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ARMSTRONG FACES CRITICISM OVER CCT REGIME SHAKE-UP

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The government is under pressure to improve on its proposed changes to the CCT regime. ...
The government is under pressure to improve on its proposed changes to the CCT regime.

Local government minister Hilary Armstrong unveiled plans in July to ameliorate compulsory competition as a precursor to the introduction of best value.

But as the deadline for consultation on the proposals passed today, unions and professional organisations criticised the minister for not going far enough on the finance competition requirement, credit for voluntary tendering and blue-collar de minimis levels.

The Association of Direct Labour Organisations, which has already attacked the government for failing to make a 'clean break' from CCT as it introduces best value (LGC, 1 August), fears the proposed white-collar changes will serve to force councils to keep concentrating on CCT rather than best value.

Alan Bowley, a principal adviser to the association, said plans to cut the finance competition requirement from 50% to 40% were insufficient.

Mr Bowley said the level needed to be returned to 35% - the percentage in place before Conservative environment minister Sir Paul Beresford's January CCT changes. In addition, ADLO wants the 'work in progress' credit, usually reserved for construction and property, extended to IT services.

The Institute of Revenues, Rating and Valuation also called for the finance competition requirement to be set at 35% in order to protect sensitive benefits work. The institute also wants finance departments to be given an extra six months' grace before being exposed to compulsory competition.

IRRV has produced a novel variation on the government's proposal to grant all work exposed voluntarily to competition after 1 October a credit worth 125% of its value.

This proposal would have the effect of reducing competition requirements. For example, an authority letting a voluntary contract for£600,000 would be able to claim a credit of£750,000. Accordingly, a competition requirement of 45% could be satisfied by a council exposing 36% of its work voluntarily.

But Stuart Reid, IRRV's head of policy and research, said the credit needed to be tapered to encourage best value.

Under the institute's proposal, authorities would attract a credit of 150% for work tendered voluntarily between 1 October 1997 and 1 October 1998. The credit would fall to 125% for the following year and 110% until best value is fully introduced.

The Trades Union Congress is concerned that the proposal to increase the de minimis level for blue-collar work from£100,000 to£150,000 from next month will have little impact. Unison in particular wants the level raised to nearer£300,000, thus enabling more councils to protect more of their manual labour from competition - a move ADLO supports.

Unions also want an explicit regulation allowing authorities to consider non-commercial factors, such as equal opportunities, in the tendering process.

Changes to competition requirements and de minimis thresholds

-- Finance to fall from 50% (40% in counties) to 40% for all councils.

-- Construction and property to fall from 65% to 55%.

-- Housing management de minimis to be pegged at 4,000 properties. Welsh housing management de minimis to be raised from 2,500 to 4,000.

-- Blue-collar de minimis to be raised from£100,000 to£150,000 from 1 October.

Enhanced credit for voluntary tendering

Work voluntarily exposed to competition after 1 October to attract a credit worth 125% of the work, which can be used against CCT requirements.

Timetables for professional services

-- London boroughs and metropolitan districts: from October, 12 months for legal and construction, 15 months for finance and personnel and 18 months for IT.

-- Status quo shires: the implementation date for personnel is moved from April 1998 to January 1999 and finance from October 1998 to April 1999.

-- Councils reorganised in 1996 and 1997: timetables to be extended by three to six months, except IT which is unchanged.

-- Councils reorganised from 1998: no changes.

Restoration of credit for work in progress

Ministers are prepared to reinstate a credit for work in progress for construction and property services on a time-limited basis for councils with a CCT implementation date after 1 October. This would allow reorganised authorities to take advantage of the credit.

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