Envoys flag transparency concerns and “defensive culture” at borough council

In their first report on the local authority, which was handed to the Government in February but made public on Tuesday (24 March), the envoys also said that there were "still pockets of resistance to change in the culture of the organisation".

Envoys were sent into the council in July last year, partly in light of the council’s significant level of debt, which stood at nearly £1.8bn in January 2025.

Their report noted that the council’s debt levels have since been reduced to £1.4bn, but stated that the council continues to face a budget gap of £130m over the next four years.

The inability to set a balanced budget recently forced the council to request exceptional financial support from the Government.

Commenting on member-officer relations, the report said that it is "clear" that not all members are aware of the full extent of  the council's financial position and commercial activity, including the cabinet.

It said this was partly due to a large proportion of members being new, having joined after the May 2024 elections.

However, it is "clear that decision making in the council has been very centralised and therefore lacked transparency and effective challenge, underpinned by long and complex officer reports to members, which made understanding and therefore scrutiny difficult", the report said.

Elsewhere, envoys said council reports were "lengthy, not easy to read and tended towards being overly positive and optimistic rather than providing a more balanced picture".

A new report template is currently being worked on, and support is being given to report authors on how to improve current culture and practices, the report added.

The report meanwhile described the council's governance structures as "complex", adding that they had "not served the authority well, leading to a defensive culture within the organisation, with wider members having little impact or understanding of processes".

Envoys said a full governance review was required to create the conditions of open and effective decision-making and a culture of constructive challenge and inclusion.

Envoys said the council must now move into a delivery phase. It pointed to the council's recent approval of an Improvement and Recovery Plan, which sets plans to deliver against a number of themes, including governance, organisational capacity, culture and financial sustainability.

An Improvement and Recovery Board has been established to provide strategic oversight, challenge and direction for the programme.

Commenting more broadly, the report said there "are major challenges ahead for the council in delivering the level of change needed to address its financial position and there still appears to be some pockets of resistance to change in the culture of the organisation".

It added: "The scale of the situation has now been laid bare and going forward on the back of a positive six months, it is vital the council fully understands and accepts the severity of the position it is in.

"With work now underway to progress the actions in the Improvement & Recovery Plan and develop a programme of transformation activity, the council can begin to take the necessary local steps towards becoming financially self-sufficient and start to meet the requirements of its Best Value Duty over the MTFP period. However, this is the start of a significantly challenging period, and we will be monitoring progress closely."

In a letter to the intervention team, Local Government Minister Alison McGovern said it was "encouraging" that the envoys’ guidance and oversight had been welcomed by the council.

She also said she was pleased to note early progress, pointing to the adoption of an Improvement and Recovery Plan, key leadership appointments, and the initial steps to strengthen governance arrangements, including the establishment of a Joint Leadership Group.

The minister added: "I also note the good progress made in understanding the council’s financial position. Your report presents a sobering picture, including a substantial structural deficit, major commercial liabilities, and a four-year budget gap of £130 million.

"Sustained focus on the actions in the Improvement and Recovery Plan, supported by the necessary transformation needed to deliver them, will be vital to strengthening the council’s financial sustainability.

The leader of the council, Hans Mundry, welcomed publication of the report, adding: "“The report reflects what we as a council willingly accept - that we need to address the failings with our commercial portfolio, that we need to work quickly to address our financial challenges, and that we need to drive widespread organisational changes to ensure that we can become an efficient, stable, and sustainable, organisation.

“As the Ministerial Envoys reflect in their report, the next six months for us as a council will be crucial. We need to make difficult decisions to begin closing our budget gap.

“We need to become a council that provides a good standard of services and focuses on the best possible outcomes for residents, while living within our means. This means we need to fundamentally change how we operate as an organisation."

Adam Carey