AUDITORS have said they no longer have ‘serious’ concerns over a council placed in special measures because of its poor leadership. 

Sandwell Council’s external auditors Grant Thornton said they are willing to remove a series of directives built to force improvements after the authority was placed in special measures and under the control of commissioners two years ago.

The auditors said the three statutory recommendations – which Sandwell Council was legally forced to address – can now be ‘lifted’ after “appropriate” progress was found to have been made during a follow-up review last year.

However, auditors still raised concerns about rising costs and increasing delays to the council’s multi-million-pound switch to HR and finance software Oracle Fusion and that “significant improvements” still needed to be made in the council’s finance department.

The council could move out of government intervention next month – with a decision expected to be made by local government secretary Michael Gove when the original two-year intervention comes to an end.

The council’s leader Cllr Kerrie Carmichael said: “Grant Thornton’s findings and the lifting of the statutory recommendations represents a significant milestone in the council’s improvement journey towards ending government intervention, and is further evidence that the council continues to improve over time.”

In its latest audit, Grant Thornton said Sandwell Council still needed to “significantly improve” how it produced financial statements in one worrying recommendation by auditors Grant Thornton and “significant progress” needed to be made in the council’s financial team if it were to become “fully effective.”

Auditors said the council’s switch to planning and finance software Oracle Fusion – what has often been described in cabinet papers as a “key component” of Sandwell’s ‘improvement plan’ – has continued to face “delays and increased costs” despite the focus.

“The risks associated with poor and ineffective implementation [of Oracle Fusion] remain significant,” Grant Thornton said.

The auditors said Sandwell Council should also keep focused on “operational and financial challenges” at Sandwell Children’s Trust – which was set up to run children’s services on behalf of Sandwell Council – following more than a decade of ‘inadequate’ ratings from Ofsted.

A report, which will be discussed by Sandwell Council’s cabinet on February 7, said Grant Thornton had told the authority it should “retain corporate focus and attention on key service and operational risks, in particular the implementation of Oracle Fusion, place-based working with Sandwell Children’s Trust and the effective management of its operational and financial challenges, industrial action in the waste service, putting a clear plan in place for the subsidy to Sandwell Leisure Trust being eliminated, financial statement production and reducing reliance on the level of interim appointments in the finance team.”

Auditors said the council’s Labour cabinet and senior leadership were “working well” – and even “maturely” – but there was “still work to be done” on the council’s medium-term budget.

Auditors warned that the council’s planned restructure would still come with risks.

Last July, the government commissioners revealed they were beginning to ‘step back’ after Sandwell Council had made “considerable progress.”

This came nearly two years after Grant Thornton made the rare move to issue three statutory recommendations to Sandwell Council over “significant weaknesses” in the council’s leadership – bluntly stating that leading councillors and senior managers needed to ‘get a grip’ of a growing list of long-standing service issues including a children’s services in special measures, a failing IT system and its poor and fledgling waste deal with Serco.

The audit revealed a “deeply troubling picture of mismanagement and of ineffective scrutiny and accountability arrangements” at the council. The review also revealed concerns with relationships between councillors and staff – with the authority needing to show that it could work together and show a “zero-tolerance approach to inappropriate behaviour.”