North Yorkshire Council
Audit Committee
23 September 2024
Internal Control Matters for the
Environment Directorate
Report of the Corporate Director
– Environment
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1.0 Purpose
of the report
1.1
To provide an update to Members of
progress against the areas for improvement identified through
internal procedures.
1.2
To provide details of the latest
Risk Register for the Environment Directorate.
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2.0
Background
2.1 The
Audit Committee is required to assess the quality and effectiveness
of the corporate governance arrangements operating within North
Yorkshire Council. In relation to the Environment
Directorate, the Committee receives assurance through the work of
internal audit (detailed in a separate report to the Committee) and
the Directorate Risk Register.
2.2 To
ensure governance and internal control matters are monitored on an
on-going basis the Environment Management Team receives and
considers a report quarterly.
3.0
Directorate Update
The main areas of note for the
Directorate are:
3.1 As with
other areas of the Council, the Directorate has been, and continues
to be, impacted by wider economic factors such as the level of
inflation in the UK impacting the cost of materials and salaries
which impacts the Directorate directly and also through the supply
chain. The main contributors continue to be in the costs of labour,
energy and materials although energy prices remain a volatile
fluctuating area and currently are significantly lower than
expected.
3.1.1 In addition, the focus
of the Directorate has also necessarily been on post Local
Government Reorganisation work including progressing service area
restructures across the Directorate, facilitating the convergence
of tasks and services previous delivered in many different ways and
also establishing strong governance processes across the
directorate for key areas of delivery including the capital
programme and transformation agenda. At the same time, the
Environment Directorate is looking forward towards how services
need to transform into the future and the delivery of
transformation savings to support the overall North Yorkshire
Council financial position. More details are included in section
3.11 below.
Highways &
Transportation
3.2
Through the winter period the
highways service successfully dealt with over 10 named storms and
the impacts that they have caused. We have seen some
accelerated deterioration on the network as a result which has
resulted in increased demands on the service in terms of reactive
road repairs and gully emptying. In addition to dealing with
these challenges the team is also focussing on developing and
delivering a transformation plan that gets the best out of the move
to a new unitary council which sees street scene, parks and grounds
and highways activities now being delivered by one organisation.
Key achievements to date being the implementation of increased
parking tariffs across all of the former district and borough
council car parks and the successful delivery of staff restructures
in parks and grounds and parking services.
3.2.1 The highways service
continues to give support to North Yorkshire Highways (NYH), as the
front-line delivery agency. We are delivering efficiency savings in
our revenue activities that contribute to the Transformation Plan
savings through the use of innovative pothole repair techniques and
we are making good progress against the delivery of our capital
programme. We are progressing a number of major schemes such
as A59 Kex Gill and Harrogate, Skipton and Selby Transforming
Cities Fund schemes and we are aiming to appoint an EV Charge Point
Operator later this financial year to commence implementation of
the council’s EV charging strategy using funding from the
Local Electric Vehicle Charging Infrastructure fund.
Waste Management
3.3 On the
establishment of North Yorkshire Council, the new council took on
responsibility for both the collection and disposal of household
waste. The new Council became the waste collection authority, a
role previously carried out by the district and borough councils,
along with the waste disposal authority which, prior to LGR, was
the responsibility of the county council. North Yorkshire Council continues to harmonise
the waste service. To date the Council has addressed different
practices and fees and charges across the garden and bulky waste
services, so that now a single approach makes it easier and more
convenient for residents to access collections. The next service
area being examined is the kerbside collection of dry recycling and
refuse. Following extensive work to model the existing different
practices and an assessment of the options to unify collection
methods, the Council is consulting residents through a public
consultation exercise. ‘Let’s talk rubbish’ seeks
residents views on their current service and their opinions on the
Council’s preferred idea. The results will be analysed with a
view to seeking an Executive decision in November to enable the
Council to begin a progressive rollout programme.
3.3.1 On behalf of North Yorkshire Council, Yorwaste
continue to be contracted to provide Household Waste Recycling
Centre (HWRC) services and as well as the waste transfer operations
which the company was previously contracted to carry out for the
county council. Waste management legislation is undergoing a period
of significant change which will affect how both Yorwaste and the
Council undertake trade and domestic collections with further
information from Government expected shortly.
3.3.2 A staff engagement
exercise for Waste Operations and Street Scene teams is underway to
seek agreement on; a new working week, start and finish time and
the removal of task and finish. There will also be a significant
change for teams across all localities and with that comes the
potential for service disruption, a large amount of effort is going
into minimising this as we seek to harmonise service
delivery.
Environment & Climate Change
3.4
The Climate Change Delivery Pathway
was reported to North Yorkshire Council Executive on 20 August 2024
which provides an update on how the council is progressing towards
it’s net zero ambitions. This report includes the early draft
of the Directorate climate action plans which seek to address the
council’s operational emissions and also describes how the
council is supporting regional targets working with the newly
established York and North Yorkshire Combined Authority.
Integrated Passenger Transport (IPT)
3.5 In the
public passenger transport sector, passenger numbers are slowly
increasing and much of the last 12 months has been about
maintaining existing services across both the supported and
commercial bus network. The DfT have provided an additional
£3.4m in BSIP3 grant funding for 24/25 which was offered
subject to NYC refreshing and submitting to them our revised BSIP
document. The areas of spend for project delivery, fall into the
following categories - Bus Service Support, Fares Support,
Marketing, EP Delivery: LTA Costs, Other Infrastructure, Ticketing
Reform and Demand Responsive Transport.
3.5.1 In the Home to School
transport sector, we continue to see challenges in the commercial
market as there are still industry concerns over driver
availability, increased costs in relation to staff pay, fuel,
parts, and maintenance. However, we are seeing several new
taxi providers come forward in the market and hope that we will
continue to see competition increased in some areas of the county.
Much work is being undertaken jointly across CYPS and IPT in
relation to transformation projects including, work on policy and
reviewing areas for savings opportunities in the existing transport
provision.
Fleet and Operations
3.6 The
asset management and maintenance of fleet items has been improved
by the introduction of a fleet management system across all areas.
This system is shared between NYC and NY Highways and ensures good
visibility and robust management of our fleet costs. The
procurement of fleet items is centralised in the fleet management
section and is completed in association with the Procurement and
Contract Management Team. The section is developing an approach to
alternative fuel vehicles and drafting a future fleet strategy to
decarbonise our fleet in line with climate change
commitments. The Council is also committed to maintaining
high quality vehicles, with a focus on compliance with our Operator
Licence requirements (Operator Compliance Risk Score), and reports
regularly on this issue.
3.6.1 The Operations team
deliver a large number of services in-house for Health and Adult
Services and for other directorates where there is no commercial
alternative or no best value alternative. The drivers and passenger
assistants are subject to a robust selection, induction and
training framework to manage the operational risk of supporting
vulnerable passengers as well as the general public. The vehicles
are operated on transport permits but the standards of maintenance
and management are close to Operator Licence standards so to ensure
the safe and compliant operation of the service.
Harbours
3.7 A future
harbour strategy is under development, co-designed with
stakeholders, that will set out how the harbour will develop over
the next 20 years prioritising protection of the fishing industry
and maximising the opportunity from the offshore wind and leisure
sectors.
Licensing
3.8 North
Yorkshire Council implemented a new consolidated taxi licensing
policy on 1 April 2023. This policy is now under full review
and a draft Inclusive Service Plan is being developed alongside to
increase the provision of wheelchair accessible vehicles and to
ensure that taxi provision is accessible to all. It is
currently anticipated that a three month consultation on both will
begin in Autumn 2024.
3.8.1 The Licensing Act 2003
and Gambling 2005 policies will also be reviewed, harmonised and
implemented for 1 April 2025.
3.8.2 The restructure of the
Licensing Team, bringing seven former district teams together, was
completed in February 2024. To fully implement the new structure it
will be necessary to harmonise the Licensing operating software
across the County, bringing seven former systems into one. Work is
ongoing with Regulatory Services, Trading Standards and Housing
Enforcement colleagues to implement one solution for all
services.
Regulatory Services
3.9.1 The Regulatory Services teams have been fully
restructured during 23/24 and new teams have been established to
cover the range of Environmental Health and Trading Standards
services related to Environmental Protection and Farming Food and
Health. In addition the Trading Standards team have taken on
management of the Safety Advisory Group (SAG) and the wider service
has also brought teams together to deliver the Pest Control and
Environmental Enforcement services. A business-as-usual
service was delivered throughout that period of time and
recruitment to the new teams is currently underway. The
restructure will put us in a stronger position to deliver all
of the reactive investigatory work relating to noise nuisance, and
consumer complaints in addition to the planned inspection regimes
undertaken in respect of food hygiene and safety, animal welfare
and private water supplies.
Registrars, Bereavement and Coroners
Service
3.10.1 The Registrars and bereavement
service have continued to deliver their statutory functions as well
as delivering wedding ceremonies across North Yorkshire. The
Bereavement Service have undergone a restructure and cross service
discussions are taking place with Parks and Grounds to ensure that
we have an efficient maintenance regime in place to manage the
Council’s cemeteries.
3.10.2 The support service to the Coroner
has been improved through a secondment with North Yorkshire Police
whereby the Senior Coroner’s Officer is now based at NYC.
This is the first stage in evaluating whether NYC could oversee the
entire Coroner’s support service including the North
Yorkshire Police function. This takes into account the directions
from the Chief Coroner about developing closer and more effective
working relationships. This is all designed to allow the Coroner to
focus on the judicial role to which they are appointed rather than
the investigative and administrative tasks that are associated with
the inquest process.
Post Local Government Reorganisation
(LGR)
3.11
Capacity and prioritisation continue
to be significant issues in the Directorate, particularly in light
of the challenges presented post Local Government Reorganisation
following the launch of the new North Yorkshire Council on 1 April
2023. The Directorate continues to play a key role in bringing
services from the previous county, district and borough councils
together to work in a cohesive way, working through the
harmonisation and transformation of services.
3.11.1
Throughout the year, the Directorate
has continued the work to bring together services and ensure
appropriate governance arrangements are established, embedded and
operate effectively. In addition to this, a significant focus of
the Directorate is on transformation of services and the savings
agenda. The Directorate is working within the Corporate governance
framework which has been established for the Transformation
agenda.
North
Yorkshire Highways
3.12 The Company is now in year 4 of operation and
processes and procedures are now well established. Governance and
internal control processes have been updated and refined to ensure
they are robust and fit for purpose. The Company Secretary is from
fellow Brierley Group Company First North Law, to advise, monitor
and maintain governance in respect of investment, operational and
financial decisions. Each of the directors have undergone Director
training run by First North Law to ensure they are aware of their
responsibilities as defined within the Companies Act.
3.12.1
The Company has been set up to
ensure it has appropriate legal status: a Board of Directors with
balanced composition, including an independent Non- Executive
Director as Chair of the Board; Articles of Association established
and approved to ensure the governance around decision making of the
Company and its shareholder, NYC are understood; Contract
management in respect of the contract between NYH and NYC; Policies
and Procedures including Finance and Procurement rules and Scheme
of Delegation signed off. A range of “Reserved Matters”
which are decision making requirements that require NYC shareholder
sign off are reviewed annually and are audited by First North
Law.
3.12.2 Each year, an updated Business Plan
has been signed off by both the company Board and the Shareholder
setting out the direction for the future and long term business
commitments. This business plan is subject to an annual refresh,
vital given current market forces and the wider transformation and
efficiency plans of NYC, of which NYH plays a part. The plan is
based around managing the risks as defined and set out in the risk
management plan. The plan is updated monthly by NYH Senior
Leadership Team and any issues are addressed through mitigation
measures.
3.12.3 It is recognised that people are an
integral part of how the service operates and so there has been a
focus on ensuring staff feel engaged. The management team hold
regular engagement sessions across North Yorkshire and the
operational team. Employees are provided with an update on their
specific area performance and an overview of the business
objectives for that year. Any requests made by the operational
teams are logged and fed back in “what you said and what we
did” communications. In additional annual staff surveys
provide additional feedback. Training and development is being
proactively managed each year. This ensures NYH has a competent and
engaged workforce.
3.12.4 Support services provided by NYC
for finance, procurement, IT, Human Resources, Health and Safety
and many other services ensures a consistency of approach between
NYC and NYH but also recognises there are differences between the
organisations and not every process and procedure can be mirrored.
The relationship between the Council, Highway Maintenance team and
NYH is structured with clear responsibilities and reporting to
ensure both parties are contributing to the successful delivery of
the highways budget. Strict controls and processes for design,
procurement and delivery ensure that blockages to progress are
identified early and mitigation measures can be implemented. The
business obtained third party certification to ISO 9000, 14000,
45000 for their quality, environmental and health and safety
systems in the third quarter of 23/24. This provides the business
and the Council with the confidence that operational controls are
consistent and compliant with internationally recognised standards.
It also allows services to be marketed to the commercial
sector.
3.12.5 Working relationships between other
Brierley group companies and the synergies envisioned by Brierley
group board and the Council are developing and coming to fruition.
APS and NYH have partnered on number of projects to deliver highway
improvements to Selby town centre and also the new Special
Educational Needs School in Osgoodby. NYH carries out
infrastructure installation works for NYNET and uses Yorwaste for
waste disposal works. NYES provide services for CCTV and IT and
Veritau provides audit and support services.
Capital Programme
3.13 Whilst this is
identified separately within the Directorate Risk Register there
are key items of note:
3.13.1 Projects continue to be carefully
monitored to assess the potential for inflation and other pressures
in the construction market that may impact on the delivery of the
Capital Programme although construction cost inflation is not as
significant a risk as it was last year.
3.13.2 In line with the Corporate Capital
Governance process which has been developed following LGR, the
Highways and Infrastructure Capital Board has been established to
oversee and provide governance and challenge to capital projects
within the Highways and Infrastructure areas. This Board has now
been running for almost a year with the governance processes now
embedded within the Directorate. Environment Directorate Services
which are not covered by the remit of this Capital Board, such as
fleet, bereavement and depots are reported through the equivalent
Board for Corporate and other Projects to ensure all capital
projects are subject to robust governance arrangements. These
Capital Boards then report issues up to the Corporate Capital
Programme Board to ensure corporate oversight of key risks and
challenge.
3.13.3 As previously reported, best
practice for capital management is to utilise a method called
“overprogramming”. Whilst this could be considered
‘business as usual’ for the service, Audit Committee
should be aware of the associated risks and what governance is in
place to help mitigate them. In short, the service programme to
spend more than the capital budget allocated in the financial year
on the basis that typically some schemes are delayed for a variety
of reasons, overprogramming therefore improves the likelihood of
spending on budget but at the risk of overspending. The Highways
and Infrastructure Capital Board monitor this practice on a monthly
basis taking intervention decisions as appropriate. The position is
then reported to Executive through the Capital Plan and quarterly
forecast updates.
4.0
Directorate Risk Register
4.1 The
Directorate Risk Register (DRR) is the end product of a systematic
process that identifies risks at Service level, and then aggregates
these via a sieving process to Directorate level. A similar process
sieves Directorate level risks into the Corporate Risk
Register.
4.2 The Risk
Prioritisation System used to derive all Risk Registers across the
Council has recently been changed. The process and reports that are
provided continue to be similar for ease of understanding, but the
Council now uses a 5x5 risk assessment ranging from very low to
very high in terms of both likelihood and impact: Once the
likelihood and impact for a risk have been assessed, the risk
scoring is calculated. The following table shows the scoring,
assessment and suggested required actions:
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Colour
|
Score
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Assessment
|
Required Action
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|
|
1 - 2
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Very Low
(tolerate)
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Risk should not appear in risk register.
|
|
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3 - 4
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Low
(tolerate)
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Regular monitoring, action plan not essential,
acceptable just to maintain current controls.
|
|
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5 - 9
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Medium
(treat)
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Frequent monitoring, action plan required.
|
|
|
10-12
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Medium High
(treat)
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Frequent monitoring, action plan required to
prevent from becoming a red risk.
|
|
|
15 - 16
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High
(treat)
|
Constant monitoring, action plan required and
escalation to next level for consideration / inclusion.
|
|
|
20 - 25
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Very High
(treat / terminate)
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Constant monitoring, action plan required and
escalation to next level with request for inclusion. Consider
terminating activity (if an option) where score cannot be reduced
by risk mitigation.
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4.3 The DRR
represents the principal risks that may materially impact on the
performance and financial outcomes of the Directorate. The
Environment (previously Business and Environmental Services) DRR
has been reviewed since it was presented to this Committee and was
last reviewed in August 2024 and represents the risks of the
Directorate.
4.4 A
summary of the DRR is attached at Appendix A. As well as
providing a quick overview of the risks and their ranking, it also
provides details of the change or movement in the ranking of the
risk since the last review in the left-hand column.
4.5 The
latest detailed DRR is shown at Appendix B. This shows the
key risks and the risk reduction actions designed to minimise them
together with a ranking of the risks both at the present time and
after mitigating actions.
4.6 The key
amendments that have been made to the DRR since October 2023
including the activities and risks of the new Council Directorate
(date of last progress report to the Committee) are as
follows:-
4.6.1 Deleted risks
·
No risks have deleted from the
register since the last review.
4.6.2 New risks
·
Whilst no risks have been added to
the Directorate level register since the last review, new service
level risks around Bridges, Play Areas, Tree Management and Parking
were considered as part of the directorate review. At this stage it
is considered appropriate that they continue to be monitored and
managed on their respective service level registers.
4.6.3 Key changes to
risks
·
Climate Change – this risk
remains very high, new actions have been added around creating a
carbon credit / offsetting strategy, working with the MCA on
regional matters, and flood risk management.
·
Capital Programme and Major Schemes
– both these risks have increased in ranking to reflect the
technical and financial challenges in delivering the Kex Gill and
Transforming Cities Fund work with Major Schemes now considered the highest
risk for the Directorate.
Risk mitigating actions relating to harbour infrastructure schemes
have also been added.
·
Passenger Transport Market
Resilience – This risk remains high. New reduction actions
have been added relating to the work required with MCA around the
future delivery of Public Transport and in supporting the delivery
of the revised Home To School Transport Policy.
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5.0
Recommendations
5.1 That the
Committee:
i)
Note the Directorate update salient
points; and
ii)
Note the Directorate Risk Register
for the Environment Directorate; and
iii)
Provide feedback and comments on the
Directorate Risk Register and any other related internal control
issues.
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KARL BATTERSBY
Corporate Director –
Environment
September 2024
Report
prepared by Vicki Dixon
