North Yorkshire Council

 

Audit Committee

 

15 December 2025

 

Assessment of Effectiveness of Governance Arrangements – Community Development Directorate

 

Report of the Corporate Director – Community Development

 

1.0       Purpose of the report

 

1.1         To inform members of the results of the annual review of governance completed by the Community Development Directorate. The review has compared the governance arrangements which have operated within the Directorate over the last year to the Council’s expected principles of good governance as set out in the local code of governance.

 

1.2         To provide details of the updated Risk Register, and the management of key risks for the Community Development Directorate.

 

 

2.0       Overall Assessment

 

2.1       The overall conclusion of the assessment of the effectiveness of governance arrangements for the Community Development Directorate are that the governance arrangements operating in the Directorate in the last year have met the Council’s expected principles of good governance, as set out in the Council’s local code of governance. The evidence of this and further actions identified to be taken are described in the sections below.

 

3.0         Background

 

3.1       The Accounts and Audit Regulations (2015) require the Council to conduct a review, at least annually, of the effectiveness of its internal control systems and to report the results as part of the Annual Governance Statement.

 

3.2       The Council has approved and adopted a local code of corporate governance which is consistent with the principles of the CIPFA/SOLACE Framework Delivering Good Governance in Local Government (2016). Annual reviews of the effectiveness of each Directorate’s governance arrangements are undertaken and reported in accordance with the Audit Committee’s agreed work programme

 

3.3          This is the first report in this format on the Directorate’s governance arrangements. It covers the period from December 2024 through to December 2025. The format and content will be refined in future years following engagement with the Audit Committee through this and other directorate reports. The intention in this report is to provide an assessment of the effectiveness of established governance arrangements in the Community Development directorate.

 

 

 

 

 

 

3.4       To deliver effective and efficient services the directorate must have a solid foundation of good governance and sound financial management. The directorate has a broad range of governance arrangements in place. The majority of services delivered by the Community Development Directorate are delivered directly by the Council and therefore follow many of the existing wider Council governance arrangements. In 2023, the Council took the decision to bring leisure provision back in-house and in July 2025 the museums and galleries run by Scarborough Museums Trust were also taken back in house. These areas now follow the Councill’s wider governance arrangements rather than maintaining separate Boards or Committees.

 

3.5         The Directorate aims to ensure that governance arrangements are proportionate and focused to enable services to deliver value for money across all of our activity. We will continue to amend and improve our governance arrangements in that regard. For example, this year a new Overview and Scrutiny Commission was established to focus on activity related to Leisure and Housing services. This reflects the significant amount of work in these areas bringing together different operating models in leisure and work focused on housing regulation for the Housing Revenue Account (HRA).   

 

3.6         In carrying out an annual assessment of effectiveness of the directorate’s governance arrangements, we have considered:

 

·                Outcomes and overall performance with regard to our statutory obligations and organisational objectives;

·                Consideration of the directorate’s governance arrangements with regard to the principles, sub-principles, actions and evidence contained within the agreed North Yorkshire Council Local Code of Corporate Governance. The seven key principles include:

 

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

Principle B:   Ensuring openness and comprehensive stakeholder engagement

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

Principle D:   Determining the interventions necessary to optimise the achievement of the intended outcomes

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

Principle F:   Managing risks and performance through robust internal control and strong public financial management;

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

 

·                Assurance from external audit as well as from internal audit reports;

·                The strategic risks identified through the Directorate Risk Register and the internal control frameworks that the directorate has in place to manage those risks. This process highlights the risk management policy, strategy and arrangements for review.

 

3.7       The Council’s Annual Governance Statement for 2024/25 highlighted four areas of control weaknesses which are set out below along with the Directorates view on how these controls are being addressed.

 

·                Information, Governance and Security – To ensure the council continues to comply with its data protection, information governance and information security legislative, regulatory and statutory obligations. This is inherent in all the Directorate does in terms of the data it holds, whether this is information held for housing management purposes, leisure memberships or planning applications to name a few examples, good data governance and security are followed. Where breaches have occurred, these have been clearly communicated and learning taking from them to reduce the likelihood of a reoccurrence.

·                Transformations and Savings Delivery – The Council has an established transformation programme to bring together services following unitarisation and deliver significant savings. However, increasing funding pressures mean there are further challenges ahead and more savings will be needed.  This area of control is being addressed through monthly Community Development Directorate Transformation Governance Board meetings chaired by the Corporate Business Partner for Resources. To date the Directorate has performed well in the delivery of its savings targets and continues to deliver transformation programmes related to leisure, planning and housing (HRA).

·                Consistent good quality management of Capital Schemes – To ensure the council consistently and effectively manages the delivery of major capital programmes and projects. This area of control is being addressed through quarterly Housing and Economic Development/Regeneration capital boards and joint meetings with the Environment Directorate to ensure cross cutting projects are discussed. Progress on project delivery and financial risks are reported and escalated as appropriately to the main Corporate Capital Board. These capital boards demonstrate how budgets and resource strategies align to the delivery of objectives. Key areas of risk are identified in the risk register around capital programmes.

·                Data and Systems – The new council inherited a large number of systems and processes. Further work is required so that the council has the reliable data and insights to consistently support decision making, track outcomes and drive improvement. The Community Development Directorate has a number of transformation projects to rationalise the number of systems and bring services together under one system, for example work continues on the implementation of the one uniform system for planning, a single leisure management system and expansion of the housing asset system - Planon.

 

4.0       Assessment of Effectiveness

 

Housing

4.1       The Housing service has seen significant transformation during the past year. For the Housing Revenue Account (HRA) services, following the self-referral to the Social Housing Regulator and subsequent C3 judgment, the service has worked closely with the Regulator, tenants and Members in the development and delivery of its improvement plan. At the heart of this plan is ensuring compliance with the regulatory consumer standards which include safety & quality, transparency, neighbourhoods and tenancy.    

 

4.2       As one of the key governance measures a new Overview and Scrutiny Committee (OSC) has been established (Housing and Leisure) which plays a vital role in the development and monitoring of the plan. Key measures and milestones are reported through this committee as well as the development of strategies and policies. As the service has needed to review and consolidate a significant number of policies and procedures during the past two years, the OSC has established several task and finish groups to support the delivery of these.     

 

4.3       In addition to OSC, the housing service has revamped its tenant engagement work with new committees formed and improved ways to access information and to influence how the service is delivered. This includes regular tenant forums, newsletters to our customers and reports on effectiveness. The housing service now carries an extensive tenant survey on a quarterly basis aligned to the annual Tenant Satisfaction Measures. Again, these not only help demonstrate performance but also provide up to date feedback to influence service delivery and priorities within the HRA business plan.

 

 

4.4       A key part of the improvement plan is ensuring up to date property information is held for all homes through a detailed property survey. This will give a clear picture on compliance of properties against the major safety areas (gas, electrical, asbestos, water/legionella, lifts, and damp and mould) and investment needs for the future. Without this property information it is challenging for the service to accurately understand the level of decency of the homes or accurately profile the financial requirements over the 30-year business plan cycle. Survey work has been delivered at pace during this year and is on track to meet the agreed targets with the regulator to have completed 50% of homes by March 26 and 100% coverage by September 2026.   

 

4.5       System consolidation and upgrading have also been a major feature for the housing service for both HRA and non HRA elements of work. This work is essential in improving the ability to report in a timely way with good assurance around the quality of the data. The service has now substantially completed the consolidation across the majority of its key systems used for Homelessness and Allocations and good progress has been made regarding Asset management. Future work is focused on ensuring they are maximised and fully embedded within service delivery. The service is still in the early stages of consolidating its housing management systems with a decision on a way forward expected in early 2026.

 

4.6      For other areas of Housing strong partnership have been embedded within the Homelessness sector following the development of the Homelessness strategy. Following LGR, significant work has been undertaken to better align our work around disabled facilities grants with other areas across the Council. Although performance in this area meets statutory requirements, the Council has now adopted best practice timeframes and has developed a plan to deliver against the four stages of DFG within this. This will include a new suite of performance measures which will be reported through the Council’s normal quarterly reporting cycle. The Housing service are also working closely with the York and North Yorkshire Housing Partnership and with other stakeholders such as Homes England and the Combined Authority through the Strategic Place Partnership (SPP). This work has a strong focus on increased affordable housing delivery.

 

4.7       Finally, Bracewell Homes is purchasing homes earmarked through the planning process under s106 agreements for shared ownership homes to support overall delivery of affordable homes. Bracewell is managed as a separate company to the Council with an established Board structure which reports into the Brierley group. Historically, Bracewell has relied on the Harrogate and Craven Development Partnership which allocates affordable homes secured under s106 agreements to participating Registered Providers. However, the current business plan is looking to expand to consider purchases across North Yorkshire. There are currently 24 purchases in the pipeline. Bracewell currently owns 43 homes, all of which have been part sold as shared ownership properties. The continued success of Bracewell is relying on securing further purchases with developers.

 

Place Shaping and Growth

4.8       The services within Place Shaping and Growth include Planning, Economic Development, Regeneration and Tourism. As with other services in Community Development this area has been through significant change since LGR as we move towards a single way of delivering across North Yorkshire.

 

4.9       Planning policy is focused on the delivery of a new Local Plan for North Yorkshire covering the largest local plan area in the country. There are a number of mechanisms in place to ensure effective and open engagement on the plan. In terms of how we engage with the public these are set out in the statement of community involvement (SCI). Alongside this there are internal officer working groups and an established Member Local Plan working group (Development Plan Committee) as well as well embedded governance mechanisms with major milestones of the plan going to area committees, planning committees, the Executive and Full Council. During this past year two major milestones have been achieved with the launch of the call for sites and the issues and options consultation taking place. As is noted in the risk register, this area is subject to continued national consultation on changes to the system and how engagement is carried out on plans. This could lead to changes in how the plan is delivered and the timescales set out in Council’s local development scheme.

 

4.10     For Development Management strong governance structures are in place through the Planning Committees and scheme of delegation. Work is ongoing on the creation of a single IT system for planning applications and enforcement cases. The single system will bring significant improvements in the services ability to provide management oversight also improving governance. This has been challenging due to the scale of change required, however significant milestones have been achieved this year with the Harrogate area and Building control moving onto the new version of uniform, and Scarborough commencing this month. Other areas will migrate during 2026 with a planned completion date for November 2026. As each area moves forward this requires the migration of large amounts of data and the closing of the system impacting on timeframes and performance. Although mitigations are in place to limit this it will inevitably impact on the overall delivery times for each area. Despite this, the service continues to meet all national targets for performance which are reported through the Council quarterly performance monitoring and can also been seen through the government’s national benchmarking reports. Moving forwards a Planning Improvement workstream has been established and will focus on areas of improvement across the area. This will include areas around consistency and speed of decision making, as well as areas such as efficiencies processes and income beyond statutory requirements.   

 

4.11     Economic development and regeneration are continuing to deliver major regeneration projects associated with the former Levelling Up schemes, Towns Deal and Plan for Neighbourhoods. These include major schemes which are now onsite at Catterick and in Whitby with other schemes in development at Scarborough. The Plan for Neighbourhoods provides a further £19.5m of regeneration funding for the Scarborough area with submissions to government returned in November. Each of these major areas has their own governance arrangements linked to the funding and are also monitored through the Council’s capital programme.

                                                                                                           

Leisure, Culture, Venues, Archives and Libraries

4.12     Significant work has taken place this year to implement the Strategic vision for Leisure services as agreed by the Executive in January 2024. The first tranche of transfers in the former Selby, Harrogate and Richmond areas has now been completed, with the majority of services now provided by the in house, Active North Yorkshire Service. The final transfer of services in the Scarborough and Ryedale area will take place in June 2027. Programme governance is in place, with the Sports and Active Well Being Board reporting into the Council’s wider corporate programme reporting, including regular reporting through the Housing and Leisure Overview and Scrutiny Committee.

 

4.13     In principle approval has been granted by the Executive for £40million of investment in Council leisure centres, following extensive work undertaken as part of the Leisure Investment Strategy. An options appraisal in relation to options for Richmond Pool was also undertaken, with approval granted to invest over £1m to reopen the pool, following a partial ceiling collapse. Initial business cases have been undertaken as part of the Leisure Investment Strategy, with further detailed financial and technical work now taking place to progress to final approvals. This work is being overseen by the Property and other Capital Board.

 

4.14     Other significant capital schemes are being developed and overseen through the Council’s Capital Programme governance including work to repair and resurface Scarborough Sports Village Pitch and improvement works, including the installation of Glamping Lodges, at Filey Brigg Caravan Park.

 

4.15     Facilities managed by Scarborough Museums Trust have been successfully transferred in             house to direct Council management, as part of the culture and archives service. This has             progressed smoothly, with minimum disruption for customers and has released ongoing               revenue savings. There are strong partnership arrangements in place through the Cultural             Consortium, which developed and now supports delivery of the NY Cultural Strategy.

 

4.16     Libraries successfully implemented a new Library Management System during 2025. The community library model continues to function well, with SLAs in place between the Council and over 30 Community Libraries, maintaining a network of libraries across the County. 

 

Harrogate Convention Centre (HCC)

4.17     For HCC a £7m investment in studio 2 was approved by the Executive in December 2024. Work is ongoing in the delivery of this scheme with RIBA stage 3 works completed and tenders to the market for its delivery. It is anticipated that contractors will be on site by April 2026 with completion by December 2026 ready for the peak conference season. This scheme is monitored and reported through the Property capital Board and corporate reporting. As part of the wider work on HCC we are also reviewing the current business model and governance arrangements to ensure it is as effective as possible. HCC currently reports financial performance in the same way as other services through corporate reporting. Although not an independent company HCC also reports on an annual basis to Brierley group to provide additional oversight to its delivery. 

 

Post Local Government Reorganisation (LGR)

4.18     It’s been nearly 3 years since North Yorkshire Council was established, and capacity and prioritisation continue to be significant challenges for the service areas. With the majority of services former district ones, the Directorate has played a key role in bringing services together to work in a cohesive way, working through the harmonisation and transformation of services.

 

4.19     This process continues to evolve with some areas now undertaking post restructure reviews to ensure services designed for the transition period are still appropriate and effective as we move forward.  Significant focus of the Directorate continues to be on the transformation of services, the integration of new single systems and the savings agenda. Since reorganisation the Directorate has delivered circa £6m of savings, equating to around 20% of the Directorate net budget.

 

Capital Programme

4.20     Projects continue to be carefully monitored to assess the potential for increased costs. Particular areas of note are risks of delay, price increases due to changes in projects which have commenced, 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 in previous years.

 

4.21     In line with the Corporate Capital Governance process which has been developed following LGR, the Housing, and the Economic Development/ Regeneration Boards are now well established and continue to oversee and provide governance and challenge to capital projects covering those areas. These Capital Boards report issues up to the Corporate Capital Programme Board to ensure corporate oversight of key risks and challenge.

 

4.22     In addition, during 24/25 a joint capital group has been established to enable discussion of projects that cut across several capital boards to ensure a joined-up approach to delivery of capital schemes. It should also be noted that a number of regeneration schemes covering Scarborough and Whitby are part of the former Towns Deal and the new Plan for Neighbourhoods. These schemes have additional governance arrangements in place through local delivery Boards.

 

 

5.0       Directorate Risk Register

 

5.1       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.

 

5.2       The process and reports that are provided continue to be similar for ease of understanding, 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:

           

Colour

Score

Assessment

Required Action

 

1 - 2

Very Low

(tolerate)

Risk should not appear in risk register.

 

3 - 4

Low

(tolerate)

Regular monitoring, action plan not essential, acceptable just to maintain current controls.

 

5 - 9

Medium

(treat)

Frequent monitoring, action plan required.

 

10-12

Medium High

(treat)

Frequent monitoring, action plan required to prevent from becoming a red risk.

 

15 - 16

High

(treat)

Constant monitoring, action plan required and escalation to next level for consideration / inclusion.

 

20 - 25

Very High

(treat / terminate)

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.

 

5.3       The DRR represents the principal risks that may materially impact on the performance and financial outcomes of the Directorate. The Community Development DRR has been reviewed since it was presented to this Committee and was last reviewed in October 2025 and represents the risks of the Directorate.

 

5.4       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.

 

5.5       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.

 

5.6       The key amendments that have been made to the DRR since October 2024 are as follows:

 

5.6.1    Deleted risks

·               No risks have been deleted. Mitigations continue to be in place and effective.   

 

5.6.2    New risks

·               Although new risks have developed within the service areas no new risks were considered appropriate for the Directorate level risk register.  

 

 

 

 

 

5.6.3    Key changes to risks

·               Whilst no current rankings for the risks were changed at this review the target ranking of the Financial Challenges risk was increased from Medium (8) to Medium High (12) as it is felt pressures in that area will continue over the coming year.

·               The target ranking for the Restructure, Recruitment, Retention and Culture risk was reduced from 9 (Medium) to 6 (Medium) as some of the work in that area relating to restructures is nearing completion.

 

6.0       FINANCIAL IMPLICATIONS

 

6.1       There are no direct financial implications as a result of this report.

 

7.0       LEGAL IMPLICATIONS

 

7.1       There are no direct legal implications as a result of this report.

 

8.0       EQUALITIES IMPLICATIONS

 

8.1       There are no direct equalities implications as a result of this report.

 

9.0       CLIMATE CHANGE IMPLICATIONS

 

9.1       There are no direct climate change implications as a result of this report.

 

10.0     REASONS FOR RECOMMENDATIONS

 

10.1     This report has highlighted a number of existing sources of assurance that help to determine the effectiveness of governance arrangements in practical terms. The review concludes that:

 

·                the directorate has not experienced any major governance failures during the last year. However, Committee should be aware of the ongoing housing improvement workstream and regulatory judgement. Internal Audit have also worked with the Housing team to provide assurance around the rent standard.   

·                the Risk Register has been working well and senior managers have actively engaged with the detailed review.

·                Internal Audit have undertaken a number of reviews to provide assurance with a number of improvements identified. These include significant improvements to the stock condition surveys for Council homes as outlined in 4.4 of the report and regarding the handling of cash within leisure centres. These findings are being addressed and will complete this financial year.

·                There are no major gaps or weaknesses identified when considering the outcomes and practical implementation of the North Yorkshire Local Code of Corporate Governance. As set out within the report there are areas of risk identified and continued work to address them.  

 

10.2     This high-level review concludes that the governance arrangements operating in the Directorate over the last year have met the Council’s expected principles of good governance, as set out in the Council’s local code of governance.

 

 

 

 

 

 

11.0     RECOMMENDATIONS

 

11.1     That the Committee:

 

i)          Note the review of the effectiveness of governance arrangements in the Community Development Directorate.

ii)         Note the Directorate Risk Register for the Community Development Directorate; and

iii)        Provide feedback and comments on the Community Development Directorate Risk Register and any other related internal control issues.

 

 

APPENDICES:

Appendix A – Directorate Risk Register – Summary

Appendix B – Directorate Risk Register – Detailed

 

BACKGROUND DOCUMENTS:

None

 

Nic Harne

Corporate Director – Community Development

September 2025

 

Report Author – Paul Foster, Assistant Director – Resources

Presenter of Report – Nic Harne – Corporate Director – Community Development