Executive Summary of the CGI Report

1. What is Corporate Governance?

Corporate Governance is the framework of accountability to users, stakeholders and the wider community within which organisations take decisions and lead and control their functions to achieve their objectives.

The quality of Corporate Governance arrangements is a key determinant of the quality of services provided.

Corporate governance inspections take a themed approach and look at how the council approaches:

4    Leadership, culture and standards of conduct – the underpinning political management processes, organisational culture, leadership and how behaviour in the organisation is governed

4    Community focus – working with and for the community, including community leadership

4    Structures and processes – the capacity for decision-making and the exercise of authority within the organisation, including the role of councillors and their relationship with officers

4    Internal control – control of the organisation’s resources and the way in which demands upon them are anticipated.

2. The main findings

Leadership, culture and standards of conduct

The Council’s current arrangements for leadership, culture and standards of conduct are inadequate. (28)

Leadership of the Council with external partners is limited and some partners increasingly question the Council’s commitment to partnership working. (28)

Internal leadership of staff by the Executive and CMT is weak and staff show very high levels of dissatisfaction with political and managerial leadership. (28)

Leadership of the ruling political group is weak, and fails to establish expected norms of behaviour, conduct and commitment to Council business and councillor training. (28)

The Council’s failure to act on previous recommendations made by external reviewers and the denial of the need to change amongst key politicians are a significant cause for concern. (29)

With weak leadership and a disunited ruling group, there is the potential that decisions which need to be made will be avoided. (29)

There has been a failure to draw a line under the various difficulties the Council has faced, most notably a failure to clearly and unequivocally disassociate the current political leadership from that of the former leader. This has resulted in mixed messages being sent by the political leadership to Council staff, partners and the public. (32)

There is a denial of the need to change, with assertions that historic problems have now been dealt with, and that there are no barriers to moving on. Significant numbers of staff and a number of partners do not agree with this view. (32)

Nearly sixty percent of staff believe that the Council is not well lead by Executive councillors. Half of staff surveyed believe that councillors do not give them enough respect. (33)

There are some examples of the council starting to conduct business in a more open and transparent way. (34)

Key mechanisms such as the standards committee, which could help send clear messages about the Council’s willingness to change, have been limited in their effectiveness by a desire amongst the political leaders of the ruling group to maintain control over its workings. (36)

The Council has set up a modernisation panel but it has failed to produce tangible outcomes that have demonstrably improved the council’s governance. (37)

The current leader is weak and has failed to clearly express to Executive colleagues legitimate expectations in terms of the amount of input they have the Council, and the way in which they work together. There is an ongoing loyalty amongst a minority of ruling group councillors (including the current leader) to the ex-leader. (38)

The leader has failed to champion the need for councillor training. (39)

Weak Council leadership has been exacerbated by the continuing public disagreements between the ex-chief executive and the Council. The Council does not have a clear strategy for dealing with the media on these issues. It has not established clarity and understanding of the values, principles, ethos and standards of behaviour which the Council wishes to strive for in order to distinguish itself from past poor conduct. (40)

Individual chief officer and Executive councillor portfolio relationships are good. However, this service to underline the lack of team working as these one-to-one relationships fail to translate into effective corporate working, with councillors’ locally-based agendas often being at odds with the corporate, cross-cutting view required of much modern service delivery. (42)

There are consistent messages about the lack of trust between officers and councillors in parts of the organisation. (43)

Senior officers have been unable to respond effectively to the political difficulties and the lack of political leadership shown within the Council in recent years. This has been due both to coping with external pressures of a police investigation, a court hearing and media attention, and their lack of coherence as a corporate team. They have therefore tended to address issues locally within departments, rather than collectively. (44)

There are substantial concerns over the culture of the Council. It is described as parochial by external partners, and has old-fashioned ideas of how to relate to its communities. (45)

In many parts of the Council staff report mistrust and fear. Nearly one in five have little confidence in the Confidential Reporting Code, particularly following the departure of the chief executive. A similar number (18 percent) said that they had been bullied by another member of staff. (45)

Community focus

The Council’s current arrangements for community focus are inadequate. It has had minimal involvement with the district-based local strategic partnership and the community strategies that they have produced, and does not have its own community strategy for the county-wide area. (47)

The Council does not have a clear corporate expression of what it wants to achieve for the area. (50)

The Council’s themes and ambitions do not clearly link to each other, and the stated objectives do not amplify the ambitions or identify specific outcomes. (52)

The Council is not able to show that it has a clear understanding of the needs of and opportunities for Lincolnshire. (53)

The Council’s attempts to set up a county LSP and its “One Lincolnshire” campaign are seen as undermining wider partnership working and do not include some significant organisations in the county. The credibility of the Council’s “Missing Millions” campaign is undermined by its failure to address the current issues around its own culture and recent history. (54)

The Council is not seen (by parish and town councils) as good at consulting or acting on the results of consultation. (56)

Satisfaction levels with the Council as a whole are amongst the worst in the country. (57)

Although it is widely recognised by staff, many councillors, partners and the public that there is an urgent need to rebuild both media and public relations, the political leadership of the Council does not recognise the scale, urgency or seriousness of this task. In addition, the Council continues to issue press releases which prolong the impression in some employees’ and the public’s minds that the Council has not yet moved on. (58)

The Council often appears to be a reluctant partner. Partners believe that the Council inadequately understands the needs of its communities. Its record in providing services in partnership is inconsistent. (63)

The Rural Action Zone has been extremely successful. It has brought in significant external funding and enabled services and support which otherwise would not have been possible, despite the limitations in the process of working with the district council described above. (64)

The Council has made notable progress in education, sustaining the improved rate of attainment in key exam results, and playing a significant role in the development of the rural and coastal academies. (66)

Structures and processes

The Council’s current structures and processes are inadequate. The required structures and processes are in place, but are inconsistently applied. (67)

There is evidence of work beginning on several key agendas (the work on developing the constitution, HR strategy, and some cross-cutting working between directorates), but sustained momentum is lacking and will be dependent upon decisive leadership from a new chief executive. (68)

The Council’s constitution is confused and lacks clarity about how it works in practice, and the Council lacks a corporate approach to policy development. (71)

In general, councillor and officer roles are insufficiently defined, with some councillors unclear about, or not accepting of, new ways of working. (72)

While CMT/Executive meetings are a positive development they are not yet providing visible strategic leadership, and there are no corporate forums for managers and staff to contribute their ideas. (72)

The standards committee plays an inadequate part in the Council as its role and function are not welcomed, understood or utilised by the Executive. (73)

Key officers and councillors do not work well together to develop and promote a corporate approach. (74)

The CMT does not naturally work corporately or as a team, and therefore tends to perpetuate the directorate-based approach to services and partnerships. (75)

The Council has no communications policy or strategy. It has failed to draw a line under previous disputes, still being pursued by ex-employees and councillors. The general approach lacks clarity and purpose, while diverting resources away from their intended ends, with no specified way in which current communications issues can be satisfactorily controlled or resolved. (79)

Internal control

The Council’s internal control processes are adequate, in that the required building blocks are in place, and meet the minimum standards required of an effective local authority. (81)

3. What should the Council do now?

The Audit Commission recommends that the County Council agrees to the establishment of an Improvement Board.

This should have representatives from the Council, the ODPM, the Audit Commission and other key stakeholders. It should oversee, support and monitor the County Council in the delivery of its action in response to the CGI report and related external reports and letters.

The Council Executive and CMT should define and with the Improvement Board agree:

4    A clear, specific, time-limited and resourced improvement plan which will tackle the actions required to address the issues raised in the CGI, in other reports and more generally to deliver the duty of continuous service improvement. This document will be made public and will include the coverage of issues specifically related to community focus, leadership and conduct.

4    A framework for implementing, managing and monitoring progress against the improvement plan, and reporting this progress regularly in public.

The Audit Commission will revisit progress made by the Council in Autumn 2005.

If there is a lack of progress in responding to the recommendations in the CGI report or in addressing the key issues within the Council’s improvement plan within nine months of the publication of the report, this may lead the Audit Commission to consider referral of the Council to the Secretary of State to further consider the Council’s position.

The Council must also ensure that an experienced and strong chief executive is appointed and develop and implement a comprehensive councillor training and mentoring programme for the next 12 months, ensuring that mandatory elements are identified and that all councillors attend.