Poor governance to blame for financial failure, not lack of funding, Oflog chair claims

The new chairman of the Office for Local Government's (Oflog), Lord Morse, has said that governance failures are to blame for special measures being imposed on financially distressed councils rather than a lack of funding from central government.

In an interview, Lord Morse told The Times that: "All of the failures that we've seen so far; all of the authorities that are in special measures are not primarily attributable to a shortage of money — they're to do with failures in management or failures in governance.

"I really can say that quite definitely," he added.

Morse said he is listening "respectfully" to councils' concerns about money but said: "Our actual experience is there's a lot to be done in improving the quality of management and oversight."

He added that councils needed to be "realistic" about the amount of financial support they could get from the government.

"There have been substantial economic pressures that have affected everyone in the country, including local government," he said.

"They all say they feel some degree of pressure [and] I recognise there's a fair amount of reason for it at the present time. 

"So we're not unsympathetic to that — but you have to be realistic. There's a limited amount of support that they can expect to get from the centre."

The comments come after the Local Government Association (LGA) and the County Councils Network (CCN) separately warned in early December of more financial issues, with the LGA reporting that almost one in five council leaders and chief executives think it is very or fairly likely their council will issue a section 114 notice this year or next.

In a statement at the time, Cllr Shaun Davies, LGA chair, said: "While councils have worked hard to reduce costs, find efficiencies and transform services, the easy savings have long since gone.

"The Government urgently needs to act to address the acute financial challenges faced by councils."

The Government later announced a provisional local government finance settlement of more than £64bn for 2024-25 on 18 December amid the warnings.

The total sum represents an increase of 6.5%, but this presumes that local authorities in England will increase council tax by the total amount allowed without triggering the requirement to hold a referendum.

Reacting to the settlement, Cllr Davies said it still did not provide enough funding to meet the "severe cost and demand pressures" facing councils.

Oflog was launched in July 2023 with the aim of using data to scrutinise local government and help councils understand their performance.

Following his appointment in November, the organisation's first chief executive, Josh Goodman, said he planned to focus on searching for signs of governance and financial failures in local authorities.

Speaking to The Times, Lord Morse said that when Oflog identifies councils that are struggling, the aim would be to step in early enough to prevent them from being forced into special measures, which results in reductions in all non-core services.

He added: "Our approach will be to have discussions about the differentiating data and ask the questions. But it's still the responsibility of local government to do something about it."

Data gathered by the organisation can be viewed on the 'data explorer' page of its website.

The explorer, which was launched in July, currently covers six service areas - planning, roads, corporate and finance, waste management, adult social care, and adult skills.

Oflog has previously said it plans to expand its data explorer to cover 20 service areas.

Adam Carey