LGA corporate and finance peer challenge: Annual report 2022/23

Corporate Peer Challenge (CPC) and Finance Peer Challenge (FPC) continue to be highly effective tools at the heart of the Local Government Association’s (LGA) sector support programme. The sector remains committed to them and this is demonstrated by the levels of take-up of the offer. During 2022/2023 almost one third of the sector have received a CPC, FPC or CPC progress review with 100 per cent of chief executives and leaders who responded to a survey saying they would recommend having a CPC to other councils.

Chief executives and leaders have told us: 

I am grateful for the opportunity to be examined as it is the only way we can rise to meet the challenge of a new generation.”

The CPC was an excellent process all round.”

It was an excellent challenge in making us look at ourselves.”

It was an overall great experience to validate, give constructive feedback and some good recommendations to work on to improve what we do.”

This report clearly demonstrates how the CPC and the FPC process, involving a follow up peer team led progress review, has helped provide reassurance to local leaders, inform organisational change and support service transformation.

In 2022/23 55 councils received a CPC or FPC and 48 received a peer team led CPC progress review. Out of the 55 councils who received a CPC, eight councils received a CPC for the first time. We also found that many councils who had a peer challenge four to five years ago have commissioned and received a second or third one. This clearly demonstrates the value local councils put on the CPC and FPC process.

Demand for 2023/2024 is at an increased level and our aim is to engage with at least 115 councils to undertake a CPC, peer team led CPC progress review or FPC during 2023/2024.

Feedback from the sector continues to be highly positive. The annual peer challenge impact survey, shared with leaders and chief executives following a CPC or FPC, shows that 100 per cent of respondents indicated that that the process of preparing for and participating in the peer challenge has had a positive impact on their council. The survey also shows how 98 per cent of respondents were satisfied with the CPC or FPC that their council received.

The sustained supply of officer and member peers to support CPCs and FPCs (including progress reviews), has involved the deployment of more than 1,285 peer days of challenge and support to councils. The LGA’s strong relationships within local government mean that senior officers volunteer support at no charge, while members receive a relatively nominal fee. Considering the fees charged by private sector consultants (an average of £1,000 per day for the level of peer challenge team members), the LGA’s peer challenge offer saves the sector up to £1.3 million annually. This continues to demonstrate a significant investment by the sector in its own improvement. It also shows how councils have benefited from peer learning as peers who are involved in the peer challenge process are able to gain new insights on how other councils operate and bring back this learning to their own councils.

In addition to peer learning, CPCs, FPCs and progress reviews provide crucial insights into how councils are continuing to respond to the challenges facing the sector. We have undertaken an analysis of CPC and FPC reports, including progress reviews, between 2022/2023. This report provides a summary of the most frequent observations and themes. It provides a true picture of how councils have shown great resilience in continuing to deliver their priorities within a challenging economic climate, rising demand and changing policy environment.

Our sector support programme is guided by a 'sector-led improvement' (SLI) approach, which recognises that the responsibility of local government improvement should remain with councils. Our sector-led improvement approach is underpinned by the key principles that:

• councils are responsible for their own performance
• stronger local accountability leads to further improvement
• councils have a sense of collective responsibility for the performance of the local government sector

The CPC and FPC approach involve a team of expert senior and experienced local government officers and councillors (and sometimes other key partners) spending time at a council as ‘peers’ to provide challenge, assurance and learning. The process involves engaging with a wide range of people connected with the council and the findings are delivered immediately. A detailed report outlines the peer team recommendations and councils are required to publish both this and an action plan showing how they will implement the recommendations.

The process also involves a peer team led CPC progress review which assesses the council’s progress in the implementation of the peer challenge recommendations and seeks to understand the impact and outcomes on the council and the communities it serves. Again, councils are required to publish their progress review feedback report.

We have continued to strengthen the CPC process taking on board the findings from regular reviews including the 'Independent Evaluation of Sector-Led Improvement' in 2020, learning from the delivery of remote peer support during the COVID-19 pandemic and feedback from the sector.

During 2022/2023 we have intensified the evidence-based approaches to inform the development of robust corporate peer challenge recommendations. This includes the provision of improved finance data and analysis of comparative performance data for peer teams. As outlined above, during 2022/2023 progress reviews have also become an integral part of the CPC process which allow us to track progress made in the implementation of CPC recommendations.

In 2022/2023 the LGA has delivered 143 peer challenges or remote peer support including CPCs, FPCs and other peer challenges covering areas such as housing, equality and communications. The CPC/FPC programme accounts for more than half of this peer challenge activity, with over 100 CPCs/FPCs and progress reviews delivered in in 2022/2023. This includes 55 CPCs and FPCs and 48 progress reviews.

The Corporate Peer Challenge (CPC) and Finance Peer Challenge (FPC) offer is based on the premise that all councils receive a CPC or FPC between July 2021 and July 2027. The key design principles and features of the CPC offer are:

• It is not an inspection; it is a tool for improvement with a strong focus on evidence-based approaches to deliver robust recommendations and assurance.
• A scoping meeting involving LGA representatives is an essential feature. The council’s needs and make-up of the peer team are agreed. All CPCs have a focus on five core areas: priorities and outcomes, financial resilience, organisational and place leadership, governance and culture and corporate capacity.
• Involves consistent in-person and onsite delivery over a three or four-day period.
• Openness and transparency - councils are required to publish their CPC report, CPC action plan and CPC progress review report.
• Progress reviews are an integral part of the new CPC process. They are designed to update peers on progress made in relation to the implementation of the CPCs recommendations.

As outlined above, all CPCs focus on five core components which reflect the critical issues that affect the performance of a council and its ability to improve. These core components (which were reviewed and strengthened in 2022) are:

• Local priorities and outcomes: Are the council’s priorities clear and informed by the local context? Is the council delivering effectively on its priorities and achieving improved outcomes for all its communities?
• 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 respect, challenge and scrutiny?
• Financial planning and management: Does the council have a clear understanding of its current financial position? Does the council have a strategy and a clear 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?

Progress reviews

During 2022/2023, as part of the drive to deliver a more robust and evidence-based CPC process, progress reviews are a core component of all CPCs. Every council that has a CPC will undertake a progress review around six months after the publication of their CPC action plan. Progress reviews provide space for a council’s senior leadership to report to peers on the progress they have made against their CPC recommendations, discuss early impact or learning and receive feedback on the implementation of the CPC action plan.  As a minimum a progress review involves both the lead chief executive peer and lead member peer from the original peer team and can also involve other members of the original peer team as appropriate.

As part of the preparation for the progress review, councils are required to provide a self-assessment position statement, detailing the status and RAG rating of each of the CPC’s recommendations. These position statements also include accompanying narrative detailing the progress made.

Following the progress review, a report is produced outlining the findings and councils are required to publish this. The progress review report is structured around each of the recommendations from the Corporate Peer Challenge. They outline the peer team feedback on the progress made in relation to each recommendation.

During 2022/2023 the CPC/FPC programme has involved delivery of:

• Fifty-two Corporate Peer Challenges
• Three Finance Peer Challenges

We delivered this activity across a range of council types as follows:

We also delivered 48 peer team led progress reviews across a range of council types as follows: 

In addition, we delivered 88 other peer challenges across the following areas: 

• housing and planning
• equalities, diversity and inclusion
• communications
• governance and leadership
• shared services

During 2022/2023 the LGA deployed 262 officer and member peers who have delivered 1,285 days of challenge and support to councils through the CPC/FPC programme. Peer teams are made up of an average of four to five peers plus the LGA peer challenge manager. Out of the 262 peers used to support delivery of CPCs, 81 were elected members and the remainder were chief executives and other senior officers.

The LGA’s strong relationships within local government mean that senior officers volunteer support at no additional cost, while members charge a relatively nominal fee. Considering the fees charged by consultants (an average of £1,000 per day), the LGA peer support offer saves the sector up to £1.3 million annually.

We have continued to target the recruitment and training of both officer and member peers. During 2022/2023 we delivered 16 peer training events resulting in more than 170 new peers being added to the peer data base. We also targeted specific areas of expertise such as senior officers with expertise in governance and also finance and have recruited over 30 new monitoring officers and S151 officers.

In November 2023, we welcomed over 112 member peers to our annual Member Peer Conference. This provided an opportunity for member peers to focus on the performance of councils and their role when working with councils who are facing challenges or intervention. Peers considered how Corporate Peer Challenge is adapting to address and support councils in this context. The Member Peer Conference also included several workshops to help member peers to grow their skills. The conference was highly regarded with over 93 per cent of respondents saying it had helped improve their overall understanding of the topics considered and 91 per cent were satisfied with the delivery of the workshops.

Peer teams

The LGA is committed to equality, diversity and inclusion and we continue our work to ensure peer teams reflect the diversity of local councils and the communities they serve. The breakdown of peers used on CPCs is routinely analysed in relation to the protected characteristics of gender, ethnicity and disability.

During 2022/2023:

• The overall percentage of male and female peers used (both member peers and officer peers) were evenly split with 52 per cent of peers male compared to 45 per cent who were female.
• CPC teams usually consist of member peers that have leadership positions, for example leader/deputy leader of the council. In 2022/23, the CPC teams used more male member peers (69 per cent) than female member peers (28 per cent). This reflects the current pool of members in these positions nationally; 72 per cent male and 28 per cent female.
• Six per cent of all peers used declared a disability (of those who shared monitoring information). This is a rise of 4 per cent from the previous year.
• Of those who shared monitoring information, 18 per cent said they were from a non-white British background.

As outlined above, the LGA is committed to increasing the diversity of both member and officer peers. This includes our work to increase the diversity of councillors across England and subsequently our member peer pool. Through the work led by the LGA’s Improvement and Innovation Board we will continue to work with the LGA’s lead members, political group offices and our member councils to increase the diversity of the peer pool.

Feedback is sought from councils that have received a CPC or FPC. This is collated through a comprehensive survey sent to chief executives and leaders after their CPC report has been published. The 2022/23 survey shows that:

• Ninety-eight per cent of respondents were satisfied with the CPC that their council had received. Most of these (80 per cent) said they were ‘very satisfied’.
• One hundred per cent of respondents feel more confident about their council delivering its priorities, having participated in the corporate peer challenge. 97 per cent said they were satisfied to a great or moderate extent.
• One hundred per cent rated the quality of the CPC team as ‘good’ or ‘excellent’.
• One hundred per cent believe that the process of preparing for and participating in the CPC has had a positive impact on their council.
• One hundred per cent said they would recommend having a corporate peer challenge to other councils if asked about it. Of these, 95 per cent said they would be ‘very likely’ to recommend the CPC and 5 per cent indicated they would be ‘fairly likely’ to recommend the CPC.

The LGA undertakes quarterly surveys of both officer and member peers who have taken part in a peer challenge. The latest available survey data for 2022/2023 shows:

• Ninety-eight per cent of peers who responded were satisfied with their experience of being part of a peer team.
• One hundred per cent of peers who responded said that taking part in a peer challenge had a positive impact on their own learning and development.
• One hundred per cent of respondents who took part in a CPC said that the liaison from their peer challenge manager had been very effective.

The following section is a summary of the most frequent and common feedback messages from corporate peer challenge teams (including progress reviews) during 2022/2023. It is structured in line with the five core components of all corporate peer challenges.

1. Local priorities and outcomes

1.1 Corporate plan/council plan: CPCs clearly demonstrated that most councils effectively translate their understanding of resident engagement feedback, quantitative and qualitative data into a clear vision and priorities through a council/corporate plan. The importance of bringing focus to fewer priorities and of engaging staff, members and partners to ensure these priorities are fully understood and embedded is a common theme. Many councils have a need to update and revise their Corporate Plans to reflect the current financial and changing policy landscape.

1.2 Partnership/collaborative working: Within a challenging economic context, councils are clearly committed to partnership working to help them draw on shared resources and assets to enable the delivery of their place-based priorities. A common theme is that councils are seen as a highly regarded and respected ‘proactive convener’ bringing together partners and resources from a wide range of sectors. This was articulated in one Corporate Peer Challenge recommendation as changing the council mindset from “how can we deliver this” to think more about “how can this be delivered”.

1.3 Performance management: Most councils are able to demonstrate the ‘golden thread’ which links all key strategies together but for some this needed to be strengthened. Many peer teams cited the importance of managing the interdependencies and relationships across key strategies and ensuring performance management frameworks clearly align to key corporate priorities and financial plans. This was captured in one Corporate Peer Challenge as “the need for a ‘golden rope’ linking all the council’s strategies and operations together” and that “this is critical if all staff and councillors are to be enabled to buy-in to the future direction and decisions regarding resourcing.”

1.4 COVID-19: Response and recovery has encouraged councils to rethink how they deliver services to and engage with communities including agile working and better use of assets and technology. A common theme is how councils can harness and drive forward new ways of working developed during the COVID-19 pandemic, particularly working alongside the voluntary sector and business community. The issue of asset prioritisation is also flagged as many councils decide the future of their asset portfolio.

1.5 Prioritisation: Councils are able to demonstrate progress against a number of stated priorities. These commonly include economic growth (including tourism, employment and education), people and place shaping, housing, health and wellbeing (including children and older people), health and social care integration, climate change, digitalisation, transformation and equalities. Maintaining focus on the outcomes expected through effective performance management is a key theme with some councils encouraged to strengthen approaches in order to demonstrate measurable difference and impact for local communities.

1.6 Understanding local communities: A common theme is the importance of evidence-led approaches to ensure an understanding of communities and provide insight for prioritisation. Councils are the best placed public sector organisations to engage with communities and reports made recommendations relating to co-production and locality working arrangements to inform prioritisation that has the greatest impact on citizen experience and outcomes.

2. Organisational and place leadership

2.1 Leadership of place: CPCs consistently recognise the role councils play in providing strong and effective leadership of place. Strong partnerships have been developed and there are good examples of place-based strategies which are jointly owned and delivered. A number of feedback reports recommended that councils should seek earlier involvement and engagement from partners to strengthen a clearer place-based narrative, vision and brand.

2.2 Partnership landscape: Many of the feedback reports highlight how partnership landscapes can be complex and evolving including Integrated Care Systems, combined authorities, regional partnerships, sub-regional partnerships, Towns Deal Boards, and other placed based regeneration partnerships. Many CPC reports recommended that councils should review their partnership landscape and structures to ensure arrangements are best serving the place, are widely owned, properly resourced and align to council priorities.

2.3 Devolution and local government reorganisation: Reports highlight how councils are seeking to capitalise on the potential to secure devolution deals and influence discussions on LGR (where applicable). A key theme is around councils maximising opportunities, advocating for a deal that works for their communities and ensuring opportunities are not missed.

2.4 Cost of living and increased demand: There were many examples of where councils are working with partners to deliver services and support to protect people against rising costs of fuel, food and other essentials. Peer teams found that they are continuing to take a collaborative approach, working closely with the voluntary sector, to target help at those facing the most complex challenges. Councils are also seeing increased demand across priority services and managing this demand is proving challenging and costly.

3. Governance and culture

3.1 Member and officer relationships: A common theme is how senior leaders, particularly council leaders and chief executives, work together and with others both inside and outside the council to influence and build trusted relationships in support of council priorities. Feedback reports also reference the importance of managerial and political leaders modelling appropriate relationships to support a positive workplace culture. They also reference the importance of investing time to develop healthy member to member and member to officer working relationships and behaviours.

3.2 Roles and responsibilities: CPCs have identified the need to strengthen and improve the understanding and application of the key roles and responsibilities of statutory officers. It was felt that some councils need to ensure that there is a better, shared understanding, amongst senior members and officers, of these roles. Some CPCs also found a blurring of roles and responsibilities of officers and members and a need to undertake engagement and development work to address this.

3.3 Overview and scrutiny: Linked to the above, the role of overview and scrutiny in adding value to local decision making is a common development theme. A common area for improvement is around strengthening overview and scrutiny’s focus on key strategic issues and priorities and also the potential to strengthen pre-decision scrutiny.

3.4 Member development, engagement and briefings: Reports highlight the importance of good communication and engagement with all members, including opposition members, so that they feel well briefed. This includes building effective systems for dealing with member queries and case management. Strengthening member development programmes was also a common theme.

3.5 Governance and assurance: Ensuring there is sufficient organisational rigour to key governance processes including financial management systems and reporting, procurement, role of statutory officers, role of internal and external audit and reporting of corporate risk are common improvement themes. A number of reports make recommendations relating to council constitutions and the need for governance reviews to improve decision making. This includes engaging both officers and members in work to improve governance and assurance processes, further develop/embed member code of conducts to protect the democratic role of members and to build positive culture change.

4. Financial planning and management

4.1 Financial sustainability: Reports continue to highlight the significant financial challenges associated with increasing costs and demand in services particularly social care (adults and children’s). They also highlight financial challenges in services such as leisure which have been severely impacted by the pandemic, sharpening of complexity (leading to increased placement and agency costs), rising costs, pay awards, inflation and cost of living pressures for local communities. Reports indicate that, in most cases, these challenges are well understood and planned for but in some cases, there is an urgent need to strengthen approaches to achieve savings and meet the challenges ahead. Approaches to addressing the challenges include transformation programmes, partnership working, income generation and service reviews. But there are variances in how equipped councils are to respond to these challenges (see also: 5. Capacity for improvement).

4.2 Financial management and oversight: Recommendations around strengthening collective ownership, understanding and responsibility of financial management and oversight is a common theme. This includes ensuring wider senior officers and members are engaged in both the budget setting process and financial monitoring and ensuring the approach to budget setting is collaborative and inclusive.

4.3 Commercialisation and investment: Some CPCs highlight how councils have established companies and made commercial purchases and/or commercial investments to generate income. Ensuring these are effectively managed and have the appropriate governance and oversight to ensure they are realising the benefits they were established to deliver and that the relevant risks are managed is a recurring theme. Recommendations have also been made around the need to review capital programmes through commercial risk assessments in the light of the external economic environment.

5. Capacity for improvement

5.1 Workforce: CPC reports highlight challenges around recruitment and retention – particularly in relation to children services, adult social care and planning. Whilst these issues are complex and subject to wider market and labour forces, some reports highlight opportunities for councils to explore shared services and/or to work with partners as a route to look strategically at the issues. Councils are also responding through the development of people strategies which focus on staff engagement, learning and development, upskilling, mandated appraisals and celebration of achievements. Councils were also encouraged to explore further avenues such as apprenticeships, graduate schemes and internships.

5.2 Agile working: Following the pandemic councils recognise that agile and flexible working is needed to deliver services in a climate of ongoing financial challenges. The importance of building clarity about what agile and hybrid working will mean for councils moving forward is a common theme. This includes ensuring councils develop clear definitions of hybrid and agile working and engage customers, staff, councillors and partners on this and what this means for services.

5.3 Digitalisation: Exploring new, innovative approaches to service delivery to help build capacity and resilience is a common theme. Peers made recommendations around fully harnessing the potential of digital and data insight to drive service improvement.

5.4 Transformation: A number of reports made recommendations relating to council transformation plans and the need for these to be robust with key milestones for delivery. Building capacity to lead, co-ordinate and drive transformation through a strong corporate core of services (human resources, ICT, communications, procurement etc) is also a common theme. Ensuring wider staff, member and stakeholder engagement in the delivery of transformation plans to ensure they are jointly owned and understood and seen as the responsibility of all members and officers is also a common theme.

Building on the achievements and learning outlined throughout this report, we will continue to work alongside councils to strengthen the CPC process as a tool for improvement and assurance that has a strong focus on evidence-based approaches to deliver robust recommendations. The main shifts in our delivery of CPCs in 2023/2024 will be an improved focus on:

• assurance, governance and scrutiny – with a refreshed set of core elements, new prompts and questions
• governance arrangements and structures as well as culture, relationships and values
• performance and outcomes – with a focus on how the council is performing and what it is achieving for its communities
• peer team selection and diversity
• peer training and development following the review of peer support
• quality assurance and consistency in CPC reports
• strengthening our approach to the delivery of Progress Reviews

Contacts

Gary Hughes (Principal Adviser, National Peer Challenge Programme), [email protected]

Cindy Lowthian (Senior Regional Adviser, National Peer Challenge Programme), [email protected]