Despite councils’ financial woes, local government lawyers tell Katharine Freeland they are committed to this ‘rare legal ecosystem’
The low down
A local authority issues a section 114 notice when it is on the verge of unauthorised spending. In the past six years, more local authorities have issued these than at any other point since the Local Government Finance Act 1988 required the notice. Funding cuts, financial mismanagement, the fallout of the pandemic and the spiralling costs of social care have put many services at breaking point. What else? Business rate revenues are down, and some commercial investments have been spectacular failures. It is an unenviable in-tray, but many lawyers remain committed to the local government sector. They see it as a rare legal ecosystem offering varied, values-based roles with management possibilities – and opportunities to better the communities in which we live.
It has never been more difficult to be a local government lawyer. They must possess the legal and practical versatility to straddle different sector teams, covering gaps left by failures in recruitment and retention. Those in leadership walk a tightrope of responsibility, duty-bound to enforce the standards regime (the current form of which was introduced by the Localism Act 2011) but unsupported by effective sanctions. And although benefiting from a public sector pension, pay is far from comparable with the private sector, and long-term job security is not what it was.
Social media has created additional pressures, with monitoring officers, who are predominantly lawyers, on the receiving end of personally targeted anger from a frustrated public. The rise in independent councillors, resulting in councils where there is ‘no overall control’, has also created a lack of accountability, with no chief whip to turn to when councillors step out of line.
Vast and varied
To be a local authority lawyer is to work for a billion-pound organisation responsible for the lives of thousands. Valuable legal expertise can be gained across a range of diverse sectors: planning, procurement, licensing, transport, education, housing, social care and more.
At the highest level of monitoring officer, legal rigour must be combined with budgetary and political nous, and a strong awareness of how to spot and manage risk. Working together with the section 115 officer (chief financial officer) and the chief executive, the monitoring officer is the legal and ethical guardian of the organisation. They ensure that governance is sound, that the local authority operates within its powers, and that high standards of conduct are upheld.
‘As well as the law, monitoring officers need knowledge of strategic management, risk management and change management, as well as sound business sense,’ says Deborah Evans, CEO of Lawyers in Local Government (LLG). ‘It is a unique position for a lawyer, which definitely has its attractions.’
Yet those who wish to forge a role in local government, and ascend to the position of monitoring officer, face unenviable challenges. After the global financial crisis, the coalition government imposed deep cuts on local authorities – a move that coincided with a sharp rise in the need for social care.
As a statutory responsibility, social care has been protected by cutting other services, such as road maintenance or street lighting. According to the Institute for Government, between 2009/10 and 2021/22, funding for local authorities in England fell by 10.2% in real terms. Many lawyers took voluntary redundancy, leading to a loss of institutional knowledge within local authorities and a burden on those left behind.
‘Legal teams in local councils tend to be very good, but the lawyers have to do a lot more than expected,’ says Imran Hussain, a prosecution, regulatory and licensing lawyer who works across a range of councils. ‘The senior lawyers do paperwork you would expect a paralegal to do, and they cover all the admin as well as the casework. There is a huge issue with resources.’
Monitoring officer
And the view at the top is not much better. A recent report by Browne Jacobson, the LLG and the Local Government Information Unit, examined the changing role of the monitoring officer, highlighting the need for good governance, and proper support and funding of this essential position. The report found that the role of monitoring officer has become highly complex as local government – and society at large – evolves, leading to a broader range of responsibilities.
For example, the explosion in social media has led to challenges in managing reputational risk for local authorities, and also the need to respond effectively to direct public concerns.
With local authorities facing ever-growing risks, the report says, the so-called ‘golden triangle’ – the monitoring officer, CEO and CFO – must use their legal powers and duties effectively to support good governance, thus protecting councils and the essential services that they deliver.
A crucial point in the report is that the standards regime is in need of urgent reform. Not least because of an absence of effective sanctions for policing bad behaviour.
The ability to suspend or disqualify councillors was removed in the Localism Act 2011. Councils have had to explore other types of sanctions such as training, enforced apologies or the removal of responsibilities.
Monitoring officers interviewed for the report felt that this toothlessness had bred a culture of disrespect and contempt for the rules and existing institutional frameworks. Some councillors see the presence of a grievance process on their records as proof of their maverick status.
‘It is important that the narrative from central government should seek to support rather than belittle local government,’ says Peter Ware, head of government at Browne Jacobson and a lead author of the report. ‘The Localism Act and the lack of an enforceable standards regime are not helpful for members, and the lack of statutory backing is often undermining monitoring officers.’
There is currently a lack of nuance in the remedies available. Rachel McKoy, monitoring officer at the London Borough of Newham, says: ‘As a monitoring officer, we do have the option of making a section 5 report under statute [the Local Government and Housing Act 1989] – where there has been an unlawful decision, action or maladministration by an authority that needs to be reported by the monitoring officer to full council.
‘However, this is not a step to be taken lightly. The absence of effective sanctions means that monitoring officers have not had much acknowledgement or respect, and have had to argue for a seat at the table of the golden triangle.’
'Investing in the support of efficient, empowered, commercially focused lawyers is of huge benefit to local government and the public they serve'
Peter Ware, Browne Jacobson
The pressures are external as well as internal. Monitoring officers face not only the wrath of badly behaved councillors and officers who do not like having their behaviour curtailed, but that of the public – who become frustrated that their complaints are not being pursued and can turn to personally directed criticism and even abuse.
Yet at a time when dozens of local authorities have indicated they could issue a section 114 notice in the next two financial years, a position that stands as a bulwark against maladministration and wrongdoing should be supported and valued.
‘Councils that are well run have legal at the heart of decision-making and good governance, and value lawyers rather than see them as just a service line,’ says Ware. ‘When things go wrong, you can very often trace that back to bad governance and decision-making that was not underpinned by a sound legal foundation. Investing in the support of efficient, empowered, commercially focused lawyers is of huge benefit to local government and the public they serve in the long term.’
A new Code of Practice, devised by the LLG, the Chartered Institute of Public Finance and Accountancy, and Solace, a representative body for CEOs, was released in July. Elucidating the ‘seven standards of the golden triangle’, the key points are that statutory officers must understand governance, act wisely, lead ethically, act effectively, resource the roles, build resilience and deliver sound decision-making.
Although the code is not the revolutionary spur of new law, it is a small step forward in bolstering the authority of the monitoring officer and setting out expected standards.
Councils at crisis point
Birmingham and Nottingham city councils both issued section 114 notices in autumn 2023, after struggling to balance their books in the face of precarious finances and rising costs.
For Nottingham, a major factor was the collapse of its Robin Hood Energy (RHE) company, estimated to have lost the council £38m. The company was set up in 2015 as Nottingham, like many councils, attempted to become more entrepreneurial to counter the effects of severe budget-cutting in the years of austerity. RHE was designed to offer a cheaper alternative to mainstream energy companies, with the aspiration of helping to tackle fuel poverty and create local jobs. The company failed to turn a profit and the council had to provide sizable loans to prevent RHE from collapsing. In 2019 Ofgem threatened to revoke its license to operate for not paying its bills on time.
Grant Thornton then issued a report in August 2020 which highlighted serious failures in Nottingham’s approach. It accused the council of ‘institutional blindness’ in letting determination for the company’s success overshadow governance arrangements while ignoring escalating risks which were jeopardising public money.
Governance arrangements were not sufficient considering the highly complex nature of the company and the regulated energy markets in which it operated. The report criticised council culture, the reporting process and the lack of accountability, among other failings.
The council is increasing bills by 5% – the maximum currently allowed with government permission without holding a referendum – axing jobs and reducing services, including re-evaluating how it provides social care.
The well-publicised problems of Birmingham’s council have only increased since it lost a £760m equal pay claim in the High Court in 2012. A calamitous implementation of a new Oracle ERP system has created grave financial challenges. The cost of the project has soared from an initial estimate of £19m to a projected £216.5m by April 2026.
Government-appointed commissioners have stepped in to propose a swathe of cost-cutting to public services such as bin collection, libraries and street lighting, among other services.
Retention and recruitment
The LLG has also launched various initiatives to address the longstanding gaps in retention and recruitment. The ‘Inspire’ programme readies local government lawyers for the transition to leadership, equipping them with the resilience and ability to ‘speak truth to power’ – essential for monitoring officers. It does this through coaching on strategy, business planning, finance and the management of business relationships.
Evans says: ‘We take lawyers and give them the extra skills and confidence they need to excel in the role of the monitoring officer. This requires an unusual mix of knowledge of statutory duties combined with a grounding in strategy and other management abilities.’ The 12-month programme, launched in 2023, is very popular, she adds. The next cohort started at the end of September.
The LLG also has an active junior professionals division, and has made efforts to improve recruitment at entry point, with an outreach programme to universities. Final-year students are invited to apply for a week’s work experience in local authorities and sample the array of niche legal specialisms available.
‘Many of our work experience students report that the week opens their eyes to different ways of practising law,’ Evans says, ‘and to the multiple roles that are available in local government.’ Apprenticeships also now offer a route into local government and a way to improve the social diversity of its intake.
There are points about a career in local government that should appeal to the core values and expectations of Gen Z. For example, net-zero considerations are fundamental to shaping policies and direction for local authorities, with a tangible impact on the communities in which we live. Another plus is that local authorities tend to offer hybrid, remote or flexible working to employees as a matter of course.
Digital transformation
Local authorities are also repositories of huge amounts of unprocessed data about their communities through GPs, the electoral roll and other sources, ripe for the use of artificial intelligence (AI) tools to create joined-up, cost-effective services. Some local authorities have made inroads into exploring how AI can improve their services to the public.
Schemes include introducing chatbots or using AI for minute-taking at meetings to free up clerks for higher-value work. Newham Council announced that it saved £40,000 within six months of setting up its chatbot scheme.
Barnsley and Buckingham councils have implemented Microsoft Copilot to streamline administrative tasks. Norfolk County Council has used AI to analyse existing data to predict when early intervention in social care is needed, such as identifying people who are at risk of falling, as well a pilot scheme addressing those at risk of loneliness.
Richmond and Wandsworth councils have created a Low Income Family Tracker to gather data from multiple sources to target households that may be eligible for unclaimed benefits.
Lawyers are optimistic about the potential for the application of new technologies to public services while remaining cautious of the implications for data protection, consent, transparency and data accuracy.
‘We are very aware of the risks of AI from a governance perspective and how information can be manipulated, as well as the opportunities,’ says McKoy. ‘No one wants to end up in front of the [Information Commissioner’s Office].’
New government
The Labour government has indicated that it intends to address the local government funding crisis. But it is not yet clear whether this will take the form of a specific long-term funding commitment. It is also too early to say what its plans are on issues such as homelessness – which was name-checked as a priority in its election manifesto.
More devolution could make a difference to local authorities, enabling decision-making on social issues and more to be made at a local level. Labour’s proposed English Devolution Bill, announced in the King’s speech, plans to pass powers from Westminster to metro mayors and combined authorities across England, allowing them to have more control over strategic planning, local transport networks and employment support.
The government has also committed to appointing hundreds of new planning officers, overhauling the planning rules and supporting councils to build more affordable housing. More policy detail is expected at the Labour party conference in October.
‘Labour traditionally puts the public sector at the heart of their policies, but there is no magic wand for new investment to offset years of underfunding,’ says Evans. ‘There will inevitably be challenges. Now our priority is to prepare local government lawyers for legal reform, as that could come very quickly. When resources are tight the danger of breaches is greater, so lawyers must be prepared.’
Why stay?
Engagement with the community, the varied caseload, and work/life balance are some of the reasons why local government lawyers stay in the sector.
‘The monitoring officer is a wonderful role despite the challenges, where you are the custodian of the constitution and good governance,’ says McKoy. ‘Before that, I was a planning and regeneration officer, enabling aspiration through new housing estates, making green spaces attractive and addressing climate change through retrofitting and improving air quality. You can walk around and see the improvements that you have helped to make. It is really special.’
Katharine Freeland is a freelance journalist
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