Hertfordshire County Council - LGA Corporate Peer Challenge report

The peer team found Hertfordshire County Council (HCC) to be a well run council, which has been characterised over the years by financial stability and high quality services.

Both members and staff reported a strong sense of pride in working for HCC. The team witnessed a genuine commitment to ‘do their best’ for the people, business and communities of Hertfordshire. Staff reported a sense of real investment in them as people and as a workforce, evidenced by a range of training and development offers, coupled with career progression opportunities. They also reported feeling trusted and enabled to do their jobs to the best of their ability, including to use discretion and make decisions.

This is reflected in the positive reviews the team heard from a range of partners, who regularly cited the high-quality staff as one of the key benefits of working with HCC.

Within the organisation, there is a sense of trust and respect, which stems from the top. The strong working relationship between the leader and the chief executive is a key foundation stone for HCC. Relationships between members and officers are largely positive, with a sense of shared professionalism and commitment to the people of Hertfordshire.

HCC has recently published a new and refreshed Corporate Plan, which is providing a renewed sense of purpose. The focus on the green agenda in particular seems to be invigorating people, and there is opportunity for the council to enhance further the strategic role it plays in this arena.

The peer team felt there was more opportunity to ensure that a common vision –  particularly in terms of a sense of Hertfordshire as a ‘place’ – was owned and understood by all partners, members and staff. Strong engagement and a more strategic role for communications, in particular in celebrating HCC’s successes and building a positive sense of narrative about Hertfordshire, as well as recognition of the challenges, will be key. With major employers and high productivity, Hertfordshire is much more than “just a place people who work in London go to sleep”, and the council can be its champion.

Though there is a strong sense that HCC has weathered some more difficult times with partners, and some legacy of this remains, across the board the team found strong support for the current leadership team. The new Leader has helped reset relationships with most key partners and this is providing a strong foundation on which to strengthen engagement; turning the aspirations for Hertfordshire as a place set out in the Corporate Plan into a shared vision for the place, which all partners can help deliver on.

Though benefitting from a strong financial foundation, like many councils HCC is facing the cumulative pressures of funding uncertainty, increased demand, significant and rising inflation, increasing interest rates, and the general volatility of the domestic political and economic climate. The challenge HCC now contends with is bigger than it has faced in the last decade and the organisation must now focus on and prioritise its resources towards meeting this challenge head on.

The council has some excellent practices and ways of working. The council must now perform a ‘pivot’ and ensure that the arrangements it has in place are fit for the turbulent times, for now and for the future. Looking at the approaches other councils have adopted will be useful and give a beneficial sense of comparison.

As all local authorities face significant financial challenges, HCC’s relative priorities must be determined and clear so they can steer activity and spending as this is rationalised to deliver a balanced budget. There will be elements of HCC practice that are valuable to keep, and others that on reflection could potentially hold it back and that it will now make sense to cease or revise. All decision making will need to be based on strong evidence and evaluation.

The scale and nature of the challenge the council currently faces and the work it will need to do to meet it can serve as a catalyst for changes which will better serve the council to be fit for the future too.

The ‘pivot’ required is at heart a cultural one and the team suggested a range of measures HCC could explore to ensure it is on the right footing to support this, including: clearly linking Corporate Plan priorities to the ‘Integrated Plan’ (IP) and matching this with a clear delivery plan, with tangible success measures; a more strategic role for communications and engagement especially in addressing a varied and inconsistent level of understanding of the scale of the financial and service challenges; and building a stronger collective ‘Team HCC’ approach across all departments with a supporting narrative for the changes and actions required.

HCC will need to review the resources it has to support the level of change required, and how these are deployed across the council. This will partly be about ‘brigading’ functions to ensure joined up activities across the whole council, but also about enabling and supporting initiatives in departments which ensure evaluation and consistent action.

The peer team felt that early decisions about the capital programme are essential to support the budget position as well as further developed proposals on the council’s asset strategy; all of which would need to be taken at pace. This would have multiple benefits, not least the potential contribution to the financial position, but would also provide opportunities to support multiple objectives including net zero targets. A review of the council’s assets, including County Hall, could go hand in hand with a review of ways of working post-COVID, which require some clarity.

There is a strong sense from staff, members and stakeholders that the residents, places, and communities of Hertfordshire are already both varied and diverse and still changing. The council will need to ensure it is seen to recognise the current and evolving picture and is using a strong evidence base for decision-making and communications.

The peer team found substantial support for and a genuine determination to both improve understanding and effectively deliver its Diversity and Inclusion (D&I) work. The commitment is supported by demonstrable investment and activity. This is evident from the senior team and establishment of new training and structures within HCC. The next step is to ensure meaningful impacts through an embedded culture across the council. This will require training, ongoing support, communications and appropriate management of key issues and behaviours.  

The peer team felt this quote from one of the Hertfordshire young people we talked to summed up our overall message powerfully:

 

“Keep up the good work but there is still much to do, the world is changing fast around you” 

There are a number of observations and suggestions within the main section of the report. The following are the peer team’s key recommendations to the council:

1. How the council approaches the future needs a strengthened business planning process that integrates the Corporate Plan and its priorities with financial planning (the well recognised IP) and activity planning across all services. It needs to encompass all spend including Capital and activities and have clear measures of success through the year that are transparently tracked.
2. This business and budget process needs to be fit for the urgency, nature and scale of the challenges faced and needs to deliver a shared understanding of the financial and service challenges within HCC and with partners. The process can be evolved over time but needs to be the way decisions are made and success is judged.
3. Create a coherent and unified programme of change and delivery that adds value and ensures additional resources are given to priorities. An effective approach needs to have buy in and be integrated across all services.
4. Ensure the ‘corporate core’ provides the glue needed to coordinate this integrated approach across HCC. The approach should support services through change whilst maintaining oversight, identifying interdependencies, and be sufficiently independent to effectively report issues and progress.
5. Undertake prompt work to implement actions arising from current property strategies to the review the council’s assets and land. This should include reviewing the council’s existing operational estate, including County Hall, to consider how this could be used to support the council's service objectives, sustainability goals, and financial position through reduced operational running costs and potential capital receipts.
6. Ensure that there is clarity about HCC’s model of new ways of working and that technology, behaviours and assets are rooted in business needs and aligned to that strategy. The model needs to link clearly to the long-term strategy for council’s land and assets and be well understood by staff, members and partners.
7. Strengthen the member enquiry and casework system to assist all elected members with responding to resident enquiries and local issues. Ensure members can keep track of enquiries and respond in a timely way: even if it is not possible to do what is asked for, it is better to be transparent and respond quickly.
8. Give attention to the communications and responsiveness of place services, in particular highways. As for all upper tier councils, these services are HCC’s ‘shop window’ for many residents and partners. The quality of the communication is often as important as the substantive response and has an important impact on its reputation.
9. Consider a more strategic role for communications and engagement in articulating HCC’s successes and direction of travel. Associated tools such as a ‘Communications and Marketing Strategy’ and supporting communication management will help engage effectively with a wide range of stakeholders and help deliver complex messages across a large area.
10. Create and promote a unifying shared vision and narrative with partners and stakeholders for what Hertfordshire’s residents, communities and businesses need. This work needs to be based on strong local evidence and engagement to ensure it articulates agreed and owned priorities, opportunities and challenges. This will ensure all local partners understand their part of the jigsaw and are able to influence each other as they make their own choices about focus and investment.

The peer team

Peer challenges are delivered by experienced elected member and officer peers. The make-up of the peer team reflected the focus of the peer challenge and peers were selected on the basis of their relevant expertise. The peers were:

• Becky Shaw, Chief Executive, East Sussex and West Sussex County Councils
• Cllr Simon Geraghty, Leader, Worcestershire County Council
• Leigh Whitehouse, Deputy Chief Executive, Surrey County Council
• Amy Harhoff, Corporate Director, Regeneration, Economy & Growth, Durham County Council
• Chris Lewis , Strategic Lead – Creating a Better Place, Oldham Council
• Helen Reeves, LGA, Peer Challenge Manager

Scope and focus

The peer team considered the following five themes which form the core components of all Corporate Peer Challenges. These areas are critical to councils’ performance and improvement.

1. Local priorities and outcomes - Are the council’s priorities clear and informed by the local context? Is the council delivering effectively on its priorities? 
2. Organisational and place leadership - Does the council provide effective local leadership? Are there good relationships with partner organisations and local communities?
3. Governance and culture - Are there clear and robust governance arrangements? Is there a culture of challenge and scrutiny?
4. Financial planning and management - Does the council have a grip on its current financial position? Does the council have a strategy and a plan to address its financial challenges?
5. 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 questions, the council asked the peer team to provide feedback on the following areas:

Does HCC have sufficient capability and capacity to effectively deliver against its strategic priorities?

• Are key strategies in place/ embedded into council processes/ resources appropriately allocated?
• Is priority setting informed by a strong understanding of service performance and community need?
• Is appropriate organisational leadership, capacity and expertise in place to implement the council’s major transformation and policy initiatives?

The peer challenge process

Peer challenges are improvement focused; 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 and proposals. The peer team used their experience and knowledge of local government to reflect on the information presented to them by people they met, things they saw and material that they read.

The peer team prepared by reviewing a range of documents and information in order to ensure they were familiar with the council and the challenges it is facing. The team then spent four days onsite at Hertfordshire County Council, during which they:

• Gathered information and views from more than 50 meetings, in addition to further research and reading.
• Spoke to more than 170 people including a range of council staff together with members and external stakeholders.

This report provides a summary of the peer team’s findings. In presenting feedback, they have done so as fellow local government officers and members.

The council has new methods of tracking performance management data and it is clear that effort has been made to ensure this process is modernised. However, the council must now ensure this monitoring links clearly back to the Corporate Plan priorities and can effectively demonstrate the extent to which they are being progressed.

It will be essential that this monitoring maps genuine impact against the agreed priorities and in doing so contributes meaningfully to overall performance, the achievement of the council’s ambitions, and also to organisational change.

Where there are issues of significant priority, it will be valuable to maintain a strong, central oversight; maintaining an understanding of how different activities can simultaneously contribute to a goal. For example, sustainability measures and their impact will span many departments, and this can be understood in a more joined up way, not just within specific projects.

There was a sense that staff need to better understand the relationship between the work that they do and the decisions that they make on a day-to-day basis and the Corporate Plan priorities. Though most staff seemed very aware of their own service plan and delivery targets, there was less understanding about how this joins up with the more centrally held Corporate Plan, or how staff would know what the organisation saw as a priority when weighing up different options during the course of normal work endeavours.

Enhancing staff understanding, at all levels, of how they contribute to the challenges ahead and see themselves as part of a ‘Team HCC’ approach will be essential to meeting them head on.

HCC’s children’s services have been  rated ‘Good’ by Ofsted with ‘Outstanding leadership’ since the last inspection in 2018. The council is seen to be taking a lead in the local Integrated Care System (ICS) and must continue to have significant influence and leadership in this space to avoid organisational retrenchment as all parts of the public sector system face a challenging financial outlook. Strong and established work across health and adult social care has helped provide a platform for more emerging work on linking NHS and council children’s services.

In terms of the work that they do, HCC’s delivery of services was mainly rated very highly by the partners the team spoke to. In particularly, there was a notable appreciation for the longstanding investment HCC has made put into prevention activity. Similarly, the council is already seen as leading the way in terms of the green agenda and sustainability, and there is much to build on here. There were some significant issues raised about both communication and responsiveness of some highways related services.

HCC had a strong reputation amongst partners and agencies involved in housing delivery. Although HCC does not have direct delivery responsibilities for housing, it is a clear objective of the county to support the cumulative Local Plan targets of 100,000 homes by 2035; though it was recognised that, on the current trajectory, it will be a challenge for Hertfordshire’s collective partners to deliver this target.

Ways of working developed during the pandemic, particularly the public health approach to collaboration with partners, seem to have been highly valued, and it will be important to ensure that advances made here are not lost as time moves on.

Senior leaders within HCC are seen as visible, trusted, open and authentic – these were words the team heard repeated on several occasions. There is a feeling of a real ‘sea change’ in terms of the new leader and chief executive, both the vision they are setting as well as the example in terms of ways of working.

The chief executive and the senior officer team have placed a priority on working beyond their functional responsibilities and to operating as a single, integrated team. There were some good examples of where this approach is bearing fruit, even though it is early in its development and still being embedded. It is important that this acts as a foundation for the whole council working effectively across departmental boundaries, and that the Executive Leadership Board have a clear route map for establishing this approach as a whole organisational one.

Staff and elected members across the organisation report feeling incredibly proud to work for Hertfordshire and cite a shared commitment to do their best for residents. They feel empowered to make decisions and to use their discretion in their respective roles. The team heard frequent examples of people continuously striving to improve what they do, often in conjunction with supportive partners.

Many staff reported feeling supported to progress in their careers and have valued the investment made in Learning & Development. The peer team witnessed a shared sense of support for one another as colleagues and a genuine mutual respect.

This working ethos in the council creates a good foundation from which to further embed a shared 'Team HCC' approach to push forward into the future. This will need to encompass both a collective responsibility at all levels for meeting financial challenges, coupled with a sense of capitalising on that shared pride and pushing a positive vision for Hertfordshire the place.

Though the Corporate Plan is a good start, and has so far been well received, the team felt there was further work to do to create a unifying and shared ‘place’ vision for Hertfordshire, that all staff, members and partners could coalesce around.  

Across the wider landscape, despite the legacy of some past tensions, there is evidently a growing trust in Hertfordshire's new leadership, and a desire and willingness to be part of the new journey with them. This change in approach has been broadly welcomed.

It will be essential to remember that though the leader and chief executive will naturally serve as place leaders, and are setting a good example of representing HCC, the job of representing HCC will need to be a shared and collective endeavour for all of the council’s political and managerial leaders.

Many partners cited the shared working during the pandemic as a significant achievement and see this as something they strongly wish to see continue, building on the foundations that have been laid.

There are some good structures in place, which can be used to greater effect to organise around a shared ‘place’ vision and resultant priorities. Both the LEP and the Growth Board are good examples of structures that are working well but can do more and go further with a stronger articulation of their purpose and the outcomes sought.

There is already evidence of good place and partner leadership happening in areas such as the green agenda and economic growth, and this can be successfully built upon to further meet the challenges of the climate emergency, financial volatility and the cost-of-living crisis, amongst other shared challenges. HCC has a range of partners willing to work together to meet shared aims, and it can play a key strategic role in ensuring this is capitalised upon.

There is a robust governance system in the council, which is coupled with a comprehensive overview, policy development and scrutiny system. This structure gives the opportunity for a broader range of members to be involved meaningfully in decision making, maintaining a core democratic line of accountability.

There is a process in place to ensure scrutiny recommendations are genuinely acted upon, which is not always the case in other councils, and helps to ensure time spent in scrutiny adds appreciable value. The governance arrangements for the council as a whole felt representative of and consistent with the organisational culture and approaches that have served it well for many years.

As such the team is not recommending any substantive changes. However, we suggest that periodic review of governance arrangements may be beneficial, if the council finds that the current model is at any time impeding the pace of decision making and change required now or in the future. As prioritisation and decision making gets harder it will be important to ensure that working with all non-executive members is genuinely valued and built into ways of working, but equally, the council will need to evaluate what is the best use of time, and best serves the level and pace of change or decision making required.

There is a positive culture of professionalism and respect evident in HCC, both between staff, and between members and officers.

Recent work to review staff terms and conditions and pay structures appears to have had a slight impact on staff morale and HCC may need to invest some time in smoothing out past tensions, in order to help staff move forward positively on the journey ahead.

The council have demonstrated a strong commitment to D&I. This is backed up by demonstrable investment, and visible changes to structures and processes. The team heard that a number of staff with lived experience of disadvantage feel the council is on a positive journey and welcome the renewed outward commitment to D&I. On the whole they report feeling listened to and recognise that progress is being made.

The team recommend that specific and additional focus is needed on issues of accessibility and disability – and this was raised by staff and members as an area that needs concerted focus.  

Though positive work has been done and this is being noticed, there is further work to do to ensure that progress is embedded across the council, not just in stated values, but in behaviours too. All measures related to D&I also need consistent and reliable evaluation to monitor genuine impact.

D&I cannot be the work of a few committed staff but must be a widespread responsibility. The council needs to ensure that D&I activity is building enduring and widespread roots throughout the organisation. Existing good relationships, many of which were strengthened during the pandemic, also provide good opportunities for continued working with community partners.

HCC has a strong track record of sound financial management. It is financially stable, with good levels of reserves. There is a wealth of financial expertise amongst senior officers in the council, and very clear shared responsibility amongst senior officers and members for delivering a balanced budget and ensuring future financial sustainability.

Managing the money effectively features very strongly in the council’s sense of itself, with great trust put in the Integrated Plan (IP) process to deliver a balanced budget, having seen it done so consistently over a sustained period of time. This process has served the council well for many years and was referenced frequently by staff and members across the council, however the extent of the financial challenges that have emerged during the current financial year, and affecting future ones, have already placed strain on these well-established ways of working.

The timing of the peer review coincided with the council evaluating and responding to some rapidly escalating financial pressures driven by external factors, including wider economic uncertainty and generationally high levels of inflation. Elements of the IP process had been reviewed and strengthened in response to these challenges, reflecting that ‘usual’ way of doing things would not be sufficient, and reflected positively on the leadership’s ability to respond quickly to changing circumstances. There was also, rightly, reflection underway as to how the position had changed so dramatically so quickly, and what could be done to better detect potential changes in future.

The strengths of the IP process would appear to be founded on accurate projections about the financial outlook being translated into departmental savings targets, which are then taken seriously and addressed by all departments. However the current year has placed great strain on this process due to the changing financial outlook, and the sense from some that the pursuit of savings solely through individual departmental routes is not best suited to meeting the scale of financial challenge that HCC is now presented with.

By the time that the council has set its budget for the coming financial year, it will need to have satisfied itself that it understands what aspects of the IP process need to be adjusted to reflect the different sort of challenges being faced, in order that it can approach future financial planning with the same level of confidence that has typified the last decade or more.

The kind of issues that will be worthy of consideration will include: the extent to which the current process allows the identification of unavoidable cost pressures and growth, as well cross departmental savings opportunities; whether resources for change are being suitably deployed to ensure future financial sustainability; the level of engagement that takes place within the council and beyond on these issues; and, whether arrangements can deal suitably with potential rapid decision making requirements.

The previous model of budget setting and financial management has relied on identifying savings with, and allocating targets to, differently departments, and pushing departments to meet these with no additional growth in-year. In approaching the new financial challenge, there is a risk that departments jump to service reductions which will be hard to palate in contrast to the relative ability to sustain services up until now.

The council could benefit from a budgetary approach that takes into account the quantum of spending in Hertfordshire, not just the ‘gap’.

This could potentially give space to more radical approaches that don’t depend on straight service reductions – though this is not to say some tough decision will not need to be taken – but gives focus to what HCC can do with the sum of the funding it has. This can be informed by a clear sense of what is prioritised and what isn’t, driven by the Corporate Plan.

In the short term the council is planning to utilise its sizeable reserves to smooth the scale of the challenge it confronts, and this seems a sensible part of the overall approach. However, care also needs to be taken to ensure reserves are used judiciously and not exhausted too quickly. Based on the recognition that the council is facing an unprecedented level of change, and that decisions will be difficult to take, difficult to implement, and may not always deliver the expected savings or additional income in the timescale anticipated, there needs to be recognition that the level of risk in the operating environment will continue to increase.

There needs to be a clear, shared and understood plan at senior levels for how they will manage reserves, and mitigation plans considered if progress is slower and usage of reserves greater than planned along the way.

Though difficult decisions will need to be taken there is a sense that the council has been able to continue to provide some services that other councils have had to move away from in recent years. The council may benefit from open conversations with other councils who have dealt with more severe financial pressures about what worked well and what not so well.

Alongside this, there is the potential to release much needed capital from a timely review of the council’s estates and assets, in particular County Hall, which the peer team recommend is now done at pace.

Across the organisation, despite the differential levels of understanding of the scale of the financial challenge, the peer team observed a willingness to explore ideas and put options on the table, and an underlying level of confidence, despite some heightened anxiety, that HCC would weather this challenge as it has weathered others before.

Does HCC have sufficient capability and capacity to effectively deliver against its strategic priorities? 

There are highly committed, skilled and knowledgeable staff in Hertfordshire, and some tried and tested methods of both public financial management and service delivery; coupled with a genuine desire to do the right thing for residents. This will stand the council in good stead.

However, the scale of change required may potentially be a ‘shock to the system’ for those who work for, with, or represent, HCC, particularly those who have done so for a long time. There is a perception that the council has weathered challenges before and will do so again. Whilst this may well be true, it will only be with a concerted programme of reform and change, and the organisation cannot afford to be complacent.

Systems and structures will need to be adapted to meet the pace and scale of change now required to meet current and future challenges. This may mean taking decisions that feel anathema to what has gone before, including dismantling practice or processes that have previously served the council well, but will no longer do so.

The organisation must respond with purpose and pace and have ways of working that enable it to do so.

The council should consider a more proactive rather than reactive approach when it comes to articulating a clear set of deliverables for the council, and this needs to be driven from a stronger corporate core, which provides the ‘glue’ across the organisation.

The council needs to make sure that all resources – including people, capital, technology and assets – are effectively deployed in a way that is designed to meet the present challenge and priorities, but also serve to futureproof the council. This will be particularly key for projects of clear and immediate benefit such as rationalising the council's assets and estate. This will complement a review of HCC’s ways of working (particularly flexible working), ensuring policies best support business need.

Given what is ahead, it will be advantageous to the council to deploy a strategic approach to communications and engagement. This would mean articulating a story and narrative of Hertfordshire, both the place and the council – celebrating its many successes, alongside a realistic appraisal of the challenges it faces. With good communications, HCC may find that both staff and residents are more willing to be part of the journey than they anticipate, provided that a sense of transparency and ‘doing right’ by Hertfordshire continue to serve as guiding principles.

The nature of all county councils means that much of HCC's external reputation and perceived value for money rests on place services, particularly areas like highways and infrastructure. Activity in these areas is highly visible to the public and partners, and in many ways act as a barometer for public perceptions of the council. Good work hidden in the depths of the council can be undermined by perceived issues at the more directly visible points of operation, such as in these service areas. As such, attention to how communications are managed, and the levels of responsiveness customers can expect to receive, would bring significant benefits and help to better reflect the very significant investment and effort in these areas; it will also boost perceptions of the council as a whole at a time when maintaining trust will be key.  

It is recognised that senior political and managerial leadership will want to consider, discuss and reflect on these findings.

Both the peer team and LGA are keen to build on the relationships formed through the peer challenge. The CPC process includes a six-month check-in session, which  provides space for the council’s senior leadership to update peers on its progress against the action plan and discuss next steps.

In the meantime, Rachel Litherland, Principal Adviser for the East of England Region, is the main contact between your authority and the Local Government Association. Rachel is available to discuss any further support the council requires. [email protected], 07795 076834.