To say that 2020/21 has been a significant year for local government is an understatement. The changes in ways of working brought about by the pandemic can be seen across all areas of the council, and this is also true for overview and scrutiny.
This blog shares some initial findings from our latest annual survey, relating to scrutiny during the pandemic and scrutiny of finance and commercial activity. The full results of this year’s annual survey will be published after the local elections, in May.
Scrutiny during the pandemic
200 different councils in England and Wales responded to our survey , and it is positive to note that in over half of these councils scrutiny activity continued as soon as it was possible after regulations came into force permitting remote meetings.
Reflecting on the move to conducting council business online, around 70% of the officers and councillors that took part in our survey would like to see the rules around remote meetings made permanent. This is something on which we continue to work, supporting legal action being taken by Hertfordshire County Council, LLGA and ADSO.
A persistent area of interest to us is what enables scrutiny to operate effectively, and what inhibits effective scrutiny from happening.
We are pleased to report that overall, responses were positive then negative when asked about scrutiny’s effectiveness in overseeing or supporting the council and local people on matters relating to the pandemic. And it is interesting to delve a bit deeper into those councils that responded positively, and negatively, to understand the conditions in place for scrutiny to be effective.
For the councils that thought scrutiny was very effective in supporting the council and local people on matters relating to the pandemic:
- Over 80% agreed there is a cross-party approach to scrutiny
- Over 80% agreed there is a constructive relationship between scrutiny and the executive
- Over 60% agreed that there is parity of esteem between scrutiny and the executive
- Over 70% agreed that scrutiny works hard to involve and engage the public in its work
When compared with the councils that thought scrutiny was very ineffective in supporting the council and local people on matters relating to the pandemic the contrast is striking:
- Less than 30% agreed there is a cross-party approach to scrutiny
- Less than 20% agreed there is a constructive relationship between scrutiny and the executive
- No one agreed that there is parity of esteem between scrutiny and the executive
- Less than 30% agreed that scrutiny works hard to involve and engage the public in its work
These conclusions are more stark than has been the case in previous years, demonstrating the particular importance of culture – behaviours, attitudes and values – to good scrutiny. We plan renewed work on this in 2021/22, engaging with those on the executive side to bolster awareness of and positive attitudes towards the scrutiny function.
This also highlights the need for concerted efforts to feed in views of residents, for scrutiny to be able to make meaningful contributions to the work of the council and lives of its communities.
We have recently produced a framework detailing the importance of culture and behaviours in good governance generally, you can find out more here.
The existence of an open and transparent culture that welcomes constructive challenge can be difficult to maintain at the best of times. But the role of scrutiny is especially important in the context of crises and uncertainty, to give that vital overview of complex systems and partnership working and to reflect community concerns.
There is at times an assumption that scrutiny is best placed to be involved ‘after-the-fact’, and whilst there is undoubtedly an active role for scrutiny to take in understanding lessons learnt from the pandemic, it has an essential role to play in testing assumptions and shaping responses so that local action can be refined and assurance can be provided as situations unfold. Our view is that active learning, through scrutiny, of lessons from the pandemic should start now, if it has not already done so.
Scrutiny of finance and commercial activity
The impact of the past twelve months upon already constrained local authority budgets has raised big questions about councils’ financial resilience and it is impossible to overlook the recent controversy around councils’ commercial activity.
Unsurprisingly, almost 80% of survey respondents agreed that their council was currently under considerable financial pressure.
Only 60% of respondents were confident that scrutiny is able to adequately oversee matters relating to council finances. There is even less confidence around the oversight of matters relating to the council’s commercial activity. Worst of all, below 40% think that scrutiny has an understanding of the council’s overall exposure to risk.
When asked which actions might improve scrutiny of financial and commercial matters, the top two answers were: better access to information in a more timely manner; and a clearer role for scrutiny. It is troubling that we still see examples of large amounts of information being held back from councillors for reasons of “commercial confidentiality”. This is something on which we propose to take action in the coming months.
Local government finance is particularly complex, and effective financial scrutiny is both an important aspect of the wider governance framework and a key part of accountable decision making. Scrutiny needs to be supported in getting an understanding of how spending matches against policies, the exposure to significant risk, and must be presented with regular information so that elected members can ask questions and challenge the affordability and deliverability of council services and investments.
Furthermore, equipping members with the tools to scrutinise councils’ own financial matters, guided by value for money, will help them to recognise the understand the diverging objectives that apply to commercial activity – even if carried out by companies wholly owned by the council. Arguably, it is a lack of appreciation of this divergence (and what it means for risk) which causes some of the more significant governance challenge around commercial activity.
You can read more about our position on financial scrutiny in the guidance we published with CIPFA last year here.
Whilst these initial findings focus on the pandemic and council finances, there are numerous other challenges to scrutiny mentioned by survey participants, as well as many successes of scrutiny highlighted. We will be publishing a more detailed analysis in the coming weeks, which will also include detailed comparison of the evolution of scrutiny practice in recent years.