Monitoring officers – keepers of conscience

In his Commentaries on the Laws of England (published between 1765 and 1769) the celebrated jurist William Blackstone referred to the lord chancellor as ‘keeper of the king’s conscience’. For ‘as the king can never be supposed intentionally to do any wrong, the law questions not but he will immediately redress the injury; and refers that conscientious task to the chancellor, the keeper of his conscience’.

In local government, the monitoring officer (MO) has some similarities. With statutory responsibility for maintaining lawfulness and sound legal governance, the MO may be regarded as keeper of the council’s conscience. This is because under section 5 (and, for authorities operating executive arrangements, section 5A), of the Local Government and Housing Act 1989, the MO must report formally to the authority on any (or any likely or prospective) breach of law or code of practice or on any maladministration.

This is often easier said than done in the fraught corridors and meeting rooms of local authority power. Good legal knowledge and practical operational acuity are of course essential. But also, as indicated in the November 2023 Local Government Information Unit (LGIU) report The Changing Role of the Monitoring Officer (produced in conjunction with law firm Browne Jacobson and Lawyers in Local Government (LLG)), the MO needs: ‘A striking range of skills and attributes, including relationship building, people skills, political nous, a thick skin and willingness to make and stand by firm decisions, not to mention knowledge of local government and its constitutions and processes’. Central to these attributes is the MO’s ability to work effectively with the two other senior officers essential to sound authority governance: the chief executive (or head of paid service (CEO)) and the chief finance officer (CFO). LLG often refers to these three officers as ‘the golden triangle’. The CEO has overall responsibility under section 4 of the 1989 act (and otherwise) for the management and governance of the authority. The CFO, appointed under section 151 of the Local Government Act 1972 (so often referred to as the section 151 officer), has responsibility for ‘the proper administration’ of the authority’s ‘financial affairs’. As Rachel McKoy, president of LLG, remarked in the LGIU report: ‘Working alongside the CEO and the s151 officer, within the golden triangle, monitoring officers are pivotal in upholding ethical conduct, setting high standards and ensuring the council operates fairly, and squarely, within the rule of law.’

As the LGIU report also remarked, MOs are ‘reliant on a strong foundation of trust with their council’s members and officers to fulfil their statutory duty’. And ‘much of their role revolves around building and maintaining these pivotal relationships’. As one MO has put it: ‘I spend the majority of my time dealing with issues that go wrong, refereeing between elected members and officers and sorting out issues and resolving things… in the organisation.’

But with three local authorities (Woking, Birmingham and Nottingham) needing to issue reports in 2023 under section 114 of the Local Government Finance Act 1988 (where, among other things, per section 114(3), expenditure is likely in a financial year to exceed available resources), what factors lead to such financial failure? Grant Thornton, in its 7 December 2023 report Preventing failure in local government highlighted, among others: poor decisions, often accompanied by a lack of transparency; risky investments made without the necessary commercial skills and knowledge; lack of an effective top team; over-reliance on interims in key roles; and the failure of members to ask the right questions.

Particularly relevant to the role of the MO is lack of an effective top team. As Grant Thornton’s report indicated: ‘The three senior statutory roles, the chief executive officer, finance director (section 151 officer) and monitoring officer, have between them complementary legal powers and duties which help to support good governance’. So: ‘A strong senior management team, which is transparent and accountable, mutually supportive and challenging and is respected by the council’s executive members, provides important safeguards against poor decision making.’ It is therefore ‘important that all the statutory officers and other members of the senior leadership team have a good understanding of the legal powers and constraints on local government as well as the fundamentals of local government finance, to fulfil their shared responsibilities.’

But capacity to create and maintain sound and effective working relationships requires considerable MO self-confidence and maturity. Credibility is considerably enhanced when (along with the other statutory officers) the MO is a member of corporate management team. As the LGIU report noted, a seat at top table along with other statutory officers ‘was universally seen as vital for doing the job’.

Among the causes of authority failure highlighted by Grant Thornton was inadequate fulfilment of the statutory officers’ professional and legal responsibilities, including failure to challenge poor or even ultra vires decision-making. Although there is no suggestion that the monitoring officer fell short in any of the above authorities, this can sometimes be testing for an MO and particularly when one (or both) of the other two statutory officers allow themselves to become inappropriately close to majority group political objectives and disagree prominently with the MO, resulting in unlawful outcomes. In such a situation, an opinion from suitable senior counsel can help. But the MO must nevertheless carry the lonely torch of corporate propriety resolutely against any strong headwinds. For while this may not win many influential friends in the authority, the MO must nevertheless stand or fall by an unimpeachable reputation for integrity. And, as the LGIU report noted, doing the right thing ‘can absolutely save… the reputation of the council’.

Nicholas Dobson writes on local government, public law and governance