LGA Corporate Peer Challenge: Royal Borough of Kensington and Chelsea

The Royal Borough of Kensington and Chelsea Council (RBKC) continues to face unprecedented challenges and circumstances unlike those facing any other local authority in this country or more widely. The tragedy of the Grenfell fire in June 2017 led to the deaths of 72 people, and affected many families, residents and wider communities both directly and indirectly. This report is not about that tragedy nor about the council’s response to the tragedy as those matters are covered by other bodies, ongoing inquiries and investigations, and related reporting arrangements. This report is about RBKC Council and how it functions today, with the aftermath of the Grenfell tragedy ever present in that context.

The council’s leadership is stable and the leader and chief executive work well together in visibly leading the council. However, overall that visible leadership is concentrated in too few individuals with too much reliance on the leader’s and chief executive’s roles in fronting and leading the organisation. More councillors and senior officers should and could play more prominent roles across the council, particularly as the effort to date has been rightly and heavily focused on supporting those directly affected by the Grenfell tragedy, but going forward other priorities will also need more corporate attention. The Council Plan is comprehensive and has been well-received by the organisation. Through its implementation, it forms the foundation for change and will help to embed a consistent corporate culture throughout the Council.

Some of the council’s services are regarded as strong, such as Adult Social Care and Children’s Services (the latter of which has received outstanding ratings from Ofsted for three consecutive inspections). Strong services can have a downside however, which is that departmental silos emerge and there is a lack of corporate and consistent working across the organisation. This means the council is missing out on applying and sharing best practice and has resulted in RBKC having some issues which need to be addressed if the council is to improve further. These issues include variable application of corporate policies, which in turn appear to be too dependent on the willingness of individuals to deliver, rather than being mandatory. Failure to address corporate working presents a risk to the delivery of the Council Plan agreed in 2019.

Steps have been taken to improve capacity at the most senior officer levels through a re-structure and the appointments of new directors and senior managerial roles, most of whom are now in post at the council. This presents an opportunity for the new Executive Management Team to step up and work together to lead the delivery of services. However further capacity is still required particularly at the centre of the organisation, to drive the transformational change that the council needs if it is to return to a degree of normality and operate in a way expected of a London borough, and to keep pace with what other councils have been delivering and how they have been managing themselves in order to deliver. This means developing corporate consistency of approach and modernising the council, so that it becomes fit for purpose for the future and includes developing the basics which other councils do better such as performance and programme management, gaining a stronger grip on its resources overall, and delivering change and improvement.

The council has historically benefited from generous funding, large reserves, capital programmes and revenue streams, and – compared to most other councils – has been relatively cushioned from austerity to date. However, the assumptions underpinning finances are beginning to change, even in this well-funded borough, not least due to the financial pressure created by the Grenfell tragedy1. Other external pressures are emerging which will have an impact in the long term, and the council has identified a need to reduce its revenue budget by £40m over the next 3 years. This means that members and officers will need to think differently about how services are planned for and delivered in the medium to long term.

Staff morale is improving, and this is reflected in the staff survey of 2019. Many staff are passionate about supporting the communities they serve, but there was evidence of some nervousness about how changes will be perceived by the community and this may inhibit the transformation process. The CPC took place before COVID-19 was widespread and this commentary reflects the council’s situation in early March 2020. This report therefore does not consider the council’s response to COVID-19 or the impact on its resources.

A refreshed executive team should provide a renewed sense of purpose and confidence to drive forward the improvements that the council is committed to delivering on behalf of the community. That executive team will however need support to work together effectively and with members to ensure effective transformation takes place. Ongoing communication with the local community in implementing the corporate plan will also be key to fostering a constructive relationship going forward.

The wellbeing of some members of staff and some councillors is still fragile and some will need ongoing, targeted attention and support if they are to recover and the council is to get the best from them. More focus is also needed to ensure that the council’s stated values are embedded across the workforce, as it shifts what it expects from staff to focus less on historic targets relating to commercial income generation and more towards a broader set of outcomes.

Despite the considerable effort and impact of the work of the council’s Grenfell Recovery Team, which is regarded as exemplary and is making a real difference to the individuals involved, there are concerns from stakeholders that the rest of the council is in danger of slipping back into old behaviours and attitudes. There were recent examples of this described to us during our onsite work, including some unacceptable behaviours in public meetings. Rebuilding trust in the council remains a work in progress and will not be helped by poor behaviours which come across as dismissive or rude. If confidence in the council is to return, then every instance of such behaviour needs to be called out and tackled consistently.

As the council takes a different and more values-based approach this should also include how it operates in the political arena. Recent changes to the structure of the scrutiny arrangements have not been well-received by all members, and more thought and dialogue is needed if a solution is to be found to ensure that this important function is performed effectively. That might mean a small degree of compromise from all involved so that members can focus on the right things for their communities. Currently attention and effort appear to be more about structures and process instead of outcomes that local people need and would recognise. More broadly the council needs to ensure it is aware of and actively seeks good practice from other councils to ensure their governance arrangements (including how councillors and scrutiny are supported) and broader service delivery keeps pace with good practice and innovation.

At sub-borough level the council could experiment with how it works in localities with partners, perhaps developing projects in one or two geographical areas to pilot new ways of working. This might enable refreshed enthusiasm for local service delivery, with a stronger outcome focus which builds on the extensive consultation undertaken to date. It would also help to support delivery of some aspects of the Council Plan.

There are a range of suggestions and observations within the main section of the report that will inform some ‘quick wins’ and practical actions, in addition to the conversations onsite, many of which provided ideas and examples of practice from other organisations. The following are the peer team’s key recommendations to the council:

1. Increase the effectiveness of the Executive Management Team (EMT) through targeted development and clarity of its wider corporate role. As the new appointees start in post there is an opportunity to work more collegiately and with a new focus at a corporate level. The new EMT needs to be supported and developed to evolve, and active consideration should be given to how to do this.
2. Increase corporate capacity through a senior transformation post, reporting to the Chief Executive, which as a minimum should include business planning and performance management, organisational development (OD), programme management and delivery, and working with directorates seek to build and enable a corporate transformation programme. This post will also strengthen organisational resilience given the ongoing involvement of the CEO at the Grenfell Inquiry.
3. Develop the corporate performance management regime and culture so that all staff are explicitly clear about the contribution they are expected to make and effectiveness in meeting their roles and responsibilities. Currently there seems to be a degree of variability about whether corporate policies are compulsory or optional. Some of this relates to variations in how performance related pay is managed across the organisation. Further clarity is needed about what is expected of employees as part of their day to day performance.
4. Strengthen organisational development capability so it becomes a real driver for embedding your values.
5. Implement corporate planning and performance framework (golden thread). Much of the council’s activity has been on post-Grenfell activity, but the organisation needs consistent corporate working, underpinned by a ‘golden thread’ which will help to ensure that the Council Plan is delivered by linking high level objectives to day-to-day service delivery. Effective service planning linked to budget planning and performance appraisal of staff needs to be developed further.
6. Implement some core principles for organisational redesigns and establish a design authority to ensure consistency.
7. Develop a more comprehensive approach to staff recruitment, retention, development and general wellbeing. The lack of a strong corporate drive means that there is a degree of variability about how staff are appointed, supported and developed. An integrated approach which is consistent across departments, should be implemented to develop employees for the longer-term needs of the council.
8. Work collectively to resolve current scrutiny issues. Disagreements and a degree of stalemate over the current scrutiny arrangements are getting in the way of a strategic focus and impact. More effort is needed, probably requiring some compromise from all involved (between and within the main political parties), to find a solution across the council’s membership, so that members can focus on what matters for residents.
9. Identify initially two other place-based issues that require collective effort from the council and its partners to explore new ways of working together. The council needs to begin to work differently with its partners across the borough. Developing pilots in one or two geographical locations could help to bring about a different outcome focus with partners, including the voluntary and community sector, and help to achieve innovation at a local level. 

The peer team

Peer challenges are delivered by experienced elected member and officer peers. The makeup of the peer team reflected your requirements and the focus of the peer challenge. Peers were selected on the basis of their relevant experience and expertise and agreed with you. The peers who delivered the peer challenge at RBKC were:

• Gavin Jones, Chief Executive, Essex County Council
• Cllr Sean Anstee, Trafford Council
• Cllr Shaun Davies, Leader, Telford and Wrekin Council
• Shokat Lal, Assistant Chief Executive, Rotherham MBC
• Sharon Godman, Divisional Director Strategy, Policy and Partnerships, LB Tower Hamlets
• Jon Bell, Assistant Director of Human Resources and Organisational Development, LB Barnet
• Abigail Raymond, Regional Programme Manager, One Public Estate
• Judith Hurcombe, LGA Peer Challenge Manager.

Scope and focus

The peer team considered the following five questions which form the core components looked at by all Corporate Peer Challenges cover. These are the areas we believe are critical to councils’ performance and improvement:

1. Understanding of the local place and priority setting: Does the council understand its local context and place and use that to inform a clear vision and set of priorities?
2. Leadership of Place: Does the council provide effective leadership of place through its elected members, officers and constructive relationships and partnerships with external stakeholders?
3. Organisational leadership and governance: Is there effective political and managerial leadership supported by good governance and decision-making arrangements that respond to key challenges and enable change and transformation to be implemented?
4. Financial planning and viability: Does the council have a financial plan in place to ensure long term viability and is there evidence that it is being implemented successfully?
5. Capacity to deliver: Is organisational capacity aligned with priorities and does the council influence, enable and leverage external capacity to focus on agreed outcomes?

The peer challenge process

It is important to stress that this was not an inspection. Peer challenges are improvement focussed and tailored to meet individual councils’ needs. They are designed to complement and add value to a council’s own performance and improvement. 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 for the peer challenge 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 four days onsite at RBKC, during which they:

• spoke to more than 100 people including a range of council staff together with councillors and external partners and stakeholders.
• gathered information and views from more than 58 meetings, visits to key sites in the area and additional research and reading.
• collectively spent more than 280 hours to determine their findings – the equivalent of one person spending more than eight weeks in Kensington and Chelsea. This report provides a summary of the peer team’s findings. It builds on the feedback presentation provided by the peer team at the end of their on-site visit (9 -12 March 2020). In presenting feedback to you, they have done so as fellow local government officers and members, not professional consultants or inspectors. By its nature, the peer challenge is a snapshot in time. We appreciate that some of the feedback may be about things you are already addressing and progressing.

The council has taken positive steps to understand its place, and its informed priorities are reflected in the Council Plan, agreed in 2019. Extensive community consultation through an exercise called Let’s Talk Priorities produced over 5,000 comments from around 2,000 residents and culminated in three cross-cutting themes and five strategic priorities which fed into the plan. A consultation exercise Creating Stronger Communities set priorities for the Grenfell Recovery Strategy and also influenced the contents of the Council Plan.

The borough has many assets including vibrant and diverse communities, a well-known location in one of the world’s best-known cities, a wide range of internationally renowned museums in South Kensington, and the famous Notting Hill Carnival which takes place annually in August. However, it also faces significant challenges. There is a strong sense of a north-south divide within the borough, seen not only in the physical appearance of localities, but often expressed locally, sometimes with a sense of 'us and them'. There is a significant gulf between the inequalities experienced by the most disadvantaged communities in North Kensington compared to the relative affluence in South Kensington, notwithstanding that both affluence and disadvantage can be hidden within wards across the borough. Seven areas in the borough are among the most affluent nationally whereas eleven areas are rated in the most deprived areas of England, with most of the latter are in North Kensington. At its most stark this includes significant disparities in the affordability of housing, not helped by the average price of a dwelling in the borough in 2019 being £2.2m, and in March 2020 there were over 2,300 residents housed in temporary accommodation. The Grenfell tragedy of 14 June 2017 and its aftermath have had a profound and long-lasting impact on many people in the borough, including the bereaved, survivors, other residents, council staff and councillors, partners and the wider community. The work of the council and its partners undertaken on the Grenfell recovery has been exemplary in many areas and shows that when the council is focussed on and committed to something, it can achieve real impactful change. The dedicated support service has been developed and designed hand-in-hand with the bereaved and survivors, and has had a considerable reach, for example 97per cent of those affected have engaged with the service. Similarly, the repeated 'outstanding' inspection judgements by Ofsted for RBKC’s Children’s Services provide an example of when the council decides it has a clear priority, it can deliver. However, we also heard concerns that the drive for real change is not consistently applied across the council’s other services, despite the levels of resources at the council’s disposal.

How the Council Plan was shaped is a clear marker of a new way of working, having been based on the council actively listening to its communities. However, it is rightly an overarching and strategic document and if the council’s ambition is to be achieved and needs are to be met, then it needs to be underpinned by rigorous service and business planning which translates aspiration into tangible activity on the ground. That planning needs to include how services will contribute to achievement and make more detailed linkages to how teams and individuals across the council will play their respective parts. A detailed delivery plan is required, with key outputs and outcomes clearly stated at director level. It needs to link to the council’s service planning and financial planning arrangements, so that resources follow its priorities. And if progress is to be made, it should be reported regularly to councillors so they can track performance through both the council’s executive and scrutiny functions. Having sought the views of communities and produced the plan, this architecture must be put in place if the council is to deliver and keep its promises. Whatever the reason is, both internally and externally, stakeholders often by-pass structures or individuals in order to go to the top of the organisation and get a decision made. This is an indication that there is more to do to change the culture of the council to respond to the needs of the community. It also needs addressing because the capacity of the leader and chief executive is a finite resource, and there are others both politically and managerially who should share more responsibility for providing solutions and answers. There are individuals who do step up and lead, both politically and managerially, and who want to bring about change and improvement, but there are others who lack the confidence or permission to lead. The overall impression is of a lack of distributed leadership which manifests itself in a degree of risk aversion, and which needs attention.

The council is making progress towards becoming less insular and is starting to be more visible externally both within and beyond the borough. This may be a feature of increased confidence as the council continues to recover post-Grenfell, as capacity begins to grow which enables it to engage more broadly. There is clearly an appetite from partners for the council to engage more extensively at the strategic level and to start to look to the future. Now would be a good time to consider what the council has to offer its partners and to explore collectively how they can work together for the longer term for the benefit of residents and the area, and as part of that consideration, begin to refine those relationships and ensure there is mutual clarity of purpose and expectation. On an individual basis there are some good working relationships and some of the new appointments at the most senior level provide an opportunity and capacity to reengage and begin that dialogue more extensively with other partners. However, the absence of an overarching strategic forum in which to do this is a barrier to improvement.

From 2011 to 2017 the council had strategic partnership arrangements for a variety of functions with neighbouring councils of Hammersmith & Fulham, and Westminster, often lauded on the national stage and usually described historically as “tri-borough” although in recent years the arrangement has become more “bi-borough” in nature. The arrangement with Westminster is still largely in place across a range of functions with several joint posts, for example the shared Director of Children’s Services, Director of Adult Social Care and Health, Director of Law, and the Director of Public Health, as well as for ICT provision and library services. The councils recognise they should take steps to review the arrangements and ensure all involved are clear about ongoing expectations and delivery for the future, to mutual satisfaction.

Although the leadership of the leader of the council and the chief executive is widely recognised, as is that of senior councillors and managers, there is less consistent leadership across the organisation. Stakeholders told us they can often get high level agreement on a particular issue only to find they are disappointed as that agreement filters through the organisation, because at operational level employees are either not empowered to follow through or use their initiative or are (perhaps in a reflection of the ‘old’ culture of the council) reluctant to do so. There are also inconsistencies about how the council responds to partners, and too much seems to depend on an individual’s preference in finding resolutions, rather than being systematic across the organisation. The role of the community and voluntary sector could play and its potential in the borough is not clear. This sector is vibrant within the borough has an obvious and important role across many aspects of daily life and more dialogue at the strategic level is needed to work out how it can contribute in Kensington and Chelsea. This seems even more pressing at the time of writing, given the development and ongoing impact of the COVID-19 outbreak and the expectations nationally on the third sector in reaching and supporting communities. Agreement about expectations also needs to be matched by clarity over funding in the medium term, particularly when organisations are expected to deliver for durations of up to 3 years but funding streams only last for one year, and some organisations described a “knee-jerk” reaction to funding which is unhelpful and unsustainable for the sector.

The Local Account Group was established in 2018 across both RBKC and Westminster Councils and is a good example of how the councils have engaged more with residents and service users. The Group is well supported by officers and is actively engaged on a wide range of matters related to Adult Social Care, providing a stronger user focus and challenge to how services are shaped and delivered. The Group’s influence can be seen across a range of issues including involvement in designing services, building accessibility and raising the profile of the needs of service users and carers.

The Group was also involved as part of a broader programme of engagement to develop the Dementia Strategy across the two boroughs, and 87 per cent of the RBKC’s workforce have received dementia friendly training in the last 12 months, with the aim of 100 per cent coverage by April 2020. The success of this approach has extended to partners from the police, Transport for London and the Fire Service seeking to be included in the training.

The council’s Leadership Team (which elsewhere would be described as the Cabinet) is on a journey to becoming a modern collegiate and engaged political team. Historically the council’s executive councillors made individual decisions, whereas now the emphasis is on more open decision making, made in public. Lead members are visible and enthusiastic about their portfolios, and on the whole are described as good to work with and are respectful of officers. These are positive developments which need to continue and be broadened and developed. There is widespread recognition for the work undertaken to stabilise the council since June 2017, particularly of the strong impact of the Leader and the chief executive in engaging with staff, stakeholders and communities. The clarity of purpose the chief executive has brought to the organisation is widely recognised and welcomed, to the extent that there is a degree of anxiety from staff and stakeholders about future succession planning relating to his role and what would happen if he were to leave RBKC.

Restructuring has taken place at the senior management level, reducing from thirteen directors to a new Executive Management Team (EMT) based on five new executive directorates, which will be largely completed in April 2020. The visibility of the Executive Management Team has room to improve: Opportunities need to be developed to raise the profile of EMT as the strategic officer decision-making body, including clarification about their roles and responsibilities, and how staff can engage with them.

The Grenfell recovery approach has introduced innovation and a more person-centred approach to the council, led by exemplary work particularly from within the Grenfell Recovery team. The council has decided to move away from having a dedicated Grenfell department and to mainstream that support work into a new structure, and this includes reorganising overview and scrutiny arrangements for Grenfell delivery. There is a considerable degree of local and partner anxiety about the intentions of the restructure, about whether the extensive learning and good practice that has been achieved will be lost or diluted in that transition, despite the capability of the individuals leading that work. Some managers told us of frustration with some departments which, despite the collective Grenfell experience, were still being resistant to proposals which if implemented would make services more customer focused (particularly from functions which might be expected to provide a more enabling role such as ICT, human resources and finance). This has the effect of sapping energy and enthusiasm as sometimes the default answer to requests seems to be 'no', as well as some initiatives and simple requests taking far longer than might be reasonably expected. Consideration needs to be given to how individuals can be reassured that the focus will not change through this transition, including how the reporting mechanisms will show that progress is still being made.

'Silos' and 'fiefdoms' are terms consistently used by stakeholders to describe how the council has worked in the past and how it continues to work, with strong service areas and a weaker or absent corporate centre. Several managers described corporate working as appearing to be optional for services rather than compulsory, with the degree of engagement being based on the personal preference of some senior managers. This results in a lack of ownership of many issues. The lack of corporate ethos may be a time-lag issue which arises from the council pre- Grenfell not having agreed corporate strategies and which did not embrace corporate working or act as a corporate entity. Indeed, the Corporate Plan agreed in 2019 was the first corporate strategy for many years. More concerted and deliberate capacity at the centre is needed in order to develop a cohesive and systematic way of working which is strategic and brings about change and improvement on a consistent basis across the council. This capacity also needs to have the authority to drive delivery so that agreed ways of working are implemented and no longer seen as optional.

Another facet of this is the need for more corporate oversight and challenge on performance. Although this does take place within directorates to a lesser or greater degree, it is service specific rather than overarching and is not seen in the round. This is particularly important in the context of complex issues which have more of an outcome focus, and which do not easily sit within one council department but will require a cross-cutting effort across a range of different specialisms if impact is to be made (such as RBKC’s response to climate change). The council can show a range of good services, but these historically have been driven by process and targets and do not pull together sufficiently as a corporate entity.

Work is ongoing through an external provider, to review the overall design of managerial arrangements through the Forward 2020 programme. It is intended to move the council away from a previously traditional approach to one which brings stronger and more coordinated corporate working. However, the failure to appoint to a new post of director of corporate strategy, which would include capacity for programme management, performance management and oversight of the Council Plan delivery, means that there is still a gap at the centre of the organisation.

Some investment has been made in leadership development to date and there is a recognition of its importance, although there are mixed views of the programme that was in place up to 2019, with some involved feeling that it had petered out. There is still more to do as the organisation continues to evolve, and a more structured, organisational development approach is needed to help individuals and the council to develop into the roles that the council expects of them. Although training and development opportunities are provided and appear to be broadly accessible for anyone interested in them, like other aspects of corporate working, the unstructured and optional nature of whether individuals participate means that the potential impact across the council is not as strong as it could be.

The training and induction programme for councillors is supported by an increased training budget and appears to cover the main issues affecting all councils, such as planning and licensing, scrutiny awareness and code of conduct issues. There are some elements which are more specific to RBKC, such as trauma awareness training. However, the approach overall could have be more overt and tailored, and link specifically to needs identified through the personal development plans provided for all councillors.

The Risk and Control Board, chaired by the chief executive, is an approach which is maturing and focusing on the right things, including overseeing and developing the risk strategy and risk registers. An area of focus for the Board is on having the right behaviours to ensure that risk is being properly managed, and a clear overall intention is that the council no longer focuses simply on straightforward de minimus (minimum) legal compliance and the risk relating to itself as an organisation, but is instead more deliberative and targeted on community risk in order to safeguard residents, service users and employees.

A Strategic Management Information dashboard is being developed to provide a stronger outcome focus on performance and is due to be rolled out during 2020. The aim is to use a broader base of qualitative information than straightforward traditional performance indicators, so that members and officers have an ongoing and better understanding of community insight. Some departments have developed their own performance management frameworks and their own service plans.

In 2019 changes were made to the approach to overview and scrutiny, which saw the introduction of an overarching Overview and Scrutiny Committee and mainstreaming Grenfell scrutiny across the council’s main services and disbanding the Grenfell Scrutiny Committee which was established after the fire. This restructure has also been reflected in the members’ training and development programme, but nonetheless the new arrangements are not regarded as acceptable by all councillors, a minority of whom regard them with suspicion and as a means of potentially diluting the impact of scrutiny on this important and ongoing matter. During our time onsite at RBKC there was a degree of impasse about scrutiny participation between the majority political groups, leading to frustration for everyone involved, including officers supporting the arrangements, yet there is widespread agreement that scrutiny activities should have a tangible impact and focus on what matters for residents. An acceptable solution and improvements are within reach if small adjustments can be made, involving some pragmatism and compromise from all involved, both between and within the main political groups.

New values for the organisation have been developed: Putting Communities First, Respect, Integrity, and Working Together. The creation of these new values is a positive step in creating a warmer, more empathetic culture, and there is evidence that awareness of the values is growing as members of staff apply them to their roles. However, they are yet to fully embed across the council, and some observers feel there is much more to do before the council achieves a warm and empathetic culture where staff work together extensively with residents.

Despite some of the positives emerging from the council about how it engages with communities, and of those stated values, there is nonetheless real and widespread anxiety expressed by many that the council could easily default back into previous behaviours and ways of working. This relates in part to earlier comments in this report about the over-reliance on a number of key individuals in the Executive Team and Leadership Team to provide leadership. Concerns are held by some internal and external stakeholders about the attitude and behaviours of some councillors and some officers, which are not in all instances regarded as sufficiently different from the old, pre-Grenfell council which attracted so much criticism. There is also some unease expressed how some people conduct themselves in meetings, whether or how they follow through on promises made, as well as general attitudes towards residents, sometimes with a marked difference between how advantaged and disadvantaged residents are treated or talked about. The peer team did not conduct a comprehensive study to the extent of which such behaviours and attitudes exist across the council, but peers did hear sufficient commentary to suggest this is a live matter which will need persistent and ongoing attention if trust is to be earned and nurtured, with everyone feeling able to call out and challenge poor behaviour, irrespective of their source.

The council’s governance has rightly been a focus of attention in order to help address issues of trust and confidence in the council as a decision-making body. The Centre for Public Scrutiny undertook an independent review of governance which provided 12 core principles of good governance and seven recommendations, including that the council should become more open and outward facing in its decision making. Elements of this are underway, for example, the improvements in how the Leadership Team makes executive decisions. Listening Forums have been introduced which enable Lead Members to meet with residents about concerns, and Full Council meetings now have the first hour devoted to a public slot for residents to share issues. In addition, the previous practice of private Lead Members’ meetings to determine the outcome of decision-making has ended.

Despite these developments which bring greater rigour to structures and processes, concerns remain at the local level. There are mixed views from stakeholders about the council’s governance arrangements and some councillors do not yet feel that the arrangements are inclusive of them as local politicians, irrespective of their political views. There is an appetite from some councillors to be able to deliver in a more targeted way at a very local level, including on improving the built environment.

Furthermore, some members feel that the work of ward councillors is not sufficiently recognised or supported by the council. There is mixed uptake of the new members casework system, although if embraced this could help more systematic responses to members requests. There are mechanisms which other councils undertake which could improve how councillors can engage on the process of decision making, for example Telford and Wrekin Council have a cross-party working group which meets regularly. Further discussion to understand these issues and ideally reach a solution would enable all councillors to feel they have a role to play, as well as stop the discussions about structures and processes from being a distraction and getting in the way of delivering services to residents.

The council’s location and the many assets based in the borough have created the benefit of being able to generate significant external income and to take advantage of sources of funding, which have been advantageous for the council’s balance sheet. The level of council tax is the fifth lowest in London and nationally. Business rates provide over £360m of income per annum, and the ability to create car parking income annually in excess of £55m is unusual for most councils, even for the more affluent London boroughs. The council’s income arising from fees, charges and rental income during 2019/20 was estimated to be £126m. The Medium-Term Financial Strategy (MTFS), agreed in 2019, covers the period 2020/21 to 2023/24. Although the council’s accounts for the last two years were unqualified by its external auditors, the council has not received a value for money judgement due to the ongoing Grenfell Inquiry. The council has been part of the London Business Rates Retention pilot scheme which is due to change during the 2020/21 financial year. The overall budget for 2020/21 is anticipated to be £486m of revenue expenditure and £161m for capital.

However, the council’s relative ease in generating income has contributed to an overall lack of financial rigour and we noted a general absence of focus on value for money. Several internal stakeholders reflected that the MTFS’s identification of the need to make budgetary savings of around £20m during 2020/21 and a cumulative total of £40m over the next three years had been somewhat unsettling because they had not been required to make such proposals before. The approach to making savings has been fairly uneventful to date. The council recognises that the need to address this is a core requirement going forward.

Historically, the large volume of reserves has also contributed to the lack of focus on delivering value for money, as up to the point of the Grenfell tragedy the council had significant levels of useable reserves at £283m. Even after spending £235m on purchasing new accommodation for residents and £65m of its own resources from the General Fund on post-Grenfell support, there has been sufficient flexibility to fund a new special school at Barlby in North Kensington from general reserves. However financial pressures relating to demography (including high social housing demand and an increasing elderly population) and broader local government sector uncertainties over Brexit and national government’s future spending plans, create complexity and uncertainty. In the longer term a different strategy will be needed to balance the budget, moving away from the previous approach of high spending service delivery, underpinned by using reserves. The Futures Programme is intended to address some of these issues by exploring where expenditure can be reduced while outcomes are improved or maintained. Delivery of the Capital Programme has been subject to significant slippage in the last two years of over £100m per annum. Some of this was outside of the council’s control, and this is not especially unusual for large scale capital schemes. However, there is a need to address the programme’s overall purpose and the scale and validity of what it includes, as with over 100 projects it is not as focused as it could be. It also needs revisiting in relation to the Council Plan, as the relationship to date has been somewhat loose. The programme has been reviewed externally and recommendations have been made to improve the clarity of accountability on the delivery of the programme, (particularly as much of this delivery is devolved to service departments), and to improve the detail and quality of reporting of the programme to the Audit and Transparency Committee.

The overall approach to financial planning for both revenue and capital workstreams, should be aligned to corporate business planning to help focus delivery of the Council Plan. Reporting arrangements also need to be aligned to enable members to track progress on expenditure and delivery.

Ownership of transformation largely appears to sit within the finance team, giving the overall impression that transformation in RBKC is narrowly focused and is largely about reducing budgets rather than being about fundamentally changing how the council operates. Crosscutting transformation capacity needs to be created and managed at a corporate level, with strong managerial input and reporting arrangements based on the council’s Corporate Plan themes. The reporting of progress on transformation to councillors needs to align with budget and service performance, so that they can see in the round and at a strategic level where progress is and is not being made.

A shift is being made in moving some internal performance targets for employees away from income generation and financial returns towards a different focus on quality of life and outcomes which residents would recognise. This is unsettling for some staff who have historically been rewarded for delivering on such targets and who readily understood having entrepreneurialism as one of the previous council values and find this new focus harder to accept, whereas others appear to relish the challenge this brings.

Through the Grenfell recovery the council has shown how it can deliver effectively by having a clear goal with resources attached and make a difference to local people’s lives. This has been a council forced to change away from its previous ways of working which were described as arrogant and resistant to change, to one where humility and kindness are growing in importance.

Going forward the council needs to have confidence that resources are in place across the organisation, to support the implementation of the Council Plan and is capable of being delivered while maintaining effective engagement with the community.

The pay and grading system is under review and this provides an opportunity to deal with the issue of performance related pay (PRP) and more broadly as a positive instrument of change. There are mixed views about the PRP scheme from employees, with some in favour of the approach and others feeling it is unfair, concerns that it can be inconsistently applied and that it appears to reward some staff excessively for doing what they should be doing as part of the day job. Managers also report difficulties in bringing further discipline into the scheme. The ongoing existence of PRP for over one third of staff feels anachronistic in the context of both this council and the local government sector more widely and feels like a reflection of an older culture of financial reward which the council is moving away from in its other aspects of people management. For example, moving towards an outcomes focus rather than a return on investment focus which has existed previously.

Formal recruitment and new starter processes could be further developed to provide a more human face, for example new employees described having largely to create their own induction to the council, which felt unstructured and limited. Better structured recruitment and induction processes will also help to support embedding of values and corporate working. Creating clearer career opportunities and career paths will also help staff retention.

The widespread use of external consultants, aided in part by the council’s resource base, has had a mixed impact. On the one hand it has enabled capacity and thinking to be brought into the organisation quickly, but in doing so that expertise has sat outside of the council, rather than supporting the skills base of the workforce. A sharper more corporate overview of the use of consultants is needed to ensure that resources are deployed effectively and with value for money and the council’s priorities in mind.

There has also been a heavy reliance on contractors and interim staff to fill key roles. This has again helped to provide capacity and bring in additional expertise, which if deployed effectively, can promote improvement. But it is expensive and can lead to a lack of continuity and the council should aim to become less dependent on them by developing and retaining existing staff, and when external appointments are required consider how best to make permanent, rather than temporary appointments.

The peer team met many motivated and professional staff who want to do the right thing and are clear about the purpose and intent of their roles and the impact of their work. Many of these employees speak about the council and its communities with passion and commitment, and this is a positive factor for the future. A new focus on organisational development will help to grow the capability of the permanent workforce. Further consideration is needed of what skills and expertise will be required in the longer term, and how the council will achieve these. This means developing a workforce for the future which is more flexible and able to adapt to future challenges. The creation of an organisational change team in late 2019 brings together managers from across the organisation to focus on bringing about cultural change across the council.

The staff survey conducted in 2019 showed some encouraging green shoots of increasing staff engagement. Overall morale appears to be improving although this is still fragile in places and was variously described by individuals as 'improving', 'a bit flat' or 'afraid'. There are concerns, reflected in the staff survey and voiced during this peer challenge that some employees do not feel sufficiently valued or have a strong sense of belonging to the council. Not following up on the survey through a clear statement and action plan, to show employees what the council plans to do next, has resulted in a lost opportunity to build further organisational trust. The wellbeing of staff more generally, and of some councillors, is fragile in many places and some people are still traumatised from their experiences relating to the Grenfell fire. Although professional support has been offered, not everyone has fully engaged with it. Recovery support for these individuals should continue to be offered and take-up encouraged and the position monitored so staff can continue to work with communities in the most effective, sustainable and impactful way. This is particularly important as the next phases of the Grenfell Inquiry take place. The Learning from Grenfell Programme, led by the Executive Director for Grenfell, has been designed to ensure lessons have been learnt from what the council did post-June 2017, particularly on safety, community involvement and engagement, and equality and diversity. This programme has brought innovation and focus into the council. The challenge remains more widely about how to apply this approach to other services to bring about more and broader improvement beyond that which is Grenfell-related, so that ambitions can be translated into action. Staff feel that the newer ways of working learnt from the Grenfell service have yet to be widely seen across the broader council.

Relationships with residents can vary from being positive to fractured, but there are small indicators of improvement. These include the developing approach to customer insight and engagement, which regards every customer contact as an opportunity for learning and to build trust, and the way that some senior managers are aspiring to better quality conversations with service users. The overall approach to customer engagement would be complemented by more corporate oversight into complaints which is consistent across services, and which treats those complaints as insight into where the council can improve. This is undertaken in some departments, but not all, and is another missed opportunity for improvement.

As might be expected of an organisation involved in such a large-scale and profound tragedy, there are multiple narratives about Grenfell and the circumstances surrounding it, and this also applies to the council’s improvement journey. There are widespread concerns that although the council has improved, it could easily slip back into its old culture of being patriarchal with “us and them” relationships, and there are also concerns that the over-reliance on a few key individuals presents a risk to sustained improvement, especially if any of these individuals were to move on.

The position statement written for the corporate peer challenge was an accurate reflection of the issues the council still faces and showed good levels of self-awareness, reflection and honesty about what it has and has not done, its failings relating to the Grenfell tragedy and the aftermath, and what it needs to do next. This new spirit of openness needs to continue and extend across everything the council does so that trust can be earned and rebuilt at many levels, and RBKC needs to take active steps to become a more corporate organisation which enables consistent outcomes to be planned for, designed, and delivered with communities. This will enable the Corporate Plan to be delivered with ownership, energy and pace.

Immediate next steps

We appreciate the senior managerial and political leadership will want to reflect on the findings within this report in order to determine how the organisation wishes to take things forward. To support you in your improvement journey the Peer Team have identified several key recommendations, some of which you may already have in hand. We welcome your response to these recommendations within the next three months through the development of an action plan.

Your LGA Principal Adviser Kate Herbert -  - will be in contact to assist the council going forward and to provide additional support, advice and guidance on any areas for development and improvement and she will be happy to discuss this.[email protected]

In the meantime, we are keen to continue the relationship we have formed with the council throughout the peer challenge. We will endeavour to provide signposting to examples of practice and further information and guidance about the issues we have raised in this report to help inform ongoing consideration.

Follow up visit

The LGA Corporate Peer Challenge process includes a follow-up visit. The purpose of the visit is to help the council assess the impact of the peer challenge and demonstrate the progress it has made against the areas of improvement and development identified by the peer team. It is a lighter-touch version of the original visit and does not necessarily involve all members of the original peer team. The timing of the visit is determined by the council. Our expectation is that it will occur within the next two years.

Next Corporate Peer Challenge

The current LGA sector-led improvement support offer includes an expectation that all councils will have a Corporate Peer Challenge or Finance Peer Review every four to five years. It is therefore anticipated that the council will commission their next Peer Challenge before 2025