PURPOSE

To adopt the report of Phase III of the Ethical Audit.

BACKGROUND

1. Members of the Standards Committee will be familiar with the Ethical Audit which has been undertaken over the past 18 months. The history of the Audit is set out in the draft Executive Summary of the final report, attached to this report as Appendix 1.

2. Phase III of the Audit involved interviews with a range of stakeholders as proposed at a previous meeting of this Committee. Those interviewees included;

· Members of the public.

· A representative of the local news media.

· An experienced member of the Council.

· A Trade Union representative.

· A representative of the voluntary sector.

· A representative of the staff.

3. Although those interviews took place some time ago, the analysis of those interviews shows some significant challenges, and it is suggested, provide a sound evidential basis for a series of recommendations.

4. A draft report of the evidence and the suggested recommendations is included as Appendix 2 to this report.

5. The actions proposed in the Phase III Audit have been extracted into a draft Action Plan which is presented as Appendix 3.

6. The Audit is now at an end. The work undertaken has resulted in a large number of recommendations, many of which have already been implemented as a result of interim reports.

7. The following steps remain:

(a) To publish the final report bringing together the three phases, the Executive Summary and a combined Action Plan.

(b) To present the Audit and Action Plan to the Full Council, along with a suitably worded motion to be proposed by the Chairman of the Standards Committee.

(c) To deliver those parts of the Action Plan which fall to the Standards Committee to take responsibility for as part of a 12 month rolling work programme for the Standards Committee.

(d) To agree monitoring mechanisms through Officers to ensure that the Standards Committee has confidence that the Action Plan will be delivered.

8. The Council can expect to be assessed, as part of the CPA process, on the extent to which it, demonstrably, delivers high standards of ethics and probity. The undertaking of the Audit, and acting upon the findings are essential elements of scoring well on that part of the assessment.

RECOMMENDATIONS

9. It is recommended that the Standards Committee:

(a) Adopt the report of Phase III at the Ethical Audit.

(b) Adopt the Action Plan to implement the recommendations of the Phase III report.

(d) Delegate to the Head of Legal and Democratic Services the task of publishing the final report in consultation with the Chairman of the Standards Committee and collating the Action Plans from each Phase.

(e) Through the Chairman of the Standards Committee, propose the following motion to Full Council.

“This Council welcomes and receives the Ethical Audit produced by the Standards Committee and recognises that:

· Delivery of high standards of ethics and probity is one of the key elements of the programme to modernise Local Government; and

· Impeccable standards of personal conduct, open decision making and accountability for performance, are essential to win and keep the trust of Island communities.

This Council therefore resolves:

(i) To support the Standards Committee in delivering the actions proposed as a result of the Ethical Audit.

(ii) To invite the Chair of the Standards Committee to bring agenda items to future Full Council meetings wherever he or his successors believe it would be beneficial to do so.

(iii) To debate at a future meeting how this Council can assist Town and Parish Councils in delivering visibly high standards of ethics and probity as part of their own community leadership.”

BACKGROUND PAPERS

Ethical Audit – Previous reports to Standards Committee: reports of Phase I and II

IDA Ethical Audit Methodology

Contact Point : John Lawson, Head of Legal and Democratic Services, ' 3203

JOHN LAWSON

Monitoring Officer

APPENDIX 1

PHASE 3 – INDIVIDUAL INTERVIEWS

1. This report comprises of the final phase of the Ethical Audit, reflecting the comments of a number of interviewees invited to discuss the interim conclusion of the first two stages of the audit that:

· Although capable of improvement, the ethical framework of the Isle of Wight Council is generally sound.

· That standards of adherence to that framework are generally relatively high, although there is no room for complacency.

· However, public perception of ethical standards lags worryingly and significantly behind actual standards.

2. Interviewees were also asked for their views as to how the situation could be improved, in the event that they accepted and agreed with the starting premise.

3. A number of key issues arose.

Personal Misconduct by Elected Members Can Taint the Reputation of the Council

4. A small minority of elected members had, in the eyes of interviewees, for example through alcohol misuse or through seeking to misuse their position, fallen below the standards expected of elected members.

5. Views were divided as to whether or not such lapses tainted the reputation of other members and the Council as a whole.

Suggested Action

5.1 Where elected members, officers of the Council, contractors and other partners, or members of the public perceive personal misconduct they should, and should feel able to, challenge that behaviour directly with the perceived perpetrator without fear of reprisal. If a challenge is not possible or does not achieve an improvement in behaviour there should be confidence in reporting mechanisms to the Monitoring Officer, Group Leaders, the Chief Executive Officer or the Standards Board, again in confidence that appropriate action will resolve and without fear of reprisal.

5.2 In order the achieve the required level of confidence the Standards Committee, the Chief Executive Officer, the Head of Human Resources, the Monitoring Officer and those managing contracts should, firstly, review the adequacy of the current Confidential Reporting Code and take steps to raise the profile of both the Confidential Reporting Code and the Code of Members Conduct insofar as relates to personal conduct.

5.3 Personal misconduct by employees of the Council did not appear to be a significant concern. Nevertheless, the Head of Human Resources should use the proposed national model Code of Conduct for Local Authority Employees as an opportunity to emphasise, in the published code of conduct, that conduct outside of the workplace can amount to a breach of an employee’s contract of employment.

Performance is an Ethical Issue: Accountability of Officers

6. The Council spends public funds and there is a strong feeling that poor performance is unethical. The accountability of elected members is discussed elsewhere but an intractable issue is identified under this heading. There is a clearly articulated and genuinely held belief among some of the interviewees that accountability of employees, including relatively junior employees, is insufficient. This is the case not just in terms of probity and conduct but also in terms of collective and individual performance.

7. There seems to be a view among some members of the public that there should be greater access to information about capability and conduct procedures when something goes wrong within the Local Authority. Some elected members are reported as wishing to see a greater role for themselves in such circumstances.

8. Perhaps the biggest single problem for the Council in responding to this challenge is that the appetite for greater public and/or member engagement with capability and conduct procedures would, if followed, bring the Local Authority into conflict with the law and good practice relating to employee/employer relations.

9. The challenge for the Local Authority is, therefore, significantly to explain and educate stakeholders and interested parties that accountability of individual employees, to be compatible with good employee relations and with the law, cannot involve the public, press or elected members in individual cases to any greater extent than is currently the case.

10. The role (and credibility) of external assessment and inspection must also be addressed as this is a means by which tax payers, service users and other stakeholders can be involved (and informed about) assessment of performance. Part of the phenomenon of distrust of officer accountability may be that, whilst accepting that individuals have a right to confidentiality, interested parties believe that low standards are applied by this Council as an employer and that conduct is excused which would not be allowed elsewhere.

11. Some description of performance related pay did take place during interviews but is probably beyond the scope of this audit

Suggested Actions

11.1 The Council should consider revising its capability proceedings to include a provision for “gross incapability” where the relationship of trust and confidence between employer and employee has broken down, as a result of a single catastrophic failure or as a result of a sequence of cumulative failures.

11.2 A statement similar to that in the Disciplinary Code which sets out a non exhaustive list of examples of performance which is likely to be regarded as grounds for (a) capability proceedings and (b) as gross incapability.

11.3 Any revisions should be given wide publicity to staff and to the public and be reflected in training in managing performance to establish shared and consistent standards across the Council.

11.4 The Council may also wish to consider adopting one or more performance indicators showing incidents of competent or misconduct resulting in formal proceedings and/or sanctions being imposed. This would have to be on the basis that individual confidentiality was not compromised but that interested parties could form a view as to how this Authority compared, over time, and with other like employers (assuming benchmark can be set).

11.5 There is a danger that performance is viewed solely in terms of remedial action when things go wrong. The criticism made by interviewees also reveals a perception of poor flows of information about performance. Senior officers are accountable to elected members for their performance through service planning and performance management reports. Engagement with the media extends that accountability. This report does not recommend establishing further systems, for example for the general public to become more involved in the accountability of officers. It is, however, suggested that senior officers of the Council should take advantage of the opportunity created by, for example, meetings of Parish and Town Councils to attend and answer questions about performance of the Isle of Wight Council where that impacts on those local authorities. The extent to which community forums, in non-parished areas, creates a similar opportunity should also be considered.

11.6 Finally particularly given imminent changes in the law, although it is likely that controversial cases will always arise there is a need for a clear statement of member’s rights to access information, to access documents and for clarity in who determines difficult cases. The Authority will also wish to consider whether there should be a right of appeal against decisions to confuse members access to information.

Performance is an Ethical Issue: Accountability of Elected Members

12. The general feeling of interviewees is that elected members have a welcome willingness to be held accountable to the media and in public both at Isle of Wight Council meetings and elsewhere.

13. Interviewees were, however, sceptical about how well that willingness translated itself into productive engagement with the media and, significantly, into a perception that members were listening and taking into account the views of the public, as well as advocate or explain a preferred course of action.

14. This is partly about recognising that individuals have different strengths and preferences and building upon them.

15. Some members are recognised as being fluid and confident in some or all of; public meetings, formal debating chambers, media interviews or in writing. Some members are less confident due to their natural inclination and ability.

16. The Council was urged by interviewees to embrace all forms of communication and to train its members (and officers) to understand how communication in different forms, and through different media, works.

17. The benefits of simple, clear and consistent messages were emphasised.

18. Some interviewees praised opposition members for their accountability. This is an interesting perspective as accountability is usually associated with those who set and deliver policy or are responsible for services. There is a challenge to members both within and without the administration to identify in what capacity and for what purpose they are communicating with press and public.

19. A trenchant criticism was made by interviewees who believe that there is a perception that decisions were made either on a whim or (worse) for local, personal or other vested interests. Interviewees emphasised the need for decisions to be supported by simple and comprehensible reasons which were well publicised.

Suggested Actions

19.1 Media spin has been discredited in recent years and the Council will be rightly wary of being seen to attempt to control the media and public agenda. There is clearly a role, however, for a strategy within the Council to identify key issues (including those with potential for controversy) and to ensure that well briefed members, who are comfortable with the role, are available at various times and in various forums (including written broadcast and electronic media) to be publicly held to account for decision making and performance. The significance of Town and Parish Councils in this arena should not be under estimated.

19.2 Support to elected members should not be limited to those who take decisions and the role of overview and scrutiny and opposition members should be given proportionate weight.

19.3 The Head of Policy and Communications should revisit the effectiveness of the current media strategy and consider a wider accountability strategy aiming to use avenues other than traditional media outlet to identify and explain significant policy and performance issues.

Conflicts of Interest – Declarations

20. Interviewees generally believed that the spirit and principles of the rules requiring members and officers to declare interests were well known and generally followed. There is, however, a need to refine practice and make sure that the letter of the requirements is also followed.

Suggested Action

20.1 It is suggested that decision making meetings with members (particularly the Executive and Development Control Committee) receive a timely and focused reminder of the detailed requirements to declare personal and prejudicial interests - particularly the requirement to make clear the nature of the interest.

20.2 In parallel the Head of Human Resources should use the implementation of a national code of conduct to, in consultation with the Monitoring Officer, ensure that arrangements in relation to officer registering and declaration of interests are sufficiently robust and well known.

Expectation on Members: The Personal Burden

21. That the expectations on those who assume public office should not take too great a toll on them, and their families, is clearly an ethical issue.

22. A number of interviewees expressed some concern that, particularly under Executive arrangements, a tremendous burden was placed on members. The concern seemed particularly focused on those responsible for overview and scrutiny, although this may have been because no Executive member was interviewed.

23. Traditionally a support for members has been through political groups and the concern expressed by interviewees suggests this is no longer sufficient.

24. Whereas training, particularly through a structured programme of member development, is now part of the landscape there is a need to review the arrangements to support members through technology, and personal support, to ensure that the burden upon them does not become too great.

25. The Council should, with its elected members, consider how to address two sets of expectations:

Suggested Actions

26. Firstly, members are seen, and are rightly so, as a valuable way of communicating with the Council. The need is to ensure that those members of the public who choose to access the Council via their elected members do so in a way which delivers a consistent experience which does not vary substantially from the experience of members of the public who choose other means of accessing the Council and its services.

26.1 Further, the experience of a member of the public choosing to contact the Council in this way should not vary substantially according to the time commitment, preferences and availability of the local member who happens to represent them. It is suggested that the Standards Committee and/or the Consumer Champion Cabinet Member may wish to assist in this line of inquiry by exploring how the principles underpinning the Great Access to Greater Services agenda can be applied to public engagement with the Council through elected members.

26.2 Secondly, it is clear that some members are worried by, and feel under pressure as a result of, the burdens of scrutiny. Interviewees expressed this in different ways, including referring to the feeling of disempowerment, of distance from decisions and of a sense of burden being borne by the Select Committees.

26.3 The Isle of Wight Council employs 3,500 staff, a turnover in excess of £250 million and it delivers an incredibly complicated array of services in pursuit of numerous policy objectives set both locally, regionally and nationally.

26.4 It is suggested that overview and scrutiny cannot be seen as the only source of accountability. It is simply too scarce a resource to deliver scrutiny at a performance management and operational level across the entire Council, but is seen by some interviewees at least as bearing just such a burden. The Local Authority should, therefore, as part of its statement of internal control, produce a simple (perhaps graphical) explanation of the many complementary (and sometimes overlapping) internal and external arrangements for monitoring, inspecting and reporting upon performance management and accountability for performance. This may form part of any accountability strategy developed in the light of recommendations set out above.

26.5 Steps need to be taken to improve the focus of, and confidence in, the Scrutiny Committee as a forum for accountability and a tool in improving performance. One such step could be inviting more junior “front line” staff (and representatives of partner agencies) to assist the Scrutiny Committee in setting their work programme, in scoping and delivering reviews.

26.6 There has historically been a focus on the commitment and input of members, at the expense of focus on the outcomes of their efforts. The standards Committee should review the practice of reporting attendance and seek other ways of identifying members achievements – and, perhaps, incentivising achievement.

Expectations – A Personal Toll on Officers

27. Some interviewees spoke fluently and forcefully about the effect which public service can have on senior officers. This is particularly the case when abrasive criticism is made in public and through the press. Some of that criticism is out of the control of the Council. The Head of Human Resources should, therefore, consider whether current arrangements to support, and protect, staff subject to public criticism, particularly where it is believed to be unfair or vexatious, are sufficient.

28. National experience shows that elected members in some authorities struggle to know how to articulate legitimate criticism without falling foul of the provisions of the Code of Conduct which require respect to be shown to employees of their Council.

Suggested Actions

29. It is suggested that the Standards Committee adopts local guidelines to assist members (and to assist officers in knowing what to expect). This work should be undertaken in time to assist new and returning members of the Council after the May 2005 elections.

Standards Committee – Future Role

30. The Standards Committee will continue to play a vital role in driving up standards of ethics and probity. In anticipation of this report, Full Council has already expanded the terms of reference of the Committee to ensure it is able to look at issues of concern to it, rather than to wait for a reference from the Council, or the Monitoring Officer. This is a subtle change which will reinforce the value of the role played, and to be played, by the Standards Committee.

Suggested Actions

31. The Standards Committee will wish, when it is reconstituted after the Local Elections in May 2005, to set a work programme for the next two years which will ensure that standards, ethics and probity keep a high profile and are demonstrably improving.

APPENDIX 2

EXECUTIVE SUMMARY

Methodology

2.1 The idea for undertaking the audit, and the core of the methodology, came from a tool developed by the Improvement and Development Agency.

2.2 That model was developed for local application. The audit has at times progressed slowly. In part that was because the Standards Committee wanted to be sure that the methodology being followed would produce meaningful results.

A detailed methodology is reproduced as Appendix 1.

A Phased Approach

2.3 The audit was undertaken in three phases. This had the benefit of allowing interim recommendations to be made and acted upon as the audit progressed.. It also allowed each phase of the audit to be designed in the light of the outcome of the previous phase. Finally, this approach suites the Standards Committee environment whereby scheduled meetings are relatively far apart.

Phase 1- Desk Top Review

2.4 This phase asked whether all the structures, policies and documents needed by a well run council with high standards of ethics and probity were in place, up to date were fit for purpose and were easily accessible. The yardstick for measuring whether the necessary elements were in place was the IDeA ethical audit tool.

2.5 The picture was generally positive with no significant gaps in the structures or documents. There were, however areas which needed improvement. Not all the documents were consistent with each other, and few ere as easily accessible as they needed to be. A series of interim recommendations were made, and have been acted upon.

Phase 2 – Questionnaire

2.6 If the structures, policies and documents were generally in place, up to date and fir for purpose the next step was to assess whether they are widely known about – and whether they are followed or breached.

2.7 A questionnaire was devised and circulated to the list of people and organisations at Appendix 2. Response was lower than hoped – but nevertheless some interesting patterns and trends emerged.

2.8 The conclusions of the questionnaire can be summarised as follows:

a. The building blocks (for example policies and codes) for high and improving standards of ethics and probity are in place and are regularly reviewed;

b. The knowledge of these building blocks, how to access them and from whom to seek advice needs some attention;

c. The perception of public and other stakeholders is that there are poor standards of ethics and probity within the Council; however

d. This is not borne out by evidence of actual poor regard of ethics and probity; and

e. There is a clear need to tackle this poor perception

2.9 The interim report at this stage therefore identified a potential finding which needed testing on a group of stakeholders through individual interviews. The emerging finding was that there is evidence of a gap between actual standards (which are relatively high) and public/stakeholder perception (which is that standards are poor).

Phase 3 – Individual Interviews

2.10 This phase gave the most insight – and the challenging outcomes.

2.11 There is, interviewees reported, a great gulf between their own experience of the local authority and it’s elected members, and public perception.

2.12 There is evidence that there are a number of reasons for this. One reason is that there is still a legacy from previous poor personal conduct. More significantly, it seems to be that the national focus on standards and probity as synonymous with personal conduct is not proving helpful on the Island. There is, among a number of stakeholders, a clear view that performance and accountability for performance is as important as standards of personal conduct.

2.13 There is a separate message about the toll which public service takes on elected members. This is clearly a moral issue, and one which needs to be accommodated under the label of ethics and probity if local concerns are to be responded to.

Action Planning

2.14 The audit needs to be translated into action. The timing of this report is designed to offer the analysis and recommendations to a new council – and to new and returning Councillors. The work done to date, by the Standards Committee leaves a legacy for the new council – in the form of significant challenges, but also some well founded recommendations for action.

Complementary Work

The audit has not been undertaken in isolation but has been explicitly designed not to replicate or overlap with other work being undertaken. The most closely aligned piece of work is an audit of the governance arrangements of the local authority . A summary of that work is set out at Appendix 4.

APPENDIX 3

	ACTION	OUTCOME	RESPONSIBLE	TIMETABLE
1	Review confidential reporting code	Increase confidence in the effectiveness of the code	Head of Human Resources	December 2005
2	Raise profile of confidential reporting code and Members Code of Conduct	Greater confidence in both codes	Head of Human Resources/Monitoring Officer	December 2005
3	Response to propose National Code of Conduct	Greater stakeholder confidence in accountability of Officers	Head of Human Resources	Determined by Government timetable
4	Revise capability process to include gross incapability	Create stakeholder confidence in accountability of Officers	Head of Human Resources	September 2005
5	Consider adopting performance indicator on competence of staff	Ability to measure relative performance of Isle of Wight Council	Head of Human Resources	September 2005
6	Propose mechanism for reporting on performance to Town and Parish Councils	Greater stakeholder awareness of and confidence in performance of Isle of Wight Council	Head of Policy and Communications	December 2005
7	Produce guidance and review processes on Members access to information	Greater confidence among stakeholders and Members that Isle of Wight Council is an open and accountable body	Standards Committee	January 2006 meeting
8	Add ethical issues as a standing item on Full Council agenda	Increase the visibility of ethical issues at the heart of the Local Authority	Monitoring Officer	Adopted by Full Council on 22 June 2005
9	Review existing media strategy	More credible communication with/ through the media	Head of Corporate Policy and Communications	To be agreed
10	Raise profile of requirements for Members to declare interest	Visible compliance with legal requirements – engendering stakeholder confidence	Monitoring Officer	Delivered through induction programme
11	Propose integrating public contact with Council via elected Members into Great Access to Great Services programme	Consistent customer/ citizen experience	Head of Organisational change	To be agreed
12	New single reference point for all internal and external arrangements for monitoring, inspecting and reporting on performance	Increase Member/ stakeholder confidence in performance monitoring systems	Head of Corporate Policy/Chief Financial Officer	To be agreed
13	Ensure scrutiny activity draws on a range of Officers from across the Council (and its partners)	Increase confidence in scrutiny as a strategically significant driver of service improvement	Monitoring Officer	December 2005
14	Review reporting of Members’ attendance	What effective reporting of Members’ achievements	Standards Committee	January 2006 meeting
15	Consider incentivising Members’ achievement	Members focussed on outcomes and achievements rather than inputs	Remuneration Panel	October 2005
16	Produce guidelines for Members’ criticism of the Council and its staff	Improved standard of debate	Standards Committee	To be agreed
17	Review of complaints procedure	Confidence that the right balance between protecting employees and encouraging constructive criticism is being achieved	Head of Corporate Policy and Complaints	To be agreed
18	Agree Standards Committee work programme	Keep ethics and standards high on the Council’s agenda	Standards Committee	July 2005 meeting