Dangers of delegation

One item approved without too much fuss by Lewisham Council last week was a scheme of delegation so that officers can take decisions without Mayoral consent.
(Documents here, item 11 and appendixes)
This was presented as a way to make the Council efficient and as a formal recognition of the status quo that only updates on an existing similar scheme already present in the Constitution.
It all sounded very reasonable, in fact it got me a bit suspicious, too reasonable, especially when you read through the documentation and discovered that Heads of Directorate have the power to authorize movements of up to £500k within their budgets without Mayoral consent and that with the consent of the Head of Resources the same amounts can be moved across Directorates’ budgets.
This Council document expressely calls this manouvers “virements” and eplains them like this:

A Virement is a transfer of a budget from the purposes for which Council originally voted in setting the budget and Council Tax to another purpose.

Am I right to see big danger here? The Council could approve a budget that has consensus and then on day two officers can start to move large sums and doing the budget they like, even if this means moving away from the budget the Council intended and possibly starving important services that are not statutory and that therefore don’t necessarily get them big brownie points with auditors.

I am not an expert on delegation schemes, only that reading this Council’s decision made me think of possible negative consequences of this scheme. Is it normal practice that officers can move up to £500k without approval at political level?
And if these large changes to the budget do take place without them leaving a mark on the papers approved by the Mayor then how can the public (or even the Overview and Scrutiny committee) ever come to know they ever happened?


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4 Responses to “Dangers of delegation”

  1. Andrew Brown Says:

    My understanding is that delegated decisions are subject to scrutiny and so if councillors think the budget’s purpose is being undermined by officer action they can call in the decision.

    In practice I think good officers will want to discuss why they’re making a virement of any reasonably big amount with the appropriate cabinet member if not the Mayor.

    Of course it’s a matter of judgement as to what level delegation should be set but it certainly is both logical and normal practice that budget holders have some flexibility in how money is spent.

  2. Max Says:

    I really hope they are subject to scrutiny but how would Councillors come to know of such virements? Is there a procedure? I couldn’t find anything in the Constitution about this.
    And yes, they always ought to check with Cabinet members and/or Mayor but the reason of the delegation for smaller items is that of freeing officers from having to check, which has also a cost in terms of added time and paperwork, only that if you get to large sums like £500k the same rules apply, but the nature of the virement is in that case very different.
    You’re right, good officers ought to check, but if there isn’t a procedure to follow so that virements are automatically flagged up then ultimately it’s up to them to do it, and if they decide not to or simply forget then important decisions can potentially slip under the radar.

  3. Andrew Brown Says:

    Well as you’ll appreciate my knowledge of what goes on is somewhat out of date, but when I was on the Business Panel there was certainly a report that officers prepared on delegated decisions and their implications and they were questioned on those decisions.

    If things have changed in the last 4 years I can’t say, but I think that if you ask anyone in local government you’ll find that no decision can be made without business cases being developed and written reports being submitted. So there’s always a paper trail for vigilant councillors and auditors to follow.

  4. Max Says:

    Glad to hear that these items do go in front of the Business Panel, and yet the Constitution doesn’t specify a procedure, so technically there’s room for things to slip out.
    Maybe there should be some sort of register of virements, so that Councillors and the general public can at a glance see what variations to the budget have been introduced under delegated power.

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