Contact: Jenny Heath, ext 7402

1 Background

1.1 Best Value became a statutory duty under the Local Government Act 1999, taking effect from 1 April 2000. There are two key elements to the duty:

· Publication of an annual Best Value Performance Plan, indicating organisational goals and targets and reporting on progress towards their achievement and standards of performance.

· Undertaking a programme of fundamental service reviews, challenging, in the context of community aspirations, whether and how services should be delivered.

1.2 The Council responded to this new duty by:

· Establishing a Corporate Best Value Team, comprising three senior officers seconded from departments, supported by an administrative officer and located within the corporate Policy Unit.

· Establishing five Best Value Review Panels of approximately nine Members for each of the service committee areas of work

· Identifying departmental officers to co-ordinate review activity and others to lead or participate in individual reviews.

1.3 After two years' experience under these `pump priming' arrangements, the Council decided on a permanent framework to streamline and integrate Best Value work with operational management, led from 2002 by a newly formed Corporate Performance Team.

1.4 This report summarises the costs of delivering the Best Value regime in Hampshire and the benefits that the Council has derived by developing its own approach to Best Value.

2 The Corporate Best Value / Performance Team

2.1 The following table sets out the staffing costs of the central team, in relation to time spent on Best Value.

2.2 The Corporate Best Value Team took up post in October 1999, resulting in part year costs for 99/00. The role of the central team in respect of Best Value continues as follows:

· Deliver the annual Best Value Performance Plan

· Research and propose the programme of Best Value reviews

· Devise and develop processes for carrying out reviews

· Support members and officers carrying out reviews

· Co-ordinate responses to audit and inspection.

2.3 There was considerable pump-priming activity undertaken in 99/00 and 00/01 as processes were set up to promote and respond to the duty of Best Value. The value of the approach taken was evidenced in the positive Best Value audits, turning round concerns expressed by the District Auditor in September 1999 that the Council was lagging behind national milestones in its preparations.

2.4 The early lessons learnt from Best Value and particularly relating to inspection, contributed to the Council's approach to the Comprehensive Performance Assessment (CPA) and the subsequent assessment as excellent.

2.5 The new Corporate Performance Team was established from 1 November 2001, with some initial savings made through changes to the structure, as the demand for senior manager input reduced. Even greater savings have been achieved in 2002/03 as 70% of the team manager's time has been diverted away from Best Value. The 2002/03 figure is anticipated to be indicative of future years.

2.6 While it is clear that the investment in the corporate team has paid off in terms of positive audit and inspection, the statutory work has ensured the team is also well placed to deliver the Council's own agenda for developing the performance management framework:

· developing an integrated approach to performance monitoring and reporting to inform policy making

· supporting members to be involved in service reviews so they can challenge assumptions and ensure all options for service delivery are considered.

3 The Best Value Performance Plan

3.1 The costs of the Best Value Performance Plan fall between two financial years as the key production deadlines are 31 March and 30 June. Therefore costs are shown in relation to the calendar year in which the plan is produced.

3.2 There are three elements to the total costs :

· The printed version of the full Best Value Performance Plan, with costs relating to printing approximately 500 copies distributed to Members, senior managers and key partners. There are virtually no design costs.

· The web version of the full Best Value Performance Plan, with costs relating to web design.

· The summary version produced as an eight-page pullout in the spring edition of Hampshire Now. The production costs include design, production and distribution and for the first year only, statistical analysis of response cards.

3.3 In the first year to meet the statutory deadline, stand-alone copies of the summary information were produced at a cost of £11,500. Separate paper purchasing for the first edition led to high costs that have since been alleviated by fully integrating production of the summary pullout with Hampshire Now. Further economies of scale have been effected through joint consultation: for example, separate consultation response cards were included in the first edition, incurring analysis costs of £1000.

3.4 From 2003, there will be no bound copies produced as the web version becomes the main vehicle for information. Photocopies of the statutory pages will be sent to each councillor and placed in libraries and information centres. The costs of producing the bound copies will be used for the initial design and set-up of the new website, with anticipated savings in future years. From 2003 onwards the plan will become known as `The Performance Plan'.

3.5 While the costs of producing the Best Value Performance Plan have been invested primarily to meet statutory requirements, tangible benefits have also emerged:

· The full Best Value Performance Plan collates a wealth of performance information which both managers and officers have found useful in meeting their day-to-day needs for reference data.

· The summary performance pullout has provided a balanced assessment of performance, supported by external evaluation, which familiarises residents with our strategic aims and how we are progressing with their achievement.

4 Best Value Reviews

4.1 The initial programme was developed in consultation with senior officers and councillors and, in accordance with legislation, scheduled reviews to cover 100% of services within the five year period from April 2000. The programme scheduled more reviews in the first three years (60% services), with the aim of tackling the more complex issues later and enabling cross-cutting issues which emerged from the bulk of the service reviews to be added into the latter part of the programme. Each year the review programme has been re-considered by members, initially through the Best Value and Performance Sub-Committee of the Policy and Resources Committee and post-modernisation through the Cabinet. Reports to Cabinet on 23.12.02 and 17.12.01 record the changes to the review programme and to the process for review.

4.2 Valuable lessons were learnt during the first year of Best Value that supported the approach of concentrating on the more straightforward service-based reviews, while the process was tested. However, Hampshire's findings echoed those being reported nationally: service-based reviews were only likely to generate incremental service improvements as the focus remained firmly on the status quo.

4.3 To achieve `step changes' in service delivery and maximise the benefit of the resource put into reviews, the Council realised it would need to tailor the review programme. Initially this meant a reduction in the number of small, service-based reviews and a focus on more strategic, cross-cutting areas of service. As Government has subsequently removed the constraint to review 100% services in a five year period, the Council has also been able to make alternative arrangements through service planning for those day-to-day activities that are already performing well. This has meant the Best Value review programme has now been streamlined to cover a very few complex areas in greater depth. Integration of the Best Value programme with the Hampshire Improvement Programme ensures the areas under review are consistent with the Council's priorities for improvement.

4.4 Costs are outlined in the table below. A breakdown of costs per review is given in the appendix. A significant proportion of these costs are estimated and with the movement of staff over time it has proved impossible to gain a more accurate picture. Guidance to review teams now ensures that costs are accurately recorded.

4.5 The direct costs associated with Best Value reviews are usually consultation costs, expenses paid to encourage external people to participate in the Council's reviews, or the costs of visiting other organisations to gather information.

4.6 Indirect costs comprise the opportunity cost relating to staff time spent on Best Value activity, when they could be engaged in other work. Time recording has been inconsistent across the wide range of reviews carried out in the early stages of Best Value, with only a minority of services supported by IT systems for time recording. In addition, protocols were not established sufficiently early about how to record time spent on Best Value, without double recording when a single activity supported more than one project, or including time spent by people not employed by the Council. Arriving at an accurate cost is not possible after the event, especially given the range of staff at different levels of pay. However, to give an estimate of these costs in financial terms, a daily rate of £220 has been used, based on a mid salary scale with basic oncosts, in cases where the actual costs are not known.

4.7 Review outcomes

Each year the Performance Plan summarises the outcomes of Best Value reviews and contains reports on progress with each improvement plan until it is completed.

4.8 This year, structured interviews have been held with review team leaders for the early reviews and a process of issuing review evaluation forms to all review team members has been started. This feedback has confirmed that overall reviews have benefited the services looked at and that the rate of service improvement has been speeded up by the opportunity to take a step back from day-to-day activity and consider more strategic issues.

5 Support for reviews

5.1 The initial process for Best Value reviews was very thorough, designed to meet unknown audit and inspection requirements. Support for the process involved:

· the development of a comprehensive toolkit

· an extensive training programme, addressing both officer and member needs for awareness of the new regime and to develop skills to carry out reviews

· an annual event to learn lessons about the process, supported by ongoing meetings held with departmental officers involved in Best Value.

· IT software to support the use of EFQM

5.2 After the first year, the toolkit was updated as a web version, contributing to what is now a comprehensive Best Value website, and enabling a dynamic approach to maintaining supporting information. The printing costs have been re-invested in more targeted leaflets and guidance, which are particularly helpful when reviews involve our partners, who are not familiar with the Best Value regime.

5.3 With the establishment of the Corporate Performance Team, the Best Value process was considerably streamlined and re-designed to support the more strategic, cross-cutting reviews that now form the bulk of the review programme. Keeping the focus of reviews at the strategic level and on those areas where there are real opportunities for improvement has saved considerable time previously spent on drafting a comprehensive position statement for the service. In general the later reviews are showing approximately half the officer days spent on the review, compared with earlier reviews, although this trend is skewed in year three by the significant resource estimated against the two year review of `children in the community'. This review is working in the context of the Climbié report and the recent Social Services Inspection findings. It may well be that in future the complex reviews undertaken will require involvement of a wider range of people across the Council, in order to deliver in areas that have previously proved difficult.

5.4 Feedback from review teams also made it clear that it is more efficient to provide skilled facilitation at key milestones in the review, rather than aim to re-skill the whole review team. This has led to a considerable reduction in training costs associated with Best Value, although unfortunately these costs are aggregated in the corporate training budget and cannot be identified separately. The costs shown in the table below are for the funds earmarked within the corporate budget for Best Value training and it is known that expenditure did not reach this level. Awareness sessions for both officers and members continue to be provided by the corporate team as they arise. In addition, facilitation of the EFQM excellence model has made the supporting software redundant, enabling the annual costs to be re-invested in systems to support performance measurement.

	99/00 £'000	00/01 £'000	01/02 £'000	02/03 £'000
Training and development (budget)	31	41	40	35
Process / guidance / IT	32	21	9	1.5

5.5 The costs for the toolkit, guidance and IT support system have been met from the funding established for the corporate team, while training costs and expenses associated with `lessons learnt' events have been earmarked in the corporate training budget, where they are in competition with other corporate development priorities.

5.6 There is generally a greater knowledge and understanding of performance tools, such as the EFQM Excellence model, project management, option analysis and other good management practices as a result of the development programme. Lessons have, however, been learnt about the level of support needed to effectively implement a new regime and about the inefficiencies that result if unreasonable expectations are made of operational staff and managers.

6 Audit and inspection

6.1 The Government adjusted the Standard Spending Assessment in 2000/01 to allow for Best Value audit and inspection costs. While this has covered the amount of the additional fees, this is against a background of other unavoidable pressures that were not similarly resourced.

6.2 Both as an excellent council in the current year and on account of an assessment as a `low risk' authority in the previous year, the inspection burden has been reduced by the local auditor. Keeping sound management information relating to performance will be key in maintaining this position.

7 Member involvement

7.1 Members have been involved in Best Value reviews since they first began in 2000. Generally between 3 and 5 members will be nominated to join each review team and their key role has been to ensure there is challenge in the process.

7.2 Since review teams or challenge events usually involve people from outside the County Council, the review meetings are held in an informal manner, to ensure everyone is confident about contributing. By being freed from chairing the meetings, Members are also able to participate fully and they have proved to be a valuable source of new ideas.

7.3 Generally speaking, Members have been self-selecting in terms of choosing which reviews to be involved in. This has allowed Members to pursue particular areas of interest or to develop their knowledge in new areas. However, there is no doubt that the pressures of other meetings or commitments, coupled with the less formalised calendar for review meetings, has meant that Member attendance at review meetings has not been consistent.

7.4 Members' views have not yet been systematically sought on these issues and there is no current mechanism for measuring the time spent by members on Best Value.

8 Conclusion

8.1 Hindsight colours views of whether the service improvements identified by the Best Value process would have emerged anyway. However, despite initial reservations about the regime, those involved in the review process have consistently stated that it gave them licence to take a step back from the pressures of everyday work and consider the possibilities for radical change and to re-focus on the purpose of the service.

8.2 Intangible benefits include:

· The developing performance culture, in which setting measurable targets and monitoring progress against them is becoming more routine and contributed significantly to the successful corporate assessment under CPA

· The developing trend to use performance results and `customer' views to inform policy and decision making

· The openness to constructive challenge, leading to an organisation with a learning culture.

· The development of members' knowledge and expertise in areas under review, providing opportunities to challenge existing policies, while exploring alternative options.

8.3 The more tangible benefits are in the service improvements themselves. Each year the Best Value Performance Plan summarises the improvement plans that result from reviews and progress towards achieving the desired outcomes. Some of these achievements seem minor in comparison to the scale of the Council's operations but they can be considerably more significant from the service user's perspective, such as the greater efficiency in dealing with disabled badge applications. Other outcomes are more headline grabbing, such as the economies now achievable through the strategic term maintenance contract, which depended on changing the transport network maintenance arrangements, or the development of the medium term nursing care strategy to meet the demand in this difficult market.

8.4 Against these benefits must be set the cost of the regime, approximately £2.25 million over the four year period examined. If the Council had sought to maintain the original high level of activity and input, or indeed if this had been demanded by Government, there is no doubt that the costs would have outweighed the benefits. However, the Council has worked to integrate the process with sound management practice and to develop the approach so that it focuses on local priorities and areas for improvement, rather than a universal programme of review. By reducing the number of reviews and the number of days spent by officers on reviews, the opportunity costs are also reduced, halting the drain on resources which should be directed to service delivery. Similarly, the reduction in the corporate costs of Best Value has enabled the corporate performance team to take on additional duties, in relation to performance measurement, Comprehensive Performance Assessment and liaison with audit and inspection. This has in turn enabled the Policy Unit to deploy resources to respond to the Government's extensive change agenda.

Recommendation

1 That the Committee notes the costs and benefits of Best Value highlighted in this report and requests an annual update to be brought to future meetings.