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REPORT TO: AUDIT AND SCRUTINY COMMITTEE ON 3 AUGUST 2016
SUBJECT:
THE DUTY OF BEST VALUE: THE NEW AUDIT AND
REPORTING FRAMEWORK
BY:
CHIEF EXECUTIVE
1.
REASON FOR REPORT
1.1
To inform the Committee of the introduction by the Accounts Commission of
an inspection and reporting framework for a new approach to auditing Best
Value.
1.2
This report is submitted to Council in terms of Section (H) (19) of the Council's
Scheme of Administration relating to Best Value.
2.
RECOMMENDATIONS
2.1
It is recommended that the Committee:(a)
consider the new framework of a five year programme of Best Value
Assurance Reports, commencing in April 2017, and note the first
six Councils in the programme;
(b)
note the continuing relevance of the Council’s statutory duty to
secure continuous improvement by the application of Best Value
and the vital characteristics it is expected to demonstrate in
fulfilment of the duty;
(c)
note, in response to this duty, the process of preparing the next
Corporate Plan (incorporating the Financial Plan) is the subject of a
report to The Moray Council on 17 August 2016; and
(d)
in light of (b) and (c) above and in order for the Council, as part of
its corporate planning process, to assess and evaluate its ability to
demonstrate and secure Best Value, instruct the Chief Executive to
submit this report to the meeting of The Moray Council on 17
August for consideration alongside the Corporate Plan.
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3.
BACKGROUND
Introduction
3.1
The Accounts Commission has agreed the overall framework (attached as
APPENDIX I) of the new approach to auditing Best Value in order to assure
itself that the approach is reflective of the changing and complex challenges
faced by local government in the current political, demographic and financial
environment.
3.2
In developing the new approach, the Commission is clear that Best Value is
as relevant and vital today as it was when introduced in 2003. It is recognised
however that the statutory guidance which supports the legislation for Best
Value would benefit from being refreshed and updated to reflect the various
changes in local government and public sector environment eg the
Community Empowerment Act 2015. The Scottish Government has indicated
its agreement with this view and it will be working with local government in the
coming weeks and months to take forward this task. But the Commission is
firmly of the view that a refresh exercise whilst ultimately benefitting the public
and Councils in ensuring that the characteristics of Best Value
comprehensively reflect the current environment in which local government
operates, does not compromise Council statutory duty to demonstrate Best
Value.
Key Characteristics of Best Value
3.3
The Committee is reminded that an authority which secures Best Value will be
able to demonstrate:Commitment and Leadership

A commitment to delivering better public services year on year and
acceptance of the key principles of accountability, ownership, continuous
improvement and transparency;

Elected member and senior managers have developed a vision of how
Best Value will contribute to the corporate goals of the authority which
informs the direction of services and is communicated effectively to staff;

A commitment to high standards of probity and propriety to honour the
trust given by the electorate
Responsiveness and Consultation

Responsiveness to the needs of its communities, citizens, customers,
employees and other stakeholders, so that plans, priorities and actions
are informed by an understanding of those needs;

An ongoing dialogue with other public sector partners and the local
business, voluntary and community sectors;

Consultation arrangements which are open, fair and inclusive
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The Assurance and Reporting Framework
3.4
In essence, as detailed in APPENDIX I, the Controller of Audit will submit to
the Audit Commission a Best Value Assurance Report (BVAR) on each
Council at least once during the five year period beginning in April 2017. The
first six Councils on whom the Controller of Audit will be reporting to the
Commission from April are (in alphabetical order):





Clackmannanshire
East Renfrewshire
Inverclyde
Orkney
Renfrewshire
West Lothian
How auditors will assess Best Value
3.5
Auditors assess the extent to which a Council is meeting its statutory duties
under the Local Government in Scotland Act 2003. These duties are set out
in the primary legislation and expressed in more detail in Statutory Ministerial
Guidance – which describes the characteristics of a Council that is
demonstrating Best Value (see para 3.4 above for example). It therefore
represents what auditors are looking for when carrying out their work, and the
benchmark on which their judgements are measured and their conclusions
reached
3.6
While Best Value remains as relevant and critically important today as when it
was introduced, the statutory guidance would benefit from strengthening and
refreshing in a number of areas and the Commission has made
representations to both the Scottish Government and Councils in this regard
3.7
In the meantime, it remains the responsibility of a Council to demonstrate that
it is meeting its statutory duties. The Commission’s new approach does not
alter this fundamental aspect of auditing Best Value. Where Councils
evidence robust and effective self-evaluation, across corporate activities,
service and outcome delivery, auditors are able to take a proportionate
approach to audit activity
3.8
Best Value audit reports in recent years have tended to focus on a small
number of issues around only certain aspects of Best Value. While this was
not unexpected in a risk-based approach, we are concerned that important
issues, such as equalities for example, have not featured as much as they
should in public reports. The new approach offers an opportunity to provide
public assurance across the range of Best Value characteristics in a more
comprehensive manner. This will be achieved through assessing Best Value
on an ongoing basis over the five years of the audit appointment. As stated
above, this will be done through audit planning in individual Councils so that
the particular context and circumstances in each can be taken into account
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4.
SUMMARY OF IMPLICATIONS
(a)
Moray 2026: A Plan for the Future and Moray Corporate Plan
2015 - 2017
These plans are the key tools for the Council to define its main
priorities. Publication of this new framework to audit Best Value
presents an opportunity to assess compliance of the Council’s statutory
duty.
(b)
Policy and Legal
The Accounts Commission is a public spending watchdog for local
government. It holds Councils in Scotland to account and helps them
improve. It operates impartially and independently of Councils and of
the Scottish Government and meets and reports in public.
(c)
Financial implications
The Accounts Commission expects Councils to achieve high standards
of financial stewardship and value for money and how they use the
resources to provide their services.
(d)
Risk Implications
Breach of the required high standards of Governance; financial
stewardship and value for money could lead to statutory reports;
adverse publicity; additional inspections, investigations and hearings
and ultimately intervention in terms of the Local Government in
Scotland Act 2003.
Adverse findings by the Accounts Commission in relation to Best Value
Assurance Reports could lead to statutory reports; adverse publicity;
additional inspections, investigations and hearings and ultimately
intervention in terms of the Local Government in Scotland Act 2003.
(e)
Staffing Implications
None.
(f)
Property
None.
(g)
Equalities
A culture which encourages both equal opportunities and the
observance of equal opportunities requirements is a pre-requisite of an
authority which demonstrates Best Value.
(h)
Consultations
This report has been prepared in consultation with CMT.
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5.
CONCLUSION
5.1
The Accounts Commission’s refresh of Best Value provides a timely
opportunity for the Council in its corporate planning processes to
assess and evaluate its ability to demonstrate and secure Best Value.
Author of Report:
Roddy Burns, Chief Executive
Background Papers: 1. Letter dated 1 July 2016 from the Chair, Accounts
Commission to the Council Leader
2. Statutory guidance issued by Scottish Government
Ministers in 2003 to be found at
www.gov.scot/Resource/Doc/47237/0028846.pdf
Ref: