Agenda item

To consider and approve the statement so that it can be signed by the Council Leader and the Chief Executive

DECISION:

To accept and approve the statement for the Council Leader and the Chief Executive to sign the statement.

Note:

·         There was a need to consider service continuity - impact of one field on another

·         A suggestion together with the annual statement, that a mid-year report is submitted to the Committee to give an update of the situation.

The Statement was presented by the Head of the Finance Department. He explained that the statement, although not part of the accounts, was a statutory document which needed to be published with the accounts. In accordance with the Accounts and Audit (Wales) Regulations and the CIPFA Code of Practice, all Local Authorities must ensure that a statement of internal management is in place. It was reported that the Chief Executive and the Council Leader were required to sign the statement, although the Governance and Audit Committee's approval was needed.

Some of the background to the statement was given. The statement which was based on the CIPFA/SOLACE Framework identified seven core principles for good governance and these had been divided further into sub-principles. It was highlighted that the Governance Arrangement Assessment Group, led by the Chief Executive, had considered these principles and sub-principles and had created a Governance Risk Register, which was part of the Council's Corporate Risk Register. Risks were identified in 24 different areas of governance, noting the controls that the Council have in place to mitigate these risks.

It was reported that there were four types of risks and that each risk had departmental ownership; the Group had concluded that there were 0 areas of very high risks, 4 high risk areas, 12 areas of medium risks and 9 low risk areas. It was noted that the high-risk areas were 'Culture', 'Information', 'Health, Safety and Well-being' and 'Customer Contact'.

Members gave thanks for the report. Reference was made to each risk in turn giving Members an opportunity to enquire about that area. During the ensuing discussion, the following observations were made by members:

·         Finance - increasing the risk impact from 3 to 5 was wise, however there was disagreement with changing the probability from 3 to 2 given that 9 out of 10 Departments were overspending.  It was added that the comments were acceptable and that management plans were in place, but that reports (such as the revenue position and savings overview) did not reflect the same situation; failure to manage a budget had an impact on many residents and forced the use of reserves.

·         In the future more clarification was needed in the comments column - namely, to outline what are the reasons behind the change in assessment e.g., was it a situation, specific matter that had changed or the opinion of officers.

·         Customer Contact - that a lack of response and complaints to the service had been evident for years - why then, was this area now being set as a high-risk area?

·         How much data work had been considered to assess the risks to ensure that the opinion was sound?  Was there a consistency score?

·         Was the effect equalmongst the headings?  That is, is the same consideration given to external links and internal links? e.g., Natural Resources Wales v Ffordd Gwynedd.

·         There was a need to ensure a relationship between customer contact and customer care - if the first contact with the Council was not a successful one then this may reflect further, damaging risks e.g., with partnerships - reputations must be secured, strong relationships maintained and customer satisfaction ensured.

·         That exit interviews are called for in the context of workforce planning – the risk score was low given the situation. Concern about long-term sickness and the failure to attract staff to deliver Council services created a significant impact (staff such as teachers, assistants, care staff, waste collection staff).

·         A suggestion was made, together with the annual statement, that a mid-year report be submitted to the Committee providing an update of the situation – specifically the 4 high risk areas.
 

In response to the comments the Head of Finance noted that the scoring process was guided by a combination of perceptions or events and that there was an element of objectivity as well as science behind the process. He reiterated that an engagement score e.g., was re-assessed due to a change in legislation while customer contact was highlighted as high risk due to the need to respond to the number of complaints and to present improvements. It was accepted that there was a tendency to over-think headings and try to fit the performance into a category, but he confirmed that the risks were challenged at service level at the performance challenge meetings and by the Governance Arrangements Assessment Group. He agreed that a failure in the customer contact field could disrupt all Council departments, and therefore that risk needs to be maximised to ensure that the area is properly addressed so that the right response was delivered to the right people within the right time.

In the area of Finance risk, the observation was accepted that the risk ratings did not highlight the Council's actual financial position, but that the risk here was a reflection of the Council's governance in the financial field, and that there was a separate budgetary risk in the corporate risk register. He reiterated that the Council had robust arrangements to report on the Council's actual financial position and that examples of transparency had recently been highlighted, e.g., in responding and identifying savings for the 2023/24 financial deficit. Reference was made to Birmingham Council where financial governance issues had arisen as they had not identified a job appraisal regime and consequently stated that it could not balance its budget without support.

In response to a comment regarding the loss of staff and the failure to recruit, it was noted that steps had been taken by the Council to restore the situation and that this had improved stability. It was reiterated that a Project Group had been set up to respond to the situation with a focus on carrying out work to make the Council a more attractive place to work. However, it was noted that pockets of services were still experiencing problems and that e.g., overspending in employing agency staff in the care area was creating an impact on other areas of work.
 

It was outlined that the risk ratings were continually reviewed and that the high-risk areas were areas where long-term plans had been identified to improve the situation.
Meanwhile, Heads of Department will report on the action and ensure the work is going in the right direction. It was agreed that a half-year update would be submitted to the committee and that all comments would be referred to the Governance Arrangements Assessment Group.
 

RESOLVED:

To accept and approve the statement for the Council Leader and the Chief Executive to sign the statement

Note:

·         There was a need to consider service continuity - impact of one field on another

·         A suggestion together with the annual statement, that a mid-year report is submitted to the Committee to give an update of the situation.