From the Twin Pillars to the Golden Triangle – a balancing of the powers

In a recent article Paul Feild expressed concern that the LLG, CIPFA and Solace’s 2024 Code of Practice on Good Governance for Local Authority Statutory Officers places onerous obligations on the Monitoring Officer without consideration as to how they might deal with them. Philip McCourt, who drafted the Code, responds to those concerns and says its publication presents an opportunity to lobby for structural change.

Local Government Lawyer recently ran an article from Dr Paul Feild on the LLG, CIPFA and Solace 2024 Code of Practice on Good Governance for Local Authority Statutory Officers. This sets out a personal position as a “critical review from the stance of a local authority lawyer as befitting this publication” an argument that “this Code places a great deal of onerous obligations on the Monitoring Officer, without a proper consideration as to how they are going to deal with it.”

That requires a response and explanation, both positive and grateful that there is a debate being had as a result of the Code’s publication and that it raises again the issues for which there is an opportunity to lobby for structural change, but also to provide practical and historical context to the questions raised.

I will let LLG, CIPFA, Solace and the LGA respond in their own way. Solace can say that the headings, and in particular the heading to ‘act wisely’, is descriptive short hand that they considered helps to explain the message of the behaviours one should exemplify, setting out the landscape for politicians and others including fellow officers who aspire or wish to be encouraged to take on these positions. LLG can also respond to the case the article makes again that the monitoring officer should be legally qualified, which has been LLG’s public position for some years now (with a few dissenters) and which sits alongside their desire to have the position of monitoring officer re-titled. For my part, it is worth adding to the article’s comparison of chief finance officers being required to be qualified accountants in the local authority sector by pointing also to company secretaries of publicly listed companies who are required to be suitably qualified, so why not a public authority of commensurate size?

I will be open and say that the drafting of the Code, and the yet unpublished thoughts behind it, is some of the most important work I have done for several years. This has, however, been a team effort. It is a document that has been the subject of detailed consultation, with considered and fulsome responses on the draft from the membership of LLG, including discussion at the Governance Conference of November 2023, as well as from CIPFA, Solace, ADSO and the LGA throughout its year-long development. Dr Feild will be a member of LLG and his input would no doubt be valued, alongside that of his colleagues, and as the Code is a living document to be reviewed as it beds in hopefully his input still will be.

Much of article’s commentary is about discussing what resourcing associated with the Code is desired to be in place to make it effective and, if that isn’t present, that this “is setting the Monitoring Officer up to fail”.

I couldn’t agree more. Acting wisely includes a duty to enquire and a statutory officer may not hide behind a stack of files or allow themselves to be swallowed up by a ‘day job’ and say they didn’t see. If their duty is to report on omission, then they must inform themselves and be looking to where that might be. An important part of the statutory officer role is what I refer to as a duty of enquiry. As Max Caller said when interviewed by Local Government Lawyer “the MO is the full-time job, and if you do it properly, you haven’t got time to be anything else. It’s a serious, serious job. It’s not a bolt-on.”

I can safely say, however, that there are no new rules or obligations as presented by the Code of Practice on Good Governance. The Code of Practice on Good Governance does not of itself place a great deal of onerous obligations on the Monitoring Officer, because they exist already and are in place. One might even say that a seasoned monitoring officer will know this already, instinctively if not written down in this way. What the Code does do, however, is point to what those existing obligations, necessary methodologies and best practices are, helping with the day to day implementation of what has been set out in statute for over a quarter of a century now. We all know from experience, for example, that Max Caller was right in his comment in that interview that “even if you are a star monitoring officer, your position in the council structure can limit your effectiveness”. What the Code does is have that position agreed by all of the professional bodies and then see it written down as a measurable performance of the roles for a local authority that the chief finance officer and monitoring officer should be a full and active member of the authority’s most senior leadership team (requirement 4.2C).

The Code is also not a lobby piece to Government, which is contained elsewhere, but as seen just above it has a place as a tool for such. If that means it highlights that there are failings in resources, the pay grading of these chief officers, support made available or the training and involvement of those colleagues (as appears to be the case in the argument of Dr Feild as one of those officers acting in support of the monitoring officer and others), then that is a matter for the individual authority to tackle. What I would say is that, by comparing what exists and how things should be as laid out in the Code of Practice on Good Governance, it is an excellent starting place to begin that conversation.

At its foundation, and included within the Code of Practice on Good Governance, is the content of the model Monitoring Officer Protocol. This was produced by LLG (in its previous form as ACSeS) in 2003 as a response to the significant change to this area of law in 2000. This Protocol has since been adopted and included within the constitution of many councils, allowing clear management of their own role by the monitoring officer and their unusual position in the organisation.

Behind that is the history to this. The term ‘golden triangle’ is the subject of a number of jokes, such as those in the article, and I am guilty of making a similar joke myself on more than one occasion. It is, nonetheless, a term that has stuck and now plays a key part in communicating what these roles are and do. The ‘golden triangle’ conjures up both the importance of the roles as being distinct from the other no less important statutory chief officer roles, the DCS, DASS and DPH for those that have them, and also conveys the separateness and balance between the three roles that is required for them to operate to best effect.

The statutory roles were a product of the Widdicombe Report (1986), which became those parts of the Local Government Finance Act 1988 (where arguably it was rushed in) and then the Local Government and Housing Act 1989, creating the two sides of a coin that are the chief finance officer and monitoring officer together with the head of paid service. What the Widdicombe Report and more particularly the government of the day in responding did not do was to address head-on the changes brought in as a result of the Bains Report a decade and some earlier, which had led to the moving away from the concept of the clerk to the council as a first among equals to the model of an executive general manager that was to become the ubiquitous chief executive, but which had not fully landed at the time. Although the Widdicombe Report recommended that a statutory post should be created of chief executive (as is now the case in Wales) the Government of the day did not consider that such a requirement was appropriate and, instead, we were given the twin aligned statutory roles of a head of paid service and monitoring officer. The old twin foundation pillars of good governance, the clerk and the treasurer, thus became three, at first in name at least.

The resulting legislation provided that the head of paid service and the monitoring officer roles could be held by different officers (neither of whom need necessarily be the chief executive). By and large, however, the two roles continued to be carried out by the same person in the form of the chief executive. That compromise also meant that the monitoring officer would not have to be qualified so as to allow the generalist chief executive to continue to take on the role.

That approach was based on a presumed view, then still present, that an authority’s most senior officer would, by and large, still come from a background of holding the skillset of the council secretary (or what we might now call the chief governance officer) which is a role they were able to fulfil as well as being the manager and policy advisor and, still quite often, could also act as general counsel. It took a good number of years for the Government to realise the mistake; in responding to the pressing events happening at that time the Widdicombe Report and then Government did not foresee the potential effect of pursuing the role of chief executive as being an executive general manager/director equivalent, a role divorced wholesale in function and background from the secretariat governance skillset that came with being clerk to the council, and what that could and occasionally did mean.

In 2000 in was announced in Parliament that:

“In future, under legislation that we shall introduce, it will not be possible for a chief executive to combine the role of head of paid service with that of monitoring officer—as is currently the case in several authorities... The increased demands that will be placed on those officers both by the new political structures and by the new conduct framework that we are introducing will, in our view, make the ability of one individual to hold both posts untenable, as well as increasing the likelihood of conflicts of interest between the two roles”.

The change took effect and, in seeking to manage the monitoring officer’s new roles, not least of which was to provide this new balance of power to the chief executive (a new form of ‘speak truth unto power’ role for the individuals concerned), ACSeS/LLG introduced the Monitoring Officer Protocol. This supported how they might go about exercising their new role and establish the practicalities of making that separation of powers work across, what was now, a triangle.

In all of this, the rather unfortunate name of monitoring officer had stuck and the then immediacy of the issue did not bring with it the opportunity for a discussion or regulations on qualification, just that separating out of the roles of the old style chief executive and clerk. The next opportunity was the Localism Act, but that was all about removing protections and regulation to bring about more ‘local control’ and ‘armchair auditors’, not increasing it. At least what that did do was confirm the position of the monitoring officer as a statutory chief officer of their local authority.

Jumping forward to now, as a response to the pressures of austerity, that lower level of governance and standards control in the legislative framework and the maturing of the practices of the head of paid service, chief finance officer and monitoring officer a decade later, the Code is about shoring up support for the statutory officers’ crucial role in upholding ethical standards and sensible delivery of good governance.

The next step is then the lobbying about the issues Paul Feild highlights, which are not unlike the representations being made by Solace, LLG, CIPFA, ADSO and, in the governance framework and directly, the LGA. Strengthening the standards regime, increasing the protections of the statutory officers and underlining the importance of training, development and support for governance are all arguments being made to Government.

Let us hope, unlike the response of the Government previous to the recommendations of the Committee on Standards in Public Life on these areas, we will get more than a delayed response of no, no, no and a tentative maybe.

Philip McCourt is both a solicitor and chartered secretary. He joined local government in 1988, was first appointed as a monitoring officer in 2000, following which he worked for a number of authorities and is a past president of ACSeS (LLG). He writes on a number of governance issues, including as the current author of Knowles on Local Authority Meetings and is an examiner for the Local Government Diploma. Philip joined Bevan Brittan LLP in October 2022, where he specialises in providing advice to local authorities on decision making, governance and monitoring officer issues.