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REPORT OF THE DONCASTER MBC INTERNAL INQUIRY TEAM

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1. Purpose of the Report ...
1. Purpose of the Report

1.1 This report seeks to address the failings in the Doncaster Metropolitan Borough Council's (the council) practices and procedures and restore public confidence in both members and officers. The full commitment of the council is required to progress the necessary cultural changes through to the millennium and beyond.

1.2 The proposals require the council to take a close look at many of its core functions and quickly adopt the initiatives proposed. It is essential that the council take the necessary steps required to re-establish the council's image and move forward by adapting to the initiatives and readily supporting the new checks and balances and strategic processes.

2. Introduction

2.1 The council is currently facing the closest scrutiny in its history. The issues it faces cannot be dismissed or put aside, and must be seen to be handled to the satisfaction of the public, employees and others. How the council handles the difficulties it is now facing, is vital to the outcome of a satisfactory and positive local authority future.

2.2 There will be feedback on how the issues are handled. There is likely to be continued media interest and other public scrutiny. Whilst the council is addressing the issues, other agencies are continuing their investigations and further matters may need to be addressed as a result of these.

3. Terms of Reference

3.1 The setting up of the Internal Inquiry Team (IIT) was confirmed by the Policy and Resources (General Purposes) Sub-Committee on 7th May 1997 with the following Terms of Reference:

-- Liaison with the police inquiry;

-- Investigation of the areas of concern within the council, identified by the District Auditor, and any other areas of malpractice; and

-- Recommendations to the council to ensure the highest standards of probity.

4. Progress to Date Within the Council

4.1 There has been significant political change, a restructuring of committees and sub-committees and changes to the management and structure of the council. There is also an expressed commitment to openness, transparency, and cultural change. These include:

-- establishing an Internal Inquiry Team

-- reviewing the organisational structure of the council and the effectiveness of the officer corps

-- establishing working relationships with the Police, District Auditor and others

-- establishing a Finance and Audit Committee and a Personnel Sub-Committee

5. Areas of Concern

5.1 From its work to date the IIT has identified three major areas of concern: management, probity and proper process of the council. Correct functioning in these areas is of fundamental importance, failures within them impact on all aspects of the council's operations.

5.2 The IIT has already identified to the Acting Chief Executive failings in certain aspects of the corporate and financial management of the council. Appropriate action is being taken by the Acting Chief Executive and the new leadership of the council.

5.3 Management

5.3.1 Over a number of years, certain aspects of the management of the council, by a number of members and a number of senior officers, has not operated effectively to determine policy, set standards and promote proper and effective decision-making.

5.3.2 Notwithstanding the commitment of many members and senior officers there has been a significant failure within the council, particularly of its strategic, corporate and financial management. Regardless of these difficulties, services have been and continue to be delivered at a high standard. This has been acknowledged by the District Auditor in his reports.

5.3.3 The checks and balances which should have safeguarded the council have often not done so. Responsibility for this lies with some members and some senior officers, in particular those undertaking the specific statutory roles of the Head of the Paid Service, Chief Financial Officer and Monitoring Officer.

5.3.4 Furthermore some officers have disregarded proper professional standards and there has been a failure by some members and some officers to appreciate their respective proper roles. This has been compounded by a lack of accountability within a flawed decision-making process.

5.4 Probity

5.4.1 All those in public office, members and officers, are required to observe the highest standards of conduct. This requirement is enshrined, not only in codes of conduct, but in common law and statute. Some of the difficulties facing this council have resulted from conduct falling short of these standards. The council is subject to police investigations into alleged criminal activity in the areas of planning approvals, contracts and expenses, some aspects of which also require internal investigation into misconduct and malpractice.

5.4.2 There is also strong evidence of undue influence, of oppressive behaviour by some members towards officers and/or fellow members, by some officers to colleagues and of misconduct of some officers seeking to influence proper processes. Such behaviour by members is contrary to the National Code of Local Government Conduct, which all members are required to be guided by, and is contrary to the professional standards required of officers.

5.4.3 There are a number of instances of inappropriate receipt of gifts and hospitality on the part of some members and some officers and a failure to comply with existing rules on this and on declarations of interest.

5.5 Proper Process

5.5.1 Within some areas of the council there has been a failure to adopt and operate proper processes which has contributed to fundamental problems, ranging from breaches of standing orders to alleged criminal activity. Flaws in the decision-making process itself, including a lack of openness, have also contributed to these problems.

5.5.2 There is substantial evidence of decisions taken outwith the proper procedures and/or in contravention of the proper procedures, standing orders and financial regulations.

5.5.3 The avoidance of proper procedures and the use of flawed procedures has meant that effective monitoring, review and evaluation of council decisions and policies, in some areas, has been difficult to achieve.

5.5.4 There is a lack of understanding by some members and some officers of the decision-making framework within which the council operates and evidence of misconduct in a number of instances. These include areas such as recruitment, selection and disciplinary matters, planning matters, contracts, grant applications and awards and asset disposals.

6. Recommendations

6.1 The Internal Inquiry Team (IIT) makes a series of recommendations, and provides the opportunity for members, officers and others, to consider these in detail. It must be emphasised that there are other investigations ongoing with other recommendations yet to come.

6.2 The recommendations of the IIT are set out below, in bold, under three headings covering the overall operation of the council.

6.3 MANAGEMENT

6.3.1 In order to demonstrate that the council is determined to respond effectively to complaints from members and officers alleging unacceptable practice, breaches of rules, regulations and the law, it is recommended that a confidential framework is introduced which will enable such issues to be dealt with expeditiously.

R1. Introduce a whistleblowers' procedure for receiving complaints.

6.3.2 The council should develop protocols, supported by training, to assist members in dealing with the public, constituents and other third parties. This system should include an appropriate referral system, with some effective form of recording, to ensure that members can act appropriately. The role of members in many of these areas needs careful consideration; they are often unrealistically seen as immediate problem-solvers, rather than part of a problem-solving process. The protocols and training would ensure that members are able to undertake their strategic and representative role more effectively. It is essential that members, officers and then the public, start to understand this process more clearly.

R2. Introduce protocols and training to assist members in dealing with the public, constituents and third parties, including appropriate referral systems.

6.3.3 It is considered essential that a consistent standard and approach is introduced to foster and build on working relationships with the council's partners and the wider community in order to develop a customer-orientated culture. This will require an effective strategy and an appropriate training programme.

R3. Develop an effective customer care strategy.

6.3.4 It has been established that there is no common approach to the management of individual directorates. There are some good examples of team working, but in some cases, meetings of senior management rarely or never occur, or are not an effective management forum. In the interests of corporate working it is essential that directorates adopt common standards ofmanagement practice.

6.3.5 The development of a performance management model is suggested to enable measurable performance targets for services to be set.

R4. Introduce common standards for directorate/ departmental management teams and a performance management model to ensure best practice.

6.3.6 The council needs to be seen to be working as efficiently and effectively as possible towards its aims and objectives. In order to achieve this, it is recommended that a wider scheme of delegated powers is agreed. This will enable members to undertake more effectively their representative and decision-making role. A working group should be established to examine the existing delegated powers and to make recommendations on further delegations. The scheme of delegation should be the subject of annual review.

R5. Establish a working group to consider the introduction of a wider scheme of delegated powers with the objective of securing more efficient and effective working within the organisation.

6.3.7 Each year the District Auditor introduces the Management Letter to the council. This particular report is of major significance to the whole of the council and contains comments on a wide range of its functions.

6.3.8 It is considered that the council must adopt a more corporate internal process for dealing with the annual Management Letter to ensure all issues are properly addressed. This will allow proper debate by the Policy Committee and other appropriate committees.

R6. Introduce a corporate internal process for dealing with the District Auditor's annual Management Letter.

6.3.9 From investigations to date it is apparent that, in the past, no effective action has been taken on certain reports produced by the council's Internal Audit Section, including reports relating to some of the issues currently under investigation. Some of the findings in these reports gave prima facie indication of criminal activity and/or misconduct on the part of both members and officers.

6.3.10 Internal Audit staff did not receive the management support to which they were entitled to progress these matters. Prompt and effective action at the time may have averted some of the problems now being faced by the council. Full details cannot be given as there are ongoing investigations.

6.3.11 To ensure that the importance and profile of Internal Audit is acknowledged, it is suggested the council appoint a Head of Internal Audit to be responsible for the service. The postholder should report directly to the Director of Financial Services. This will ensure that the process outlined above is swift and direct and that Internal Audit will be headed by a person at the appropriate level.

R7. As a matter of urgency, the establishment of and recruitment to a post of Head of Internal Audit, at second tier level.

R8. The Head of Internal Audit should be responsible for submitting audit reports on sensitive matters simultaneously to the Director of Financial Services, the Head of the Paid Service and the Monitoring Officer as well as to the relevant service director to ensure appropriate consideration.

6.3.12 The council has embarked upon an ambitious programme to consider their organisational structure and how it might meet the public's needs. Whilst recognising the need to restructure the organisation and to ensure that a more cohesive management approach is adopted, it is considered that it should be progressed to an agreed timescale.

R9. It is recommended that careful consideration be given to the timescale, at the early meetings of the Restructuring Working Group.

6.4 PROBITY

6.4.1 Members and officers do not appear to have received appropriate advice and guidance to adequately protect their interests and those of the council in the day-to-day activities which they undertake. In order to ensure probity and the adoption of best practice across the council, it is recommended that there are a series of training courses which should be compulsory for members and officers to attend on all probity and best practice issues. Additionally, it should be mandatory for further training to be undertaken every two years.

R10. Introduce a mandatory training programme for members and officers in local government law, procedure and best practice.

6.4.2 It is suggested that the council undertake annual monitoring of the use of Standing Orders. An officer working group should be established to undertake this and report to the Standards Sub-Committee (see R.18) on an annual basis.

R11. Introduce annual monitoring of the use of the council's Standing Orders.

6.4.3 There have been examples of some members and some officers behaving in an oppressive manner towards officers and similarly to other members. A consequence has been that some members and some officers have felt unable or unprepared to challenge instructions which at least were flawed, or at worst were unlawful. It is essential that undue influence be eliminated.

6.4.4 The National Code of Local Government Conduct states that 'Mutual respect between councillors and officers is essential to good local government. Close personal familiarity between individual councillors and officers can damage this relationship and prove embarassing to other councillors and officers.'

6.4.5 In order to protect both members and officers, it is suggested that a formal procedure is developed so that issues of concern can be properly addressed. It is suggested that a report on this issue is submitted to the proposed Standards Sub-Committee (see R.18).

6.4.6 It is also suggested that the Standards Sub-Committee consider the introduction of a protocol for members on how to deal with approaches from outside organisations/individuals.

R12. Introduce a protocol for standards of behaviour for members and officers.

R13. Introduce a protocol for members and officers on relationships and dealings with outside organisations and individuals.

6.4.7 The report of the Nolan Committee on Standards inPublic Life emphasises the need to develop clear codes of conduct for members of every council, within an ethical framework approved by Parliament.

6.4.8 Although this council has introduced its own scheme on gifts, hospitality and interests, it has become apparent that implementation has been delayed in some directorates. There can be no excuse for this and action should be taken without delay.

6.4.9 There are examples where some members have failed to declare pecuniary interests at committees and sub-committees of the council. This is damaging to both the individual and the organisation. It is important that this issue is kept in constant focus.

6.4.10 An annual review of the scheme of gifts, hospitality and pecuniary and personal interests should be commissioned.

R14. A principal officer within the Legal Services Division be identified as the contact point for advice to members and officers on gifts and hospitality and pecuniary and personal interests.

R15. Annual review of the officer and member procedures relating to gifts and hospitality and pecuniary and personal interests to ensure they are up to date and easy to understand.

R16. As a matter of urgency the existing officer procedures relating to gifts and hospitality and pecuniary and personal interests be fully implemented in all directorates and departments.

6.4.11 Some members and some officers have expressed concern about the lack of clarity associated with the claiming of expenses and allowances for normal day-to-day business. This has led to external criticism and the matter should now be addressed. The council should ensure that there is a simple format for all members and officers to claim the appropriate expenses. This would ensure that no inappropriate and unnecessary criticism is aimed at members or officers during the course of their responsibilities in the future.

6.4.12 The council identify a post (within the principal officer range) to oversee the process and be responsible for providing advice and guidance to members and officers on the rules, regulations and procedures governing allowances, travel, subsistence and other expenses. This officer is to have the authority to defer payment of expenses where it is unclear whether they should be paid, and to have direct access to a chief officer who can determine the matter.

R17. The identification of a post (within the principal officer range) to oversee the process and to be responsible for providing advice and guidance to members and officers on the rules, regulations and procedures governing allowances, travel and subsistence expenses.

6.5 PROPER PROCESS

6.5.1 In order to demonstrate that issues of probity and standards are given the highest priority within the organisation, it is recommended that the council establish a Standards Sub-Committee of the Policy Committee.

6.5.2 The Sub-Committee should examine, in detail, the many recommendations of the Nolan Committee on Standards in Public Life and other matters of propriety within local government. Additionally, amongst other things, all reports and proposals which would result in significant change to service committees' processes, practices and procedures would be referred to this sub-committee for consideration.

R18. That a Standards Sub-Committee of the Policy Committee be established to address issues of probity and good practice.

R19. All reports or proposals which would result in significant change to a service committee's processes, practices and procedures should require the approval of the Policy Committee.

6.5.3 In order to promote better understanding of the council's procedures concerning discipline, grievance and appeals, it is considered that a regular series of training courses should be developed for all members and officers involved in the process. It is suggested that attendance should be mandatory.

R20. Introduce a mandatory structured training programme for members and officers involved in disciplinary, grievance and appeal procedures.

6.5.4 In the main, it would appear that the council's Recruitment and Selection Code of Practice has been followed, despite complaints to the contrary. However, to avoid further criticism and to demonstrate that the Code is fully understood and is being observed it is recommended that members and officers involved in the process be required, on a regular basis (at least every two years) to receive appropriate training.

R21. Introduce a mandatory structured training programme for members and officers involved in the recruitment and selection of employees.

6.5.5 In the event of there being any complaints or alleged breaches of the Code of Practice on Recruitment and Selection, they should be immediately referred to the Head of the Paid Service, Monitoring Officer and the Director of Personnel and Training Services.

R22. Any breach of the council's Code of Practice on Recruitment and Selection should be immediately referred to the Head of the Paid Service, Monitoring Officer and the Director of Personnel and Training Services.

6.5.6 The latest Nolan Committee Report on Standards in Public Life acknowledges that 'planning is possibly the most contentious matter with which local government deals'.

6.5.7 Investigations into planning matters are ongoing, but it is vitally important for the integrity of the planning process and the credibility of the council, that members are aware of the latest guidance and changes in the law. It is suggested that this is dealt with through a mandatory training programme.

R23. Introduce a mandatory training programme for all members on planning law, procedure and the decision-making process.

6.5.8 As stated above, investigations into planning matters are ongoing. A new procedure in relation to planning site visits has recently been adopted by the council. Although encouraged by this progress it is considered that further review may be required within six months. Further to this a structured regular review will be necessary. All reviews should take into account examples of nationally recognised 'best practice'.

R24. Adopt clear rules and guidelines, to be reviewed on a regular basis, in relation to planning site visits.

6.5.9 Many committees and sub-committees of the council are involved in site visits or other types of visits which are relevant to the day-to-day functioning and decision-making of the council. It is proposed that there should be a set of procedures for conduct at site visits. Recommendations from that site visit should be reported back to committee as part of the decision-making process. Procedures should be reviewed on an annual basis.

R25. Introduce procedures for the conduct of site visits by committees and sub-committees.

6.5.10 To ensure the council receives the best value from the purchase of its travel it is suggested that a centralised system should be established urgently. This will enable checks to be carried out by the council's own Internal Audit Section, and others within the Directorate of Financial Services who have the responsibility for monitoring. It would ensure that complete financial information is immediately available, and also ensure that the rules for travel are complied with.

R26. Establish within the council a centralised system for co-ordinating all travel arrangements for members and officers.

6.5.11 It has been ascertained that the council's current travel agency agreement was entered into without reference to proper tendering procedures and consequently was in contravention of the council's Standing Orders and Financial Regulations. The lack of compliance with approved procedures may have resulted in the council not obtaining best value, bearing in mind its purchasing power and discounts which may be offered.

R27. At the earliest opportunity, the travel agency requirements of the council to be subjected to competitive tender as required by Standing Orders.

6.5.12 Reasonableness of expenditure on travel has been the subject of criticism. Whilst the investigations are not complete it is apparent that there was not a consistent approach across the council.

6.5.13 Much clearer rules are needed, but it is important to strike a balance between over-prescription, which can lead to avoidance of proper procedures, and unclear guidance which may be abused. A cost/benefit analysis should be standard practice and integral to new procedures.

6.5.14 Travel and expenditure on travel are sensitive and complex areas. Overall the council must be satisfied that it is acting within the law and in accordance with its spending priorities.

R28. The council must re-examine its travel policy to ensure consistency of approach and reasonableness of expenditure. The rules, regulations, procedures and guidance on travel policy should be reviewed annually and a report submitted for consideration by the Policy Committee.

6.5.15 There were many appropriate visits which had a proper purpose, which included relevant members and officers, from which the authority obtained benefit, and on which the expenditure was reasonable. There were others where one or more of these elements was missing. There were some instances where none of these criteria was met.

6.5.16 There are visits where it is appropriate for partners to accompany members or officers. Where this is the case a clear procedure is required and should be introduced.

6.5.17 The procedures for approval were not subject to the proper decision-making processes of the council and therefore the criteria outlined above were not demonstrably assessed. The need for a proper and transparent approvals process is overwhelming.

R29. Approval of all conferences, study visits and other overseas travel and the selection of appropriate delegates to be decided by service committees. Approval of Town Twinning visits to remain with the Policy Committee.

6.5.18 There should be a transparent reporting back process for all conferences, study visits, Town Twinning visits and other overseas travel. This should include some detail of the programme undertaken, which of the party attended particular events or meetings and an assessment of the value to the authority of the visit.

R30. The service committee and Policy Committee to receive a report back following attendance at any conference, study visit, Town Twinning visit or other overseas travel.

6.5.19 The establishment of an Internal Inquiry Team has led to examination of many of the council's core practices. It is recognised that the council may need external assistance to endorse their approach in certain areas and specialisms.

R31. The council agree to the appointment of external advice and assistance where appropriate.

7. The Way Forward

7.1 The council has further work to do. It is considered important, however, that some recommendations for improvement are made as early as possible. Many of the recommendations contained in this report are self-evident examples of good and/or corrective practice and will help the council towards its goal of being at the forefront of local government practice. Some are more wide-ranging and will require further work to achieve implementation. It is imperative, however, that the progress made so far continues, in order to demonstrate the commitment by the council to changing some past practice and culture.

7.2 The recommendations made in this report should be referred for implementation to the appropriate committees and/or directorates. The implementation process will need to include a system for monitoring and review.

7.3 It is clear from this report and ongoing inquiries that there are a considerable number of issues/matters which still require examination. Those listed below have been identified as areas for further consideration. The list is not exhaustive and other issues may arise as progress is made. The issues include:

-- Clear understanding of the statutory framework of the council

-- Corporate management and its processes

-- The structure of the council

-- A system of monitoring, review and evaluation

-- Improving and maximising skills and communication in the public arena

-- Review of standards and practices within directorates

-- Introduction and review of relevant codes of conduct

-- System of accountability

-- District Auditor's Section 15(3) Report

-- Liaison with other agencies

-- Public image

-- Standards of service delivery

7.4 Although much good work in the council has been achieved, it must be accepted that a fundamental change in the existing culture is taking place and the new momentum is continuing. This will be welcomed by the vast majority of members and officers working for the good of Doncaster Council.

7.5 This report is produced as at 1st September, 1997. It will be obvious that with the quantity of issues to be addressed and the wide-ranging nature of current internal and other investigations, further timescales cannot yet be determined.

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