Independent report

Nottingham City Council: Improvement and Assurance Board report (18 May 2023)

Published 18 May 2023

Applies to England

1. Introduction

The Board’s last report focused on the Council’s response to the Statement of Requirements which was issued in September following the Secretary of State‘s decision to retain the Improvement and Assurance Board (IAB), but with powers of direction. The Statement of Requirements remains very relevant to the Board’s oversight of the progress of the Council in delivering its recovery and improvement plan. The independent IAB members have issued a series of instructions to the Council with a specific timeline attached to each instruction. This report will track the Council’s performance in delivering its improvement and recovery plan, fulfilling the requirements laid down in September 2022 and measuring the progress against the directions within set timescales.

2. Governance

Although the Council’s constitution was agreed in September 2021 the Board has continuously challenged the practical application of the governance arrangements contained in the constitution. Decision-making is underpinned by a scheme of delegation alongside a protocol for managing the process. It is encouraging to see there is greater clarity now in the way in which decisions are taken, and by whom, but evidence remains of instances of delay or variation in the outcome of the decision-making process. A deadline has now been set, by instruction, through which sound governance in decision-making must be effected.

The Council is also charged with ensuring it has robust arrangements for managing its role in partnerships, and protocols pertaining to joint working. This also extends to commissioning and procurement of services and the oversight and management of outsourced services. Much has been done to address these challenges and, again, an instruction specifies the timeline within which this must be completed. In terms of risk, the Council has established a comprehensive approach to risk policy and practice which accountability and management properly recognise. The challenge now is to ensure that the concept of risk and its implications, in the context of the Council statutory duties, is fully embedded in the organisation at all levels.

3. Finance

The Board has been clear and unequivocal in specifying what is required for the Council to provide financial resilience and sustainability in the short, medium and long term. The annual budget and medium term financial plan will be considered by the Council on 6 March and the outcomes must demonstrate a balanced and properly resourced revenue budget supported by a capital investment plan without recourse to further borrowing. A 4 year medium term financial plan must adhere to the same principles of rigour and balance and be entirely consistent with transformation, workforce and service planning.

The finance improvement plan is critical in terms of ensuring sound and secure financial management, budgeting and accounting arrangements. There has been some limited advances in this area but the Council now concedes that it has made unsatisfactory progress in virtually all of the key elements of the Finance Improvement Programme. This needs to change as the Board looks to an early resolution of the problems relating to the experience and the calibre of staff for the finance function. It can be noted that the new permanent Corporate Director of Finance and Resources, and Section 151 Officer, started at the beginning of January and an offer of appointment has been made to an individual for the Director of Finance, Deputy Section 151 Officer role.

4. Transformation

Fair progress has been achieved in the development of the transformation plan and its relationship to the medium term financial plan although the resources needed to affect fundamental change in ways of working have yet to be formally approved. Changing behaviours in terms of working practices remains a challenge, but for the support of consultants including PWC and Newton Europe, as well as the LGA, Essex County Council and CIPFA have been positive to date. Again, there is an instruction that determines the timescale within which this work must be completed.

The Change Academy team has been effective in championing transformation and there are increasing signs within the workforce generally that such messaging is taking root, but this is not universal.

5. Companies

The programme of company reviews is proceeding within a set timescale. The Board has sought acceleration of this work but, perhaps inevitably, the complexities associated with governance arrangements and company law sometimes run counter to the desire for greater pace in achieving change. Enviroenergy, Thomas Bow and Nottingham City Homes have progressed quite well although issues remain with NCH subsidiaries. Revenues and Benefits is programmed to be moved ‘in-house’ and a plan is in place for the remaining companies to be reviewed.

Governance remains an issue and the Board looks for very early progress in putting in place appropriate safeguards against the potential conflict of interest of Board members together with ensuring the Councils own involvement recognises the fiduciary responsibility to residents/council tax payers.

On a separate point the Council must ensure that sound business plans are in place for Tram Link and Nottingham Castle before NCC support or investment is contemplated. Instructions include the Council maintaining such a discipline.

6. Workforce planning

There is in place a substantial programme relating to training and reskilling of workforce but, again, progress has been slow in implementing this. Additionally, a previously mentioned concern about culture reveals a desire to achieve change but there is a lack of urgency in addressing this underlying problem within the Council. There is an instruction which determines the deadline for achieving this. The Board has frequently challenged management to explain how elements of the workforce struggle with the concept of change. Slowly this issue is being tackled. In terms of performance management a new appraisal system is in place but more needs to be done to address underperformance. It is acknowledged, in terms of recruitment, the labour market is challenging and it is compounded by issues of pay comparability. The Council is examining pay policy as a means of strengthening its permanent staff but, in the meantime, is reliant on a number of key temporary appointments.

7. Corporate planning

The Council has moved to integrate its planning processes and significant progress has been achieved here. Bringing together plans relating to improvement and recovery, strategy, transformation, workforce and finance has led to a more coherent approach in the delivery of change. There is the continuing need to ensure that there is a process whereby any change impacts all or some of these plans is readily and immediately reflected wherever appropriate. Historically, there has sometimes been a mismatch between the content of different plans which leads to ambiguity, confusion and lack of clarity.

The corporate planning process must also ensure that there is clear recognition of outcomes in all of the Council’s plans. Much focus has been on planning and implementation over the past two years, perhaps inevitably given the poor progress in those areas. However, the Board will continue to measure the impact on residents of the plans once delivered. The Council’s duty to deliver best value is relevant here and the quality and cost effectiveness of services is a basic discipline which Nottingham must observe if the transformation of the City Council is to be judged a success.

8. Conclusion

In summary, the Council has made progress in a number of areas in terms of improvement and recovery but there has been a distinct lack of urgency in tackling the necessary change. Recent months have seen some increase in momentum but the pace of improvement must be accelerated.

The issues highlighted in this report relating to governance, finance, companies, transformation workforce, illustrate a need to grasp the importance of delivering fundamental change in a timely fashion. The Independent Board members have now issued instructions to seek early resolution of these problems, the results of which will be contained in the next quarterly report.