Agenda and minutes

To note the attendance at this meeting of any duly appointed Reserve Members.

Reserve Members may attend meetings:-

(i)                 to take the place of an ordinary Member for whom they are a reserve;

(ii)               where the ordinary Member will be absent for the whole of the meeting; and

(iii)             the meeting notes at the start of the meeting at the item ‘Reserves’ that the Reserve Member is or will be attending as a reserve;

(iv)              if a Reserve Member whose intention to attend has been noted arrives after the commencement of the meeting, then that Reserve Member can only act as a Member from the start of the next item of business on the agenda after his/her arrival.

RESOLVED:  To note the attendance at this meeting of the following duly appointed Reserve Member:-

To receive declarations of personal or prejudicial interests, arising from business to be transacted at this meeting, from:

(a)               all Members of the Committee, Sub Committee, Panel or Forum;

(b)               all other Members present in any part of the room or chamber.

RESOLVED:  To note that the following interest was declared:

Agenda Item 9 – Half Yearly Health and Safety Report

During consideration of this item Councillor Sue Anderson declared a personal interest in that her husband was Chair of Governors at Kingsley High School.  She would remain in the room whilst the matter was considered and voted upon.

That the minutes of the meeting held on 21 September 2011 be taken as read and signed as a correct record.

RESOLVED:  That the minutes of the meeting held on 21 September 2011 be taken as read and signed as a correct record.

To receive questions (if any) from local residents/organisations under the provisions of Committee Procedure Rule 17 (Part 4B of the Constitution).

RESOLVED:  To note that no public questions were received, questions put or deputations received at the meeting under the provisions of Committee Procedure Rules 17, 15 and 16.

To receive references from Council and any other Committees or Panels (if any).

None received.

Report of the Interim Director Finance.

The Interim Director Finance introduced the report, which proposed changes to the Counterparty Policy in response to recent revisions to UK Bank credit ratings while continuing to prudently manage the investment portfolio.  She advised the Committee that the proposed change would allow the Council to earn more investment income without exposing the Council to a materially higher risk.

The Interim Director informed Members that the Council’s short term investments were placed with Banks and Buildings Societies selected in accordance with the Creditworthiness Policy set out in the annual Treasury Strategy.  The rate of interest received on short-term investments was low and it was felt that some of the cash balances of £110m held by the Council could earn a better interest rate, if the proposal was agreed.  It would help meet some of the existing gaps in the Council’s budget.

The Chairman welcomed David Whelan, Managing Director of Sector, a leading and independent provider of capital financing, treasury advisory and strategic consulting services to UK public service organisations, to address the meeting.

David Whelan set out the context for the current financial and economic climate and how the dynamics of risks had altered from pure banking risks to quasi governmental risks.  He was of the view that it was important to manage risks effectively whilst maximising income opportunities.

David Whelan advised that with regard to Banks that had been nationalised, such as the RBS Group and Lloyds Bank, the Council could consider going beyond the specified 1-year investment limit to up to 3-years.  He added that since the report was circulated, the situation had altered but the advice given was based on the market view that the Banks were unlikely to return to private ownership in the immediate future.  However, it was likely that the government would eventually want to dispose of its holdings in the Banks.  In so doing the government would need to consider the possible loss to the tax payer of the price paid for the equity shares purchased including the market share price of the two Banks due to the quantity of the shares it had already purchased.  As a result, he was of the view that the government would give advance notice of its intention to dispose of its holdings and he expected any such disposal to take some 3-5 years.  He explained that the rewards for extending the investment for longer periods were potentially good.

Members enquired about the penalties that could be imposed for early withdrawals, the challenges that the Council would face if the government decided to dispose off its holdings, whether the UK Banks were strong enough to take the pressures of the current volatile period in the UK Banking history.  The Chairman asked whether the Bank of England would step in with support in the event of a liquidity issue provided the banking institutions were solvent.

In response, the Interim Director stated that the Banks were fundamental to the UK Banking System and support of the government was  ...  view the full minutes text for item 128.

Joint Report of the Interim Director Finance and Director of Legal and Governance Services.

The Committee received a joint information report of the Interim Director Finance and the Director of Legal and Governance Services, which set out progress made against the Capital Implementation Plan following the request made by Cabinet to monitor this area as a result of the overspend in the Children’s Services Capital programme.

An officer reported that overall the progress made against the Implementation Plan was good with 83% of the action agreed having been implemented.  12% of the actions were being progressed and 5% had yet to be addressed.  The officer was satisfied that the remaining 5% did not pose huge risks, as one was classified as a low risk and the other two were considered to be of medium risk.  She added that a further report would be submitted to the March 2012 meeting when the actions on the remaining recommendations would be addressed, including how those already implemented were working.  In response to a question from a Member about the use of inappropriate cost codes, surreptitious working, the quality of managers, the Interim Director Finance, the Divisional Director Corporate Finance and Procurement and an officer responded as follows:

·                     the levels of scrutiny had been increased to ensure that such failures did not arise again, including increased training on guidelines;

·                     there was a consistent check of the ledgers with a view to eradicating such issues and increased vigilance from staff  in the Finance Directorate;

·                     those involved had not accorded with the rules rather than in a surreptitious manner and that the monitoring of spend had not been in depth.  There had been an issue for applying the correct cost codes.  As a result, the Capital Forum which had been set up to monitor projects had been strengthened such that the status of each individual project was reported and scrutinised;

·                     two separate  investigations had been carried out on the overspend in Children’s Services Directorate resulting in a number of recommendations.  As a result, a more holistic approach to project monitoring had been instigated whereby an end to end process was considered and monitored.  This process now covered roles, responsibilities, accountabilities, adequacy of guidance, compliance with Contract Procedure Rules and Financial Regulations, adequacy of monitoring and reporting, and the use of project management in order to ensure that a robust process was in place and that it met with all internal controls.

In response to a query from another Member, the officer explained that where good progress had been made in relation to a recommendation but it remained to be finalised, the actions were classified as Amber.

RESOLVED:  That the report be noted and a further report be submitted to the March 2012 meeting.

Report of the Assistant Chief Executive.

The Committee considered an information report of the Assistant Chief Executive, which summarised the Council’s Health and Safety Performance for the period 1 April – 30 September 2011.  The report provided an update of the activities undertaken and included outcome measures on the training undertaken, audits performed and accidents reported.

The Divisional Director Risk, Audit and Fraud highlighted the achievements, particularly in relation to the monitoring of asbestos.  He added that the 2-year Plan was broadly on target and that a great deal of work on reviewing policies had been carried out since its instigation as a response to both the Improvement Notices served and the Independent Peer Review in 2011.

The Divisional Director Risk, Audit and Fraud informed Members that the take up on the numbers of training courses on offer had been relatively low compared to previous years and that Managers had expressed concerns about the Occupational Health Service in relation to referrals.  As a result of these concerns, discussions with the providers of the Service had ensued and a series of actions and monitoring had been agreed to resolve difficulties.

Various aspects of the report were queried by Members, such as the high take up of Fire Safety Awareness courses by the Children’s Services Directorate, the continued provision of Health and Safety courses together the advice and support being given, the poor take up on the course on Stress Awareness, the general take up of courses on offer by Councillors, the plans for working with Academies, training with schools, and asbestos management in Council housing.  In response, the Divisional Director and the Assistant Chief Executive stated that:

·                     the take up Fire Awareness courses by the Children’s Services Directorate had been as a result of a direct marketing campaign at schools;

·                     the number of courses had not been reduced but the take up had fallen, as a result of which e-learning was  being considered;

·                     improvements in working with schools had taken place and policies revised in relation to staffing problems. Levels of accidents in schools remained an issue;

·                     work was underway in drawing up Service Level Agreements (SLAs) with Academies.  However, the Academies were not required to report on their health and safety performance through the Council;

·                     they were not aware of any specific issues relating to the management of asbestos in the Council’s housing stock but undertook to speak with the Member concerned to identify the problem.  A comprehensive programme on identifying asbestos and issuing advice as part of the Decent Homes Programme was being undertaken by the Council’s partner Kier which was scheduled to be completed in 2013.

A Member congratulated officers on the courses on offer, particularly the quality which had improved drastically.  He stressed that there was a need to promote these courses to Members.  Another Member asked about the working relationship with the Trade Unions in relation to health and safety issues.  In response, the Divisional Director stated that regular meetings were held with the Trade Unions and between the lead  ...  view the full minutes text for item 130.

Report of the Assistant Chief Executive.

Members considered an information report of the Assistant Chief Executive setting out the mid-year progress against the 2011/12 Internal Audit Plan, including key issues arising from the work undertaken.  The Committee also considered a confidential appendix setting out details of potential irregularity.

An officer introduced the report and reported on the following:

·                     only 14 days had been spent on investigating suspected financial irregularities in the first half of this year;

·                     12.5 days had been spent on non-standard follow-ups that had required further audit testing;

·                     a rigorous process  had been undertaken in ensuring that the schools would be able to comply with the new government standards from 2012/13 and, in the future, audit reviews would concentrate on the financial controls aspects of schools;

·                     a total of 35 reports were issued in the last 6 months with a majority achieving a Green assurance rating;

·                     the audit team had exceeded its target of productive days by 30.

The officer assured Members that schools would be required to ensure that the controls around the systems were operating properly.  The Assistant Chief Executive stated that improvements were continuous and challenged through the Council’s Improvement Boards.  The implementation of audit recommendations would become a formal performance indicator.  In addition, audit response times to draft audit reports and follow-ups would be measured and reported as a formal performance indicator.

The Divisional Director Risk, Audit and Fraud undertook to examine the asbestos management in relation to housing stock following a query from a Member.

The Chairman congratulated officers for their continued excellent work in regard to the work relating to the Internal Audit Plan.

RESOLVED: That the report be noted.

Report of the Assistant Chief Executive.

The Committee received a report of the Assistant Chief Executive, which set out the options for meeting the budget challenges facing the Council in relation to the Risk, Audit and Fraud Division.

The Assistant Chief Executive introduced the report and set out the context in which the proposals had been submitted to the Committee for comment following a series of Commissioning Panels to discuss the options identified.  He added that the proposals would be included in the draft budget report to Cabinet.

The Divisional Director Risk, Audit and Fraud outlined each of the proposals being put forward, details of which were set out in the report.  He informed Members that since the report was written, and following professional advice, two of the 18 proposals would not now be put forward and explained the reasons for the change as follows:

·                     Service Change R15 – Reduce Annual Contribution to Internal Insurance Provision - a reduction of £330k was not now considered feasible following advice from the Council’s insurance actuary.  The proposal would therefore not go forward to Cabinet as a potential saving;

·                     Service Change R17 – Increased Excesses on Property and Liability Policies with Council-wide Policy Proposals to Reduce Claims – the advice received was that this proposal could not be realised.  The proposal would therefore not go forward to Cabinet as a potential saving.

However, an additional proposal had been identified which would help realise a saving of £70k by the use of the in-house legal service to defend insurance claims made against the Council instead of employing external lawyers.  The proposal would involve the employment of a specialist lawyer in this field. With regard to R15, Future Trading with Academies, this could now commence following legal advice.  In respect of R12, Merge Civil Contingencies and Insurance Teams, including Joint Working Arrangements with Ealing Council, the proposal would not be implemented until 2013, as a result of the 2012 London Olympics.  It was welcomed that minimal savings were being proposed to Internal Audit.  The proposals put forward had been drawn up with a view to ensuring that they had the least impact overall, including on staff and services provided.

Members were informed that discussions had taken place with those staff who would be affected by the proposals and redundancies were likely bearing in mind that opportunities for redeployment were relatively low in the current economic climate.  All services in the Assistant Chief Executive’s Directorate had been required to suggest 26% savings.

A Member enquired if vacant posts were being financed. Another Member commented that the report did not address or quantify the impact of cuts on services provided nor did it measure the impact on residents.  In response, the Assistant Chief Executive stated that at least 43% of the savings were insurance related and that he did not consider the proposals to have a significant impact overall.

The Divisional Director Risk, Audit and Fraud informed Members that these proposals would not stop officers from working on new initiatives and these would  ...  view the full minutes text for item 132.

To resolve that the press and public be excluded from the meeting for the following items of business, on the grounds that they involve the likely disclosure of confidential information in breach of an obligation of confidence, or of exempt information as defined in Part I of Schedule 12A to the Local Government Act 1972:

RESOLVED:  That in accordance with Part I of Schedule 12A to the Local Government Act 1972, the press and public be excluded from the meeting for the following item(s) for the reasons set out below:

Report of the Assistant Chief Executive

The Committee received a confidential report of the Assistant Chief Executive setting out the Council Strategic Risk Register.  The Register was submitted to the Committee to help ensure transparency.

RESOLVED: That the report be noted.

Report of the Assistant Chief Executive.

The Committee considered a confidential report of the Assistant Chief Executive that included an update on the actions taken by the Internal Audit team to address areas of key risk within the Council.

RESOLVED:  That the report be noted.