A letter to Council Chief Executive Tony Parkinson said ministers from the Department of Leveling, Housing and Communities (DLUHC) have concerns about the local authority.
It adds that Foreign Secretary Michael Gove will examine powers to inspect the council or intervene if there is no improvement.
The Best Value Notice – a notification informing councilors that they are not meeting expectations – has been in effect for 12 months and improvements are expected to come at a significant pace.
In July 2022, a report by auditors at financial firm EY revealed a pervasive lack of trust among city councillors, employees and politicians.
It also found that the appointment of Dave Allan as adviser to Mayor Andy Preston and the £32,000 payments signed by Mr Parkinson to his PR firm were unlawful.
At the time, Mr Parkinson said there was a “deep-seated” political dysfunction and Mr Preston said the culture was toxic with too many “selfish and lazy” councilors.
Three months later, a review carried out by the professional association CIPFA found that the behavior of politicians embarrassed council staff, who reported being bullied and intimidated.
It also highlighted that a clash of cultures resulted in a difficult relationship between Mr Preston and Mr Parkinson, that there was distrust and dysfunction between council staff and politicians, and that officials and elected members used hostile language.
An improvement board has since been set up and councilors have also been involved in working groups to address key issues raised during last year’s reviews. An informal meeting place for politicians was established, cultural workshops were held and a plan for membership/officer engagement was developed.
The Government’s letter to Mr Parkinson read: “The Department expects the authorities to put in place and implement arrangements to ensure continuous improvement and recognizes the steps they have taken to identify the serious issues Mittelbrough and the action plan you have put in place to address them. However, Ministers remain concerned about Middlesbrough’s ability to meet its Best Value Duty.”
DLUHC has instructed the Council to continue its efforts to expeditiously meet the commitments set out in its action plan while clearly defining how success will be measured. It also wants continued efforts to implement cultural change, particularly between Council officials and politicians.
If necessary, the notice period can be extended after the first 12 months or revoked or escalated at any time.
In a joint statement, Mr Parkinson and Mr Preston said: “We remain committed to our corporate governance improvement program and are working with the Chartered Institute of Public Finance and Accountancy (CIPFA) on this work.
“We have already taken steps to address these issues and have put in place an action plan, and we are pleased that the DLUHC recognizes our progress to date.
“We fully recognize the seriousness of the Best Value Notice and are committed to demonstrating the progress that the DLUHC has a right to expect.
“Middlesbrough Council delivers hundreds of services that residents, businesses and visitors to the city rely on. Our staff are doing an excellent job and they have our full support and support.
“Alongside our day-to-day activities, our commitment to ensuring positive cultural and governance change continues.”
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