LGA Corporate Peer Challenge: Eastleigh Borough Council

Eastleigh is a well-run and successful Borough Council with a clear vision and ambition to shape the place and improve the lives of local people. Over the past years, it has delivered a wide range of capital projects for its communities, including Places Leisure Eastleigh, a new visitor centre at Lakeside Country Park and Stoneham Football Complex. There are impressive achievements against all its Corporate Plan priorities, including Green Flags for its country parks, continued National Portfolio Organisation status and grants awarded to its theatres, a widely acknowledged proactive and effective response to the refugee resettlement scheme as well as investment in skills development, sports & health promotion programmes. 

Staff are enthusiastic, committed and dedicated – they are proud to work for the council and this should be commended. The Leader and Chief Executive are both respected and influential locally and in wider regional discussions. This was acknowledged by local government colleagues, representatives from the private sector and other public sector partners including Health and the Police. They regard the Leader and Chief Executive as open, helpful and generally ‘good people to work with’, putting Eastleigh first.

Stable political leadership has leveraged long-term opportunities for the council, for example its approach to borrowing and investments to support housing development, economic development, and regeneration, particularly where private sector schemes had stalled. Examples are One Horton Heath, a 310-acre development site of up to 2,500 homes, housing development at Stoneham Lane and investment in the Ageas Bowl Conference and Hotel facilities. This demonstrates ambition and clear place leadership for the Borough and the wider region. 

The council had £525million borrowing (as at 31 March 2022), the fourth highest borrowing relative to size of all UK authorities, and therefore a risk that needs to be monitored closely and actively managed. The council is aware of the risks that its investment portfolio brings and has mitigations to manage them. The commercial model has served the council and has shielded the impact of financial austerity over the last 10 years. The council’s Medium Term Financial Plan (MTFP) shows a balanced budget, and the council has made an early approach to finding significant savings for 2024/25 not least through its organisational restructure. A Continuous Improvement Programme is in place to ensure that the projected savings over the course of the MTFP are being met and the council recognises the need for a robust approach to ensuring delivery.

The ambitious plans around Housing and re-opening the HRA as well as the council’s commercial activities require governance and assurance to be ‘best in class’ and to reflect lessons learned from wider sector difficulties. This includes being mindful of and seeking external independent advice and challenge, ensuring that the council’s audit and scrutiny functions are able and well supported, the establishment of a strong and well supported Client function for its development programmes and removing statutory officers from its in-house companies.  

The vision and ambition around One Horton Heath is to be commended. It is a project of significant scale and ambition. This scheme is massive and cannot be delivered through existing disparate programmes. It will occupy significant council bandwidth for a long time with implications for overall council capacity and quite possibly non-statutory services. It will require investment in specialist skills, governance and the council’s reliance on phase-by-phase Affordable Housing Grant could create a financial gap later in the scheme, depending upon the future availability of grant funding as the scheme goes beyond the end of the current affordable homes programme of March 2026. It is important that this is fully acknowledged by members and as the council takes on the delivery of this flagship scheme in house, it needs to ensure that it fully understands and plans for the impact and challenges for the whole organisation, including risks and capacity. 

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:

Recommendation 1

Ensure a golden thread from Corporate Plan to Directorate Plans supported by aligned risk registers, KPIs and Internal Audit Programme.

Recommendation 2

Appoint independent challenge, particularly for Audit & Resources and One Horton Heath.

Recommendation 3

To address the significant budget gap, actively plan for and explain that some areas of the council will require further investment whilst others may have less resource.

Recommendation 4

Deliver the People Strategy so that your workforce is skilled, motivated and can see clear career pathways.

Recommendation 5

Develop a mechanism for evidence-based understanding of residents’ needs to inform choices about service re-design and reallocation of staff resources.

Recommendation 6

Modernise systems and processes to reduce the amount of processed work and improve resilience and efficiency.

Recommendation 7

Review and update the IT strategy to ensure it supports the organisation to modernise and change.

Recommendation 8

Consider the need for a strategic planning committee for borough and regional wide matters.

Recommendation 9

Put in place a robust governance framework for your companies and Joint Ventures in accordance with latest governance guidance.

Recommendation 10

For the One Horton Heath development, establish a Senior Officer Board, chaired by the Corporate Director, with independent advice, making recommendations to the Joint Officer / Member Board. Both Boards need clear terms of reference to separate out operational decision making from policy and strategic direction. 

Recommendation 11

For each phase of the One Horton Heath development, understand the split of tenure and funding streams to ensure that each phase is financially viable.

Recommendation 12

Be confident in the vision and capabilities of Eastleigh Borough Council and recognise the strength of your ambition and resilience of financial position to deliver that ambition, whilst clearly understanding the risks and emerging challenges to the organisation and the imperative drive to deliver further savings and efficiencies.

3.1 The peer team 

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

1. Cllr Gareth Roberts, Leader, London Borough of Richmond upon Thames 
2. Caroline Green, Chief Executive, Oxford City Council
3. Emma Foy, Director of Corporate Services and S151 officer, West Lindsey District Council 
4. Phil Mason, Strategic Director for Sustainable Growth and Development, Cornwall Council 
5. Angela Glithero, Assistant Director – Strategy, Workforce and Communications, Stoke-on-Trent City Council 
6. Anne Brinkhoff, LGA Associate 

3.2 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. 

Local priorities and outcomes - Are the council’s priorities clear and informed by the local context? Is the council delivering effectively on its priorities?

Organisational and place leadership - Does the council provide effective local leadership? Are there good relationships with partner organisations and local communities? 

Governance and culture - Are there clear and robust governance arrangements? Is there a culture of challenge and scrutiny? 

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? 

Capacity for improvement - Is the organisation able to support delivery of local priorities? Does the council have the capacity to improve? 

In addition to these questions, the council asked the peer team to provide feedback on its capacity and capability to deliver the One Horton Heath development in-house and the establishment of a Housing Revenue Account (HRA). 

3.3 The peer challenge process 

Peer challenges are improvement-focused; it is important to stress that this was not an inspection. The process is not designed to provide an in-depth or technical assessment of plans and proposals. 

The peer team used their experience and knowledge of local government to reflect on the information presented to them by people they met, things they saw and material that they read. The peer team prepared by reviewing a range of documents and information in order to ensure they were familiar with the council and the challenges it is facing. The team then spent three days on-site at Eastleigh Borough Council, during which they:  

• Gathered 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. 

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

The Council has a clear vision and priorities that are reflective of the Borough. They are well understood by councillors, officers and partners. The Council’s new Corporate Plan 2023-26 articulates its vision as ‘enabling improved quality of life for residents, promoting thriving and healthy people and places, supporting the local economy, and maintaining an attractive and sustainable environment that residents value’. There are five priority themes for the council’s work over the medium term, including ‘shaping places’ and ‘creating homes and communities’ that underpin the Council’s significant ambition and investments in these areas. It’s core purpose of ‘shaping our place and improve people’s lives’ is well communicated, understood and embraced by staff, councillors and partners the peer team engaged with. 

A three-year action plan (2023-2026) defines aspirations, planned commitments and enabling and supporting actions for each of the five priority themes in the Council Plan. The planned commitments are specific, measurable and with identified timescales. The plan gives clarity to internal and external stakeholders what the council plans to deliver and how it intends to prioritise its resources. 

Eastleigh is a high-performing council and was named Council of the Year 2022 by the Association for Public Service Excellence (APSE). Over recent years, it has delivered a wide range of capital projects for its communities, including Places Leisure Eastleigh, a new visitor centre at Lakeside Country Park and Stoneham Football Complex. There are impressive achievements against all its Corporate Plan priorities, including Green Flags for its country parks, continued National Portfolio Organisation status and grants awarded to its theatres, a widely acknowledged proactive and effective response to the refugee resettlement scheme as well as investment in skills development, sports and health promotion programmes. The Council performs strongly against Districts in the South East on most nationally collected performance measures. There are a few exceptions, including the number of people on the housing waiting list and several health and wellbeing indicators such as adults being active and the percentage of adults being overweight or obese. The Council’s focus on health and wellbeing and significant investment in building new homes are a direct response to this. 

The Council is making improvements to its performance management framework and practice. A small corporate performance team provides capacity and infrastructure and collates service and financial information for monitoring purposes. Information is collected monthly and there are comprehensive reports to Policy and Performance Scrutiny Panel and then Cabinet. Reports include performance data and narrative on service and financial performance, progress with the Council Plan, the Council’s continuous improvement plan and provide a commentary from the Council’s Chief Financial Officer.

Five Local Area Committees (LACs) provide a direct connection with local communities. Made up solely of local ward councillors, their purpose is to ensure that local communities have a voice and that decisions are taken at the lowest possible level. Whilst the opportunities are big, a key function of LACs appears to be the determination of planning applications, as well as overseeing investments and projects in their area. The Council is reviewing the purpose, function and costs of LACs which provides an opportunity to consider whether and how their scope might be widened, for example to adopt asset-based community development principles, to support communities doing more for themselves. Some perceive that the relative independence afforded to individual LACs has led to an inconsistent approach and disparities in their effectiveness. 

The Council has a strong and commendable ambition and political will on tackling environmental degradation and climate change. This is explicit in the Corporate Plan and much of this is linked to using the Council’s land assets, including One Horton Heath, to building energy efficient homes, energy creation, environmental mitigation, and new accessible green areas. With less resources and a significant focus on housing development, there is a need to be more specific about the next steps in this policy area, particularly in relation to reducing the council’s own emissions.

 The bandwidth of the organisation is focused on housing development, and we heard concerns from some councillors, staff and partners about the future capacity of the Council to deliver ‘Business as Usual’ (BAU) and doing the basics well. This is important feedback for the Council to consider when managing the financial pressures in 2024/25 through its continuous improvement and savings programme. There will be a need to carefully consider how savings targets will be met, balancing Council ambitions, service standards and discretionary services to meet savings requirements. Consideration of mechanism to gather evidence from residents (such as surveys or a residents panel) to inform choices may be helpful. A clear narrative on the Council’s continued ambition alongside the financial challenges will be crucial so that staff, councillors and the public understand the choices that are being made. 

Creating a more dynamic oversight of performance and financial reporting and senior leadership level will help with effective prioritisation and monitoring from a corporate perspective. The Corporate Leadership Board (CLB) is still forming with two new Corporate Directors having joined very recently. Its role will be to transcend individual services and act as a Corporate Board. The team still needs to form and there are opportunities to consider how information is presented and by whom to support dynamic challenge and discussion as well as peer accountability. 

The Council should be more confident in communicating the advantages of flagship policies, including the commercial enterprise activities, One Horton Heath and prioritising housing to residents, members, staff and partners. 

Stable political leadership has leveraged long-term opportunities for the Council, for example its approach to borrowing and investments to support housing development, economic development, and regeneration, particularly where private sector schemes had stalled. Examples are One Horton Heath, a 310-acre development site of up to 2,500 homes, housing development at Stoneham Lane and investment in the Ageas Bowl Conference and Hotel facilities. This demonstrates ambition and clear place leadership for the Borough and the wider region.  

Relationships between officers and councillors are characterised as trusted and respectful. There is a clear understanding of the respective roles and responsibilities of officers and members. Senior councillors are visible across the organisation but don’t interfere with operational matters. 

The Leader and Chief Executive are both respected and influential locally and in wider regional discussions. This was acknowledged by local government colleagues, representatives from the private sector and other public sector partners including Health and the Police. They regard the Leader and Chief Executive as open, helpful, and generally ‘good people to work with’, putting Eastleigh first. 

The Council’s recent restructure has strengthened organisational leadership which is bedding in. The appointment of two Corporate Directors is providing capacity for some significant programmes, including One Horton Heath. A team of Service Directors are responsible for groups of services. Together they form the Corporate Leadership Board which meets weekly to provide corporate leadership and oversight of significant and corporate projects and monitor service and financial performance. This is a good infrastructure to ensure effective corporate leadership. 

The council is recognised as a strong partner in the sub-region, though partners also acknowledged that collectively partners could do more. The Council plays a significant role in PfSH (Partnership for South Hampshire) which is navigating issues such as planning for housing and employment across a complex regional economy. It was recognised that the Chief Executive in particular has been proactive at stepping into partnership space on some challenging areas, for example taking a lead on Waste. Partners in Health and Community Safety spoke positively about the Council’s support on asset development, including new diagnostic centres, engagement with Primary Care and proactive engagement to promote community cohesion and crime diversion activities for young people. 

Communication is recognised as a high priority and adequately resourced. A new senior officer is implementing positive change. Using a multi-channel approach, the comms team are delivering a range of campaigns and press releases to support the Council’s priorities, raise profile of the services the Council provides and to help build trust. Communication is consistent and co-ordinated with good branding. There are a range of internal comms strands which recognised and welcomed by staff, for example the ‘start of the week’ briefings from a member of CLB. We heard that the council had done a survey of staff relating to hybrid working and is planning a wider staff survey to track progress on issues that matter to staff. 

There are opportunities to do more with partners and regard partnership working as an opportunity to build resilience and do more for less, particularly across shared priorities such as climate change. Most of your partners have called a ‘climate emergency’ and have made available some dedicated offer time and resources. Are there advantages in pooling these and working across more than one partner to share some of the research, monitoring, communications, and fund-raising functions? Several of your partners in local government are keen to explore partnership working in some key services to build resilience and economies of scale, particularly in times of financial constraints. This may require shift in policy and practice, where partnerships are encouraged and actively pursued as a way of delivering the council’s business. 

Senior managers could be encouraged to play a more active role in key partnerships. Effective partnership working requires investment in building relationships which takes time. We heard about positive engagement from representatives of the private sector we spoke with, many of which centred on the Chief Executive. The new Corporate Directors provide additional capacity to build new and enhance positive relationships with large employers to support them in delivering their ambitions. An example is Southampton Airport which is an important economic asset in the area with scope for growth. Your network of Parish and Town Councils provide skills and resources to deliver local priorities. They would welcome more strategic engagement as a group with the corporate leadership to explore challenges and opportunities on their patch and for the council as a whole. 

Build on the Chief Executive’s approach to being visible amongst employees, with new senior officers and senior members taking a similar approach. Corporate Directors can help by holding some of the key relationships on an ongoing basis. 

Much of the visual leadership is focused on the Chief Executive. A more distributed approach across the Corporate Leadership Board will not only increase capacity but help Directors and Service Directors develop their corporate leadership styles and act (and be seen to act) in the corporate interest, rather than promoting their own services or Directorates. Strong consistent and aligned messaging is crucial to convincingly communicate the narrative on continued ambition alongside the reality of financial challenges. The impact of the recent restructure is still felt across the Council and will require on-going and sensitive communication about changes in roles and accountabilities and any changes in service delivery.

Use the opportunity of the new members of the CLB to review its effectiveness and develop a collaborative senior leadership culture and ensure that all CLB members understand and enact their responsibility for the Council as a corporate entity. High functioning teams need trust to engage in passionate disagreement that is necessary for team members to make good collective decisions and hold each other to account for individual, service and corporate performance. Building trust takes time and requires investment. 

In addition to contributing to place leadership, Local Area Committees also reinforce the Administration’s commitment to local decision-making. They are an established infrastructure with a small team of managers and support staff to facilitate this approach. There are few District Councils who afford this infrastructure given the current financial pressures across the sector. They are a great opportunity to forge strong and equitable alliances with local community groups, Town and Parish Councils, Schools and local business groups to create synergies and align local resources, skills and assets to support local areas to flourish. 

Councillor/senior officer relationships are reported to be good with a culture of ‘nosurprises’. Councillors and Officers understand and respect each other’s’ roles and responsibilities, act professionally and with positive intent. Policies and practices to facilitate the political decision-making processes are understood, well supported and work. For example, meetings are scheduled so that Cabinet will receive feedback from Scrutiny processes and can deal with matters as they arise. The Council has produced a ‘decision making by managers’ leaflet which sets out the roles, responsibilities and accountabilities of the Chief Executive/Directors, Service Director, and Heads of Service together with decision making arrangements. This bodes well for effective decision making.

 Member-Member relationships appear good, with low levels of complaints and appropriate processes and policies to ensure high standards. The Council has codes of conduct for councillors and staff, and these are reviewed annually. All complaints are investigated by the Monitoring Officer who provides an Annual Report with her findings to the Administration Committee. 

There is a good infrastructure and capacity for effective governance. For example, the Audit & Resources Committee meet approximately eight to nine times a year and the Strategic Risk Management Board meet quarterly; and there are regular meetings of Statutory Officers, i.e., the S151 Officer, Monitoring Officer and the Head of Paid Service, to review risks and keep abreast of wider governance issues. Our work demonstrated that core assurance documents are discussed in exempt session. Consideration could be given as to whether more of the reports could be in the public domain using confidential appendices for commercially sensitive information, in accordance with good practice for transparency. 

Stable political leadership contributes to long-term stable governance with established and embedded policies and processes and significant organisational memory. The ruling group have been in control of the Council for three decades and the Leader has been in post since 1994. There are currently 39 Councillors, of which four are in opposition to the ruling group. As mentioned earlier, political stability has been a key strength in adopting innovative policies that have, until recently, protected the Council from financial austerity, and the delivery of ambitious flagship projects. However, this could be perceived as allowing limited scrutiny and challenge through the political system and the peer team consider that governance and accountability would be strengthened by independent challenge, particularly given the ambition and innovation of the Council. 

Whilst there is significant experience in the Internal Audit function, the plan is centred on traditional substantive testing. The function itself is comparatively small and understandably lacks specialist audit skills in relation to the Council’s more complex treasury management, commercial or housing investment activities. There is a need to match the audit programme to the ambition of the Council which will require a stronger Audit function through suitable specialists or commissioning of specialist reviews. 15 18 Smith Square, London, SW1P 3HZ www.local.gov.uk Telephone 020 7664 3000 Email [email protected] Acting Chief Executive: Sarah Pickup CBE Local Government Association company number 11177145 Improvement and Development Agency for Local Government company number 03675577 Ensuring sufficient scrutiny and challenge of the Council’s ambitions places a considerable expectation on the Audit & Resources Committee to provide adequate challenge. This requires significant amount of member capacity in addition to many members playing an active role on their Local Area Committee. To boost capacity and capability the peer team recommend the Council takes on board the recommendations of the recent Redmond review (Local authority financial reporting and external audit: independent review) and appoints at least one independent lay member onto the Committee to add expertise and support. The team believe that the programme of Audit & Risk Committee also needs to reflect the ambition and innovation of the Council’s operation, including a strong corporate focus such as a review of the Corporate Risk Register. This places considerable expectation on members of the committee who require sufficient support and training to provide strategic and operational challenge to ensure that the Council is kept safe at times of increased national scrutiny. 

To deliver its ambitions, the Council has established several companies and Joint Ventures. We consider that governance arrangements for these entities should be reviewed to ensure that they are in line with good practice nationally and that their roles, responsibilities, and inter-relationships is made clear. In particular, the Council’s Statutory Officers should not be Company Directors as it does provide a conflict of interest with their substantial and principal roles as advisor and shareholder representative to the Council. 

The Council’s Annual Governance Statement gives robust detail of how the Council demonstrates compliance with the CIPFA/SOLACE good governance framework. Given the ambition and innovation of the Council and the associated risks this brings, it is appropriate for the Annual Governance Statement to include the key strategic risks. This will strengthen transparency about the risks associated with its ambition and its plans to manage and mitigate these.

Ensure there is capacity to deliver effective counter fraud activity and the National Fraud Initiative. We would encourage the Council to regularly refresh its Counter Fraud Risk Assessment and to update the Counter Fraud Risk Register to take account of updated fraud risks. 

The Council’s Medium Term Financial Plan (MTFP) shows a balanced budget, and the council has made an early approach to finding significant savings for 2024/25 not least through its organisational restructure. A Continuous Improvement Programme is in place to ensure that the projected savings over the course of the MTFP are being met. It is becoming an integral part of the financial and corporate strategy of the Council and gets reviewed by the CLB to ensure that solutions are being implemented in order to meet savings requirements. 

Financial monitoring is strong. The CLB receive timely and quality information in performance and finance packs. There is a comprehensive spreadsheet with metrics and dashboards that provide target and progress summary as well as potential savings projects. Information is provided corporately and broken down by service directorates. Key points are presented by the performance team at regular meetings to facilitate discussion and challenge. The Council’s systematic approach and regular challenge gives confidence that savings targets, albeit challenging, will be met. 

The Council has a skilled treasury management function and finance staff are committed and resilient. The strong capability of the finance team was raised by staff, members, and external stakeholders we spoke with. It has significant expertise in treasury management and local government accounting. Members and officers value the quality of financial advice and financial information they receive, particularly given the complexity of some of the Council operations. The team is regarded as hard working and has built excellent relationships across the Council. 

The Council’s commercial asset portfolio is delivering a net £4m return annually. There is a clear purpose and strategy for its different investments. The 2023/24 investment strategy states that the Council invests in commercial and domestic property primarily for regeneration, economic and housing development. This is achieved through direct investments in the Borough or the impacts derived from income generated through investments in the wider region which is then spent on local regeneration and housing. 

The Council had £525million borrowing (as at 31 March 2022), the fourth highest borrowing relative to size of all UK authorities, and therefore a risk that needs to be monitored closely and actively manged. The Council is aware of the risks that its investment portfolio brings and has mitigations to manage them. There are measures to spread loans across different categories of borrowers, assessing markets, undertaking appropriate checks and due diligence, and seeking appropriate external advice. Furthermore, the Council has established an Interest Rate Equalisation Reserve where it holds the difference between short-term borrowing rates and the longer-term rates reflected in the investment business cases. 

Whilst the MTFP shows a balanced budget as the headline, this is conditional on significant savings being delivered as part of the corporate improvement programme. Despite the budget gap, there seem to be further growth and resource requests from managers in good faith. There is a need to acknowledge and communicate the financial situation and provide a narrative why some areas of the council will require further investment whilst others may have less resource. This needs to be linked to the overall story referred to earlier of the council’s continued ambition, in particular its ambitions in housing and the One Horton Heath programme in particular. 

Seek and accept independent expert advice in specialist accounting matters early to safeguard against challenges that may cause delays later on. Our conversations with stakeholders highlight that the 2021/22 accounts were delayed because of a number of specific accounting processes, for example the valuation of One Horton Heath and accounting of Nitrates Trading. These are complex and highly specialist areas of practice and delays could have been avoided if early financial accounting advice would have been obtained. 

The Council needs to consider the resilience of its financial system. We understand that the current version of the council’s finance system (INTEGRA) is at risk of being unsupported by the supplier and lacks key elements of self-service. The system is largely used as a database for transactions with reports being supplementally produced. This makes it vulnerable to human error and potentially unreliable and risky. Further processes and resources are required to produce monthly monitoring. 

Staff have pride in the work of the Council and are committed and engaged. They feel trusted and enjoy working for the Council. ‘Working for EBC has been my best job ever’ or ‘Eastleigh is a CAN-DO council’ are some of the quotes we heard when we spoke with staff. They are proud to work for a dynamic, ambitious, and aspirational organisation and value flexibility of working arrangements, being trusted and treated with respect and as responsible adults. Having good will and engagement from staff is the foundation for delivering your ambitions. The Council’s refreshed People Strategy (2023-2026) focuses on the themes ‘Recruit, Reward, Retain’ in order to create an organisation that is ‘Resilient’ – both corporately and individually. Sponsored by the Chief Executive as the theme lead for ‘the way we work’ it has a comprehensive implementation plan. Agreeing a pay progression scheme and a strategic approach to career progression are a focus for this year and the council will be holding a staff survey in winter 2023 to create a baseline for staff wellbeing and job satisfaction levels. 

There are a range of policies to attract and retain staff to the Council, including flexible and hybrid working arrangements. The council is making good use of apprenticeships and including higher degree apprenticeships in, Internal Audit, accountancy, chartered surveying and digital and technical solutions. This is a good way of growing and developing staff in a highly competitive labour market. The council has put in place a virtual learning platform (EBC Learn) which provides access to learning and training materials as well as supporting learning and wellbeing materials such as resilience, stress management and mental health support. The system is also used to monitor mandatory training. 

There is a perception amongst some staff, councillors and stakeholders that the focus on housing delivery is taking capacity away from other services and important BAU functions. For example, some external partners, whilst supportive of the Council’s ambition are concerned about capacity in the planning or neighbourhood teams where they work with staff lacking capacity. The recent staff survey results highlight some concerns about overpromises and under-delivery, for example in recycling and waste services. The introduction of Directorate Development Plans, completing the ‘golden thread’ between the Council Plan, team plans and individual staff objectives will help to prioritise, set service standards and boundaries. 

Many staff we spoke with feel stretched and there are concerns about delivering the basics well. ‘It never stops’ or ‘I can’t remember the last time I finished something’ were quotes which came up repeatedly. Whilst staff are excited about the variety of work and the Council’s ambition, they are also concerns about capacity, for example in homelessness and customer services. The financial challenges will require choices on how and where to prioritise and it will be important to listen to staff at the front-line and team leaders to understand capacity constraints and gauging ideas and solutions to manage demand. These conversations and considerations need to feed into the mechanics of the Corporate Improvement Programme to avoid the latter of becoming a Savings Programme. 

Sickness levels have increased recently, particularly in some services, against a backdrop of traditionally below national average rates. It will be important to fully examine causes and address these through a range of interventions, including policy reviews and giving appropriate autonomy to managers to apply policies in a way that is consistent but also allows for requisite variety. 

Career progression, the outcome of the pay review, and quicker recruitment processes were issues raised by several staff we spoke with. Many of these are being addressed through the People Strategy. Career progression in particular was raised as a key issue and staff can’t see these career pathways as yet. Progress in delivering the People Strategy needs to be communicated with consistent buy-in and application across the organisation. Whilst there is ownership through the Chief Executive, the Council may want to put in place a Forum of ‘Change Champions’ or similar, drawn from across the Council, who can communicate and champion the organisational changes, including the continuous improvement plan and the fallout from the restructure, and are also invited to speak truth to power. 

As the newly shaped organisation matures, there are opportunities to ensure that decision-making and accountability sit at the lowest level possible and that all staff feel empowered to contribute and take responsibility. This may require further refinement of the Council’s decision-making guidance and encouraging and supporting managers in adopting a coaching style to management. The peer team heard about some good initiatives such as the staff suggestion theme. However, it is important to create the infrastructure to take forward the ideas that are elicited from staff and close the feedback loop so that staff recognise when and how they have initiated changes to organisational practices.

IT is a key building block for transformational change. There are several examples, including Finance and performance management, where the Council is operating with spreadsheets or unsupported systems which will hold it back in the longer term. We saw limited evidence of exploring the use of PowerBI as a reporting tool, or RPI or Chatbox and many of the processes are spreadsheet based and manual. Updating its IT strategy will help the Council to consider when, where and how it can use new technologies to build corporate capacity and be the best it can be. 

The ambition for One Horton Heath, the Council’s flagship 310-acre community development and housing project is outstanding. The vision is bold: delivering sustainable development of up to 2,500 quality new homes alongside physical and community infrastructure, and a host of connected open spaces and informal areas where wildlife can thrive. Drawing on Garden Village principles, and with good design codes, this is about designing a sustainable Community as opposed to a Housing Estate with an ‘Infrastructure First’ approach that allows roads, cycle paths and green spaces to be established before people move into this new community. Responding to the requirements of housing needs, the scheme will deliver a mix of affordable housing (managed by the Council through the HRA), private rentals (retained by the Council in the General Fund and let as rental accommodation on the private market) and market sales (sold by the Council on the open housing market to generate capital receipts). A focus on private rental housing seeks to meet a significant demand locally. Such a scheme cannot be delivered through existing disparate programmes and the team commend the council for its ambition and vision. 

The council’s leadership and close commitment to this long-term scheme is seen positively by stakeholders and prospective tenants. Relationships with the programme team at Homes England are well established, supportive, and trusted. This is supporting an effective and speedy grant application process. By establishing itself as a public value-driven Landlord, the Council is showing long-term commitment to tenants. The success of early marketing indicates that prospective tenants feel good about the Council standing behind the scheme. 

The Council has assembled a skilled and experienced in-house delivery team. It is led by a Project Director who joined the council from the private sector and brings significant commercial experience. The team is well resourced and includes a range of technical skills and expertise as well as extensive private sector experience and expertise.

One of the two new Corporate Directors brings experience and expertise in Housing and Property which are required to represent the ‘client’ side. He will require adequate technical support, including legal, procurement, finance, and project management capacity to manage this client role adequately and ensure the ‘Council Corporate’ is safe.

Within the context of a great vision and ambition, there are several questions and issues the council may wish to explore further: 

• Most importantly – with schemes of this size and ambition inevitably come risks, obligations and impact on overall capacity. This scheme is massive and cannot be delivered through existing disparate programmes. It will occupy significant Council bandwidth for a long time with implications for overall council capacity and quite possibly non-statutory services. It is important that this is fully acknowledged by members. 
• Who holds the vision for the scheme and acts as the ‘Council Client’? So far this has not been clear. The arrival of a new Corporate Director provides capacity and they have to (and be seen to) take and embody this role at pace and this has to be communicated across the organisation and partners 
• As mentioned earlier in the report, more work is needed to communicate the council vision and ambition across the council, particularly at a time of financial pressures. Using the client/contractor paradigm might help to explain the difference in resourcing of teams who all work for the Council. 
• With an in-house and commercially focussed delivery team for One Horton Heath there is a need to ensure scrutiny and appropriate governance. We are suggesting that an Officer Board, chaired by your Corporate Director meet and report to the joint Member/Officer oversight group where policy decisions can be taken/recommended. If this was an independent company, that oversight group would be a board with a number of independent representatives scrutinising and challenging proposals. This is good governance and could be replicated through independent advisor/s being invited to be part of your governance arrangements. 
• The Council will also need to be able and willing to invest in the required specialist skills and capacity in areas such as procurement, legal, programme management and finance to service both client and provider functions. 
• There is a need to develop plans to ensure that the Council can effectively and efficiently deliver a consistent standard and approach for the stewardship of this new scheme, and these arrangements will need to be in place before any sales are undertaken. The Council will need to ensure that its brand is in place for the long-term and is recognised by tenants and residents. 
• It will be important to plan ahead now to ensure that the Council’s housing delivery is focussed on the efficiency of future repairs and maintenance reducing variety (for example of fittings and furnishings) where appropriate. This includes considerations of how to manage the open space well, including early conversations with Town and Parish Councils and other groups or associations who will have stake in the place. 
• The relationship with County Highways needs resolving in response to the challenge of road adoption. 
• The Council’s reliance on phase-by-phase Affordable Housing Grant could create a financial gap later in the scheme, depending upon the future availability of grant funding. The removal of s106 requirement for affordable housing helps viability of the scheme and protects the delivery of other infrastructure. There may, however, be financial uncertainty for the whole of phase 1 if the delivery timescale goes beyond the end of the current affordable homes programme of March 2026. 

The Council’s decision to re-open the HRA is ambitious in the context of its housing delivery plans but exposes it to several issues. Failure to manage the HRA effectively in terms of finance and operation could have reputational and regulatory impact. The peer team have identified a number of issues the council may wish to reflect on:  

• It has been some 30 years since the Council managed its HRA and aside from the loss of corporate management there is a need for additional capacity and specialist knowledge to deliver support services to an HRA. This includes Housing management, facilities management, IT, Finance, rent collection, repairs and maintenance. We heard about the Council’s recruitment plans and understand that it is planning to work with housing partners to service the HRA properties until the council’s property holdings reach an appropriate critical mass to justify in-house provision. 
• The HRA will take stock from a range of housing delivery vehicles. This makes it important for the Council to plan now for the future efficiency of facilities and housing management, particularly in the first phase where you will be working with different housing partners and products. 
• Does the Council have a clear strategy or approach for holding housing stock of different tenures? 
• More generally, is direct delivery getting in the way of your facilitative and policy role of encouraging the private sector to deliver more homes?

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

Both the peer team and LGA are keen to build on the relationships formed through the peer challenge. The CPC process includes a progress review within twelve months of the CPC, which provides space for the council’s senior leadership to update peers on its progress against the recommendations from this report. 

In the meantime, Will Brooks, Principal Adviser for South East, is the main contact between your authority and the Local Government Association. Will is available to discuss any further support the council requires. [email protected], 07949 054421