Issue - meetings

Report by the Chief Operating Officer.

10.1     The Chief Operating Officer introduced the report. Strategic risk monitoring is also part of the Reconciling Policy, Performance and Resources (RPPR) process, and was included in the quarter 4 Council Monitoring report that went to Cabinet recently. A Climate risk has been added to Strategic Risk Register to reflect the risk from climate change. The covering report also summarises any changes to the strategic risks and the management responses to them.

10.2     The Committee discussed the report and welcomed the addition of the Climate risk and a No-Deal Brexit risk to the strategic risk register. A summary of the comments made by the Committee during the discussion of the strategic risk register is given below.

• RPPR. The Committee noted that the existing text of this risk makes no mention of the increasing difficulty of delivering savings in the current financial climate. The Committee agreed that it would be worth suggesting a revision to the wording of this risk. The Chief Operating Officer agreed to discuss an amendment to the wording with the Corporate Management Team.
• Local Economic Growth – The Committee commented that it is reassuring to see that there are some risks that are rated as ‘green’. It also commented that it was not solely the responsibility of the Council to deliver economic growth, and perhaps a form of wording that reflects the leverage that the Council has and what it can deliver may be more appropriate. The Chief Operating Officer will discuss re-wording the risk outside the meeting.
• Departmental risk registers. The Committee asked whether it would be possible to examine the departmental risk registers, which sit below the strategic risk register. The Chief Operating Officer outlined that it would be possible to share the contents of the departmental risk registers with interested Committee members.
• Workforce. It was noted that Workforce issues are a common problem for all local authorities and not just confined to East Sussex County Council (ESCC).

10.3     The Committee RESOLVED to note the current strategic risks and the risk controls / responses being proposed, and welcomed the addition of the Climate and No-Deal Brexit risks to the strategic risk register.

Report by the Chief Operating Officer.

44.1     The Chief Operating Officer introduced the report which provides an update on strategic risks and the mitigation measures that have been put in place. He highlighted that a separate No-Deal Brexit risk has been included in the Strategic Risk Register following the November 2018 Audit Committee meeting.

44.2     The Committee discussed the strategic risk monitoring report and made the following comments:

• Reconciling Policy, Performance and Resources - RPPR (Risk 5). The ESCC financial planning process is extremely robust and the Red rating should not be interpreted as a criticism of the process. The Council is getting to the point where however robust the financial planning process is, it may not be able to mitigate the risk. The Red rating more properly reflects the unknowns that the Council faces in terms of financial planning. The Chief Operating Officer acknowledged this point and commented that it is the implementation of the budget where the main risk resides.

• Cyber Attack (Risk 12). The Committee asked if the two data centres are separated enough to recognise a cyber-attack and not pass on a risk from primary to secondary data storage.  The Chief Operating Officer confirmed that there is a physical separation of storage facilities and resources are not shared to counter this risk.

• Workforce (Risk 9). The Committee noted that the days lost due to stress have reduced, but the days lost due to mental health have increased. The Committee asked for clarification on whether incidences of stress are being appropriately responded to and are not causing an increase in reported mental health issues.  The Chief Operating Officer responded that as the cause of sickness absence is self-reported, so some of the variation is due to this factor. However, there are appropriate responses in place for all types of sickness absence, including a range of mental health initiatives.

44.3     The Committee RESOLVED to note the current strategic risks and the risk controls / responses being proposed and implemented by Chief Officers.

26.1     The Chief Operating Officer introduced the report. The report has been produced in response to the discussion of the Strategic Risk Register at the September Audit Committee meeting. The Brexit risk is currently reflected as part of the risks that are on the Strategic Register Risk Register. The report seeks the Committee’s views on the way in which the risk from a disorderly Brexit should be dealt with on the Register. The report also outlines the work that has already been undertaken on this area of risk, including work that has been carried out with our South East Seven (SE7) partner authorities. The engagement with local government outlined in the report reflects the position 6 months ago, and there has been further engagement since this time.

Brexit Risk

26.2     The Committee discussed the likelihood and risks arising from a disorderly Brexit (i.e. with no transitional arrangements in place). The Committee agreed that there should be a separate item on the Strategic Risk Register for a disorderly Brexit, which should show details of the contingency planning and potential mitigation measures for the main risks. It will be especially important to cover the disruption effects related to a disorderly Brexit and displacement activity (e.g. Newhaven port which may take traffic from Dover).

26.3     The Chief Operating Officer responded he will take the advice from the Committee and create a disorderly Brexit item on the risk register. This will include the work that has already been done such as assessment in the workforce risk and the contingency planning that is taking place for national issues.

26.4     Councillor Bowdler asked if the Council has assessed the risk of further illegal immigration. The Chief Operating Officer outlined that asylum seeking placement activity and unaccompanied children is unrelated to the Brexit risk, and is covered in the Reconciling Policy, Performance and Resources (RPPR) budget setting process.

Risk from Funding Formula changes to Smaller Schools

26.5     The Committee discussed the risk arising from changes to the national funding formula for schools, which may have a particular impact on smaller schools. The Committee’s concerns centre around the potential impact on primary schools, where a change in emphasis towards per pupil funding may make it more challenging to meet fixed costs. The risk to the Council arises from the possibility of smaller schools getting into financial difficulty and the impact this might have on school place planning and home to school transport costs. Some members of the Committee considered this is a developing strategic risk for the Council in the longer term, and should be on the Strategic Risk Register.

26.6     The Chief Operating Officer outlined that the risks are covered in the departmental risk register. These issues relate to the Council’s statutory responsibility for school place planning and school performance, which are undertaken by the Children’s Services department. As such they are within the programme of work being dealt with by the People Scrutiny Committee.

26.7     The Committee agreed that it would like further assurance that there  ...  view the full minutes text for item 26

Report by the Chief Operating Officer.

16.1     The Chief Operating Officer introduced the report. The report incorporates the latest risk register and outlines the changes since the last strategic risk monitoring report. Section 3 of the report outlines the risk management process.

Schools

16.2     The Committee noted that the risk register has two risks concerning schools but neither appears to be concerned with the long term funding of small schools. The Committee understands that the national funding formula cut off is around 150 pupils, but there are many smaller schools which may get into financial difficulties. This is a risk to the budget of the whole Council as there is a potential impact on capital spending for schools, and an increase in the school transport budget if children have to travel further to school.

16.3     The Committee would like more information on how many schools may be affected, the nature of the problems they may face and how the Council is planning to address this issue. Although this risk may be on the departmental risk register, the Committee would like more detail on why the Council is satisfied that the risk is being controlled.

16.4     The Chief Finance Officer responded that work has been undertaken to model the impact of the proposed changes to the national funding formula based on discussions with Children’s Services.  The Chief Operating Officer advised that the implications of the national funding formulae would be considered as part of the Reconciling, Policy, Performance and Resources (RPPR) planning process. The Committee’s view on the risk to small schools being on the corporate risk register will be referred to the People Scrutiny Committee.

16.5     The Committee commented that the risk to small schools should be on strategic risk register until an assessment has been completed and the Audit Committee is assured that mitigation measures are in place. The work that is being undertaken should be summarised in the mitigation column of the risk register, where it is visible to Members. The Committee recommended that the funding risk to small schools is added to the strategic risk register.

Cyber Attack

16.6     The Committee asked if the Council has the capability to react rapidly to a Cyber-attack. The Chief Operating Officer responded that the Council is well prepared and its information management practices are strong. However, there is always a first organisation to be subject to a new threat. The Chief Operating Officer gave reassurance that the Council has the controls in place to protect the Council’s and residents’ information.

Disorderly Brexit

16.7     The Committee commented that Brexit is not mentioned on strategic risk register if there is a disorderly exit. There is a risk from an adverse currency fluctuation and higher inflation, plus an impact on ports. Therefore, a disorderly Brexit should be on the strategic risk register. The Chief Operating Officer responded that the Brexit risk had been considered but further review was required to define the risk and mitigations. At present it is difficult to put in place mitigations when the actual  ...  view the full minutes text for item 16