Scotland's position, and how long will the consultation process that will eventually lead to Scottish legislation last?

266.

Mr Murray: I can give a definite answer for I am directly involved in the process. The draft Bill for Scotland will be published next month, but the consultation and the parliamentary process will not start until next year to allow time for the findings of the three-month review, and so on to be considered by the Parliament. The word "delay" has been used, but it is perhaps not accurate in this case.

267.

To date, the consultation process on the legislation in Scotland has been very open, and the publication of the Bill is eagerly awaited. The councils, and all bodies subject to best value in Scotland, are very clear about what the Bill will contain, thanks to the detailed consultation process. We now have the opportunity to build in the developments from the three-month reviews in England and Wales. That is a welcome opportunity and is essential to the process of the legislation.

268.

The Chairperson: How could the Department be so wrong about the consultation process when it said that everyone was happy?

269.

Mr J Kennedy: In his submission the Minister referred to consultation that had taken place outside the best value process. The first draft Bill came out for consultation in early December. Local authorities were given until 7 February to respond to it. That was the minimum period that could be allowed for consultation. It took in Christmas and the new year. Therefore local authorities had a time-limited period of three weeks to consider the draft Bill. I tried to contact Mr Murray in Scotland to organise a meeting of local authorities to discuss the draft Bill and to come up with an agreed response to the Department. The timescale was tight.

270.

My experience of consultation with the Department has not filled me with enthusiasm about its willingness to take on board the views of local authorities. The Department set up a working group, on which I sat, to look at performance indicators. After much deliberation the group's recommendations were fed through to the Department. Few of those recommendations and comments were taken on board when we finally received the performance indicators that were required by the Department from local authorities, with effect from 1 April 2000. Local authorities are concerned that the Department is paying lip service to consultation.

271.

The draft Bill refers to statutory guidance and circulars in relation to matters such as performance improvement plans. We are concerned about how that consultation will be managed and how much notice will be taken of the outcome, from local authorities and others. With regard to statutory guidance and circulars, we are keen for those matters to be brought before the Committee for deliberation. The Minister and the Department could therefore be questioned about how much heed was being taken of the opinions of the local authorities.

272.

There is a fair degree of scepticism. Experience gleaned over the years leads local government to point out that if something is to be taken out of the draft Bill and circulars and statutory guidance issued instead, we need to know how will that be developed. We are unclear on that.

273.

The Chairperson: The Committee received a letter from the chairman of SOLACE, in which he says

"On a personal note I would say that there was a feeling of the inevitability of Best Value legislation as the Department seemed determined to follow the example of England and Wales. Consequently Councils in their responses were mainly concerned about the detail of the Bill."

274.

The Department gave the impression that it would push ahead with the Bill regardless of what anybody said. The district councils, therefore, were concerned about its content.

275.

Mr J Kennedy: I think that is a fair comment from SOLACE.

276.

The Chairperson: Do you agree with the Department's response that the views of councils should not be given precedence over the rights and needs of ratepayers and residents? That is why we emphasise the benefit of best value.

277.

Mr J Kennedy: I agree with that comment. However, how do you marry that with a situation where auditors working for the Department have the right to tell council members, who have been elected by local ratepayers and are responsible for delivering services, what type and range of services they can provide? Local political decision-making must be taken into account. Your comments have hinted, as has the draft Bill, that officers in the Department, particularly in the audit section, could make a case for local authorities not being allowed to provide services, for example. That gives cause for concern.

278.

Mr Ford: You talked about the problems with guidance being issued and the question of consultation on it. It has been suggested that one difference between the Department's original proposals and the current Bill is that subordinate legislation is being replaced by guidance that is less prescriptive. You seem to be suggesting that there would be even less consultation over guidance than would be required, at least with this Committee, if there were the matter of subordinate order to go through. What are your views on that?

279.

Mr J Kennedy: I agree with what you say. It is not subordinate legislation; it is guidance. One should look at the CCT situation. On the back of the CCT legislation there was all sorts of guidance by way of Department of the Environment circulars. Local authorities ignored those circulars at their peril. Therefore I am more concerned about circulars because they are issued by the Department, and local authorities are under an obligation to implement what is in those circulars.

280.

Circulars have very little democratic mandate if they do not come through the likes of the Committee for the Environment or if they are not consulted widely upon. History has shown that, to date, circulars have not been widely consulted upon.

281.

Mr Murray: The suggested amendment is that such guidance - whilst more welcome than prescriptive legislation - is sought through agreement with the key stakeholders.

282.

The Chairperson: I draw your attention to the letter I sent, on behalf of the Committee, to the Minister on this matter. I made it clear that rushing ahead with this legislation would certainly meet with resistance. Whether that happens now or, if circumstances changed and the Committee were not sitting, when the Assembly would sit again, we will be looking afresh at this issue. We feel pretty strongly about it.

283.

Thank you for your representation this morning. The Committee will take it into consideration when coming to its final conclusion.

Thursday 8 November 2001

Rev Dr William McCrea (Chairperson)

Ms Hanna (Deputy Chairperson)

Mrs Carson

Mr A Doherty

Mr Ford

Mr McLaughlin

Mr M Murphy

Mr Poots

Mr S Foster ) Minister of the Environment

Mr S Quinn )

Ms C Smith ) Department of the Environment

Mr D Barr )

Mr D Starritt )

284.

The Chairperson: I welcome the Minister and his officials.

285.

The Minister of the Environment (Mr Sam Foster): I am grateful for the opportunity to again discuss the Best Value Bill with the Committee. No doubt the Committee already knows Stephen Quinn, Cynthia Smith, David Barr and Donald Starritt from the Department of the Environment. My officials and I have already given the Committee detailed presentations on previous occasions. I do not propose to retrace those steps this morning, and will limit myself to a few general comments. My officials will be happy to address any issues Members may wish to raise afterwards.

286.

Feedback from the Committee suggests that there is support for deferral of the statutory framework for best value legislation. The argument for deferral is that it would provide the opportunity to adjust the framework to reflect the outcome of either the review of best value in England or Wales or the forthcoming review of public administration in Northern Ireland. I am not persuaded that deferral on those grounds is justified.

287.

I will deal firstly with the review of best value in England and Wales. I am, of course, aware that the review commenced last month and I have instructed my officials to monitor its progress. However, my understanding is that the review is unlikely to challenge the basic principles and framework of best value established under the Local Government Act 1999. My Department's Bill simply establishes a corresponding framework for Northern Ireland, scaled down to meet local circumstances. Therefore, the review does not justify the deferral of the best value legislation in Northern Ireland. Any adjustments that emerge from that review can be considered when guidance circulars are drafted.

288.

I also referred to the proposed review of public administration in Northern Ireland. That review has not yet started and I believe that it will be some time before its outcome will be made known. It is neither necessary nor prudent to defer the Best Value Bill pending the outcome of that review. Best value principles will apply irrespective of the structure and responsibilities of local government. The early introduction of best value legislation will help councils to network and benchmark more effectively. It will also aid the process of continuous improvement and help prepare councils to assume wider responsibilities, if indeed that is the review's recommendation.

289.

Another ongoing debate is whether best value should be applied across the public sector. A decision on this is outside my remit as Minister of the Environment. It is my personal view that central Government already operates under a best value type framework. The main features of this include a Programme for Government published after extensive consultation on a draft; public service agreements also published as part of the Programme for Government; departmental corporate and business plans which set out detailed targets and performance indicators; Northern Ireland Audit Office value for money studies, broadly akin to the best value audits envisaged in the Bill; and formal examinations and ongoing scrutiny by the Public Accounts and Statutory Committees of the Assembly.

290.

All of these combine to ensure a high degree of transparency and accountability in the activities of central Government. Indeed, our appearance here today is part of that process. The specific application of the Best Value Bill to central Government is not justified. It is a red herring, and would lead to duplication of effort and, in my view, would not represent value for money.

291.

I will clear up any remaining confusion over whether the repeal of compulsory competitive tendering (CCT) and the introduction of best value legislation must run back to back. I have written to the Chairperson confirming that there is no legal imperative for that scenario, and I repeat that message again today. I have consistently advocated the replacement of CCT with a statutory framework for best value on policy grounds, namely that best value would give council residents and ratepayers information and assurances to which they are clearly entitled.

292.

I recognise that some councils and this Committee may retain concerns over the best value legislation. I expect that the Committee will be taking further evidence over the coming weeks, and I am happy to listen to any suggestions arising from that process. Following the Committee Stage, the Environment Committee will have an opportunity to propose amendments to the legislation, and to seek to justify them in terms of the entitlements of council residents and ratepayers to information and independent assurance. However, as Minister, I will continue to argue in the Assembly that council residents and ratepayers need the information and independent audit assurances offered by the statutory framework for best value set out in the legislation.

293.

I hope that the Committee has found these comments helpful. My officials and I are content to enter into discussion with you on issues which you may raise.

294.

The Chairperson: Will Members declare their interests so that they may be recorded, please?

295.

The Chairperson and Ms Hanna recorded interests.

296.

Mr A Doherty: I thank the Minister for his statement. I found it illuminating but not particularly helpful in view of the concerns expressed by councils and others. As a former councillor you will appreciate the turmoil going on in councils, trying to meet what they feel is a rushed and unfair imposition upon them, over and above the other aspects of Government.

297.

You are unwilling to defer the Bill, saying that

"[the] Bill simply establishes a corresponding framework for Northern Ireland, scaled down to meet local circumstances."

298.

Is it a scaling down of the imperfections which seem to have been brought to light by the UK review? Would it not be better to find out the degree of imperfection that exists in the present UK set-up, rather than repeat those mistakes? To go through the process again will result in a duplication of effort. It is better to get a Bill right from the start, rather than to have what happened in Britain. A Bill was created there and found to be unworkable - it had to be reviewed.

299.

Also, you mentioned that you do not see the need for best value in central Government, and that all the factors you mentioned combined to ensure a high degree of transparency and accountability in the activities of central Government. I will give you an example of something that is not so transparent or accountable. Earlier this morning, we were discussing hare coursing legislation. Judging by the information we received from central Government, while they insist on the issue of licences, they seem to have only a vague idea of what is happening on the ground in respect of hare coursing - namely the catching and release of hares and their treatment in captivity. I am not sure if we are getting best value for money there. I do not share your confidence that certain aspects of central Government do not need to submit to a best value process more rigorous than the self- appointed system that is currently operating.

300.

Mr Foster: I appreciate your concerns and the points that you have made, which we have explored. I respectfully disagree with your assertion that the Bill is being rushed. This situation has been continuing on a voluntary basis for the last three years, and the experience is there. A deferral will not get us anywhere. The review you referred to on the mainland will not touch on the basic principles of the Best Value Bill. We have come along quietly, and have listened to what you have said and acknowledged it.

301.

The Bill originally contained 19 clauses, which have now been reduced to 11. Basically, it is a five-clause Bill. This is very important. For the time being, we are subject to scrutiny from above. We are responsible for local government, and we feel duty bound to the ratepayers and the community served by the councils and the Department to be open and transparent about the spending of public money.

302.

Ms Hanna: We all want best value, we want to replace CCT, and we certainly need accountability and transparency. However, I do not understand the urgency. I know you have said that there is no urgency, but there does seem to be some urgency on the part of the Department to implement this legislation. Other legislation, such as planning amendments, requires more urgent attention.

303.

Mr Foster: I still do not accept that there is an urgent need. You seem to believe that we are pushing this through against the will of other interests. The Bill is very important. Transparency is essential for the Department, the councils and the whole community. The Bill is not being pushed through hastily, and nothing devious is going on. As far as we are concerned, it is transparency, openness and frankness.

304.

Mr Quinn: There is an agreement about the urgency in respect of the repeal of CCT. That is one reason for trying to bring forward the Bill, but I am not sure that urgency is the right term. The other justification for bringing in a statutory framework for best value is that, objectively, the voluntary arrangements do not appear to be working. In fact the position appears to be getting worse rather than better. That is the policy rationale for the introduction from 1 April next year.

305.

Ms Hanna: Must the best value legislation immediately replace CCT? Is there a problem there?

306.

Mr Quinn: It needs to immediately repeal CCT, to remove the risk that councils might be acting unlawfully from 1 April next year.

307.

Ms Hanna: So there is no time space there?

308.

Mr Quinn: The clear legal advice is that we cannot defer CCT any longer by subordinate legislation. Part of the objective of the Bill, and the rationale for it, is to remove that risk from councils. There is a separate point. The best value provisions of the Bill are not driven by that legal imperative but by the Minister's judgement of policy.

309.

Ms Hanna: Best value is already there, and councils are already working that. So maybe there is not that urgency in removing CCT - or is there? I am not sure, as there is some confusion around that. Best value is now being practised by the councils even though CCT is still there.

310.

Ms Smith: There seems to be a bit of confusion, as you say. The requirement is that CCT will kick in from 1 April 2002. In other words, all councils will be required to submit their services to compulsory competitive tendering unless we have a piece of legislation that repeals that requirement. The requirement is on the statute book; and will come into play on 1 April next year. We need a piece of legislation to repeal that requirement. To date it has been postponed using subordinate legislation, but the clear legal advice - and it seems to be the legal point that is causing the confusion - is that we cannot continue to defer it that way. It either must come into play on 1 April or we must have a piece of legislation to repeal it. There is no legal requirement to replace CCT with best value. The Minister is proposing that for policy reasons.

311.

Ms Hanna: That is the point that I was trying to bring out.

312.

Ms Smith: I want to add to the point that was raised earlier about why it is being introduced for policy reasons. One of the reasons indicated by the Minister was that independent evidence shows that there are some difficulties in being able to meet the requirements, for example, to submit performance improvement plans. Also there is some inconsistency. Some councils are performing well in being able to meet those requirements while others are finding it more difficult.

313.

This Committee has yet to receive evidence from the local government auditor. He might say that he has some concerns about his continued ability to audit under the voluntary approach without having the statutory powers to do so. The Bill is designed to give those to him.

314.

Mr Ford: I want to ask two questions both based on the Minster's statement. In paragraph 6 the Minister said,

"the early introduction of Best Value legislation will help councils network and benchmark more effectively, will aid the process of continuos improvement, and would help prepare them to assume wider responsibilities".

315.

Clearly we all think that helping councils in that respect would be a good thing, but why is the early introduction of legislation necessary for that, as opposed to an appropriate phased introduction of any legislation on the basis of the voluntary approach? It has been highlighted that some councils are currently having difficulty, but I fail to see how legislation will make it any easier for councils.

316.

If we want to encourage councils, we should do that while we are sorting out the arrangements for the future legislation. How would early legislation assist the councils more than encouragement about future legislation when the details are sorted out?

317.

Mr Foster: The Department is there to assist, and believes that it is necessary to have benchmarks. We need people to work on the one channel, and we need to help people when they are in difficulties. You can ask why have legislation now, or why in 12 months or in two years hence. I take your point, but I do not think that we are gaining anything. We want to bring about something constructive - we want everyone working together and liasing together and with other councils, rather than doing it voluntarily, which is not very effective.

318.

Mr Quinn: Adding to the Minister's point, his correspondence with the Chairperson made it clear that councils' performance was worsening, even though the task was not getting any more difficult. It would be reasonable to conclude that councils were performing worse because they were not under a legislative compulsion to address performance. It is clear that the voluntary arrangements do not work as well as they might. Our anxieties might be less if that were not the case.

319.

Mr Ford: As someone who is no longer a district councillor, I suggest that the worsening performance of councils, to which the permanent secretary alleges, might be tied to factors such as this year's elections, as the councils had to adhere to timetables.

320.

Paragraph five of the Minister's statement to the Committee refers to procedures in England and Wales. The Minister says:

"My Department's Bill simply establishes a corresponding framework for Northern Ireland, scaled down to meet local circumstances."

321.

Can the Minister - or any of the officials - tell us how best value applies to community councils in Wales and to parish and town councils in England? Do district councils in Northern Ireland have significant powers that are greater than those of the larger councils over there?

322.

Mr Barr: We have attempted to scale down the process of best value in Northern Ireland to suit the needs of councils in Northern Ireland. The Bill only requires councils to consult with the public and to produce performance improvement plans - those are good housekeeping measures. To be fair, councils have been doing that to a large degree, regardless of best value.

323.

Mr Ford: I do not wish to be rude, but I am getting a statement of the Department's position - I am not getting an answer to the questions that I asked. The question is: how does best value apply to community councils in Wales and to town and parish councils in England?

324.

Mr Barr: I cannot answer that question.

325.

Mr Ford: Thank you. My second question is: do district councils in Northern Ireland exercise more powers than those exercised by the larger town and parish councils in England and the larger community councils in Wales?

326.

Mr Barr: I am not familiar with the detail of the parishes in Wales.

327.

Mr Ford: Thank you.

328.

Mr Foster: Pro rata, checks and balances are necessary, and that is what we are looking for. We constantly think that there is a need to ensure that the ratepayers whom we serve know what is going on. I will emphasise again the words transparency, openness and frankness.

329.

Mr Murphy: In written and oral evidence that we received from councillors, the concern was the absence in the Bill of the power to modify estimates and to confer new powers that equate to sections 16 and 17 of the Local Government Act 1999. Do you have any opinion on that?

330.

Mr Barr: Councils raised that issue in consultation and at the Second Stage, and we are presently discussing the possibility of introducing an equivalent power to our Bill with some councils. The issue is complicated and we need time to discuss the detail with the Minister. The concern was raised yesterday at a meeting with one council, and we will address it.

331.

Mr Murphy: Is that not a reason for taking more time with the Bill?

332.

Mr Barr: Not necessarily. The issue could be addressed separately from the Best Value Bill, and included as an amendment. We would like time to consider the detail fully because there are significant implications, but we are not ruling out that issue.

333.

The Chairperson: The framework for Northern Ireland is the same as for England and Wales but scaled down to meet Northern Ireland circumstances. Why is a review of best value needed so soon in England and Wales? Is everything working well?

334.

Mr Barr: One major concern in England and Wales is that part of the best value framework which is concerned with the inspection regime. We do not have such provision in our framework, and it is not contained in the Bill. That is therefore a key concern.

335.

My understanding from officials in England, Wales and Scotland is that the review in England will look at the finer detail of the processes of best value. The equivalent Northern Ireland processes will be addressed in circulars rather than in the Bill. We are not therefore dealing with processes in the Bill, but mainly with the general framework for best value.

336.

We will look closely at what happens in the GB review, and will learn from those processes and their results. We will take those on board when the time comes to address detailed guidance for best value in Northern Ireland.

337.

The Chairperson: But there is no saying what will come up in the review. Who told you it only concerned the processes?

338.

Mr Barr: Terms of reference were sent to us from England and Wales, as well as transcripts of press releases. From reading those, no one is sure what might come up.

339.

Mr Chairperson: Let us not assume that that would be the only thing.

340.

Mr Barr: No one knows for certain what will come up in any consultation process. From our information to date, however, it appears that the detailed processes are being questioned, particularly in regard to the inspection of best value. Again, I stress that inspection does not feature in our Best Value Bill.

341.

The Chairperson: There has been movement, and we appreciate that a number of clauses in the Bill have been changed. However, in previous meetings to identify problems on the matter, the clear impression both in the House and in this Committee was that there was a degree of urgency. There was a legal requirement for a "back-to-back" repeal of CCT and introduction of best value legislation. Not until we pushed the issue, put it in writing and demanded an answer did the Minister state that there was no legal imperative to have it "back-to-back". That was not said originally, and it was not the impression given in the House. Our clear impression was that one could not be moved without the other being in place. That is not in fact the case, and while everyone is in agreement for a Bill to remove compulsory competitive tendering (CCT), there is no legal imperative for putting best value in place. However, that was the impression given in our previous meeting and on the Floor of the House.

342.

Mr Foster: No one is trying to deceive you. I want to deny that. What was implied to you and what you have inferred are two different things. With respect, I cannot account for what you think I implied. No one was trying to mislead you.

343.

The Chairperson: If that is the case, I want to point out that every Member misunderstood the implications given by you and your departmental officials. There was no difference of opinion in that regard. It was not the case that the Chairperson inferred anything. Until we were given a clear answer at a very late stage, Committee members were unanimous about the impression they were given on this matter.

344.

Mr Foster: I must reiterate that no one was trying to mislead anyone else. I apologise if that is what you and the Committee have inferred. The Department and I have pointed out that that was not the case.

345.

The Chairperson: I appreciate that.

346.

Mr Quinn: I hope that the record will show that the arguments that have been advanced pertaining to best value are policy arguments, and that there is no conflation on the record of the legal arguments for repealing CCT.

347.

The Chairperson: What policy arguments pertaining to best value have been advanced? If you examine your papers, you will find that policy arguments are light. Claims have been made that the current voluntary approach is causing deterioration rather than improvement. Can we identify which councils are at fault, or is that a generalisation that condemns everybody? Can we identify where this approach has broken down?

348.

Mr Foster: We can identify where there have been failures.

349.

The Chairperson: The Committee must have a copy of that information.

350.

Mr Barr: The Committee has a copy of the list, in an annex to the Minister's letter.

351.

Mr Chairperson: It does not identify councils that are offending.

352.

Mr Barr: Indeed it does.

353.

Mr Chairperson: I am referring to the offending councils.

354.

Mr Barr: I do not like to use the word "offending".

355.

Mr Chairperson: Let us call a spade a spade. We are talking about offending councils because there has been deterioration. That is why this legislation is needed. If the Committee believed that the Department's performance had deteriorated, would that justify a demand for best value legislation in order to adjudicate on the Department?

356.

Mr Foster: The Department is subject to scrutiny as is shown by today's meeting. In my initial statement I referred to departmental scrutiny by other means.

357.

The Chairperson: The difference is that there is a legal requirement in what has been suggested. I am trying to tease out the reason for such urgency. Mr Quinn said that that reason was policy. Your letter dated 10 October states that it is not because of policy, but rather that it is the Department's judgement that that is in the interest of ratepayers and residents.

358.

The judgement of the Department is that it can best determine whether ratepayers and residents are getting a good service at a good price, whether anyone else can establish that, or whether that can be done on a statutory best value basis or on a voluntary basis. That is the premise on which the letter is based. That is not policy.

359.

I am happy for you to read the letter. Almost every section of it refers to the interests of ratepayers and residents:

"it is essential to the interests of ratepayers and residents that a statutory framework exists";

"Ratepayers and residents are entitled to know.";

"Local people need to be engaged fully consistently in the Best Value process,";

"this would not be in the interests of ratepayers and local residents.".

360.

That is the sum substance of why what we are saying is being turned down.

361.

Mr Foster: That is my policy judgement on this particular matter. Again, I have to emphasise that we are looking for co-ordination throughout, as far as benchmarking is concerned. We are looking for best value throughout - for people to be on the same wavelength, as it were, so they can be judged, assisted and helped. We are not trying to do anything more or anything less. We have a duty and responsibility to the community, as all councils have as well.

362.

The Chairperson: That is the same for us, as elected representatives and Assembly Members like yourself. We want best value for the ratepayers and the residents of Northern Ireland. It is a judgement call rather than a policy decision.

363.

Mr Foster: I do not doubt that whatsoever - we are all in the same line, which is very necessary. However, we are a Government Department and, as such, we have responsibilities which may oppose the former direct rule format. We have a role to play in this issue. Again, I must emphasise that we are not trying to do anything more or anything less. We are seeking benefit for the community and the ratepayers.

364.

The Chairperson: In the presentation given to my Committee, there was a clear indication that this had the backing of the district councils. When the Committee investigated this matter, we found it was the very opposite. Why is there such a divergence between what we were told and the real facts? We had representation from two councils, but we could have had 15 or 16 councils sitting in here. Some of them told us they had given up the ghost on the matter. They had not objected to the shorter clause Bill, because they felt it was a bit better than what was there previously. They felt that the Department was going to force it through anyhow, and there was no way back. Other councils, very forcefully, gave evidence and wrote to this Committee to show their opposition to what the Government is doing, outlining their reasons. It was not that they did not want to be troubled by this, or that they did not want best service for the community. Why the great divergence between what was told to the Committee - that there was an agreement with the councils - and what we found out?

365.

Mr Foster: We had done extensive consultation, and, as far as we were concerned, what we were giving you was what we had found. I want it understood that nobody from our Department is trying to impose something on anybody unnecessarily. We are not trying to fool anybody in anyway whatsoever, which is the inference I draw from what you are saying. We are doing this for good government -

366.

The Chairperson: There is no inference; I am asking a question. I am asking why a clear impression was given to us - and we can produce the documents - that this was clearly accepted by local government. When we investigated this we found the very opposite. Now we did not write those papers, so why the difference?

367.

Mr Barr: We did a thorough consultation process on best value, and have been doing so since late 1997, early 1998. In 1998 all district councils signed up to the process of best value. We are absolutely clear on that. Every council wanted to see the demise of CCT, and they all wanted that replaced by best value. We have been working closely with councils in trying to work up the procedures of best value. We have been doing that through various working groups and a best value steering group, on which councils and councillors are represented. Therefore, we are in close contact with councils throughout.

368.

The Chairperson: Here is the letter we received, Mr Barr - maybe it would be helpful to you:

"At the 22 August meeting members unanimously agreed that, unlike Compulsory Competitive Tendering, Best Value offered District Councils the opportunity to provide quality services, with the emphasis on public consultation and with transparency, accountability and value for money ."

and

"In discussing the revised Bill, local government representatives recognised the changes that had been made to the original Bill and each endorsed the revised draft legislation as an acceptable basis upon which Best Value could be further developed."

369.

It says that the draft legislation was unanimously endorsed. When we wrote to the different councils we found out that there was no basis for that approval.

370.

Mr Barr: I chaired the meeting of the best value steering group to which you refer, and three chief executives of district councils sat on that group, along with two councillors, as well as the audit service and staff commission. I purposely raised the question with all members of the steering group at that meeting, because this Committee wanted feedback from the best value steering group as to what they thought of the revised Bill. I asked each member what he felt about the revised Bill - namely the 11 clause Bill as opposed to the 19 clause Bill. Each member was given the opportunity to speak on the matter, and each recorded that he felt that the 11 clause Bill was a good way forward. It provided a solid framework on which best value could be further developed. I was only relaying to the Committee in that letter the feelings of the members of the best value steering group. That may not represent the full local government.

371.

The Chairperson: Was it a surprise to you when we informed you of their views, which were very different to what was written in the letter?

372.

Mr Barr: I am not aware of each member's response; I can only recall the comments of the three chief executives who responded to me on the day.

373.

The Chairperson: Mr Barr, I thought that we sent you copies of the submissions?

374.

Mr Barr: We have that information. I can name the three chief executives who sit on the best value steering group and their views on the day. One of those chief executives represents Craigavon Council. He commended the Committee first of all for the work that it has done, and his letter also went on to say that the 11 clause Bill was a good way forward. He also relayed that message to me at the best value steering group.

375.

The Chairperson: There are, however, 15 councils and we sent the actual documents to you, so you know which councils were involved. Fifteen councils expressed serious concern.

376.

Mr Barr: Concerns were certainly expressed, and we are examining those. Indeed, some concerns were a repeat of what was mentioned at the Second Stage of the Bill, and we are considering those issues.

377.

The Chairperson: Minister, there seems to be a withdrawal in your statement today. Your statement states very firmly that you are going ahead with the Bill, yet the last communication which I received from you was rather different. I received that letter on 18 October - not so long ago - and I will quote exactly what you said.

"For this reason, I am prepared to explore, with the Committee, options for a limited deferral of the implementation date".

Where in today's statement do you mention options for deferral?

378.

Mr Foster: I stated that I was prepared to explore it, as you have quoted. However, I am of the opinion that we need to proceed with the Bill at this time.

379.

The Chairperson: The Committee has given a clear indication that the Department of the Environment could have used its time more profitably by introducing other Bills rather than a Bill that is so contentious. The Committee takes a stand on this issue and does not accept that the Department is developing the issue is the correct or appropriate manner. Therefore, if the Bill is presented to the House, we will be taking a stand against the Department.

380.

Mr Foster: With respect, I fail to understand why. The main clauses of the Bill provide a duty of best value. It is effectively a duty of continuous improvement. It requires councils to critically review their services and prepare performance improvement plans. Clause 2 empowers Departments to set performance indicators and standards for district councils. It empowers the Department to issue guidance to councils.

381.

Clauses 3, 4 and 5 - the main clauses of the Bill - enable the local government auditor to audit councils' performance improvement plans and other best value documentation. An auditor is required to produce a report on its findings and councils are required to respond to that report. Those are the main clauses of the Bill. I fail to understand why anyone should find difficulty with them.

382.

The Chairperson: The failure to understand, or the perception of it, is not my responsibility. It is my responsibility to inform you of the Committee's feelings on the issue. If you and your officials have listened carefully to the debate in the House, the proceedings in the past and to what has been said today - and I am not saying that you have not - you will realise that there are no grounds for the Department of the Environment pushing ahead with CCT and the Local Government (Best Value) Bill. The Department should move forward with the removal of CCT. There should be a simple Bill to allow proper negotiation and progress between the Committee and the Department on the timing of best value.

383.

Everyone wants best value, but it is a judgement call. The Committee feels that elected representatives are in as good a position as departmental officials who advise you on the best interests of ratepayers and local residents.

384.

Mr Foster: I accept your point. You did say that the Department's time would have been better spent doing other things. I resent that berating attitude. We are willing to listen to your advice and to discuss issues. We are not trying to berate you, and I do not think that we should be berated either. I accept your points and that is important.

385.

However, the Department is working on other Bills as well. I do not accept that departmental officials are sitting on their backsides doing nothing except working on the Local Government (Best Value) Bill. There are other issues, but the Department believes that there is a need for this Bill. I cannot understand the objections to the Bill, and I am pushing it through to the Assembly for its decision. The Department has reduced the Bill from 19 clauses to 11. I am still waiting for the Committee's alternative suggestions, but I know that you do not want the Bill at all. I fail to understand why. The Bill is for the good of ratepayers and the community - nothing more or nothing less.

386.

The Chairperson: Committee Members cannot make their positions any clearer than they have done. It is a judgement call, and it will be a judgement call in the Assembly. We will have to wait to see if the Committee decides to pre-empt the Department on the issue or wait on the Department. That is a decision for the Committee.

387.

Minister, I thank you for listening to Committee Members. I thank you and your officials for attending. There is nothing personal in what was said; it is a matter of judgement. The Committee has equal right to its judgement as you have to yours.

388.

Mr Foster: I thank you for your frankness and I hope that you appreciate our frankness and honesty in the matter.

Thursday 15 November 2001

Rev Dr William McCrea (Chairperson)

Mr Ford

Mr McClarty

Mr McLaughlin

Mr M Murphy

Mr Poots

Mr Watson

Mr J Corey )

Mr P Casey ) Northern Ireland Public
Mr B McLennon ) Service Alliance

389.

The Chairperson: I welcome the representatives from the Northern Ireland Public Service Alliance. We are interested in what you have to say to us concerning the Local Government (Best Value) Bill.

390.

Mr Corey: The Northern Ireland Public Service Alliance is grateful for the opportunity to address the Committee. I propose to speak briefly. Our written submission captures the essence of what we wish to say about the Local Government (Best Value) Bill. I hope that the Committee finds that submission helpful.

391.

The written submission did not, perhaps, do justice to the role of district council staff in the whole best value process. Best value is about services that are delivered to the public. Almost all district council services must be delivered by staff. The provision of services is a highly intensive operation, and staff play a critical role in the whole best value process.

392.

District council staff want to work in high quality places of employment, delivering high quality services. The Northern Ireland Public Service Alliance believes passionately that the way to guarantee high quality public services is to have them delivered by public servants who are subject to all the scrutiny and all the checks that go with that role. That is why the Northern Ireland Public Service Alliance opposed compulsory competitive tendering (CCT) so strongly. As paragraph 2 of our submission says, we were convinced that CCT threatened public service quality, as well as threatening public service jobs, and we maintained opposition to it.

393.

We welcomed, in principle, the move from CCT to best value, and that is stated in paragraphs 3 and 4 of the submission. Although the Local Government (Best Value) Bill concentrates on district councils, the best value approach is being adopted by other public services. The education and library boards and the Housing Executive have undertaken extensive work on best value. The approach is fairly widespread, and it is important to note that the work is carried out on a voluntary basis and with the co-operation of the trade unions.

394.

I am not saying that we are entirely happy with the way in which best value has been practised. We are unhappy with the district councils' approach to best value; for example, we believe that the best value process should be inclusive. However, at the joint negotiating council, we have found the employers' side reluctant to establish consultative arrangements on the best value process. That was disappointing.

395.

We are concerned that best value could be driven the wrong way, and our concerns are set out in paragraphs 5 and 6 of the submission. Best value offers an opportunity for public services, but the shadow of CCT still hangs over it. One way to overcome that problem is to create space between CCT legislation and the enactment of new best value legislation. There is a strong case for that. The link between the CCT era and the best value era is too strong. We doubt whether it is necessary to have best value legislation in Northern Ireland. We are operating best value without legislation, but we accept that there is a wider point.

396.

We have no doubt that the Bill is not the way forward. In paragraph 6 of the submission, we say that we are concerned that the Bill will create an audit- or accountancy-driven process. That would be a grave mistake. That approach will stifle innovation, and it will reduce the scope for councils to improve services or to invest more in services.

397.

Another reason why we think the content and timing of the Bill is wrong is set out in paragraph 7. Our view is shared by others, including the Association for Public Service Excellence, to which we, as a trade union, are affiliated, but which also represents the interests of many councils in the process. We are considering the Bill at a time when Scotland is still determining the best way to approach best value. Paragraph 7(b) mentions the important review of best value instigated by Stephen Byers, the Minister responsible for best value in England. An important element of that review, as the Committee may be aware, is the focus on achieving higher standards and not just on providing the same services at lower cost, which was the recipe under CCT. Those important points should influence the timing of the Bill. Paragraph 7(c) mentions the major review of public administration scheduled for Northern Ireland, which will have an impact on district councils. We are concerned about that. The effects of best value legislation may transfer to successor bodies without proper assessment of what that really means.

398.

If the Assembly passes the Bill, and Scotland then develops a sharper and better model for best value, and the Byers review produces a different focus on best value, there will be a big time delay before Northern Ireland can follow that up. The legislative process inevitably takes time. In the light of those developments, there are good reasons for stepping back from the Bill.

399.

Paragraphs 9 and 10 of the submission raise three equality issues. First, we do not accept the Department's analysis that there are no equality issues in the Bill. Legislation as important as best value should be subject to rigorous equality scrutiny. We are more than surprised at the Department's analysis that no equality impact assessment of the implementation of the Bill is required.

400.

Secondly, and in support of that argument, we draw attention to an Equal Opportunities Commission report of 1996, which identified the adverse impact of CCT on the number of women employed and on the terms and conditions of female employees. Departments did not have much to say about that report, but it is still on record. That factor should be considered in the context of best value, especially as CCT still hangs around the best value process.

401.

The third point, highlighted in paragraph 10, relates to the interface between the best value process and reviews and the statutory obligation on all district councils, as public bodies, to subject all policies to equal opportunities screening and equality impact assessment. Those processes - particularly equality impact assessments - are extremely rigorous investigations into the implementation of policy. Councils are coping with that. They have had to produce equality schemes and must now subject all policies to equality impact assessments. To impose the strict statutory obligations of a best value Bill - annual best value reviews and service improvement plans that are subject to audit inspection - could cut across the work on equality impact assessments and equality screening.

402.

NIPSA believes that there is a case for allowing screening and equality impact assessments to be developed fully. Such requirements would apply to any best value activity that councils are engaged in without imposing an additional layer of statutory duties on them. There is a case for leaving open the option of a voluntary approach and allowing the equality impact assessment work to develop rather than adding statutory best value obligations.

403.

Paragraph 11 of our submission considers the argument made on paper by the Minister and the Department that a failure to enact best value legislation would mean the return of CCT by default. NIPSA finds it difficult to give credence to that argument. The legislative process is not as regimented as that; there is scope to deal with the issue. The Scottish Parliament has dealt with the problem by altering by legislation an effective date. Furthermore, we think that it would not be possible to return to CCT, given the Equal Opportunities Commission's report on the impact that it had. A return to CCT by default, as a policy or otherwise, would be in contravention of the councils' equality obligations under section 75 of the Northern Ireland Act 1998.

404.

NIPSA's strong preference is that the Bill be delayed or set aside, but, as a last resort, there are some amendments that we would like to see made. One of our concerns - perhaps I did not emphasise it enough - relates to scrutiny and investigation of best value improvement plans. It is set out in paragraph 12(iv) of the submission. NIPSA staff and members are concerned that the process will become an accountancy or audit process. That is not the proper way to approach the process. It is not yet clear that a better model has been established, but, in Britain, the inspection process is widened to include a range of inspectorates such as the social services inspectorate and the police inspectorate. That gives it a different focus from the Northern Ireland proposition, which is to make it an audit function. We would not argue that the English model is the best option, and it may be that, following the review in England, which will focus on the provision of high quality services, there will be changes relating to inspection processes. However, we are concerned about the prospect of an audit or accountancy process.

405.

The Chairperson: I will summarise what the Minister said in the House: "experience to date of the voluntary implementation of best value indicates that a statutory framework for best value is essential if we are to deliver.transparency, accountability and consistency".

He continued:

"While councils have, as expected, taken the opportunity to stand down CCT, they have not yet fully implemented some key aspects of best value". - [Official Report, Vol 12, No 4, p93].

406.

The Minister said that that strongly suggested the need for a statutory approach. What is your view of that?

407.

Mr Corey: We are surprised at the Minister's comments. District councils have willingly and voluntarily embraced best value and have sought to develop it. Councils have been engaged in best value practice since 1998, soon after it was first developed as a policy in Britain. The Northern Ireland Public Service Alliance is surprised at the view that district councils need to have a statutory obligation imposed on them to get them to work on best value. There is no evidence to support that.

408.

The best value process is not meant to be - nor can it be - a nice, neat and simple process that we can implement overnight. It is meant to be a rigorous examination of services and how they are delivered, and it is meant to be a search for best practice. Best value is also designed to achieve the best services that can be provided with the available resources. That takes time. The Minister's analysis is unfair, if it is based on the idea that councils have not delivered or that there has been no public evidence of best value practice. Councils have willingly embraced best value, and it is not meant to be an overnight process.

409.

The Chairperson: Will Members please declare any interests? Some Members may wish to declare an interest as district councillors.

410.

Mr McLaughlin: I am sure that you know that the Committee takes a robust approach to the issue. Last week, the Minister was at pains to decry any confusion, and he said that he was surprised at the confusion about ending CCT and immediately legislating for best value. The Committee Chairperson and others set the record straight as to how that perception had emerged.

411.

How, in your view, will the system be scrutinised and monitored? I think that your view of the role of the auditor is in line with the Committee's.

412.

Mr Corey: We have not found the best system for scrutinising councils' delivery of best value. The public will provide the best scrutiny, because councillors are responsible for the service that the electorate receives. Therefore, the public will be the final arbitrators. We examined the models in England, where they produce separate documentation on the inspectorial role. However, that process is a mixture of audit and inspection and does not seem to be the right model for scrutinising councils' delivery of best value. We do not have a nice answer - we cannot point to one model as the right kind of inspectorate. A new breed of inspector may be required, and one option is to establish a new unit to undertake the work.

413.

The work could be done through the democratic process in a similar way to the Public Accounts Committee's scrutiny of the way in which public money is spent. I admit that we have not yet developed our thinking on that. However, it would be wrong to make the work a purely audit or accountancy function. What worries us most is the prospect of councils focusing on price when applying best value. By doing so, they would lose one of the main purposes of best value, which is a better quality of services.

414.

Mr Ford: It is not a formal declaration, I should state that, as a public sector employee for 16 or 17 years, I was a member of Northern Ireland Public Service Alliance (NIPSA) and a branch officer. I am announcing that, in case anyone thought that I was concealing the fact, although it is not technically relevant.

415.

Mr McLaughlin: Did you have to change your designation?

416.

Mr Ford: You will have to find a better joke than that, Mitchel.

417.

In paragraph 10, you refer to the fact that equality might be hampered by a rigid definition of best value, which is a concern that has not come up in previous discussions. However, having been a member of a district council that has examined such problems over the past couple of years, I agree with your concerns. The more rigidly best value is imposed, the more difficult it will be to cover the equality aspects.

418.

Paragraph 11 and the start of paragraph 12 seem to say that equality legislation means that we cannot go back to compulsory competitive tendering. Would you agree with the Committee, if it took the view that CCT should be formally abolished through a two or three clause Bill, allowing the voluntary process to develop?

419.

Mr Corey: Yes, we would.

420.

Mr Ford: The submission reads as if you think that the courts should decide which option should take priority. However, I would say that we should resolve the matter at this stage, if we can. Rather than throwing out the Bill, we should reduce its effect to a simple abolition of CCT.

421.

Mr Corey: I agree. In paragraph 11, I was trying to respond to the Minister of the Environment's comment that if we did not enact the Bill, CCT will return by default. That is the point that NIPSA challenges. It should not happen. A council could be challenged if it sought to re-introduce CCT. Before a council subjected a service to CCT, the service would have to undergo an equality impact assessment. NIPSA thinks that there is potential for an adverse impact, as the Equal Opportunities Commission found in 1996.

422.

Mr Ford: You referred to the voluntary implementation of best value in the Housing Executive and the education and library boards. What success has come from that approach? Last week, the Minister of the Environment made a strong case that the review of public administration was not a reason to delay best value legislation for district councils, but you disagree. Is there anything more that you would like to say on that matter?

423.

Mr Corey: I am more familiar with the work that the education and library boards have done on best value t[han that of the Housing Executive. The education and library boards' best value approach was much wider and more focused on the quality of services. That was not the case with district councils; they tend to assume that if a service such as refuge collection or leisure facilities was previously subject to CCT, best value should now be applied to it.

424.

The education and library boards have moved beyond that. For example, a best value review is being undertaken for special education. NIPSA is concerned about the areas that the review is examining and the implications. However, the review is focused on the overall quality of the service, as opposed to just the delivery or financial cost. Therefore, our experience of the voluntary approach, particularly outside the district councils, is that there is a much greater scope for a public authority to examine the totality of a service and look for better practice, rather than focusing on audits. NIPSA feels that removing the statutory base creates a freedom that currently does not exist.

425.

NIPSA's point about the review of public administration can be argued in different ways. However, if best value legislation - which NIPSA thinks is not good legislation - is applied to district councils, prior to a review of public administration that might create successor bodies to district councils that, hypothetically, might provide a different range of services, the question arises of whether best value legislation automatically applies to either those successor bodies or those services that did not come under the framework of the legislation. Therefore, NIPSA is concerned that due to the upcoming review of public administration, best value is a leap in the dark. It could be argued that if there were to be successor bodies to district councils, it would require legislation, and that legislation could deal with the best value point by repealing the application. NIPSA understands that, but it seems to be a leap in the dark.

426.

Mr Poots: The Committee received a letter from the Department of the Environment on 29 August about the best value steering group, which includes members of NIPSA. The letter states that

"At the 22 August meeting, members unanimously agreed that, unlike Compulsory Competitive Tendering, Best Value offered District Councils the opportunity to provide quality services, with the emphasis on public consultation and with transparency, accountability and value for money as key components in procurement and service delivery."

Were representatives of NIPSA at that meeting, and was that NIPSA's view?

427.

Mr Corey: You have an advantage over me, Mr Poots, for I was not at the meeting and am not sure if NIPSA was represented. I do not think that we would demur as regards the quotation. Unless you are returning to my point that we were concerned about district councils engaging us in a consultative process, we have no difficulty with what you have said.

428.

Mr Poots: In paragraph four of your submission, you say that

"The stated purpose of Best Value is indisputable - to give rate payers the best possible quality public services at optimum cost."

429.

The Department has said that there have been problems where things have been done on a voluntary basis, that timescales have not been met and that some district councils have not provided the information at all. You say that the purpose of best value is indisputable, and the Department says that the voluntary system is not working. You said that amendment of the Bill was your least favoured option, but bearing in mind what the Department says is happening on the ground and NIPSA's view that best value is beneficial if done properly, would it not be better to opt for statutory best value with an amended Bill?

430.

Mr Corey: You must view the situation from our perspective. We are moving from a legislative requirement for compulsory competitive tendering, which we thought completely wrong, unfair and not in the interests of the service, to the concept of best value. For the past three years, councils in Northern Ireland have been running the best value process voluntarily, and we feel it is operating well.

431.

We do not argue that there should never be legislation in the area. Best value may be deemed part of district councils' relationship to central government, for both are elected. Central government cannot tell what district councils should or should not do every day, and there may be some requirement for a legislative base to make the system operate. We argue not that there should never be a Bill, but that this is not the right Bill. Our main reasoning is that there is no reason to rush into the Bill now when we know that developments are afoot, particularly in England, which may change the face of best value, altering the process and the legislative base behind it. It is unfair to argue that district councils have missed deadlines and so on, for that reduces the process to some narrow thing that is simple to implement; it is not meant to be so.

432.

Our other point is that we have not learnt all the relevant lessons from the voluntary operation of best value. Time should be allowed to develop the process before we move to legislation. We do not argue that there should never be legislation in the area, for it may be required simply to deal with the relationship between central government and locally elected bodies. You will need someone with more constitutional knowledge than I to comment on that.

433.

The Chairperson: Mr Poots asked you about the meeting on 22 August, and I know you have the difficulty of not having been present. However, the Committee received a letter saying that

"members unanimously agreed that, unlike Compulsory Competitive Tendering, Best Value offered District Councils the opportunity to provide quality services".

It was at that meeting that it was unanimously agreed that the Bill offered a way forward. The letter goes on:

"In discussing the revised Bill, local government representatives recognised the changes that had been made to the original Bill, and each endorsed the revised draft legislation as an acceptable basis upon which Best Value could be further developed."

434.

If my memory serves me right, I posed the question about the Bill to Mr Barr of the Department and he suggested that he had asked the opinion of each individual attending that meeting. Mr Corey, were you, your colleagues or your union asked about this specific Bill? The letter stated that

"each endorsed the revised draft legislation as an acceptable basis upon which Best Value could be further developed."

435.

Mr Corey: I need to go away and investigate the matter, Chairperson. Some notes I have indicate that an official of NIPSA was asked to attend the meeting, but it was not a senior official. I will have to clarify to my own satisfaction the original basis on which a trade union representative attends that group, because I doubt that that representative is empowered to speak authoritatively on behalf of the trade unions. In the equivalent body with respect to the education and library boards, the trade union representative attends as an observer and does not contribute in an executive capacity.

436.

The Chairperson: I do not want to place too much emphasis on the point, and it may not be of specific relevance to you, but it was stated in the letter that local government representatives and a number of chief executives were present at the meeting to discuss the revised Bill. Is it the case that the three chief executives present endorsed the revised draft legislation, or was it referring to the meeting in general?

437.

Mr Corey: I am fairly satisfied in my own mind, Chairperson, that the trade union official who attended that meeting was not there to speak authoritatively and to accept decisions of that body as applying to the trade union movement. That would not be the normal basis on which a representative would attend, so I will go on record as saying that nothing should be read into the presence of a NIPSA official at that meeting in terms of our policy or approach.

438.

The Chairperson: However, we received letters from various councils saying that the three chief executives did not voice their views and also that their agreement or endorsement was not the view of the council.

439.

Your statement on the equality considerations disputes the Department's claim that there are no potential inequalities in the proposed legislation and that no impact assessment is required. Are you referring to the explanatory and financial memorandum, which states at paragraph 10 under the heading "Equality Impact Assessment",

"The Department has undertaken equality screening of the Best Value legislation. No potential inequalities were identified, and therefore an impact assessment was not undertaken."

440.

Is it the case that you are challenging that statement?

441.

Mr Corey: If the passage of the Bill per se is being considered, as opposed to the outcome, it could be argued that it would not need to be subjected to an equality impact assessment. That issue and others have never been resolved. For instance, at what point should the equality impact assessment take place - should it take place around the projected legislation, or on the application of the legislation? Our view is that the quality impact assessment should be applied to the projected legislation and not just to the policy flowing from its implementation. However, the implementation of the equality impact assessment has never been addressed in any discussions or debates in which I have been involved.

442.

If a piece of legislation came before us now to enforce CCT, then our clear argument would be that it should be subject to an equality impact assessment. The situation is less clear in relation to best value because an argument could be put that CCT is not an automatic part of best value, but it is still a part of it.

443.

The Chairperson: Are you saying that CCT is an automatic part of best value?

444.

Mr Corey: Our view is that best value should be subject to some analysis. That analysis should be made public to satisfy concerns that there is no equality impact. However, the Department has not provided anything more than a single line stating that it has undertaken a screening and no potential inequalities were identified. Therefore, I do not know exactly what it has done.

445.

The Chairperson: Standing Order 33 may be of help in the matter:

"(1) For the purpose of obtaining advice as to whether a Bill, draft Bill or proposal for legislation is compatible with equality requirements (including rights under the European Convention of Human Rights) the Assembly may proceed on a motion made in pursuance of paragraph (2).

(2) Notice may be given by: any member of the Executive Committee, or

the Chairman of the appropriate Statutory Committee (or another Member of that Statutory Committee acting on the Chairman's behalf), of a motion 'That the . Bill (or draft Bill or proposal for legislation) be referred to an Ad Hoc Committee on Conformity with Equality Requirements'."

446.

Are you suggesting that that should be done?

447.

Mr Corey: I have no reason not to.

448.

The Chairperson: Yes, but do you feel it is important enough to do it?

449.

Mr Corey: It is important enough, yes.

450.

The Chairperson: The Minister attended the Committee and made a number of statements in the House conveying the message that both he and the Department are forcefully committed to this legislation, and that he therefore intends to bring a Bill before the House. Why is the Department so committed to the Bill if it is not in the best interests of society in general and councils in particular?

451.

Mr Corey: The short answer is that I do not know why the Department is attaching so much importance to enacting the legislation. I assume that there is a departmental view that unless the legislation is there, the district councils will not move forward on best value. There is evidence, however, that district councils are moving forward on best value and that a lot of substantive work has been accomplished. The Local Government Staff Commission of Northern Ireland has been playing an active role in assisting councils and co-ordinating work on best value.

452.

The Department may have its own thoughts as to why the legislation is necessary, but we argue that there is evidence that that is not the case. To respond to Mr Poots's point, we are not arguing that there should never be legislation. The strongest arguments are about the timing of the legislation in light of events.

453.

The Chairperson: The Minister indicated that he would discuss a date for deferral, but that seemed to have been withdrawn from the table at the last Committee meeting. If the union were given the option of either removing CCT in the Bill or deferring the eleven clauses to April 2003, what would be your thoughts on that?

454.

Mr Corey: In considering the options, we would go for a simple Bill eliminating CCT. A deferral of the Bill to 2003 would create a space that would allow us to consider the developments arising from the Stephen Byers review. We would also be able to see the Scottish developments, because Scotland has gone about the matter differently and may develop alternative models in that area which might be useful to Northern Ireland. If you put us to the pin of our collar, we would prefer to eliminate CCT and move forward on best value on a voluntary approach.

455.

The Chairperson: And then, as the issue becomes clearer, a proper Bill would be put to the House?

456.

Mr Corey: That is right.

457.

The Chairperson: Gentlemen, thank you for your attendance. We appreciate your submission and your time, which were helpful.

Thursday 22 November 2001

Rev Dr William McCrea (Chairperson)

Mr A Doherty

Mr McClarty

Mr McLaughlin

Mr M Murphy

Mr Poots

Mr Watson

Mr John Buchanan ) Local Government Auditor

Mr Brian Kernaghan )

458.

The Chairperson: You are welcome, Gentlemen; it is a pleasure to see you. It is also a pleasure to have Hansard in attendance, reminding you that "anything you say will be taken down and may be used in evidence against you". May the Committee hear your submission?

459.

Mr Buchanan: When I attended a Committee meeting on 15 March I gave details of the work of the Local Government Auditors' Office on best value in councils. To date, it has worked with the Department and with councils in developing that initiative. While awaiting a statutory role that would allow auditors to report publicly on each council's progress, we have limited our approach to providing informal feedback to individual councils on their performance improvement plans, and have held discussions on the councils' approach to best value.

460.

As chief local government auditor, I have also provided remarks on progress on best value through my reports, which are circulated to all councils. When I last spoke to the Committee I provided members with a copy of my report to councils, issued in February, entitled 'Audit Review of Performance Improvement Plans and Performance Indicators in Northern Ireland Local Authorities'. The report highlighted some of the key points that auditors had drawn to councils' attention on the preparation, presentation and content of their 2000-01 performance improvement plans. In my report I pointed out that 12 of the 26 councils had completed and submitted their plans by the target date of April 2000. I said that those 12 councils were to be commended on what were their first plans.

461.

Many of the plans were well presented. However, there was a wide variation in the standard of presentation. Nevertheless, it was accepted that 2000-01 was the first year in which councils had to prepare a plan and that the suggestions made by auditors could be implemented the following year. Since then, the position on the preparation and submission of plans for the current year has deteriorated. I understand that the Committee has already received progress reports on this: several plans are still outstanding.

462.

Having issued my February report, I issued my usual annual report on the audit of the 26 local authorities in May. In that report I pointed out that some councils were not applying best value as originally intended - three years after its introduction. I stressed that it was important that the weaknesses be overcome, otherwise it may be difficult for those councils in the longer term to demonstrate clearly to their communities and to other interested parties that they are being efficient and effective in service delivery.

463.

Some of the key points in the report were as follows. First, member involvement in the best value initiative in some councils, by participation in service review teams for example, has been very limited. Secondly, and perhaps as a result of this, the reviews have tended to be operational rather than the fundamental reviews that were required. Thirdly, the areas of challenge and competition have yet to be fully developed in many councils. Although assessment of council efforts in these areas will require more in-depth audit work, to date there is little evidence reaching councils' performance improvement plans that these essential, and riskier, aspects of the best value process are being tackled in the reviews. Fourthly, there has been a divergence among councils in how they package their long-term service review programmes; many council programmes contain numerous reviews aimed at very narrow areas.

464.

I know that the Committee is particularly interested in our statutory role in the audit of councils and in our present and future role in best value. The audit of each district council's accounts under the Local Government Act (Northern Ireland) 1972 is carried out in accordance with a code of audit practice. Its financial emphasis is on financial statements, financial controls, the legality of transactions and the prevention of fraud. The audit report on each council is available to local electors. Unlike other parts of the United Kingdom, there is no specific statutory requirement for a local government auditor here to review a council's arrangements for economy, efficiency and effectiveness in service provision.

465.

In 1985 new powers were introduced for the Department of the Environment to appoint auditors to carry out comparative studies across councils. These studies are known as value for money studies and are aimed at making recommendations for improving economy, efficiency and effectiveness in service provision by councils. However, unlike Great Britain, this is at the discretion of the Department and rather than part of the audit function. Not all suggestions for study are necessarily taken up. Over the years, studies of leisure services, environmental health and building control were undertaken. However, since the introduction of compulsory competitive tendering there has been less emphasis on these formal studies, although we continue to work with councils on matters such as absenteeism.

466.

We in audit have have observed developments in the rest of the United Kingdom and how the audited bodies there have taken forward their role under best value. In England and Wales, where a strong statutory base for value for money work already exists, the audit role in best value was covered by new statutory arrangements from the outset. In Scotland, the audit and reporting role in best value has been developed under existing audit powers of value for money. In Northern Ireland, it was envisaged that local government auditors' role in reviewing progress on best value would be based on the original twelve best value principles, without replicating the comprehensive inspection regime of services that has prevailed in England and Wales. However, it was understood that this initiative and its audit would be supported by statutory powers as soon as practicable. We considered that to be essential, given our limited statutory powers in that area.

467.

The Committee requested an audit perspective on the proposed Bill. Best value is essentially about councils demonstrating their performance to their communities. To me, outcomes are the main focus of best value legislation, the purpose of which is to improve the user's experience. The local community should judge whether best value has been achieved, although I am sure that the local electorate and service users would welcome an independent audit opinion before reaching a conclusion.

468.

The Local Government Audit Office considers there to be a need for a sound statutory base for best value that will set out clearly what is expected of councils in demonstrating their performance to the local community. It will also give the auditor the power to provide an independent opinion.

469.

We believe that a statutory as opposed to a voluntary arrangement for best value is essential for three reasons. First, to provide the statutory framework for councils; secondly, to keep attention focused on that important area; and thirdly, to give local government auditors the power to report publicly on best value application in individual councils.

470.

With regard to the statutory framework, local government audit recognises the debate on the most practical approach to best value and on the pros and cons of prescription. It is useful to have general duties for best value. However, if the public is to be reassured these must be supplemented with specific duties supported by independent audit. Local government audit considers the most important of those duties to be the preparation of an annual statement of past and anticipated future performance - the performance improvement plan. Our experiences have shown us that, in some respects, the lack of a common service review timetable and common definitions for services has contributed to councils' difficulty in benchmarking - resulting in extra paperwork and effort - and has also allowed reviews to move away from the strategic level, where the main benefit lies. Several players in local government have also emphasised the need for more consistency among councils.

471.

During our discussions with councils, some senior council staff spoke of the competing demands of the non-statutory best value regime compared to the statutory requirements, such as equality. The implication is that if there are no statutory requirements best value will become less important.

472.

Local government auditors have been engaged in best value since 1998. Since then my auditors have indicated to me that certain issues concerning best value are not being tackled in some councils and that this could ultimately result in reporting in the public interest under the proposed statutory framework. However, they said that they will not be able to issue a formal public audit report on best value in an individual council unless the necessary legislation to support their role is in place. Voluntary audit of best value is unworkable as it does not provide for a formal public audit report on each council; and that is the key outcome of an external audit. In effect, such an audit would be more akin to an internal audit - the purpose of which is to reassure the management of the audited body. Such a role is incompatible with our function as external auditors. Although it is for the Minister, the Committee and the Assembly to decide on the statutory framework for best value, local government auditors have a long tradition of reporting in the public interest on behalf of electors.

473.

Although there may be debate on the level of prescription associated with the best value process, serving the public interest through the independent examination and reporting of councils' application of best value cannot be done properly without statutory accountability.

474.

The Chairperson: You made several sweeping statements; I hope that you can back them up. Would it surprise you to learn that there are those who believe the timing of best value to be inappropriate? Would it also surprise you to learn that they believe in the importance of accountability, efficiency and effectiveness?

475.

Mr Buchanan: I do not doubt that they believe in those principles - one would expect them to hold by such values. Timing is a different matter.

476.

The Chairperson: It is a question of perception.

477.

Mr Buchanan: Perception or otherwise, all we can report on is our experience of working with councils on financial audits over a long time.

478.

Mr Poots: What would we be replicating from England and Wales? I understand that a best value review is being undertaken there and that a new code of practice will be launched in April for the review in England. I also understand that best value is to be replaced in Wales by a Wales Improvement Programme. Are we replicating the old or the new?

479.

Mr Buchanan: When best value was first mooted for Northern Ireland, at every opportunity I recommended that we should not slavishly follow what was recommended for England and Wales. My strong view is that the elaborate inspection system of England and Wales is not necessary here. From the outset, Northern Ireland has decided not to go for such heavy inspection. Inspection in England and Wales appears to be excessive, and it has been heavily criticised. England needs a review of its inspection; we have no inspection in our legislation.

480.

Mr Poots: The situation in England and Wales is different. They have greater responsibilities in local government than we do, and therefore differences are necessary. However, we are building a regime that is quite similar to the one in England and Wales. While that is being revised and replaced we are going headlong into something quite similar to what they are revising, and you are supporting that.

481.

Mr Kernaghan: What is proposed for Northern Ireland is radically different to what is proposed for England and Wales. There is no question of inspection, and the intervention proposals have been dropped. When best value was first mooted in Northern Ireland it was clear that we should not wait to see what would happen in England, Wales or Scotland; it was about developing a form of best value that best suited the circumstances in Northern Ireland. At one point, Northern Ireland was about a year ahead of England and Wales in carrying out voluntary reviews. It was never intended that we should slavishly follow England and Wales. The present proposals are radically different.

482.

Mr Poots: Should we not wait and see what happens in England and Wales to learn from their experience?

483.

Mr Kernaghan: Our colleagues in the local government division have been doing just that, and we also contributed. We considered the proposals for England, Wales and Scotland and took the view that certain aspects were not appropriate to Northern Ireland, especially with regard to inspection.

484.

Mr Poots: The review in England has not been completed, so we do not know what they believed were the best and worst aspects. Would it not be wiser to wait until the review has been completed? We would only have to wait until April to introduce our legislation rather than go headlong into it now without the benefit of the review's findings.

485.

Mr Buchanan: The legislation in its present draft is quite light compared to legislation in England and Wales. Inspection features prominently in the local government press. I suspect that England and Wales will reduce their present level of inspection. However, while waiting we may reach the conclusion that we need some inspection in Northern Ireland. It is unlikely that England and Wales will abandon a regime of massive inspection for no inspection at all. We are unlikely to have the full regime but we should have more than the present proposals allow. I believe that our legislation is radically different and much lighter.

486.

The Chairperson: You say that there is no inspection in our proposals. In the Local Government (Best Value) Bill, clause 3 subsection 4, it states

"he may (as part of that audit) carry out an inspection of the council's compliance with those requirements or that guidance in respect of that matter."

487.

Mr Buchanan: The legal advisors could better explain why that is there. However, I think that word has been retained from the cutting down from the original.

488.

The Chairperson: Gentlemen, you know well enough that when "inspection" is inserted it will be used. Inspection will be done; it is not there by chance. It was suggested a few moments ago that there was no inspection. I will read clause 3, subsection 4 again

"Where, in the course of the audit of a council's best value performance improvement plan, it appears to the auditor that a council may not, in respect of any matter have complied with -

the requirements of this Act; or

any guidance under section 2,

he may (as part of that audit) carry out an inspection of the council's compliance with those requirements or that guidance in respect of that matter."

489.

How can you say that there is no inspection when it is included in the Bill? It sounds as if you were told in the letter from the Minister that compulsory competitive tendering can only be repealed by primary legislation. Therefore that is one of the main reasons for introducing the Local Government (Best Value) Bill. However, we have since found that one can have it removed under the legislation without back-to-back best value.

490.

Mr Kernaghan: What was proposed there -

491.

The Chairperson: Clarity is the best thing to have proposed, and that is what we are looking for.

492.

Mr Kernaghan: I think any use of the word "inspection" is purely as part of the audit. It was indicated that there were no plans to set up a comprehensive separate audit inspectorate to carry out inspections in Northern Ireland.

493.

The Chairperson: Where does it state that there is no intention of a comprehensive audit inspection? Where is it denied that this could be set up under the Bill?

494.

Mr Buchanan: Personally I think there would have to be specific powers in the Bill to set it up. At the moment there is only provision for the audit, and we would not have the power to set up an inspectorate.

495.

The Chairperson: With the greatest respect - it says inspection. Listen. It is correct that there can be a play on words in law, but the word "inspection" is not there by chance. Do not suggest to us that inspection does not mean inspection.

496.

Mr Buchanan: As my colleague has said, the only interpretation we can put on it is inspection within the terms of audit. It is not a separate inspectorate like that in England and Wales where recognised statutory inspection regimes for different flavours, be it education or health, are relied upon.

497.

The Chairperson: With the greatest respect, Mr Buchanan - you were not suggesting that inspection was in the Bill at all. You suggested the very opposite.

498.

Mr Buchanan: In best value terms, I only see audit. Perhaps if this were referred back to the legal people, more would be read into the word inspection, but I only see it as audit and certainly not as the work of any separate inspection.

499.

The Chairperson: We will move on to further questions and come back to that.

500.

Mr McLaughlin: All of the Committee members have spoken strongly in support of accountability and transparency throughout. We are dealing here with an issue that appears to us to be disjointed thinking in terms of the very public commitments that have been given - particularly by the parties that form the Executive - to the review of the public service. Clearly, that review will include local Government. We want to see best value across the board. Local Government is responsible for somewhere in the order of 5% of the public expenditure programme. In light of the very clear evidence and the experience of best value in England, Scotland and Wales does it not make sense that in bringing forward a review here, we take account of those reviews at the same time? This is particularly pertinent because as a result of the review we might well arrive at a different configuration of local Government, with the possibility of powers being devolved back to those councils. Therefore, working with enhanced budget baselines, does best value itself not commend the argument that we should wait until that evidence is available and then go forward on the basis of best practice for all our sakes? Whether or not we have tweaked and amended and studied what other people have done in other places, there seems to be some disjuncture in a review that will require us to repeat the exercise. I do not understand the reticence of the Executive in announcing a date for the commencement of that review, and I very much look forward to it. Nonetheless, whatever the date, would we not then be required to recast the very exercise that we are describing in those new circumstances? Does that not provide a perfect example of wasteful expenditure and wasted time for people who are already busy enough?

501.

I wonder if you would comment on our argument in your capacity as a local Government auditor. Would it not make sense to continue with the voluntary practice until such times as the Executive were in a position to proceed on the evidence of their own review?

502.

Mr Buchanan: Towards the end of my opening statement I mentioned the voluntary - as opposed to the statutory - arrangement. First, we do not have the power to comment publicly on a voluntary arrangement. We have statutory power to carry out financial auditing, but we do not have the power to report publicly. Secondly, from my experience of working with councils, I think you will find that some councils will go ahead on a voluntary basis and use best value to focus on the service reviews and the way they deliver services. Those councils would want to be pro-active. You will also find that there are other authorities which will not be pro-active, and even the experience of the activity under the voluntary arrangement shows that.

503.

With reference to your point that linking might be a waste of time, the experience gained by district councils while they had fewer responsibilities would be useful to them in taking on more - if that was how the review panned out. If local government were to grow, working best value beforehand would be a valuable experience.

504.

Mr McLaughlin: Does that not disregard the negative experience of England, Scotland and Wales where more responsibility is being taken on at local government level? That is a compelling argument with reference to the use of public money. Mr Buchanan, perhaps due to my presentation, you did not pick up on my point that the evidence presents an argument for you as a local government auditor to encourage the Executive to bring forward the review of public services. Is that not a better use of time and money?

505.

Mr Buchanan: I do not have any influence on that argument. Our statutory base and influence relates to the audit of local government, and I am sure that a letter from me would carry very little weight with the Executive.

506.

Mr A Doherty: Our Chairperson mentioned the variety of perceptions involved in the exercise; I have no special insights. The Chairperson also suggested that you made some sweeping statements, and I am happy to make some of my own rather than deal with specifics.

507.

My perception is that local government has been selected as the subject of an experiment in public administration, and is being judged on that basis. Why has local government been singled out for this experiment? If other realms of public administration were examined as rigorously as district councils, would other bodies perform any better under the prevailing circumstances?

508.

The Department, the Minister and you yourselves have clearly stated that district councils are being guided, as otherwise they will not know how to go about their business properly. The Department and the local government auditor seem to know the wants and needs of the public better than the councils who daily deal face to face with the public.

509.

Although I no longer have an interest to declare in local government, I can still express a deep concern about the perception that councils cannot be trusted to work on a voluntary basis. I am not sure if the auditor's stance on the issue of working on a voluntary basis is the one to which we should adhere. The people I dealt with as a councillor were very quick to tell me when they thought the council was not performing properly. Can that status quo not remain, as Mr McLaughlin suggested, until we have a better understanding of the situation in England and Wales where there are grave doubts about the policy of best value?

510.

Mr Buchanan: Our experience is in the wider scene of public sector audit - we audit local government, but are also involved in auditing a number of non-departmental public bodies. Neither I nor my colleagues have any remit in auditing central Government, so we have no experience in that sector.

511.

I have the impression that a number of councils are looking for guidance. They are asking what the format should be, and whether the situation is a charter to bring in consultants and do whatever they like. If there is no broad framework or guidance, councils will do their own thing. That would not necessarily be for the best. Councils should do their own thing, but within a framework.

512.

Mr A Doherty: It all depends on what you mean by the term "guidance". You have already said what you mean by the term 'inspection', which was not to the satisfaction of the Chairperson. There is guidance and there is guidance - sometimes it goes beyond guidance and becomes prescription. Why is there a lesser degree of trust in what local councils will do, than in what the Department will do? Why is the Department not subject to best value? It is argued that the Department is so upright and so heavily audited that it does not need a best value programme, whereas the councils do. I do not agree with that argument at all.

513.

Mr Kernaghan: Councils are not being singled out. Best value practice has been applied to councils elsewhere; it has grown up in England and Wales, and it is being applied in Scotland. Therefore, existing practice is being transferred here. In addition, in Scotland, the best value task force's review suggested that the system should be applied to the whole Scottish Executive Budget. That has been considered there, and the proposals have been accepted. That is outside our remit when looking at local government, but it should be considered.

514.

Mr A Doherty: You cannot get away from the fact that councils feel as though they have been singled out. Councils feel that all other elements of public administration continue to work for better or worse, while best value is applied only to them.

515.

Mr Kernaghan: Although best value is not being applied to many other bodies, several other non- departmental public bodies are applying best value on a voluntary basis. Some of those bodies provide services that are provided by local government in England.

516.

Mr Murphy: Edwina Hart, the Minister for Finance, Local Government and Communities, said that

26 September 2001

Thank you for your letter dated 21st September 2001 to the Town Clerk and Chief Executive about the above. Mr Fallows is currently on leave however the following are Council's views on the Local Government (Best Value) Bill.

During the Consultation process for the first draft of the Bill the Council raised concerns about the use of subordinate legislation to steer councils. It is accepted that the change towards Departmental Circular will ensure a degree of consultation in any guidance given, however it is of concern that continued emphasis on "process" rather than "product" will work against achieving Best Value.

When the concept of Best Value was first introduced, councils were told that they would be given the freedom to use their own initiative in how Best Value was achieved. It is essential that a full opportunity exists for innovation and that creativity is encouraged in the way services are delivered so that value for money and customer satisfaction can be achieved. Departmental circulars, providing rules and procedures, may stifle this ability to be innovative.

The Council previously recommended that the duty to achieve Best Value be a general duty. The Council asks it to be noted that within any service, it is possible to come to a point where further improvement is not achievable without additional cost and therefore the obligation upon Councils should be a general duty as any additional cost could militate against best value.

Ards Borough Council has vigorously adopted the Best Value approach on a voluntary basis and has developed consultation methods appropriate to its needs. Therefore it is suggested that guidance on the consultation process, enshrined in legislation, is not necessary and an assurance would be sought that any such guidance would only be issued where a Council is not consulting sufficiently.

The Council welcomed the less prescriptive approach to the Performance Improvement Plans, however even with this amendment it is still of concern that the over-emphasis on procedure, whether by primary legislation or departmental guidance, acts against the achievement of actual Best Value in the delivery of services.

The Council therefore seeks an assurance that detailed guidance will only be issued where Best Value is not being addressed sufficiently and that councils will be given greater flexibility in how best to achieve this objective.

A concern arises from the financial burden which may be imposed on the Council for the audit and any inspection of Best Value, as the charge for this service is at the discretion of the Department. As previously recommended the Council would again request that such a charge be a "reasonable charge", and not merely what the Department considers reasonable. Furthermore to impose any audit charge adds cost to the service and works against achieving Best Value.

The timescale of 6 weeks for remedial action is inappropriate for local authorities. The Council would, therefore, reiterate that this timescale should be extended to at least 2 months to give time for it to consider the implications of the report, decide what action it should take and process this through the Committee system and the full Council.

The Council believes that the Local Government Audit be subject to the same Best Value regime as councils. This would not only ensure Best Value for each council but would give the auditors an understanding of what Best Value really means.

Additionally the Council also believes that all Government Departments and Public Bodies should be required to submit themselves to Best Value in relation to all their activities, not just Local Government.

I hope this is of assistance, however please feel free to contact me should you require anything further.

1 October 2001

Thank you for the opportunity to comment on the above, apologies for not getting back to you last week.

In my opinion the Bill itself went a long way towards recognising the concerns raised by Councils generally and SOLACE in particular. Having had experience of the application of Best Value in England I would counsel against a heavy audit based approach with more of the stick than the carrot - this I think was taken on board. However, I can understand where many MLAs are coming from and can see some merit in putting this legislation on hold. I think that it would be helpful if the issue of Best Value were addressed through a more radical change to local government powers - with recognition given to the Council role in promoting social, economic and environmental wellbeing. This is particularly pressing, I believe, with the development of Community Planning and establishment of Local Strategy Partnerships.

Finally, if the Bill does not progress there is still a need to address CCT and remove that burden before next year.

Hope these comments are helpful.

In response to your request for Armagh City and District Councils views in relation to the Local Government (Best Value) Bill and in support of comments submitted by our Chief Executive, we would like to state that we welcome this further opportunity to convey our comments and concerns.

We welcome the proposed repeal of the existing provision for Compulsory Competitive Tendering (CCT) and also welcome the principles that the bill wishes to address namely those of transparency, accountability and consistency. Ultimately best value addresses the provision of quality services for council residents at a price that local district ratepayers are prepared to pay (albeit much is outside our control).

While supporting the principles of Best Value we concur with many of the points that were made during the Second Stage Reading debate in the Assembly of the Bill on 18^th September 2001, in particular the following:

We would still question the timing of the introduction of Best Value legislation, given the pending review of public administration.

Why hurry; Why only local government; 2.8% of the total Northern Ireland public expenditure of £9.9 billion.

Inherent in Best Value is the concept of community well being. We believe that a fundamental flaw of the Bill is the omission of this duty, which rests most comfortably with councils who should have competence commensurate with the responsibilities.

Full and detailed consultation and agreement with all stakeholders should be sought before the Department issue guidelines in relation to fulfilling the obligations under the Act.

26 relatively small local authorities in Northern Ireland attempting to carry out fundamental policy and service reviews have the potential to create great inefficiencies i.e. demonstrating good practice rather than implementing the development of a strategic approach/template. Any improvements will be achieved at a price namely consultants and staff time. Greater co-ordination at a regional level is essential and this must be addressed before this bill is adopted. It still remains a concern that Best Value practice is more involved with the process rather than the outcomes.

It is proposed that the Local Government Auditor audit Best Value and we feel that although financial accountability is an essential part of Best Value it is not the only element. The audit function should be appropriate if the Department is serious about implementation of Best Value as a whole and should be development biased rather than pure audit.

We would also question why an allowance for variations in performance indicators between councils has not been included in the Bill.

Section 16 of the Local Government Act 1999 allows the Department to confer additional powers on councils so that they can enact Best Value. This is not included in this Bill and by pushing through this current legislation the department avoids addressing the issue of additional powers to local authorities. This legislation has not taken into consideration what has been happening on the ground with the development of Local Strategy Partnerships and the pivotal role fulfilled by Councils.

In summary the main issues arising from the Bill are the omission of any reference to 'well being' powers for councils, the move from Legislation towards Guidance shifting the 'Power' to DOE Officials and the omission of any reference to workforce issues and ultimately why only councils?

26 September 2001

With reference to your letter to me dated 21 September 2001 and given that your extremely tight deadline for response prevents me from tabling the matters raised to a Council or committee meeting I am as requested providing you with an interim response.

1. The points raised in my letter to you dated 5 April 2001 would still stand in that these issues are felt by Council to be vitally important with regard to the successful development of the Best Value regime.

2. In particular we would like to reinforce the previous point regarding the application of the Best Value regime solely to local Councils. Given that (a) Best Value is supposed to be geared towards the continuous improvement of all public services and (b) that Local Government in Northern Ireland accounts for less than 3% of public expenditure, the continued sole emphasis on local Councils seems somewhat misdirected.

3. I note from the copy of the Hansard that some members of the Committee expressed concerns with regard to the effects of outsourcing and TUPE transfers on public sector employees in England and Wales eg pensions, and would again draw your attention to our concerns outlined in our previous letter with regard to competition. Our view remains that unless proper consideration is given to the legal complexities associated with the Transfer of Undertakings that very significant industrial relations and legal difficulties will result.

Finally as previously stated this is an interim view on the matter and it will be the middle of October before Council are able to consider the latest developments and provide you with a substantive response.

5 April 2001

I acknowledge receipt of your letter dated 29 March 2001 regarding above which was considered by Council at its Monthly Meeting held on 2 April 2001.

Council would make the following comments in relation to the Opening Statement to the Assembly Committee -

• Paragraph 5 - In a general sense the point should be raised once again as to why, if Best Value is geared towards the continuous improvement of public services, does the legislation focus purely on local Councils?
• Paragraph 6 - the legal point with regard to the suspension of CCT legislation is important in that, whilst no-one is particularly welcoming towards further legislation, in my opinion the Best Value regime would be preferable to a reinstatement by default of CCT and all the issues associated with the tendering process.
• Paragraph 7 - the statement that no additional audit charges will be made with regard to the audit process for Best Value, is to be welcomed.
• Paragraph 8 - the commitment towards consultation and a guidance approach rather than a directive approach being taken, should be clearly set out in the legislation.
• Paragraph 9 - the absence of prescribed performance indicators unlike the Mainland legislation is a positive step. Agreed performance indicators arrived at one a partnership basis will be much more useful to all parties.
• Paragraph 13 - clarification is needed with regard to the competition element of Best Value and how this will stack up with the TUPE Regulations in the event of an outsourcing exercise.

With regard to the Minister's letter to the Committee the comments concerning Article 6(4) relating to a 'person' being found guilty of an offence for failing to deliver information requested by an Auditor are worthy of note. Collective responsibility would be a more appropriate means of dealing with this issue.

I apologise for the delay in reply.

26 September 2001

I refer to your letter of 21 September, to which I am replying as Chief Executive on my own behalf, and not necessarily representing the views of my council. I have also taken comments from some members of the Best Value Forum which I chair and which is open to all 26 councils.

When the issue of a Best Value was considered by my council it took the view that legislation was inevitable and concentrated its response on ensuring the councils had as much freedom as possible to implement best value in ways appropriate to local circumstances. The amendments in the current version of the bill show some recognition of the strength of opposition to detailed legislation and that is welcome.

It is my view, however, that legislation is unnecessary at this stage, especially given the creditable way it which Best Value has already been implemented in its absence over the last 3 years. I welcome the review of the process that is taking place and believe that this, along with departmental guidance, which is also welcome provided that it is developed in consultation with practitioners in local government, is sufficient without the overkill of legislation (except as is needed to repeal CCT provisions). This is especially so given the small scale of public expenditure (<<5% of total in NI) controlled by Councils, who alone are subject to the Best Value process.

25 September 2001

Thank you for your letter dated 21 September 2001 seeking this Council's views on the above Bill by Wednesday 26 September 2001.

At a meeting of the Policy & Resources Committee meeting on Monday 24 September Members authorised me to reiterate the Council's view expressed at an earlier stage of consultation that Best Value legislation is not necessary in Northern Ireland.

The Council support the tone and content of comments made by Members of the Committee for the Environment at the Second Stage Reading debate and would challenge the Minister's contention that

We contend that the contrary is true.

In the absence of a legislative framework Councils have implemented the Best Value regime incorporating increased consultation and accountability to ratepayers. All have produced Service and Corporate PIPs and are fully involved in a mature Best Value process incorporating the 4 C's methodology. It is difficult to see how the proposed Bill will contribute to developments under Best Value.

The Minister suggests that a statutory framework is required to provide consistency. There might be some merit in this if Council's were in the habit of resisting Central Government Guidance. This is not the case. On the contrary, Councils are aware that Best Value is a complex and evolving concept and welcome guidance from the Department.

The Council recognises that the Minister has gone some way to assuage concerns in the draft Bill but is of the view that the approach for Northern Ireland should include:

• Maintenance of a voluntary ethos rather than a legislative framework;
• Experimentation with the Best Value methodology to suit the different infrastructure in Northern Ireland;
• Improved central guidance/co-ordination;
• Development of a guidance framework to suit all central and local government departments.

I hope these comments are of assistance.

26 September 2001

Thank you for your e-mail of 21st September and the copy of Hansard setting out the matters raised at second consideration stage.

I understand that the committee stage is now to take place on 27th September and you have asked the Council whether it has any further views on the bill.

I enclose herewith a copy of a report presented to the Policy & Resources Committee on 21st September which sets out the Council's views on the bill.

From reading the Hansard report on the debate at second consideration stage it is apparent that many of these concerns have already been raised by Assembly Members.

For ease of reference I set out below the Council's comments on a clause by clause basis:-

Clause 1 now states "a council shall make arrangements for continuous improvements in the way its functions are exercised having regard to a combination of economy, efficiency and effectiveness.

The Council welcomes the change from the wording in the original consultation draft to the wording in the draft bill by the replacement of the words "to secure" with the word "for". It has been suggested in the debate at second consideration stage that the words "equality" and "the environment" should be added after the word effectiveness. In England the recently enacted Local Government Act 2000 provides that every local authority are to have the power to do anything which they consider likely to promote or improve the economic, social and environmental well being of their area. Rather than amend the present wording of clause 1(1) by the addition of the word "environment" a better course would be to obtain the views of the Minister on whether active consideration is being given to the enactment of a similar social, economic and environmental well-being power for councils in Northern Ireland. The suggestion that the term "equality" should be added to paragraph 1(1) should be in seen in light of section 75 of the Northern Ireland Act 1998 which already imposes an obligation on district councils to promote equality of opportunity in performance of their functions.

Clause 2(4) of the Bill indicates that different performance indicators or standards may be specified for different functions and to apply at different times. In the original consultation draft bill it was indicated that different performance indicators or standards may be determined "for different councils". This is in line with the position in the English Bill. The Council would recommend that the words "for different councils" should be re-inserted at clause 2(4)(c). The reasoning for this has already been articulated by Assembly Members at second consideration stage. In essence it is difficult for Belfast to benchmark itself against other councils in Northern Ireland because of the difference in size. The working group of district council officers also recommended to the Department that councils should be able to use different indicators if they could justify their use. In order that the Department will have the legal power to prescribe different indicators, if a council can make a compelling case, it is recommended that the above words be re-inserted to the Bill.

The Council also note that clause 2(1) provides that the Department may "issue guidance" to councils as to the carrying out of their functions under the Act. It is evident from this clause and indeed clause 3 which deals with the audit of performance improvement plans, that this guidance will play a central role in determining how the Best Value process will be developed and audited. The Minister has stated at second consideration stage that he intends to "establish a joint working group to develop the necessary guidance". Given that clause 2(5) requires the Department to consult on performance indicators or standards with persons appearing to represent councils and such other persons (if any as it thinks fit), it is recommended that paragraph 2(5) be amended as follows. "Before issuing guidance or specifying performance indicators or standards, the Department shall consult (a) persons appearing to it to represent councils; (b) such other persons (if any) as it thinks fits".

The Council would certainly welcome the Environment Committee being consulted in relation to such guidance and it may be that the Committee would wish to seek such a commitment from the Minister that it will be consulted in relation to the guidance which is eventually issued by the Department. This will allow the Committee to exercise a very valuable oversight over such guidance and in particular the powers of the auditor which are set out in clause 3.

Clause 3(2) makes it clear that in auditing a performance improvement plan the auditor must have regard to determining whether the plan was published in accordance with the "guidance" issued under section 2. The auditors powers in relation to audit are set out clause 3(3)(c)-(e). The Council originally made comments in relation to the meaning of economy, effectiveness and efficiency. The Council state that economy is achieving what is needed at the least cost, effectiveness examines whether an activity achieves its objective and efficiency is a balance between the two which looks at the overall cost effectiveness of the activity.

While the assessment of economy and efficiency may broadly be reduced on assessment based on financial, factual and quantitative analysis, the question of whether or not services have improved with regard to effectiveness has traditionally been a political decision based on politicians determining the level of provision they wish to provide for their constituents at a cost they are prepared to pay after proper and due consideration of competing priorities.

It would be a matter of concern to the Council that the Bill might give the Local Government Auditor power to pass adverse comment upon the level at which a council may decide to provide a particular service or function especially if the Council has decided to do so after due consideration of its legitimate political priorities. The Council would therefore once again emphasise how important it is that the Committee seek to be consulted about any guidance which may be issued under paragraph 2(1) and which will direct the auditor on how audits of performance improvement plans should be conducted.

Clearly such guidance should set out the principles which should guide an auditor in such a task. In the submission which accompanies this letter it is recommended that the auditor should adopt an open mind and support an innovative approach, that he should further support well thought out risk taking and that he should provide advice and encouragement to councils promoting good practice and sharing experience.

The Council has no adverse comment to make in relation to clauses 5, 6, 7, 8, 9, 10 and 11.

However the Council would once again draw to the Committee's attention to the absence in the Bill of a power to modify enactments and confer new powers which is the equivalent to section 16 and 17 of the Local Government Act 1999 which applies in England.

Section 16 of the English legislation reads:-

Section 17 goes on to state that before such an Order is made the Secretary of State is required to consult such authority or persons as appear to be representative of interests affected by the proposals. The Council believe that "partnership" is essential to the delivery of Best Value. This is recognised in the guidance issued by the Department of Environment, Transport and Regions in England. It is also recognised in the final report issued by the Warick Team on the Best Value pilots when it was stated that 75% of the pilot authorities believed that partnership was of importance in their approach to Best Value. The ability to forge successful partnerships is presently restricted by legislation.

In the Minister's response to this question at second consideration stage he stated that "Great Britain's legislation gives the State the power to amend or remove the legislative barriers to achieving Best Value. Mr. Sammy Wilson asked why these powers were not replicated in the Local Government (Best Value) Bill. As in Great Britain, certain legislative barriers to Best Value might become apparent over time. Any legislation which could impede the full implementation of Best Value would need to be examined and discussed in the first instance with the appropriate department. If a decision were reached to change existing provision the relevant department would be responsible for any amending legislation, which would be channelled through the "normal legislative process".

The Council would state that the enactment of similar provisions in Northern Ireland to section 16 and 17 in England would provide a legislative basis which would recognise that other legislative provisions may have to be changed to remove barriers to Best Value. Given that the terms of those sections clearly provide that there must be prior consultation before any Order is made and that such Order would in any event be subject to the scrutiny of the Assembly it seems that there would be no risk associated with the enactment of these provisions and the advantage would be that such provisions would be on the statute book.

Once again the Council would recommend that the Committee gives serious consideration to making such a recommendation to the Minister.

I trust these comments are of assistance and once again thank the Committee for providing the opportunity for the Council to make representations to it.

21 September 2001

Belfast City Council supports the view that legislation is required to replace the CCT regime with a new Best Value Duty which would require local councils to take steps to ensure arrangements are made for the promotion of continuous improvement in the way services are provided.

However it is extremely disappointing to see that the Department has not taken account of the Council's earlier submission on the first draft of the legislation. It causes the Council great concern that the example of the English Best Value legislation with respect to the enactment of a similar provision to section 16 of the English Local Government Act 1999 has not been followed.

Section 16 of the English legislation reads as follows:-

In the guidance issued by the Department of the Environment Transport and the Regions in England, it is specifically stated that

The guidance further emphasises the importance of "partnership" in delivering Best Value solutions and refers to

and adds that by

For two years prior to the introduction of the legislative duty to provide Best Value in England, a number of local authorities were involved in a pilot of the Best Value approach. The work of the pilot authorities was evaluated by a research team commissioned by the Department of the Environment Transport and the Regions and based at the local government centre at the Warwick Business School. In the final report issued by the Warwick team on the Best Value pilots, it was stated that 75% of the pilot authorities believed that partnership was of importance in their approach to Best Value. Furthermore the team reported that a large proportion of pilots reported that partnerships had lead to innovation in service delivery and had also enabled them to make more effective use of existing resources.

The Council pointed out in its original submission, that the present way in which section 16 is drafted in England provides a large measure of scrutiny and control by way of central government. Whilst the Council recognises there may be extensive consultation in relation to this issue, it is contended that a provision could be introduced into the proposed legislation which would provide for consultation on any occasion when the section was to be involved. Indeed section 17 is the equivalent English provision specifically provided for this.

Given that partnership is an essential element of Best Value the Council would make the strongest possible representation to the Department to revisit this matter.

Clause 1 now states

Obviously the Council welcomes the change to replace the words "to secure" with the word "for". Clearly Councils are now being requested to make arrangements for continuous improvement rather than being charged with actually securing continuous improvement.

The new sub-paragraphs 1(3) and 1(4) are welcome as they represent a more pragmatic approach than previous sub-paragraphs 1(3) and 1(4).

In relation to the new sub-paragraph 1(5) and specifically for consultation activities the Council would recommend that the Department follow the approach set out in paragraph 34 of the DETR Circular 10/99.

The new clause 2 states that the Department may issue guidance rather than "may determine" as stated in the previous clause 2 and this less prescriptive approach is welcomed.

In the previous clause 2(2) it was stated that different performance indicators may be determined by the Department "for different Councils". The reference to different Councils has now been deleted from the new clause 2(4).

It is disappointing that the reference to "different Councils" has been deleted as Belfast measures itself against many Authorities in England and Wales mainly due to its relative size against other Northern Ireland District Councils. In this respect it uses many of the performance indicators recommended by the Audit Commission.

The deletion of the reference to different Councils is also contrary to the recommendations of the Performance Indicator Working Group chaired by Norman Dunn, Chief Executive of Newtownabbey, which recommended that where appropriate, Councils could continue to use their own indicator to measure a specific area of performance. The Council would therefore urge that the reference to different Councils be reinstated under this clause.

The deletion of clause 3 Best Value Reviews and clause 4 Best Value Performance Improvement Plans is to be welcomed as this removes some of the concerns that the Auditor may comment upon the level at which and the way in which a Council is exercising its functions as this should be a matter for local politicians to determine.

The Council would agree with the rewording of this section, it would however recommend that the Local Government Auditor when carrying out an audit of a Performance Improvement Plan should:

• adopt an open mind and support the approach to innovation;
• support well thought out risk taking;
• provide advice and encouragement to Authorities promoting good practice and share
  experience.

The Council welcomes the re-drafting of this section.

It is noted that section 11 Powers of Department have been removed from the current proposal and that greater emphasis has been given to "guidance issued by the Department". The Council would wish to have an input into drafting of such guidance.

Close liaison between Councils and Central Government has worked well in the Scottish context and is within the spirit of Best Value.

As we have stated previously the Council would propose that a Steering Group is set-up to develop any guidance and that this Group should be properly resourced and representative of all involved parties.

It is noted that the legislation would appear to now be less prescriptive, "to provide a broad framework" and within which the Department will issue guidance. It is essential that full consultation takes place with District Councils when guidance is being formulated and that the requirements of guidance are proportionate, practicable and effective in promoting rate payers interests.

28 September 2001

As the person acting as Best Value Officer in Carrickfergus Borough Council I have been passed your letter for response. Please note that the views expressed herein are my own as there has been insufficient time to canvas elected members.

I take the view that the implementation of the Best Value legislation is premature. The procedure itself is still changing, developing and maturing. (I suspect that the attempt by the department to build so much flexibility into the legislation is reflective of this) There is, at present, an over emphasis on process rather than output - on the production of what are effectively glossy marketing tools rather than hard, working documents. That very process, indeed, is still drawing down too much resource which could be used to provide the very service it aims to improve.

I feel that the progress made to date, voluntarily, is substantial. The existence of, among others, the forum and various benchmarking groups confirms this. I believe that the good work started by these groups could be built on substantially through increased and more visibly active participation of LGA and the Local Gov Div. (After all who is, and always has been, in the best position to spot and advise on good practise but the LGA who visit and assess council departments on a regular basis.)

Northern Ireland has been exposed to the same rigors of, firstly CCT and now Best Value as England and Wales. Yet there have been few abuses in local authorities in NI such as those exhibited in Liverpool, Lambeth et al. Indeed LA's in NI, whilst not perfect, have managed to provide a level of constancy and steadfastness not demonstrated by many other levels of government since 1973. Most officers in LA's in NI show a willingness and an interest in improving their performance, and will, I feel adopt the practices of Best Value - particularly if it is a leaned down version which doesn't require too much of their available resources.

In conclusion, I do not feel that legislative imposition of Best Value is desirable, particularly at this stage (other than to deal with the CCT legislation). Considerable further progress could be made through partnership with the LGA and the department and the production of clear, simple, agreed guidance documents. ( If the LGA and the Department is not prepared to devote some time and energy to the process how can they lay blame on others who act in a similar fashion?). In short, allow the system to continue to develop as it has done but with increased support and participation from LGA and the Department. Consider legislation only if it begins to falter.

These are my own views and should not be taken to represent the views of Carrickfergus Borough Council.

Please note also that I have replied in the same vein to John Dempsey, Chair of the Best Value Forum.

27 November 2001

Thank you for the opportunity to express my views on the above Bill. Unfortunately, the timescale for replying (2 days) is extremely tight and my diary commitments during the day and evening this week have prevented the preparation of a more comprehensive reply.

The Minister is correct in his assertions that "few Members will mourn the passing of CCT" and it "placed too much emphasis on costs rather than quality". The latter is an understatement and the overriding pressure to accept the lowest tender (which met the specifications provided) under CCT, has, in the long-term in many cases proved to be more expensive due to the inferior quality obtained. The Minister is not correct, however, in his assertion that "CCT did, however, bring to local government a useful focus on value for money in the delivery of services". In most cases the costs of CCT (tender preparation etc.) greatly outweighed the benefits obtained and this was the prime reason for its replacement.

The Committee of the Environment is, I am sure, well aware of the fact that initiatives which are applicable to councils in Great Britain do not necessarily achieve a 'strategic fit' with councils in Northern Ireland, because of our smaller size and restricted powers. This applied particularly to CCT, which in the main affected our Direct Service Organisation contracts. We were forced to go out to tender on contracts (at great cost in terms of time and expense, particularly for smaller councils) for which there was no private sector provider in Northern Ireland.

The Minister stated that

It may not be a new concept but many councils are struggling to implement it due to the massive amount of work involved and, once again, we are in great danger of the costs involved outweighing the benefits, particularly for the smaller councils. At a meeting of mayors and chief executives with the Minister in Belfast Castle, we outlined our strong concerns at the effect the additional work was having on our overstretched staff, and the fact that sickness levels (particularly through stress) was climbing alarmingly. The amount of new legislation and policy changes being imposed on local government is overbearing, and we are trying to implement Single Status, Best Value and our new Statutory Duty obligations all at the same time. This places great pressure on staff at manager level and above, all of whom have existing work to carry out. Employing additional staff to deal with these issues, as most councils have had to do, merely puts up the costs.

I do not agree with the Minister's comments that a statutory framework is the best way of promoting the interests of local people with regard to quality and value for money in council services. The interests of local people are best served through the democratic process, and the value of each council can be easily determined by the ratepayers through the range and quality of services provided and the cost to them. I would have no objection to a statutory framework if (after any local government reorganisation) councils became large and bureaucratic bodies, well removed from their local accountability, but the reality is that councils in Northern Ireland are small, in close touch with their local communities and the statutory framework is time-consuming and creates additional needless costs.

One of the main criticisms of Best Value is that councils (in an attempt to satisfy the auditor) are concentrating on the process (producing grand plans and policies which no-one will ever read) and that this is distracting them from concentrating on the outcomes.

I am pleased that the Committee has questioned the need for the Bill to be so detailed and prescriptive and, in support of this, I would argue that the prescriptiveness is out of proportion to the size of the majority of the councils. I am also pleased to see that the Committee is recommending to simply put a best value general duty on councils to seek continuous improvement. This is, in my view, the best way forward. The Chief Local Government Auditor publishes the performance figures of councils annually and this is the best way to identify the need for continuous improvement. Castlereagh Borough Council has set the lowest district rates in Northern Ireland for 11 of the past 12 years and, according to our customer surveys, we provide a very high standard of services, yet we are being forced into a prescriptive regime which is placing our staff under additional unnecessary pressure and will actually increase our costs but not improve our standards. We would argue that we have always delivered good value and we would, therefore, welcome a non-prescriptive 'voluntary' regime which placed a duty on councils to obtain best value and to make arrangements for continuous improvement. This would allow the council to use its available resources where they are most needed and we could concentrate on the delivery of our services. Accordingly, I would endorse the Committee's view that "there is merit in extending the non-statutory approach to implementing best value, as currently happens in Scotland".

Finally, I would caution against this legislation being 'rushed through' against the wishes of local government in general. I do not believe the Minister is correct in asserting "the revised draft legislation was endorsed unanimously as an acceptable basis for developing best value" and the Committee may wish to consult with individual councils on this point to ascertain their views. My recollection is that we were asked to comment on the wording of the draft bill and having spoken out strongly on a number of issues at earlier stages, it was my view that the Bill was a 'fait accompliat'. I therefore read the draft with a view to commenting on its layout and construction as opposed to issuing a strong opposition to its entire content and nature.

I am pleased at the stance being adopted by the Committee for the Environment and its attempt to ensure that common-sense applies and we are not tied into a prescriptive piece of legislation from which we will be unable to escape the consequences and which, in my view, will increase costs rather than reduce them.

21 September 2001

I welcome the revised approach to Best Value legislation taken by the Minister and appreciate the valuable input of the Environment Committee in securing amendments to the draft Bill.

The key to the future of Best Value is the preparation and issue of appropriate guidance by the Department. It is vital that the Department develop such guidance in partnership with Local Government. The Dept. representatives on the Best Value Steering Group have given a commitment that this will be the case and I trust that this will be followed through.

27 September 2001

I refer to your letter of 21 September, 2001, and wish to state that our Council would broadly concur with the concerns raised by the members of the Committee of the Environment.

I will therefore restrict the Council's response to the following brief comments.

Derry City Council welcome the changes made to the Bill since its original drafting but feels that there is considerable merit in repealing the CCT legislation alone and leaving the framework of Best Value to be formulated by the Department and Local Government at a later date.

The Council agrees that there is merit in extending the non-statutory approach to implementing Best Value as this would allow time to develop an effective partnership approach between management, staff and the trade unions to the delivery of Best Value.

The Council would also still have some concerns regarding prescriptive nature of performance indicators but will comment further on their practical value when they have been produced for 2000/01.

It is also important that the audit of Best Value is broader to include the five "E's", i.e. equality and environment in addition to economy, efficiency and effectiveness.

2 October 2001

This response has been formulated without reference to the members of the Council or its management team due to the short time scales required. It expresses the views as far as known of the management of Down District Council.

We welcome the introduction of Best value principals being applied to the Council but feel that the introduction of comparative benchmarks between Councils will lead to a culture of explanations of differences rather than as previously thought a mechanism for progressive step improvement in Council services.

As indicated the introduction of benchmarks that do not allow for local conditions seems to defeat the principal of best value i.e. a service that local people want at a price they are willing to pay.

The bill has been amended to make it more prescriptive than was previously thought in that it would appear to be at the direction of the Department rather than allow the Council to be innovative and provide best value in terms of how it sees the needs of the ratepayers of the District.

The cost of audit has again been placed on the Council, which will add to the overall cost to the ratepayers of the District.

4 October 2001

I refer to the consultation issued in relation to the above and for the opportunity given to respond.

This Council welcomes the Best Value initiative and is generally most supportive of the progressing of the Bill. However, the Council would question the establishment of a programme which would be essentially academic and which would fail to address the many practical issues which require consideration. Indeed the Council feels that if the system is subjected to a strict regime, there will be a demise in innovative and lateral thinking.

A broad system needs to be introduced which will ensure continual improvement in respect of all the services of each authority involved.

In order to deliver such an improvement, realistic targets will need to be established. A review over 7 years would enable these targets to be realistically reached.

I trust that due cognisance will be given to the Council comments.

26 September 2001

1. There is full support for the repeal of CCT.

2. It is noted that the Minister is now proposing a joint working group - it would be interesting to know the proposed membership, how it might operate and what account will be taken of its views.

Will the Working Group or the Department be approving the Guidance and will full account be taken of Councils' comments made in consultation.

3. It would be agreed that an extension of the 3 Es to include Equality and Environment would be beneficial as Councils are major players in each of these areas.

4. The necessity for the Bill to reflect the need for Local Performance Indicators is emphasised as Councils must meet local needs.

25 September 2001

I refer to your letter dated 21 September 2001 regarding the above and would comment as follows:

• Magherafelt District Council has adopted the Best Value principles and continues to work towards demonstrating its commitment to continuous improvement across all its services. We do however feel that the perceived gains achieved by Best Value does not justify the costs and resources required to implement Best Value in a Council of our size.
• Public consultation regarding Best Value, and other matters such as Section 75, have now reached saturation levels, to a point where the public are losing interest. The majority are tired of receiving questionnaires, phone calls and attending meetings on an ongoing basis. Issues are now only being addressed by those who have a vested interest or an extremist point of view.
• The emphasis on public consultation should be prioritised and thereby reduced to an acceptable level. We feel that in the majority of issues (and in particular minor issues) Councillors, as elected members, can put forward the view of their constituents. They are in contact with most of the ratepayers and groups throughout the District.
• We feel that Best Value, as presently constituted, was aimed at large English/Scottish Authorities with responsibility for large budgets such as Education, Health and Housing etc. We feel it is not cost effective for small Councils with small budgets eg Building Maintenance with this Council has a budget of £200,000 (approximately), Dog Control has a budget of £50,000 (approximately). The cost of implementing Best Value to these services cannot be justified. We feel there should at least be a diminious figure, similar to CCT, below which Best Value would not apply.
• The way Best Value is implemented at present allows individual Councils to chose their review of services programme, ie to define in which year a particular service will be reviewed. This is causing problems, particularly with benchmarking which is fundamental to the measurement of Best Value.
• When you try to benchmark with a Council of a particular size and make-up, that reflects your Council area, you find they are not reviewing that particular service on the year that you are carrying out that review. We feel that Government should define as review programme whereby all Councils review the same activity on the same year.
• The fact that Best Value is only being applied to Councils is a matter of concern. If one accepts the principles of Best Value surely all individuals are entitled to the benefits of it across all public services, not just Council Services. There is also an equality issue to be addressed in that District Councils and their staff are being treated differently from other public bodies.
• We would therefore suggest that if it is acceptable that other Government bodies such as the Departments, the Housing Executive and the Education Boards, are exempt from Best Value or can operate a more cost effective streamlined procedure (eg Quality Assurance or a model of Excellence) surely this should apply to Councils as well.

I hope this is to your satisfaction. If you have any queries please do not hesitate to contact me.

26 September 2001

Further to our telephone conversation this afternoon, I am writing to say that Newry and Mourne District Council is satisfied with the contents of the Bill and therefore has no further comments to make at present.

Kind Regards

3 October 2001

We are in receipt of your letter of 28th September, addressed to the Chief Executive, requesting the Council's views and any concerns with the above Bill. Mr Dunn is currently on leave and therefore is unable to respond on behalf of the Council. However, the Hansard report on the debate has been considered by the Council's Corporate Services Manager, who has responsibility for the implementation of Best Value within the Council. She would have nothing further to add other than to support some of the views expressed by the Assembly Members ie

• Variations in indicators between Councils - there should be the option to allow for variation. The majority should be the same to allow benchmarking but this is not feasible for all measures.
• Additional powers - the Department should be able to confer additional powers on Councils in line with legislation in the rest of the UK - this allows for the use of partnerships, which has found to be beneficial in England.
• If Departmental circulars, rather than subordinate legislation are to be used to provide guidance, will these be discussed by Assembly, or how will they be consulted on?

I hope these few comments are helpful.

(a) Hansard Report of 2nd Stage Reading of Bill - 18 September 2001

(b) Committee response to Department's Consultation Paper on proposed Best Value legislation - 6 April 2001

(c) Letter from Department with revised Best Value Bill and Explanatory and Financial Memorandum - 28 June 2001

(d) Letter from Department on outcome of 22 August 2001 meeting of Best Value Steering Group - 29 August 2001

(e) Letter sent by Committee to all Chief Executives in Local Councils - 21 September 2001

(f) Executive Briefing of Changing Gear: Best Value Annual Statement 2001 from the GB Audit Commission - September 2001

(g) News Release from DTLR announcing Review of Best Value in England and Wales - 1 October 2001

(h) Letter from Minister to Committee Chairperson - 10 October 2001

(i) Letter from Committee Chairperson to Minister - 12 October 2001

(j) Letter from Mr R Gilmore, Chairperson of the NI Branch of the Society of Local Authority Chief Executives - 15 October 2001

(k) Letter from Minister to Committee Chairperson - 18 October 2001

(l) Letter from NIPSA requesting meeting with Committee - 2 November 2001

(m) Clause by Clause amendments/additions to Bill considered by Committee - 15 November 2001

(n) Options considered by Committee on way forward with Bill - 15 November 2001

(o) Extract on Welsh approach to Best Value from 'Contract Line' Autumn 2001

(p) Letter from NIPSA on role of NIPSA representative at Best Value Steering Group meeting of 22 August 2001 - 29 November 2001

The Minister of the Environment (Mr Foster): I beg to move

That the Second Stage of the Local Government (Best Value) Bill (NIA19/00) be agreed.

The Bill will remove the statutory requirement for the compulsory competitive tendering (CCT) of selected services and in the interests of council residents and district ratepayers establish in its place a new framework of best value.

Few Members will mourn the passing of CCT. When I was a district councillor, I had no great love for CCT, which seemed at times to place too much emphasis on costs rather than on quality of services. CCT did, however, bring to local government a useful focus on value for money in the delivery of key services. It was therefore a policy that had the interests of residents and ratepayers at heart. Under best value, I am keen to promote greater transparency and accountability in the use of council resources and in the provision of local services to council residents and ratepayers. The Bill is an essential step towards achieving those objectives - it is a Bill for local people.

"Best value" is, of course, an expression that is not yet familiar to most residents and ratepayers in Northern Ireland's 26 council areas. However, the Bill is highly relevant to the local issues that impinge on the everyday lives of the people whom Assembly Members and district councillors represent. It seeks to promote quality services for council residents at a price that local district ratepayers are prepared to pay. It does not simply pursue the lowest cost option. Unlike CCT, the Local Government (Best Value) Bill will require district councils to review all of their services in consultation with local people and to seek areas for improvement in the quality of service and in value for money.

Best value is not a new concept for local government in Northern Ireland. In 1998, all 26 district councils agreed to implement best value voluntarily in advance of primary legislation. A joint departmental local government steering group was set up to oversee the implementation, and key tasks were assigned to a number of joint working groups chaired by district council chief executives. My Department also introduced subordinate legislation to defer the further implementation of CCT while the best value initiative was being progressed.

Some might ask why we need the Bill. There are two main reasons. First, the requirement for CCT has merely been deferred by subordinate legislation; it remains on the statute book. Legal advice is that it cannot be further deferred in that way. That means that the CCT obligation becomes effective again on 1 April 2002, unless it is repealed before that date. Secondly, experience to date of the voluntary implementation of best value indicates that a statutory framework for best value is essential if we are to deliver the transparency, accountability and consistency that council residents and ratepayers deserve.

While councils have, as expected, taken the opportunity to stand down CCT, they have not yet fully implemented some key aspects of best value and have called for further detailed guidance to ensure that there is an effective and consistent approach. That strongly suggests that a statutory framework is the best way of promoting the interests of local people with regard to quality and value for money in council services.

I say that without rancour towards councils, which I regard as having filled the democratic gap in Northern Ireland during 30 years of direct rule. Members may argue that the best value framework might be too prescriptive and bureaucratic. They may also contend that councils should be given the scope and flexibility to seek continuous improvement on their own terms. Such views have merit. Those points were raised with me when I discussed an earlier, much more detailed and prescriptive draft Bill with the Environment Committee.

I reflected carefully on those points, and I have substantially altered the draft Bill. However, I have done that without prejudice to the sensitive principle that council residents and ratepayers are entitled to transparency, accountability and consistency in the delivery of council services. People are entitled to be given a say in the determination of council priorities for the area in which they live. People are entitled to know how their council is performing and to have the opportunity to contribute to its plans.

Ratepayers are also entitled to an assurance that their money is being well spent and that every effort is being made to provide quality services. Such an assurance can be provided only after a robust, independent scrutiny of council activity. The Local Government (Best Value) Bill makes provision for delivery on all of those counts. At the same time, I have gone to some length to ensure that the proposed statutory framework is not over- prescriptive. Moreover, I assured the Environment Committee that I would avoid over-prescription in the implementation of the framework. I repeat that assurance to the House today, because it is an important one.

Current best value procedures allow for different approaches to suit local circumstances. For example, at present councils can determine the means by which they engage local people in consultation, and, through local targets and performance indicators, they can demonstrate to the residents and ratepayers how they are performing year on year. The implementation guidance in the Bill will allow for appropriate local variation. Inevitably, any new framework will involve time, effort and resources - best value is no exception.

I am committed to taking all genuine opportunities to streamline the process. However, the proposed framework should instil some consistency of approach, enabling councils to learn from one another, while improving transparency and accountability for residents and ratepayers. That should prevent unnecessary duplication of effort, while promoting continuous improvement through meaningful benchmarking.

I do not deny that, during the consultation process, significant reservations were expressed by the local government sector. In particular, there was a genuine concern that my Department would use subordinate legislation to establish a framework that would place more emphasis on process than on outcomes. It was feared that that would stifle innovation and flexibility of approach. I have made it clear that I am opposed to such an approach.

The Bill makes provision for a robust framework that will allow for the sensitive and practical development of the best value concept. Emphasis will be placed on the use of departmental circulars for setting out the operational requirements of best value, rather than subordinate legislation, as previously proposed. That will allow us to continue and strengthen our partnership with local government to develop further guidance. I propose to establish a joint working group to develop the necessary guidance on implementation. That will make best use of the expertise of local government representatives and officials, to the benefit of the 26 district councils, their residents and ratepayers.

The Bill now comprises 11 clauses, as opposed to the 19 that were proposed at consultation stage. Clause 1 describes the best value duty and applies it to all district councils in Northern Ireland. The clause sets out a requirement that councils should systematically review all their functions and prepare plans to address any deficiencies. Councils will be required to consult widely with their communities, and that will give people more influence over council priorities for their area. Clause 2 empowers the Department to issue guidance to councils on how the duty of best value is to be discharged. Councils have requested such guidance, on the understanding that they will have input into its development. As I have said, I am committed to such engagement.

Clauses 3 and 4 deal with the arrangements for the audit of best value. That will give local people, the Department and the Assembly the assurance that council activities are subject to independent scrutiny. The Bill will allow the local government auditor to undertake an audit of every council's performance improvement plans and to report on whether they are consistent with the legislation and any guidance issued by the Department. Other provisions will enable the auditor to examine all aspects of a council's approach to best value in more detail. On completion of an audit, the auditor will produce a report of his or her findings. Any such report will highlight areas of concern and make recommendations for either the council or the Department to act on.

Clause 5 outlines councils' responsibilities following receipt of an auditor's report. If the report contains recommendations, a council will be required to prepare a statement outlining its views on those recommendations and saying, in appropriate circumstances, how and when it proposes to address the issues raised. Such statements will be forwarded to the Department and will be included in the council's next performance improvement plan.

Significantly, councils will be required to publish an auditor's report, thereby improving transparency for local people. Such reports will be valuable sources of information for local residents and ratepayers as well as for councillors, council staff and the Department. The provision for independent scrutiny and accountability checks will enable the Department, councils and the local government auditor to work together on promoting the delivery of quality local services.

Clause 6 deals with non-commercial considerations. Article 19 of the Local Government (Miscellaneous Provisions) (Northern Ireland) Order 1992 specifies matters that councils should not take into account when awarding council contracts. However, in certain circumstances, it is possible that some of those matters may be deemed relevant to procurement objectives. The clause therefore gives the Department powers, subject to Assembly approval, to specify, through subordinate legislation, matters that are no longer deemed to be non-commercial. We would, of course, ensure that any such proposal to use those powers would take account of the procurement review being undertaken by the Department of Finance and Personnel.

Clause 7 makes provision for my Department to disapply a council's statutory obligations under best value, either for individual councils or for local government as a whole. That power would be exercisable through subordinate legislation. At this stage, I do not envisage any circumstances in which that power would be used, so its inclusion is for reasons of contingency.

Clause 8 is simply an interpretation of key references in the Bill.

Clause 9 lists the changes to primary legislation necessitated by the Bill. The main change will be the repeal of Part II of the Local Government (Miscellaneous Provisions) (Northern Ireland) Order 1992, which makes provision for compulsory competitive tendering.

I would like to emphasise two points. First, it is crucial that we make progress with the Local Government (Best Value) Bill if we are to avoid the reinstatement by default of compulsory competitive tendering as a statutory obligation for 2002-03. I believe that there is consensus on that, although it undoubtedly creates pressure on the Assembly and my Department, given our tight schedule.

Secondly, Members will have noted my recurring reference to the need for transparency, accountability and consistency, in the interests of council residents and ratepayers. I make no apologies for that deliberate repetition. When I was first appointed Minister of the Environment, I was still a councillor. However, when I became conscious that my appointment gave rise to potential conflicts of interest, I took steps to avoid those conflicts. The mere possibility of potential conficts of interest eventually led me to resign my seat on Fermanagh District Council.

About 60 of my fellow MLAs retain dual mandates as councillors and Assembly Members. It is perfectly in order that they do so. However, that dual mandate undoubtedly carries with it an added responsibility. The Assembly must assure the public that the framework created for local government is transparent, accountable and subject to independent scrutiny. In particular, we must reassure council residents and ratepayers that the legislative powers of the Assembly are not being used to deny them that transparency, accountability and independent scrutiny.

The challenge is to create a balanced framework that is proportionate and practicable, but is also sufficiently robust to ensure that the legitimate needs of ratepayers and residents are met. I believe that the Bill does strike the necessary balance, and I commend it to the Assembly.

The Chairperson of the Committee for the Environment (Rev Dr William McCrea):

I thank the Minister for his speech this morning. It is true that many members of my Committee are also members of district councils, and they declared that at the time.

As Chairperson of the Committee for the Environment, I wish to register with Members and also the Minister, a number of concerns that the Committee still has about the Bill. On 6 April, the Committee formally responded to the Department's best value consultation document. We questioned not only the timing of the Bill but the need for it to be so detailed and prescriptive. At that time, the Department was proposing a 21-clause Bill as opposed to an 11-clause Bill, and I acknowledge that the Minister has taken some of our concerns into consideration.

We carefully considered the policy memorandum and saw the purpose of the Bill. Members of my Committee objected to few of the stated purposes including the repeal of the existing provision for compulsory competitive tendering (CCT). Few councils are sad to see the demise of CCT. The Bill will also give councils a duty to make arrangements for continuous improvements in all their functions - who would not want that? The question is whether it should be done in a compulsory way, through the Bill, or voluntarily, as is already happening.

The Committee's recommended a two-clause Bill, which would repeal CCT and simply put a best value general duty on councils to seek continuous improvements. I respect the fact that the Minister has made changes to the initial draft brought to my Committee. It seems that this Bill is less prescriptive, particularly on the audit of best value plans and reviews, and places more emphasis on the use of departmental circulars and consultation than on subordinate legislation. It drops clauses on best value inspections, costs recovery via prosecutions and performance improvement plans. It puts a duty on councils to seek best value and to make arrangements for continuous improvement. That is better rather than the original statement about securing continuous improvement.

The Committee wrote to the 26 district councils in January and March. We heard directly from representatives of three councils, the local government auditor, the Association for Public Service Excellence and, of course, our Minister of the Environment and his senior officials. Several of the councils questioned the need for legislation, saying that they had been voluntarily operating best value for two years. It was acknowledged by many inside and outside the Department that that had been successful.

The councils also questioned the timing of the introduction of best value legislation, given the pending review of public administration in Northern Ireland. To date, Members have heard much talk about this review, but little has been done about it. Councils also argued that the best value framework used in Great Britain was not applicable to Northern Ireland district councils, which have more limited roles and budgets.

The Committee therefore sees merit in extending the non-statutory approach to implementing best value, as currently happens in Scotland. That would allow us time to develop and strengthen the partnership and improve communications between local government and central Government. It would also allow councils time to develop good practice and improve transparency, accountability and value for money, which are key components of councils' procurement and service delivery.

Who would deny the importance of improved transparency? Who would not want accountability or value for money? As ratepayers, we certainly desire those, but is the Minister's approach - to race ahead with the legislation - the appropriate one?

Improved transparency, accountability and value for money are essential, and that applies as much to the Department and its activities as to the district councils and theirs. The Executive contribute to the Bill, and they consider accountability in local government to be in need of improvement, to provide more transparency for ratepayers and those who rely on council services. However, that could also be said about the Executive. My Committee discussed the 11-clause Bill. We had serious reservations about it, but we undertook to scrutinise it rigorously, clause by clause, at Committee Stage and report in full to the Assembly.

We noted the Department's letter of 22 August, which said that, at the meeting between local government and departmental officials, it was unanimously agreed that, unlike compulsory competitive tendering, best value offered district councils the opportunity to improve quality services. It also said that the revised draft legislation was endorsed unanimously as an acceptable basis for developing best value. Can the Minister confirm that that is correct? Did the district councils ask whether that statement referred to local government throughout Northern Ireland or just to the limited number of officials who happened to be at the meeting? How will the Bill address my concerns? Will the Minister explain why extending the non-statutory approach to implementing best value is not a viable option?

Mr A Doherty: This is an important Bill, and we need to get it right, for it reaches the heart of what politics - local and national, should be about -quality of life.

I look from three perspectives. First, the perspective of the SDLP, which, from its beginning, has worked to build the partnerships and communities - social, economic and political - that are essential to the achievement of that quality of life. Secondly, in 24 years as a district councillor, I have promoted the importance of partnerships as the best method of giving best value. Good councillors of every persuasion, despite their differences, have been united in their commitment to giving good service and good value to their constituents, making a major contribution to keeping Northern Ireland from sinking into the abyss that still opens up before us. Thirdly, I speak as a member of the Environment Committee, which is charged with giving serious consideration to the points that will be made during the debate and to the responses of the Minister and his Department. There are still many small-print points that must be examined.

I have some general questions: why the hurry; why only local government; why not the Department itself; why not Big Brother - central Government? Why impose this on councils that may soon be abolished or, God forbid, subsumed into a few supercouncils? The reasons given by the Department in support of the revised Bill are worthy of close scrutiny.

The Bill is

The requirements relating to economy, efficiency and effectiveness are admirable and acceptable, depending on how they will be imposed. They concentrate on the processes, which might effect a limited sort of best value. We hope that the need for councils to provide best value services that take account of the human needs of the community, council workers and other stakeholders are covered under the last three words, "for connected purposes".

In its response to the draft Bill, the SDLP made that point, with regard to the absence of an equality impact assessment and the fact that both new targeting social need and equality considerations should be taken into account in local government procurement. I am not sure that the revised Bill has taken up those points.

We can readily accept the assurance of the central management branch that best value offers district councils the opportunity to provide quality services with an emphasis on public consultation and with transparency, accountability and value for money as key components in procurement and service delivery. To help councils, the Department may

That is in clause 2 (1). Obviously, councils will, at times, need guidance, but what is sauce for the goose is sauce for the gander. It is surely in order to suggest that, before it issues its guidelines, the Department should consult the councils and other stakeholders fully. I take on board the Minister's words this morning about discussions with councils.

That is just one suggestion of the many that, I am sure, will be made during the debate and the Committee Stage. District councils are already heavily and voluntarily engaged in seeking to provide best value in all their services. Before the Bill becomes law, we must be satisfied that, as an Assembly officer said, the statutory framework for best value is

Mr McLaughlin: Go raibh maith agat, a Cheann Comhairle. I want to give a broad welcome to the concept and contents of the Bill, while expressing some concerns that can be more properly dealt with in detail in Committee, if we ever get that far. The Bill will require district councils to make arrangements for continuous improvement in all their functions. It is designed to replace compulsory competitive tendering and is a recognition that CCT was too rigid and on occasions prevented councils from acting in the best interests of their communities. In other words, it was a failed and counterproductive concept.

Services and contracts will be judged not just on cost but on the balance of economy, efficiency and effectiveness. Obviously that is to be welcomed, because it allows local government services and functions to be carried out in a manner that encourages the targeting of social need and embraces human rights and equality considerations.

I welcome the changes that have been made to the Bill since its original drafting. Many of the concerns expressed by the Environment Committee and by district councils have been taken into account. I welcome and acknowledge the responsiveness of the Minister and his advisers to those concerns. The Bill is now less prescriptive, particularly on the auditing of best value plans and reviews. It places more emphasis on the use of departmental circulars and consultation, rather than on subordinate legislation. It has dropped best value inspections and cost recovery via prosecutions and the section on performance improvement plans. It now provides a duty of best value that requires councils to make arrangements for continuous improvement, rather than to secure continuous improvement.

However, I remain to be convinced that we require back-to-back repeal of CCT and the introduction of best value on a statutory basis now. The Committee Chairperson comprehensively and scrupulously outlined the general view of the Committee on that matter. I note that the Scottish Parliament has extended the non-statutory implementation of best value. Best value should encourage the continued development of partnerships with the community, voluntary and private sectors, where this adds to the overall efficiency, effectiveness, and economy of services. Best value practices should encourage the sharing of resources and information in appropriate cross-border partnerships.

It is vital that best value practice does not become too mechanistic. It is vital that it be accompanied by a culture of workplace partnership and be related to human rights and equality issues - as I said earlier. It is my firm conviction that local government reform will set the context for local authorities' powers and their limitations. It does not seem to be sensible, prudent, or even logical, to impose additional restrictions and structures in advance of this reform, given that local authorities are already implementing best value policies on a voluntary, non- statutory basis. It would be more appropriate to await the outcome of this reform before considering the legislative framework that may be required to foster local government practice in a spirit of the culture of best value.

CCT legislation needs to be rescinded. However, the introduction of a detailed legislative scheme for best value should be deferred until local government reforms are being introduced. Until then, local authorities should continue to implement best value policies on a partnership and co-operative basis, and the legislative timetabling should reflect this flexible and phased approach. Go raibh míle maith agat.

Mr Ford: The Minister, in outlining his proposals, told the House that there were two reasons why we required the Bill. The first was to get rid of compulsory competitive tendering (CCT); the second was because we need a statutory framework for best value. The first reason is self-evident, and it is not questioned by anyone in the Chamber. CCT has been an unmitigated disaster in its implementation in Northern Ireland. The very modest financial savings by district councils have been more than matched by consultants' fees and staff time lost through pressures. However, the sweeping statement that we require a statutory framework for best value has not been spelt out in any detail. No reason has been adduced as to why a statutory framework is required.

Can the Minister tell us why the Scots can manage for two more years without a statutory basis for best value, yet for our councils there is apparently an urgent requirement for back-to-back legislation to introduce statutory best value? It should be borne in mind that district councils in Northern Ireland account for less than 5% of all public expenditure and that they are in a completely different situation from that of the unitary authorities in Scotland, which have far greater powers.

The reaction of councillors, in giving the proposals a general welcome, has also been cited. The Committee Chairperson has queried the numbers and the format involved in that. I suspect that district councillors who have not had the pleasure of being elected to the Assembly still think that the consultation process is as it has been for the last 30 years. They think that a consultation document is issued; district councils and others comment on it; the Civil Service ignores the comments; and an Order in Council goes through Westminster at midnight without any regard for what has been said.

It would be an interesting exercise to remind district councillors that it is the Assembly that legislates and not Westminster - at least for another week anyway. On issues requiring consultation, they should know that there are open minds in the Assembly that will listen to the evidence - not closed minds that will slavishly follow whatever is being done in London, Edinburgh or Cardiff.

There is no doubt that the Minister has outlined some significant points that need to be taken into account. We need much more transparency and accountability. We need to give local residents and ratepayers a say in how matters are dealt with in their districts. What the Minister proposes, however, is that the district auditor, who has functions in the field of accounts, should be able to report on other matters. An auditor, with his accounting background, may be qualified to judge matters of economy, efficiency and effectiveness. However, will the Minister explain how an auditor can judge when a swimming pool should be open, whether a district council should spend money on a children's playground, or whether additional recycling centres should be maintained? Those are political issues on which councillors are entitled to set political priorities. They are not issues to be tied up purely on the basis of an auditor's examination of best value.

It is clear by the reaction to the draft Bill that was put before the Committee that this is a frightened rethink on the part of the Department and the Executive. Speaking as a Member of the Opposition, and given today's reaction from leading figures in the DUP, SDLP and Sinn Féin, I am not surprised that the Executive are running scared. If members of their parties sit in the Chamber and query the legislative plans that the Executive put before us, they clearly have a great deal to be frightened about. It has been highlighted, for example, that the best value regime is now somewhat less prescriptive because we will no longer depend on subordinate legislation but on departmental circulars.

Will the Minister explain how the Committee for the Environment will scrutinise the Executive's proposals, which will come out in the form of a departmental circular? Will we have a full opportunity to discuss them? Will they be laid before the House as subordinate legislation would be? If not, we shall end up with a best value regime that is equally as prescriptive but not subject to democratic scrutiny in the Assembly.

If we are to talk about transparency and accountability, the Executive must clearly explain to the Assembly what is happening to the review of public administration. This issue is one of directing best value to councils alone. Where is the rest of the quango state? Where are all the agencies that look after what would be council functions if we were in England, Wales or Scotland? We cannot simply compare a body such as Moyle District Council with Glasgow City Council, Cardiff City Council or a London borough council. The population is minute by comparison, and the range of functions is totally restrictive. What we still have, although there are modest changes in the way that best value is to be administered, is the best value regime being introduced in England. That regime is being applied to a completely different set of circumstances in Northern Ireland.

The Department's original proposals were like using a sledgehammer to crack a nut. We now have a heavy single-handed club hammer to crack a nut. My Colleagues and I shall seek to design a suitable nutcracker, both in Committee and when the Bill comes back to the Chamber, rather than use what the Government have suggested.

Mr S Wilson: I endorse many of the remarks that have been made about the necessity to drive the legislation through as quickly as the Minister has suggested. I suspect that one of the reasons behind driving through quickly is that it will provide the Minister with an excuse for not including many of the concerns that people have, and many of the legitimate amendments that should be made to the legislation. It strikes me as odd that we have to rush the Bill through in Northern Ireland, when voluntary best value could be extended in Scotland for a period of time.

I have served in local government for a long time, therefore I am not against local government being forced, and legislation being introduced, to ensure that ratepayers get good value for money.

Many Members who have served on councils know that value for money is important because ratepayers are increasingly asking questions about the delivery, cost, quality and nature of services. Let nobody run away with the idea that asking for the legislation to be delayed is an excuse for not wanting value for money at local government level. Serious questions need to be raised about the legislation. However, I suspect that the impetus being applied by the Department will drive the legislation through.

I wish to deal with two aspects of the legislation; one aspect is included in the legislation and the second is not. First, the Minister spoke about the need to make allowances for local variations. He referred to clause 2 (Best value guidance, performance indicators and standards) and said that he would establish a joint working group to make best use of the knowledge at local government level. The working group would advise the Department as to what should be contained in guidance.

Looking at the record of the Minister and of the Department to date, I doubt very much if anyone will pay any attention to the working group. As mentioned earlier by Mr Ford, one change in the new legislation is that it will not allow for indicators to vary between councils. Allowance was made for that in the original legislation. The working group that was set up to look at the indicators recommended that there should be different indicators for different councils, given the diverse nature of some councils. One example is street cleaning in Belfast. It is unfair to impose an indicator of cost-per- head-of-population for street cleaning on a city that has so many daily visitors, whether they be tourists or workers. It does not make sense to apply the same indicator to Belfast as to a rural town that does not have the same numbers of visitors and therefore does not have the same street cleaning problems.

The original intention was to allow variations in indicators between councils. However, the Minister has removed that allowance, despite the fact that it was recommended by a working group that was made up of practitioners at local government level. If that is an example of how he intends to heed the views of local practitioners or the people who he says have knowledge of local government, we should be sceptical about his promise.

When the Environment Committee goes through the legislation clause by clause, I hope members will re- examine clause 2(4) and ensure that the words

are reinstated. It is logical to include those words in the legislation. Having worked in local government, I know that if something is measured, it is likely to be done. I am in favour of indicators. Problems arise when a bad indicator is set and resources are pushed towards meeting that indicator; the exercise is futile and wasteful and does not give good value for money.

My second point relates to something that is absent from the legislation here but is included in the legislation for the rest of the United Kingdom.

Section 16 of the Local Government Act 1999 allows the Department to confer additional powers on councils so that they can enact best value. Those additional powers might change the way in which councils do things or they might allow councils to enter into partnerships. That is important.

Six pilot studies were carried out before best value legislation was introduced, and 75% of them showed that the authorities believed that partnership was important in their approach to best value. The team reported that partnerships enabled innovation in service delivery and made more effective use of existing resources.

Despite the evidence from the pilot studies in England the Minister has dismissed the inclusion of any clause enabling him to give additional powers to councils to let them have partnership arrangements if it was believed that they would lead to a more effective delivery of services. The Minister has made a number of arguments. He wrote to the Committee Chairperson with the usual "I am committed to broader powers for local government, et cetera, et cetera." However, the first argument was that this legislation must go through. One reason why the Department wishes the legislation to go through is that it will allow the Department to avoid having to look at whether or not to give those additional powers to local authorities.

During my time in local government I learned that the local government branch of the Department of the Environment wants very little to do with local government; it certainly does not want local government to have too much power. I suspect that there is an element of in-house fighting going on.

The Minister did not believe that the councils were large enough to benefit from partnerships. However, the joining of three bodies - the councils that joined together to look at waste management - has shown that it is possible for partnerships to be effective.

As long ago as 1997 - I remember this because I was involved through Belfast City Council - Lord Dubs promised to look at the possibility of allowing councils to enter into partnerships for economic development purposes. Yet, here we are four years later, and nothing has been done about that. Lord Dubs has gone; there is a new Minister; and we are still getting the same promises.

For the Minister to say that he is looking at ways of enhancing the powers of local government but that consultation will be required is an excuse. The Local Government Act 1999 allows for scrutiny when a council asks for those extra powers, and that means that the process does not need to be delayed any further.

The Minister says that he does not believe that partnerships are critical to the early success of best value. That is bizarre considering that 75% of the councils involved in the initial pilot studies said that that was the case. Surely the Minister has to give cognisance to the evidence from local government where best value has been practised and partnerships have been used.

The Minister should respond to the first position adopted by the Committee, that the legislation should not be pushed through. There is no need for haste.

If the Department insists that the legislation come before the Assembly it could be voted down. If that does not happen then it is important that the legislation be amended to change clause 2 to allow individual performance indicators for different councils. Belfast could have a performance indicator that is the same as those used in medium-sized cities in other parts of the UK. That would be reasonable.

A clause should be inserted to allow additional powers to be given to individual or groups of local authorities. Additional powers are believed to lead to a more efficient use of resources when entering into partnership with other bodies or with the private sector. This would lead to a council's achieving best value objectives.

Unlike the situation under direct rule, we can look at flaws in the legislation. This is the view that has come from the practitioners, the people who have to implement the legislation. The Minister ought to use the evidence that is coming from the Environment Committee, local government and Members of the Assembly to see the folly contained in the Bill as it presently stands and remedy it.

Mr ONeill: The thought of getting rid of compulsory competitive tendering is wonderful to me. The depredation that the policy has wreaked on councils and the delivery of public services is sufficient to encourage me to support the legislation.

I am convinced that the concept of best value, if not always its practice, emphasises, reinforces and values public service. This is something that was vilified by previous Administrations in England and led to the introduction of compulsory competitive tendering.

Public service is, and could be in the future, excellent. However I am amazed at the approach, not just by the Minister and his Department, but by the entire Executive towards best value. Why does it apply only to councils? If we look at the concept of best value and at the statistics that the Assembly Research and Library Service can provide, we see that the estimated net expenditure by councils in 2000-01 amounted to £275 million, out of a total Northern Ireland public expenditure of £9·9 billion. This is approximately 2·8%, even lower than the figure of 5% that Mr Ford referred to.

There are 148 other public bodies operating in Northern Ireland that are run by 2,000 appointees. There are 46 executive non-departmental public bodies and 32 National Health Service bodies with an expenditure of £5·5 billion, approximately 56% of public expenditure. Nothing is being done about best value in that sector. Why should Departments escape the discipline and rigour of best value; they are responsible for the rest of the expenditure? If we look at best value and its introduction into the Administration in Northern Ireland, 2·8% of that expenditure is hardly exciting.

I am not a member of the Environment Committee, so there are a number of points that I would like the Committee and the Department to examine. First, on page 1 of the Bill, clause 1(1) (The duty of best value) refers to the three Es - economy, efficiency and effectiveness. Although there are differences between local government in Britain and in Northern Ireland, we can learn from the experience of the operation of best value there.

Economy, efficiency and effectiveness are good things, but they apply principally to finance. There is little emphasis on the human element, or on delivery to the population. Now, instead of three Es, we talk about five Es: economy, efficiency, effectiveness, equality, and environment. This is often referred to as the well-being factor, as it addresses the well-being of the community and not just the monetary aspect of best value. I would like to see that emphasis included in the amended legislation.

Mr Wilson referred to clause 2(1) of the Bill. The introduction to that clause reads

Although it is hinted at, nowhere does it actually say that there should be consultation with the people involved. An amendment should be included to emphasise that the Department may issue the guidelines as to carrying out of their functions under the Act, "following full and detailed consultation and agreement with all stakeholders". I am suggesting an emphasis on the well-being factor. It would not be a big job for the Department to discover who its stakeholders are - they are councils, community groups and various other people. Departments could quickly investigate that through an audit.

Mr S Wilson: I agree with the Member's point. Clause 2(5) states

How would you see that being strengthened?

Mr ONeill: I was referring to clause 2(1). Mr Wilson is referring to a clause that is specifically on performance indicators. Consultation should apply to the whole operation of the introduction of best value.

In addition, I refer to clause 3(4)(b) where there is a requirement for inspection in circumstances indicated in the Act. It would be sensible, fair and wise to have a specified date for the inspection to be carried out. Such a date could be chosen to allow local authorities time to compile a full annual report.

A date such as the end of June would give councils an opportunity to compile that report and help people adjust to the requirements of the Act.

Finally, I refer to section 16 of the Local Government Act 1999, which Mr S Wilson has already mentioned. I emphasise again that the experience in Britain has been good. In fact, I understand that Nick Raynsford has agreed for work to be done on that sector to improve the regulations under section 16. The well-being concept and partnerships have been highlighted. Mr S Wilson made the arguments very well, and I do not need to reiterate them. Among the regulations is a new power to provide indemnities to members and officers involved in partnerships and external bodies.

While we have had bad experiences here, the ravages of compulsory competitive tendering in England have produced some frightful cases. I read recently about an employee who has five pensions because he was shoved around from one private contractor to another. He has lost all the stability and security that he had as a council employee.

In addition to the partnership emphasis, section 16 helps to ensure that employees are safeguarded and that their benefits and job standards are not lost or interfered with through any of the partnerships or public-private deals that might be made. It is, and should be, an area of great concern to us as we embark on a best value approach. We should learn from what has happened in England in that regard and be very wary of the damage that could be done to individuals.

The Minister of the Environment (Mr Foster): I thank the Members who contributed to the debate. There is, undoubtedly, a keen interest in this matter. Members have dwelt upon the issue and looked into it, and it is right and proper that it should be debated thoroughly. The responses mirror the genuine interest shown in the earlier consultation process, which sought to deliver best value in the interests of council residents and district ratepayers.

I have listened to the debate carefully and I will try to reply to as many points as possible in the time available. My officials will, in any case, scrutinise Hansard, and I will write to those Members who raised issues that require further clarification.

Rev William McCrea asked why we need legislation if councils have already introduced best value voluntarily? First, the requirement for compulsory competitive tendering (CCT) has merely been deferred using subordinate legislation that remains on the statute book and cannot be deferred further. That means that the CCT obligation becomes effective again on 1 April 2002 unless the legislation is repealed before that date. Secondly, experience of voluntary implementation of best value to date indicates that a statutory framework is essential if we are to deliver transparency, accountability and consistency.

Should best value legislation be deferred pending the review of local government? In accordance with the Programme for Government, the Executive are committed to a full review of public administration, including the administration of local and public services. I have been pushing for that for quite a while but other events have taken over. However, best value principles apply irrespective of the structure and responsibilities of local government. I therefore see no need to defer the introduction of best value legislation on those grounds.

Why the urgency with the Local Government (Best Value) Bill? Why does the Minister not simply defer it? That approach has been used in Scotland, where a moratorium has been placed on CCT pending the development of appropriate best value legislation. However, it is not possible in Northern Ireland, where a different legislative framework exists. The Department has already used subordinate legislation to defer the implementation of CCT, but it is still enshrined in primary legislation. Legal advice indicates that further deferral in this way is not viable.

Should the Bill deal with the repeal of CCT alone, leaving the framework of best value to be formulated by the Department and local government at a later date? That is a good question; indeed, there were several good questions. The clear objective underpinning best value is that it is a policy designed with the interests of residents and ratepayers at heart. If we are to deliver the transparency and accountability, which local people deserve, while ensuring consistency of approach, experience to date of voluntary implementation of best value indicates that the framework needs to be clearly defined in legislation. That is vitally important. As drafted, the Bill would allow local people to have their say on the levels and standards of service provision in their areas.

Rev William McCrea also asked if all councils were happy with the redrafting of the Bill. The draft Bill has been circulated to all councils, and they have not advised me of any particular problems. That does not surprise me, as the redrafted Bill addresses their key concerns.

Mr Doherty asked why the Bill did not apply to Government Departments. I contend that central Government already operates under a value-for-money or best value framework. Elements of that include a Government accounting manual and accompanying financial regulations; a requirement to operate resource accounting and budgeting; a detailed Programme for Government incorporating departmental public service agreements, corporate and business plans, internal scrutiny and Northern Ireland Audit Office scrutiny; and the Public Accounts Committee of the Assembly. I assure the Member that we are very well scrutinised.

Mr Doherty also asked if best value would concern process at the expense of outcome. That issue was highlighted during the consultation process, and I am anxious to ensure that it will not occur. At the same time, councils expressed a need for guidance concerning best value.

Mr Doherty wanted to know why the Department had not conducted an equality impact assessment of draft best value legislation. My officials have closely screened the proposed policy and have identified no issues of concern on equality grounds. A decision not to undertake a full equality impact assessment was ratified with the Equality Commission. Under section 75 of the Northern Ireland Act 1998, councils are required to produce equality schemes for approval by the Equality Commission. Councils will therefore have a legal obligation to operate best value within the parameters of their approved schemes.

Mr McLaughlin referred to support for the partnership approach. I have already advised his party that we have delayed the introduction of this legislation pending local government reform. Mr Ford asked why we need a statutory framework for CCT, and why we do not adopt the Scottish approach. I referred earlier to the Scottish approach and to our legal difficulties. Is it true to say that the Department has ignored the concerns of councils and the Environment Committee in bringing forward the draft Bill? I assure the Member that that is definitely not the case - we do not do business like that. We want to work with people and we co-operate with people. I refute any suggestion that my staff override any Department or area. The draft legislation was subject to an extended consultation process. My officials and I met the Environment Committee to discuss the draft proposals. That approach proved most useful and led me to instruct my officials to redraft the legislation and address many of the concerns expressed at that time. In particular, there was a genuine concern that my Department would use subordinate legislation to establish a framework that placed more emphasis on process than on outcomes. We have examined that issue and dealt with it, we do not want to override anyone's responsibility.

Mr Sammy Wilson made a number of points. He referred to individual performance indicators, which are not appropriate to all councils. He asked why councils do not have the freedom to set their own performance indicators. I see clear merits in having a set of four indicators, which are used by all councils, instilling some consistency across local government. However, I recognise that individual performance indicators will not be equally relevant to each council. No indicator, taken in isolation, can accurately measure the performance of a council. We need benchmarks, and that is why we seek them. I therefore expect councils to supplement cross-council indicators with local indicators, which they will develop themselves to reflect local circumstances. The joint use of cross-council and local indicators should prove an effective means of summarising council performance.

Mr Sammy Wilson also asked whether the Department would genuinely listen to local government when producing guidance. I have assured the Assembly that the Department collaborates with the Environment Committee and all relevant agencies and groups to ensure that we are working together for the common good.

I emphasise that my record shows that my officials have worked positively with council officials and I refute the suggestion that we are not working in co-operation with others or discussing matters with them.

Great Britain's legislation gives the Secretary of State the power to amend or remove the legislative barriers to achieving best value. Mr Sammy Wilson asked why those powers were not replicated in the Local Government (Best Value) Bill. As in Great Britain, certain legislative barriers to best value might become apparent over time. Any legislation that could impede the full implementation of best value would need to be examined and discussed, in the first instance, with the appropriate Department. If a decision were reached to change existing provision the relevant Department would be responsible for any amending legislation, which would be channelled through the normal legislative process.

Mr Sammy Wilson asked about economic development powers, a matter that has been referred to many times in my years as a councillor. The issue has cross-cutting implications for many Departments; it will be addressed in due course through interdepartmental discussion. However, the matter should not be allowed to delay the progress of the important task of establishing a sound framework for best value.

Mr ONeill welcomed the demise of CCT, and asked whether the statutes of guidance would be subject to consultation. I have responded to that point and his question on whether we could draw on the English experience.

I assure the House that I do not wish to be over- prescriptive in regard to best value. I recognise that best value touches all aspects of local services; none is more important than the well-being of local communities. I have every confidence that councils will continue to address that issue within the best value framework.

As the Minister responsible for local government in Northern Ireland, I consider it my duty to further promote transparency and accountability in the use of council resources and the provision of local services. In bringing the Local Government (Best Value) Bill to the Assembly, I sought to achieve that objective. I listened carefully, therefore, to all of the representations, and I thanked everyone who contributed to the consultation process. It is true that concerns were expressed about the labour intensive nature of best value and about the apparent emphasis on procedures rather than outcomes.

Rev Dr William McCrea: In the light of today's debate, the Minister and the Department of the Environment should realise that if they press ahead with the Bill there will be great difficulty in getting it passed by the House. As Chairperson of the Environment Committee, I ask the Minister to reflect calmly on today's debate and to consider the appropriate way forward.

Mr Foster: If the Bill were delayed now, it would be too late to get rid of CCT by next April; therefore we would be under contract for another three or four years. I appreciate the points and concerns expressed. I want the Bill to proceed. I am not trying to push something through against anyone's will. However, while some negative points have been made, not everybody has said that they do not want the Local Government (Best Value) Bill. Members are concerned and have questioned some points, but, in the main, they welcome the Bill. I would not therefore give way on that point.

Many people support the provision of greater guidance to help streamline processes provided that allowance is made to accommodate the diversity of circumstances among councils. There was uniform agreement that CCT should be replaced, with greater emphasis on quality service delivery rather than the lowest-cost option.

It was also widely recognised that in order to achieve quality services a framework for best value - which I still contend is necessary - must be developed to engage local people in meaningful consultation. I have fully considered all of these matters; we need a common statutory framework to ensure that people in different council areas have equal opportunity to participate in local services provision and to obtain quality local services. Again, such a framework must be transparent, consistent and accountable to ratepayers and users of local public services. The framework should provide a basis for local people and councils to work in partnership with each other. The framework has to be workable and proportionate to the requirements and circumstances of district councils. That is why I have made provision in the Bill for my Department to develop further guidance on partnership with local government. The guidance should benefit councils in their implementation of best value by providing the necessary consistency of approach and enabling councils to learn from one another. It is important that we have benchmarks and that we learn from one another.

In the Local Government (Best Value) Bill I have responded to the representations made to me. I firmly believe that the Bill makes provision for the framework that I described. The Bill is proportionate to the needs of local government in Northern Ireland and at the same time it addresses the needs of residents and ratepayers, giving them the assurances that they require. The Bill needs to proceed, and, although I understand everything that was said, I know that not everyone is against the Bill because we have discussed and co-ordinated the matter across the realm. I commend the Local Government (Best Value) Bill to the Assembly.

Resolved: That the Second Stage of the Local Government (Best Value) Bill (NIA Bill 19/00) be agreed.

Mr Speaker: I am conscious that efficiency was a topic of the last debate, and the House has been particularly efficient in dealing with this morning's business. In so doing, it has earned itself a longer lunch. The House will now rise and is suspended until 2.00pm, when it will resume with the motion on hospital waiting lists.

The sitting was suspended at 12.18pm.

6 April 2001

1. Your letter of 30 November 2000 sought the Committee's comments on the above.

2. The Committee examined research on how Best Value legislation has been handled throughout the United Kingdom. It heard directly from Departmental officials at its meeting of 25 January 2001 and subsequently wrote to all 26 District Councils to hear of any remaining concerns with the Department's proposals. Ten councils responded within the tight deadline set and seven detailed their concerns - some quite considerable - much of which had already been made known to the Department. The Committee also noted the various concerns lodged with the Department on 30 January 2001 by the Association of Local Authorities of Northern Ireland (ALANI).

3. Three of the Councils (Belfast, Ards and Craigavon) presented to and discussed their principal areas of concern with the Committee at its meeting of 1 March 2001. The Committee then wrote to you on 2 March 2001 requesting the Minister to attend the 15 March 2001 Committee meeting immediately after the Committee heard from the Chief Local Government Auditor. The letter outlined some of the main areas of the Councils' and the Committee's concerns with the Department Best Value proposals as follows:

• the need for and timing of the detail in the draft of the Bill - there was a discussion that a two clause Bill (as opposed to a nineteen clause Bill) which removes CCT from Statute and introduces a General Duty on Councils to 'seek' rather than 'secure' continuous improvement;
• linked to the above, the question of introducing detailed Best Value legislation before the consideration of re-organisation of Local Government in Northern Ireland plus Best Value is already in place and working on a voluntary basis;
• the over-emphasis on process (and prescription in the legislation) at the expense of product and quality, stifling innovation;
• Councils having to pay for the costs of Best Value audits or Inspections and that it will be an offence for a person not to comply with a requirement of an Auditor or Inspector; and
• finally, the means of central communication/engagement between Councils (officials and elected representatives) and the Department needs to be improved - demonstrated by such fundamental concerns with the Best Value draft legislation at this time.

4. The Minister wrote to the Committee on 20 March 2001 formally responding to the above points and other issues raised on 15 March 2001. Finally, the Committee heard directly from representatives of the Association of Public Service Excellence on 22 March 2001, who also expressed concerns with the Department's Best Value proposals.

5. The Committee, at its meeting of 29 March 2001, discussed its response to the Department on the Best Value Consultation Paper. Before finalising its conclusions, the Committee decided to urgently request the views of District Councils on the key points in the Minister's opening statement to the Committee on 15 March and his subsequent letter of 20 March 2001.

6. On the basis of all the evidence obtained over the last 3 months, the Committee, at its meeting on 5 April 2001, concluded that it does not accept the emphasis put by the Department that the NI Best Value regime must be 'robust, albeit proportionate', to obtain 'credibility in the eyes of DFP' and in case the Treasury 'exploit any weaknesses, actual or perceived' if it does not match the GB regime. Nor does it accept that the regime should at this stage be robust simply to be able to cope with any outcome of the review of NI's public administration. Bearing in mind the relatively small size and limited powers of our District Councils, the Committee has serious concerns on the need for the proposed legislation beyond a requirement which repeals CCT and introduces a Best Value Duty on Councils to 'promote continuous improvement' i.e. a two clause Bill. Councils would be required to produce an Annual Report to demonstrate their performance achievements under the General Duty.

7. The Committee would request an early response to the above, bearing in mind the Department's proposal was to take forward legislation on Best Value in the very near future. The Committee would emphasise that it is important that it is kept both informed and involved in the process to take forward legislation.

28 June 2001

Your 25 June letter to me regarding the above refers.

I will address first of all the Committee's concern about the length of time taken to respond to its letter of 6 April. As the Committee will recall, the Department issued its Best Value Consultation Document on 1 December 2000 and sought comments by 31 January 2001. The Environment Committee's formal response was received on 6 April 2001. In taking the matter forward, the Minister wanted to ensure that full and careful consideration was given to all comments received, including those submitted by the Environment Committee.

In light of all the consultation responses, the Minister presented advice for consideration by the Executive Committee. This process of collective consideration took some time and the Department acted promptly when the Executive's policy decision was made.

The Committee has sought details of the abridged Bill and I now enclose for its information:

a) a revised Policy Memorandum;

b) a revised draft Bill;

c) a revised Explanatory and Financial Memorandum.

With reference to the abridged Bill, I should say that the Executive Committee considered that the accountability framework for the Local Government sector needed to be improved and made more transparent in the interests of ratepayers and those who rely on council services. The Executive Committee sought to respond to the Committee's concerns by adopting a more flexible and consultative medium for articulating the specifics of the Best Value framework. The Minister would like to repeat his assurance to the Committee that he will instruct the Department to act in accordance with proportion and practicability, and to avoid over prescription when providing further guidance on Best Value procedures.

In the Department's letter of 18 June, we indicated that Local Government Division would have an opportunity to outline details of the abridged Bill to Council members and officials represented on the Best Value Steering Group. The next meeting is planned for early August and Departmental officials will seek views on the bill from Council members and will relay their comments to the Environment Committee at the earliest opportunity.

Finally, arrangements have been made for the Minister to introduce the Bill to the Assembly on 2 July. 2001.

I trust the Committee will find this letter and enclosed documents helpful.

1. The proposed Bill would:

(i) repeal existing provision for the compulsory competitive tendering (CCT) of specified council services, as contained in the Local Government (Miscellaneous Provisions) (Northern Ireland) Order 1992;

(ii) give councils a duty to make arrangements for continuous improvement in all of their functions;

(iii) outline, in broad terms, a framework for delivering Best Value in the interests of transparency, consistency and accountability;

(iv) provide the Local Government Auditor with statutory powers to conduct an independent audit of council performance;

(v) establish, within the Best Value framework, the areas where detailed guidance/directions on Best Value requirements will be delivered through Departmental circular;

(vi) make provisions enabling the Department to redefine, by order, present non-commercial considerations in the procurement process, in keeping with equality issues and in the interests of wider policy objectives generally.

2. Under Part 2 (and Schedule 1) of the 1992 Order, district councils are expected to demonstrate competitiveness in the delivery of certain council services. This was to be achieved by a requirement on councils to subject these services- known as "defined activities" - to a rigorous competitive tendering process. Part 3 (Article 19) of the Order specifies matters which councils should not take into account in awarding contracts; these are termed as "non-commercial considerations"

3. The concept of Best Value in the delivery of all local authority services was a key element in Government proposals for the modernisation of local government in Great Britain. The new framework was designed to replace the existing arrangements for the compulsory competitive tendering of selected council services. In England, Best Value was launched initially on a pilot basis and in advance of primary legislation. Local authorities were invited to participate in the pilot exercise, and those granted approval were exempted from CCT. Later, the 1999 Local Government Act repealed CCT and established a Best Value framework for local authorities across England and Wales.

4. In Northern Ireland, the experience of CCT had highlighted the difficulties faced by local councils in securing real competition in the performance of "defined activities". Best Value offered the opportunity to investigate more flexible and innovative ways to improve service performance in the future. However, the 'pilot approach' was considered to be unsuitable, given the small scale, limited range and commonality of district council functions.

5. In December 1997, the Department issued a Consultation Paper entitled "Best Value: Proposals for District Council Services in Northern Ireland". The Paper outlined proposals to replace the existing system of compulsory competitive tendering in Northern Ireland (CCT) with a new duty on councils to achieve Best Value in the delivery of all of their services. It also made proposals for the transition from CCT to Best Value in Northern Ireland, recommending that that Best Value should be introduced simultaneously for all councils on the basis of an agreed common framework. Otherwise, the proposals were fairly consistent with Government proposals for a new Best Value regime in Great Britain.

6. Reaction to the consultation document was generally positive and, by March 1998, all 26 district councils had voluntarily endorsed the new regime. The Department established a joint Department/Local Government Steering Group to oversee progress, and councils agreed a timetable for full implementation.

7. In England and Wales, the new arrangements have already been enshrined in legislation. The Local Government Act 1999 repealed CCT from January 2000, establishing in its place a legislative framework for the implementation of Best Value. In Northern Ireland, we have introduced Best Value on a voluntary basis, working in partnership with district councils and in advance of primary legislation. We have used subordinate legislation to defer the further implementation of CCT, allowing councils to focus on Best Value.

8. Generally, the partnership approach has been reasonably successful to date. Under the voluntary arrangements, however, too many councils have under-performed in meeting the sequential requirements in planning for Best Value e.g. Performance Improvements Plans. We therefore need to establish, through legislation, a more robust framework for Best Value, with emphasis on transparency, consistency and accountability. Additionally, we need to make provision for the repeal of CCT, as its further deferral by means of subordinate legislation is not a viable option. Otherwise, existing statutory provision will require councils to re-apply the principles of CCT, thus negating much of their efforts to date in advancing Best Value across the full range of council services.

9. The Department initiated consultation on the draft legislation in December 2000. That initial draft provided for:

(i) the repeal of CCT

(ii) a new statutory duty on councils to secure continuous improvement

(iii) a detailed framework within which that duty should be discharged

10. A number of the responses received were critical of the amount of detail contained in the draft Bill. There was some concern that the Bill's provision for further subordinate legislation would make the Best Value process overly prescriptive. In particular, the Environment Committee advocated an abridged Bill that would simply repeal CCT and give councils a general duty to promote continuous improvement in the exercise of their functions.

11. Following extensive consideration of responses received in the consultation exercise, the Minister presented advice to the Executive Committee advising them of the outcome of the consultation and setting out options for advancing the Bill. These options included:

(1) the Department's original proposed Bill which would repeal CCT and put in its place a robust Best Value framework enshrined in primary and subordinate legislation;

(2) bridged Bill, which again would repeal CCT, but would address the key concerns expressed in the consultation and place more emphasise on the use of Departmental circular rather than subordinate legislation in delivering the detailed requirements of Best Value; and

(3) Environment Committee's preference for a two-clause Bill which would repeal CCT and place a general duty on councils to promote and demonstrate Best Value.

In examining these options, the Executive Committee recognised that the Best Value process needed to be transparent, consistent and accountable through the process of independent audit. It also acknowledged, however, that the detailed working arrangements for Best Value should continue to be developed by DOE in partnership with local government, and delivered by Departmental circular rather than subordinate legislation.. The Executive Committee, at its meeting on 14 June 2001, favoured Option 2 above and a revised Bill has been drafted in accordance with that policy decision.

12. The proposed legislation will not impact adversely on the rationale behind, nor the practices engaged in, the policy of targeting social need. Indeed the reverse is true; as Best Value places much emphasis in public consultation. This practice, in itself, will help to identify the specific needs of local communities and will assist district councils to address key issues, including the welfare of those living in areas of greatest social need.

13. Following a detailed screening exercise, in accordance with Equality Commission directives, the Department considered that the Bill would not impact adversely on equality issues and concluded that an Equality Impact Assessment was not required. Indeed Clause 6 of the Bill, dealing with non-commercial considerations (see paragraph 1 (vi) above, will positively support DFP plans to improve the public procurement process, in the interests of equality and other key policy objectives.

14. The Bill does not propose to reduce public services, but is designed to promote the effective and efficient use of resources, with the aim of delivering quality local services. Therefore, there will be no adverse impact on employment policy or objectives, and no extra costs to business.

15. The proposed Bill is considered to be fully compatible with Human Rights legislation.

16. Although it is much less detailed, the Bill is broadly compatible with statutory provisions in England and Wales. A similar Bill to our own is being planned for Scotland. Therefore, our proposals should impact positively on East/West interaction.

17. In ROI, a local government modernisation programme is already well underway. One of the stated objectives of that programme is the delivery of quality local government services, driven by customer needs and customer satisfaction. The aim is to promote increased co-ordination of local authority services, delivered to quantifiable standards. The proposed Best Value Bill is therefore fully consistent with these objectives.

18. There are no relevant EU issues.

1. This Explanatory and Financial Memorandum has been prepared by the Department of Environment to assist the reader of the Bill and to help inform debate on it. It does not form part of the Bill and has not been endorsed by the Assembly.

2. The Memorandum needs to be read in conjunction with the Bill. It is not, and is not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any particular explanation or comment, none is given.

3. When the government came to power in May 1997, it gave a commitment to replace existing arrangements for the compulsory competitive tendering (CCT) of specified council services in Great Britain with a new regime of Best Value in the delivery of all services. In England and Wales, the Local Government Act 1999 repealed CCT (effective from January 2000) and provided the legislative framework for Best Value.

4. In Northern Ireland the Department has worked in partnership with district councils to introduce Best Value on a voluntary basis. This Bill therefore provides the legislative framework for existing Departmental policy and requirements. The proposed Bill:

• repeals existing provision for the compulsory competitive tendering of specified council services, as contained in the Local Government (Misc. Provisions) (NI) Order 1992
• establishes a legislative framework for a new regime of Best Value in the delivery of all district council services
• outlines arrangements for the audit of Best Value
• includes discretionary powers to amend the existing definition of issues that are deemed to be "non-commercial" in the awarding of council contracts.

5. In December 1997, the Department issued a consultation paper outlining proposals to replace the existing system of CCT in NI with a new duty on councils to achieve Best Value in the delivery of all their services. The proposals contained in the paper were broadly consistent with government proposals for a new Best Value regime in GB and received wide acceptance from all district councils.

6. The Department has worked in partnership with councils to introduce Best Value on a voluntary basis, in advance of legislation. A joint Department/Local Government Steering Group has monitored the process, assigning key tasks to a number of joint working groups. However, full implementation of Best Value requires primary legislation. The draft Bill was issued for consultation, prior to its introduction to the Assembly.

7. Best Value replaces existing statutory provision for the compulsory competitive tendering (CCT) of certain specified council services. In Northern Ireland, the experience of CCT highlighted the absence of real competition for councils in the delivery of those services. The statutory duty to achieve Best Value provides councils with an opportunity, and a challenge, to investigate more flexible and innovative ways to improve service performance in the future. All district councils in Northern Ireland have voluntarily endorsed the Department's proposals for the implementation of the new regime. The Bill was subject to extensive consultation and the attached clauses reflect comments received from all interested parties.

8. The Bill contains 11 clauses. The Bill also provides for the consequential amendment of the Local Government Act (NI) 1972 and repeal of Part II and schedule 1 to, the Local Government (Miscellaneous Provisions) (NI) Order 1992.

Clause 1 describes the Best Value duty, and applies it to all district councils in Northern Ireland. Councils are specifically required to undertake a systematic review of each of their functions ("Best Value Reviews") and prepare plans designed to address any deficiencies highlighted in the review process ("Performance Improvement Plans").

In fulfilling their duty of Best Value, councils are required to consult widely with local people, and to adhere to any guidance circulars issued by the Department.

This clause empowers the Department to issue guidance to councils on how the duty of Best value is to be discharged. In particular, it is anticipated that such guidance will address the Best Value review process and performance improvement plans. It is also expected to outline performance indicators and standards, against which council performance can be measured. These performance indicators and standards will be developed in consultation with local government.

This clause requires the local government auditor to undertake an audit of a council's Best Value performance improvement plan. This audit would check whether the plan was consistent both with the legislation and with any guidance issued by the Department. As a result of this audit, the auditor may, at his discretion, decide to examine in more detail any or all aspects of a council's approach to Best Value.

On completion of the audit, the auditor should produce a report of his findings. The report should highlight any areas of concern, and may make recommendations for either the council or the Department to action. Copies of the auditor's report should be forwarded to both the Department and the council concerned within specified timescales.

This clause gives the auditor reasonable rights of access to council premises and any relevant information and documents. In carrying out his duties the auditor is required to observe any code of practice that has been approved by the Department. Any expenses incurred by the auditor as a result of the audit process shall be recoverable from the council.

This clause sets out councils' responsibilities on receipt of an auditor's report. Where the report contains recommendations, the council is required to prepare a statement outlining how and when it proposes to address the issues raised. Statements should generally be forwarded to the Department within 6 weeks, and should be included in the council's next performance improvement plan. Councils are also required to publish an auditor's report.

Article 19 of the Local Government (Miscellaneous Provisions) (NI) Order 1992 specifies a list of matters which should not feature in the contractual process and this has been identified as a potential equality issue. This clause therefore provides the Department with powers, subject to Assembly approval, to specify matters, which cease to be "non-commercial matters" in subordinate legislation. Councils would be required to adhere to any Departmental guidance on this issue.

This clause allows the Department to disapply councils' statutory obligations under Best Value, either for individual councils, or local government as a whole. This power is exercisable through subordinate legislation

This clause explains the meaning of words and expressions used in the Act

This clause lists the changes to primary legislation resulting from this Bill. These include the repeal of Part II of the Local Government (Miscellaneous Provisions) (NI) Order 1992, which compelled councils to subject many of their functions to a process of compulsory competitive tendering. The clause also extends the role of the local government auditor to incorporate a Best Value audit.

The proposed legislation will be known as the Local Government (Best Value) Act (NI) 2002 and come into force on 1st April 2002

9. The Bill will not unlawfully, unfairly, or unjustifiably discriminate, directly or indirectly, against specified sections of the community.

10. The Department has undertaken equality screening of the Best Value legislation. No potential inequalities were identified, and therefore an impact assessment was not undertaken.

11. The Bill would have no direct impact on employment and would not lead to additional costs or savings to businesses. While the powers within this Bill repeal the obligation of councils to subject certain functions to compulsory tendering, the principle of competitive service delivery is a pre-requisite of Best Value.

The Minister for the Department of the Environment has made the following statement under section 9 of the Northern Ireland Act 1998:

29 August 2001

In my letter of 28 June I indicated that Department officials would discuss the revised Best Value Bill with representatives of local government at the Best Value Steering Group meeting scheduled for August 2001. I undertook to advise the Environment Committee of the outcome of those discussions.

You will recall that membership of the Best Value Steering Group includes 2 Councillor representatives and 3 Council Chief Executives, as well as officials from the Department, Local Government Audit, the Local Government Staff Commission and the Northern Ireland Public Service Alliance. The Group's main functions are to discuss policy issues arising in the development of Best Value, establish working groups to undertake various specialist assignments, offer guidance to those groups and consider and report on proposals emanating from them.

At the 22 August meeting members unanimously agreed that, unlike Compulsory Competitive Tendering, Best Value offered District Councils the opportunity to provide quality services, with the emphasis on public consultation and with transparency, accountability and value for money as key components in procurement and service delivery. In discussing the revised Bill, local government representatives recognised the changes that had been made to the original Bill, and each endorsed the revised draft legislation as an acceptable basis upon which Best Value could be further developed.

Throughout the discussion, there was widespread support for developing guidance on methodology and on promoting good practices through the partnership arrangements already in place between local government, the Department and the Local Government Auditor. Indeed, Departmental officials informed the meeting that both the Environment Committee and the Minister supported the further development of the partnership approach, thus ensuring good communications links between local and central government. In support of this, the Department suggested that improvements could be made on two fronts:

a) Reconstitute the Best Value Steering Group to allow for greater representation by local councillors and those with first-hand experience in service delivery; and

b) Engage a working group, representing the views and expertise of local government (to include councillors, officials and those directly engaged in service delivery), Departmental officials and the Local Government Auditor, in the formulation of Best Value guidance. In addition, the remit and engagement of the Steering Group would be strengthened to enhance its advisory functions and to broaden its examination roles.

Resulting from these discussions, it was agreed that the Department would produce a paper outlining proposals for taking both matters forward. The issues would then be discussed further at the next Best Value Steering Group Meeting scheduled for 26 September.

I hope that you find this information helpful, and if anything should require clarification please do not hesitate to contact me.

21 September 2001

1. Following the Second Stage Reading debate in the Assembly on the above Bill on 18 September 2001, the Committee for the Environment is preparing for its formal Committee Stage consideration of this Bill.

2. A great number of concerns with the Bill were raised by Members who participated in the debate and I attach for your convenience a copy of the Hansard of the debate.

3. The Committee wishes to consider its approach to the clause-by-clause consideration of the Bill at its meeting on Thursday 27 September 2001. It would therefore be extremely helpful if you could let the Committee know your views and any remaining concerns with the Bill by close Wednesday 26 September 2001. I apologise that this presents a tight deadline for you but the Committee is very keen to hear your views as soon as possible. If you cannot provide a full response within this timescale, an interim response would be most helpful. My e-mail address is: john.simmons@niassembly.gov.uk and the fax number is: +44 (028) 9052 0343.

Excellent public services are essential to ensuring the quality of life of people across the country. It was no surprise that the state of public services were at the heart of the debate during this year's general election, and this focus shows no sign of diminishing. Best value gives an explicit responsibility to local authorities to transform and improve local services, and to ensure that all local authorities match the standards set by the best performers.

The Audit Commission remains committed to meeting our own responsibilities in this area, by reporting independently, honestly and constructively about local services, and ensuring that the debate on public service standards is one based on evidence, not on dogma. This year's annual best value statement is a major contribution to this ambition.

This year's statement identifies much that we should celebrate in council performance. Performance across local government has improved in three-quarters of the 20 best value performance indicators where historical information exists. Best value inspectors have found forty per cent of services to be good or excellent, and that half are likely to improve in the future. Most councils are now more open about their performance and many are using best value to ask challenging questions of themselves. And best value has helped ensure that councils are more in touch with the needs and wishes of service users and council tax payers.

These changes are to be welcomed, but significant problems remain. Public satisfaction with many local government services is low, while public expectations continue to rise. Over 60 per cent of inspected services are found to be poor or fair, and there are still substantial variations in performance across different councils. It is of particular concern that the poorest services are often judged the least likely to improve.

And there are stark differences in how well councils are coping with best value. Many councils have yet to get to grips with the most challenging elements of best value. The analysis in this report suggests that almost two-thirds of councils are either coasting or performing poorly. In some cases this is because they lack the capacity or systems to improve themselves. More often, and more worryingly, it is because they lack the will to ask challenging questions or the vision to tackle difficult choices.

These challenges are not unique to local government - all public services are under unprecedented pressure to improve. But best value, and parallel developments including Local Public Service Agreements, offer an opportunity to achieve real improvements in local services, if they can be harnessed in the most effective way.

Over the last few years all councils have learned important lessons about how they can improve services for local people. But many need to go further. Councils need a clear focus on what matters to the people they serve. They need to be open to challenge and willing to change. They must ensure that they have the capacity to deliver.

Finally, just as we urge local authorities to improve, we make the same commitment to improve our own approach. Inspection and audit of best value have provided important external challenge to councils. Elected members, in particular, often welcome the challenge and critical review that inspection has provided them. But, while most councils agree with the need for external scrutiny of their performance, there are a number of consistent and fair criticisms over how inspection and audit operate.

A more integrated regime is needed that targets work in a way which better differentiates between the needs of different councils. We have already announced plans to better integrate audit and inspection, with the piloting of single client managers to co-ordinate local work. More fundamentally, it is clear that 'one-size-fits-all' inspection is not the most effective means to support improvements in local services. We will introduce a tailored service, which applies audit and inspection in different ways based on council performance and their capacity to improve.

Government should also take stock. Reforms are needed to the performance management and statutory planning arrangements for local government. Local authorities are required by government to produce a wide range of plans (including Best Value Performance Plans, LPSAs, community strategies) all of which focus on some aspect of performance. This system is fragmented and bureaucratic, and can hinder councils' capacity to focus on what matters. The expansion of LPSAs offers the opportunity for integration, with LPSAs setting out priorities, the BVPP reporting annual progress, and a cutback in the range of statutory plans required by Whitehall.

The best councils show that lasting and relevant service improvement is rooted in dialogue, with service users and with the wider community. This is a powerful lesson for us all. It is only by establishing a constructive dialogue between all those with a stake in improved local services, that we can hope to rise to the challenge of delivering excellent public services. At the Commission, we look forward to continuing to work with local government, central government, and all those with an interest in better local services, to help achieve this ambition.

News Release 407:
1 October 2001

Stephen Byers, Secretary of State for Transport, Local Government and the Regions today announced a three month review of the Best Value regime for local authorities aimed at improving the quality of services.

The review of Best Value will start today and last for 3 months. It will aim to reduce bureaucracy and focus on raising standards. It will examine what can be done to protect the terms and conditions of employees and involve front line staff in a creative way.

Mr Byers said:

The review will look to bring in expertise and experience from a wide range of bodies with an interest in improving public services.

1. The Local Government Act 1999 placed a duty of 'best value' on local authorities to make arrangements to secure continuous improvement in the way their functions are exercised, having regard to a combination of economy, efficiency and effectiveness. Statutory guidance for Best Value was issued as DETR Circular 10/99

2. Authorities have been subject to the statutory duty of Best Value since 1 April 2000. Best Value Authorities include Local Authorities, Police and Fire Authorities, and bodies such as Waste Authorities and National Park Authorities.

3. The regime provides for continuous improvement by requiring authorities to:

• establish a rolling five-year review programme to review all functions;
• monitor their performance against national Best Value Performance Indicators, and
• publish performance information as part of an annual Best Value Performance Plan.

4. A rigorous audit and inspection regime exists to ensure that authorities have appropriate arrangements in place to achieve Best Value.

Media enquiries 020 7944 3042; Out of hours: 020 7944 5925
Public Enquiries Unit 020 7944 3000
E-mail: press@dtlr.gov.uk
Web site http://www.dtlr.gov.uk/

Published 1 October 2001

10 October 2001

The Committee Clerk wrote to my Department on 8 October 2001, seeking clarification of some issues prior to a Committee meeting on 11 October 2001. Officials in my Department's Local Government Division will be attending that meeting and will respond to issues raised in the Committee's consultation with local Councils. I thought it appropriate that I should reply direct to you, since the Clerk's letter raises a number of policy issues.

Before I address the specific questions in your letter, I should like to reiterate what I believe is the essential context to the Best Value Bill. Best Value is designed as a framework within which Councils should deliver local services on the basis of what residents and ratepayers want, but at a price that they are willing to pay. Ratepayers and residents are entitled to know how their Council is performing and how well their money is being spent. It follows that they are entitled to the information required to make these judgements. While CCT did have its flaws, it nevertheless assured ratepayers and residents that their Council was engaged in defining a detailed specification for its key services. Moreover, these services were being market tested and this assured ratepayers and residents that costs were, at least, not unreasonable. And, importantly, the CCT process enabled independent audit, which again provided ratepayers and residents with assurance that service procurement and delivery was transparent and subject to a robust and consistent form of scrutiny.

The repeal of CCT, without a satisfactory replacement, would deprive ratepayers and residents of this transparency and would weaken the public accountability of Councils to their ratepayers. The framework contained in the draft Best Value Bill aims to provide ratepayers and residents with the assurances to which they are entitled.

With these points in mind, I will address the specific issues you have raised.

As explained on previous occasions, CCT can only be repealed through the use of primary legislation, hence one of the main reasons for taking forward the Best Value Bill. Sub-ordinate legislation was used to defer CCT so that Councils could immediately make arrangements for Best Value without the statutory requirements to further procure services under CCT Legal advice is clear that this arrangement cannot be sustained beyond 1 April 2002, as this would be tantamount to a repeal of the primary legislation of CCT by subordinate legislation.

There are no statutory requirements preventing the repeal of CCT without a replacement procurement process. However, as I have indicated above, it is essential to the interests of ratepayers and residents that a statutory framework exists, to provide them with a consistent and transparent overview of how their Council is performing. This, together with an independent audit, is fundamental to the rights of local people to ensure that they are obtaining value for money.

This is most certainly not the case. When District Councils signed up to Best Value in 1998, an agreed policy objective was the repeal of CCT at the earliest opportunity. It has to be remembered, however, that most key services are under contract within the CCT statutory framework until 31 March 2002.

This is answered under paragraph 4 (i) above.

In principle this could be done. But, in practice, this would not serve the interests of ratepayers and residents who use Council services. A statutory framework for Best Value is the only effective means of assuring local people that their Councils are obliged to act transparently, and independent audit is a crucial part of that assurance. It also places an onus on Councils to meet key target dates within the framework, where such consistency is fundamental to meaningful benchmarking with each other. Local people need to be engaged fully and consistently in the Best Value process, and ratepayers and residents must be assured that they have the rights and the information needed to have an effective dialogue with their respective Councils on how their money is spent. Any Council failing to act transparently is, in an important sense, failing its local community, and local people need an independent assessment of performance to help them exercise their democratic rights.

It has been claimed that the voluntary arrangements are proving successful. There are certainly some positive aspects to date, namely the work being done through the joint working groups. Some Councils, too, have developed Best Value to a commendable level. But the performance of many requires considerable improvement if they are to demonstrate to ratepayers and local residents that they are being efficient and effective in the provision of services. By way of illustration, Councils' response to the submission of Performance Improvement Plans (PIPs) is, overall, unsatisfactory and has deteriorated this year. In ANNEX A, details are provided of response times in regard to the submission of PIPs to the Local Government Auditor. In 2001/2002, for example, no Councils submitted PIPs by the required date of 30 April 2001. By the end of June, nine Councils had responded and although this figure doubled by the end of July only three more were received by the end of September. Alarmingly, five Councils have still to submit PIPs, almost six months after they were due. The Local Government Auditor, in his Annual Report on the Audit of Local Authorities 2000/2001 (issued in May of this year) expressed concern about Council performance on a number of aspects of Best Value. Rather than discuss the detail of these, I have attached, as ANNEX B, an extract of the Auditor's Report, which the Committee will find helpful in assessing objectively whether the voluntary arrangements are working.

Again in principle this could be done. But for the reasons stated under paragraph 6 (a) this would not be in the interests of ratepayers and local residents, particularly as implementation of the outcome of the Review of Public Administration is clearly some years away. Ratepayers and residents should not have to wait that long to get the information they are entitled to about Council services and performance. Moreover, it is clear that Best Value principles apply, irrespective of the structure and responsibilities of local government. I, therefore, see no need to defer the introduction of Best Value legislation pending the outcome of any Public Administration Review.

This is addressed in Paragraphs 4 and 4 (i).

This is addressed in Paragraphs 6(a).

This is addressed in Paragraph 7 (i) applies equally in this case.

Drawing on my experience as a Councillor, I believe that it would be right to promote further transparency and accountability in the use of Council resources and the provision of local services. Best Value is designed to ensure that ratepayers and residents are given the information to shape local service provision. Councils must ensure that they provide local people with all the relevant information they need to evaluate Council performance. A Best Value framework, enshrined in primary legislation, is the most effective way to provide local people with a local government service that is transparent and accountable. I am mindful though of the need to allow for some flexibility to enable Councils to address local conditions and I have already given the Committee and the Assembly my assurance that guidance resulting from Best Value legislation will address this important requirement.

Finally, I would like to emphasise that Best Value is designed primarily for the benefit of ratepayers and residents. While I am committed to avoiding the imposition of unnecessary bureaucracy on Councils, the views of Councils should not be given precedence over the rights and needs of ratepayers and residents. The Committee will wish to know that the Minister for Finance and Personnel, Mark Durkan, has written to me expressing his support for the Bill. He has indicated that he is concerned that any public sector regime should be subject to proper audit on grounds of economy, efficiency and effectiveness.

SUMMARY: Submitted On Time 12 Submitted On Time 0
0-1 month late 4 0-1 month late 4
1-2 months late 4 1-2 months late 5
2-3 months late 2 2-3 months late 9
3-4 months late 1 3-4 months late 1
4-5 months late 1 4-5 months late 2
Later 1 Still outstanding 5
Still outstanding 1

15 October 2001

Thank you for your invitation to SOLACE to make a presentation to the Executive Committee on Thursday of this week.

As explained to you all the SOLACE officer bearers will be attending the SOLACE UK Conference at Ipswich from 16-18 October 2001.

When SOLACE considered the proposed legislation, it was decided that SOLACE would not adopt a corporate view on this matter but would leave it to individual Councils to respond.

On a personal note I would say that there was a feeling of the inevitability of Best Value legislation as the Department seemed determined to follow the example of England and Wales. Consequently Councils in their response were mainly concerned about the detail of the Bill. In truth I believe that the proposed Bill adds little value to the voluntary regime already in place and could well be postponed until after the pending review of public administration.

I am sorry that I cannot be more helpful on this matter.

18 October 2001

Thank you for your 12 October 2001 letter.

With reference to paragraph 4 of your letter, I am happy to have clarified that there is no legal imperative to replace CCT with an alternative procurement process. However, I am at a loss to understand how this confusion has arisen. I attach a copy of the Hansard Record of the Bill's Second Stage Reading, and would refer you to my opening remarks (page 7), when I cited two reasons for the Bill. These were the legal requirement to either repeal or resume CCT, and the need to provide a statutory framework for Best Value, given the limited success of voluntary implementation. Later, in response to issues raised by MLAs (page 19) I justified the provision of a legislative framework in the interests of the delivery of transparency, consistency and accountability, for the benefit of council residents and ratepayers. However, at no stage did I suggest that there was a legal imperative to make such provision.

As regards the policy underlying the Bill, my firm view remains that Best Value requires a statutory framework that is capable of independent scrutiny. I listened carefully to issues raised during consultation and amended my original proposals to address key concerns. I now believe that the redrafted Bill strikes the appropriate balance between allowing councils some flexibility of approach, and assuring local people that council activity will be transparent and capable of independent scrutiny. The Committee will, of course, have opportunity to propose amendments to the Bill. To the extent that such amendments would reduce the rights and entitlements of residents and ratepayers to information about the performance of councils, and the scope for independent scrutiny of council activity, it would be for the proposer to explain and justify that policy. For my part, I will continue to argue in the Assembly that residents and ratepayers should have the information and assurances that the provisions of the Bill would deliver.

There is, of course, a legal imperative to repeal CCT at 1 April 2002. However, I accept that some councils are concerned at the prospect of the immediate implementation of a statutory framework for Best Value. For this reason, I am prepared to explore, with the Committee, options for a limited deferral of the implementation date. I must stress the word limited; I would not agree to, for instance, the deferral of a statutory framework for Best Value pending the outcome of any review of public administration, which may take several years to complete and implement.

2 November 2001

I am writing to register formally with the Committee this trade union's direct interest in the draft Local Government (Best Value) Bill, which is currently before the Committee.

NIPSA represents over 38,000 civil and public servants in Northern Ireland and we are the main trade union for all non-industrial staff employed by District Councils. We have been fully involved in the Best Value processes already being operated by Councils.

We would therefore welcome the opportunity to give evidence to the Committee on the draft Bill. In particular we hope we could have the opportunity to meet with the Committee at an appropriate date and time as part of this process.

I would be grateful if you could arrange for this to be considered by the Committee.

15 November 2001

(1) Which provides for Councils to make arrangements for continuous improvement in the way its functions are carried out (with regard to economy, efficiency and effectiveness) by:

(2) Consulting with specified groups/individuals

(3) Carrying out Best Value reviews within periods set by the Department

(4) Preparing an annual Performance Improvement Plan

(5) Having regard to any guidance issued by the Department

'How does the decision to apply the legislation only to District Councils fit with the recent developments in equality legislation in NI.'
(Antrim Borough Council)

'The other missing element is what is referred to as the Henry VIII Clauses (Local Government Act 1999). The GB Bill includes at Section 16 powers for the Secretary of State to give authority to Councils to relax the rules constraining local government if a particular Council finds a new way of delivering Best Value, such as public-private partnerships or other options.'
(Antrim Borough Council)
(also Belfast City Council)

'The Council previously recommended that the duty to achieve Best Value be a general duty.'
(Ards Borough Council)

'In England the recently enacted Local Government Act 2000 . provides that every local authority have the power to do anything . to promote or improve the economic, social and environmental well-being of their area . a better course would be to obtain the views of the Minister on whether active consideration is being given to the enactment of a similar social, economic and environmental well-being power for Councils in Northern Ireland.'
(Belfast City Council)

'I am . pleased to see that the Committee is recommending to simply put a Best Value general duty on Councils on seek continuous improvement. This is, in my view the best way forward.'
(Castlereagh Borough Council)

'A broad scheme needs to be introduced which will ensure continual improvement in respect of all the services of each authority involved.'
(Larne Borough Council)

'It would be agreed that an extension of the 3 Es to include Equality and Environment would be beneficial as Councils are major players in each of these area.'
(Lisburn Borough Council)

'There is a need to include equality and the environment in the general duty of Best value - going beyond the three Es of economy, efficiency and effectiveness, and going beyond value for money.'
(Association for Public Service Excellence)

'Clause 1(1) - extend the factors that Best Value must take into account to include "quality of Service, equality and the environment"

Clause 1(2) - add an additional sub paragraph requiring councils to consult with "(d) the trade unions representing employees of Councils".'
(Northern Ireland Public Service Alliance)

(1) Which provides for the Department to issue guidance regarding:

(2) The Councils' responsibilities under Clause 1 of the Act

(3) The Department's right to specify performance indicators and standards and

(4) different indicators/standards

(5) The Department's obligation to consult specified groups/individuals

(6) The Department's obligation to promote improvement in the way Councils' functions are carried out (with regard to economy, efficiency and effectiveness)

(7) The Department's obligation to publish any guidance or performance indicators/standards issued under this Clause.

'There should be more emphasis on the commitment to consulting with Councils and ensuring . the results of the consultation will be taken on board.'
(Antrim Borough Council)

'The Council . seeks an assurance that detailed guidance will only be issued where Best Value is not being addressed sufficiently and that Councils will be given greater flexibility in how to achieve this objective.'
(Ards Borough Council)

'We would question why an allowance for variations in performance indicators between Councils has not been included in the Bill.'
(Armagh City Council)

'The commitment towards consultation and a guidance approach rather than a directive approach being taken, should be clearly set out in the legislation.'
(Ballymena Borough Council)

'The Council would recommend that the words "for different Councils" should be re-inserted at Clause 2(4)(c).'
(Belfast City Council)

'The key to the future of Best Value is the preparation and issue of appropriate guidance by the Department. It is vital that the Department develops such guidance in partnership with Local Government.'
(Craigavon Borough Council)

'The Council would . have some concerns regarding prescriptive nature of performance indicators but will comment further on their practical value when they have been produced for 2000/01.'
(Derry City Council)

'. the introduction of benchmarks that do not allow for local conditions seems to defeat the principal of Best Value ie a service that local people want at a price they are willing to pay.'
(Down District Council)

'In order to deliver such an improvement, realistic targets will need to be established. A review over 7 years would enable these targets to be realistically reached.'
(Larne Borough Council)

'When you try to benchmark with a Council of a particular size and make-up, that reflects your Council area, you find that they are not reviewing that particular service in the year that you are carrying out that review. We feel that Government should define a review programme whereby all councils review the same activity in the same year.'
(Magherafelt District Council)

'If Departmental circulars, rather than subordinate legislation are to be used to provide guidance, will these be discussed by the Assembly, or how will they be consulted on?'
(Newtownabbey Borough Council)

'The draft bill refers to statutory guidance and circulars in relation to matters such as performance improvement plans. We are concerned about how that consultation will be managed and how much notice will be taken of the outcome, from local authorities and others. With regard to statutory guidance and circulars, we are keen for those matters to be brought before the Committee for deliberation.'
(Association for Public Service Excellence)

'A new clause should be added imposing a general duty on the Department to consult on the proposed guidance and not just in relation to performance indicators. We suggest that clause 2(5) be amended to read:

(1)-(6) Which provides for Councils' Best Value Performance Improvement Plans to be audited by a Local Government Auditor regarding the definition of an audit and the remit of the Local Government Auditor in reporting his findings and the action he is required to take (including an inspection) if it appears a Council may not have complied with the requirements of the Act or the Department's guidance under the Act.

'It is . important that officers undertaking the Best Value audits are suitably trained and qualified . in order that the non-financial elements of the PIP can be properly analysed and audited.'
(Antrim Borough Council)

'The audit function should be appropriate if the Department is serious about implementations of Best Value as a whole and should be development biased rather than pure audit.'
(Armagh City & District Council)

'The Council would . emphasise how important it is that the Committee seeks to be consulted about any guidance which may issue under Clause 2(1) and which will direct the auditor on how audits of Performance Improvement Plans should be conducted.'
(Belfast City Council)

'How do you marry . a situation where auditors working for the Department have the right to tell Council Members, who have been elected by local ratepayers and are responsible for delivering services, what type and range of services they can provide?'
(Association for Public Service Excellence)

'In line with our comments above we propose that the whole of the Clause should be replaced by a more general duty giving scope for Best Value performance improvement plans to be open to scrutiny (which may include scrutiny by the Local Government Auditor under the latter's existing statutory responsibilities).

. if the specific role of the Local Government Auditor is retained these Clauses should be amended as follows.

Clause 3(4) - impose a requirement to give notice to interested parties (as listed in clause 1(2) of the intention to carry out the inspection and to receive any representations the parties may wish to make.

Clause 3(6) - add a sub clause requiring a copy of the report to be sent to other interested parties.'
(Northern Ireland Public Service Alliance)

Which provides for:

(1)-(3) The right of access to premises and information for the Local Government Auditor in pursuit of his responsibilities under Clause 3

(4) The auditor's responsibility in regard to any relevant code of practice

(5) The responsibilities of Councils in facilitating an audit including payment

'A concern arises from the financial burden which may be imposed . for the audit and any inspection of Best Value, as the charge for this service is at the discretion of the Department.'
(Ards Borough Council)

'The cost of audit has again been placed with the Council, which will add to the overall cost to the ratepayers of the Council.'
(Down District Council)

Which provides for the Councils' responsibilities regarding any audit report received including:

(1) Publication of the audit report

(2)-(5) Preparation of statements of action in relation to any recommendation made by the auditor.

'The timescale of 6 weeks for remedial action is inappropriate for local authorities . this timescale should be extended to at least 2 months.'
(Ards Borough Council)

(1)-(5) Which specifies the conditions under which the Department may provide for a specified matter to cease to be a non-commercial matter for the purposes of Article 19 of the Local Government (Miscellaneous Provisions) (NI) Order 1992.

'Is Article 19 . in contravention of the new equality legislation in that it forbids consideration of workforce issues in the award of public supply or works contracts.'
(Antrim Borough Council)

(1) & (2) Which specifies the conditions under which the Department may provide that a Council, or description specified, should not be subject to the functions or duties of the Act.

No comments.

(1) & (2) Which provides definitions of terms used within the Act.

No comments.

(1)-(3) Which provides details of amendments and repeals required to introduce this Act.

All 17 Local Councils content with Clause 9(2) and 9(3) necessary to repeal CCT.

This Act shall come into operation on 1st April 2001.

'Legislation is unnecessary at this stage, especially given the creditable way which Best Value has already been implemented in its absence over the last 3 years.'
(Ballymoney Borough Council)

I do not feel that the legislative imposition of Best Value is desirable, particularly at this stage .'
(Carrickfergus Borough Council)

'The Council agrees that there is merit in extending the non-statutory approach to implementing Best Value as this would allow time to develop an effective partnership approach between management, staff and the trade unions to the delivery of Best Value.'
(Derry City Council)

'A generally expressed opinion, and a key recommendation, was that the time is not right for a Best Value Bill in Northern Ireland, in the light of continuing concerns about the legislation and the announcement of a three-month review of Best value legislation in England and Wales.'
(Association for Public Service Excellence)

No comments.

15 November 2001

Repeal CCT ie 2 clause Bill and one of the following options.

1. Consideration of introduction of Statutory BV Framework as part of Review of Public Administration in NI with full and effective consultation on any legislative proposals.

2. Consideration of introduction of Statutory BV Framework after GB Review of BV is complete with full and effective consultation on any legislative proposals.

3. Committee to undertake clause-by-clause consideration of Bill and put forward motions to radically amend BV clauses including deferring commencement date of introduction of Statutory BV Framework until April 2003. In the meantime, Department to draft Guidance with effective consultation with District Councils plus Environment Committee approval by April 2003.

4. Committee to undertake clause-by-clause consideration of Bill and put forward motions to radically amend BV clauses including requirement for Department to draft Guidance with effective consultation with District Councils plus Environment Committee approval by April 2002.

5. Committee to undertake clause-by-clause consideration of Bill and put forward motions to amend BV clauses including Department to draft Guidance in effective consultation with District Councils and Environment Committee.

6. Accept Bill as currently drafted and Committee to seek commitment by Department to draft Guidance with effective consultation with District Councils and Environment Committee.

Psnet's Wales region chairman Keith Bryan has given a cautious welcome to news that Best Value is to be scrapped in the principality following agreement between local government chiefs and the National Assembly that the regime is 'seriously flawed'.

The Assembly has announced that authorities can follow a 'Welsh Way' amid cross party concern that Best Value lacks credibility.

Moves are now underway for Best Value to be repackaged under the Wales Improvement Programme which would involve less bureaucracy and fewer inspections.

Keith Bryan, Assistant Chief Executive at Denbighshire told Contract:

He says there are several positive elements in the new programme which local authorities will welcome.

Psnet Director Ossie Dodds added:

In England the Best Value regime is under review and a new code of practice is expected to emerge from next April.

29 November 2001

At the meeting of the Committee for the Environment on 15 November 2001 references were made to a letter from the Department of the Environment dated 29 August 2001 about the draft Local Government (Best Value) Bill. This letter referred to a meeting of the Best Value Steering Group held on 22 August 2001, which a NIPSA representative attended, and recorded that:

I wish to advise the Committee for the Environment that I have made further enquiries about that Best Value Steering Group meeting and we would clarify the position as follows.

First, I attach a copy of the Department's record of the meeting held on 22 August 2001 - paragraphs 7 and 8 refer to the discussion on the Best Value Bill. It will be noted there is no record of any unanimous agreement of all present to Best Value or that each representative endorsed the revised draft legislation.

Second, I can confirm for the record that the NIPSA representative, attending the meeting in a substitute capacity, did not express any views in favour of the draft legislation and in our view this is confirmed by the official record of the meeting.

I trust this clarifies the position.

Attendees: David Barr (Chairman)
Trevor Reaney (Craigavon Borough Council)
Wavell Moore (Coleraine Borough Council)
Norman Dunn (Newtownabbey Borough Council)
Mervyn Rea (Mayor, Antrim Borough Council)
Jim McCart (Local Government Staff Commission nominee)
Adrian Kerr (Local Government Staff Commission)
Geraldine Alexander (NIPSA)
Brian Kernoghan (Local Government Audit)
Donald Starritt (Local Government Division)
Ken Bradley (Local Government Division)

1. The Chairman welcomed Geraldine Alexander to the meeting and extended his congratulations to Councillor Mervyn Rea on his recent appointment as Mayor of Antrim Borough Council.

2. Mr McCart took the opportunity to clarify his position within the Group as he is no longer a Councillor. Mr McCart was nominated to the Steering Group as a representative of the LGSC. He indicated that his membership of the LGSC, which is due to expire on 1 December, is likely to be extended. It was agreed that Mr McCart should be retained on the Group.

3. Members agreed that additional public representatives should be encouraged to take part in the Steering Group. Mr Barr agreed that the Department would give further consideration to the composition of the Steering Group.

4. The minutes of the previous meeting were agreed.

5. Unfortunately, the Steering Group meeting scheduled for May to approve revised Performance Indicators (PIs) had to be cancelled. The Group members were subsequently asked for their views using "written procedure" and, following favourable responses, the PIs were issued to all councils on 7 June.

6. Following issues raised by a number of councils, the Department has undertaken more work with council finance officers in further developing definitions on the finance related PIs. These definitions have been forwarded to the Secretary of ALGFO for discussion at their next full meeting. It is hoped to issue the revised definitions to councils by October 2001.

7. The revised Best Value Bill was introduced to the Assembly in July following prolonged scrutiny from the Environment Committee. The second stage is scheduled for mid September. Mr Barr advised members that the Department had agreed to relay the views of Steering Group on the revised Bill to the Environment Committee. He, therefore, asked for comments/views from individual members.

8. Overall feedback from the Group was positive in that the Bill reflected a valid compromise relevant to NI councils and provided a framework for the delivery of quality services. Elected members welcomed the fact that substantial consultation, including ALANI and the NAC, was undertaken and that their concerns had been addressed in reviewing many aspects of the legislation. Chief Executives also expressed positive remarks on the partnership approach developed by the Department. However, they stated that the legislation should be underpinned by a flexible approach to Best Value through detailed guidance. Mr Barr stressed that work on guidance material would be undertaken prior to legislation coming into force.

9. Trevor Reaney had compiled a paper listing a number of issues raised by the various working groups, as well as individual councils and other bodies. Issues included:

• How to embrace competition given the limited market within NI.
• Additional workload for council staff leading to lack of motivation. Best Value was treated as a "bolt on" task which is seen as process led.
• How to engage elected representatives more fully.
• Need for more detailed guidance.
• Should all services (large or small) be subject to stringent reviews, or can a threshold be imposed.
• Need to look at structures of Working Groups to review PIs and customer satisfaction survey.
• Best Value, along with other initiatives, has led to "out of control" consultation.

10. One of the main issues related to the lack of guidance and the Group was asked for views as to how this should be handled. There was general agreement that a specific Working Group should be set up to address all of the issues raised in the report. It was envisaged that the Working Group should comprise relevant council officials/members and local government audit, and be chaired by LG Division. Members also agreed that the Working Group should have a dedicated Project Manager to ensure tasks are undertaken by relevant personnel and effective progress made. The Steering Group would be consulted on all proposals made by the Group.

11. In conclusion it was agreed that the Department should produce a paper containing proposals for progressing the issue of guidance material. This would also cover proposed membership of the working group. The paper would be tabled at the next meeting of the Steering Group, scheduled for Wednesday 26 September at 10.00 am in Clarence Court. The paper would also consider options for revising the membership and remit of the Best Value Steering Group.

12. The meeting closed at 12.15 pm.

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