FINANCE

Governance under the spotlight

More than ever, councils need to have the right systems of finance and governance in place. The role of the in-house monitoring officer in particular is one that has to change, says Seb Lowe.

As councils look to lead their communities beyond COVID into the recovery, many are quite rightly focusing on digital transformation and the integration of key service lines. But the local government backdrop of financial uncertainty around the future settlement, and political uncertainty caused by potential local government reorganisation means that many are also taking a look at their central services.

There is a realisation on the part of many councils that they cannot deliver what they need to deliver unless they have the right systems of finance and governance in place. While recently-issued section 114 notices have shown the importance of financial leadership in very stark terms, many of our clients have been seeking to change the way they look at their legal functions.

This year has seen a significant increase in the number of councils looking to recruit to senior legal posts, with many taking the opportunity to reconsider what they need from a leadership perspective.

The statutory post of monitoring officer has traditionally often carried with it a secondary title – typically something like ‘borough solicitor'. While on one level this seems appropriate, more contemporary job titles such as ‘chief legal officer' and ‘director of law and governance' are increasingly in use.

This change in title is by no means superficial or cosmetic. It reflects a desire on the part of councils to vest the post with far more strategic emphasis, and generally indicates a local authority which is seeking far more from the postholder than an encyclopaedic knowledge of local government law.

When we recruit to section 151 officer posts, the phrase used most often by our clients is ‘business partner'. By this, they mean that they are seeking a finance professional who is able to facilitate rather than to police – someone who understands and buys into the broader strategic vision of the council, and then uses the financial tools at their disposal to facilitate that vision. I am yet to hear the phrase ‘business partner' in relation to a monitoring officer, yet this is overwhelmingly what councils are seeking.

Decades ago, officers and members would typically see the monitoring officer as someone whose primary role was telling them what they couldn't do. Whilst keeping the council out of legal difficulties remains one of the key components of the post, the 21st century monitoring officer is expected to offer alternative solutions to the problems and aspirations of the councils they serve. If the monitoring officer of the past would simply tell the council what they couldn't do, the modern local authority expects the monitoring officer to provide an alternative way in which the same problem can be addressed.

The organisational and structural makeup of local government has changed immeasurably over the last decade. The increase in wholly owned subsidiary companies delivering ‘core' council services; trusts delivering children's services; the formalisation of joint posts between authorities and health partners; joint leadership roles across council boundaries; and formal alliances between local authorities all present complicated governance arrangements for the monitoring officer to navigate.

The ability to bring this type of solution requires a complex blend of characteristics. Key among them is an ability to think around legal issues far more broadly, rather than within a narrow personal specialism.

Many lawyers are, by definition, deep subject matter experts in a particular field of law, however, there is a significant appetite among councils to recruit lawyers who have both the capability and the will to think outside of their own areas of legal expertise.

Complex problems require complex solutions, and these solutions will not typically sit within the narrow confine of the personal specialism of one individual. This does not mean that council preference is moving towards generalists – there will always be a need for experts, however, the best monitoring officers know how and when to bring in the expertise of others and know what questions to ask in order to maximise that expertise.

Strong interpersonal skills are also critical. The monitoring officer needs to be approachable, and to communicate extremely complex legal issues effectively and clearly to a lay audience. Yet alongside this, there remains the need for monitoring officers to be resilient and robust when necessary to defend the council's interests and protect its officers and members.

Whereas historically the partnership between the chief executive and section 151 officer would form the leadership core of a council, many local authorities now look to elevate the role of monitoring officer to form a triumvirate of core leadership. In doing so – especially where the monitoring officer is able to demonstrate versatility, creativity to solutions-orientated approach – they open up an expansive range of possibilities as they address the complex challenges faced by their communities.

The days where the monitoring officer is seen simply as an in-house expert on local government law are coming to an end, and the potential benefits for councils and their communities are huge.

Seb Lowe is a partner with GatenbySanderson's local government practice

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