Opinion: The Council Is at a Crossroads – Where is the Required Leadership?

Published on: 30 Sep, 2023
Updated on: 3 Oct, 2023

Bernard Quoroll

By Bernard Quoroll

The recent announcement by GBC and its Liberal Democrat leadership raises questions.

For the avoidance of doubt, I do not belong to or support any particular political party, nor ever have but I do have experience as a former CEO of several local authorities and as an official “independent person” for Guildford Borough Council.

The background is that the council, originally and knowingly, adopted a deficit budget with a built-in shortfall of £3.3 million for the current year. It was hoped to make in-year savings in order to balance the books. (Councils are required to balance their books each year. Passing a deficit budget without a full understanding of how the deficit is going to be met is in my view, poor practice and in some circumstances, unlawful.)

It then became clear from officer reports that the council’s financial management and control systems were in almost complete disarray. Worse, the budget deficit was not only for the current year. It is projected to get much worse in years to come and will carry with it the continuing threat of a need to issue a Section 114 notice by the Council’s Section 151 officer. (He or she is the finance-qualified officer appointed by the Council with a statutory duty to blow the whistle, should a situation equivalent to bankruptcy arise. The issue of such a notice stops all expenditure within a council, as we have seen at Woking).

It became clear… that the council’s financial management and control systems were in almost complete disarray

GBC were apparently confident that they could manage an in-year deficit because reserves had been massively and artificially inflated by a figure of £10 million which had been wrongly posted as a financial asset, when it was in fact an obligation to repay monies due to central government.

The failure to query such a huge figure, which must have stood out like a sore thumb in the accounts, is in my view, itself a shocking failure of governance. You don’t have to be finance qualified to ask the question, “What is that?”

The council’s website now carries an announcement that measures recently taken and intended will avoid the need for a S114 notice in the current year and cross references an “update report” by officers, describing the progress being made in fixing things, which is due to be considered by the Executive and the full council in early October.

Because of a simultaneous press release by the Liberal Democrats there is some ambiguity in my mind about whose announcement this is and why it appeared in this way. The only person who can issue or decide not to issue a Section 114 notice is the Section 151 officer – not the largest political party and not even the council.

I would not have expected an announcement of such importance to have been made on the council’s website before it had first been reported to the whole council and formal approval sought for any measures which need to be taken or ratified to close the budget deficit, which is a function of the whole council. This is more than a formality.

I would not have expected an announcement… on the council’s website before it had first been reported to the whole council

Councillors should expect to be allowed an opportunity to consider changes in service levels or cuts for which voters will hold them accountable. It is more than a courtesy owed by the officers and the administration to other parties, it is a requirement. If such measures affecting service delivery are to be taken without public consultation, because of urgency, that also needs justification.

The update report itself is heavy on what is being done to manage the council’s finances better in future and those measures are to be commended, although many of them just repeat what has already been reported and amount to little more than reviewing the day-to-day job of financial management and control systems which are commonplace in any well-managed council.

The fact that almost every aspect of financial and general management processes in the council also apparently need to be addressed, suggests that the whole delivery structure will be in recovery for some years to come. Some confirmation of the necessity for this is provided by another shocking revelation reported in recent stories in The Dragon relating to mismanagement of the ring-fenced Housing Revenue Account, which gets a passing mention in the update report.

The report is however light on what steps are actually being taken to increase income and reduce expenditure in the current year and what the effects on services will be. Reducing expenditure is my euphemism for cuts and freezes of job vacancies which themselves have an impact on services. There is an list of possible candidates for reduced expenditure as an appendix to the report but only in relation to future years and only as a simple wish list.

There is also no reference in the report as to to how consultation with the public should be carried out. That may be because all the focus is still on chasing for savings. But planning the way the public can express their views needs to start now and within the context of a budget making timetable.

It should be remembered that the process for making next year’s budget in the context of a medium-term financial strategy should already be underway; it promises to be much tougher than just balancing the books in the current year.

…there is a very long journey ahead

The only people who so far seem to me to have earned any credit are the current senior officers, who are mostly new senior appointees, some of whom are temporary employees. What their reports indicate to me is that there is a very long journey ahead, rebuilding financial systems and developing management skills to a level where the council can be relied upon in future.

This situation is more than a glitch and unlikely to have arisen overnight. It speaks volumes as to the way things were being done, or not done, before and the need for root and branch reform, which will take time and good consistent political and managerial leadership to implement.

Given the turnover of senior staff which Guildford has historically and is continuing to suffer, that is no mean task. This is a crossroads. Get it right and GBC has the potential to rebuild itself as a top rank council. Continue papering over cracks and the future looks bleak for the recipients of council services and for the morale of the generality of staff, who deserve better.

…the current dysfunctional style of political leadership

The indecent haste with which the Liberal Democrat administration seems to be attempting to promote a feel good factor and by implication claim some credit for work done by the officers, whilst ignoring the legitimate interests of other parties whose cooperation they sought so earnestly when the crisis first arose, does not bode well for future cooperation between them.

It will only get worse if they play similar games with the public who have a right to be consulted before decisions are taken. Cooperation between the parties, many of whom have arguably contributed to or presided over the current situation, is most likely to happen if the current political administration stop trying to steal a march on their opponents for short term electoral advantage.

This appears to be the second time that has happened recently. I doubt if other parties will allow them a third chance. This is an ongoing crisis and one which will not be solved by the current dysfunctional style of political leadership. If it is not addressed, GBC will not get and keep the managerial leadership it needs and everyone will be the poorer for it. It is time to “wake up and smell the roses”.

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