The corporate councillor

Governance comprises the arrangements (including political, economic, social, environmental, administrative, legal and other arrangements) put in place to ensure that the intended outcomes for stakeholders are defined and achieved.

Source: CIPFA/Solace Delivering Good Governance in Local Government: Framework, 2016

Another way of putting this is ‘the right people, doing the right thing, in the right way, at the right time’. The councillor code of conduct is one way in which each council ensures things are done in the right way (your council will give you training on your own council’s code).

Councils are statutory corporations and operate within a framework laid down by law. There is a wide range of statutory duties which councils are required to fulfil, and an even wider range of permissive powers enabling them to undertake defined activities if they so wish, within the resources available. All councils are required to agree their own constitution, this provides the codified basis for how the council is governed and addresses: roles and responsibilities, decision making processes, procedural rules and standards.

To ensure that council decision making is effective, transparent and accountable, it is important that all decisions:

• are proportionate to the desired outcome
• are accompanied by a published report which clearly explains the aims, reasons, desired outcomes, alternative options and risks
• are informed by professional advice from officers and appropriate consultation
• are made openly and transparently in accordance with legislation
• respect human rights and provide equality of opportunity.

Many councils set out their principles for decision making in their constitutions.

Full council

Full council is responsible for the governance of the council and its decisions: it may delegate some of its responsibilities. It approves the council’s budget and policy framework, appoints the leader of the council and amends the constitution.

• Must know guide: The annual budget process

Cabinet

In councils which have the Leader/ Cabinet governance model, Cabinet is the body responsible for making decisions on behalf of the council on issues not reserved by full council or a regulatory committee. It comprises the leader of the council and up to nine cabinet members with specific portfolios. As well as taking collective decisions, individual cabinet members may take decisions.

In councils which have the elected Mayor/ Cabinet model, the Mayor may decide to reserve some decision-making to themselves.

• A councillor's workbook on finance for non-finance portfolio holders / cabinet members
• Performance management guide for councillors
• Leader’s guide: Leading good governance and assurance
• Councillor workbook – Commissioning services

Decision making committees

Within councils with a committee-system of governance, designated committees make decisions within defined areas of responsibility. These decisions are made collectively by committee members.

Planning Committee

The Planning Committee reviews and decides on planning applications, ensuring they comply with local and national planning policies.

• Councillor workbook: planning

Licensing Committee

The Licensing Committee oversees the issuing, renewal, and regulation of licenses for alcohol, entertainment, and gambling, ensuring compliance with the law. It also addresses public concerns and enforces conditions to maintain public safety and order.

• Licensing committee training resources
• Public protection services: councillor handbook

Appointments Committee

Appointments Committee oversees the recruitment and selection of senior officers, ensuring the process is fair, transparent, and in line with council policies. It recommends to full council the appointment of appropriately qualified statutory officers.

Timely and accurate information, evidence and evaluation of how local authorities are delivering their duties, functions and outcomes, which can be used to hold them to account and may give confidence.

There should be no assumption that assurance will always be gained – in some cases the outcome will be ‘not assured’.

Source: LGA Improvement and assurance framework for local government, 2024. 

In councils which have the Leader or Mayor and Cabinet governance model, Overview and Scrutiny committees hold the council's decision-makers to account by reviewing policies, decisions and performance. They also make recommendations to the Cabinet and other bodies on how things could be improved based on their findings.

• A councillor's workbook on scrutiny
• Financial scrutiny – a guide for members - CfGS
• Performance management guide for councillors

The Audit Committee provides independent assurance on the effectiveness of the council's financial reporting, internal controls, governance, and risk management.

• Ten questions for audit committees
• Audit, Scrutiny and Risk - CfGS
• Must know guide: Working with auditors

An Annual Governance Statement provides a council with assurances relating to its governance arrangements and identifies the actions required to improve its governance. The statement is produced following an annual review of internal controls involving senior councillors and officers, which should be an open and honest assessment. Councillors publicly consider their council’s annual governance statement and monitor the implementation of improvement actions. 

The Standards Committee promotes and maintains high standards of conduct among councillors, advises on the adoption and revision of the code of conduct, and oversees councillor training on ethical matters. It monitors compliance and handles complaints related to breaches of the council’s code of conduct.

• Councillor conduct and standards
• Councillor conduct and standards

Legislation is clear that every councillor is responsible for financial control and decision making at their council. Therefore, every councillor should take an interest in the way their council is funded and the financial decisions that the council takes. 

Councillors are also responsible for ensuring that the council provides best value in all its services, acting as stewards of public funds and making decisions in the long-term interests of the council and the communities it serves. There is unlikely to be sufficient money to do everything the council would wish to; therefore, councillors need to consider the council’s priorities and objectives and ensure that these drive the budget process.  

There are a number of important differences in the way local government finance operates and how it reports financial performance compared to the private sector, and it is important for all councillors to have a broad understanding of how the system works in order to undertake their council duties effectively. 

Our virtual finance induction session Finance without numbers is a webinar aimed at new councillors and those looking to refresh their knowledge of the basics of local government finance. 

The councillor workbook on local government finance provides further information that can be worked through at your own pace, supplemented by a number of more detailed publications on specific issues. For additional information on the pressures threatening local authority sustainability, and how to navigate them the House of Commons Library have produced this briefing.

The LGA has also launched Finance Unpacked, a series of short animated explainer videos to provide councillors with an understanding of some of the key concepts within local government finance and audit. It will be of particular relevance as a resource for new councillors.

In recent years the Government has made bilateral agreements with a number of authorities in financial distress. This has become known as ‘Exceptional Financial Support’ (EFS). 

Exceptional financial support comprises the government making separate bespoke ‘capitalisation directions’ to each individual local authority, using section 16 of the Local Government Act 2003. These capitalisation directions give the authority permission to transfer a specified sum from its capital to its revenue account, and to use that sum to bolster its revenue spending. 

The gov.uk website contains government guidance on the terms of EFS, and full details of the amounts received by individual local authorities since 2020/21.

When local authorities that accessed EFS borrowed additional funds, these initially had to be borrowed at an interest rate 1% above the standard PWLB rate. It was announced in October 2024 that the 1% premium would be ended.

Exceptional financial support has been wrongly reported as consisting of ‘bailouts’ in many parts of the media. This is not accurate. It comprises government permission for local authorities to use existing money in a different way. A local authority that uses asset sales to plug gaps in spending will have fewer assets, and a local authority that borrows additional money to cover gaps in its capital programme will have to repay that money.

The government has announced that it will facilitate a programme of local government reorganisation for two-tier areas and for those unitary councils where there is evidence of failure or where their size or boundaries may be hindering their ability to deliver sustainable and high-quality services for their residents. 

Proposed reforms in the English Devolution White Paper will have a significant impact on every council and community. The LGA remains clear that local government reorganisation should be a matter for councils and local areas to decide. There are differing directions of travel underlining the diverse range of views about devolution and local government reorganisation that exist within the local government sector. The LGA will continue to respect each perspective and each choice equally.

You can find out more at the LGA’s Devolution and LGR hub.