Lack of understanding of law caused council meeting 'chaos', says investigator

October 8, 2014

No-one at the London Borough of Barnet understood local government law in depth and this was one of the factors that led to flawed reports being presented to full council for decision, an external investigator has concluded.

Barnet appointed Claer Lloyd-Jones – former chief executive of the Social Housing Regulator, the TSA, and an experienced local government lawyer – to carry out an investigation following its Annual Council meeting on 2 June 2014.

Reports on members’ allowances and proportionality were presented for decision without appropriate legal clearance and were incorrect or misleading.

Following her investigation, Lloyd-Jones has produced two reports. In the first she examined events in the run-up to the meeting, and in the second she set out various options to strengthen future governance arrangements at the council.

In the first report, which can be viewed here, the investigator said: “The voting on ‘wrong’ reports, and the subsequent unraveling of the decision-making structure caused Barnet to be mocked in the local press with headlines using words such as ‘disgrace’ and ‘chaos’. No local authority would wish to be subject to such avoidable public criticism.”

The truth was more complex, Lloyd-Jones said, adding that there was a general risk of underperformance in the area of Barnet’s governance, culminating in these ‘wrong’ reports. This was due to a combination of factors:

There was no-one who understood local government law in depth at Barnet. Barnet employed no lawyers.
There were staff in key roles in the governance structure in Barnet who were inexperienced in governance matters.
There was no clear protocol or process between Barnet’s governance team and HB Public Law – the legal service shared with Harrow Council – for clearing council reports through taking external legal or other specialist advice.
Barnet was moving to a very different constitution at the Annual Council and needed to have given detailed consideration to the implications of moving back to the committee system. It was not just a question of making amendments to the constitution.

Lloyd-Jones revealed that legal advice had been requested on both the reports, but was not forthcoming on either in time for them to be printed. “No-one at Barnet queried this or noticed anything was wrong.”

She added that both reports were repeated from previous reports and therefore did not address current legal issues which had arisen in the meantime. There was therefore no legal scrutiny as to whether they remained correct.

The investigator concluded that “there was a joint but not necessarily equal responsibility on Barnet’s Governance Team as well as the council shared legal service with Harrow, HBPL [HB Public Law], for allowing the reports containing incorrect advice to be presented to councillors as though they were correct.”

Lloyd-Jones said that in order to prevent the risk of some other governance failing attributable to the absence of legal advice or misapplication of legal advice, a number of changes needed to be made to both the inter-authority agreement and to Barnet’s internal governance arrangements.

Her second report, which can be viewed here, set out various options for improved governance, including requiring the monitoring officer to be the client for the shared legal service.

A report prepared by Barnet’s chief executive, Andrew Travers, for a meeting on 14 October of the council’s Policy and Resources Committee invites the committee to endorse various recommendations made by Lloyd-Jones in her first report.

These were that:

Barnet Governance implements “the same high level of control over its council reports as it does over other committee reports”;
It takes early legal advice before drafting reports, as well as taking legal advice for clearance purposes;
HB Public Law provides early legal advice outlining the legal principles to be involved in council reports;
HB Public Law extends its actions of clearance within five days towards council reports in the same way as it does towards committee reports;
Barnet Governance informs HB Public Law well in advance of the subject matter of reports likely to be submitted to council meetings;
Barnet and Harrow review and sign the 2nd or side agreement to the shared legal service inter-authority agreement;
Barnet looks carefully at the options to strengthen its governance arrangements, including looking at the contract with HB Public Law, addressing the issue of professional clienting of the inter-authority agreement, addressing the issue of lawyers not being on site at Barnet, considering the implications of having exercising s101 of the Local Government Act 1972 to delegate all its legal functions to Harrow.

The Policy and Resources Committee will also be asked to agree that:

The council retains its own monitoring officer;
A limited scope of high level corporate legal support be removed from the scope of the inter-authority agreement with Harrow, and instead be provided ‘in-house’ and/or through separate external arrangements;
The council’s integrated Assurance Function be retained;
The outcome of negotiation with Harrow in respect of these matters be reported to the committee in due course, along with detailed proposals for amendments to the inter-authority agreement.

The Travers report explained that in relation to the role of monitoring officer at Barnet, the council decided in 2012 not to specify that a legal qualification was required.

In May 2013 the council’s legally qualified monitoring officer – who was also Director of Corporate Governance – left. The Director of Assurance, an accountant, was appointed to the role.

Travers recommended that the committee reject the option of having a shared monitoring officer, which would, he said, have represented “a significant shift of approach” if pursued.

His report to the committee said the suggestion of increased, directly-controlled legal capacity to support the monitoring officer had been accepted, however.

During negotiations with Harrow, arrangements for the delivery of a deputy monitoring officer function could be clarified and the potential for a shared head of the shared legal service considered, he added.

The committee was told that performance reports to the Strategic Monitoring Board for HB Public Law indicated that it had been providing a good quality of service to both organisations.

Travers described Lloyd-Jones' suggestion that the monitoring officer be designated as the client for the shared legal service as “a helpful clarification of the existing arrangements”.

The additional but limited scope of high level corporate legal support would enable the monitoring officer to have increased capacity to manage the inter-authority agreement as well, he said.

“The side agreement to the inter-authority agreement and the section 101 delegation will need to be reviewed as necessary through negotiation with Harrow Council,” Travers added.

Following the report to the Policy & Resources Committee, Barnet’s chief executive will consider whether or not there is a requirement for further formal action against individuals.

“The report does not consider matters of conduct or competence, and no inference should be drawn regarding individual officers of the council,” he said. “Such matters will be addressed in line with the council’s Human Resources policies.”

On the question of risk management, Travers said Barnet’s structure and operating model as a commissioning council was novel, “as are the arrangements for the delivery of legal services”.

He added: “The council’s risk management arrangements have acknowledged this through the stages of organisational design and implementation. The events described in this report represent the crystallisation of certain of those risks, and it is necessary for the council to consider the lessons learned and make changes as appropriate.”

Both Barnet and Harrow had reaffirmed their commitment to the continued success of the shared legal service, he said.

A spokesman for Barnet told Local Government Lawyer: “The shared legal service and, now, the committee system are both running smoothly.

“Ms Lloyd-Jones has made recommendations that would clarify responsibilities within the arrangements with HB Public Law. It will be up to the Policy and Resources Committee to agree the recommendations or otherwise.”