Watchdog launches corporate governance inspection into council

The Auditor General for Wales is to undertake a special corporate governance inspection of Caerphilly County Borough Council.

Publishing his Annual Improvement Report on the local authority, Huw Vaughan Thomas said the inspection would focus on its governance and decision-making arrangements, and would assess the progress the council had made in addressing the recommendations made in an auditor’s public interest report issued in March 2013.

The auditor’s report outlined failures in governance arrangements and inadequacies in the council’s processes when it came to setting chief officers’ pay.

He concluded that the council had “acted unlawfully with regards to this pay-setting process” and made a number of recommendations.

Caerphilly’s chief executive, Anthony O’Sullivan, and his deputy, Nigel Barnett, were suspended pending a police investigation. The council’s own disciplinary investigation is on hold pending the completion of that investigation.

The Auditor-General said: “Whilst there are weaknesses in its self-evaluation arrangements, and the pace of improvement is slow in some key priority areas, the council has made some service improvements.

“However, since I concluded, in September 2012, that the council was likely to comply with the requirement to make arrangements to secure continuous improvement during 2012-13, providing it increased the pace of improvement, we have found significant failings in its governance arrangements, and I will therefore undertake a special corporate governance inspection of the council later this year.”

In the annual improvement report the Auditor General also concluded that, whilst the council had discharged its improvement planning duties under the Local Government Measure in 2012-13 and acted in accordance with Welsh Government guidance, it had failed to discharge some of its improvement planning duties for 2013-14.

Vaughan Thomas warned that the council's progress against regulators' recommendations was “mixed and often slow”.

He said he was encouraged by the council’s acceptance that accountability arrangements to manage and deliver the findings from audit and inspection work needed to be strengthened, but said that these arrangements had yet to be put in place.

The Auditor-General’s report also reported that:

• Although the council had to date responded to the financial challenges it had faced and secured savings in advance of need, it did not have a rigorous approach to developing business cases or to setting, delivering, monitoring and evaluating savings in order to meet future demands and challenges.
• The council's performance in improving services in 2011-12 had been mixed and it had been slow to address some key priority areas.
• The council with its partners had continued to make good progress in making Caerphilly county borough a safer place to live in.
• Education services for children and young people were adequate with adequate prospects for improvement, and a new Education Achievement Service for South East Wales had been created and was focusing on improving attainment within schools.
• Whilst the council provided citizens with a range of channels to access its services, it had been slow to progress improvements to the way it engaged citizens.
• The council’s efforts to regenerate and support the economy had had a mixed impact as had its performance in relation to health and social care.
• There were also key weaknesses in the way the council managed its people, information and assets.
• The council had embedded performance management arrangements and had effective arrangements in place to collect, record and monitor performance information. However, it needed to address weaknesses in its approach to self evaluation and challenge, and report and account for its performance in a more balanced and transparent way.

The Auditor-General made four statutory recommendations to Caerphilly to which it must respond within 30 days. These were to:

1. Address the five recommendations made by the appointed auditor in his Report in the Public Interest dated March 2013.

2. Address the outstanding proposals for improvement identified in the Auditor General's work to date.

3. Address the three recommendations made in the Auditor General's report Evaluation of Social Services Contributions to the Medium Term Financial Plan, dated July 2013.

4. Put in place arrangements that enable the council to formulate, scrutinise and approve its improvement objectives in a timely way to meet its statutory obligations under the Local Government (Wales) Measure 2009.

Stuart Rosser, interim chief executive of Caerphilly Council, said: "We acknowledge and accept the findings of the report and I can confirm that work is already well underway to address many of the issues raised in the document.

“I am confident that the council will be able to manage these issues successfully thanks to our excellent workforce and the ongoing support of members. I would like to assure residents that we are moving forward as an organisation and our focus remains on delivering efficient and effective services to all sections of the community."


Cllr Harry Andrews, Leader of Caerphilly County Borough Council, said: "We are obviously disappointed with some of the issues raised in the Annual Improvement Report, but I have full confidence in our excellent workforce and I know that steps are already being taken to address some of the concerns that have been highlighted.

“I will continue to work closely with my members and the council leadership to ensure that progress is made to tackle these issues over the coming weeks and months. I would like to assure the community that our priority is, as always, the delivery of quality services across the whole county borough."