LGA Corporate Peer Challenge - London Borough of Merton

Corporate Peer Challenge (CPC) is a highly valued improvement and assurance tool that is delivered by the sector for the sector. It involves a team of senior local government councillors and officers undertaking a comprehensive review of key finance, performance and governance information and then spending four days at LB Merton to provide robust, strategic, and credible challenge and support.

CPC forms a key part of the improvement and assurance framework for local government. It is underpinned by the principles of Sector-led Improvement (SLI) put in place by councils and the Local Government Association (LGA) to support continuous improvement and assurance across the sector. These state that local authorities are responsible for their own performance, accountable locally not nationally, and have a collective responsibility for the performance of the sector.

CPC assists councils in meeting part of their Best Value duty, with the UK Government expecting all local authorities to have a CPC at least every five years.

Peers remain at the heart of the peer challenge process and provide a ‘practitioner perspective’ and ‘critical friend’ challenge.

This report outlines the key findings of the peer team and the recommendations that the council are required to action.

Merton council is ambitious and innovative, with a dynamic leadership team working hard to modernise the council and establish a clear and recognisable brand for Merton the place and Merton council.

The borough is situated in southwest London encompassing the areas of Mitcham, Morden and Wimbledon and with a population of more than 220,000. It is a densely populated area and a borough of two halves, with persistent economic and health inequalities experienced at a higher rate in the East of the borough contrasting with the more affluent West of the borough. Merton is known for its extensive green spaces, with almost all schools rated as good or excellent and it is home to the All England Lawn Tennis and Croquet Club, where the annual Wimbledon Championships Tennis competition is held, with over 500,000 people attending during Wimbledon fortnight.

In the past two years Merton’s political and managerial leadership have been leading the council on a transformation journey. This has led to a period of rapid change at the council that the peer team conclude could only have happened through the determination and energy of the leadership.

Much work has been done to create recognition and a sense of energy in the organisation for Merton’s three strategic priorities; nurturing civic pride; building a sustainable future; and creating a borough of sport. These council priorities are known by staff and many partners, forming the foundation to the brand recognition and story of place that the council seeks to establish for Merton. Although the peer team acknowledge the amount of work that has already taken place to communicate the priorities, it recommends that the council, which is two years into these ambitions, takes time to reflect on the progress made to date against each priority and ensures a clear outcomes framework sits behind each one. This will help the council, partners and the community to fully understand the breadth of the ambition against each of the priorities and the links between service areas and departments to achieve the priorities, and what will change as a result. Merton should ensure that adequate focus and resources are allocated to achieving the three strategic priorities while also safeguarding the importance of other priorities. This is especially crucial given the heightened emphasis on the borough's sports priority. Alongside this the leadership should review the type of council Merton wants to be in the future, including the vision it sets in its approach to insourcing and commissioning, and how it communicates this in a way that staff and partners understand.

The council has a history of working well with partners to help deliver regeneration across the borough. It is now embarking upon a larger council led regeneration programme to include Morden town centre, alongside other town centres in the borough. The money from the sale of CHAS has been used in part to reduce some historic debt with the majority earmarked to invest in the council’s place making objectives including supporting large capital projects. Plans have been drawn up for Morden town centre and engagement with the development sector and businesses is underway. Merton should look to pick up the pace with this work and engage more proactively with the private sector, encouraging more inward investment across schemes and more widely into the boroughs activity. Merton should also be clearer on its economic growth strategy. It is important that Merton’s ambitions in this area are broadly understood across the organisation, so that services recognise the part they are playing in supporting the borough’s economic recovery, business investment and job growth. It is clear that many businesses and partners supporting the council’s ‘borough of sport’ ambitions are well established and provide opportunities, that if harnessed could provider wider benefits across all of the council’s priorities.

The strength and trust between the leader, deputy leader and chief executive were recognised and praised by those that the peer team spoke to, with each individually described as being visible, inspiring and active in the community with residents and partners. The peer team were particularly impressed by the place leadership shown when responding to critical incidents such as the Galpins Road ‘gas explosion’ with clear evidence of leading from the front, demonstrating resilience and strong collaborative working.

It was positive to hear how staff at the council are recognised as an asset to the organisation, with the peer team hearing officers explain how proud they are of their work and proud to work for Merton Council. The council is aware of the experience and talent in their workforce but also recognises that in some areas of the council, work is needed to build capacity, resilience, and stabilise the workforce, appreciating the national difficulties with recruiting and retaining staff in some service areas. More work is needed to develop the workforce strategy to aid the council with succession planning and to nurture and support local talent. There is an opportunity for Merton to review funding to support workforce planning and look at ways to fund apprenticeships, so learning is shared early and embedded.

Merton has a good level of financial resilience and good financial reporting and management systems overall, however there is a need to develop clear plans for achieving sustainable savings, at pace, to reduce the structural budget deficit within a three year period. Financially the council is in a relatively strong position with low levels of borrowing and debt to manage through inflationary pressures. While the CHAS funds provide the council opportunities to expand their capital ambitions, it is likely there will be a need to build in-house capacity, capability and skills to enable delivery of regeneration and transformation programmes and reduce the reliance on external advice.

Merton has many well performing services and should be proud of these, including their children’s services department, with the positive ‘outstanding’ Ofsted inspection in 2022. The strength of homelessness prevention over the last few years has also been an area of strength for Merton, against a backdrop of a housing crisis in London. Steeply rising demand for temporary accommodation and increasing costs in this area are a challenge for Merton, and most London boroughs. It is important that Merton ensure that resources are in the right place to support strong management of this service area, with appropriate staffing levels to enable staff to proactively manage caseloads to deliver as much prevention activity as possible, helping to keep temporary accommodation placements within a manageable level.

The council recognises that it has pockets of excellence in its approach to equality, diversity and inclusion (EDI), in particular in children and families services and staff networks. This good practice should be celebrated and shared more rapidly across the organisation, including strengthening senior management sponsorship of EDI at Merton.

The peer team heard positive feedback from partners about Merton’s approach to collaborating to meet the needs of residents and tackle challenges emerging from the pandemic and cost of living crisis. Partners working with the council on their borough of sport ambitions, were impressed with the council’s approach and work in this area. Partners praised the achievement made in such a short period of time to raise the profile of Merton the place, and putting the parks, sports activities and facilities high on their list of priorities. Merton should celebrate and nurture what partners, communities, and staff think is great about Merton and harness their energy to strengthen the ‘Merton United’ approach.

The relationships between the political and officer leadership are very good with a high level of collaboration. The level of member/officer communication is good with decision-making processes working in the main, but there is an opportunity to look at strengthening these further. The peer team would encourage the council to create the space for the leader’s strategy group (LSG) and the corporate leadership team (CLT) to come together as a group on a more regular basis to better establish their joint strategic leadership of the council.

Merton is a great place to live, work and invest. The council should use the current enthusiasm and energy evident at the council to build the story of Merton and its places and people, addressing inequalities across the borough, developing its approach to neighbourhoods and cherishing and sustaining all that is good.

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:

• Celebrate and nurture what partners, communities, and staff think is great about Merton and harness the energy they have to build on this. Look at how the council can develop the storytelling of the benefits of the borough and the achievements of the council, to further engage the communities and gain stronger buy-in to the ambitions.
• Create more space for regular, strategic conversations for the member/officer leadership of the council
• Recognise pockets of excellence around the approach to equality, inclusion and diversity (EDI), in particular in children and families services and staff networks and share good practice more rapidly across the organisation and strengthen senior management sponsorship and enhance staff wellbeing
• Pause and reflect on progress to date against the three strategic priorities and what outcomes you want to achieve.
• Consider what kind of council you want Merton to be now and over the long term, including the approach to insourcing, commissioning, and the approach to council housing management
• Develop clear plans to reduce the structural budget deficit within a three year period.
• Use funding to support workforce planning to fund apprenticeships so learning is shared early and embedded
• Review the prioritisation of key projects and align resources to support delivery
• Build in-house capacity, capability and skills to reduce reliance on external advice
• Engage more proactively with the private sector to encourage more inward investment and be clearer on Merton’s overall economic strategy
• Develop a clearer, more consistent and more accessible ‘one council’ approach to delivery models and ensure capacity to enable the change the council needs to achieve. Build on the good practice employed in digital and other areas, to create a more structured approach, with a clear methodology and strong governance arrangements for all delivery models and improvement programmes.

The peer team

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

• Cllr Grace Williams – Lead Member peer - Leader Waltham Forest
• Jenny Rowlands – Lead Officer peer - CEX LB Camden
• Cllr Mike Ross – Leader of Kingston Upon Hull
• Kathy Freeman – Strategic Director of Resources - LB Havering
• Richard Roe – Corporate Director of Place – Trafford Council
• Camilla Mankabady – Director of Communications - Liverpool City Council
• Sadie East - Director of Communications, Insight and Innovation – LB Brent
• LGA Peer Challenge Manager – Rebecca Ireland

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? Is there an organisational-wide approach to continuous improvement, with frequent monitoring, reporting on and updating of performance and improvement plans?
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? What is the relative financial resilience of the council like?
5. Capacity for improvement – Is the organisation able to bring about the improvements it needs, including delivering on locally identified priorities? Does the council have the capacity to improve?

As part of the five core elements outlined above, every Corporate Peer Challenge includes a strong focus on financial sustainability, performance, governance, and assurance.

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. This included a position statement prepared by the council in advance of the peer team’s time on site. This provided a clear steer to the peer team on the local context at LB Merton Council and what the peer team should focus on. It also included a comprehensive LGA Finance briefing (prepared using public reports from the council’s website) and an LGA performance report outlining benchmarking data for the council across a range of metrics. The latter was produced using the LGA’s local area benchmarking tool called LG Inform.

The peer team then spent four days onsite at LB Merton, during which they:

• Gathered evidence, information, and views from more than 35 meetings, in addition to further research and reading.
• Spoke to more than 70 people including a range of council staff together with members and external stakeholders.
• Visited a regeneration site
• Met with borough of sport partners

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.

Merton is an outer London borough with a population of over 220,000. It is ethnically diverse, with the population becoming older based on the 2021 census figures. The borough has a wealth of green spaces, a strong sporting heritage, good schools, good transport links, an emerging cultural scene, and a cohesive community. The borough has affluent areas and areas that experience significant social inequalities. There is a divide in outcomes between the East and West of the borough that drive a health divide including a persistent gap in life expectancy and ill-health. The council recognises the strengths of the borough whilst also appreciating the challenges it faces with health inequity but also in inequality of opportunity, housing demand and condition issues, economic development, and climate change.

Merton’s’ Corporate Plan, Building a Better Merton Together commits to tackling these challenges, whilst also keeping residents at the heart of everything the council does. The senior leadership of the council see their role as not only custodians of Merton delivering and leading with pride, but also committing themselves to being visionaries for the future and enablers of transformation for the borough.

The council has an ambitious political vision as set out in the Council Plan 2022-2026 centring on three priorities for Merton over the four year period; creating a borough of sport, nurturing civic pride, and building a sustainable future. The aims behind these priorities are to improve the quality of life for all residents, promote inclusivity and ensure long-term sustainability, as well as helping to put Merton on the map.

The three key strategic priorities are recognised within the organisation and with many partners, with the peer team observing that the borough of sport ambition is the most recognised of the three priorities. Strong communication both internally and externally has resulted in a high and impressive level of recognition for the borough of sport. Merton’s approach has created a rare energy and vibrancy around the council’s ambitions and attracted interest and involvement from partners and residents that have not engaged in this way before with the council. This work could bring new and innovative opportunities for collaboration for the council, therefore it is important that Merton links their borough of sport ambition to their wider economic ambitions, ensuring the most benefit is gained for the borough and council, with partners and the business sector. Now is the time for Merton to build a strong visible economic growth and inward investment strategy, identifying key economic sector priorities to create new jobs and assist in addressing inequalities. This strategy can then be used by all services in the council.

In reviewing and reflecting upon progress against the three strategic priorities it is important that Merton also checks what the community understands about the scope of the priorities and what success will look like for the council and for them. A review should include considering what the top five key actions should be to meet each ambition. It is important to understand how far each ambition goes, what the change will be as a result on work completed around the priorities (outcomes) and what needs to happen next and in what priority.

Behind the three corporate plan priorities sit multiple workstreams, programmes, projects and delivery areas. Merton is a busy council with a workforce of over 1900 staff (excluding schools staff), with the majority of frontline manual service staff having been outsourced.

It is important that alongside the corporate plan and priorities, supporting strategies and workplans are in place to guide the workforce and support delivery of the required outcomes. Merton should review their current policies and strategies and ensure they are aligned to the current corporate priorities. Strategies still in development should be completed at pace to ensure the workforce, residents and external partners know what to expect of the council.

There is an excitement and sense of urgency within the senior leadership team to lead improvement, innovation and change at Merton, however it is important that the key priorities have clear milestones and defined outcomes and success factors.

The peer team, as part of the peer challenge meetings, heard many examples of positivity and pride about the ambition of the council, amongst the workforce and from some partners. The work done to set the priorities, achieve the level of recognition, and work to change the culture of the organisation incorporating the ‘Merton United’ values, has created a more modern and innovative council, which is recognised. The council also received positive feedback from the community sector and statutory partners about how Merton services are delivered.

Ensuring access to affordable, high-quality housing for all residents is a priority but a huge challenge for the council to achieve. The council has been successful in agreeing a Local Plan setting out its ambitions for growth and should be proud of this achievement. Demand for affordable housing outstrips supply, with an increasing number of households needing to be housed in temporary accommodation, at high cost to the council. Alongside their established homelessness prevention work Merton is also seeking to increase housing supply to meet needs, including delivering a new council housing programme to help meet demand. Approval is in place to deliver the first 93 new council houses of a programme of 400, with additional resources brought in to support the delivery. Although Merton has an established prevention offer on homelessness which improves outcomes, given the recent national pressure with demand doubling for Merton, it is important that the council ensures adequate focus, capacity and ownership/leadership as it seeks to address this growing issue.

Merton has ambitious regeneration plans for the borough that are either in place or emerging. The regeneration of Morden town centre is a big economic growth opportunity for the borough and critical to meeting important housing supply targets for the council. Merton is set to break ground on the delivery of 93 council built homes in the borough. The peer team recognises that the Council does not have recent experience of directly delivering major housing and regeneration programmes but sees the development of the 93 homes as a valuable opportunity to build capacity and expertise that will serve the council well as it embarks on its more ambitious regeneration plans. The peer team encourage the council to increase the pace, intensity and resources behind delivery of this regeneration.

A key priority of the council is modernisation, yet the change team is modest for the level of ambition the council has. The peer team heard positive feedback about the effectiveness of the change team, made up of existing staff members seconded from other parts of the council. The pace at which the digital team is working and the confidence in their structured approach was also positively shared with the peer team. Merton should reflect and review the role, capacity and future operating model of the council’s change and digital function to enable the change that the council needs to achieve at pace. The peer team suggests using this review to align the digital and change work and consider combining them into a single programme.

The peer team saw a real commitment within the council to deliver for residents with members and officers demonstrating a strong understanding and connection to their communities.

Merton’s resident satisfaction surveys identify satisfaction with core council services as good. The survey results showed that residents feel well informed by the council and there is a high level of trust. An area for improvement is the degree to which residents feel that they are involved in decision making. The council’s corporate plan includes a commitment to work better with Merton’s communities and to work collaboratively with partners, with the council working on plans to improve their community engagement offer. The peer team were impressed with the work the council did with involving the community in shaping the use of CHAS legacy funding. Merton do recognise that historically the in-house capacity to engage with the community has been low, relying on external agencies to complete this work on behalf of the council. Merton is working on plans to build up their in-house team and use capacity across the organisation more effectively. Alongside this they have committed to all consultations and engagement activity being inclusive, direct, high-quality, well-planned and building trust with the community and partners. A positive in this area is the strength of Merton’s community partners, who demonstrate a clear understanding of the communities’ needs, working in a cohesive and collaborative way, sharing their efforts to support and reduce inequality in Merton. The council should develop a resident and customer engagement strategy that offers opportunities for the communities served to be listened to and participate in the decision-making of the council.

Merton is a great place to live, work and invest. The work in the last two years to build pride in the local area, make the borough greener and more sustainable and provide great opportunities and incentives for residents to lead active lives, should be commended. The peer team recommends that the council build upon this work and look at how the council can develop the storytelling of the benefits of the borough and the achievements of the council, to further engage the communities and gain stronger buy-in to the ambitions.

Performance

Merton’s standard of performance across its core services compared to other London Boroughs (excluding the City of London) is mostly good with some areas performing averagely and others requiring improvement.

Summarising some of the indicators, Merton’s council tax collection rates are at the mean for London in the 2023/24 period; performance in planning is around the London mean; and the borough has lower than average rates for qualifications and further education achievements per 100,000 population aged 19 to 64 in the 2022/23 period. Furthermore, although some social care metrics are not available, it is noted that the adult social care staff turnover rate is higher than the London median, which will hamper the council’s work supporting the most vulnerable in Merton.

Merton has good schools and the council’s green spaces perform strongly with eight green flag parks. Almost all Schools in the borough are rated as ‘good’ or ‘outstanding’.

The council is rightly proud of the ‘outstanding’ rating in Children’s Services by Ofsted in May 2022, with Ofsted paying tribute to Merton’s senior leaders, saying that “highly aspirational and committed senior managers and political leaders placed children and their families at the centre of their decision-making.”

This outcome and good practice identified is being used across the council as an example of how to move services requiring improvement, to a stronger position.

At the time of the peer challenge, the council were due an adult social care inspection by the Care and Quality Commission and were preparing for this, having had an LGA Preparation for Assurance Peer Challenge in summer 2024. The messages of that peer challenge echo much of what this corporate peer challenge has found including the strength of the leadership at the council and the strong approach to safeguarding. It is recommended that the council is clearer around their strategic narrative, approach and direction of travel, in an outcome and evidence based way. Merton have also arranged an LGA Planning Peer Challenge to look at improvements to their planning service.

The Local Government Ombudsman (LGO) annual performance letter to Merton for the year ending March 2024 identified issues with receiving responses in the allotted time frames and occasions where remedial action on upheld complaints were not completed by the agreed deadline. However overall in 100 per cent of cases the LGO were satisfied that the organisation had successfully implemented their recommendations and found that Merton in cases where the LGO had upheld complaints, provided satisfactory remedy action before the complaint reached the Ombudsman, in a higher than average number of cases compared to similar organisations.

Merton is unusual among London boroughs in that it no longer owns or manages any social housing. It also has the fifth lowest proportion of social rented stock in London at approximately 14 per cent compared to the London average of 24 per cent. Over 60 per cent of the overall stock in Merton including in the private rented sector are flats.

Merton has a performance management framework in place, developed alongside the Corporate Plan in 2022/23. It was refreshed to reflect the strategic priorities set in the plan, with initiatives and indicators in place and reported upon against the three strategic priorities. These are supplemented by a further set of 13 ‘core service delivery’ indicators that enable Merton to have oversight of various elements of organisational health and effectiveness. The peer team observed a good awareness of the performance management framework. It would benefit Merton to look across the organisation at all delivery and outcome metrics and make the connections with the three strategic priorities. This would develop the performance management framework further.

In Merton, men earn more on average than women, with this being the case in gender pay gap reported statistics for 2022/23 and 2023/24. Merton’s Pay Policy statement sets out the background and causes of the figures and Merton’s approach to dealing with this.

Merton has a clear commitment and appetite to equality and diversity in the workforce. Six key behaviours form the councils Merton United values which features ‘inclusion’ with the council committing to celebrating diversity and having a workforce that reflects the communities they serve. A clear commitment was seen in the senior leadership group to improve and make change for staff on EDI in the council. It’s important that Merton recognises the pockets of excellence around their approach to EDI, in particular in children and families services and staff networks. The peer team encourage Merton to share their good practice more rapidly across the organisation and strengthen senior management sponsorship. The council needs to ensure that the EDI narrative and conversations are broad and not just internally focused.

The senior leadership at Merton is very highly regarded. The peer team heard that the council could only have got to the place it is in now with the culture shift and delivering good services with the energy and determination of the leader, deputy leader and chief executive. In particular the council has put a concerted effort in to becoming a more outward looking authority and adopting a trailblazing and innovative approach.

The leader is seen as visible, and is passionate about delivering change and improvements for the borough. The deputy leader was praised for her work in particular with external partners. The chief executive was described as inspirational and approachable, and is highly respected internally and externally. One member of staff said that they were surprised and inspired by the fact that within a week of starting their role they had met the chief executive and was very quickly made to feel like part of the family at Merton.

The strength and trust between the combined leadership group of the leader, deputy leader and chief executive was recognised and praised during the peer challenge. The effort made by the three of them to ‘get people to come along with them’ on the change journey at Merton in the last two years was recognised and appreciated.

The recruitment of the new extended leadership team is now complete providing more resource to lead the organisation in being a modern, responsive and flexible council. It is important that the leadership role and approach championed by the leader and chief executive are distributed even further into the organisation. Strong Leadership from the top has enabled the council to set a clear agenda for change. Senior Leaders should now carve out space to reflect on strategic priorities and allow distributed leadership from Cabinet and the management team to develop. All cabinet members should be empowered and supported to deliver their strategic leadership role and executive directors should take their place as delivery and place leaders. The cabinet understand their roles and responsibilities and are well equipped with the skills and passion to step up further into the strategic space. The same applies to the senior executive staff at the council, with the peer team hearing that there is a desire for the new executive directors to be visible in the same way as the chief executive.

The peer team found the staff at Merton to be a huge asset to the council with their skill and experience recognised both externally and internally. Staff described how committed and proud they are to work for Merton.

The peer team heard that the appetite and enthusiasm in the council for delivering change and regeneration for the borough is growing. The council’s priorities and the recent successes achieved, have been well communicated by a well led and resourced communications function with a clear vision for improvement. The strong and successful communication of the borough of sport ambition should be used as a template of how to engage, create excitement and develop a story with partners around council ambitions. The peer team were pleased to hear that the council is keen to share their approach and the learning from being a borough of sport and delivering outcomes against this priority with the sector.

Merton have recently embarked on an admin review of the council, taking the opportunity to trial more in depth consultation processes with the workforce. The peer team identified a gap in staff understanding of the scope and purpose of the review and recommend the council recommunicate this as part of the wider change programme. Changes with the Merton workforce will be best delivered with early engagement with the workforce, staff networks and unions.

Merton is aware of the breadth of experience and talent in their workforce but also recognises that in some areas of the council work is needed to build capacity, resilience, and stability. Reshaping the council’s structure and workforce continues with recruitment and reviews ongoing. Work should be done now to further develop the workforce strategy, to work on mitigations to address the current recruitment challenges, and to aid the council with future workforce changes and succession planning. The council has a workforce that is experienced and longstanding with an older age profile. Supporting and attracting good staff to come and work at Merton is key to the council’s success, with the peer team hearing that in recent recruitment the strategic priorities and the ambition the council shows to move quickly to a more modern and flexible council has been a draw to applicants. It is also important that Merton has schemes to nurture and support local talent.

There is an opportunity for Merton to review funding to support workforce planning and look at ways to fund apprenticeships, so learning is shared early and embedded. There is evidence of commitment to staff development and training, helping leaders and managers in their role and supporting participation in the SOLACE Total Leadership programme funded by the LGA and the London Councils London Leadership Programme.

Both the officers and the political leaders at the council are committed to leading the change and improvement they want to see across the borough. This includes influencing and working collaboratively with partner agencies on outcomes not necessarily the responsibility of the council, but that lead to better opportunities, outcomes and services for Merton residents.

Place leadership is clearly important to the council with the peer team hearing examples of strong leadership and resilience by officers and members working through critical and challenging situations. The peer team were particularly impressed by the place leadership shown when responding to critical incidents such as the Galpins Road ‘gas explosion’ with clear evidence of leading from the front, demonstrating resilience and strengthening broader partnerships through their leadership and desire to co-produce the response.

The council also nurtures their partnerships with statutory partners to co-deliver better services and improved outcomes for residents. Partnerships with the police and health were noted as particularly strong, with the peer team hearing positive feedback about the council’s approach to safeguarding.

The leader of the council sits on the board for Transport for London and also London Sport, both priority areas for the borough, enabling the council to have a voice within key strategic decisions that affect London and Merton. The chief executive is active in her role as leading for place, chairing the London Asylum Oversight Group , ensuring a strong voice for London local government with central government. This is a challenging and complex policy area working to lead and influence policy for London councils, with the Home Office. She also uses her background and skills in health to lead on health and care within the South London Partnership. Merton should build upon positive progress leading across London and with government, including the missions approach, to further Merton’s priorities.

The council’s place leadership role is especially important given the regeneration plans for Merton. The proposals for Morden town centre are key to meeting Merton’s’ housing growth targets. The council’s approach whilst positive in engaging with communities and small businesses, is cautious in pace and has not involved the private sector which will be essential to ensuring scale and pace. Merton should engage more proactively with the private sector to encourage more inward investment. The peer team recommends setting out the council’s approach to investment in a visible economic strategy, enabling a clear and consistent message that Merton is keen to collaborate and implement innovative solutions in partnership to meet demand, get value for money for the residents Merton serves, and address emerging challenges.

At the time of the peer challenge the council had recently employed a business engagement manager to ensure the council is connected to businesses in the borough. The peer team recommends that the council, using this additional resource, works to develop a stronger and more focused place based strategic relationship with the business sector, reflecting the different needs of the main town centres. Voluntary sector partners that the peer team spoke to were positive overall about their relationship with the council, with partners trusting that the council is working to achieve better outcomes for residents and improve the borough. The team heard that ‘Merton goes out of its way to show it values it’s volunteers – recognising the right people’. The peer team advises that there are still opportunities to link up engagement across the council with the voluntary sector and share best practice and positive outcomes. It is equally important that engagement activity with residents and partners is followed through with the outcomes of the engagement communicated.

The council should celebrate and nurture what partners, communities and staff think is great about Merton and harness the energy they have to build on this.

There is a good working relationship and a good level of trust between members and officers at the council. The peer team heard a strong sense of loyalty to the council, and Merton the place, from both members and officers. The direction of the administration is well understood.

With the recruitment to the wider executive team now complete, the team reflect the values and priorities of the council. Members and senior officers reflected that as well as understanding the council’s priorities, the understanding of each other’s role and responsibilities in leading the council has become clearer in the last two years. It is important to remember however that local government is a political environment, and members will be political and will champion their communities and the residents they serve. This is a strength that should be appreciated and embraced.

Merton had a substantial new member cohort in 2022, making training and development an important area of focus for the council. The peer team heard that the new members felt welcomed and valued the training and support they received when they joined. They also found the 1-2-1 sessions with the leader helpful. Some members reflected that a more phased training programme, following an early induction, would have been beneficial to them. Alongside implementing the changes from the member skills audit that the council recently completed, Merton should regularly review their member development programme and look at opportunities to deliver training in a phased way, gathering views on the need for refresher training sessions.

The peer team noted that cabinet members understand their portfolio areas and it was positive to see that they are supported in their role, including mentoring/coaching support being in place for all cabinet members.

The peer team heard how members come together, sharing cross party practice in key areas, a notable example being corporate parenting. There is a clear and proud commitment by the leader to cross party working, with all members from all parties being involved in the life of the council.

The leader and chief executive have set a clear direction for the council and should now allow the cabinet and executive directors to step fully into their leadership roles, giving them space to be more visible and grow their confidence. The cabinet and corporate leadership team might also want to look at how to draw more on local skills to create a stronger model of place leadership, especially with the opportunity of the CHAS legacy fund, the borough of sport and the community infrastructure levy.

Scrutiny in the council is respected and well established in the organisation. Merton are committed to reviewing and improving their approach to scrutiny and have commissioned the Centre for Governance and Scrutiny to review their model and practice. Merton also has an Annual Governance statement in place.

Work has clearly been done to develop members involvement in the budget engagement process with extra scrutiny sessions, members briefings and more information provided. Members however still expressed a desire to have more information to understand and engage in the budget decisions. Given this feedback there is an opportunity to review the information that members need to fulfil their various roles.

The peer team saw evidence of good quality briefings being provided to cabinet members from officers, to support decision-making. The Leaders Strategy Group meetings enables forward planning for the business of the council and the opportunity for collective responsibility decision-making. However it was not clear to the peer team where the strategic conversations were happening with the political and officer leadership coming together to shape council progress against ambitions, investment and risk. It is important that time and space are carved out for big, important and challenging conversations to take place.

Scrutiny at the council works well, with a good forward plan of activities in place. The peer team heard that occasionally decision-making lacks pace and some officers and members were not always sure of the delegation provisions. The council should take some time to review the scheme of delegation and recommunicate this to staff and members, especially in light of the tough financial decisions ahead for the council.

The peer team found a strong culture of transparency in the governance systems at the council, with the peer team hearing that Merton are developing new arrangements for publishing regular performance information.

The golden triangle relationship and cooperation between the chief executive, chief finance officer, and monitoring officer is a strength of Merton’s. The peer team found that officers have a good understanding of governance issues and are open and approachable. Now is the opportunity to use the ongoing reviews of the governance structures, including the work completed by the Centre for Governance and Scrutiny, to ensure they work for the ambition and maturity of the council.

The council has spent a year creating and embedding the refreshed council values, seeking to create a culture at the council and amongst the workforce of shared common values and a clear understanding of how staff should go about their jobs and achieve their objectives.

Staff that the peer team spoke to said they were proud and excited about their work at the council and recognise the work underway to address inclusion and diversity issues.

Merton has a good level of financial resilience and good financial reporting and management systems overall. The council however should work at pace to develop clear plans to reduce the structural budget deficit and achieve sustainable savings over a three- year period.

The council is in a good financial position, although it must continue to focus on managing the costs from high demand areas including adults and children’s services and temporary accommodation. The council is also part of the governments Safety Valve Programme aimed at helping local authorities with large budget deficits reduce their debts and manage their spending on Special Educational Needs and Disabilities (SEND) services.

Merton have capital growth opportunities, not available to many other councils, afforded to them from their unique and entrepreneurial history with the creation of CHAS over 20 years ago, a wholly owned subsidiary company which delivered external services. The sale of CHAS in 2023 resulted in the council generating over £186m. The sale enabled the council to reduce a proportion of its historic debt and allows them to now use sale funds to support their redevelopment and renewal ambitions. Merton should review the capacity available within the council to deliver these programmes and ensure skills and resources match those required to be successful.

There is a good level of understanding and visibility of the financial challenges the council face. However it is recommended the council review opportunities to deepen collective responsibility for the council budget, embedding these into the portfolio areas and creating time for whole cabinet consideration of the budget across service areas. Ownership of savings delivery should be corporately owned and reflected in the council plan and key performance indicators.

The cabinet member for finance has led work to deepen members involvement in the budget process, with extra scrutiny sessions and members briefings. Members are keen to develop their role around setting the budget.

The peer team observed good financial management arrangements in place, with regular budget monitoring reports produced, budget deep-dive sessions between members and officers organised to ensure accountability of high spend areas, member scrutiny of the financial management position, and exception reporting to corporate leadership team.

Reporting of in-year pressures and challenges are well understood by the corporate leadership team with clear management actions taken to mitigate pressures. These mitigations include spend controls that have delivered significant cashable savings, with clear established processes. There is ownership by executive directors on mitigations and prevention of demand led pressures especially in the areas of rising temporary accommodation costs. It is important that resource levels reflect the demand pressures in this area.

The council have recruited to a new commercial director position, which has been created to focus on expanding the commercial culture at the council and generate extra income. The expertise provided by this role will also be available across the council to support supplier negotiations and to strengthen contract management more widely. This role is important for ensuring good performance across all contracts but also providing advice and support on value for money considerations and the ability to reach savings targets.

The change function at the council is relatively new and still developing. The council should explore providing more funding to support investment to deliver change and the council’s corporate ambitions. Merton should look at opportunities to increase organisational capacity by possibly aligning the digital and change teams more closely to enable the strong performance management structure applied in digital to be used across the change projects. There is also a need to strengthen the governance around the change function to enable change as there is currently a gap between resources, capacity skills and pace of ambition

Develop a medium-term approach to resolve the on-going budget structural deficit. MTFS should address the scale of the challenge, with a clear plan on delivering sustainable savings over a three-year horizon. The MTFS should include the in-year pressures faced by the council arising from demand pressures faced by councils nationally. Although the council has been effective at preventing and reducing the temporary accommodation pressures, sufficient growth should be incorporated into the MTFS as the preventative measures will not fully offset the increase in cost.

In order to fully achieve the council’s ambitions to build 400 new homes across the borough, consideration should be given to the different delivery and ownership models available to achieve its ambition. It is important to fully understand the benefits and risks of the various delivery models and to adopt the option most relevant to the scheme in question. The council should consider the ownership model of the homes and be clear on the operating costs where scale could present a challenge. Funding strategy of regeneration programme to be established and assess financial viability of self-delivery and ownership of new homes.

The council has strong strategic and place leadership. While the council has achieved a lot through the leader and chief executive and the willingness and enthusiasm of officers and members, the leadership of the council now needs to be a shared endeavour with activity more widely distributed across the leadership team.

The council have a very loyal and motivated workforce who are behind the ambition for change and who go the extra mile. To deliver against the council’s priorities Merton must ensure alignment between capacity, skills and investment in key service areas. The peer team heard that the corporate centre requires further capacity and investment, with the council identifying that Merton needs to invest further in human resources and build a new People and Culture Plan.

The council has a strong tier of middle managers who work collaboratively together to deliver for Merton’s residents. The change team at the council have also brought a new energy to change and innovation at the council. The staff are trusted and well respected and it is a positive that the council has a dedicated resource. The resource however is small given the breadth of the ambition for change at the council. To successfully implement Merton’s change ambitions at pace, a clear prioritisation and change methodology is needed including programme management, governance, clear leadership and consistent support at a senior level and appropriate staffing resource.

Positive feedback was received about the pace at which the digital team is working and the confidence in their structured approach. Merton should reflect and review the role, capacity and future operating model of the council’s change function to enable the change that the council needs to achieve at pace. Use this review to align the digital and change work and consider combining these into a single programme.

The council is aware of the workforce challenges it faces, from recruitment issues in areas including finance and planning, to needing a robust plan for future staffing needs. The peer team heard that there is a real appetite to learn and teach within the organisation with staff keen to nurture local talent to support delivery at the council, and to meet the pressing need to manage succession as parts of the workforce reach retirement age. There is an opportunity to review funding to support workforce planning and look at ways to fund additional apprenticeships, so that learning is shared early and embedded.

Merton has many good services, and the council should use the skills and experiences from the successes in service areas, for example Merton’s children’s and families services, to show how improvement can be delivered and maintained.

Merton is well located with excellent transport links, good schools, an attractive environment and a successful town centre in Wimbledon. There is an excellent base from which to deliver regeneration. However, there is a challenge in skills and capacity to deliver their ambitions at the pace that is expected. The proposals for Morden town centre are essential to delivering the council’s housing growth target but have previously stalled. The approach now, whilst positive in engaging with communities, is also cautious in pace and has not engaged fully with the private sector, which will be essential to ensuring scale and pace of delivery. There is an opportunity to consider the scope of the scheme to ensure links to wider town centre assets. The council should also review the capacity in-house to deliver this scheme and explore opportunities to build capacity, capability and skills to reduce reliance on external advice.

The council’s ambitions around the borough of sport are inspiring. The development of this priority and the brand recognition achieved across the borough the sector is impressive. Merton should look at how to best leverage the partnership it has and look to involve other parts of the business sector.

Merton wants the council to be clearer, more consistent and more accessible, aiming to deliver this via a ‘one council approach’ to delivery models with a structured approach, methodology and clear governance by building on good practice in certain areas e.g. digital.

It is recommended that Merton and all councils, consider now how to build an understanding of the differences in approach to digital and AI (artificial intelligence) in the council work on modernising and digitalisation of appropriate council systems. Digital change at the council is underway and positive feedback was heard about the team’s structured approach. Merton must ensure corporate leadership and management of the programme , with an organisational development and skills strategy to support this work. This work will help fuel the change in culture at the organisation that is sought and help deliver efficiencies overall.

It is recognised that senior political and managerial leadership will want to consider, discuss and reflect on these findings. The LGA will continue to provide on-going support to the council. Following the publication of the CPC report you need to produce and publish an Action Plan within five months of the time on site. As part of the CPC, the council are also required to have a progress review and publish the findings from this within twelve months of the CPC. The LGA will also publish the progress review report on their website.

The progress review will provide space for a council’s senior leadership to report to peers on the progress made against each of the CPC’s recommendations, discuss early impact or learning, and receive feedback on the implementation of the CPC action plan. The progress review will usually be delivered on-site over one day.

The date for the progress review at LB Merton is to be agreed.

In the meantime, Kate Herbert, Principal Adviser for London, is the main contact between your authority and the Local Government Association. As outlined above, Kate is available to discuss any further support the council requires.[email protected].