Shortfall in Best Value Compliance

The guide to achieving a whole of organisation approach to Best Value is a good document, however it has a major shortfall. When a Council decides to terminate a service or dispose a serviced oriented asset, a Council can legitimately excuse itself from complying to best value principles.

 This is the case witnessed in Monash Council, when it recently decided to sell off its residential aged care facilities and formally communicated publically that it is not obliged to comply with best value principles because service termination and assets disposal, despite association with services, is not within the scope of legislative best value compliance criteria.

 In business applications, services (and assets) are managed on a lifecycle basis, which implies best practice value should apply from service conceptualisation to termination or asset acquisition to disposal. The consequences of not applying best value principles in a service lifecycle management context means that any Council can disregard its legislative obligations to show how its decision to terminate/dispose a service oriented asset  can yield best value benefits and show their associated evidence based measures for the community.

 In the case of the Monash Council, they refused (on the grounds of commercial in confidence) to disclose the financial and social costs and measurable benefits of disposing residential aged care facilities and reallocation of disposal funds that can show genuinely without doubt are in the best interest of the community. They also choose a time to sell when sale proceeds are not maximized for best returns.

Because of this identified loophole in the LG Act and the guide to achieving a whole of organisation approach to Best Value, some Councils can discretionary decide to dispose services and assets, not necessarily yielding best value to the community they serve and can refuse to disclose cost-benefit justification details as they like.

As witnessed in the Monash case, without best value demonstration in disposing services or assets, transparency issues are more easily fostered and construed to support hidden agendas in decision making, and resulting in the community losing trust and confidence in their Council.

This practice gap has been reported to the Ministry of Local Government  (LG) to be addressed and help enhance LG reform improvements in best value compliance.