Local Government Association Corporate Peer Challenge progress review report

Executive summary

The breadth and depth of activity undertaken by Gateshead Council in response to the CPC recommendations is commendable. Out of the CPC's ten recommendations, the council developed a detailed action plan comprising of forty individual actions. Of these, 85 per cent are currently RAG-rated 'green' and progressing as planned, 15 per cent are rated 'amber', indicating areas requiring further attention, and zero per cent are rated 'red', meaning no actions have failed to progress.

This progress has been achieved whilst navigating unexpected events, including a cyber incident and major highways closure, as well as maintaining core service delivery. This includes securing several positive inspection outcomes from Ofsted (Good), Care Quality Commission (Good), and Regulator of Social Housing (C2).

Gateshead Council is focused on the right priorities to drive positive change for the organisation and in response to the CPC recommendations. Whilst positive progress is evident, many actions remain underway and yet to be completed. This is to be expected given the nature of organisational change, which takes time to embed and deliver results. However, maintaining momentum and ensuring the actions are fully delivered will be vital to achieving the intended improvements.

In particular, the peer team recognised and commended progress in relation to the:

• strengthened accountability, corporate grip, and clearer strategic direction, evident across parts of the organisation
• significant and positive impact of the chief executive's leadership in driving improvement and change across the council

There were areas where Gateshead's actions in response to the CPC were not as advanced, or the impact of them less clear. To sustain and accelerate progress, the peer team encouraged further focus on:

• enhancing longer-term financial planning and demand management, particularly in the context of three-year financial settlements
• continuing to more closely integrate service and financial planning in line with the corporate plan to strengthen strategic coherence
• continuing to improve governance arrangements, including expediting the speed of political decision-making processes

Theme 1: Vision, place and communications

Recommendation

Future role of the council: Define and communicate, in partnership with councillors, staff, partners and communities, Gateshead Council's vision and approach for the future role of the council, including within this:

• establishing an inclusive borough-wide place narrative and inclusive economic strategy reflective of the full borough

• developing a strategy for place based working and community engagement

• developing a partnership working framework

Gateshead has taken significant steps to shape and communicate its vision for the council's future role. This includes progress on proposals to bring forward the Quays development and a refreshed regeneration plan focused on maximising community benefit. As part of a wider regional strategy, the council is working with Newcastle City Council (NCC) and the North East Combined Authority (NECA) to establish a mayoral development zone, and has also begun preparing a joint local plan with NCC.

Strengthening partnership working has also been a key focus. The Gateshead Strategic Partnership has been re-established to develop place-based priorities, and a recent 'state of the nation' event was held as a platform to energise partnership and community collaboration to shape Gateshead's future collectively. The council is also developing a community-based support strategy, with phase one complete and phase two underway.

The peer team commended the breadth of activity and heard consistent feedback about a more coherent, joined-up approach to regeneration and partnership working, with a stronger 'golden thread' linking initiatives to the corporate plan. Staff shared positive views and reported that partners had responded well to the refreshed regeneration strategy and renewed partnership approach. Additionally, the peer team heard there is now better corporate coordination around community engagement.

Recommendation:

Communications: Accelerate the development of the Communications Strategy and review the council's capacity to deliver it.

Gateshead has made concerted efforts to strengthen its communications. Whilst progress has taken longer than initially planned - partly due to staffing changes - meaningful steps have been made. These include reviewing the communications approach, investing in team structure, appointing a cabinet portfolio holder for communications, and developing a draft corporate communications strategy, due for implementation in November 2025.

The peer team heard widespread praise for the tangible improvements in Gateshead's external communications, the impact of the new portfolio holder, and the positive shift these changes have made to public perception. Internal communications were also reportedly clearer, with staff welcoming more consistent messaging. While progress is evident, there is inevitably more to do, and implementing the corporate communications strategy will be key to sustaining and building on this momentum. The recent appointment of a new Head of Communications should also assist in driving this forward.

It is also positive that a residents' survey has recently been carried out as part of the council's commitment to community engagement. To continue to strengthen communications, the council should provide timely feedback on how residents' views are being acted upon, to demonstrate a clear 'you said, we did' and/or 'you said, we will' approach.

Theme 2: Governance and corporate grip

Recommendation:

Governance: Undertake a governance review that seeks to:

• address the speed of decision making

• strengthen the role of scrutiny, including pre-decision scrutiny

• strengthen councillor - officer relationships through more effective communication and clarifying expectations, roles and behaviours

• review decision-making processes and scheme of delegation

Gateshead has taken forward a range of actions to strengthen governance and decision-making, with much of the work ongoing and expected to conclude by spring 2026. On the officer side, this includes a decision-making accountability (DMA) review of organisational structures. A comprehensive review of the constitution is planned - focusing on scrutiny, cabinet roles, and the scheme of delegation - alongside Centre for Governance and Scrutiny (CfGS) guidance to strengthen scrutiny and pre-decision processes. Both are due for implementation by April 2026.

Staff the peer team spoke with reflected that accountability has improved, leading to quicker and more confident officer decision-making. The implementation of phase two of the DMA will play a key role in embedding these improvements more deeply. However, progress in accelerating elected member decision-making has not yet advanced significantly and remains a concern for the peer team. The peer team heard that wider governance improvements - particularly in the speed of decision-making, the effectiveness of scrutiny, and clarity in member and officer roles and relationships - remain areas requiring continued focus. It is therefore important that the council responds constructively and in a timely manner to the CfGS report to help drive these changes forward. 

Recommendation:

Corporate strategic framework: Establish a strategic framework with central resource capacity to coordinate, support, and monitor the delivery of the council's corporate plan. This should include a refreshed council-wide performance, governance and risk management approach aligned to an outcomes framework and 'time to be different' organisational change programme.

Gateshead has had a keen focus on putting in place the necessary strategic framework and capacity to strengthen its approach to performance, governance, and risk management. Activity undertaken includes the establishment of a programme management office (PMO) to lead the corporate change programme, oversight of corporate reviews by the corporate management team (CMT), and the development of a consistent, organisation-wide project management approach. Alongside this, a senior corporate policy post has been identified within the future organisational structure. A revised performance management and improvement framework has been in place since April 2025, with regular reporting to the CMT and ongoing co-design of key performance indicators with elected members.

The peer team received consistent and widespread feedback indicating a stronger corporate grip and a clearer strategic direction across the organisation since the CPC. This is reflected in the introduction of service plans, with clear lines of accountability for delivery. Increased staff engagement and consultation have also been welcomed and cited as contributing to greater organisational clarity. The peer team commended the momentum and impact achieved to bring these changes about.

The peer team heard that performance management has improved, with examples of the elected member task and finish group focused on this, and learning from other councils to bring forward recommendations so the council can further develop its performance management. The development of the performance reporting metrics is an iterative process, and there is understandably further work to do to continue to refine these. 

The chief executive's leadership has been pivotal in driving this council-wide change and in strengthening the strategic framework. To ensure this progress is sustained and embedded, it will be important for this responsibility to be shared across the senior political and officer leadership to ensure change is widely embedded and sustainable beyond any one individual.

Recommendation:

Approach to risk: Review and refresh approach to corporate risk management. A more robust approach needs to include clear lines of accountability and ownership, with continuous monitoring of the risk profiles of major projects, including Gateshead Quays and the council's housing improvement plan, to ensure compliance with the required standards as set out by the Regulator of Social Housing.

In response to this recommendation, a review of Gateshead's corporate risk management approach has been completed and implemented. This has included a revised strategic risk register and the adoption of an updated corporate risk framework, which has been used to assess the 2026 draft budget options. The refreshed PMO approach is now being applied to the regeneration programme and other major investments. Additionally, plans are in place to procure a corporate risk system to better integrate performance and budget data, enhancing risk assessment.

The peer team heard that some aspects of recent changes are already having a tangible impact - for example, impact assessments are contributing positively, and there is growing internal confidence in project delivery across regeneration and other areas. While progress has been made, Gateshead still has work to do to strengthen its risk management. Greater ownership by elected members through regular cabinet oversight of strategic risk is one area for improvement. The peer team encourages continued efforts to embed a more robust approach. 

Theme 3: Financial planning and management

Recommendation:

Urgently develop a savings plan - which is understood across the council and corporately owned by cabinet and corporate management team - to:

• address the full extent of the financial gap within the MTFS

• reduce reliance on the use of reserves in budget planning

• ensure there is adequate understanding of future demand pressures built into the budget

Gateshead has taken several steps to strengthen financial management, including the development of some savings plans aligned with corporate reviews, with further reviews in the pipeline. A refreshed Medium Term Financial Strategy (MTFS) was considered by cabinet in September, and work is underway on budget setting and savings identification for 2026/27. In addition, phase one of the DMA review has been completed, with phase two set to commence in the autumn, aiming to deliver efficiencies and enhance service delivery.

The peer team recognised the positive progress made, in particularly highlighting the evidence of greater collective ownership of the budget and its impact. The use of impact assessments in budget proposals and CMT ownership of the budget were cited as positive examples.

Significant work has been undertaken to identify options to address the £16 million savings required in 2026/27. It was clear to the peer team that cabinet members understand the scale of the challenge and the difficult decisions ahead. Further work however is needed to strengthen longer-term financial planning and demand management, particularly with a £42 million projected gap over the next five years, and a forecast 2025/26 in-year overspend of £1.6 million.

The peer team encourages Gateshead to start developing savings plans beyond 2026/27, recognising the long lead-in time often needed to achieve meaningful savings. It will be important to start now to ensure that any interventions - whether based on efficiencies, demand management, or transformation - are sufficiently robust and deliverable before being factored into the financial planning. Similarly, with the Government committing to a multi-year financial settlement from 2026/27, there would be benefit in Gateshead moving to three-year budget plans to enhance the council's ability to plan beyond the immediate term.

Reducing reliance on reserves will also be critical. While the peer team advised ending the use of reserves to support budget setting, the council has agreed to an additional final planned use in 2026/27 to support the transition ahead of expected transformation benefits. Gateshead does have a plan to cease reliance on reserves - which is positive - albeit on a slightly extended timescale.

Recommendation:

Accountability: Increase the frequency and connectivity of financial and performance monitoring and reporting. Ensure clearer lines of accountability for both the revenue budget and the capital programme, that also encompasses an assessment of risk.

A range of activity has been undertaken, or is planned, to strengthen accountability and the connectivity of financial and performance monitoring and reporting. A more robust and integrated performance and risk management framework has been implemented, including additional reporting to the corporate resources overview and scrutiny committee. The strategic budget planning cycle has also been updated to better align financial, corporate, and service planning, with earlier engagement on savings plans for the 2026/27 budget. A fundamental review of capital commitments is also planned to ensure alignment with corporate priorities and the asset management plan, supported by the recently strengthened PMO and business case process.

The peer team welcomed the clearer alignment between the budget, service planning, and political priorities, alongside improved financial reporting to overview and scrutiny to support stronger member engagement and challenge. The peer team heard that there is also now greater alignment between the revenue budget, capital programme, and the corporate plan. This will be important to ensure that capital investment supports delivery of strategic corporate plan objectives. There is nevertheless further work needed to fully integrate service and financial planning at both strategic and operational levels. The peer team heard for example that the council stopped various environment services and could not deliver them well enough, despite them being a priority for councillors. The council has however since put some investment back into those services, given their priority. Reducing costs in such work requires more strategic thinking about future services and long-term planning with clear desired outcomes.

In terms of the capital programme, momentum is clearly building through Gateshead's regeneration programme, with ambitious plans to revitalise the town centres, communities, and riverside. The peer team heard that the strengthened PMO and business case process is already having a positive impact, with increased confidence in project delivery. They nevertheless emphasised the importance of having clear funding plans in place to support these ambitions, and for the council to remain mindful that delivery may require the reprioritisation of other capital commitments to ensure affordability and manage borrowing responsibly.

Theme 4: Culture and transformation

Recommendation:

Culture: Drive a programme of cultural and behavioural change to foster a joined up 'one council' approach and culture of openness, clear communication, and constructive challenge. This should include coproduced corporate values and behaviours with councillors and staff.

A significant amount of activity has been undertaken to foster a joined-up 'one council' approach. The 'time to be different' cultural change programme has expanded, and an organisational development and leadership programme is under development. A refreshed set of corporate values and a new behaviours framework - co-designed with councillors and staff - will launch in Autumn 2025. This builds on the introduction of a revised appraisal and development process in April, alongside a new strategic planning cycle now in place. In addition, an equality, diversity and improvement (EDI) Board has been established to coordinate the implementation of the corporate EDI policy and workforce strategy.

The peer team reflected positively on the wide-ranging activity underway to build strong foundations for cultural change, particularly highlighting the co-design of corporate values with councillors and staff. Peers heard that the organisational development work has been broadly welcomed by staff, including the leadership development programme, the introduction of bi-monthly officer leadership meetings, and recent changes to the appraisal process. These initiatives represent important steps toward embedding a more collaborative and consistent culture. The leadership of the chief executive, supported by the leader, has been central to driving this progress. Looking ahead, it will be important to consider how this leadership can be more broadly shared across political and officer roles to support continued progress and resilience.

Recommendation:

Consistency: Ensure consistent and standardised application of policy and procedures across the council, including people and performance management. Set and enforce clear standards for flexible, office, hybrid and remote working that supports an effective corporate culture and service delivery.

Gateshead has made concerted efforts to drive consistency and standardised application of policy and procedures across the council. Steps taken have included the implementation of an updated smarter working framework (SWF) implementing revised expectations around hybrid working, and with changes to the flexitime policy to follow. Refreshed corporate protocols have also been adopted, supporting a wider update to the council's constitution and a new corporate behaviours framework. To embed these changes, a programme of learning and development activity is underway.

The peer team heard that the introduction of the SWF is helping to set clearer expectations and promote a more consistent approach across the council, with early signs of positive impact. At the same time, they heard that anxiety remains for some staff, which is to be expected as these changes continue to bed-in. Notably, the uptake of appraisals has increased significantly - from 40 per cent to 80 per cent - indicating growing consistency with the council's performance and development processes. This will help strengthen alignment with the council's 'golden thread' - ensuring that individual performance and development are more clearly connected to organisational priorities. While this progress within such a short timeframe is impressive, there is clearly more to do, and Gateshead remains committed to building on this momentum.

Recommendation:

Transformation capacity: Ensure the council has sufficient corporate capacity to support the delivery of Gateshead's priorities and its change programme.

Ensuring Gateshead has sufficient corporate capacity to deliver its priorities and change programme has been a key focus over the past 11 months. This has led to the establishment of a PMO, with further recruitment underway to strengthen deliver capacity, alongside a commitment to appoint a corporate lead for performance and transformation. Financial resources to support corporate reviews have been identified and reflected in the MTFS to ensure sustained investment in transformation.

The peer team welcomed Gateshead's efforts to strengthen corporate capacity and the recognition of the PMO as a key foundation for delivering its transformation programme. These changes are already having a positive impact, with more robust processes in place. Ensuring Gateshead maintains sufficient capacity will be critical to delivering its savings plans and transformation ambitions. As the transformation programme becomes more firmly established, Gateshead can then unlock further opportunities to drive efficiencies, identify improvements, and realise both financial and non-financial benefits.

The corporate reviews will be essential in shaping the council's future operating model. The peer team encouraged the council to assure itself that through its corporate reviews it is sufficiently prioritising the 'big wins' to ensure maximum benefit and has the capacity required to deliver the full scale of transformation.