Given recent events, former chief executive of the London boroughs of Richmond and Hammersmith & Fulham Richard Harbord reflects on what an s151’s duties actually are, and in particular the importance of getting section 25 reports right.
There have been two specific things which have started me thinking in greater detail about the responsibilities of the section 151 officer.
The first was the attempt by members of the House of Commons working party on the current state of the external audit delays to say that it was the section 151 officer’s fault. Fortunately, the committee has an ex-councillor as chair and this was dismissed and did not get a mention in the report. The responsibility of the s151 I believe in this instance is to publish the accounts by the due deadline and ensure that queries from the external auditor are dealt with in a timely fashion.
The second came out of the address given by the minister for local government Lee Rowley at the Finance Director’s Summit in September this year. He said that in the local authority budgeting process, “there was a need to be squeaky clean about the use of taxpayers resources with an endless focus on efficiencies and the acute need to refashion services”.
He added that “there will always be efficiencies although sometimes difficult to find”. In addition, local government “must not become stuck on what is enough versus not enough money”.
Other speakers on the day were able to show without difficulty that there is not enough money in the system. That indeed was the reason the last Fair Funding Working Party report could not be implemented. I am sure that the budget discussions now being finalised have shown that the demand local authorities face, particularly from external providers in children’s and adult care services, mean that to provide essential services effectively is impossible without more money in the system.
It is no surprise that there has been a lot of discussion about section 114 notices. So far, however, there have been very few actually issued.
I was one of the members of the working party making recommendations for the drafting of section 114 etc. We never expected it to be widely used. It was intended to help the growing number of section 151 officers who in 1988 were no longer a member of the corporate management team: section 114 was a way of ensuring their views were heard by full council before any decision was taken. It was expected to be project specific rather than a general warning.
On a more general day to day basis the most important document for the section 151 officer is the report given under section 25 of the Local Government Act 2003.
In my opinion this is becoming an extremely difficult report to write and one that could so easily come back to bite later in the year.
The report is intended to assure council at budget making on the robustness of the budget and the adequacy of reserves.
The overall framework of local government does not help. I have seen several statements from authorities declaring their budget is for essential services or statutory services only. There is no comprehensive statement anywhere of what these terms mean. There are a number of statutory services, but how they are provided and to what degree is often not specified. There have over past years been challenges particularly around care services which have led to litigation, and this must present a risk where these statements are made.
It could be said that the section 25 report encapsulates the whole budget process. It requires judgements on inflation rates, demand led pressures and particularly the likelihood of savings programmes underpinning the budget being achievable. Also interest rates and borrowing and the availability of reserves to finance contingencies and variations from the script.
Some of the risks are not immediately apparent due to external pressures such as appeals against major rateable values etc. There is a general mantra that reserves should not be used to fund overspending.
It is not helped by the uncertainties over central government support and this year the complete unknown of the effects of a general election on financing.
Section 25 reports are therefore very important and need to be evidence based and carefully written.
Apart from anything else, if it were to become necessary to issue a section 114 notice later in the year, it would be essential to show clearly what had happened against the expectations of the section 25 report at budget time.
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