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ABSTRACT The current localism agenda, and other legislative and organisational
changes, will impact on English local governments capacity and commitment to address
fraud, corruption and conict of interest from both investigative and preventative perspectives. These have been issues for local government since the nineteenth century
onwards, often brought to prominence during specic scandals or periods of extensive
change. This article summarises the reforms in terms of a low road of a control
environment and of a high road of an ethical governance framework, and their perceived interrelationship, up to the introduction of the Localism agenda. It discusses how
far the current changes may change the emphasis between roads in returning to an
amended control environment, particularly in terms of the publication of the Fighting
Fraud Locally strategy. It concludes with concerns less about the various initiatives
promoted by the strategy than the implications of whether councils have the capacity or
commitment to continue along the high road of ethical governance.
KEY WORDS: Local government, fraud, corruption, localism, ghting fraud locally
Introduction
In England, there are currently over 350 unitary, county and district councils
providing a range of services costing approximately 168 billion (of which
capital expenditure is over 20 billion); over 50% of the total expenditure is
on educational services and social services (Local Government Financial
Statistics England 21 2011, p. 10). They employ nearly 2 million staff at a
cost of over 65 billion; there are over 20,000 elected councillors.1 The total
risk of losses from fraud and corruption are estimated by the National Fraud
Authority (NFA), an advisory agency currently located in the Home Ofce, at
over 2 billion, ranging from housing tenancy fraud to procurement fraud and
corruption.
Current Afliation and Correspondence Address: Professor Alan Doig, Newcastle Business School,
Northumbria University, Newcastle Upon Tyne, UK. E-mail: doigdurham@msn.com
2014 Taylor & Francis
671
In terms of reported cases and losses based on reporting by councils, the 2012
Protecting the Public Purse report (Audit Commission 2012) noted 124,000
cases of fraud with losses of 179 million. Ninety-two per cent of the cases
and 77% of the losses related to housing benet, council tax benet and council
tax discounts. Of the remaining areas of fraud, disabled parking concessions
generated the most cases (4,800) while procurement fraud had the highest loss
value (8 million). The reports gures excluded housing tenancy fraud whose
losses are estimated at over 900 million for all social housing and whose costs
in terms of recovery of council property are estimated to have a replacement
value of over 264 million. Cases involving council staff are low in number and
cost 1,460 cases involving losses of some 15.5 million (or less than 9% of the
total value of detected fraud). The Audit Commission receives information on
corruption but does not publish any details of cases or losses. On the other hand,
the average annual cases prosecuted under the 1889 Public Bodies Corrupt
Practices Act, which until its repeal by the 2010 Bribery Act covered local and
other public bodies, were three (a similar number has been noted in other years;
see Doig 1984; Transparency International 2011). In terms of conict of interest,
the last set of statistics published by the Standards Board for England (2006)
noted 111 cases referred for local investigation concerned members who allegedly used their positions as members improperly to confer or secure an advantage, 751 concerned disclosure of personal and prejudicial interests and 31
allegations involved the register of interests (the total number of cases was
1,357).
While the general structure and scope, sources of funding and size of English
local government have not changed radically in the past few decades, successive central governments agendas from 1979 have either sought specic
interventions such as the devolution and diversication of budgets and
service delivery or energised local politics and services by, for example,
changing internal decision-making structures or promoting partnership working
(see, for example, Adam et al. 2007; Leach 2009). The 2011 Localism Act is a
comprehensive evolution of both aspects of the agendas. It is intended to lead
to signicant reforms to the organisation and delivery of local government,
including an overt commitment to reduce the role of bureaucracy, regulation
and the involvement of central government, and to promote local engagement.
The Act, as well as the range and rate of other government changes which will
impact on local government, has raised concerns, specically about fraud losses.
In 2011, the NFA Fighting Fraud Locally strategy warned that the next few
years will see major reforms to the welfare system, policing and local government. The change of emphasis from local government being a provider to a
commissioner of services changes the risk prole of fraud, as well as the control
environment in which risk is managed. More arms length delivery of services by
third parties in the voluntary and not-for-prot sector and personal control of
social care budgets, for example, will mean that more public money is entrusted
to more actors, whilst the controls the local authority previously exercised are
removed or reduced (Fighting Fraud Locally Oversight Board 2011, p. 6).
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A. Doig
This article2 considers what comprises fraud, corruption and conict of interest
and how they have been addressed in the context of English local government
within the context of periods of change. Drawing on Rohrs analogy of low and
high roads it explores, rst, the development of a control environment, and more
recently the promotion of an ethical governance framework up to 2011, and notes
the interrelationship between the two. The continuation of both will be affected
by the current changes at local level, although their future may in part also be
inuenced by the 2011 Fighting Fraud Locally strategy. The article asks whether
this will result in an emphasis on sustaining the control environment and concludes with concerns less about the various initiatives promoted by the strategy
than the implications of whether councils have the capacity or commitment to
continue along the high road of ethical governance.
Fraud, corruption and conict of interest: issues and responses
The risks posed by fraud, corruption and conict of interest are not new, and the
means to address them in terms of prevention, detection, investigation and
application of sanctions have been continuing issues for local government.
Fraud is the loss of income or funds by external and internal perpetrators by
accessing local services, resources or functions through a variety of means, from
abuse of trust, deception, misappropriation or misrepresentation. Corruption
involves the acceptance of an offer or reward in favour of acting, or not acting,
in favour of the giver; corruptly awarded contracts may also, for example, cause
nancial loss or a poor quality of service. Both may involve conict of interest
where ofcials or councillors use their position to secure an advantage on behalf
of a nancial or non-nancial interest or where the interest could be assumed to
inuence his or her ofcial conduct. Both conict of interest and corruption may
also involve gifts and hospitality.
The narrative on arrangements to address them may usefully draw on Rohrs
distinction, when considering ethics education, between the low road that
emphasises adherence to formal rules, and the high road that stresses social
equity3 (Rohr 1978, p. 50). While not mutually exclusive, the former concerns
an adherence to the rules, where the primary concern is detecting violations and
apprehending and sanctioning offenders (Hutter 2001, p. 15). This may be
termed a control environment the system of technical and procedural controls
that provides reasonable assurance of effective and efcient operations, internal
nancial control and applies processes, regulations and laws to scrutinise, detect
and punish perpetrators. With most nancial losses associated with fraud such an
environment would be seen as essential to the proper conduct of many council
functions and services and the stewardship of public funds.
The high road travels beyond the traditional strategies of monitoring, control
and punishment (Anechiarico and Jacobs 1996, p. 207) through the persuasive
shaping of motives and values to the point of internalised voluntary compliance
with the expectations and procedures of the organisation (see Hutter 1997, 2001).
This not only concerns individual conduct but also the promotion of
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effectiveness of a control environment was a local responsibility. Only if allegations of misconduct were seen as so signicant and councils either their cause
of or incapable of their resolution did central government intervene, as it did on
a number of occasions with formal inquiries, up to and including the use of the
quasi-judicial Tribunals of Inquiry (see Doig 1984).
No inquiry, however, resulted in any overall review of the effectiveness of the
control environment until the 1970s following the case of John Poulson. Poulson
was an entrepreneurial architect who used a number of means across a number of
local authorities, and over a substantial period of time, to win contracts, including
the use of councillors as consultants and lobbyists (and who invariably failed to
declare their interests), and excessive use of undeclared gifts and hospitality as
well as straightforward bribery (see Fitzwalter and Taylor 1981). The extensive
network Poulson operated across local government prompted the 1974 Prime
Ministers Committee on Local Government Rules of Conduct; his contacts
among MPs and government ministers, as well as a number of scandals elsewhere
in the public sector led to the 1976 Royal Commission on Standards of Conduct in
Public Life. Noting the context of local government undergoing the most profound structural changes since the late 19th century the 1974 inquiry recommended a primary focus on reinforcing existing arrangements, including legal
reforms. However, it also wanted to emphasise that public life requires a standard
of its own; and those entering public ofce for the rst time must be made aware
of this from the outset (Prime Ministers Committee on Local Government Rules
of Conduct 1974, pp. 3, 19). To achieve this the Committee proposed a code of
conduct, guidance on gifts, hospitality and use of ofcial information, formal
requirements relating to the declaration and registration of interests and internal
monitoring arrangements through a council committee. Its recommendations were
endorsed by the 1976 Royal Commission which, while proposing strengthening
the law and the involvement of the police in corruption cases, also wanted to
encourage the role of management in setting and maintaining standards. This
would be achieved by avoiding proposing systems of regulation and scrutiny so
rigorous that they inhibit leadership by management and imply that people working in the organisation are unworthy of trust (Royal Commission 1976, p. 12).
Subsequently, only a limited number of reforms were implemented and those that
were had limited impact (see Parker et al. 1986). It was the reaction of the
Conservative government to what it perceived as local government proigacy and
politicisation which prepared the way for the development of an effective control
environment through the establishment of the Audit Commission. The Commission
had not only the statutory responsibility to oversee existing external audit arrangements but also a wider remit in terms of overall council management and performance.. The Commission published national guidance (from Fraud and Corruption
in 1994 to Probity in Partnerships and Ethical Governance, both in 2005), as well as
Value for Money (VFM) national studies under statutory powers. The in-house Audit
Practice (usually termed District Audit) undertook the majority (approximately
two-thirds) of audits for local public bodies, as well as setting the standards and rates
for the one-third of audits undertaken by the private sector. All audits included
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standards across the public sector nationally and locally. Its rst report noted a
culture of moral vagueness, moral uncertainty and a lack of awareness of the
ethic of public service in part brought on by changes to the public sector,
including decentralisation, contracting out and greater interchange between sectors. It looked to a holistic response in terms of codes of conduct, independent
scrutiny and guidance and education. The CSPLs third report proposed an
explicit ethical framework for local government (CSPL 1997) based on a
model code of conduct, standards committees to deal with allegations of
breaches and sanctions and the creation of external tribunals to adjudge on
appeals. The view of the CSPL was that the primary responsibility should be
given to those in charge of the organisation itself but that there should be
appropriate safeguards by way of external scrutiny and appeal mechanisms
(CSPL 1997, p. 13) which, as it noted its rst report, could be an independent
body to oversee the framework within which actions are taken and to monitor
compliance can be an important additional safeguard (CSPL 1995, p. 18).
Such a body was legislated for after the then Labour government was persuaded after a number of scandals that self-regulation alone would not be
effective. The 2000 Local Government Act provided not only for the code of
conduct and standard committees (to maintain high standards of conduct by the
members and assist adherence to the code) but also for Monitoring Ofcers to
take on responsibility for standards, supporting standards committees, managing
registers of interests and so on, and for an independent body the Standards
Board for England (later renamed Standards for England). The Boards responsibilities included giving standards committees, independent Chairs and councillors guidance on understanding and implementing the code and investigating
complaints of breaches for all councils, including parish councils; cases could be
taken to an independent Tribunal for adjudication and sanctions. The effectiveness of the Board was challenged by the CSPLs 10th Report. It proposed that it
should become a strategic regulator because its work was being adversely
affected by its serious and ongoing operational difculties in managing the
centralised system and the volume of minor complaints, as well as emasculating
the responsibilities of councils and local standards committees (CSPL 2005, pp.
7980). In 2007, the Local Government and Public Involvement in Health Act
2007 handed back primary responsibility for investigating and disciplining
breaches of the code to standards committees and required, apart from responsibility for a limited number of serious cases, the Board be primarily strategic,
including dening the ethical framework for local government, promoting and
championing standards, and ensuring and monitoring effective local
arrangements.
This change coincidently came at a time when the Audit Commission had also
been moving towards the development of ethical governance frameworks within a
corporate governance context: corporate governance combines the hard factors
robust systems and processes with the softer characteristics of effective leadership and high standards of behaviour (Audit Commission 2003, p. 4). This
approach was developed both through specic assessments and through
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with the Conservative government committed to remove both the control and
those agencies perceived to be responsible for this.
Already signalled as a candidate for abolition in Control Shift (see also
Parliament and Constitution Centre 2013a), the government announced the
closure of the Standards Board by early 2012 as a centrally-imposed, bureaucratic regime, thus leaving councils themselves to decide their own local rules
(Department for Communities and Local Government 2012, p. 1). While most
councils retain the low and high road arrangements developed in recent years,
responsibility for sustaining them now rests with councils. The 2011 Localism
Act states that councils must promote and maintain high standards of conduct
and requires councils to adopt and publish a code of conduct consistent with
the Seven Principles announced in the rst CSPL report. The code will deal with
how the council intends to address the disclosure and registration of nancial and
non-nancial interests; failure to comply with the code does not invalidate any
decision. Although the statutory requirement for a standards committee is abolished, there must be arrangements for the investigation and adjudication of
complaints with the appointment of an independent person whose views
may be sought on allegations and are to be sought on any decision by the
council on an investigated allegation. Councils Monitoring Ofcers must continue to receive and publish councillors interests but are not responsible for
verifying the information. It will be a criminal offence to fail to register, and to
speak and vote on nancial interests and it will also be an offence to provide
false or misleading information in the declarations (convictions for any offence
incur a nancial penalty).
The governments decision to abolish the Audit Commission, and particularly
District Audit, was unexpected although similar arguments were advanced for
the need to end a centrally imposed, bureaucratic and costly audit and inspection
regime and ensure democratic accountability for local spending decisions. The
Communities and Local Government Committee noted that the decision signalled the end of the principles of public audit at the local level4 while the
manner in which the Audit Commissions abolition was announced and progressed may have resulted in a missed opportunity for what could have been a
valuable reassessment of the arrangements for public audit (2011, p. 4). It was
also clear that little consideration had been given to the consequences of the
termination of the various services and functions the Audit Commission and
District Audit provided. The ad hoc Committee on the Local Audit Bill concluded that the government failed to ensure a coherent, technically competent
and uniform audit regime as the one it was replacing, to provide for an open and
competitive audit market and for appropriate oversight arrangements, and to
guarantee adequate safeguards for the independence of audit, PIR and whistleblowing (Draft Local Audit Bill ad hoc Committee 2013; see also Parliament and
Constitution Centre 2013b).
While the Audit Commission retains a xed-term residual role, all external
audit work was transferred to the private sector in 10 audit contract areas during
2012. The Bill will require all councils to tender for their own audits, set their
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own audit days and set their own rates from 2017. The arrangements will be
subject to the appointment of an independent panel to advise on the choice of
auditor, to the suitability of tendering rms and to professional oversight by the
Financial Reporting Council and by designated professional accountancy bodies.
External auditors may still, in consultation with the independent panel, publish a
PIR but there is no guidance on the time allocated to auditing the control
environment or adherence to ethical standards. A limited number of VFM studies
will be undertaken by the National Audit Ofce which will also take responsibility for audit codes of practice. PIDA responsibilities will end as will the
annual fraud and corruption survey and publication of the results. The future
of the NFI is still unclear although the requirement to provide information to any
future designated body continues; the future of Protecting the Public Purse
reports remains a discretionary government commitment.
In understanding the implications of these decisions for the roads, it is also
important to note the wider range of initiatives impacting on local government,
including imposing funding cuts, changes in relation to the provision of education, benets and social housing, proposing a revised planning framework, and
so on. For example internal council resources are diminishing with the creation
of a single fraud investigation service (SFIS) by the DWP. When all claimants
are migrated onto the Universal Credit by 2017, the DWP will investigate all
benets and tax credit offences, including Housing Benet. Council staff would
be expected either to apply for available vacancies in SFIS or become a full cost
to councils although current predictions5 suggest that many councils are already
downsizing in terms of investigation staff. Where councils may expect to turn to
law enforcement investigators rely on other bodies such as the police to carry
out their work. If they cant secure the support, their work frequently comes to a
halt (Button 2011, p. 254) the cumulative impact of changing police priorities,
from street policing to organised crime, has meant the decline in police fraud
squads and access to specialist staff (Gannon and Doig 2010). As the National
Fraud Authority (NFA) noted: the ght against fraud locally needs to be seen in
the context of a number of changes affecting local authorities. Financial
constraints, the move towards localism, plus the introduction of local auditing
arrangements and a single fraud investigation service to tackle benet fraud
could all make the environment for tackling fraud more challenging. To respond
to this challenge it is necessary for local authorities to ensure that the strategic
response addresses these issues and capitalises on the opportunities that
these future challenges may present (Fighting Fraud Locally Oversight Board
2011, p. 15).
Negotiating the roadworks: strategies, choice and the localism agenda
The abolition of the Audit Commission and the Board has not involved consultation with various stakeholders, nor has a coherent framework been proposed
to take over a number of roles and responsibilities relevant to the roads. This
may reect wider implementation problems already encountered (in local
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government and elsewhere) (which) cast doubt over the Coalitions ability to
push through its nascent, and somewhat eclectic, ideological project (Lowndes
and Pratchett 2012, p. 37). Further, the CSPL, which was particularly
impressed in 2005 with the ethical governance benchmarking work of the
Audit Commission (Committee on Standards in Public Life 2005, p. 5) although
unhappy with some of the more vexatious and disproportionate aspects of the
local government standards regime (Committee on Standards in Public Life
2013, p. 55), had signicant reservations about the inherent robustness of the
new arrangements the Committee has consistently argued that codes need to
be supported by independent scrutiny to support internal systems for maintaining
standards and by the promotion and reinforcement of standards (quoted in
Parliament and Constitution Centre 2013a, p. 3).
Certainly the changes cannot necessarily assume that current arrangements
are fully embedded at local level. A Standards Board survey of standards
committee for 20082009 found that only around one-third of committees or
their chairs met with council leaders, Chief Executives or the full council to
discuss ethical issues and in only 31% of the councils had an executive
member (or senior member where appropriate) been given portfolio responsibility for standards (Standards Board for England 2009, p. 9). Central government has proposed a number of ad hoc initiatives, including the issuing of a
ministerial ten-point anti-fraud plan, requiring councils to release an increasing
amount of council information and thus potentially engaging others to undertake scrutiny roles, including what the minister has termed citizen journalists,
microbloggers and armchair auditors. The NFA has been working with the
Department for Communities and Local Government (DCLG) and the
National Audit Ofce (NAO), in the light of new auditing arrangement legislation, to advocate for the introduction of a duty by auditors to make an assessment of the adequacy of anti-fraud arrangements. External auditors should
make themselves aware of the recommendations to local authorities in
Fighting Fraud Locally as part of the current arrangements and current Code
of Audit Practice, to ensure that audited bodies have in place a system of
internal control (Fighting Fraud Locally Oversight Board 2011, p. 22).
More generally, the engagement of the NFA at local level does represent a new
(and external) source of guidance and facilitation specically in support of the
control environment and particularly in relation to fraud. Developing new
approaches to addressing fraud in both public and private sectors have been on
the governments agenda since 2005. The then Labour government initiated a
review process to produce an evidenced strategy response to concerns over the
costs of fraud, its use to fund other crimes, such as organised crime and terrorism
and the opportunities for new types of fraud crimes opened up by new technology such as identity and internet fraud. A national review (Fraud Review 2006)
proposed a number of institutional reforms to coordinate measurement, reporting
and intelligence, promotion of prevention good practice, more innovative sanctions and more public/private partnerships; this included an advisory agency, the
National Fraud Strategic Authority (NFSA, later renamed the NFA).
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In 2011, the NFA, which also issues an annual cost of fraud indicator,
published the Fighting Fraud Locally Strategy with three main objectives; an
improved recognition of the risk of fraud, better prevention and detection and
more effective sanctions, including asset recovery. The reforms proposed to
deliver the strategy included the use of risk assessments, removal of barriers to
information sharing, legislating for greater investigative powers, greater use of
data analytics and nancial investigations, continued professionalisation of training and more joined-up working. In practice, and in the absence of funding or
other reforms, the main roles of the NFA have been awareness-raising and
dissemination of good practice, as well as coordinating and facilitating local
initiatives. These have included increased vetting of council staff, the use of datamatching across internal databases (such as the SNAP [Synchronising Names
and Addresses of People] initiative by Ealing Council to identify fraudulent
council tax claims), promoting awareness among staff and the public (for
which Stoke council won a 2012 award), and undertaking peer reviews and
risk assessments. Externally, councils are encouraged to use private sector and
professional resources and partnership working. The latter have included joint
teams (such as the 14-agency Margate Task Force) or addressing common issues
(such as addressing unlawful subletting of social housing across Bexley,
Bromley, Lewisham and Southwark) and working with other agencies on sanctions (such as the use of asset recovery under the Proceeds of Crime legislation
used by the council and police in Eneld).
Many of the initiatives in developing new approaches to maintaining the control
environment reect how, as is argued elsewhere, nancial and other constraints to
organisational resilience are not insurmountable, and can be overcome by digging deep, drawing upon existing resources and capabilities and exhibiting greater
ambition and imagination (Shaw 2012, p. 297). Indeed, the Fighting Fraud
Locally Strategy argues that at a time of unprecedented change and fundamental
alterations to the counter fraud environment it is time to introduce new arrangements to ensure that local government has a resilient response to the changed
conditions (Fighting Fraud Locally Oversight Board 2011, p. 6). On the other
hand, the responses involve a limited number of councils, with the resources,
commitment or common purpose to act. The work relates primarily to fraud with
much less emphasis on corruption and conict of interest and thus towards a
more basic and limited control environment. This in turn will still require the
deployment of resources and expertise to provide effective and proportionate
defences against emerging fraud risks, including business rates, Social Fund and
Local welfare Assistance, Right to Buy discounts, Local Council Tax Support,
schools and grants (Audit Commission 2012, p. 5) and respond to conict of
interest risks as a consequence of, for example, the Localism agenda on planning
and development.
Where the main concerns must lie are with the absence of any incentive,
guidance or monitoring of the high road, both in itself and its role in relation to
the control environment, as the CSPL warned in 2013: the current requirement
is instead to ensure that ethical standards are addressed actively at an
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organisational level across the public sector, and indeed more widelyEthical
standards should be deeply embedded in governance and other organisational
processes so that they become an integral part of the way things are done
around here and so that individual behaviour which does not meet those
standards is challenged (Committee on Standards in Public Life, 2013, p. 4).
While it is unarguable that strong leadership as an understandable and appropriate response to the changing needs of local and national politics (Bochel and
Bochel 2010, p. 735), much will now depend not only on the commitment of
local leadership but also on their understanding of the value of, and interrelationship between, both roads; the current practitioner view is that a signicant risk
arises where the real culture of an organisation differs from the anti-fraud
policies, processes and formally declared organisational values. An environment
which tolerates the non-implementation, or bypassing, of procedures may provide encouragement to those who are motivated to commit fraud and may
facilitate corrupt behaviour (CIFAS/NFA 2012, p. 7).
The concerns raise a number of practitioner issues and areas of future research.
One issue is whether councils focus solely on the reduction of fraud losses, and
do so through a technical and procedural approach based on the strategy, rather
than approach fraud, corruption and conict of interest as part of both a low- and
a high-road approach. An associated issue concerns the implications of, as
examples of current Fighting Fraud Locally initiatives suggest, differing levels
of resource or commitment to both roads which do not necessarily simply reect
responses to local conditions. This raises a more general question of the potential
consequences of the removal of the comprehensive audit regime making it
difcult, if not impossible for localities to be benchmarked or compared
(Lowndes and Pratchett 2012, p. 36). Differing approaches also require means
to distinguish between malpractice or mismanagement in poor governance, and
poor ethical standards and the need for research to build up a greater understanding of how and at what stage poor standards of conduct and behaviour can
begin to have a negative impact on the delivery of public services. We need to
know more about whether poor ethical governance will eventually adversely
affect performance: if so, it would be useful to know more about the degree of
governance problems that is likely to trigger service failures, and the timescales
involved (Audit Commission 2005, pp. 69). Another issue concerns responsibilities for ensuring compliance with the requirements of the Localism Act,
particularly where councils may be ill equipped to deal with ethical issues
when they arise or where there may be a reluctance to challenge instances of
unethical behaviour, particularly when the instance is perpetrated by a party with
a long tradition of ruling the council (or, to put it differently), there may be a
reluctance to challenge the existing cultural norms accepted by the authority
(Hunt 2005, p. 7). Finally, Fighting Fraud Locally initiatives already raise the
wider question of who will fund the capacity or commitment to continue along
the low and high roads at a time of organisational change and nancial constraints; self regulation (whatever form it eventually takes) is unlikely to come
cheap. To be effective it will require considerable investment in gathering robust
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performance data and equipping local politicians and voters with the knowledge
and skills they will need to interpret information and use it to hold services
to account. It remains to be seen whether local authorities facing massive
budget pressures will be willing to take on these additional burdens (Martin
2011, p. 15).
Conclusion
English local governments capacity and commitment to address fraud, corruption and conict of interest has developed since the nineteenth century, rst, in
terms of a low road of a control environment and, much more recently, in terms
of a high road of an ethical governance framework. Regulators and other
agencies have argued for the value in the latter in ensuring an effective control
environment and also in addressing the opportunity and incentives for fraud,
corruption and conict of interest, and the wider conduct of council business,
with a preventative and compliance approach. The Localism agenda has largely
ended external scrutiny and support for both roads, returning most of the
responsibility to the local level, although the Fighting Fraud Locally strategy
provides councils with both guidance and facilitation specically in relation to
fraud.
The various initiatives promoted by the strategy are to be welcomed but the
commitment of time, resources and expertise to develop control and compliance
environments to deal with dishonest and potentially dishonest staff and public
begs the question of how much more effective, and cost-effective, would these
environments be if councils devoted the same effort to developing cultures that
identify and encourage honesty and compliance?
The Localism agenda also raises signicant issues for local leadership and for
the the effectiveness of self regulation by either individual authorities or the
local government sector as a whole Effective self regulation by individual
councils implies a need for councillors to make informed and honest assessments
of the performance of their councils (Martin 2011, pp. 1314). It is too early
to assess whether councils will continue the journey along both roads at the same
rate and with the same drive but the roadworks thrown up by the Localism
agenda will be a major test of local capacity and commitment to maintain the
journey and direction of travel.
Notes on contributor
Alan Doig is Visiting Professor at Newcastle Business School, Northumbria University,
and Honorary Senior Research Fellow, International Development Department, University
of Birmingham. Previously, he was Professor of Public Services Management at Liverpool
and Teesside Business Schools. He was a board member for Standards for England from
2001 to 2005 and is a board member of the North-east Fraud Forum. He has written
extensively on fraud, corruption and public ethics. His last book was Fraud: The CounterFraud Practitioners Handbook, published by Gower in 2012.
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A. Doig
Notes
1. There are also some 10,000 parish and town councillors with 100,000 elected councillors and an overall expenditure of 500 million.
2. The article draws on academic and practitioner material, and interviews with relevant
agencies, during 2012 and 2013; the author is very grateful for the time, information
and comments from the staff involved.
3. Rohr was concerned that ethics training should not give the impression that ethical
behaviour was about staying out of trying out of trouble rather than reecting regime
values. Social equity is dened by the US National Academy of Public Administration
as the fair, just and equitable management of all institutions serving the public directly
or by contract; the fair, just and equitable distribution of public services and implementation of public policy; and the commitment to promote fairness, justice and equity
in the formation of public policy (see www.napawash.org).
4. These are: auditors are independent of the audited body; the scope of auditors work
covers not only the audit of nancial statements, but also regularity (legality), propriety (probity) and use of resources (value for money), and auditors may report widely to
the public, councillors and other key stakeholders.
5. LAIOG, the association representing local government investigators, noted in a
September 2012 survey of members in southern England that 18% of existing establishment had already been lost.
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