Report Recommends Abolishing Council, Citing Loss of Spending Control

We wrote here about the problems at Northamptonshire County Council (NCC), both generally and looking at the issues around their outsourced service businesses, including a sorry tale of poor procurement and lack of ethics.

Anyway, the inspector appointed by the central government Minister to look into the council’s problems has now reported, and here is the output;  Best_Value_Inspection_NCC

It's a clear and effective report but shocking in its content. Max Caller CBE, an ex-local government CEO, says that the council is basically beyond redemption, should be closed down and replaced by two new unitary authorities, one for the south/west  of the county and one for the north. NCC has failed to comply with its statutory duty to provide best value in the delivery of its services and “a way forward with a clean sheet, leaving all the history behind, is required”.

The road to failure has a simple cause, he says – from 2013 “NCC lost tight budgetary control and appeared to abandon strong and effective budget setting scrutiny. Instead of taking steps to regain control, the Council was persuaded to adopt a ‘Next Generation’ model structure as the solution”.

A “Next Generation” model in this context means making the council a smaller, strategic, commissioning organisation, looking to outsource or spin out many of the delivery aspects of its work. Similar models have been implemented to some extent elsewhere – Barnet is perhaps the highest profile, and if I were a Barnet resident I would read this report with some trepidation.

But NCC pursued this model without any “hard edged business plan or justification to support these proposals”, as Caller says. Instead, it “served to obscure and prevent effective member oversight and budgetary control”. He also rejects the idea that Northamptonshire has special problems – it is not particularly disadvantaged, so that is not excuse for the shambles here.

He is also pretty scathing about the LGSS shared service venture which we wrote about here.

In structural terms there are no particular benefits or savings from doing this … it appears that staff working on NCC projects are employees of NCC and staff working on Cambridgeshire projects are CCC employees… staff are not deployed flexibly to meet need nor are they working to common standards… LGSS claims to have delivered significant savings… but it is very hard to see what additional saving has been produced by the structural grouping and what could have been generated by normal management action… much of the reported saving is not more for less but routine service reductions”.

Other new ventures were set up, but the radical Next Generation vision was never turned into a “practical system” and it was hard for ordinary councillors to see what was going on. There was limited commissioning expertise, poor reporting and governance. The culture also sounds toxic - as Caller says, “NCC works in silos and does not communicate well internally or share common objectives. This is not a recent phenomenon”.  And how about this: “overspending is acceptable and there are no sanctions for failure”.

In terms of the issue we wrote about here regarding the senior manager re-hired (without proper procurement process) after her “retirement”, Caller says this.

The inspection team received evidence expressing concern at the way in which a senior officer of the council employed in LGSS was made redundant and within 48 hours started work through a personal service company in LGSS. The inspection team referred this to the external auditors and it is understood that there will be a specific report on this matter to the council commenting on the appropriateness of this action”.

There are many questions here about how all this happened, and Caller does not name names. It’s hard to expect officials to be able to do too much in this environment, and elected members have to take ultimate responsibility, but we wonder what procurement staff thought of all this lack of spending control, and the awarding of contracts to these odd organisations like LGSS?

And how many other procurement professionals look in despair at their own organisation right now, but just think “well, I’m getting paid, there’s not much I can do about it so I’ll just keep my head down”.

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