Agenda and minutes

Apologies were received from Councillor Mary Bateman, Cllr Philip Bateman MBE, Councillor Paul Appleby, Councillor Jonathan Yardley and Mike Ager, Independent Member.

Claire Nye, Director of Finance declared an interest as the Director of Yoo Recruit. Alison Shannon, Chief Accountant declared an interest as the Director of WV Living. David Pattison, Chief Operating Officer advised the Committee that the officers who declared interests would leave the room if any detailed discussions occurred.

[For approval]

That the minutes of the previous meeting held on 20 June 2022 be approved as a correct record.

The Chair of the Committee requested a re-visit to the Civic Halls in November 2022 to see the progress ahead of completion. He advised members that an online training session was arranged for Thursday 16 August 2022 and that invites would be circulated to members.

[To consider any matters arising from the minutes]

Clair Nye, Director of Finance advised the Committee that the CIPFA Financial Code was circulated to members and that an action plan would be presented at the next meeting. 

[To receive an update on the code of corporate governance.]

David Pattison, Chief Operating Officer, presented the Code of Corporate Governance. He provided members with an overview of the document to be added to the Constitution to ensure lawfulness and effectiveness. 

He thanked Michelle Rowe, Deputy Monitoring Officer, for work towards the production of the Code of Corporate Governance.

He advised the Committee that the Code of Corporate Governance is a document that all Local Authorities should have and that it previously went to the Governance and Ethics Committee for approval.

The CIPFA standard set of principles are adhered to and reflected at the Council, the Council’s corporate code were updated to be consistent with the set principles. He outlined to the Committee the underpinning principles and implementation principles that ensure high standards and good practice at the Council.

The Committee were advised that there was a focus on the Council’s performance framework including the Our City Council Plan approved by Council in March 2022. Increased transparency would be assessed and measured by each scrutiny panel/ board. 

He advised that additional training had been implemented for officers to ensure the understand the responsibilities and delegations. Including a series of video training by the Chief Operating Officer.

Michelle Rowe, advised that the Council undertook a review of the Codes of Corporate Governance from a number of Local Authorities, taking a steer from the best of those identified. The revised version uses fewer words, relies on signposting and contains more useful information as a result.

In response to a point raised by Councillor John Reynolds regarding the ordering of the Code of Governance Principal B, what the Council does and how it demonstrates ensuring openness and comprehensive stakeholder engagement. The Chief Operating Officer advised that he will change the order in regards to the notices in local newspapers based on relevancy.

In response to a question raised by Councillor Craig Collingswood, regarding any identified gaps in the Council’s core principles. The Chief Operating Officer advise that additional training was needed for Councillor’s and Employees on certain aspects.

The Chief Operating Officer advised that the Code of Corporate Governance forms part of the Annual Governance Statement reviewed annually. He advised that the frequency of the Code of Corporate Governance review would be determined during the Annual Governance Statement review.

The Chair of the Committee thanked the Chief Operating Officer for the work put into this exercise.

Resolved:

1. That the revised Code of Corporate Governance go forward to Council for final approval.

That the Chief Operating Officer be authorised to publicise the document and add it to the Constitution.

[To receive an annual governance statement 2021-2022 update.]

David Pattison, Chief Operating Officer, presented the Annual Governance Statement 2021-2022 which would form part of the Annual Statement of Accounts in line with the requirements of the Local Government Act.

He advised that the review of the effectiveness of the governance arrangements had noted that good governance was in place at the Council. He also noted that the statement included an increased focus on Local Authority Control Companies (LAC). The LAC Companies included:

City of Wolverhampton Housing Company (WV Living)

Wolverhampton Homes

Yoo Recruit

Help to Own.

As part of the review a number of issues were identified where further action would be required in the year ahead. This included the need to produce a written statement of action for special education needs assessment (SEND), following an OFSTED report.

In response to a comment from the external auditor the Chief Operating Officer advised that clearer reference to an unqualified opinion being received from the Council’s External Auditors would be included. This would be added prior to September 2022 when the statement would form part of the wider accounts. 

He also advised that the annual internal audit opinion formed part of the assurance framework.

The Committee were updated on the progress made relating to the items identified in the previous year’s governance statement, including:

Savings Targets

Procurement

Contract Management

Strategic Assets

Civic Halls

Constitution Review

The items identified for the action plan for 2022-2023 included;

Medium-Term Financial Strategy

Procurement and Contract Management

Adult Services

Linked Bodies

Civic Halls

Compliance with Information Governance

Transparency Requirements

SEND.

In response to a question raised by Councillor John Reynolds regarding climate change the Chief Operating Officer advised that the Council remained committed to tackling this.

In response to a question raised by Armstrong Ngoh, Independent Member, regarding the difference in oversight of bodies relating to Wolverhampton Homes, Peter Farrow, Head of Audit advised that all bodies are independently externally audited, however the City of Wolverhampton Council also provided internal audit support to Wolverhampton Homes, and that Grant Thornton conducts their external audit. The Chief Operating Officer advised that the SEND report received focus from the relevant scrutiny panel/ Council resulting in the implementation of additional resources and a clear written statement of actions accepted by OFSTED.

Resolved:

That the review and comment upon the contents of the Council’s Annual Governance Statement for 2021-2022 be approved.

[To receive an assessment of going concern status update.]

Alison Shannon, Chief Accountant, presented the Assessment of Going Concern Status. She advised that the Assessment of Going Concern Status would be submitted to Grant Thornton to form part of the Council’s audit.

The main factors of the going concern included;

Current/ Projected Financial Position

Governance Arrangements

Risk Management

The control environment which the Council operates.

The statement also reflects the increased cost of living and the impact that Covid-19 has had on the Council’s financial position. The Chief Accountant advised that the council continues manage its finances well and has been able to set a balanced budget yet again without the use of general reserves. The Council reported an underspend of £2 million for 2021-2022. 

An update on the 2023-2024 draft budget and MTFS, including an update on the Council’s projected deficit position would be presented to Cabinet on 27 July 2022.

The Chief Accountant advised the Committee that the Council remained a going concern.

Jon Roberts, Grant Thornton welcomed the statement and advised the Committee that Grant Thornton would look at the financial health of the Council and report back.

Resolved:

That the assessment of Going Concern Status be noted.

[To receive the draft statement of accounts.]

[To receive an update on the strategic risk register.]

Peter Farrow, Head of Audit, presented the Strategic Risk Register.

He advised that the risks are linked to the priorities in our city plan and the risk register was hopefully seen to be a fair reflection of the risks the city faces.

The Committee were advised that 17 risks has been identified and RAG rated, with two red risks highlighted around the medium-term financial strategy and high employment. Two new risks had been added to the risk register, safeguarding Ukrainian refugees and financial wellbeing and resilience. A number of risks relating to the Covid -19 vaccination programme had recently been removed from the risk register. The relighting our city process had also been replaced by the new financial wellbeing and resilience risk, reflecting the cost-of-living crisis and rising inflation.

The Chair of the Committee asked that members raise any risks on the strategic risk register, that they may wish to ‘call in’ for a deeper dive review at a future meeting He requested that financial wellbeing, resilience recognising the cost of living in Wolverhampton be added to the agenda for discussion at the next meeting.

Councillor John Reynolds suggested that the climate change risk be called in at a future meeting.

Resolved:

That the latest summary of the Council’s Strategic Risk Register, as at Appendix A be noted.

[To receive an update on cyber security.]

Jai Ghai, Head of Digital and IT, presented the Cyber Security Update. He advised the Committee that the cyber threat landscape is continuously evolving, highlighted by the current conflict in Ukraine.  Based on the current situation the National Cyber Security Centre (NCSC) has increased the cyber threat level to high.

To manage the cyber threat the Digital and IT team ensure that measures are put in place as priority and that the Council’s network, devices, data and workforce are kept secure at all times. The team are actively monitoring the system behaviours and taking remedial actions, ensuring our systems are patched to the required levels. The team is also attending webinars and continuously collaborating with third parties.

He advised that there was a 50% increase in cyber-attacks, costing in the range of billions for the UK government, following attendance to the Government and IT Security conference.

The Council worked closely with Microsoft to deploy the threat mitigation services when risks are identified and eradicating legacy technology to upgrade current solutions to protect the Council security posture.

He advised that the Council worked with the Local Government Association (LGA) and was successful in securing funding. This allowed the team to employ a consultant to benchmark the services with NCSC best practice standards to ensure that services stay secure and compliant. The Head of Digital and IT was pleased to report that the Council was awarded a strong cyber security posture statement, following the benchmarking exercise. He advised that the NSCS benchmarking statement focused on 10 key principles, the Council was deemed to have minor issues with 3 of the principles. He advised that they worked closely with the internal audit team to ensure a robust incident response plan was in place that was up to speed and endorsed by the information governance/ business continuity and internal audit team. 

The Council was also awarded funding to train the security resources to a certified security course that is recognised nationally/ internationally

He advised the Committee on some of the short-medium-term activities planned and that there would be learning in collaboration with the Organisation Development team, rolled out from an awareness point of view for Councillors and leadership.

In response to a question raised by Armstrong Ngoh, Independent Member regarding the Council’s system recovery. The Head of Digital and IT advised that they practice system recovery on an annual basis.

In response to a question raised by the Chair of the Committee regarding the risks associated with portable devices and security working from home. The Head of Digital and IT advised that security measures included connectivity/ password authentication and multifactor authentication. He advised that network security monitoring was in place to allow employees to work from any location.

Resolved:

That the review and comment upon the contents of the Council’s Cyber Security Statement for June 2022 be noted.

[To receive an update on counter fraud.]

Mark Wilkes, Audit Business Partner, presented the Counter Fraud Update.

He advised that further data would be submitted later this year as part of the national fraud exercise.

He outlined the Council’s position regarding the business grants recovery.

He also advised that three properties had recently been returned to stock as part of tenancy fraud investigations.

Resolved:

That the contents of the latest Audit Services Counter Fraud Update be noted.