Localis, an independent think-tank focused on politics, public service reform, and localism, has published a new report urging English councils to renew their commitment to high ethical standards in financial governance.
The report, titled “Present Tense: renewing and reforming local financial governance towards long-term resilience and sustainability,” acknowledges the challenges faced by councils since the abolition of the Audit Commission in 2010 and the current financial constraints. It emphasizes the importance of improved governance to ensure the success of the new government’s efforts to rebuild local public finances.
Among the principal recommendations directed at local authorities, the report calls for a shift towards long-term financial planning, formalizing checks and balances, and strengthening internal audit functions to identify potential financial threats. It also urges councils to create a culture that embraces challenge and criticism and holds leaders accountable.
Localis Chief Executive Jonathan Werran stated, “In renewing governance, the task for local authorities is extremely challenging. However, there is still work to be done in universalizing a reformist mindset in the sector and ensuring that an ethos of public service, combined with long-term, strategic thinking, guides local decision-making and service provision everywhere in England.”
The report also makes recommendations for central government, including the establishment of a framework that defines good governance and outlines the roles and responsibilities of local government. It suggests that the new multi-year settlement should align with the statutory duties of local authorities and fund preventative measures and long-term resilience projects.
In addition, the report recommends that the government provide support for recruiting and retaining experienced governance officers and consider empowering a national body or creating a set of local bodies to oversee the local government audit system.
Localis Senior Researcher Callin McLinden said, “Local authorities continue to face unprecedented financial challenges, exacerbated by years of austerity and outdated funding models. Our report reveals an alarming erosion of governance capacity, undermining councils’ ability to manage finances, oversee contracts, and plan effectively.”
Grant Thornton UK LLP, an independent assurance, tax, and advisory firm, has also expressed support for the report’s findings. Simon Christian, Local Government Consulting Director at Grant Thornton UK LLP, stated, “Now is a time for renewal in governance in the local government sector. The systems of oversight and scrutiny need to be improved both nationally and within local councils.”
The report emphasizes the need for a collaborative approach between the government and local authorities to rebuild trust and ensure resilient local finances in the long-term. It also highlights the importance of transparency and public engagement in decision-making processes.
For more information, please contact Nuala Cudmore, Communications Manager at Localis, via email at nuala.cudmore@localis.org.uk or by phone at 07510 691149.
About Localis:
Localis is an independent think-tank dedicated to issues related to politics, public service reform, and localism. They carry out research, hold events, and facilitate a network of members to stimulate and challenge the current governance of the UK. For more information, please visit their website at www.localis.org.uk.
About Grant Thornton UK LLP:
Grant Thornton UK LLP is one of the world’s leading organizations of independent assurance, tax, and advisory firms. They employ over 62,000 people in over 140 countries, with over 5,500 employees in the UK. Grant Thornton UK LLP has been working with local authorities and other public sector clients for over 30 years, providing consultancy, advisory, and assurance expertise to support them in managing their challenges and opportunities. For more information, please visit their website at www.grantthornton.co.uk.
Key report recommendations:
Recommendations to local government:
– Embed the Nolan principles of standards in public life to reinforce ethical leadership and transparency.
– Adopt a paradigm shift towards long-term financial planning.
– Create a culture that embraces challenge and criticism.
– Formalize checks and balances, establish channels for open communication, and encourage a culture of learning from past mistakes.
– Strengthen internal audit functions and proactively identify emerging financial threats.
– Review public interest and auditor annual reports to identify best practices and implement recommendations.
– Collaborate to attract and retain experienced officers.
– Improve transparency and public engagement.
Recommendations to central government:
– Establish a framework for local government that defines good governance and outlines roles and responsibilities.
– Align the new multi-year settlement with statutory duties and fund preventative measures and long-term resilience projects.
– Reinstate legal protections for statutory officers.
– Support recruitment efforts to attract and retain experienced officers.
– Invest in the audit sector to clear the backlog and improve quality.
– Review and renew the standards regime for local authorities.
– Consider empowering a national body or creating a set of local bodies to oversee the local government audit system.
