Our local councils play a vital frontline role in our communities and our democracy. Everyone in the House recognises what they do and the importance of making sure they are able to contribute to our levelling-up agenda. We need our councils to be able to make our towns and cities great places to live, where everyone, no matter what their circumstances, has the opportunity to thrive and can take advantage of effective and efficient service delivery. We need our councils to be able to support our most vulnerable citizens, for example through children’s services and adult social care. In doing so, we need councils to make the most of every penny they receive from hard-pressed taxpayers to secure better outcomes. This will build confidence and trust between local authorities, local councillors, and the communities they serve. That is why the situation at Slough Borough Council is of such concern.
Slough Borough Council was one of a small number of local authorities to request exceptional financial support during the covid-19 pandemic. The Government agreed in principle to this request subject to the outcome of an external assurance review. This review considered the council’s financial position and the strength of its wider governance arrangements, and provided an assessment of the council’s ability to achieve financial sustainability without further recourse to public funds.
The Chartered Institute of Public Finance and Accountancy (CIPFA) led on the financial aspects of the review. Jim Taylor, former chief executive of Salford City Council, Trafford Council and Rochdale Borough Council, led on governance. I would like to thank Jim Taylor and CIPFA for their hard work. Copies of the reports have been deposited in the Libraries of both Houses.
The reports paint a deeply concerning picture of mismanagement, of a breakdown in scrutiny and accountability, and of a dysfunctional culture at Slough Borough Council. The council’s internal controls and processes are inadequate, and the overview and scrutiny function is not equipped to operate effectively. Service delivery is hampered by ineffective core corporate functions such as IT and HR, and the residents of Slough are poorly served by the council’s struggling revenues and benefits service. The council’s contract management is weak and has resulted in rushed procurement, missed exit opportunities, and has delivered poor value for money. There is little evidence that the council understands the entirety of its commercial investments and their impact on its finances. The staffing structure lacks the capacity and capability to deliver on the challenges the council faces without external help. It is only very recently that senior members have grasped the seriousness and urgency of this situation and established it is not solely a result of financial accounting assumptions. The council cannot demonstrate a track record of making difficult decisions or of taking decisive action to bring about improvements. The reports confirm that, as indicated in the section 114 notice issued by the council earlier this year, the council’s expected requirement for additional financial support in 2021-22 has risen from £15.2 million to over £100 million.
The review shows unequivocally that Slough Borough Council has failed to comply with its best value duty of continuous improvement, as required by the Local Government Act 1999. The financial challenge is acute, and the review has concluded that the council cannot become financially self-sustaining without considerable Government support.
To quote the review:
“An authority struggling to comply with its best value duty displays the following characteristics:
an overreliance on interim officers
a lack of corporate capacity
many inadequate internal processes
signs of distrust among and between councillors and senior officers
the absence of effective scrutiny, transparency, and public consultation
insufficient capacity to achieve the change required
instances of poor-quality advice to members
a lack of understanding of how some meetings should be conducted ? In some cases, members not understanding their role
significant unknown past liabilities yet to be determined.
Slough Borough Council has been displaying these characteristics over past years until present day and has failed its best value duty despite the concerted efforts in the last few months. It is unable to resolve the difficulties on its own.”
Expressed in formal terms, the Secretary of State is satisfied that Slough Borough Council is failing to comply with its best value duty and he is considering exercising his powers of intervention to secure compliance with the duty. To that end, and in line with procedures laid down in the Local Government Act 1999, officials in my Department have today written to Slough Borough Council, asking for representations on the external assurance review and on the proposed intervention package. That letter also recognises the hard work of many of the staff at Slough Borough Council.
The proposed package is centred on the appointment of commissioners to exercise certain and limited functions as required, for a minimum of three years. The proposal is for the council—under the oversight of the commissioners—to prepare and implement an improvement plan, and report on the delivery of that plan to the commissioners every six months.
In detail, the council would be required to:
Complete, within three months, an assessment of the functional capability of all service areas to identify the gaps in capacity and capability.
Prepare and agree, within six months, action plans to the commissioners’ satisfaction to address any functional shortcomings.
Undertake any actions the commissioners require to avoid incidents of poor governance or financial mismanagement that would jeopardise the council’s ability to meet its best value duty.
Prepare and agree, within three months, a fully resourced improvement plan which should include action plans to deliver: financial sustainability; improvements in democratic services, including the audit and corporate governance functions; a scrutiny function that is fit for purpose; improvements in internal audit; properly functioning procurement and contract management functions; improvements in the council’s IT function; an officer structure and scheme of delegation which provide sufficient resources to implement the improvement plan.
It is also proposed that Slough Borough Council will:
Devise and implement a programme of cultural change to rebuild trust between officers and members within six months.
Following the review of Council companies, within six months consider the roles and case for ongoing operation of each subsidiary company—except Slough Children First.
Take steps to enable better and evidence-based decision making, including enhancing data and insight functions.
I hope and expect Slough Borough Council will take the lead on this path to improvement. Given the gravity of the review’s findings, the Secretary of State must consider what would happen if the council failed to deliver the necessary changes, at the necessary speed.
The Secretary of State is, consequently, proposing to direct the transfer to commissioners of all executive functions associated with:
The governance and scrutiny of strategic decision making by the council.
The strategic financial management of the council.
The oversight of collection of revenues and the distribution of benefits by the council.
All non-executive functions relating to the appointment and dismissal of statutory officers, and the designation of those persons as statutory officers at the council to the commissioners.
These powers are for use should the council not satisfy the commissioners in their improvement processes. I hope it will not be necessary for the commissioners to use these powers, but they must be empowered to do so if they consider the required improvement and reforms are not being delivered.
The commissioners will report to the Secretary of State at six monthly intervals on progress. They will also work closely with Trevor Doughty, the children’s services commissioner for Slough Borough Council already in place and reporting to the Secretary of State for Education.
This will ensure that the improvements that he has overseen to date through the Department for Education’s statutory intervention continue to be made, and that services for Slough’s vulnerable children and families continue to be delivered to an acceptable standard. Similarly, the commissioners will be mindful of the interests of the Secretary of State for Work and Pensions and the consultancy support available from the Department for Work and Pensions to improve the revenue and benefits service.
We are inviting representations from the council on the report and the Secretary of State’s proposals by Friday 5 November. Given the conclusion of the review that
“Improvement for Slough Borough Council will rely on stability in political leadership, and it would be advisable that the council moves towards a four yearly election cycle at the earliest opportunity”,
we are also seeking views on how best to achieve this.
We want to provide the opportunity for members and officers of the council, and any other interested parties, especially the residents of Slough, to make their views on the Secretary of State’s proposals known. Should the Secretary of State decide to intervene along the lines described here, he will make the necessary statutory directions under the 1999 Act and appoint commissioners. I will update the House in due course.
Government do not take these steps lightly and recognise and respect the role of local councils in our communities and our democracy. Slough Borough Council is a rare case of failure. Most local authorities in England have a good record of service delivery, transparency, probity, scrutiny, and accountability. It is a record worth protecting. We will take whatever steps are necessary to uphold the good name of local government and to root out practices that do it down.
Finally, I urge council leaders across the country to read these reports. I know the local government sector—officers and members—will be saddened by the news that a council is failing. I would encourage all to make sure that they are not making the same mistakes as those that are described in this review. Local people deserve better than this from their local councils.