Governance failures most common challenge in best value interventions, report finds

The 'lessons learnt' report authored by the Ministry of Housing, Communities & Local Government (MHCLG) and thinktank Verian took in data from 24 councils in England, made up of 11 with experience of statutory intervention and 13 with experience of non-statutory intervention.

It revealed that while interventions delivered "their intended improvements and outcomes" and were generally regarded as successful, some councils complained about poor communication and a lack of transparency from central government.

According to the report, the main drivers behind the failure of their Best Value duties are governance, finance, leadership, culture, local politics, and external factors.

The most frequently reported challenges were governance-related, which were reported for 18 out of 24 councils, followed by financial (17) and leadership (16) challenges. There were 12 councils that faced cultural challenges, and 8 that experienced local political challenges.

The report said that governance failures ranged from specific governance weaknesses to complete governance breakdowns, "and in the most extreme cases, allegations of bribery and corruption".

Examples included a lack of process oversight, poorly defined officer roles, poor scrutiny, accountability and transparency in decision-making, and ineffective delegation.

In five councils, poor governance was associated with the disproportionate turnover of senior leadership roles, which led to instability across the organisations, according to the report.

It added: "In 2 of these councils, the transition from a committee to a cabinet system was viewed as contributing to reduced levels of transparency and accountability, which in turn led to their Best Value failure."

Elsewhere, it said: "Effective governance systems are vital for council performance. Weak internal structures, ineffective scrutiny, and defensive cultures reduce accountability and hinder problem identification.

"Financial and audit systems are particularly vulnerable to governance weaknesses, often exacerbated by funding cuts. However, not all councils facing similar environments fail, suggesting other factors influence Best Value failure."

Five councils meanwhile reported that their entry into intervention was not communicated transparently or with sufficient notice. Similarly, three councils with non-statutory Best Value Notices reported that they were unclear whether their Notice would be lifted, the report said.

Participants also called for "greater transparency" from MHCLG on the basis for interventions, arguing that this would reduce the risk or perception that the process can, or has been, politicised.

This had led to mistrust across local government of central government’s intentions for interventions, according to participants, who also stated that MHCLG and other departments still have work to do to ‘reset’ and improve the relationship.

Reflecting this, four councils reported that MHCLG did not transparently and sufficiently communicate the reasons for their Best Value intervention, while two stated the belief that the reason for their interventions was politically influenced.

Despite the criticisms, the majority of those who had experienced an intervention reported a positive experience (17). Six said it was too early to comment, while just one council reported a negative experience.

The report went on to make 11 recommendations, including that MHCLG updates its Best Value statutory guidance to clarify data sources used to monitor councils; processes for recruiting and appointing Best Value experts; roles and responsibilities of Best Value experts; processes for setting and reviewing expectations for Best Value experts; how intervention delivery and progress are reviewed; the range and flexibility of intervention models; and that receipt of Exceptional Financial Support does not automatically preclude a council from exiting intervention, depending on the drivers of EFS and its plan and progress.

It also recommended that MHCLG continue to use political advisors "with caution" and collaborate with the local government sector to strengthen its intervention approach, among others.

Adam Carey