Over the past few years there have been an increasing number of councils that have required some form of external intervention or additional scrutiny.
While hoping for the best, recent economic and market events increase the possibility of more to come – the upcoming announcements of the chancellor and the ensuing local government settlement will combine to be the defining moment for local authority finances for the coming years.
These interventions are normally a consequence of financial or governance issues and often both. The level of intervention varies, but has in many cases led to the need for interim or permanent replacements of personnel at the most senior levels. In some cases that has included the s151 or other statutory officers. The new appointees are then expected to both clean up the financial Augean stables as well as to take the authority forward. In reality, is this a realistic or reasonable expectation of anyone with so many stakeholders to please at the same time – commissioners; improvement panels; local politicians from all groups; auditors; inspectors; key partners; unions; workforce; management teams; and the all too easily forgotten citizens?
The nature of government intervention is in particular about early evidence of recovery while driving improvement forward at pace. These can be challenges even in the most benign circumstances and with a reliable, stable and experienced team. Both recovery and improvement will always rely on a solid financial base. This creation almost invariably requires the review of past policies and decisions, transactions, accounting and contractual arrangements. Very often there will be the need to correct errors of the past, often looking at transactions and deals struck some years previously. All of this is of course at the same time as giving external auditors comfort that due process has been followed during a period where accounts may not even have been signed off.
The whole process of problem identification and solution in itself will often take a considerable amount of time and effort from someone who may also be involved in making arrangements to take the authority forward. Specialist management consultants or peer challenge may lighten the load, but even these require client management or coordination.
We would again ask the question: is it reasonable or realistic to expect one person to both take the authority forward from a state of jeopardy and still clean up the past? Does this simply create the next big risk? We would like to suggest a better way.
The need to deal with the past is in most cases a time limited exercise, to both deal with the financial and accounting consequences of past decisions and importantly to review the governance arrangements that led to them. It is essential that governance lessons, difficult though these lessons may be, are learned. Inevitably, changes will need to be designed and implemented to enable both the council concerned and the sector as whole to understand and reflect on what happened and hopefully to avoid history repeating itself. To do this may need broad experience and a level of concentration and focus to deal with issues of great complexity and to translate these into sustainable solutions.
Managing the future would, of course, benefit from these attributes. However, the main issues become about rebuilding process and managing relationships with that wide range of stakeholder interests. This is a role that needs enormous energy and vision and can very quickly become a 24 / 7 challenge. This commitment is critical in taking the council on the improvement journey and then help them fly into clearer skies beyond intervention. This is a role that benefits from a presence that extends beyond the initial disruption and ‘chaos’ and where the individual can then move on to manage in gentler headwinds; potentially a role needing longer term engagement with a clear view as to how the future financial management of the council will work . This of course with the support, advice and challenge of a critical friend sweeping up the lingering problems created by past events.
One of the key failures, in our view, of the one person acting like Janus, is that it leaves them like the Roman God of the same name on the edges of heaven and earth and unable to do either role properly . Something will have to give and what can happen in our experience, is that the improvement journey can be compromised simply by the lack of available time to undertake the required planning and foresight to bring the council forward.
So, what’s the solution? Simply, we think that these are held more safely and with more impact when managed by a team of two; two skilled and committed individuals, one checking in the rear view mirror from the cockpit and one at the yoke, controlling speed, height and direction of travel while keeping both passengers and crew safe, informed and on the same flight. The two must have a clear understanding of their respective roles, not least relationships both within the council (including elected members) and externally.
Is this duplication; we don’t think so. We believe that, while this approach may be an extra short term cost, the separation is more likely to attract a wider range of talented candidates both earlier and later in their careers into lead roles that without separation look daunting, perilous and, frankly, just too difficult. Separation of duties should also allow for more rapid resolution of historic issues that enable the council to move forward to a new normal sooner.
Which of the two should be the statutory post holder? Well that’s for the council to decide; maybe there could be a transition from the rear gunner to the pilot? Could we suggest in any event the model encourages the pilot to fly the plane into the sunset with confidence that past difficulties are in full sight and being fixed.
Chris Buss was appointed as Liverpool City Council’s acting s151 officer and director of finance in June, and stepped down from the role in September. He has formerly worked at Croydon, Kensington & Chelsea and Wandsworth LBCs
Duncan Whitfield is Southwark LBC’s strategic director for finance and governance
