Middlesbrough Council: External assurance review

We raise Recommendation 1 encouraging the council to undertake a robust scenario analysis of the 2025/26 budget position based on different scales of delivery of the Transformation Programme. This should include an analysis of the potential exposure and related contingency EFS required for a range of scenarios.

Whilst there is evidence that the current administration has shown a willingness to make politically unattractive decisions to protect the council's financial sustainability, we raise Recommendation 2 urging the council to ensure it has the capacity and arrangements in place to manage and deliver significant change, as the financial imperative will demand some fundamental changes to the mode and scope of council services. This will require focused political engagement, extensive consultation and delivery at pace in order to manage barriers to change and make difficult decisions surrounding service provision.

We raise Recommendation 3 encouraging the council to: a) consider the merits of appointing at least one independently, ideally two, co-opted independent members to its Audit Committee; b) ensure that the Audit Committee reports directly to Full Council and that this is documented within the Constitution; and c) include quarterly presentation of the Strategic Risk Register to the Audit Committee

We raise Recommendation 4 encouraging the council to explore options for growing report writing skills at the lower levels of the organisation.

We raise Recommendation 5 encouraging the council to pursue mitigation measures to address the risk surrounding succession planning within the finance team.

We raise Recommendation 6 for the children's services directorate to work to define its strategy regarding the future residential placement provision. This strategy must be devised in collaboration with procurement/commissioning and finance.

We have raised Recommendation 7 that encourages the council to rapidly establish an appropriate timetable for the Strategic Capital Board to meet and report on a regular basis.

We have raised Recommendation 8 that the council should, as a matter of urgency, review and update Asset Acquisition Policy and the Asset Disposal Policy to ensure that the policies reflect the desired governance and scrutiny of the approach to acquisition and disposal of assets.

We have raised Recommendation 9 that the council should more clearly articulate its approach to mitigating treasury management risks in the Treasury Management Strategy. From our review we have not identified any significant risk that the council is exposed to but recommend a clearer articulation of the steps taken to mitigate these risks.

We have raised Recommendation 10 that the council should closely monitor the cost of the external debt it holds to ensure that it remains affordable, especially within the context of the council's challenging financial position.

We have raised Recommendation 11 that the council should progress external management arrangements for its remaining commercial properties in a timely manner.

We have raised Recommendation 12 that the council should continue to review and consider the most prudent approach to calculating MRP whilst considering both short-term and long-term impacts on the revenue budget.

We raise Recommendation 13 for the council to broaden the scope of the transformation strategy to include long-term planning and strategic vision beyond immediate savings, whilst expanding the programme to identify new cost reduction and efficiency improvement areas. We encourage the council to develop future-oriented initiatives that align with digital transformation and modern service delivery trends. High-impact initiatives should be prioritised, focusing on digital transformation and service innovation.

We also raise Recommendation 14 for the council to conduct comprehensive functional maturity assessments across all service areas to identify inefficiencies and areas for improvement. These assessments should be used to inform strategic planning and set benchmarks against best practices.

We raise Recommendation 15 for the council to develop comprehensive mitigation plans for savings that have been designated as 'Amber' and 'Red' within the Transformation Programme, focusing on identifying barriers and implementing solutions to reduce risks. Ensuring these plans are regularly updated and integrated into the project's lifecycle is crucial to enable delivery.

We raise Recommendation 16 that the council should develop a comprehensive change management framework that includes clear objectives, key performance indicators, and a culture of continuous improvement. There should be integrated accountability structures that clearly define roles and responsibilities for transformation initiatives.

We also raise Recommendation 17 for the council to engage with stakeholders, including employees, residents, and partners, to build support for transformative initiatives and ensure alignment with broader community goals. The council should ensure all stakeholders are aligned with the transformation agenda through effective communication and engagement strategies.

We raise Recommendation 18 for the council to undertake targeted upskilling programmes and recruits specialists to fill gaps in transformation and financial management to embed skills and continuous improvement within the organisation.

We raise recommendation 19 for the council to adopt a more customer-centric approach: redesign services around customer needs, use technology to deliver more efficient and user-friendly services, and reduce costs while improving service quality. Implementing integrated service delivery models focusing on common processes like applications, assessments, and triage will enhance efficiency.