Agenda item

The report updates the General Purposes & Audit Committee Members on the corporate risk register. The Committee is asked to note the content of the Corporate Risk Register as at January 2021.

The Head of Risk & Insurance spoke to the risk register report, which were risk rated at twenty or twenty-five. Officers informed that there was twenty-five risks, which was currently rated as corporate red.

The risks were categorised into one of three categories:

The first category was large numbers of existing risks, which were identified as being the existing stock demand, budget gap risks in areas such as Adult Social Care, Special Educational Needs, Unaccompanied Asylum Seekers and so forth;

The second category of risks was specifically related to the pandemic and Covid-19, and responded to the public health emergency, which was developing on a daily basis, which officers were very focused on from a risk point of view; and

The third set of risks related to the major financial challenges arising from the section 114 notice and governance issues, which were highlighted in the report in the public interest, and the ability of the council to respond to the to the report in the public interest (RIPI).

Officers advised that the risk management team, had been doing a significant amount of work with Members and new members of the executive leadership team, in particular, to review the register.

Officers added that an area of development was in relation to target dates for future control measures, and a lot of work was being done around this. In other cases, there would be control measures set up with the risk owners for a more definitive target date, so that there was assurance on the progress towards achieving those future control measures where appropriate. One risk register, which took twelve months was the horizon scan, and thus as a future controller, officers would look to achieve it within that time scale.

Officers concluded following Members queries that future reports would include a one page guide to rating risks both for likelihood and impact, which would help interpret the risk register to decipher a rating of five for likelihood to a rating of four for impact, for example.

Members welcomed the comprehensive report and discussed some of the risk register in detail.

The first comments were in relation to the tracking of long standing risks and long standing future controls, it was asked whether there was the potential to have a report highlighting future controls not delivered within that twelve month period. Officers responded that it was feasible to effectively investigate using the Council's risk management software to review how long those future controllers had been on the register. In the short term officers or risk owners should be asked whether a future control could be delivered in twelve months, in which case, it would provide data alternatively to the reality of existing controls.

Members made comments relating to individual risks particularly EHCSC001 in the report, where the future controls seemed very sensible with a robust set of measures. Although with the scales, if it was to be implemented or mitigated, it suggested that management did not believe the Council would be able to implement all of the future controls, and so there would only be limited impact. Officers acknowledged the comments made and drew Members attention to the Unaccompanied Asylum Seeking Children risks in the report where the future risk rating reflected a realistic outlook and there was not a lot the Council could do to control the demand in this area. A lot of the control measures were listed around the national transfer scheme working effectively, though all local authorities were under pressure, which highlighted risks, and in reflection to the ability to control this risk, or where it would go in the future.

In relation to the ELT0005 risk within the report, Members felt it was quite likely that that the Council would not be able to balance the budget, and the impact was described in the risk scenarios as clearly enormous. Members queried whether there was a timeframe as it was clear that the time would run outside of the twelve months and wondered how officers planned to manage this. Officers addressed the Committee on the delivery of the 2021 balanced budget, which was a major control measure around the capitalisation. The section 151 officer informed that the current financial year, which would end on the 31st of March 2021 would see that time was against the Council, which was why the Council was operating under a section 114 notice as the Council could not deliver a balanced budget. Following an application to MHCLG for a capitalisation direction, officers were awaiting a response which would shed light to what would happen next; should the Council get to the end of the financial year without hearing back from MHCLG, with regard to this financial year (2020-2021), officers would have to end the year with a negative reserve due to the £7.4 million unaudited general fund reserve at the moment, and officers were predicting a much higher forecast spending year, which meant the negative reserve would be carried forward. This was also the case for the capitalisation direction for the 2021-2022 financial year, should there be no response from MHCLG officers cannot set a balanced budget for the year. Furthermore, officers shared that the report which was part of the budget report which would be heard at Cabinet and Council in very late February, early March. Should the Council not be able to balance its budget, it would need to continue to operate under a section 114 notice and a new one would be issued for the financial year of 2021-2022. Members were reminded that Croydon was not the only local authority in this position and MHCLG had a lot to review, balance and weigh up when making their decisions.

In relation to PH001, Members wanted clarity on what this stemmed from. Officers informed that this the risk related to the statutory obligations of the Director of Public Health, which was dominated by Covid-19. This was put on the risk register by the Director of Public Health upon reflection having received a wide ranging statutory duties to respond to the public health emergency and related issues in unprecedented scenarios. There was concerns about the Council’s ability to deliver statue obligations in relation to the Covid-19 pandemic, and other wide ranging responsibilities and obligations the local authority had. This risk was rated red because officers shared concern about the way the pandemic was developing on a daily basis and the Council’s ability to respond appropriately. Additionally, Members asked about the future controls given all the uncertainties that it lowered the likelihood of this from a five to a three. Officers responded that as part of the review of future controls, rating also reflected cautious optimism of others in the longer term in responding to the Covid-19 pandemic, though the vaccination programme and the other things were in place across the borough to control this, officers would need to receive further information from the risk owner.

In another Covid-19 related risk on the register, C190017, Members asked whether the current likelihood which was listed as four and a future likelihood of three, was considered with the increased infection rate. Officers informed that it was to be reviewed as the data was out of date upon publication, and at the moment it was rated at 20, and this arguably could be a 25, thus the risk owner would be the one to escalate it.

The Interim Chief Executive Officer provided further assurance informing that she chaired the Gold control part of the emergency response to the current situation and the group regularly reviewed a very specific risk register in regard to the Covid-19 pandemic readiness. This had gone through a lot of detail at Silver and Gold meetings, which consisted of the global risks aggregated and very specific risks.

In relation to the risk ED003 on the increased number of Council maintained schools moving into financial deficit and potential default, Members commented that the only future control listed for this risk was a decision to delay the independent financial review of schools to later in the autumn term, to allow schools to restate their budgets, and queried whether this had reduced the future risk rating from five to three, which seemed quite dramatic, considering it was just delaying any action. Officers responded that it was the effectiveness of existing controls the risk officer had made and in review of the finance teams in relation to schools in deficit and earlier intervention to spot problems early and assist schools in question. Officers assured Members that they were working very closely with all schools monitoring their budgets before they would get into a deficit position, and if the schools were looking like they were moving into deficit, officers would start to put in place measures with them, which involved school meeting with officers from the finance team of the Council and also the children, families in education department of the Council. The schools forum was also receiving reports regularly on schools and the schools financial position. Officers would update at the next committee a report on the independent financial review of schools.

In relation to the risk PST001 which related to the Whitgift Centre not developed, or redeveloped as anticipated, Members commented that they did not think the future controls for this risk were fit for purpose and potential actions should be put in place with an alternative strategy to the approach of the redevelopment of the Whitgift Centre. Officers commented that a potential item for a future committee meetings could be scheduled to give a risk presentation where officers could discuss in detail the risks. This was supported by the Interim Chief Executive Officer who commented that the risk register was a live document that was discussed, reviewed, amended, updated, and sought improvement. 

Members discussed the approach to risk itself and raised a question that following the RIPI what approach and learning had officers taken, and how had the leader of the institution (political and executive officers) changed or developed the approach to risk within that period. Officers responded that the risk management framework was very explicit that risk was every officer’s role and that the framework was only as good as the officer’s and Members who applied it. Officers added that the executive leadership team and Members were taking the risks very seriously, and focused on areas highlighted in the RIPI, particularly where risk was specifically referenced, which was getting a lot of officer and Member attention. Officers were encouraged by people asking for support and assistance in updating the register and really getting engaged with the process, in terms of making sure that it was up to date, and really reflecting realistically of the current status.

The Chair thanked officers for the report and the questions and answer session.

The Committee RESOLVED to note the contents of the corporate risk register as at January 2021.