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Getting Best Value from waste strategies for
local authorities
How does Best Value apply to waste management and what are the guidelines for dealing with contractors? Anthony Shelley reports on how local authorities can embrace Best Value practices.
Local authorities must be more flexible in planning their waste strategies and should embrace a spirit of partnerships with service suppliers if they are to achieve Best Value targets.
This was the message to about 50 delegates from local authorities, universities and environmental agencies and consultancies at the Best Value from Waste conference, which was hosted by
Nabarro Nathanson and Robert Long Consultancy last week.
The aim of the conference in London was to help local authorities apply Best Value in their waste management strategies and provide them with guidelines for continuous improvements in their service and better relationships with contractors.
Targets
Michael Morris, of Nabarro Nathanson, said the need to meet the biodegradable municipal targets set by the EU's Landfill Directive and the UK's Waste Strategy 2000 would see a growth in contracts with waste collection authorities (WCAs) and waste disposal authorities (WDAs), which incorporated Best Value performance targets.
Although the Best Value system was "softer" than the tough compulsory competitive tendering (CCT) process, waste contracts had to work in partnership. They tended to be complex and long term and required major capital investment, often beyond the means of a local authority. In line with guidance issued by the Department of Environment, Transport and the Regions (DETR) this year, contracts had to accommodate timetables of Best Value reviews, allow review mechanisms for Best Value change, set out performance standards to measure efficiency and deliver continuous improvement.
Commenting on the scope of services and performance monitoring in terms of Best Value, Mr Morris said collection and disposal contracts had to clearly define from the start what was expected, such as collecting household waste, disposing guaranteed minimums, composting, recycling and waste to energy.
A council needs to consider national and local performance indicators, current levels of performance and what it wants to achieve while contractors had to provide service delivery plans and regular performance information.
"Linking contracts into Best Value requirements must create living documents which can be updated regularly," he said.
Performance remedies require a phased intervention system, progressing from a correction notice, a chance to improve service delivery - to warning or default notices, financial penalties and even contract termination. "Councils can step in as a statutory right," Mr Morris said.
Contracts
Commenting on contracts in general, he said they should take Best Value into account, even in cases where the contracts are very rigid. Changes in law, policy, volume or content of waste, performance criteria, notification of variations and contract price adjustment are points that had to be considered.
Lianne Smith, a lawyer for Nabarro Nathanson's public sector group, and Malcolm Iley, a partner in the firm, gave an overview of Best Value and its application in waste management.
Ms Smith outlined the need for local authorities to show continuous improvement in all their services by having annual Best Value performance plans and five-year Best Value reviews, as required by the Act. In order to provide efficiency and high quality, local authorities could not be reactive but had to respond to citizens by tailoring services to their needs by using, for example, more information communication technology.
Mr Iley said Best Value required local authorities to carry out fundamental review of all activities by challenging their relevance and value; to compare performance with other organisations in the public and private sectors; to consult service users, business and stakeholders, and set targets for improvement.
Local authorities had to be open-minded about service delivery according to who could deliver Best Value to the public, which may involve joint venture companies or private enterprises. "Local authorities must publicise their performance plans," he said, by comparing past performance and reviewing key results.
Inspection
Waste services are subject to inspection and intervention. The Act provided the protocol for Local Government Association and DETR monitoring by involving the Audit Commission, the Best Value Inspectorate and the Secretary of State. To meet the Best Value targets of the Landfill Directive and the Act, local authorities will need to create "innovative partnerships" with all waste management services -
WCAs, WDAs and joint waste disposal authorities.
"It is important for contractual parties to enter agreements or contracts that work for them within the legislation and give government inspectorates no cause to intervene," Mr Illey said.
Local authorities had to investigate the various options available for procuring services and take into account all the legal issues relating EU procurement regime, standing orders, non-commercial considerations and fiduciary duty, while considering private investment in capital assets needed to
deliver the services efficiently and allocating the risk to those best able to manage them.
 Len
Attrill, an associate of Robert Long Consultancy, discussed some of the perils and pitfalls in reaching Best Value agreements.
Unlike rigidly prescriptive and defensive CCTs, Best Value was less well-defined and required careful decisions to be made in drawing up contracts.
Even in a mature market, price was determined by the basic laws of supply and demand and it was "naïve to believe that Best Value can be achieved on the basis of demand without considering supply issues too," Mr Attrill said.
Specifications
Customers and suppliers had to be consulted on the specifications and Best Value meant not unnecessarily restricting the number of suppliers.
"You need to get the supplier's estimator to sharpen the pencil and contracts have to be attractive to the supplier, not just to the purchaser. It may be necessary to stand CCT on its head. In the past, the processes were often aimed at restricting suppliers. In the future, they may be aimed at encouraging suppliers and extending the choice.
"Best Value is more akin to a partnership or marriage and the true test of success is quality and longevity," he said.
BEST VALUE
Best value was introduced under the Local Government Act 1999 and became compulsory for all waste collection and disposal authorities from April 2000. The Act obliges local authorities to secure continuous improvement in a way that they exercise all their functions "having regard to a combination of economy, efficiency and
effectiveness".
CASE STUDY : MILTON KEYNES
Andy Hudson, head of infrastructure for Milton Keynes Council, outlined the process the council had used in implementing Best Value in its waste management strategy, which included collection, treatment and disposal, and associated services such as household waste sites and cleansing services.
Being a relatively new unitary authority, the council had inherited contracts from former borough and county authorities. Major contracts were coincidentally terminated in March this year and other incidental contracts were "engineered" to co-terminate to provide greater flexibility.
The strategy included recycling and embraced the emerging principles and targets of Best Value, which pre-dated EU directives and local legislation, said Mr Hudson.
In compiling its strategy document, which was ready by July 1999, the council consulted the waste industry, contractors, DETR, parish councils and neighbouring and nearby authorities, for example Luton.
It conducted a public survey and held focus panels to gauge public expectation of a waste management service.
"In this consultative and flexible approach, we could tap into local outside knowledge and were surprised by the extent of public's knowledge of waste management and found contractors that could provide more than one service," said Mr Hudson.
Tenders were not accepted on lowest price but were analysed by taking quality, technical, health and safety factors and other issues into account.
He suggested that it could prove more advantageous to allow prospective contractors the chance to offer a range of services within a set budget.
Paul Redman, deputy general manager of Cory Environmental Municipal Services, gave delegates a private sector perspective of implementing Best Value. Cory started its Onepass service contract in Milton Keynes in October this year, which reduces the number of vehicles on the town's roads.
In an innovative Best Value bid, Cory collects residual household refuse each week. At the same time and in the same vehicle it collects different recyclables on alternate weeks: glass, plastic and cans are collected one week and newspapers, magazines and garden waste on the alternate week.
"Best Value delivers different kinds of service and needs effective partnerships, unlike CCT which did not take the cost of change into account," Mr Redman.
He criticised LAs for using private contractors for "free consultation" and the time restraints often imposed by councils for preparing tenders and the implementation of contracts. While contractors could provide the expertise and the systems, councils had to be aware of the time needed, for example, in transferring staff and delivering fleets in the start-up process.
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