Research project to boost understanding of councils on how to reduce risk of corporate governance failures

The Centre for Public Scrutiny (CfPS) and Localis are undertaking research aimed at enhancing councils’ understanding of how they can diagnose and reduce the risk of failure in corporate governance, and what success factors can point the way to greater strength in this area.

The research has been funded by a consortium of partners – the Ministry of Housing, Communities and Local Government, the Local Government Association, the Chartered Institute of Public Finance and Accountancy, Local Partnerships and law firm Trowers & Hamlins.

Writing on its website, CfPS Director of Research Ed Hammond said: “Good governance is important in ensuring good decision making and leadership in local authorities. Weakness in governance can have far reaching implications for individual councils and the people they serve.

“It is therefore important for councils to have a way to work through what good governance looks like for them, how the risk of weak governance can be minimised and the attitudes and behaviours that underpin this. In extreme cases, governance failure can lead to informal and formal oversight being imposed by central Government.

“The research will engage closely with these instances because of the wealth of evidence that exists about governance failure – and subsequent improvement – in those cases. But it will not provide a forensic study of individual interventions, instead drawing out common themes and lessons which can be analysed to provide practical support to councils.”

The CfPS and Localis previously produced a discussion paper on this topic entitled “Decline and fall”.

Hammond said they would now focus in more depth on specific governance issues in order to:

• Better understand what evidence can be found that could signpost to the risk of governance failure, and help councils to mitigate those risks by strengthening governance systems. “Researchers will look in depth at six case study councils to identify early indications of the risk of governance failure before that failure became evident, and will take a wider view of councils’ experiences in develop strong and effective models of governance. Together, this evidence will contribute to practical tools for councils to deploy to take local action on governance.”
• Provide practical advice to councils as to how they can recognise and act on the risk in their own area. Researchers will consider whether it is possible to put in place tools to assist local leaders, decision-makers and scrutineers to better understand how governance risk can present itself, and how it can be arrested.

Hammond said researchers were keen to learn the views of the wider sector on the issue. Findings alongside a practical toolkit for councils will be published in mid-May 2020.