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Feedback report: 24 -26 June 2024
1. Executive summary
Mole Valley District Council (MVDC) is a well-managed council that takes pride in providing high-quality services to the community it serves. However, at this time, the established arrangements for funding local government are under immense strain, particularly with reductions in central government funding. This increases the prospect of well-run authorities having to issue s.114 notices and heightens the need for vigilance and an even more focused approach to managing financial risk.
MVDC benefits from excellent member/officer relationships and good governance arrangements. The Strategic Leadership Team (SLT) is cohesive, maintains good financial oversight, and understands the challenges ahead. There is a good business planning and budget-making process that fully involves the Cabinet, SLT, Scrutiny and Audit committees, and the wider council membership. During 2023, the council undertook a comprehensive round of local engagement and consultation to inform its review of the council strategy.
Financial leadership and management are strong. Both independent auditors (internal and external) described the council as engaged, well-governed, and proactive. The chairs and vice-chairs of the Audit and Scrutiny committees are independent and provide constructive challenge.
Partnership working is well developed across Surrey. Partnerships are established for different reasons, including geographic proximity, service needs, financial benefits, and resilience. Over time, this has led to a ‘patchwork quilt’ of partnerships that would benefit from a review to assess continuing value and, where these are productive, the opportunities to extend membership and increase mutual benefits. Partners were fulsome in describing the council as good to work with, engaged, and capable.
The council is engaged with three major programmes. The Asset Management and Transformation programmes are focused on contributing to the council’s revenue budget.
The asset investment programme ceased purchasing new assets in 2018, but the asset management programme is now involved in continual performance review and active portfolio management. This programme also considers hold and disposal strategies. The asset management programme continues to generate commercial income that supports the revenue budget.
The Transformation programme runs coterminous with the four-year Medium Term Financial Plan (MTFP) to deliver substantial savings scheduled to fill most of the identified funding gap in the council’s finances over that term.
The third programme is the Transform Leatherhead Regeneration scheme. This Joint Venture (with Keir Property Ltd. as a partner) is a proposed £350m development of Leatherhead's Swan Centre and Bull Hill area. The development includes the delivery of housing, commercial, community, and leisure space. The duration of the joint venture is set at up to 15 years, with the potential to extend this based on certain criteria or if the partners choose to do so.
On 31 March 2024, the council’s total useable reserves stood at £10.9m, of which £1.1m were general unallocated reserves and £9.8m were useable earmarked reserves. These are in the lower end of the lowest quartile for districts nationally and in the South East (CIPFA resilience index). Mole Valley has traditionally had a low level of reserves, and their level has reduced in recent years due to their use to support the revenue budget. One of the consequences of a reducing reserve level is that, as it becomes depleted, any accrued interest, often used in the short term to support revenue projects, also decreases.
In 2023/24, the council increased the level of reserves at outturn compared to the previous year. However, it is recognised that reserves may need to be used to support the 2024/25 budget due to delays in delivering the savings programme.
A key area of the council’s financial sustainability depends on adhering to a minimum level of reserves. The council’s S.151 officer has proposed a minimum level of £7.2m in useable reserve based on an assessment of the risks the council faces. It will be essential that these minimum levels are not breached.
The council has a comparatively lower tax base than other councils. Due to the extent of designations that proscribe development, the limited availability of suitable land constrains the growth of house building and commercial development.
However, increasing the tax base, widely recognised nationally as necessary for financial sustainability, can only be achieved by such growth. This is a national conundrum faced by all local authorities, each needing to resolve it at a local level.
The council is approaching a pivotal moment. A number of looming risks include the likelihood of a low government finance settlement, low tax base growth, and increased service demand. The council will need to change its operating and financial model to be sustainable. This will require implementing a long-term strategy for growing locally derived sources of funding, such as council tax, business rates, and other income.
MVDC should use this moment to take control of its future by setting out a place-based partnership approach for good growth. This would encapsulate how the council supports residents to be healthier and have better homes, transport, and education, even if other organisations are statutorily responsible for elements of their delivery.
Until recently, the Coast to Capital Local Enterprise Partnership (LEP) led economic growth for the region. Although MVDC holds many related economic growth strategies, these appear unconnected. This was understandable, while the LEP held the strategic ring for growth. With the future of LEPs changing on 1 April this year (with government sponsorship and core funding ending and their functions transferred to upper tier authorities – in this case, Surrey County Council), there is no longer a coherent place-based partnership growth vision for Mole Valley. With a new government, this is an opportune time to prepare a place-based partnership growth plan to benefit Mole Valley residents and businesses and support the council’s long-term financial sustainability.
2. Key recommendations
There are several observations and suggestions within the main section of the report. The following are the peer team’s key recommendations to the council:
Recommendation 1
The council should set out a vision for the future of Mole Valley through a place-based partnership approach for good growth
Recommendation 2
The council must adhere to the minimum level of useable reserves ( currently at £7.2m) based on an assessment of the risks the council faces, as recommended by the S.151 officer.
Recommendation 3
Additional resources and time should be allocated to widen the council’s understanding of the objectives and outcomes, risks, and impact of complex major projects, such as the Leatherhead joint venture (JV), and how future risks associated with the joint venture will be managed through enhanced ‘shareholder’ arrangements to ensure their robustness as the project evolves[1]
Recommendation 4
The S.151 officer should have observer status on the JV board rather than being a full member. This is to avoid any perception of potential conflicts of interest and allow the postholder to focus on the JV’s impact on the council’s financial position.
Recommendation 5
The council’s ambition for a social housing portfolio should form part of the future vision for good growth in Mole Valley. This should consider the delivery vehicle most suited for the council, along with an understanding of the skills and resources that will be required.
Recommendation 6
The council should develop an adequately resourced asset maintenance programme as a priority.
Recommendation 7
Partnership arrangements should be reviewed to retain only those that benefit the delivery of the council’s overall ambitions and to identify those that may be suited to enlargement.
Recommendation 8
Working with its current partners, the council should seek opportunities to standardise contract and commissioning processes to streamline the current patchwork arrangements and provide opportunities for partnerships to grow.
Recommendation 9
Adopt a commissioning approach to assess the best delivery option for each externalised service as they come up for retender to give the best outcomes for Mole Valley.
Recommendation 10
Review and assess the best future delivery vehicle for Mole Valley Life to maximise its benefit to customers and the council.
[1] Shareholder is used in this instance to refer to the arrangements by which the council ensures it is protecting its position and has oversight of the joint venture. The term ‘shareholder’ is used to differentiate from directors' responsibilities to ensure there is a clear focus on council risks and liabilities.
3. Summary of the peer challenge approach
The peer team
Peer challenges are delivered by experienced elected members and officer peers. The makeup of the peer team reflected the focus of the peer challenge, and peers were selected based on their relevant expertise. The peers were:
- Tracie Langley, Chief Operating Officer and S.151 officer, Cornwall Council
- Cllr. Richard Keeling, Executive Member for Finance (Acting Leader), Teignbridge District Council
- Alison Scott, Director of Finance, Three Rivers District Council
- Andrew Winfield – Peer Challenge Manager, LGA
Scope and focus
The peer team considered the following five themes, which form the core components of all Finance Peer Challenges. These areas are critical to councils’ performance and improvement.
- Financial leadership: Does the authority have plans for its long-term financial sustainability that its members and officer leaders own?
- Financial strategy, planning, and forecasting: Does the authority understand its short—and long-term financial prospects?
- Decision-making: Are key decisions taken in the understanding of the financial implications, risks, and options?
- Financial outcomes: Are financial results (including those of the council’s investments and transformation projects) monitored and acted upon to realise the authority’s intentions?
- Partnership and innovation: Is finance at the cutting edge of what the authority is working to achieve, working with partners and seeking innovative approaches?
In addition, the council asked the peer team to provide feedback on:
- The scope to improve the development of business cases, particularly for major capital projects?
- How can MVDC develop its financial scenario planning and modelling?
- Does the council fully consider its asset management liabilities in its medium-term revenue and capital plans?
- The Audit Committee includes Treasury management, which may not be in accordance with CIPFA guidance. Where should scrutiny of Treasury management sit?
- How to grow council tax and business rates income, get out of the safety net, and improve business rates collection?
- Does the council have a robust long-term strategy and operating model for financial sustainability?
- Does MVDC have/need a clear and robust strategic vision regarding its operating model, future service delivery, and the role of partnerships?
The peer challenge process
Peer challenges are improvement-focused and are 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 they read.
The peer team prepared by reviewing a range of documents and information to ensure they were familiar with the council and the challenges it is facing. The team then spent three days onsite at Mole Valley District Council, during which they:
- gathered information and views from more than 25 meetings, in addition to further research and reading
- spoke to more than 60 people, including council staff, members, and external stakeholders.
This report summarises the peer team’s findings, presented by fellow local government officers and members.
4. Feedback
4.1 Financial Leadership
Financial management at Mole Valley District Council (MVDC) is effective and has a firm grip on the issues in what continues to be an extremely challenging environment for local government. The S.151 officer's (chief financial officer) financial leadership is robust and clear in its objective, with a keenly attuned understanding of the council's financial pressures. Financial management is well organised, with sound business planning arrangements, well-coordinated budget-making processes, and good working arrangements with members. Officer peers of the S.151 officer describe her as collaborative, capable, thoughtful, and influential.
Key leadership relationships are in place. The S.151 is well supported by her Strategic Leadership Team (SLT) colleagues and members. The relationship between the statutory officers’ golden triangle (Head of Paid Service, monitoring officer, and S.151) is clearly understood and working well.
This translates well to council services and managers. Budget managers report a supportive and valued relationship with finance staff. This is an important working platform on which to build. MVDC has a dated financial management system, and budget managers complained about how this system cannot provide live financial monitoring, with functionality described as “clunky.” The council plans to address this by entering a shared service arrangement with Spelthorne Borough Council. Not only will this arrangement provide access to a more modern financial system, but it will also improve financial monitoring. The partnership will also provide MVDC with increased service resilience, as the council has experienced difficulties recruiting financial staff. It may also offer opportunities to enhance commercial skills across both councils.
Financial information is regularly provided to members and staff. Budget and performance information is reported to Cabinet and Scrutiny every two months and to the SLT every month.
The council has a four-year Medium Term Financial Plan (MTFP) to 2026-27 and a ten-year Long-Term Financial Strategy (LTFS). The latter allows financial modelling and projections to anticipate issues and opportunities over an extended period. The process to produce these plans began in 2022, closely involving SLT and Cabinet. This provides a sound financial framework, enabling a longer-term view of financial planning while delivering for the immediate four-year period.
Given the number of major projects the council is committed to, the S.151 officer has recognised the need for a more nuanced MTFP and LTFS, ensuring that the risks of slippage are regularly assessed. This is particularly the case with complexities from longer-term projects like the Transform Leatherhead Regeneration joint venture.[1] It will be important to evaluate and update existing monitoring and risk management arrangements to ensure that they provide sufficient insight and understanding to anticipate emerging issues.
Effective project oversight will require modelling the risk and effect of slippage from the Transformation Programme on the MTFP. As budgets get tighter, a more focused approach to project planning will be needed to manage the risks of slippage, budget overspends, or reduced levels of savings.
The Transformation programme was established in November 2023 to achieve £4.156m in savings to meet the identified financial gap of £4.9m in the MTFP. If these savings are not delivered, it would present a significant risk to the council and jeopardise its intention to achieve financial sustainability. There are signs of slippage, with some elements described as “off track.” If this continued, it would raise the prospect of more difficult decisions being needed. Contingency planning for possible failure should be considered, and scenario planning may assist in identifying alternative options.
The major asset management and Transformation projects are key initiatives to support financial sustainability. The other major programme is Transform Leatherhead Regeneration.[2] Although robust governance arrangements are in place to manage these programmes, MVDC will need to ensure that capacity and expertise are available to manage continuing and emerging risks and impacts on the council’s financial position, as these will invariably change during the projects' lifespan.
While strong governance arrangements are in place for the joint venture, the council’s position will need to be protected as the project progresses. To ensure that the shareholder arrangements continue to meet the council's requirements, consideration should be given as to how future risks will be managed. The current governance proposals mean that two of the three statutory officers are on the Joint Venture Partnership Board. The peer team recommends that the S.151 officer only have observer status to avoid any perception of potential conflicts of interest and allow that officer to focus on the impact of project delivery on the council’s financial position.
The increased complexity of major projects can inhibit members' and officers' understanding of the project detail. To mitigate this, additional time and effort should be given to explaining complex projects, their intended outcomes and impact on corporate capacity and financial sustainability, the project risks, and how the council will monitor and manage these. Gaps in understanding project detail could present further risks, making this transparency and explanation crucial.
Financial strategy, planning and forecasting
There is a strong budget and business planning process. It begins early in the first quarter and progresses with the full involvement of members, officers, and Scrutiny and Audit Committees. This ensures that budget-making is aligned with the annual plan. Once agreed upon, Business Managers develop service-level business plans linked to individual staff performance objectives and annual development reviews.
The newly revised charging and pricing strategy is a positive move to bring charging levels up to date. This provides a baseline to ensure that charges can, where permissible, cover delivery costs and contribute to the income side of the revenue budget.
Benchmarking is used effectively by finance to understand comparative performance levels and ask questions about finance and other services.
The council's capital programme is constrained. It has a relatively high need to borrow, expressed as the Capital Financing Requirement (CFR), and a higher-than-average level of debt gearing. The CFR rose from 10 per cent in 2016-17 to 48 per cent by 2017-18. This was due to the council’s Asset Investment Strategy, which, between 2017 and 2018, acquired investment properties funded through its capital programme to generate commercial income to support the council’s revenue budget. Net income from investment property assets was £4.37m for 2023-24. (With a net revenue budget of £12.08m for 2023-24, the investment income is an important element.)
The council has accepted that proposals for inclusion in the future capital programme post 2024-25 must meet set criteria. The intention is that, where possible, the council will fund a more modest level of capital expenditure through internal borrowing, where the CFR is reducing and is expected to continue to fall with future asset sales.
Good risk management assurance mechanisms are in place. Internal and external audits effectively check risk and promote improvement. MVDC has recognised that existing mechanisms will need to adapt given the increasing and changing level of risk the organisation manages.
The current budget pressures and the slippage in planned mitigations highlight the continuing need for good governance so that issues that may de-rail approved plans can be recognised early and resolved quickly. The scrutiny and audit committees have vital roles to play in this regard, and it will be necessary to ensure that each committee has the appropriate information to enable them to discharge their roles effectively. The S.151 officer will need to continue to work closely with these committees to ensure they have the right skills to understand the impact and risks arising from major projects such as transformation and the joint venture.
The current operational and financial model is not sustainable for the longer term. The council acknowledges this, as continuing financial pressures for it and local government may mean cuts to discretionary services and reduced quality standards for statutory services. The council is at the early stages of discussing a ‘thinking outside the box’ contingency plan of strategic options with the cabinet as part of the 2025/26 budget. This sets out future options that may be required and is an example of contingency planning as the council runs out of more viable options. This confirms that MVDC is approaching a pivotal point at which a change of operational and financial model will be needed.
The council is working in an increasingly challenging environment. The likelihood of a low government settlement, low tax base growth, and increased demand means it needs to change its operating and financial model to be sustainable. Sustainability requires a long-term strategy for growing locally derived funding sources, such as council tax, business rates, and other income.
The peer team recommends adopting a Good Place Growth model, designed to create a laser-like focus on what MVDC needs to deliver to add increased economic and social value to the district. This model aligns with the UK's need for economic growth and offers a route for the council to compete for growth resources. It would aggregate related but disconnected MVDC strategies, such as the Local Plan, the Economic Prosperity Strategy, and housing strategies, into a single strategic approach that is clear about the role of partnerships required to deliver elements of the model. For example, partners responsible for transport, education, and health would work with the council to provide a shared vision for residents and businesses in Mole Valley.
The model would recognise that MVDC does not have the ‘responsibility’ for delivering all aspects as these will often sit with other public and private sector players (Department of Housing, Communities and Local Government; Department of Transport, Surrey County Council, Homes England, etc.), but would make clear what MVDC is asking of them. Such a growth model seeks to increase the district's tax base to generate more income to deliver local public services but aims to do that in a way that creates better places for people to live and work.
The peer team also recognises that growth can be challenging. There is a need for housing and commercial land for development in Mole Valley. For example, in 2023, average house prices were £665,748, making Mole Valley the third-highest average house price in the South East. The median house prices ratio to residents' gross annual earnings was more than 14:1 in 2023. Similarly, the average monthly rent for a private sector property and local authority weekly rent were in the upper quartile for districts in the South East.
The council’s draft local plan recognises these pressures in setting out housing objectives to deliver as much new housing as the district’s constraints allow, provide homes of the right tenure and size in the right place, and meet the needs of older people and those who need specialist housing.
Despite the social demand for housing, growth proposals arouse strong local and political views. The protected areas and assets of particular importance within the district, such as the Green Belt and the Surrey Hills Area of Outstanding Natural Beauty, provide obvious constraints that limit the overall scale and location of development. Making a breakthrough on these will require opening up a debate and working with partners to enlarge the proposition.
The peer team understands the council has ambitions to develop a social housing portfolio, which should form part of the future vision for good growth in Mole Valley, but this will need a different set of skills and increased resources to deliver. Many vehicles are available to provide social housing, and it will be necessary for the council to select one appropriate for its needs. The council may wish to work with partners to bring in the commercial, development, and housing management skills required to ensure the success of such arrangements. The LGA could assist in sharing information on different models and putting the council in touch with other councils who have developed these.
The council owns an extensive asset portfolio but does not have an associated budget for cyclical maintenance of the capital programme. As a property owner, the council has a fiduciary duty to maintain property that secures its value. This omission needs to be addressed as a priority. If MVDC wishes to own property, it must ensure that it has cyclical maintenance programmes with the appropriate maintenance budgets.
[1] Under this JV model of a Local asset backed vehicle (LABV), the council is not under any obligation to fund the JV, only to provide the land. LABV loan notes create an equity investment. The transfer of land is a capital investment into the scheme, offset by a corresponding capital receipt. While no money changes hands, value clearly does.
[2] The Transform Leatherhead Masterplan involves three key assets - one (Claire House & James House) of which is being delivered by McCarthy Stone, the other two (Bull Hill and Swan Centre) is a 50:50 joint venture. It is proposed to deliver a mixed-use scheme on Bull Hill, which cross-subsidises investment in the Swan Centre. The duration of the joint venture is set out as up to 15 years with potential to extend based on certain criteria or if the partners so choose.
4.2 Decision making
The council has brought together business and financial planning arrangements. This constitutes best practice.
The risk and governance arrangements for business and financial planning appear robust. This was confirmed by an internal audit report on Financial Governance from 2023-24, which found reasonable assurance that the council had a sound governance and risk management system in place. The Corporate Governance Board provides further risk management oversight.
Members are actively engaged in monitoring the delivery of council plans. The scrutiny committee considers reports in advance of the cabinet. The audit committee fulfils a vital role in overseeing the council's financial management. All council reports for decision have a financial implications section within the template that provides information to show alignment with the council strategy.
Members will be required to make difficult decisions in the face of continuing financial pressures and the unsustainability of the current operating model. This will be necessary given the expected overall reduction in resources, the risks of slippage from the transformation plan, and, simultaneously, the council’s commitment not to breach the agreed threshold for useable reserves. Decisions may be needed to consider cuts to discretionary services, quality standard reductions to statutory services, and falling back on the contingency list of options.
The council asked the peer team to consider how it could improve the development of business cases, particularly for major capital projects. The general advice is to ensure that the amount of work needed to complete the business case should reflect the complexity and size of the project. However, all business cases must recognise first, the benefits and the explicit link to the council strategy (outcome focus), second, the resources required to deliver and third, be realistic about the timeframes for delivery.
Further areas that the council could consider include:
- Building a suite of business case templates for different types of projects, such as Green Book for financially higher–threshold projects, Green Book Light for financially lower–threshold projects, and Agile for project and programme management
- For each template, ensure that they articulate the internal capacity required, and the resources to deliver, and test for optimum bias
- Consider training staff to complete project business case templates effectively. This could include training in commercial skills and financial modelling for key staff.
MVDC is already using Microsoft Project for the Transformation programme. Extending project management training would deepen the council’s understanding of project modelling and risk management.
The council asked the peer team where the scrutiny of treasury management should sit. Our view is that the treasury management strategy (TMS) is an essential element of the annual budget-setting process and goes through the same scrutiny as the budget would in being signed off annually by the full council. The council developed its Capital, Investment, and Treasury Management strategy for the 2024-25 financial year, combining the strategies into an annual document alongside the annual budget arrangements, the council strategy, and the annual plan. The cabinet and council approve this through the normal process.
The audit and scrutiny committees have the remit to scrutinise treasury management. The metrics within the TMS should form part of the performance management of the overall budget, which is usually undertaken through quarterly reports to the cabinet and scrutiny and audit committees. Under these arrangements, the audit committee will be responsible for ensuring that the KPIs within the TMS are being delivered in line with expectations, and the scrutiny committee can request reports on treasury management. These arrangements ensure that the council is meeting the requirements of the treasury management code.
4.3 Financial outcomes
Scenario planning and modelling are useful ways to understand the potential impact on the council from issues that emerge in an increasingly complex operating environment. At the moment, these include, in addition to the pressure of reduced local government funding, the challenges of high inflation and high interest rates, increased energy costs, labour and skills shortages, increased labour costs, and increased demand for services. These add considerable uncertainty to financial planning.
The council effectively used modelling to create alternative scenarios for an MTFP report to Cabinet in November 2023. When the council confirmed a structural deficit, it set out four scenarios developed with different assumptions on central government funding, income and expenditure, savings levels, and the impact on council reserves. This exercise also presented the risk to the council, where the S.151 officer may need to consider using statutory powers. This scenario planning assisted the council in making the optimum budget decision.
The council could develop its financial scenario planning and modelling to enhance council-wide understanding of risk. For example, the council would benefit from a single narrative on the accumulated risk it holds, especially given the high level of complexity of current major projects. This would require a very focused quantification of the risks across the council’s project portfolio. The major projects of asset management, the Transformation programme, and the joint venture will be subject to many of the same risks, such as external economic factors. A single narrative of accumulated risk in a single document would quantify this and the council's strategy for managing risk.
Financial modelling skills are necessary when engaged in large, complex programmes of change, and these tend to be the skills that are not readily available in the sector. Such skills can be difficult and expensive to create, and most authorities will buy this capacity and capability as and when required. Alternatively, a ‘grow your own’ strategy could work as a shared resource with another authority(ies).
The Transformation programme has been well planned. Good governance arrangements are in place and the Corporate Governance Board supervises these. Delivering savings is key to ensuring the council's sustainability during the MTFP period. However, there is recognition that failing to deliver the Transformation savings will add pressure on the council to consider introducing Plan B options, as usable reserves will no longer be available. This presents a significant risk; contingency planning involving different scenarios would be worth exploring.
The peer team was asked to suggest ways in which the council could grow its council tax and business rates income, get out of the safety net, and improve business rates collection. Due to their statutory nature, the optimisation of budgeting for and collection of council tax and business rates is a matter of efficient and effective process management, including a focused approach to collecting debt. This is an issue that the council is aware of. As a result of two internal audit reports, it is looking to improve the collection rates of council tax and business rates with appropriate management actions. The peer team saw improved council tax collection rates for 2023-24.
Some business rates collection advice and activity is provided under a service level agreement with Reigate and Banstead Borough Council, which is in the top quartile for collection. MVDC is working with Reigate and Banstead to find ways to improve its collection levels. The obvious areas to focus on are budgeting and collection, as they are controllable levers that can be reviewed to improve performance.
The peer team understands that the council is considering expanding the new financial shared service with Spelthorne to include revenues and benefits. This would improve resilience and provide more resources to maximise income collection efforts. Rather than the current split arrangements, a more focused partnership arrangement would provide a single system and approach to revenue collection. This should improve resilience and enable the council to improve its collection rates.
Ultimately, the only way to increase income is through a strategy that seeks to increase the number of businesses and houses, increase the tax base, and generate more revenue from council tax and business rates. Improvement of the total budgetable council tax and business rates level can only be considered in the context of an overall Good Place Growth Strategy for the district that seeks to increase the number of businesses and houses, increase the tax base, and generate more revenue from council tax and business rates.
4.4 Partnership and Innovation
Partnership working is strong across councils in Surrey. MVDC is regarded as a good partner, and other partners value the council's working relationships and contributions.
The approach to establishing the finance shared service arrangements with Spelthorne is positive, and these are likely to achieve tangible benefits for the council, including improved financial management performance, capacity, resilience, and capability, in particular, around enhancing commercial skills.
However, the current ‘patchwork quilt’ of partnerships, which were established principally in response to conditions at the time and a relationship between willing partners rather than a strategic intent, may limit the potential of partnerships to grow. To ensure that partnerships deliver what the council needs, it should review arrangements to retain only those that benefit the delivery of its ambitions and are aligned with its overall strategic future.
Contract arrangements and associated contract management resources seem inconsistent, and consideration should be given to standardising contract and commissioning arrangements. This would ensure that there are standard arrangements to which services could be added or extended across more partners to allow partnerships to continue to develop. This would clarify which contracts and partnerships require what resources to deliver defined outcomes.
The S.151 officer has recognised the need to improve contract management arrangements to ensure robust delivery arrangements and consistency across the organisation. Recent reviews by the Scrutiny Committee Grounds Maintenance Panel and internal audit have identified a need to improve contract monitoring arrangements and key performance metrics included within the council’s contracts. Recent improvements to contract management have led to contract retention being used more effectively to drive improved performance. It will be necessary for the council to check all externalised contracts to confirm that appropriate client monitoring processes are in place and working as intended.
The peer team understands there is a renewed desire by the administration to explore insourcing. Best practice is more concerned with describing the service to be commissioned (the ‘what’ and ‘why’) rather than the specific ‘how’ and ‘who’ delivers it. In these instances, the authority is required to test value for money in each commissioning requirement. This then turns into a contract for delivery, with technical and procurement rules for discharging the best way to deliver services, and is, therefore, ‘neutral’ on who provides these. The peer team recommends that instead of a wholesale approach to insourcing, a commissioning approach be taken to assess the best delivery option for each service before coming up for retender.
Mole Valley Life has been successful in growing its business and becoming self-financing. In doing so, it has demonstrated the importance of the range of community services it provides, particularly as these benefit an ageing population. However, further development may be constrained while it remains part of the council. The council should consider the best delivery vehicle to maximise the benefits to customers, residents, and the council.
5. Next steps
It is recognised that senior political and managerial leadership will want to consider, discuss and reflect on these findings.
The peer team and Local Government Association (LGA) are keen to build on the relationships formed through the peer challenge, and further support can be discussed.
William Brooks, Principal Adviser for the South East, is the main contact between your authority and the LGA. William is available to discuss any further support the council requires. Mobile: 07949 054421 Email: [email protected]