Councils are taking a "legalistic and mechanical approach" to meeting a key government audit, according to a leading think tank.

A report released by the Economic and Social Research Council on Friday questioned the approach local authorities take with a key government audit process.

The "Best Value" inspection requires councils to review how they operate based on the "four Cs" - compare, consult, challenge and compete.

The think tank said the system can provide an effective way of improving local government.The research was based on councils in six areas including Manchester, Derby and Oxfordshire.

But the report found some councils simply see the process as a chore that has to be carried out to keep central government at bay.

It warned that such a view has been encouraged by inspection processes which tend to be carried out in an ad hoc and informal way.

Understanding about how the review should be carried out is often fragmented and frequently depends on a small number of knowledgeable individuals.

"Approaches to Best Value could be divided into two broad groups: first, those in which Best Value was seen as a tool to accomplish performance improvement in line with locally established corporate and service goals; and second, those in which Best Value was viewed as a task which had to be completed to satisfy central government legislation," said the ESRC.