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LGC FEATURE - A FUTURE CAST IN KEYSTONE

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Corporate governance is the key to local government's survival, say John Whiteoak and Paul Croft. ...
Corporate governance is the key to local government's survival, say John Whiteoak and Paul Croft.
Just when you thought you had read enough policy documents, another one comes along. Corporate governance in local government - a keystone for community governance has been published with the support of Hilary Armstrong and the presidents of CIPFA and the Society of Local Authority Chief Executives.
Its publication follows a review aimed at self-regulation and developing guidance for establishing locally-adopted codes of practice. In effect, it weaves the loose strands of governance into a practical guide for councils.
Each council is being asked to use the framework to review their working arrangements. This will mean adopting and maintaining an up-to-date code and reporting annually on its effectiveness in practice.
It is another 'initiative', but a timely one. The guidance will support the mainstream business of delivering services and developing community relationships.
The Audit Commission is advancing its approach to the inspection of governance as part of reviewing the running of the whole council. Such inspections will occur either as part of best value reviews, referral by auditors or direction from the secretary of state, and will inevitably relate to the framework proposals.
A major reason for writing the guidance was that recognition of corporate governance has been furthered in a piecemeal, reactive way over the past century. In the main, the developments have reflected legislation and regulatory pressures following 'embarrassing events'.
The framework comprises high-level principles designed to capture the spirit of self-regulation and improvement and offers a practical approach to what can so easily be dismissed as bureaucracy.
There is plenty of scope for taking account of local circumstances. As its title suggests, it should be seen as a keystone in the building of new relationships and a validation of local government's community leadership role.
The document is up-to-date in that it follows the messages emerging in the private sector. In this sense it recognises that corporate governance, in a risk-based environment, is about more than control and accountability - it is about service improvement. As the Hampel report on corporate governance suggested:
'The importance of corporate governance lies in its contribution both to business prosperity and to accountability. In the UK, the latter has preoccupied much public debate over the last few years. We would wish to see the balance corrected.'
Governance processes should be seen as an aid to building stakeholder confidence and support in delivering services.
Corporate governance is not new - nor is it an add-on. Good corporate governance is essential to the survival of local government - and it is hoped that the framework will help all councils respond to the challenge as leaders rather than followers.
-John Whiteoak, Whiteoak Associates and Paul Croft, chief executive of Purbeck DC, members of the working party which drew up the document.
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Key elements of council governance:
Corporate governance for a council is the system by which it directs and controls its functions and relates to its communities.
It encompasses five key elements:
-Community focus
-Risk management and internal control
-Service delivery arrangements
-Management structures and processes
-Standards of conduct.
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