The Best Value Statutory Guidance and
how to use it
1. Introduction
1.1.
Under the previous government, many local authorities used specific central
government grants (such as Area Based Grant, Performance Reward Grant and
Working Neighbourhoods Fund) to replace significant elements of mainstream
voluntary and community sector (VCS) grants programmes, particularly for local
support and development organisations.
1.2
In the June 2010 emergency Budget1 and the November 2010 Spending Review2, all
of these funding streams were withdrawn and not replaced by central government.
1.3
Many local authorities reacted by simply passing on these funding cuts to their local
VCS, with the result that VCS organisations were suddenly faced with
disproportionate and in some cases complete ending of their funding, often at very
short notice.
1.4
VCS national umbrella organisations were quick to start monitoring their members’
experience of the cuts, and to use this information as the basis for lobbying for a
moratorium on disproportionate cuts and the involvement of the local VCS in
decisions about the implementation of the cuts and the redesign or reshaping of local
services.
2. The Best Value Guidance and the local VCS
2.1
The Best Value Statutory Guidance reiterates the general Duty of Best Value which
requires an authority “to secure continuous improvement in the way in which its
functions are exercised”.
2.2
When procuring or commissioning services, an authority must consider “overall
value”; not only economic value but also environmental and social value. Social value
“is about seeking to maximise the additional benefit that can be created by procuring
or commissioning goods and services, above and beyond the benefit of merely the
goods and services themselves.”
This means that if a community group offers community benefit beyond the contract
specification (for example, by employing young offenders or people with disabilities),
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2
http://www.hm-treasury.gov.uk/2010_june_budget.htm
http://www.hm-treasury.gov.uk/spend_index.htm
this should be taken considered by the authority in deciding where to award a
contract.
2.3
Before deciding how to fulfil the Duty of Best Value, an authority must meet its
statutory Duty to Consult representatives of a wide range of local persons, specifically
including local voluntary and community organisations.
This means that local VCS representatives must be involved throughout the
commissioning cycle and in any process of decommissioning services. This is not
optional.
2.4
“An authority should be responsive to the benefits and needs of VCS organisations of
all sizes (honouring the commitments set out in local Compacts).”
This means that an authority must not discriminate in funding decisions against any
VCS organisation on the grounds of its size or its ability to deliver economies of scale.
2.5
An authority should not make disproportionate cuts to the local VCS, in comparison
with the cuts they take on themselves. The provisions on local VCS funding apply
explicitly to both grants and fixed-term contracts.
This means that an authority which cuts funding for its own direct activities by (for
example) 10% should not cut funding for the local VCS by more than 10%, and can
be challenged if it does so.
a. An authority should give at least three months’ notice of any cut to a VCS group,
as well as to the public or service users.
This is in line with the Compact (see below) and recognises VCS organisations’
reasonable expectation of continued funding based on previous practice. The
reference to service users provides for them to be involved in any negotiations.
b. The authority should engage the VCS organisation and service users “as early as
possible before making a decision” on a funding cut, on the future of the service,
on implications for associated land and buildings and on the wider impact on the
local community. It should also give community groups, service users and others
a chance to put forward “options on how to reshape the service or project”.
This is an opportunity for the community group and its service users to develop a
revised vision of the services required to address local needs, to consider any
implications for related buildings and other assets and the wider impact on the
local community, and to have the chance to submit proposals for reshaping
services, in dialogue with the authority.
c. The local authority should make available “all appropriate information” to assist
this process.
This allows VCS groups to see information about the authority’s budget and
spending on existing services, council staff, buildings maintenance or service
contracts. It therefore gives VCS groups a chance to make informed and
competitive proposals for different way of delivering services.
3. Scope of the Guidance
3.1
The Guidance applies to all local authorities and other Best Value authorities3.
3.2
All central government departments and agencies of government departments have
also signed up to the standards set out in paragraph 5 of the Guidance, which are
reflected in 2.5 above.
4. Status of the Guidance, Public Law and the role of the Compact4
4.1
The Statutory Guidance is not strictly binding but it places Best Value authorities
under a duty to give it careful consideration in any relevant decision making and to
follow it unless there are good reasons for not doing so.
4.2
Where it is believed that an authority has failed to give the Guidance careful
consideration and/or failed to follow it without good reason, there may be grounds for
a Public Law challenge through a process of judicial review. In such a case, the
authority would be required to defend its decision on the grounds outlined.
4.3
The Introduction to the Guidance reiterates the government’s commitment to the
principles in the renewed national Compact5 and states that the Guidance does not
supersede any part of the Compact.
4.4
Paragraph 4 of the Guidance requires authorities to honour the commitments made in
local Compacts.
4.5
Consequently, while neither national nor local Compacts have the force of law, being
voluntary agreements, it has been suggested that their reference in the Guidance
may have the effect of making breach of Compacts a breach of statutory guidance.
4.6
The renewed Compact is backed by a set of accountability and transparency
measures outlined in a new guide6 with which it is well worth being familiar.
4.7
The Compact Advocacy programme7 exists to offer support and advice to voluntary
and community organisations where a public body has made a decision that's not
compliant with the Compact or public law principles.
3
Other Best Value authorities: A National Parks authority; the Broads Authority; police and fire authorities, the London Fire and
Emergency Planning Authority; a Waste Disposal Authority, Joint Waste Authority, an Integrated Transport Authority; Transport
for London; the London Development Agency, economic prosperity boards established under section 88 and combined
authorities established under section 103 of the Local Democracy, Economic Development and Construction Act 2009.
4
For a fuller discussion, see Ravi Low-Beer, New Best Value Statutory Guidance, in NAVCA’s EVS newsletter, Issue 16
5
http://www.compactvoice.org.uk/sites/default/files/the_compact.pdf
6
http://www.compactvoice.org.uk/news/2010/12/14/renewed-compact-published-ocs-and-compact-voice
7
http://www.ncvo-vol.org.uk/compactadvocacy
4.8
Voice4Change's Compact Advocacy Referral Service8 works with the Compact
Advocacy Programme and the Public Law Project (see below) to help BME groups
resolve disputes with public bodies.
5. Suggestions for action if you believe the Guidance has been breached
5.1
Contact a councillor or officer in the relevant authority, refer to the Guidance and ask
for an explanation of how the authority reached its decision.
5.2
If necessary, follow this up with a formal letter or email to an appropriate portfolio
holder, senior councillor or officer, copied to all relevant persons and groups.
5.3
Mobilise service users to lobby or petition the authority, in co-operation with any other
affected groups, if any.
5.4
Write to your MP and contact the local news media (community newsletters, local
newspapers, local radio stations) about the issue.
5.5
If the situation cannot be resolved, you may need to seek legal advice from a Public
Law solicitor9 about the possibility of seeking a judicial review. This must be started
within three months of the issue arising.
Case Study – Community Action Derby10
Sixteen charities have had their grants from Derby City Council extended after challenging
the local authority with the Communities and Local Government department’s Best Value
Statutory Guidance. Community Action Derby which represents voluntary groups in the city
warned Derby City Council that they had not followed the guidance which says local
authorities should consult organisations when planning to decommission services.
The council voted last April to cut its voluntary sector grants budget from £2.7m to £1.8m,
and to set up a programme for administering the new budget, which was due to take effect
this month.
Matthew Allbones, operations director at Community Action Derby, said the organisation
started to use the guidance as soon as it came into force in September. "The council had
run a consultation on what the priorities for its new, reduced voluntary sector grants budget
should be, but I don’t think it had realised that this was not enough to meet the
requirements in the statutory guidance," he said.
Allbones said Community Action Derby had told council representatives in September that
the council should consult all charities that would lose funding. He said the organisation
realised that although the council had opened a consultation with the charities that had
unsuccessfully applied to the new fund, it had not consulted the charities that had not
applied.
8
http://www.voice4change-england.co.uk/content/compact-advocacy-referral-service
Contact the Empowering the Voluntary Sector adviceline http://www.navca.org.uk/services/learningopps/evs/adviceline
reported in Third Sector 4 January 2012 http://www.thirdsector.co.uk/go/news/article/1110515/sixteen-derby-charities-councilgrants-extended/
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