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Good Governance


The term governance is often bandied about in connection with local councils, but can mean different things to different people.

Governance is defined as “The action or manner of governing a country, company or other organisation including the process of collective decision making and policy implementation”

It encompasses the system by which an organisation is controlled and operates, and the mechanisms by which it, and its members and officers, are held to account. Ethics, risk management, compliance and administration are all elements of governance.

In a democratic enterprise such as a council the governance process is focussed on ensuring that the will of the community on any issue, as expressed through elected members is identified and an appropriate decision taken, in the interests of that community. Governance processes will ensure that information is made available equally to decision makers who make effective decisions efficiently, using agreed rules, and that these decisions are implemented appropriately. This goes on in a transparent way in which ethical standards are observed and enforced. Additional processes may be added which ensure that whenever the council takes action, it does so fairly, transparently and according to democratic principles.

The number and complexity of governance processes should be tailored to the size and complexity of the council. A governance structure should support the council in achieving its objectives rather than being an objective in itself. Thought therefore needs to be given to the appropriate structure for a council which reflects its size, its actual functions and the expectations of its stakeholders.

CIPFA, the Public Sector Finance and Accountancy professional body and its international body IFAC has set out a Framework for Good Governance in the Public Sector. It contains seven principles that all public bodies should seek to meet. These are:

1)      Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law. In UK local government this is achieved through the Nolan Principles and Council Codes of Conduct.

2)      Ensuring openness and comprehensive stakeholder engagement. This includes actions such as public question time before council meetings, Councillors’ surgeries, newsletters, websites, consultation surveys and public meetings which underpin this principle.

3)      Defining outcomes in terms of sustainable economic, social and environmental benefits. Councils should have a clear vision that they offer to their communities which express the benefits in these tangible terms.

4)      Determining the interventions necessary to optimise the achievement of the intended outcomes. Councils should ideally have a strategic plan with specific projects and programmes which are aimed at delivering these promised outcomes together with a decision making process and staff and other resources focused on achieving them.

5)      Developing the entity’s capacity including the capability of its leadership and the individuals within it. Councils should ensure that the right staffing is in place and that staff and councillors are appropriately trained and developed.

6)      Managing risks and performance through robust internal control and strong public financial management. Good councils have up-to-date risk assessments and a range of processes that underpin financial audit and control and good performance management at the level of the organisation and of the individual.

7)      Implementing good practices in transparency, reporting and audit to deliver effective accountability. Adherence to the freedom of information act, achieving clean audits and publishing annual reports go towards meet these requirements.

Fortunately many of the model processes available to town, parish and community councils via NALC, One Voice Wales and bodies such as the Information Commissioner are designed to ensure compliance with the above principles. For this reason it is important that councils seek and use the published models as a foundation for the processes they adopt, even if they are adapted to meet local needs.

As mentioned there are a wide range of policies and processes which contribute to an overall governance framework or structure. A small parish will stick to the basics while the larger and more complex a council becomes the more policies and processes it will adopt. The acid test of whether to add to the governance framework is whether doing so enhances or detracts from the performance of the council. Governance should always facilitate the smooth running of the council and not impede performance.

At LGRC we undertake governance health checks for councils which take a deep look at 46 governance processes under 37 different headings. Frankly most councils do not remotely need a governance process that might be created by deploying policies and processes in all 37 areas. It describes the range rather than the absolute requirement. However, apart from the core policies or processes that all councils must use there is an additional level of measures that councils should see as desirable if they undertake certain functions or have particular expectations within their community. A third level of processes are in the “conflict resolution” category, which councils may decide to adopt as a self-imposed discipline, particularly where the councils is politically (small or large “p”) divided or there is a history of other issues within it.

Policies and processes within each category are as follows:

Core Policies or processes (essential for all councils)

  • Annual Governance Accountability Return (AGAR)
  • Annual risk assessment
  • Code of conduct
  • Data Protection (GDPR) policies
  • Financial regulations.
  • Freedom of Information
  • Internal audit
  • Standing orders

Secondary Policies or Processes (desirable particularly in larger councils)

  • Annual calendar of meetings
  • Budget setting process
  • Buildings and asset management policy
  • Bullying, harassment, dignity at work
  • Carbon neutral/biodiversity policy
  • Communications strategy ( internal and external)
  • Community engagement policy
  • Complaints procedure
  • Council performance management system
  • Discipline and grievance
  • Document retention policy
  • Grant awarding policy
  • Grants policy
  • Health and safety policy
  • Investment policy
  • Member and staff training policy and records
  • Policy to attract members
  • Scheme of delegations/ committee terms of reference
  • Service level agreements for devolved services
  • Staff handbook
  • Strategic plan
  • Strategic vision
  • Transparency code

Tertiary Policies or Processes (desirable in some circumstances)

  • Absence management
  • Anti-fraud, anti-bribery
  • Co-option policy
  • Computer, email , internet and telephone use
  • Crisis management procedure
  • Customer service policy
  • Expenses (staff and councillors)
  • Home working, flexible working
  • Member and staff relationship protocol
  • Membership of professional and sector bodies
  • Partnership working
  • Prejudice, bias and pre determination
  • Press and media relations
  • Staff retention
  • Whistle blowing

A robust system of governance is therefore an important consideration for all local councils, but does require thought and clear reasoning for why each element is being deployed. The governance process is not an end in itself but should work to facilitate a resilient and pro-active council in undertaking its work and achieving its goals.


Written by Nick Randle OBE, Managing Director, Local Government Resource Centre Associates,
As appeared in Clerks & Councils Direct, September 2021
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