When Central Governments start talking about Compulsory Competitive Tendering (CCT) it is the element of 'compulsory' that immediately starts alarm bells ringing in Local Government. At the recent NSW Local Government Association Annual Conference in Dubbo, delegates passed a motion rejecting Compulsory Competitive Tendering for Roads and Traffic Authority (RTA) roads. They have called for a moratorium on the proposed competitive tendering for roadworks until a social impact assessment is undertaken.
Where CCT has been used in Britain, and more recently Victoria, the key complaint from Councils was the loss of autonomy, particularly in regard to making decisions which best reflect the needs of their residents and locality. The one size fits all approach takes away flexibility. Councils are forced to put services out to tender. This can be detrimental to their community.
LGA President Peter Woods believes that NSW Councils' reaction to the recent proposal to introduce CCT for roadworks is understandable as this could 'potentially hurt the economic and employment prospects of whole communities'.
According to Victoria's new Minister for Local Government, Bob Cameron, CCT was a key issue in regional and rural Victoria during the recent State election. With the Bracks Government winning vital seats in these areas, it has come as no surprise that legislation has already been introduced in Victoria to replace CCT with a more flexible model.
The Minister is emphatic that the new model will be 'Best Value Victoria' not 'Best Value Blair'. This addresses concerns that Britain's approach to Best Value is now under question due to cost blow outs. With Victoria's new legislation following best practice principles of continuous improvement, meeting community needs and value for money, the Minister has stated that development of guidelines for Victoria's Best Value model will include close consultation with Local Government.
Both the Municipal Association of Victoria (MAV) and the Victorian Local Governance Association (VLGA) have welcomed the removal of CCT. MAV President Brad Matheson agrees that the jury is still out on Best Value in the UK. However, he believes that a partnership between Local Government and the State Government will enable the detail to be worked through resulting in a practical and sensible framework for Victoria that does not need to mirror what is happening in the UK.
VLGA Secretary Mike Hill said that although CCT did deliver some benefits it was not a process the Association advocates. Describing it as costly to implement and disastrous for rural municipalities, he said it was 'an ideological experiment that produced some incidental benefits but at a great cost to communities and Local Government'.
VLGA has concerns that, in its relief about the removal of CCT, Local Government is in danger of embracing Best Value too quickly. As Mike Hill rightly points out, used inappropriately Best Value could prove to be worse than CCT.
Councils, large or small, rural or metropolitan all have one thing in common. They are endeavouring to do the best for the community within the tight constraints of the resources they have available. To do this, best practice, continuous improvement and value for money are fast becoming second nature to Councils.
However, some Central Governments have mistakenly believed greater efficiencies in Local Government can only come from their direction. Too often they have used their legislative muscle to undermine Local Governments' most important role, that is the ability to make decisions that best meet the needs of their local community.
With the Victorian experiment with CCT now over, the NSW State Government's move in this direction will no doubt continue to be rocky if it pursues a path of competitive tendering that is 'compulsory'.