Decline and fall: understanding how and why local government fails, what leads to central Government intervention, and what comes after

Posted on 10/12/2018 by Ed Hammond.

Why do councils fail? What happens when they do?

As a sector we’ve been grappling with these questions for some time, but just at the moment they seem more pressing than ever. It’s not just Northamptonshire and the spectre of other councils potentially issuing s114 notices. Failure is often many years in the making. Councils become less outward looking, more introspective, more defensive – they develop narratives about themselves and their own performance which increasingly bear no relation to reality.

On the national stage we see the end product of this gradual slide when it escalates into the public domain – often precipitated by events that make no sense to outsiders. How can this have been allowed to happen? Failure seems so obvious and self-evident that we fool ourselves that we couldn’t fall into the same traps – and yet failure continues to happen.

In partnership with the local government thinktank Localis, we’ve published a discussion paper to begin to explore these issues. We’re worried that we don’t, in our sector, have the mechanisms to deal consistently with council failure – particularly as the risks (not only financial) continue to grow.

Our paper introduces the idea of a “typology of failure” – an articulation of the key factors that lead failure to happen. It explores the current national landscape around failure and improvements and tries to chart a course for how Government, and sector led, improvement and intervention might be enhanced – in particular, by more attention being paid to the strength of governance at a local level.

We think that strong local governance will need to play a stronger role as the tough climate for the sector continues. We need to be better at identifying and arresting the risks of failure – reducing the risk of intervention further down the line and feeding into the existing sector-led improvement framework.

We recognise that there are plenty of people out there with their own views around local failure and improvement. The experience of CIPFA’s attempts to moot a “financial resilience index” demonstrate that while this work is necessary, it is tough to get it right. We’re keen to hear people’s views – in the New Year we plan to refine and develop our typology, and our thoughts on strengthened local governance, by speaking to a range of people involved in intervention at a local level, to really dig in to what failure looks and feels like, and by so doing help others to recognise it and draw themselves back from the edge – particularly where the risks are imminent.

About the Author: Ed Hammond

Ed leads CfGS's work on devolution, transformation and on support to councils and other public bodies on governance and accountability.