Feedback report: 21-24 March 2022
1. Executive summary
Wirral Metropolitan Borough Council (WMBC) is in a challenging place. The council needs to make significant improvements to address both historic and recent shortcomings, including specific challenges in finance, governance, and culture. This corporate peer challenge (CPC) was completed against a backdrop of two external assurance reviews commissioned by the Department of Levelling Up, Housing, and Communities (DLUHC) and published in November 2021 which highlighted these issues. The first report, completed by the Chartered Institute of Public Finance and Accounting (CIPFA), focused on the finances of the council, with the second being an independent assessment of the council’s governance.
These reviews were a condition of the council’s application for exceptional financial support worth £17.2 million through a capitalisation directive for the financial years 2021-22 and 2022-23. This funding was required to support the council in setting a balanced budget in 2022-2023. A key contributing factor to the requirement for this financial support was the council’s cultural approach of avoiding difficult decisions and using reserves to offset undelivered savings. In response to the findings of these reports, 27 recommendations were put to the council to take forward. Whilst the council has accepted these reports, as is to be expected, there remains a significant amount of work to be done over the coming years in taking forward these recommendations.
This corporate peer challenge was completed in March 2022. It is important to note that it is not the intention of this review to duplicate previous findings and recommendations which have been accepted in full by the council. Instead, this report tries to assess the progress made by Wirral council in response and set out further specific considerations to support continued improvement in the coming years. Therefore, reference will be made to specific recommendations to illustrate the position of the council today, or previous findings to act as a point of triangulation when appropriate.
To date, the council has responded positively to the recommendations of the external assurance reports. This reflects the strong and genuine appetite across the council for improvement, with the peer team recognising that this is a clear and shared priority for the organisation. The positive response of WMBC to date has included establishing an independent panel to support with developing, advising, and scrutinising a financial recovery plan and wider strategic improvement plan. The panel provides regular updates, in the form of written reports to full council and is in regular contact with officials from DLUHC regarding progress.
This panel has been in place since December 2021 and offers an important oversight to the council’s improvement, as well as bringing legal, finance, and sectoral expertise that will be essential to WMBC’s progress. Working with the panel, the council’s progress to date has included passing a balanced budget for 2022-2023 and reviewing the structures and processes which underpin their committee system. Although these are significant milestones, the council, the independent panel, and the peer team all recognise that there is still a lot more to-do. Whilst the progress to date is encouraging, it is essential that this is treated as the start of a long-term journey of improvement with WMBC building on the emerging progress to add further pace and rigour to addressing the issues identified. It will be important to this improvement that the council continues to engage with external support positively whilst also demonstrating their ownership of this work, this will naturally include the Wirral improvement and assurance panel but should also include the proactive use of external audit.
Despite this challenging context, the peer team were struck by the level of ambition which exists for both the council and the wider borough, particularly on regeneration, and the benefits that this could bring physically, but crucially in supporting outcomes for residents. This ambition is underpinned by the significant progress that the council has made in developing a new local plan, which is currently at regulation 19 consultation following the council not having had an approved plan in place since 2000. The progress made on developing the local plan is something which the council is rightly proud off and is a significant achievement for WMBC. This work has been taken forward through clear leadership, and the provision of dedicated support and capacity from a range of officers. Whilst the regeneration ambition of the council is laudable, it is important for WMBC to recognise that this will not be a solution to the base budget issues they are facing. Further, the delivery of this level of ambition will require careful management, including the necessary revenue budget investment to support increased capacity needed, management of risk, and consideration of impact on wider services.
The passing of the council’s 2022-2023 budget is an important milestone for improvement. However, there is now a need for complete commitment and prioritisation to ensure delivery of the proposals. This budget includes approximately £18 million of savings, which is higher than the level of savings achieved in recent years where reserves have been used to mitigate non-delivery. Delivery of agreed savings should be monitored closely and there needs to be continued political support across all groups for the decisions agreed at budget council. Whilst it is natural and healthy that there will be debate, discussion, and campaigning on a political level between the groups, it is essential that this is grounded within the current financial reality of WMBC and framework of necessary reforms which the council finds itself. The peer team heard examples when members had, shortly after agreeing the budget, challenged decisions included in the budget framework, and the detrimental impact that this had on the organisation.
The peer team were told by staff and councillors that behaviours have improved in recent years, however further work is still required, to work towards and embed the highest possible standards in line with the council’s code of conduct. The proposed implementation of the LGA’s model code of conduct in May 2022 presents the opportunity for dedicated training and development on this issue. It is important that councillors consider the impact of their actions and behaviour on staff, and make sure that this is in-line with supporting the council to be an employer of choice. Similarly, the peer team were made aware of some instances of inappropriate behaviour from a small number of officers and would encourage these issues to be addressed collectively.
Whilst the 2022-2023 budget presents a balanced position for the council, it is important to note that this is only a one-year plan, and the council’s medium term financial strategy (MTFS) still reports a financial gap of £17.9 million through to 2025. The peer team recognise that this figure could be significantly higher, particularly since the council has a history of financial optimism in budget development. With this in mind, the team would encourage further work to confirm this gap as a priority. The current uncertainty surrounding local government finance means that there will always be a need for modelling and the use of appropriate assumptions to refine and estimate the budget gap. Therefore, the council needs to understand the likely best- and worst-case scenarios, and the risk factors which impact on its assumptions.
In this context, there is a critical need for the progress made through the 2022-2023 budget to be maintained for 2023-2024 and future years, recognising that the work to date is just a start and that there is ‘no breathing space’ for further difficult budget decisions to be deferred. Within this context of challenging budget decisions, it is important that options are worked up and presented to councillors to support political choices and options to address this gap. There is also a need for the council to set-out a clear vision that brings together the content of their strategic improvement plan, MTFS, and wider ambitions for the borough to set both a narrative and framework for strategic decisions.
A strong ‘corporate core’ will be essential to taking forward the council’s ambitions for both regeneration and improvement. The peer team noted that corporate services are currently fragmented across a number of directorates which leads to the separation of key functions such as change management, finance, and the council’s programme management office creating separate silos across the organisation. The peer team recognise that the council is currently considering the structure and alignment of these corporate services.
A central corporate core will support the council to have increased capacity for corporate priorities and will lead to more joined up working at pace. Moreover, this will also present an opportunity to further develop and embed cultural changes which are urgently required, including improved sharing of information across directorates and committees, as well as an increased focus on outcomes and performance. Delivering wider and sustained change in organisational culture requires clear leadership, communications, and time. It will be important that these issues of cultural change are highlighted within the council’s strategic improvement plan as a core theme to ensure that this is prioritised across the organisation.
The council has been no overall control since 2019. The current political distribution of seats at the council is Labour 27, Conservative 23, Liberal Democrat six, Green six, two Independent councillors, and two vacant seats. The political make-up of the council is currently decided on electoral thirds, with 22 seats to be contested in May 2022. However, the council will be moving to all-out elections from 2023 onwards. This provides the opportunity for increased political stability, with four-yearly election cycles providing a clear medium-term political framework. It is important that the council maximises this opportunity to support longer-term decision making and moving away from the deferral of difficult decisions which has existed under the thirds election cycle.
It is in this spirit of opportunity that the peer team would encourage the council to continue to look forwards at the work that needs to be completed and the opportunities that exist within the borough. This will enable WMBC to build on their recent progress, and will avoid important energy, effort, and attention being focused on the issues of the past.
2. Key recommendations
The main body of this report contains a range of findings and recommendations relevant to WMBC. Many of these may be easy to implement “quick wins” and practical actions. However, the key recommendations below focus on the issues which will be most critical to the council’s improvement, and those which should be prioritised going forward:
- Develop a clear and collective vision for the future of Wirral council and the borough: The council revised the Wirral plan (2021-2026) in July 2021 setting out the priorities for the council for the coming years in a post-covid context. However, the subsequent publication of assurance reports has changed the context of the council. Therefore, there is a need for WMBC to articulate a vision and priorities that brings together the council’s budget, strategic improvement plan, organisational structure, culture, regeneration ambitions, and relationship with partners into a single narrative and framework.
- Develop a golden thread which cuts across tiers of the organisation regarding this vision: There is need to further develop the golden thread associated with this vision into service plans, team plans, and staff appraisals (known locally as “check ins”). This will support with the identification of SMART outcomes, and for staff across the organisation to understand the contribution that their teams and roles can make towards them.
- Review the resources, capacity and capability required to support the council’s Regeneration ambitions: The peer team recognise the exciting opportunities that exist within the borough through regeneration. However, WMBC need to assure itself that it has the appropriate skills and resources across the organisation to deliver on its scale of ambition. This includes particular focus on the finance support required to support delivery and manage risk on the council’s behalf as a ‘client function’. It is also essential that the council maximises the opportunities to improve outcomes for residents through this work, making sure that this is not just viewed as ‘physical regeneration’.
- Realign the council’s corporate core to support financial transformation and wider improvement: A strong corporate core is essential to coordinating, managing, and monitoring, the council’s financial recovery. This core is currently dispersed across a number of directorates, and the council should look to bring this resource into a centralised team as far as possible. The council needs to consider the most appropriate place for this to sit in the organisation, ensuring that it is aligned to delivering the council’s strategic improvement plan and financial recovery, but does not act to dilute the attention required of statutory officers.
- Foster a culture of rigorous and constructive challenge within the organisation: A key feature of successful organisations is robust internal challenge. This is essential in the development of saving proposals, regeneration propositions, and policy implementation. Wirral needs to ensure that this challenge is a central feature of the organisation’s culture, whilst mitigating the risk that challenge escalates into inappropriate behaviours. This can be supported through improved movement of information across the council, and better engagement with councillors through the decision-making process (including improved reports).
- Develop a corporate approach to the management of reserves: Reserves are currently held at a directorate level which creates challenges of oversight and limits the strategic opportunities regarding their use. The use of earmarked reserves should not be seen as an in-year contingency. The peer team feel that reserves should not be managed within directorates and should be managed corporately and maintained at the appropriate level. This centralisation of reserves is essential for sound budget management and supports their use strategically rather than reactively. This work needs to link the management of reserves to the council’s medium term financial strategy and the delivery of the existing budget framework.
- Proactively engage with external audit to support financial improvements across the council and the management of risk: The delivery of the council’s financial recovery and strategic improvement plan should address the statutory recommendations from external audit. However, it is important that the council engages beyond this to support an improved culture of financial reporting and good governance through proactive and regular dialogue on emerging issues.
- Work towards political consensus on shared priorities to engender cross-party support on key issues: Given WMBC is ‘no overall control’ there is a need for shared political approaches on priority issues. Therefore, to strengthen the stability of decision-making, the council should work towards political consensus across parties on issues of strategic importance. This should include an ongoing shared understanding of the financial context of the council.
- Implement proposed governance reforms to support increased effectiveness of the committee system: The council undertook a review of its committee system in December 2021, which included specific recommendations such as reducing the number of committees, refining scrutiny, and reviewing schemes of delegation. The improvement of delegations within the council will both support the pace of decision making but will also act to empower officers across the organisation. The council needs to implement these reforms at the earliest instance and continue to be live to the culture of good governance to support ongoing improvement.
- Consider additional capacity to support the political and managerial leadership of the council: Within the framework of no-overall control and the committee system it is essential that the leadership of the council is well supported to ensure that their capacity is protected for strategic issues and to enable the timely movement of information across political groups and committees in-line with wider sectoral norms.
- Provide dedicated space and time for the council’s senior management team, committee chairs, and group leads to come together: It is important that the council recognises the collective teamwork required across members and officers to support improvement. To this end, the peer team would recommend that further ‘top-team development’ work takes place at pace to support key roles both collectively and individually.
- Further the training and development provided to elected members and managers: Whilst this is being delivered currently, and there are plans for this to be extended, this needs to move to new levels to include a comprehensive plan for elected members covering roles and responsibilities, being a councillor in the 21st century, and increased learning from across the sector. This should be mirrored with a comprehensive management development programme, but it is essential that these are viewed as ongoing and continuous processes.
- Continue to work effectively with the Wirral improvement panel, considering the development work that is required over the coming two years: Wirral have made good progress working with the Improvement and assurance panel since December 2021, and this relationship is central to the council’s journey. However, it is important that over the coming two-years the council does not become dependent upon the advice and direction of the panel, and instead fully owns and understands the actions required. This is especially pertinent for ensuring that there is clarity regarding the requirements and milestones that the council must meet to ensure that the panel has confidence that they are committed to and capable of continued improvement without external oversight.
3. Summary of peer challenge approach
Background and overview
From 2017-2020, the Local Government Association (LGA) delivered 447 Peer Challenges, including 182 corporate peer challenges. This process involves officer and councillor peers from across the sector reviewing council services and functions through constructive and respectful challenge. This process enables experience and expertise to be shared across councils collectively and is a central element of sector-led improvement.
These reviews are designed to be locally led, with councils requesting that peer challenges are completed and volunteering to take part. This includes the LGA working with councils in advance to jointly develop the scope of the review, and key areas of focus. In this spirit, the findings and recommendations from peer challenges are locally owned, with councils responsible for the development of their own action plans in response to these reports, and updating staff, partners, and councillors as appropriate.
The benefit of peer challenges has been independently validated, including the 2020 evaluation completed by shared intelligence. The feedback which has been received by participating councils has included 93 per cent of respondents saying that this process has helped to provide an external view of the organisation, and 94 per cent stating that the process had contributed a positive impact on their relationship with partners.
The peer challenge team
Peer challenges are delivered by experienced councillor and officer peers who are working elsewhere in the local government sector. The make-up of a peer team is carefully planned in line with the council’s requirements and the agreed scope. Given the close political composition of Wirral council, it was requested that there would be both a labour and conservative peer included on the tam.
Within the context of no overall control, it was also proposed that the team would include officer experience familiar with working in this environment. Finally, the council requested that there was dedicated expertise included on issues of finance, governance, and regeneration. Therefore, the LGA is grateful to the following peers for providing their time and input to support WMBC through this review:
- Jacqui Gedman (Lead Peer): Chief Executive (Kirklees Council).
- Cllr Sir Steven Houghton: Leader (Barnsley Council).
- Cllr Mike Wilcox: Conservative Peer (Staffordshire County Council).
- Carol Culley: Deputy Chief Executive and City Treasurer (Manchester City Council).
- Asif Ibrahim: Monitoring Officer (Rochdale Council).
- Sharon Strutt: Head of Regeneration (London Borough of Redbridge).
- James Millington: Adviser (Local Government Association).
- Matt Dodd: Peer Challenge Manager (Local Government Association).
The peer challenge methodology
Peer challenges are improvement focused; and it is important to stress that this was not an inspection. The process is not designed to provide an in-depth or technical assessment of plans, proposals, or specific services. Instead, the peer team used their experience and knowledge of local government to reflect on the information presented to them by people they met, documents they reviewed, and the culture which they saw.
The peer team prepared for this work by reviewing a range of documents and information to ensure that they were familiar with the council, the borough, the opportunities that exist, and the challenges that it is facing. This included a position statement that the council produced specifically for the peer challenge, which is designed to encourage self-assessment, reflection, and dialogue across the organisation. Alongside this position statement, the council also provided reference documents including (but not limited to) copies of key plans and strategies, the medium-term financial strategy, and staff survey results.
In conjunction with the documents provided by the council, the peer team also undertook an independent assessment of the performance of council services and wider council finance using publicly available information through L.G. Inform. The team also commissioned a dedicated financial review of the council’s financial position, focusing specifically on the 2022-2023 budget.
Prior to arriving with the council, peer team members contacted their equivalents working at WMBC, as well as speaking to members of the Wirral improvement panel. These meetings were completed to support the teams’ understanding of the council, and to the development of appropriate areas to explore. Beyond this, the team also:
- collectively spent around 280 hours to determine our findings (the equivalent of one person spending over six weeks in Wirral).
- spoke to approximately 145 individuals, including councillors, officers, external partners, and residents.
- completed a short tour to consider some of the key regeneration ambitions in the borough.
- watched over 20 hours of public meetings and previous forums and committees.
Immediate feedback was delivered to the council on the afternoon of Thursday 24 March, at a session which was attended by the council’s senior leadership team, the council leader, deputy leader, and representatives from other political groups. A copy of these slides was immediately provided to the council to support communication with those who took part in the process. This final report was produced in Spring 2022, with agreement that the peer team will engage with the council approximately six months following publication to discuss progress against their action plan.
The peer challenge Scope
The peer team considered the following five themes which form the core components looked at by all corporate peer challenges that the LGA undertake. These are the areas that are critical to councils’ performance and improvement:
- Local priorities and outcomes: Are the council’s priorities clear and informed by the local context? Is the council delivering effectively on its priorities and achieving improved outcomes for all its communities?
- Organizational and place leadership: Does the council provide effective local leadership? Are there good relationships with partner organisations and local communities?
- Governance and culture: Are there clear and robust governance arrangements? Is there a culture of respect, challenge, and scrutiny?
- Financial planning and management: Do the council have a grip on its current financial position? Does the council have a strategy and a clear plan to address its financial challenges?
- Capacity for improvement: Is the organisation able to support delivery of local priorities? Does the council have the capacity to improve?
In addition to these five themes, the council asked if the peer team could provide further focus, findings, and recommendations on their approach to regeneration, including consideration of the capacity required to deliver this programme.
When developing the scope for this corporate peer challenge it was recognised that the DLUHC had recently undertaken external assurance reports focused on the council’s governance and finance respectively. It was agreed that the focus of this peer challenge would be to build on these findings and recommendations, and consider progress made rather than replicating their key findings.
These reports will be referenced as a source of triangulation or context as appropriate. However, given that the council has accepted these previous findings and recommendations (published in November 2021), this report aims to check progress or provide further specificity on issues already identified, or to highlight new proposals for the council to take forward.
Finally, this scope was agreed with the council in advance of the peer challenge and was also presented to the Wirral independent panel to support alignment of work and support.
4.1 Understanding the local place and priority setting
As context, Wirral council was established in 1974 and is one of 36 metropolitan authorities in the United Kingdom. The borough is part of the Liverpool City Region Combined Authority alongside five other authorities in Merseyside. The borough covers approximately 61 square miles and serves a population of 323,000 residents. As a peninsula, the council shares a border with Cheshire West and Chester to the east, with the remaining boundaries marked by the River Mersey, River Dee, and the Irish Sea. The borough is nearly 13 miles long and seven miles across, with the biggest conurbations being Birkenhead and Wallasey, and further town settlements in Bromborough, New Brighton, Heswall, Hoylake, and West Kirby.
The peer team met with councillors and officers who demonstrated extensive knowledge about the Wirral and the communities they serve. The team was also provided with access to several key documents which form a strong evidence base regarding the population, needs, and characteristics of the borough. This information helped the team to better understand the local area and the nature of the social issues that the council is working to address. These include:
- Wirral is ranked as the 42 most deprived out of 333 authorities based on the index of multiple deprivation average score, with a quarter of neighbourhoods in the 10 per cent of most deprived lower super output areas nationally.
- health inequalities in the borough are illustrated by differences of life expectancy between the most affluent and most deprived wards of 10.7 years for men and 11.2 years for women.
- the council ranks 13th nationally for the total number of vacant dwellings (4,955) and ninth for the number of long-term vacant properties (2,097).
- there are an estimated 10,490 children in the borough living in poverty.
This evidence base is well collated and easy to navigate through the council’s joint strategic needs assessment. However, some of those that peer team engaged with said that this information could be better utilised within the council, particularly on the development of specifications and contracts through the commissioning process, and as an evidence base in policy development. Alongside this quantitative information, the team also recognised a depth of qualitative knowledge held by officers and councillors, often developed through many years of service with the council and the council will want to make use of this valuable resource. However, there is also a need for his to be balanced with a workforce that understands ‘what good looks like’ and ideas from across the wider sector to mitigate the risk of insular approaches.
The council also has an effective approach towards resident engagement, with the ‘Have your say Wirral’ website being a good tool for consultation and enabling the organisation to close feedback loops through the principles of ‘you said, we did’. Whilst this is a good tool for engagement and consultation, there are still improvements that could be made on this issue, including the council’s approach towards budget consultation. The timeline for the 2022-2023 consultation was too late, creating challenges for implementation, and creating a perception that the consultation had limited ability to influence proposals.
The council’s wider approach to engagement was praised by local partners, with the youth parliament, business community, and wider voluntary and community sector organisations praising the relationships they have brokered with the council and the ‘good will’ that they have for the organisation. This included specific praise for the council’s leadership and their willingness to engage with partnership working and approachability when resolving issues.
These partners are keen to further develop their relationship with WMBC, moving beyond communication towards more integrated approaches to designing and delivering services. For the council to take this opportunity, it will need to be able set out a clear and concise narrative about the organisation’s ambition to support engagement with partners and residents about how their individual actions contribute towards these broader goals. The council appreciates that there is further work required to articulate the wider vision for the borough and the council, that brings together the budget, strategic improvement plan, target operating model, and regeneration ambitions into a single narrative and framework. This builds on the external governance review of the council which called for “a clear, costed and timed plan in order to put the council on a sustainable footing” by aligning the Wirral plan, medium-term financial plan, and target operating model.
The council’s overarching strategy is currently the Wirral plan which is well recognised and understood within the organisation. This plan was developed in 2020 and was refreshed in 2021 to reflect the council’s post-covid context. However, the peer team heard that partners felt more engaged in the development of the original draft than the refresh and would welcome more input on future iterations. Whilst there is a good understanding of the Wirral plan within the council there is more work that could be done to set out the contribution of services, teams, and individuals. Therefore, there is need to further develop the golden thread associated with this vision into service plans, team plans and staff appraisals (which are known locally as “check ins”).
This development of vision that brings these strands together is important to the council to ensure that its priorities are well articulated, and to support partners and staff to better understand the contribution that their roles can make to it. This will also be important in terms of creating a framework for the decisions that WMBC is making over the coming months and years, including those required in the council’s financial recovery strategy. This framework will enable the council to anchor decisions in a broader context, setting out how individual issues contribute towards this wider vision, rather than individual changes each being viewed purely as an approach to reducing costs.
4.2 Organisational and place leadership
The council’s relationships with partners have been essential in the borough’s response to managing the Coronavirus pandemic. Wirral was one of the first affected regions nationally, with repatriated nationals from Wuhan being quarantined at Arrowe Park hospital in February 2020 ahead of national lockdowns and wider restrictions. In total, approximately 110,000 Wirral residents have had COVID-19, with over 2,500 being hospitalised, and over 1,100 losing their lives. Like other areas, the council’s response to COVID-19 is worthy of both pride and praise. This included responding to a rapidly changing national context, establishing new services at short notice, maintaining the provision of core offers, and supporting the successful rollout of the vaccine. Some of the council’s achievements include:
- distributing 20,000 emergency food hampers and compiling 13,000 wellbeing call during lockdown following an emergency response to food and welfare support.
- supporting 2,427 expressions of interest to volunteer with 4,610 tasks completed.
- distributing over £50 million of businesses support grants.
- enabling 2,306 staff to work from home at short notice, with a further 506 being redeployed to support frontline services.
The council should also be more willing to promote and champion their successes, both in responding to COVID-19, but also relating to wider services. This will be beneficial to supporting morale within the council, as well as recognising the contribution of wider partners in the borough towards the goals of the borough.
Beyond the council’s COVID-19 response, the team were presented with several good examples of partnership working. This included strong relationships with the local clinical commissioning group which will be key to the ongoing work required to deliver a successful integrated care partnership across Cheshire and Merseyside in 2022. The team was also presented with examples of shared approaches to service development with voluntary and community sector organisations, as well as shared posts with the local chamber of commerce. With this in mind, there is potential and appetite to do more work with partners, but this requires clear communications and consistency to continually build these relationships.
A specific issue which the council is looking to work closely with local partners and community groups on is community asset transfers. The peer team appreciate that a new asset transfer policy was agreed shortly before this peer challenge and recognise the benefits that this work can bring. Nevertheless, if community asset transfers are to take place, there is a need for them to be aligned to the council’s wider financial recovery and strategic priorities. Therefore, these transfers require further prioritisation, and consideration of the capacity needed to both enable partners to develop robust business cases and provide effective corporate engagement.
Furthermore, WMBC’s approach to community asset transfers also needs to be considered against the role and relationship which they wish to build with residents. The peer team heard that there was recognition that the council currently had a ‘traditional’ or ‘paternalistic’ model of service provision, and that there was an appetite to move towards a more enabling and empowering relationship with residents and communities. The challenge of this transition cannot be under-estimated in terms of a different level of engagement, and this will need to be linked to wider changes to service provision. However, the opportunity also exists to transform services and work differently through new approaches with a neighbourhood focus. This approach will require councillors to play a different role as leaders of place at a local level, built around the principles of the 21st century councillor.
The peer team praised the collaborative approach to leadership that has been taken by the leader of the council, particularly in the context of no overall political control, and through the dispersed governance model of the committee system. The leader has engaged constructively with other groups across the council and has worked to foster a culture of collective responsibility for the council’s improvement. Whilst there will always be a need for political debate at the council, it is important that all political groups recognise the parameters for these discussions, including the requirements which have already been approved through accepting the recommendations of the DLUHC assurance reports.
The peer team also heard positive feedback for the visibility and approach of the chief executive in relation to improved communication with staff. Importantly, staff felt that the chief executive had contributed towards improvements at the council in recent years. The return of staff to the workplace following COVID 19 provides an opportunity to build on this progress to ensure pace of change and improvement is continued. This will also enable the council’s senior leadership team to collectively come together on issues and improve work across existing organisational silos.
The council would benefit by creating more space for strategic discussion, considering best practice and external expertise to support forward planning, and address internal silos. This development work should look to include the council’s senior leadership team, as well as committee chairs to support the political and managerial leaders to work effectively together. This will provide an opportunity to collectively share information, work through critical decision pathways, and raise and manage risk in a collaborative manner. Moreover, this space will support the political leadership of the council to have effective oversight of the entire overarching improvement programme. This will also enable members to engage with constructive challenge away from formal committee meetings, enabling committee meetings to remain more focused on the key decisions facing the organisation.
In addition to the increased involvement of backbenchers in decision making through the committee structure, it is important that there is recognition across the organisation for the specific responsibilities, duties, and powers which fall specifically to the leader of the council. To this end, the council should consider the dedicated support and capacity that is provided to the leader, in line with practice in the wider sector enabling their time to be best applied to strategic priorities and supporting their engagement across the wider system of committees.
4.3 Organisational governance and culture
The council’s committee system includes seven policy and service committees operating beneath full council and supported by sub-committees. This is more than the sector norms for other councils which operate this system, which often have four or five policy and service committees. The council also operates further statutory committees for several regulatory and judicial functions, including, pensions, licensing, regulatory services, and planning.
In November 2021, the council also commissioned the LGA to further consider the current committee system. This process involved focus groups with each of the five political groups led by political peers and culminating in a further ten recommendations. These included empowering the policy and resources committee to lead on delivering, monitoring, and amending the council’s budget framework to avoid this being siloed across the organisation. This review also proposed that committees have an increased focus on financial matters at a committee level, and further training for officers on report writing.
It is important that the council does not treat issues of governance as a solely academic or theoretical process, recognising that the technical procedures of the written constitution are applied within the cultural norms of the organisation. Furthermore, governance is not a static issue, and there will always be a need for continual reforms and iterative improvements that the council will need to respond to. To this end, it is important that the council continues to consider and develop a culture that supports good governance, including the ongoing training and development needs for officers and members. Central to a culture of good governance is the relationships across the ‘golden triangle’ of statutory officers (chief executive, section 151, and monitoring officer). This requires making sure that there are regular communications, a shared understanding of risk, and constructive challenge on the approaches that are taken to manage these risks on behalf of the organisation. Importantly, these officers need to communicate with one voice and present consistent information, advice, and guidance to councillors and staff regarding these issues. When these relationships are at their most effective, these roles are seen as the custodians of good governance and enabling the safe and affordable delivery of council priorities.
Central to the trust between officers and members is the sharing of information within the council. This is essential to support accurate and informed decision making, but also in enabling appropriate political challenge. Notwithstanding, it is important that improvements are made to the quality of reports provided to councillors, ensuring that they provide proportionate levels of information to enable political decisions. There will always be a tension that exists between the length of reports and the volume of information which can be included. But currently, the excessive length of these reports makes them harder to navigate, this requires officers to become more comfortable to append supplementary information, or to hold it on file for reference. It will further slow-down the pace of key decisions if the default approach of reports is to include unnecessary background and reference details. More importantly, there is a need for these reports to be more candid in the issues which are being presented to councillors to enable them to discuss the most pertinent points. This issue was also noted in the governance review of the council which highlighted “somewhat disingenuous drafting” in some committee reports and must be addressed at pace.
Moreover, it is important the officers across the council recognise that the production of reports is only part of the process in engaging councillors in decision making. Given the extensive number of meetings which are held through the committee system, there is an understandable temptation for all engagement to happen through these forums. However, instead these meetings should be viewed as the end of a process, with further work required to engage with committee chairs and deputies earlier in the forward plan to discuss emerging options, political views, progress made, and draft reports. This will help to ensure that committee meetings run smoothly and reduce the risk of surprises emerging during the meeting themselves. During these meetings, there is also an opportunity for officers to play a more active role in supporting political discussion and the content of reports to support informed debate.
The peer team heard that there is an improving performance culture at the council. This was reflected in the meeting of the council’s senior leadership team which was observed during our time on site. However, the team are keen to feedback that whilst this gathering and reporting of key management information is an important first step in embedding a performance culture, further work is required to refine and tailor how this information is used most effectively and proportionality for the council. Wirral would benefit by bringing this information into one place for regular public reporting (such as the policy and resources committee) to enable strategic conversations regarding priority outcomes and reducing the risk of different levels of information being reported at committee level. The council will need to consider what is an appropriate suite of indicators to support this reporting and the development of appropriate targets for these measures based on current performance.
4.4 Financial planning and management
Of the challenges which are facing Wirral council, the most significant and urgent are those relating to the council’s finances. The council’s application for exceptional financial support for 2020-2021 and 2021-2022 was originally for £63 million which it felt was required to set a legally balanced budget and avoid issuing a section 114 notice. In time, the size of the request for capitalisation has reduced significantly, largely due to additional tranches of government funding relating to adult social care as well as test and trace obligations. With £6.5 million approved for 2020-2021, and a further request of £10.7 million made for 2021-2022 currently being considered. Further to the request for capitalisation, the council is currently charging £12 million of the council’s revenue budget to its capital programme. These figures should be considered in the context of a net revenue expenditure of £331 million.
The financial pressures facing the council have, as with other councils been exacerbated by COVID-19 but cannot be attributed purely to the impact of the pandemic. This was highlighted in the CIPFA assurance report in November 2021 which highlighted that general fund reserves had reduced from 8 per cent in March 2018 to 3.3 per cent by March 2022, reducing the council’s ability to navigate unexpected events with General Fund Reserves now being £10.7 million. The peer team recognises that reserves of the council are currently held by directorates and have often been used at a directorate level as an in-year contingency. It is the strong belief of the team that these reserves should be managed corporately to support their strategic use, and to minimise the use of reserves to address in-year issues.
The peer team’s findings concur with the CIPFA assurance reports regarding the issues which have contributed to the council’s financial context, including an unwillingness of the council to take difficult decisions. This has been enabled through a mixture of political differences making it difficult to develop consensus on approaches, and the lack of a realistic and viable financial strategy. The CIPFA report also presents a detailed analysis of the council’s current position and highlights key issues including lack of clarity within the council’s MTFS, the use of optimistic assumptions for financial planning, and a cultural disconnect from the scale of the challenge facing the council. The report also included 10 recommendations to set out the actions which the council should take to improve financial resilience.
The council has made progress in responding to these recommendations, most notably through passing an approved and balanced budget for 2022-2023. This budget includes a saving programme of £18.3 million, within which there is a prudent £3 million contingency for part-year effect. Passing this budget is an important milestone and illustrates an improving recognition for the council’s financial context.
The peer team is keen to stress that passing the 2022-2023 budget is just the first step in the council’s financial recovery, and it is essential that this progress is now maintained with attention moving to the delivery of these savings. This is especially pertinent given the recent under delivery of savings, including £12.4 million which was not achieved in 2019-2020 for the last full financial year before COVID-19. This will require an increased organisational focus on budget delivery and the use of regular reporting to identify potential delays and support mitigating actions at the earliest possible instance.
The recommendation from CIPFA called for the council to update their MTFS so that it provides a realistic assessment of the financial challenges facing the council. The peer team recognise that the work to-date completed by the council has rightly focused on the robustness and appropriateness of the 2022-2023 budget. Whilst this is an important first-step, the council must recognise that the work to-date does not address their core budget issues. The recommendations put to the council on future sustainability and wider reforms to their MTFS remain outstanding, including the use of sensitivity models, risk-based approaches to delivery of savings proposals, and understanding the wider changes required to reshape services. Central to the wider revisions to the MTFS is a need for the council to ensure that the forecasting of future resources, income generation and costs is accurate and robust, and that future incomes are not included in budget planning until there is confidence that they are secured. This includes considering capital and revenue budgets alongside the councils balance sheet to make sure that the MTFS is built on solid foundations with regards to delivering identified savings for 2022-2023, and an accurate understanding of their resource base.
Therefore, it is important that further work is completed to identify further savings for beyond 2022, engaging councillors as appropriate in these plans, and ensuring that they collectively address any revised budget gap. This includes a need for the budget strategy for 2023-2024 to be brought forward as much as possible. The peer teams believe that urgent work is required by the council to better understand the 2023-2024 budget gap which is currently forecast at £8 million. Whilst it is not the job of the team to quantify this gap, if was felt that this is likely to be significantly higher than the council has currently forecast. Furthermore, this gap is also subject to the same risks which are facing the wider sector, including immediate challenges created by energy costs, pay settlements, as well as policy changes such as the cost of care cap. Central to this work, is the importance of the council having a robust understanding of its current and forecast resource base, including council tax and business rates. This will require improved financial reporting and communication as the required foundations for further work in this area.
Bringing forward the 2023-2024 budget process will also provide the time required for proposals to be developed, tested, and consulted on before the 2023 budget date. This will help to ensure that the sequencing issues created by the 2022-2023 consultation are not repeated but will also support increased planning, management, and engagement on these proposals ahead of the all-out elections of 2023. It is natural that there will be political debate throughout this process, and officers will need to provide space for this. However, it is important that there is shared recognition across all groups of what is realistically achievable within for the financial context the council is working in.
The peer team appreciate that the council is in the process of implementing a new financial system (ERP) to update their accountancy processes and practice and replace outdated systems. This is an important priority within the council, and an opportunity to improve financial monitoring and management across the organisation. With this in mind, the team would highlight the risk that this creates given the need for timely and accurate reporting and ensuring that the financial basics are in place to support organisational focus on the delivery of 2022-2023 proposals. The council is encouraged to assure itself that the system and associated controls are fully developed, tested, and supported (including staff training) before the system goes live. It needs to be recognised that the work required to develop, test, and transition towards any new system is significant and needs dedicated capacity and support ahead of ‘going live’. This new system presents the opportunity to consider and review some of the council’s existing core processes, making sure that the focus of their finance team is in the right areas.
The peer team has highlighted elsewhere that the council’s regeneration ambitions will not address the council’s financial challenges and creates further risks regarding deliverability and security. Moreover, this approach has also seen the council move c.£12 million of revenue costs to their capital programme which creates the risk of detracting from long-term investment. Similarly, the team recognises that there has been significant slippage on the council’s capital programme with £94 million being reprofiled into 2021-2022, and £68 million into 2022-2023, which creates an immediate challenge of capacity given that the programme is frontloaded with 40 per cent of capital delivery scheduled for the first two-years, which may be an optimistic assumption. Alongside the delivery of this programme, the council needs to be clear on the service areas which are capitalised, and the impact that this brings to their borrowing capacity and the affordability of future loans. Central to these capital issues is the importance of the council having the right governance and commercial support in place to continue to support the sustainable delivery of the council’s priorities. An indicator of success for improvement in this area would be a reduction in the use of direct awards.
Finally, to deliver this level of financial resilience, there is a need for the management of the budget to become a shared priority across the council, across both members and officers. This requires a better understanding and planning for revenue budgets, capital, and balance sheet impact. The council will need to review the skills and structure currently in its finance team to be assured that there is appropriate capability and capacity. The peer team recognise that this team is currently carrying a number of vacancies and temporary arrangements, and thought is required about how to attract the right talent and develop existing staff in this area. The delivery of this improvement would be aided by the council engaging with internal and external audit regularly throughout the journey. This includes responding to the concerns which have already been raised through the section 25 notice (A notice on the conclusion of external audit of the council’s accounts) of external audit, but also looking to work with external audit pro-actively on emerging programmes and approaches.
4.5 Capacity for improvement
The peer team was struck by the commitment and appetite for improvement that exists across councillors and officers of the council. It is clear that this is shared across political groups, as well as different officer tiers across the council. This commitment has contributed to the progress that the council has made, both on priority issues such as the development of a new local plan, but also in responding to the findings of the DLUHC assurance reports.
Central to delivering the necessary improvement for the council will be the corporate capacity of the council and the strength of corporate services. The ‘corporate core’ is currently dispersed across a number of directorates with key elements held separately to each other. This has resulted in the creation of silos, challenges of maintaining oversight, which makes it more difficult to make sure that capacity is aligned to priority programmes. Therefore, the council may wish to consider the benefits of bringing these services and functions together, as well as making sure that these teams have the capability required to deliver what is needed. Whilst there will be natural benefits to bringing these functions together, careful consideration is needed as to the most effective way to do this, and where in the organisation they would be held. The management of these functions would require additional oversight, and the peer team recognise there is a need for senior sponsorship and focus to be protected to drive improvements within their service areas, and the development of foundations for improvement.
Furthermore, the corporate core is essential to effectively managing risk across the organisation. This will be central for making sure that the council is well placed to take rectifying or mitigating actions. This management of risk is often built around the relationship between the council’s statutory officers, including the ‘golden triangle’ of chief executive, monitoring officer and section 151 officer. The peer team could not identify a dedicated space where these officers came together and would encourage short check-in meetings are implemented for this purpose, even if informally. This will be essential in the context in which the council is working, but also, given the pace of change required to manage risk and support, the safe delivery of the council’s priorities through effective challenge.
The council has access to valuable external support through the independent assurance panel which will be central to their improvement. The council has built a constructive and positive relationship during the first six months of working with them. It is important that the council continue to maximise the expertise, scrutiny, and rigour which this process enables over the full period of the panel. This clarity will also support setting out a clear process and criteria that will enable the panel to stand down safely in two-years’ time. This process and criteria are needed to support the identification of milestones, to mitigate the risk of dependency, and enable the panel to best report progress to central government. The council also needs to consider the communications support which is required for the panel, to support member and staff understanding of their role, responsibilities, and subsequent progress reports. However, going forward it is important that the council’s improvement is fully owned and understood by Wirral council, rather than being delivered due to the direction of external partners.
The peer team met with several talented staff from across various directorates of the council who are well placed to support the strategic improvement plan. These staff will benefit from the access to the insight and expertise which is supporting the council through the independent assurance panel as part of their development. Alongside this transfer of knowledge and wider practice in the sector, it is important that there is an extensive programme of training and development to underpin capacity for improvement. This should include:
- a comprehensive member development programme linked to the 2023 all-out elections. This presents the chance to better support councillors through a more structured programme of training and development. This would work through a four-year cycle incorporating essential training for all councillors, as well as tailored content for specific roles.
- delivery of joint training for both officers and members on the specific of working in a no overall control environment, considering the challenges that exist for briefing political groups, brokering agreements, and member/officer relationships in this space.
- further training for elected members focusing on their specific roles, future ambitions, and learning from across the sector.
- take more time as a ‘top team’, engaging with committee chairs, political group leaders, and senior leadership team to collectively plan for future issues and support the sharing of information across the dispersed committee system.
This training will support increased capacity across the organisation but will also have a positive impact on the culture of the council. Achieving an increased workplace presence (at an appropriate point) will also have an important impact on service delivery at the council and wider cultural change. Further thinking and clarity is required around planning for ‘life after COVID’ and this needs to be effectively communicated and understood by staff. These considerations are relevant to making sure that the council is seen as an employer of choice and supporting the recruitment and retention of high-quality staff in a challenging sector.
One of the historic issues which has faced Wirral council has been its lack of local plan which resulted in direction from the Secretary of State regarding the necessary progress required to address this issue in January 2019. Since this point the council has made considerable progress, with full council agreeing to move the current draft to regulation 19 consultation during the peer team’s visit in March 2022. This progress has been supported through an external review of the council’s planning services which was completed by the planning advisory service in July 2019, with progress being reviewed in August 2020. The progress in developing a local plan is a significant step forward as it moves the council away from planning decisions being based upon national planning policy framework which can only apply English-wide considerations as a previous necessity of the organisation in the absence of a local plan since 2000. This revisit praised the council for the ‘gear shift’ and ‘focus’ which had been applied to this issue. The council’s new local plan is built around the principle of a brownfield first approach to development and is something which the organisation is rightly proud of.
This progress has contributed towards rightful optimism regarding the potential of regeneration in the borough. This is reflected in the size and scale of the regeneration programme, which is one of the largest outside London. The council has been successful in securing external funds to support this programme including the town deal plan worth £25 million which has contributed to increased internal and external confidence.
Within the context of this ambition, the peer team believe that there is further work to do to coalesce and coordinate the council’s regeneration ambitions into a single place in an overarching plan. The team was told of the 140 projects that are proposed within the borough and would encourage the council to set-out their collective impact. This will need to be underpinned by a detailed delivery plan which manages interdependencies such as sequencing, funding, disposals, and capacity. There is also a need for this wider programme to be aligned to the wider vision and ambitions for the borough as outlined in recommendation one of this report. Also, given the breadth of this programme, the risk exists that the council may not deliver against all funding streams within the required timescales, placing further emphasis on the importance of this overarching programme plan, and ensuring that it contains appropriate flexibility to be reviewed to respond to opportunities and challenges.
Furthermore, the delivery of this level of ambition will require additional capacity to what is currently in-place. If there is true cross-party support for these ambitions, a decision is needed regarding the necessary revenue budget investment which is required to provide additional capacity to support this programme. This investment into capacity for regeneration will create an additional budget pressure to the council, and consequently may require additional savings to be made elsewhere. This capacity is not just in regeneration, but also in the advice and support provided through procurement, legal, and commercial finance which is required to support this programme. It is important that this is not just seen as a revenue budget ask, but a careful assessment of how resources are used across the organisation, moving towards a model where this support is drawn down through statutory officers, rather than brokered or commissioned separately.
Beyond the dedicated capacity required, it is important that corporate services are meaningfully engaged with regeneration initiatives at the earliest instance to support refinement through constructive challenge and delivery. This is something which the peer team believe the council need to improve on, hearing a mixed picture regarding the current levels of internal challenge which are applied, ranging from important checks and balances to risking delivery. It is important that these relationships are improved, and the council’s senior leadership team can manage this complexity collectively.
The peer team were struck by the enthusiasm and appetite across the council for the regeneration opportunities that exist in the borough, and this was brought to life during our time with the council with further information being provided on the Wirral waters programme and the wider 2040 Birkenhead framework. The peer team were pleased that this ambition was clearly a shared priority across political groups and partners which will support cross-party support going forward.
However, whilst the peer team appreciate these opportunities and the importance of regeneration to the long-term future of the borough, it is essential that the council recognises that this will not address any of the council’s short-term financial issues. Whilst recognising the longer-term benefit this will bring for sustainability, the peer team have strongly stated that regeneration will have a limited impact on the council’s immediate financial context and will in fact bring further challenges in the immediate future. Therefore, the peer team would encourage the council to treat any financial upside to regeneration as a ‘bonus’, rather than a central financial planning assumption. This is consistent with the findings of the CIPFA review.
The council’s historic approaches to regeneration have been delivered through a joint venture which they entered with muse developments in 2018 called the Wirral growth company (WGC). The CIPFA financial review raised a number of concerns regarding the financial due diligence of the company and whether the risks associated were fully understood: “We are concerned that the council does not clearly understand the extend of the financial risks associated with its regeneration agenda and the companies it owns.” This is also reflected in feedback which the council has received from external audit regarding the deliverability of income targets attached to this area.
With this in mind, it is encouraging that the council has removed an income of £1.38 million target for WGC from their budget, albeit, with this being replaced with salary capitalisation. The peer team recognise that the council is currently considering the most appropriate delivery vehicle to support these regeneration plans, including the potential for an urban development company. The team recognises that it would not be appropriate to comment on which is the most appropriate vehicle for the council to implement but would encourage that this issue is addressed in the round alongside consideration of issues including capacity, budgeting, and sequencing, rather than this being seen as the primary question in isolation
5. Next steps
It is recognised that senior political and managerial leadership will want to consider, discuss, and reflect on these findings over the coming weeks. To support transparency, the council is expected to publish this report within six weeks of receiving a final draft. There is also an expectation that an action plan is publicly available within eight weeks of the report’s publication.
Both the peer team and LGA are keen to build on the relationships formed through the corporate peer challenge revisit. This process includes a six-month check-in holding a structured conversation across peers and the council to consider progress made against these recommendations.
In the meantime, Matthew Dodd, programme manager for the North West, is the main contact between your authority and the Local Government Association. Matt is available to discuss any further support the council requires and can be contacted by email (Matthew.Dodd@local.gov.uk) or mobile phone (07780 226 852).