LGA corporate peer challenge: Preston City Council

Preston City Council (PCC) has strong ambitions for the city that are underpinned by its model of Community Wealth Building (CWB) named the ‘Preston Model’. Developed just over a decade ago in response to the challenge of austerity, CWB centres on creating a resilient and inclusive economy for the benefit of the local area. Working alongside local stakeholders and communities, the council, through this model, aims to reduce the wealth flowing out of the local economy, so that it can be shared more widely and recirculated for the benefit of local people and businesses.

The peer team were informed by the council that the CWB approach has resulted in a number of achievements, including increasing procurement spend in the local economy, becoming the first local authority in the North of England to be accredited by the Real Living Wage Foundation; and generating local employment, training and skills opportunities through the council’s planning process. Whilst very positive, the council now needs to ensure that it is gathering more detailed information and figures to demonstrate the impact of CWB.

Also, whilst the aspiration for CWB is clear, the peer team found that there were mixed levels of awareness of the Preston Model amongst council officers, partners and community organisations, with limited evidence that it is embedded across the activity of the council overall.

The peer team met a number of committed community, voluntary and faith groups who are delivering a range of innovative projects and services that are improving outcomes for local people and embody the ethos of CWB, although their connection to this agenda is mixed. There is a need for PCC to implement a more consistent approach to supporting community, voluntary and faith groups, including implementing the infrastructure to promote, engage with and connect the sector to the principles of CWB and wider council priorities. 

The wider ambition and priorities of the city are not being communicated effectively currently and as a result are not widely understood. There is a need for members, working with officers, to take the lead (with the community) on developing a new, clear, shared vision and priorities for the council, which is aligned to and shapes the use of the financial and resource envelope available. This reset of priorities will provide an opportunity to better articulate the aspirations of the council to staff, members, partners and residents and foster collective buy-in. Building a stronger corporate narrative which tells the council’s vision for the future will be central to this and should be aligned to the development of a corporately-led communications, engagement and marketing strategy, which will help to create clearer messaging and enable collective buy-in to the council’s priorities. 

There is limited evidence of the use of data and performance management to inform an understanding of the needs of communities, support strategic direction and decision-making, or to assist with the management of the business. Plans are in development for a new approach to performance reporting following a recent review. The peer team recommends that a whole council strategic approach to the use of data and performance management is implemented. This should be aligned to the work to develop a new vision and priorities for the council, ensuring that the delivery of these priorities for the council and city are then closely monitored. 

The council is driving forward city centre regeneration on a large scale, with significant investment and commitment to regeneration projects within the city by public and private sector partners. Commitments through the council include the £21 million Towns Fund, £20 million Levelling Up Fund and the municipally funded £45 million Animate project. 

Whilst the regeneration agenda is driving change, capacity is a challenge. There is a concern that the delivery of some of PCC’s regeneration aspirations, alongside frontline council services, is at risk due to an imbalance between the priorities of the council and the capacity and resources available. The peer team believe that the council should seek to become an employer of choice, informed through a staff survey and enabled by a workforce strategy, that seeks to respond effectively to recruitment and retention challenges and meets future workforce requirements.

Partners who met with the peer team spoke clearly about how they welcome the creation of opportunities to come together through partnerships, such as the newly established Preston Regeneration Board and Health and Wellbeing Partnership, which enable a place-based approach to deal with the opportunities and challenges facing the borough. There is a need in doing this, for the council to further strengthen its role as a place leader and particularly as a convener to support community, voluntary and faith groups and partners to coalesce around shared outcomes and maximise opportunities from working together.

It is clear that the council – over a number of years - has established a positive partnership with the University of Central Lancashire (UCLAN), predominantly in relation to the regeneration agenda. Building on this the council can benefit more, from closer working with UCLAN to maximise the delivery of shared ambitions, including those related to local employment generation, skills expansion and the development of new housing.

There is a strong sense of political maturity and cross-party working at PCC. The Audit and Overview and Scrutiny Committees are chaired by members of the opposition, building openness, trust and transparency (this is recognised as good practice across the local government sector). Member training and support is also seen as strong by members. 

Employees of the council are passionate about what they do and are committed to achieving the best outcomes for the residents of the city. There is a huge sense of pride and loyalty for Preston, although there is evidence of siloed working. Moving forward they would benefit from more informal and formal opportunities to connect with colleagues across the council to ensure more collaborative working.

At a time when many councils are facing severe financial difficulties, Preston City Council is in a relatively strong financial position. As at 31^st March 2023, the council held £30 million of earmarked general fund reserves and had just £12 million of outstanding borrowing. Usable reserves[1] amounted to £57 million (238 per cent of Net Revenue Expenditure at £24m). However, longer-term financial sustainability would be strengthened by continuing to develop a financial strategy for the organisation that releases efficiencies, delivers savings and increases income. In addition, the peer team believe that the council would benefit from agreeing and defining their appetite and attitude towards risk financially. The approach taken should of course be cognisant of the objectives of the CIPFA Prudential Borrowing Code and must ensure any borrowing is affordable, prudent and sustainable. The approach should be owned by all senior members and officers who need to share collective responsibility for managing the budget.

The peer team also heard evidence that the council does not have a proactive approach to the use of strategic assets and is therefore missing opportunities to make the most efficient and effective use of their land and property, including the potential to generate future capital receipts, or maximise the use of their estate by community organisations. This indicates a need to implement a more formalised asset management strategy, that is currently in development.

There are a number of observations and suggestions within the main section of the report. The following are the peer team’s key recommendations to the council:

2.1 Vision and priorities

Develop a refreshed vision and priorities for Preston City Council, led by members, informed by engagement with residents, partners, local businesses and staff and shaped by insights from a robust assessment of current and future demand and needs. This will help promote a clear set of local priorities, a positive place identity and collective ownership by the communities the council serves.

2.2 Partnership working

Continue to strengthen the council’s role as a place leader and convener to support community, voluntary and faith groups and partners to collaborate around shared outcomes through the successful implementation of the newly established place partnerships and development of supportive infrastructure for the community, voluntary and faith sector. 

2.3 Communications, marketing and engagement 

Develop a corporately-led Communications, Engagement and Marketing Strategy. This will help create clearer messaging and enable collective buy-in by:

• (a) Engaging residents and stakeholders
• (b) Increasing feedback into council work and opportunities for co-design and co-production
• (c) Promoting the council’s priorities and community wealth building aspirations
• (d) Enhancing internal communications.

2.4 Organisational capacity

Take steps to ensure that current and future organisational capacity - including staff levels, resources and skills, are suitably aligned for enabling the successful delivery of the vision and priorities of the council.

2.5 Workforce 

Become an employer of choice, informed through a staff survey and enabled by a workforce strategy, that seeks to respond effectively to recruitment and retention challenges (including considering undertaking a pay review), meet future workforce requirements and is reflective of PCC’s communities.

2.6 Data and performance management

Implement a whole council strategic approach to the use of data and performance management, which actively informs decision making, supports the management of the business and ensures a focus on the delivery of priorities.

2.7 Financial management

Strengthen longer term financial sustainability by (a) continuing to develop a financial strategy for the organisation that releases efficiencies, delivers savings and increases income and (b) implementing financial reporting that enables Cabinet and the senior management team to take collective responsibility for the council’s budget. This should include improving the assessment of financial risks and creating dialogue to collectively understand personal, group and organisational risk appetites. 

2.8 Strategic asset management

Implement a strategic asset management plan to support the transformation agenda, which maximises income and savings and the use of the council’s estate for social and environmental benefit. 

3.1 The peer team

Peer challenges are delivered by experienced elected member and officer peers. The make-up of the peer team reflected the focus of the peer challenge and peers were selected on the basis of their relevant expertise. The peers were:

• Lead Chief Executive Peer – David Sidaway, Chief Executive, Telford & Wrekin Council 
• Lead Labour Member Peer – Cllr Rebecca Cooper, Leader of Worthing Borough Council
• Conservative Peer – Peter Fleming, Former Leader, Sevenoaks District Council
• S151 Officer Peer – Mark Green, Director of Finance and Business Improvement, Maidstone Borough Council
• Senior Officer Peer – Beverley Bearne, Assistant Director - Development and Growth, Hartlepool Borough Council
• LGA Corporate Peer Challenge Manager – Rachel Robinson
• LGA Shadow Corporate Peer Challenge Manager – Poonam Mistry

3.2 Scope and focus

The peer team considered the following five themes which form the core components of all Corporate Peer Challenges. These areas are critical to councils’ performance and improvement.

1. Local priorities and outcomes - Are the council’s priorities clear and informed by the local context? Is the council delivering effectively on its priorities?
2. Organisational and place leadership - Does the council provide effective local leadership? Are there good relationships with partner organisations and local communities?
3. Governance and culture - Are there clear and robust governance arrangements? Is there a culture of challenge and scrutiny?
4. Financial planning and management - Does the council have a grip on its current financial position? Does the council have a strategy and a plan to address its financial challenges?
5. Capacity for improvement - Is the organisation able to support delivery of local priorities? Does the council have the capacity to improve? 

In addition to these questions, the council asked the peer team to provide feedback on staff capacity and resilience, which was picked up during theme five. In addition, as part of theme two, the challenge considered the role of partners in enabling city growth and community wealth building. 

3.3 The peer challenge process

Peer challenges are improvement focused; it is important to stress that this was not an inspection. The process is not designed to provide an in-depth or technical assessment of plans and proposals. The peer team used their experience and knowledge of local government to reflect on the information presented to them by people they met, things they saw and material that they read. 

The peer team prepared by reviewing a range of documents and information in order to ensure they were familiar with the council and the challenges it is facing. The team then spent three days onsite at Preston City Council during which they:

• Gathered information and views from more than 49 meetings and focus groups, in addition to further research and reading.
•  Spoke to more than 100 people including a range of council staff together with members and external stakeholders.

This report provides a summary of the peer team’s findings. In presenting feedback, they have done so as fellow local government officers and members.

Located on the north bank of the River Ribble, Preston is positioned at the heart of Central Lancashire and is the administrative centre of the County of Lancashire. One of the twelve districts of Lancashire, Preston has been ranked by the PwC ‘Good Growth Index’ as one of the most rapidly improving urban areas in the country, although it faces significant challenges with health inequalities, high levels of deprivation (Preston is within the 20 per cent most deprived lower tier local authority areas in England) and ageing housing stock. 

Preston City Council (PCC) has strong ambitions for the city which are underpinned by its model of Community Wealth Building (CWB) named the ‘Preston Model’. Developed just over a decade ago in response to the challenge of austerity, CWB centres on creating a resilient and inclusive economy for the benefit of the local area. Working alongside local stakeholders and communities, the council through this model aims to reduce the wealth flowing out of the local economy, so that it can be shared more widely and recirculated for the benefit of local people and businesses.

The peer team were informed by the council that the progression of the CWB approach has led to a number of achievements including increasing procurement spend in the local economy by the council and partners; encouraging suppliers to add to the ‘social value’ of their contracts by providing training and employment opportunities; and, becoming the first local authority in the North of England to be accredited by the Real Living Wage Foundation. It has also adapted the planning process through an Employment and Skills Supplementary Planning Document, which requires all major planning applications to commit to generating local employment, training and skills opportunities through a scheme’s construction. There was however a lack of hard data in support of these achievements and as such the peer team would recommend that the council develops their approach to data capture to provide further evidence that illustrates the impact of the CWB model. 

The peer team heard many examples of the positive impact of CWB as it continues to evolve, such as the adoption in June 2023 of a new Social Value in Procurement Policy for Preston; the growth of a more diverse and democratic economy through investment in organisations such as Preston Cooperative Development Network; the provision of financial support for community and voluntary groups, such as Kind Communities, a community interest company that has been working to respond to the food crisis; and enabling the expansion of decent and fair employment opportunities with local anchor organisations, such as Lancashire Teaching Hospitals, for those from the city’s most deprived areas.  

Whilst the aspiration for CWB is clear, the peer team found that there were mixed levels of awareness of the Preston Model amongst council officers, partners and community organisations, with limited evidence that it is embedded across the council or the city. Ensuring that CWB is adopted more consistently across the organisation, and with partners and residents, can help the council to have a bigger impact with this approach. A new Communications Strategy has recently been developed aligned to the priorities of the council; it is vital that its implementation incorporates a focus on how CWB is communicated, branded and promoted - both internally and externally - to raise awareness and understanding of this agenda. 

Building on the City Centre Area Action plan created in 2016, which sought to plan for the development of the city centre, the council is driving forward city centre regeneration on a large scale, with significant investment and commitment to regeneration projects within the city by public and private sector partners. Commitments through the council include the £21 million Towns Fund, £20 million Levelling Up Fund and the municipally funded £45 million Animate project. These projects include the Harris Quarter Regeneration Project, which is culture and heritage focused, the Station Quarter Masterplan providing grade A office accommodation and the predominantly residential-led Stoneygate Regeneration Framework. 

The peer team were very impressed by the scale of the regeneration ambition held and progress that has already been made, but questions were raised by staff and partners about the capacity of officers and availability of the specialist skills needed to deliver on what is a significant undertaking, as well as the associated reputational risks of non-delivery. 

This commitment to regeneration is evident through the council’s current vision, which seeks to “ensure that Preston is a growing, vibrant city with a thriving, fair economy” and associated ‘Achieving Preston’s Priorities’ corporate plan, produced annually, which sets out the corporate strategic priorities and the links to each service’s delivery plan. This document is complemented by a suite of associated plans including the Our City Investment Plan 2035, Lancashire 2050, City Living Strategy and Community Wealth Building Strategy to make up the strategic framework for the council. 

Whilst the regeneration agenda is driving change in the city, capacity for the scale of this work is stretched, with feedback during the challenge from officers and partners highlighting a view that the delivery of PCC’s aspirations are at risk due to an imbalance between the priorities of the council and the available capacity and resources. The peer team recommend that the council develop an explicit level of prioritisation for the Capital Programme and a selective approach to future funding bids based on how these link to the vision. By delivering priority projects first, this will target resources where they will have greatest impact and safeguard against organisational overstretch.

Further, from a range of stakeholders that the peer team spoke to, there is a perception that some core services, such as community safety, parks and homelessness support, are lacking investment and resources due to the focus on regeneration, which is impacting on core service delivery. In one of these service areas for instance, the peer team heard that there is only one designated officer.

The peer team believe that there is a need for prioritisation and rationalisation of the volume of plans, which are restricting the clarity of purpose and a clearly seen golden thread. Members (working with officers) should take the lead to develop a new, clear shared vision and priorities for the council which is both aligned to and shapes the use of the available financial and resource envelope.  This activity should be informed by a robust needs assessment that utilises a range of datasets to understand the needs and assets of local residents to ensure that future priorities are responding appropriately to community need. 

The refresh of the vision and priorities should be developed in consultation with the local community, partners and businesses, utilising relevant mechanisms that provide engagement opportunities to build from. This could incorporate for example a residents’ survey, and would also need to include targeted approaches to engage with the city’s wide-ranging stakeholders. The peer team heard that at present, resident engagement is not systematic and is restricted to feedback gained from the insights of community and voluntary groups, or via targeted service specific consultation, such as that underway to consider the future of cemetery and crematoria facilities in the city. 

This reset will provide an opportunity to articulate the aspirations of the council to staff, members, partners and residents and help develop collective buy-in. Building a stronger corporate narrative which tells the council’s story for the future will be central to this. 

The refresh will also provide an opportunity to review the specific roles of Cabinet and senior officers in delivering the vision and priorities, ensuring that there is a golden thread running from the aspirations of PCC through to front line service delivery with clear lines of accountability. It will also help the council to provide leadership through the place-based partnerships. 

Preston is one of the top performers for the number of affordable homes delivered when compared to the statistical neighbours[1]. This follows a step change in the council’s delivery of housing in recent years that saw 5,400 new homes built between 2016/17 to 2022/23, including 1,900 affordable homes (more than anywhere else in the County), funded through the City Deal and enabled by the council’s planning policy on affordable housing provision. However, challenges remain, with Preston experiencing above average volumes of vacant dwellings and numbers of households on the housing waiting list. The council has committed to addressing these issues through its City Living Strategy which will focus on re-developing empty buildings and bringing brownfield sites back into use, as well as seeking to tackle the challenges of ageing private sector housing stock. 3750 homes are projected to be delivered through this strategy, a number that is currently under review and set to be increased. 

There are a number of areas where Preston’s performance is significantly lower than comparators, including the proportion of waste that is recycled (in 2021/22 32 per cent of household waste was sent for reuse, recycling or composting compared to a CIPFA nearest neighbour average of 39 per cent) and the percentage of council tax that is not collected (in 2021/22 9.8 per cent of council tax was not collected compared to a CIPFA nearest neighbour average of 4.3 per cent)[2]. The peer team were concerned that there is currently no performance management framework in place to monitor the delivery and impact of the corporate plan, although it is understood that a full review has been carried out and plans are in place to re-launch the approach to performance reporting. The peer team would encourage the council to press ahead with this at pace and to ensure that it aligns to the work to develop a refreshed vision and priorities for the council.

Partners who met with the peer team welcome the opportunities to come together through the recently created partnership boards, which enable a place-based approach to deal with the opportunities and challenges facing the borough. 

This includes recognition of the climate emergency, with the council committing to achieve net zero emissions by 2030. A Climate Action Plan will be published in the Autumn in conjunction with the hosting of a Climate Jury, organised with partners, to engage with residents on this issue. Partners involved in the jury are extensive and varied, including for example, University of Central Lancashire Students Union, Climate Action Preston, and Preston and Western Lancashire Racial Equality Council.

A recently established Preston Regeneration Board, incorporating key city stakeholders including public and private anchor organisations, such as UCLAN, Lancashire County Council and the Preston Partnership, has been set up to deliver a refreshed City Investment Plan, which builds on several high-profile redevelopment programmes achieved with partners in recent years. This includes the £10 million public realm improvements in the city centre, £200 million University of Central Lancashire Masterplan and £5 million Preston Markets scheme. Partners involved were extremely positive about the role of the forum in enabling a joined-up approach to driving economic growth in Preston, particularly its role in exploiting opportunities such as the relocation of the government’s new national cyber force campus just outside Preston. To maximise this opportunity will require strong collaboration and relationships, with the partnership committed to deliver in line with a clear terms of reference and shared priorities. 

The peer team heard that Preston has recently become more proactive in the health and wellbeing space, which is welcomed by partners, who see the establishment of a health and wellbeing partnership and alignment of strategies as an opportunity to tackle the significant local health inequalities and capitalise on the recently announced building of a new hospital in the Preston area as part of national investment in capital infrastructure beyond 2030. 

It is clear that the council – over a number of years - has established a positive partnership with the University of Central Lancashire (UCLAN), predominantly in relation to the regeneration agenda. Building on this the Council can benefit more, from closer working with UCLAN to maximise the delivery of shared ambitions, including those related to local employment generation, skills expansion and the development of new housing. This mirrors a theme shared by a number of partners, that the council’s focus on regeneration can be sometimes at the detriment of delivering basic services, such as community safety and homelessness support, due to the volume of resource and capacity regeneration entails. 

The peer team met a number of committed community, voluntary and faith groups who are delivering a range of innovative projects and services that are improving outcomes for local people. Some groups are in the CWB model - such as Let’s Grow Preston, which runs community gardens that also support local food distribution. Equally, the Leighton Street Cooperative was set up in conjunction with PCC to support the management of a traveller site. Other community, voluntary and faith groups do not feel as connected to the agenda, although they embody grass roots delivery of CWB aspirations and feel strongly about the need for CWB delivery to focus in on more deprived communities. 

A more consistent approach to supporting community, voluntary and faith groups would be welcomed by those organisations that the peer team spoke to. This could include developing a convening role and implementing the infrastructure to promote, engage with and connect the sector to the principles of CWB and wider council priorities. The upcoming establishment of a volunteer hub may provide a useful vehicle for this, providing an opportunity to use community capacity to shape and deliver priority outcomes.        

The peer team saw that the council is working to establish Preston as a major centre for culture, drawing on CWB principles to take forward community-led events and cultural activity. Embedding arts and culture into the city and local communities can have a significant benefit in relation to economic regeneration and health and wellbeing. Recent examples include the Birley (an artist-led studio set up as a not-for-profit organisation by UCLAN graduates), which provides emerging artists with project spaces and opportunities to collaborate and exhibit their work. The council has enabled the project to thrive through the provision of redundant former council office space. Another example is the MET, a Mobile Events Tent that was situated in the heart of Ribbleton, one of the most deprived communities in Preston, throughout July 2023, providing a range of co-designed, community-led events that were accessed by a total of 1,000 community members in one month. PCC collaborated with UCLAN to support delivery, including community outreach work. The peer team were impressed with activity in this area and would encourage the council to ensure that they monitor the impact of this work.

It was clear to peers that PCC have a positive working relationship with Lancashire County Council and neighbouring districts. The peer team also heard how the Council is involved in discussions with councils across Lancashire, about a potential County Deal for Lancashire.

Peers recognise that whilst there is much collaboration and partnership work ongoing, there is a need for the council to continue to strengthen its role as a place leader and particularly as a convener to support community, voluntary and faith groups and partners to coalesce around shared outcomes. Closely linked to this is the identification (as noted above) that at present the ambition and priorities of the city are not being communicated effectively. The peer team heard that the approach to communications and marketing is distributed across the council, affecting the coordination of activity and restricting resource availability for basic requirements, such as the implementation of effective branding techniques and translation services. The council should consider developing a corporate approach to the delivery of communications and marketing, to support improvement in this regard. 

Employees with whom the peer team spoke are passionate about what they do and are committed to the city and council. There is a huge sense of pride and loyalty to Preston. 

There is an appetite from staff for more formal and informal opportunities to connect with colleagues across the council at all levels. This has become particularly prominent since the pandemic, with evidence of siloed working and some employees noting that they now feel isolated from other departments. More frequent formal staff events would provide an ideal forum to communicate the council’s aspirations, engage staff in the development of associated strategies and aid an understanding of their role in achieving the council’s vision. 

Members of the peer team observed political maturity amongst members, with cross-party relationships and engagement seen as a strength, which is working for the benefit of the residents of the city. 

The Audit and Overview and Scrutiny Committees are chaired by members of the opposition, supporting openness, challenge, trust and transparency (an approach that is recognised as good practice across the local government sector). The peer team were told that there is good member challenge through the Overview and Scrutiny and Audit Committees; pre-meetings make way for open agendas and topics are questioned deeply. 

The peer team believe that strong governance is evident from the work of the Audit Committee. Members of the Audit Committee have a good overview of the Internal Audit’s work programme, which is driven by the organisation’s risk register, with opportunities to challenge and bring in experts to further consider topics of focus. Positive feedback has been received from the external auditor regarding the functioning of the Audit Committee, for which they are a regular attendee. 

The Council’s Annual Governance Statement and the Local Code of Corporate Governance sets out the governance arrangements for the Council, which are reviewed annually. Statutory officers meet regularly, with discussion informed by the work of the Corporate Governance Group. Internal Audit report that they are increasingly being viewed as a partner in key Council projects with their involvement sought at the outset.   

Member training and support is strong, with a systematic and annual programme of training that is aligned with an assessment of member training needs, new legislation and the timing of key committee reports, such as the Annual Statement of Accounts. The training programme is overseen by the Member Development Steering Group, which is chaired by an elected member and supported by the Learning and Development Manager. The group may wish to explore the range of external training opportunities offered for members by the LGA.

The peer team believe that there is a need to develop a mutual understanding of the roles and responsibilities of members and officers within the leadership space and how this operates in practice. This will provide clarity of expectations for all parties regarding the approach to setting strategic direction and decision making. The council would benefit from external support for these discussions.

A key area for improvement for the council is the equality and diversity strategy, which needs to be reviewed and strengthened as a priority. The peer team heard that the council’s Corporate Equality Strategy is currently under review; the Equality Framework for Local Government provides a useful tool for organisations to self-assess their position against the public sector equality duty.

At a time when many councils are facing severe financial difficulties, Preston City Council is in a relatively strong financial position.  At its last balance sheet date of 31 March 2023, it held £30 million of earmarked general reserves and had just £12 million of outstanding borrowing. Usable reserves[1] amounted to £57 million (238 per cent of Net Revenue Expenditure at £24 million). 

PCC’s revenue generating capacity is strong. Its 2023/24 Council Tax is the second highest of all English districts and Core Spending Power in 2023/24 per head of population of £157 is the fourth highest of all English districts.

However, the council tax collection rate is significantly below that of comparator councils (during 2021/22 9.8 per cent of Preston’s council tax was not collected, compared to the CIPFA nearest neighbour average of 4.3 per cent). Potential causes include a low collection rate for households on council tax support and delays in collecting council tax from new homes. The council should consider reviewing the council tax Support scheme. For every 1% improvement in council tax collection, additional revenue of approximately c£150k would be received, therefore if performance came in line with the CIPFA average it would generate over £800k per annum.

There has been a history of strong financial control, which has served the council well. The section 151 officer and the portfolio holder for resources have a shared understanding of the council’s financial position. However, the peer team heard that there is a tendency for finance to be viewed as purely the responsibility of the portfolio holder, whereas the issues are cross-cutting and the cabinet as a whole need to understand the issues and share collective responsibility for managing the budget.

Despite the relatively strong position, the financial picture presented to members shows an increasing budget deficit over the coming years. As such members should be presented with a range of different scenarios, to reflect potential upsides around (e.g.) growth in the council tax base, or one-off funding from central government. 

Substantial budget savings have been delivered in 2023/24 from a reduction in budgeted interest payable, additional interest on cash balances, and staff vacancies.  In future, the scale of savings needed means that the council will have to consider more radical steps including service transformation. The external auditors have highlighted that income from fees and charges is lower than the norm for Preston’s statistical neighbour group. Addressing these issues is also necessary in order to build greater capacity in high priority services, such as homelessness and community safety, which has emerged as an urgent requirement.

Further, the peer team believe that the current understanding of risk is holding the organisation back and that the council would benefit from revisiting, defining and agreeing their appetite and attitude towards risk financially. This includes consideration of risks from both a management and political perspective. This approach will be central to future transformation programmes and policy objectives but should also be embedded within all of the council’s financial assumptions (such as future years income, or the longevity of additional funding announcements). The approach taken should of course be cognisant of the objectives of the CIPFA Prudential Borrowing Code and must ensure any borrowing is affordable, prudent and sustainable. The approach should be owned by all senior members and officers who need to share collective responsibility for managing the budget. 

It is in this context that the peer team have identified a need for the council to undertake further development of plans to create the financial capacity needed to deliver the organisation’s objectives and meet the challenges facing the council, such as an increasing demand for services. This could incorporate freeing up resources as invest to save opportunities. The council may benefit from support to develop their strategic approach to financial management that aids these conversations and enables closer alignment between the budget and priorities. The LGA would be happy to offer further dedicated support to the council, to assist in this regard.

The council has an ambitious capital programme which inherently comes with risks around funding, delivery, and potential escalation of costs. The peer team heard about an unquantified liability around the Guild Hall which will need addressing urgently. The risks around delivery are acknowledged but are not evaluated in the reports that we have seen. More comprehensive, regular reporting of progress on projects is required in order to ensure a full understanding and greater transparency. Internal audit is focusing on the governance of these projects, which present an unusual dynamic for Preston due to their involvement of external partners. 

The peer team heard a positive view of the council from the external auditors with whom they have a positive and transparent relationship. Unfortunately, there were delays in the production of statutory accounts due to a national issue regarding the valuation of pension funds. The audit of the 21/22 accounts had not been completed at the time of our visit and the draft 22/23 accounts had not been shared with members or the auditors.  As of November 2023, the 21/22 audit was completed and the 22/23 accounts were published. Capacity issues in finance, raised in the past as a problem by the auditors, are said to have been resolved. In addition, the most recent external audit of housing benefits achieved an unqualified opinion. 

The peer team heard evidence that the council does not yet have a proactive approach to the use of strategic assets and is therefore missing opportunities to make the most efficient and effective use of their land and property, including the potential to generate future capital receipts, or maximise the use of their estate by community organisations. This indicates a need to implement a more formalised asset management strategy that is in development.

As already stated, the employees that the peer team spoke to were engaged, loyal and proud to work for Preston. They are the organisation’s greatest asset. Peers also witnessed the passion and desire to collaborate with the council from the Community, Voluntary and Faith sector driven through a mutual desire to improve outcomes for local residents and reflecting the inherent ethos of community wealth building. 

However, there is an inherent lack of capacity from staff, partners and community groups, which is risking the delivery of core services, such as community safety and homelessness support and the achievement of the council’s ambitions. Responding to this significant risk will require a multi-faceted approach including a review of priorities, refreshed financial strategy and a focus on transformation.   

The peer team heard from many stakeholders that there are significant risks to the organisation associated with staff recruitment and retention, including pay, which are impacting on the delivery of the council’s ambitions. The comparative level of local pay for some roles is seen to be a barrier to recruitment, with a competitive local jobs market and accessibility to neighbouring local authorities impacting on the ability to attract the best talent to Preston. 

The council are taking part in national initiatives, such as the LGA’s Skills Hub Programme set up to tackle skills gaps and explore solutions to recruitment difficulties. Consideration could be given to undertaking a fundamental pay review, but more immediate action should centre on how Preston markets itself as an employer of choice. The role of the local University in this context, including the expansion of apprenticeships or creation of opportunities for graduates, should also be explored.

Peers believe that a better understanding of the workforce profile across the council is needed to proactively respond to staffing challenges, including for example the identification of any single points of failure, the impact of an ageing workforce and the nature of sickness absence (Preston’s comparative sickness levels during 22/23 at 15.99 days lost per full time equivalent were significantly high). This should be complemented with a staff survey, which peers understand has not been undertaken since 2017, to gain an insight into the perceptions and satisfaction levels of employees. 

This data and insight from the above provide intelligence which can be used to inform the creation of a robust workforce strategy that the peer team were told is currently in development. A new approach to transformation will require new skills and capabilities which may be latent in some areas but can be developed through training and development opportunities. 

The peer team heard that the council does not at present have a strategy for transformation, but that it has been approached incrementally, with a particular focus on digital transformation (for example, the use of online forms integrated into back-office systems for transactional requests and introduction of Chatbot functionality). A new Digital and IT Strategy has recently been launched, which will assess how the council can use digital connectivity to drive growth and to support residents, including exploring co-operative ISP approaches.

The peer team received positive feedback regarding the Revenues and Benefits shared service with Lancaster City Council, which has been established for ten years. The approach has provided cumulative savings across both councils of more than £10 million, achieved primarily by streamlining processes and reducing staffing costs. Peers note the intention to actively explore future shared service opportunities through the new Preston Regeneration and Health and Wellbeing Partnerships. 

However, the readiness to adapt and to embed transformation is not consistent across the organisation. A Service Improvement Board has been established, but there will need to be leadership commitment to a whole organisation approach and strategy to embed a culture of transformation moving forward. 

Despite the focus on digital transformation, the peer team saw limited evidence of the use of data and performance management to inform and support strategic direction and decision-making, or to assist with the management of the business. This is a significant gap. Moving forward there is a need to build a narrative for the organisation regarding the power of data and the multidimensional benefits to its effective use, from identifying efficiencies and evaluating impact, to improving service user experience and resident outcomes. The peer team heard that a roll out of new GIS technology is underway and that there are aspirations to create a data warehouse, which has the potential to provide a more holistic understanding of residents and their engagement with the council.

It is recognised that senior political and managerial leadership will want to consider, discuss and reflect on these findings. 

Both the peer team and LGA are keen to build on the relationships formed through the peer challenge. The CPC process includes a progress review that should be undertaken within twelve months of the CPC, which provides space for the council’s senior leadership to update peers on its progress against the recommendations from this report.

In the meantime, Claire Hogan, Principal Adviser for the North West, is the main contact between your authority and the Local Government Association. Claire is available to discuss any further support the council requires and can be contacted via [email protected]