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Peter Fleming: Despite headlines, councils do governance well

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Two recent reports by government watchdog the National Audit Office have dwelt on the quality of local governance and audit.

Councils take the need to provide sound and transparent decision-making extremely seriously. As well as being democratically elected in our own right, providing the regular scrutiny of the ballot box, we are subject to a range of internal and external checks and balances.

While the headlines tend to give a different picture, both of the National Audit Office’s reports show that despite significant cuts in funding from government, councils continue to have high standards of governance.

In the report on the outcomes of the 2017-18 local audit, councils compare favourably with NHS bodies. In all, 8% of local government bodies have had some qualification in their value for money arrangements. This has remained about the same over the last year. In contrast, the figures for the NHS is 38%, up from 29% in 2015-16.

The watchdog’s companion report on local council governance also reflects a system that is still working. A sizeable majority of auditors are satisfied that councils have adequate arrangements in place.

For example, 81% of auditors agree or strongly agree that councils have effective internal audit against 8% who disagree. And 83% agree that the councils have robust risk management overall compared with 6% who don’t.

The National Audit Office also surveyed council chief finance officers and discovered that 98% agree or strongly agree that they can give challenging advice to elected members.

The watchdog has recommended that central government should collect more information from councils on their governance arrangements. This hardly seems necessary given that external auditors are providing oversight at local level and Public Sector Audit Appointments is supervising the audit contracts and collecting and reporting information on how councils are doing.

With the levels of revenue support grant councils receive from government dwindling, and with 168 councils due to receive none of this grant in 2019-20, we might even question whether the government has any right at all to scrutinise our finances.

This does not mean that we can rest on our laurels. Where councils have qualified conclusions they must act, and all of us must ensure that we are taking on board the recommendations of our local external auditors if problems are to be nipped in the bud.

Faced with an overall funding gap that will reach £8 billion by 2025, councils in England must increasingly make difficult decisions about how to manage their resources and look for new ways to reduce costs, and to generate income. It is therefore vital that our governance arrangements remain transparent and stand up to scrutiny.

Peter Fleming (Con), leader, Sevenoaks DC, and improvement and innovation board chairman, Local Government Association

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