Matt Gladstone: “I can leave my mark”

First-time chief executive Matt Gladstone accepts top job on struggling Peterborough City Council

Resume: Matt Gladstone

• Chief Executive Officer, Peterborough City Council, 2021-present
• Place Executive Director, Barnsley MBC, 2013-21
• Deputy Managing Director and Director of Commissioning, Policy and Performance 2010-13; deputy general manager 2007-10; Performance and Quality Manager 2004-07, Rotherham MBC

Matt Gladstone has taken on the unenviable challenge of leading a unit that has come under more scrutiny in the past five years than almost any other. But he is adamant that despite its misfortunes, the Peterborough City Council “is not broken.”

“We just need a little time to sort it out – it’s not a quick win,” he said.

Mr Gladstone’s top team has been operating under the watchful eye of the government, having been subject to scrutiny by a government-appointed improvement committee since December. Further support is being provided by the Chartered Institute of Public Finance & Accountancy and the Local Government Association and the council has been warned by Minister Kemi Badenoch that statutory intervention is to be expected if the road to recovery fails. This usually takes the form of the government appointing commissioners to take responsibility for municipal services.

Mr Gladstone joined Peterborough as managing director in January, having previously served as place executive director at Barnsley MBC. He took over shortly after the board announced it no longer needed the £13.7m capitalization guideline it was in line for, after plundering its reserves and imposing a moratorium on spending to close the financing gap.

Budget hole

But Peterborough still faces a struggle to balance its books. A shortfall of £27m needs to be made up this financial year, with a gap of £5m already emerging for next year, which the panel warned Mr Gladstone could reach £10 million due to inflation.

The government-commissioned Cipfa review last November described Peterborough’s financial challenges as “significant and urgent”.

Mr Gladstone admits that setting the budget has been “a challenge”. No party has held overall control for the past three years, with the Conservatives relying on the tenuous support of independent councilors to pass decisions.

Mr Gladstone thinks some of the challenges of the board are that it requires “real ambition and a sense of purpose”.

“I’m trying to put in place a clearer sense of priorities and corporate governance now, working with politicians on what we’re trying to achieve here. Stronger decision-making around some of our key priorities and projects is important. »

Mr Gladstone believes Peterborough’s financial outlook has so far been ‘very focused on the annual budgeting process, as opposed to a longer-term approach’. He plans to solve the problem with a “robust and sustainable” three-year plan.

“I’m trying to put in place now a clearer sense of priorities and corporate governance”

The recent “tough spending moratorium” was “necessary to signal a shift in culture and focus; now we need to extend this to a medium-term perspective,” says Gladstone. “Difficult choices still await us. Every council must face this fact. I’m trying to look more now at what’s really important, what we’re trying to achieve here. It’s not just about statutory expenses.

The Cipfa review also said “political uncertainty” in Peterborough is “exacerbated” by the holding of third-party elections, with major parties “still focused on the next election”.

The government wants Peterborough to explore four-year election cycles to give it more political stability, and the council plans to start a political dialogue on the issue.

“It’s what the government expects of us and the Improvement Committee is also doing it,” says Mr Gladstone, who thinks it would give Peterborough the “ability to think longer term”.

Borrow to spend income

In 2019-20, Peterborough was one of the first councils to use a government capitalization directive, allowing it to borrow to fund revenue expenditure. It drew £5.6m in 2019-20 and was then allowed to borrow £4.8m at the start of 2021 and £20m this financial year. But after making “tough choices” the council avoided having to use the last two of those loans.

One such choice was to stop planting spring and summer bedding plants in certain areas to save £50,000 a year, which prompted a backlash from civil society in the city .

Mr Gladstone says officers had to work ‘very hard with politicians to get [savings] proposals put forward quickly, on the back of government orientations”.

“I commend them for that – they have put together a balanced budget. But it was a difficult process. Funding directive approval remains in place should Peterborough require it, and the board currently holds monthly meetings with the Department of Upgrading, Housing and Communities about its finances.

Inflation buffer

The council has created an inflation buffer, with £3.2m recently added to an ‘inflation reserve’, currently worth £4.7m, to cushion the price spike . Asked whether inflationary pressures could spell further turmoil for Peterborough’s finances, Mr Gladstone would not rule out using the capitalization direction in the future. “Our view is that we don’t need any support at the moment.

“The reality is that, as the inflationary picture is rapidly changing, the ripple effect on our contracts could be significant.”

The Improvement Panel is chaired by former Southwark LBC chief Eleanor Kelly and includes former Barking & Dagenham LBC chief Chris Naylor. Mr Gladstone meets with the panel monthly, with “a lot of informal dialogue” between the two.

He says it “highlights a few areas that need improvement.” But the road to improvement will be long, with the panel expected to be in place for “probably another 12 to 18 months”.

Mr Gladstone said the board is “making inroads” on the expert panel’s recommendations on corporate governance, with a new audit committee system now in place with “external chairs”.

Cipfa provides support on the financial structures of certain independent companies. “It’s really helpful to have this mirror in front of us, which gives us an external perspective on the ways we can get things done,” he says.

But Gladstone doesn’t always agree with outside experts. Slough, which is also under government control, is tackling its large debts with a sale of assets worth up to £600m. However, Mr Gladstone objects to what he calls the government’s ‘implied pressure’ for Peterborough to balance its books by selling off major assets.

“The economic return or the community social return that you get on some of these assets is absolutely essential”

The Cipfa review said Peterborough had sold around £35million of its assets over the past five years to ‘ease the financial pressures they have faced’ but still owned 1,821 property assets from worth at least £304m. He urged the council to establish an asset disposal strategy that included the sale of its former town hall which no longer houses the council headquarters.

The Leveling and Regeneration Bill currently going through Parliament includes a clause giving the Secretary of State the power to force individual councils to sell their assets.

Mr Gladstone says that before he became chief there was ‘real pressure on the council [from government] say, ‘you have to have a lot of your assets to reap financial benefits’.

“In my opinion, that would have been naive, because you can only sell it once and then you lose it. The economic return or community social return that you get on some of these assets is absolutely essential. »

Mr Gladstone said the council was exploring the future of its leisure centers and libraries, but had not yet closed any.

Mr Gladstone praises his council’s ‘very positive’ response to covid, and says it is a fast growing town with ‘phenomenal opportunity’.

Her vision now is to ‘balance the books in a different way’, which involves ‘combining a level of growth and aspiration to help balance more prevention-type services – and working differently with partners’ .

“We have to make tough choices about what is really our core business as a consultancy and I’ve learned to do that in line with what local people and businesses want. This is for the Board to take stock of our role and our objective. I can leave my mark and really get things done. It’s exiting. There are many challenges, but we are exploiting them.