Agenda item

To give consideration to a report which advises the Committee of the outcome of the review of the Authority’s systems of internal control as presented in the Annual Governance Statement which will assist it to consider the effectiveness of the Authority’s arrangements for the governance of its affairs, including arrangements for management of risks and systems for internal control.

The Committee was presented with the Annual Governance Statement (AGS) which contained the outcome of the review of the Authority’s systems of internal control and explained how it delivered good governance and reviewed the effectiveness of those arrangements. The statement complied with the required regulations and was based on the governance framework which had been produced by the Chartered Institute of Public

Finance and Accountancy (CIPFA) in association with the Society of Local Authority Chief Executives (SOLACE). The Chief Executive, Director of Public Health and each Head of Service had been involved in populating the Annual Governance Statement with the evidence supporting how the principles had been met within the Authority.  Having reviewed the evidence, the Senior Leadership Team had taken the view that, as a whole, the governance arrangements in operation during 2018/19 were adequate.

A number of areas had been identified which required continuous monitoring to ensure that they did not become significant governance issues in the future.  These included:

• A risk that the Authority would not be able to protect its housing assets and services to tenants as a result of changes to government policy on welfare reform which had resulted in reduced income to the Housing Revenue Account;
• A risk that the roll out of Universal Credit could impact on residents’ finances and also the Housing Revenue Account as a result of increased rent arrears;
• A risk that the Efficiency Savings Programme if not properly implemented could result in the Authority not being able to deliver improved services and meet the increased demand for the Authority’s services;
• A risk that existing budget monitoring does not fully align with the efficiency programme
• A risk that the impact of the development of the Integrated Care System (ICS) across the North East and North Cumbria and the Integrated Care Partnerships (ICP’s), which have replaced the former Sustainability and Transformation Plans, have on the Local Authority in relation to the financial implication of the plans and the ability to deliver services for residents;
• Changes to the business rates scheme which allowed local authorities to retain 100% of business rates in their area. Whilst this had the potential to give authorities greater ability to plan for the long term with more financial independence there were added risks including a lack of business growth, the closure of a major business and the cost of appeals. It was noted that measures were in place to provide timely support to businesses and to mitigate the risk;

·      The risk that should the policies and procedures in place fail to ensure that sensitive data is secure and managed appropriately then the Authority could face fines under the Data Protection Act 2018 as well as compensation claims.

·      A need to ensure that governance arrangements for the partnerships were in place to ensure that services were delivered to a satisfactory level whilst delivering value for money and taking account of changes to staffing in both the partners and the

Authority;

·           The decision to leave the European Union had resulted in a number of uncertainties for the Authority and businesses in both financial and economic growth terms. The full extent of the impact would not be clear until the precise trade terms were known.  There was an opportunity to work closely with other local authorities, the North East Local Enterprise Partnership (NELEP) and the North of Tyne Combined Authority to exploit new areas of growth and financial streams.  A watching brief would be kept to ensure that any changes could be identified and acted upon; and

·           The risk that the Authority might not be able to maximise the opportunities of the devolution deal for the North of Tyne. It was explained that a North Tyneside Working Group continued to meet and there was North Tyneside representation on the North of Tyne Steering Group which ensured that there was involvement by Elected Members and Officers of the Authority.

Members expressed their concerns at the late circulation of the above report.

Resolved that (1) the outcome of the review of the Authority’s systems of internal control be noted;

(2) the Annual Governance Statement be approved to accompany the Statement of

Accounts for 2018/19; and

(3) the actions proposed in the Annual Governance Statement be noted.