Feedback report: 29 November – 2 December 2022
1. Executive summary
Great Yarmouth is a borough of contrasts with an exciting and ambitious future. Built on a thousand-year-old sand spit and once a thriving fishing port, it is now the most popular Norfolk seaside resort, with 15 miles of beaches drawing in £436m to the local economy last year, providing 26.9 per cent of local employment. It is also England’s offshore energy capital, with £39bn being invested over the next 20 years. Uniquely placed to capture for the UK the significant growth opportunities in offshore wind, it is the closest deep-water port to the Southern North Sea market and has an extensive locally based marine energy supply chain. The arts and culture offer has been brought to prominence by a number of Banksy murals, drawing in visitors to cultural activities and events such as Fire on the Water.
With a growing population just under 100,000, the borough has significant challenges with pockets of high deprivation, low educational and health outcomes with 20 percent of children in low-income families. Over 33 percent of adults have no formal qualifications and the age profile is skewed towards people over 65. Despite these challenges, Great Yarmouth Borough Council (GYBC) is highly ambitious and absolutely steadfast in its aspirations for the place. Driving regeneration, supporting rising levels of economic prosperity, skills, jobs and healthy lifestyles for its residents as demonstrated by its removal from the top 20 most deprived districts in 2019.
There is strong and visible leadership from the political leaders, chief executive and strategic directors, evidenced through every conversation and meeting peers took part in. Exceptional system leadership and influence was also demonstrated by a strong Place Board and Town Deal Board relationships as well as partnerships with Norfolk councils, the LEP, businesses, industry, health and education. Together they are poised to deliver transformation for Great Yarmouth as a place and improve the prospects for its communities.
The council has a track record of delivering major projects, including, the Venetian Waterways Marina Centre and Equinox Eastwood housing. Future projects include, the Winter Gardens, the Library and University Hub, North Quay, the Riverside Gateway, the Conge and an energy sector Operations and Maintenance Campus. These genuinely exciting projects have the potential to transform the borough, raise economic prosperity, upskill a future workforce, improve health and wellbeing and create a year-round tourism economy. In order to achieve these outcomes, peers urged the council to maintain a focus on exploiting the major projects and partnerships to ensure they benefit those most in need, over the medium to longer term. Furthermore, they recommend GYBC evaluate and communicate to stakeholders how the major projects deliver improved outcomes for those most in need.
Partners, businesses and stakeholders are heavily involved in the vision and prospects this growth is generating. The physical regeneration is being seen but peers felt there was a lack of understanding amongst the community and residents of the borough about the opportunities for local people, what exactly the transformation is, and how it will generate improvements over the longer term. Peers recommend the council communicates the narrative on the transformation of Great Yarmouth to its communities, the general public and other stakeholders. Clarifying what Great Yarmouth wants to be known for, the reputation it wants and its unique selling points. GYBC should ensure this narrative clearly demonstrates and prepares the public for how they can benefit.
The major projects and capital programme are clearly exciting and rewarding to be involved with and rightfully their management and delivery are a clear priority for the organisation. Looking across the organisation, performance in some business-as-usual operations was below average compared to “near neighbours” in the LGInform database. Whilst performance reflects locally set targets and priorities, peers recommend that the council assure itself that core services and corporate performance consistently receive a comparable focus to the major projects and have equal comparable quality of oversight and accountability.
Procurement services are provided by another district council. Given the scale and quantity of projects GYBC is embarking on, a highly skilled, experienced and dedicated resource is required to support the councils’ ambitions along with appropriate training and development of managers to understand, support and oversee the process. The current arrangement is not working, is leading to delays and needs to be reviewed. Peers recommend GYBC secure strategic resource for procurement (in house or a strategic partner) to drive and embed procurement processes, culture & compliance.
Whilst recognising the strong leadership displayed by the chief executive and strategic directors, it was widely acknowledged that senior officer leadership was being stretched too thinly across the major projects, partnerships, external relationships and services. Working practices have changed since Covid and although virtual meetings have a role to play, they do not encourage and inspire creativity. Peers recommend the council invests in the executive leadership team (ELT)/management team (MT) alliance, empowering heads of service (HoS) to play a wider corporate role in order to strengthen corporate resilience.
Workforce capacity were words peers heard frequently throughout their time in Great Yarmouth. It was mentioned in internal and external conversations and was used to explain a number of underlying issues. For example, as a coastal resort GYBC has a much more limited area to recruit from. The skills required are more often found outside the borough or so specialised that they require the appointment of contractors or consultants. Having a pipeline of speculative projects waiting for funding opportunities means resources are often allocated to a project at short notice. Ensuring the council has the right skills in the right areas is a challenge.
Peers recommend the council establishes a strategic approach to talent management and recruitment, focussed on skills gaps. The development of the library and university hub in partnership with East Coast College, the University of Suffolk and University of East Anglia is perfectly positioned to provide a pipeline of skilled students into the council if the right courses are offered. With some dedicated resource, there are opportunities to develop rising stars in the council, by offering training and development through the apprenticeship levy, T levels and other programmes focussed on the technical skills the organisation needs, such as planning, environmental health and project management.
GYBC has faced considerable financial challenges since 2010 with a 50 percent real term reduction in spending power. Through a mixture of service reductions, use of reserves and income initiatives, a balanced revenue budget has been achieved at year end. There is forecast to be a financial gap in the current year of £1m and action is underway to reduce this through a combination of holds on vacancies, efficiencies and use of reserves. The gap is predicted to rise to £2.4m in 2023/24. With the long-term uncertainty around the future of the council’s substantial Revenue Support Grant (RSG), increasing inflation and interest rates, cost of living, revenue costs associated with the newly created assets and the ability to raise income/capital receipts, Peers recommend the council review the MTFS/Business Strategy following the elections in May 2023, to enable the delivery of future balanced budgets without the use of reserves. This should include a detailed understanding of the revenue implications and legacies of major projects and solid contingency options, also analysing the future revenue implication of major projects before securing the funding.
There are positive and constructive relationships between all members across the different political parties. Members and officers’ benefit from positive professional working relationships. Strong political and officer leadership ensures there is cross party engagement and endorsement of the major projects, enabling the council to take mature long-term approaches to investment, regeneration and economic development. It was noted that this has improved significantly over recent years. Peers recommend the council continues to invest in cross party working and relationships to ensure the positive political culture is sustained as it moves to the cabinet model. There was strong political support from the majority group for the cabinet model and the continuation of working groups. Many members also felt it had the opportunity to speed up decision making. However, peers cautioned against underestimating the impact of the change to the wider system, for example, the introduction of overview and scrutiny which can be a big commitment. The political culture at GYBC is precious and an example to others - protect it.
Great Yarmouth Borough Council is clearly ambitious for its place and its people. Major infrastructure projects have the potential to transform the seaport into the epicentre of green energy for the UK whilst maintaining its reputation as a top seaside resort. The officer and political leadership are dedicated in their pursuit of external funding to support the regeneration with partners and stakeholders also on board. It is a very exciting time to be living and working in Great Yarmouth.
2. Key recommendations
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:
Evaluate and communicate to stakeholders how major projects deliver outcomes for those most in need.
Communicate the narrative on the transformation of Great Yarmouth including the major projects and the impacts they have on the borough to the general public as well as other stakeholders – Tourism; Culture, Energy...
Ensure core services receive the same focus as the major projects.
Investment in the ELT/MT dynamic, empowering HOS to play a wider corporate role in order to strengthen corporate resilience.
Establish a strategic approach to talent management and recruitment, focussed on your skills gaps.
Secure strategic resource for procurement (in house or strategic partner) to drive and embed procurement processes, culture & compliance.
Review the business strategy post May 2023 to enable future balanced budget without the use of reserves - pay attention to risk of "revenue tails" of major projects.
Continue to invest in cross party working & relationships to ensure political culture is sustained as you move to the cabinet model – don’t underestimate the impact of the wider system.
3. Summary of the peer challenge approach
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:
- Lead Peer, Martin Hamilton - Chief Executive, Newcastle-under-Lyme Borough Council
- Member Peer, Cllr Nick Worth, South Holland District Council (Con)
- Member Peer, Cllr David Ellesmere - Ipswich (Labour)
- Officer Peer, Donna Reddish, Service Director Corporate, Chesterfield Borough Council
- Officer Peer, Sandra Beck, Director of Finance – Broxbourne Borough Council
- Officer Peer, Alison Chessell, Chief Procurement & Risk Officer - Chelmsford City Council
- Peer Challenge Manager, Kirsty Human – LGA Senior Regional Adviser
- Project Support Officer, Nikita Mehta – LGA.
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, you asked the peer team to provide feedback on:
- pace of working and capacity
- recruitment and retention
- strategic partnerships and procurement
- moving from a committee to cabinet system.
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 four days onsite at Great Yarmouth Borough Council, during which they:
- gathered information and views from more than 40 meetings, in addition to further research and reading.
- spoke to more than 190 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.
4.1 Local priorities and outcomes
Great Yarmouth Borough Council (GYBC) clearly understands its communities and has a strong grasp of the local needs and demands. The impact of national and international issues are also understood and inform the councils priorities. This was evident through the documents peers read and the conversations with staff, partners and stakeholders. Typical of a coastal resort, there is an ageing population but in addition there is a high rate of long-term economic inactivity, with 75.9 per cent of working age people in employment (80.9 per cent East of England average). There are more, lower skilled, lower paid jobs than the national average and professional roles are often taken by people living outside the borough. Until recently Nelson and Northgate wards – within Great Yarmouth town, were among the most deprived neighbourhoods in the country. However, in 2019 they moved into 25th position showing a relative improvement.
The council is focused on transforming this context with its bold plans for regeneration, employment and health. “The Plan 2020 – 2025” sets out the vision, priorities and outcomes GYBC has for the borough and how they will be achieved through working collaboratively with partners, stakeholders, investors and communities. With multi agency buy in and successful bids for external funding, there are numerous capital projects completed, nearing completion and planned which demonstrate an ambitious response to local issues. These include:
- completion of the £26m Marina centre, to provide health and lifestyle opportunities to local people and attract tourists
- investment of £120m into a third river crossing (due to complete in 2023), supporting better access to the port, town and improving transport links
- National Heritage Lottery funding of £16m to restore the grade II listed Winter Gardens - providing a year-round tourism attraction
- redevelopment of the Palmers building into a library and university centre “The Place” using £15.4m Town deal and Future High Streets funding to promote education and economic regeneration.
These genuinely exciting projects have the potential to transform the borough, raise economic prosperity, upskill a future workforce, improve health and wellbeing and create a year-round tourism economy. In order to achieve these outcomes, peers urged the council to maintain a focus on exploiting the major projects and partnerships to ensure they benefit those most in need, over the medium to longer term. For example, whilst it is still too soon to measure impact of the major projects GYBC has delivered, conversations with customers, stakeholders and partners revealed that 70 per cent of customers at the Marina centre for example are paying the full rate and not concessionary rates and schools have indicated that the prices are too high for them to consider hiring for lessons. Whilst the Marina Centre opened at the height of the busy summer tourism season, which may impact on this statistic, the council should keep this under review.
Consideration needs to be given to the various schemes on offer such as offering free swimming vouchers which may encourage people to visit once, alongside more sustainable offers such as a number of free lessons to ensure that people see the long-term health and wellbeing opportunities this centre provides in the local area. A review of the pricing structure is necessary to ensure it is affordable for the communities of Great Yarmouth. Therefore, peers also recommend GYBC evaluate and communicate to stakeholders how the major projects deliver outcomes for those most in need.
The approach being taken by the Home Office to temporarily house asylum seekers in hotel accommodation is a complex national issue which Great Yarmouth is managing well. The council is balancing the need to protect and enforce against planning policy with its statutory duty to house and care for the homeless/displaced. Resources are being stretched across the organisation to maintain the ethical barrier between enforcement and humanitarian support and peers applaud the council in their efforts with this. Peers heard of the time and effort from officers working on the legal case and of the care and compassion shown by Great Yarmouth’s community marshals working with asylum seekers on the ground.
GYBC seized upon an opportunity following the covid pandemic to create a legacy of community engagement. Maintaining a network of over 100 diverse voluntary community champions who complement the 12 community marshals to provide a useful link between the council and its communities, sharing information top down and bottom up to help the council drive improvement. There is an opportunity to develop this network further as part of the two-year project with East Suffolk Council to better understand volunteering in the area. There was a suggestion the champions would be happy to do more work on behalf of the council if their contribution was more widely recognised, for example a thank you day with the mayor.
Organisational performance is reported quarterly through the Policy and Resources Committee. There is no doubt that GYBC are delivering on major projects and priorities and the performance of these are measured through clear and structured highlight reports. Core service performance is RAG rated against locally set annual targets with an indication of direction of travel.
When comparing core service performance against CIPFA near neighbours the Lginform report identifies some areas of relatively low performance in terms of key performance indicators. For example, the time taken to process new housing benefit claims in quarter one 22/23 was 16 days which, whilst in line with the local target, is the longest time taken within the comparison group, where the average is nine days. Peers felt this was at odds with the wider council narrative about addressing the needs of demographics and community needs within Great Yarmouth’s most vulnerable, and the council could consider a more challenging target to provide all claimants, rather than just the most vulnerable, with quicker decisions.
Sickness absence is another area which the council is actively trying to address. Figures reported in 2021/22 put it at 13.2 days compared to a national average of 7.6 days per employee. Early indications for 22/23 show that at 6.17 days in quarter two, the trend is not decreasing and further work is required to ensure the council’s intention to tackle this is realised.
The council has demonstrated, through its action in relation to the Norse contract for example, that once performance issues are identified then it acts decisively. Peers recommend the council assure itself that core services and corporate performance receive a comparable focus to the major projects and have the same quality of oversight and accountability.
4.2. Organisational and place leadership
Throughout all the conversations peers held with staff, members, partners and stakeholders; the strong and visible leadership of the political leadership, chief executive and strategic directors was evidenced. The executive leadership team (ELT) were praised for leading partnership spaces on behalf of all the Norfolk districts. Members were seen to “lead from the front” chairing key partnership groups such as the Health and Wellbeing Board. They were also applauded for using their lived experience of the borough “not just talk.”
Peers witnessed exceptional system leadership and influence with strong Place Board and Town Deal Board relationships as well as partnerships with Norfolk councils, the LEP, businesses, industry, health and education. The two Enterprise Zones (Beacon Park and South Denes) have unlocked more than £46.6m in investment, over 500 jobs and more than 24 businesses. The Place Board has a clear delivery plan with focussed workstreams to target specific health outcomes.
They have taken inspiration from the Croydon model of integrated care to shape a “one team” approach in Great Yarmouth where all partners work collaboratively to drive forward holistic approaches to reducing health inequality and increasing life expectancy. The Town Deal Board has developed an impressive vision for Great Yarmouth through extensive consultation and engagement. The strengths and challenges of the borough have been bought together under four themes: growth, regeneration and business development, skills and aspirations, arts, culture and tourism and connectivity and sustainability. Together with partners GYBC has been very successful in drawing in over £300m funding to the borough to support large capital projects (operations and maintenance campus, library and university hub, north quay and the winter gardens) and smaller projects to improve the lives of residents (£1m Youth Endowment Fund, £0.8m recreation overhaul in largest council housing estate).
Great Yarmouth is being transformed and the council is driving the regeneration of its place, economy, infrastructure and profile. Best known as Norfolk’s top seaside resort – worth £625m annually, there is also a sustainable energy revolution taking place. A lesser-known fact is that Great Yarmouth is also England’s offshore energy capital, with £39bn being invested over the next 20 years. Having been the principal operations base for the regions oil and gas sector for more than half a century it is now leading offshore wind production and is home to the UK’s first commercial wind farm at Scroby Sands. Following the purchase and investment of the outer harbour by Peel Ports in 2015, it is now the base for the £1.5bn Galloper (Innogy SE) and £2.5bn East Anglia ONE (ScottishPower Renewables) offshore wind farms with further opportunities on the horizon.
Partners, businesses and stakeholders are heavily involved in the vision and prospects this growth is generating. The physical regeneration is being seen but peers felt there was a lack of understanding amongst the community and residents of the borough about the opportunities for them, what the transformation is, and what it will, generate over the longer term. GYBC needs to think about how it can translate the glossy marketing material and promotional videos into something tangible residents can connect with to see the future skills and jobs they could aspire to or the supply chains they can target. There is real opportunity with the new library and university centre to provide the technical courses local businesses need, to hire people with the required skill sets for this new economy.
Whilst a labour market analysis was conducted as part of the library and learning hub project to better understand the courses required to meet local need, from the meetings, peers observed there appeared to be a disconnect with those skills businesses need and the ones communities requested through consultation on “The Place.”
Peers recommend the council communicates the narrative on the transformation of Great Yarmouth to its communities, the general public and other stakeholders, clarifying what Great Yarmouth wants to be known for, the reputation it wants and its unique selling points. GYBC should ensure this narrative clearly demonstrates and prepares the public for how they can benefit.
GYBC currently has the national stage, as the energy epicentre of the UK, experts in drawing in external funding, partners of choice and pioneers on balancing the needs of asylum seekers with protecting planning law and the valuable tourism industry. Do not undersell your strengths and sweat this with government to ensure GY’s profile remains high, as a location in which to invest.
4.3. Governance and culture
The council is conservative led under a committee system of governance with ten committees reporting into Full Council. Following a referendum, the council has moved to all-out elections, the first of which takes place in May 2023. At the same time the council plans to change to a cabinet system of governance, the details of which are currently being discussed within a cross party working group.
There are positive and constructive relationships between all members. It was clear to peers that regardless of politics, members share in the successes and are all dedicated local advocates who are committed to developing and improving the borough for its residents, “We all want to get to the same place, we just take a different route to get there.” Strong political and officer leadership ensures there is cross party engagement and endorsement of the major projects, enabling the council to take mature long-term approaches to investment, regeneration and economic development.
Members and officers’ benefit from good professional working relationships. It was noted that this has improved significantly over recent years. Members cited the project management of the Marina centre as an example of where officers and members worked together with appropriate member involvement and oversight of the project. Members would like this approach replicated for other projects, such as the Winter Gardens.
As part of the move to a cabinet model of governance the constitution is being reviewed to prevent it from hindering the pace at which the council wants to work and make decisions. Some members had concerns about the number of late reports they were being asked to consider and that sometimes when making decisions, there isn’t always opportunity to explore the consequences “ripple effect” of them. It will be important to get the balance of pace and good governance/scrutiny right as changes to the constitution are taken forward.
Peers recommend the council continues to invest in cross party working and relationships to ensure the positive political culture is sustained as it moves to the cabinet model. There was strong political support from the majority group for the cabinet model and the continuation of working groups. Many members also felt it had the opportunity to speed up decision making. However, peers cautioned against underestimating the impact of the change to the wider system, for example, the introduction of overview and scrutiny which can be a big commitment. The political culture at GYBC is precious and an example to others - protect it.
Peers met with a range of officers from across the council who were very positive, engaged and clearly excited by the vision, “It feels a lovely place to work,” “really exciting to work in Great Yarmouth.” At the same time, they also felt stretched, “there is never a dull moment, “everything is a bit last minute.” “Every time we finish a reporting cycle it’s time to start again”. As an ambitious council there are clearly expectations around the pace of work which need balancing with staff health and wellbeing. The chief executive and strategic directors were often described as a “powerhouse.” This was meant as a compliment, but it also validated concerns from the peer team that three people were not enough to run an organisation with such large-scale ambitions for delivery.
Working practices have changed everywhere as a result of the covid pandemic, staff said, “there was more camaraderie pre-covid.” Even though GYBC have implemented an agile working policy, hybrid working has changed the dynamic at senior levels of the organisation. There is less creativity, less cross service collaboration and a more transactional relationship, “ELT can be opaque.” Peers felt there was an opportunity for non-ELT directors and heads of service to play a wider leadership role, taking pressure off the senior leadership and supporting a broader distribution of responsibility to reduce the risk of single points of failure. Peers recommend the council invest in the ELT/MT alliance, empowering heads of service to play a wider corporate role in order to strengthen corporate resilience.
Internal communications were viewed positively by staff, who commented that it had improved a lot over the past few years. The council holds an annual staff conference and quarterly staff briefings as well as a fortnightly email from the chief executive and frequent internal communication emails. Given the pace of change and the need to broaden managers roles and strengthen resilience, peers suggest the leadership team may like to consider a more regular, possibly weekly update to all staff and members, from different members of the team. This would provide an opportunity to update on progress with projects, outcomes from meetings, funding decisions and upcoming opportunities without becoming too burdensome on one person.
The Staff Engagement Group (SEG) is well established and involved in valuable work across the council, including mental health awareness training, equality and diversity awareness, a forum for menopause discussions, developing the flexitime policy and updating appraisal processes. They are a positive group of staff from across all service areas, seeking to influence the organisation. Peers suggest this group could be used to explore the issues around why some staff feel stretched and why the lowest scoring question on the recent staff survey was “I feel safe to speak up and question the way things are done at Great Yarmouth Borough Council.”
4.4 Financial planning and management
The Medium-Term Financial Strategy (MTFS) sets out the council’s financial position over the next four years. It is supported by the Business Strategy which focuses on a number of key themes and priorities to support the financial planning process. These align with the priorities and outcomes set out in the councils Corporate Plan to ensure there are resources and plans to deliver.
Officers ensure there is good oversight and governance through regular budget monitoring for both revenue and capital spending providing advance warning of potential areas of overspend. The Budget report gives members detailed advice on reserves and balances – including earmarked reserves with a clear policy and justification for the level of balances. Reserves are projected over the whole period of the forecast up to 2024/25. The treasurer’s s.25 sign-off makes appropriate reference to risks and it is logically consistent with the decisions taken. It is a comprehensive section included within the council tax setting report detailing risks and mitigating factors. However, reports and advice do not always result in remedial action and “it is often difficult to get project managers and budget holders to feed into the monitoring process” - this can lead to inaccurate forecasts being presented to ELT and members. More involvement of the finance team in the preparation of the funding bids or business cases for the major projects will also help to avoid in-year overspends.
GYBC has faced considerable financial challenges since 2010 with a 50 percent real term reduction in spending power. Through a mixture of service reductions, use of reserves and income initiatives it has managed to balance the revenue budget at the year end and in some years been able to set aside earmarked reserves to fund change.
There is forecast to be a financial gap in the current year of £1m. Action is underway to reduce this through a combination of holds on vacancies, efficiencies and use of reserves. The gap rises to £2.4m in 2023/24, council tax and business rates growth will go some way to meeting the challenge, along with additional income in line with the approved fees and charges policy. Further work is on-going with members to develop a draft savings and incomes list which includes further use of reserves, income and savings. There is a recognition that the use of reserves is not sustainable and that continued draw down on these will reduce balances to below the minimum recommended level of £3.5m.
There are a number of risks on the horizon that peers urge the council to consider developing contingencies (plan B) for, including:
- the council continues to receive a significant annual Revenue Support Grant (RSG) - £2.14m in 22/23. Uncertainty around the Fair Funding Review, the government’s phasing out of RSG and weighting given to deprivation factors will see this reduce in future years
- recent rises in inflation and interest rates are likely to prove a challenge. The ambitious capital programme partly funded by Government grant could be difficult to manage in terms of cost and delivery
- financial implications from the rising cost of living, energy prices, salary increase and the increased costs of borrowing due to interest rate increases
- potential revenue costs from major projects, for example, the Marina Centre where if income is not as predicted, the council is liable to fund the shortfall.
- business cases for the major projects should be tested before projects commence to ensure that they are still financially viable
- the opportunity to generate capital receipts from asset disposal is time critical and high stakes
- use of capital reserves on major projects, minimises the amount available for the core capital programme and these are likely to be required moving forward.
In light of these risks, peers recommend the council review the MTFS/Business Strategy following the elections in May 2023, to enable the delivery of future balanced budgets without the use of reserves, detailed understanding of “revenue tails” of major projects and solid contingency options.
The council has two subsidiary companies – Equinox Enterprises and Equinox Property Holdings which it has loaned £2.3m. It has also invested in commercial property – offices (£5.9m), corporate estates (£39.2m), seafront concessions (£4.6m) and markets (£4.6m) – a total of £50.21m estimated at 31 March 2022.
The council is very successful in securing match funding and external investment to fund its largest projects. By working in partnership, it has also leveraged funding to secure joint posts, for example the community marshals and public health roles. Although often short term, with contracts running year to year, continuing to look for opportunities to work in this way will help to add capacity, provide efficiencies and avoid long term financial commitments. The Norfolk County deal provides additional opportunities for GYBC to secure funding for housing, regeneration skills and capacity.
Concerns were raised with peers over the capacity within the finance team to service the major projects, support budget holders, produce reports, provide the external auditor with information requested and respond to audit queries in order to meet the deadlines. There have been errors in the accounts, including, the treatment of leases with break clauses, problems with accuracy of creditor and debtor information and the cashflow statement.
The Council’s housing stock and decent homes standards were raised as a concern by a number of members, staff and the external auditor. This issue is likely to be exacerbated with the recent events relating to the death of Awaab Ishak.
There was some concern that limited financial provision has been made to bring homes up to the decent homes standard and that this may impact on future valuations affecting the council HRA’s ability to borrow in the future. Peers were advised that 45 per cent of the repairs budget was spent on five per cent of the properties by the current contractor - in evaluating future options, issues such as this will need to continue to be addressed.
The budgeting for waste and environmental services via Norse post transfer to GYBC has been done on a like for like basis, that is the value the council was paying Norse has been transferred over as a budget for the new company. The peers recommend that a zero-based budgeting exercise is carried out to establish what the likely trading position should be and what resources the company need in order to operate effectively. This will provide the council with some certainty that it will not need to prop the company up financially or if this is necessary it will be clear by how much. It will also ensure that the new business has the resources they need to be able to operate efficiently and effectively for the council.
The capital programme is considerable and requires significant resources to deliver it. Where these resources cannot be provided in-house, they are bought in. The additional costs attributed with this are not always factored into the business case. The capital programme is also being allocated capital reserves as part of its funding. The general capital projects are also competing for these reserves and capital receipts. There is a risk therefore that the major projects will be delivered at the detriment to the general capital programme which is needed to ensure the council has the resources it needs to continue to operate effectively.
4.5. Capacity for improvement
Without fail, everyone peers spoke to talked about stretched capacity. It was raised so often that peers felt it had become part of the council’s narrative and is self-fulfilling. There were however genuine concerns raised by staff and partners around GYBCs ability to deliver given the huge scale of work and being a relatively small authority. The council has a track record of developing speculative projects and then identifying funding opportunities as they become available – this enables the council to maximise external investment and quickly mobilise to deliver projects at short notice. However, this comes at a cost. This approach is proving very successful in terms of inward investment, but it is having an impact on capacity with comments from staff, “we get funding in and then work out what next.” Involving enabling services early in the bidding and project management process would help then to understand the future resource implications on their teams.
The councils’ major projects are project managed externally (Greyfriars and Fusion). This provides additional capacity and access to capital building experts, unlikely to exist internally. The strategic directors and directors then manage the political governance process and partner/stakeholder engagement. Concern was raised about the impact of losing a strategic director and the bearing this may have on delivery of key capital projects. Ensuring the top team does not become spread too thinly and that responsibilities are shared will be crucial moving forward, especially to avoid any bottle necks in decision making. Projects within core services are managed internally, supported by a small programme management office.
The waste and environmental services joint venture with Norse is ending in April 2023. The council has set up a wholly owned company Great Yarmouth Services Limited (GYS) to transfer in these services, resulting in greater control over the shape of the service, costs and profits. Planning for the transfer is well underway and a director is currently working across Norse and GYBC to support integration and continuity of service. Drawing on the experience of peers who have undergone similar exercises, the scale of this project is on par with some of the major capital projects. The organisation will be adding nearly 200 staff to its establishment list which will impact on a number of back-office functions including HR, legal, procurement, finance, IT, assets and customer services. There was concern, these service areas were not prepared for or have the capacity to support the transfer, “we need the infrastructure behind the ambition.” Applying the same focus and resource to this project as with that of the major projects would help to mitigate risks.
Investment in the digital transformation programme will help create capacity by providing cloud based, modern systems capable of more automation and process efficiencies. The Digital Strategy capital budget of £1.8m is supporting the replacement and/or upgrading of systems across finance, housing, HR, environmental services and planning. Working closely with Norfolk County Council who provide IT services to GYBC it will be important to manage the roadmap and implementation of each system to ensure client confidence.
A relatively new HR team is in place, with senior staff taking up positions within the last two years. Over that period, they have had to adapt existing practices and procedures to cope during the covid pandemic at the same time as reshaping the service, “it was stuck in a time warp.” Peers heard of systemic inconsistencies in the management of sickness, recruitment, training, capability, underperformance, appraisals and onboarding – all of which were impacting on the capacity of the organisation to deliver, “we don’t deal with under performance,” “there are no people conversations.” The People Strategy lays the foundations for achieving one of the key outcomes of the council’s corporate plan, “having a skilled and positive workforce, with career and succession planning in place and the ability to retain good people, making us an employer of choice.”
Progress has already been made, with the development of an Equality, Diversity and Inclusion Strategy and action plan, reviewed recruitment, induction and probation processes, HR metric reports for mangers, introduction of a management development programme, agile working and staff surveys. The implementation of the new digital HR platform offers the opportunity to consistently embed practices and procedures, centralising recruitment to keep track of new staff and support onboarding processes and category spend on temporary and contract staff. This will also require managers to be appropriately trained in the procedures, engage with HR and have the difficult people conversations with leadership oversight and discipline to ensure compliance. The central HR function of the council does not currently have oversight of interims and temporary staff in terms of contract management and the general management as this process of appointment does not always involve HR.
With a tighter corporate grip on HR processes and procedures, the council can turn its focus to attracting the brightest and best staff, harnessing the talent within the organisation, exploring succession planning (50 percent of staff are over 50 years of age) and developing the skills it finds so difficult to recruit. Peers recommend GYBC establishes a strategic approach to talent management and recruitment, focussed on its skills gaps. With some dedicated resource, there are opportunities to develop rising stars in the council, by offering training and development through the apprenticeship levy, T levels and other programmes focussed on the technical skills the organisation needs, such as planning, environmental health and project management. Many skilled roles are currently filled by interim staff, contractors or fixed term positions. Working with local colleges and universities the council could consider work placements and targeted approaches to university leavers. The new university hub is perfectly positioned to provide a pipeline of skilled students into the council if the right courses are offered. There are also opportunities to join the National Graduate Development Programme, consider career grade roles and use planning performance agreements to fund posts linked to the major projects.
4.6. Procurement and contracts
GYBC asked peers for their views on different approaches to partnership and procurement opportunities, whilst reviewing the arrangements currently in place. The outsourcing of project/programme management is working well, with the companies involved very competent and working in partnership with the council to deliver on the major projects, providing regular updates on the projects to ensure risks and issues are addressed and members have appropriate governance and oversight. The procurement shared service arrangement with another local authority is however causing delays and needs to be reviewed. Peers heard of many issues, including a lack of resource, knowledge and expertise which given the scale of projects the council is embarking on, presents a significant risk. The skill and capacity within Greyfriars could be explored further to deliver the procurement on the major projects and speed up administration but the council will need to look for alternative options to support council wide procurement requirements.
There are other providers of procurement services and other shared partnerships the council could explore. As an example, Chelmsford provides a service to Uttlesford and Braintree provide services to three neighbouring authorities of varying size. These arrangements provide resilience, delivering strategic advice and policy development as well as day to day support and advice. To support any new arrangement there needs to be investment in organisational knowledge of modern processes, procedures, options and law.
Good practice needs embedding across all services to ensure the council maximises opportunities, engages the appropriate supply chain at the right time and provides value for money. There appeared to be a mixed skill set across the council and a new Procurement Strategy which wasn’t widely understood or known about. In addition, there needs to be a clarification of roles and responsibilities, accountability and ownership of procurement and contract management at a senior level and also operationally throughout the council. At present there doesn’t appear to be an oversight of the pipeline of future works or contract register. Peers recommend GYBC secures strategic resource for procurement (in house or strategic partner) to drive and embed procurement processes, culture & compliance.
There needs to be an approach to procurement which provides an opportunity to engage with SME’s and local suppliers. Early supplier engagement and using social media can really impact the local supply chain and share opportunities in a dynamic way.
Using standard methods of measuring social impact across environmental, social and economic factors such as Social Value Themes, Outcomes and Measures will provide a systematic and transparent method to demonstrate impacts from the councils spending. This will support the local economy in a variety of ways. Peers advocate the development of a key supplier risk matrix to identify risks and vulnerabilities within the supply chain and to help form a suitable contract management framework.
Contract management is currently managed within service areas outside the major capital programmes. The peers heard that the approach was at times ad-hoc and did not necessarily provide sufficient challenge to contracts. There is a need to develop a comprehensive contracts register to maintain a tighter corporate grip on contract management arrangements to ensure any risks, including underperformance, are being picked up and resolved. Peers recommend all senior staff undertake contract management training and a contracts performance framework needs to be developed and monitored with clear management oversight and reporting. Take some time to record and consider the lessons learned from the Norse experience and reputational risks of any future regulation breaches.
5. Next steps
It is recognised that senior political and managerial leadership will want to consider, discuss and reflect on these findings.
Both the peer team and LGA are keen to build on the relationships formed through the peer challenge. The CPC process includes a six-month check-in meeting. This will be a short, facilitated session which creates space for the council’s senior leadership to update peers on its progress against the action plan and discuss next steps.
In the meantime, Rachel Litherland, Principal Adviser for the East of England, is the main contact between your authority and the Local Government Association. Rachel is available to discuss any further support the council requires.
Email: [email protected]
Tel: 07795 076834