Peer challenge report highlights section 114 risk at council, calls for scrutiny and decision-making changes

The report, which was made public last week (17 July), recommended the local authority "urgently" review its decision-making framework, give "more time and emphasis" to scrutiny across the council, and improve the quality of its reports presented to committees.

The peer review was completed in March 2024 following the appointment of a new chief executive in January 2024 and amid a financial position that forced the council to ask for £17.6m in exceptional financial support from the government.

It also came as an Ofsted inspection concluded that the council's children's services should be downgraded from 'requires improvement' to 'inadequate'.

According to the report, the peer team was "seriously concerned" about the council's immediate financial stability and sustainability. 

The report noted that in 2023-2024, the council used £11 million of its reserves to set a balanced budget and that it has a savings requirement of £20 million for 2024-2025.

It added: "If these savings are delivered, it will still only leave the organisation with £2.1 million in reserve by the end of this financial year.

"In this context of low reserves, historic departmental overspends, and a lack of organisational confidence regarding the delivery of existing saving plans, if there is not significant change at pace, it is very likely that the council will be required to issue a section 114 notice in the near future."

Elsewhere, the report detailed a series of cultural challenges facing the council, including poor joint working, poor working relationships, and a lack of compliance with corporate requests and direction.

On this point, it said a culture of working in siloes with "poor joint working across (and within) departments" had contributed to challenges in service delivery and communication.

The report added that poor working relationships across services had resulted in a lack of compliance with corporate requests and direction.

"Finally, this lack of compliance has resulted in gaps in information and delays in action which have weakened the council's assurance framework undermining the organisation's ability to provide internal scrutiny, challenge, and assurance as a consequence."

It said there is now a need to reset expectations and behaviours at all levels of the organisation to support increased respect, compliance, and appropriate challenge.

The report also highlighted issues with the council's internal assurance framework relating to its committee system.

The local authority has a scrutiny committee focused solely on external issues, leaving internal scrutiny to occur concurrently with decision-making at policy committees.

However, scrutiny "varies significantly" across the committees, "ranging from removing the guillotine to enable seven-hour questioning, to strict adherence to three-minute question time limits," the report said.

The report recommended that the council introduce further training regarding the benefits of scrutiny to ensure a more consistent approach and understanding of how it can be managed to support improved decision-making without the need for excessively long meetings.

Eighteen key recommendations were made in the report overall, which included a call to "urgently" review the council's decision-making framework and streamline current decision-making arrangements to avoid siloed working across committees, ensure that committees are working through effective work programmes, and reduce confusion and lost capacity caused by the current system.

"This should include consideration of governance structures, schemes of delegation, and report approval arrangements ahead of committee meetings," the report said.

Further recommendations relating to scrutiny said the council should give more time and emphasis to scrutiny across the council, and "include more consistent approaches to scrutiny at committee", alongside improved forward planning and agenda setting to maximise member input into the decision-making process.

Another recommendation called for the council to improve the quality and clarity of reports presented to committees, including report writing training for officers and increased compliance with the council's desired structure and length of reports.

The council's leader, Cllr Sam Corcoran, resigned last week (17 July) during a full council meeting discussing the report's findings, citing a lack of confidence in him needed to carry out a transformation programme at the local authority.

Cllr Nick Mannion, who has since been selected as council leader, said: "Looking to the future, I want to continue and accelerate the work to place the council on a more sustainable financial footing and guide the council's transformation programme to its completion. I cannot do that alone, nor can one political group."

As part of an action plan responding to the key recommendations, the council has pledged to agree on an updated scheme of delegation to be incorporated into the constitution.

It is also planning to mandate that all significant decisions should be made via committee or, where delegated under a committee decision, they are clearly recorded.

In response to the recommendations on scrutiny, the council has committed to providing further training on the role of scrutiny in a committee system and improving forward planning to include scrutiny items on committee work programmes.

Adam Carey