A tall order for the SIC

AS THE islands children prepare to go back to school this week, it appears that councillors and senior officers at Shetland Islands Council are going to have to do the same.

The report by local government watchdog the Accounts Commission report following their two day hearing into how the authority is run suggests they have much to learn about how to do their jobs properly.

What is more, they find the council has not learned from previous criticism, raising questions about their commitment to follow the long list of recommendations that come at the end of the commission’s 11 page report.

Top of the list of those recommendations is an order to put in place “a comprehensive programme of training and development to be undertaken by all councillors and senior officers to enable them to understand how to perform effectively in their roles and how to demonstrate the value of good governance in their conduct”.

The implication is clear, and made more so by the 45 points the commission makes, of which there is little to be proud.

The council does provide a high standard of services, but at a relatively high cost and with “little consideration…of value for money”, and it has appointed an interim chief executive, but he faces “a danger…of unrealistic expectations being placed (on him)”.

It has also appointed a head of capital programming along with various initiatives to improve its approach to spending, however these initiatives will be tested by the council’s ability “to implement such plans effectively when difficult choices have to be made”.

The rest of the report does not inspire much confidence in the council’s ability to meet those challenges.

Councillors are not showing leadership, officers are not providing clear and consistent advice, processes are flawed, meetings are undocumented and matters are made worse by “significant tensions” amongst councillors and with officers.

Such is the deterioration in “mutual trust and respect” that it is now “crucial” that an agreed set policies and procedures are put in place so everyone knows what they have to do.

No common understanding

But the commission is “particularly concerned” that the council does not seem to appreciate the seriousness of the situation it finds itself in or that there is any common understanding amongst councillors or officials of what good governance is.

The report does not accept the point made by convener Sandy Cluness that life is different on a council made up of 22 independent, free thinking members who represent a close knit community.

“On the contrary,” it says, “in these circumstances it is all the more important that issues of transparency and public confidence in decision making processes are seen to be taken seriously.”

Problems on the bridge at the SIC have been apparent for many years, but the arrival and departure of former chief executive Dave Clark brought them to a head and highlighted their nature.

Councillors ignored advice from personnel staff about how to recruit him, he was set no objectives once he started work, and there was no mechanism for appraising his performance.

When things started to go wrong, which happened very quickly, the council undermined its own already weak position. Councillors ignored advice to cease their public criticism of him and confidential information was leaked to Mr Clark’s negotiators.

The commission says the council must bear “significant responsibility” for what happened.

“Had proper steps been taken to introduce formal objectives and a performance appraisal process – as would be expected for all employees – the council would have been in a stronger position to consider other approaches to resolving matters, without the same cost to the public purse or damage to the council’s reputation.”

By January this year the council had been left with no choice but to bring in the local authority umbrella group COSLA and its chief executive Rory Mair had no choice but to negotiate a deal to extricate the SIC from the situation as fast as possible.

However even on 19 February when councillors agreed to the £285,000 golden handshake (plus expenses), some still did not understand “the nature and implications” of their decision.

“This demonstrates a failure of governance and decision-making processes which has made it very difficult for the council to explain clearly these important decisions to the local community,” the commission states.

Lack of transparency

The SIC also only has itself to blame for the crisis surrounding the deletion of assistant chief executive Willie Shannon that first brought calls for an outside investigation into the council from Alistair Carmichael and Tavish Scott, the isles’ parliamentarians.

The commission does not understand why the post had no clear job description, or why Mr Shannon did not play a full part in the corporate management team, and says the “lack of transparency” in creating the job “contributed to subsequent problems”.

Whether Mr Clark had the authority to delete the post was a matter of dispute between monitoring officer Jan Riise and the chief investigating officer of the Standards Commission for Scotland, but the commission says: “It is unacceptable that it was not clear and beyond dispute with all parties in the council whether or not this delegated authority existed.”

The report implies an arrogance within the council in its failure to look elsewhere for examples of good practice.

But it also has much to say about the one unique thing about Shetland Islands Council – its relationship with Shetland Charitable Trust.

The commission has no patience with SIC head of finance Graham Johnston and his position that the failure to group the two organisation’s accounts is merely “a technical matter”.

They suggest instead that it represents “a material misreporting of the resources over which the council has influence” and accuse the finance department of “weaknesses” and a failure to appreciate “the importance of good accounting practice to public accountability”.

In fact the entire relationship of the council to the charitable trust comes under considerable scrutiny in the report, suggesting the SIC is trying to have the best of both worlds by co-ordinating the activities of the two bodies while denying there is any conflict of interest in doing so.

Councillors should “err on the side of caution” in this respect, and actively seek advice on the issue, while officers should provide “clear and timely advice”. There is little consistency in this respect, the commission says.

The recommendations are long (13 in all) and cover the most important aspects of running a local authority – leadership, governance and strategic direction; effective working relationships; robust and transparent decision making; and the capacity to deliver a financial strategy.

As well as going on a comprehensive training programme, councillors and officers are being called on to raise their game considerably, improving their relationships with each other, with the local media, the wider public and the world of local government outside Shetland.

The SIC must become more open and less insular…and it must sort out the long running sore of its relationship with the charitable trust.

The council’s convener and interim chief executive have responded to the report saying they accept its findings and have promised to improve the way the council operates.

Whether it will succeed remains to be seen. As the report says regarding the qualification of the SIC’s accounts: “The Commission welcomes the willingness expressed by the convener and senior councillors to resolve the qualification, but notes that such willingness has been expressed previously by the council without progress being made.”

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