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The government has announced a three-month review of the Best Value regime starting this week.

Transport, local government and the regions secretary Stephen Byers unveiled the review at the Labour Party annual conference this week and said it would aim to ensure that Best Value reduces bureaucracy. In particular, the review would examine whether performance plans under the regime can be simplified to ensure they "add real value".

"We will review the statutory guidance on Best Value to focus on higher standards and not just lowest cost," said Byers. "We will also seek to ensure that Best Value is neutral as to whether services are best provided by the public, private or voluntary sectors. However, we shall continue to have regard to the need for diversity and contestability and with alternative providers available both to challenge existing providers and to tackle failing services."

The review will also cover concerns over the transfer of local government employees to the private sector, as well as how staff could be more fully involved in the Best Value process. Finally, Byers added the potential for successful councils to carry out work for other councils, or for private and voluntary sector bodies, would be investigated.

The Best Value regime replaced the Compulsory Competitive Tendering scheme in April 2000 as a means of ensuring continuous improvement in public services. Authorities have to establish a rolling five-year review programme of all their functions, and monitor performance against national indicators.

But in recent months there have been increasing calls for an overhaul of a regime that has "bogged down" councils in red tape and needs "streamlining", according to the Local Government Association.