Both elected members and officers need to be aware of conflicts with their democratic duties when involved in partnerships. In the fifth of our series on challenges to rolling out shared services, Denis Cooper looks at the governance implications for councillors and managers An essential ingredient of effective joint working is to ensure that governance structures enable the council to discharge its legal duties in relation to best value, and be a good steward of public resources. In this article, we will consider some of the key issues which need to be considered to ensure effective governance. A framework of relationships and accountabilities must be established so that members, officers and other nominees can understand what is expected of them. This is particularly so when joint working involves appointing representatives to a management body. Councils must set criteria for determining who the council’s representative should be, and procedures for making those appointments which accord with the council’s form of constitution. Representatives on outside organisations will have duties of confidentiality in relation to the local authority and the management body. And there may be circumstances in which these produce conflict. For example, the duties of a company director with regard to confidentiality may clash with his or her duties as an elected member. There will be circumstances where intelligence received in one forum may of relevance and help in the other forum, but it is not possible for that information to be disclosed. At a personal level, taking improper personal advantage of confidential information would give rise to a breach of the code of conduct, as well as a breach of director duties. Reporting back to the council is often a neglected area. Some authorities have a practice of appointing a lead officer in relation to all their outside appointments, as a point of reference within the organisation from whom they can obtain support, and a filter for feedback. And where financial assistance is more than £2,000, there is an obligation to state in writing to the council how the funding has been used. Arrangements for the council or committees to ask questions of members and officers who are appointed as directors must also be made. The under-used area of overview and scrutiny is one potential area where reviewing the work of outside bodies could be appropriate. New legal provisions govern the granting of indemnities to members and officers. Regulations and guidance govern the circumstances in which those indemnities can be granted. Many authorities have not yet applied their minds to the need to strengthen their indemnity arrangements and ensure that the indemnity covers all relevant circumstances. The organisation to which appointments are being made might have its own provisions for indemnity insurance, and one of the key inquiries to be made before participation in the organisation would be to establish what indemnities and insurance arrangements are in place. There is no indemnity against criminal liability for fraud, dishonesty or other criminal acts, nor for reckless or deliberate decision-making in the knowledge that, for example, the organisation is not able to meet its debts or to continue trading. The importance of partnership governance was recognised in a report published in October by the Audit Commission which is a helpful codification of many of the issues with suggested actions and responses. In commending the development of joint working, its key findings are that partnerships bring risks, complexities and ambiguities which can generate confusion and weaken accountability. The public needs assurance that public money is spent wisely. Public bodies should ask searching questions about those they are engaged in. Clear accountability is needed between partners. On this occasion we find ourselves in accord with the Audit Commission. n Denis Cooper is a senior associate with Eversheds. Eversheds is running a series of seminars on shared services for local authorities across the country in May and June. E-mail: nicolaarmstrong@eversheds.com
