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The Local Government Association is to introduce two new kinds of peer challenges, but is being forced to rethink other parts of its offer after ministers pulled funding.
Under its contract with government to deliver sector led support, the LGA will now offer finance and governance peer challenges alongside its regular corporate peer challenges in a bid to provide greater assurance on struggling councils.
Government funding for sector-led support will remain at £18m in 2023-24 however, the Department for Levelling Up, Housing & Communities will no longer fund the association’s work in a number of key areas. Dennis Skinner, the LGA’s director of improvement, told LCG that the government had thought about “what they wanted to get out of £18m”.
The areas no longer being funded by the government include work on procurement, climate change, the housing advisors programme and equality, diversity and inclusion. The LGA is exploring ways it can continue to provide support in these areas.
Mr Skinner said DLUHC had been “very clear they wanted to prioritise other areas around workforce and governance”.
Abi Brown (Con), chair of the LGA’s innovation and improvement board, told LGC the LGA was expanding its sector-led support offer in other ways, including through a new programme of support for council chief executives and a mentoring scheme for chief finance officers.
She said the finance and governance challenges would be “targeted for a relatively small number of local authorities who specifically want, or we feel need that kind of support”.
Cllr Brown suggested that “perhaps” in the case of recent failed councils, such as Thurrock Council and Woking BC, “maybe a governance challenge, or a finance challenge at an opportune moment may have helped”.
She said it was “very hard” to say whether the new approach would avert another major council failure and stressed it was a “minority” of councils that got into trouble.
The new approach follows the LGA’s own corporate peer challenge which reported earlier this year and recommended the body strengthen its approach to sector-led support.
Asked whether she felt the number of councils that have failed in recent years was a failure of sector-led support, Cllr Brown pointed to the work started in response to the LGA’s peer review to map the whole assurance framework for local government.
“It does feel for me like this is a bit of a moment for local government,” she said.
“We are recognising for ourselves that we need to evolve as an organisation in terms of support that we provide, because we recognise our own members are evolving in terms of the complexity of what they’re having to deal with and the challenges that they’re facing.”
One of the criticisms of the sector-led support system is that it is voluntary. Former chair of the LGA Carolyn Downs told LGC recently that peer reviews should be made mandatory.
Asked what would happen if a council refused to engage with a peer review, Cllr Brown said there was a “change in the way that we feel about this”.
“All four political groups [on the innovation and improvement board] believe that we need to slightly change our approach and move together to do that and take our groups with us.
“It’s not a huge scale change, because there’s an element of reflecting that the system that we’ve got at the moment of corporate peer challenges are broadly the right tool to use.
“But if a council is saying, I don’t really want to do this, how do you address that? That might be politically, that might be through the organisation, maybe through other means. And I think actually, we are having that conversation around how we do that.”
Mr Skinner said it was “disappointing that there’s been a few councils that have got into significant difficulties”.
He said that raised the question the LGA was looking at in mapping the assurance system for local government.
“Why didn’t the other bits of checks and balances work as they should have done which, were perhaps more pertinent for some of those councils than corporate pay challenge?”
“One of the checks and balances of about audit has clearly failed.”
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