All Members will recognise the crucial role that local councils play as the frontline of our democracy and the contribution they make to our levelling-up agenda. That is why the situation at Sandwell Metropolitan Borough Council is of such concern.
Sandwell Metropolitan Borough Council has struggled for many years to resolve a variety of governance issues, including allegations of serious misconduct by both members and officers. The council has had six different leaders in six years and three chief executives over the past three years. This instability has led to a breakdown in trust, respect and confidence between those holding governance roles at the council.
In August 2021, the council’s external auditors, Grant Thornton, initiated a value for money governance review into the council’s arrangements for securing economy, efficiency and effectiveness in its use of resources. In their view, until the council is able to resolve various persistent challenges, it is at risk of not having adequate governance arrangements in place to ensure the effective discharge of its statutory responsibilities and to maintain financial sustainability. This comprehensive governance review—“the report”— based on evidence gathered from 75 interviews over a period of three months, was issued to the council on 3 December 2021. It makes 45 wide-ranging recommendations, three of which are statutory recommendations, and in my view provides evidence of significant and systemic best value failure. I would like to thank the team at Grant Thornton for their work, and to recognise the critical importance of external audit in protecting and enhancing local accountability as we level up across the country. Copies of the report will be deposited in the Libraries of both Houses.
The report paints a deeply troubling picture of mismanagement, a significant breakdown in trust across the authority, and of ineffective scrutiny and accountability arrangements at the authority. This includes, but is not limited to:
On governance, a lack of a clear performance management framework and agreed key corporate indicators has impacted on the ability of the leadership team and cabinet to take an effective grip of the key issues. The effectiveness of the scrutiny boards and the audit and risk assurance committee need improvement.
On culture and leadership, poor behaviour and a lack of trust across the wider organisation continues to exist. Insularity, along with poor engagement with local residents, businesses, external partners, the West Midlands Combined Authority and the Black Country local enterprise partnership, has resulted in a lack of clarity on the authority’s key strategic priorities.
On financial governance, there has been an ineffective approach to budget monitoring and budget setting, and there remains no visible consultation on the council’s budget setting priorities.