Lawyers have raised alarm at the lack of oversight in local government, as a Guardian analysis found almost one in 10 councils in the UK have been subject to a corruption investigation in the past decade.
Across the UK, 36 local authorities have had councillors and staff accused of economic crimes including fraud and the misuse of public funds, with dozens arrested and convicted.
Many other councils are being scrutinised for potential financial mismanagement leading to huge losses in councils funds. One of those is Thurrock council, found to have recklessly put hundreds of millions of pounds into commercial investments, where an accountant is being investigated by the Financial Reporting Council.
Rachel McKoy, the president of Lawyers in Local Government, said they raised concerns about the “complete lack of sanctions” to help keep local authorities in check and clamp down on misbehaviour.
“We don’t have an effective sanctions regime in this country. The government says the sanction is at the ballot box but that doesn’t help if there’s rotten pervasive behaviours that create toxicity in a council,” she said.
A recent report on the role of monitoring officers – the person responsible for legal governance in each council – found they are often powerless “even when dealing with proven cases of rule breaking … including serious, harmful and criminal actions by councillors or staff”.
Under current sanctions, councillors can be barred from cabinet, committees or representative roles and be removed from their political party for wrongdoing, with criminal matters referred to the police.
“Monitoring officers need the teeth, they need the sanctions,” said McKoy, adding that increasingly toxic cultures within councils were pushing monitoring officers out of the industry. “We’ve got no real proper protections. You’re in this situation where you’re trying to speak truth to power and you’re really vulnerable,” she said.
One of the most high-profile corruption scandals in recent years was at Liverpool city council, where a number of officers were arrested after allegations of bribery and witness intimidation linked to building deals in the city. Each of the individuals deny the allegations.
A government-commissioned report found as much as £100m of public money could have been squandered by the “dysfunctional” council and that senior councillors flouted the code of conduct by not declaring gifts or hospitality on a register of interests.
In 2022, four men at Lancashire county council were charged in an investigation into allegations of financial irregularity relating to a £5m contract. Each of them deny the allegations.
In other cases, council staff have been convicted and in some cases imprisoned for corrupt behaviour.
A boss at Surrey county council was jailed in 2019 for stealing almost £94,000 from a taxpayer-funded hardship scheme, a former council worker was sentenced to prison last year for stealing almost £1m from Birmingham city council, and a Derbyshire county council employee was given a suspended sentence for claiming £90,000 worth of vouchers from a charity scheme to help children living in poverty.
In October, a senior officer at Newham council was charged after being accused of plundering £250,000 to spend on laptops, phones, and tablets for himself. He has pleaded not guilty. Meanwhile, a fraud investigation is under way at Bolton council after close to £1m of its budget could not be accounted for.
Serious cases of criminal corruption at councils are still relatively rare, said Jonathan Carr-West from the Local Government Information Unit, but there are concerns about the “ability to ensure councils are well run and people are behaving properly”.
“Our ability to hold councils to account on a day-to-day level – making sure appropriate decisions are being made, the right questions are being asked, ensuring councils are conforming to legal and regulatory duties – that is where the pressure is in a way that it hasn’t been before,” he said. “And it’s because councils have less money. Everything they do is happening in a more stretched, shoestring fashion than it once was.”
Ed Hammond, the deputy chief executive at the Centre for Governance and Scrutiny, said the problem has been compounded by the failure of the local audits market.
“We’ve seen all these instances recently where bad financial governance have led to local authorities failing, and a lot of that has been because of failures in behaviour and culture,” he said. “These councils have all got external auditors now, but it’s failing. The system is just not working. And there are meant to be other systems as well, providing oversight, but the behaviours aren’t there to support them to work.”
Almost all councils in England (99%) failed to get their 2022-23 financial accounts signed off by auditors by the deadline last year, and more than 900 sets of accounts for councils and other public bodies going back to 2017 remain unaudited.
A spokesperson for the Department for Levelling Up, Housing and Communities said: “We are committed to ensuring accountability and scrutiny across local government and that monitoring officers are equipped with powers to robustly tackle breaches of conduct, including barring councillors from cabinet, committees or representative roles.
“While councils are ultimately responsible for their own finances, we will not hesitate to intervene and protect taxpayers’ money where they do not meet the high standards we set.”
