New research from leading business and financial adviser Grant Thornton UK LLP finds that local authorities have divided opinions about the effectiveness of scrutiny arrangements.
It found that while 90% of those surveyed felt their organisations encouraged well-managed risk taking and innovation, nearly half (43%) of respondents felt scrutiny committees were not challenging enough about the way councils operate.
Grant Thornton's fourth annual review into local authority governance, All Aboard?, also revealed a wide variation in the practice of scrutiny. Though the average number of meetings in a year for committees was 17; some councils had just one meeting whilst one council had 66.
Paul Dossett, Partner and Head of Local Government at Grant Thornton UK LLP, said: "Though fifteen years has passed since the introduction of scrutiny committees it's clear that the system has been a mixed success. Nearly one in five of the councils surveyed said that they had returned, or were considering returning, to the traditional committee structure. This could turn out to be a backwards step for effective scrutiny.
"Scrutiny committees can offer a valuable ‘check’ to the executive. Potentially, they can also offer a fresh perspective by taking both a long-term view of strategic issues and ‘deep dives’ into vital areas of council operations. We know that some councils are doing this with great success so it's important that those who are struggling receive support to improve their processes so that they are not tempted to fall back in to outdated methods of scrutiny."
The report also looks at how the wider challenges facing councils and how this is impacting governance. Other key findings include:
- 84% of respondents said their organisations are now using or considering alternative delivery models
- 59% said the transition to police and crime commissioners had not had a positive impact on local partnership working arrangements
- 42% saw no difference in local healthcare governance as a result of council's new public health role
- the annual accounts and annual governance statement continue to expand in length, making them even more challenging for people to read and understand, impacting on local transparency and accountability
- Only 30% of cabinet positions in local authorities are held by women, while over half our survey say member do not adequately reflect the demographic profile of the local population
- Most survey respondents named external audit as their main source of assurance on the governance framework, rather than internal audit. This raises concerns that some internal audit functions are not sufficiently strategic and are not providing the broader assurance required in a complex and challenging environment.
Paul Hughes, Director and Public Sector Governance Lead at Grant Thornton UK LLP, added: "Good governance remains critical in ensuring that public interest remains at the heart of decision-making. Maintaining strong scrutiny over how local monies are spent is a principal tenet of good governance, providing assurance to council members and the wider public. Challenging why things are done and scrutinising processes and decisions encourages the development and introduction of more efficient and effective ideas."
Alongside the research findings the report highlights examples of good practice and also poses a number of questions for management and members aiming to help them assess the strength of their current governance arrangements.