Learning the stark lessons from a crisis

By Ann McGauran | 13 September 2023

The misfortunes of local authorities are in the spotlight more starkly than ever, with the largest council in the UK plunging over the edge into section 114 notice territory last week.

Labour-led Birmingham City Council has blamed devastating financial problems, including a £750m equal pay bill. But it has also seen a rapid turnover of chief executives and interims in recent years, alongside some notably difficult politics.

Are leadership revolving doors making it harder for councils to tackle problems? It’s a question exercising former chief executive of Slough Council Josie Wragg – sacked for ‘gross misconduct’ by Best Value commissioners in March 2022 following a s114 notice issued by the unitary council in July 2021.

Responding to events in Birmingham, Ms Wragg told The MJ she believes rapid turnover at the top is a key proxy indicator for problems, and it’s time to look for a new way of predicting local authority instabllity.

She said: ‘I feel so strongly for colleagues in Birmingham. Finance should be only one element of a predictive dashboard. Using softer proxy indicators such as turnover of chief officers gives us an insight into the culture and potential instability of a council.

‘I was the fourth chief executive in two years when I started at Slough. A high turnover of chief executives or other senior officers can be indicative of instability, disagreement and perhaps a more “bludgeonly” approach to manifesto offerings.’

Lately she has been working on a personal project focused on predicting serious problems. She wants to create a model building on what she calls the Office for Local Government’s (Oflog) ‘basic metrics’ – and blending that with ‘softer context’.

Her vision is to take both quantitative and the qualitative data, ‘and you marry that with some experiences from current chief executives but also some chief executives who have left and have the benefit of looking into the sector as opposed to actually being part of the sector’.

She continued: ‘You create something which says “ok this is your situation now – in five years’ time you really need to be worried. If you’re not worried you need to be doing things around this and this.”’

She moved from Wokingham BC into the top role at Slough in October 2018. Her less than three years in the job ended when she was asked to step away from the council in September 2021. At the time of her sacking, she said on social networking website LinkedIn she was prepared to ‘robustly defend my reputation’.

Ms Wragg told The MJ her time at the helm contained ‘incredible pressures’, and that since her departure her mental health ‘is really suffering’.

She said the words used in the full media glare setting out the reasons for her dismissal are ‘very painful for me – to repeat them might be triggering’.

Broadly, Slough’s investigating and disciplinary committee (IDC) was highly critical of what it said was her failure to address both the issues facing the council when she joined and a series of failures since her arrival. The IDC also hit out at what it said was her failure to monitor, challenge or manage the council’s revenue budget, borrowing or capital programme, and a failure to develop a credible response to the s114 notice. Announcing her sacking, the commissioners highlighted the IDC’s criticism of the chief executive’s decision to reorganise the council ‘during [a]pandemic without the necessary financial and operational knowledge’.

Reflecting on the reasons given for her dismissal, Ms Wragg said the restructure was a programme that was established right at the start of her tenure. ‘When I started in Slough my remit was; “Josie, we want you to transform this organisation”. And transformation is not just about staffing restructure, it’s about whole organisational change.’

She continued: ‘The investigation procedure relied on a governance report that did not make reference to me personally but rather a decade-long systemic problem at the council.

‘No formal interviews were undertaken as part of the investigation but hearsay from a very small number of shall we say “interested parties” was peppered throughout the report.

‘Anyone who understands how these processes work – and you really don’t understand until you’ve been through it – knows there is an inherent bias towards the commissioning council’s preference. If you challenge, which I did, the language becomes stronger.

‘Using evocative words such as “reckless” does not in any way describe me and even now hearing the term has a Pavlovian effect on my emotions. I naively relied on a process which I thought would be fair but ultimately, when the system needs a particular outcome, the system dances to that tune.’

She said her first 17 months in the role were spent ‘trying to get under the bonnet of the organisation, trying to understand the changes needed’. In March 2020 Covid hit, and ‘overnight everything changed’. Ms Wragg was Gold lead. ‘All the goalposts moved, and all the parameters of dealing with a normal local government situation shifted radically’.

During Covid she continued the consultation process for a council restructure. In the middle of this, and with staff exhausted, the 2021-22 budget round started, and she said gradually financial difficulties became increasingly apparent.

Does she now think the restructure should have been slowed down? ‘In a purest world we would probably have checked in and gone, “is it still ok that we carry on?” I don’t disagree with that. What I do disagree with is that fundamentally I steered this reckless course of action against a tide of people who were saying something opposite. That is not the case, and I feel really upset about that.’

In spring 2021 external auditors Grant Thornton issued a highly critical statutory recommendations report on financial management at the council. By May s151 officer Neil Wilcox had left the council, with Steven Mair appointed as his replacement. Writing in The MJ, Mr Mair said that when he arrived, material errors had been found in the 2018-19 accounts that were not yet signed off by auditors, and no accounts at all had been produced for 2019-20 or 2020-21. In July that year Slough was one of eight councils granted ‘exceptional support’ and given a capitalisation direction worth £15.2m by the secretary of state.

By October that year two Government-ordered reviews were published – one from the Chartered Institute of Public Finance and Accountancy (CIPFA) examining financial and risk management and one from retired chief executive of Salford City Council Jim Taylor covering wider governance arrangements. In a report that did not name Ms Wragg personally, Mr Taylor said: ‘The council does not have a track record of taking appropriate difficult decisions, for example in reforming services and limiting certain expenditure.’ He added the authority had been displaying all the characteristics of a council struggling with its Best Value duty ‘over past years until present day and has failed in its Best Value duty despite the concerted efforts in the last few months’.

In spring 2022 the council asked the Department for Levelling Up, Housing and Communities for an initial capitalisation direction of £307m to balance its budget for 2022-23, with the department warning the bailout would only be considered if the council proved it could turn itself around. Slough’s commissioners are expected to publish their third report on the council’s future this week.

With nine councils within the Special Interest Group of Municipal Authorities (SIGOMA) last month warning they could issue a s114 notice by 2025, the pressure on the sector’s chief executives is relentless. Ms Wragg is deeply concerned about the potential for a tragic outcome. She said: ‘The Ruth Perry case [of the Berkshire headteacher whose family say killed herself after a negative Ofsted inspection] really resonated with me because there was a woman who had dedicated her professional life to improving the lives of children.

‘And because an external narrative deemed that something within the school should not have happened then suddenly the tectonic plates start to shift and move and that poor lady was absolutely devasted by that. It really touched a nerve with me. I was talking to another ex chief executive and we were both wondering how long it is before something like that happens to somebody in our sector.’

Now that crisis-hit councils and their leadership teams are increasingly the focus of public and media attention, many council chiefs must be saying: ‘There for the grace of God go I.’

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Finance SIGOMA Transformation Reorganisation Coronavirus leadership Best Value