Report of: Head of Financial Services

Purpose of report: To update the Committee on both corporate and service risks as at 30 June 2024

Recommendations: That the Committee reviews the risk management report and notes its contents.

Bill Lewis, Financial Accounting Manager, introduced the report and stated the report differentiates between the corporate and service registers, presented an overview of the details of the risks and said that some risks have moved to be higher, while others have decreased in severity. Additionally, he stated that his team are also updating the corporate business continuity plan and the committee could expect to hear about this in future.

Councillor Fry requested further information regarding the two new red risks, regarding quality of data and data management systems.

In response, Emma Gubbins, Corporate Asset Lead, stated that these risks relate to the lack of an asset management system. She stated that were they have data, it is difficult for them to store and analyse the data, because they do not have the necessary system for this. They are working to procure a suitable management system and are looking to have a contract in place for January 2025. Due to the time needed to upload all relevant data, they hope to have the system in use by April 2025 and to help to alleviate some of the risk detailed in the report.

The Corporate Asset Lead went on the discuss the risks related to recruiting and maintaining staff. Nonetheless, she said that from September, they will be fully staffed in the corporate property team. In property services, they continue to struggle to retain staff, due to recent and ongoing changes in legislation.

Additionally, it was discussed the risks detailed in the report relating to condition surveys and their need to procure a management system, to improve date interpretation. Due to this, the management system needs to be in place before condition surveys are widely undertaken.

Councillor Fry asked if the new system would move at least two of the risks examined in the report from red, to a less significant risk category. The Corporate Asset Lead  responded that the new management system would move the two new red category risks out of that high risk level.

Councillor Ottino asked about the procurement of a management system and if there is anyway for this to be done more quickly. In response, they could not develop their own system, because this would be too time consuming. However, there is a wide range of management system products available and they have employed a consultant to help them determine which system is the most suitable for their needs.

Councillor Fry asked if, in practice, the risk regarding proper procedural practice occurred very frequently. Bill Lewis responded that although that risk is always present, it is not a regular occurrence. However, with the new legislation that is coming in, this could become more frequent and they are working to prepare for this eventuality. The Head of Financial Services agreed that the challenges that relate to this risk do not occur often, but that the new regulations could lead to increases in these issues occurring.

Councillor Smith asked what assurances the committee would be given regarding the new regulations and how the procurement team are preparing for the implementation of these regulations. In response, Nigel Kennedy stated that the procurement staff are on several training sessions and they are reviewing their contracts in order to prepare. He also stated that they are aware that a substantial amount of work will still be necessary. Responding to a question from Councillor Ottino, the Head of Financial Services said that extra trainings will be needed and that he will discuss the possibility of extra staff with the Head of Procurement.

The difference between existential and manageable risks was raised by Councillor Fry. He asked if it would be useful to distinguish between those risks that can be controlled and those which cannot. The Financial Accounting Manager responded that they can try to separate these out, but that there is some inevitable crossover.

Recommendation: The committee recommended that in future reports, a distinction is made between risks which are and are not under the control of the Council.

The Audit and Governance Committee noted the report.