Local Government Governance review 2012

Local government governance review 2012
Assurance leaders seminar
Birmingham - 10 May 2012

Agenda

• Why look at governance again now
• Scope of our review
• Main conclusions
• Key messages for councils

© 2012 Grant Thornton UK LLP. All rights reserved.

Why look at governance again now

High pressure in the system
• SR10
• localism
• reorganisation
• alternative delivery models.
Good governance essential to help
councils manage through


Scope of our review

• Wide agenda
• Focus on public reporting
• Consideration of components of
governance framework
• Methodology:
– 200 AGS and explanatory foreword
reviews
– 100 survey responses
– roundtable discussion
• FTSE 350 and NHS reviews


Main conclusions

People Reporting
Councils should rethink their Councils can significantly improve
investment in people to ensure good stakeholder engagement in their
governance. reporting.

Governance framework Way forward
Councils have strengthened their We believe there is a strong case
processes around governance, but for all councils to publish a
more focus is needed on improving consolidated annual report.
their effectiveness and on emerging
risks.


Key messages - people
Capacity and capability

20% of survey respondents said that
their council did not have robust
arrangements to develop the capacity
and capability of officers and
members.

With people, culture and behaviour at the heart of making governance
work, this is a significant finding.
Underpins many of the key messages in our report around challenging
effectiveness of governance arrangements to move from compliance
to best practice.


for example…
Although 98% of members and senior officers said that their council carries
out an annual review of governance arrangements, this is often done to
‘tick the box’ rather than a genuine effort to achieve best practice.


Key messages - people
Gender balance

Lots of focus nationally and
internationally on board gender balance.
UK councils do a lot better than UK large
corporates on the gender balance of the
cabinet (board).
However, there is a low proportion of
female Cabinet leaders (12%).
Councils should consider what more
could be done to ensure that they are
benefitting from as diverse a leadership
as possible.


Key messages - governance framework
Risk management

Over 90% of our survey respondents said that their
council had effective and embedded risk
management arrangements, reflecting a decade of
focus.
However, risks are increasing and resources are
under pressure.
Councils will now need to become more creative with
the deployment of a more stretched risk management
resource. This will include maximisation of
opportunity arising from forced change rather than
just minimisation of risk.


Scrutiny

With one-third of senior officers and
members saying that their council’s
scrutiny function was not effectively
responding to changing risks, our
survey results demonstrate a
recognition in the sector that scrutiny
needs to improve.
The attitude that the leadership takes
towards accountability and inviting
challenge is fundamental to successful
scrutiny.


Audit Committee

Survey results showed a strong view that audit committees were
effectively responding to changing risks and adding value.
We recognise the development over recent years but, in our experience,
there is considerable variation in practice.


Partnership working

Partnership working is now the rule
rather than the exception and this
trend is set to continue.
89% were positive about clarity of
responsibilities when working in
partnership.
Other published evidence suggests
that there may be some
underestimation of the governance
challenge.


Fraud and corruption

Over 90% reported that their council
was aware of increased risk and was
responding effectively.
£185m detected last year supports the
positive response.
However, estimated fraud is 10 times
this figure so there is always more that
can be done, with reference to
established good practice.


Key messages - public reporting
Accounts

With more than a third of members and senior officers saying that they
did not find the accounts helpful, there is a clear message that councils
should challenge the overall usefulness of their accounts.


Explanatory foreword

Our survey results show a very
positive view from councils around
the usefulness of the explanatory
foreword.
Whilst generally compliant, we
noted a great variety in content and
approach.
We think that councils should
review their forewords from a user
perspective to improve
transparency and accountability.


AGS accessibility

There is scope for councils to improve the
accessibility of the draft and final AGS.


AGS usefulness

Our survey showed 98% positive
survey results on the usefulness of
the AGS.
Our analysis suggests that while
most comply, few represent best
practice.
Better planning, tracking and
evaluation could bridge the gap
between the perceived and actual
merits of the AGS.


Annual reports

Our results indicate that there is a
strong case for all councils to
produce a consolidated annual
report.

Produced by 30 September each year, it would include audited
summary accounts, a final AGS, an explanatory foreword, KPIs,
significant risks, environmental matters and any other information the
council believes stakeholders should see.


Questions and comments?


Contact details

Paul Hughes
Email: paul.hughes@uk.gt.com
Twitter: @paulhughes71
Mobile: 07860 282763


Local Government Governance review 2012

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