Agenda and minutes

Audit & Governance Committee - Thursday, 18th July, 2024 6.30 pm

Venue: Council Chamber, Town Hall, Katherine Street, Croydon, CR0 1NX

Contact: Hannah Cretney, Democratic Services  Email: hannah.cretney2@croydon.gov.uk

Items
No. Item

75/24

Disclosure of Interests

Members are invited to declare any disclosable pecuniary interests (DPIs) they may have in relation to any item(s) of business on today’s agenda.

Minutes:

There were none.

76/24

Minutes of the Previous Meeting pdf icon PDF 120 KB

To approve the minutes of the meeting held on Thursday, 11 April 2024 as an accurate record of the proceedings.

Minutes:

The minutes of the meeting held on 11 April 2024 were approved as an accurate record.

77/24

Urgent Business (if any)

To receive notice of any business not on the agenda which in the opinion of the Chair, by reason of special circumstances, be considered as a matter of urgency.

Minutes:

There were none.

78/24

Audit & Governance Committee Action Log pdf icon PDF 55 KB

To note the Audit & Governance Committee Action Log. (To follow)

Minutes:

The committee reviewed and noted the updates to the action log.

79/24

Audit & Governance Committee 2024/25 Work Programme and Assurance Mapping Document pdf icon PDF 318 KB

To review the Audit & Governance Committee Work Programme 2024- 25 alongside the Committee Assurance Mapping Document.

Additional documents:

Minutes:

The committee noted the 2024/25 Work Programme and Assurance Mapping Document.

 

The committee requested the formalisation of an annual item inviting the Chair of Scrutiny and Overview Committee to attend the committee meeting and to ensure the Chair of Scrutiny and Overview Committee was invited to committee meetings when Risk Deep Dive items were scheduled.

 

 

80/24

Section 24 Statutory Recommendation Report and Productivity Plan pdf icon PDF 102 KB

The purpose of this report is to update the Audit and Governance Committee on the Council’s response in relation to the Section 24 Statutory Recommendation received from the Council’s external auditors, Grant Thornton, in the spring of 2023:

 

Demonstrate clearly to Council taxpayers how the additional Council tax for 2023/24 has been properly controlled and demonstrates improvements in value for money arrangements.

 

As well as giving an opinion on the financial statements and assessing the arrangements for securing economy, efficiency and effectiveness in the Council's use of resources, Grant Thornton have additional powers and duties under the Local Audit and Accountability Act 2014. These include powers to issue a public interest report, make written recommendations, apply to the Court for a declaration that an item of account is contrary to law, and to give electors the opportunity to raise questions about the Council's accounts and to raise objections received in relation to the accounts.

 

Following the two Public Interest Reports they issued in October 2020 and February 2022 and the Report issued on 18 November 2022 by the Council’s Section 151 Officer under s.114 of the Local Government Finance Act 1988, Grant Thornton concluded that it was appropriate to make written recommendations under section 24 of the Act.

 

Progress against most of the recommendations has been reported to the Audit and Governance Committee via the regular monitoring of the Annual Governance Statement. This particular recommendation required a report to be made to the Committee in June 2024. This report has been slightly delayed due to the Audit and Governance Committee being deferred to July 2024 due to the General Election.

 

There are two parts to this report:

 

·       The first is the Provisional Outturn report for 2023-24 which, in line with the Statutory Recommendation, demonstrates that the Council managed to balance its budget for the year through tight budget assurance processes. This report is due at Cabinet on 24 July 2024 and will be available from 16 July 2024 on the Council’s website.

 

·       The second part is the draft Productivity Assessment which is attached as Appendix A to this report. The Productivity Assessment is being produced at the request of the previous Local Government Minister, Simon Hoare MP, in a letter to all councils in May 2024. The Productivity Assessment will be presented to the Mayor for sign off and will be submitted by the deadline of 19 July 2024. It demonstrates how the Council has improved productivity during 2023-24, in line with the Statutory Recommendation.

 

Additional documents:

Minutes:

Jane West, Section 151 Officer introduced the report to the Committee.  

 

Following the council’s 14.99% increase to the council tax in 2023/23 the council’s external auditors Grant Thornton had requested the council to demonstrate the council’s budget had been properly controlled in 2023/24 and improvements had been made to the council’s Value for Money arrangements.

 

The council’s provisional outturn report for 2023/24 had been published and was available on the council’s website. The report demonstrated that the council was within budget in 2023/24, one of only three London boroughs. It was noted that London boroughs were suffering from increased demand in Children’s placements, SEN transport, Homelessness and whilst managed well in Croydon elsewhere also in Adult Social Care. The report illustrated the council had been within its budget and that the budget monitoring and adjustments had been accurate and well managed throughout the year.

 

The second part of the report set out the council’s VFM response via the Council’s Draft Productivity Assessment as requested by the Local Government Minister, Simon Hoare MP under the previous Government.  

 

Councillor Jason Cummings, Cabinet Member for Finance noted the difficulty in framing the council tax rise and advised the response demonstrated the money had been spent in an efficient way and achieved the task of not cutting back council services further. The comments of Tony McArdle Chair of the council’s Improvement and Assurance Panel within the report were noted as articulating that if it were not for the gap in Croydon’s finances it would be operating as a normal council..

 

In response to questions from the Committee, Cllr Cummings advised that the council had no plans of raising council tax above the cap in any future year at this time. The £38 million gap in the council’s finances was unsustainable going forward. However if the council could reach an arrangement with national Government to deal with this, it would be operating at the same level and subject to the normal pressures experienced by all councils. It was noted these negotiations were ongoing.

 

The thanked officers for the report and noted the public perception of the improvements which had taken place were likely behind. Also, the culture transformation was not articulated within the report and was a critical element of the improvements taking place.  

 

Matt Dean, Grant Thornton noted the improvement work the council had realised and was on a journey to complete. The detailed VFM work would be reviewed for 2023/24 and the external auditors concurred with officers’ assessment. It was noted that there was a limit to the work local authorities could do under the current funding arrangements when in financial distress.

 

The Committee thanked the external auditors for their work and recommendations.

 

 

The Committee RESOLVED;

 

1.     To note the Council’s Provisional Outturn Report for 2023-24 which has delivered a balanced budget through tight budget assurance processes.

 

2.     To note the Council’s Draft Productivity Assessment, to be submitted as requested by the previous Local Government Minister, Simon Hoare MP.

 

3.     To note that  ...  view the full minutes text for item 80/24

81/24

Governance of Transformation pdf icon PDF 170 KB

This report provides an overview of the governance arrangements established to deliver the council’s transformation and improvement. It follows the publication in March 2024 of the council’s Future Croydon transformation plan with 10 new programmes and a revised corporate improvement plan of 35 programmes and projects.

The Mayor’s Business Plan commits the council to becoming financially sustainable by delivering a wholesale transformation of our way of working, so that we balance the budget and change how services are run. Critically, the delivery of the transformation plan, Future Croydon, is integral to the Improvement and Assurance Panel (IAP) exit strategy. 

The transformation plan, Future Croydon 2024 – 2029 sets our priorities which are seen through three lenses of our residents, our council, and our place. It marks a shift, that recognises the past but sets a clear intention focussed on the future. The transformation plan is underpinned by our revised corporate improvement plan 2022 – 2027 which was also agreed at Cabinet in March 24.

 

Minutes:

Jonathan Ross, Interim Transformation Financial Analyst provided an overview of the governance arrangements in place around the council’s transformation strategy as detailed within the report.

 

The committee had requested the report to seek assurance on the governance structures underpinning the council’s transformation strategy.

 

In response to questions from the committee, it was noted the Croydon renewal plan had been replaced by the Mayor’s Business Plan and any remaining items were captured within the Annual Governance Statement (AGS). Cabinet received reporting on the Mayor’s Business Plan quarterly and the IAP Exit Strategy was monitored closely by the Improvement and Assurance Panel, with the intervention anticipated to end within the next year.

 

The Corporate Management Team (CMT) closely monitored all improvement and strategic plans with dedicated meetings on each area. This ensured overall alignment and an awareness of any interdependencies or duplication between the different action plans.

 

The committee queried the governance of the 35 programmes within the Croydon Improvement Plan. Officers advised this was included within CMT’s broader transformation oversight and saw dedicated time allocated for monitoring of each program.

 

Members noted some of the proposals made by Boston Consulting Group regarding cost savings were similar to historical proposals and emphasised the importance of culture change, to achieve the intended improvements to ways of working. It was requested for future programme reporting to include information regarding the pace and progress of culture change.

 

The committee raised concerns regarding the complexity and accessibility of reporting for councillors and residents across the improvement and transformation projects and queried whether new technology would be utilised to present progress in a clearer way.

 

Officers recognised the cultural challenges within the council. The improvement and transformation programmes had been collated under the Future Croydon banner and the council had sought support from three external consultancy firms to assist in achieving its transformation aims in recognition that there had been challenges previously. The consultancy firms worked closely together and a coordination board would be set up. There were areas of good progress regarding culture, such as engagement by managers in recent conferences.

 

The Oracle Improvement programme was a key area of improvement work and new areas of functionality were being introduced every three months. Focused training and guided learning was being provided.

 

The distinctions were noted between this report to provide assurance regarding the transformation programme’s governance arrangements, the People and Cultural Transformation reporting received previously and reporting due on programme implementation, which would include an update on culture change.

 

The committee queried the approach to monitoring progress from a baseline and requested benchmarking against other local authorities across the improvement programmes. Officers advised the consultants were developing a baseline position to ensure common definitions, effective tracking of benefits and implementation. The committee requested baseline and benchmarking data to be included in future transformation programme reporting. 

 

The committee queried the expected benefits of the transformation programme and whether there was an overall dashboard to monitor progress. Officers noted the work to define the expected benefits was at  ...  view the full minutes text for item 81/24

82/24

Revenue & Capital Monitoring Improvements: Updating Report on Progress pdf icon PDF 121 KB

This report provides a further update on progress against the recommendations from two external reviews:

 

·       The Opening the Books reports by Worth Technical Accounting Solutions in February 2023, and

·       The Capital Framework Improvement Plan by PWC in January 2023.

 

Additional documents:

Minutes:

Allister Bannin, Deputy Section 151 Officer introduced the report to the committee. It was noted that the recommendations were now prioritised as previously requested by the committee.

 

In response to a request by the committee, officers agreed to include an expected date of completion for recommendations in future reporting. 

 

The committee queried whether there were certain recommendations to be highlighted and whether the committee could support in progressing work in these areas. Officers advised several recommendations related directly to the council’s annual accounts with actions required as the work to complete previous years’ accounts was completed. The council’s 2019/20 accounts were anticipated to be completed in the coming weeks and the external auditors were now progressing the 2020/21 accounts and officers were responding to related queries.

 

It was noted that the 2020/21 annual accounts were expected at the 31 October 2024 committee meeting.

 

The committee queried the difference in the prioritisation terminologies ‘to be progressed’ and ‘underway’ within the report. It was advised that underway indicated the work was in progress, whereas to be progressed indicated the recommendation had not yet been started and in some cases, this was due to interdependencies with other actions requiring completion.

 

The committee RESOLVED, to:

 

1.     Note the update on progress against recommendations from the Opening the Books external review, as detailed in Appendix 1.

 

2.     Note the update on progress against recommendations from the Capital Framework Improvement Plan, as detailed in Appendix 2.

 

3.     Note that this is a further update to the previous report to Audit and Governance committee on 30 November 2023 and now includes an indication of priority for the outstanding actions.

83/24

Quarterly Whistleblowing Update pdf icon PDF 148 KB

The Council’s Whistleblowing Policy provides for six monthly reports to the Committee on whistleblowing referral received. This report provides an update on referrals received for the period January 2024 to June 2024.

 

Additional documents:

Minutes:

Stephen Lawrence-Orumwense, Monitoring Officer introduced the report to the committee.

It was advised that following paragraph 4.4 of the report, the subsequent three paragraphs had been included erroneously.

The committee recognised the work by officers to improve engagement with the whistleblowing process and queried where Croydon benchmarked against other comparable local authorities. Officers advised that the benchmarking data was not yet available, however an average of one whistleblowing case per month indicated a good level of awareness within the organisation. 3 of the 5 cases had been staff relations matters.

The committee queried if there was further work to be done to improve awareness of the parameters of whistleblowing and to ensure issues were reported using the correct pathways. It was advised there had been an internal communication campaign for staff to raise awareness of the process and training was available. Officers intended to report to the Statutory Officer’s Board and the Finance and Risk Internal Control Board. Other programmes within the council included the Guardian’s programme which encouraged earlier reporting and Whistleblowing was utilised as a last resort. Officers advised the other reporting mechanisms at Croydon could impact comparison data with other local authorities without alternative routes of reporting in place. 

The committee queried if the reporting of management/staffing disputes via the Whistleblowing procedure suggested alternative routes of escalation required more visibility. It was noted that the Whistleblowing procedure could be seen to raise the profile of an issue and as required HR colleagues were always involved in investigating employee relation issues.

It was noted the council was developing an approach to mitigate the escalation of issues to grievances via more informal initial intervention in the first instance.

The committee RESOLVED, to;

Note the whistleblowing referrals and outcomes.

 

84/24

Committee Annual Report pdf icon PDF 181 KB

Minutes:

Dave Philips, Head of Internal Audit introduced the draft Committee Annual Report 2023/24. It was noted that the committee reported its work to Council annually and the report was the committee’s document. The foreword had not yet been updated for 23/24 and officers welcomed any changes or additions from committee members to be sent directly to Dave Philips and the Independent Chair. The committee would receive the final version of the annual report for approval at a future meeting.

The committee noted the importance of capturing its impact during the previous two years along with its intended achievements in the coming year.

The committee queried if there was a way of capturing the individual contributions of members. It was agreed some detailed examples of improvement could be included to provide greater detail.

Committee members agreed to provide contributions to the annual report within two weeks.

Officers also requested committee members to contribute to the self-assessment circulated in May 2024, this would need to be circulated to newly appointed members of the committee.

 

85/24

Part A - Corporate Risk Register pdf icon PDF 129 KB

As part of the Audit & Governance Committee’s role, the Committee’s terms of reference include monitoring the Council’s risk management arrangements and  providing independent assurance as to their adequacy.  This report contains details of all of the open Part A risks. A complementary Part B report contains details of risks with exempt information.

 

Additional documents:

Minutes:

Malcom Davies, Head of Insurance, Anti-Fraud and Risk introduced the report to the Committee.

 

The report included publication of the full Part A Corporate Risk Register, which indicated a significant improvement in the council’s risk reporting maturity and supported the broader transparency agenda for the council. This provided a complete overview for the Committee and enabled it to ‘call in’ any risk for a deep dive regardless of its current rating by risk owners.

 

The risk summary report included at Appendix A was noted, as requested by the Committee this indicated the direction of travel of risks in a condensed dashboard.

 

A summary of the intended developments for the risk register framework going forward, with input from the Committee and other key stakeholders was included within the report.

 

The Committee thanked officers for their work alongside the Independent Chair, Vice Chair, Independent Member, Chair of Scrutiny and Overview Committee and others to develop and improve the risk management framework further and for taking onboard feedback raised by members at the previous Committee meeting.

 

The Committee noted there were several risks which had been at red status since October 2023 and queried whether this was because nothing could be done to improve the risk score. Officers advised there were some areas such as the accounts which were anticipated to improve and finance where there were ongoing issues, particularly where for example demand was rising and therefore issues were anticipated to continue. The risk register provided an accurate overview of where the council’s risk profile was presently.

 

The Committee raised risks where there was a future rating which was inexplicably low, with no details provided within the future control measures to explain how the future rating would be achieved. It was noted that members had discussed with the dashboard developer the possibility of a field to provide a justification narrative for the future rating.

 

The Committee discussed the importance of clearly defined definitions for future risk rating, which should articulate a future target level for the risk, the anticipated future rating based upon the implementation of current control measures, and narrative around how this would be achieved. This would ensure the Committee was able to challenge the link between the actions and the reductions in the risk.

 

The Committee raised that there appeared to be inconsistencies in how risk owners were adopting the risk management framework, either due to differing interpretations of what was required or that risk owners were not using the risk management framework to manage risks.

 

Officers advised that a recommendation from the improvement work being undertaken was to ensure consistency in the terminology and noted Members would likely prefer the council to move towards using the standardised risk management terminology of ‘inherent’, ‘residual’ and ‘target’ risk ratings. At present the council’s target risk rating was described as ‘future’ risk rating.  

It was suggested that risks with anticipated scored reductions but insufficient  control measures lacking could be called in by the Committee to seek further assurance.

 

Officers was advised  ...  view the full minutes text for item 85/24

86/24

Part B - Corporate Risk Management

Minutes:

RESOLVED that members of the Press and Public be excluded from the remainder of the meeting under Section 100A(4) of the Local Government Act 1972 on the grounds that: (i) it involved the likely disclosure of exempt information as defined in Paragraph 3, Part 1 of Schedule 12A of the Act: and (ii) that the public interest in maintaining the exemption outweighed the public interest in disclosing the information.