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One of the immediate consequences of central Government intervention in councils – the kind of intervention that is expected imminently in Northamptonshire – is that commentators and journalists begin to crawl over the council, dissecting what went wrong and offering their own insights.

These sorts of “noises off” are often precisely what the council involved – bruised after brutal criticism, reeling with the thought of what comes next – doesn’t need. This period is a punishing one for councillors and officers, many of whom have done nothing wrong but who find themselves attached to a council whose name will be used as a synonym for the phrase “basket case” by speakers on the conference circuit for the next year or so – or at least until attention turns to the next victim.

So this isn’t going to be one of those kinds of blogposts. I’m not going to talk about Northamptonshire specifically – I’m not, at this point, going to comment on the prescription for change (intervention and reorganisation, natch). What I do want to do is to take what Max Caller, the Best Value Inspector whose report on Northamptonshire was published last week, says about budget scrutiny and some associated issues, and to reflect on what it means for the sector as a whole.

In line with the tone of the rest of the report, Caller is frank about both budget scrutiny’s shortcomings, and the lack of proper oversight and implementation of the council’s plans for transformation. I am quite confident that the report will be read by councillors and officers up and down the country with a gnawing sense of familiarity. Caller highlighted a range of issues:

  • The council’s ambitious new operating model has made it difficult for backbench councillors to establish what was going on, particularly on budget management;
  • Members were repeatedly stonewalled when trying to obtain basic information about the budget;
  • When it did happen, budget scrutiny was too late, and too superficial, to make any real difference.

New operating models

Many councils are pursuing radically different operating models – often spinning out services to a range of trading companies, CICs, staff mutuals, private sector and voluntary sector bodies. Under this “hub and spoke model” the council is a commissioner and manager of services – not, by and large, a deliverer. We covered these issues at length in our 2015 publication “The change game”.

There is a difference between ambition and actual practice. Setting out these kinds of plans on paper is easy but putting them in place is exceptionally challenging, and requires a significant investment in time and resources. Such measures will not deliver immediate results.

Where new operating models are proposed and developed, scrutiny (and wider member involvement) has to be central. This is not just about testing and challenging the assumptions that underpin those models – although this is a vital task. It is not just about breaking down the risk of groupthink that can beset those plans – because senior officers and cabinet members may be emotionally invested in seeing them implemented. It is, above all, about member buy in and visibility. A change to the operating model on this scale involves a shift in governance, in accountability – but not in responsibility. For councillors, the risk is that it is the worst of both worlds – spun of services being opaque and unaccountable to councillors day to day, but where service failure (if and when it happens) nevertheless putting responsibility squarely at the door of the elected member. Officers in particular owe members a duty to ensure that they are bought in to what is happening – at the start and as plans develop.

Budget scrutiny

On this point I am going to be very robust. Are you doing budget scrutiny mainly in January? You’re doing it wrong. Are you doing it based on papers that only become available when the agenda is despatched? You’re doing it wrong. Are you doing budget scrutiny by trying to go through the draft budget line by line? You’re doing it wrong.

When I say “you” here I don’t mean “scrutiny officers and members”. I mean councils. Budget scrutiny is a corporate endeavour – a critical part of the assurance framework for councils, central to the regulatory and control environment. I have run out of patience for those councils – and for s151 officers and Cabinet Members for Finance – who view proper budget scrutiny as an irritant and non-executive involvement as something to compartmentalise in a couple of directionless “workshops” and a formal committee meeting which in some cases may precede the despatch deadline for Budget council by only a few days.

Many councils can (and do) do this better. They recognise the need for scrutiny involvement early and often. But such practice is not widespread. I am staggered that, once again, I am writing down a basic timetable of the kind of involvement scrutiny should be expecting at various stages in the budget development cycle. But here we go again.

  • April/May: review of the MTFS as overall themes and constraints for next year’s budget begin to emerge;
  • June – August: review of underlying risks and opportunities associated with next year’s budget, review of previous years’ spends and in-year monitoring to evaluate the strength of predictions, proposals and control systems;
  • September – November: oversight as detailed plans begin to be developed, liaison with officers strategically and department-by-department, with scrutiny being designed to tease out major expected spending pressures in the context of in-year performance, finance and risk issues;
  • December – January: budget scrutiny winds down. Draft budget is prepared. It may be appropriate (depending on the informality or otherwise of the above interventions) for scrutiny to report to Full Council on its activity in order to inform debate at Budget Council.

To be clear, this is not the “optimum” form of budget scrutiny, it is the minimum. You may read this and disagree. If so, good. Let’s have a conversation about it, and let’s start to agree a way forward on this issue as a sector, because the window to influence the 2019/20 budget (that isn’t a typo) is fast closing if councils don’t put in place an agreed course of action soon.

As a first step we would recommend that *all* councils debrief on 2018/19 budget scrutiny in the next four weeks and put in place a clear and coherent plan for 2019/20 budget scrutiny inmediately after.

What about resourcing this? Firstly – prioritise. Secondly – support and assistance should come from Finance. Thirdly – mainstream budget scrutiny into scrutiny’s wider work.

If you are not taking this very, very seriously – if you are not looking with a critical eye at the ways that you do this now – you should be.