Local authorities gear up for new tendering regime

Uncertainties surround the introduction of the “best value' replacement for compulsory competitive tendering. Some local government lawyers are, however, coming to grips with the issues, writes Guy Campos. Guy Campos is a freelance journalist.

In December 1997, the London Borough of Camden learned that its pilot scheme to replace compulsory competitive tendering (CCT) with a simple duty to obtain “best value” for the taxpayer was one of 37 in England to be given approval by the Government.

For Scott Dorling, acting head of Camden's housing team, which won The Lawyer/Hifal Client Care Award 1997, this came as a relief.

“CCT had the downside that we were heavily reliant on locum staff as they could be counted as part of the externalised legal services,” he says.

Now he hopes there will be more long-term staffing arrangements with new employees eligible for full benefits and training.

As the legal department at Camden is not among the first tranche of services at the council to adopt the new scheme, Dorling does not know exactly what it will mean in practice.

In this respect he is like so many other staff at pilot authorities and at councils still subject to compulsory tendering.

The Government published a white paper earlier this month setting out the key elements of the “best value” regime which is expected to replace CCT in two years' time.

CCT is to be scrapped because of a number of reasons: its bureaucracy; the hostility it engendered between private and public sectors in general; and its lack of flexibility in providing for innovation and improvements in quality.

The “best value” policy document calls on councils to review all of their functions including legal services over a four to five year cycle and set targets for improvement.

As part of each review, local authorities have to make a case for the service's existence. They have to consult local people through surveys and panels and listen to suggestions of employees.

They should compare their performance with that of similar local authorities in a benchmarking exercise. Crucially, in a way that has yet to be made clear, they must still compete to show that the service is being provided at a cost and to a standard that compares with the best.

Local authority compliance is to be judged by the district auditors and, where appropriate, by service inspectors and central government which will have the power to intervene in cases of failure.

Whitehall could impose its own improvement targets, demand that the service be put out to tender, send in a management hit squad or hand the service over to another authority or organisation.

These guidelines have been drawn up for the full range of council services and need a certain amount of interpretation before they are applied to legal work.

For instance, user consultation for legal departments largely means talking to internal clients within the local authority something many already do before signing a Service Level Agreement for the next year.

At Braintree District Council in Essex one of the “best value” pilot authorities head of corporate and legal services, Patrick Dempsey, is already sending out questionnaires every two years to internal clients to measure the performance of the council's nominated solicitor against 23 variables. This information is supplemented with quantitative performance indicators, such as the time taken to prepare a commercial lease.

In Wales, where every authority has been given pilot status for all or some of its services, Pembrokeshire County Council's head of legal and committee services Huw Morris says the legal department will not just consult internally. It will also be talking to the local fire authority whose business it won in a competitive tender and to local solicitors over its land charges.

At the London Borough of Newham, another pilot authority, internal consultation for “best value” has already got under way and produced a surprise. Head of legal services Gifty Edila has found that internal clients are looking for more specialist lawyers and she is now having to rethink the number of generalists within her litigation team.

Benchmarking legal services against other organisations will also present its own challenges. The Audit Commission, which sets performance indicators for local government, has not produced any measures of legal performance other than the cost of the land charges services.

One approach to benchmarking which could be tried is that of Newark and Sherwood District Council in Nottinghamshire. This is the only pilot “best value” authority to specifically designate legal services as an area for experimentation in its application for pilot status to the Government.

Soon-to-be deputy chief executive Kirsty Cole says legal services are to undertake “process mapping” of the legal work. This means recording everything the legal team does with flow charts, putting times to each activity and sharing this information with a comparison group of other district councils in Nottinghamshire.

The authority can then consider whether each activity is needed or whether other legal departments have found better and faster ways of working.

Elsewhere, Pembrokeshire is to benchmark the performance of its land charges section against that of a handful of other local authorities in Wales which use the same computer package, enabling direct comparisons to be made using electronic data.

While these authorities are getting on with “best value” in a practical fashion, there are others which are as hostile to it as they are to CCT and are frustrated by the lack of clarity as to what the policy means at this stage.

The deputy director of legal services at one Welsh council, who asked not to be named, says many people see “best value” as CCT dressed up under another name, because there is still a requirement for competition even if it is not clear exactly how this requirement is to be implemented.

Likewise, he asks, if local authority legal services are to be benchmarked, is this to be against legal aid rates, the rates of neighbouring local authorities or those of private practices in the locality? There could be scope for a Welsh benchmarking forum to sort this out, he says.

Regardless of how “best value” turns out, there will be few regrets for the demise of CCT and its assault on the stability of local government careers.

Councils expect there to be an increase in training opportunities as a result of the increase in career stability and as a result of the requirement for local improvement targets to be met.

But “best value” is not to be introduced immediately and will come in after the pilot authorities have shown what works and does not work and when the Government can find parliamentary time for it.

Until then, many authorities will still be waiting for the clouds caused by the rigid and bureaucratic CCT to lift.