Agenda item

(A presentation will be provided as part of this item on the risks associated with the delivery of savings and efficiencies through service redesign and transformation recorded in the Corporate Strategic Risk register.)

 

The Committee considered a report of the Director of Corporate Resources, the purpose of which was to provide an overview of key risk areas and the measures being taken to address them.  The report also provided an update on the outcome of the Internal Audit risk review and on related risk management matters such as Insurance and Business Continuity.  A copy of the report is filed with these minutes.

 

The Committee also received a presentation on the risks associated with the delivery of savings and efficiencies through service redesign and transformation recorded in the Corporate Strategic Risk register.  A copy of the presentation slides is filed with these minutes.

 

Presentation – Transformation

 

The Committee noted that through the Transformation Board a more co-ordinated approach had been adopted to ensure plans put forward to achieve future savings were robust.  The operation of this Board did not replace specific governance arrangements already in place to monitor transformation through this Committee and the Cabinet etc.  This therefore provided an additional check during this difficult period. 

 

The Committee was assured that changes introduced would be monitored closely throughout to ensure any issues or concerns arising from the transformation programme could be addressed early on.

 

Corporate Risk Register

 

Transfer of nine elderly persons homes

 

Some members raised concerns regarding the delay by Leicestershire County Care Limited (LCCL) to pay the balance outstanding in accordance with terms previously agreed with the County Council (i.e. by 31 March 2014). 

 

In response to questions raised, the Director of Corporate Resources confirmed the following:

 

·         Independent accountants advice had been taken to secure the new payment arrangements with LCCL;

·         A revised payment schedule had been negotiated with additional security obtained, as detailed in the report;

·         Escalating interest rates had been agreed starting at a rate of 7% above the Bank of England base rate for the 2014/15 financial year;

·         As detailed in the report to the Cabinet on 4 February 2014, the County Council had independently verified with LCCL’s proposed lender, that its application for finance had been approved at a local level and had been passed for approval at a national level;

·         LCCL had a single Director who had provided a personal guarantee on all his assets.  Further guarantees had also now been obtained from a new company and the original parent company.

The County Solicitor reported, for clarification, that the nine elderly persons homes had been transferred to LCCL, but that the County Council had a legal charge secured against each of the homes should LCCL not meet the arrangements for repayment.

 

The Committee agreed that it would be important to continue to monitor this risk area and requested that a further update be provided at its next meeting.

 

General

 

i.              Some members raised concerns regarding the Single Local Growth Fund (SLGF) and the lack of advanced preparation of schemes within the Environment and Transport Department.  It was noted that work to accelerate the early planning of schemes was being undertaken which would enable projects to be identified and delivered quickly, to meet the short time frames by which SLGF funding must be spent;

ii.            The Committee noted the risk within the Children and Young People’s Service regarding a duplication of risk reporting processes which had the potential to cause confusion and result in risks potentially not being reported. This had been identified by Internal Audit as a high importance recommendation and a structured process was now in place to address this.  Follow-up testing would be undertaken shortly;

iii.           The Committee noted the risks associated with Municipal Mutual Insurance going into administration and the potential cost to the Authority.  Earmarked reserves of £5m were being held to mitigate this and other uninsured losses.  However, the final amount payable would not be known for several years;

iv.           The Committee noted the addition of risk 19 relating to increased unplanned and speculative local developments to address the shortfall in the 5 year housing supply which could have an adverse impact on the functioning of the transport network and the County Council therefore as the Highway Authority.  The Committee requested that a presentation on this new risk area be provided at its next meeting;

v.            In respect of risk 20, it was questioned whether such liability (i.e. deficit budgets and repair costs) would also apply if a foundation school was directed to become a sponsored academy and if so, if this should be made clearer within the Risk Register.  The Director of Corporate Resources undertook to clarify the position and advise members of the Committee after the meeting. 

 

vi.           A number of issues were arising around future housing developments in the area and in particular around developer contributions.  The revision of the County Council’s developer contributions policy would shortly be subject to a public consultation.  It was suggested that to obtain members input into that consultation, an all member briefing/workshop would be helpful.

RESOLVED:

 

(a)  That the contents of the report and presentation be noted;

(b)  That the current status of the strategic risks and emerging risks facing the Council, as detailed in the report and the Corporate Risk Register, be noted;

(c)  That a presentation be provided at the next meeting of the Committee on the risks associated with an increase in unplanned and speculative local developments to address the shortfall in the five year housing supply and the possible adverse impact on the functioning of the transport network, as detailed in the Corporate Risk Register (Risk 19);

(d)  That the Committee support the proposed briefing to members regarding the revision of the policy on developer contributions;

(e)  That the updated Corporate Risk Register be approved;

(f)   That, in light of the concerns now raised by some members of the Committee, a further update be provided on the risks to the County Council surrounding arrangements in respect of the transfer of nine elderly persons homes at the next meeting of the Committee.