18.Section 3 describes the general duty of best value. The duty is not described exhaustively, but requires best value authorities to make arrangements to secure continuous improvements in the exercise of their functions, judged against named criteria and with regard to a combination of economy, efficiency and effectiveness.
19.For the purposes of fulfilling the general duty, the section also imposes upon best value authorities a mandatory duty to consult with representative groups of people falling within specified categories, and in doing so, to have regard to any relevant guidance issued by the Secretary of State.
20.Section 4 provides for the creation of the performance measurement framework which will be applicable in respect of the duty of best value. It provides the Secretary of State with a discretionary power to prescribe by order factors of performance (performance indicators) against which best value authorities will be measured. In addition, the Secretary of State may set national standards in respect of any such performance indicators which he prescribes, and where he does so, best value authorities must meet the relevant standard in order to satisfactorily discharge the duty of best value. Section 4 also gives the Secretary of State discretion to specify different performance indicators and standards.
21.As a matter of general principle section 4 also provides that, in setting indicators and standards, and in deciding to do so, the Secretary of State must have regard to the general nature of the duty of best value described within section 3, and also to any relevant recommendations which the Audit Commission make to him in respect of performance measurement. In addition, before specifying performance indicators and standards, the Secretary of State will be obliged to consult with persons appearing to him to represent best value authorities and such other persons as he sees fit. The Audit Commission, which has responsibility (under section 44 of the Audit Commission Act 1998) for the prescribing of performance indicators, is expected to continue to analyse performance data under best value and make recommendations based upon its findings to the Secretary of State as to how the indicators and standards might be amended or adjusted in the future.
22.Section 5 is concerned with the manner in which best value authorities conduct reviews of their functions, reviews being one of the key procedural components of best value.
	Review is used here in the sense of requiring best value authorities to carry out an initial assessment of whether functions are to be performed, how, by whom and to what standard.
Thus an authority which was considering how education might be provided to excluded children would begin, initially, by considering whether it ought to provide the service at all. In this case, there are certain statutory standards that the authority needs to observe in terms of the minimum level of education provided, and its further consideration under the review might result in the authority only providing the statutory minimum level of education, or something higher; and giving an indication of how the function is to be performed—e.g. by home visits or through education centres.
23.The section provides that best value authorities must review all of their functions within a time period which is specified by the Secretary of State. The Government expects that, initially, this period will be set at five years. In conducting reviews authorities must also have due regard to the general nature of the duty as described within section 3, and to any relevant guidance issued by the Secretary of State. The section also describes a number of key stages in any review which authorities will be expected to complete. These include not only a consideration of the level at and the way in which a function should be performed, as is described above, but the best value authority’s objectives with regard to the function and the extent to which it is meeting any standards and targets which have already been set. The Secretary of State will have a power to make orders setting out what elements will comprise a review, and to issue guidance on them.
24.The section provides the Secretary of State with a power to issue guidance to best value authorities on the form, content and timing of reviews, and may include specific guidance on the way in which the performance indicators and targets should be used in attaining best value. As will be seen under section 6 below, action plans and targets emerging from the conduct of reviews are expected to form a key part of the content of Local Performance Plans.
25.As is provided for at paragraph 7.18 of the White Paper Modern Local Government: In Touch With the People (paragraph 7.26 of the White Paper Local Voices: Modernising Local Government in Wales), section 5 provides the Secretary of State with a power to issue guidance in respect of the main component elements of the review process.
26.Section 6 requires best value authorities to prepare and publish Local Performance Plans (LPPs) on an annual basis. These plans are the main instruments by which best value authorities will be held accountable for delivering best value by their local communities.
27.The section requires best value authorities to produce their plan for the financial year ahead by 31 March, and annually thereafter; and will allow the Secretary of State to alter the date by which plans must be published. The section provides for LPPs to achieve three main functions:
	first of all, to provide local people with a summary of how far the authority was successful in meeting its previous year’s objectives and performance targets, and the results of its performance as compared with that of other best value authorities;
	secondly, to inform local people of the performance targets it has set itself for the following year and future years, where necessary, and the extent to which it is on the way to meeting any longer term targets. Where it is not on course, this may include an outline of what action(s) it is taking to remedy the situation;
	thirdly, to summarise the outcome of the reviews carried out under section 5 above, which will usually be expressed in the form of revised targets, and the future programme for achieving them.
28.The Secretary of State will have a power to make orders in respect of best value authorities setting out the elements which must be included within a Local Performance Plan. He will also have a power to issue guidance in respect of those orders to which best value authorities must have regard.
Commentary on Sections Part I: Best Value Sections 3-6 : Duties