The May 2022 elections – for governance and then?
Paul Feild examines the governance lessons to be learned from last week’s elections in two London boroughs.
Of all the results of the May 2022 elections from a governance perspective, two results stand out. No, not Westminster or Wandsworth. It’s Croydon and Tower Hamlets. Both imply that the English opposition party is losing control and bucking the 2022 London trend of their net gains. The common factor is governance and two very different outcomes.
Consider Croydon first. In the case of Croydon, as always, what’s really going on is only fully known to insiders, local government are perfect for filtering and presenting a good story. A thorough exercise on voter motivation would be good, however Croydon has now had two Public Interest Reports (PIRs) and a Section 114 Notice in less than two years.
The article continues below…
The RPIs are established by the Local Board Auditor under Section 24 and Schedule 7 of the Local Audit and Accountability Act 2014 (2014 Act). They are legally required to do so under the 2014 Act if they come across an item or issue that the local auditor considers should be brought to the attention of the responsible body and the public. The first RPI for Croydon was published on October 23, 2020.
A Section 114 notice is issued by the Chief Financial Officer of a local authority (S.151 Officer Local Government 1972) under Section 114 Local Government Finance Act 1988. These notices are specifically referred to in the 2014 Act. Essentially, the effect of a Section 114 notice is a drastic financial measure where all expenses except those required by law are frozen.
Section 114(3): “… The chief financial officer of a competent authority must make a report under this section if it appears to him that the expenditure of the authority incurred (including the expenditure which it proposes to incur) at the during a financial year are likely to exceed the resources (including borrowed sums) at its disposal to meet these expenses.
To add to Croydon’s woes in January 2022, another RPI was released. View Fairfield Halls Public Interest Report | Council of Crodon. It concerns errors in the management of the costs of the renovation of the famous Fairfield Hall in Croydon. The local verifier declares:
By 2016 the need to refurbish Fairfield Halls had become urgent and the venue closed in July 2016 for refurbishment, with an expected reopening date of June 2018 and an initial Cabinet-approved investment of £30 million for the proposed renovation (the project). The project was delivered in September 2019 (over a year late) with a final cost of £67.5m committed to date (more than double the original budget). Our review leading to this report took place after we issued a public service report on October 23, 2020 regarding the Council’s financial condition and related governance arrangements. Grant Thorton
To paraphrase Lady Bracknell, ‘to have a relationship in the public interest may be considered one misfortune but two…’. So, not the kind of story to end up in the national and local press and which undoubtedly made the electoral community want change.
As I have already said on Local government lawyer, the Local Accountability and Audit Act 2014 Reporting in the public interest is becoming a powerful driver of change due to the objectivity of professional auditing and the legislative requirement in Schedule 7 that its conclusions must be published and implemented. The implication is that any such report can have a significant effect. Here, it would have been a causal factor of political change. Any council that obtains one must give due consideration to the full council. It cannot be ignored or minimized.
Tower Hamlets has had a difficult period of governance. Action was taken by Secretary of State Eric Pickles following PWC’s best value inspection and he placed commissioners to perform certain duties. The governance was an elected mayor and a cabinet. Following an electoral tribunal sitting on April 23, 2015, mayor-elect Lutfur Rahman was found guilty of breaches of sections 106 and 113 of the Representation of the People Act 1983 and disqualified from political office and a member of a local authority for 5 years. He was later struck off as a barrister by the Barrister Disciplinary Tribunal in 2018. But he has never been prosecuted by police for any criminal offences. The time limit for disqualification from the Electoral Tribunal has now duly expired, and so he stood and successfully returned as the elected Mayor of Tower Hamlets on May 5, 2022.
Before this result, after the departure of the commissioners, the electorate elected another mayor. On May 6, 2021, then-Mayor John Biggs conducted a public referendum on changing council governance from elected mayor to chief and cabinet.
His address on the subject is well worth a view on YouTube.
It’s quite short and gives food for thought. He pointed out that, unlike the strong leader, the full council cannot be held accountable in the same way. In the strong leader model, the board selects the leader and he emphasized the need for checks and balances. Through a chief and cabinet governance model, members can change leadership and thus achieve greater accountability. Biggs said a bad mayor can surround himself with yeses. He suggested that under the elected mayor model, it’s easier to ignore community groups, so, he argues, it’s harder to stop a bad mayor from doing things.
But what’s interesting is the overwhelming outcome of the 2021 referendum rejecting the proposal – almost 4 to 1 of voters backed keeping the institution of the elected mayor. It’s not isolated. The fact is that the local electorate resembles elected mayors.
In any event, the losses in May 2022 for the incumbent party were legendary. Not only did they lose the mayoral election, but they turned a massive majority into a minority losing 21 MPs to 19.
So why did Labor lose? One explanation is that the community and its groups simply preferred a candidate with whom they could identify best. No one could say they didn’t know what they were getting.
New Town Hall for Tower Hamlets
Finally, on a more positive note, some good news about Tower Hamlets, something for those like me who love the architecture of public buildings, Tower Hamlets will soon receive a new municipal office complex. He will arguably take possession of one of the finest and most exciting civic buildings in the country, the over £110million refurbished Old London Hospital near the line’s brand new station. Whitechapel Elizabeth.
In the past, many councils, including mine, had in-house architectural capability and designed and constructed (in-house) large buildings. Probably only Rochdale Town Hall [i] can surpass Tower Hamlets New Town Hall in its architectural magnificence. There is an irony that many local authorities across the country are finding that with remote working there can be a rationalization of office space, but on the other hand such a historic site in a very disadvantaged borough used for community and democratic purposes seems as good a use as any. So let’s hope the occupation goes ahead on schedule and opens a new chapter for the borough. [ii].
Dr. Paul Feild is Senior Standards and Governance Counsel and works within Barking & Dagenham’s legal practice governance team. His 2015 doctoral dissertation in business administration was “How does localism for norms work in practice? ‘The Practitioner’s View of Local Standards after the Localism Act 2011’. He researches and writes on finance and governance issues and can be contacted by email.
[i] Rumor has it that Adolf Hitler admired the building so much that he ordered that it not be bombed and dismantled brick by brick and taken to Nazi Germany if it won the war! It is used almost constantly as a film set for the courts, Birmingham Town Hall in Peaky Blinders for example.
[ii] It would be really ironic if the reported additional costs became an issue because the new mayor could stress the stewardship of his predecessor.