Cheshire East

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External auditors tell council to take “effective grip” of longstanding service issues, following breakdown in relationships between senior officers and senior members

Sandwell Council has seen deteriorating senior officer and senior member relationships over a number of years and this has resulted in a breakdown in trust, respect and confidence between those holding governance roles, a value for money governance review carried out by the local authority’s external auditors Grant Thornton has found.

The review, which will be considered by Sandwell’s Cabinet at a meeting on Wednesday (15 December), suggested that this had limited the council’s ability to look forward and manage the challenges and opportunities it faces.

Grant Thornton said a significant amount of time had been spent responding to internal allegations and complaints. It also accused the council of being “insular and siloed” and said senior officers and senior members had historically been unable to make the changes required to move away from this organisational culture and focus.

The report noted however that since the appointment of an interim chief executive in August 2021, working with the then new Leader, that many of these matters were being resolved.

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Grant Thornton suggested that certain “green shoots” were positive. “Without these changes we would have had concerns with regard to the Council's ability to manage and govern itself, and intervention by the Government may have been necessary.”

The key findings from the report included:

  • Even taking into account the impact of Covid-19 until recently the council had failed to take an effective corporate grip on the issues it faces. This has been hindered by the lack of a clear performance management framework and agreed key corporate indicators, although the report noted that recent progress had been made on this.
  • In failing to take ownership of key challenges and issues and seeking resolution, lessons had not been learned. “This has resulted in a number of instances whereby the Council has repeated actions leading to similar outcomes. For example, the Wragge report [which examined a series of land sales by the council] continues to be an area of mistrust between members and between officers and members.”
  • Repeated instances had been identified where commercial decisions or procurement decisions had contributed to a number of key legacy challenges which had not been resolved. These included legacy property related decisions such as those relating to Lion Farm, Providence Place and Sandwell Land and Property Company “where there was either a lack of appropriate expertise and advice or failure to consider all appropriate options”. There were also more recent examples of poor procurement decisions relating to waste management and recycling, the council’s enterprise and resource planning (ERP) system and SEND Transport.
  • A number of key contracts had been impacted by either poor specification during procurement, a lack of clear contract management responsibility, or poorly defined approaches to contract management. These related to Sandwell Leisure Trust (SLT), Serco, Inoapps and Sandwell Children’s Trust (SCT). “At varying times relationships between the Council and these key partners have been fraught with the lack of senior leadership grip significantly contributing to a deterioration of these relationships. A lack of clear corporate ownership has meant that issues with these contracts have not been resolved in a timely manner.”
  • An insularity and short-term focus had meant that Sandwell had not had the necessary time and space to consider the long-term.
  • The scheme of delegation and the involvement of senior members in key decision making had resulted in a lack of empowerment of officers in decision making and the agility of the council to make, where necessary, prompt decisions.
  • The prevalence of interim and acting up arrangements in senior officer roles had in some places not seen effective back-fill arrangements put in place, resulting in capacity challenges for some key officers and teams such as Finance.
  • The council had been through a period of significant change to its leadership, both in terms of senior officers and senior members. The impact of this had been instability and uncertainty for the organisation. There had also been a loss of corporate knowledge and history. This had “contributed to historic issues resurfacing and senior members making the initial decision to progress a major project or initiative not being the same group of members taking further decisions during the project’s implementation, such as the SEND Transport procurement”.
  • Recent widespread changes at chief officer level and the election of a new Leader and appointment of a new Cabinet had however provided a significant opportunity for the council to move away from this position. “Indeed, there is a consensus that senior officers and members are in a much stronger, more effective and constructive position than in the recent past. There is also a clear desire to make the improvements required, and a greater understanding of roles and responsibilities.”
  • Whilst Grant Thornton recognised that recent changes had been positive, it remained concerned about the lack of trust across the wider organisation and continuing poor behaviours, for example, the leaking of the review into the Wragge report to local media in October 2021. “It will take time for the wider organisation to regain trust in the senior leadership, see the stability required, and believe in the changes that have begun.”

The review’s statutory recommendations under section 24 of the Local Audit and Accountability Act 2014 were:

  1. It is imperative that senior officers and senior members take effective corporate grip of long-standing service issues highlighted by the findings in the report (including SLT, SCT, the waste service, the ERP system, and Lion Farm) and prioritise corporate effort in managing the issues identified, and embed the solutions into the Council.
  2. The Council must ensure that the learning in relation to commercial decisions, procurement and contract management highlighted in this report are understood through the organisation.
  3. Senior leadership, both officers and members, must demonstrate that they can continue to work together effectively, that they operate in line with the Council’s values, codes, policies and procedures, and that there is zero tolerance to inappropriate behaviours. This includes changing the organisational culture in relation to complaints so that they restore balance and proportionality.

In compiling the report Grant Thornton examined – amongst a wide range of matters – the appropriateness of complaints made against senior officers and the responses to those complaints. The report noted that the council had had a history of complaints against members, many of which were not found to be circumstances that were in breach of the Code of Conduct.

The report noted that the Monitoring Officer had been subject to a number of complaints from members which had not met the threshold for investigation, and there was a perception that at least some of these complaints had been spurious and reflected a blame culture. It noted that no complaint had been upheld against the monitoring officer. “Similarly, in the case of other complaints against officers, rather than complaints relating to breaches of council policies and procedures, they are based on the dislike of an individual or of an individual’s response or actions during meetings.”

Grant Thornton said this formed part of a wider culture and a deterioration in trust and respect between members, and between members and officers. “This is arguably also reflected in a culture of written communications in relation to member enquiries. For example, in many instances officers want to have a written record of their response due to the culture of the organisation.”

The report continued: “Again, due to the organisational culture, there is a perception that historically for some officer complaints, investigations have been undertaken due to concern of the consequences of deciding no further action was required.

“The level complaints at the Council has been described as a 'mini industry' which takes up valuable time and resource, should the complaints be spurious.”

Grant Thornton said there were signs that the new political administration had moved away from this culture, but this was not yet evident across the wider councillor group.

“The Council’s senior leadership – both officer and member – must act to change the culture and organisational ethos in relation to complaints, and to restore balance and proportionality,” the report urged.

Cllr Kerrie Carmichael, Leader of Sandwell Council, said: “I welcome this detailed and thorough review of our governance arrangements. The cabinet and I recognise that, while the auditors are satisfied that government intervention is not necessary, we must build on the improvements put in place by the new leadership team. We have demonstrated the progress that has already been made and, as the report recognises, we are already seeing green shoots in key areas.

“We are fully committed to making the necessary improvements and will work hard to embed the positive changes that have been described in the report.”

Cllr Carmichael added: “We have been given a number of statutory and key recommendations as part of this governance review and these will form the basis for an action plan detailing the improvements we must make as an organisation.

“The report recognises there is a consensus that senior officers and members are in a stronger, more effective and constructive position than in the recent past. We will be relentless in focusing on improvements and will use this report as a baseline for the council’s future transformation."

Kim Bromley-Derry, Sandwell’s Interim Chief Executive, said: “Significant improvements have already taken place, which has been recognised in this report

“Along with the cabinet and the new Leader of the Council, the leadership team and I will not shy away from the work that is needed and we will be relentless in focusing on improvements.

“My absolute priority going forward will be embedding sustainable, robust processes and improvements that the council can continue to build on in the months and years to come.”

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