Government issues best value notices for two councils

The Ministry of Housing, Communities and Local Government has issued best value notices for Newham Council and Cheshire East Council.

The notices are formal notifications that the department has concerns regarding the authorities and requests that the councils engage with the department to provide assurance of improvement over the next 12 months.

In a letter to Cheshire East's chief executive, Rob Polkinghorne, MHCLG's deputy director for Local Government Stewardship and Interventions, James Blythe, said the notice was issued following "significant concerns" about the council's financial sustainability and medium term financial strategy.

He pointed to a report from the council's external auditor, the findings of a corporate peer challenge (CPC) conducted by the Local Government Association, and an assurance review undertaken by CIPFA to explain the Government's decision.

Blythe also noted "concerns around leadership capacity, governance, scrutiny and culture identified by the CPC and CIPFA reports.

He added: "The council has engaged constructively with the department about the challenges it faces, including during the process for exceptional financial support.

"However, given the seriousness of the issues identified, and the pace to deliver the level of change required I am setting out the department’s expectations of the council in providing assurance of progress."

His letter listed a series of expectations for Cheshire East, including a call to develop and agree a single overarching improvement plan, and continue taking urgent steps to improve its financial sustainability by delivering saving.

In addition, it called on the council to embed organisation cultural change, continue increasing its senior officer capacity and stability, and ensure it has effective corporate, governance and scrutiny processes, including improvements to the council's committee system.

It also called on the council to continue complying with an improvement notice issued by the Department for Education by delivering "appropriate and sustainable improvements in relation to the council’s children’s social care services", among other recommendations.

The best value notice issued for Newham meanwhile listed concerns about "significant value for money weaknesses around the council’s governance arrangements" highlighted in an external auditor's report.

It also flagged cultural and governance issues identified in a scrutiny improvement review by the Centre for Governance and Scrutiny in 2023, and a LGA corporate peer challenge.

In addition, the notice highlighted "significant delivery concerns" for some council programmes, "particularly following the Regulator of Social Housing C4 grading published in October 2024".

In a letter to the London borough's chief executive, Abi Gbago, James Blythe said: "Given the seriousness of the issues identified, failure to deliver the level of change required at sufficient pace would be very concerning.”

Blythe's letter sets out a series of expectations, including a call for the council to take steps to improve its financial sustainability, reflecting this in the council’s medium-term financial strategy, and continue working with its independent improvement & transformation board, launched in 2024.

It also asked that Newham review and clarify roles and responsibilities and scrutiny processes to enable more effective decision-making, as well as continue to implement and measure cultural change, "particularly in improving relationships between members as well as officers and members".
In addition, it called for Newham to ensure the effectiveness of the council’s officer and political leadership, by developing a comprehensive retention strategy and appropriately managing any leadership changes.

Newham Mayor Rokhsana Fiaz OBE said she was determined that the council “rapidly responds to the notice, adding: “The Council is already on a significant change and improvement journey to enable us to meet our statutory requirements, transform how we operate and deliver our Building a Fairer Newham Corporate Plan.

“We have already strengthened governance and processes as part of our Action Plan following the Corporate Peer Challenge we instigated in October 2023 with the Local Government Association (LGA).

“We are also currently finalising an Action Plan with the Regulator of Social Housing to improve our housing services, following the unacceptable C4 rating the Council received last year.”

The leader of Cheshire East Council, Cllr Nick Mannion, and Deputy Leader Councillor Michael Gorman, said: “We are confident in our transformation and improvement plans – while we have set ourselves a challenging agenda, we are making good progress.

“This is reflected in the report from the Local Government Association (LGA) Peer Challenge revisit which we are also able to share today. The report acknowledges the council has delivered against key aspects of their recommendations, while recognising that we know ourselves and the improvements we still need to make."

Cheshire East’s chief executive meanwhile said: “We have made significant progress in the last year with a shared understanding of the challenges and putting the building blocks in place for sustainable improvement including the transformation plan, new Cheshire East plan, budget and Medium-Term Financial Strategy albeit with the need for Exceptional Financial Support.”

The notices for both councils will be reviewed after 12 months.

Adam Carey