New Barnet Council boss Nick Walkley gives first ever interview

Full interview transcript:

RL: Let's start with the problems in the treasury department. Manager Patrick Towey has resigned because he failed to apply the correct credit rating criteria from the Treasury Management Strategy (TMS) when making £2 billion of council deposits in 2006 to 2008. But the four-page report produced by the treasury department seems to imply that the TMS was flawed because its criteria were too restrictive and didn’t let the officers make the deposits it was necessary for them to make.

So what I want to know is: Why was there a TMS that was not viable in the first place? And why was it not flagged up?

NW: I can’t actually give you a definitive answer to that, which is why we need an independent inquiry. It is a pretty special circumstance where you get a report from an officer that says "this wasn’t working, and I broke the policy that I helped write", and that is a matter of grave concern.

RL: It was 89 per cent of all council deposits that were put in institutions they should not have gone into. Was it really only one officer who was responsible for that? How can that be? If that was the case, does the system not need to be changed?

NW: I’m obviously really concerned where any public official is being named and vilified in this way, as that is not what public servants get into things for, and part of my job as head of paid services is to make sure that officers can carry out duties effectively. One of the reasons why I am very emphatic about needing an independent investigation is because of the importance of understanding how the treasury team was functioning – and I think the important distinction here is “in practice”, as opposed to what was being described and presented on paper. That is why an inquiry and a review is absolutely essential, both to reassure the public, but also so we can learn the lessons and take them forward.

RL: Who is going to be doing this independent inquiry?

NW: We haven’t made those sorts of decisions, and clearly framing that inquiry and identifying the right people to lead that investigation from outside the organisation is an important task. It is an important task that is urgent, but we don’t want to take snap decisions. We need to seek advice and appoint the right people. And it needs to be sufficiently thorough-going, requiring senior expertise that covers not just treasury management, but also questions about the technical aspects of what is a highly technical function. So someone of significant senior expertise.

RL: Is this just going to focus on the treasury department or will it be extended to cover other departments too?

NW: On rejoining the council, I think it is absolutely right that concern is being raised that if those problems can happen in one department, why not elsewhere too? What I would say to that is two-fold. First of all, we need to have an investigation into the circumstances, the decision-making that relates to the specifics. But secondly, I will be making it a priority to ensure the wider working controlled environment is kept under pretty consistent review, and the lessons from the TMS investigation are widely learnt across the council. But I don’t want, because it would be extremely unhealthy for the organisation, to suddenly put everything on pause and begin a whole set of second-guessing investigations, because you’ll end up with paralysis, and that would be bad for Barnet.

RL: So the investigation will be focused on the department, but any lessons learnt will be applied to others?

NW: Absolutely, but I’m also making another point, which is I think that control – what I call the necessary costs of the democracy of public money – is going to be a priority for me anyway.

RL: What does that mean, the “necessary costs of the democracy of public money”?

NW: It is not our money, so we need to give assurances that it is being well spent. And actually showing some leadership about that, prioritising that issue, is something that I will be concerned to do. So it isn’t just about this inquiry and acting on those results, it is also about saying to the organisation at large that this really, really matters – if there are concerns, those are things that need to be dealt with.

RL: Will this investigation just be internal or will you be looking at the external auditors too? Some people have questioned why they didn’t pick up the problems at the time.

NW: I think what you are alluding to is what I would call the “wider control enviornment”. I think it is pretty reasonable to assume that a team writing and developing a policy with professional experience and expertise then follow that policy and follow the rules. However, all organisations have a process of control to review and ensure that is happening. Clearly in this case those review processes did not pick up what was happening, so we will need to look into why that was the case. I have not yet had, at 2pm on my second day, the conversation with the external auditor as to how they will engage with that process. But quite clearly they will need to. If I were the external auditor, it is probably in their interests to learn lessons here. That will include ensuring they are informed of the terms of reference, that they are informed of the report, and clearly any action planning will be reported to them too.

RL: Do you have any idea of what time-scale we are talking here?

NW: It is too early a stage for that yet. But I would be of the view that this is a pressing matter. Because, not least there is a whole organisation here that is deeply concerned about what has happened.

RL: Do you agree with Mike Freer that this is essentially an officer matter, and either the system was flawed or he didn’t abide by it effectively, or both, and the councillors are not in any way to blame for what happened?

NW: I don’t comment on what members’ views are on these issues. Period. It’s something that’s really, really important to me. My job here is to act as head of paid services, to run an organisation and deliver effectively for the people out there. I do not yet have a view as to the who and how is to blame – that’s why I’m asking for an independent investigation, which I will put significant resources behind. What members make of that and how they behave is for the polititicans to deal with.

RL: And if this investigation uncovers that more people were involved in making the dodgy deposits, either other officers or councillors, will they be dealt with in the same way as Patrick Towey?

NW: This officer was not dealt with, this officer resigned. What I would say is that this is a highly technical and specialist area and I would be concerned if the day-to-day activites of that team were the subject of member intervention. I would be very uncomfortable about that. It would be contrary to the constitution. There is an appropriate division of responsibilities here.

RL: But there needs to be some degree of communication, doesn’t there, between officers and councillors, to provide a level of accountability to the public?

NW: Quite clearly there is officer accountability here. Officers are accountable for the failures that appear to have happened, and if there are issues beyond the individuals identified, then the council’s procedures will need to deal with those. But at this stage I really can’t say, because we don’t know. And I don’t want to get into a position where the organisation begins to finger-point without evidence, as that leads to all sorts of difficult implications.

RL: I understand that this document, the TMS, changed in March last year – it originally had an A/B independent rating criteria, which then changed to C in March because it was decided A/B was too strict. Then it was decided that that was too low and it was changed to B after the Icelandic banks collapsed. Who is responsible for that document?

NW: It is approved by the cabinet resources committee, but it is approved very clearly on the technical advice of officers.

RL: So why was it not viable in the first place? Who was responsible for creating a strategy that didn’t work? As I understand it, Mike Freer's name was on that document.

NW: This is what I think is pretty unique about this case. The officer drafting the strategy and making recommendations to members then contravened his own strategy. We can attempt to hypothesise as to why that might be, but those are the raw facts. I rarely use the word ironic, but it is ironic that here we are trying to minimise risk, which was what the general direction of council policy was in the first place. Patrick Towey made that recommendation, that recommendation was accepted, but then he and that team broke that policy.

RL: And are you satisfied that the TMS now is a viable and acceptable one that works, and the deposits you are making now will not cause the same problems in the future?

NW: Have you noticed the international banking system? I am deeply concerned about all public finances. I have just come from a period in central Government and have seen this issue right across the country – where to safely put deposits. It’s not like having a large sum of money in one’s own personal bank account, it is rather more difficult than that. This is an area, like other areas in council life, where we are balancing a number of different risks. The big step forward for us now is making other strides in recovering money from Iceland.

RL: And are you confident of recovering the money?

NW: I can’t say too much at this stage, but I believe the situation is improving.

RL: Improving from what baseline? From hopeless?

NW: You have to remember that the British Government was in formal dispute with Iceland, wasn’t it? I don’t want to comment on the politics, but there is a platform now to have proper negotiation.

RL: Any idea of a time period on that?

NW: We have no idea, but what I can say is that Barnet Council has played a leading role on behalf of all local authorities in securing our deposits and we will continue to do that.

RL: How about all these other officers that seem to be dropping off the radar? Four officers quite have all recently lost their jobs for one reason or another: Andrew Westcott, Roger Arkall, Mike Freestone, and Patrick Towey. Is there any reason for this? Is there a pattern here?

NW: I can’t comment on individual cases. I think the positive news is actually that there is a new chief executive. There are councils up and down the country which are struggling to recruit at the moment.

RL: Why are they struggling? Is there not a larger pool of talent to delve into now because there are so many people looking for jobs? Is it just a financial issue?

NW: Councils occasionally find it difficult. A priority for me is providing stability for the council and across public bodies at an officer level during what will be a very difficult time for Barnet. People are struggling with the recession and we need to play our part.

RL: Talking of struggling through the recession, the obvious areas really struggling are the regeneration projects – especially with Barratt Homes losing so much of its share price over the past year. Are you confident West Hendon, Grahame Park estate, Stonegrove etc are going to make it through to the finish line?

NW: I am not a day in to my new job and am not sufficiently up to speed to be able to comment, but I think you would be better to ask the cabinet members where we are. There are political issues here that need to be responded to.

RL: But is is an officer issue as well.

NW: Yes, and we are committed to these schemes and we will continue to work on them in anticipation they will be delivered.

RL: So what are your priorities as the new chief executive? What have you come into the council to achieve? Do you have a blueprint, an ideology?

NW: I have never been a fan of grand blueprints, but there are some principles I hold pretty dear and some experiences which have shaped where I have got to. The principles are about the importance of public service, the importance of value for money and protecting the public purse. But I also believe that standing still is never an option given the pressures facing the public sector, and that we need to take some radical changes if we’re going to deliver for the people out there.

RL: And what are these radical changes?

NW: I can’t put my finger on whether it has to be “x” or “y”, but I am not going to be the sort of business manager who is just going to be defensive. I think, having worked with politicians from all political parties, that there is a view that things need to change. And significant improvement is often possible.

One of my formative experiences is working in councils that are really struggling, like Hackney. You see how very quickly a badly run council can degenerate into having very negative effects on everything, from staff morale to outcomes with people. So I will be focused on valuing people, valuing public money, improving things. That seems to be absoutely central to what I should be about.

RL: But you must have some priorities as to what you want to tackle first.

NW: I‘m going to be quite guarded here, as that is something for me to work with cabinet on. But I do think Barnet’s corporate plan sets out a very clear set of prioities for the coming year, and is clear about the five priorities continuing. And I think, as we face up to the need of ever-tightening public budgets, value for money will continue to be a very significant issue.

RL: What about joint-initiatives with the police and other services? Will this be a focus?

NW: It’s a reality now that public services have to work more closely together. The members need to lead on policy and initiatives, but we need to get better at joining up between officers. One of first priorities is to meet with leaders of other key public services – I met with the head of the PCT [primary care trust] today – to begin to set some leadership examples about that. I suppose the question for me is: how do we make sure all the money, whether it be council tax payers’ money or the money coming from national taxes to fund other services, is being used for the maximum benefit of the people of Barnet? And all public servants need to have that view, and that can be quite challenging to people within the different organisations.

RL: But surely no one would deny that giving value for money was a bad thing? What exactly do you mean when you say that?

NW: They might often say: “I want to do the best for Barnet Council,” which I do not say. I want to do the best for the people of Barnet.

RL: Do people really say that? What would “doing the best for Barnet Council”, as opposed to doing the best for its people, mean?

NW: It would mean being defensive about your own organisation, rather than actually asking the question: What is right for the people out there?

RL: I'm just not sure I could imagine anyone coming in and saying they didn’t want to do what’s best for the people of Barnet.

NW: Yes, but therefore you need to be quite challenging with them, don’t you, and demonstrate from leadership that you are open to different ideas, that you’re willing to listen.

RL: So how, in concrete terms, are you planning to do that?

NW: I intend to be visible about the organisation and strong on comunicating, but also be as clear as possible about who runs this place – the members. Our role is facilitiating and achieving their utcomes.

RL: Is the communcation and the relationship between the members and officers as good as it could be? This Iceland issue does seem to show a breakdown of some degree of communication between the two.

NW: I’m not sure that’s a breakdown between officers and members, that is a breakdown between one officer and another. This is an officer failure that we need to deal with, and I can’t emphasise that enough.

RL: But I thought you said you wouldn’t know that for definite until the investigation has looked into it.

NW: Yes, but a report was produced that told us that this was an officer failure.

RL: But surely he still was meant to communicate to the councillors what he was doing?

NW: He was meant to communicate through his management chain to councillors, not directly. That is really important.

RL: But at some point the communication broke down.

NW: No, it didn’t. There’s a Rumsfeldian thing here. How could someone who didn’t know what was going on communicate it to members? We are talking about someone quite a long way down the chain, not someone who attends directors’ groups or cabinet. It is someone much further away than that.

RL: So is the structure of the council, including both officers and councillors, as good as it could be?

NW: You have to ask the members, but I am pretty much restless about everything and want to make things better. It’s my trademark and why people find me really quite annoying at times. I am restless to improve things.

RL: You’ve talked about improvement a lot but have been quite vague about what exactly is on your agenda. Can you be more specific?

NW: Well, the corporate plan makes it quite clear. A cleaner borough, a greener brough, a place that’s safer – what are we going to do about that? Well, some of that is about making the budgets right, about getting the resources into the right place.

RL: Are there going to be more corporate efficiencies?

NW: Well, the reality of the council budget is, if we just continued next year as we did this year, we would have to have an enormous council tax rise, and unless the politicians decide that’s what’s acceptable, which I think is highly unlikely, the reality of council budgets is that we will need to continue to find efficiencies. Hence the future shape project.

RL: And are you solely a passive instrument in this? You say it’s the role of cabinet members to make decisions about policy, which you then implement, but you also talk about being restless, about having lots of ideas and wanting to change things. How do the two sit together?

NW: Clearly, as the lead policy advisor to members, one of my jobs is to ensure there are the right resources, so members get good advice. Because when you get bad advice, you end up with bad decisions. You can tell I’m not just going to sit in meetings and say: “Yes, that’s fine.” I think part of the job of a good public servant is to be challenging on all sides.

What do we need to be concerned about? Public finances all parties acknowledge are going to get very, very tight. So we need to plan now for how we deliver the most efficient services we can. And that is something I will be saying to everyone. I don't want to scaremonger about it, but...

RL: Does that mean more redundancies? I think when people hear “efficiencies”, they think “redundancies”.

NW: The two need not be the same, but, just as households are having to trim their budgets, big organisations are having to think about how they will cope with reduced income. This is not just about the cabinet, but all members from all parties will need advice and support about how to respond to that.

If I have one concern, clearly we need to address the TMS issue and deal with it very quickly and effectively, because there are many services in Barnet that are externally now viewed as improving.

We have the strongest rating on improvement, and what I don't want to lose is that impetus. I do want to make it clear that the investigation is a priority – this is not in any way an attempt to brush things under the carpet. And it's interesting, isn't it, that a successful piece of scrutiny work, no matter how painful, has demonstrated that members do have considerable influence, even if not in the cabinet, to make them happen.

RL: Are there certain things about the running of the council now that you want to change and improve?

NW: I think we can do more to attract and retain talented staff. I think it’s about offering a package that goes beyond simply getting involved in salary discussions: the right work-life balance, the right working environment, the right development opportunities. You can go a long way with good people.

RL: What are your thoughts about the way Leo Boland ran things? What do you want to do differently and what do you want to keep the same?

NW: Style change, because we’re different people. I think for me, we will need to ensure there is a much more open style of leadership. And not just me. If you’ve any notion that one person can just run everything, that’s clearly not the case. It’s about empowering people to do the jobs that we pay them for, about having a team capable of responding to the needs of the community and ensuring that that team is communicating what it wants done.

RL: What can the average Barnet resident in the street expect? Are they going to feel the difference now you’ve arrived?

NW: I’m not sure I’ll have that kind of grand impact. But I think what we can do is ensure the council is, at an officer level, well-run, not just ticking along invisibly, and ensure that where there are member policies, they are having an impact. This is the first time I have ever given an interview to the press rather than just dealing directly with press inquiries, because we should be here to make things happen.