Thurrock Council: Best Value Inspection Report

Thursday 15th June 2023 Written Statements

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

I am today publishing the best value inspection report into Thurrock Council, authored by their inspector, Essex County Council. The final version of this report was submitted to the Secretary of State on 19 May 2023, following a representations process whereby any particular individuals criticised were given an opportunity to read and respond to those relevant parts of the report before it was published.

This publication follows my update to the House on 16 March in which I confirmed that the Secretary of State for Levelling Up, Housing and Communities and I had formally expanded the Government intervention in Thurrock Council, appointing Dr Dave Smith as an independent managing director commissioner, and providing commissioners with further powers over Thurrock’s governance and staffing functions.

The best value inspection report details widespread failure in Thurrock Council’s financial, governance, and leadership functions. The challenges facing Thurrock “stem from a series of self-sustaining, systemic weaknesses which have allowed for repeated failure over many years." Although individual officers and members made significant mistakes, particularly in relation to financial investments, they were operating within broken systems at the council which are in urgent need of reform and improvement.

The report clearly sets out the events which led to the collapse of the council's commercial investment strategy last year, after that strategy was allowed to operate in an environment with wholly inadequate scrutiny and governance arrangements.

That failure has had profound consequences for the council’s financial sustainability, and the inspection report confirms that Thurrock is unable to balance its budget without exceptional financial support from Government, which has now been granted in principle for the financial year 2022-23. Going forward, the report makes it clear that in addition to realising extensive efficiency savings, the council will have to review the scope of its local services.

The report reveals that the pattern of failure which has characterised the council’s approach to commercial investment can also be seen in its delivery of major infrastructure and regeneration projects. These failings have resulted in the loss of substantial sums of public money. The council’s lack of openness and transparency prevented these failings from being properly scrutinised, and these losses were often concealed, or not properly reported.

The report concludes that these failings are attributable to the breakdown of political and managerial leadership; inadequate governance arrangements; and profound weaknesses in the council’s control environment.

The Government’s Response

The best value inspection report makes a number of recommendations, some of which pertain to actions that the council should take, for example to expand the scope of its improvement and recovery plan, and some of which relate to expanding the powers of commissioners.

I am pleased to confirm that the majority of the report’s recommendations have already been addressed by the expansion to the intervention I announced on 16 March, which provided commissioners with the powers to drive forward change in Thurrock council’s finance, governance, and staffing functions, which the report highlights as areas of particular concern.

The recommendation in the report on member development, and the importance of engaging residents in local democracy, accords with the concerns about leadership and member training raised in the first commissioner’s report and best value inspection update letter. The importance of strengthening member capacity at the council cannot be overstated, because all members will have a vital role to play in the council’s recovery. I expect Thurrock council to carefully consider this recommendation, and to work closely with commissioners to ensure that it is taken forward, for example, by being incorporated into the council’s improvement and recovery plan. I would expect that equally close attention is paid to the section of the report which focuses on the council’s delivery of major projects, where there are clearly lessons to be learnt.

The report also recommends that Thurrock council change its scheme of elections, from electing its members in thirds, to “all-out” elections, where all members are elected at the same time. The report recommends that if the council does not make this change by 31 July, that the Secretary of State should consider making an order under section 86 of the Local Government Act 2000 to secure this.

Given the pressing need to bring stability to the council, the Secretary of State has concluded that he wishes to seek representations on using his powers under section 86 of the 2000 Act, to bring about a move to whole council elections from May 2025. The May 2024 elections of one third of members will go ahead as planned, to ensure residents have the opportunity to have their say. It is important that Thurrock council can express its view on this proposal before a final decision is made. I have written to the leader and commissioners of Thurrock council today to notify them of the Secretary of State’s proposals, and representations should be received, from the authority or any other interested party, by 29 June.

This report lays bare a rare but significant case of a council failing to comply with its best value duty across several fronts. As I noted in my statement to the House on 16 March, I am hopeful that the recent expansion to the intervention will help the council to address the concerns set out in the best value inspection report, and to continue its vital work to improve the way in which the council is run.

The people of Thurrock deserve a well-run council that can fund the delivery of good-quality services in a sustainable and responsible way. Progress has been made in recent months but this will require significant improvements in the COUNCIL’S leadership, finance, and governance functions at both the political and managerial level. Commissioners will play a significant role in securing these improvements and informing Ministers’ ongoing response to the situation in Thurrock. The Secretary of State and I look forward to receiving the commissioners’ second report at the end of this month.

This will be a challenging time for Thurrock’s officers and members as they reflect on the findings and recommendations of the best value inspection report. The Government will continue to work closely with Thurrock council and its commissioners, and we remain fully committed to supporting them in their improvement journey.

A copy of the best value inspection report will be placed in the Libraries of both Houses.

[HCWS852]