RBH - Audit Commission Report published

Date published: 18/03/2008

In what is a significant victory for open and transparent governance, and for public accountability of the Council and its various arms length management organisations, the Audit Commission Report into the two failed attempts to recruit a new Chief Executive for Rochdale Boroughwide Housing (RBH), including the behaviour of the recruitment panellists, in particular Chairwoman Gill Walch who was alleged to have caused the abandonment of the second interview process due to inappropriate approaches to other panellists, has been published.

The report makes a number of significant criticisms including failures in communicating with candidates and serious breaches of confidentiality. Also highlighted as significant is a serious lack of trust between the Council and RBH - showing just how disingenuous the rebuttals of this breakdown between the two organisations in official council/RBH statements over the past year have been.

The Audit Commission says on this matter: "It seems to us that wrong perceptions and a low level of mutual trust and confidence are the most serious problems in current working relations. Unresolved tensions between the tenant and independent members of the Board and the Council make it hard to build mutual trust and confidence. This increases uncertainty in working relationships and decision making which consequently increases the risk of disagreement."

The need to appoint a new Chief Executive, along with a new Operations Director, arose due to the Council pressuring the previous Managing and Operations Directors into taking early retirement. The Audit Commission criticises the Council for the manner in which it went about this saying: "the decision to approach the Managing Director and Operations Director to initiate discussions relating to possible early retirement was inappropriate and outside the terms of the Management Agreement. This action also clearly undermines the authority of the Board and compromised the discharge of Board members’ responsibility as company directors".

In what is strong language for a report of this nature, and hence a stinging rebuke of the Council Executive Leadership team, the Audit Commission goes on to conclude about the approach: "The action of the Executive Leadership Team was ill judged, not the right way to commence discussion about a significant but sensitive staffing issue and has made building mutual trust and confidence with Board members more difficult. It seems to us that there is a lack of acceptance of the nature of arms length management exercised through a company and the Board members appointed."

The report is also critical of Gill Walch, who at the time, and until her very recent departure, was the Chairwoman of RBH. Ms Walch was the subject of allegations concerning inappropriate behaviour during the second interview process. The Audit Commission is of the opinion that she "made an error of judgement" in contacting other panellists outside the formal process. The report adds: "This is so even if the motivation was to encourage reaching agreement using her position as Chair. She should not have done so before taking professional advice".

The lengthy report has many recommendations throughout, however, the main conclusion is that mutual trust and confidence must be rebuilt between all parties. The Audit Commission stresses, "there is a firm basis to do this because the underlying performance of Rochdale Boroughwide Housing in managing housing services appears to be good at present".

Gareth Swarbrick, Acting Managing Director of Rochdale Boroughwide Housing thanked the Audit Commission and confirmed that the RBH Board has fully accepted the whole report.

Margaret Carney, Executive Director of Rochdale Council said the authority welcomed the report and would be implementing the recommendations as a priority: "We have received the report and both organisations have agreed with its recommendations. We are now going to be jointly working together to implement them."

Read the full report:

• www.rochdaleonline.co.uk/media/Audit_Commission_Report_March_2008_RBH.pdf