LGA responds to Government consultation on revised best value duty guidance

Whitehall should take a transparent, consistent, timely and proportionate approach to dealing with “the small number” of councils at risk of not meeting their Best Value duty, the Local Government Association (LGA) has said.

It was responding to the Government’s consultation on draft statutory guidance for local authorities on the duty.

This stressed seven principles for Best Value: continuous improvement, leadership, governance, culture, use of resources, service delivery, and partnerships and community engagement.

The LGA said it was right for the Government to be clear about its expectations of local government, so long as those were transparent and realistic.

“While councils are rightly expected to take steps to plan and manage their budgets effectively and manage demand as part of continuous improvement, Government should consider the impact of pressures on council finances and the cumulative impact of actions across Whitehall on councils’ capacity and capability: measurement of performance without consideration of cost or other resource implications is meaningless,” the LGA said in its response.

This explained that councils “are large, very complex systems which have different priorities, and it will never be possible to draw sound conclusions about their performance through a focus on quantitative metrics or taking a tick-box approach”.

It would be rare that a set of indicators all point in the same direction, and the guidance was right to say there is no single version of ‘good’.

When significant issues of concern arose at a council, “it will always be essential to enter into dialogue – with no preconceptions - with that council’s leadership (political and managerial) to understand the local context and risk, level of self-awareness and ownership of the challenge and current direction of travel before proceeding with any form of intervention”.

The LGA offered to facilitate this as part of its sector-led improvement programme with Government intervention being a last resort that is “costly and should be avoided wherever possible”.

Sector-led improvement is the most effective route to ensuring good performance for the vast majority of councils, the LGA said.

The guidance draft was issued following several cases of financial failures by councils and the LGA said it was important to understand the context that “councils have been relatively underfunded over a long period [and] it is not surprising that some have managed this better than others”.

Because the Government has had to bail out the few cases of failure, it is concerned not to introduce a ‘financial motive to fail’, a stance the LGA said it understood.

But it said: “The government tends to overstate this issue: in discussions with councils, no chief executive or leader has ever expressed to us the view that financially it might be better for them to fail and no-one has ever set out to fail deliberately.”

Many descriptions were given in the draft of ‘indicators of potential failure’, some of which “could more accurately be termed poor practices”, the LGA said.

Some - such as failures of risk management or budgeting - might on their own to lead to failure, but others would not unless associated with other poor practices.

“Because the guidance does not make this clear, this limits the usefulness of the document to councils, “ the response noted.

"It would be more accurate to state that a significant accumulation of poor practices is an indication of potential failure. However, counting the number of indicators alone cannot lead to a judgement of failure.”

Councillors and officers, particularly those such as section 151 and monitoring officers with statutory responsibility, should “uphold their duties and speak truth to power” through effective provision of advice to members, enabled by constructive working relationships between members and officers.

The LGA rejected the idea that holding all-out elections should be considered a characteristic of a well-functioning authority, since many with annual elections worked perfectly well and “a lack of political stability is not an indicator of failure, it can be a valid outcome of the democratic process in a place where the politics are finely balanced”.

It also opposed the idea that the existence of credible allegations of corruption or maladministration should in itself be an indication of failure, although “a lack of appropriate action in response to such allegations would be a cause for concern”.

Looking overall at the proposals, the response said: “We believe strongly that not all of the characteristics and indicators proposed are of equal weight.

“Some of the indicators are extremely granular, others cover multiple issues in one indicator.”

The LGA considered the strongest indicators of compliance with the best value duty were:
• Openness to external challenge
• Clear leadership demonstrated through a realistic and robust corporate plan
• A robust medium-term financial strategy, with consistent delivery of budget plans
• Compliance with legislative, regulatory and constitutional requirements
• Effective risk management with ownership and understanding across senior political and managerial leadership
• Effective use of performance management information leading to strong self-awareness
• Robust plans to address service failure, where applicable.

Mark Smulian