Agenda item

4.1  The Transformation and Intelligence Manager presented to the Governance and Audit Committee the report. The Council’s Corporate Risk Register monitored those risks that may prevent the Council from achieving its strategic priorities or delivering services to its communities and service users in Newport.

4.2  At the end of Quarter 3, there were 15 risks recorded in the Corporate Risk Register that were considered to have a significant impact on the achievement of the Council’s objectives and legal obligations.

4.3   Overall, there were 8 Severe risks (risk scores 15 to 25); 7 Major risks (risk scores 7 to 14); that were outlined in the report. In comparison to the Quarter 2 Corporate Risk Register, one risk score decreased (Failure to achieve completion of the Internal Audit Plan).  The scores for all remaining risks remained the same.

4.4  The Programme and Performance Manager referenced the Risk Management Policy, which was presented at the last Committee meeting. The comments from Committee were taken on board and reflected in the final Policy.  The Programme and Performance Manager therefore thanked the Committee for their contribution.

4.5  There were 8 severe risks and seven major risks.  The internal audit plan risk score had reduced from 16 to 9, with the summary and explanation included in the report. All other risks remained the same for Quarter 3. Moving to Quarter 4, officers were looking at service planning for 2024/25 for all service areas. Any changes would therefore be reported in Quarter 1.

Comments of Committee Members:

4.6  Mr Reed referred to page 23, the Risk Heat Map, there were two R8s. The Programme and Policy Manager advised that the R8 in grid 5-3 was incorrect and would be adjusted.

4.7  Dr Barry queried the timescale to prepare the Homelessness Prevention and Support Strategy. The Strategic Director for Transformation and Corporate advised that this query could be considered through the Performance Scrutiny Committee – Place and Corporate where it could be raised with the Head of Service.

4.8  Dr Barry also commented on the severe risks for the highways network and the property estates.  There was a worry that a lack of investment would lead to greater cumulative expenditure in the future.  The Strategic Director for Transformation and Corporate advised that Newport City Council was facing the same challenges as many other local authorities within the UK, with a significant infrastructure burden including the highways network and other assets. There was a rationalisation programme in place to mitigate this in part.

4.9  Councillor Jordan queried the amount of compensation the Council was dealing with regarding potholes.  The Strategic Director for Transformation and Corporate advised that whilst insurance payouts were not large the Council was legally covered through the Highways and Assets Management Plan (HAMP).

4.10    Councillor Cocks referred to the direction of travel of risk in relation to highways, which stated in the report that the risk was constant. With no investment and ongoing deterioration, Councillor Cocks considered that this situation would get worse rather than stay at a constant level of risk.  The Strategic Director for Transformation and Corporate advised that the Risk was measured against the HAMP and the Committee’s concerns could be passed to Performance Scrutiny Committee, Place and Corporate, to consider the service area’s ratification of the risk this presented.

4.11    Councillor Cocks also referred to the risk mitigation action plan regarding highways on page 48 where it was mentioned that no further action could be taken to manage the risk, which he felt was not appropriate. The Programme and Performance Manager advised that there were existing arrangements in place to manage the risk within the HAMP, outlined at the beginning of the document.  In addition, the HAMP was being updated and would be presented to Performance Scrutiny Committee – Place and Corporate for scrutinization. This particular risk would be looked into as part of the service plan review, to see what additional actions could be taken to align with the new HAMP and address any mitigating actions going forward. Therefore, there may be changes reflected in the Quarter 1 report.

4.12    Mr Reed referred to page 59, and the direction of travel regarding schools, where 12-13 schools would be unable to set a balanced budget even with mitigation plans in place.  The Programme and Performance Manager advised that this was looking back to Quarter 3 before the budget was set, with the information available at that time. The Head of Finance advised that whilst the score would remain elevated, however, these issues were dealt with successfully every year. Where appropriate, the finance team worked with schools to look at financial recovery plans.

4.13    Councillor Cocks referred to School budgets on pages 59-60 and noted that there were other associated risks identified with school budgets such as reduced spending on Additional Learning Needs (ALN) which Councillor Cocks felt were being underrated.

4.14    The Programme and Performance Manager acknowledged that the requirement for ALN and out of county placements were both corporate risks.  The governance arrangements within the service area to manage these pressures and the monitoring by Internal Audit provided assurance around these activities.  In addition, these risks were linked to the asset management risk and the Medium-Term Financial Plan (MTFP).  Finally, there were also service area risks that were not monitored on the corporate register but instead sat in Education, including risk projections around pupils and education which were regularly reviewed. The Strategic Director for Transformation and Corporate added that whilst Newport schools had challenges, they were no schools in special measures and the Estyn findings indicated that Newport schools delivered a good provision.

4.15    The Chair added that this was a risk set as of 31 December 2023, before the budget round and settlement for schools.  Schools were however autonomous and dealt with funding themselves. The Director, covering Education had powers to intervene and could serve a warning notice on a school if there were concerns.  The Chair felt that the risks should be scored at 25. 

4.16    The Chair referred to the highways annual investment of £500K, which a small amount in context, and echoed comments about the state of state of infrastructure and lack of funding.

Recommendation:

§  The Governance and Audit Committee considered the report and assessed the risk management arrangements for the Authority.

§  The Governance and Audit Committee requested assurance on the Highways Asset Management Plan and Asset rationalisation be reported back to the Committee following the Performance Scrutiny Committee – Place and Corporate meeting.

§  The Governance and Audit Committee proposed that Scrutiny consider whether the target dates for Housing and Homelessness strategy and plans are appropriate as part of their performance review process.

§  The Committee also requested that Scrutiny consider whether the risk rating and mitigation was appropriate to the perceived issues around roads and infrastructure management.

§  The Committee also wanted Scrutiny to consider if the risk management embedded in the HAMP is sufficient to manage the associated infrastructure risks.