https://cspl.blog.gov.uk/2019/01/30/poor-standards-are-an-early-warning-system-for-corporate-failure/

Poor standards are an early warning system for corporate failure

Today, the independent Committee on Standards in Public Life has published a new report which considers how best to maintain high standards of conduct in local government and makes recommendations to strengthen and clarify the system so that standards issues are addressed more effectively.

As well as regulating ethical conduct, the system must also build and support a strong ethical culture: to embed high standards so that they become part of the DNA of the organisation, an integral part of how the organisation works as a whole, and how each individual person goes about their role within it. So one of the main questions we asked was ‘how can local authorities build and maintain an ethical culture’?

To understand the picture in local government, we sought evidence from experienced senior leaders in local government and went out to visit to a range of different types of local authorities across England. We also looked hard at analyses and reports into high-profile corporate failures – for example, in Tower Hamlets, Doncaster, and Northamptonshire - to see what constitutes a poor culture.

Our analysis of reports of corporate failure revealed three common threads in many cases: an unbalanced power relationship between officers and councillors, a lack of appreciation of due processes and scrutiny, and a culture of fear or bullying. Left unchecked, these standards failings were early indicators of what often turned into larger corporate failure.

It became clear that there were four key building blocks of an effective ethical culture. First, is a constructive and civil tone in political discussion. It is clear to us that this is a basic prerequisite for an ethical culture - both between elected members, and between elected members and the council’s officers.

Second, training and induction. Clear expectations of behaviours need to be set - but also the rationale for those behaviours, namely that these are the standards expected and necessary for the council to perform its functions in the public interest. Early, effective training and induction should set such expectations. Party political groups play an important role in this, and we call on them to them to take this leadership role seriously.

Third, councils require an impartial and objective Monitoring Officer who has the trust and confidence of council members and officers. They must be supported in their role.

Fourth, an ethical culture is an open culture. Members and officers should feel able and willing to discuss and account for the decisions they make on behalf of the public. Decisions will not always be popular - but explaining the way in which they have been reached is important for public trust. Scrutiny should not be seen as a necessary evil, or a rubber-stamp but as an opportunity to improve the quality of decision-making through constructive challenge. Similarly, councils should not be attempting to circumvent open decision-making processes, or relying unnecessarily on commercial confidentiality.

A strong ethical culture can only be created and maintained by effective leadership. The tone and values of any organisation come from the people at the top. This leadership needs to come from the most senior officers, in particular the chief executive and the leader of the council; the standards committee and chair of a local authority; and leaders of political groups.

In our report, the Committee is not recommending a return to the previous centralised standards system for local government. The evidence showed there was no appetite or requirement for this - not least because local authorities having responsibility for their own ethical standards is crucial in embedding an ethical culture.

Our findings echo those of the most recent NAO report on local authority governance saying, ‘local checks and balances need to be effective in a more complex and less well-resourced context for local decision making’.

All our analysis and recommendations are included in our report published today. We hope that these recommendations, together with proposals for best practice will enable local authorities to build and maintain a more effective ethical culture, not for their own sake but for the tangible benefit to the local people councils serve.

Dr Jane Martin CBE is a member of the Committee on Standards in Public Life, and led the Committee’s review of local government ethical standards. The report can be downloaded from our website.

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