Last November, Croydon Council became the second council in more than 20 years to declare bankruptcy when it issued a Section 114 notice, following in the footsteps of Northamptonshire County Council, which went effectively bankrupt in 2018. Earlier this year, the National Audit Office warned that up to 25 councils in England are at risk of financial failure, with 94% expecting to cut spending over the next 12 months.
“District councils have not had a great time due to loss of income,” says Cllr Chris White, leader of St Albans City & District Council. “They rely heavily on charges from car parks and leisure centres. Leisure centres have been closed for very long periods due to lockdown, which has knocked a big hole in the budget. Some councils are in dire straits because investments they’ve previously made haven’t paid off.”
As Charlotte Alldritt, director at the Centre for Progressive Policy (CPP), argues, local authorities have been struggling for years and the pandemic has exacerbated the situation. “We’ve seen local government finance hollowed out over the past decade. There have been council tax freezes, particularly during the coalition government, but that’s put more pressure on local authorities, which then have to deliver services on a shoestring.”
Yet on the whole, trust in local authorities remains relatively healthy. Alldritt says Ipsos MORI polling ‘consistently shows’ that trust for local government ‘far outstrips’ trust for central government.
“Local authorities are the front line of public service delivery. It’s important for those authorities to connect with local residents and, overall, that’s what many have been doing,” she adds.
Communicating positive messages to communities
Yet for those local authorities that are having conversations with the Ministry of Housing, Communities and Local Government for bailouts or capitalisation directions, what does negative press coverage do to undermine trust?
“Generally, local authorities provide great services but negative press coverage doesn’t do a great deal for trust and confidence, as well-run councils, unfortunately, get tarnished with the same brush,” says Sanjiv Kohli, director of resources and deputy chief executive at Newark and Sherwood Council.
“Which is why it’s so important for local authorities to be more transparent and more proactive in communicating some of the positive messages to their communities. What are they doing for the community locally? Why are they doing it? What are the outcomes going to be? Local government has never been good at that. Communication teams that sit within our authorities tend to be more reactive rather than proactive.”
Sian Moore, corporate director and Section 151 officer at Richmondshire District Council, agrees. She recalls the severe flooding in her local region during 2019, which caused devastation across farming communities. “We learned a lot about our messaging from that,” she says. “Social media was way ahead of us in getting messages out. The fact that various farmers were suffering badly in one patch, yet five minutes away no one was affected. It showed us the importance of having our ear to the ground and being on top of what was going on.”
Since then, Richmondshire has invested in its communications and has focused on improving and developing the interaction it has with the public, both through its website, running regular surveys and making better use of social media.
Newark and Sherwood Council also has a new communications team, which has been busy pushing positive messages out around new investments and opportunities, such as the region’s new Business Resilience Programme, major regional redevelopment projects and ongoing collaborative work with local educational institutions to facilitate apprenticeships.
“We’ve got lower-than-average employment rates in certain areas, wages are below the national average and we also have low skills in certain areas, so a lot of what our comms teams have been doing is communicating to the public how we’re addressing these issues,” says Kohli. “Otherwise, the community will pick up on all the negative press around other councils.”
Transparency, expertise and commercial acumen
Kohli believes the key to restoring trust levels is about transparency and ensuring the Assurance Framework in councils is ‘effective and working’.
“That’s where Croydon fell down. The Assurance Framework was there, but its statutory officers, the chief executive, the monitoring officer and the Section 151 officer were all quite new to their posts. Councils need to have suitably experienced people, especially in the top tier.”
In Kohli’s view, skillsets among members of the audit committee need to improve, not just by training and development initiatives, but by bringing in professionals from the private sector to add an extra layer of expertise and commercial acumen. These independent members, he says, should both advise and support the committee. Another key element is to ensure that the chair of the committee is from the opposition group to suitably challenge the executive.
“This adds more checks and balances to the process,” Kohli explains. “It’s not an easy conversation to have with a leader, to tell them that the chair of the committee needs to come from the opposition, but it was one of the recommendations that came out of Croydon.”
Ultimately, it’s about encouraging local authorities to operate with more of a commercial mindset, especially as the onus is on them to self-generate their own funding. “That’s where the challenge is right now. You have 343 local authorities which, for a number of years, have operated in one way and are now being asked to operate more commercially. That’s a huge culture shift that needs to happen.”
Richmondshire’s Moore takes a more direct approach. “Local authorities can help maintain and build on trust levels by delivering what they say they’re going to deliver or being clear and honest if they can’t,” she says. “It’s about keeping promises and being transparent. What the public doesn’t like is, ‘we’ll sort it out’ and then they never do. Trust relates to clarity. If you have to say no, you’ve got to say no. That’s always better than fobbing someone off.”
St Albans’ White shares her views. “There’s the reassurance piece that’s important, too. Residents need reassurance that their local economy won’t be fatally damaged by COVID-19, and I don’t think it will. In St Albans, we’re the London rim that has got enormous potential. There are fewer people commuting into London now, which will inevitably benefit local hospitality services.”
It’s about engagement, too. “Local authorities need to be engaging with their residents and the choices being made,” CPP’s Alldritt advises. “They need to be upfront about what those choices might mean. Effectively, they need to show they’re with residents every step of the way and that they’re engaging with businesses to shape and forge their future.”