Minister acknowledges “significant steps forward” at Thurrock including on governance, but warns of need for changes to be embedded

It is clear that Thurrock Council is working hard to meet its Best Value Duty and it is positive to see a corporate plan and conclusion of a governance review, “both significant steps forward”, a Government minister has said.

The comments from Baroness Taylor of Stevenage, Lords Minister for Housing and Local Government, came in a letter to Thurrock’s Lead Commissioner, Gavin Jones, its Managing Director Commissioner, Dave Smith, and the Thurrock Council Commissioners after their fourth report on the intervention at the unitary.

Baroness Taylor also wrote, however, that as the Commissioners had reflected, “changes need to be embedded and become part of the council’s business as usual activity.

“There remains a need for Thurrock to strengthen its collective leadership, aspects of governance and scrutiny, and implement changes to its operating model.”

She added that the Government had been clear with councils in Greater Essex that Commissioners have “a vital role, not only in supporting Thurrock to continue to improve, but also in responding to the invitation to all principal authorities in Greater Essex to provide proposals for local government reorganisation, to ensure that proposals are robust”.

The Parliamentary Under-Secretary called on the Commissioners, with the statutory intervention due to end on 1 September, to deliver their next report by Easter (20 April 2025), including an assessment of the extent to which the Best Value Duty is being met.

The Commissioners’ fourth report, which was submitted on 29 November 2024 and so before the Government postponed the May 2025 elections as part of its devolution priority programme, noted an increased pace of improvement activity across the council, particularly in terms of the outputs and deliverables being produced.

The report said: “We are optimistic about the council’s progress to date but looking ahead over the next year and with the all-out elections in May, we require further evidence that these outputs will bring about the necessary cultural and behaviour change that we expect to see from both Members and officers across the organisation. It is vital that any improvements are embedded enough to withhold any changes to either the political or managerial leadership.

“However, at this point, we can see the legacy of the learned behaviour and cultures referenced in the Best Value Inspection (BVI) report affecting the wider working of the council. We would urge the council to focus on strengthening its collective leadership, both politically and organisationally, increased collaboration and improved communications between directorates and embedding a one council approach to performance and policy.”

The Commissioners said Thurrock had made substantial progress since their last report in January 2024 on improving its financial position.

The fourth report also highlighted the conclusion of the Governance Review at the council.

“The outcome and priority actions identified in this work, led by the Monitoring Officer, has created a clear, comprehensive action plan to strengthen the authority’s governance function, as outlined in the Directions. A previously disconnected series of improvement activity has now been brought together into holistic package, underpinned by a strategic vision for the council’s governance,” it said.

The approach to the Constitution Review at Thurrock had meanwhile been “refreshed and streamlined, and, as a result, activity has moved more quickly than before”.

On a separate issue, the report revealed that the Commissioners have had concerns about the governance arrangements for the Thames Freeport. “Negotiations on governance and establishing the related necessary legal agreements were proving challenging and slow moving. The Council, as the Accountable Body, has in recent months made the necessary progress in establishing appropriate agreements to institute effective governance with partners, but work is ongoing to ratify these into legally binding agreements. We expect this to have been resolved by the time we submit our next report.”

In relation to the council’s culture, the report described relationships between members and officers as “steady, with portfolio holders engaging well with relevant officers on their areas of responsibility”.

However, it also warned that – as noted in a previous report – there were still examples where a limited number of members had not treated officers and their decisions, or their fellow members, with the respect and courtesy that the Commissioners would expect to see within a professional organisation.

“This cannot be tolerated and needs to change,” the report said, adding that dealing with member conduct issues continued to take up a significant amount of certain senior officers’ time.

In the conclusion to the report, the Commissioners said: “As we look ahead to the end of the period of the Directions in September 2025, Thurrock Council should be proud of its achievements to date, but the council needs to remain focused to meet the targets it has set itself over the coming months in the run up to the Budget and ahead of the all-out elections. We will need to take a view on whether the council is meeting its Best Value duty in our next report in the new year.

“It is our current view that at this stage, we do not have evidence that the improvements we have seen are sufficiently sustainable or embedded across the wider organisation. Additionally, a substantial amount of improvement activity is due to be completed ahead of the all-out elections and the next municipal year. We expect that in some areas, for example around leadership and culture, these changes may take longer than the current timeline for the end of intervention.”

The Commissioners added that, in their future reports, if they have sufficient assurance that the implemented or planned improvement activity will bring about this sustainable change, they may look to discuss with the Government the current model of intervention, “including whether and at what point it may be appropriate to review the timeline, amend the Directions or hand back any Commissioner powers”.

However, until the position is clearer on long-term financial support, the Commissioners “anticipate that some form of external involvement will likely be required to provide oversight of the council’s financial position and support on its journey to financial sustainability”.

Dave Smith has been reappointed as Managing Director Commissioner at Thurrock until the current Directions expire on 1 September 2025. Baroness Taylor said the Government is minded to appoint a replacement for outgoing Finance Commissioner Nicole Wood in due course.

Responding to the Commissioners’ fourth report and the Government’s response, Cllr John Kent, Leader of Thurrock Council, said: “The fourth report from Commissioners is a reassuring read, setting out the progress the council made last year both in terms of getting our finances back onto a more sustainable footing, and in making improvements to the way the council is run.

“However, it’s clear to me that we can’t take our foot off the pedal. When I became Leader I knew that the significant problems of the past meant we had to be in it for the long haul, ensuring we make meaningful and deep-rooted changes that set us on the right path for years to come. With devolution and local government reorganisation now offering Thurrock a chance for a fresh start as part of something stronger, more resilient and better able to deliver for residents, it remains as important that we get our house in order, and continue to make savings and transform how we work.”

The previous government ordered intervention and a best value inspection of Thurrock in September 2022 in response to urgent concerns about the council’s level of financial risk and debt.

A report in December 2022 said the local authority was planning to request exceptional financial support from the Government in order to resolve a £470m funding gap partly resulting from solar farm investments.

Thurrock went on to issue a section 114 report later that month. The intervention was subsequently expanded in March 2023.

Last month a multi-million-pound claim brought by Thurrock against 23 member councils of the Association for Public Service Excellence (APSE) was paused following an agreement between the parties to stay proceedings.

Thurrock had issued proceedings against the 23 local authorities last year, alleging that the association provided "negligent" valuations of solar farm assets that it says led it to invest millions in bonds.

APSE's management said the APSE associate who prepared the valuations stood by his calculations. The association also "vigorously" disputed Thurrock's argument that it must seek to recover from APSE and its member councils to meet its Best Value Duty.

The council had previously issued a separate claim against the businessman behind the venture, Liam Kavanagh, three months prior in an attempt to claw back £150m in investment funds that the council claims were misused. Kavanagh has strongly denied the allegations.

The suspension in proceedings against APSE is intended to allow Thurrock to reach the final determination in the Kavanagh case, according to a letter sent by APSE to its member authorities.