Getting the culture right is critical for local government to succeed in its goals

The extent to which an organisation’s culture supports the execution of its strategy, the management of risk and the treatment of its service users is increasingly under the spotlight, and weaknesses in culture are now frequently blamed for failings in these areas.

When it goes wrong…

The current environment presents dynamic uncertainty over what the future holds, with only one thing really clear: local government must be ready to adapt whilst protecting services for society’s most vulnerable. Now, more than ever, the principles of good risk management, sound governance and robust internal control must remain central to organisational control to maintain confidence in the ability of authorities to effectively self-govern and reliably demonstrate value to stakeholders.

But it can, and does, go wrong. And for local authorities, the ramifications of getting it wrong can be far reaching and damaging. Recently, we have been working with a range of local authorities on incidents involving:

failures in contract management and governance leading to significant uplift in energy costs
the award of a contract and approval of significant costs to a senior individual at the authority
allegations of improper Member conduct to influence funding to third parties
allegations of undue pressure by Members outside of committee meetings to influence officer decision making
incidents of significant fraud committed by officers against the Council.

Case study: investigation into increased energy costs to be funded out of public money by Liverpool City Council

We were engaged by Liverpool City Council in 2022 to investigate and establish the facts and circumstances that led to the Council being placed in a position where there was a significant increase in energy costs as a result of entering into an emergency variable-rate energy tariff.

Our findings and recommendations were presented to the Lead Commissioner for consideration and then to the Audit Committee. There was no evidence of malpractice, cover-up, or playing the market by any officer and no evidence that the Mayor, or Deputy Mayor, had any prior knowledge of the situation. In addition, there was no indication that the Nolan Principles of Public Life had been breached. However, there were issues at a strategic level including culture and workload, combined with risk management processes and lines of reporting, both of which the Council has already begun to review as part of its improvement journey.

Through our work, we consistently find that culture emerges as a root cause where things have gone wrong, whether through complacency or stress of significant workloads or other means. As a result, local authorities are increasingly having to examine and assess the concept of culture and if it supports their strategy and mandate.

Senior leadership teams need to examine what aspects of the culture they should change and how, which is particularly relevant in the current environment as it can highlight both successes to be replicated and recommendations to address any areas of divergence. The problem is, culture can be intangible and difficult to define, let alone assess or change.

We have a structured tool to assist organisations in auditing culture. This tool helps organisations to define their ‘target’ or desired culture, and then measures actual culture across the organisation against that target. Finally, it assists in defining a plan to address any material gaps between target and actual culture, in particular those that create a risk that the organisation won’t be able to achieve its strategy or deliver on its mandate.

Find out more

Local Government

Making a proactive contribution to our communities and wider society has always been fundamental to our values and the way we do business. We are proud of our long-standing relationship with the local government sector, acting responsibly in the public interest and helping build the economic foundations of a fair and prosperous world.