The Role of Competition and Competitiveness in Best Value in England and Wales
| Author | Tony Bovaird |
| Published date | 01 October 2000 |
| Date | 01 October 2000 |
| DOI | http://doi.org/10.1177/095207670001500406 |
| Subject Matter | Articles |
arrangements
to
secure
continuous
improvement
in
the
way
in
which
its
functions
are
exercised,
having
regard
to
a
combination
of
economy,
efficiency
and
effectiveness".
Since
the
duty
to
have
regard
to
the
'3Es'
has
been
in
force
since
the
early
1980s,
it
is
the
duty
of
continuous
improvement
which
constitutes
the
novel
element
of
this
duty
of
Best
Value.
While
the
Best
Value
approach
is
intended
to
reduce
some
of
the
inflexi-
bility
of
the
'contract
culture'
which
CCT
injected
into
local
government,
there
is
still
a
major
emphasis
by
central
government
on
the
need
for
'competitiveness'
in
local
services
and
the
value
of
competitive
tendering
in
demonstrating
this
competitiveness.
This
has
led
to
concern
by
local
author-
ities
that
CCT
for
a
limited
set
of
services
has
simply
been
replaced
by
a
milder
version
of
CCT
for
all
local
services.
This
article
considers
how
the
Best
Value
initiative
has
dealt
with
issues
of
'competition'
and
'competitiveness'
and
the
implications
for
the
future
of
the
BV
regime.
It
deals
specifically
with
the
situation
in
England
and
Wales,
because
the
Best
Value
regime
has
followed
a
different
timetable
and
has
not
yet
been
written
into
legislation
(although
it
is
still
mandatory
upon
local
authorities)
in
Scotland
and
Northern
Ireland.
Difference
Between
'Competition'
and
'Competitiveness'
While
some
authorities
have
seen
Best
Value
as
a
release
from
the
CCT
regime,
the
government
Green
Paper
on
Modernising
Local
Government
emphasised
that
'best
value
means
that
services
should
not
be
delivered
directly
if
other
more
efficient
and
effective
means
are
available'
(Department
of
the
Environment,
Transport
and
the
Regions,
1998a,
p.20).
Indeed,
the
Green
Paper
suggested
that
fundamental
performance
reviews
would
be
expected
to
demonstrate
that
"the
preferred
means
of
delivering
the
service
has
been
-
or
will
be
-
arrived
at
through
a
competitive
process"
(p.18).
Clearly,
there
are
two
different
concepts
intertwined
in
this
analysis.
On
the
one
hand,
services
provided
through
the
local
authority's
budget
need
to
be
'competitive',
in
the
sense
that
no
other
agency
and
no
other
method
could
more
satisfactorily
achieve
the
objectives
of
the
key
stakeholders.
This
concept
of
'competitiveness'
is
central
to
the
issue
of
improving
outcomes
within
a
BV
framework.
Indeed,
the
Local
Government
Act
1999
requires
authorities
'to
assess
the
competitiveness
of
its
performance
in
exercising
the
function
by
reference
to
the
exercise
of
the
same
function,
or
similar
functions
by
other
best
value
authorities
and
by
commercial
and
other
businesses
including
organisations
in
the
voluntary
sector'.
However,
another
way
of
demonstrating
which
delivery
mechanisms
provide
'best
value'
would
be
to
use
competitive
mechanisms
to
determine
who
delivers
the
services.
As
always,
an
approach
based
on
competition
raises
major
issues
affecting
the
welfare
of
different
stakeholders
involved
-
particularly
the
users
of
the
services,
the
local
authority
staff
who
might
find
themselves
transferred
to
another
provider
(and
might
even
lose
their
jobs
Public
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Volume
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2000
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completely)
and
the
private
businesses
and
voluntary
agencies
which
might
bid
for
the
contracts
of
externalised
services.
Clearly,
these
two
different
meanings
of
'competitive'
have
very
different
consequences
for
local
authorities,
which
are
therefore
far
from
indifferent
as
to
which
interpretation
should
be
paramount
in
Best
Value.
Benchmarking
for
'Competitiveness'
In
a
high
proportion
of
the
bid
documents
submitted
by
local
authorities
for
Best
Value
pilot
status,
there
was
a
clear
commitment
to
a
much
more
rigorous
and
extensive
regime
of
performance
indicators
in
order
to
demonstrate
'competitiveness'
even
in
those
services
which
would
not
be
subjected
to
competition.
Furthermore,
a
substantial
number
of
authorities
committed
themselves
to
systematic
'benchmarking'.
This
signalled
the
extension
to
local
government
of
the
practice
in
the
Civil
Service
during
the
last
decade,
where
CCT
was
not
considered
necessary
in
order
to
demonstrate
the
competitiveness
of
central
government
services
(Cabinet
Office,
1993;
Cabinet
Office,
1998).
The
government
had
instead
imposed
a
more
general
'market
testing'
process
in
order
to
determine
if
competitive
tendering
was
the
most
appropriate
means
to
ensuring
a
better
ratio
of
quality
to
cost.
Of
course,
the
market
testing
process
in
the
Civil
Service
placed
substantial
emphasis
on
the
spur
provided
by
competition.
Until
recently
it
has
been
hard
for
public
agencies
to
convince
politicians,
particularly
at
national
level,
that
services
are
competitive
unless
some
of
the
service
at
least
has
been
put
out
to
tender.
Agencies
which
claimed
'competitiveness'
without
subjecting
themselves
to
such
a
test
were
regarded
with
suspicion,
even
if
they
were
able
to
show
that
the
transactions
costs
of
tendering
would
be
high
and
that
their
performance
indicators
compared
favourably
with
potential
private
or
voluntary
sector
providers.
Nevertheless,
under
the
market
testing
regime
some
government
departments
and
agencies
were
able
to
avoid
competitive
tendering
altogether
in
specific
services,
where
they
could
argue
circumstances
were
exceptional.
Moreover,
even
where
the
competitive
route
was
pursued
as
a
result
of
the
market
testing
process,
in
practice
the
added
flexibility
of
the
market
testing
approach
allowed
government
departments
and
executive
agencies
to
negotiate
a
wider
variety
of
types
of
contracts
with
their
suppliers
than
was
typically
possible
in
local
government
under
CCT.
In
local
government,
the
market
testing
route
was
always
an
option
for
all
services,
apart
from
those
which
were
defined
for
CCT
purposes.
However,
it
was
not
widely
followed.
Indeed,
there
were
strong
undercurrents
in
many
parts
of
local
government
against
exercises
such
as
benchmarking,
since
most
local
authorities
have
regarded
comparative
performance
data
as
unreliable,
and
many
authorities
were
openly
sceptical
about
the
'perfor-
mance
families'
in
which
they
were
placed
for
various
comparative
exercises,
e.g.
by
the
Audit
Commission.
Public
Policy
and
Administration
Volume
15
No.
4
Winter
2000
84
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