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Office for Local Government to tackle local authority failures

Author: ICAEW Insights

Published: 07 Jul 2023

Former National Audit Office chief to chair new body to understand and support local government performance in England.

Department for Levelling Up, Housing and Communities (DLUHC) Secretary of State Michael Gove MP officially launched the Office for Local Government (Oflog) on 4 July 2023 to provide authoritative and accessible data and analysis about the performance of local government and support its improvement.

Oflog says its vision is to provide authoritative and accessible data and analysis about the performance of local government in England, and support its improvement. 

The launch was accompanied by the first iteration of the Local Authority Data Explorer using existing metrics on waste collection, adult social care, adult skills and finance already collected by DLUHC, the Local Government Association (LGA) and the Chartered Institute of Public Finance Accountants (CIPFA). Oflog aims to expand data collection to cover more service areas over time, as well as developing new metrics on local authority performance, although it stresses that it wants to minimise the compliance burden. 

DLUHC says that to better understand local government performance, it needs to attain a clearer view of what good performance entails as well as tell-tale signs of those on the road to serious failure. To do this there is a need to use data more effectively. Although there is some strength in the amount of data currently collected, the dispersal of it limits its collective value and use. DLUHC says this “illustrates the need for an organisation that can locate itself at the centre of this nexus, synthesising the data that is currently available, making it more accessible and useful for all users by understanding their needs – without increasing the current data burden on councils”.

Through each step of this journey, DLUHC says Oflog will “put data at the centre of its approach”, stressing that it will not set targets or conduct burdensome area assessments. It says: “This is not about re-creating the Audit Commission. The Audit Commission was regulating, micromanaging, and inspecting local councils forcing them to spend time ticking boxes and filling in forms rather than getting on with the business of local government. In doing so it was hindering local transparency and scrutiny.” 

DLUHC continues: “Local government already works within a framework of statutory powers and responsibilities. Oflog will not add new responsibilities onto local government or seek to establish an expensive compliance regime, thereby safeguarding the principle of democratic accountability.”

The data explorer so far encompasses county and district councils in two-tier local authority areas and unitary authorities, London boroughs and metropolitan boroughs in one-tier areas, although Oflog’s website implies that data collection is likely to expand to encompass the Greater London Authority and regional combined authorities in those parts of England with a regional tier of government in due course. 

However, the data explorer will not cover town, village or parish councils, nor local authorities in Scotland, Wales or Northern Ireland as these are out of scope.

Lord Amyas Morse, former Comptroller and Auditor General of the United Kingdom and head of the National Audit Office, was appointed interim chair in January and has been working with DLUHC to get Oflog up and running, with recruitment for a permanent chief executive currently underway.

At the same time as officially establishing Oflog, Michael Gove also announced a plan to simplify the funding landscape for local authorities, with a plan to streamline existing funding, providing better information on the local funding landscape, a new funding simplification doctrine to require central government departments to follow, and reforms including multi-year trailblazer funding arrangements for mayoral combined authorities to be implemented at the next Spending Review.

Alison Ring, ICAEW Director for Public Sector and Taxation, commented: “ICAEW welcomes the establishment of the Office for Local Government and its emphasis on using authoritative data as a basis for improving the performance of local authorities in England. We concur with the plan for a measured approach to developing the data it collects in such a way that minimises the burden on local authorities while maximising the improvements that can be achieved.

“We believe that local authority audited financial statements are an important tool that this new office should embrace as a vehicle for both collecting data in a standardised way, as well as in analysing operational and financial performance. It is therefore vital that the backlog of local audits is resolved and that actions are taken to improve the quality and understandability of annual financial reports so that they can play their full part in accountability, governance, strategic decision-making, regulatory and system oversight, financial control and external assurance.

“We also welcome plans to streamline local government funding arrangements so that local authorities can focus their efforts on delivering the best possible local public services for local residents and ensuring that public money is spent as effectively as possible.”

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