Agenda item

N Howcutt presented the update, noting the recommendations to note the update, any further assurances, and to highlight the revised strategic risks put forward to the Committee and Cabinet.

N Howcutt advised of one change to the scores in reference to the Council's ability to provide sufficient quality and affordable homes, as linked to the moratorium. The moratorium has now been partially lifted, meaning that more development can be undertaken and there is now around £50m of new build programme in the HRA for next year. It was noted that the Council only provide a small amount of numbers and they are therefore reliant on the private sector.

Councillor Silwal queried the amber and red ratings. N Howcutt stated that part of the risk strategy outlines a matrix system for risks and anything that scores over 9 as an actual risk or over 4 as likely or consequence will be regarded as red, with amber being any item that scores over 2 or 3. The first red risk is on the failure to secure sufficient investment in essential infrastructure, which requires £1bn of investment, and is therefore particularly high risk as this relies on what funding is in place. The second red risk is regarding funding and income not being sufficient, particularly when there is an in-year pressure on budget. N Howcutt confirmed that there are several strategies in place to bring the budget back in line for the year.

N Howcutt noted the revised strategic risks, which commenced in June 2022 with a cross-party group of councillors to review the existing strategic risks. Key corporate priorities have been reviewed alongside the 52 objectives and key strategic risks have been identified around the delivery of the corporate plan. N Howcutt proposed a specific risk regarding climate and ecological emergency, which has cross-party support.

N Howcutt stated that, following the appointment of a new administration in May, there will likely be a new corporate plan and the strategic risks may need to be reviewed again, though the proposed risks remain a good basis for what the Council needs to focus on. Work has been benchmarked against other local authorities and it is therefore felt that the proposed list of strategic risks is appropriate for approval.

Councillor Townsend asked if the corporate plan had changed. N Howcutt explained that the corporate plan was revised in 2021 when the climate emergency was included in more detail. It was noted that Brexit negotiations have been removed.

Councillor Townsend noted the risk regarding infrastructure and asked how the scope of this risk is defined given that DBC is not responsible for all infrastructure. N Howcutt advised that the risk is now linked to the failure to deliver place, shaping and regeneration ambitions, meaning there is now more of a focus on what the Council does. N Howcutt referred to page 44 detailing the revised strategic risks as outlined in Table 1, stating that the risk has now been revised to ensure it is more appropriate. It was noted that HCC (Hertfordshire County Council) have a wider infrastructure development plan that they are delivering.

Councillor Townsend queried if the Risk Management Policy and Risk Management Guide would also be discussed. N Howcutt advised that these are part of the review.

Councillor Townsend commented that the Risk Management Policy is also referred to as a strategy. N Howcutt explained that the strategy and policy are effectively the same and confirmed that he would correct the references within the report.

Councillor Townsend noted the Committee's role to oversee risk management and asked what governance actions the Audit Committee is required to take. N Howcutt clarified that strategic risks are first reported to the Audit Committee to allow for scrutiny, and it was confirmed that the Committee provides oversight as Cabinet will approve the strategic risk reports whilst reflecting the Audit Committee's review. P Lazenby suggested that the Audit Committee has more responsibility regarding risks than stated give that the Committee's Terms of Reference articulates the responsibility in respect of identifying weaknesses, risks and receiving assurance, and it is therefore the Committee's duty to take an overall view of these risks. P Lazenby agreed that the Audit Committee does not have overall responsibility for each individual item, though it does have an overall monitoring responsibility.

Councillor Townsend suggested that the Audit Committee is responsible for setting the risk appetite and therefore the approval of the policies would also fall to the Committee. N Howcutt explained that risk appetite has to be set as part of strategic risks going forward and this needs to be discussed with members and the Audit Committee, with the Committee needing to be comfortable with the risk appetite being set. N Howcutt advised that now the new strategic risks are in place, they can now look at setting the appetite for these risks.

Councillor Townsend queried if the risk management framework is decided by Cabinet or the Audit Committee. N Howcutt stated that both the Audit Committee and Cabinet have to accept the risk strategy and appetites set. P Lazenby added that Cabinet has the ultimate say on the risk appetite of the organisation and that it is the Audit Committee's responsibility to monitor against this.

Councillor Townsend asked about the approval of the Risk Management Policy and where the responsibility for approvals sits. N Howcutt explained that the policy was brought to the Audit Committee for feedback and that it would not be taken to Cabinet for ratification unless the Audit Committee was comfortable with the policy.

Councillor Townsend noted that the Audit Committee was being asked to oversee the policy rather than formally approve it. N Howcutt stated that this was the language used in the recommendation.

N Howcutt asked if the recommendation could be updated to ask for approval. Councillor Townsend commented that his expectation was to comment on the policy rather than approve it. N Howcutt noted that the Councillor had read the policy and not raised any concerns. Councillor Townsend asked that the governance regarding the Audit Committee's responsibilities is considered further.

P Lazenby commented that the last version of the document was prepared in 2020 and has been brought to the Audit Committee, though this is now a new version and should be formally ratified.

N Howcutt stated that the policy could be brought back to the Audit Committee meeting in March for formal ratification.

Councillor Townsend stated that he did not wish to delay the process in approving policy and requested that the governance be considered for the future.

N Howcutt suggested the following options; that the recommendation be updated to approve the policy in the meeting, that they approve the recommendation and it be brought back to the Committee at a later date, or to approve the recommendation and an update be circulated electronically for approval.

The Chairman stated that having it circulated electronically would mean that members are reviewing the policy as individuals rather than an assembled committee and that he would therefore not recommend that option.

Councillor Townsend stated that he was comfortable approving the policies, subject to the comments raised being considered for the next iteration.

The Chairman noted that there is already a strong level of governance in place and recommended that this governance not be updated if not necessary.

Outcome

The Committee agreed the recommendations.