4. Options Appraisal

Having identified the business requirement, an options appraisal is required to establish the most feasible way to meet that requirement.

The National Procurement Strategy for Local Government describes the options that English authorities should consider in the context of Best Value Reviews and similar strategic reviews of services (the “make or buy” decision):

• In-house
• Public Sector Consortium
• Tactical Contracts (multiple)
• Non-Profit-Distributing Organisation
• Local Authority Company
• Joint Venture Company
• Partnering Contract
• Framework Agreement
• PFI (Private Finance Initiative)
• Concession or Franchise
• Closure or Disposal
• Mixture of the above

The presumption is that all Council Services should be periodically exposed to “genuine competitive pressure”, unless there are compelling reasons to recommend a different route.  This is a mandatory requirement of the best value regime.

When conducting an options appraisal there are a number of internal options:

a)     To cease the service in whole or in part where there is little or no demand for the service from local people; and/or where the costs of provision outweigh the overall benefits of provision; and/or where many other providers exist whose service is better or less expensive than the Council’s.

This may be inappropriate if there is a statutory duty for the council to provide that service not necessarily directly; and/or where the demand for the service may be small but is the only way of reaching a discrete or vulnerable group.

b)     Another option is to restructure or reposition the in-house service where there are no developed supply markets for the service; and/or where there are exceptional legal, practical, policy or other issues that have ruled out competition at this stage.

This may be inappropriate where contracts do not allow for change and negotiation and /or where the costs of change outweigh any benefits.

c)     Alternatively, the Council could jointly commission or deliver the service with another public or voluntary sector provider. 

d)     The Council may wish to set up a new function or unit to deliver a particular service where a review has identified the need for a service or a gap in provision and there is a clear user need; and/or where the Council agrees to take on the provision of a service from an existing body; and/or where the Council is clear about the need for the service and a budget can be made available. This may not be appropriate where the cost of provision is prohibitive.

Next: Code of Conduct for Employees and Councillors

• Introduction
• Regulatory Framework
• Project Management
• Options Appraisal
• Code of Conduct for Employees and Councillors
• Preparing to Purchase
• Kent Authorities' Contract Standing Orders and Purchasing Guide at Thanet
• Collaborative and Partnership Working
• Pre-qualification and Accreditation
• EC Procurement Regulations
• Standard Contract Documentation
• e-Procurement
• Sustainability and Best Value

E-mail: contracts@thanet.gov.uk

Tel: 01843 577111