Government hits Council with Best Value Notice raising 'significant concerns'

The government have issued Cheshire East Council with a Best Value Notice confirming it has significance concerns regarding the authority's financial sustainability and medium term financial strategy.

The notice also expresses concerns regarding the Council's "leadership capacity, governance, scrutiny and culture".

Whilst the Ministry of Housing, Communities and Local Government (MHCLG) acknowledges the steps already taking to address issues at the Council, ministers remain concerned as to Cheshire East's capacity to comply with its best value duty under the Local Government Act 1999.

The formal notification also outlines the areas where it expects the Council to make further progress over the next 12 months, which include "Develop and agree a single overarching improvement plan which addresses recommendations from the council's various external reviews" and "Continue taking urgent steps to improve its financial sustainability, by delivering against its agreed transformation plan".

James Blythe Deputy Director, Local Government Stewardship and Interventions stated "The council has engaged constructively with the department about the challenges it faces, including during the process for exceptional financial support. However, given the seriousness of the issues identified, and the pace to deliver the level of change required I am setting out the department's expectations of the council in providing assurance of progress."

It was confirmed in February that Cheshire East Council will receive exceptional financial support of £25.3 million from central government, enabling them to borrow money to effectively avoid bankruptcy,

Rob Polkinghorne, chief executive of Cheshire East Council said, "The council has received a letter from Jim McMahon OBE MP, Minister of State for Local Government and English Devolution, issuing us with a non-statutory Best Value Notice.

"This means that while the government recognises the steps we are already taking, it requires further assurance of our ongoing improvement and work towards financial sustainability.

"The letter states that the council is expected to continue leading its own improvement and is requested to engage with the department to provide assurance of progress and respond to the expectations set out in the Notice which are areas we are already aware of and working hard to address.

"We have made significant progress in the last year with a shared understanding of the challenges and putting the building blocks in place for sustainable improvement including the transformation plan, new Cheshire East plan, budget and Medium-Term Financial Strategy albeit with the need for Exceptional Financial Support."

Leader of the council, Councillor Nick Mannion, and Deputy Leader Councillor Michael Gorman, added, "We are confident in our transformation and improvement plans – while we have set ourselves a challenging agenda, we are making good progress.

This is reflected in the report from the Local Government Association (LGA) Peer Challenge revisit which we are also able to share today. The report acknowledges the council has delivered against key aspects of their recommendations, while recognising that we know ourselves and the improvements we still need to make."

"The LGA stated: '...it is clear that there is a significant appetite and energy for reform from senior political and managerial leaders in the organisation, and that this is linked to a wider ambition for improvement.'

"Ofsted, in their recent monitoring visit report, also recognised positive improvement, stating, 'There are now robust governance arrangements in place to support oversight of progress in accordance with the revised improvement plan. Political support for the new senior leadership team is strong, and the children's services budget has been aligned to the new strategic priorities across the service. This investment has resulted in strengthened capacity across the service at a senior and frontline level."

"We must build on this momentum. Continuing to drive improvements, delivering what we have committed to, and supporting each other to deliver at the required pace is critical."

Mr Polkinghorne added, "We set up our independently chaired assurance panel in August 2024, to support and guide our transformation and improvement activity as part of the sector led improvement offer from the LGA. Work with the panel will be strengthened to ensure we continue to improve.

"We will also continue to report on our progress to councillors through committees including Finance Sub and Corporate Policy Committees in June and Full Council."

The Best Value Notice will be reviewed after 12 months.