North Yorkshire Council

 

Audit Committee

 

24 June 2024

 

Corporate Governance

 

Report of the Corporate Director Resources

 

1.0       PURPOSE OF REPORT

 

1.1         To note progress on Corporate Governance related matters.

 

1.2       To note improvements and changes made to governance arrangements.

 

 

 

2.0       BACKGROUND

 

2.1       The CIPFA/SOLACE Delivering Good Governance in Local Government Framework 2016 and associated Guidance Notes, set out the standard for local authority governance in the UK.  The Framework defines the principles that should underpin the governance of an organisation and provides a structure to assist individual authorities with their approach to governance.  Local authorities should review existing governance arrangements against these Principles, develop and maintain an up-to-date Local Code of Corporate Governance, and report publicly on compliance with their own Code on an annual basis, and on how they have monitored the effectiveness of their governance arrangements in the year and on planned changes.  This is done through the Annual Governance Statement.

 

2.2       According to the Terms of Reference of the Audit Committee, which have been reviewed and revised, its role in respect of Corporate Governance is:

(i)            to assess the effectiveness of the Council’s Corporate Governance arrangements

(ii)           to review progress on the implementation of Corporate Governance arrangements throughout the Council

(iii)          to approve the Annual Governance Statements for both the Council and the North Yorkshire Pension Fund

(iv)          to liaise, as necessary, with the Standards Committee (now known as the Standards and Governance Committee) on any matter(s) relating to the Codes of Conduct for both Members and Officers

(v)           to work with the Standards and Governance Committee to promote good ethical standards within the Council

(vi)          to review the arrangements in place for ensuring good governance in the Council’s key partnerships and owned companies.

 

2.3       In relation to (i), (ii) and (vi) above, an annual report is submitted as set out in the Programme of Work and item (iii) is considered as part of the report relating to the Statement of Accounts.  Issues are addressed by the respective Corporate Director alongside a report on internal audit work relating to that Directorate which is produced by the Head of Internal Audit.

 

 

3.0       LOCAL CODE OF CORPORATE GOVERNANCE

 

3.1       At the last meeting of this Committee it was resolved that the updated Local Code of Corporate Governance be recommended for formal approval by the Executive in March 2023.

 

3.2       The Local Code was approved and as a result the updated Local Code is now available on the Council website here.

 

 

4.0       ANNUAL GOVERNANCE STATEMENT 2023/24

 

4.1       The Annual Governance Statement (AGS) is being updated to reflect the last year’s and current status of governance and internal control arrangements which continue to be fit for purpose within the Council.  The latest governance guidance issued by CIPFA is called Bulletin 06 Application of the Good Governance Framework 2020/21.  The updating of the Statement has taken the guidance into account and has been amended to conform where appropriate.  It also provides an assessment of the effectiveness of the Council’s governance arrangements in supporting the planned outcomes.  However, it is recognised that there can be areas identified that require attention to address weaknesses and/or external challenges. 

 

4.2       The impact of significant issues will be taken into account and highlighted in Section 7 of the final draft of the AGS which is due to come to this Committee in September. This includes:

·         issues associated with the consolidation and transformation of services following vesting day;

·         delivery of the savings needed to support future financial sustainability for the Council

·         ensuring the quality of our customer interactions across operational service delivery; and

·         on-going work to maintain cyber and data security.

 

4.3       Information Governance and Security continues to be a significant challenge to the Council with the need to be ever vigilant to potential cyber-attacks as well as possible day to day breaches of confidential information.

 

 

5.0       DEVELOPMENTS IN 2023/24

 

5.1       Although the responsibility for managing the day-to-day aspects of the Corporate Governance agenda belongs to the Executive and the Management Board, wider Members also have to be actively engaged – the role of this Committee is therefore critical in this regard.

 

5.2       This Committee receives progress reports on a range of specific governance issues such as counter fraud arrangements and partnership governance through the year.

 

5.3       A full review and update of the Local Code of Corporate Governance and the Annual Governance Statement are also carried out, as has already been mentioned in the paragraphs above.

 

6.0       CORPORATE GOVERNANCE CHECKLIST SUMMARY OF IMPROVEMENTS

 

6.1       The Corporate Governance Checklist is a self-assessment checklist and is in line with the 7 principles defined in the Local Code of Corporate Governance.  The requirements of the document CIPFA Statement of the Role of the Chief Financial Officer in Local Government are also incorporated within the Checklist.

 

6.2       The Checklist is effectively a “live” document to monitor and review the overall Corporate Governance process within the Council.  Although a copy of the latest “version” is available to Members, a Summary is attached as Appendix A for ease of reference.  This Summary shows:

è   a sample of the improvements made in corporate governance between April 2023 and March 2024 in the left-hand column.

è   some examples of improvements in corporate governance to be made between April 2024 and March 2025.

 

6.3       Areas of development and / or improvement continue to be identified as a result of the need to comply with new guidance and requirements as they are published.

 

6.4       The Checklist is used by officers to provide some assurance that all relevant areas of governance are being adequately addressed and, where relevant, gaps are identified with consequential actions to fill such gaps.

 

 

7.0       ALTERNATIVE OPTIONS CONSIDERED

 

7.1       There are no alternative options that require consideration.

 

 

8.0       FINANCIAL IMPLICATIONS

 

8.1       There are no financial implications.

 

 

9.0       LEGAL IMPLICATIONS

 

9.1       There are no legal implications.

 

 

10.0     EQUALITIES IMPLICATIONS

 

10.1     There are no equalities implications.

 

 

11.0     CLIMATE CHANGE IMPLICATIONS

 

11.1     There are no climate change implications.

 

 

12.0     REASONS FOR RECOMMENDATIONS

 

12.1     Corporate governance is the system by which North Yorkshire Council directs and controls its functions and relates to the community it serves. It is therefore a framework of policies, management systems, procedures, and structures that together, determine and control the way in which the Council manages its business, determines its strategies and objectives, and sets about delivering its services to meet those objectives for the greater good of its community.

 

12.2     This is an exciting time as we build our first year as a new unitary authority and continue with the consolidation and transformation that has started, ensuring we can deliver the services and priorities as set out in the Council plan. Governance arrangements play a fundamental role in ensuring that the Council can deliver those services to our community in a safe and legal manner.

13.0

RECOMMENDATION(S)

 

 

i) That Members note progress on Corporate Governance related matters.

ii) That Members note the improvements that have been made, and that are to be made in corporate governance (Appendix A ).

 

            APPENDICES:

 

            Appendix A – Corporate Governance Checklist Summary of Improvements

           

 

BACKGROUND DOCUMENTS:

None.

 

Gary Fielding

Corporate Director – Resources

County Hall

Northallerton

June 2023

 

Report Author – Karen Iveson - Assistant Director, Resources karen.iveson@northyorks.gov.uk

 

Presenter of Report – Karen Iveson - Assistant Director, Resources

 

Note: Members are invited to contact the author in advance of the meeting with any detailed queries or questions.

 

 

CORPORATE GOVERNANCE CHECKLIST

 

Examples of Improvements made between April 2023 and March 2024

Improvements

Reference

Requirement

 

Principle A

Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law

·       Launched a Whistleblowing Policy awareness raising campaign via key message, intranet and staff communications, supported by an ongoing campaign (MT)

A.1.1

Ensuring members and officers behave with integrity and lead a culture where acting in the public interest is visibly and consistently demonstrated thereby protecting the reputation of the organisation.

·       Worked to embed the agreed Values and Behaviours Framework as part of the People Strategy (TF/PY)

·       Transferred the Parish Council, councillor and clerk information to the NYC Modern Gov site, including councillor Registers of Interest; audit the information submitted and request updates and clarifications as needed  (BK)

·       Developed Managers’ skills on the new policies and systems (e.g. MyView) via webinars and drop in sessions (TF/PY)

A.2.3

Developing and maintaining robust policies and procedures which place emphasis on agreed ethical values.

·       Completed preparations for the new Procurement Regulations including revision to Contract Procedure Rules, update of Constitution and management of procurement (GF)

·       New forward procurement plan in place and individual inherited lapsed contracts being picked up on a case by case basis. (GF)

·       Developed an Artificial Intelligence (AI) Policy to ensure that any use of AI is ethical and in in compliance with all applicable legislation, regulations, and organisational policies (RL)

·       Introduced an AI Steering Group to help shape the NYC emerging approach to AI and coordinate a holistic and informed approach that balances innovation and safety (RL)

·       Undertook a review of the partnership landscape and reported as part of the Partnership Governance update to Audit Committee (RJ)

A.2.4

Ensuring that external providers of services on behalf of the organisation are required to act with integrity and in compliance with high ethical standards expected by the organisation

 

Principle B

Ensuring openness and comprehensive stakeholder engagement

·       Integrated the management of FOIs and SARs into a single standard process for NYC (MT)

B.1.1

Ensuring an open culture through demonstrating, documenting and communication the organisation’s commitment to openness.

·       Established new consultation and engagement team within the communications team and reviewed the approach, this will now need embedding (RJ)

·       Agreed the Parish Charter that defines the relationship between North Yorkshire Council and the parish sector (RJ)

B.2.1

Effectively engaging with institutional stakeholders to ensure that the purpose, objectives and intended outcomes for each stakeholder relationship are clear so that outcomes are achieved successfully and sustainably

·       Developed the new localities structures (RJ)

·       Carried out a review of governance arrangements of Council owned companies against CIPFA Best Practice and reported to Audit Committee (BK/GF)

CFO (Principle 1) B.2.2

Review partnership arrangements to ensure that the authority always has access to financial advice in relations to its role in partnership.

·       Implemented the new arrangements for governance and support for the York and North Yorkshire Mayoral Combined Authority through SLAs with NYC (JF/VD)

·       Embedded the extra monitoring officer responsibilities around publishing the parish and town council registers of interests and the handling of complaints where parish / town councillors may have breached their own codes of conduct (BK/MoB)

B.3.2

Ensuring that communication methods are effective and that members and officers are clear about their roles with regard to community engagement

 

Principle C

Defining outcomes in terms of sustainable economic, social, and environmental benefits

·       Refreshed the Council Plan (RJ)

C.1.1

Having a clear vision which is an agreed formal statement of the organisation’s purpose and intended outcomes containing appropriate performance indicators, which provides the basis for the organisation’s overall strategy, planning and other decisions

 

 

·       Adopted the Climate Change Strategy and developed a draft Climate Change Delivery Pathway (ML)

C.2.1

Considering and balancing the combined economic, social and environmental impact of policies, plans and decisions when taking decisions about service provision

·       Refreshed the Beyond Carbon Officer Group to support organisational projects (ML)

 

 

Principle D

Determining the interventions necessary to optimise the achievement of the intended outcomes

·       Decided on the type and frequency of staff surveys to implement as part of internal engagement strategy (TF/PY)

D.2.2

Engaging with internal and external stakeholders in determining how services and other courses of action should be planned and delivered

·       Obtained Management Board approval for the Joint internal engagement strategy with Comms and OD and rolled out wider use of Intranet, Teams, Viva Engage and NY1000 (TF/PY)

·       Launched Ways of Working workstream to review how to operate as a new Council including hybrid and agile working (GF)

D.2.4

Ensuring arrangements are flexible and agile so that the mechanisms for delivering outputs can be adapted to changing circumstances

·       Established Business Continuity (BC) Manager post and commenced review and refresh of plans across the Council (RJ)

 

Principle E

Developing the entity’s capacity, including the capability of its leadership and the individuals within it

·       Completed the bringing together of service plans into transformation and savings plans (RJ)

E.1.1

Reviewing operations, performance and use of assets on a regular basis to ensure their continuing effectiveness

·       Delivered a series of officer training sessions in key areas (eg. Planning and Licencing) covering governance and decision making (BK/MoB)

E.1.4

Developing and maintaining an effective workforce plan to enhance the strategic allocation of resources

·       Delivered online training sessions to parish and town councils covering,  code of conduct, member interests, complaints handling and ethical framework (BK/MoB)

·       Provided the required support in service restructures to help deliver the post LGR Transformation. (TF)

·       Carried out a training and support programme for budget managers (GF)

·       Launched the new Hybrid Working Policy and reported to Management Board with initial feedback (TF/PY)

E.2.4

Developing the capabilities of members and senior management to achieve effective shared leadership and to enable the organisation to respond successfully to changing legal and policy demands as well as economic, political and environmental changes and risks.

·       Delivered training to standards and governance committee members on appointments, elections and duties previously carried out in districts and boroughs (BK/MoB)

·       Provided training for Pension Fund Committee and Pension Board via on line training programme, supplemented by conferences and other training events (GF)

·       Aligned the use of IPM across NYC through delivery of webinars and further comms outlining link to pay progression (TF/PY)

E.2.7

Holding staff to account through regular performance reviews which take account of training or development needs

·       New post of property compliance officer filled, charged with leading on delivery of prioritised programme for H&S compliance across the new property portfolio (GF)

E.2.8

Ensuring arrangements are in place to maintain the health and wellbeing of the workforce and support individuals in maintaining their own physical and mental wellbeing

 

Principle F

Managing risks and performance through robust internal control and strong public financial management

·       Implemented the agreed risk management approach for the new council (GF)

F.1.2

Implementing robust and integrated risk management arrangements and ensuring that they are working effectively

·         Carried out some improvements to the finance system and practices (GF)

 

CFO Principle 2 F.5.1b

Ensure that appropriate management accounting systems, functions and controls are in place so that finances are kept under review on a regular basis.  These systems, functions and controls should apply consistently to all activities including partnership arrangements, outsourcing or where the authority is acting in an enabling role

·         New capital boards created to monitor progress and to request funding through to the corporate capital board who then filter requests through to Executive (GF)

 

 

Principle G

Implementing good practices in transparency, reporting, and audit to deliver effective accountability

·       Reported results of the QA review of internal audit under the Public Sector Internal Audit Standards PSIAS, to the Audit Committee (MT)

G.3.2

Ensuring an effective internal audit service with direct access to members is in place which provides assurance with regard to governance arrangements and recommendations are acted upon

 

Examples of Improvements to be made between April 2024 and March 2025

 

Improvements

Reference

Requirement

 

Principle A

Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law

·       Continue to monitor the new Data Protection and Digital Information Bill for possible impact and actions required. (GF/MT) Mar 2025

A.1.1

Ensuring members and officers behave with integrity and lead a culture where acting in the public interest is visibly and consistently demonstrated thereby protecting the reputation of the organisation.

·       Develop new organisational culture with managers, focusing on values and behaviours (launches in May 2024 and goes throughout the year) (TF/PY) Mar 2025

·       Provide information and training to members and officers on what AI means and its safe adoption, including adherence to the Policy and reference to the Governance including the AI Steering Group (RL) Mar 2025

A.2.3

Developing and maintaining robust policies and procedures which place emphasis on agreed ethical values.

·       Ensure that the use of AI is in a manner that promotes fairness and avoids bias to prevent discrimination, promotes equal treatment, and contributes positively to the council’s goals and values (RL) Mar 2025

·       Put in place updated arrangements to comply with the new Procurement Regulations (GF/RWo) Oct 2024

·       Redefine our relationship with the voluntary and community sector once the new combined authority and health structures are in place (RJ) Mar 2025

A.2.4

Ensuring that external providers of services on behalf of the organisation are required to act with integrity and in compliance with high ethical standards expected by the organisation

·       Assist with the provision on statutory returns and legislative performance information in the former district and borough teams (e.g. housing, planning) (RJ) Mar 2025

A.3.2

Creating the conditions to ensure that the statutory officers, other key post holders and members are able to fulfil their responsibilities in accordance with legislative and regulatory requirements

 

Principle B

Ensuring openness and comprehensive stakeholder engagement

·       Work on the development of the People Strategy to include succession planning and further consideration on workforce diversity and inclusivity. (TF/PY) Mar 2025

B.1.1

Ensuring an open culture through demonstrating, documenting and communication the organisation’s commitment to openness.

·       Embed the agreed new approach to consultation and engagement (RJ) Mar 2025

·       Review the Parish Charter via the established working group (RJ) Mar 2025

B.2.1

Effectively engaging with institutional stakeholders to ensure that the purpose, objectives and intended outcomes for each stakeholder relationship are clear so that outcomes are achieved successfully and sustainably

·       Deliver the key priorities of the new localities structure (RJ) Mar 2025

·       Oversee implementation of the recommendations of the Commercial Governance review into Brierley Group Companies (BK/GF) Mar 2025

CFO (Principle 1) B.2.2

Review partnership arrangements to ensure that the authority always has access to financial advice in relations to its role in partnership.

 

Principle C

Defining outcomes in terms of sustainable economic, social, and environmental benefits

·       Carry out a fundamental refresh of the style and content of the Council Plan (RJ) Feb 2025

C.1.1

Having a clear vision which is an agreed formal statement of the organisation’s purpose and intended outcomes containing appropriate performance indicators, which provides the basis for the organisation’s overall strategy, planning and other decisions

·       Gain executive approval of the Climate Change Delivery Pathway (ML) Jul 2024

C.2.1

Considering and balancing the combined economic, social and environmental impact of policies, plans and decisions when taking decisions about service provision

·       Finalise the Directorate level Climate Change Action Plans (ML) Jun 2024

 

·       Refresh the Climate Change Impact Assessment to accommodate the Climate Change Strategy (ML) Sep 2024

 

 

Principle D

Determining the interventions necessary to optimise the achievement of the intended outcomes

·       Review governance and decision making arrangements in respect of decision records, procurement gateways and grant bids. (GF/BK/RWo) Dec 2024

D.1.1

Ensuring decision makers receive objective and rigorous analysis of a variety of options indicating how intended outcomes would be achieved and including the risks associated with those options. Therefore ensuring best value is achieved however services are provided

·       Carry out full staff survey. This will then be ongoing, each year alternating between full and pulse surveys. (TF/PY) Jun 2024

D.2.2

Engaging with internal and external stakeholders in determining how services and other courses of action should be planned and delivered

·       Develop staff intranet content including Managers Page and ‘Be Connected’ for key staff information (TF/PY) Mar 2025

·       Continue the review and refinement of Service Continuity Plans relating in particular to cyber security issues (GF) Mar 2025

D.2.4

Ensuring arrangements are flexible and agile so that the mechanisms for delivering outputs can be adapted to changing circumstances

·       Review support to the voluntary and community sector (RJ) Sep 2024

D.3.4

Ensuring the achievement of ‘social value’ through service planning and commissioning.

 

Principle E

Developing the entity’s capacity, including the capability of its leadership and the individuals within it

·       Agree and embed the new performance framework (RJ) Mar 2025

E.1.1

Reviewing operations, performance and use of assets on a regular basis to ensure their continuing effectiveness

·       Ongoing training programme for budget managers and a new training programme will be launched as system or process changes are introduced (GF) Mar 2025

E.1.4

Developing and maintaining an effective workforce plan to enhance the strategic allocation of resources

·       Agree a training programme for Audit Committee (GF/MT) Sep 2024

E.2.4

Developing the capabilities of members and senior management to achieve effective shared leadership and to enable the organisation to respond successfully to changing legal and policy demands as well as economic, political and environmental changes and risks

·       Carry out a review of the hybrid working policy following the first year of implementation via the Ways of Working sub group of the Transformation Programme (TF/PY) Mar 2025

·       Deliver a prioritised programme for H&S compliance across the new property portfolio which includes all services of a unitary council (GF) Mar 2025

E.2.8

Ensuring arrangements are in place to maintain the health and wellbeing of the workforce and support individuals in maintaining their own physical and mental wellbeing

 

Principle F

Managing risks and performance through robust internal control and strong public financial management

·       Agree and implement the changes to Overview and Scrutiny Committees and their terms of reference (BK) Mar 2025

F.2.3

Ensuring an effective scrutiny or oversight function is in place which encourages constructive challenge and debate on policies and objectives before, during and after decisions are made thereby enhancing the organisation’s performance and that of any organisation for which it is responsible

·         Ongoing review of standards and complaints arrangements and closer scrutiny with a view to reducing the number of complaints (BK) Mar 2025

·         Develop and implement a transformation programme which incorporates savings and improvement (GF) Mar 2025

F.5.1

Ensuring financial management supports both long term achievement of outcomes and short-term financial and operational performance

·         Carry out a self audit against the components of the Financial Management Code, to establish whether any improvements are required (GF) Jun 2024

·         Programme commenced for new financial system with aim of operation by April 2026 (GF) Mar 2026

CFO Principle 2 F.5.1b

Ensure that appropriate management accounting systems, functions and controls are in place so that finances are kept under review on a regular basis. 

 

Principle G

Implementing good practices in transparency, reporting, and audit to deliver effective accountability

·       Prepare for the implementation of the updated PSIAS following the publication of the revised Global internal audit standards (MT) Mar 2025

G.3.2

Ensuring an effective internal audit service with direct access to members is in place which provides assurance with regard to governance arrangements and recommendations are acted upon

·       Carry out self-assessment of effectiveness of the Audit Committee (GF/MT) Mar 2025

CFO (Principle 3) G.3.2a

Ensure an effective internal audit function is resourced and maintained

 

 

People Key

Initials

Name

Job Title

AN

Amanda Newbold

Assistant Director Education and Skills (CYPS)

BK

Barry Khan

Assistant Chief Exec: Legal & Democratic Services (= Monitoring Officer)

FS

Fiona Sowerby

Head of Insurance and Risk Management (RES)

GF

Gary Fielding

Corporate Director Resources (Chief Financial Officer) (RES)

KB

Karl Battersby

Corporate Director Environment  Services (ENV)

KM

Kerry Metcalfe

Assistant Director, Commercial, Property and Procurement (RES)

MB

Management Board

 

MH

Madeline Hoskin

Assistant Director, Technology

ML

Michael Leah

Assistant Director, Environment Services and Climate Change

MoB

Moira Beighton

Senior Lawyer – Governance (CS)

MT

Max Thomas

Head of Internal Audit (= Veritau)

NH

Nic Harne

Corporate Director, Community Development

PY

Penny Yeadon

Head of Human Resources (CYPS)

RF

Richard Flinton

Chief Executive (= Head of Paid Service)

RJ

Rachel Joyce

Assistant Chief Executive, Local Engagement

RL

Robert Ling

Director of Transformation

RW

Richard Webb

Corporate Director Health & Adult Services (HAS)

RWo

Rachel Woodward

Head of Procurement (Resources)

SC

Stuart Carlton

Corporate Director Children and Young People’s Service (CYPS)

TF

Trudy Forster

Assistant Chief Executive, Human Resources and Business Support

VG

Vanessa Glover

Assistant Director, Communications (CS)

VD

Vicki Dixon

Assistant Director, Resources