Local Government & Councils Non-Executive Director Recruitment

Local Government NED & Board Member Recruitment

NED Capital places non-executive directors and independent board members for local authority-owned companies, arm’s length organisations, leisure and cultural trusts, economic development bodies and other public sector governance organisations across the UK. Local government governance spans a wide range of organisation types — from wholly-owned local authority trading companies operating in commercial markets to arms-length management organisations managing social housing stock — each with specific governance requirements, accountability frameworks and board member profiles. Adrian Lawrence FCA, founder of NED Capital and Fellow of the ICAEW, leads every local government board search personally.

Call 0203 137 2496 or email recruitment@nedcapital.co.uk to discuss a local government board member search.

Local Authority Trading Companies (LATCos)

Local authority trading companies — companies wholly owned by one or more local authorities, established to deliver commercial services — represent the most active category of local government board member demand. LATCos are private limited companies governed by the Companies Act 2006 in the same way as any other limited company, but with the council as the sole or majority shareholder and with specific governance accountability to the council through its shareholder function.

The types of service delivered through LATCo structures are diverse: local authority housing development companies (building homes for market sale and affordable rent on council-owned land); energy companies (purchasing and selling energy on behalf of the council and local residents); commercial property companies (managing the council’s commercial property portfolio); waste and recycling companies; construction and maintenance companies; and various other commercial activities that councils have chosen to deliver through corporate rather than direct service delivery structures.

The governance of a LATCo has two distinct dimensions. As a private company, the LATCo board is accountable to its shareholders — primarily the council — for financial performance, legal compliance and the achievement of the company’s commercial objectives. As a council-owned entity, the LATCo is also accountable to the council’s democratic governance processes — its business plan may be subject to Full Council approval, its major decisions may require shareholder consent and its financial performance is subject to scrutiny by the council’s Overview and Scrutiny Committee. Independent NEDs on LATCo boards must understand both dimensions of this accountability and must navigate the tension between commercial governance and public accountability that is specific to the LATCo governance environment.

The Local Authority (Companies) Order 2020 — which replaced the 1995 Order — sets out the framework for local authority participation in companies, including the requirements for the council to have a shareholder representative on the board and the need for the company to report to the council in accordance with the council’s requirements. Board members of LATCos need to understand this regulatory framework alongside the Companies Act director duties that apply to them as directors of a limited company.

The Section 114 Context — Governance in Financially Stressed Councils

The governance environment for local government-related organisations has been significantly affected by the financial difficulties facing a substantial number of local authorities. Section 114 notices — issued by the council’s Section 151 officer (the chief finance officer) when the council has insufficient resources to meet its expenditure obligations — have been issued by multiple councils in recent years, including Birmingham City Council (2021, the largest local authority financial failure in UK history, arising from equal pay liabilities of approximately £760 million), Nottingham City Council, Woking Borough Council (speculative property investments), Thurrock Borough Council (similar investment losses) and Croydon London Borough Council (repeated S114 notices).

For board members of LATCos and arm’s length bodies established by financially stressed councils, the Section 114 context creates specific governance challenges. The parent council’s financial difficulties may affect the company’s ability to access capital, may result in the council seeking to withdraw resources from the company or may create pressure on the company’s governance to prioritise the council’s financial needs over the company’s commercial interests. Board members in this environment need to understand their Companies Act duties — particularly the duty to promote the success of the company for the benefit of its members (Section 172) — and how those duties interact with the council’s shareholder demands in a financially stressed context.

The Nolan Principles — selflessness, integrity, objectivity, accountability, openness, honesty and leadership — provide the ethical governance framework that underpins public sector governance. Board members of local government organisations are expected to demonstrate the Nolan Principles in their governance conduct, and any perception that a board member is prioritising personal interests or political considerations over their governance duties creates specific reputational and governance risks in the public sector context.

Arm’s Length Management Organisations (ALMOs)

Arms Length Management Organisations were established by local authorities to manage their housing stock at arm’s length from the council — typically with a board comprising councillor representatives, tenant representatives and independent board members. Many ALMOs have since been wound up as councils have brought housing management back in-house, but a significant number continue to operate as the housing management structure for council stock.

ALMO board governance has specific characteristics. The presence of tenant board members — elected by council tenants to represent their interests on the ALMO board — is a distinctive governance dynamic that requires independent board members who can work effectively in a multi-stakeholder governance environment. The Regulator of Social Housing’s consumer standards apply to ALMOs where they manage social housing, creating the same RSH governance requirements described on our Housing Association Board Member Search page. Finance-qualified independent board members, legal expertise (particularly in housing law and tenancy management) and people governance experience are the most consistently sought profiles for ALMO boards.

Leisure and Cultural Trusts

Many councils have transferred the operation of leisure centres, swimming pools, theatres, museums and other cultural facilities to charitable trusts — organisations that operate these facilities on behalf of the council under a management agreement, with the governance advantages of charitable status (VAT treatment, business rates relief, gift aid eligibility) and the operational flexibility of independent management.

Leisure and cultural trust boards have specific governance requirements. As charities, they are regulated by the Charity Commission — their trustees must comply with charity law and the Charity Governance Code alongside the management agreement obligations to the council. The trust’s accountability to the council (which typically provides the capital assets and a management fee) alongside its accountability to its charitable beneficiaries creates a governance complexity that independent board members must understand. Finance-qualified trustees, legal expertise (charity law and employment law for the significant workforces that leisure facilities employ) and commercial expertise (income generation from non-council sources, digital fitness and wellness platforms) are consistently sought by leisure trust boards.

Economic Development Companies and Growth Bodies

Economic development companies — established by councils, combined authorities or groups of councils to drive local economic growth — operate as companies or charitable bodies depending on their specific structure and activities. These organisations — urban development corporations, regeneration companies, inward investment bodies and business support organisations — have boards that typically combine council representation with independent business community members.

The governance of economic development companies has evolved significantly as Local Enterprise Partnerships (LEPs) have been absorbed into Mayoral Combined Authorities and local authority economic development functions. The emergence of Local Growth Plans and the devolution settlements for the major combined authority regions (Greater Manchester, West Midlands, West Yorkshire, South Yorkshire, Tees Valley, Liverpool City Region and others) has created a new set of governance bodies with board member requirements across economic development, transport, skills and regeneration.

Board members of economic development bodies need: commercial business experience applicable to the specific economic development agenda; understanding of the public sector accountability framework (CIPFA governance standards, Treasury Green Book economic appraisal requirements for public investment); and the ability to engage credibly with both the public sector partners and the private sector businesses that these organisations seek to attract and develop.

Combined Authority and Mayoral Governance

The expansion of combined authorities and elected mayors across England’s major cities has created a new tier of governance bodies with board member requirements. Combined authorities — governing transport, economic development, skills and increasingly health — have Overview and Scrutiny Committees, audit committees and various delivery bodies that require independent governance expertise.

The governance of combined authorities is complex — the combined authority operates across multiple local authority areas, with governance accountability to multiple council leaders and to the elected mayor where one exists. Board members of combined authority bodies need to understand this multi-principal governance structure and must be able to navigate the political dynamics of governance across multiple council boundaries.

Public Sector Governance Standards — The Nolan Principles

All governance roles in local government and public sector organisations are underpinned by the Nolan Principles — the Seven Principles of Public Life established by the Committee on Standards in Public Life in 1995. These principles — selflessness, integrity, objectivity, accountability, openness, honesty and leadership — define the ethical standard expected of everyone in public life, including board members of local authority-owned companies and arm’s length bodies.

Board member candidates for local government organisations are assessed against the Nolan Principles as well as their specific governance skills. The public accountability of local government organisations — and the political scrutiny that their activities attract — means that board members whose personal conduct does not reflect the Nolan Principles create governance and reputational risk for the organisation and its council parent. This assessment dimension is specific to public sector governance and does not apply to commercial company NED appointments in the same way.

Local Government Board Member Profiles

Finance and commercial expertise. Finance-qualified board members — particularly those with experience of public sector financial management (CIPFA-qualified, or with local authority finance experience) — are consistently sought across LATCos, ALMOs and leisure trusts. The specific financial accounting of local authority companies — the intersection of Companies Act financial reporting with public sector treasury management, grant accounting and capital programme governance — requires board members who understand both commercial and public sector financial frameworks.

Legal expertise. Housing law, charity law, employment law, public procurement law and planning law are the most commonly required legal expertise areas for local government board appointments. The intersection of public sector obligations and commercial company governance creates specific legal governance complexity that generalist commercial lawyers may not be equipped to address without local government legal experience.

Commercial property and development. For LATCos with significant property development or commercial property management activities, board members with direct property development, estate management or housing development experience provide the governance challenge capability that public sector financial specialists alone cannot.

Public sector governance experience. Board members who have previously served in local government governance roles — as council officers, as ALMO board members, as LEP board members or as governance members of other public sector bodies — bring the public accountability framework understanding that is specific to local government governance and that commercial sector NEDs frequently lack.

Local Government Board Member Fee Benchmarks

Fees for local government board appointments vary significantly by organisation type and size. LATCo independent NEDs: £8,000–£25,000 per annum depending on company revenue and complexity; chairs £20,000–£50,000. ALMO independent board members: £5,000–£15,000; chairs £15,000–£30,000. Leisure and cultural trust trustees: typically unremunerated (charitable status — CCEW authorisation required to pay trustees); chairs of larger leisure trusts £8,000–£20,000 where authorised. Economic development company board members: £5,000–£20,000; chairs £15,000–£35,000.