Recent section 114 notices have highlighted the importance of good governance in ensuring the financial sustainability of councils. Geoff Wild, experienced monitoring officer, director of Law and Governance, consultant and interim manager, outlines what good governance in local government looks like and how authorities can achieve it.
In local government, good governance has never been more important. Recent high-profile examples have highlighted how the absence of good governance can lead to catastrophic results.
Governance is about the way in which organisations work to make decisions. Good governance is necessary to ensure that the insights and perspectives of a range of people are used to inform decision-making, to ensure that decisions are made transparently, consistently and based on evidence, by people with the legitimacy to make those decisions. Good governance is necessary for us to know that we can continue to provide the services as well as support that people need and expect.
For these reasons, good governance is central to local democracy and to the business of local authorities. With the postponement of the 2020 elections, the impact on decision-making of the pandemic and the economic turmoil that followed, it became even more crucial to take firm and concerted action to improve governance. The fluid nature of the environment in which local government operates and the response that it demanded meant a more dynamic approach than usual was required.
Good governance is essential for councils to be effective in providing the services and support that local people expect in these challenging times. Without strong and effective decision-making in place, a council’s actions will be muddled and fragmented. It will not reflect the vision that councillors have for the future of their area and raises the likelihood that the authority will be poor at managing the external and internal risks that it is likely to experience.
Issues causing bad governance
There are typically four core issues that serve to weaken a council’s overall governance position:
Leadership: the failure to assert a clear set of priorities and objectives for the council makes political accountability difficult to discern.
Workforce: uncertainty around roles and responsibilities of members and officers.
Politics: significant political tension coupled with a lack of political nous from some senior officers; a failure on the part of some senior members to come to terms with changing political winds and the comparative inexperience of new councillors unable to navigate the council’s systems and become increasingly frustrated.
Finances: uncertainty around a council’s medium-term budget position and real member oversight of the budget development process, with members of all groups being involved in tough conversations about prioritisation, focus and organisational direction.
Without strong and effective decision-making in place, a council’s actions will be muddled and fragmented – Geoff Wild.
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Importance of collective and individual responsibility
Good governance requires that:
- Individual responsibility is clear. Councillors and officers must understand where their respective duties and accountabilities lie. Importantly, ownership of action on risk is a key part of of this.
- Collective responsibility is clear. Within a functioning governance system, there has to be a collective responsibility for good governance, held by everybody.
No one person is responsible for overall stewardship of the governance system. The constitution (including the scheme of delegation) may set out the legal foundation within which such roles and responsibilities should be exercised, but behaviours do not always reflect this. A tendency to focus on the structures and systems of governance, rather than its core objectives, can lead to a lack of interest from members of the leadership and cause them to drop the ball.
Councils with good governance have clear objectives and a sense of how governance connects to their objectives. Governance isn’t seen as a distraction to delivery. Because of this, governance is thought about and reflected upon in the planning of major activities, meaning that time is not wasted unproductively in post-hoc discussions and disagreements when things don’t go as expected.
Make decisions based on evidence
Good governance is framed by the making of decisions based on evidence, and on the use of information to drive accountability and responsibility. Well-governed authorities understand how important the flow of accurate information is to their effective functioning. The principle of equality of access to information underpins the way that such councils approach this matter.
It is therefore important that all councillors (administration, opposition, scrutiny) have between them open access to information and a range of ways to informally and formally influence decision-making in a variety of meetings and forums. The governance framework should provide the context within which these can be facilitated and sustained.
But, alongside this comes the expectation that information will be used productively and in the service of constructive debate on the authority and its business. Protocols need to incorporate behavioural expectations around the confidentiality of certain information, its access and use. The important thing is that they collectively form a consistent and transparent framework, which does not privilege any one group – a necessary component of governance in any council.
Good governance is framed by the making of decisions based on evidence, and on the use of information to drive accountability and responsibility – Geoff Wild.
Championing good governance
Councils can use the Annual Governance Statement (AGS) as a way to manage and champion good governance and improvement. The aim should be for the AGS to provide a road map for governance improvement. This should be accompanied by clear lines of accountability and mechanisms for member oversight and ownership of key objectives, projects and decisions.
The purpose of the AGS is to provide public assurance on the extent to which the authority’s governance systems and processes conform with local expectations, and with wider sector norms – as well as taking account of emerging risks and pressures which could lead to a need for change. It is only possible for the AGS to provide this assurance if it is informed by a meaningful review.
In many councils, this need has not been acknowledged, and the AGS has reflected more on the need to produce and sign off a decontextualised document rather than presenting the culmination of a reflective review of the council’s governance position.
So, what does good governance in local government look like? Some think of it as only being about structures, systems, and processes. But equally important are the behavioural elements of good governance: the way that personal relationships and trust influence accountability and transparency, and the way that individuals operate within and interpret the governance framework. It involves a deep understanding of how political and organisational risk intersect, and how an awareness of risk should be used to define and refine the organisation’s priorities.
Geoff Wild is an experienced experienced monitoring officer, director of Law and Governance, consultant and interim manager.
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