1 Market Town Initiatives A

MARKET TOWN INITIATIVES

A REVIEW OF

ALLERDALE BOROUGH COUNCIL’S ROLE AS ACCOUNTABLE BODY

CORPORATE SCRUTINY COMMITTEE

FEBRUARY 2007

Draft

1 1. INTRODUCTION

1.1 The Market Town Initiative is a Government- funded programme (through the North West Regional Development Agency (NWDA)), to help secure the future prosperity of rural communities through locally-led regeneration projects and initiatives.

1.2 There are three Market Town Initiatives in Allerdale: Cockermouth, Keswick and North Allerdale (the latter representing Aspatria, Silloth and Wigton). These Market Town Initiatives were awarded £1 million by the NWDA in the summer of 2005 towards the delivery of regeneration projects in ambitious action plans drawn up by local partnerships over the preceding 3-4 years and which reflect local aspirations.

1.3 It is a requirement of the NWDA that there should be a third party experienced in managing public sector funding who acts as Accountable Body for those funds. It was agreed when the local action plans were submitted for approval in 2003 that Allerdale Borough Council would fulfil that role.

1.4 Subsequent to the award of funding, relations between North Allerdale and Keswick partnerships on the one hand and their accountable body, Allerdale Borough Council, deteriorated, the outcome of which was a move by both partnerships to seek alternative accountable body arrangements.

1.5 As a result, the Corporate Scrutiny Committee undertook to carry out a review of Allerdale Borough Council’s role as accountable body in response to community concern, with the following terms of reference:

“To review the relationship between Keswick and the North Allerdale Partnerships and Allerdale Borough Council as their accountable body.”

2 The Evidence Considered

2.1 Members of the Corporate Scrutiny Committee have considered evidence in the course of eleven meetings over a period of around eight months. They have heard from:

• The Chairmen of the three Market Town Initiatives and project officers • The North West Development Agency’s lead officer for Market Town Initiatives • Allerdale Borough Council’s Head of Regeneration; Regeneration Strategy Manager; and Community Services Director • Cllr Jefferson

A synopsis of the verbal evidence can be found at appendix 1 to this report.

2 Members have also considered the following written evidence:

• The expectations of an accountable body (from the NWDA) • Service Level Agreement with Cockermouth Market Town Initiative • Latest version of the unsigned Service Level Agreement with Keswick and North Allerdale Partnerships • The report to the Executive (29/10/03) seeking approval to act as accountable body. • A report by the Community Services Director (Restricted Circulation) • Partnership agreement between Longtown Market Town Initiative and Carlisle City Council. (To be found at Appendix 2) • The results of an enquiry following a complaint by North Allerdale Partnership with respect to the Viking Project (Exempt information under paragraphs 1, 2 and 3 of schedule 12a of the Local Government Act 1972, as amended).

2. MAIN FINDINGS

2.1 It is clear from the evidence heard that there was a critical lack of understanding of the roles and reponsibilities of an accountable body at the outset of the relationships.

2.2 The Market Town Initiatives understood the role to be ‘pay and rations’ for the Market Town Initiative staff together with the provision of office space and network support.

2.3 Allerdale Borough Council, on the other hand, had clear responsibilities as an accountable body with respect to governance of finance and the employment of staff.

2.4 The Market Town Initiatives felt that there was ‘micro-management’ by Allerdale Borough Council, who in turn felt that they were carrying out their obligations as accountable body.

2.5 It is difficult for scrutiny to adopt a stance on allegations of ‘micro- management’ when their evidence relies solely on strongly-held and differing views. Scrutiny, therefore, needs supporting evidence to enable conclusions to be drawn.

2.6 The ethos of the Market Town Initiatives is that of local people taking the lead in creating sustainable rural communities. Regardless of the reasons why, the Partnerships clearly felt that they were losing local control amid the allegations of micro-management. To what extent that is justified can only be determined by looking at hard evidence.

2.7 The Partnership Agreement between Carlisle City Council and Longtown Market Town was developed by a risk assessment process. It gives management control of the project manager to the Initiative to deliver a clearly-set out action plan, but stipulates that the Market Town Initiative will work closely with the local authority to ensure that employment procedures, policies and legislation are carried out. The Market Town Initiatives in Allerdale wanted to manage their own staff - the barrier to this, the Committee heard, was the need of Allerdale Borough Council to fulfil its employment legislation obligations.

2.8 The project administrator for Millom Market Town Initiative holds a stationary float of around £100. The Project Manager has a float of £25 for expenses. Evidence was heard of the Market Town Initiatives in Allerdale having to fill out forms initially to enable project staff to access basic stationary (although it is understood that this situation has now been rectified).

2.9 It is, therefore, clear from the above that other Accountable Bodies within Cumbria have adopted a more flexible approach. This approach would have helped in no small part to alleviate the allegations of micro- management and those advising the regeneration team in their responsibilities as Accountable Body should perhaps reflect on their guidance.

2.10 In terms of financial control, the committee has taken note of evidence received with respect to financial governance. The regeneration strategy manager gave evidence that suggested that financial processes had picked up anomalies when monies had been claimed which were not in accordance with eligible costs. (It should be noted that there was no suggestion in this evidence of any deliberate wrong- doing).

2.11 By way of explanation, when funders agree to make money available for a particular project they usually specify exactly which parts of the project their funding could be used for, known as eligible spend.

2.12 Whether this experience mitigates some of the inflexibility in approach is difficult to judge, but the Committee would suggest that this identifies a training need, existing financial processes having picked up the anomalies.

2.13 There were early signs that relationships were floundering. Cockermouth Market Town Initiative had in 2002 approached Allerdale Borough Council with similar grievances, resulting in improved relations in late 2004 and a willingness to sign a Partnership Agreement.

2.14 It is the view of the Committee that earlier intervention in both North Allerdale and Keswick Market Town Initiatives would have helped prevent the ultimate break down in relationship.

2.15 Tangible evidence of deteriorating relationships with both these Initiatives was to be found as early as June 2005, a formal approach to the Council to sort the issues out was made by the NWDA in October 2005. By January 2006, when strenuous efforts were made by all sides to reach agreement, it was probably already too late to salvage the relationships, which eventually broke down in May 2006.

2.16 It is, therefore, a further conclusion of this committee that Senior Management could and should have intervened at a much earlier stage and its failure to do so has played a significant part in the eventual break down of the relationships (this, despite the previously acknowledged strenuous efforts made by all sides between Jan-May 2006).

2.17 The consequence of the time taken over trying to find a resolution to the issues is that the Market Town Initiatives have been set back between 6-12 months in their programmes, and that at least some projects have been lost, which have, naturally, had a negative impact on the local communities involved.

2.18 It is accepted, that Allerdale Borough Council has invested some considerable time in ensuring the smooth hand over of accountable body status, which is supported by the Committee. The Committee regrets, however, that this level of support was not available much earlier. It is clear to the Committee from the evidence that it heard, that the reputation of Allerdale Borough in the local communities involved in the Market Town Initiatives has been damaged and that lives have been adversely affected by the management of the partnership relationships, in particular those of the partnership managers.

2.19 The extent of the deterioration of the relationships, which was flagged up throughout by the Portfolio Holder, was the main reason that two of the Market Town Initiatives failed to sign a Partnership Agreement. Some Members have acknowledged that strong personalities also played a part. However, the Committee has also concluded that a move to have one partnership agreement for all three Market Towns did not help the situation, nor could it hope to reflect local circumstances or the stages of development of each of the Market Towns. Had a risk assessment been carried out at the outset, this may well have identified the differences in the partnerships and their approaches.

2.20 The Committee have also considered the response by the Chief Monitoring Officer to Cllr Gerry Sewell’s complaint with respect to a specific project in the North Allerdale Partnership. Without going into specific details, the Committee have been concerned to read of a lack of proper documentation on the part of Allerdale Borough Council in respect of the management of regeneration projects, which has caused the Committee some concern.

3 RECOMMENDATIONS

R1 That Allerdale Borough Council does not enter into any further Partnerships (irrespective of whether there is an Accountable Body role) without a comprehensive Partnership Agreement in place, which should include formal procedures for the resolution of conflict and an exit strategy. The agreement should be guided by a method statement and supported by a thorough risk assessment.

R2 That those with responsibility to ensure the financial and legal obligations of an Accountable Body are carried out should further consider how Allerdale Borough Council fulfils that role, providing guidance to frontline staff which takes account, if applicable, of local aspirations. The guidance should also emphasise that full and proper records should be kept of all the interactions with partnership bodies.

R3 That the Executive reflect on the length of time taken, in this instance, for Allerdale Borough Council to react in a timely and appropriate fashion, review its actions and take steps to improve on the management of relations with community-led organisations.

R4 That, the Head of Paid Service, in the light of our findings, review the regeneration department, their various roles in the conduct of relations with the Market Town Initiatives, in order to consider both corporate responsibilities and, if applicable, individual accountability, as is the case for Members.

R5 In the light of our investigation, findings and recommendations, which were self-evidently not previously available for consideration, that the Chief Monitoring Officer reconsiders the conclusions of the investigation made into a complaint by Cllr Gerry Sewell with respect to a specific project in North Allerdale.