Caerphilly council improving, Wales Audit Office report finds

A council developed a greater appetite for risk when its former chief executive took up his post in 2010, said a public spending watchdog.

But the Wales Audit Office (WAO) report into governance at Caerphilly council said improvements had been made.

Its chief executive, Anthony O'Sullivan, and his deputy, are being investigated for unlawful allowance payments to senior staff.

The council said it would continue to build on the positive progress.

The WAO report looked into the causes of what it called "governance failings" at Caerphilly.

"For example, the tone at the top of the organisation changed with the appointment of a new chief executive in September 2010," it said.

"Then, the council became more action oriented with a greater appetite for risk, and pressure for an increased pace of working, but key governance arrangements were not reviewed or changed to reflect this."

A number of issues involving the running of the council came to light after the WAO commissioned a special inspection of the authority's governance arrangements last year.

In December the WAO said payments by the authority to senior staff losing car and annual leave allowances were unlawful.

The WAO said the decision was taken without proper authority by officers who would benefit personally from it.

The council is also at the centre of a separate police investigation into £270,000 worth of pay rises for senior staff.

Police investigation

Mr O'Sullivan and his deputy, Nigel Barnett, remain suspended.

In Wednesday's report, Hugh Vaughan Thomas, the Auditor General for Wales, said the council was already taking steps "to address fundamental weaknesses in governance".

"It now needs to continue this road to recovery and apply the same levels of energy to improving other aspects of its corporate services," he said.

"Further changes are likely following the completion of the police investigation.

"The council needs to ensure that the changes it is making, and planning, are robust enough to be sustainable for the future."

The WAO report made several recommendations to ensure that improvements continued. These included:

• Clarify in an easily understandable way the governance and decision-making roles of the cabinet; chief executive; corporate management team; corporate directors; scrutiny committees and audit committee

• Ensure it maintains appropriate documents for all decisions made and by whom, to provide assurance that decisions made are appropriate and transparent

• Strengthen risk management processes further

• Ensure the actions identified to improve the human resources function and workforce planning are implemented

Caerphilly council said it welcomed the recognition that improvements had been made.

But Councillor Harry Andrews, the council leader, added: "That said, we also recognise that there is still much work to do and we will act on the recommendations contained within the report and continue to build on our positive progress to date."

On Monday the Williams Commission recommended a reduction in the number of local authorities in Wales.

Under its proposals Caerphilly could merge with Blaenau Gwent and Torfaen.