Corporate, finance and governance peer challenge programme: Annual report 2023/2024

1. Executive summary

As part of the Local Government Association (LGA) Sector Support offer, we have developed a targeted peer challenge programme that provides all English local authorities with either a Corporate Peer Challenge (CPC Finance Peer Challenge (FPC) or Governance Peer Challenge (GPC) at no direct cost every five years

The peer challenge programme continues to be highly effective, and is at the heart of the LGA‘s Sector Support programme. The sector remains committed to them and this is demonstrated by the levels of take-up of the offer. During 2023/2024 almost one third of the sector received a CPC, FPC, GPC or CPC progress review with 100 per cent of chief executives and leaders saying their peer challenge has had a positive impact on their council.

Chief executives and leaders have told us:

“A very worthwhile exercise that holds up a mirror to the council's vision and current activities, which produces a roadmap for improvement. Everyone should have one.”

“Improved transparency and accountability on audit processes.”

“Our Corporate Peer Challenge was a thorough and rigorous process that delivered real benefits to the council.”

“The LGA Corporate Peer Challenge provided a great challenge for us as a council facing a challenging time, as all councils are, for a new administration.”

“The team worked exceptionally hard in terms of the sheer number of meetings, the triangulation and the analysis. The challenge was useful overall.”

“(The peer challenge) helped us shape our future planning and approach to services.”

This report clearly demonstrates how peer challenge, involving a follow up peer team led progress review, has continued to be strengthened to provide reassurance to local leaders, inform organisational change, and support service transformation for the benefit of local residents and communities.

Despite the challenges facing local authorities, in 2023/24 67 councils engaged in a CPC, GPC or FPC with 46 councils receiving a CPC progress review. Out of these councils,13 received a CPC for the first time. The remaining councils have commissioned a CPC for the second or third time. This clearly demonstrates the value local councils put on the CPC process.

Demand into 2024/2025 continues and we will engage with at least 105 councils to undertake a strengthened CPC, CPC progress review, FPC or GPC over the coming year.

Feedback from the sector continues to be highly positive. The annual peer challenge impact survey, completed by leaders and chief executives following a CPC or FPC, shows that 100 per cent of respondents indicated that the process of preparing for and participating in their peer challenge has had a positive impact on their council. The feedback from the survey also shows that 100 per cent of respondents found the peer challenge process challenging, which demonstrates how the offer is providing constructive and critical friend challenge to councils.

Peers remain at the heart of this support and challenge. Both officer and member peers have given more than 1,500 peer days of challenge and support to councils during 2023/2024. The LGA’s strong relationships within local government sees senior officers volunteer support at no charge, while member peers receive a relatively nominal fee. Considering the fees charged by private sector consultants (an average of over £1,000 per day for the level of peer challenge team members), the LGA’s peer challenge programme saves the sector up to £1.5 million annually. This continues to demonstrate a significant investment by the sector in its own improvement. It also shows how councils have benefited from peer learning as peers who are involved in the peer challenge process are able to gain new insights on how other councils operate and bring back this learning to their own councils.

In addition to peer learning, the peer challenge programme provides crucial insights into how councils are continuing to respond to the challenges facing the sector and support their local communities. We have undertaken an analysis of CPC (including progress reviews), FPC and GPC reports, between April 2023 and March 2024. This report provides a summary of the most frequent observations and themes. It provides a picture of how councils have shown great resilience in continuing to deliver their priorities within a challenging economic climate, rising demand and changing policy environment.

2. Introduction

Our sector support programme is guided by a 'sector-led improvement' (SLI) approach, which recognises that the responsibility of local government improvement should remain with councils. Our sector-led improvement approach is underpinned by the key principles that:

councils are responsible for their own performance
stronger local accountability leads to further improvement
councils have a sense of collective responsibility for the performance of the local government sector.

The CPC, FPC and GPC approach involve a team of expert senior and experienced local government officers and councillors (and sometimes other key partners) spending time at a council as ‘peers’ to provide challenge, assurance, and learning. The process involves engagement with a wide range of stakeholders who are connected with the council and the findings are delivered immediately. A detailed report outlines the peer team recommendations and councils are required to publish this. For CPCs, councils are also required to publish an action plan showing how they will implement the recommendations.

The CPC process also involves a peer team led progress review. Taking place approximately ten months after the CPC, the progress review assesses the council’s progress in the implementation of the peer challenge recommendations and seeks to understand the impact and outcomes on the council. Again, councils are required to publish their progress review feedback report.

The LGA is developing an improvement and assurance framework to assist councils in providing assurance of the performance of local government. The CPC, FPC and GPC offer to councils is a key component of this framework.

The peer challenge programme will also assist councils to meet their best value duty, with the draft guidance detailing how Government expect all local authorities to have a corporate or finance peer challenge at least every five years, to publish the outcomes and deliver on the recommendations of that review.

The LGA is working alongside the Office for Local Government (Oflog), and we are both committed to supporting the local government sector to be as efficient and effective as possible and to ultimately deliver the best possible outcomes for residents. We will do this by playing to our strengths and respective roles in the wider ecosystem of information-sharing, warning and sector support.

In this context, we have continued, over the past year, to work with the local government sector to strengthen the peer challenge offer to ensure that it meets the ever-changing needs of councils. This includes a stronger focus on council performance, governance, and culture, to reflect the current challenges to the sector including the current operating context and draft statutory guidance on best value authorities outlined previously.

This stronger focus involves the provision of improved financial data and comparative performance data for peer teams. It also involved the roll out, during 2023/2024, of a new programme of face-to-face training, development, and accreditation for LGA member peers.

The peer challenge offer is based on the premise that all councils receive a CPC or FPC at least once every five years. The key design principles and features of the offer are:

It is not an inspection; it is a tool for improvement with a strong focus on evidence-based approaches to deliver robust recommendations and assurance.
A scoping meeting involving LGA representatives is an essential feature. The council’s needs and make-up (in terms of the skills and experience required) of the peer team are agreed.
All CPCs have a focus on five core areas: priorities and outcomes, financial resilience, organisational and place leadership, governance and culture and corporate capacity.
Involves consistent in-person and onsite delivery over a three or four-day period.
Openness and transparency - councils are required to publish their CPC report, CPC action plan and CPC progress review report.

The on-site progress reviews continue to be an integral part of the CPC process which allow us to track progress made in the implementation of CPC recommendations. As outlined above, councils are required to publish their progress review reports as well as their original CPC report and CPC action plan.

The strengthened approach to Corporate Peer Challenge

3. Programme delivery in 2023/2024

During 2023/2024, the programme has involved delivery of:

61 Corporate Peer Challenges
4 Governance Peer Challenges
2 Finance Peer Challenges

We delivered this activity across the full range of council types as follows:

Council type	Number
District councils	34
Unitary councils	13
Metropolitan councils	10
London boroughs	6
County council	2
Parish and town councils	2

We also delivered 46 CPC progress reviews as follows:

Council type	Number
District councils	24
Unitary councils	6
Metropolitan councils	7
London borough	6
County councils	1
Combined authorities	1
Waste authority	1

4. Peer development and deployment

During 2023/2024, the LGA deployed 320 officer and member peers who have delivered around 1,500 days of challenge and support to councils through the peer challenge programme.

Peer teams are made up of an average of four to five peers plus the LGA peer challenge manager. Out of the 320 peers used to support delivery of the programme, 88 were elected members and the remainder were chief executives, Section 151 officers, monitoring officers and other senior directors/officers.

The LGA’s strong relationships within local government mean that senior officers volunteer support at no additional cost, while members charge a relatively nominal fee. As outlined earlier in this report, considering the fees charged by consultants (an average of £1,000 per day), the LGA peer support offer saves the sector up to £1.5 million annually.

Peer development

During 2023/2024 we delivered 27 peer briefing and training events resulting in over 200 new peers being added to the peer data base including 13 chief executives, nine monitoring officers and 12 Section 151 officers.

During 2023/2024, this includes a new programme of face-to-face training, development and accreditation sessions for LGA member peers. This has involved the delivery of four training sessions lasting a full day covering the strengthened CPC approach and what to expect, CPC and assurance, skills and behaviours and practical scenario exercises. Overall, 64 member peers have benefited from this training.

Feedback from participants includes:

“LGA peer review is a very credible way in which (local government) can support and mutually reinforce itself. It provides a two-way street of learning - for host authority and for peer reviewers - the more we do this, the more we will learn, together, and uplift our places and communities, together.”

“The (training session) provided a step-by-step guide to how a peer review is conducted, and my role within it. I particularly appreciated the advice and guidance around personal resilience and how the review is a learning experience for all involved."

“Great, informative session on peer reviews. So glad I attended as it built my confidence and gave me a better understanding."

In November 2023, the LGA’s Annual Member Peer Conference, which took place over two days, was held in Bristol. Over 140 member peers from across the country came together to share learning, best practice and challenges. Member peers participated in a series of development sessions focussed on assurance and governance, the future of Sector Led Improvement (SLI) and Corporate Peer Challenge, people services and regulation, transformation and how to have difficult conversations in their role as member peers on a Corporate Peer Challenge. There were also practical demonstrations of LG Inform, the LGA’s benchmarking tool which is used by peer teams to explore the performance of councils.

Feedback from this conference shows that 97 per cent of delegates said their understanding of the subject matter had improved from attending the conference and 100 per cent of delegates were satisfied and very satisfied with the keynote address.

Other feedback from participants included:

“A timely event which was clearly focused on sharpening LGA peer challenges and the wider context with Oflog. Also helpful for my current peer assignments.”

“I found the session on how to deliver difficult messages […] very informative and relates to the times we are living in.”

“Well chaired and well organised, with knowledgeable, insightful and inspirational speakers.”

Peer teams

The LGA is committed to equality, diversity and inclusion and we continue our work to ensure peer teams reflect the diversity of local councils and the communities they serve. The breakdown of peers used on CPCs is routinely analysed in relation to gender, ethnicity, and disability.

In the year between April 2023 and March 2024:

The overall percentage of male and female officer peers were fairly evenly split – 52 per cent female and 47 per cent male (one per cent did not share information). This represents a shift from the previous year with the number of female peers increasing.(in the previous year, 45 per cent of peers were female and 52 per cent were male, three per cent did not share information).
Corporate Peer Challenge teams usually consist of member peers that have leadership positions, for example Leader/Deputy Leader of the council. We have used significantly more male member peers (72 per cent) than female member peers (27 per cent) this year (2023/2024). This figure has remained relatively the same as last year, when 69 per cent of member peers on peer teams were male and 28 per cent were female. There is still more work to do to ensure peer teams reflect the current pool of members in these positions nationally - 61 per cent male and 39 per cent female.
Of those who wanted to share information (226 peers), six peers (3 per cent) declared that they have a disability. Last year, the figure was 6 per cent.
Of the 320 peers used, 245 declared their ethnicity. Of those who declared their ethnicity, 11.5 per cent are from non-white British background. This figure is less than last year when it was 18 per cent.

As outlined above, we remain committed to increasing the diversity of both member and officer peers. This includes our work to increase the diversity of councillors across England and subsequently our member peer pool. Through the work led by the LGA’s Improvement and Innovation Board we will continue to work with the LGA’s lead members, political group offices and our member councils to increase the diversity of the peer pool.

5. Feedback from councils

Feedback is sought from councils that have received a CPC, FPC or GPC. This is collated through a comprehensive survey sent to chief executives and leaders after their report has been published.

The 2023/24 survey shows:

100 per cent believe that the process of preparing for and participating in the CPC has had a positive impact on their council.
100 per cent of respondents were satisfied with the CPC that their council had received. Most of these (84 per cent) said they were satisfied to a ‘great extent’.
95 per cent of respondents feel more confident about their council delivering its priorities, having participated in the Corporate Peer Challenge. 90 per cent said they were satisfied to a great or moderate extent.
95 per cent rated the quality of the CPC team as ‘good’ or ‘excellent’.
95 per cent said they would recommend having a Corporate Peer Challenge to other councils if asked about it.

A follow up survey is also shared with chief executives and leaders following the progress review.

The 2023/2024 survey shows:

100 per cent said taking part in a progress review has had a positive impact on the council.
100 per cent were ‘very’ or ‘fairly’ likely to recommend a peer challenge to other councils.

The LGA undertakes quarterly surveys of both officer and member peers who have taken part in a peer challenge.

The latest available survey data for 2023/2024 shows:

100 per cent of peers who responded were satisfied with their experience of being part of a peer team.
100 per cent of peers who responded said that taking part in a peer challenge had a positive impact on their own learning and development.
100 per cent of respondents who took part in a CPC said that the liaison from their peer challenge manager had been very effective.

6. Key themes 2023/2024

The following section is a summary of the most frequent and common feedback messages from corporate peer challenge teams (including progress reviews) during 2023/2024. It is structured in line with the five core components of all corporate peer challenges.

Five core components of Corporate Peer Challenge
Vision and Strategy: The need for councils to engage staff and councillors to develop a clear corporate vision and priorities, underpinned by available resources (both money, people, and systems) continues to be a common theme. Reports highlight how councils cannot do ‘everything, everywhere, all at once’. Recommendations relate to a need for better prioritising, rationalising, and aligning of wider plans, strategies, and delivery mechanisms in support of an agreed vision and priorities.
Performance Management: Reports feature feedback on council performance and performance management frameworks. Most CPC reports reference both LG Inform benchmarking data and council performance data. A range of recommendations relate to the need to ensure performance management frameworks reflect the ‘golden thread’ from agreed priorities through to the Medium-Term Financial Strategy, directorate plans, service plans and individual performance appraisals. Many reports outline the importance of demonstrating impact and outcomes for local communities, and a need to build a positive performance culture where there is a commitment at all levels to adopt evidence-based improvement approaches to inform decision making, transformation and change.
Data and Intelligence: Strengthening mechanisms to build a stronger evidence-based understanding of residents’ needs through data and resident feedback is a common feature. How to then use this to inform service re-design and allocation of resources is a consistent theme. In particular, reports highlight how some councils have opportunities to strengthen approaches by building on good practice evident in parts of their organisation e.g., social care and public health, and extend these approaches and learning into other service areas.
Service Delivery/Outcomes: Councils continue to demonstrate progress against a number of stated priorities for their communities. Strong themes continue to include social care (children and older people), economic growth (including regeneration, education, employment, skills and housing), health and social care integration and waste management. Reports feature feedback on climate change plans including climate change leadership, building awareness across all service areas and the importance of strengthening partnership working.
Housing: A common theme including housing supply, investment, homelessness and support for asylum seekers. For stock holding authorities, planning for, and ensuring compliance with, the new consumer regulation requirements is captured in some reports. Recommendations relate to the need for councils to prioritise housing repair improvement plans and stabilise Housing Revenue Accounts (HRA).

Organisational and place leadership

Leadership of Place: Feedback on how councils use their strategic leadership role to work with partners, locally and regionally, to shape a shared place-based vision for their place is a consistent theme. Recommendations relate to the need to refresh partnership plans to harness the collective power of partners in developing and shaping the place, capitalising on assets and increasing investment. Reports reference the need to ensure a compelling place-based narrative role, working with communities. The role that heritage, arts and culture play in regeneration is often highlighted.
Growth: Reports highlight how councils are harnessing external funding across a range of government funding programmes e.g., Town Deals, Future High Streets Fund, Rural England Prosperity Fund and UK Shared Prosperity Funding, to regenerate local highstreets and communities. They show how these schemes are helping councils to strengthen partnership working in support of shared priorities. Partners clearly value the place leadership role that councils play in relation to these initiatives. Peer teams refer to ‘inclusive growth’ focussed on the creation of opportunities for local people. Challenges associated with market pressures - including interest rates and inflation on capital projects – are highlighted. Recommendations relate to project governance including robust business case development and the need to ensure internal capacity to deliver initiatives.
Community engagement: Recommendations relate to the need to ensure effective mechanisms are in place to support genuine resident engagement and to maintain a strong resident focus. Reports highlight a wide range of approaches that councils are using including resident panels, support for the voluntary, community and faith sector, youth councils, service user groups and other forums. Recommendations made by peer teams relate to the need for councils to ensure consistent approaches are in place to improve residents’ experiences across all services. The development of strengths-based approaches to community engagement and harnessing the community leadership role of active ward members are also highlighted.
Social care: For upper tier councils, social care pressures continue to be highlighted (children’s social care and adult social care) including inflationary pressures, rising demand and costs. Reports outline the impact this is having on council finances in the medium and longer term associated with increased expenditure on fostering and residential placements, pressures in relation to the Dedicated School’s Grant and Special Educational Needs (SEND) and costs of adult social care. Recommendations are made in relation to transformation, partnership working, prevention/early help, commissioning/procurement, extra care housing and the development of future target operating models.

Governance and culture

Cohesive leadership: Building collective, visible, and cohesive political and managerial leadership is a strong and consistent theme in reports. Peer teams have made a range of recommendations relating to the importance of building clarity of understanding on the respective roles and responsibilities of members and officers. Recommendations also relate to the importance of building constructive cross-party relationships at all levels.
Governance and assurance: Ensuring clear and robust corporate governance arrangements, including financial governance and reporting, are common themes. Reports reference the management of risk, including the need to ensure that risk registers are “seen as a tool rather than a list”. Strong references to internal and external audit, delegated decision-making arrangements, statutory officer relationships and member development programmes are common themes. Project and programme governance, including governance arrangements for council owned companies (for those councils who have them) are common themes.
Overview and scrutiny: Ensuring that scrutiny is challenging, effective and robust is a key theme. Some reports highlight examples of effective scrutiny practice. Others make recommendations to improve the scrutiny function including the need to ensure it is effectively resourced and that robust work programmes are in place. Ensuing investment in training and development for both officers and members covering areas such as pre-decision scrutiny, scrutiny reviews, performance management and policy development/review are also common themes. Recommendations have been made for some councils to review their scrutiny arrangements to strengthen a culture of more effective overview and scrutiny.
Organisational culture: Building positive organisational culture is a common theme. Some reports reference the need to strengthen engagement on agreed values to better embed them across the organisation. Peer teams make a range of recommendations relating to staff and member engagement and the importance of senior leaders modelling behaviours.

Financial planning and management

Financial sustainability: Ensuring that Medium-Term Financial Plans (MTFP) and budgets are clearly aligned with agreed strategic priorities is a common theme. Reports make recommendations for councils to ensure MTFPs are informed by a range of financial scenarios (best to worst) to reflect the uncertainty in local government funding. Some peer teams recommend that councils need to develop longer-term budget setting approaches - moving away from a year-to-year approaches - to support longer term planning around agreed priorities, outcomes, and ambitions.
Financial challenges: Reports highlight the financial challenges associated with rising demand, social care challenges including increased placement and agency costs, cost of living, market pressures and inflationary pressures. Ensuring collective ownership, understanding and ownership continues to be a theme. This also relates to capital schemes. Reports also make recommendations relating to asset management strategies and ensuring councils are fully harnessing the operational and financial benefits of them.
Financial management and oversight: Ensuring that robust and effective controls and processes are in place to ensure value for money is a consistent theme. As outlined above, recommendations include the need for some councils to “create a culture of budgetary responsibility and ownership”, flowing from the political and managerial leadership through to scrutiny and individual managers. The need for timely, accurate and transparent performance reports, ensuring capacity within finance teams, having in place robust financial ICT systems, investment in the development of finance skills for officers and members and approaches to financial risk continue to feature in reports.
Reserves: Concerns about levels of reserves are highlighted with recommendations relating to over-reliance on reserves and the need to keep the level of reserves under review. Recommendations also relate to the need for councils to deliver savings through efficiencies, cost savings, transformation and income generation at pace.

Capacity for improvement

Transformation: Reports recommend the need for councils to have a clear vision for transformation with plans “underpinned by a clear and shared understanding of what transformation means”. Building capacity to support transformation through a strong corporate core of services (digitalisation, human resources, communications and procurement etc) is a common theme.
Workforce: Peer teams continue to be impressed with the committed, motivated, and talented workforce that exists within local government. A range of recommendations are made relating to on-going challenges of recruitment and retention in areas such as social care, finance, and planning. Recommendations relate to the production of new People/Workforce strategies, promoting and marketing the benefits of working within the local area, ‘grow your own’ workforce approaches (T Levels, Social Work Academy, apprenticeship levy), induction approaches, succession planning, career development pathways/training, employee assistance programmes and health and wellbeing support for staff.
Organisational structures: Recommendations relate to organisational structures, ways of working and capacity to deliver priorities. These include being clear on what a council’s operating model needs to be to deliver priorities including the experience, skills and expertise required. Recommendations are made in relation to silo working and the need to build a ‘one council’ approach to service delivery and to tackle some of the more complex and cross cutting challenges faced.

7. Summary

The peer challenge programme highlights the amazing work that continues continue to do every day for their communities. Reports feature feedback on a range of key service areas covering social care (children and older people), economic growth, regeneration, education, employment, skills, housing, health and wellbeing, climate change and waste management.

It is clear from the common themes and outcomes that are contained within peer challenge reports over the past year how councils continue to face significant challenges. The 2023/24 peer challenge programme identified that all councils continue to face financial pressures associated with rising demand including increased placement and agency costs (social care), temporary accommodation costs and cost of living, market and inflationary pressures. The importance of strong and cohesive place leadership accompanied by a robust approach to governance and assurance cannot be understated to ensure the council has a grip on these pressures.

Another area of concern relates to workforce challenges, with CPCs identifying a range of recommendations relating to on-going challenges of recruitment and retention in areas including social care, finance, and planning and the need for councils to ensure they have the appropriate capacity and skills to deliver priorities.

As councils face these challenges, the programme has highlighted opportunities for councils to review their use of data to support customer insight, service re-design across services and with partners and improved outcomes for residents.

And, as councils seek to transform themselves, the programme has also made recommendations relating to transformation, particularly the importance of building a clear internal vision for transformation with plans “underpinned by a clear and shared understanding of what transformation means”.