The Peter Principle and Its Impact on Local Authorities
- truthaboutlocalgov
- Jul 18
- 8 min read
Updated: Jul 23
In the intricate and often politically charged ecosystem of local government, where decisions directly shape the quality of life for millions, the importance of capable, forward-thinking leadership cannot be overstated. Local authorities are the backbone of public service delivery in the UK, responsible for everything from housing and education to waste management, planning, and adult social care. These services are not abstract they touch the lives of residents every single day.
Yet, despite the critical nature of their work, many councils across the country are grappling with a persistent and often overlooked challenge: the Peter Principle. This phenomenon, though subtle in its onset, can have far-reaching consequences for organisational effectiveness, staff morale, and ultimately, the communities these councils serve.
Understanding the Peter Principle
The Peter Principle was first introduced by Canadian educator Dr Laurence J. Peter in his 1969 book The Peter Principle: Why Things Always Go Wrong. Though written over half a century ago, the concept remains strikingly relevant today. It suggests that in hierarchical organisations, employees are frequently promoted based on their performance in their current role, rather than their suitability for the next. Over time, this leads to individuals being elevated to positions in which they are no longer competent what Peter termed their “level of incompetence.”
“In a hierarchy, every employee tends to rise to his level of incompetence.” Dr Laurence J. Peter
This is not a critique of individuals, but of systems. A highly effective housing officer, for example, may be promoted to a managerial role without the necessary leadership training or strategic insight. Similarly, a technically brilliant IT specialist might be elevated to a head of service position, only to struggle with budgeting, stakeholder engagement, or team dynamics. These mismatches, when repeated across departments, create a leadership structure that is ill-equipped to respond to modern challenges. The result? Sluggish decision-making, resistance to innovation, and a workforce that feels unsupported and undervalued. Over time, this erodes trust both internally among staff and externally among residents.
Why Local Authorities Are Especially Vulnerable
Local authorities are particularly susceptible to the Peter Principle due to a combination of structural, cultural, and financial factors:
Promotion by tenure: Many councils still operate on traditional promotion systems where length of service is a key determinant of advancement. While experience is undoubtedly valuable, it does not always equate to leadership capability.
Limited resources for training: Ongoing austerity and budget pressures have led to the deprioritisation of leadership development. As a result, many newly promoted managers are left to “sink or swim” without adequate support.
Internal promotion culture: Councils often favour internal candidates for senior roles, which can boost morale and retention. However, without rigorous assessment, this can lead to the recycling of ineffective leadership behaviours.
Political complexity: Local government leadership requires navigating a unique blend of operational delivery and political oversight. Many technical professionals are promoted without the political literacy or communication skills needed to thrive in this environment.
The impact of these vulnerabilities is not just theoretical it is measurable. According to a 2023 report by the Chartered Management Institute (CMI) and the Social Market Foundation:
Only 67% of local government leaders believe their senior leadership is effective.
Just 45% say their leadership is effective at attracting talent.
40% report that senior leadership is poor at motivating staff.
Only 44% believe their organisation is effective at ensuring accountability.
A mere 24% think their council is doing well at addressing staff underperformance.
69% of public sector managers cite leadership and management obstacles as a barrier to doing their jobs effectively.
“Good followers do not become good leaders.” Dr Laurence J. Peter
These statistics paint a sobering picture. They suggest that the Peter Principle is not just a theoretical curiosity it is a lived reality for many working in local government. And unless addressed, it will continue to undermine the effectiveness of councils at a time when public expectations and service demands are higher than ever.
Real-World Examples from UK Local Authorities
The Peter Principle is not just a theoretical concept it plays out in real time across councils in the UK. From financial mismanagement to digital innovation, these examples illustrate both the risks of promoting individuals beyond their competence and the rewards of investing in leadership capability and culture.
Birmingham City Council – A Case of Financial Collapse
In 2023, Birmingham City Council, the largest local authority in Europe, issued a Section 114 notice effectively declaring itself bankrupt. The crisis was triggered by a £760 million equal pay liability and a failed Oracle IT implementation that ballooned in cost. However, deeper analysis pointed to systemic leadership failures. Individuals were promoted into senior roles without the necessary financial oversight or programme management experience. The council’s internal culture reportedly discouraged challenge and scrutiny, allowing poor decisions to go unchecked. In response, Birmingham launched the Foundry Programme, a leadership development initiative aimed at rebuilding capability and trust. The programme focuses on values-based leadership, cross-functional collaboration, and accountability an attempt to reverse the effects of years of misaligned promotions and siloed thinking.
Croydon Council – Repeated Section 114 Notices
Croydon Council has issued multiple Section 114 notices since 2020, becoming a symbol of financial mismanagement in local government. A 2021 government review cited “collective corporate blindness” and a failure of leadership to grasp the scale of financial risk. Senior leaders had been promoted internally without sufficient scrutiny or external challenge, leading to unchecked borrowing and risky investments in commercial property .
The council’s leadership structure lacked the financial literacy and risk management expertise required to oversee such ventures. This is a textbook example of the Peter Principle: individuals promoted based on past performance in unrelated roles, rather than their suitability for complex strategic leadership.
Woking Borough Council – Investment Gone Wrong
Woking Borough Council issued a Section 114 notice in 2023 after revealing a staggering £1.2 billion deficit one of the largest in local government history. The shortfall stemmed from high-risk property investments intended to offset funding cuts. Leadership had failed to adequately assess or manage the risks involved, and oversight mechanisms were weak or absent. This case highlights the dangers of promoting individuals into senior roles without the necessary commercial or financial expertise. It also underscores the importance of external challenge and governance in preventing leadership complacency.
Wigan Council – A Model of Leadership Innovation
In stark contrast, Wigan Council has been widely recognised for its innovative approach to leadership through the Wigan Deal. This social contract between the council and its residents is underpinned by a leadership culture that values trust, empowerment, and community engagement. Rather than relying on traditional hierarchies, Wigan has invested in leadership development at all levels. Promotions are based on values, capability, and a demonstrated commitment to public service not simply time served. The council has also prioritised training, mentoring, and cross-functional experience to ensure that leaders are well-rounded and resilient. As a result, Wigan has maintained strong service delivery, high staff morale, and positive resident engagement even in the face of austerity.
Camden Council – Embracing Digital Leadership
Camden Council has taken a proactive approach to digital transformation by ensuring that leadership roles are filled by individuals with both technical and strategic expertise. Rather than defaulting to internal promotions, Camden has recruited externally to fill key roles, ensuring that digital initiatives are led by those with the right blend of skills.
This has enabled Camden to modernise its services, improve accessibility, and build a more agile organisation. It also demonstrates a conscious effort to avoid the Peter Principle by aligning leadership roles with actual competence and future needs.
Dorset Council – Digital Innovation Through Reorganisation
Following local government reorganisation, Dorset Council undertook a major digital transformation of its housing services. The council embraced modern technology, built a culture of continuous improvement, and used data to enhance services for residents. Crucially, leadership played a central role in this success. Rather than promoting based on tenure, Dorset invested in leaders who could drive innovation and manage change effectively.
Coventry City Council – Building Data-Literate Leaders
Coventry City Council has taken a strategic approach to workforce development by embedding data skills across its leadership structure. Through a structured apprenticeship programme, the council has developed a pipeline of data-literate leaders capable of making evidence-based decisions. This initiative reflects a forward-thinking approach to leadership development one that actively counters the Peter Principle by preparing staff for future roles before they are promoted.
How Local Authorities Can Address the Peter Principle
The Peter Principle may be a systemic issue, but it is not an irreversible one. Local authorities can take deliberate, strategic steps to mitigate its effects and build a more competent, resilient leadership pipeline. Below are five key interventions that councils can implement to address the root causes of misaligned promotions and leadership underperformance.
1. Redefine What “Promotion-Ready” Means
Traditionally, promotions in local government have been based on tenure, technical expertise, or performance in a current role. However, these criteria often fail to predict success in leadership positions. Councils must shift towards a more holistic and evidence-based approach to identifying leadership potential.
This means incorporating:
Behavioural interviews that assess decision-making, resilience, and interpersonal skills.
Psychometric assessments to evaluate emotional intelligence, leadership style, and cognitive agility.
360-degree feedback from peers, subordinates, and supervisors to gain a rounded view of a candidate’s readiness.
By redefining what it means to be “promotion-ready,” councils can ensure that individuals are elevated based on their ability to lead, not just their ability to deliver.
2. Build a Culture of Continuous Leadership Development
Leadership is not a fixed trait it is a skill that can be developed over time. Yet, many local government managers receive minimal formal training. According to the Chartered Management Institute, most receive only 2–4 days of leadership development per year, compared to a UK average of 6 days.
To address this, councils should:
Establish structured leadership development programmes tailored to different levels of responsibility.
Offer mentoring and coaching from experienced leaders within or outside the organisation.
Facilitate secondments and cross-departmental projects to broaden experience and perspective.
Partner with academic institutions or professional bodies to provide accredited training.
“True progress is achieved through moving forward to a better way of life, rather than upward to total life incompetence.” Dr Laurence J. Peter
Embedding leadership development into the organisational culture ensures that future leaders are not only competent but also confident and well-prepared.
3. Create Dual Career Pathways
Not every high-performing employee aspires to or is suited for management. Forcing individuals into leadership roles simply to reward their technical excellence is a classic trigger of the Peter Principle.
Instead, councils should establish dual career pathways that allow for progression in both technical and managerial tracks. For example:
A senior planner could become a Principal Planning Consultant rather than a team manager.
An IT specialist might advance to Lead Technical Architect without taking on line management duties.
This approach respects individual strengths, retains specialist talent, and reduces the pressure to promote people into roles they may not enjoy or excel in.
4. Make Performance Reviews More Strategic
Annual appraisals are often treated as administrative exercises, but they can be powerful tools for leadership development when used effectively. Councils should reframe performance reviews to focus on:
Identifying leadership potential and readiness for future roles.
Aligning career aspirations with organisational needs and opportunities.
Diagnosing skill gaps and creating personalised development plans.
Managers conducting reviews should be trained to have honest, constructive conversations that go beyond performance metrics and explore long-term growth.
5. Promote a Culture of Accountability and Feedback
A healthy leadership culture is one where feedback is welcomed, accountability is expected, and underperformance is addressed not ignored. Councils can foster this by:
Encouraging peer feedback and regular team reflections.
Creating safe spaces for staff to raise concerns about leadership behaviours.
Implementing clear mechanisms for addressing poor leadership performance, including coaching, reassignment, or, where necessary, formal intervention.
“Employees in a hierarchy do not really object to incompetence… they merely gossip about incompetence to mask their envy of employees who have Pull.” Dr Laurence J. Peter
By normalising feedback and accountability, councils can prevent the entrenchment of ineffective leadership and promote a culture of continuous improvement.
Conclusion: A Call for Smarter Leadership
The Peter Principle is not just a theoretical curiosity it is a real and pressing issue that affects the efficiency, morale, and credibility of local authorities across the UK. But it is not inevitable. With intentional design, councils can build leadership structures that are fit for purpose, future-ready, and grounded in competence rather than convenience.
In an era of shrinking budgets, rising public expectations, and increasing complexity, local authorities cannot afford to let leadership stagnate. The time to act is now. By rethinking how leaders are identified, developed, and supported, councils can ensure that the right people are in the right roles delivering better outcomes for staff, residents, and communities alike. Because in local government, good leadership isn’t just good management it’s good governance.
