Apologies were received from Councillor Peter Hamblin.

To receive details of any councillor nominated to attend the meeting in place of a member of the committee.

There were no named substitutes.

To receive declarations of interest in respect of items on the agenda.

No declarations of interest were made.

To approve and sign the minutes of the meeting held on 29 October 2024.  

RESOLVED:

That the minutes of the meeting held on 29 October 2024 be confirmed as a correct record and signed by the chairman.

To receive any questions from members of the public.

There were no questions received from members of the public.

To receive any questions from councillors.

There were no questions received from Councillors.

To enable the committee to be assured that high standards of conduct continue to be promoted and maintained. To provide an overview of how the arrangements for dealing with complaints are working together.

The Head of Legal Services (HLS) introduced the report the following points were highlighted:

·       The Council had received 24 Code of Conduct complaints since the last update, 3 of which were against Hereford Councillors and 21 against Parish Councillors.

·       Over half of complaints were raised by residents and there were no complaints raised by members of Herefordshire council or officers. 46% of complaints had been raised by parish, town and city councillors.

·       Looking at the breakdown of what had been done with these complaints over the last two years, it was noted only two of the complaints actually went to Investigation posing the question why so many complaints were being received with so little merit and what could be done to promote other avenues.

·       Information provided by NALC had indicated that only 7 Parish/Town Councils had signed up to the Civility and Respect Pledge, the second lowest in the country. It was agreed that we would consider ways to promote the pledge which in the long run could aid in reduced complaints and aid in the reduction of resources. 

·       Appendix 1 was highlighted where increases were seen in Ross and Wye Town Council and Homer and Shelwick and Colwall in the last six months. It was noted no complaints had been received by Bartestree and Lugwardine and Walford and Llangarron which historically have had higher levels of complaints.

·       The theme of complaints was still predominantly around disrespect and non-declaring of a personal interest.

·       The average time taken in days from receipt of a complaint to the initial decision of the Monitoring Officer was 22 days.

·       The response time for the Independent Persons to provide their views on matters is currently an average of 2 days which is considered to be exceptional and, in many cases, have been received the same day.

·       One formal investigation had taken place during the period and took 56 days due to the number of interviews and delays in interviewees making themselves available. The matter is due to be referred to a Standards Panel.

·       The Independent person (IP) highlighted how the report was extremely helpful in setting the scene and clearly explaining the issues. It provided a good level of transparency, the IP’s felt their views are considered and feel valued. The organisation of the effective team under the monitoring officer was highlighted and that there was a clear understanding of their role, remit, responsibilities which ensures complaints are dealt with swiftly for all parties. They were encouraged to see that some parish councils were addressing their training and governance arrangements.

The HLS and Chair expressed they’re thanks to the IPs for their contributions.

·       Following the committee’s recommendation, a letter was sent to the secretary of state asking her to introduce a more effective standards regime with appropriate sanctions. The government had launched a consultation which the Council’s response and recommendations can be found at appendix 2. The response had been drafted by officers, but the views of the committee and Group Leaders had been sought.  ...  view the full minutes text for item 33.

To review and approve the proposed updates to the Contract Procedure Rules, the Financial Procedure Rules and the Financial Procedure Rules Guidance Notes.  To ensure council financial and contract procedure rules are up-to-date following the introduction of the Procurement Act 2023 and Procurement Regulations 2024, which is new legislation due to come into effect on 24 February 2025 in order to ensure transparency about how public resources are used and controlled to mitigate the potential for fraud and ensure compliance with relevant legislation.

The Director of Finance (DOF) introduced the report, the purpose of which was to provide an update on the contract procedure rules and financial procedure rules and guidance notes. They were last reviewed by the committee in January 2024 and updates were needed to reflect required legislative changes due to the procurement act and procurement regulations that came in to force the following month as well as some changes in job descriptions through the financial procedure rules. A summary of the changes could be seen at paragraphs 10 and 12 of the report.

In response to committee questions:

1.     It was explained that to engage smaller/ local suppliers relied on good engagement early on and communication and sharing of information and making sure that the requirements through the tender process are proportionate to the size of the contract. The Priority Supplier Programme had been introduced which is an early payment programme that gives suppliers the opportunity to be paid earlier than contracted terms.  It was noted that new regulations encouraged greater premarket engagement.

2.     The Commercial Services Manager (CSM) confirmed that there were local companies bidding for work, particularly in mortgage construction and minor works areas. It was thought that there was still work that could be done to encourage other companies and look at opportunities in dividing contracts to make works more accessible for local suppliers such as encouraging larger suppliers to work with local supply chain and subcontractors.

3.     It was explained that there are mechanisms within the new legislation to direct awards in certain circumstances, for example, protection of life and users’ choice.

4.     The use of the dynamic market process was explained.

5.     Each director is responsible for appointing contract managers within their directorate area to manage contracts. Any officers that are dealing with procurement or contract management related activity in their role should either have the requisite experience in contract management and procurement or would be appropriately trained. The Commercial Services team offer both sets of training, procurement, and contract management, twice yearly to those officers. There is also an online introduction to the contract procedurals and finance procedure rules that must be completed once a year to ensure they keep themselves updated of the procedures.

6.     The Senior Lawyer (SL) confirmed under the new rules all contracts over £5 million must have 3 Key Performance Indicators (KPIs) published. The Waste Contract and Public Realm contracts did have KPI’s within their contracts but there was no legal requirement to publish them. The SL would investigate if it were permissible for these to be published.

7.     There were provisions within the waste contract to vary the KPIs, work was ongoing to ensure that the KPIs that go into the public realm contract will have similar mechanisms as where contracts are for a number of years, requirements and ways to measure performance will change over time.

8.     In the procurements and contracts, it is stated that companies should reduce the environmental impact of the  ...  view the full minutes text for item 34.

To provide an update on progress in respect of actions identified to deliver continuous improvement in governance arrangements.

Note: Paper to follow;

Appendix 1      Update on actions to improve governance arrangements

The Director of Finance (DOF) introduced the report the purpose of which was to provide the committee with an update to areas that could be strengthened to the governance arrangements and provide assurance that work was ongoing and not just a year end exercise.  Appendix 1 provided an update against each of the areas of improvement linked back to the core principles that they related to.

In response to committee questions the DOF highlighted that she and her team were not solely responsible for contributing to the Annual Governance Statement, that it was a council document informed by a variety of different sources including the Corporate Leadership Team, Heads of Service and Internal Audit Opinion.

The committee noted the activity completed to deliver improvements in governance arrangements in 2024/25. 

To provide an update on the council’s approach to risk management arrangements. 

The Director of Finance (DOF) introduced the report the purpose of which was to provide an update on the council’s approach to risk management arrangements.  The principal points were noted:

·       The Corporate Leadership Team (CLT) had taken part in a risk management workshop that morning, hosted by South West Audit Partnership (SWAP) where risk appetite and tolerance was discussed and considered in the context of the council plan and the priorities of the council plan around people, place, growth and transformation

Next Steps Included

·       Updating the corporate risk registers ensuring the risks are proportionate and where appropriate mitigations, they are linked to the risk appetite.

·       Sharing and informing colleagues across the organisation of risk appetite to empower officers in their decision making and activities.

·       Additional training and information sessions to ensure that director activity is consistent with the strategic approach.

·       Attention was drawn to the timeline of planned activity.

In response to committee questions, it was noted:

1.     It was noted that whilst aligning the strategy to the core principles of the council plan the underpinning theme across all those principles was working and joining up all the relevant bodies across the county to also consider cabinet priorities and making sure that the council is considering risks.

2.     A realistic and robust budget for adult’s services in the community wellbeing directorate had been set which had been considered by the in-year cost pressures. and the likely impact of demand, growth and the direct impact of employees national Insurance etc on social care contracts. It had been through the scrutiny process and discussed at cabinet twice and was due to be considered and approved by full council.  Cabinet had also approved the transfer of £11 million from the business rates risk reserve to a budget resilience reserve which will exist to support and mitigate those risks of emerging demand in future financial years.

3.     The DOF clarified that there were no costs incurred for the workshop that had been provided by SWAP and was included as part of the council’s annual contract and services and the external risk management company as part of the council’s insurance arrangement. Both perspectives at the workshop were of great value.  

The committee noted the activity completed to develop the Risk Management Strategy.

This report is to provide an overview on all counter fraud activity across the Council’s services throughout the previous calendar year and represent an up-to-date account of the work undertaken, including progress and outcomes aligned with our strategy and core objectives.

The Counter Fraud Manager (CFM) presented the report, the purpose of which was to provide an overview on all counter fraud activity across the council’s services throughout the previous calendar year and represent an up-to-date account of the work undertaken, including progress and outcomes aligned with the council’s strategy and core objectives. The following key points were highlighted:

·       There had been a further increase in the number of corporate fraud referrals, an uptrend over the past three years. Whilst increases are positive in many ways as it shows confidence and accessibility in reporting systems, it can also pose a challenge due to the increased volume of work on resources allocated to respond.

·       Further challenges in 2024 such as understanding of how the fraud risks continue to develop across the organisation, increasing evolution and adaptation of artificial intelligence and risks associated with this emerging technology being utilised by bad actors was highlighted.

·       96.5% success rate of all staff completing fraud awareness training.

·       2 new strategic pillars in deter and protect had been added which aimed to capture and report to the committee some of the key existing measures that the Council had in both deterring fraud and protecting local residents from the risk of fraud.

In response to committee questions, it was noted.

1.   The CFM explained that a large percentage of referrals comes from external means, this could be via a postal form, the public referral hotline or digital reporting form. Most referrals utilised the anonymity option.

2.   The CFM confirmed a joint working agreement with the Department for Work and Pensions was in place.  An increase in the number of criminal investigations being jointly worked between both organisations was noticed and benefited in the number of civil recoveries being achieved. The importance of joint working with other enforcement agencies was highlighted to have significant impact and reduce the risk of fraud.

3.   The CFM confirmed that there is mandatory awareness training which reaches all staff across the Council and more targeted training for grant schemes.

4.   It was explained that benchmarking fraud prevention against other local authorities would be difficult.

5.   Council tax revenues and benefits remains a high area of referrals which marries nationally and what was being seen through other local authorities that engage in the Midlands fraud group, (a hub of corporate fraud investigators that share intelligence across the UK). 

6.   The committee were informed that the CFM was the sole full time equivalent officer that deals with corporate fraud in the council and that there could be some benefit in additional resources.

7.   The DOF highlighted that the counter fraud service is supported by colleagues across the organisation such as finance, benefits and revenues but would continue to review the resources and the cost benefit of what is able to be recalled in terms of avoided fraud.

8.   The Head of Internal Audit also advised the committee that she was working with the council tax team about second homes and sharing within the swap partnership  ...  view the full minutes text for item 37.

To update members on the progress of internal audit work and to bring to their attention any key internal control issues arising from work recently completed.

To assure the committee that action is being taken on risk related issues identified by internal audit. This is monitored through acceptance of agreed management actions and progress updates in implementing the action plans. In addition, occasions where audit actions not accepted by management are documented if it is considered that the course of action proposed by management presents a risk in terms of the effectiveness of or compliance with the council’s control environment.

The Head of Internal Audit (HIA) introduced the report the purpose of which was to update members on the progress of internal audit work and to bring to their attention any key internal control issues arising from work recently completed and to assure the committee that action was being taken on risk related issues identified by internal audit.

The principal points were noted:

·       No high organisational risks had been identified.

·       2 Limited assurances were identified of which there were 7 priority 2 findings.

·       4 priority two actions were identified in the use of spot purchasing, non-accommodation audit and 3 were from the Court of Protection Audit.

·       Four audits had been completed since the last progress report with 11 currently in progress and 3 at draft report stage.

·       Links to corporate risks remain largely the same as the last progress update but this is to be expected as SWAP awaits the Council’s revised Corporate Risk Register.

·       Once the corporate risk registers had been revisited, updates would be made to the dashboard with the corporate risks and moving forward officers would work to and agree the best approach for providing members with assurance for those areas with no coverage.

·       Adjustments had been made to the visual presentation on the Internal audit work programme and coverage dashboard used to identify the coverage at the request of the committee at the previous meeting.

·       27 actions had been closed off since the last update with a further 11 actions having been agreed with Council officers. 44 actions are pending remediation. Work would continue to gain an update from the responsible officers allocated to the actions. Work would continue to concentrate on those that are most overdue.

·       A continued high feedback score of 99% was still being achieved

The committee noted the report and were satisfied with the areas of activity and necessary improvements outlined.

To discuss the councils response to the Local Audit Reform Consultation.

The Director of Finance (DOF) gave an overview of what the Local Audit Reform consultation contained. The main responses included.

·       The council strongly disagreed with any proposals of loosening to statutory deadlines. Herefordshire was the first and only Council in the country to have their accounts signed off by the statutory deadline for 23/24 and to receive an annual audit report.

·       The council is supportive of simplifications to the financial reporting regime and a good practical response by the audit sector, which is proportionate to the financial risks.

Action(s)

023/24-051 The DOF to circulate the council’s response to the Local Audit Reform consultation to committee members.  

To consider the work programme for the committee.

The Risk Management Strategy had been added to the work programme for 25 March 2025.

RESOLVED

That the work programme be agreed.

Tuesday, 28 March 2025. 2pm.

Tuesday, 28 March 2025. 2pm.

Recommendation) That under Section 100(A)(4) of the Local Government Act 1972, the public be excluded from the meeting for the following item of business

Internal Audit Update Report Quarter 3 2024/25, Appendix B – Court of Protection on the grounds that it involves the likely disclosure of exempt information as defined in Schedule 12(A) of the Act (as amended) as indicated below.

3            Information relating to the financial or business affairs of any particular person (including the authority holding that information)

And the public interest in maintaining this exemption outweighs the public interest in disclosing the information.

RESOLVED

That the exempt appendix listed at Item 12 on the agenda be discussed in closed session.