Agenda item

(a)       That the Committee notes and supports the work on the risk management framework and the allocation of risks to Overview & Scrutiny committees following a presentation at the Committee; and

(b)       That monthly progress reports on the principal ‘open risks’ be made to the April, May and June meetings of the Committee.

The Chief Executive presented a report on the development of an improved internal risk management framework including the allocation of risks and oversight of financial risks which were areas of interest to the Committee.

The Chief Executive and Strategic Performance Advisor gave a presentation on the following:

·         Review of the Risk Framework

·         Risk categories

·         Risk types

·         Active Risk Management

·         Financial Risks 2020/21

o   Pay (annual awards)

o   Out of County Placements

o   Post-16 School Transport

o   School Deficit Budgets

o   In-year Budget

o   Medium Term Financial Strategy (MTFS)

The aim was to introduce a more effective, systematic approach to identifying and escalating risk which was viewed as best practice.  The process involved positive engagement with the Chief Officer team and portfolio performance lead officers along with the Internal Audit team in an advisory role.  As part of the presentation, an overview was given of the four principal ‘open’ risks that could be reported on at this stage.  For example on Pay (annual awards) where the Council had little influence on the national position but could build in sufficient flexibility to the MTFS to reduce the impact.  Whilst the impact severity was significant, the likelihood was low due to those mitigation measures.  Whilst setting the overall budget was an open risk, the MTFS and managing the budget in-year remained ongoing risks.

In response to Councillor Jones’ query on the risk for Additional Learning Needs/Special Educational Needs (ALN/SEN) reforms, the Chief Executive said that work was ongoing to assess demand following a delay in national grant funding.

Following comments by Councillor Johnson on the risk category for health and safety, the Chief Executive said that this applied to Out of County Placements due to the complexities involved.

The Chief Executive spoke about the significant cost pressures arising from school budget deficits which was currently given a ‘black’ risk score as financial actions had not yet been taken.

As the Leader of the Council and Cabinet Member for Education and also the Welsh Local Government Association (WLGA) Education spokesperson, Councillor Roberts described school budget deficits as a consequence of the period of austerity and of significant concern across Wales.  In Flintshire, officers were working closely with schools in a licensed deficit position and welcomed plans by Welsh Government (WG) for a change in Pupil Deprivation Grant funding arrangements.

On the allocation of risks across committees, the Chief Executive said that discussions would take place with Overview & Scrutiny Chairs to agree urgent risks to inform active work programming.  He suggested that the status of the principal open risks be reported to this Committee in April, May and June, and that the Revenue Budget Monitoring reports from July include an update section on each.

Councillor Jones suggested that all health and safety risks should be given a red status, particularly on Out of County Placements where this was a primary risk.  The Chief Executive said that the overall risk rating reflected the current status on each of those live examples and would be subject to change as mitigating actions were taken in the future, for example on Post-16 School Transport where current negotiations on proportionate cost sharing could significantly reduce the risk in-year.  It was for the Committee to consider whether mitigating actions were sufficient.

The Chief Officer said that the risk framework document would show the changing risk status before and after mitigation measures.

On school deficit budgets, Councillor Jones said that the Council should make representations to WG to support schools which were in an unsustainable position despite all steps taken to reduce this.  Councillor Roberts spoke about the financial challenges to schools and the outside risks to pupils arising from exclusions.  In response to comments on the need to accommodate the regulatory risk, the Chief Executive said that this applied to the MTFS where the future risk of being in a position to set a balanced budget was a reputational and regulatory risk.

Councillor Heesom thanked officers for the report which also provided positive links with the Council Plan discussed at the previous meeting.

Councillor Jones spoke about the need to make the case to WG to provide financial support for Out of County Placements and school budget deficits.  It was explained that these were amongst a number of budget pressures where representations had been made.

The recommendations, which were amended to reflect the debate, were moved by Councillor Heesom and seconded by Councillor Cunningham.

RESOLVED:

(a)       That the Committee notes and supports the work on the risk management framework and the allocation of risks to Overview & Scrutiny committees following a presentation at the Committee; and

(b)       That monthly progress reports on the principal ‘open risks’ be made to the April, May and June meetings of the Committee.