Government sets expectations in Best Value Notice to unitary council beset with governance problems
The Department for Levelling Up, Communities and Housing (DLUHC) has said ministers “remain concerned” as to Middlesbrough's capacity to comply with its Best Value Duty, after a series of reports last year that revealed governances issues at the unitary authority.
Writing in a Best Value Notice letter to the council’s Chief Executive, Tony Parkinson, the DLUHC detailed fears over the council’s capacity to comply with the duty under the Local Government Act 1999.
A Best Value Notice is a formal notification that the DLUHC has concerns regarding an authority's capacity to meet its Best Value Duty and is a request that the authority engages with the Department to provide assurance of improvement.
Issues at the local authority came to light in July 2022 after the council's external auditors, Ernst & Young, concluded that the "culture and governance arrangements at the authority have not been operating as expected and that this is undermining the effectiveness of the Council's governance framework".
The external auditors identified multiple instances where the authority took significant decisions without following its own established policies and procedures.
The report highlighted the council's involvement in a £21m office regeneration scheme named Boho X, where significant changes to the design of the project occurred "outside of the Authority's Programme and Project Management Framework".
In addition, it raised concern over the council's procurement of Covid-19 tests, which were not authorised for use in the United Kingdom, and over the use of an external individual to provide mayoral assistance activities which are required by The Local Authorities (Elected Mayor and Mayor's Assistant) (England) Regulations 2002 to be performed by an employee of the authority.
The report's authors found "mistrust and dysfunction between Members and Officers" and were reportedly "struck" by "adversarial" language.
The council consequently agreed on the creation of an 'Improvement Board' to resolve the issues detailed in the CIPFA report.
The Best Value Notice issued on Tuesday (24 January) sets out the following expectations the DLUHC has for Middlesbrough, namely to:
- continue in its efforts to deliver against its agreed action plan, accepted at full council, "at pace and meet the set milestones, also setting out clearly how success will be measured"
- continue in its efforts to implement cultural change, particularly in relation to the relationships between officers and members, and that this will be an important focus of the Improvement Board
- complement the existing engagement between the authority and the Department - the DLUHC expect that "contact at working level should occur on a quarterly basis initially, recognising that this may change according to need over time"
- fully and promptly meet any requests for information. "The Department will also look to the Governance Improvement Board for assurance on your authority's plan and its delivery as part of our engagement on this matter."
Responding to the notice in a joint statement, Middlesbrough Mayor Andy Preston and Council Chief Executive Tony Parkinson, said they "remain committed" to their Governance Improvement programme and "are fully engaged with the Chartered Institute of Public Finance and Accountancy (CIPFA) on this work".
They said: "We've already taken steps to address these issues and put in place an action plan, and we're pleased that DLUHC has acknowledged the progress we've made so far.
"We fully acknowledge the seriousness of the Best Value Notice and are committed to demonstrating the progress the DLUHC rightly expect."
The pair later added: "Alongside our everyday activities, our dedication to ensuring positive cultural and governance changes will continue."
Adam Carey
