Compulsory Competitive Tendering (Hansard, 2 June 1997)

§ Ms Armstrong

Well run local authorities which deliver high standard services are vital to the quality of people's lives. We are therefore very keen to press ahead with our Manifesto commitment to replace Compulsory Competitive Tendering (CCT) with a duty on local authorities to achieve best value and we will make this change as soon as Parliamentary time allows. We are using the interim period to talk to local government, the business community and others to ensure that the new framework is efficient and imaginative, but realistic, and makes the most of what local authorities, the private sector and the local community can contribute.

Achieving best value will not just be about economy and efficiency, but also about effectiveness and the quality of local services. The new framework will be a demanding challenge to local authorities, seeking continuous improvements in service costs and quality. It will be a permissive framework which emphasises local choices and local accountability. But it will also ensure that every local authority makes improvements. I am today writing to the Local Government Association to consult them on a draft statement of principles about best value which encapsulate these points. A copy of this letter will be placed in the Library.

We intend to encourage authorities to develop the principles of best value and pursue innovative approaches to service delivery in advance of primary legislation on best value. We have therefore agreed with the Local Government Association that Government will seek, where possible and within the existing statutory framework, to relax CCT for a selected number of authorities on condition that they follow a best value regime. We will set out shortly criteria against which authorities' bids will be considered—including a requirement to publish the authority's plans for improving the quality of services, enhancing efficiency and reducing costs to the taxpayers. The criteria will also reflect our view that competition will be an important management tool and test of best value, but that it will not be the only such tool.

Because the bulk of local authorities will continue to be subject to the existing CCT regime, we will also carry out an urgent review of existing regulations and guidance to make it work better and, to the extent that it is consistent with existing CCT legislation, introduce elements of best value. The Review, which will take 4–6 weeks, will be carried out in consultation with the LGA and other interested parties. Among other matters we will specifically be considering the question of timetables, including those for authorities who are subject to recent reorganisation. The Government will then consult on proposals with a view to laying new regulations and 50W guidance in the summer. In the meantime, local authorities must continue to plan for meeting existing statutory obligations.

We have an open mind on whether services are delivered by the private sector or directly within the public sector. Either way there needs to be an effective partnership, and fair and open competition where this is called for. To achieve this, we accept that direct service organisations should be able to compete for work where it makes sense to do so. So we are reviewing the framework within which local authorities carry out work for others. We are also to review the restriction on factors which local authorities can take into account in awarding contracts consistent with our obligations under European Community rules.

These proposals should leave no doubt that Government intends to pursue a rigorous alternative approach to the improvement of local services, confident of its success in partnership with local government and the private sector.