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DCLG to withhold funding from district over transparency "failings"

The Department for Communities and Local Government is to withhold funding from a district council in response to alleged transparency failings.

In December 2014 Minister for Local Government Kris Hopkins accused Rother District Council of failing to comply with reporting regulations when it made redundancy payments to a former chief executive and two heads of service.

In a letter earlier this month to Rother’s Leader (Cllr Carl Maynard), Hopkins highlighted a “clear legal requirement” within the Accounts and Audit (England) Regulations 2011 for authorities to publish certain information on senior remuneration in their annual statement of accounts.

He noted that the secondary legislation set out the separate elements of remuneration that must be published for certain senior staff, and that this included any payments made in connection with the termination of employment.

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“Such payments cannot be protected from disclosure by confidentiality agreements,” the minister said. “To be absolutely clear, neither the Code of Local Authority Accounting nor past judgements by the Information Commissioner can override these statutory obligations.”

Hopkins also said that the DCLG had, in light of the approach Rother had taken in its annual statement of accounts, taken the opportunity to look at the local authority’s broader approach to transparency.

This had raised further concerns, the minister suggested in the letter, including that the council did not appear to be following best practice on Localism Act pay policy statements.

“Our guidance states that councils should ensure that pay policy statements are easily accessible to the public as stand alone documents, not hidden in committee papers. Your council does not appear to have followed this guidance,” Hopkins said.

The minister said he was also concerned that the information published on Rother’s website on senior salaries did not meet the requirements of the mandatory Local Government Transparency Code 2014.

“Indeed, I note that your council has stated that it intends to achieve compliance with the Code by April 2015,” Hopkins wrote. “Councils’ statutory obligations under the Code are very clear – the first set of quarterly data had to be published by 31 December 2014 and the first set of annual data had to be published by 2 February 2015.

“It appears from your website that your council has not published data in a number of important areas, for example, contracts over £5,000, land and assets, senior salaries, an organisation chart, trade union facility time, parking revenues, grants to the voluntary sector and the like. This is a significant failing.”

Hopkins said that, in light of this, he had decided to withhold Rother’s new burdens funding for 2014-15 in respect of publishing data in 2014-15 under the Code.

The minister said he would reconsider making a new burdens payment in respect of 2014-15 if Rother were able to show that the data specified in part 2 of the Code was published in line with the council’s statutory responsibility.

“However, I must be clear that we will also consider withholding any future payments if it continues to appear that the council is not complying with the Code, and therefore not incurring any relevant new burden,” he warned Cllr Maynard. “We may also take into account the extent of your compliance with these statutory obligations in determining your eligibility for future grants.”

Hopkins said the DCLG had decided against blocking Rother from taking part in the statutory notice pilot, in relation to which the council had submitted an expression of interest.

The minister concluded in the letter to Cllr Maynard: “Councils should aim to provide the highest standards of transparency, particularly in how they spend local taxpayers’ money, and certainly meet their legal duties. The public expect no less.

“It is our view that, as it stands, your council is failing to do so. I would therefore urge you to use the coming weeks to ensure that your authority takes the necessary remedial action and to ensure that local taxpayers in Rother have access to all the information that they have a right to expect.”

In his reply to Hopkins, Cllr Maynard said he was "hugely disappointed to receive such a letter from the DCLG only weeks before the general and district elections on matters where you believe we have not conformed to the various codes.

"With staff resources within Rother DC having been depleted by 27% over the last three years, our previous response offered the council's commitment to comply with the codes and legislation within a reasonable timescale and within existing staff resources," he said.

Cllr Maynard also stressed that Rother had never 'hidden' information from the public and its community – "indeed in the last two years we have only conducted two reports in confidential session and both these were to do with legal matters".

He added: "The changes made to our organisational structure and the redundancy payments were all in line with the council's redundancy policy and made clear in public reports."

Rother took its accountabilities to its community "extremely seriously", Cllr Maynard said. He added that the minister's view was not shared by the Conservative councillors and MPs in the area "who view Rother DC as one of the more responsible authorities".

Rother's Leader said the council would nevertheless make every effort to accommodate the minister's requirement over the forthcoming weeks.

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