Department for Levelling Up, Housing and Communities issues North East council with revised best value notice

The Department for Levelling Up, Housing and Communities (DLUHC) has issued Middlesbrough Council with a revised best value notice.

DLUHC had issued a best value notice earlier this month amid concerns about Middlesbrough’s capacity to comply with its Best Value Duty under the Local Government Act 1999.

In a letter to Middlesbrough’s chief executive, DLUHC’s Deputy Director, Local Government Stewardship, Max Soule, said the Department acknowledged the steps the council had taken to identify the serious issues in faced, and praised its “timely and helpful engagement”.

The letter said that since the original best value notice was issued, Middlesbrough had worked effectively with the Department setting out and implementing a range of improvement measures to effectively address the identified concerns.

Soule said, however, that “more work is still to be embedded to ensure sustained and material improvements particularly in relation to financial sustainability, delivery of transformation and effectively implementing new strategies to embed positive cultures”.

The revised best value notice will remain in place for six months, “after which time, should the Department deem it necessary to continue to seek assurance through such a Notice, the Notice will be reissued”.

The letter said that, during that time, DLUHC expects Middlesbrough to:

1. Continue to work with the Independent Improvement Board established in Middlesbrough to support the council to deliver the council’s locally lead improvement strategies, organisational transformation and to monitor progress of the application of the improvement board recommendations and delivery of improvements against the serious concerns highlighted by the external auditor, published in July 2022, around governance arrangements, and cultural and governance issues further investigated in the CIPFA review published in September 2022.
2. Continue in your efforts to deliver against your agreed action plan, accepted at full Council on 30 November 2022, at pace and to meet the set milestones and success measures established.
3. Continue in your efforts to implement cultural change, particularly in relation to the relationships between officers and members, and that this will be an important continuing focus of the Independent Improvement Board.
4. Work with the Department as you deliver on your Best Value requirement to secure the financial recovery and return to financial sustainability through setting a balanced 3-year MTFP over the period to 2026/27.

Soule said that if the Independent Improvement Board and external auditor recommendations are not met in full, with necessary improvements delivered at sufficient pace, then the Department would consider whether statutory intervention is needed.

The letter said the notice was being issued outside the statutory powers held by the Secretary of State under the Local Government Act 1999 to inspect or intervene in local authorities where there is evidence of Best Value failure and, separately, under section 230 of the Local Government Act 1972 to request information from local authorities.

“However, a failure to demonstrate continuous improvement may be judged to contribute to Best Value failure and the Secretary of State will consider using these powers as appropriate,” it added.

The Executive at Middlesbrough earlier this month (17 January) unanimously approved a report recommending an application to government for permission to borrow £6.3m plus a small contingency to cover its budget gap for 2024/25.

Sums to cover future risk, which may or may never be called on, make a total of £15m in Exceptional Financial Support (EFS), the council said.

Middlesbrough is looking to make savings of around £14m in a drive to balance its budget for 2024/25. “Despite considerable progress”, a shortfall of £6.3m for 2024/25 remains, the council said.