Notes from our event on the governance implications of Government intervention in local councils

Posted on 13/12/2023 by Ed Hammond. Tags: intervention

On 31 October 2023, the Centre for Governance and Scrutiny convened an online roundtable for governance professionals to talk about their experiences (and expectations) relating to Government “Best Value” interventions. The intention was to understand the impact that intervention has on local governance systems and arrangements. This is a summary of the conversation. 

This part of our work is supported by a grant from HM Government. 

Overview

Participants were present from a number of authorities either under intervention or where intervention may be in prospect. There were thirty participants in total and the event took place under the Chatham House rule, so while we are able to share what contributors say, we won’t be sharing their identities. The event began with the sharing of perspectives from a number of speakers with direct personal experiences, before moving on to a general discussion.

Purpose of this note

This briefing note serves as a summary of the key insights, discussions, and takeaways from this event. It also provides some additional contextual information. It is designed to provide a resource for council officers, elected members and other stakeholders interested in gaining a deeper understanding of the specific challenges and opportunities experienced by governance professionals where Government is either under way or in prospect.

We should stress that the content of this note reflects participants’ views specifically in relation to governance issues and pressures relating to intervention, rather than broader commentary on wider policy issues.  

What is council intervention?

When councils are seen to be failing, Government may use its statutory powers to intervene. The legal framework for the Government to undertake this form of intervention in England is primarily outlined in the Local Government Act 1999 and the Local Government Act 2000. These Acts provide the Secretary of State with powers to intervene in the affairs of local councils under certain circumstances. This intervention can range from issuing a formal direction to the council to appointing commissioners with specific powers. The intervention can take various forms, depending on the severity of the issues. It may involve:

• issuing improvement directions,
• appointing commissioners to oversee specific functions,
• in some cases, taking direct control of the council.

Commissioners appointed during an intervention have specific powers to address the identified issues. They may have expertise in areas such as finance, governance, or local government management. Commissioners work to stabilise the council’s operations and implement necessary improvements.

The government published a guide in 2020, ‘Statutory intervention and inspection- a guide for local authorities’ which provide local authorities in England with in-depth practical guidance on statutory inspection and intervention. They also published further guidance in 2022 ‘Guidance on our intervention work with local authorities – October 2022 (publishing.service.gov.uk)’.

The Secretary of State has formally intervened in a number of local authorities since 2010:

• Northamptonshire CC
• Rotherham MBC
• Tower Hamlets LBC
• Liverpool CC
• Birmingham CC
• Slough BC
• Sandwell MBC
• Thurrock BC
• Woking BC
• Slough BC
• Croydon LBC
• Nottingham CC and
• Doncaster MBC

Before that, Hackney Council was the first council subject to a best value intervention and statutory directions.

Whilst there were a relatively small number of councils placed under intervention in the 00’s and the first part of the 10’s, by the end of the decade and into the 20s, numbers had begun to rise.

What have councils’ general experiences been?

• Intervention often (by definition) happens in chaotic environments, and this sense of chaos can ensure longer than initial expectations. Stabilisation of councils that are newly subject to Government intervention can take some time;
• There can be a sense of fatalism amongst both members and officers, and an environment in which intervention is welcomed as a “way out” of intractable problems. This reflects the conclusion that some people within councils reach that they cannot resolve their own problems. This can also lead to councils seeking to be over-reliant on the assumption that Commissioners will seek to use their powers to issue directions regularly and that therefore proactive decision-making and problem-solving can stop;
• Paradoxically there can sometimes be an attempt by councils to underplay the impact and effect of intervention as it begins;
• The timescale of improvement under intervention is critical to understand. Typically, a 6-8 month period transpires before noticeable improvements begin to take place.

Key themes

We have ordered comments to present a thematic summary of the roundtable discussion. This discussion focused on the period when commissioners first begin working in the authority, and the ongoing period of intervention itself, rather than the steps leading up to the failure that precipitates intervention in the first place. We are focusing on:

• The personal and political dynamics involved in working with Commissioners;
• Addressing cultural change organisation-wide;
• Staff support and development;
• Specific governance experiences and challenges;
• Preparing to emerge from intervention.

Commissioners’ Powers and Intervention Dynamics

• Personalities, particularly those of commissioners involved in the process, play a pivotal role in reshaping the culture of the organisation, as well as shaping the culture and approach of the intervention itself. This means that a lot rests on the personal character of commissioners and those in senior leadership positions in councils under intervention.
• Commissioners generally position themselves as facilitators, emphasising their role in allowing the organisation to drive decisions. Their approach involves refraining from dictating the correct path but intervening when a potentially detrimental decision is about to be made.
• The absence of a structured setup for recording decisions taken by commissioners poses an early challenge during intervention – councils have to carry out work (at an otherwise challenging time) to put in place clear and consistent arrangements for commissioners as a key part of the governance framework.
• Distinguishing between the roles of commissioners in providing feedback, offering advice, and giving directives is critical. Establishing a commissioner decision-making protocol becomes imperative to navigate the uncertainties associated with their involvement.
• Member scrutiny of commissioners’ activities can happen, and can be productive, but has to take place on the understanding that commissioners’ ultimate accountability is to the Secretary of State. Constructive challenge requires political acumen
• Democratic services professionals can be positioned as valuable advisors to commissioners, leveraging their knowledge and insight into the broader political context and background at the authority, which is useful for commissioners new to the council.
• The Secretary of State defines the scope of intervention, which is non-uniform – this lack of uniformity can produce challenges with regard to mutual expectations.

Cultural Change: overall

• Intervention entails being under a microscope. In the view of some participants this extends beyond merely fixing broken elements of the way the council works to being able to demonstrate that the council under intervention is actually adhering to a higher standard than other councils. (We should stress that Commissioners’ formal role is to ensure that Best Value standards are adhered to, not a notional higher standard of service performance, which is down to individual councils to demonstrate).
• Unpacking and reshaping organisational culture is a central challenge during intervention. This involves starting with values and behaviours. In one example given, the leader initiated a supplementary code of conduct, setting a higher standard for members under commissioner scrutiny.
• Effecting change in an organisation grappling with fundamental issues poses a substantial challenge during the intervention.
• Examination of the intake of members, including considerations about their origin and selection by groups, becomes a focal point. This is a matter generally led by political groups (and by political parties locally), but there is also a connection to councils’ wider responsibility for member development. Member turnover, as much as officer turnover, is a theme in recovery from failure.
• In a wider sense, personal shortcomings among leaders, both in officer and political roles, contribute to the complexities faced during the intervention.
• Intervention can be a catalyst for the flourishing and growth of organisational processes—described metaphorically as “process fertiliser.”
• The intervention period offers a chance for rebuilding with the right values, prompting a reconsideration of expectations, behaviours, standards, and conducts—a holistic organisational reset.
• Drawing from the challenges faced in one local authority, the establishment of a culture of good governance proved to be a substantial task, requiring a significant investment of time over a lengthy period for proper embedding. The intervention was firmly rooted in addressing governance failures.

Cultural change: staff support and development

• Councils under intervention may undertake a significant restructuring, involving the removal of top leadership layers and those beneath. The unpredictable nature of this process, where turnover affected the entire organisational structure, was highlighted. Participants talked about the need to take a cautious approach, avoiding encouraging individuals to leave amid challenges.
• Burnout emerged as a notable issue, with the recognition that commitment could only sustain individuals for a limited period, leading to a two-year turnover of senior staff in some cases. Culture change is an added pressure here.
• Taking people along on the improvement journey is essential. An example of an authority was given where a voluntary improvement panel has illustrated how councils can take serious, proactive measures on improvement.
• Learning and development initiatives were crucial to ensure a comprehensive understanding of roles and responsibilities among personnel. It was noted that sometimes these efforts are perfunctory, or that systems to support the clear transaction of roles and responsibilities can develop into inflexible processes treated as tickbox exercises, which can undermine a behavioural commitment to good governance.
• Embracing change during intervention presented opportunities for officers to take a leadership role, contributing to a shift in the political narrative and facilitating the removal of ineffective practices.
• The arrival of new personnel brought fresh energy, vision, and momentum – which proved beneficial despite the significant disruption of losing long-standing, and good, staff. Transformative improvements could elevate the organisation from a perceived state of failure to being recognised as having improved.
• The intervention was described as intense and arduous, with the added pressure of being answerable to a commissioner. The toll on personal lives and the condensed timeline for accomplishing what felt like eight years’ worth of work in four years added to the complexity.
• Stress among other officers navigating decision-making processes during the intervention was acknowledged as a significant challenge.

Specific governance challenges

• The impact of small, practical changes (such as revision of the process of report sign-off for Cabinet – which under intervention will usually involve Commissioners signing off and commenting on reports) cannot be underestimated.
• Individuals with demanding roles from diverse backgrounds are often brought in during intervention, contributing to an increased demand for reports, oversight and information.
• The influx of additional reports and information can be of variable value, often compromised by the busy schedules of those involved and the sheer volume of requests.
• Governance-related challenges were emphasised, with a distinction made between issues stemming from political dysfunction rather than structural inadequacies – there can be a tendency to focus unduly on structure and process changes, especially on decision-making systems.
• Method and timeliness of decision-making, early engagement, changed deadlines, increased scrutiny, and enhanced quality of reports are identified as key areas where shifts will be noticed. Commissioners represent a new “pole” of authority, alongside senior officers and Cabinet members.
• Roles like the Chief of Staff to Commissioners can significantly influence the post-intervention landscape. The role of the PA for the commissioner emerges as one of the pivotal positions within the organisation hierarchy.
• The democratic impact of the initial removal of powers, followed at the end of the process by their reinstatement, emerged as a key pillar. Resetting of democratic values has served to intensify the effectiveness of scrutiny, and can lead to increased pre-decision involvement with members. Instances of constructive collaboration, such as opposition participation in budget setting, were noted.
• The focus on neighbourhood working underscored the importance of placing members at the heart of community interactions, fostering improved communication between the council, members, and local communities.

Planning for the end of intervention

• Navigating the transition of the organisation from entering intervention to a successful exit was a lengthy and complex process that demanded substantial effort and pace.
• The primary objective was to restore the authority to a state where it is led by democratically elected representatives.
• The need for clarity regarding the post-intervention direction was emphasised, cautioning against a mere rush to exit without a clear way forward. The policy function often found itself consumed by intervention work, leaving limited resources for strategic planning.