PURPOSE

1. This report proposes a robust and thoroughgoing ethical audit of the Council.

BACKGROUND

2. The Standards Committee has been in existence for some time and has changed the nature of its role significantly with the advent of a national statutory framework. The responsibility of the Committee remains a combination of detailed responses to particular issues and a more general duty to drive the development of the highest standards of ethics and probity.

3. The context in which this duty has to be discharged grows ever more complex. New partnership arrangements, both commercial and non-commercial, are being developed in response to the best value agenda and to the need for a strategic and community leadership by the Local Authority. Additionally, the statutory framework now requires the Standards Committee to consider how standards can be further raised in Parish and Town Councils.

4. Examples of the imperative for the Standards Committee to demonstrate a thoroughgoing approach to discharging its duties can be found in :

· The Council’s Constitution

“To promote and maintain high standards of conduct by the members and co-opted members of the Isle of Wight Council and the Town and Parish Councils on the Isle of Wight.”

· CIPFA/SOLACE guidance on Corporate Governance

“There also needs to be a coherent approach to the Government’s proposals as local authorities review the various systems and processes they have in place for managing their relationships with key stakeholders. It is particularly important in the drive for modernisation that the principles of corporate governance are not left behind, ignored or merely given lip service. By adopting best practice, a local authority can significantly enhance its processes of modernisation, community leadership and engagement and continuous performance improvement.”

· Standards Board guidance

“Creating and maintaining an ethical organisation is not just about adopting a code of conduct for members. It is also about relationships both internally between members and council staff, and externally with members of the public. It is about how the council relates to the community and improves the service it provides. It involves the input and dedication of both members and council staff.”

· Successive District Audit Management letters, the CPA self assessment and the draft CPA report can be expected to emphasis the need for a continual, coherent drive towards raising standards of corporate governance, including ethics and probity.

AN ETHICAL AUDIT

5. It is suggested that the drive to improve standards of ethics and probity is similar to other agendas being pursued in the public sector. There is great benefit in undertaking a stock-taking exercise designed to identify issues for prioritisation, as a launch pad for an action plan to prioritise efforts to deliver identified targets within planned timescales and allocated resources, and to act as a benchmark to measure progress over time (and where helpful, to measure performance against similar organisations).

6. There is a wealth of information and evidence about the current approach, strengths and weaknesses of the Isle of Wight Council’s approach to ethics and probity. The information and evidence is, however, scattered, possibly incomplete and of limited value in establishing a planned and thoroughgoing approach to raising standards.

7. The concept of an ethical audit has been used successfully in both troubled and apparently well-run Councils as an effective tool. To be effective the audit must be challenging and robust. Other authorities have found value in external validation. The structure of the Standards Committee with its strong independent voice also gives a sound footing for such an audit.

8. A challenging, reliable and useful audit will take time and consume significant resources.

DEVELOPING A METHODOLOGY

9. There is a growing body of expertise, nationally, in ethical government issues. Appendix 1 is a paper prepared by the IDeA addressing such issues. It is suggested that this provides the basis of a thorough and robust methodology.

10. However, further work will need to be undertaken to establish :

(i) How all the relevant information and evidence held by external and internal stakeholders can be accessed by the audit.

(ii) What tools and techniques should be adopted to obtain, evaluate and analyse that evidence and information.

(iii) What resources should be used to commission, undertake and act upon the audit.

TIMETABLE

The following timetable is suggested:

Action	Date
Proposal and outline methodology	26 November 2002
Externally validated methodology	February 2003
Identification of resources	February 2003
Field work	To May 2003
Interim report	June 2003
Consultation and validation of final report	To September 2003
Final report and action plan	September 2003

OPTIONS

11. The Standards Committee may decide either to conduct or not to conduct an ethical audit. The alternative to an audit would be to deal with issues on an individual basis. Whilst this may give an approach which is responsive and apparently dynamic, it would run the risk of a missed opportunity to take a coherent overview which will lay the basis for a series of annual work plans over the next two to five years. It is suggested that the duties of the Standards Committee would be better undertaken within the context of an audit allowing the Committee to drive the ethical agenda rather than merely to respond to issues as they arise.

12. There are many different methodologies which may be adopted. It is suggested, however, that the proposed methodology lends itself to development in a way which will enhance the approach to ethics and probity within the Isle of Wight Council.

FINANCIAL IMPLICATIONS

13. The methodology proposed is likely to incur some cost. It is anticipated that this will be met by existing corporate budgets including that held by the Monitoring Officer. Should the methodology, planned to be approved in February 2003, require additional resources that will form part of any subsequent report to the Standards Committee.

LEGAL IMPLICATIONS

14. The constitutional and statutory context of the proposal is set out and discussed in the body of the report.

RECOMMENDATION

15. It is recommended that a methodology is developed on the basis of Appendix 1, as discussed and to the timetable set out in the report.

BACKGROUND PAPERS

IDeA Ethical Audit paper.

The Constitution.

Contact Point : John Lawson, F 823207

J LAWSON

Monitoring Officer