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Long-term sustainability is central to good governance

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In a guest briefing, Cipfa’s Diana Melville says good governance requires consideration of an future needs

At this time of year, local authority leaders’ thoughts should be turning to end-of-year public reporting, an essential mechanism of accountability and openness.

The Committee on Standards in Public Life’s report in January on Local Government Ethical Standards was a helpful reminder of the importance of governance and the risks of tolerating misconduct and poor practice, as backed up in LGC earlier this month, when the academic Catherine Staite rightly emphasised the need for effective governance and the importance of the ethical framework.

Governance and standards are important in themselves. They also matter for the impact on the business of local government. We need good governance to ensure effective decision making and prioritisation of resources.

Ensuring that governance isn’t a strand apart is central to the ethos of the Chartered Institute of Public Finance & Accountancy and the Society of Local Authority Chief Executives and Senior Managers’ framework, Delivering Good Governance in Local Government (2016).

It set a bold goal: “achieving the intended outcomes while acting in the public interest at all times”.

This firmly links the individual principles of good governance to achieving outcomes and acting for the wider benefit of society. It gets to the heart of local government, accounting for its democratic purpose, and local needs and priorities, together with local authorities’ wider place in the network of government and society.

Whilst the official Seven Principles of Public Life focus on the individual holder of public office, our good governance framework is aimed at the entity itself. The core principles of good governance facilitate a commitment to acting in the public interest, as well as the effective exercise of governance in practice.

The six elements of governance identified in Catherine’s article closely align with the Seven Principles of Public Life and the principles of good governance in local government established by the 2016 Cipfa-Solace framework. But I do not think that they go far enough.

For example, Catherine’s fifth principle of ‘clarity of purpose’, which asks whether decision makers are clear about their strategic priorities, stops short of addressing the most challenging responsibility faced by a local authority: the need to define and plan for outcomes that are sustainable.

An authority might have clear strategic priorities, and they might well appear to be in the interests of those they serve, as in Catherine’s fourth principle. But if those objectives fail to address longer term issues and consequences then they won’t be sustainable – economically, socially or environmentally.

Public decision making often involves tensions between competing interests and expectations. Decision makers must account for the future needs of the local area, as well as the wishes of the current community.

This is the essence behind the Welsh Government’s Well-being of Future Generations Act 2015 which requires public bodies to put long-term sustainability at the fore of their thinking. Whilst the act might not apply to the rest of the UK, the principle should always be central.

Local government must use the Cipfa-Solace framework as the basis for its annual governance statements, due as part of their public reporting. This is an ideal time to reflect on the adequacy and effectiveness of your governance over the past year.

The framework not only addresses whether you have the right policies and procedures in place, but challenges whether behaviours and actions live up to the principles of good governance.

With its focus on outcomes, the annual governance statement is a chance to challenge whether the organisation is acting in the public interest and striving to achieve sustainability. It is also a chance to honestly address the difficulties the organisation may face in achieving those goals.

In its recent report on local authority governance the National Audit Office noted “poor governance can make the difference between coping and not coping with financial and service pressures”. The Committee on Standards in Public Life also concluded recently that there is “a strong link between failings in ethical standards and corporate failure by councils”.

For the sake of your services and your communities, as well as your organisation, it is essential to take the principles of good governance to heart and ensure they guide what you do every day.

Diana Melville, governance adviser, Chartered Institute of Public Finance & Accountancy

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