Agenda item

To consider the report of the Director of Finance.

The Director Finance presented the report which referred to the revised Corporate Risk process which was presented to the September meeting of the Executive, and which outlined the future reporting arrangements. He now sought Members’ endorsement and any comments on the revised risk management process.

It was important to note that the Audit and Governance Committee had a different role to the Executive in terms of the Council’s Corporate Risk register and risk management process.  The Executive was responsible for delivering the priorities and services and their role was to identify and manage the risk, who with individual Portfolio Holders in conjunction with Directors had responsibility for those risks with appropriate implementation of any necessary mitigations. The role of the Audit and Governance Committee had not changed in terms of being satisfied and ensuring there was an adequate process in place to manage risk, with the opportunity to comment and make recommendations on the process to Council.

Following a Member’s question, he confirmed that the role of Audit and Governance Committee in this regard was not that of a scrutiny function, but was a parallel process using the same reported detail on the Risk Register. The Committee could comment on the process in agreement with the Executive with the opportunity to make recommendations to Council to enhance the process. 

The new risk management procedure will allow individual Directors to work more closely with the Executive and Portfolio Holders to identify and manage risk. He outlined the key benefits, which included a summary page which included an assessment of resources that would be required to mitigate the risk in terms of the effect on finance, reputational risk, regulatory and legal compliance as well as the impact on the community. The risks are also focused on the Council’s Corporate Priorities, alongside the four pillars that underpin the provision of services relating to People, Finance, Assets and Time.

In response to questions from Members, the Director Finance confirmed that:-

·         each Director will work with their respective service Portfolio Holder to consider the Risk Appetite rating. Examples might be in relation to property where a particular scenario might result in a significant change such as danger or loss of life, whereas risk associated with more evolving technology with other benefits and opportunity to contribute to a priority could result in a different approach. It was for Members to consider the outcome, and achievements and the impact of the risks and match that with the appetite for risk. It was for Members as a Council to determine where resources in the widest sense would be targeted, and appetite for risk was not necessarily linked to the level of available resources.

·         with a further explanation of the headings and colour coding on the summary sheet relating to the internal assessment of the level of resources in terms of the Council’s four pillars of time, financial, people and assets needed to fully mitigate those risks and in relation to the external areas of Drivers for Risk Appetite of wider considerations should the risk materialise including areas such as finance, reputational risk, regulatory and legal compliance as well as the impact on the community. To consider the appetite for risk that the Council would wish to take to deliver the priority and that will vary with the potential risk and impact will be. The aligned dates were now more meaningful and varied from a rolling target such as in the case of financial sustainability to alignment to a work programme or funding.

·         the Net Zero Risk Register was about the City Council’s attempts to become carbon neutral as a Council. One of the objectives is to deliver a Net Zero city and is a risk that focuses on the City Council and also the wider city.

·         SMB and Portfolio Holders will now have better understanding of the risks, and the Audit and Governance Committee will also be able to comment on maintaining the cautious approach or acceptability of any risk.

A Member made a comment in relation to the potential consequences on the community being considered, the wider effect of not understanding the impacts of missing targets that inform the priorities, and also the omission of a section dealing with an unknown or emergency scenario or situation. She made a request if the summary page could include the risk matrix with an explanation of the definitions. These comments along with the other comments and enquiries made which the Director had responded to, would be passed to SMB colleagues. He noted that there should be some consideration of the potential impacts section to be more meaningful.

As previously agreed as part of the reporting format, a Director with responsibility for a particular area of the Risk Register was invited to attend the meeting. The Director City Development was present to comment on Risk 6 - Delivering and Building Great Neighbourhoods and Communities.

There were challenges in needing to deliver more homes in the city in the current economic climate, and the focus of using brownfield sites. That was the most appropriate and sustainable strategy to address those challenges, however it was included on the Risk Register. He welcomed the new approach to the Register which would focus draw attention to the most important matters. He advised that a forthcoming Member Briefing session would provide more information on the Housing delivery challenges.

He responded to Members’ questions:-

·           addressing the housing challenge were not entirely in the City Council’s control including establishing the five year housing supply which depended on acquiring the necessary planning permissions and developers’ interests in the sites.

·         the risk was not being able to deliver on sites identified in the Exeter Plan. 'The City Council had been quite successful in obtaining grant funding from the Government’s Brownfield Land Release Fund. Despite being a smaller authority and not having strategic funding, or being able to attract Levelling Up Funding or of our limited levels of deprivation, the Council will still continue to work with other agencies such as Homes for England and take any opportunity to bid for funding which also requires skills and capacity.

·         a report to the Executive would give an in principle approval for purchase powers of some land to help resolve a transport network issue if needed in relation to the proposed Water Lane development. As part of a collaboration they would work with local landowners as the land contributes to the wider infrastructure, with the costs and risk being borne by those landowners.

·         the Growth Board was an internal officer group, which he chaired to look at the detailed issues such as viability of the brownfield sites.

·         he was unable to comment on the scope of the Devolution Deal in relation to the funding of housing, as those discussions were not in the scope of this Committee.

·         a report to the Executive would include a reference to the Clifton Hill site.

·         in respect of the five year housing supply, it was not sufficient just to allocate sites in the Local Plan, they had to demonstrate that they were deliverable as they could be deemed not deliverable at appeal.

·         the improved process and data set out in the Risk Register will offer a more regular opportunity for review. It is envisaged that any changes will be reported to Members. The Director Finance added that the previous reporting regime highlighted any changes to the risks. It may be that where there are significant changes to the mitigations that they ask each Director to highlight those and include in the report.

·         the planning process was not entirely down to the City Council as individual planning agreements including the 35% affordable housing policy were negotiated and subject to viability, but was with Council owned buildings and land brought forward through the Housing Revenue Account (HRA) process. The Risk Register captures the concerns in relation to brownfield site land.

·         the business case of the Exeter City Fund project has explored a possible delivery mechanism which went beyond the business as usual scenario. It included the delivery options for further exploration or to establish if it was appropriate for us or any partners to introduce a delivery mechanism..

·         the Exeter Development Fund work would explore different forms and there was not one single option.

The Audit and Governance Committee noted the updated Corporate Risk Register and thanked the Director City Development for attending the meeting.