Bradford Council: 'Lack of trust' between authority and organisation running children's services

And it argues the agreed budget of the Bradford Children’s and Families’ Trust, which took over the service in April, was “unachievable.” Last week the Government announced it would provide Bradford Council with “exceptional financial support” – allowing the authority to borrow money to avoid bankruptcy.

The announcement was accompanied by the release of a report into the council’s finances by the Chartered Institute of Public Finance and Accountancy. The review was carried out last Summer, and the report written in October, but it was only released late last month.

It highlights the financial problems facing the council in the run up to the request for financial support, saying there were “significant issues with financial control.” But it does also say the council has a “clear sense of direction” and a “strong leader.”

The council says many if the issues raised in the report have been dealt with in the months since it was written. As well as granting Bradford, and 19 other councils, exceptional financial support, the Government issued a “best value notice” to Bradford.

This requires the council to engage with Government to tackle concerns raised – in this case around the council’s finances, and will be in place for 12 months.

The Bradford Children’s and Families Trust was set up due to the poor performance of Bradford Council’s Children’s Services. It is funded by the council, but run independently.

Last year it emerged that the Trust was due to overspend its annual budget by tens of millions of pounds, and this overspend was one of the main pressures that could have led to the council declaring bankruptcy.

The report argues the Trust’s budget was too low, saying: “In CIPFA’s view the initial contract price of £170 million seemed unachievable.

“We have evidenced a range of papers and reports which document a series of discussions between the shadow Trust officers and the shadow Board suggesting a range of contract prices up to £222 million with a mid-point of £196 million.

“The council insists that it maintained a strong position (during negotiation) around the affordability of an initial contract price up to £170 million and that a higher price was simply unaffordable.

“Levels of trust between the two parties could be better and whilst we do not apportion blame to either party, we strongly recommend that the parties come together to jointly agree how to secure a better understanding of the solutions to the issues facing the Trust.”

It raises concerns that unless things changed, there could be “a complete breakdown in trust and relationships between the parties.”

The report also refers to a “legacy of the financial control weaknesses” that led to the budget crisis.

It adds: “Up to the financial year 2022-23, Bradford managed to balance its budget year on year whilst delivering around £350 million of savings since 2011. However, through an accumulation of increased service demand in key service areas, the Council started to rely on reserves to balance the budget. Over the last 12 months, reserves have been depleted.

“Up until last year, Bradford was a financially stable organisation having built-up reserves and cash over previous years, but very rapidly, the council’s financial position has deteriorated.”

But the report does include some praise for the council.

It says: “The leader is very focused on finance and strives to ensure that the council lives within its means and is fiscally responsible and prudent. Bradford has a clear sense of direction and strategic focus as directed by the Labour administration. It has a strong leader with a very clear sense of vision for the council.”

After the publication of the review, Bradford Council Leader Susan Hinchcliffe said: “It’s good that the CIPFA review, carried out last summer, has now been published by Government. We welcome external challenge to help us keep on track. ”

In response to the report, Councillor Brendan Stubbs, leader of the Liberal Democrats, said: “The independent review makes it clear the children’s trust was set up to fail from day one. The contract was too low and ‘unachievable.’ Once again Labour leadership failed our children. They couldn’t even get out of the way without it costing taxpayers millions more. It is outrageous that the political leadership remain in post.”

Councillor Mike Pollard, Conservative spokesman for finance, said: “The report makes it clear that CIPFA and DLUHC have quite serious concerns regarding the pattern of disagreements between the Council and the Children’s and Families Trust. These are centred upon differences between the amount of money which the Trust said that it needed to cover the shocking level of demand in Children’s Social Care and what the Council (and, to be fair, the DfE) thought it should cost.

“The council needs to see the costs come down significantly and quickly but has a track record of being wildly optimistic and unrealistic on this score. The Trust appears to be taking a more realistic approach, based in the real world and augmented by the facts on the ground. Ultimately it will cost what it costs and it will be the trust, not the council, that controls this.

“Local people’s crown jewels are being sold to pay for the basket case that has been Bradford Council for years now and I am perplexed as to why the CIPFA Review could, in a million years, support the Council’s “financial leadership” at that time. It was nothing less than woeful; pitiful even.

“That CIPFA could describe Bradford Council as having a, and I quote, “clear sense of direction and strategic focus” with a “strong leader” would be hysterical, if such a blatant failure to understand the situation was not so serious for the residents of Bradford District and the services that the Council should be providing to them.

“What we consider to be the serious failings of the CIPFA Review look likely to have emboldened and empowered those responsible for the loss of what looks like near half a billion pounds over the next five years – truly appalling.

“The actions of CIPFA in the case of Bradford Council has motivated me to write to the Secretary of State for Levelling Up, Housing and Communities to suggest that the roles and legislated responsibilities of CIPFA and possibly other regulatory bodies in public sector governance may need to be urgently reviewed if we are to see fewer Councils led into financially troubled waters by single controlling Party Executives/Cabinets, way out of their depth.”