Agenda item

Karl Battersby explained that the report shows that the directorate is well governed. The following additional points were made when the report was introduced.

 

·        It was reported that the Major Schemes risk carries a high score due to the significant financial exposure and complexity associated with delivering large-scale projects.

·        Risks associated with climate change are Council-wide and require coordinated action across multiple Directorates and partners. The scale of the challenge – including the ambition to become carbon negative by 2040 – contributes to the elevated risk rating.

 

The following points were raised during the discussion.

 

·        Members acknowledged that the Directorate appears to be managing harbour-related work effectively and hoped that this would continue.

 

·        Members highlighted that the Audit Committee has not reviewed the Kex Gill project and the additional costs associated with the scheme.

 

Officers explained the factors that had contributed to the increased cost.

-        A delay in signing the contract due to the Department for Transport not having signed the business case resulted in a compensation event, with an estimated cost of £2.5 million.

-        Unexpected ground conditions required the movement of material to ensure the road would settle properly and to avoid future issues.

-        The design of the scheme was revised from a piled foundation approach to an earthworks-based solution. This reduced the risk of delays but allowed the contractor to revisit original assumptions.

 

A member raised concerns about the original assumptions, querying whether the initial site surveys had been inadequate. In response, it was confirmed that ground surveys were carried out prior to the start of the scheme, but due to the size and complexity of the site, only specific areas were surveyed. As the Council didn’t have the necessary expertise, a company called WSP was appointed as the external project manager and technical advisor. It was acknowledged that ground conditions in some areas were worse than anticipated, and a review is underway to assess whether the support provided met the required standards.

 

It was reported that a compensation event has gone to adjudication, and the outcome is expected to set a precedent for other claims. The Council has brought in external expertise to assist with these events and ensure robust handling of contractual matters.

 

Officers clarified that the figures reported to date reflect anticipated, not actual, expenditure. The final cost will depend on the compensation events. It was also noted that the original business case, approved by the Executive, acknowledged the likelihood of cost increases due to the complex terrain and engineering requirements.

 

It was reported that the scheme is progressing well, and the road is expected to open earlier than anticipated.

 

It was confirmed that Internal Audit is currently undertaking a lessons learned review of the project. This audit is intended to provide feedback while the project is still ongoing, rather than retrospectively, and aims to inform future capital projects.

 

·        Members observed that some risks listed in Appendix A, such as climate change and passenger transport market resilience, are not expected to reduce. It was reported that risks with higher initial scores, such as major schemes, offer greater scope for reduction through targeted mitigation, particularly as they are largely technical in nature and within the Council’s control. It was also highlighted that some mitigation actions for the major schemes risk are already underway, contributing to the reduced score. In contrast, risks such as climate change and passenger transport market resilience remain high due to their broader scope and reliance on external factors. Climate change mitigation requires coordinated action across multiple Directorates and partners, while passenger transport resilience is affected by market conditions such as fuel prices and vehicle cost inflation, which are outside the Council’s control.

 

·        A member asked for clarification on how the capital funding for car park machine replacement and lighting upgrades had been secured. It was reported that the upgrades were funded through a capital investment business case, following a member query about improving car park lighting. The funding was provided from the Council’s capital programme.

 

·        Members queried the current delegation of transport functions from the York and North Yorkshire Combined Authority to the Council. It was confirmed that the Combined Authority is responsible for bus services, but due to limited capacity, NYC and City of York Council have continued to deliver this service. This agreement was extended to 30 June 2025, and can be extended further should the Bus Service Improvement Plan for 2025/26 not be in place. It was noted that NYC’s transport teams deliver a range of functions beyond bus services, and any formal transfer of responsibilities would require appropriate time to manage staffing implications.

 

·        A member queried whether savings were yet being made by charging holiday properties for waste collection. In response, it was reported that progress is being made, with manual interventions underway and collaboration with Revenues and Benefits colleagues. The Scarborough area had previously implemented a system, and efforts are ongoing to introduce a countywide approach. The necessary IT systems are part of a wider programme and were reported to be a lower priority. It was reported that the target is to make the savings in the next financial year.

 

·        A member queried whether the Council’s score from the Carbon Disclosure Project reflects only its own operations or includes scope 1, 2, and 3 emissions. The question was raised in the context of policy changes, such as the Home to School Transport Policy, which may reduce emissions from Council vehicles but potentially increase private car journeys. The member expressed concern that excluding wider impacts could present an incomplete picture of the Council’s environmental footprint. In response, officers stated that they believed the score currently reflects only the Council’s own operations. They assured that the Council does not intend to externalise services to artificially reduce its reported emissions and is committed to full and complete measurement. It was noted that the two largest areas of emissions under the Council’s control are buildings and transport.

 

Resolved

 

a)     That the review of the effectiveness of governance arrangements in the Environment Directorate are noted.

b)     That the Environment Directorate Risk Register is noted.