The report of the HR & OD Manager is attached.

Contact: Sam Collins-Lafferty (01743) 252854

The Committee received the report of the HR & OD Manager which set out the current strategic risk exposure following the December 2024 bi-annual review, subsequent discussions and amendments.

The Executive Director of Resources (Section 151 Officer) introduced and amplified the report.  He informed the Committee that there were currently 11 strategic risks on the Strategic Risk Register which were reviewed every six months, in conjunction with the named risk owner, they were all scored, and a year-end target score identified.  The controls and mitigations put in place throughout the year were then measured against that target score to see whether the year end target had been achieved.  He drew attention to the Strategic Risk List (set out in paragraph 7.5 of the report) and explained that risk exposure was then plotted on a matrix (set out in paragraph 7.6).

The Executive Director of Resources (Section 151 Officer) explained that as all risks were either high or medium, and as such above the Council’s tolerance level, these were actively managed on a regular basis.  The emerging risk around the change in political balance had been considered but had not been added as a strategic risk.  The Executive Management team met every two weeks and considered these risks one by one, and this was outside of the regular review of the risk process.

Members expressed concern at the number of risk scores that were increasing, several of which having increased to the highest risk score.  This was felt to be synonymous with the Council’s current position, and although no reference to the NWRR, it was felt that this was a great risk to the Council.  A query was raised as to how the project risk scores were arrived at.  In response, the Executive Director of Resources (Section 151 Officer) explained that the risks around the financial implications of delivery, or indeed non-delivery, of the NWRR were considered every month and were presented to Cabinet along with the risks around other external projects and all other financial risks of the whole authority.  It would therefore be inappropriate to put all of those as separate strategic risks.  He went on to discuss the three levels of risk (operation, project and strategic) and how these were defined and reviewed.

Councillor Evans requested that the Committee have a more detailed examination of the ‘Inability to contain overall committed expenditure within the current available resources within this financial year’ risk along with the ‘failure of officers and members to adhere to Governance arrangements’ risk.  In response, the Executive Director of Resources (Section 151 Officer) explained that it was in order for the Committee to do so, but he queried what the scope of that consideration would be, so as not to duplicate work that was already being undertaken elsewhere, because the financial position was already reported to Cabinet each month, was considered by Scrutiny Committee who consider the impact of expenditure, including under and overspends, and it was also considered at the weekly collaborative budget group meetings which were attended by all group leaders.

The Executive Director of Resources (Section 151 Officer) explained that the ‘failure of officers and members to adhere to Governance arrangements’ had been identified as high risk related in part to the review that was undertaken every year on the internal control environment which was currently considered to have limited assurance, along with the Annual Governance Statement which had identified 9 or 10 governance issues that needed to be addressed.  Based on that information, it would be inappropriate to not consider that to be a significant strategic risk and, until all of the actions were in place and improvements were being seen, the level of risk would not be reduced.  He clarified that although a risk, it did not mean that officers and members were not adhering to governance arrangements.

The Chairman felt that the fact that the risk scores were increasing, although a matter of concern, indicated how well the assessment process operated and how seriously risks were taken.  The Executive Director of Resources (Section 151 Officer) reiterated the point that the fact the scoring was moving was reflective of the fact that those risks were being considered, and, as an example, he explained that although there were a lot of mitigations around the ICT systems the risk was such that it should be kept on the highest alert, but that did not mean that anything was failing. He went on to explain why the three highest risk scores shift throughout the year.

In response to further concerns raised by Members, Councillor Evans proposed that the Committee have a more detailed examination of the ‘Inability to contain overall committed expenditure within the current available resources within this financial year’ risk along with the ‘failure of officers and members to adhere to Governance arrangements’ risk.  Upon being put to the vote, and the Chairman using his casting vote, the proposal fell.

In response to concerns around the overall risk exposure being above the Council’s tolerance level, the Executive Director of Resources (Section 151 Officer) explained that if a risk fell below the tolerance level, the Council were willing to accept that level of risk without putting additional controls in place and they were therefore not reported on. Therefore, only those risks that were above the Council’s tolerance level were reported on and he went on to give a detailed reminder of how the process worked.

Councillor Evans voted against this proposal.

RESOLVED:

To accept the position as set out in the report.