Government issues Best Value Notice for combined authority over continued concerns about governance arrangements

January 27, 2023

The Department for Levelling Up, Housing and Communities (DLUHC) has issued a Best Value Notice for the Cambridgeshire and Peterborough Combined Authority (CPCA), as ministers "remain concerned" as to the combined authority's ability to comply with its Best Value Duty.

In the letter to the CPCA's Interim Chief Executive, Gordon Mitchell, DLUHC called on the combined authority to engage with its recommendations, continue investigating internal cultural problems, and deliver against an improvement framework it has been set, among other recommendations.

CPCA first sought formal help from the Government in June 2022 in the wake of a report by its external auditors, Ernst & Young, which claimed the authority had "insufficient capacity, capability and an inappropriate culture to support the effective governance and operation of the organisation and how it discharges its statutory services".

The external auditors raised concerns over an increased rate of employment-related claims against the authority, vacancies in the authority's senior management team (particularly at the Chief Executive level), and weaknesses it had observed in how the extraordinary meeting of the Authority Board makes informed decisions.

The combined authority’s mayor, Dr Nik Johnson, was almost ousted over the external auditor’s findings in an extraordinary board meeting, but the Best Value Notice reveals that one of the Government’s concerns on partnership working predates Mayor Johnson.

Following the report, the DLUHC withheld £1.3 million in funding earmarked for the authority as part of a precautionary approach to allocating funds to the CPCA.

Independently of the external auditor's report, the DLUHC identified "significant" delivery concerns in some of the programmes delivered by the authority, concerns around partnership working, and concerns in respect of procurement of services.

In its Best Value Notice, the DLUHC said: "Given the seriousness of the issues identified, a failure to deliver the level of change required at sufficient pace would be very concerning."

It set out a list of expectations which call on the authority to:

fully engage with the Independent Improvement Board and its recommendations.
continue in its efforts to deliver at pace against the improvement framework and the action plan, meeting the set milestones.
continue in its efforts to conduct investigations at pace and to implement cultural change, particularly in relation to the relationships between officers and members and with the Mayor's office.
endeavour to achieve strong partnership working, built on consensus and shared vision.
ensure a robust, open, and transparent recruitment campaign to make permanent appointments to the senior team in a timely manner.
commit to regular official level engagement on progress against the Best Value Notice, on a quarterly basis initially. "We expect any requests for information to be fully and promptly met. The Department will also look to the Independent Improvement Panel for regular updates and assurance on the authority's plan and its delivery as part of our engagement on this matter."

The letter added that the authority may now receive and be awarded Government funding again but emphasised that this does not indicate the DLUHC's broader view of the performance of the authority.

Commenting on the notice, a spokesperson for the CPCA said: "A proposal for an initial Improvement Plan was agreed by the Combined Authority Board on the 30th of October which address the governance issues and other areas identified for improvement."

The combined authority added: "Implementation of the Improvement Plan has been underway for several months. An Independent Improvement Board (IIB) set up to oversee the Improvement work, met earlier this month for the first time to review progress and the Combined Authority are fully committed to implementing their recommendations. Whilst there is still much to do, good progress is being made and the IIB are supportive with the direction the improvement is taking."

Adam Carey