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Agenda and minutes

Venue: Committee Room 3 - Waltham Forest Town Hall. View directions

Contact: John Williams, Democratic Services Officer  020 8496 4344 | Email: john.williams@walthamforest.gov.uk

Items
No. Item

1.

WELCOME, APOLOGIES FOR ABSENCE AND SUBSTITUTE MEMBERS

Minutes:

The Chair welcomed Councillor Patrick Edwards to his first meeting of the Committee since his appointment by Council.  He also thanked Councillor Umar Ali, the former Vice-Chair, for his service over the previous year.

 

Apologies for absence were received from Councillor Rosalind Doré, Vice-Chair; and from Mark Hynes, Director of Governance and Law.  There were no substitute Members.

2.

MINUTES OF THE PREVIOUS MEETING pdf icon PDF 331 KB

Minutes:

Minute 48 – Joint Health and Overview Scrutiny Committee – The Chair said that additionally, Members had asked the Scrutiny Officer to clarify the process of joining the JHOSC (INEL), and that subject to a satisfactory response, the proposal should be accepted and recommended to Council.  (The Democratic Services Officer confirmed that the response had indeed been satisfactory and Council had agreed the proposal).

 

Subject to this amendment, the minutes of the meeting held on 28 March 2019 were approved as a correct record and signed by the Chair.

3.

DECLARATIONS OF INTEREST

Members are required to declare any pecuniary or non-pecuniary interests they or their spouse/partner may have in any matter which is to be considered at this meeting. Interests are defined on the inside cover of this agenda.

Minutes:

None.

4.

INTERNAL AUDIT AND ANTI-FRAUD DIVISION - ANNUAL REPORT AND OPINION ON THE COUNCIL'S INTERNAL CONTROL SYSTEM 2018-19 pdf icon PDF 801 KB

Additional documents:

Minutes:

Consideration was given to a report of the Assistant Director, Internal Audit and Anti-Fraud Shared Service, providing the Committee with an overview of the assurance work of the Internal Audit team during 2018-19, and stating the opinion of the Head of Internal Audit on the effectiveness of the Council’s internal control environment for the year ending 31 March 2019.

 

Gemma Young, in her capacity as Head of Internal Audit, as designated by the Section 151 officer, introduced the report and confirmed that it met requirements set out in the Public Sector Internal Audit Standards. 

 

Hawkswood - The Chair expressed disappointment that representatives from the Hawkswood Group of schools had been invited to the meeting to explain a finding of no assurance.  An invitation from the school to Members to visit them was a misunderstanding of the process. He asked that the Committee write to Hawkswood expressing their displeasure and the expectation they would attend a future meeting.

Five-Level Risk Maturity Scale – Miss Young confirmed that on this industry-standard index, 3 as attained this time was perfectly acceptable for a local authority.  4 should be aspired to, but 5 was designed for major international organisations and would not represent a realistic investment.

Areas of concern – Members welcomed generally positive results, but felt that the limited assurance in DBS checks, Deprivation of Liberty Safeguards (DoLS), central accounting and Henry Maynard School represented significant risk.  With DoLS there was some excellent practice, but it was not consistent.

School Audits - It appeared that the themed approach had worked well for some years, but recent full audits had pointed up some wider concerns about the performance and approach of certain Governing Bodies, which had been raised with Governor Services and the School Improvement Team.  For example it was difficult to understand that a Governing Body thought it was acceptable not to have a finance committee.  There needed to be a clear feedback loop to point up governor development needs and the specific training required.

Councillor Fitzgerald said that schools which did not buy into the Governing Bodies’ Unit’s training programme would not necessarily have information about, or access to any specific training which might be provided. She asked how clear the Council was with them on what was expected.  Miss Young said that information could perhaps be disseminated better, but it was frustrating when school business managers claimed they did not know where to obtain the guidance.

Draft reports – Sometimes reports are not completed because the evidence takes a long time to produce, or it does not relate to the findings.  Delays may occur because of reorganisations or new legislation.  It is not unknown to close a report without a management response, but audit should be seen as a supportive activity and not a punitive one.  However, where recommendations are not accepted by management, they need to justify this and the risk attached.

Members said they would like to get a better sense of management responses to audit reports, and how  ...  view the full minutes text for item 4.

5.

ANNUAL INTERNAL AUDIT PLAN 2019-20 pdf icon PDF 311 KB

Additional documents:

Minutes:

 

Consideration was given to a report of the Assistant Director, Internal Audit and Anti-Fraud Shared Service.

 

Gemma Young introduced the report, and said the plan was largely shaped by the risk register, horizon scanning, cumulative auditor knowledge and experience, and the views of senior management.

 

In response to Councillor Edwards, Miss Young outlined the typical timelines and deadlines in the life of an audit.  There are key performance indicators (KPIs) for completion, so an audit that starts in Quarter 1 would probably be concluded near the beginning of Quarter 3.  It is likely that more audits than usual will be carried out by external delivery partners this year due to staff turnover.

 

Decision

 

The Committee agreed the internal audit plan 2019-20.

 

6.

UPDATE ON PROGRESS OF THE CORPORATE ANTI-FRAUD TEAM, INCLUDING THE PROACTIVE PLAN 2019-20 AND ANTI-FRAUD AND CORRUPTION STRATEGY pdf icon PDF 845 KB

Additional documents:

Minutes:

Consideration was given to a report of the Assistant Director, Internal Audit and Anti-Fraud Shared Service.

 

Gemma Young introduced the report and outlined the number of investigations and the value of savings from properties recovered.

 

Staff resignations – Councillor Fitzgerald asked if a member of staff who was the subject of an investigation would be allowed to resign.  It was explained that ultimately the Council could not prevent it but would endeavour to complete the investigation within the notice period.  If a reference from a prospective employer were sought, it must be fair and accurate, and may make reference to an investigation, but there must have been a finding of fact.  The Council has a duty to the person leaving and the engaging employer, which is why increasingly certain employers do not provide references.

 

TMOs (Tenant Management Organisations) – it was confirmed that there is a lead officer within the Corporate Anti-Fraud Team for both TMOs in the borough, and  and every allegation from TMOs is investigated.

 

Temporary Accommodation Project – It was noted that there were more confirmed residencies outside the borough than inside.  Officers explained that as stock in the borough diminishes due to right-to-buy, temporary accommodation properties outside the borough have increased.  There is a danger that people are prepared to take accommodation a long way from Waltham Forest and then sublet it while staying on the waiting list for a permanent property.

 

Strategy – Members felt that the analytical element of the strategy could be developed further to help identify and tackle those areas that present the greatest challenges, and, as expressed by Councillor Edwards, the state of affairs and ‘how it smells’.

 

Publicity – Miss Young said thatshe was in contact with Communications to ensure that specific cases received suitable publicity, but agreed that year-end results could also be publicised.

 

Decision

 

The Committee:

 

(a)  noted the contents of this report and proactive plan;

 

(b)  approved the updated policy; and

 

(c)  asked that the analytical element be looked at further as noted above.

7.

ANNUAL TREASURY MANAGEMENT REVIEW 2018-19 pdf icon PDF 583 KB

Additional documents:

Minutes:

Consideration was given to a report of the Pensions and Treasury Manager.

 

Debbie Drew introduced the report and said that the Council held £43.06m of investments as at 31st March 2019 and the average investment portfolio yield for the year was 0.87 per cent against a benchmark of six-month London inter-bank offer rate (Libor) of 0.91 per cent.

The debt portfolio as at 31st March 2019 was £251.96m with an average interest payable of 4.46 per cent and an average maturity of 30 years. Current Public Works Loans Board rates compared to the Council’s loan portfolio profile is 2.25 per cent, reflecting the fact that most borrowing was undertaken historically when rates were higher.

Mrs Drew said the report would require refreshing before it was submitted to Council.

 

Reporting - Members felt there were some inconsistencies in the way the capital expenditure figures were presented.  The 2018/19 estimates did not appear to correspond to the 2018/19 strategy.  There was a large apparent difference between budgeted and actual unfinanced expenditure and the totals, including for the Housing Revenue Account.  Councillor Edwards said he would provide officers with further details of where he felt the figures did not match up. 

 

He asked why there had been a reduction in loans to market but the average life of the loans had increased.  It was explained that the shorter life of the loans which have come to an end had brought the average up.

 

LOBO – It was confirmed that the Council has shed most of these loans or they have switched to fixed rates.  The Council’s exposure is now quite minimal.

 

Sixty Bricks – Members asked further about the role of Sixty Bricks and its impact on the Council’s capital spending.  It was explained that approvals need to move through a series of meetings: Sixty Bricks is set up to be self-financing and not to offset capital expenditure.  There are also a number of complex issues to ensure developers are in place.

 

Decision

 

It was noted that the report would require amendment before submission to Council.  

 

8.

TREASURY MANAGEMENT STRATEGY, MINIMUM REVENUE PROVISION POLICY STATEMENT AND ANNUAL INVESTMENT STRATEGY AMENDMENTS 2019/20 pdf icon PDF 161 KB

Additional documents:

Minutes:

Consideration was given to a report of the Pensions and Treasury Manager.

 

Debbie Drew briefly introduced the report setting out the context within which the Council’s treasury management activity operates and outlining a proposed strategy for the coming year. The report considered the Council’s borrowing and investment strategy alongside required Prudential Indicators. It also identified risk reduction strategies that have been established to ensure the fundamental aims of security, liquidity and yield of the Council’s investments.

 

Mrs Drew said that paragraph 2.1.4 of the recommendations was no longer relevant.

 

The Chair noted the forecasts and asked if they were usually as at variance as they were last year, or would be next year.  The Strategic Director of Finance and Governance explained that in the past there has just been a capital programme.  Now there is a capital investment strategy more work can be devoted to it.

Councillor Edwards noted the estimates set out in paragraph 2.1 of the appendix, and it was acknowledged that for the later years this was work in progress, although they are shown to demonstrate that the Council’s capital investment plans are affordable prudent and sustainable.

Decision

 

The Committee:

(a)        agreed the Treasury Management Strategy Statement and Annual Investment Strategy Report 2019/20;

(b)        agreed the MRP strategy for 2019/20  (as outlined in appendix 1);

(c)        agreed the Prudential Indicators as set out in the Treasury Management Strategy, which demonstrate that the Council’s capital investment plans are affordable prudent and sustainable; and

(d)        delegated authority to the Strategic Director Finance and Governance may approve the pre-payment of employer and employee Local Government Pension Scheme contributions for a period of up to three years.

9.

FIRE SAFETY RISK MANAGEMENT - COUNCIL HOUSING STOCK pdf icon PDF 429 KB

Additional documents:

Minutes:

Consideration was given to a report of the Divisional Director, Housing Assets.

 

Sumitra Gomer introduced the report, setting out the Council’s arrangements for managing risks relating to Fire Safety for its housing stock, performance in respect of fire risk assessments, and additional actions taken since the previous report; and addressing several actions taken over the last year to enhance fire safety.

The Chair thanked Ms Gomer for a comprehensive report.  He asked how issues identified during Fire Risk Assessments (FRAs) were communicated to residents.  It was explained that FRAs are included in the new repairs and maintenance contract with Morgan Sindall.  Fire risk assessment is a dynamic process which includes actions over different cycles, rather like an MoT, and it moves from high priority and low priority tasks.

The approach is therefore holistic: the quarterly report to the Portfolio Lead Member

Officers were taking a paper to the Strategic Tenants and Residents (STARPanel with ideasas to how best to work with them.  A series of Fun Days on estates is also proposed with the emphasis on fire safety.

Registered Social Landlords – The Council has a compact with RSLs and can ask them to provide fire safety information through this mechanism.  However, the Council is not necessarily aware of what each RSL is doing as they send the information separately to the Government, as does the fire brigade.

Sprinklers – It was noted that installation of sprinkler systems will take ten years.  Members sought assurance that there was sufficient investment in the programme to see it through.  Ms Gomer said she would provide this.

 

It was clarified that sprinklers will go in common areas, and also in sheltered accommodation units, as advised by the fire engineer’s report on each individual building.

 

Stay Put Policy – It was confirmed that for high-rise this remains the position of the London Fire Brigade.  Ms Gomer said that much housing is not designed for mass evacuation via corridors and stairwells.  While the advice was consistent, it must be assessed by the building owner. However, the Chair believed that the advice was dependent on holistic interventions by local authorities, and there was a disconnect, which Grenfell Tower had so tragically pointed up. 

 

Decision

 

The Committee:

 

(a)  noted the management of risk relating to fire safety in the Council’s housing stock;

 

(b)  noted that the outcome of the FRA review in paragraph 4.2 of the report would be brought to the next ordinary meeting; and  

 

(c)  asked for further assurance on the investment in the sprinkler programme.

10.

RISK MANAGEMENT UPDATE pdf icon PDF 131 KB

Additional documents:

Minutes:

Consideration was given to a report of the Strategic Director of Finance and Governance, providing an update on the progress being made to embed risk management within the Council, and presenting the strategic risk register for review and approval.

 

The Chair emphasised that the report was a risk management update noted that Members were undertaking an exploration of risk generally as a separate exercise.

 

Andrea Nitschke briefly introduced the report and said that Management Board had requested a review of all strategic risk.

 

The Chair asked how a strategic risk would be downgraded to an operational one.  Ms Nitschke said she meets the relevant risk owners and champions and a decision is made in line with the scoring criteria and a judgment of acceptable levels is made before the decision is taken by the risk owner and Management Board.  She agreed that a strategic risk will continue to be managed operationally, but added that it must be evidenced, for example by audit.

 

It was observed that certain risks are quite static – their scores go neither up nor down.  Is this mostly because of successful mitigation or should these be more fundamentally reviewed?  Ms Nitschke said it was often due to external factors the Council cannot control, such as funding: for example, the financial settlement may be adverse, or they may be a successful inspection in Children’s Services.  Therefore there has to be challenge and a good explanation of why nothing has changed.

Decision

The Committee:

 

(a)  noted the contents of the report; and

 

(b)  agreed the strategic risk register, detailed in appendix A.

11.

ACTION TRACKER pdf icon PDF 94 KB

Minutes:

Noted.