England & Wales Democracy, devolution and governance

What is a Best Value Notice?


This week, the central government issued a ‘Best Value Notice’ for South Cambridgeshire District Council over its four-day week trial.

The government is currently running a consultation on the Best Value Duty of local authorities.

A Best Value Notice is a letter issued to a local authority by the Secretary of State for Levelling Up, Housing and Communities. It sets out concerns about the authority’s performance and ability to achieve its Best Value Duty. It may require them to take specific actions to improve their services and achieve better value for money, report on improvement plans or engage directly with the department.

Essentially, it’s a firm tap on the shoulder and being handed a note which says: “Things seem shaky there, friend. You need to get back on the right track.”

So what is the Best Value Duty?

As outlined in draft guidance from July 2023, ‘Best Value Duty’ is a concept introduced under the Local Government Act 1999. This statutory obligation applies to local authorities – councils – and other public bodies. It demands that they constantly strive for improvements while balancing economy, efficiency, and effectiveness. In practice, this regulation relates to how these bodies achieve a balanced budget, deliver crucial services such as adult social care and children’s services, and ensure value for money in all spending activities.

In simpler terms, ‘Best Value Notice’ urges sound governance with accountable usage of public funds.

What can trigger a Best Value Notice?

When the central government thinks a council might not be adequately serving its local community, they can take action. They do this by giving what’s called a “Best Value Notice”. This evidence of failure could pertain to almost anything a council is responsible for, from managing finances to delivering local services to relationships within the council or, as we found out on 3 November, decisions taken about how to arrange working times.

Evidence of failure could include sources such as audit reports, complaints, public plans, data submissions to the central government, peer reviews, and sector inspections. There’s a comprehensive list of potential indicators in the draft guidance, which includes the big red flags like a damning audit to signals of poor governance like a hard-to-navigate website. Councils are expected to make use of the support made available to them, such as peer challenges offered through the Local Government Association. At a minimum, councils will be expected to have a financial or corporate peer review every five years.

What if a council thinks a Best Value Notice has been issued in error?

Presumably, councils would be welcome to make their case to the Secretary of State. However, the guidance also states:

“An inability or reticence to acknowledge clear failings and/or resistance to external challenge or scrutiny is indicative of failure to secure best value.”

So what happens when a Best Value Notice has been issued?

It really depends on what’s in the notice. The notice remains in effect for 12 months, unless it is withdrawn or escalated. And it depends what kind of Best Value Notice has been issued. Non-statutory notices may simply ask for more information and evidence of improvement and act as a warning. Statutory Best Value Notices are issued under the general powers (section 230) of the 1972 Local Government Act and require direct engagement with government.

Who’s had a Best Value Notice?

So far, only four non-statutory notices have been issued. All can be found on the Department’s website.

In January 2023, two were issued:

  • Middlesbrough Council was warned about concerns raised by an external auditor and cultural and governance concerns raised by a Chartered Institute of Public Finance and Accountancy (CIPFA) review. The notice required quarterly meetings with the Department for Levelling Up, Housing and Communities (DLUHC) about its adherence to performance improvements.
  • Peterborough and Cambridgeshire Combined Authority received a letter following ‘serious concerns’ raised by an external auditor, the authority’s own request for support and concerns about procurement. The combined authority was expected to engage with the Improvement Board, make progress at pace and meet quarterly with DLUHC.

In August 2023, Bournemouth, Christchurch and Poole Council was issued a notice based on ‘unrealistic’ financial plans, risk over an arms-length company and concerns about councillor and officer relationships. BCP council is relatively newly constituted and has enjoyed some changes of control during its short existence. The notice set out some training and cultural improvements, as well as setting more achievable financial plans.

And then, in November 2023, there was South Cambridgeshire District Council.

What happened in South Cambridgeshire?

South Cambridgeshire started trialling a four-day working week in January 2023. They claim this trial is already demonstrating benefits – by delivering 100% of the work in 80% of the time, improving staff satisfaction and retention rates, helping them to compete in a tight employment market without raising salaries and saving money by reducing their reliance on expensive contractors.

The council received admonitions from central government about four day working weeks, including a direction from Lee Rowley, the Minister for Local Government, to halt the trial. At the end of October, new guidance was issued on four day work weeks in local government. It was remarkable for its brevity and clarity – nonetheless, it can be further boiled down to ‘just don’t’ under the principle that councils would be removing 20% of their capacity.

And then, on 3 November, a Best Value Notice was issued to the council, requiring the council to work with independent data assessors and provide weekly returns to the department, including each week in retrospect, if they persist with the trial of the four day week.

So what?

The LGIU fully supports good governance, transparency and accountability, and we support central government working with local government to achieve better outcomes and better governance. However, we caution against blurring the boundary between policy formation and the regulation of value for money. It can be too easy to rely on important mechanisms of standards enforcement, when there is disagreement about policy or whether a new method of operational service delivery is a dreadful waste or a potentially positive step forward.

We also support councils who take reasonable risks, who try new things and innovate. Each council faces its own challenges depending on local conditions, including local labour markets. We know that there’s more than one way to deliver a service and more than one way for a council to efficiently organise its resources. And if we don’t try new methods of working, we’ll never find out what works. We also know that no one is closer to the challenges or the solutions than local government.

Pilots can be run in slipshod fashion, though that seems unlikely to be the case here. But on the face of it, this notice feels contrary to the spirit of best value – the pursuit of continuous improvement and better value for money. More importantly, it undermines local democracy, and the ability of locally elected representatives and their appointed officers to best determine operational methods of delivery suited to their local circumstances. 

Ingrid Koehler is Head of Content at LGIU. This article was a blast from the past for her, early-career she was a Best Value Officer at a London borough and has also previously worked for the Audit Commission. Research and support provided by Greg Stride.


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