Spelthorne Borough Council: Best Value Duty
(Limited Text - Ministerial Extracts only)
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The Minister for Local Government and English Devolution (Jim McMahon)
All hon. Members will recognise the importance of having well-functioning local councils which provide essential statutory services local residents rely upon. Local councils must be fit, legal and decent and this Government are aiming to fix the foundations of local government. Today I am updating the House on the statutory inspection of Spelthorne borough council and the steps I am proposing to ensure a focus on reform and recovery, alongside and within the wider context of having invited proposals for unitary local government in Surrey.
Best value inspection report
It is a matter of public record that Spelthorne borough council has significant debt leverage. Spelthorne’s debt stands at nearly £1.069 billion—as of January 2025—which is 62.2 times its total service expenditure and is the second highest level of debt for a district authority in England, after Woking.
A capital review by the Chartered Institute of Public Finance and Accountancy (CIPFA) highlighted concerns around governance and decision making. Following this, on 8 May 2024 the then Secretary of State, the right hon. Michael Gove, commissioned an inspection of the council and its compliance with its best value duty. He appointed Lesley Seary as lead inspector, alongside Mervyn Greer, who were later joined by Peter Robinson and Deborah McLaughlin. Inspectors were asked to report their findings by 31 July 2024. The deadline was subsequently extended to 31 January 2025. The inspectors completed their inspection and submitted their report to the Secretary of State for Housing, Communities and Local Government, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) and, as statute requires, provided a copy to the council. I am grateful to the inspection team for their thorough work, and to the council and all participants for their co-operation.
The report identifies some positive features at the council, such as strong resident engagement and positive local partnerships. The report also notes that the council has already taken positive steps to make improvements, including against recommendations made in the CIPFA review, such as the suspension of the planned housing developments and cessation of further borrowing for this initiative after determining it was no longer viable. However, the report documents serious concerns across a number of areas which I consider to be against its best value duty:
On Continuous Improvement: The report describes the council as having a “poor record” of adequately addressing recommendations from external reviews and the inspectors have no confidence in the council’s ability to make the changes “without significant external support”.
On Leadership: The report highlights that the council lacks consistent leadership, strategic direction, constructive challenge and a robust corporate plan. Optimism bias clouds officers’ awareness of risks, and to some degree the council has been “blindsided” by the financial situation.
On Governance: The report concludes that the council’s “poor, late and incomplete reporting, together with a lack of audit and a reluctance to accept and act on challenge” has “severely undermined informed decision-making” and there is a culture of secrecy.
On Culture: The report describes member and officer relationships as poor and deteriorating, with both sides describing a culture of mistrust and broken relationships which are “hindering constructive discussions” on key financial, housing and asset issues. Members and officers do not share an understanding of their respective roles. Inspectors consider the council to be insular and in denial of the situation it faces.
On Use of Resources: The report concludes that a lack of long-term planning, risk management and an “overly-optimistic reliance” on property markets has led to the authority’s financial strategy being unsustainable.
Compliance with the best value duty
I have carefully considered the report and other relevant material, including findings from the CIPFA review, recent reports from the council’s external auditors, and the corporate peer challenge conducted by the Local Government Association. I am satisfied that Spelthorne borough council is failing to comply with its best value duty in relation to continuous improvement, governance, leadership, culture, and use of resources. I am therefore minded to exercise powers of direction under section 15(5) and 15(6) of the Local Government Act 1999 to implement an intervention package that ensures the council’s compliance with its best value duty. The proposed intervention includes the appointment of commissioners to exercise certain and limited functions as required, for five years. The commissioner team, if appointed, would consist of a lead commissioner and commissioners with expertise in finance, commercial investment and governance. The council will be directed to prepare and agree an improvement and recovery plan to the satisfaction of the commissioners. I would like the commissioners to report on progress against this plan after the first six months, and then at six monthly intervals. I need to ensure the council’s compliance with its best value duty: the commissioners’ assessments will provide assurance to residents and strategic partners. The council will also be directed to actively engage with the commissioners while reviewing and implementing any proposals for unitary local government.
Representations
I am inviting representations from Spelthorne borough council on the respective inspection report and on the proposed intervention package by 28 March 2025. I want to provide the opportunity for members and officers of the council, and any other interested parties, especially the residents of Spelthorne, to make their views on the proposal known.
I made clear in my written statement of 5 February that potential proposals on unitary local government must demonstrate how local councils have sought to work together in coming to a view that best meets local needs and is informed by local views: given the potential implications for the proposals currently being developed by councils in Surrey for unitary local government, I have taken steps to ensure that this report will be seen by all relevant parties across the area. I will carefully consider all representations and any other evidence received, before deciding how to proceed with the council.
Conclusion
The proposal to intervene in Spelthorne borough council is not taken lightly. The proposed intervention package is designed to strengthen and accelerate the improvement work needed at the council. I am confident that the proposal will address the failings identified and is necessary to ensuring the council’s compliance with its best value duty. I hope that with focus and oversight, improvement will come at pace and that it will not be necessary for the commissioners to use their powers. However, they must be empowered to do so if they consider that the required improvement and reforms are not being delivered.
I am committed to working in partnership with the council to provide the necessary support to ensure its compliance with this duty and the high standards of governance local residents and service users expect.
I will deposit in the House Library a copy of the inspection report I have referred to, which is also being published on gov.uk today. I will update the House in due course.
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