Halton Borough Council – Progress Review

Halton Metropolitan Borough Council (Halton Council) undertook an LGA Corporate Peer Challenge (CPC) in September 2024 and promptly published the full report with an action plan.

The Progress Review is an integral part of the Corporate Peer Challenge process. Taking place approximately ten months after the CPC, it is designed to provide space for the council’s senior leadership to:

• Receive feedback from peers on the early progress made by the council against the CPC recommendations and the council’s RAG rated CPC Action Plan.
• Consider peers’ reflections on any new opportunities or challenges that may have arisen since the peer team were ‘on-site’ including any further support needs

Discuss any early impact or learning from the progress made to date.

The Progress Review focussed on each of the recommendations from the Corporate Peer Challenge, under the following theme headings: 

• Financial planning, management and resilience
• Transformation
• Oversight and accountability
• Leadership of Place

For this Progress Review, the following members of the original CPC team were involved:

• Lead Peer – Will Godfrey (Chief Executive – Bath and North East Somerset Council)
• Lead member – Simon Henig CBE (former Leader - Durham County Council)
• Julie Murphy (Director of Corporate Services - Rochdale Borough Council)
• Dan Archer, Peer Challenge Manager, Local Government Association

Out of the CPC’s thirteen recommendations, the council’s RAG rated Action plan reports that:

• 4 / 13 recommendations are graded ‘green’
• 9 / 13 recommendations are graded ‘amber’
• 0 / 13 recommendations are graded ‘red’

This progress review provides a summary of the feedback given by the peer team on the progress made by the council against the recommendations made in the original CPC.

The council has demonstrated in a number of areas, how it is acting on the recommendations given – examples of which include risk management, performance, children’s social care and overview and scrutiny. The steps to reduce the number of children’s social care agency staff especially is a very positive area of progress, which has helped to significantly reduce the levels of spend in this area. A close working relationship between the service and the transformation unit have supported this progress.

However, there is one clear message from this progress review, that there remains the need to urgently address the financial pressure the council faces. This has not lessened since the team were on site. Urgent action is required to ensure that the council is able to limit the amount of additional debt the council takes on through Exceptional Financial Support beyond the amounts now already in place. Doing so will reduce the scale of future repayments faced by the council, lowering the burden financially in future years, helping the council to then deliver for communities more sustainably into the future.

In order to achieve this, it is imperative that the council has in place at pace, a clear programme of savings and efficiencies that will show how the reliance on Exceptional Financial Support will reduce and ultimately stop. This cannot be achieved without this clear programme being in place. There are inevitably difficult decisions required now, in order to achieve this, which will require the support of the leadership team and wider political support. A strong, closely connected corporate approach is essential for effectively dealing with this challenge. There are examples where this is the case, as detailed above and elsewhere in this report. These need to be built on further and more widely across the council. A clear, system wide financial improvement plan which details the roles of different stakeholders right across the council in ensuring the council is able to achieve this is vitally important.

Finally, as the council enters into a period of transition in its officer leadership, whilst seeking to address such significant corporate challenges in regard to finance and children’s services, the team strongly encourage the council to accelerate the timelines for the external recruitment process for a permanent chief executive, supporting the stability of senior leadership within the officer cohort over this crucial period of time.

This theme includes reference to the following recommendations from the original CPC:

• Take urgent action to address the highly significant 2024/25 budget overspend position.
• Clearly communicate widely and on an ongoing basis the current, financial position of the council for 2024/25 and beyond. Ensuring that reports are suitably clear and succinct, reflecting the needs of different audiences, whilst also increasing the frequency of budget reporting.
• Reset the budget setting culture, planning and grip to ensure the council has confidence that it can set a recurring, balanced budget.
• Put in place quickly a finance improvement plan that can be monitored regularly by members and officers around the progress against the range of actions required.

At the time of the CPC in September 2024, the council was forecasting a £19.8m year-end overspend with only c. £11.5m left, available from reserves that could be used for bridging any year-end overspend in 2024/25. With this, the CPC highlighted ‘a high level of concern about the council’s financial resilience, which included the immediate 2024/25 position’.

That forecast overspend position decreased to a £18.9m overspend position in January 2025, before reducing to a 2024/25 outturn position of £16.1m. Underpinning this improvement, were the following shifts from the forecast position in July 2024:

• A significant in-year reduction in spend within the children's directorate from a forecast year-end position of a £13.3m in July 2024 to a year-end overspend position of £9.7m. A significant contributor to which was a reduction in spend on agency workforce over this period which is highly impressive and is detailed elsewhere in this report.
• In addition, an increased level of underspend in the Environment and Regeneration directorate (+£363,000) and a £916,000 reduction in the forecast level of overspend in 'Corporate and Democracy'.

However, the council has also seen an increased level of overspend in the adult’s directorate from a forecast position in July 2024 of £3.3m to a year-end position of £4.5m. This includes increasing spend in regard to the 'Community Care' and Adult Social Care budget lines specifically.

Steps have been taken to try to increase the level of grip corporately around the financial position. For example, immediately following the CPC, monthly budget monitoring meetings were established with all directorates, including the Chief Finance Officer and Chief Executive and are now scheduled throughout 2025-2026.

Despite some improvement in-year in the overall overspend position, the council was required to apply for Exceptional Financial Support (EFS) to cover this overspend position. The overspend position being funded from the application of £6m of reserves and £10m of borrowing via EFS. It should be noted that the 2025/26 budget was in deficit by £29.4m and therefore further EFS is required for 2025/26 prior to any service reporting any in-year overspends. This is also dependent on the delivery of around £8m of savings. The cost of this borrowing will lead to an additional pressure on future council revenue budgets, which must then be tackled alongside existing and other future pressures. However, it should be noted that the use of EFS is subject to a review by CIPFA which is programmed to take place in September 2025, currently the council does not have a robust recovery plan to share with CIPFA to support this visit.

It is within this context that the ‘urgency to act’ remains just as pressing, to minimalise as much as possible (and as quickly as possible) the amount the council draws on from EFS in 2025/26 and beyond.

Whilst there is always the potential that future funding settlements may provide some relief to these pressures for the council, the underlying budget pressure is one the council must tackle with real urgency, which will mean acting at a greater pace to identify the savings and efficiency commitments that will reduce or eliminate the requirement for further EFS beyond 2025/26.

It is essential that the council puts in place, at pace, a clear and robust programme of savings, income and efficiencies, that will reduce the budget gap the council is currently bridging through EFS. Meaning that at present, there is no clear programme which shows what the council will do to avoid the requirement for further EFS in 2026/27 and beyond. The longer this is allowed to continue, the larger the amount of debt the council will be burdened with in future years, from using this mechanism.

The time is now – and has to be now – to make the difficult decisions this requires, so that the council can start to establish a route back towards self-sustainability.

The peer team were able to see the steps the council has taken and has committed to continue taking in communicating ‘widely and on an ongoing basis the current, financial position of the council…’. The frequency of budget reporting was increased since the CPC, with council-wide updates going to both the Chief Officers Management Team and Executive Board every other month. Further-to-this, bi-monthly spending reports are provided to full council and all Policy and Performance Boards. An increased amount of detail is now being shared on capital spend within reports to the Executive Board and Policy and Performance Boards. Dedicated training on treasury management has been made available to all members, which will be repeated on an annual basis from now, with an opportunity to tailor such sessions to current issues for members at each point.

The council has not yet however put in place the Finance Improvement Plan, which was recommended to the council by the original CPC team in September 2024. This plan serves the purpose of detailing all of the different actions that are required to ensure the council-wide response to this challenge is fully acted on – including financial planning, monitoring, delivery, culture as well as wider accountability and oversight (for example). A fully council-wide response is essential for dealing with the financial pressure now being faced and the peer team strongly encourage the council to bring this plan together at pace. Having such an improvement plan in place will help to ensure that the multiple stakeholders who are required to contribute to this position are mapped out and held to account for their role in this. The council are encouraged when doing this to use a structured planning template for this plan, that supports routine accountability and focus. This is an important step in further developing the council’s corporate response to this financial challenge – supporting a cultural shift around the budget. Doing so will help in reducing the likelihood of more significant further requirements for EFS than is already likely and is therefore a preventive step that ultimately helps all services of the council and the outcomes they seek to impact on, for local people. The plan should go through various iterations as progress is made and new challenges emerge. As well as when further feedback is given to the council in support of financial sustainability – for example from the external auditor and forthcoming CIPFA review.

The steps being taken to assess the council’s compliance with the CIPFA Management Code, will inform further steps the council then takes in the second half of the financial year for its budget setting process for 2026/27. The council is looking to how it can develop the level of public engagement with the budget setting proposals, although has not made any changes to the established process to date. The council has taken steps to update the MTFS has been updated to cover four years, reflecting the level of financial risk the council is exposed to and to more specifically articulate those risks.

This theme includes reference to the following recommendations from the original CPC:

• Reset and reposition the Transformation Programme. Communicate its purpose and develop increased shared ownership across the council. Prioritise the work of the programme on the largest immediate and medium-term budget opportunities.
• Ensure all transformation programmes have clearer delivery plans, including benefits realisation, and are in place which are signed-off by the finance team.

In order to ensure the council is able to deliver against this significant financial challenge, the original CPC made the above recommendations.

The transformation programme has continued to have a strong working relationship with children’s services, which has helped to support the significant progress seen in reducing the costs of agency staff. The number of agency staff within children’s social care reduced from 56 per cent to 36 per cent in the period since the original CPC, with a continued downward trend.

In environmental services, the service has worked with the transformation unit to secure the additional external subject matter expertise to support the transformation of those areas which show the largest variance against benchmark costs (greenspace, waste collection & disposal).

A concern that the peer team were able to highlight as part of the original CPC, was that savings identified within the budget did not consistently have fully costed delivery plans underpinning them. At the time of this progress review, peers were assured by senior council officers (albeit were not able, within the time available for this progress review to check), that all savings identified within the transformation programme had a fully developed delivery plan in place. However, the team were not able to gain the same assurance that those savings that sat outside the transformation programme and within individual services had the same. An example of this was in regards to a budget saving of £1m for 2025/26 in community care.

The team were also assured by finance officers that they had a greater degree of engagement with the work of the transformation unit than was the case at the time of the original CPC and is something to sustain and continue to build on. Both of these points should be considered in light of the earlier point, that the council will only be able to address the scale of its financial challenges with a fully connected, corporate response.

There does however remain, some confusion about the role of the transformation programme and how much of the existing financial gap, is the business of the transformation programme and how much is being addressed by other measures, including those that sit within finance corporately and within services individually. It is vitally important, for the council’s own accountability and progress against this challenge that these distinctions are clearly and consistently seen. This includes for the budget savings already committed to as well as the budget options agreed as part of the council’s programme for addressing the underlying underspend beyond 2025/26. This progress review took place before Q1 monitoring information had been released, meaning it was not possible to consider progress across the transformation targets in 2025/26 in detail.

This theme includes reference to the following recommendations from the original CPC:

• Further develop oversight and accountability around finance and the transformation programme.
• Take steps to support Policy and Performance Boards to have a greater impact, based on the considerations shown in this report.
• Further develop the role of performance management at the council.
• Further develop the role of risk management at the council.
• Appoint independent persons to the Audit Committee and support the committee to grow the level of challenge it brings.

In the November following the CPC, the Audit and Governance Board reviewed the Terms of Reference of the Transformation Programme Board and made a recommendation to the Executive Board that the membership be broadened to include two members from the Audit & Governance Board. This recommendation was accepted and that change is now in place. Alongside this further, early discussions have taken place at the time of the progress review to more closely align the work of the Policy and Performance Boards with the transformation programme. These are examples of steps the council should build further on, under this recommendation and including these within a Finance Improvement Plan.

The council’s scrutiny processes were reviewed following the CPC via the Members’ Scrutiny Chairs Group. These changes were taken to the May Annual General Meeting (AGM) and agreed by full council. Changes included amending the Policy and Performance Board titles and terms of reference to reflect the new priorities in the Corporate Plan. The team heard how improvements within the practice of overview and scrutiny at the Children Young People and Families Policy and Performance Board could now be taken into the work of the other Policy and Performance Boards. The council have been offered further support from the LGA to assist with this following this progress review, and in particular to support the chairs of these committees to take a more empowered, central role in increasing the profile, practice and impact of the Policy and Performance Boards in line with the practice seen in other councils. This includes robust and targeted forward planning, agenda setting, setting expectations for the length of papers received and approaches to providing overview and scrutiny. Supporting the chairs to ensure that Policy and Performance Boards are more engaged and impactful against the key priorities of the council, which includes the overarching financial challenge and the difficult spending decisions this will inevitably necessitate.

Colleagues from the council were able to provide some detail to the team about the background work the council has been doing to enhance the use of performance information at the council. This includes development work to establish a ‘data lake’ and self-access performance monitoring which can soon be used and tailored towards a range of different stakeholders. The team were informed by lead officers at the council how the approach being developed has been commended by colleagues within the Liverpool City Region’s Office for Public Service Innovation as strong practice and an area others could look to learn from. This approach has the potential, to reduce the amount of time taken to co-ordinate data from across departments and shifts the way in which existing central performance capacity can be used towards analytical and forecasting work, supporting the potential for more preventative approaches and evidence-based decision making. In this regard, whilst the progress review has come too soon to see the impact of this preparatory work in practice, the work that the council has done to date to put in place the building blocks for this, would suggest that the council has made more progress than it has detailed in its own self-assessment.

Translating that into effective performance management practice will require a continued effort to see the benefits of this realised, supporting high quality data sources and accessibility for end users, whilst also ensuring that the council is developing the modern analytical and forecasting capacities to capitalise on the potential from this preparatory work. Ensure in this next stage that the fundamental reporting arrangements are in place and are routinely used before developing the use of this information further, guarding against the potential for distraction from the key priorities – particularly in this crucial stage of improvement at the council.

Following the CPC and alongside the recommendation made by the External Auditor, the council has reviewed and developed a new policy in regards to risk management working with the working with the council’s insurers as a subject matter expert. This will be followed by a new risk register and approach to monitoring and accompanied with a programme of training for officers and elected members.

The council’s Audit and Governance Board reviewed its terms of reference in November following the CPC to align these arrangements with the CIPFA Code of Practice. This included reducing the number of members on the board and including an independent person, changes that were approved by full council in May at the AGM as part of an annual review of the constitution. Arrangements are now being made to appoint an independent member. Following the AGM in May, the council has not yet begun the process of recruiting an independent person for the Audit and Governance Board and are not at present due to pay for this person’s time beyond expenses. In a field where it can often be difficult to source an independent person, and given the scale of financial challenge the council faces, this may be a decision the council needs to return to – if this means getting in place quickly a high quality independent person who can support the work of the Audit and Governance Board more quickly, strengthening the council’s own level of assurance locally.

This theme includes reference to the following recommendations from the original CPC:

• Use the lessons from the strength of partnership working in the Liverpool City Region that Halton demonstrates, to develop the council’s place shaping role, strengthening Halton’s voice in other partnerships. Doing this can support transformation, financial viability and efforts to meet the priorities for Halton.
• Continue to prioritise the improvement of Children’s Social Care and SEND corporately.

The council received its first quarterly monitoring visit of children’s social care from OFSTED in March, which identified steady progress in the development of social work practice, with senior leaders also being identified as establishing some of the foundations for improving practice. The ‘strong political and corporate support, and significant additional investment’ in particular is of note from this monitoring visit, for a progress review of this nature. It is pleasing to see these early signs of progress at the council, which the council are encouraged to continue to build on.

The council has spoken with partners more widely about local partnership working and the options available for taking the learning from other successes in partnership working and applying these elsewhere, work that is set to continue and includes the development of a ‘borough plan’ which is owned by the partnership. It is also important to acknowledge how the council has reflected on the relationship with the local voluntary, community and faith sector and is taking steps to rebuild those relationships from what has been a challenging period in this relationship at the time of the original Corporate Peer Challenge.

We appreciate that senior managerial and political leadership will want to reflect on these findings and suggestions in order to determine how the organisation wishes to take things forward.

Under the umbrella of LGA sector-led improvement, there is an on-going offer of support to councils. The LGA is well placed to provide additional support, advice and guidance on a number of the areas identified for development and improvement and we would be happy to discuss this. 

Dan Archer (LGA Senior Regional Adviser) is the regional lead for the North West and, is the main contact between your council and the Local Government Association. As outlined above, Dan is available to discuss any further support the council requires, his email address is [email protected].