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FEATURES - CHANGING FORTUNES

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Councils have been digesting their CPA results for a few weeks now, but what if you have had a bad result? Nick Tri...
Councils have been digesting their CPA results for a few weeks now, but what if you have had a bad result? Nick Triggle presents LGC's indispensable guide to transformational management

Get the politicians on track

The relationship between chief executive and executive member has always been a crucial one and, more often than not when a council is struggling, an acrimonious one.

When Telford & Wrekin Council's Michael Frater was parachuted into Walsall MBC as interim chief executive in July 2002 in the wake of damning Ofsted, social services and corporate governance reports he found senior councillors unco-operative. The situation came to a head in October of that year when he wrote to councillors saying the ODPM would block the recruitment of a new chief executive and management team if they did not delegate more powers to officers.

Councillors were bullying staff and leaking stories to the local papers, says Mr Frater. 'We really cracked down. We knew it worked when a high-profile member was reported for bullying by a member of his own group.'

Consultant Mel Usher, founder of the Improvement & Development Agency, says it is quite common for people at the top to ignore how bad things have really got.

'It is difficult for councillors who don't have experience of seeing how other councils are run. When you are responsible for running a failing organisation, criticism can be taken personally and it is natural to want to defend yourself. But that can hinder improvement.' he says.

The officer/councillor relationship can be one of the most difficult, according to the Society of Local Authority Chief Executives & Senior Managers report, Flying high. The study urges chief executives not to try to control relationships, but instead to give all senior officers and councillors more autonomy so 'information and ideas are constantly being exchanged and challenged'.

Out with the old, in with the new

Dumping bad managers and recruiting a new team is a tried and tested me thod when things have gone wrong. But in local government the tactics adopted are more varied.

Alastair Robertson left Three Rivers DC six months ago to become managing director of Watford BC, which is likely to be graded in one of the bottom two categories in the forthcoming comprehensive performance assessments. Since he started he has only changed about 50% of the top team.

Mr Robertson says: 'I wanted to bring some new people in but some of the staff who have remained have not been here for long and it is not necessary to change the entire team.'

Mr Usher agrees: 'Turnaround does not always involve personnel changes. If a council is in a state of flux people can often feel vulnerable because their futures are uncertain. However, significant changes in staff at the top can have benefits. New people come in with fresh eyes and they do not need to defend the past.'

But when there is a high turnover of top managers Professor David Wilson of Warwick Business School believes the selectionand recruitment process needs to be handled with care.

'If a new chief executive goes in and shakes up a place you will increase the mistrust and uncertainty among those who are left,' he says.

But the crux of the question when it comes to deciding whether to keep existing staff or hire new ones is simple for Mike Emmott, an advisor on employee relations at the Chartered Institute of Personnel Development. 'You have to find someone better to replace what you have. Staff loyalties do change. People are not stupid, they know where the dead wood is.'

If there is a clear out, it is not always possible to get the right team in place straight away and recently there has been an increase in the use of interim managers. In Walsall, Mr Frater, himself an interim chief executive, recruited several senior officers temporarily.

But while the Improvement & Development Agency runs the peer clearing house, which acts as a market place for interim managers, Mr Robertson says recruiting officers from other councils on a temporary basis can be tricky as councils are understandably reluctant to let there best staff leave, even for a short time.

Manage your money

Kingston upon Hull City Council is similar to many councils which find themselves in trouble - it has suffered from poor financial management.

The council needs to find£18.4m of savings this financial year and that is predicted to rise in future years. An Audit Commission corporate governance reinspection report in November branded its corporate financial management 'inadequate' and warned there was a 'substantial risk the council will be unable to finance improved services or address local improvement priorities'.

And when a council does find itself in the financial mire, it is a long road back. Three years ago the district auditor disclaimed Watford BC's accounts - almost unheard of in local government - after the books did not add up by£500,000. The auditors were to come back another three times before the accounts were eventually passed unqualified.

But it is not always a simple case of a council in difficulty having no cash. Mr Usher says sometimes there is money there, it is just that no one knows where it is.

'Councils are large organisations and quite often some part of the process has deteriorated so much that it is very hard to trace where everything is.'

Liverpool City Council chief executive David Henshaw admits this was the case when he took up the reins in October 1999.

'One of my first jobs was to get a fix on how bad the situation was, but no one could even tell me how many people worked in the organisation.

'I brought people in from the private sector, Audit Commission and interim managers who worked with me to uncover what was going on. Eventually we had to get costs down and now employ 19,000 staff compared to the 23,500 when I first started.'

Gareth Davies, the Audit Commission's north regional director, says if councils are to get to grips with their finances it has to come from within.

'Successful counc ils and chief executives make sure they shift money to the priority areas.'

Be ready for anything

If a council is failing, it goes without saying that the odd crisis or five may crop up. Staff may walk out, councillors grandstand or the government threaten to intervene.

How do you cope then? Prof Wilson advocates an open, honest approach. 'The evidence is pretty strong that it is best not to punish, or for that matter reward, failures. A great deal can be learned in the midst of a crisis,' says the professor, who chairs the European Group of Organisation Studies.

'People at the top should make mistakes public but most try to cover them up. Do not crisis manage.'

The next step to take, he says, is to neutralise the opposition party, which will obviously be looking to take advantage of the situation.

'The judo form of leadership is to fight the opposition but that will lead to suffering. If a chief executive says 'I tried this and it did not work, what do you suggest?' not only do you stop the attack, you get to pick their brains.'

Mr Henshaw, who was chief executive at Knowsley MBC before taking the Liverpool job, also recommends keeping councillors informed.

'Members don't like surprises, so let them know what is going on,' he says.

Talk to your staff

The single most important task in transforming poor-performing councils is lifting the morale of the workforce, according to Solace director general David Clark.

'If an organisation has been panned the assumption of many is that everyone working there is useless,' he says.

'Of course, that is not the truth. Usually there is some system failure, but quite often there will be areas of the council that are performing very well. The trick is then establishing a culture where people take pride in the organisation and to do this you need to celebrate the successes as well as learn from the failings.'

Mr Robertson, who is also honorary secretary of the Association of Local Authority Chief Executives, agrees workforce morale is one of the key areas that needs to be addressed, but he also says he has had to work at getting staff to accept the situation.

'I have had seminars with staff just to go through what is wrong and to prove it to them. I have shown them examples of failing services and talked about areas we need to address. Only once the problem is accepted can you really bring the staff with you,' he says.

Unsurprisingly, good communication is the key to achieving both better morale and acceptance, according to IDeA.

'In excellent councils more often than not people understand what the council is trying to achieve, they know their role and they get feedback on their performance. It is not rocket science,' says IDeA's director of knowledge and learning Martin Horton.

Professor Wilson also believes the good old tactic of leading by example is essential. 'As a chief executive, if you want people to work in teams and take responsibility, you better make sure you do it yourself. You cannot tell and sell anymore. It is called modelling desired behaviours.'

Talk to your residents

In a poll by the Liverpool Echo, scousers voted themselves the second most important aspect of the bid to become 2008 European Capital of Culture. The Beatles came top.

The council seems to agree. Mr Henshaw says he has tried to instil a customer-based approach. 'When I started, Liverpool was ranked the third worst council, but it had the highest council tax. What sort of message does that sent out to citizens? The council has since strived to focus on residents as customers, organising itself around them rather than the other way round.'

As a result, Liverpool has developed one of the most envied customer service facilities in local government. The council's call centre, Liverpool Direct, set up with BT, is open 24 hours a day, seven days a week so residents can contact the council whenever it suits them. Six one-stop shops have also been opened and six more are in the pipeline, providing the public with direct access to all service s.

The idea of giving people one point of call for the council is not unique to Liverpool or just urban councils. Rural areas have also begun developing their own one-stop shops and the customer service trend is set to continue with the e-government drive.

Talk to the inspectors

In the new world of CPA the looming presence of the Audit Commission has grown even larger.

But the commission is quick to stress that it does not want to be seen as Big Brother, monitoring and criticising what is going wrong with local government.

Mr Davies says: 'The experience of CPA has been successful in creating a recognition of the problems with councils, whatever they may be. It is the first time people have had that clear and comprehensive detail of what position they are in.'

The immediate role of CPA, says Mr Davies, is to provide an accurate assessment and diagnosis but the commission's role does not stop there.

Each council which has undergone CPA has a relationship manager appointed to it by the commission. Mr Davies says the manager helps to co-ordinate the improvement process by making sure the council is not overburdened by inspection and by arranging support from other bodies such as IDeA and the ODPM.

But the Local Government Association still believes it is hard to move on from a bad CPA grading. A spokeswoman says: 'If a council is assessed as 'poor' or 'weak' it is almost as if they are stuck with that label.

It is important councils, with the help of the LGA,

Audit Commission and everyone else, moves on

from this'

Learn to take advice

The world of local government has changed beyond all recognition in the last 10 years. More inspection has meant more media interest.

But as the number of inspectors and column inches has increased so has the amount of support available.

The obvious point of call is IDeA. Through a series of projects and partnerships the agency offers a plethora of support and guidance. Thereis IDeA Knowledge, a website with best practice guidance an d case studies, IDeA Solutions, which uses peers to help councils improve, the beacon council scheme and performance support, which is available to councils with poor and weak CPA grades and involves officers and members from other councils lending support during difficult periods.

Mr Horton says: 'Part of what we do is building capacity for sustainable improvement so councils can make improvements themselves. The focus is very much on helping councils help themselves. IDeA is not in the business of creating a dependency relationship.'

As well as IDeA, there is the Employers' Organisation, 4Ps, which helps with procurement, and Local Authorities Co-ordinators of Regulatory Services, which offers support and advice with regulatory services such as food, trading standards and licensing.

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