BEST VALUE REVIEWS (Hansard, 24 March 1999)

§ Mr.Jenkin
I beg to move amendment No.35, in page 4, line 5, after 'section', insert 'unless it can satisfy the Secretary of State that there is a reason why this should not be done.'.

§ Mr. Deputy Speaker (Sir Alan Haselhurst)
With this, it will be convenient to discuss the following amendments: No.65, in page 4, leave out line 10.
No.37, in page 4, line 43, at end insert— '(e) the upper cost limit of conducting a review.'.
No.38, in clause 6, page 5, line 43, at end insert— `(m) to provide details of the cost of completing the plan.'.
No.94, in clause 7, page 6, line 27, at end insert— '(g) indicating clearly the financial savings (if any) and quality improvements (if any) achieved from past plans, and to be delivered from the current plan.'.

§ Mr.Jenkin
Amendment No.35 is in the name of my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), but he has not been able to attend the Chamber for most of this afternoon's proceedings owing to the rather late date on which this business was fixed. I am sure that the House will forgive him for that. 473 The amendment concerns the obligation in clause 5 on best value authorities to conduct best value reviews in accordance with the provisions of any order made under this section. The amendment would add the caveat that there should be an obligation to conduct a best value review unless there is agreement between the authority and the Secretary of State that such a review should not be conducted. I understand that the amendment would make a substantive change to the Bill, and I shall be interested to hear what the Minister has to say about that and the other amendments.
Amendment No.65 would delete clause 5(2)(c), which requires specified functions to be reviewed in specified financial years. We are discussing only what the Secretary of State may put into an order about a best value plan. We are testing whether specified functions should be prescribed in that way. A function should be considered in the round, not in specified financial years. I should like the Minister to deal with amendments Nos.65 and 94 in his comments.
Clause 5(4)(e) refers to other best value authorities and…commercial and other businesses". They must be considered when a best value plan for reviewing a function is being drawn up. Subsection (4) says: The Secretary of State may by order specify matters which an authority must include in a review of a function under this section; and in particular an order may require an authority…to assess the competitiveness of its functions with regard to how similar functions are exercised by those other bodies. I would be grateful if the Minister addressed that point.

§ Mr. Burstow
I shall not take up too much time because I am also interested in the Minister's response to the amendments, particularly amendment No.35, which would have the added value of tipping the balance back towards the local authority. That would be welcome because clause 5 on best value reviews, which the amendment seeks to alter, and other clauses in this part of the Bill place in the hands of the Secretary of State disproportionate power relating to how best value reviews are to be conducted.
We welcome also amendment No.65, which would remove the requirement for specific functions to be reviewed in specified financial years. That is unnecessarily prescriptive about the way in which best value reviews are to be undertaken. Given the partnerships, protocols and concordats that the Minister described in Committee and again in today's proceedings, it seems to us that clause 5 goes to the heart of the prescriptive nature of the Government's approach.
I want to take this opportunity to say that I have had the chance to read the report of the Committee proceedings on this clause and others, and I was struck by the number of contributions made by my hon. Friends the Members for Torbay (Mr. Sanders) and for Taunton (Jackie Ballard).Unfortunately, I was unable to serve on the Committee because I was serving on another Committee. I want to express my gratitude to my hon. Friends for their hard work.
474 I look forward to hearing what the Minister has to say about the amendments. I hope that the Government will be encouraging and say that they will support amendment No.35 in particular, as it tilts the balance back to local authorities and away from central Government prescription.

The Parliamentary Under-Secretary of State for Pales Mr.Jon Owen Jones)
I am afraid that I shall have to disappoint the hon. Gentleman. Amendment No.35 is designed to add an additional factor by which a best value authority could satisfy the Secretary of State that it should not carry out a best value review of its functions.
Hon.Members will be aware that one of the fundamental requirements of the duty of best value is that authorities will have to carry out fundamental performance reviews of all their functions over a period, probably five years, so that we ensure that continuous improvements are made to all services, not just to those where there are serious shortcomings. That should apply to all local authorities across the board, so that a proper comparison of performance is made between authorities on a common basis. Neither local people nor the Government would be prepared to accept any exceptions.
The amendment has the potential to create a bureaucratic machinery for the Secretary of State, who would need to evaluate all cases made by local authorities, to satisfy himself that the reasons given for not carrying out the review were valid. We could not rule out some local authorities using that as a means of delaying or avoiding reviews, at least in the short term. That would be unacceptable to all concerned, not least to the local community, who would lose out.
Amendment No.65 would remove the flexibility and discretion that the Secretary of State needs to specify functions to be reviewed in specified financial years, as circumstances may warrant. If, for instance, a local authority should try to delay or avoid conducting the reviews of some of its services, or should face some particular crisis in the way that it provides its services, it is essential for the Secretary of State to have powers to direct the local authority to carry out those services quickly and effectively. It would be the local communities who would be most disadvantaged if the amendment were allowed to stand.
Amendments Nos.37 and 38 relate to the costs of best value performance reviews and local performance plans. The amendments recognise that some compliance costs are likely to be involved in best value reviews and local performance plans. However, the drive for continuous improvement will deliver efficiency gains of around 2 per cent, which would far outweigh those costs.
I have been asked to comment particularly on amendment No.94, which would add to the work of the auditor in his audit of performance plans. In auditing a performance plan, the auditor is required to state whether the plan has been prepared and published in accordance with legislation and guidance.
Clause 6 sets out clearly that, in preparing plans, authorities must summarise their past performance with regard to performance indicators; compare their performance with previous financial years; summarise their success in meeting performance standards; and summarise their progress towards performance targets.
475 An authority that has met the requirements of the Bill will have indicated the financial savings and the quality improvements that it achieved as a result of past plans, and those delivered by current plans. If the auditor is prepared to state that the plan has been prepared in such a way that it meets the requirements of clause 6, he will have ensured, by default, that financial savings and quality improvements are indicated.
The amendments are, therefore, unnecessary and I ask hon.Members to withdraw them.

§ Mr.Jenkin
I am not entirely convinced that amendment No.94 does not add anything to the Bill. By specifying that savings might be made, it might encourage best value performance plans to produce savings, which would improve value for money—or best value, as the Minister prefers to call it. However, in the interests of brevity, I beg to ask leave to withdraw the amendment.

§ Mr.Jenkin
I beg to move amendment No.68, in page 4, line 29, leave out from 'other' to end of line 30 and insert 'parties'.

§ Mr. Deputy Speaker
With this it will be convenient to discuss amendment No.69, in page 4, line 31, leave out from 'other' to 'about' in line 32 and insert 'parties'.

§ Mr.Jenkin
The amendments refer to clause 5, under which best value authorities must conduct best value reviews, and subsection (4) under which The Secretary of State may by order specify matters which an authority must include in a review of a function". The order that the Secretary of State may draw up must include the requirement to assess the competitiveness of performance against various other parties. Those parties are specified in the Bill as other best value authorities and commercial and other businesses".
We suggest that an authority's performance should be measured against that of other parties, without those being specified. Similarly, in clause 5(4)(f), which sets out the obligation to consult other best value authorities and commercial and other businesses", we believe that the word "parties" should replace the word "businesses". I should be grateful for the right hon.Lady's comments.

§ Ms Armstrong
Amendments Nos.68 and 69 betray a misunderstanding by Opposition Members. It was never our intention to make an exhaustive list of all the bodies that the Secretary of State may require best value authorities to consult, or against which they should assess their competitiveness. Any future order may go wider if there is a case for it to do so. However, to be useful and sensible, consultation must be meaningful. It may not be appropriate for it to include a wide range of bodies. There needs to be a link to those that can most usefully assist best value authorities in discharging the general duty.
476 In clause 5(4)(e) and (f) we have listed the most obvious bodies against which a best value authority should compare its performance in exercising a function. Naturally, those bodies are other best value authorities and private sector bodies. Best value authorities should consult with such bodies and make comparisons in respect of their competitiveness.
It is difficult to see how the current description omits anything of substance. The term "parties", which is the subject of the amendment and a substitute for our definition, defines nothing in particular. I am told that it is not helpful in achieving what the hon.Member for North Essex (Mr.Jenkin) is looking for.Using that term could send the wrong message about the breadth of consultation and mean that the essential link to those who can input most value to the process is lost.
The House will remember that, yesterday, hon.Members pressed the point that consultation, if undertaken too loosely, could be expensive. We are concerned that the consultation should be appropriate and that the authority should consult the appropriate people—those who need to be consulted—during the process. It is important that we restrict the duty to such people.
We would expect the existing definition to cover organisations such as chambers of commerce, about which the hon.Member for South Cambridgeshire (Mr.Lansley) was concerned.
It being five hours after the commencement of proceedings, MR. DEPUTY SPEAKER, pursuant to the Order [24 March], put forthwith the Question already proposed from the Chair.
Amendment negatived.
MR. DEPUTY SPEAKER then put the remaining Questions required to be put at that hour.