Government writes to Thurrock Council to expand interventions in financially troubled municipalities by handing commissioners additional powers, including governance and staffing functions, in light of “unprecedented” challenges He said he was “considering” to do so.
Local Government and Building Safety Minister Lee Lowry, who announced the plans in a statement yesterday (January 24), said he and Secretary of State for Level Up, Housing and Communities Michael Gove said the new evidence was “severe enough.” “There is,” he said. “Expand the intervention.
The Essex County Council has decided to intervene in Thurrock from September 2022 after then-Secretary of State Greg Clark decided to intervene over the financial and commercial risks and the “severity” of allegations regarding the Council’s financial decisions. Acting as Commissioner and Supreme Value Inspector of
Essex has since submitted a Commissioner’s Report and Update Letter in December 2022, revealing a £470m annual deficit in the Council’s finances.
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In a statement yesterday, Lee Lawrie said, “The commissioner’s report and the latest letter taken together reveal serious weaknesses in this agency’s financial function and, as a result, it will be out of hand in the current financial year and in the years to come.” It created an unmanageable budget gap,” he said.
He added that Best Value Inspection’s update letter “hypothesizes that the agency’s financial failures are a manifestation of deeper systemic weaknesses in historical and recent council operations.” .
After reviewing the document in the context of the intervention, Lowry said the secretary of state was “satisfied that the agency has not lived up to its best-value obligations, both with respect to known financial issues and governance and staffing.” “.
“While we have not yet undergone a definitive best value inspection, the Secretary of State and I are confident that the evidence and recommendations presented in the Commissioner’s Report and Update Letter will support measures to expand interventions to prevent I agree that it is serious enough to take another best value failure.”
The proposed extensions to the intervention package would empower the Commission over the agency’s governance and staffing functions and direct the agency to take further action to support its recovery.
Specifically, the Secretary of State “contemplates” issuing further instructions to enable the Commissioner to exercise authority over:
- All functions related to governance, scrutiny and transparency of strategic decision-making by authorities to ensure compliance with best value obligations. This includes oversight of audits of the authority’s governance.
- Redesign of all functions related to the Authority’s operating model and parliamentary services to achieve cost-effectiveness and financial sustainability.
- Appointment, suspension and dismissal of the top three levels of staff in the organization. Includes authority to determine these appointment and dismissal processes and to design new board structures.
- Developing, monitoring and operating an effective performance management framework for senior executives.
Under the expanded intervention, another commissioner may be appointed as Thurrock’s managing director.
In line with the procedures laid down in the Local Government Act 1999, officials from the Department of Upgrading, Housing and Communities (DLUHC) wrote to Thurrock notifying him of the Secretary of State’s proposal, which the Council was invited to submit. made prior to February 7.
The Minister for Local Government and Building Safety also solicited public comment on the Commissioner’s report, the update letter of the Best Value Inspection and the Secretary of State’s proposals.
In response to the Minister’s announcement, Thurrock’s Acting Chief Executive Officer Ian Wake said:
“We have developed an initial improvement and recovery plan that reflects the Commissioner’s initial report and is taking action to address finances and change the organization’s overall culture.
“But it is also clear that some very difficult decisions will have to be made when it comes to dealing with finances and agreeing on how to maintain services to the local population.”
Council leader Mark Coxshall said he welcomed the Secretary of State’s commitment to giving Thurrock residents a say in the proposal.