Slough Borough Council

Kemi Badenoch Excerpts

Wednesday 1st December 2021 Written Statements

[The Minister for Levelling Up Communities (Kemi Badenoch)]

On 25 October 2021, I announced to the House that the Secretary of State was minded to intervene at Slough Borough Council (“the Authority”) and to appoint commissioners to take over functions associated with financial management and governance, oversight of the collection of revenues and distribution of benefits, and non-executive functions relating to the appointment and dismissal of statutory officers.

At the same time, I sought views on how best to improve political stability in the Authority’s leadership and to move towards a four-yearly election cycle.

These proposals followed the publication of an external assurance review, led by the Chartered Institute of Public Finance and Accountancy and Jim Taylor, the former chief executive of Salford City Council, Trafford Council and Rochdale Borough Council. The review showed that the Authority had failed in its best value duty. This is a requirement set out in the Local Government Act 1999 to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness. In addition, the review showed that the financial challenge was acute, and that the Authority could not become financially sustainable without Government support.

The governance element of the review identified poor practices which had dated as far back as 2011, but which were still occurring today; the council was unable to resolve such difficulties on its own (p.29). The council had the third highest level of borrowing per head for councils in England, but there was little evidence of any concerted, strategic, or commercial plan of investment; there was little evidence that the council understood the financial implications and risks of such borrowing (p.21).

Financial government was poor; the council was not equipped to undertake pre-decision scrutiny; its budget lacked clear business cases setting out how its planned savings could be delivered (p.17). There was no significant corporate ownership or understanding of finance; if the senior council senior team and senior members had acted more rigorously, the current financial impact on the council could have been mitigated (p.18).

As part of my announcement in October, I invited the Authority to make representations about my proposals to formally intervene on or before 5 November 2021. The Authority, its Conservative councillor group, an independent councillor and seven residents made representations. All representations supported the intervention and the proposal to appoint commissioners. The Authority accepted the findings of the external assurance review, stated that it looked forward to working with commissioners, and in relation to elections, confirmed that it had established a cross-party working group and planned a consultation. The Conservative group and the independent councillor pledged to work with the commissioners. Residents were universally supportive of the intervention and keen to see real improvement in the Authority’s services.

Best value intervention in Slough Borough Council

Following consideration of these representations, the Secretary of State has decided to proceed with the proposals announced on 25 October.

The Secretary of State is mindful that the lessons from past interventions suggest that once commissioners are in post, additional issues can arise. He is therefore directing the Authority to undertake an assessment of the functional capability of all service areas within the next three months, to identify any gaps in capacity and capability, and may expand the scope of the intervention if necessary.

Appointing Commissioners for Slough Borough Council

The Secretary of State has decided to appoint two commissioners with a proven record of leadership and transformation, strong financial management and governance, and the specific expertise that will be relevant to their functions.

Max Caller CBE (Lead Commissioner)—Max led the best value inspections at Northamptonshire and Liverpool and was a commissioner at Tower Hamlets. Max is a former chief executive of the London Boroughs of Hackney and Barnet and former chair of the Local Government Boundary Commission for England.

Margaret Lee (Finance Commissioner)—Margaret recently retired from Essex County Council where she held senior finance roles, including the statutory finance officer, and is a member of the London Borough of Croydon improvement and assurance panel.

The commissioners have been appointed for three years from 1 December 2021 to 30 November 2024, or such earlier or later time as we determine. We are clear that the directions should operate for as long, and only as long, and only in the form, as necessary.

The commissioners will be asked to provide their first report within the next three months, with their initial views and an assessment of whether they require further support. If further appointments are necessary, we hope to reflect the diversity of Slough’s population. Further reports will be provided every six months, or as agreed with the commissioners.

I want to be clear that most decisions will continue to be made by the Authority; the intention being that commissioners will only use their powers as a last resort if they are dissatisfied with the Authority’s improvement processes.

Commissioners will work collaboratively with the Children’s Services Commissioner, Trevor Doughty, to make sure that these vital services continue to be delivered effectively and efficiently in line with the Authority’s statutory duties. The Children’s Services Commissioner will continue to support the Slough Children First company and Slough Borough Council on its important work to continue to improve children’s social care services, which are no longer rated “inadequate”. He will also work with the council to explore the ideal future scope of services to be delivered by the company, including the recommendation on this in Jim Taylor’s report.

Following the recent Ofsted-Care Quality Commission inspection of local services for children and young people with special educational needs and or disabilities (SEND), the local area must now prepare a written statement of action setting out how it will improve these services. The Department for Education is supporting the council in this important task, and is considering how to engage and work with the commissioner team to ensure this work is also prioritised.

I am also asking the commissioners to support the Authority in relation to the negotiations with the Department for Education on the safety valve intervention programme. The Authority will participate in the programme given the size of its dedicated schools grant deficit. The programme requires collaboration across education and finance leadership for the long-term benefit of children and young people with high needs.

As with other interventions led by my Department, the Authority will be directed to meet the costs of the commissioners. The Government have reviewed the level of fees paid to commissioners appointed using powers in the Local Government Act 1999 and have determined that they should be uplifted. The fees paid to individuals are published in appointment letters which are available separately on www.gov.uk. I am assured this provides value for money given the expertise that is being brought, and the scale of the challenge in councils requiring statutory intervention. Given the importance of these roles, my Department will also move to a new annual open recruitment process to identify potential candidates for future commissioner appointments and other non-statutory improvement roles. Further information on this process will be published in due course.

Future of Slough Borough Council

Since the publication of the external assurance review the Authority have updated their financial position. The situation is unprecedented. Commissioners will play an important role in informing Ministers’ response to the situation in Slough, including the council’s request for exceptional financial support, and what the right medium-term plan might be for Slough, given the scale of the financial and wider challenges facing the council.

Conclusion

The Government will continue to work closely with the political, business, and cultural leadership of Slough, and is committed to making sure the residents of Slough have what they need from their local council, including confidence in its service delivery and financial management and governance.

I have published the directions and explanatory memorandum associated with this announcement at https://www.gov.uk/government/collections/intervention-at-slough-borough-council.

[HCWS435]