Sunday, 28 March, 2021
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Sunday, 28 March
What we’re seeing and what we’ve been up to
This week, we’ve read and reflected on the Liverpool City Council’s Inspector’s report. We’re sad to say that it represents a spectacular failure of governance, leadership and public duty. This comes as a shock, but no surprise.
It is shocking as taxpayers. And it is shocking as the leader of a company of people who spend their working lives helping to tackle and transform the tough living conditions in many of our big metropolitan cities and combined authorities.
Our role as trusted advisor regularly involves supporting senior leaders rebuild fractured governance to ensure it is functioning effectively to deliver transformational portfolios. It’s a deeply held belief of ours that any self-respecting project leader should welcome good governance with open arms. Robust oversight provides a spotlight for the project, a forum to solve issues, a chance to collaborate, and a system to debate, own and ultimately lead change.
The situation in Liverpool (and recently Croydon) raises two really significant issues that warrant deep reflection:
1. The systemic issue of how cuts in funding has led to reductions in staff capacity particularly at leadership level. These roles are vital to setting culture, applying learning, and maintaining standards. Reduced staff also means the authority missed basic income opportunities in LCC: “As example of the effect of this reduction and capacity in the team a key post lost was that of Rent Officer. This affected the management of the ‘let’ estate and timely collection/payment of rent. Without this role in place, LCC continues to have a significant outstanding rent debt of c£7m. This would have been difficult to collect before the pandemic but now it is likely that significant write offs will be necessary.”
In Croydon the financial pressures appear to have led to undue risk taking in pursuit of a balanced budget. In many authorities, the Place and Growth departments are asked to chase growth towards year end in order to balance the books. Why? Often, they are faced with tough transformational decisions that have not been made in the people-side of the organisation. This is ultimately a failure of leadership as the day-to-day grind is allowed to overwhelm the ‘strategic’ and ignore the complex, necessary work of concentration, skill and resource.
2. The behaviour of individuals in positions of power within our public services. This is more shocking. One interpretation of the Liverpool report is that poor practice was allowed to drift by requirement as leaders looked the other way.
Meanwhile the whole system appears to have lost its focus on what really mattered: the needs of the Liverpudlians and strategic corporate priorities. “Under the management of the Regeneration directorate, the PAMS team lacked senior direction and support to use property assets strategically to deliver sustainable regeneration projects that supported the corporate objectives of LCC. More commonly, the Regeneration Director used property assets as ‘disposable’ assets at best… This was with apparent disregard to the strategic importance; capital value or social value of the properties being used.”
Where is the governance in all this?
In Croydon the Auditors pointed to a “collective corporate blindness.” This sounds like a very serious kind of ‘group think’ called out in books such as Black Box Thinking or the earned hubris of certain leaders in The Intelligence Trap, both books I’ve previously referred to in this newsletter.
Getting project level decisions right requires a sound corporate policy framework, skilled project-level leadership, great governance, and humility. The governance and a sound PMO (programme management office) is often overlooked and errantly dismissed as yet more meetings or paperwork. However, this is matter of basic accountability. The systems we use are particularly vital to manage the trade-offs within any project, so it best meets the corporate prioritise and ultimately needs of the citizens as a whole.
What does this mean?
Much of this comes down to money and a slightly twisted view of cost versus value. The irony is that the right investment in governance, PMOs, skilled staff ultimately pays back through more effective and efficient public service, early intervention in troubled lives, and more impactful urban growth projects.
When done right, these vital projects bring in finance and transform local economies. On the other hand, saving a few shillings and avoiding some hard decision can be extremely costly in the long run.