Minister's statement on Local Government Best Value - Croydon, Thurrock, Dudley and Liverpool

Statement made by Jim McMahon, Minister of State for Local Government and English Devolution

I have previously updated this House that this Government is committed to resetting the relationship with local and regional government, and taking the action necessary to fix the foundations of local government. Today, I am updating the House on the steps we are taking in partnership to support four councils to recover and reform: the London Borough of Croydon, Thurrock Council, Dudley Metropolitan Borough Council and Liverpool City Council.

London Borough of Croydon

On 12 June, I informed the House that I was satisfied, having considered the latest report from the Improvement and Assurance Panel and other information, that the London Borough of Croydon is failing to comply with its Best Value Duty. I proposed an intervention package to secure the Council's compliance with that Duty and asked the Council and others to provide representations by 25 June.

I received 35 representations which I considered carefully. I am satisfied that the Council is failing to comply with its Best Value Duty in relation to Continuous Improvement, Leadership and Use of Resources. I have concluded that it is both necessary and expedient for me to exercise powers in the Local Government Act 1999 (the 1999 Act) as I proposed, with minor amendments.

Croydon remains one of the most financially distressed councils in the country. Failing to change course would condemn Croydon's residents to a worsening position without a recovery strategy. I am satisfied that the scale of the financial difficulties facing Croydon, the failure of the Council to adequately respond to these difficulties and the assurance required moving forward means that a short and sharp reset, with fast action, is required to shift the dial on the Council's recovery. I believe this is best achieved by escalating the statutory intervention to a Commissioner-led model to ensure the Council can achieve sustained change at the pace needed.

Today, I issued Directions under section 15(5) and 15(6) of the 1999 Act to implement the proposed intervention package. The intervention package, to be in place until 20 July 2027, comprises specific actions the Council is required to take alongside the appointment of three Commissioners appointed to exercise specific Council functions and a Political Commissioner. I am confident that his package will address the issues identified and is necessary for the Council to secure compliance with its Best Value Duty.

I have appointed Gerard Curran, Debra Warren, Jackie Belton and Councillor Abi Brown OBE as Commissioners. I am confident that their extensive knowledge and experience will help deliver the necessary improvements for Croydon.

I have issued Directions which, in summary, require the Council to:

• Continue to develop and implement the London Borough of Croydon Stabilisation Plan and transformation programme to the satisfaction of Commissioners.
• Fully co-operate with the Commissioners and take any reasonable action within the Authority's functions to prevent further failure, as reasonably determined by the Commissioners.

I expect the Council to drive its own improvement with the support, challenge, and advice from the Commissioners. To safeguard the process, some Commissioners will have powers to exercise certain functions to ensure compliance with the Best Value Duty:

• To ensure the Council has the leadership, structures and systems in place to drive and sustain improvement – including governance and scrutiny of strategic decision-making, oversight of strategic financial management and decision-making, and the appointment, dismissal and performance management of senior and statutory officer positions.

• To support financial sustainability and enable transformation of the Authority's operating model and services to deliver value for money and long-term financial resilience.

The Commissioners' appointments and Directions take effect from today. The Commissioners will provide their first report in six months, with a second report before Summer 2026 and further reports every six months or as agreed with the Commissioners. I will review the Directions and Commissioners' roles after 12 months, to ensure that Croydon has the support required to accelerate recovery and protect the public purse. Subject to clear and sustained evidence of improvement, certain functions may be returned to the Council ahead of the expiration of the Directions.

As with other statutory interventions led by my department, the Council will meet the costs of the Commissioners and provide reasonable amenities and services and administrative support. The fees paid to individuals are published in appointment letters on gov.uk. I am assured this provides value for money given the expertise being brought and the scale of the challenge.

Finally, I would like to place on record my thanks to Tony McArdle OBE and all of the Improvement and Assurance Panel members for their work in supporting the Council on its reform and recovery.

Thurrock Council

On 19 June, I informed the House that I was satisfied that Thurrock Council is not yet complying with its Best Value Duty. I proposed to issue new Directions to Thurrock Council to extend the statutory intervention until 30 April 2028, and asked the Council and others to provide representations by 2 July 2025.

I received three representations which I considered carefully. I am satisfied that the Council is not yet complying with its Best Value Duty. I have concluded that it is both necessary and expedient for me to exercise powers in the 1999 Act as I proposed, with minor amendments.

I have today issued Directions to the Council under section 15(5) and 15(6) of the 1999 Act to implement the proposed intervention package. These come into effect immediately and will remain in force up to and including 30 April 2028. The Directions issued on 2 September 2022 (updated on 16 March 2023) are revoked with immediate effect. This package, to be in place until 30 April 2028, comprises of specific actions the Council is required to take alongside the appointment of three Commissioners with powers to exercise functions. I am confident that this package will address the issues identified and is necessary for the Council to secure compliance with its Best Value Duty.

The success of Thurrock is important both for its own benefit and that of the region, with its critical role in local government reorganisation and devolution across Essex, which offers significant opportunities to drive growth, improve transport connectivity and build new homes, as well as raising living standards for its population.

I have today appointed Gavin Jones CBE, Denise Murray and Dr Dave Smith as Commissioners.

I have issued Directions which, in summary, require the Council to:

• continue to implement and report on plans for the Authority's improvement and recovery, to the satisfaction of the Commissioners.
• develop and maintain a revised Corporate Plan which includes the necessary work to ensure the Authority's compliance with the Best Value Duty.
• Ensure that the Authority has personnel with sufficient capability and capacity including access to appropriate specialist expertise where required.
  • work with Commissioners on the work with other councils in the Greater Essex area for unitary local government and the Devolution Priority Programme on implementing any such proposals later agreed upon.
  • Fully co-operate with the Commissioners and take any reasonable action within the Authority's functions to prevent further failure, as reasonably determined by the Commissioners.

Commissioners will be able to exercise functions:

• associated with the governance, scrutiny and transparency of strategic decision making by the Authority.
• associated with financial sustainability and delivering financial governance and scrutiny of strategic financial decision making by the Authority.
• associated with the Authority's operating model and redesign of services to achieve value for money and financial sustainability; and those that ensure the Council has the right skills, capacity, capabilities and structures to make improvements.

I intend to review the proposed arrangements by Summer 2026 when I would expect there to be further clarity on broader plans for devolution and local government reorganisation across Greater Essex.

As with other statutory interventions led by my department, the Council will be required to cover the costs associated with the Commissioners and provide reasonable amenities and services and administrative support. The Commissioner' fees are published on gov.uk. I am assured this provides value for money given the expertise that is being brought, and the scale of the challenge.

Dudley Metropolitan Borough Council

I am also updating the House on steps we are taking in relation to Dudley Metropolitan Borough Council.

After carefully considering the relevant evidence, my department has today issued the Council with a Best Value Notice. This is not a statutory intervention but a formal notification of the department's concerns. We found no evidence of current Best Value failure at the Council, but recent progress must be sustained and embedded to ensure that the council meets its Best Value Duty.

The Council is expected to continue driving its own recovery and is asked to engage regularly with the department for assurance of improvement. Progress against the notice will be reviewed after 12 months. I am pleased that the Council already has the support of an independent improvement board and the LGA and am hopeful that it will continue to make good progress. I urge the Council to make full use of its board's expertise, and the department will seek updates from them.

Liverpool City Council

The statutory intervention in Liverpool City Council concluded in June 2024 when the Council established its own Improvement and Assurance Board (the Board). I have welcomed the Council's engagement with me and the department, and the progress reports from the Council and Board Chair. We have been pleased to provide ongoing support.

The Board has now concluded its successful work with the Council, and I am pleased to hear that the Council can now lead its own recovery, continue to drive continuous improvement, and respond to future challenges. I do not underestimate the work it has taken to reach this point and give my thanks to the Council's leadership, staff, and the Improvement and Assurance Board for their efforts.

I welcome the Council establishing an ongoing Improvement Committee in place of the Board, and I encourage the Council to seek some independent, external strategic support. I am now ending the departmental support provided since last June but have asked to stay close to developments, with periodic engagement with the department continuing. I thank Cllr Liam Robinson for the leadership he has shown together with Members, officers and colleagues within Liverpool, and to the Improvement and Assurance Board, for their dedication to ensuring the best possible services for the people of Liverpool. I look forward to seeing Liverpool's journey continue.

As a council which has been through the Best Value process it has insights and experience which the department and wider sector would take value from.

Conclusion

I am committed to working in partnership with these councils to provide the necessary support to ensure their compliance with the Best Value Duty and the high standards of governance that local residents expect, ensuring they are fit, legal and decent with a government in active support of recovery and improvement.

I will deposit in the House library copies of the documents referred to, which are being published on gov.uk today. I will update the House in due course.