LGA Corporate Peer Challenge - Gateshead Council

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 Gateshead Council 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.

Gateshead Council serves a population of 199,100, covering densely populated urban areas, rural expanses and situated centrally within the North East Combined Authority (NECA) footprint. With high levels of deprivation and stark variances in health inequalities, it is committed to tackling inequalities and making Gateshead borough “a place where everyone thrives”.

The council is recognised externally as wanting the best for its communities, with passionate and dedicated staff and some strong services. Its plans to radically transform how it works, through its ‘thrive’ strategic approach, have not consistently resulted in change and impact, with many of the issues raised in the 2016 Corporate Peer Challenge remaining.

Faster and fundamental change is needed for Gateshead Council to meet the scale of financial pressures, rising demand and service transformation challenges it faces.  To do so, it needs to more clearly define the future vision and role of the council, and reshape itself in the light of this in collaboration with councillors, staff, communities and partners.

The leader and chief executive recognise this and have been instrumental in instigating positive change. A huge amount of activity is planned and underway to drive organisational-wide transformation, focused on ‘getting the basics right’. Whilst at an early stage, this is starting to have a demonstrable impact, generating optimism with staff and partners who are largely enthusiastic for change. The council has a great opportunity to capitalise on the positive momentum brought through the changes championed by the leader and driven by the chief executive.

To deliver sustained change and impact, activity needs to be more clearly communicated, coordinated, and adequately resourced. Steps to achieve this should include:

• Fostering values and behaviours - across staff and councillors alike - to deliver the council’s improvement aspirations.
• Consistent application of policy, procedures, and collaborative working to address silos, strengthen performance management, and increase accountability across the council.
• Establishing a strategic framework with a more robust approach to performance, risk management and outcome measurement to drive, monitor and evaluate corporate plan delivery. This should have a strong focus on performance improvement, including around social housing.
• Creating corporate capacity to support the delivery of Gateshead Council’s key priorities and change aspirations.
• Strengthening governance to improve the speed of decision making, efficacy of scrutiny, and clarify expectations, roles, and behaviours between councillors and officers.
• Strengthen communications activity to match the council’s ambitions, and better tell the story of the borough and council.

Gateshead Council’s financial position is relatively stable with healthy reserves, however the scale of the forecast £34m funding gap over the 2025-30 medium-term financial strategy (MTFS) should not be underestimated. To meet this challenge, it needs to cease reliance on planned use of reserves to close budget gaps and urgently bring forward collectively owned savings plans at pace, underpinned by strong understanding of future demand pressures. Financial oversight, accountability and risk management also needs to be strengthened. It can do so by introducing more frequent, simplified budget information for political and officer decision makers, with clearer accountability, and closer alignment to a more robust corporate risk and performance management approach.

Gateshead has strong collaborative sub-regional partnerships and plans to reinvigorate its local partnership approach. This will be important so partners across sectors can contribute to a shared vision for the borough. This refresh should include collaborative development of an inclusive place narrative and economic strategy which maximises benefits for the whole borough, directly links economic investment to benefits for residents, and leverages the advantages of devolution.

The council is committed to deepening community engagement and has made positive strides in this Further work is required to translate this into a whole council approach that contributes to Gateshead Council’s wider ambitions. To do so, the council should coproduce, with partners and communities, a place based working and community engagement strategy, defining its approach and desired outcomes.

Gateshead Council is at a pivotal juncture, with a great opportunity to build on its new positive direction of travel. To do so, it needs to be brave, bold and focus its capacity on delivering its key priorities at pace. “Let’s not miss this opportunity.”

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. Savings: Urgently develop a savings plan – which is understood across the council and corporately owned by cabinet and corporate management team – to:

• Address the full extent of the financial gap within the MTFS.
• Reduce reliance on the use of reserves in budget planning.
• Ensure there is adequate understanding of future demand pressures built into the budget.

2. Corporate strategic framework: Establish a strategic framework with central resource capacity to coordinate, support, and monitor the delivery of the council’s corporate plan. This should include a refreshed council-wide performance, governance and risk management approach aligned to an outcomes framework and ‘time to be different’ organisational change programme.

3. Future role of the council: Define and communicate, in partnership with councillors, staff, partners and communities, Gateshead Council’s vision and approach for the future role of the council, including within this:

• Establishing an inclusive borough-wide place narrative and inclusive economic strategy reflective of the full borough.
• Developing a strategy for place based working and community engagement.
• Developing a partnership working framework.

4. Culture: Drive a programme of cultural and behavioural change to foster a joined up ‘one council’ approach and culture of openness, clear communication, and constructive challenge. This should include coproduced corporate values and behaviours with councillors and staff. 

5. Governance: Undertake a governance review that seeks to:

• Address the speed of decision making.
• Strengthen the role of scrutiny, including pre-decision scrutiny.
• Strengthen councillor – officer relationships through more effective communication and clarifying expectations, roles and behaviours.
• Review decision making processes and scheme of delegation.

6. Accountability: Increase the frequency and connectivity of financial and performance monitoring and reporting. Ensure clearer lines of accountability for both the revenue budget and the capital programme, that also encompasses an assessment of risk.

7. Consistency: Ensure consistent and standardised application of policy and procedures across the council, including people and performance management. Set and enforce clear standards for flexible, office, hybrid and remote working that supports an effective corporate culture and service delivery.

8. Transformation Capacity: Ensure the council has sufficient corporate capacity to support the delivery of Gateshead’s priorities and its change programme.

9. Approach to risk: Review and refresh approach to corporate risk management. A more robust approach needs to include clear lines of accountability and ownership, with continuous monitoring of the risk profiles of major projects, including Gateshead Quays and the council’s housing improvement plan, to ensure compliance with the required standards as set out by the Regulator of Social Housing.

10. Communications: Accelerate the development of the communications strategy and review the council’s capacity to deliver it.

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 by the LGA on the basis of their relevant expertise. The peers were:

• Denise Park, Chief Executive, Blackburn with Darwen Borough Council
• Sir Steve Houghton CBE, Leader, Barnsley Council
• Cllr Roger Harmer, Leader of Liberal Democrat Group, Birmingham City Council
• James Henderson, Director of Policy and Democratic Engagement, Sheffield City Council
• Judith Badger, Strategic Director of Finance and Customer Services, Rotherham Council
• Abigail Benari, Member Services Officer, LGA
• Frances Marshall, Senior Regional Adviser and Challenge Manager, LGA

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.

In addition to these themes, the council asked the peer team to provide feedback on the council’s approach to community engagement, empowerment, and communication as an additional area of focus.

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 Gateshead 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 a 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 Gateshead Council, during which they:

• Gathered evidence, information, and views from more than 50 meetings, in addition to further research and reading.
• Spoke to more than 130 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 councillors.

The borough: Gateshead Council serves a population of 199,100, covering 55 square miles, located centrally within the NECA footprint. It describes itself as a borough of contrasts; ranked 4^th in the indices of multiple deprivation, with densely populated urban areas and rural expanses, as well as stark variances in health inequalities. It has rich and diverse communities, with 7.4 percent of its adults from an ethnic minority background and the third largest Orthodox Jewish community in the UK. The borough is home to notable cultural sites, including the Angel of the North, the Baltic Centre for Contemporary Arts and The Glasshouse. It has a mixed economy, with key innovation assets ranging from advanced manufacturing to the growing Baltic Quarter.

Local context: The council’s understanding of its local context is evident with its ‘health in all policies' approach and commitment to tackling inequalities through its ‘thrive’ agenda. Its use of the LION data analytics tool provides a sound starting point for understanding its population and relative needs of different places and people. This will be augmented further through Gateshead Council’s developing work on community and ward profiles.

Thrive: The council’s ‘thrive’ objectives - to make “Gateshead a place where everyone thrives” - is well known internally and with partners. It was clear from conversations with partners that the council is recognised externally as wanting to do its best for its communities. Its ambition to radically transform how it works through ‘thrive’ however, has not always translated into delivery, change and impact. (See capacity to improve paragraph).

Golden thread linking what the council does to its goals: The peer team heard there is a huge amount of activity underway, however there is not sufficient clarity over priorities, with a sense that everything is a priority. How all parts of the council contribute to delivering the ambitions for the borough is not yet fully understood beyond those within the health and wellbeing strategy. The new chief executive has brought a strong focus on ‘getting the basics right’ to address this and establish solid foundations to deliver the council’s ambitions. Steps undertaken have included a corporate plan refresh, reinforcement of the golden thread, reestablishment of group and service plans, development of organisational behaviours and values, and the launch of the ‘time to be different’ change programme. The new corporate plan has been well received and will help clarify Gateshead’s vision, priorities, and alignment with ‘thrive’.

Strategic Framework: Greater coordination and alignment of strategies, plans and activities is needed through the establishment of a strategic framework for the council. This framework should articulate how strategies and plans relate to one another and support the council to achieve its wider objectives. It is essential this includes an outcomes framework, aligned to the corporate plan, to understand how Gateshead Council’s efforts contribute to the ambitions it has set out. To be effective, central resource capacity will be required to coordinate, support, and monitor delivery of the corporate plan, as well as ensure a consistent and standardised approach to underpin performance management and ‘time to be different’ infrastructure. A programme management office (PMO) approach, for example, would help embed robust programme and project management frameworks.

Performance Management: The importance of good performance management is recognised by staff, with evidence of performance information being utilised effectively in some parts of the organisation. This is particularly in adults and children's social care. There is a strong desire from councillors and staff alike for data to be systematically used and scrutinised more effectively, to drive service improvement and accountability. There is wide support for the planned refresh of the council’s performance management framework and for this to be used to develop a stronger performance management culture with a greater focus on addressing areas of poor performance. To do so, Gateshead Council would benefit from:

• Quarterly reporting to councillors on a smaller number of indicators, aligned to the corporate plan and outcomes framework.
  • Routinely publishing annual service and group plans to aid transparency.
  • Closer alignment of performance management with other critical assurance measures, such as risk management, internal audit, and financial reporting and ensuring a standardised approach to the provision of performance information.
  • Reviewing underlying data infrastructure and systems to support performance ambitions.

Performance: To understand Gateshead Council’s performance, the peer team considered the council’s latest key performance reports, tenant satisfaction data and LGInform report which benchmarks Gateshead Council’s performance against the Chartered Institute of Public Finance and Accountancy’s (CIPFA) nearest neighbours. Understanding Gateshead Council’s performance is not easily established through its six-monthly performance report as it does not clearly present performance targets and trends overtime. The LGInform report shows Gateshead Council performs strongly (compared to nearest neighbours) in some areas, including low staff turnover rate for adult social care, and low percentage of local authority roads requiring maintenance. The council performs less strongly on some other areas, including the level of children in the council’s care, and on household waste recycling rates, residual waste, and recycling contamination rates.

Equality, diversity, and inclusion: The council’s approach to equality, diversity, and inclusion (EDI) is improving, having made positive enhancements in recent years, with further still to go. Its new EDI policy is aligned to the equality framework for local government and provides a positive basis for improvement. It will be important that it is underpinned by a corporate work programme, to implement the policy priorities identified and embed EDI principles into day-to-day practice across all services. The new integrated impact assessment process is positive and has potential to improve how Gateshead Council considers holistically the impact of its decisions, including for groups of people who share protected characteristics.

Community engagement: There has been a step-change in recent months in the proactivity and reach of Gateshead Council’s community engagement activities. This is evident with the introduction of resident engagement roadshows led by the leader, the successful Pride in Gateshead festival, and strong ‘youth voice’ events. There are also promising service-based resident engagement initiatives, such as family hubs, the planned localities team reconfiguration, and community led support programme in adult social care in partnership with the national development team for inclusion.

Whilst these efforts have been positively received, the purpose of some of the activity appears unclear, and predominantly driven by individual services, which means that it lacks consistency and may not appear joined up to residents. Greater coordination and collaboration are needed through a strategy for place based working and community engagement. Coproduction of this strategy with partners and communities is essential. It should define a clear rationale for engagement, the impact it hopes to have, and what that means in practice, including for how that is delivered. This will help foster meaningful community empowerment and social capital creation, contributing to the council’s wider ambitions for place.

Inclusivity: As part of this strategy, the council should consider how it engages with communities of identity and interest, as well as those of geography. The cessation of the race and faith forum, following the pandemic, has been felt by voluntary, community and social enterprise sector (VCSE) partners. It will be important for Gateshead to create the conditions to hear from a wider range of voices. This will help it to meet its EDI objectives, ensure it is responsive to the needs of the whole borough, and drive inclusive service delivery.

VCSE: The council has invested in rebuilding strong relationships with the VCSE partners. This has included the launch of an inequalities focused voluntary sector grants fund and a new compact (agreement between the council and VCSE) guiding how health and wellbeing board partners work together. These efforts have been welcomed and started a journey of improving relationships. Gateshead Council should consider what further it can do to both harness and show value to the work of its VCSE sector, including ensuring the compact principles are consistently applied across all services. This will support the council’s wider preventative approach and anti-poverty activities.

Communications: The peer team heard widespread views - across staff, councillors, and partners - that internal and external communications could be strengthened. Recent improvements to internal corporate communications were recognised by office-based staff, and the visibility of the chief executive within these was welcomed. Further improvements are required with communications expertise not sufficiently valued across the organisation, and the need for a more proactive, planned and prioritised approach. The council’s development of a communications strategy is in recognition of these issues and frustrations. Development of this strategy should be accelerated to strengthen organisational working and better tell the story of the borough and council. To be successful, it will be important that Gateshead Council consider:

• The operating model for communications and the capacity and financial resource required to deliver it.
• Creating a clearer focus on the core communications disciplines of media relations, campaigns, and internal communications.
• A standardised approach to communications planning, including evaluation and measurement of impact, and clearer alignment with corporate plan objectives.
• Strengthening its use of social media as a core channel to connect and engage with residents.
• Mechanisms for providing regular strategic and tactical communications advice and reporting to the leader, cabinet portfolio holders, and senior officers.
• Closer working between internal communications and employee engagement functions within human resources (HR) to benefit the workforce.
• Ensuring internal communications messages are heard by the whole of the workforce, including those without routine access to the intranet and email.

Role: Gateshead Council has recently embarked on an organisational-wide transformation and cultural change journey, led by the leader and new chief executive. This new direction reflects the fundamental changes required for Gateshead, to meet the scale of the financial, demand, and service transformation challenges. To do so, Gateshead Council must define its purpose, role, and future vision, and then take steps to reshape itself in the light of this. To be successful, this needs to be coproduced, communicated, and delivered in partnership with councillors, staff, partners, and communities.

Leadership: The role and visibility of the leader and chief executive in seeking to reinvigorate the council is widely recognised by staff, councillors, and partners alike. The leader is well regarded, and chief executive has made an immediate impact, bringing a positive shift in engagement, momentum and style which has been widely welcomed. Whilst at an early stage, this new direction is starting to have a demonstrable impact, creating optimism, and starting to build confidence with staff, councillors, and partners who are largely enthusiastic for change.

The leader and chief executive are supported by a corporate management team (CMT) and cabinet. The monitoring officer and section 151 officer are members of CMT which is in line with good practice. The peer team heard that CMT have been working more closely and supportively together in recent months. To ensure momentum is maintained, it is important that responsibility for Gateshead Council’s change journey is shared and distributed across the senior officer and political leadership. The political leadership of the council needs to be owned by the cabinet alongside the leader, with cabinet portfolio holders taking active roles in supporting this.

Sub-regional partnerships: Gateshead Council has strong collaborative sub-regional partnerships. It is viewed as a positive partner within the sub-region, reflecting its positive role in bringing about the North East Combined Authority devolution deal. The council and particularly the leader deserve credit for this. This presents a fantastic opportunity to capitalise on the borough’s central location and assets to full effect benefits for the whole borough.

Local partnerships: Gateshead Council has constructive relationships with some key local stakeholders such as local health partners, cultural sector organisations and some voluntary sector organisations for example. The peer team heard the strength of relationships was not consistent across all local partners, but that there had been a welcome step-change in engagement recently driven by the new chief executive. Partners are “excited for the next chapter” and keen to deepen collaboration on shared agendas to better understand and contribute to the council’s vision. Gateshead Council should ‘lean into’ this goodwill, as it seeks to reinvigorate its borough-wide local partnership approach and develops a shared vision for place. Co-production and joint delivery of this with partners and communities will be key and ensure resources and insights across the borough are leveraged to better effect.

Place narrative: The council has bold growth ambitions; however, these are not articulated through a strategic narrative for the borough.  Its varied plans include the large-scale Gateshead Quays development, town centre regeneration, and major housing development sites, through to Derwent way green corridor and the district heat energy scheme, as part of the council’s commitment to become carbon neutral by 2030. Developing an inclusive borough-wide place narrative and inclusive economic strategy should be a priority for Gateshead Council’s reinvigorated partnership approach, to ensure investments are part of a coherent economic strategy. These should be codeveloped in partnership, informed by locality working and community engagement strategy, and reflect the priorities of the whole borough. Having clear business planning processes and outcomes frameworks, underpinning the strategy, will be important to link economic investments with direct benefits to residents.

Decision making: The political leadership is proud of the council’s inclusive and consultative political decision-making approach. The speed of decision making can however be slow and lead to delayed delivery of outcomes. This can be seen with many of the issues raised in the 2016 Corporate Peer Challenge – particularly around pace of change - remaining eight years on. It is also evident in the length of time taken for some scrutiny committee recommendations to be responded to, or for agreed full council motions to be implemented, for example. The contributing factors behind the speed of decision-making are numerous, including:

• Thresholds for officer and cabinet member decision making within the scheme of delegation.
• Regular consultation by the political leadership with Labour group meetings on non-key as well as key issues.
• The cabinet not always taking collective ownership of decisions.
• Decisions taken at CMT not being consistently communicated.

It will be important for Gateshead Council to review its decision-making processes and scheme of delegation - as part of a wider governance review - to streamline and strengthen this area of governance.

Overview and scrutiny: Gateshead Council have four overview and scrutiny committees covering thematic areas of: families; care, health, and wellbeing; corporate resources; and housing, environment, and healthy communities. The peer team heard examples from the housing, environment and healthy communities committee of effective scrutiny impacting outcomes. However, feedback predominantly indicated that the overview and scrutiny function could be strengthened, with limited in-depth issue-based scrutiny undertaken and only one decision ‘called in’ over an eight-year period. Greater challenge and proactive pre-decision scrutiny would promote more effective scrutiny and opportunity for councillors to shape policy development.

Councillor and officer relationships: The peer team heard mixed messages about councillor and officer relationships within the council. On the one hand, examples of positive relationships were shared, and councillor conduct was perceived as generally good. At the same time, there has been a general deterioration in relationships since the pandemic with reduced in-person contact contributing to a rise in frustrations for both councillors and officers. This has been further exacerbated by a lack of clear communication, no systematic approach to councillor enquiries, and insufficient clarity on expectations and roles. It will be important to address these underlying factors to strengthen councillor and officer working. Steps should include clarifying councillor and officer expectations, roles, and behaviours, strengthening more effective communication, and greater in-person engagement.

Audit: The peer team heard there is a positive relationship between the council and its external auditors. This can be seen in the way external audit is prioritised within the council, with work generally concluded on time and to plan. The independence and importance of internal audit is evident, with the head of internal audit having direct access to the chief executive independent of management reporting lines. The peer team heard positive views about the strength of Gateshead Council’s audit committee in providing effective challenge. The inclusion of lay members with technical expertise as part of the committee’s membership is good practice.

Risk: Gateshead Council has a corporate risk register (CRR) which is reviewed by CMT as part of its strategic risk management arrangements. The CRR is high level and not reflective of the depth or breadth of the current strategic risks the council manages. The financial and delivery risks around the flagship Gateshead Quays development is not specifically captured, for example. The CRR should be urgently refreshed and updated, with the content and scoring of corporate strategic risks reviewed. A more robust corporate risk management approach should be put in place with clear lines of accountability, ownership, and continuous monitoring of risk profiles of major projects, including the Gateshead Quays. These steps will enhance the council’s understanding of its corporate risk profile and strengthen assurance and risk mitigation measures .

Financial Position: Gateshead Council has a relatively stable financial position, with a healthy £22.2m budget sustainability reserve as at March 2024. A significant amount of these reserves is either committed or planned to support the budget and MTFS in the current and next two financial years. Gateshead Council is experiencing many of the cost pressures felt by councils across the country, such as in children’s social care and homelessness, and the positive outturn last year was supported by some one-off financial benefits that have masked overspending in some areas. It has however a track record of managing its budget overall with a positive revenue outturn in both 2022/23 and 2023/24. This provides a good base for moving forward.

Like much of the local government sector, the council nevertheless faces significant in-year and longer-term budget pressures and uncertainties. A £3.6m overspend was projected at quarter one of the current 2024/25 financial year, driven predominantly by pressures of £3.9m in Children Services and £1.9m in homelessness. It is positive that the council has instigated steps to address overspending areas, including development of inhouse residential homes, realignment of home to school transport to meet need, and reduced use of bed and breakfast homeless accommodation.

Budget gap: There is a £34m funding gap across the lifetime of the council’s 2025-30 MTFS. This scale of reduction will take time to deliver and should not be underestimated. Major transformation takes time from approval to implementation to delivering savings. Whilst Gateshead Council’s children's and adult social care spend are relatively high compared to similar authorities, reducing costs will need constant focus to deliver in a challenging environment. Further work is needed to urgently bring forward collectively owned savings plans for consultation, decision, and implementation to address the full extent of the MTFS budget gap. Whilst cost management interventions in social care and other budget efficiencies have been either identified or are planned, there remains almost £15m of budget cuts to be identified and delivered over the course of the MTFS.

As part of this, the council should move away from reliance on planned use of reserves to close the budget gap. Currently £8.5m use of reserves in 2025/26, and £4m use in 2026/27 have been planned, and their use is reflected within the MTFS. Use of reserves, only when necessary to manage the timing of the delivery of savings, will improve transparency and heighten focus on savings delivery.

Transparency: Gateshead Council should also take steps to ensure there is adequate understanding of future demand pressures built into the budget. It is important for cabinet and CMT to ensure they have a shared understanding of the core assumptions and variables underpinning the MTFS, capital programme and associated level of risk. This would be aided by streamlining and simplifying budget information shared with councillors and decision makers, to enable greater understanding and ownership. This should include setting out the technical position and options for councillors to achieve a balanced budget. This increased transparency would also support close alignment between future budget decisions and key council and transformational priorities to drive delivery.

Financial accounts: The council takes financial management seriously, as evident through its it statements of accounts and external audit assessment. Gateshead Council’s financial accounts for 2022/23 received an ‘unqualified’ judgement with no issues relating to value for money. The peer team heard that the nearly complete 2023/24 external audit had identified no specific weaknesses thus far.

Capital: Gateshead Council has a relatively large capital programme that relies on significant borrowing. In recent years the council has consistently underspent a significant portion of its capital budget, with spend carried into future years. In 2023/24 for example, the budget reduced from £112.1m to £68.9m in the capital programme outturn. Stronger CMT ownership of the capital programme will be vital to support delivery of the council’s priorities and reduce capital financing costs for future years.

With the scale of the capital programme, the council is managing risks associated with high-value and high-profile projects. It will also be important to further strengthen the council’s financial and risk management approach. To do so, it should increase the frequency of performance reporting and align more closely with financial reporting, with clear lines of accountability of both the revenue budget and capital programme, encompassing an assessment of risk. (See culture and governance paragraph).

Change: Organisational-wide improvement and modernisation has not occurred within Gateshead Council at the same pace as it has in many other councils. This can be seen with the council having managed £207.5m funding reductions since 2010, without significantly transforming organisationally. Faster paced transformation is needed so Gateshead Council can meet the financial pressures, service demands, and expectations of modern-day public service delivery. It is positive how both the leader and chief executive recognise this and have commenced an organisational-wide transformation change journey to drive change.

There are strong instances of innovation and change within services, which the council can learn from, to support its corporate change ambitions. Transformation within adult social care - resulting in financial savings and service outcomes - is a notable example. The peer team commended the creation of capacity funding to support service transformation and savings delivery as a vital enabler of change.

Workforce Culture: Staff the peer team spoke with - spanning frontline services to strategic leaders - were committed, passionate and motivated to do their best for Gateshead Council and its residents. They were generally open to change and enthused by the fresh direction and energy brought by the chief executive. This provides a strong platform to build from.

There was a strong understanding - in parts of the organisation - of where improvements need to be made. The importance of addressing organisational silos and establishing a learning culture with greater accountability, transparency, and consistency came through strongly. The recent staff survey also highlights the need for improvement across leadership, performance, culture, and staff wellbeing. It is important the staff survey results are fully understood across the organisation, with service level detail transparently shared and action plans developed, progressed, and monitored to understand impact, and that surveys are repeated in future years to demonstrate progress. Listening and responding to the workforce will help foster an organisational culture to support Gateshead Council’s change agenda.

Consistency: The peer team heard consistently that workforce productivity and capacity are adversely impacted by siloed working and inconsistent approaches to policies, processes, and systems. This can be seen in the multiplicity of digital tools and IT systems across the council, as well as in variable approaches to people management, communication, performance management and hybrid working. Whilst the council’s Smarter Working Framework sets out its hybrid working policy, Peers heard there was a lack of clarity and inconsistent application of it. This is impacting adversely on staff, councillors, and customer outcomes. (See governance and culture paragraph). Consistent and standardised application of policy and procedure across the council is needed. This should include clear standards for flexible, office, hybrid and remote working that supports an effective corporate culture and service delivery.

Workforce strategy: HR, organisational development and digital services, working seamlessly as enablers of transformation, will be critical to its success. This is not currently the case; although foundations are being established with the recently launched ‘time to be different’ change programme, workforce strategy and action plan development, and reviews of HR policies. These activities need to form part of a coherent cultural and behavioural change programme to foster a culture of collaboration, openness, and constructive challenge. The planned development of organisational values and behaviours will be important in this and provide staff and managers with the tools to support transformation. Co-production with staff and councillors is essential so agreed values are ‘lived and breathed’. Gateshead Council should consider how the ownership of its change agenda is shared across the cabinet and CMT, and what leadership and management development may be required to support this.

Capacity: There is a huge amount of activity planned, and underway, to deliver Gateshead Council’s change ambitions. It is not clear however if capacity is currently matched to the scale of Gateshead Council’s aspirations, or in the right places. Gateshead Council needs to be brave and ensure it focuses its capacity on delivering its key priorities and change programme at pace. The organisational decision-making accountability (DMA) review will be important in addressing structural capacity imbalances to enable senior leaders to focus on strategic issues and operational managers on operational delivery. Creating capacity within corporate functions to coordinate, support, and monitor delivery will be equally critical to success. (See local priorities and outcomes paragraph).

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 publication of CPC report you need to produce and publish an action plan within 5 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 progress review at Gateshead Council will take place and report be published by 13 November 2025 at the latest.

In the meantime, Mark Edgell, Principal Adviser for the North East, Yorkshire and Humber and North East is the main contact between your authority and the Local Government Association. As outlined above, Mark is available to discuss any further support the council requires. [email protected].