Agenda Document Pack - Audit and Scrutiny Panel - 04/09/2023
North Lanarkshire Council · 4 September 2023
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24 August 2023 Members of the Audit and Scrutiny Panel Chief Executive’s Office Archie Aitken Chief Officer (Legal & Democratic) Civic Centre, Windmillhill Street, Motherwell ML1 1AB www.northlanarkshire.gov.uk Notice is given that a Meeting of the Audit and Scrutiny Panel is to be held in the Committee Room 1, Civic Centre, Windmillhill Street, Motherwell, ML1 1AB on Monday, 04 September 2023 at 13:00 PM which you are requested to attend. The agenda of business is attached. Archie Aitken Chief Officer (Legal & Democratic) Members : Clerk Name: Andrew Rose Clerk Telephone: 07951409714 Clerk Email: rosean@northlan.gov.uk S Watson, H Dunbar, H Brannan-McVey, A Duffy-Lawson, T Fisher, M Hughes, J Hume, D Johnston, J Leckie, B McCulloch, G Robinson,
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Agenda 1 Declarations of Interest In Terms of the Ethical Standards In Public Life Etc. (Scotland) Act 2000 2 Compensation for Compulsory Purchase Order Submit report by the Chief Officer (Place) providing information regarding the latest report approved at the Housing Committee on 31 August 2022, whereby it was agreed to write off historic Maintenance Order debts in order to support the case for the Compulsory Purchase Order at Millcroft Road, Cumbernauld (copy herewith) 1 - 10 3 Housing Refurbishments Submit report by the Chief Officer (Housing Management) (1) updating the Panel regarding the policy for adaptations including wet floors, and (2) addressing the concern raised by the Panel at its meeting on 16 February 2023 in relation to the installation of wet floor shower rooms for new tenants following fitting of a Capital Programme bathroom at void stage (copy herewith) 11 - 18 AUDIT-RELATED ITEMS 4(a) Debt Recovery Submit report by the Chief Officer (Finance) providing assurance that the Council has adequate, robust and effective management arrangements in place for ensuring that the management of debtors is appropriately and effectively controlled (copy herewith) 19 - 24 4(b) Equality Audit Progress Submit report by the Chief Officer (People Resources) providing the Panel with an update on progress made in relation to the audit carried out on the Council's approach to managing its statutory equalities duties (copy herewith) 25 - 40 5 Audit and Risk-Related Items Action Log Submit report by the Chief Officer (Audit and Risk) allowing Members to track implementation of outstanding requests and recommendations made by the Panel in respect of audit and risk-related items (copy herewith) 41 - 44 6 Internal Audit Progress Report Submit report by the Chief Officer (Audit and Risk) (1) providing an overview of Internal Audit activity, and (2) reporting the results of internal Audit outputs finalised since the last update to the Panel in May 2023 (copy herewith) 45 - 112 7 Internal Audit Follow-Up of Actions previously agreed by Management in responce to Audit Recommendations Submit report by the Chief Officer (Audit and Procurement) updating the Panel on the results of internal Audit's follow-up work reviewing the extent to which management have implemented actions previously committed to in response to previous Internal and External Audit recommendations (copy herewith) 113 - 130 8 Accounts Commission - Local Government in Scotland in Scotland Overview 2023 report (May 2023) Submit report by the Chief Officer (Audit and Risk presenting to the Panel the contents of the Accounts Commission report 'Local Government in Scotland 2023' which was published in May 2023 (copy herewith) 131 - 136 9 National Fraud Initiative Update Submit report by the Chief Officer (Audit and Risk) (1) informing the Panel of the progress made to date by the Council in response to the 2022 National Fraud Initiative (NFI) data matching exercise, and (2) highlighting where further action is required by the Council and/or relevant Services (copy herewith) 137 - 142
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RISK-RELATED ITEMS 10 Risk Management Update and 2023-24 Corporate Risk Register Submit report by the Chief Officer (Audit and Risk) providing an update on key risk management developments with a particular focus on the results of the recent annual review of the corporate risk register, as well as providing the Panel for the first time with a snapshot of the highest current residual risks within the Service risk registers (copy herewith) 143 - 158 SCRUTINY-RELATED ITEMS 11 Self-Evaluation of the Audit and Scrutiny Panel Submit report by the Chief Officer (Legal and Democratic) providing the Panel with an advance overview of the evaluation framework, process, and timetable for the self-evaluation of the Audit and Scrutiny Panel (copy herewith) 159 - 176 12 Scrutiny Work Programme (Mid-Year Update) Submit report by the Chief Officer (Business and Digital) providing a mid-year update to the composite Scrutiny Work Programme and reporting timetable for the scrutiny function of the Audit and Scrutiny Panel as set out in Appendix 3 to the report (copy herewith) 177 - 190 13 Strategic Performance Framework - Performance Reporting Schedule Quarterly Performance Assurance Review Submit report by the Chief Officer (Business and Digital) providing the Panel with the outcome from the performance assurance review that has been undertaken of performance reports which have been submitted (in line with the Performance Reporting Schedule) to Council Committees during Cycle 2 of 2023 (copy herewith) 191 - 216 14 Arm’s Length External Organisations ALEOs Governance and Risk Management Oversight and Assurance Report 2023 24 Submit report by the Chief Officer (Business and Digital) providing an overview of the ALEO landscape and the performance and financial monitoring safeguards that are in place to provide such assurance (copy herewith) 217 - 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref NW/PH Date 31/08/23 Compensation for Compulsory Purchase Order From Pamela Humphries, Chief Officer (Place) E-mail wattsn@northlan.go.uk Telephone Neil Watts, 07583023239 1. Background 1.1 The Housing and Regeneration Committee in November 2021 approved the strategy for the Council to progress the Compulsory Purchase Order (CPO) for acquisition of 168 flats, with subsequent demolition and provision of new build housing at Millcroft Road, Cumbernauld. 1.2 The CPO, if approved, will provide a unique opportunity to address the unacceptable living conditions of many current residents who will be rehoused in higher quality homes within a sustainable and healthy environment, and also radically improve the amenity of the wider area for the benefit of the local community. The new development will provide high quality, accessible housing within an attractive environment which will include garden areas and outdoor space to significantly improve the quality of life for residents and help meet housing need within the Cumbernauld area. The new Executive Summary The report responds to the questions raised by the Audit and Scrutiny panel regarding the latest report approved at the Housing Committee on 31st August 2022, whereby it was agreed to write off historic Maintenance Order debts in order to support the case for the Compulsory Purchase Order at Millcroft Road, Cumbernauld. Recommendations It is recommended that the Audit and Scrutiny Panel: 1) Note the contents of this report including the approvals that have been obtained in previous committee reports. The Plan for North Lanarkshire Priority Improve economic opportunities and outcomes Ambition statement (1) Ensure a housing mix that supports social inclusion and economic growth Item 2 Page 1 of 240
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development will also have a considerable impact on the surrounding area and community by replacing the existing buildings which have fallen into disrepair with an attractive new build development. The cost to the Council in arranging continuous fly tipping uplifts/ clean-ups will be removed, as will the serious fire risk that the dumped material presents within the closes, which is of on-going concern to the Fire service. 1.3 In November 2021, the Housing Committee also agreed to the voluntary acquisition of properties in advance of the CPO for those owner occupiers at Millcroft Road who were interested in moving to the nearby new build development at Burns Road (which is being delivered by Sanctuary (Scotland) Housing Association). Nineteen owner occupiers have now successfully moved to Burns Road. 1.4 As part of its case for the CPO, and as set out in the Statement of Reasons, the Council must demonstrate that it is doing everything possible to support the re-housing of residents affected by the CPO and help address the negative financial impact the CPO may have on owners and residents. 1.5 A number of properties still had Debts secured over them following enforced Maintenance Orders that were carried out by the Council in 2011. The Debts require to be addressed by the Council prior to submission of the CPO because the Council need to carefully consider the impact of the CPO on affected parties and how that impact can be mitigated, thus minimising risk of failure of the CPO itself. 2. Report 2.1 At the Housing Committee on 31st August 2022, it was agreed to write-off of debts to the Council amounting to £145,296.86 to support the case for confirmation of a Compulsory Purchase Order (CPO) at Millcroft Road, Cumbernauld. 2.2 In the case of Millcroft Road, the Council owned only one of the properties in the blocks at the time of the Housing Committee on 31st August 2022. The Council has submitted the CPO in order to acquire the remainder of the properties to allow regeneration of the site. Should the CPO be confirmed the Council must then compensate the owners accordingly and as per Scottish Government CPO Guidance. 2.3 The Audit and Scrutiny Panel have asked a number of questions in relation to the compensation payments and CPO process. These questions, and the responses, are set out below: 2.4 What is the indicative completion value for each flat? Bearing in mind that in many cases these flats are and have, in recent years, been changing hands at auction for relatively low prices. In the event that the CPO is confirmed by the Scottish Government, the compensation level for each flat will be determined by the District Valuer who is appointed as an impartial third party by the Council. The property owners will also be able to have a second valuation carried out via an independent RICS accredited surveyor (which the Council will pay the fees for to a capped level). If there is discrepancy in the valuations then the District Valuer and owner appointed surveyor will provide satisfactory evidence to their conclusions and a negotiated figure agreed. If agreement cannot be reached, proceedings will take place via the Lands Tribunal to bring matters to conclusion. As per the CPO Guidance, market value must be offered for the properties affected by the CPO, with market value being assessed via independent RICS accredited surveyors. Page 2 of 240
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To date, the Council have instructed the District Valuer to assess the homes of Owner Occupiers who have explicitly expressed an interest in having their homes voluntarily acquired (19 in total) in order to move to the neighbouring development at Burns Road as part of the Council’s Rehousing Strategy in advance of the CPO. The agreed values of these homes vary between £17,000 and £43,000 depending on their size and condition. The average value of the nineteen properties acquired to date is £23,842.11. These acquisitions are based on Market Value determined by the District Valuer during Summer 2022 and will be subject to change in the future depending on the timing of the valuation and purchase of the remainder of the properties in the event the CPO is confirmed. In addition to the Market Value offered, Owner Occupiers are entitled to Home Loss as well as Disturbance payments. Scottish Government Guidance states that Home Loss is applied “...if you have lived in a residential property for at least one year prior to its compulsory acquisition you may be entitled to an additional payment to recognise the distress and discomfort of having to move out of your home… An owner-occupier who qualifies for a home loss payment is entitled to 10% of the market value of their interest in the property, with a minimum payment of £1500 and a maximum payment of £15,000. If you are a tenant who qualifies for a home loss payment, you are entitled to a fixed payment of £1500. If more than one person qualifies for a home loss payment, the amount due will be divided equally between you.” The definition of the Disturbance payments is noted as follows: “…for losses caused as the occupier or tenant of a property as a direct result of being disturbed from possession of your property and other losses caused by the compulsory purchase process. This may include removal and relocation costs, temporary/permanent loss of profits, reconnection of services, loss of fittings and certain reasonable professional fees, such as legal fees and the costs of employing a professional to help you assess and negotiate your compensation claim.” Owners who do not live in their Millcroft flat are entitled to Disturbance payments only in addition to Market Value. The entitlement to these categories of compensation is set out in the Scottish Government CPO Guidance. 2.5 These low prices can, in part, be attributed to title difficulty. Title difficulty associated with the presence on the title of a charging order. Said charging orders which the Committee were asked to waive payment on (at the Housing Committee on 31st August 2022) - can the service give assurance that compensation levels will be set so that there will be no profit made by owners due to the decision to waive sums due to the council and which were secured on the title? The Council cannot confirm that no profit will be made by owners as there would be no method of knowing or confirming this as we do not have the means to assess the financial circumstances of individual owners of private property. Compensation levels, as previously noted, are dictated by the Scottish Government CPO Guidance, in that market value must be offered for the property, namely: “Open market value is based on what a person could expect to get if they willingly sold their interest in the land on the open market, without the threat of the compulsory purchase.” The low valuations for the properties cannot be directly correlated to title difficulty from the charging orders, although the lack of factoring arrangements has had a significant effect on the lack of maintenance over many years leading to the poor condition of the properties and amenity areas evident today. Page 3 of 240
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2.6 If assurance cannot be given then why did the service get the Council into this position? The proposals outlined in the August committee report are considered necessary in order to demonstrate that the Council is doing what it can to mitigate the financial impact on affected owners and supporting the rehousing of residents, thus reducing the risk of the CPO not being confirmed. Bad debts are written off on an annual basis Council wide for a variety of reasons, for example relating to Rent debt and Council tax debt, as such the debts in question at Millcroft Road have been included within the same justification principles. However, the unique circumstances of this CPO and its strategic goals does not create a new precedent for prematurely writing off debts owed to the Council in the future. At the same committee, a report titled General Debtors Write-Off 2022 was approved which led to £462,352 of bad debts from outstanding debtor accounts being written-off as it was deemed uncollectable. 2.7 Specific details are requested to be presented to the Audit and Panel Process in terms of the full process for CPOs, the resulting financial impact on the council, and the ultimate benefits to the council. To support the regeneration of Millcroft Road, in November 2021, the Council approved the making of a Compulsory Purchase Order for the 168 privately owned properties at Millcroft Road. The Statement of Reasons was submitted to the Scottish Government as part of the full CPO application in late March 2023. The Statement of Reasons is, as per the Scottish Government CPO Guidance, the justification document which makes the case for the CPO itself. It outlines the full detail of why the CPO is necessary in order to improve the quality of housing and living standards of the designated Millcroft area. As part of the CPO process, over 500 individual Notices were prepared and served to all affected parties. The CPO objection period has now lapsed and a total of 3 objections to the CPO were received from landlords. No individual living at the properties objected to the CPO. The Council has submitted responses to those objections which are now being considered by the Scottish Government as to whether or not they will be upheld. Formal determination is expected to take approximately 12 months from the point of submission based on previous CPOs of a similar size and scale. However, the determination period could be extended by a further 6 months if the Objections are upheld and an appeal with subsequent hearing is required. There is no statutory determination period for CPOs and the Scottish Government may reach a determination sooner or even beyond these estimated timescales. Further details can be accessed in the Supporting Documentation section of this report including: the Scottish Government Guidance document and the Council’s Millcroft Road CPO documentation, including the Statement of Reasons. The total estimated cost of this regeneration project is estimated at £21.6m, which includes: acquisition; Home Loss and Disturbance payments; conveyancing legal costs; Land and Building Transaction tax (LBTT); Security Costs; DV fees; demolition and new build costs. The project is being funded through the HRA and grant from the Scottish Government. The final level of grant funding cannot be confirmed until the CPO is confirmed, and thereafter a grant application has been approved for both the new build element in addition to the associated costs of the CPO, such as acquisition, Home loss, Disturbance, owner’s legal fees and valuation legal fees, all of which are eligible for grant funding. The benefits to the council, and the community of Carbrain, have been outlined above. The council will receive rental income for the 72 new homes which will help meet the need for social rented housing in Cumbernauld, an area of high demand. The new homes will be built to a modern standard with energy efficient and zero carbon heating Page 4 of 240
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systems. They will have improved amenity spaces, include lifts, wheelchair provision and improved connectivity to the local active travel and public transport network. Further details on the benefits and financial impacts on the Council were included in detail in previously approved committee reports and are provided for reference under Supporting Documentation along with the Millcroft CPO application including Statement of Reasons. 3. Measures of success 3.1 The existing housing is no longer fit for purpose and does not meet the needs of residents. The regeneration proposals will improve housing conditions by removing generally poor quality housing and replacing it with high quality new build residential accommodation which will comply with current standards and will be well managed and maintained. 3.2 The regeneration proposals will make a significant contribution to the enhancement of the local community and environment at Millcroft Road and the surrounding area. The Council therefore considers there to be a clear and compelling case in the public interest to acquire the properties at Millcroft Road to facilitate the provision of high quality social rented housing. Once completed the redevelopment of Millcroft Road will contribute to the improvement of the well-being of the local residents and wider community. 3.3 The ultimate measure of success is approval of the Compulsory Purchase Order, allowing wholescale rehousing of the residents at Millcroft Road, thereby facilitating onward demolition and creation of new build properties for NLC social rent. 4. Supporting documentation Housing Committee 31 August 2022, Millcroft Road, Cumbernauld, Compulsory Purchase Order https://mars.northlanarkshire.gov.uk/egenda/images/att98585.pdf Housing and Regeneration Committee 24 November 2021, CPO of private properties at Millcroft Road, Cumbernauld and construction of new homes https://mars.northlanarkshire.gov.uk/egenda/images/att97188.pdf Enterprise and Housing Committee 2 November 2017, 1−103 and 2−204B Millcroft Road, Cumbernauld https://mars.northlanarkshire.gov.uk/egenda/images/att86792.pdf Housing and Social Work Services Committee 2 February 2017, Millcroft Road, Cumbernauld https://mars.northlanarkshire.gov.uk/egenda/images/att85481.pdf Further Scottish Government guidance on the full process for carrying out a CPO https://www.gov.scot/publications/scottish-planning-series-planning-circular-6-2011- compulsory-purchase-orders/documents/ The documentation for the Millcroft Road CPO which was submitted in March 2023 Millcroft Road, Cumbernauld - Compulsory Purchase Order | North Lanarkshire Council Page 5 of 240
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Pamela Humphries Chief Officer (Place) Page 6 of 240
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☒ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The proposals reflect the legal advice received. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☒ No ☐ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☒ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☒ No ☐ Page 7 of 240
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5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? A risk register has been developed to capture and help mitigate potential risks in accordance with Project Management Guidelines. There are a number of risks to the Council, including those associated with the confirmation, or otherwise, of the CPO; financial risks in terms of project costs, and the re-housing of owner occupiers and tenants. The proposals outlined in this report were considered necessary in order to reduce the risk of the CPO not being confirmed and to demonstrate that the Council is doing what it can to mitigate the financial impact on affected owners, and supporting the rehousing of residents. It is recognised that there may be a negative reaction from owners who have already paid the debt, but on balance it is considered that the risk of the CPO failing if these debts are not written off is significant and therefore is a necessary step to take. This therefore does not create a precedent for writing off debts owed to the Council in the future. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. Page 8 of 240
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5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 9 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref SL/MK/BL Date 31/08/23 Housing Refurbishments From Stephen Llewellyn, Chief Officer (Housing Management) E-mail llewellyns@northlan.gov.uk Telephone 01698 274192 1. Background 1.1 Adaptations within a home ensures that tenants and residents can undertake everyday tasks more easily and safely as well as to live independently at home for as long as possible, to alleviate hospital admissions and enable swifter discharge from hospital allowing a person to return home. 1.2 The Integrated Equipment and Adaptation Service (IEAS) is preventative and anticipatory, in nature, which has a direct impact on reducing the need for more intensive and higher cost health and social care services. Therefore, integrated ways of working between Housing and Health and Social Care have become well established practice in North Lanarkshire supporting people to live as full and independent lives as possible. Executive Summary The purpose of this report is to update the Audit and Scrutiny Panel regarding the policy for adaptations including wet floor showers and address the concern raised by the Panel at its meeting on 16 February 2023 in relation to the installation of wet floor shower rooms for new tenants following fitting of a Capital Programme bathroom at void stage. Recommendations It is recommended that the Panel note the content of this report. The Plan for North Lanarkshire Priority Improve the health and wellbeing of our communities Ambition statement (12) Ensure our residents are able to achieve, maintain, and recover their independence through appropriate supports at home and in their communities Item 3 Page 11 of 240
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1.3 When a referral is made to the IEAS, a community care assessment of need is undertaken by an Occupational Therapist, who looks at the individual situation and needs of each person and assesses what adaptation(s) can help the individual in their home. A decision is then made on what needs can be met. The IEAS prioritises need because there are more needs than resources available and does so by assessing the risk if needs are not met into four categories: • Critical (Priority 1) • Significant (Priority 2) • Moderate (Priority 3) • Low (Priority 4) 1.4 Not all of a person’s needs will fall into the same category, which means that some needs may fall into a higher priority than others. If a person’s needs fall into priority 1 or 2 then the person will be eligible for support. Priority 3 needs will be met if resources allow this. Priority 4 needs will not be met, but advice will be provided to identify if needs can be met in another way. 1.5 The adaptation must be based on an occupational therapist’s assessment of need that the tenant requires a permanent adaptation. For some people, the assessment of need may identify alternative housing solutions. 1.6 Referrals for adaptations are received into the IEAS from individuals, their carers and staff across the partnership working with the person, including financial inclusion, nursing, hospital occupational therapists and physiotherapists, physiotherapists in the Integrated Rehabilitation Teams, Social Workers, Integrated Day Services, Sensory Impairment, Locality Support, GPs and Housing Solutions. Referrals are also received for bathing assessments via North Lanarkshire Health and Social Care Partnerships (HSCP) online self-assessment platform ‘Making Life Easier’. 2. Report 2.1 As part of the Scrutiny work programme for Audit and Scrutiny Panel, a query was raised by Elected members in relation to potential wastage in relation to the installation of wet floor shower rooms for new council tenants following the fitting of a Capital Programme bathroom at void stage. Analysis of the installation of wet floor showers over the three years 2020, 2021 and 2022 is indicated below in Table 1. There was a notable decline in wet floor shower rooms installed during 2020 due to the impact of the COVID-19 pandemic, with 226 wet floor shower rooms installed, 317 wet floor shower rooms were installed in 2021 and 320 installed during 2022. The total number of major adaptations installed over the 3-year period 2020-2022 was 1012. 863 of these major adaptations were for wet floor shower rooms, which is the main major adaptation undertaken in North Lanarkshire. The remaining 149 major adaptations over 2020-2022 were comprised of 123 ramps, 6 external step lifts, 2 through floor lifts, 3 automatic door openers and 15 automatic toilets. Page 12 of 240
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Table 1: Number of Wet Floor Showers Installed 2020-2022 Calendar Year Number of WFS installed 2020 226 2021 317 2022 320 Total 2020-2022 863 2.2 As can been seen in Table 2 below, the number of wet floor shower rooms installed for new tenants following the fitting of a Capital Programme bathroom at void stage were very small, with only two instances in 2022. In the context of a high volume of overall wet floor shower room installations, 320 installed during 2022, there have been very few instances of wet floor shower rooms being installed within one year of the tenancy start date following fitting of a Capital Programme bathroom over the past three years. These instances represent approximately less than 1% of all wet floor shower rooms installed in people’s homes. Table 2: Number of WFS installed following new capital bathroom within 1 year of new tenant moving in. Year of tenancy start date Number of WFS installed following new capital bathroom (at void) within 1 year of new tenant moving in 2020 1 2021 3 2022 2 Total 2020-2022 6 2.3 Table 3 below indicates the high volume of new Capital Programme bathrooms completed in void properties, with 310 capital bathrooms completed in 2022. Over the 3-year period 2020-2022, there were 960 capital bathrooms completed in void properties. Given the high volume of new Capital Programme bathrooms completed, there have been very few instances of wet floor shower room installations for new tenants following the fitting of a capital bathroom at void stage, with only 2 installed in the calendar year 2022. Table 3: Number of new Capital Programme bathrooms in void properties by year 2020- 2022. Year Number of Capital Programme bathrooms in void properties1 2020 271 2021 379 2022 310 Total 2020-2022 960 1 Voids includes properties acquired through the Open Market and Empty Homes Purchase Schemes Page 13 of 240
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2.4 A capital bathroom that is issued at void stage will mainly be for two reasons: it may have been missed when other bathrooms in the area have been replaced (previous tenant may have refused the capital bathroom) or the bathroom is scheduled for improvement on the current Capital Programme of works to meet the Scottish Housing Quality Standard. A capital bathroom is installed at void stage as it is easier and more efficient. 2.5 At the time of inspection of a void property, the Technical Officer identifies repairs and will check the property database if the property should have a capital bathroom installed. Capital Programme staff liaise with the Locality Housing office to determine if it is known at that stage the specific needs of the prospective new tenant. This would only be in relation to ground floor amenity stock and some ground floor flats. 2.6 In the six instances over the three-year period 2020-2022, none of the prospective tenants indicated either on their housing application that they were seeking a house with a wet floor shower room, or at the time of offer and viewing. In these instances, the property would have been deemed suitable for the tenant, which met the tenant’s housing’s needs and the tenant accepted the property following viewing of the property at an improved standard. Health needs can change over time. This can necessitate a need at a later stage following an offer and allocation of a property, for an adaptation. 2.7 It is also important to note that in the very few instances of properties with a new capital bathroom installed at void stage only the capital bath would have been replaced with a wet floor shower and the new capital WC and wash handbasin would have been retained in order to minimise wastage whilst at the same time ensuring improved housing standards. 2.8 Measures are undertaken across the Housing Service, working in partnership with Health and Social Care to ensure a proactive approach to identifying and planning for current and future needs, through early intervention and prevention, effective information sharing and partnership working arrangements. Several improvements have been and continue to be made in relation to the provision of equipment and adaptations and partnership working. These include: • The implementation of an online self-assessment tool ‘Making Life Easier’, providing signposting, advice and information on equipment and adaptations, as well as other services and supports • Adapting for Change e-learning module developed and in person training delivered to housing, health and social care to encourage early intervention and prevention to prevent housing crisis from occurring and encouraging effective information sharing and signposting • Implementation of joint planning and assessment structures involving Housing, Health and Social Care for complex adaptation cases, to improve access to a wider range of options to meet needs • HSCP’s intention to conduct a review of service arrangements in relation to the IEAS to improve efficiency in identifying needs, directing resources and measuring outcomes for individuals in need of support. Housing and HSCP will explore referral processes to either service in relation to people who need a major adaptation such as a wet floor shower room • Current procurement of a new Social Work IT system which will improve community care assessment data Page 14 of 240
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3. Measures of success 3.1 Robust and effective partnership processes for the assessment and provision of adaptations that enable safety and independence whilst making best use of housing stock in meeting needs. 4. Supporting documentation N/A. Stephen Llewellyn Chief Officer, Housing Management Page 15 of 240
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Although this report relates to the specific protected characteristic, disability, there is no information contained that highlights any specific adverse or other impact arising specifically from this report. If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☒ Page 16 of 240
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5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 17 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref EK/NL Date 04/09/23 Debt Recovery Review From Elaine Kemp, Chief Officer (Finance) E-mail kempe@northlan.gov.uk Telephone 01698 302408 Executive Summary In 2022 an Internal Audit was undertaken on Sundry Debt and Debt Management. The purpose of this audit was to provide assurance that the Council has adequate, robust and effective management arrangements in place for ensuring that the management of debtors is appropriately and effectively controlled. Despite collection rates of over 97%, the audit identified significant deficiencies in several aspects of the control environment under review and as such the audit opinion was defined as limited assurance (Amber-Red) with the recommendation that there was an urgent need to strengthen the robustness and effectiveness of many aspects of the debt recovery control framework through a formal review of all aspects of the framework. The review of this framework is nearing completion with a number of actions implemented and the remainder to be finalised by the end of September. Recommendations It is recommended that the Audit and Scrutiny Panel: 1. Acknowledge the actions implemented so far; 2. Endorse the introduction of quarterly reporting of Debt Recovery through Senior Management Teams; 3. Acknowledge the actions required to complete the review. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning Item 4(a) Page 19 of 240
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1. Background 1.1. The effective management and collection of debt is an essential contributor to the council’s financial resources and helps maximise income available to fund essential services. To achieve this, the council aims to issue invoices, where appropriate, and collect all debt owing to it promptly, effectively and efficiently whilst ensuring fair and equitable treatment to debtors in line with approved policies. 1.2. The council has a Corporate Debt Policy and there is also a Debt Recovery procedure manual which contain a range of information/guidance in relation to policy, procedures and responsibilities for debtor invoices and debt recovery. Both of these documents are in need of review and updating as highlighted by Internal Audit. 1.3. During financial year 2022/23, 107,849 invoices totalling £106.562m were raised, adding to the outstanding debt from the previous year of £12.073m. Although collection rates are generally very high (the debt collection rate for the last four years is 97%), as at 31 March 2023, invoices totalling £12.6m were outstanding, with £4.937m of these outstanding in excess of 12 months. 2. Report Audit Findings 2.1 The Internal Audit opinion given was that of limited assurance (red-amber), the report highlighted the urgent need to strengthen the robustness and effectiveness of many aspects of the debt recovery control framework. The recommendation given was: “A formal review of the debt management framework should be undertaken to revisit and refresh all aspects, including policy, procedures and operational arrangements with a view to improving efficiency, timeliness, effectiveness and equity of the Council’s current approach to debt management.” 2.2 The report went on to advise that the review should include consideration of the purpose and objectives of debt management activity and cover areas such as: • Establishing which activities are best done at a corporate-level and within services; • Ensuring corporate and service roles and responsibilities are clear and documented; • Examining whether services are minimising the need for raising invoices by ensuring wherever possible that payment for good and services is obtained in advance of service provision; • Producing clear guidance detailing key requirements for all aspects of the debt management process (e.g. holding appropriate documentation to support debts raised and expectations for monitoring outstanding debt and recording debt recovery action taken); and • Identification of the most effective methods for monitoring compliance and performance of debt management activities. Accountability 2.3 A significant part of the review was to look at Accountability and establish the role Finance and Legal Services have in debt recovery. Page 20 of 240
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2.4 Each Service is responsible for raising their own invoices within the Ash Debtors system for goods and services provided and are responsible for ensuring payment of that charge. However, there are a number of tools available to assist in the debt recovery process should it be required: • Ash issues a system generated reminder 3 days after the payment due date. • The sundry debt recovery team within Finance will pursue the debt if the initial period of recovery is unsuccessful, this is normally 10 days after the reminder has been issued. This team have additional processes they can utilise to assist recovery. • Thereafter, should recovery continue to be unsuccessful, Legal Services can raise a court action, if deemed economical to pursue. 2.5 However, the review has concluded that it is essential that Services who raise debt recognise that accountability for that debt remains with the service until the debt is either paid or written off. All effort should be made within the first 10 days of non- payment to contact the customer to encourage payment to avoid the debt moving to the sundry debt team or legal services. Actions Undertaken 2.6 To address the audit recommendations a focus group consisting of key staff from across the services was established to gain an understanding of current processes and where improvements could be made. 2.7 Following the initial meetings, the group were asked to consider a number of quick wins which included reviewing contact information on invoices being issued, ensuring debt recovery processes are understood across their wider teams and giving consideration to areas where payment in advance may be appropriate. 2.8 From this, a number of specific actions have been completed: • The debtors procedure manual has been reviewed and updated • “How to” guides have been prepared for Ash debtors reporting to give users direct access to debt reports and move away from the current process where reports are issued quarterly by the Sundry Debt Team • A review of Community Alarm billing within Adult Social Care is underway in conjunction with the Community Alarm Service review that is currently ongoing • Each service are considering where payment in advance could be introduced and how this could be implemented. • A report was approved at Business Management Team to introduce a quarterly reporting regime whereby a standing item on debt recovery would be included on Senior Management Team (SMT) meetings. This would detail the level of debt raised and outstanding across the service, the actions which have been taken during the preceding quarter to address outstanding debt and where accounts are deemed no longer economical to pursue these would be proposed for write off with appropriate justification provided. This would feed into the annual debt write off exercise presented to service committees. Page 21 of 240
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Planned Actions 2.9 In order to finalise the review there are a small number of actions planned for completion by the end of September 2023: • A template will be developed for the quarterly reports for SMT to ensure consistency in what is being reported across the Council. • The Corporate Debt Policy will be considered to ascertain where this needs updated to reflect the outcomes of this review. • The new procedure manual and “how to” guides will be issued to all services. • Where charges can be moved to payment in advance Services will engage with Business and Digital on how to progress telephone or online payments to facilitate this. • A revised billing system for Community Alarms will be introduced should that be the outcome of the service review that is currently underway. 3. Measures of success 3.1 Measures of success will include: • Pro active debt monitoring with clear accountability across services. • An improvement in recovery rates across the council. 4. Supporting documentation N/A Elaine Kemp Chief Officer (Finance) Page 22 of 240
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Recovery rates across the council for debt are already high at 97% however improvements in processes and reporting should have a positive impact on Council resources. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Page 23 of 240
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Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☒ Page 24 of 240
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North Lanarkshire Council Re Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref FW/AC Date 04/09/23 Equality Audit From Fiona Whittaker, Chief Officer (People Resources) E-mail Whittakerf@northlan.gov.uk Telephone 07973 728628 Executive Summary This report provides Audit and Scrutiny Panel with an update on progress made in relation to the audit carried out on the Council’s approach to managing its statutory equalities duties. The purpose of the audit was to provide assurance on the adequacy and effectiveness of the key controls and management arrangements associated with ensuring that the Council complies with both its general and specific equalities responsibilities as laid down in the Equalities Act 2010 (‘the Act’) and Equality Act 2010 (Specific Duties) (Scotland) Amendment Regulations 2016. The audit was assessed as providing ‘reasonable assurance’, concluding that the Council generally has appropriate arrangements in place to demonstrate consideration of the Public Sector Equality Duties in mainstreaming equalities into its day-to-day functions. The audit also found that there are effective processes in place for ensuring that equalities outcomes are set and reviewed in accordance with expected timescales and that key equalities reports have been published in accordance with the Council’s specific equality duties. Recommendations for management consideration and action were noted in a few areas and the report details the service’s proposed actions to address the recommendations, along with an update on progress already made, and additional planned action to meet the agreed timescales. Recommendations It is recommended that the Audit and Scrutiny Panel: 1) Acknowledge the progress already made to date. 2) Endorse the planned activity to provide further substantial assurances that the Council has a sound system of governance, risk management and control to meet the requirements set out by the Equality Act 2010 (Specific Duties) (Scotland) Amendment Regulations 2016; and 3) Acknowledge the potential for the Specific Duties to change prior to the next reporting period in 2025. Item 4(b) Page 25 of 240
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1. Background 1.1 In June and July 2022 an internal audit was carried out on the Council’s equalities work, the purpose of which was to provide assurance on the adequacy and effectiveness of the key controls and management arrangements associated with ensuring that the Council complies with its statutory general and specific equalities responsibilities as laid down in the Equalities Act 2010 (‘the Act’) and Equality Act 2010 (Specific Duties) (Scotland) Amendment Regulations 2016. 1.2 The audit assessed as providing ‘reasonable assurance’, concluding that the Council generally has appropriate arrangements in place to demonstrate consideration of the Public Sector Equality Duties in mainstreaming equalities into its day-to-day functions. The audit also concluded that there are processes in place for ensuring that the equalities outcomes which have been set, are reviewed in accordance with expected timescales and that key equalities reports have been published in accordance with the Council’s specific equality duties. 1.3 Recommendations for management consideration and action in a few areas were identified and include that: • our current governance arrangements for equalities need reviewed and improved to ensure that they remain fit for purpose. • improvements are needed to ensure consistent and appropriate use is made of Equality Impact Assessments (EQIAs); and • improvements are needed to the equalities performance monitoring framework including ensuring that comprehensive and robust information is regularly and timeously reported to key stakeholders. 1.4 The following report provides information on the work to progress the recommendations of the equality audit and planned activity to provide Audit and Scrutiny panel with the substantial assurances that a sound system of governance, risk management and control exist, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. 2. Report 2.1 To address the areas highlighted within the audit report an agreed action plan was developed. The progress for each of the three areas of concern are detailed within the following section of the report along with details of further planned activity. 2.2 Improvement Actions, Progress and Planned Activity. 2.2.1 Review and Improve Governance Arrangements Recommendation 1. Establish a new vehicle to ensure better overarching governance and a focus on the delivery of our Equalities Strategy. This is likely to be in the form of an Equalities Delivery Board with a focus on the Equalities Delivery Framework, engagement across services, and supporting our annual plan of activities in this area. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (23) Build a workforce for the future capable of delivering on our priorities and shared ambition Page 26 of 240
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Progress An Equality Board was established in February 2023 that consists of full representation from all service directorates across the Council and managers with linked remits to the Delivery Framework for Equalities which was agreed by the Wellbeing and Tackling Poverty Committee in February 2023. The Board will ensure the Framework’s associated action plans are effectively monitored and reviewed on a quarterly basis and that equality work is mainstreamed across our services – Chief Executive’s Office, Education and Families, Enterprise and Communities and Adult Health and Social Care. The Equality Board is chaired by the Chief Officer, People Resources. The Terms of Reference for the Equality Board is attached as Appendix 1 to this report. Recommendation 2. The corporate action plan will be updated to include individual service actions and will include named responsible officers identified to take appropriate actions at service and corporate level together with the relevant timescales for taking that action. The Action Plan will be monitored through the Delivery Board. Progress All current action plans to advance equalities in North Lanarkshire are currently being reviewed and updated to meet the audit recommendations and being brought together under the Equalities Delivery Framework action plan to bring consistency of approach and oversight. In addition, this one framework will also contain: • the service action plans, once approved by their respective service management teams; and • the Equality Outcome Performance Management Framework This one Equalities Delivery Framework Action Plan will allow for more effective and co-ordinated arrangements for monitoring, review, and reporting purposes. It is on track to be in place by 30 September 2023 and will be presented to the Equality Board at its meeting on 2 October for approval. Recommendation 3. The Delivery Board will monitor the progress on the Equalities Delivery Framework on a quarterly basis. Progress The Equality Board has had two meetings to date with future quarterly meetings scheduled. Once the Delivery Framework Action Plan is in place, updates will be prepared in advance of all Board meetings to ensure progress is kept on track and any corrective action required can be factored in. 2.2.2 Equality Impact Assessments Recommendation 1. An immediate review of current EQIA arrangements will be undertaken by the Equalities Manager. All user communications will be issued based on the CMT recommendation for all staff undertaking EQIA’s to undertake a mandatory e-learning module. Progress Page 27 of 240
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The Council’s equality impact assessment guidance has been subject of both an internal and external review. The external review was undertaken by the Scottish Women’s Budget Group as part of the Gender Budgeting Project. The form has now been updated and reflects better the considerations required to ensure a robust assessment. The covering quality control sheet of the EqIA assessment form has been updated to include a signed and dated confirmation that the author has undertaken the Council’s bespoke impact assessment e-learning module as agreed as a mandatory requirement by Corporate Management Team. All forms and updated guidance have now been moved to MyNL – as CONNECT is now decommissioned. An All-User email was issued in July 2023 to highlight both the location of the forms, the updated guidance, resources available and the need to undergo the mandatory e-learning module. Recommendation 2. A wider review of EqIA arrangements will be undertaken to agree a revised and improved approach. This will be finalised in conjunction with the Equalities Delivery Board and rolled out into services thereafter. It is also the service’s intention to appoint Equalities leads within each service who will take responsibility for ensuring the effectiveness of EQIA use within their service. A revised programme of EQIA training will be developed to support the roll out of the new process. Progress The Equality Manager is working with the Service Leads to review and improve the approach to equality impact assessments. It is looking at: 1. The process – how do we ensure a consistent approach across services when undertaking assessments; and 2. The quality – what else can we do to improve the quality of assessments that are undertaken ensuring they evidence compliance with the general equality duty. The findings and recommendations of this work will be presented to the Board for its consideration and included in the Equality Delivery Framework and Service action plans as required. Recommendation 3. The Equalities Manager will develop a process for the periodical review of compliance within services, working in conjunction with each service equalities leads. Planned activity. The Equalities Manager has committed to carrying out the following every six months: • A desktop review of equality considerations written within service committee reports in partnership with Service Leads. • A check on published equality impact assessments to consider how they evidence compliance with the general equality duty; and • Provide the Equality Board with an update report on the review findings every six months. 2.2.3 Performance Management Framework Page 28 of 240
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Recommendation 1. A robust performance monitoring framework is developed that will allow management to measure performance and impacts more effectively and accurately against the equality outcomes and allow for periodic assessments to be undertaken. This should include identifying clear and realistic targets for each outcome and consideration of current and future planned actions which are designed to contribute to the achievement of these outcomes. Progress As detailed in section 2.3.1 a new Equalities Board has been established to oversee the work to mainstream equalities across the Council as well as the progress in relation to the Council's nine equality outcomes. A new Performance management framework is developing and will be in place by 30 September. This PMF is based on one previously developed and used by the Council and lauded by the Equality and Human Rights Commission as good practice due to its ability measure performance and impacts effectively. Board members were selected for their operational role in relation to the Equalities Delivery Framework and the equality outcomes. The Board members are currently working with the Equalities Team to develop SMART action plans for each of their services and within these plans the equality outcomes will also sit - adjacent to the service where they belong to ensure the outcomes are not only SMART but mainstreamed. Services have been asked to have the action plans ready by 30 September 2023 as agreed with audit. Recommendation 2. Ensure that robust arrangements are in place to enable accurate and up to date information to be collated and reported to key stakeholders in accordance with the committee and statutory timescales. Progress The equality outcomes progress report, required by the Public Sector Equality Duties to be published every 2 years was published on the Council website in April 2023 and subsequently approved by the Wellbeing and Tackling Poverty Committee in line with the PSED timescales. The next equality outcomes progress report is to be published by 30 April 2025. With the new performance management framework in place the Equalities Board and the Equality Team will work back from this date to ensure information is reported in accordance with committee and statutory timescales. Recommendation 3. Seek to ensure greater transparency underpins the process for identifying / setting/ prioritising equality outcomes/ targets and associated actions. Planned Activity. Equality outcomes are to be reviewed and set every 4 years taking reasonable steps to involve and consider relevant evidence. The next set of outcomes require to be set by 30 April 2025. The Equality Board will ensure the necessary steps are in place to develop a process which aligns with the recommendations of the audit. This process will be set out by end of March 2024 and will align with the review of the Council’s Equality Strategy. The Panel should also be aware that the Scottish Government is expected to imminently publish its findings of the review of the Scottish Specific Duties - which includes the duty to publish equality outcomes and report on progress. Any changes Page 29 of 240
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to the duties will need to be taken into consideration as we move to review and set the Council's next equality outcomes in 2025. 3. Measures of success 3.1 Audit and Scrutiny Panel have substantial assurances that a sound system of governance, risk management and control exists within the Council’s work to meet the requirements set out by the Equality Act 2010 (Specific Duties) (Scotland) Amendment Regulations 2016. 4. Supporting documentation 1. Equality Board Terms of Reference Fiona Whittaker Chief Officer (People Resources) Page 30 of 240
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The report supports and further advances the Council’s duty to comply with the Public Sector Equality Duty. If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ Page 31 of 240
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If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 32 of 240
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Author Audrey Cameron Contact Details cameronau@northlan.gov.uk Owner/s Fiona Whittaker whittakerf@northlan.gov.uk Version Control Date 10/20/2023 Document No. 0.1 Document Status Draft for comment 22/02/2023 0.2 Final Draft North Lanarkshire Council Equalities Delivery Board – Terms of Reference Page 33 of 240
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1. Our Responsibilities 1.1 The Equality Strategy 2019-24 sets out how the Council can effectively deliver on the asks of the Equality Act 2010 Public Sector Equality Duty (General Duty) to mainstream equality into its day-to-day business. It underlines the Council’s ambition for North Lanarkshire to be the place to live, learn, work, invest and visit for all. This requires that we find effective ways through our policies, programmes, and activities to address the inherent disadvantage and inequality that certain groups of people experience because of societal constructs, policies, prejudice, direct and indirect discrimination. 1.2 Aligned to this strategy, the Council has set out 5 mainstreaming objectives for success: 1. to know and understand all our communities 2. to involve our communities effectively 3. to demonstrate leadership in equalities and human rights, both within the Council and amongst partners, and commitment to organisational excellence 4. to ensure that local public services are responsive to different needs and treat users with dignity and respect 5. to develop and sustain a skilled and committed workforce able to meet the needs of all local people. 1.3 Delivering Better Equality Outcomes Following a review of our approach to delivering on these 5 objectives, a revised delivery framework for Equalities (set out in figures 1 and 2 below) was agreed by the Wellbeing and Tackling Poverty Committee in February 2023. Figure 1 sets out the statutory drivers for this work; our objectives and enablers; our 9 Equalities Outcomes for 2021-2025 and our 3 priority areas of delivery which will shape how we achieve these objectives and desired outcomes. Figure 1 Page 34 of 240
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Figure 2 shows the key areas of delivery focus which will underpin this work and the specific equalities campaigns and activities we will be taking forward within the next 12 – 18 months. Figure 2 1.4 Equalities Audit In October 2022, our Equalities plans were subject to a full corporate audit by the Audit and Risk team. The purpose of the audit was to provide assurance on the adequacy and effectiveness of the key controls and management arrangements associated with ensuring that the Council complies with its statutory general and specific equalities responsibilities as laid down in the Equalities Act 2010 (‘the Act’) and Equality Act 2010 (Specific Duties) (Scotland) Amendment Regulations 2016 (as detailed in Appendix 2 of this report). 1.5 Although the Audit was graded as providing reasonable assurance of our work in this area, there were a number of specific recommendations for management action, and these included: • revised governance arrangements for Equalities to improve engagement and oversight of relevant activities and plans, both corporately and within services linked to the delivery of our outcomes • ensuring the consistent and appropriate use of Equality Impact Assessments (EQIAs) for significant organisational changes • improving our equalities performance monitoring framework including ensuring that comprehensive and robust information is regularly and timeously reported to key stakeholders, including Elected Members. 1.6 As part of taking this work forward it was agreed that an Equalities Delivery Board would be established, with full representation from all service directorates across the Council, and a number of specific services with linked remits, and that this Board would be afforded overall responsibility for driving the delivery of the Equalities Strategy both corporately and at a service level. Page 35 of 240
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1.7 The Purpose of the Equalities Delivery Board The Equalities Delivery Board will: • enable collective ownership of the delivery of the Council’s Equalities Strategy and its associated objectives and outcomes • ensure the effective implementation of the Equalities Delivery Framework • provide a cross-service approach to the advancement of equality in the line with the ambitions set out in the Plan for North Lanarkshire • advise the Council on matters of compliance re the Public Sector Equality Duties (General and Specific) and any relevant implication for Council policy • support and champion the work of the Employee Equality Forum, and other corporate equalities campaigns and activities • engage across services to ensure equality is embedded and advanced via the development of individual service Equality Action Plans • Encourage improved equalities reporting amongst our employee base and provide ideas and input for ways in which we can directly engage residents and groups of staff. • Consider relevant religious, cultural and other Equalities related events, conferences and celebrations that the Council may wish to support and participate in e.g Pride Glasgow • develop a robust performance monitoring framework that will more effectively measure performance and impacts against our equality outcomes. 1.8 The role of the Equalities Champion The Council’s Equalities Champion is one of the key Sponsors of the Councils Equalities programme of work and is a senior politician who demonstrates support for equality and diversity matters and initiatives both within the council and across North Lanarkshire's communities. This is critical role in support of our Equalities Agenda and ensures that it has visibility and agency particularly within out communities and wider partner agencies across North Lanarkshire. Our Elected Member Equalities Champion will: • provide leadership − raise the profile of and promote equality within the Council and its communities. • provide scrutiny − ensure that equality consideration are embedded in the decision making and governance of the Council. • drive change − request, where appropriate for an examination on an aspect of equality to be carried out for the purpose of progress and call for action to be taken where disadvantage exists for people with particular protected characteristics. • provide representation − represent the Council at a political level on regional and national forums where equality matters are concerned. • provide support − attend and endorse equality related employee and community events as appropriate. • meet on a regular basis with key Council officers. The Council’s Elected Member Equalities Champion will be involved with the Equalities Delivery Board on an oversight basis, ensuring that the Board outcomes are meeting the desired outcomes, but they will not be involved in actual tasks associated with achieving the work of the Board. Page 36 of 240
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1.9 Executive Sponsor for Race As part of the Council’s commitment to sign up to the Race at Work Charter, we have now appointed an Executive Sponsor for Race. This role entails providing visible leadership on race and ethnicity and is an important ally for driving change, particularly in areas where there are stubborn inequalities that require systemic and cultural change. The Council’s Depute Chief Executive has agreed to step into this role and in doing so has fulfilled the requirement that this appointment be one of our most senior officers. The importance of this role cannot be overstated. Having a highly visible Chief Officer will underscore, for current and prospective employees, not only the Council’s commitment to advancing equality but will also support more effective engagement with our BAME employees. The Executive Sponsor has indicated what he wants to achieve in the coming two years, with the support of the Equalities Team, and the Equalities Delivery Board and this includes: • hosting a conference for our Black, Asian and Minority Ethnic employees in partnership with our Employee Equality Forum • building on the BAME employee survey that was carried out in 2021 such a conference will be an important first step in engaging with BAME employees to help set the future priorities for the role and give BAME employees the confidence that their worth is valued and prioritised in our organisation. • exploring with our BAME employees the potential for: - creating a network of Race Equality Champions in the workforce across services; and - developing a BAME employee network • a mentoring programme for BAME employees that will include mentors in a variety of positions in the Council starting with Heads of Service • considering where positive action can be used to increase BAME employees in promoted posts The Executive Sponsor for Race will not be a formal member of the Equalities Delivery Board but will engage with the Board on an ongoing basis as required to engagement in delivering place to meet the goals of our recent agreed Advancing Race Equality Action Plan which was agreed with the Wellbeing and Tackling Poverty Committee in February 2023. 2. Board Membership 2.1 The Board is sponsored by the Corporate Management Team and the Council’s Equalities Champion and will be chaired by the Chief Officer, People Resources. Membership of the group will consist of representation from all Council Services with special focus on areas set out within the Equalities Delivery Framework. Roles Name of Officer Designation Chair Fiona Whittaker Chief Officer (People Resources) Corporate Board Members Audrey Cameron Equalities Manager Elaine Wightman Equalities Assistant ( Board Secretary) Donella Duff Supported Enterprise Service member Page 37 of 240
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Leanne Pollock Community Partnership member Colin Fraser Stratgeic Communications member Sara Tennant Hub Operating Model member John Campbell Tackling Poverty Team member Service Directorate Board Representatives Marie-Claire Hendry Education & Families Service Representative Rachel Blair Chief Executives service representative & Legal Manager, People Graeme Cowan Adult Health & Social Care Representative Margaret Kelly Enterprise & Communities service representative & Business Strategy Manager, Housing Solutions. 2.2 Service representatives for the four main service directorates will also be required to work with the Board to create and maintain a working service Equality Action Plan and to have this approved by and reported to their Service Management Teams on a regular basis. 2.3 The work of the Equalities Delivery Board will be co-ordinated by the Equalities Manager, supported by the Equalities Assistant. 3. Delivery Board Meetings 3.1 Date of first meeting: 27.3.23 3.2 The Board shall meet quarterly with working groups forming to undertake specific areas of work at the request of the Board. 3.3 Meeting organiser: Equalities Manager (EM) 3.5 The EM will record actions points from the meeting and circulate these within 1 week to Board members for approval. 3.6 Board members agree to prioritise their attendance at Board meetings, where this is not possible a depute may be requested to attend meetings on their behalf. 4. Governance and Reporting 4.1 The Board will report to the Corporate Management Team. Equality Reports are presented to the Wellbeing and Tackling Poverty Committee. 5. Quorum 5.1 There being no defined number of members, quorum will be deemed as a minimum number of 6 attendees Page 38 of 240
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Appendix 1 Equalities - Key Roles and Responsibilties Roles Name of Officer Definition of Role/Responsibilities Board Sponsor (BS) Councilor Ayesha Khan, Equalities Champion. The Board Sponsor will not be directly involved in the implementation or actions associated with the Board but will attend Board meeting on occasion to engage with and oversee the work of the Board. Chair and Senior Responsible Officer (SRO) Fiona Whittaker, Chief Officer, People Resources The SRO chairs the Equalities Board. The Senior Responsible Officer has overall responsibility for ensuring the functions of the Board are implemented successfully. Vice Chair and the Council’s Equalities Manager Audrey Cameron, Equalities Manager Responsible for co-ordinating Board activity and deputising for the Chair in their absence. Key organisers Chair (SRO) Fiona Whittaker These officers will take primary responsibility for the effective functioning of the Equalities Delivery Board as set out in the above Terms of Reference. They will also provide oversight to Corporate Management Team, the Councils Equalities Champion and Elected Members through the Wellbeing and Tackling Poverty Committee. Vice Chair Audrey Cameron Secretary Elaine Wightman Page 39 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KA/ASP/Aug23 Date 04/09/23 Audit and risk-related items: Action log From: Ken Adamson, Chief Officer (Audit and Risk) Email: adamsonk@northlan.gov.uk Telephone: 07939 280602 Executive Summary The purpose of this report is to allow elected members to track implementation of outstanding requests and recommendations made by the Panel in respect of audit and risk-related items. The attached log (at Appendix 1) records those audit and risk-related requests and recommendations made by the Panel and when these were addressed and/or are expected to be addressed. Recommendations The Panel is invited to note the report. The Plan for North Lanarkshire: Priority: All priorities Ambition statement All ambition statements Ken Adamson, Chief Officer (Audit and Risk) Item 5 Page 41 of 240
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Appendix 1 Audit and risk related items: Outstanding action log. Meeting Requests or agreed action Status May 2023 1. Request a report be brought back by management to a future meeting on progress implementing agreed actions in relation to audit recommendations in the Internal Audit reports ‘Payments to staff - overtime and travel and subsistence’. Not yet due - timescales for agreed actions are not yet due and will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. 2. Request a further report be brought back by management to a future meeting on progress implementing outstanding actions identified by Internal Audit follow-up work in relation to risk management. Not yet due - timescales for agreed actions are not yet due and will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. 3. Request a further report be brought back by management to a future meeting on outstanding actions identified by Internal Audit follow-up work in relation to managing strategic change. Not yet due - timescales for agreed actions are not yet due and will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. 4. Request a further report be brought back by management to a future meeting on outstanding actions identified by Internal Audit follow-up work in relation to ‘Employee Service Centre – key controls. Not yet due - timescales for agreed actions are not yet due and will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. February 2023 5. Request a further report be brought back by management to a future meeting outlining how the Council plans to strengthen pre-employment checks or otherwise address the issue highlighted in the Investigation: Primary School A Internal Audit report regarding the Council re-employing someone who has previously left during a live fraud or disciplinary investigation. Complete - A report on these matters was submitted to the May meeting of the Panel. 6. Request a further report be brought back by management to a future meeting outlining progress of agreed actions in respect of issues raised in the Internal Audit report on Supply Teachers Complete - A report on these matters was submitted to the May meeting of the Panel. 7. Request a further report be brought back by management to a future meeting outlining how the organisation identifies, ensures, and gains assurance that staff are undertaking all relevant mandatory training. Complete - A report on these matters was submitted to the May meeting of the Panel. Page 42 of 240
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Appendix 1 Audit and risk related items: Outstanding action log. Meeting Requests or agreed action Status November 2022 8. A further report be brought back by management to a future meeting on progress made implementing agreed actions in relation to audit recommendations in the Internal Audit report on Sundry Debtors/Debt management. Complete - A report on these matters is included as a separate agenda item for this meeting of the Panel. 9. A further report be brought back by management to a future meeting on progress implementing agreed actions in relation to audit recommendations in the Internal Audit report on Equalities. Complete - A report on these matters is included as a separate agenda item for this meeting of the Panel. September 2022 10. Internal Audit to provide specific assurance that management actions proposed in response to Business Continuity Planning are progressed in line with agreed timescales. Partially complete - timescales for agreed actions are not yet due and will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. 11. Updates on the management of key corporate risks to be provided to the Panel in accordance with agreed timetable included at Appendix 3 of Risk Management update report. Partially complete – two of the three planned reports (Supply chain and Governance, leadership and decision- making) were included in the papers for the November 2022 meeting. Work on the third planned report (Resources aligned with future target operating model) is underway but not yet complete and will be reported later. June 2022 Internal Audit to provide an update on whether management actions proposed in response to Internal Audit investigation into overtime issues within Waste and Fleet have been implemented and adequately addressed the weaknesses/identified areas for improvement. Complete - A report on these matters is included as a separate report within the Internal Audit progress report agenda item for this meeting of the Panel. Standing item Implementation by management of actions agreed in response to External Audit's recommendations (Annual Report) be monitored through reports from Internal Audit. Complete – This is addressed through the Follow-up of Internal and External Audit recommendations report included as a separate agenda item for this meeting. Internal Audit provide a report to future meetings of the Panel on progress made in implementing agreed management actions in relation to all Internal Audit recommendations categorised as “red” or “amber”. Complete – This is addressed through the Follow-up of Internal and External Audit recommendations report included as a separate agenda item for this meeting. Page 43 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No ☐approval ☒noting Ref KA/ASP/Sept23 Date 04/09/23 Internal Audit progress report From: Ken Adamson, Chief Officer (Audit and Risk) E-mail: adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to provide an overview of Internal Audit activity and to report the results of Internal Audit outputs finalised since the last update to the Panel in May 2023. This report highlights the most significant issues arising from these recently completed Internal Audit assignments as well as providing updates on other aspects of the work of Internal Audit. Appendix 1 provides a summary of the scope and key findings of each substantive planned audit report and relevant investigative outputs. Full copies of the relevant audit outputs highlighted in this report are also included in the meeting paper in line with best professional practice and the approved Internal Audit Charter and associated reporting protocol. The 2023-24 Annual Plan was approved by the Audit and Scrutiny Panel in May 2023. The Internal Audit Charter, most recently approved by the Panel in September 2021, requires that the results of Internal Audit’s work be periodically reported to CMT and the Panel. This report fulfils that expectation. Recommendations The Panel is invited to: (a) note the findings, conclusions and recommendations of completed Internal Audit reports together with the associated management responses; (b) consider whether there are any issues raised by Internal Audit which the Panel consider are sufficiently significant to require a further report from management to be submitted to a future meeting of the Panel; (c) request that Internal Audit provide a report to future meetings of the Panel reporting progress made by management implementing agreed management actions in relation to all audit recommendations categorised as ‘High’ or ‘Medium’; and (d) otherwise note this report. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Item 6 Page 45 of 240
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1. Background 1.1 The 2023-24 Annual Plan was approved by the Audit and Scrutiny Panel in May 2023. The Internal Audit Charter, most recently approved by the Panel in September 2021, requires that the results of Internal Audit’s work be periodically reported to CMT and the Panel. This report fulfils that expectation. 2. Report Audit reviews completed in the period 2.1 Table 1 below provides an overview of completed Internal Audit reports since the last update to the Panel in February. These outputs were included in the 2022-2023 Internal Audit Plan. Work is currently underway on other assignments included in the 2023-24 Plan and this work will be reported to the Panel as it is completed. Table 1: Completed Internal Audit outputs in the period Subject Internal Audit Opinion 1. Waste/Fleet staffing issues – follow-up Limited assurance (Amber-Red) 2. Housing allocation Reasonable assurance (Green-Amber) 3 Counter-Fraud arrangements Reasonable assurance (Green-Amber) 4 Procurement – achieving best value Reasonable assurance (Green-Amber) 5 Investigation – Grant Claim (note 1) Not applicable Note 1: In line with the Internal Audit Reporting Protocol, information relating to this work and a copy of the full audit report are not included in the papers for this meeting (see explanation at paras 2.23 to 2.25) 2.2 Appendix 1 provides a summary of those reports forming part of the annual programme of planned assurance work and investigation reports as required by the Internal Audit Charter and associated reporting protocol. This report excludes audit outputs produced for the North Lanarkshire IJB which are reported directly to its senior management team and audit committee. 2.3 Appendix 2 contains detailed definitions of the categories used by Internal Audit when making recommendations, providing an audit opinion and on the extent of assurance which is being provided to management and Panel members on those systems or areas of Council operations examined by Internal Audit. 2.4 In addition to the above reports, work is currently underway on a range of topics including Social Work quality assurance arrangements, payments to staff, climate change, treasury management and council tax . Once finalised, these reports will be submitted to a future meeting of the Panel. Commentary on completed planned ‘core’ Internal Audit work 2.5 The nature of Internal Audit exercises means that most audit reviews invariably find some scope for improvement, usually in the form of controls which are weak or only partially effective and, therefore, contain recommendations. Page 46 of 240
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2.6 One of the four substantive non-investigation reports being reported in the period is assessed as providing only limited assurance, while the remaining three reports provided more positive levels of assurance. All four reports contain a range of improvement actions and audit recommendations. 2.7 Our report, Follow-up of investigation of staffing issues within Waste and Fleet Resources, was designed to provide independent assurance on whether management actions agreed in response to the February 2022 Internal Audit report on staffing/overtime issues within Waste and Fleet Resources had been progressed in line with agreed timescales and that key weaknesses had been addressed. 2.8 We were pleased to note that many of the management actions agreed in response to the previous audit report and included in the resultant action plan had been progressed. However, after reviewing the actions taken by management, we have concluded that many are, as implemented, not sufficient to effectively address the weaknesses identified and we consider that there remain significant gaps and/or weaknesses in the control environment and instances of non-compliance with expected procedures which we consider require to be urgently addressed by management. 2.9 Most significant, were the need to ensure compliance with all key corporate expectations within recruitment processes, including in respect of successful candidates meeting essential criteria for specific roles and the Service failing to comply with corporate expectations surrounding payments to staff and/or routinely using enhanced rates to deliver core services and without appearing to always exercise proper control over the use of such payments. As a result of the additional findings identified during this audit, we have raised several new recommendations, which are detailed in section 3 of the audit report. 2.10 The Panel should note that, while providing satisfactory management responses, including planned actions, the relevant senior managers, Chief Officer (Community Operations) and Chief Officer (People Resources), disagree with Internal Audit’s assessment of ‘limited assurance’ and consider that the audit opinion over-emphasises the significance and/or severity of the issues identified and that the findings raised do not create or represent major financial, operational or reputational risks to the Council. Internal Audit consider the assessment appropriate based on the findings detailed in the report. 2.11 Our work on Housing Allocations was designed to provide assurance on adequacy and effectiveness of the Council’s key controls and management arrangements associated with the process of allocating Council houses and the extent to which the system and associated processes are operating in line with approved Council policies. As well as the administration of the ‘waiting list’ and how applicants are offered housing, the review also covered how the Service manages tenancy succession. 2.12 Based on the results of our work, we assessed the audit as providing ‘reasonable assurance’ as we concluded that there is a generally sound control environment in place although some issues and areas for improvement were identified. We were pleased to note that the Council’s arrangements for the management of housing allocations, including management of the waiting list, making housing offers and assessing applications for tenancy succession were generally being conducted in line with approved Council policies. We identified a small number of areas for improvement. 2.13 The most significant of these related to the need to record the rationale more clearly for both the waiting list and applicant selected when an offer is made to an applicant who is not top of the selected waiting list to increase transparency and to enable the Service to better demonstrate that decisions made were appropriate. Members should note, however, that we found no evidence of inappropriate allocation decisions being made by the Service. Satisfactory responses and planned actions have been received from management in response to the issues raised. Page 47 of 240
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2.14 Our work on the Council’s Counter-fraud arrangements was designed to provide assurance on the adequacy and effectiveness of the Council’s Anti-Fraud Policy and associated management arrangements for the prevention and detection of fraud to identify any actions necessary to update the policy and to assess whether the Council’s arrangements were consistent with recognised good practice. 2.15 We have categorised this audit as offering ‘reasonable assurance’ as we consider that the Council’s arrangements are generally aligned with good practice as responsibility for ensuring that risks of fraud and corruption are managed effectively has been acknowledged and is embedded in the Council’s governance arrangements, a risk management framework is in place, which includes a corporate risk for ‘serious organised crime, fraud or corruption’ and there is an approved Anti-Fraud Policy in place which details the Council’s attitude to fraud and its approach to the prevention, detection and investigation of fraud across all of the Council’s service areas. 2.16 We have, however, identified a small number of areas for improvement including the need to better align the Council’s counter fraud arrangements with good practice by considering whether the approach to fraud work could be more pro-active rather than reactive and whether establishing a dedicated counter-fraud resource might be cost-effective. We also highlighted scope for improvement in the consideration and inclusion of fraud risks in Service Risk Registers, reporting on recognised fraud risks and on the need for awareness raising, more generally, in relation to fraud risks and how these can be prevented, detected and reported. Satisfactory responses have been received from management to the issues raised. 2.17 Members are reminded that in line with the Internal Audit Charter and to ensure the independence of the Internal Audit function when reviewing an activity for which the Chief Officer (Audit and Risk) also has line management responsibility, this work was led by the Principal Auditor and planned and conducted without the involvement of myself, (instead in my role as Chief Officer (Audit and Risk), I assumed the role of client during the audit process). 2.18 Our report on Procurement – achieving best value was designed to provide assurance on the Council’s procurement arrangements, particularly in relation to contracts awarded on the basis of single tender responses. The Audit and Scrutiny Panel specifically requested that this work be undertaken following several elected members expressing concerns over an apparent increase in the number of reports to Committees awarding, or seeking approval to award, contracts where there has only been a single tender response, with consequential concerns about a lack of competition, whether the Council is securing best value and the risk of anti-competitive behaviour amongst potential bidders. 2.19 Based on the results of our work, we have categorised this audit as offering ‘reasonable assurance’. We noted that there are several different routes for procuring supplies, services and works and were pleased to note that there are clear expectations and documented guidance available to all Services undertaking procurement activity. 2.20 In response to the specific concerns raised by members regarding an apparent increase in the number of contracts where there has only been a single tender response, our review and analysis of performance information indicates that there was not a high incidence of single tender responses but that we consider that the way in which procurement outcomes are being reported could be misleading and therefore, understand why elected members have raised concerns. We identified a number of areas where we consider that there is scope for improvement. Page 48 of 240
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2.21 These include that ‘below threshold’ reports to committee should be amended to more clearly convey the level of competition and how best value has been achieved. We also raised that key procurement documentation and reports for contracts awarded need to better convey how best value has been achieved and recommended that performance information in relation to procurement activities could be improved. 2.22 Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Commentary on completed unplanned ‘non-core’ Internal Audit work 2.23 There is one fraud/irregularity investigation report arising from areas of unplanned or ‘non-core’ work undertaken by Internal Audit in the period that requires to be reported to the Panel in accordance with the Internal Audit reporting protocol. 2.24 The Internal Audit reporting protocol previously agreed by the Panel commits Internal Audit to openness and transparency in reporting on its work, but recognises that different considerations sometimes need to be applied when considering how to report the results of Internal Audit investigative work in relation to suspected fraud, corruption, thefts and other irregularities. The protocol is designed to reflect the balance to enable the Panel to be suitably informed to effectively discharge its role with potential sensitivities around data protection issues, the risk that disclosure could sometimes potentially prejudice existing controls and security arrangements and the need to avoid prejudicing any ongoing Police involvement and/or disciplinary processes. There is also a recognition of the need to reflect materiality in reporting the results of such work by considering the nature and significance of the issues reviewed. 2.25 In line with the above considerations, no further information in relation to the work undertaken has been included in the papers for this meeting. Other Matters – Internal Audit Performance 2.26 In March 2021, the Panel were presented with a revised performance management framework for Internal Audit that was to be implemented from April 2021. Most indicators are reported on an annual basis. There are two indicators however that are subject to quarterly reporting. 2.27 The first is about the implementation of agreed actions arising from Internal Audit reports by the implementation date. 38% of agreed actions have been implemented by the agreed implementation date in the period to June 2023. Progress in implementing agreed actions is monitored and reported separately to the Panel each cycle. 2.28 The second performance indicator is about client satisfaction and reflects provides the results of four key questions we ask audit clients at the conclusion of each audit assignment. Results presented in the Annual Internal Audit report to the June meeting of the Panel showed generally positive feedback on the work of Internal Audit with most respondents agreeing that Internal Audit added value by assisting in providing assurance, and that reports were relevant and constructive with findings clearly and accurately communicated. As only a small number of responses have been received in this period, this data will be carried forward and reported in more detail in the next update. 2.29 Where management raise concerns over Internal Audit’s work, these matters are discussed with relevant senior management to fully understand the nature of any concerns and, where it is considered appropriate, to identify areas for improvement. We also seek Services’ views on what they liked or disliked about the audit process and comments received are used to inform future action plans for improving the service provided by Internal Audit. Page 49 of 240
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2.30 Finally, the Panel will be aware that one of the key annual performance indicators for the function is the percentage of the Internal Audit Plan (the Plan) completed each year, with a target of 90% set for this indicator. I require to inform the Panel that performance against this indicator is likely to be impacted in 2023-24 by some current long-term sickness absence within the team. Consequently, some planned work will require to be delayed, postponed or cancelled. I will update the Panel more fully on the impacts and decisions about which audits within the Plan will be prioritised as part of the next progress report in November. 3. Measures of success 3.1 Internal Audit reports annually on its performance to the Panel and is also subject to review annually by the Council’s appointed external auditors. 4. Supporting documentation Appendix 1 Summary of Internal Audit assignments completed in the period Appendix 2 Audit gradings Appendix 3 Internal Audit performance framework Ken Adamson, Chief Officer (Audit and Risk) Page 50 of 240
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If yes, please provide a summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Effective responses by management to the weaknesses, control issues and/or areas of improvement identified by Internal Audit will increase the likelihood of the Council achieving its ambitions by improving control frameworks and more effectively mitigating potential risks and threats to the achievement of planned outcomes. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex-Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ 5.11 Childrens rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 51 of 240
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Appendix 1 Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 1 Follow-up of investigation of staffing issues within Waste and Fleet Resources Internal Audit Opinion: To be confirmed Audit recommendations: High 2 Medium 1 Low 1 The purpose of this audit was to provide independent assurance that management actions agreed in response to the February 2022 Internal Audit report on staffing/overtime issues within Waste and Fleet Resources have been progressed in line with agreed timescales and that key weaknesses have been addressed. In response to the issues raised in the February 2022 report, the Service prepared an action plan detailing the recommendations from the initial audit report and identifying responsible officers and the actions required to address the recommendations. This action plan was discussed and monitored at management meetings and was updated on an ongoing basis to reflect progress. From our testing, we were pleased to note that most of the management actions agreed in response to the previous audit report and included in the resultant action plan have been progressed. However, after reviewing the actions taken by management, we have concluded that many are, as implemented, not sufficient to effectively address the weaknesses identified and we consider that there remain significant gaps and/or weaknesses in the control environment and instances of non-compliance with expected procedures which we consider require to be urgently addressed by management. Most significant, were the need to ensure compliance with all key corporate expectations within recruitment processes, including in respect of successful candidates meeting essential criteria for specific roles and that the Service regularly fails to comply with corporate expectations surrounding payments to staff and/or routinely has to resort to using enhanced rates to deliver core services and without appearing to exercise proper control over the use of such payments. As a result of the additional findings identified during this audit, we have raised several new recommendations, which are detailed in section 3 of the audit report. The Panel should note that, while providing satisfactory management responses, including planned actions, the relevant senior managers, Chief Officer (Community Operations) and Chief Officer (People Resources), disagree with Internal Audit’s assessment of ‘limited assurance’ and consider that the audit opinion over-emphasises the significance and/or severity of the issues identified and that the findings raised do not create or represent major financial, operational or reputational risks to the Council. Internal Audit consider the assessment appropriate and the content of the report sets out our rationale for the stated audit opinion. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 52 of 240
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 2 Housing allocations Internal Audit Opinion: Reasonable assurance (Green-Amber)) Audit recommendations: High 1 Medium 2 Low 2 The purpose of this audit was to provide assurance on adequacy and effectiveness of the Council’s key controls and management arrangements associated with the process of allocating Council houses and the extent to which the system and associated processes are operating in line with approved Council policies. As well as the administration of the ‘waiting list’ and how applicants are offered housing, the review also covered how the Service manages tenancy succession. Based on the results of our work, we have assessed the audit as providing ‘reasonable assurance’ as we have concluded that there is a generally sound control environment in place although some issues and areas for improvement have been identified. We were pleased to note that the Council’s arrangements for the management of housing allocations, including management of the waiting list, making housing offers and assessing applications for tenancy succession are generally being conducted in line with approved Council policies. Recommendations for management consideration/action are detailed at Section 3 of the report and include: • There is an urgent need to review current users and user access privileges to the Common Housing Register (CHR) system and to undertake such reviews on a regular basis thereafter; • Although we found no evidence of inappropriate allocation decisions, there is a need to record the rationale more clearly for both the waiting list and applicant selected when an offer is made to an applicant who is not top of the selected waiting list to increase transparency and to enable the Service to better demonstrate that decisions made were appropriate; and • There is a need for the Service to review that key controls for checking applications input to the system and validity of supporting documentation provided are operating appropriately. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 53 of 240
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 3 Council’s counter-fraud arrangements Internal Audit Opinion: Reasonable assurance (Green-Amber) Audit recommendations: High 0 Medium 3 Low 0 In line with the Internal Audit Charter and to ensure the independence of the Internal Audit function when reviewing an activity for which the Chief Officer (Audit and Risk) also has line management responsibility, this work was led by the Principal Auditor and planned and conducted without the involvement of the Chief Officer (Audit and Risk) (who instead assumed the role of client during the audit process). The purpose of this audit was to provide assurance on the adequacy and effectiveness of the Council’s Anti-Fraud Policy and management arrangements for the prevention and detection of fraud to identify any actions necessary to update the policy and ensure that the Council’s arrangements are consistent with recognised good practice. Work undertaken included consideration of the Council’s anti-fraud arrangements against a good practice checklist developed from a range of sources, including the CIPFA Code of Practice on Managing Risk of Fraud and Corruption and Fighting Fraud and Corruption Locally – A Strategy for the 2020s as well as an update and refresh of the Anti-Fraud Policy, including a change of title to Counter Fraud Policy. The updated Counter Fraud Policy will be submitted to the Policy and Strategy Committee for approval in September. Based on the results of the work undertaken, we have categorised this audit as offering ‘reasonable assurance’ meaning that we consider that the Council’s arrangements are generally aligned with good practice as responsibility for ensuring that risks of fraud and corruption are managed effectively has been acknowledged and is embedded in the Council’s governance arrangements, a risk management framework is in place, which includes a corporate risk for ‘serious organised crime, fraud or corruption’ and there is an approved Anti- Fraud Policy in place which details the Council’s attitude to fraud and its approach to the prevention, detection and investigation of fraud across all of the Council’s service areas. We have, however, identified a small number of areas for improvement to better align the Council’s counter fraud arrangements with good practice and our recommendations are detailed at Section three of this report. These include: • There is no dedicated counter fraud resource, counter fraud plan or annual counter fraud report and fraud work undertaken is generally reactive rather than proactive; • There is scope for improvement in the consideration and inclusion of fraud risks in Service Risk Registers and reporting on recognised fraud risk; and • There is a lack of awareness raising in relation to fraud risks and how these can be prevented, detected and reported. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 54 of 240
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 4 Procurement – achieving best value Internal Audit Opinion: Reasonable assurance (Green-Amber)) Audit recommendations: High 0 Medium 2 Low 2 The purpose of this audit was to provide assurance on the Council’s procurement arrangements, particularly in relation to contracts awarded on the basis of single tender responses. The Audit and Scrutiny Panel specifically requested that this work be undertaken following several elected members expressing concerns over an apparent increase in the number of reports to Committees awarding, or seeking approval to award, contracts where there has only been a single tender response, with consequential concerns about a lack of competition, whether the Council is securing best value and the risk of anti-competitive behaviour amongst potential bidders. Based on the results of our work, we have categorised this audit as offering ‘reasonable assurance’. We noted that there are several different routes for procuring supplies, services and works and are pleased to note that there are clear expectations and documented guidance available to all Services undertaking procurement activity. However, in response to the specific concerns raised by members regarding an apparent increase in the number of contracts where there has only been a single tender response, our review and analysis of performance information indicates that there is not a high incidence of single tender responses. However, we consider that the way in which procurement outcomes are being reported could be misleading and therefore, understand why elected members have raised concerns. We have identified a number of areas where we consider that there is scope for improvement, and these are contained in section 3 of this report. These include: • ‘below threshold’ reports to committee should be amended to more clearly convey the level of competition and how best value has been achieved; • key procurement documentation and reports for contracts awarded need to better convey how best value has been achieved; and • performance information in relation to procurement activities could be improved. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 55 of 240
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Appendix 2 Audit Gradings Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance There are minimal or minor control weaknesses that present low risk to the control environment. The control environment has substantially operated as intended although some minor errors have been detected. Very few or no improvements are needed. Green-Amber Reasonable Assurance There are some control weaknesses that present a low to medium risk to the control environment. The control environment has mainly operated as intended although errors have been detected. Some improvements should be made. Amber-Red Limited Assurance There are significant control weaknesses that present medium to high risk to the control environment. The control environment has not operated as intended. Significant errors have been detected. Substantial improvements should be made. Red No Assurance There are fundamental control weaknesses that present an unacceptable level of risk to the control environment. The control environment has fundamentally broken down and is open to significant error or abuse. Immediate and major changes need to be made. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but it is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 56 of 240
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Appendix 3: Internal Audit performance framework Category Measure Internal Audit management Reported to Chief Executive and CMT Reported to A&SP (Quarterly) Reported to A&SP (Annual) 1. Delivery of Annual Plan Percentage completion of agreed plan X X X 2. Targeting Percentage of key corporate risks and key financial systems over which assurance provided X X X 3. LGBF - Efficiency Cost of Internal Audit per £ million revenue budget X X 4. LGBF - Efficiency % of productive hours delivered v Plan X X 5. Delivery / recommendations Percentage implementation of agreed actions by implementation date (cumulative year to date) X X X X 6. Delivery / other Number of significant irregularity / fraud investigations X X X 7. Customer satisfaction results Scores from customer satisfaction questionnaires (audit assignments) (cumulative year to date) X X X X 8. Customer satisfaction results Scores from key stakeholders (CMT and A&SP) questionnaires (overall performance of the function) X X X 9. Quality / standards Reliance placed by External Audit on the work of Internal Audit X X X 10. Quality/ standards Quality review outcomes – EQAR or internal self- evaluation X X X 11. Delivery of Annual Report Annual opinion /report prepared by 31 May annually X X X 12. Targeting Approval by CMT and A&SP of strategy and annual plan by 31 May annually X X X Internal management performance indicators 13. Efficiency Actual v planned days on completed assignments X 14. Efficiency Time between completion of fieldwork and draft reports being issued X 15. Efficiency Time between draft reports and final reports being issued X Page 57 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 1 INTERNAL AUDIT REPORT FOLLOW UP OF INVESTIGATION OF STAFFING ISSUES WITHIN WASTE AND FLEET RESOURCES Contents 1. Executive Summary 2. Summary of New Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Progress of Actions Against Previous Recommendations Issued to: Chief Officer (Community Operations) and Chief Officer (People Resources) Copied to: Chief Executive and Deputy Chief Executive Headlines The purpose of this audit was to provide independent assurance that management actions agreed in response to the February 2022 Internal Audit report on staffing/overtime issues within Waste and Fleet Resources have been progressed in line with agreed timescales and that key weaknesses have been addressed. In response to the issues raised in the February 2022 report, the Service prepared an action plan detailing the recommendations from the initial audit report and identifying responsible officers and the actions required to address the recommendations. This action plan was discussed and monitored at management meetings and was updated on an ongoing basis to reflect progress. From our testing, we were pleased to note that the majority of the management actions agreed in response to the previous audit report and included in the resultant action plan have been progressed. However, after reviewing the actions taken by management, we have concluded that many are, as implemented, not sufficient to effectively address the weaknesses previously identified and demonstrate that staff involved may not have given sufficient consideration to some of issues raised in the initial report and/or nature of the improvements required. We have therefore, categorised this audit as offering ‘limited assurance’ as we consider that there remain significant gaps and/or weaknesses in the control environment and instances of non-compliance with expected procedures which we consider require to be urgently addressed by management. Most significant, are the need to ensure compliance with all key corporate expectations within recruitment processes, including in respect of successful candidates meeting essential criteria for specific roles, the need to establish a staffing structure which meets the requirements of the Service whilst minimising overtime levels, and that the Service regularly fails to comply with corporate expectations surrounding payments to staff and/or routinely has to resort to using enhanced rates to deliver core services and without appearing to exercise proper control over the use of such payments. As a result of the additional findings identified during this audit, we have raised several new recommendations, which are detailed in section 3 of this report. These supersede the recommendations made in our previous audit report. It should be noted that the relevant senior managers, Chief Officer (Community Operations) and Chief Officer (People Resources), disagree with Internal Audit’s assessment of ‘limited assurance’ and consider that the audit opinion over-emphasises the significance and/or severity of the issues identified and that the findings raised do not create or represent major financial, operational or reputational risks to the Council. However, Internal Audit consider the assessment appropriate and the content of the report sets out our rationale for the stated audit opinion. Internal Audit Opinion (see definition at Appendix 1) Limited assurance (Amber-Red) Organisational impact (see definition at Appendix 1) Moderate Report status FINAL Audit ref 0800/2023/001 Date Issued 18/07/23 Audit Team Lesley Armstrong, Paula Hendry and Jackie Struthers Page 58 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 2 1. Executive Summary 1.1 Background 1.1.1 In February 2022, Internal Audit reported findings in response to concerns identified during a previous payroll audit within Waste and Fleet Resources where cumulative overtime for some employees appeared excessive and potentially indicative of control weaknesses and/or irregularities, and which we considered warranted further investigation. 1.1.2 The review identified a number of significant failures by Service management in a number of related processes including ensuring that overtime claims were properly checked/verified to confirm they were valid and accurate prior to authorisation and in relation to the implementation of some of the Council’s expected HR and recruitment processes, which were not always implemented in a manner consistent with the relevant corporate policy. The most significant of these issues included management being aware of the high levels of overtime being worked but appearing to take no formal action to address this issue. We also noted anomalies in the appointment of staff prior to all pre-employment verification checks being completed and a contract being issued, and a significant number of potential errors in pay from our review of a relatively small sample of employees (e.g. non-core hours and contractual overtime) which we considered may be indicative of weaknesses in the Service’s approach to managing additional payments to employees. 1.1.3 The initial audit report was included in the Internal Audit progress report presented to the Audit and Scrutiny Panel meeting in March 2022, at which members requested a formal follow-up be undertaken by Internal Audit to provide assurance that all agreed management actions were progressed in line with agreed timescales and that the identified weaknesses had been addressed. This report represents the findings from the follow-up work undertaken. 1.2 Action taken by Service 1.2.1 Service management responded positively to the initial audit report and committed to clear management actions to address the recommendations outlined in the report. 1.2.2 The Service prepared an action plan, detailing the recommendations from the initial audit and identifying the actions required to implement the recommendations, and responsible officers. We were informed that this action plan is discussed and monitored at management meetings and updated on an ongoing basis. 1.2.3 The action plan contains comments which indicate the progress of each action identified and, based on the Service’s monitoring of implementation of the actions identified, the Service considers that all but two actions are complete. The two remaining actions relate to addressing the over/underpayments identified in Appendix 2 of the initial report and implementation of processing overtime through MySelf. 1.2.4 Details of the actions taken against each of the recommendations arising from our earlier report, together with our assessment on the adequacy and effectiveness of the actions taken are detailed at Appendix 2 of this report. 1.3 Internal Audit Assessment of Action taken by Service 1.3.1 Testing for this audit involved discussions with the Business Manager (Waste and Fleet), Performance and Compliance Manager, HR Business Partner and Support Services staff as well as reviewing the action plan, obtaining appropriate documentation to support actions taken, confirming whether the issues raised in Appendix 2 of the original report had been actioned and undertaking checks on payments made to a further sample of employees within the Service. 1.3.2 From our testing, we were pleased to note that the majority of the management actions as stated in the initial report have been progressed, however, on reviewing the adequacy and effectiveness of these actions, we consider that many are, as implemented, not sufficient to address the underlying weaknesses identified and demonstrate that staff involved may not have given sufficient consideration to some of issues raised in the initial report and/or nature of the improvements required. Most significantly is the ongoing failure by Service management to ensure that recruitment processes undertaken are consistent with corporate policy and that the Service appears to regularly fail to comply with corporate expectations surrounding payments to staff and/or routinely has to resort to using enhanced rates to deliver core services and without appearing to exercise proper control over it. 1.3.3 As a result, we have raised further findings and recommendations, which are detailed the action plan contained in section 3 of this report. Page 59 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 3 2. Summary of New Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 2 1 1 Key areas requiring management action (High) The following key areas requiring urgent management action have been identified: • The Service need to ensure compliance with all key corporate expectations within recruitment processes, including in respect of successful candidates meeting essential criteria for specific roles; • There continues to be significant weaknesses in the controls used within the Service for managing and processing contractual and non-contractual payments. Other areas for improvement (Medium) Another area for improvement was also identified: • The Service needs to ensure that the impact of structure changes in reducing overtime paid at premium rates is monitored and consideration as necessary to further amendments and/or actions to reduce this. Page 60 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 4 3. Action Plan Follow Up of investigation of staffing issues within Waste and Fleet Resources 0800/2023/001 Ref Finding 1 The Service needs to ensure compliance with all key corporate expectations within recruitment processes, including in respect of successful candidates meeting essential criteria for specific roles. During our previous audit, we identified an employee who had been recruited to a post for which he did not hold the relevant essential qualifications and commenced the role prior to pre-employment verification checks being completed and verified by the Recruitment team. Management subsequently withdrew the offer and agreed to remind staff of the need to fully comply with the Council’s recruitment policies and procedures and committed to seeking clarification to ensure that candidates shortlisted for interview meet the essential qualification requirements. In response to this commitment, the Service issued an email in March 2022 to all managers and staff involved in recruitment, advising that recruitment should be carried out in line with the Recruitment Policy and providing a link to the Policy on MyNL. We consider that this email does not provide sufficient information in relation to corporate expectations during recruitment processes as it only provides a link to the Recruitment Policy and does not specifically refer to the detailed process to be followed when ensuring that essential qualifications are held prior to inviting candidates for interview or advise recruiting managers to seek advice if it is unclear whether the qualifications held by individual candidates meet the essential qualification requirements. As a result of our work during this audit, we consider that there remains some dubiety by the Service over equivalent qualifications and there is very little evidence that, where these are not clear, confirmation is sought prior to interview to ascertain that the relevant qualifications are held by all candidates selected for interview. Review of employee specifications for recent recruitments confirmed that there is a requirement that generally, for NLC9 and NLC10 posts, an HNC or equivalent is held and for posts graded at NLC12 and above, a degree or equivalent is held. We noted, however, that the qualifications held by many of the Waste staff in these promoted posts are CMI (Chartered Management Institute) qualifications which, as confirmed by the Talent and Organisational Development Team within People Resources, are not equivalent to an HNC or degree (in line with Scottish Credit and Qualifications Framework (SCQF) tables). We selected a sample of four recent recruitments within Waste (Recruitments A, B, C and D) and reviewed relevant recruitment documentation to confirm whether each of the successful candidates held appropriate qualifications in line with those stated in the employee specification. We noted that two of the four successful candidates (Recruitments B and D) do not hold the required essential qualifications. In reviewing the sample of recruitments, we identified a number of other anomalies that are indicative of this Service failing to adhere to and/or comply with corporate expectations and the principles of fairness, consistency and transparency. This includes: • For one of the recruitments (Recruitment B), the successful candidate did not provide a sufficient work history (from 12/07/21 only and little reference to waste and fleet experience) in their application form but for another post, one candidate was rejected at the shortleeting stage and not taken forward to interview as it was deemed that their work history was limited to one job (note - this covered a 13-year period) and they had zero waste experience. This suggests that there is inconsistent treatment of applicants during the shortleeting process; • Recruitment A was undertaken in May 2022 with Recruitment B taking place in September 2022. The successful candidate for Recruitment B provided a reference for the successful candidate for Recruitment A, who was subsequently part of the interview panel for Recruitment B. The post for Recruitment B reports to the post for Recruitment A. Whilst we appreciate given the management hierarchy it is important that the postholder from Recruitment A be involved in the selection process for Recruitment B, there appears to be a potential conflict of interest for the postholder of recruitment A. This conflict does not appear to have been declared and as such consideration and implementation of appropriate actions to mitigate this potential conflict do not appear to have been taken. This highlights significant concerns on the validity and transparency of the recruitment process for Recruitment B and what appears to be an undeclared potential conflict of interest; and • A further three employees who were recently promoted to Supervisors (Waste management) who did not hold the required essential qualifications. The offer of employment letter for each of these employees specifically states that the appointment is subject to undertaking and successfully obtaining an HNC or equivalent qualification within 12 months, that as this is an essential criterion for the post, they must submit proof of the qualification within the stated timescale and that failure to obtain the qualification will result in the offer of employment being revoked. Two of the three employees were due to undertake a CMI level 3 qualification, but this was on hold as they may move to SVQ3 (equivalent to HNC) and one had commenced the SVQ3 but has subsequently withdrawn. The latter remains in the Supervisor post and is in fact, currently being paid higher duties at an NLC10 post. We would question whether they can be deemed appropriately qualified for this higher graded post when they haven’t achieved the minimum qualification requirements for the NLC9 post. Additionally, we found no evidence that, having withdrawn from the qualification, management have considered arrangements for moving them back to their original post in line with proviso included in the offer of employment letter. (continued overpage) Page 61 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 5 3. Action Plan (continued) Follow Up of investigation of staffing issues within Waste and Fleet Resources 0800/2023/001 Implication Recommendation Priority Recruitment processes may not be compliant with corporate expectations. Staff may be recruited to posts which they are not suitably qualified for which could affect Service operations and could have an adverse effect on the Council. The Chief Officer (Community Operations) should: (1) in consultation with the Talent and Organisational Development Team, prepare and issue formal guidance on essential qualification requirements, which indicates the types of qualifications that meet these requirements and which advises that where there is dubiety over specific qualifications, advice should be sought from the Talent and Organisational Development Team prior to confirming the list of interviewees; (2) in consultation with People Resources ensure that specific and targeted recruitment training is devised for this Service area which includes specific reference to essential qualification requirements and the formal documentation prepared above; and (3) undertake checks on a sample of recruitments to ensure that the Council’s policies and expectations have been adhered to and that the successful candidate holds the essential qualifications for the post, prior to the contract being issued. High Management response Implementation Month/Year (1) Partly Agree Chief Officer (Community Operations) and Chief Officer (People Resources) Given the number of qualifications available, it is not considered logical to prepare and issue guidance indicating the types of qualification which meet the essential job requirements. Instead, where there is dubiety over the level of qualification stated by applicants, all staff involved in recruitment will be instructed to contact the People Resources prior to selecting candidates for interview to ascertain whether the stated qualifications are equivalent to those required by the essential criteria. It is accepted that in some previous cases, and as stated in the finding, there have been some candidates presenting for interview and being successful in gaining the post who do not have the academic qualifications associated with NLC9, 10 or 12 posts. However, it is considered that when assessing competency for a management post within a large front-line service and in such a competitive recruitment sector, the current recruitment policy, which puts significantly more emphasis on academia over experience, does not necessarily aid the Service to select the best candidate for the post and can lead to no-one being recruited. As Chief Officer, I have a has a duty of care to the current management team to ensure the Service does recruit the best candidate for the post as in the absence of this we would either not recruit anyone due to the competitive market or indeed recruit the wrong person – and either outcome would place a significant strain on the existing management team and have a negative impact on the outcomes for the Service. This has now been recognised at a corporate level and Council is now moving toward becoming an accredited Inclusive Recruiter which will see full adoption of the SCQF framework and allow the Council to recognise both experience and equivalent qualifications in operational services such as Waste and Fleet. A report has been prepared and will be presented to a forthcoming meeting of the CMT for approval. Following this approval, a trial for specific hard to fill roles will be undertaken before this is rolled out across all Council Services. In the absence of any formal policy being in place at present and to provide assurance that proper consideration is being taken to any ‘equivalency’ decision, the appropriate Business Manager shall, in discussion with an appropriate member of the TOD team, consider any such request and in the absence of any agreement with this this will be escalated to the Chief Officer who will undertake a final decision following guidance from the TOD team. (2) Agree Chief Officer (Community Operations) A programme of refresher training for all staff engaged in recruitment will be introduced and completed by the end of December 2023. (continued overpage) December 2023 December 2023 Page 62 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 6 3. Action Plan (continued) Follow Up of investigation of staffing issues within Waste and Fleet Resources 0800/2023/001 Management response Implementation Month/Year (3) Agree Chief Officer (Community Operations) Random samples will be checked by the Service’s Performance and Compliance Team and appropriately recorded. However, if matters are found to have been addressed by the next audit, this further layer of check will be removed. Note: The Service consider that the priority rating for this recommendation should be ‘Medium’ rather than ‘High’. However Internal Audit is content that the assessment is appropriate. The assessment of the recommendation as ‘High’ is informed by the findings representing a clear deviation from existing corporate policies, expectations and work practices in relation to recruitment and despite a commitment from management to address these issues which were identified in an earlier audit, further similar issues were identified during this follow-up exercise. June 2023 Page 63 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 7 3. Action Plan (continued) Follow Up of investigation of staffing issues within Waste and Fleet Resources 0800/2023/001 Ref Finding 2 There continues to be significant weaknesses in the controls used within the Service for managing and processing contractual and non-contractual payments. As part of the earlier review, we undertook a review of contractual and non-contractual payments made to a sample of employees within Waste and Fleet and identified a number of issues with non-core hours and overtime payments. Management was advised of the issues identified and agreed to review these issues and undertake a review of any regular payments made to waste and fleet staff, taking appropriate action to resolve any issues identified. A report of all non-core hours and contractual overtime payments made to waste and fleet staff was obtained and reviewed by the HR Business Partner, with a number of queries and potential errors notified to the Employee Service Centre, who have since reviewed and provided comments to the HR Business Partner. Despite a commitment timescale of March 2022, the notification to ESC was not undertaken until November 2022 and to date, relatively few of the errors have been addressed. We understand that the HR Business Partner advised ESC to wait until a wider issue relating to the interpretation of non-core hours was resolved prior to taking action, however, we consider that the issue relating to non-core hours within Waste relates to the use of incorrect work patterns to calculate non-core hours rather than the wider issue which is subject to ongoing discussion at present. Additionally, many of the specific issues identified and reported in our previous report have not yet been actioned, with many of the outstanding issues likely to result in ongoing overpayments. We consider that the longer the issue remains outstanding, the higher any overpayments and the less likelihood of recovery. Given the number of issues identified in our previous review, we undertook sample checking of contractual and non-contractual payments made to waste and fleet employees and again identified further issues. These issues, together with the outstanding issues from the previous audit have been provided under separate cover, however, examples of the issues arising are as follows: • employees who provide cover for a higher-graded post receive an hourly difference payment to compensate for the difference in salary and if applicable, an overtime element to cover the contractual overtime payment due. When the higher graded post is advertised, if the successful candidate is the employee who provided cover during the vacancy, the start date is often backdated which results in the basic pay and contractual overtime (if applicable) elements of the post being backdated to the start date, resulting in effectively double payment of each aspect; • we identified three employees who were promoted to a supervisor post from August 2022 which was not actioned on iTrent until September 2022 and for which the contractual overtime element was not applied until January 2023. As each employee was in receipt of hourly difference and the contractual overtime element until the new post was actioned on iTrent, they were in fact paid twice (for almost two months for hourly difference and five months for contractual overtime). Whilst the overpayment of hourly difference is often identified and corrected by Payroll staff (although not always), the contractual overtime element is not, as Payroll staff would not be aware that overtime paid related to this; • there are inconsistencies in the contractual overtime element (paid as 0.58 per day and 0.5 on Sunday) claimed and paid for employees acting up, and working overtime as Supervisors, as timesheets for the period January to August 2022 record overtime of 1.19 hours per day and from August to November 2022 record 0.58 for a Sunday when only 0.5 hours should be claimed; • there are also inconsistencies in the overtime claimed and paid by Supervisors and Assistant Operations Managers working additional shifts, with some employees claiming the usual shift hours (10.66 hours or 10 hours on Sunday) whilst others claim the usual shift plus the contractual overtime element (11.24 hours). Assistant Operations Managers (NLC10) are not entitled to contractual overtime; and • our review of the overtime reports identified that three senior managers currently receive a regular non-core hours payment (of 15 hours per four weeks) for working one weekend day over each two-week period. Review of a report from iTrent which details employees graded NLC13 or above who are in receipt of non-core hours identified only one other employee, graded NLC15, who is in receipt of non-core hours. We would query whether there is a service requirement for these managers to work weekends given the other sufficient management tiers who should be able to deal with any issues that may arise. (continued overpage) Page 64 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 8 3. Action Plan (continued) Follow Up of investigation of staffing issues within Waste and Fleet Resources 0800/2023/001 Ref Finding 2 (Continued from previous page) We also identified that one of the employees who was promoted to Supervisor in August 2022 had various anomalies in his pay, arising from both the issues identified above and further issues. Payroll staff have only recently been provided with the appropriate documentation and, through a manual check on payments made and due, have identified this this employee has a net overpayment of approximately £2,500. The additional issues which created this overpayment are as follows: • Soon after the employee was promoted to the NLC9 Supervisor post, he began ‘acting up’ to an NLC10 post for which he received both hourly difference and higher duties payments (for undertaking a post at a higher grade) for three weeks, resulting in a double payment. • The employee has been in receipt of higher duties payments at NLC10 since September 2022. The higher duties forms completed and authorised by the Operations Manager and HR Business Partner state that he is covering for a vacant post, however, all three posts at that grade are filled. The HR Business Partner advised that he is undertaking a project at that grade and that his had been approved by the Chief Officer. No documentation was provided to support this, and we were not advised of an end date. The higher duties forms completed, therefore, do not accurately and transparently reflect the reasons for undertaking higher duties; and • A request for a salary advance, submitted by the HR Business Partner and authorised by the Chief Officer, to cover higher duties claims which were not submitted on time and an overpayment which he considered was deducted from his pay in error was received and processed by Payroll staff. We were informed that salary advances are normally only paid for issues relating to basic pay and not for overtime or additional payments. The advance has not yet been repaid. The findings detailed above indicate that the Service appears to regularly fail to comply with corporate expectations in relation to payments to staff, there appears too much flexibility/deviation from standard practice and/or the Service routinely has to resort to using enhanced rates to deliver core services without have appropriate monitoring and oversight, awareness and understanding over payments made. Checks on the other employees affected by the issues highlighted above have not yet been undertaken by Payroll staff. Implication Recommendation Priority A lack of documentation to clearly support the reasons for staff undertaking higher duties, claims for higher duties payments may be authorised inappropriately and staff could receive payments which they are not entitled to and this could lead to increased costs for the Council. Failure to apply conditions of service appropriately could lead to inconsistency of employee payments across both the Service and the Council. If errors are not stopped immediately when they are first identified, any overpayments arising from the error could continue to increase and the likelihood of recovery could be reduced. Delays in employees agreeing and signing repayments schedules for overpayments could lead to a delay in recovery and increase the risk of the overpayment not being recovered if the employee were to leave the Council’s employment. The Chief Officer (Community Operations), in conjunction with the Chief Officer (People Resources), should: (1) ensure that HR Business Partners, prior to authorising and passing higher duties claims for payment, properly scrutinise and understand the appropriateness of such claims, confirm that claims have been agreed and authorised by the Chief Officer or senior management and ensure that documentation accurately reflects the reason for such payments; (2) review, and take appropriate action, to resolve the issues and errors in contractual and non- contractual payments identified by Internal Audit and outlined in the document which has been provided under separate cover; (3) identify other employees who may be affected by the issues identified in the finding above, with a view to review and taking appropriate action to resolve any subsequent issues/errors identified; and (4) ensure that where overpayments arise from these reviews, prompt action is taken to ensure that appropriate repayment schedules, with reasonable terms, are promptly agreed with relevant employees and that recovery commences as soon as possible. High Page 65 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 9 3. Action Plan (continued) Follow Up of investigation of staffing issues within Waste and Fleet Resources 0800/2023/001 Management response Implementation Month/Year Agree (1) Chief Officer (Community Operations) The HR Business Partner, in conjunction with the Chief Officer (Community Operations), will ensure that appropriate scrutiny of higher duties payment requests is undertaken and will have due regard to the overall corporate review of this area currently being undertaken. (2) Chief Officer (People and Resources) and Chief Officer (Community Operations) Work has commenced to check all non-core and contractual overtime payments for all employees within Waste and Fleet. Work is also underway to identify and recover any over or under payments for any employees impacted. (3) Chief Officer (People and Resources) and Chief Officer (Community Operations) This would reflect the statement in (2) above. (4) Chief Officer (People and Resources) and Chief Officer (Community Operations) All overpayments will be addressed as a matter of priority. Work on the recovery of overpayments has commenced and the payroll team will ensure that all anomalies raised from this audit will be reviewed and action taken as appropriate. Additionally, for relevant roles, the Waste Service have moved onto an electronic overtime requesting process through MySelf. This should address manual issues identified with the current process for these roles with appropriate checking that the details on the MySelf system are correct. Note: The Service consider that the priority rating for this recommendation should be ‘Medium’ rather than ‘High’. However Internal Audit is content that the assessment is appropriate. The assessment of the recommendation as ’High’ is informed by the scale of errors in employee payments identified in the original audit, the lack of management action to correct these errors and/or to prevent them continuing/re-occurring and the identification of further significant errors during this follow up exercise which have resulted in some large overpayments. September 2023 June 2023 June 2023 September 2023 Page 66 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 10 3. Action Plan (continued) Follow Up of investigation of staffing issues within Waste and Fleet Resources 0800/2023/001 Ref Finding 3 The Service needs to ensure that the impact of structure changes in reducing overtime paid at premium rates is monitored and consideration as necessary to further amendments and/or actions to reduce this. We previously recommended that Service management should review current arrangements within Waste and Fleet Resources with a view to identifying the most cost-effective solution which ensured that the required level and standard of service can be delivered whilst keeping overtime paid at premium rates to a minimum. We advised that this may require considering the roles of individual employees’, the hours and work patterns required to provide the service, the work undertaken and the remuneration to be paid and whether staff are able to undertake the duties allocated to them within their contracted hours. We confirmed that a new structure was approved in February 2022 and, at the time of testing, were informed that the final parts were being implemented with additional loaders and drivers being processed by the Recruitment Team and that this should lead to a reduction in overtime due to fewer vacancies and fewer absences. We noted that whilst a new structure has been implemented within the Service, this has not yet been properly/accurately reflected in iTrent as some posts which have been removed from the structure remain as vacant posts on iTrent and the job titles of some occupied posts on iTrent do not appear on the approved structure (e.g. Routing and Data Waste Officer). We consider that there is therefore a risk that posts which are not part of the approved structure (and for which there is therefore no budget) could be recruited for and filled. From Comparison of spend on overtime in this Service following this restructure, against that in the year prior to the structure changes, identifies that the changes made have not as yet resulted in a significant reduction in overtime being paid. We recognise that there will always be a requirement for a certain level of overtime for front-line waste staff (i.e. loaders and drivers) given that there is no ‘pool’ staff to cover unplanned absences and that without the appropriate level of staff, the required level of service cannot safely be provided. As this is the group of staff with the highest level of overtime, management reviews to reduce overtime have generally been concentrated here. We consider, however, that a review of the work patterns, hours, roles and levels of overtime for promoted staff (NLC9 and above) and staff within Fleet should be undertaken to determine whether there is more efficient way to deliver the core service minimising the use of overtime and other payments paid at premium rates. In this regard, we noted for example, that the introduction of two Fleet Chargehands to assist the Fleet Co-ordinator has resulted in a reduction in the overtime claimed by the Fleet Co-ordinator, however, with two additional staff now being paid and all three working the same work pattern and claiming overtime, often simultaneously for the same days/times, we consider that the new staffing structure has not been always been effective in tackling and reducing overtime levels. Implication Recommendation Priority Services may not be delivered in the most cost-effective manner which could result in additional costs to the Council at a time of constrained resources. The Chief Officer (Community Resources) should: (1) in conjunction with People Resources, ensure that the structure recorded on iTrent is up-to-date and accurately reflects the approved current staffing structure and hierarchy; (2) that a review of the work patterns, hours, roles and levels of overtime for promoted staff (NLC9 and above) and staff within Fleet should be undertaken to determine whether there is more efficient way to deliver the core service which maintains the required level and standards of service whilst minimising the use of overtime and other payments paid at premium rates; and (3) ensure that the impact of structure changes in reducing overtime paid at premium rates is monitored and consideration as necessary to further amendments and/or actions to reduce this. Medium Page 67 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 11 3. Action Plan (continued) Follow Up of investigation of staffing issues within Waste and Fleet Resources 0800/2023/001 Management response Implementation Month/Year Agree (1) Chief Officer (Community Operations) The structure of iTrent will be updated to reflect the most recent restructure. (2) Chief Officer (Community Operations) Structure reviews are constantly undertaken within both the Waste and Fleet service and within the past four financial years, the Service has delivered £2.183M of efficiency savings through effective management. I would agree with the necessity to have a constant review of structures to ensure operational and financial efficiency and a further structural review is now being undertaken after the recent amalgamation of the former Environmental Asset and Regulatory Services and Waste Solutions services into Community Operations. Part of this restructure has been the establishment of the Fleet service under a dedicated Business Manager. One of the first tasks of this manager will be to determine the best operating model for the Fleet service going forward and this will include a review of the existing shift pattern etc. (3) Chief Officer (Community Operations) The nature of the service is such that any sickness or annal leave needs to be covered through overtime to ensure that operational requirements of the service are met. This means there will always be a requirement within Waste and Fleet for Overtime. To mitigate against this cost the service has now undertaken an exercise to increase the pool of employee who drive to reduce the overtime levels. Controls and measures are now in place with a standing 4 weekly meeting to review overtime. Additionally, the service is working with HR and finance colleagues on a traffic light system whereby the overtime rates are reviewed weekly by service managers. We aim to have this implemented within the next 3 months. The introduction of this traffic light system will assist with the identification of any areas of ongoing high overtime and will be used as an indicator and trigger for considering any further amendments to the structure (assessment of individual employees’ roles, hours and work patterns, duties and remuneration with consideration given as to staffing levels and whether staff are able to undertake the duties allocated to them within their contracted hours). September 2023 July 2023 June 2023 Page 68 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 12 3. Action Plan (cont’d) Follow Up of investigation of staffing issues within Waste and Fleet Resources 0800/2023/001 Ref Finding 4 Some of the recommendation and management actions identified in the initial audit have not been adequately and/or effectively implemented. During the course of our work, we identified a number of other areas where we consider that the recommendation and/or agreed management action arising from the initial audit has not been adequately or effectively implemented, as follows: • The Service issued an email to all staff and managers involved in overtime advising that the Service was carrying out a review of overtime, a procedure would be issued and highlighting the rules for payment of overtime above salary point 35. We consider that this email does not provide sufficient information in relation to corporate expectations as it fails to remind staff of the need to properly scrutinise and challenge overtime claims and ensure that they are satisfied that claims are accurate, in line with Council policy and properly reflect additional time work prior to authorising them. Additionally, given the delay in issuing the procedure, the email does not reflect any interim arrangements; • The Performance and Compliance team are currently in the process of preparing a procedure for staff in relation to roles and responsibilities for claiming and authorising overtime. Given that the Service has only recently moved from recording overtime on timesheets with input to iTrent by the Support Team to employees directly recording their overtime on Myself, this procedure is currently being prepared and has not yet been issued. As a result, we have not yet had sight of the procedure and are therefore, unable to comment on its adequacy and effectiveness; • No independent review of overtime is undertaken after timesheets have been processed to ensure that they are accurate, however, sample checking by the Performance and Compliance team, in conjunction with the Support Team, is now undertaken. Review of this process appears satisfactory, however, it appears to concentrate on loaders and drivers (whose overtime is recorded on a weekly timesheet which includes every member of the team) rather than all Waste and Fleet staff and does not take account of other managers/staff who submit individual timesheets/overtime claims; and • We consider that there is scope for improvement in the way in which overtime sheets are held on Sharepoint. We found it difficult to locate some overtime sheets as there is no standard naming convention so that they are held in date order and some folders contained timesheets for a number of staff. Implication Recommendation Priority Management response Implementation Month/Year Failure to clearly inform and remind staff and managers of the Council’s conditions of service and corporate expectations in relation to recruitment, overtime and contractual payments could lead to inconsistency in payments made to staff across the Council and Service. If regular independent reviews of overtime and other contractual payments made to staff are not undertaken the Service will not be able to promptly identify and action any errors or common issues, which could lead to fraudulent claims, inconsistencies in payments mane and therefore, staff being under or overpaid. The Chief Officer (Community Operations) should consider the issues identified in the finding above and take appropriate action to resolve them, ensuring that the action taken is effective and contributes to reducing or removing the risk that each issue poses. Low Agree Chief Officer (Community Operations) We have considered the issues raised in the finding above and commit to the following actions: • As we have now moved to an electronic method of recording and processing overtime there should be no need to manually store any overtime sheets. However, it is accepted that a scrutiny process must still be in place which provides assurance that all overtime claimed has been worked and this will be devised and implemented by the Performance and Compliance Team. One such example will be the introduction of retina/ fingerprint recognition for all operatives which will provide evidence that any overtime claim can be aligned to the recognition software for that day. Ideally, overtime should then only be paid once this has been verified digitally but this will require our digital transformation process to move at the same pace as the service; and • Audits of overtime will be extended to cover all levels of staff – although this finding must be caveated that only a couple of overtime reviews had been undertaken by the time of the audit and there was no intention not to include higher grade claims within the overall reviews. December 2023 June 2023 Page 69 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 13 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 70 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 14 Appendix 2 – Progress of actions against previous recommendations Recommendation Management Response Action Taken IA Assessment on Action Taken Adequate Effective Recommendation 1 Service management should review current arrangements within Waste and Fleet Resources with a view to identifying the most cost-effective solution which ensures the required level and standard of service can be delivered whilst keeping overtime paid at premium rates to a minimum. This should also include consideration of improvements to current monitoring arrangements to enable prompt identification of, and where appropriate action, in response to any potential issues arising. This may require clarifying the purpose of individual employees’ roles, the hours and work patterns required to provide the service, the work undertaken and the remuneration to be paid. As part of any review, consideration may be required as to whether staff are able to undertake the duties allocated to them within their contracted hours. We are in the process of implementing a new structure within Waste and Fleet Resources which will reduce the need for overtime, particularly in respect of the roles undertaken by the employee referenced in this report. This restructure will be presented by the Head of Service to the Workforce Steering Group on 18/02/22. Through the Business Manager (Waste and Fleet) there will be a regular review of overtime levels by the Service’s senior management team. This will provide information on the overall levels of overtime and specifically those highest earners. This will in turn prompt identification, and where appropriate action, in response to any potential issues arising. We will also undertake a review of the process to authorise, monitor and highlight higher levels of overtime across the service through the Performance and Compliance Manager. Responsible Officer: Business Manager (Waste and Fleet) Timescale: March 2022 A new structure was approved in February 2022. At the time of follow-up testing (November 2022), the final parts were being implemented, with additional drivers and loaders being processed by the Recruitment Team, which in the Service’s opinion should lead to a reduction in overtime due to fewer vacancies and fewer absences. The HR Business Partner advised that the new structure was not necessarily designed to reduce overtime but was more about how best to run the Service and make it more efficient. Other than above, no confirmation was received on how the new structure would reduce the need for overtime for areas other than drivers and loaders. Regular review of overtime is undertaken through discussion at monthly senior management meetings. The Service receives fortnightly and four-weekly overtime reports from iTrent and any issues identified and considered for action. Meetings are not minuted, therefore we are unable to confirm content of discussions. No formal review of the overtime process has been undertaken, however, the Service Manager (Waste and Fleet) now countersigns all overtime sheets (below SCP35) prior to being processed by the Support Team. Our review of a sample of overtime claims between November and December 2022 confirmed this. The Performance and Compliance Manager confirmed that she discusses overtime with the Service Accountant and that there is an intention to notify managers and the Support Team where staff are reaching SCP35. Yes – new structure and regular review of overtime levels. No – review of overtime process No Page 71 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 15 Appendix 2 (continued) – Progress of actions against previous recommendations Recommendation Management Response Action Taken IA Assessment on Action Taken Adequate Effective Recommendation 2 Service management should ensure that managers/ supervisors responsible for authorising overtime claims are reminded of the need to properly scrutinise and, where appropriate, challenge overtime claims prior to authorisation to ensure that they are satisfied that claims are accurate, appropriate, in line with Council policy and properly reflect additional time actually worked. On completion of the review detailed above, procedures will be issued to all managers and supervisors to ensure compliance with Council policy with a request that all appropriate managers complete and sign a return sheet advising that they have read and understand the overtime process. Copies of claim forms will be held in a central, secure area on SharePoint and sampling of completed overtime sheets will be carried out to ensure claims are accurate. Responsible Officer: Business Manager (Waste and Fleet) Timescale: April 2022 The Performance and Compliance Manager issued an email to all staff and managers involved in overtime on 23/03/22 advising that the Service was carrying out a review of overtime, a service procedure would be issued and highlighting the rules for payment of overtime above SCP35. A draft procedure for overtime has been prepared but has not yet formally been implemented. The email was re-issued on 14/12/22 advising that the overtime procedure had been drafted but will change significantly due to the move to recording and authorising overtime via Myself and would be issued after this process was in place. Update at March 2023 – the revised procedure reflecting the move to Myself is still under development. The email issued included a request for all recipients to complete a confirmation record to confirm that they have been informed of, and understand, the processes outlined in the email. A SharePoint area has been created for storing overtime claims and timesheets have been copied across in bulk from the server with no amendment to names, etc. The Performance and Compliance Manager confirmed that senior management has discussed her team undertaking sampling and reviews on overtime claims, however, her staff do not have access to iTrent to undertake such checks and she stated that overtime reports detail overtime cost whilst timesheets detail hours. Instead, one of the Performance and Compliance Officers selects a sample of names and sits with the Support Team to review what has been claimed and paid and prepare a report. Two reports have been prepared to date. Yes No Page 72 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 16 Appendix 2 (continued) – Progress of actions against previous recommendations Recommendation Management Response Action Taken IA Assessment on Action Taken Adequate Effective Recommendation 3 Service management should ensure that managers responsible for recruiting staff are reminded of the Council’s current recruitment policies and procedures, including ensuring that appropriate essential criteria are met prior to selecting candidates for interview, and that successful candidates do not commence their new role until the Recruitment Team have confirmed that all pre-employment checks have been completed and the relevant contract has been issued. Managers responsible for recruiting staff will be reminded of the need to fully comply with the Council’s recruitment policies and procedures. A copy of these will be provided to all managers and similar to above, with a request that all appropriate managers complete and sign a return sheet advising that they have read and understand the recruitment process. In respect of qualifications, it should be noted that there are many different qualifications across numerous bodies and managers are not always clear which levels are equal to the Scottish Credit and Qualifications Framework. Going forward, the Service will ensure that when undertaking recruitment exercises, clarification will be sought, as necessary, from the HR Business Partner Team to ensure that candidates shortlisted for interview meet the essential qualification requirements. Responsible Officer: Business Manager (Waste and Fleet) Timescale: April 2022 The email that was issued to all managers and supervisors also covers recruitment and includes a link to the Recruitment Policy on MyNL. The email issued included a request for all recipients to complete a confirmation record to confirm that they have been informed of, and understand, the processes outlined in the email. The Service Manager (Waste and Fleet) confirmed that checks on essential qualifications prior to the shortlisting process is in place. He advised that managers have a list of SQA qualifications and equivalents and this is checked as part of the interview shortlist process. If a manager is unsure whether a qualification meets the essential criteria, they would contact the HR Business Partner before the interview. Yes No Recommendation 4 Service management should review, and take appropriate action, to resolve the errors in the NCH and contractual overtime payments identified by Internal Audit and outlined in Appendix 2. In addition, management should undertake a detailed review of any regular payments made to waste and fleet staff to confirm the validity, regularity and accuracy of these payments in line with Council policies, taking any required remedial action as appropriate. A review of all issues raised within Appendix 2 as well as any regular payments made to waste and fleet staff will be undertaken and the appropriate action taken in line with advice from the HR Business Partner. A revised process has already been put in place, with input by one officer and check by line manager prior to overtime being submitted. Responsible Officer: Business Manager (Waste and Fleet) Timescale: March 2022 No action appears to have been taken in response to the issues raised in Appendix 2. Our review of the issues raised confirms that very few have been actioned, with many of the actions which have potentially large overpayments still outstanding. The HR Business Partner obtained a report detailing all non-core hours and contractual overtime payments for employees in Waste and Fleet (up to NLC12). She reviewed the report and notified the ESC of queries/potential errors in November 2022. No action to correct the issues identified has yet been taken. No No Page 73 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 17 Appendix 2 (continued) – Progress of actions against previous recommendations Recommendation Management Response Action Taken IA Assessment on Action Taken Adequate Effective Recommendation 5 Service management should remind all staff processing overtime claims of the importance of fully and accurately recording overtime information on iTrent and should consider undertaking second officer checks on a sample of claims to confirm accuracy and to enable identification of any errors. As mentioned previously, this process is now in place. However, it should be noted that staff system permissions have only been changed recently to allow this to happen. Previously once overtime was keyed it was no longer visible to anyone in the service to view and carry out checks. This was highlighted on numerous occasions. Supervisors/managers have also been instructed to ensure that all overtime is checked and accurate prior to submitting to the Support Team for input. Any changes must be made by managers/supervisors and new timesheet submitted. Previously several changes were notified by e-mail. In addition to the above, a random sample of 20 overtime sheets will be reviewed every quarter by the Performance and Compliance team to provide further assurance that the new process is working effectively. Responsible Officer: Business Manager (Waste and Fleet) Timescale: April 2022 The Support Services Manager confirmed that second officer checks for processing overtime are in place to ensure the accuracy of recording overtime on iTrent. These second officer checks were previously not evidenced, however, the Support Services Manager agreed during our discussion that checking officer would also sign and date the overtime forms. This is now in place. Both the Business Manager and Performance and Compliance Manager stated that the importance of accuracy of recording, authorising and inputting overtime claims was included in the email issued by the Performance and Compliance Manager on 23/03/22. The Business Manager also referred to him having oversight of the overtime claimed through reviewing and signing all overtime claims. Both the Business Manager and Performance and Compliance Manager stated that the requirement to ensure that any changes are submitted on a new updated spreadsheet was in place. However, the Support Team confirmed that they do not request or receive updated timesheets due to the tight timescales for processing overtime and that queries are dealt with via a Teams call with the Supervisor. The Support Services Manager confirmed that in future this would be done via email with a copy of the email retained with the timesheet. The Performance and Compliance Manager confirmed that senior management has discussed her team undertaking sampling and reviews on overtime claims, however, her staff do not have access to iTrent to undertake such checks and she stated that overtime reports detail overtime cost whilst timesheets detail hours. Instead, one of the Performance and Compliance Officers selects a sample of names and sits with the Support Team to review what has been claimed and paid and prepare a report. Two reports have been prepared to date. Yes – reminding staff No – checks on sample claims No Page 74 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0800.2023.001 - Follow Up Waste and Fleet Investigation/A - Findings and Report/A10 20230717 Waste and Fleet Final Report v1.0 as issued.docx 18 Appendix 2 (continued) – Progress of actions against previous recommendations Recommendation Management Response Action Taken IA Assessment on Action Taken Adequate Effective Recommendation 6 Service management should ensure that appropriate processes and procedures are put in place for the retention of documentation to support payroll payments. This should include ensuring that documentation is appropriately filed for easy access should the need for review arise and retaining the documentation for an appropriate period, in line with Council’s records and information management policy and relevant retention schedules. As detailed in 2 above, documentation will be held electronically in secure Sharepoint area. This will ensure compliance with retention schedules. Responsible Officer: Business Manager (Waste and Fleet) Timescale: April 2022 This is covered at recommendation 2 above. N/A N/A Page 75 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0650.2023.001 - Housing Allocations/A - Findings and Reports/A07a 20230811 Housing Allocations Final Report v1.0 .docx 1 INTERNAL AUDIT REPORT HOUSING ALLOCATIONS Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Issued to: Chief Officer (Housing Management) Copied to: Performance and Improvement Manager, Chief Executive and Deputy Chief Executive Headlines The purpose of this audit was to provide assurance on adequacy and effectiveness of the Council’s key controls and management arrangements associated with the process of allocating Council houses and the extent to which the system and associated processes are operating in line with approved Council policies. As well as the administration of the ‘waiting list’ and how applicants are offered housing, the review also covered how the Service manages tenancy succession (where, upon the death of a tenant, the property is re-allocated to an individual currently residing at the property). With a stock of over 35,000 houses, the Council is the largest local authority landlord in Scotland. The Council currently has around 13,000 applicants seeking housing and makes around 2,500-3,000 allocations in a typical year. The Council’s approved Housing Allocation Policy is based on a clear framework which seeks to prioritise people who are in most need of housing and which meets the legal responsibilities the Council has in terms of allocating housing. The policy sets out the rules and guidelines regarding how the Service matches the people who apply for Council housing with homes that become available. Based on the results of our work, we have assessed the audit as providing ‘reasonable assurance’ as we have concluded that there is a generally sound control environment in place although some issues and areas for improvement have been identified. We were pleased to note that the Council’s arrangements for the management of housing allocations, including management of the waiting list, making housing offers and assessing applications for tenancy succession are generally being conducted in line with approved Council policies. Recommendations for management consideration/action are detailed at Section 3 of the report and include: • There is an urgent need to review current users and user access privileges to the Common Housing Register (CHR) system and to undertake such reviews on a regular basis thereafter; • Although we found no evidence of inappropriate allocation decisions, there is a need to more clearly record the rationale for both the waiting list and applicant selected when an offer is made to an applicant who is not top of the selected waiting list to increase transparency and to enable the Service to better demonstrate that decisions made were appropriate; and • There is a need for the Service to review that key controls for checking applications input to the system and validity of supporting documentation provided are operating appropriately. Internal Audit Opinion (see definition at Appendix 1) Reasonable assurance (Green-Amber) Organisational impact (see definition at Appendix 1) Moderate Report status FINAL Audit ref 0650/2023/001 Date issued 11/08/23 Audit Team Elaine MacDonald, Paula Hendry and Hugh Shevlin Page 76 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0650.2023.001 - Housing Allocations/A - Findings and Reports/A07a 20230811 Housing Allocations Final Report v1.0 .docx 2 1. Executive Summary Objectives The purpose of this audit was to provide assurance on adequacy and effectiveness of the Council’s key controls and management arrangements associated with housing allocations and the extent to which the system processes are operating in line with approved Council policies. As well as the administration of the ‘waiting list’ and how applicants are offered housing, the review also covered how the Service manages tenancy succession (where, upon the death of a tenant, the property is re-allocated to an individual currently residing at the property). Work undertaken during this audit included: • identification of key controls relating to housing allocations and compliance testing to confirm that the controls are operating as expected; • substantive testing on a random sample of housing waiting list applications, including a high-level review of 40 applications and detailed testing on 20 of these applications across two selected localities, to verify the accuracy of information being entered into the Common Housing Register (CHR) system; • a review of the authorisation process for a sample of 40 recent offers and a detailed review of the allocation decision for 20 of these offers to confirm that allocation decisions were being made in accordance with the approved policy; and • review of 17 succession to tenancy applications to confirm that the decision to accept or reject the application was adequately supported. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 1 2 2 Key areas requiring management action (High) One key area requiring urgent management action has been identified: • There is an urgent need to review current users and user access privileges to the Common Housing Register (CHR) system and to undertake such reviews on a regular basis thereafter. Good practice identified We noted the following areas of good practice during the audit: • the Housing Allocation Procedure Manual and CHR System Guide, which is available to all staff, details the eligibility criteria to be satisfied when making housing applications and assessing housing need, and the processes to be followed when making offers of housing; • applications for succession of tenancy must be made on a standard application form and must be supported by appropriate documentary evidence to support eligibility; • the CHR system, which is maintained and managed by NLC, is used by Council staff and many of its partner registered social landlords to operate a joined-up housing provision service; • points recorded/awarded in the CHR system are consistent with the approved Housing Allocation Policy; and • effective control exists when housing is being offered with decisions to make offers to applicants requiring to be reviewed and approved by an Area Housing Manager prior to any formal offer of housing being made. Other areas for improvement (Medium) A number of other areas for improvement were also identified: (describe weaknesses identified) • there is a need to more clearly record the rationale for both the waiting list and applicant selected when an offer is made to an applicant who is not top of the selected waiting list to increase transparency and to enable the Service to better demonstrate that decisions made were appropriate; and • there is a need for the Service to review that key controls for checking applications input to the system and validity of supporting documentation provided are operating appropriately. Page 77 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0650.2023.001 - Housing Allocations/A - Findings and Reports/A07a 20230811 Housing Allocations Final Report v1.0 .docx 3 3. Action Plan Housing Allocations 0650/2023/001 Ref Finding 1 There is an urgent need to review current users and user access privileges to the Common Housing Register (CHR) system and to undertake such reviews on a regular basis thereafter. The CHR is the IT system used by North Lanarkshire Council and its partner registered social landlords (RSLs) to manage the housing waiting lists for social rented housing in the area. There are many system users across all landlords, each with different access permissions that are intended to be consistent with their designation and responsibilities. The Service’s Business Development and Support Team manages system access rights and oversees the operation of the CHR system. Key aspects of the allocation process are actioned on this system including the allocation of points to an applicant based on data input from an application form using standing data and the approval of an offer for housing to an applicant. As such, it is vital that access permissions to these critical aspects are appropriately restricted. We obtained a list of all live NLC CHR system users and information pertaining to role profiles, and noted the following issues: • from a random sample of 20 live users, five of these users were no longer employed by the Council, with some leaving the Council’s employment as far back as 2018; • 44 staff members had access to update/amend the CHR Pointing standing data within the system. We understand that many of these users only require ‘view only’ access, suggesting that permissions within each CHR access role do not currently reflect the access needs of system users; and • the Housing Allocations procedure manual assigns the authority to approve/reject housing offers to Area Housing Managers and as such, access within the system to perform such actions should be appropriately restricted to only these individuals. We noted that access to undertake this task was enabled for 14 role profiles, and that 210 users were assigned to these roles. We understand that most of these users only require ‘view only' access to confirm/reject housing offers activity. The issues identified above indicate a clear lack of regular, formal oversight and review of CHR system users and the access permissions for role profiles set up in the system. Implication Recommendation Priority Management response Implementation Month/Year Significant numbers of staff with high levels of access which they do not require increases the risk of inappropriate and/or fraudulent misuse of the system and the information held. Inappropriate access levels may not be identified and amended promptly. The Chief Officer (Housing Management) should ensure that: (1) as a matter of urgency, a full review of all users with CHR access is undertaken to determine the ongoing validity of this access taking action to amend/end as appropriate; (2) a comprehensive review of access role profiles is undertaken to ensure that the permissions granted within each role are appropriate and only provide access necessary for the user to fulfil their duties. This should include specific review of staff with access to amend standing data within the system and ensure it is restricted to as few users as is operationally required; (3) a formal user access review process is introduced whereby confirmation is sought from relevant management, on a periodic but regular basis (e.g. annually), that staff within their team who have CHR system access continue to require this access and that the access level allocated to each member of staff remains relevant to their post’s responsibilities and duties; and (4) regular reviews of access to restricted areas, such as the pointing data, are undertaken to verify that there is no unusual activity and/or where amendments have been made these are appropriate and valid. High Agree Lynn Lowe, IT Solutions Manager (1) A full review of users and roles was started as the Internal Audit fieldwork was being undertaken, and our review was completed in March 2023. The cases cited in the finding above of leavers with ongoing access will be cross- checked to our review to confirm access was removed as part of our review (if not access will be deleted). (2–4) Going forward a formal user review process will be undertaken on an annual basis and will incorporate all aspects of the recommendations made in this action point. Complete August 2023 March 2024 Page 78 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0650.2023.001 - Housing Allocations/A - Findings and Reports/A07a 20230811 Housing Allocations Final Report v1.0 .docx 4 3. Action Plan (continued) Housing Allocations 0650/2023/001 Ref Finding 2 There is a need to more clearly record the rationale for both the waiting list and applicant selected when an offer is made to an applicant who is not top of the selected waiting list to increase transparency and to enable the Service to better demonstrate that decisions made were appropriate. A formal process of consideration and review is carried out by Housing Advisers prior to making a housing offer proposal. This involves determining which waiting list category is most appropriate to allocate the property from, by reviewing each of the waiting lists’ performance against targets and details of the applicants’ placing on the selected waiting list at the time of review. The Housing Advisor’s proposal is then reviewed by the Area Housing Manager, who will approve or reject it on the CHR system. The waiting list generated follows the rules of the approved allocations policy when determining the position of applicants and normally the applicant at the top of the list with the highest number of points should be made an offer. However, there are exceptions to this rule, with the locality housing team considering factors such as making choices that maintain diverse neighbourhoods and any urgent housing needs arising at the that time of the allocation. The allocation process is undertaken on the CHR system with the waiting list category and generation of the selected list being displayed on screen. No other hard copy or electronic documentation to support the offer process is held. The CHR system clearly logs the waiting list position of the successful applicant at the time the offer was made. If this applicant is not at the top of the wating list, a bypass reason must be entered on the system to indicate, for each applicant higher placed on the waiting list, why they were not selected for the offer. The system provides a drop-down list for selection of the bypass reason as well as a corresponding ‘details’ box that allows for free-text narrative to be input to support the reason selected. From our review of a sample of 20 recent housing offers, we are satisfied that offers are being assessed by Housing Advisors and approved by Area Managers in accordance with guidance. With regards the waiting list selected, whilst we noted that performance information captured and monitored by the Service includes % allocations per waiting list category, it is our view that the lack of documentation to demonstrate the snapshot position at the time of generating the allocation proposal and brief narrative documenting the reason this was the most appropriate list adversely impacts on the openness and transparency of the process. Similarly, although in all cases reviewed, a bypass reason had been selected, where necessary, we consider that where additional narrative was added to the system it was limited and failed to adequately and sufficiently document the rationale for the allocation decision. For example, for one sample case reviewed the applicant that the offer was made to was significantly lower on the waiting list and the narrative simply stated “management decision” with no further explanation formally recorded as to the specific reason this individual was considered the most appropriate at that point in time. When queried by Internal Audit, the Area Housing Manager provided a clear, justifiable rationale for the decision which we were satisfied with, however, no formal documented audit trail for this explanation existed. Again, the lack of clearly documenting and substantiating decisions made diminishes the openness and transparency of the process and could leave the Council open to criticism and/or an inability to properly defend its decision-making. Implication Recommendation Priority Offers of housing may be made which are not in line with the approved policy and without sufficient evidence to support the decisions made. As such it may be difficult to demonstrate how decisions were made in the event of any claims of bias by other applicants. The Chief Officer (Housing Management) should: (1) to ensure transparency in the decision-making process, identify, and thereafter implement, appropriate arrangements to improve the recording, justification and evidencing of the allocation process, from why a particular waiting list was selected through to the rationale for bypassing applicants on the waiting list, particularly when the top ranked applicant is not selected; and, (2) introduce a mechanism for periodic oversight and analysis of the bypass reasons used and undertake regular analysis/monitoring to ensure that the policy, and exceptions to it, are being applied in an appropriate and consistent manner across localities, and the rationale for allocations outwith the top of the list are adequately and sufficiently documented. Medium Page 79 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0650.2023.001 - Housing Allocations/A - Findings and Reports/A07a 20230811 Housing Allocations Final Report v1.0 .docx 5 3. Action Plan (continued) Housing Allocations 0650/2023/001 Management response Implementation Month/Year Agree Tracey Harper, Performance and Improvement Manager (1) A further IT enhancement to the ‘make an offer’ wizard within the CHR system will be required at the waiting list selection screen so that the waiting list % lets at the time the offer was being made can be captured and the introduction of a free text box to enable an explanation of why a particular waiting list was chosen to be added. This would need to be kept with the offer information and visible for audit purposes. These enhancements will require system development work to be undertaken which will be impacted by available resources due to other competing demands and priorities. With regards the rationale for bypassing applicants on the waiting list, the system already has functionality via a free text box for localities to clearly record the rationale for their decision. We will undertake a review of the pre-set bypass reasons selected from the drop-down list and will also re-enforce to staff and management, via a briefing note, the importance of fully utilising this free text box for bypass reason to clearly demonstrate the rationale for the chosen applicant when it is not the top ranked applicant. (2) As an immediate action we will develop a quarterly audit report to address this recommendation. In addition, as Power BI reporting is rolled out across the Council, we will utilise this to facilitate monthly reporting on bypass reasons used. July 2024 September 2023 September 2023 for initial MCO report December 2024 for Power BI report Page 80 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0650.2023.001 - Housing Allocations/A - Findings and Reports/A07a 20230811 Housing Allocations Final Report v1.0 .docx 6 3. Action Plan (continued) Housing Allocations 0650/2023/001 Ref Finding 3 There is a need for the Service to review that key controls for checking applications input to the system and validity of supporting documentation provided are operating appropriately. Applicants wishing to be considered for housing must complete a housing application form and provide various documents to evidence their eligibility and housing requirements to their locality housing office. Once received and initial checks on the completeness of the information and evidence provided have been undertaken, an officer at the locality will input the application details to the CHR system. The accuracy of input is then checked by another member of the team, after which the status of the application will move to ‘live’, with points calculated and the applicant allocated a position on the relevant waiting list. The second officer check in this instance acts as a key control in ensuring data capture is accurate to facilitate the correct assessment of housing need. Although there is a clear expectation for segregation of duties in this regard, the system does not prohibit the same officer checking an application they have input. Our review of a random sample of 40 applications across various localities confirmed a high degree of compliance with this expectation, however, we did identify 3 instances (7.5%) from our sample where the officer inputting the application detail also checked the input for accuracy. Whilst we understand this was necessary due to staff shortages within a specific locality, we noted that there is currently no mechanism in place to identify and/or monitor the incidence of this deviation from expected practice. We consider that management need to review and address this gap. As part of our detailed review of a sample of 20 applications, we identified some instances where the data input was inaccurate or expected documentation was not retained as follows: • while two forms of ID were being presented with applications, documentation accepted by locality offices was not always compliant with the acceptable forms of ID listed with the application form; • no supporting documentation to evidence eligibility for one assessment for additional points was held; and • there were two instances where the additional points awarded to the applicant were incorrect based on our review of the application form. In both cases, an additional 10 points for overoccupancy in the applicant’s current accommodation had been allocated because of a specific question within the application (question 2c) being omitted or incorrectly answered by the applicant and subsequently incorrectly recorded on the system These anomalies have been highlighted to the localities, reviewed and corrections made to the points awarded to each applicant. Implication Recommendation Priority The Council may fail to award housing based upon need if all applications are not accurately assessed and recorded. If information is not input and checked for accuracy it may result in an applicant not being correctly assessed which could result in them being omitted from consideration of an offer of housing or unfairly disadvantage other applicants. The Chief Officer (Housing Management) should: (1) determine and introduce appropriate exception reports to identify and monitor instances of the same officer inputting and checking an application to ensure this key control is not diminished and appropriate action can be taken if the incidence of the same person inputting and checking increases; (2) re-enforce to all locality staff involved in inputting and checking applications of the need to ensure that forms of identification accepted with an application comply with the documentation criteria specified in the procedures manual; and (3) given the issue identified regarding the completion by applicants of question 2c and the award of overoccupancy points depending on this, consider how this issue can be monitored to ensure incorrect points do not continue to be awarded. This might include consideration of appropriate exception reports and awareness raising with locality staff. Medium Page 81 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0650.2023.001 - Housing Allocations/A - Findings and Reports/A07a 20230811 Housing Allocations Final Report v1.0 .docx 7 3. Action Plan (continued) Housing Allocations 0650/2023/001 Management response Implementation (Month/Year) Agree Tracey Harper, Performance and Improvement Manager (1) The system can be amended to include validation which will prevent the same officer inputting and checking an application – a similar process is in place for offers. This will require system development work to be undertaken which will be impacted by available resources due to other competing demands and priorities. Although we will aim to introduce this amendment as soon as is reasonably possible, it is likely to take some time therefore as an interim measure we will develop a report to monitor compliance with requirement for the input and checking of applications to be undertaken by different officers. (2) We believe the current procedure document is already explicit in this regard; however, given the audit findings above, a briefing note will be developed to issue further instructions to staff and management teams to re-iterate expectations. (3) We believe the current procedure document is already explicit in this regard. However, the above briefing note at point 2 will also include specific instruction regarding couples within the household and the check an application process. Interim measure – October 2023 System amendments – July 2024 September 2023 September 2023 Page 82 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0650.2023.001 - Housing Allocations/A - Findings and Reports/A07a 20230811 Housing Allocations Final Report v1.0 .docx 8 3. Action Plan (continued) Housing Allocations 0650/2023/001 Ref Finding 4 Waiting list and suspension reviews are not always completed in a timely manner. To ensure that the housing waiting list remains up-to-date and reflective of need, the Service’s operating arrangements require an annual review of every applicant and their circumstances on the waiting list to be undertaken. The CHR system has a review enquiry process to assist in this by highlighting all applicants on the system with whom there has been no contact over the last 365 days. The system then initiates sending a letter to the applicant requesting an update of their details, or confirmation that their circumstances remain unchanged. No contact from the applicant results in the application being cancelled and removal from the waiting list. We were pleased to note that waiting list reviews at most localities were up to date, however, at the time of our fieldwork (May 2023), the waiting list reviews at Shotts and Wishaw localities had not been undertaken in a timely manner, with some reviews being significantly overdue and outstanding since before October 2022. We understand that there were staffing issues at these locality offices and that management have now identified actions to enable the recommencement of these reviews. The Service may also suspend an applicant from the waiting list temporarily on the grounds of conduct (e.g. previous rent arrears, refusal of previous offers or anti-social behaviour) and/or eligibility (e.g. an unmet support need). The Service’s allocations procedures manual outlines that all suspensions, other than those allocated for a set period, require to be reviewed on a fortnightly basis. The CHR system has a suspension enquiry process that, when utilised, acts as evidence that suspensions are being reviewed on a regular basis and that they remain valid. Our sample testing confirmed that suspension reviews linked to rent arrears are being undertaken in accordance with expected practice, however, reviews of suspensions for other reasons were only being undertaken on an ad-hoc basis. Although our testing confirmed the reason for suspending applicants appeared valid, we consider that there is scope to improve the consistency with which suspension reviews are carried out. Implication Recommendation Priority Management response Implementation Month/Year If reviews of waiting lists are not undertaken regularly and timely, the information held in the CHR system may not be accurate and up to date, and properly reflect the housing needs in the area. If reviews of applications which have been suspended are not undertaken on a regular basis, applications may remain suspended for longer than necessary which could lead to the applicant not being considered for offers of housing. The Chief Officer (Housing Management) should remind all localities of the need to: (1) continue monitor progress of waiting list reviews to ensure they are being undertaken on a timely basis for applicants who have had no other contact within the last year to enable the early identification of potential delays and subsequent remedial action to address this; and (2) ensure that formal reviews of all open-ended suspended applications are undertaken on a fortnightly basis in line with corporate expectations. Consideration should also be given as to whether the current review frequency remains appropriate or requires to be altered. Low Agree Tracey Harper, Performance and Improvement Manager (1) Progress of waiting list reviews is already undertaken on a monthly basis as part of Measuring Charter Outcomes reporting and reviewed by senior management including the Chief Officer (Housing Management), however we will remind all housing localities of need to progress. (2) Localities will be reminded of review frequency for open-ended suspended applications. August 2023 Page 83 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0650.2023.001 - Housing Allocations/A - Findings and Reports/A07a 20230811 Housing Allocations Final Report v1.0 .docx 9 3. Action Plan (continued) Housing Allocations 0650/2023/001 Ref Finding 5 Required evidence to support succession of tenancy decisions were not always held. A succession of tenancy is a situation where on the death of a tenant, the property is re-allocated to other individuals currently residing at the property. Legal succession is possible provided there is a "qualified person" (whose only or principal home at the time of the tenant’s death was within the tenant’s house). The relationship of the qualified person to the deceased person needs to be ascertained and a ‘rank’ attributed to them based on the criteria and requirements set out in the Housing (Scotland) Act 2001, as amended. In assessing an application for succession of tenancy and determining the eligibility for the right to succeed the tenancy, the applicant is required to provide evidence to support the relationship declared (which differs for each rank) and proof of their permanent residency at the property. From the sample of 14 successful and 3 unsuccessful successions reviewed during this audit, we were satisfied that generally applications for succession to tenancy are accurately assessed, and the correct succession decision had been reached. However, we noted the following omissions: • instances of an absence of adequate documentary evidence in support of decisions reached. This included one original succession application that could not be produced, one application that had not been copied, and therefore was not held on file in full and one application where proof of death and other evidence of eligibility had not been retained (the locality explained they do not retain evidence on data protection grounds); and • one application form where the ‘housing advisor recommendation’ section of the application for succession to tenancy did not record the succession rank attributed and two other forms that had an incorrect succession rank recorded. Although no incorrect succession decision had been reached as a result, there is an increased risk that this may occur if insufficient or incorrect information is recorded/evidence is received. Implication Recommendation Priority Management response Implementation Month/Year The Council may be unable to provide evidence that its decisions to award or reject successions is in accordance with legislation and procedures. If the correct rank of the applicant is not identified, evidence requested to support the application may not be sufficient which may result in an incorrect decision being made. The Chief Officer (Housing Management) should remind all localities of the need to ensure that all applications and relevant supporting documentation for succession of tenancy are retained on file and the qualifying rank of the applicant is accurately assessed and documented on the ‘housing advisor recommendation’ section of the application for succession of tenancy form. Low Agree Tracey Harper, Performance and Improvement Manager A review of the Succession application and other paperwork will be undertaken, and instruction issued to locality teams as required. September 2023 Page 84 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0650.2023.001 - Housing Allocations/A - Findings and Reports/A07a 20230811 Housing Allocations Final Report v1.0 .docx 10 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 85 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 1 INTERNAL AUDIT REPORT REVIEW OF THE COUNCIL’S COUNTER FRAUD ARRANGEMENTS Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Good Practice identified – CIPFA Code of Practice on Managing Risk of Fraud and Corruption Appendix 3: Good Practice Identified – Fighting Fraud and Corruption Locally – A Strategy for the 2020s Issued to: Chief Officer (Audit and Risk) (points 1, 2 & 3(1)) and Chief Officer (People Resources) (point 3(2) only) Copied to: Chief Executive Headlines The purpose of this audit was to provide assurance on the adequacy and effectiveness of the Council’s Anti-Fraud Policy and management arrangements for the prevention and detection of fraud to identify any actions necessary to update the policy and ensure that the Council’s arrangements are consistent with recognised good practice. Work undertaken included consideration of the Council’s anti-fraud arrangements against a good practice checklist developed from a range of sources, including the CIPFA Code of Practice on Managing Risk of Fraud and Corruption and Fighting Fraud and Corruption Locally – A Strategy for the 2020s as well as an update and refresh of the Anti-Fraud Policy, including a change of title to Counter Fraud Policy. The updated Counter Fraud Policy will be submitted to the Policy and Strategy Committee for approval in September. Areas of recognised good practice are detailed at appendices 2 and 3. Based on the results of the work undertaken, we have categorised this audit as offering ‘reasonable assurance’. We consider that the Council’s arrangements are generally aligned with good practice as responsibility for ensuring that risks of fraud and corruption are managed effectively has been acknowledged and is embedded in the Council’s governance arrangements, a risk management framework is in place, which includes a corporate risk for ‘serious organised crime, fraud or corruption’ and there is an approved Anti-Fraud Policy in place which details the Council’s attitude to fraud and its approach to the prevention, detection and investigation of fraud across all of the Council’s service areas. We have, however, identified a small number of areas for improvement to better align the Council’s counter fraud arrangements with good practice and our recommendations are detailed at Section three of this report. These include: • There is no dedicated counter fraud resource, counter fraud plan or annual counter fraud report and fraud work undertaken is generally reactive rather than proactive; • There is scope for improvement in the consideration and inclusion of fraud risks in Service Risk Registers and reporting on recognised fraud risk; and • There is a lack of awareness raising in relation to fraud risks and how these can be prevented, detected and reported. Internal Audit Opinion (see definition at Appendix 1) Reasonable assurance (Green-Amber) Organisational impact (see definition at Appendix 1) Moderate Report status FINAL Audit ref 0900/2023/011 Date issued 11/08/23 Audit Team Lesley Armstrong and Paula Hendry Page 86 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 2 1. Executive Summary Objectives The purpose of this audit was to provide assurance on the adequacy and effectiveness of the Council’s Anti-Fraud Policy and management arrangements for the prevention and detection of fraud to identify any actions necessary to update the policy and ensure that the Council’s arrangements are consistent with recognised good practice. Work undertaken included: • a review of the current anti-fraud arrangements against a good practice checklist, prepared by Internal Audit, from a range of sources including the CIPFA Code of Practice on Managing Risk of Fraud and Corruption and Fighting Fraud and Corruption Locally – A Strategy for the 2020s; and • a comprehensive review of the Council’s Anti-Fraud Policy, including comparison against good practice and a range of other Scottish Council’s policies to identify any areas for improvement. This included renaming the Policy to the Counter Fraud Policy to better align it to good practice. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 0 3 0 Key areas requiring management action (High) No key areas requiring urgent management action have been identified. Good practice identified We noted the following areas of good practice during the audit: • The Council has in place an Anti-Fraud Policy which has been approved by Committee. The policy states that the Council has a zero-tolerance attitude to fraud and will not accept any level of fraud, bribery or corruption and outlines the responsibilities of the Chief Executive, senior management and staff for preventing and detecting fraud; • A number of policies/procedures are in place which are designed to assist in the prevention/detection of fraud including codes of conduct for both employees and chief officers, a Whistleblowing policy, a Money Laundering Policy and an Information Security Policy; • The Council has identified serious organised crime, fraud and corruption as a corporate risk, which is included in the Council’s Corporate Risk Register and monitored by CMT on a regular basis; and • The Council participates in the National Fraud Initiative (NFI) data matching exercises and is an active member of the Scottish Local Authorities Investigators Group (SLAIG) which enables sharing of information in relation to current and emerging fraud risks. Other areas for improvement (Medium) A number of other areas for improvement were identified: • There is no dedicated counter fraud resource, counter fraud plan or annual counter fraud report and fraud work undertaken is generally reactive rather than proactive; • There is scope for improvement in the consideration and inclusion of fraud risks in Service Risk Registers and reporting on recognised fraud risk; and • There is a lack of awareness raising in relation to fraud risks and how these can be prevented, detected and reported. Page 87 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 3 3. Action Plan Review of the Council’s Counter Fraud Arrangements 0900/2023/011 Ref Finding 1 There is no dedicated counter fraud resource, counter fraud plan or annual counter fraud report and fraud work undertaken is generally reactive rather than proactive. Good practice advises that local authorities should have effective counter fraud arrangements in place, acknowledging and understanding fraud risks and demonstrating this by committing the right support and appropriate resource to tackling fraud. It states that not every local authority requires a large team but should have assessed the risk, have a plan to address it and have access to resources with the right capabilities and skills. This includes having a counter fraud plan, counter fraud annual report and dedicated counter fraud resource with staff appropriately trained in fraud processes. Our review of the Council’s counter fraud arrangements against good practice confirmed that the arrangements in place are generally satisfactory. Responsibility for ensuring that the risks of fraud and corruption are managed effectively has been acknowledged and is embedded in the Council’s governance arrangements, particularly through the requirement for Chief Officers to complete an annual assurance certificate and the presentation of an Annual Governance Statement to Committee. A risk management framework is in place, with both corporate and service risk registers and there is a corporate risk for ‘serious organised crime, fraud or corruption’ which is regularly monitored by CMT and updated as appropriate. The Council also has in place an approved Anti-Fraud Policy which details its approach to the prevention, detection and investigation of fraud across all of the Council’s service areas and defines the responsibilities of managers, employees and key stakeholders in relation to fraud. However, we identified some areas where the Council’s counter fraud arrangements were not compliant with good practice, as follows: • The Council does not have a dedicated counter fraud resource to undertake fraud work on targeted areas, therefore work carried out in relation to fraud is generally reactive rather than proactive. All fraud investigations are undertaken by Internal Audit staff and whilst all Internal Auditors hold a professional qualification, have many years’ experience and have received some fraud training, they do not hold formal fraud investigation qualifications or counter fraud accreditation. A number of other local authorities have established counter fraud teams who deliver outcomes and savings based on the counter fraud work undertaken. In determining whether it would be beneficial for the Council to have a counter fraud resource, consideration should be given to undertaking a review/cost benefit analysis to benchmark against other local authorities; • The Internal Audit Annual Plan details the work to be undertaken by Internal Audit during the year and, whilst this contains a section on frauds and irregularity, it only includes work on the National Fraud Initiative (NFI) and an allowance for responding to instances of reported fraud and irregularities, therefore, fraud work currently undertaken is generally reactive rather than proactive. As such, there is no annual counter fraud plan outlining how the Council plans to proactively prevent and detect potential fraud or irregularity or how the success of the Anti-Fraud Policy will be measured. There is no overall assessment of the level of fraud risk to the Council (e.g. through the use of data analytics, estimates of the cost of fraud or analysis of statistics in relation to the outcome of frauds identified and investigated) or to identify service areas where proactive work could potentially lead to financial savings for the Council. The outcome of such analysis could be included in a counter fraud plan; and • The Audit and Scrutiny Panel (ASP) receives Internal Audit progress reports at each committee cycle, an annual report at its June meeting and update reports on the NFI, which include details of significant fraud investigations undertaken in the period. However, there is no annual counter fraud report or sufficiently detailed commentary in existing reports to report on the success and outcomes of the Anti-Fraud Policy, including the levels of fraud reported, fraud work undertaken, analysis of statistics in relation to fraud activity and outcomes, publication of successful outcomes and future plans for undertaking fraud work. (continued overpage) Page 88 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 4 3. Action Plan Review of the Council’s Counter Fraud Arrangements 0900/2023/011 Implication Recommendation Priority Management response Implementation Month/Year The Council may not be able to fully demonstrate compliance with good practice on counter fraud arrangements. The absence of proactive fraud investigation work could significantly impact the Council’s ability to promptly identify, prevent and/or respond to fraud and irregularity and could lead to significant financial loss for the Council. The Chief Officer (Audit and Risk) should: (1) review and consider the benefits of identifying and undertaking more proactive work in relation to fraud and irregularity by assessing the level of fraud risk and identifying service areas where proactive fraud work could potentially lead to financial savings for the Council; (2) consider whether there is a need for a dedicated, appropriately qualified and experienced staff resource to undertake such work. This may include discussions with other Councils who already have such a resource to identify potential areas of work and the cost and benefits involved; and (3) prepare an annual counter fraud plan which outlines the fraud work to be undertaken throughout the year and an annual counter fraud report which details the success and outcomes of the Counter Fraud Policy, including the levels of fraud reported, fraud work undertaken, analysis of statistics in relation to fraud activity and outcomes, publication of successful outcomes and future plans for undertaking fraud work. Medium Agree Ken Adamson, Chief Officer (Audit and Risk) (1) Whilst fraud risks facing the Council are generally understood and recognised within the Council’s risk management framework, it is accepted that, to date, the approach adopted has been largely focused on prevention of fraud and robust investigation where it is identified. Resource allocation has therefore been predominantly reactive. Work will be undertaken to assess how other public bodies approach counter-fraud activity with a view to bringing forward proposals to CMT on how the Council might address this issue. This will include consideration of how to better assess fraud risks facing the Council and whether a business case exists for bespoke counter-fraud staffing resources to be established. (2) See response to (1) above. (3) Consideration will be given to how best to address this issue as part of the proposals referenced at (1). Proposals: December 2023 Implementation: April 2024 As above As above Page 89 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 5 3. Action Plan (continued) Review of the Council’s Counter Fraud Arrangements 0900/2023/011 Ref Finding 2 There is scope for improvement in the consideration and inclusion of fraud risks in Service Risk Registers and reporting on recognised fraud risks. Good practice states that fraud risk identification is essential to understand specific exposures to risks, changing patterns in fraud and corruption threats, and the potential consequences to the Council and its service users. It advises that fraud risk should be considered as part of the Council’s risk management arrangements. The Council’s Risk Management Strategy provides a framework for ensuring that risk management processes are in place to enable risk to be managed and provides guidance on how to identify, analyse and assess risks. Serious organised crime, fraud and corruption has been identified as a corporate risk and as one of the risk sub-categories for consideration by Services when identifying risks and preparing Service Risk Registers. There has been a vast amount of activity over recent years to review and improve the identification, recording and reporting of risks and associated controls and required actions. The Council has a risk management system (Figtree) for recording and managing all corporate and service risks. Our review of the Figtree system identified only 21 live Service risks relating to fraud with 12 classified as ‘serious organised crime, fraud and corruption’, many of which were very high level and insufficiently descriptive. Given the number of individual Service areas within the Council and the identified sources of fraud risks detailed in Appendix A of the revised Counter Fraud Policy, we consider that there is scope for improvement in the identification and recording of fraud risks by Services to ensure that proper consideration is given to all activities undertaken by Services to identify potential fraud risks, controls and actions required to mitigate these, and that these are appropriately detailed in Service Risk Registers. This should facilitate appropriate reporting on fraud risks to enable senior management to regularly review and monitor risk registers and inform decision making, in line with the terms of reference for Service Management Teams (SMT). Implication Recommendation Priority Management response Implementation Month/Year Senior management and elected members may not be fully aware of the fraud risks that the Council are exposed to. If Services do not fully consider all potential areas of fraud risks, appropriate controls may not be implemented and there may be an increased risk of fraud and corruption occurring within their Service area, which could lead to financial loss for the Council. The Chief Officer (Audit and Risk) should ensure that sufficient direction/guidance is provided to Services, via the Corporate Risk Management Working Group, to enable Services to give proper consideration to fraud risks when preparing their Service Risk Registers, with particular emphasis on the identified sources of fraud risks detailed in Appendix A of the revised Counter Fraud Policy, with reporting to SMT thereafter. Medium Agree Ken Adamson, Chief Officer (Audit and Risk) While line management within Services are responsible for the content of Service risk registers, the RMCWG will be used to remind Services of the need to ensure that relevant fraud risks facing individual Services are properly recognised in risk registers. As part of this process, Internal Audit will also work with Services to highlight relevant risks, informed by the experience of other public bodies and relevant national risk assessments. October 2023 Page 90 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 6 3. Action Plan (continued) Review of the Council’s Counter Fraud Arrangements 0900/2023/011 Ref Finding 3 There is a lack of awareness raising in relation to fraud risks and how these can be prevented, detected and reported. The Council has a zero tolerance approach to fraud, bribery and corruption and outlines its approach to the prevention, detection and investigation of this. Additionally, the Council has a Whistleblowing Policy which provides a mechanism for reporting fraud and concerns of serious wrongdoing within the Council. However, neither of these policies appear to be actively promoted to ensure that staff and Elected Members are aware of the risks of fraud, how they can assist in the prevention and detection of fraud and how to report any issues/suspicions. We noted the following: • The current Anti-Fraud Policy is not actively promoted. Whilst the policy was approved by the then Policy and Resources Committee and is therefore available on MARS, it is not available on InsideNL, MyNL or the Council’s website and regular awareness raising activities, such as NLC announcements or articles in staff newsletters, are not undertaken to ensure that all staff and Elected Members are aware of the Council’s approach to fraud and their responsibilities in relation to the prevention, detection and reporting of fraud; • Other than emailing Internal Audit, there is no appropriate mechanism for reporting frauds/suspected frauds both either internally and externally to ensure that all the required information to assist with any investigation is reported, and there is no signposting on InsideNL or the Council’s website for reporting fraud; • The online induction course for new employees states that employees must follow the Employee Code of Conduct, however, there is no specific reference to the Council’s zero tolerance approach to fraud, bribery and corruption or the Anti-Fraud Policy; • There is a Fraud Awareness e-learning module on LearnNL, however as access levels are not monitored, it is difficult to determine the uptake of this module. The module was created about three years ago and the content is not specific to North Lanarkshire Council and does not refer to the policies, processes and procedures in place for being alert to fraud and raising suspicion of fraud, including the Anti-Fraud Policy. There is scope for reviewing and updating the module to make it more relevant to the Council; and • The Employee Code of Conduct makes reference to both the Anti-Fraud and Whistleblowing policies and contains links to them, however, these links are not active. Implication Recommendation Priority Staff and Elected Members may not be aware of the Councils approach to fraud and their responsibilities in relation to the prevention, detection and reporting of fraud. (1) The Chief Officer (Audit and Risk) should identify and implement appropriate and effective methods for communicating and raising awareness of fraud risks and responsibilities for preventing, detecting and reporting fraud. This should include: • promoting the Counter Fraud Policy by making it available on relevant platforms (such as InsideNL, MYNL and the Council’s website) and through regular awareness raising activities (such as NLC announcements or inclusion in staff newsletters); and • creating a form for reporting fraud, both internally and externally, to incorporate all the required information and enable prompt notification to Internal Audit. (2) The Chief Officer (People Resources) should: • review and update the online induction and fraud awareness modules to include relevant content in relation to the identification of fraud risks, the Council’s response to fraud through its policies and processes and raising awareness of the Council’s Counter Fraud Policy; and • ensure that the links to other policies contained with the Employee Code of Conduct are active. Medium Page 91 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 7 3. Action Plan (continued) Review of the Council’s Counter Fraud Arrangements 0900/2023/011 Management response Implementation Month/Year Agree (1) Ken Adamson, Chief Officer (Audit and Risk) The revised Counter Fraud Policy will be communicated to all staff once approved by Committee. Additional communications will also be undertaken with CMT and OMT highlighting the need for line management within Services to understand the fraud risks they face and how to respond both in terms of prevention, detection and response when fraud is identified. This work will be linked to actions outlined at action plan point 2 above. Arrangements for reporting fraud will be enhanced with the development of an on-line reporting tool for staff and the public. (2) Fiona Whittaker, Chief Officer (People Resources) Relevant People Resources teams will review the Council’s current training provision and documentation aligned to our Anti-Fraud arrangements, including the code of conduct to ensure that they are robust. An employee communication plan regarding this material will also be developed. September 2023 October 2023 October 2023 December 2023 Page 92 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 8 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green - Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber - Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 93 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 9 Appendix 2 – Good Practice Identified in CIPFA Code of Practice on Managing the Risk of Fraud and Corruption Principle A – Acknowledge the responsibility of the governing body for countering fraud and corruption A1 – acknowledge threats of fraud and corruption and the harm they can cause to the organisation, its aims, objectives and to its service users. A2 – acknowledge the importance of a culture that is resilient to the threats of fraud and corruption and aligns to the principles of good governance. A3 – acknowledges its responsibility for ensuring the management of its fraud and corruption risks and will be accountable for the actions it takes through its governance reports. A4 – sets a specific goal of ensuring and maintaining its resilience to fraud and corruption and explores opportunities for financial savings from enhanced fraud detection and prevention. Principle B – Identify risks – fraud risk identification is essential to understand specific exposure to risks, changing patterns in fraud and corruption threats and the potential consequences to the organisation and its service users. B1 – Fraud risks are routinely considered as part of the organisation’s risk management arrangements. B2 – The organisation identifies the risks of corruption and the importance of behaving with integrity in its governance framework. B3 – The organisation uses published estimates of fraud loss, and where appropriate its own measurement exercises, to aid its evaluation of fraud risk exposures. B4 – The organisation evaluates the harm to its aims and objectives and service users that different fraud risks can cause. Principle C – Develop a strategy – an organisation needs a counter fraud strategy setting out its approach to managing its risks and defining responsibilities for action. C1 – The governing body formally adopts a counter fraud and corruption strategy to address the identified risks and align with the organisations acknowledged responsibilities and goals. C2 – The strategy includes the organisation’s use of joint working or partnership approaches to managing its risks, where appropriate. C3 – The strategy includes both proactive and responsive approaches that are best suited to the organisation’s fraud and corruption risks. C4 – The strategy includes clear identification of responsibility and accountability for delivery of the strategy and for providing oversight. Page 94 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 10 Appendix 2 (cont’d) – Good Practice Identified in CIPFA Code of Practice on Managing the Risk of Fraud and Corruption Principle D – Provide resources – the organisation should make arrangements for appropriate resources to support the counter fraud strategy. D1 – An annual assessment of whether the level of resource invested to counter fraud and corruption is proportionate to the level of risk. D2 – The organisation utilises an appropriate mix of experienced and skilled staff, including access to counter fraud staff with professional accreditation. D3 – The organisation grants counter fraud staff unhindered access to its employees, information and other resources as required for investigation purposes. D4 – The organisation has protocols in place to facilitate joint working and data and intelligence sharing to support counter fraud activity. Principle E – Take action – the organisation should put in place policies and procedures to support the counter fraud and corruption strategy and take action to prevent, detect and investigate fraud. E1 – The organisation has put in place a policy framework which supports the implementation of the counter fraud strategy. E2 – Plans and operations are aligned to the strategy and contribute to the achievement of the organisation’s overall goal of maintaining resilience to fraud and corruption. E3 – Making effective use of national or sectoral initiatives to detect fraud or prevent fraud, such as data matching or intelligence sharing. E4 – Providing for independent assurance over fraud risk management, strategy and activities. E5 – There is a report to the governing body at least annually on performance against the counter fraud strategy and the effectiveness of the strategy from the lead person(s) designated in the strategy. Conclusions are featured in the annual governance report. Page 95 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 11 Appendix 3 – Good Practice Identified in Fighting Fraud and Corruption Locally (FFCL) – A Strategy for the 2020s Part 1 – What Should Stakeholders Do? The Chief Executive Is the authority measuring itself against the FFCL checklist? Is there a trained counter fraud resource in the organisation or does the organisation have access to one? Is the audit committee receiving regular reports on the work of those leading on fraud and is the external auditor aware of this? The Section 95 Officer Is there a portfolio holder who has fraud in their remit? Is the head of internal audit or counter fraud assessing resources and capability? (A3) Does internal audit have sufficient internal unfettered access? (D3) Does internal audit produce a report on activity, success and future plans and are they measured on this? The Monitoring Officer Are members, audit committees and portfolio leads aware of counter fraud activity and is training available for them? Is the fraud team independent of process and does it produce reports to relevant committees that are scrutinised by members? The Audit Committee Does the audit committee receive a report at least once a year on the counter fraud activity which includes proactive and reactive work? Does the audit committee receive a report from fraud leads on how the resource is being allocated, whether it covers all areas of fraud risk and where those fraud risks are measured? Is the audit committee aware that the relevant portfolio holder is up to date and understands the activity being undertaken to counter fraud? Does the audit committee support proactive counter fraud activity? The Portfolio Lead Does the portfolio lead receive a regular report that includes information, process and barriers on the assessment against the FFCL checklist Fraud risk assessment and horizon scanning? Page 96 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 12 Appendix 3 (cont’d) – Good Practice Identified in Fighting Fraud and Corruption Locally (FFCL) – A Strategy for the 2020s Part 2 – The FFCL Checklist 1. Has the local authority made proper assessment of its fraud and corruption risks, has an action plan to deal with them and regularly reports to its senior Board and its members? 2. Has the local authority undertaken a fraud risk assessment against the risks and a horizon scanning of future potential fraud and corruption risks? This should include the understanding of the harm that fraud may do in the community. 3. Is there an annual report to the audit committee, or equivalent detailed assessment, to compare against FFCL 2020 and the checklist? 4. Has the relevant portfolio holder been briefed on fraud risks and mitigation? 5. Does the audit committee support counter fraud work and challenge the level of activity to ensure that it is appropriate in terms of fraud risk and resources? 6. Is there a counter fraud and corruption strategy applying to all aspects of the local authority’s business which has been communicated throughout the local authority and acknowledged by those charged with governance? 7. Are risks of fraud and corruption specifically considered in the local authority’s overall risk management process? 8. Are counter fraud staff consulted to fraud proof new policies, strategies and initiatives across departments and is this reported to committee? 9. Are successful cases of proven fraud/corruption routinely publicised to raise awareness? 10. Has the local authority put in place arrangements to prevent and detect fraud and corruption and a mechanism for ensuring this is effective and is reported to committee? 11. Has the local authority put in place arrangements for monitoring compliance with standards of conduct across the local authority covering codes of conduct, including behaviour for counter fraud, anti-bribery and corruption; register of interests; and register of gifts and hospitality? 12. Does the local authority undertake recruitment vetting of staff prior to employment by risk assessing posts and undertaking the checks recommended in FFCL 2020 to prevent potentially dishonest employees from being appointed? 13. Are members and staff aware of the need to make appropriate disclosures of gifts, hospitality and business? Is this checked by auditors and reported to committee? 14. Is there a programme of work to ensure a strong counter fraud culture across all departments and delivery agents led by counter fraud experts? 15. Is there an independent and up-to-date whistleblowing policy which is monitored for takeup and can show that suspicions have been acted upon without internal pressure? 16. Have contractors and third parties signed up to the whilstleblowing policy and is there evidence of this? 17. Is there any discrimination against whistleblowers? 18. Are fraud resources assessed proportionately to the risk the local authority faces and are they adequately resourced? Page 97 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0900.2023.011 - Review of Council's Anti-Fraud Policy/A - FINDINGS AND REPORT/A06a 20230811 Counter Fraud Arrangements Final Report v1.0.docx 13 Appendix 3 (cont’d) – Good Practice Identified in Fighting Fraud and Corruption Locally (FFCL) – A Strategy for the 2020s Part 2 – The FFCL Checklist (cont’d) 19. Is there an annual fraud plan which is agreed by committee and reflects resources mapped to risks and arrangements for reporting outcomes? Does this plan cover all areas of the local authority’s business and include activities undertaken by contractors and third parties and voluntary sector activities? 20. Are statistics kept and reported by the fraud team which cover all areas of activity and outcomes? 21. Do fraud officers have unfettered access to premises and documents for the purposes of counter fraud investigations? 22. Is there a programme to publicise fraud and corruption cases internally and externally which is positive and endorsed by the council’s communications team? 23. Are all allegations of fraud and corruption risk assessed? 24. Does the fraud and corruption response plan cover all areas of counter fraud work including prevention, detection, investigation, sanction and redress? 25. Is the fraud response plan linked to the audit plan and is it communicated to senior management and members? 26. Is asset recovery and civil recovery considered in all cases? 27. Is there a zero-tolerance approach to fraud and corruption that is defined and monitored and which is always reported to committee? 28. Is there a programme of proactive counter fraud work which covers risk identified in assessment? 29. Does the counter fraud team work jointly with other enforcement agencies and encourage a corporate approach and co-location of enforcement activity? 30. Does the local authority share data across its own departments and between other enforcement agencies? 31. Are prevention measures and projects undertaken using data analytics where possible? 32. Has the counter fraud team registered with the Knowledge Hub so it has access to directories and other tools? 33. Does the counter fraud team have access to the FFCL regional network? 34. Are there professionally trained and accredited staff for counter fraud work? If auditors undertake counter fraud work, they too must be trained in this area. 35. Does the counter fraud team have adequate knowledge in all areas of the local authority or is it trained in these areas? 36. Does the counter fraud team have access (through partnership/other local authorities/funds to buy in) to specialist staff for surveillance, computer forensics, asset recovery and financial investigations? 37. Are weaknesses revealed by instances of proven fraud and corruption scrutinised carefully and fed back to departments to fraud-proof systems? Page 98 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 1 INTERNAL AUDIT REPORT PROCUREMENT – ACHIEVING BEST VALUE Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Sample of contracts selected for review Appendix 3: Procurement route – competition and best value Appendix 4: Selected performance data 2018-19 to 2021-22 Issued to: Chief Officer (Asset and Procurement) Copied to: Procurement and Support Manager, Chief Executive and Depute Chief Executive Headlines The purpose of this audit was to provide assurance on the Council’s procurement arrangements, particularly in relation to contracts awarded following receipt of a single tender responses. The Audit and Scrutiny Panel specifically requested that this work be undertaken following a number of elected members expressing concerns over an apparent increase in the number of reports to Committees awarding, or seeking approval to award, contracts where there had only been a single tender response, with consequential concerns about a lack of competition, whether the Council is securing best value and the risk of anti-competitive behaviour amongst potential bidders. Our review involved discussions with the Corporate Procurement Team (CPT) and review of the Council’s Contract Register, the Annual Procurement Report, relevant Committee reports, and information held on Public Contracts Scotland (PCS) to identify contracts awarded and the procurement routes used. The Council's Annual Procurement Report for 2021-22 provides a snapshot of procurement activity for that financial year with comparison to the previous three years. Details of the performance figures for four years to 2021-22 are contained at Appendix 4 for information. The performance information in the 2021-22 report indicates that there has been an increase in the number of contracts awarded over the last four years with a significant increase in contracts awarded using the Negotiated Tendering Procedure (NTP) and a reduction in the use of frameworks. Additionally, whilst the number of contracts advertised fell between 2018-19 and 2020- 21, there was a slight increase in 2021-22, with no contracts awarded where only one bid was received. It is recognised that procurement activity has been impacted by the Covid-19 pandemic and recovery period and this has been a relevant factor in levels of participation and competition since 2020. Based on the results of our work, we have categorised this audit as offering ‘reasonable assurance’. We noted that there are a number of different routes for procuring supplies, services and works and are pleased to note that there are clear expectations and documented guidance available to all Services undertaking procurement activity. However, in response to the specific concerns raised by members regarding an apparent increase in the number of contracts where there has only been a single tender response, our review and analysis of performance information indicates that there is not a high incidence of single tender responses. However, we consider that the way in which procurement outcomes are being reported could be misleading and therefore, understand why elected members have raised concerns. We have identified a number of areas where we consider that there is scope for improvement and these are contained in section 3 of this report. These include: • key procurement documentation and reports for contracts awarded need to better convey how best value has been achieved; and • performance information in relation to procurement activities could be improved. Internal Audit Opinion (see definition at Appendix 1) Reasonable assurance (Green-Amber) Organisational impact (see definition at Appendix 1) Minor Report status FINAL Audit ref 0550/2023/001 Date issued 23/06/23 Audit Team Lesley Armstrong, Paula Hendry and Jackie Struthers Page 99 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 2 1. Executive Summary Objectives The Council’s procurement arrangements are designed to comply with all relevant legal obligations, help ensure open and transparent competition and deliver best value in the procurement of goods and services. The purpose of this audit was to provide information and assurance on the following questions: (1) How often are contracts awarded by the Council based on a single tender response? (2) Has there been any increase in the Council awarding contracts following single tender responses? (3) Are there particular sectors and/or types of goods and services more affected by single tender responses? (4) If the frequency of single tender responses has markedly increased or is high in particular areas or categories, has the Council sought to consider the reasons behind this and whether or how it might respond? (5) Where contracts are awarded based on single tender responses, do adequate Council processes require staff to seek to ensure that awarding the contract on that basis represents, and allows the Council to demonstrate, best value and have these expected processes been followed. Testing for this audit included discussions with one of the Category Managers within the CPT and review of the Council’s Contract Register, the Annual Procurement Report, relevant Committee reports, and information held on Public Contracts Scotland (PCS) to identify contracts awarded and the procurement routes used for each. Our review also included examination of the procurement documentation (the pre-tender Contract Strategy, post-tender Contract Award report and Committee report) for a sample of 20 contracts awarded to confirm that the expected procurement processes were being followed by Services. The audit considered all circumstances where a single contractor was involved in the procurement process, including use of the NTP and where a single contractor is pursued within an agreed framework/ approved list of suppliers. The contracts selected for review are detailed at Appendix 2. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 0 2 2 Key areas requiring management action (High) No areas requiring urgent management action have been identified. Good practice identified We noted the following areas of good practice during the audit: • the CPT is responsible for the co-ordination of strategic procurement for the Council and for supporting Services with some procurement activities, particularly in relation to high risk/high value contracts; • the Council has in place General Contract Standing Orders (GCSOs) and associated procurement guidance which set out the ‘internal rules’ for any arrangements made by, or on behalf of, the Council relating to supplies, the provision of services and the execution of works; • the Council has well-established procurement procedures and documentation in place for all procurement activity over £50,000 for supplies/services or £500,000 for works, which requires all relevant procurements to be notified to the CPT at the outset, enabling a full record to be centrally maintained and ensuring greater consistency of approach and compliance with expected processes and legislative requirements; • there is a Procurement Strategy in place, which is reviewed and updated on annually to reflect any required changes. The purpose of the Strategy is to provide an efficient and effective procurement service that delivers Best Value from procurement activity and where possible, cash savings; provide quality advice and contracts; and procure supplies, works and services in a lawful and ethical manner; and • an Annual Procurement Report is prepared and submitted to the Finance and Resources Committee each year, providing an update on the activity and outcomes delivered through the Procurement Strategy as well as details of the Regulated Procurements undertaken during the year, annual performance indicators and other legislative reporting requirements. Page 100 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 3 Other areas for improvement (Medium) A number of other areas for improvement were also identified: • ‘Below threshold’ reports to committee should be amended to more clearly convey the level of competition and how best value has been achieved; • Key procurement documentation and reports for contracts awarded need to better convey how best value has been achieved; and • Performance information in relation to procurement activities could be improved. Page 101 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 4 3. Action Plan Procurement – Achieving Best Value 0550/2023/001 Ref Finding 1 Key procurement documentation and reports for contracts awarded need to better convey how best value has been achieved. For contracts which require to be notified to the CPT, the procuring Service is required to prepare a pre-tender Contract Strategy/NTP Strategy, and a post-tender Contract Award report and Committee report (either individual or summary report depending on contract value). For contract extensions, a Contract Extension Request must be prepared. For the sample of contracts reviewed (see Appendix 2), we obtained copies of the relevant strategy documents and reports and identified the following areas for improvement: • We consider that the justification provided on the NTP Strategy for three contracts selected was not reasonable and could have been more detailed to fully explain why the contract could not be provided by other contractors and how the NTP represents best value. • For contracts awarded using the open procurement route (advertised on PCS) and mini competition from a framework, where only one bid is received, the Contract Award and Committee report did not clearly indicate, in the main body of the report, that only one bid was received and did not sufficiently justify the reasons for continuing to award the contract despite only one bid being received (i.e. what the Service did to satisfy themselves that the Council is getting best value and there were no issues with the tender process). Additionally, the reports for these contract awards generally state that the contract was awarded based on most economically advantageous tender, however, we consider that this is not valid if only one tender is received as there are no other bids for comparison. • For contracts awarded as a result of a direct award from a framework agreement, we consider that the Contract Award reports could provide more detail to justify the decision for the selected contractor and demonstrate best value (e.g. best prices on contract). For one contract, the Contract Award report was only issued by the Service after discussion as part of our testing and the report issued did not provide the appropriate justification for selecting the contractor and was not signed by either the Service or CPT. • A Contract Award report was not prepared for two of the NTPs reviewed. There appears to be uncertainty within Services around whether such a report is required for NTPs, particularly where the contract has been awarded due to extreme urgency. • Section 9.5 of the GCSOs requires all NTP contracts to be reported to committee explaining the circumstances justifying the use of the NTP procedure. For one of the contracts reviewed, the contract was only reported to committee as part of the below threshold report, therefore there was no requirement to provide justification for the use of the NTP procedure. Additionally, the committee reports did not always provide appropriate justification for the use of the NTP procedure as the report template only refers to the NTP Strategy and does not require a detailed explanation. • Contract Extension Requests were completed for all extensions in the sample; however, we consider that the documentation could provide more detail and justification for extending the contract and how the extension represent best value to the Council. Implication Recommendation Priority The Council may fail to demonstrate best value is being secured by its procurement processes. Management is unaware of the extent of compliance with key corporate expectations and/or may fail to identify issues requiring action. The Chief Officer (Asset and Procurement) should: (1) for contracts with a single tender response, update the Contract Award and Committee report templates to clearly require, in the main body of the report, commentary which highlights where only one bid was received and explains the rationale for continuing to award the contract; (2) reinforce to Services the requirement to complete Contract Strategy documents, Contract Award reports and Committee reports, including clear and sufficiently detailed justification of why the procurement route was selected and how the proposed contract award delivers best value; (3) review, and amend as appropriate, the Contract Extension Request to require Services to more fully justify the reasons for extending contracts and how/whether this represents best value for the Council; and (4) ensure that prior to signing off relevant completed procurement documentation, the CPT review and challenge the content to ensure compliance with expected practice. Medium Page 102 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 5 3. Action Plan Procurement – Achieving Best Value 0550/2023/001 Management response Implementation Month/Year Agree Brian Ferguson, Procurement and Support Manager (1) The CPT will update the contract award and committee report template with a useable paragraph (if applicable) for the Procuring Service to outline rationale in awards where there is a single tender response. In considering this the CPT will ensure that the Council’s commercial position is not compromised or negatively impacted, particularly where the market is weak and/or there are low number of contractors. (2) and (3) The CPT will communicate updates to templates through the established CPWG and Procurement Network. This will enable the targeting of the correct officers and provide appropriate awareness to the reasons behind the need for updates. (4) The CPT will consider relative checks in accordance with the recommendation and incorporate this within the procurement improvement plan 2023/24. November 2023 November 2023 April 2024 Page 103 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 6 3. Action Plan (continued) Procurement – Achieving Best Value 0550/2023/001 Ref Finding 2 Performance information in relation to procurement activities could be improved. Under the Council’s agreed approach to procurement, Services are responsible for undertaking the significant majority of procurements, ensuring that these are progressed in accordance with the GCSOs and associated guidance. The CPT provides a central source of expertise, advice and support, providing checks and challenge as appropriate. The CPT also supports Services to deliver some of the more complex or sensitive procurements. The Procurement Reform (Scotland) Act 2014 requires the Council to prepare an annual procurement report on regulated procurement activity (over £50,000 for supplies and services and £2 million for works). The CPT prepare and submit an annual report to the Finance and Resources Committee in September each year providing an update on the activity and outcomes that have been delivered through the Procurement Strategy during the previous financial year and evaluating the extent to which regulated procurement activity was undertaken in accordance with the Council’s Procurement Strategy. The report contains performance information, including statistics on the procurement routes used. There is, however, a range of procurement activity below the regulated procurement thresholds, undertaken by Services, for which performance information is not currently collated, analysed and/or monitored by the CPT. As a result, any potential issues and/or actions required are not routinely identified/determined and information is not routinely reported. This represents a gap in current management arrangements. We consider there is a need for relevant indicators to allow management to report to key stakeholders on all contracts that are notified to CPT. We requested documentation from the Service to support some of the percentages included in the 2021-22 annual procurement report, however, this was not readily available. We, therefore, calculated the figures for 2021-22 using the list of regulated procurements contained in the report, the contract register and information contained on Public Contracts Scotland (PCS). We identified some differences, including contracts reported to committee and/or included in the annual report which were not included in the contract register (and vice versa) and differences in the split of contracts by procurement route. We also noted that the main body of the annual report does not provide an analysis of the statistics included in the appendices (i.e. trends over years/Services or reasons for changes) to highlight any possible areas requiring management attention and/or any actions required/being taken to address any issues arising. As a result of the enquiries from Elected Members about single tender responses, the CPT prepared information on all contracts awarded over the last five years, by Service area and procurement route. These statistics only included contracts with single tender responses and did not indicate the contracts awarded after receiving more than one tender response, therefore we were unable to determine the proportion of contracts awarded from single tender responses against all contracts awarded. These statistics have only recently been prepared for internal management purposes and there are, we understand, currently no plans in place to routinely monitor and/or report these figures to the Corporate Procurement Working Group (CPWG) or Committee. Implication Recommendation Priority Without formal documented analysis, key stakeholders may have no basis to make decisions and/or identify any areas for concern and/or requiring management attention. A lack of documentation to support reported performance measure could result in figures being calculated inconsistently which could result in difficulty comparing performance over different years and/or inaccurate reporting and/or interpretation of results. The Chief Officer (Asset and Procurement) should: (1) review the format of the Committee Paper that accompanies the Annual Procurement report and consider including an analysis of the performance measures to highlight any areas of concern and actions required/taken to address these issues; (2) consider and identify a condensed suite of indicators which would allow for the measurement, analysis and reporting of all procurement activity notified to the CPT including relevant indicators to capture procurement exercises which did/did not involve competition and ensure that this is subject to regular review to identify any trends and/or potential issues within particular sectors and/or goods/services, investigate the reasons for these and take appropriate action to resolve; and (3) ensure that performance information is calculated in a clear and consistent manner and that documentation to support the calculation of all performance measures is retained. Medium Page 104 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 7 3. Action Plan (continued) Procurement – Achieving Best Value 0550/2023/001 Management response Implementation Month/Year Agree Brian Ferguson, Procurement and Support Manager (1) The CPT will review and refine the Committee Paper for members that accompanies the Annual Procurement Report. Given the Annual Report 2022/23 is due to be presented soon this action will be complete for the next annual report covering 2023/24. (2) The CPT structure and resource currently in place is relative to the Council’s devolved procurement model and is set up to meet the requirements of the GCSO’s which has exemptions in procedures for lower value procurement activity. To fully address this recommendation will require a change in the GCSOs to require Chief Officers to submit Registers of Quotations to CPT and CPT would need a resource to manage this. There is however a willingness for CPT to work with Services to obtain more thorough feedback on lower threshold procurement/contracting activity, but this will take time and resource to work through. (3) The CPT will review data capture, reporting and checking of performance information for incorporating into the 2023/24 Annual Procurement Report. September 2024 April 2024 September 2024 Page 105 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 8 3. Action Plan (continued) Procurement – Achieving Best Value 0550/2023/001 Ref Finding 3 ‘Below threshold’ reports to committee should be amended to more clearly convey the level of competition and how best value has been achieved. Section 2.6 of the GCSOs states that all contracts must secure best value and the Council’s Procurement Strategy defines best value as ‘overall value, including price and quality considerations and including economic, environmental and social value’. Additionally, section 5.1.1 of the GCSOs states that all contracts in excess of £50,000 for suppliers and services and £500,000 for works may only be awarded after steps have been taken for the purpose of ensuring genuine competition by seeking tenders by public advertisement (with the exception of contracts awarded where the use of the NTP route is justified). There are various procurement routes for undertaking procurement exercises with varying degrees of competition and these are detailed at Appendix 3. However, there may be times where, despite selecting a procurement route which involves an appropriate degree of competition, only one bidder responds resulting in an unexpected lack of competition as there are no other bids for comparison to enable an assessment of best value. The Corporate Procurement Team (CPT) should be notified of all contracts exceeding £50,000 for supplies and services and over £500,000 for works and record these on the Contract Register. In line with the GCSOs, the Chief Officer (Asset and Procurement) is required to prepare and submit a summary report to the appropriate committee notifying all contracts awarded below committee thresholds (between £50,000 and £500,00 for supplies and services and £500,000 and £2 million for works). These reports contain an appendix which includes details of each contract awarded, including the procurement route used and number of tenders received. For contracts awarded using the direct award, negotiated tender process (NTP), open/restricted/mini competition where only one bid is received, and contract extensions, the number of tenders received is recorded as ‘1’, indicating that only one response/bid was received. We noted that these summary reports do not define what is classed as a single tender response and which procurement routes fall into this category and why. As the contracts for some of these procurement routes have previously been subject to competition (as part of a framework or the original contract), we consider that recording the number of tenders received as ‘1’ could be misinterpreted by Elected Members that more contracts have been accepted without any competitive element to the procurement process than is actually the case. We also consider that the current format of the report does not clearly indicate, for those contracts with a single bid response, how best value has been considered and achieved. Implication Recommendation Priority Management response Implementation Month/Year The current format of the ‘below threshold’ committee reports could be misleading and could lead readers to conclude that more contracts are being awarded with single tender responses than actually are. The Chief Officer (Asset and Procurement) should review and update the current format of the ‘below threshold’ committee report to ensure that it clearly indicates the level of competition that each contract has been subject to, and for those contracts with only a single bid, outlines how best value has been considered and achieved. This could be facilitated through the use of separate tables within an appendix to the report for each procurement route. Low Agree Brian Ferguson, Procurement and Support Manager The CPT will update the below threshold template for reporting so that there is more clarity for the reader to better understand best value considerations/levels of competition. November 2023 Page 106 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 9 3. Action Plan (continued) Procurement – Achieving Best Value 0550/2023/001 Ref Finding 4 Performance information in respect of contracts awarded following a single response to a tender has been incorrectly calculated. We previously reported, in the Internal Audit report on Procurement (dated 25/11/21), that the figures for the performance measure contained within the Annual Procurement Report 2020/21 relating to ‘contracts awarded further to an advertised contract opportunity that resulted in only one bid being received’ was calculated incorrectly based on the definition. The Service had calculated this measure as 8 advertised tender opportunities that received only one bid from a total of 80 procurements. We consider that the denominator used in the calculation of this performance measure is incorrect and is not consistent with the performance measure definition, as it is based on the total number of Regulated Procurements as opposed to the number of Regulated Procurements which were advertised only. If the correct denominator had been used, the percentage figure would be 25% (i.e. 8 advertised tender opportunities that only received one bid from a total of 32 advertised tender opportunities). Agreement was received from management that they would review the processes in place to ensure that all future performance measures contained with the Annual Procurement Report would be accurately and consistently calculated in line with the definition. However, based on our work undertaken during this audit, we noted that the previous year figures contained in the Annual Procurement Report 2021/22 were consistent with the 2020/21 report and had not been amended to accurately reflect the correct calculation of the performance measure. We also noted that some of the performance measure definitions contained in the annual report were stated as ‘number of’ whilst the figures provided were percentages. Implication Recommendation Priority Management response Implementation Month/Year If performance measures are not correctly calculated in line with the definition, management and elected members may misinterpret the information presented to them and may not raise appropriate questions. The Chief Officer (Asset and Procurement) should ensure that all figures for all performance measures contained within future Annual Procurement Reports are accurately and consistently calculated and recorded in line with the corresponding definition, and that where errors/changes are identified, any previous year figures are updated accordingly. Low Agree Brian Ferguson, Procurement and Support Manager The CPT will ensure this recommendation is addressed in its Annual Procurement Report 2022/23 to be presented to Committee in cycle 3. September 2023 Page 107 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 10 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 108 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 11 Appendix 2 – Sample of contracts selected for review CPT Reference Contract Name Award Date Contract Value Service Type NLC-CPT-21-004 Decommissioning of Housing Property Low Rise Roof Anchors in North Lanarkshire 30/04/21 £823,369.43 Housing Property Services Open NLC-CPT-21-045 MTC UPVC Door and Window Repairs and Maintenance 2022-2026 28/04/22 £7,500,000.00 Housing Property Services Open NLC-CPT-21-112 MTC: Water Quality Assessment and Lead Mains Replacement 2022-24 11/04/22 £1,899,999.99 Housing Property Services Open NLC-SLP-22-012 BA Childhood Practice Course 27/10/22 £290,137.50 Education Open NLC-SLP-22-046 Glencryan School, Cumbernauld - Rewire, Fire Stopping & Redecoration 14/12/22 £1,298,988.23 Assets and Procurement (Contract Support) Open NLC-CPT-21-108 Allanton Primary School 15/11/21 £764,066.91 Assets and Procurement NTP NLC-CPT-21-055 Distress Brief Intervention 24/06/21 £211,250.00 Adult Social Work NTP NLC-CPT-22-020 Route Optimisation and In-Cab Technology Solution 2022-25 01/05/22 £69,083.00 Community Operations (Waste) NTP NLC-NTP-22-049 Professional and Technical Support: Environmental Improvements and Community Engagement 14/10/22 £80,000.00 Community Operations (Roads) NTP NLC-NTP-22-040 Low Rise Fire Door Programme 16/11/22 £8,000,000 Housing Property NTP NLC-CPT-21-067 Purchase of Fuel Cards 03/12/21 £162,205.92 Community Operations (Fleet) Direct Award NLC-CPT-21-136 Supply and Delivery of CO2 Monitors 02/02/22 £229,500.00 Education Direct Award NLC-CPT-22-052 Supply and Distribution of Frozen Foods 2022-2026 08/08/22 £8,340,000.00 Assets and Procurement (Facility Support Services) Direct Award NLC-SLP-22-057 Design and Install of Electronic Signs 2022-24 23/11/22 £1,000,000.00 Place Direct Award NLC-SLP-22-075 Provision of Support for People Affected by Huntingdon’s Disease 01/04/22 £398,898.00 Adult Social Work Direct Award NLC-CPT-21-111 Provision for Occupational Health Services and Employee Assistance Programme 01/06/22 £2,775,000.00 People Resources Mini Comp NLC-CPT-21-167 Cashless Catering Solution and Online School Payments 17/06/22 £1,752,140.00 Assets and Procurement (Facility Support Services) Mini Comp NLC-CPT-19-015 Provision of Winter Related Services Lots 1 and 2 21/07/22 Extension Value – £192,500.00 (Contract Value – £770,000.00) Assets and Procurement Extension NLC-CPT-20-033 MTC: Controlled Door Access Systems and Associated Works, Repairs and Maintenance 2020-23 15/09/22 Extension Value – £350,000.00 (Contract Value – £1,050,000.00) Housing Property Services Extension NLC-CPT-21-022 Contract Progress Analyse/Programmer 16/03/22 Extension Value – £178,962.50 (Contract Value – £357,925.00) Housing Property Services Extension Page 109 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 12 Appendix 3 – Procurement Route – Competition and Best Value Procurement Route Competition (Yes/No) Internal Audit consideration of how route demonstrates Best Value (1) Open (multiple bids received) Yes Single stage tender process. Contract openly advertised on Public Contracts Scotland (PCS) with stated quality criteria and scoring and awarded to contractor with the most economically advantageous tender (MEAT) i.e. the Contractor with the highest price and quality score combined based on an agreed price/quality ratio. Any Contractor can participate in the competition. If only one bidder responds, there will be a lack of competition as no other bids for comparison or to enable assessment of best value. (2) Open (single bid received) No (3) Restricted (multiple bids received) Yes Two stage tender process. Contract openly advertised on PCS with initial assessment of bidders’ capability, capacity and experience to perform the contract to identify a manageable number of contractors (usually 5-8) for issuing with Invitation to Tender. Contract awarded to contractor with MEAT i.e. the Contractor with the highest price and quality score combined based on agreed price/quality ratio. Any Contractor can participate in the competition. If only one bidder responds, there will be a lack of competition as no other bids for comparison or to enable assessment of best value. (4) Restricted (single bid received) No (5) Negotiated Tender Process (NTP) No Identification of a single contractor and entering into negotiations to deliver contract. No advertisement of contract. The procurement regulations set a specific condition for directly awarding contracts this way due to extreme urgency brought about by events that could not have been foreseen, e.g., securing a contractor to urgently supply medical goods (as required during the pandemic necessary to allow frontline services to be carried out), or to address a critical failure. The procurement regulations also set out other conditions for directly awarding contracts on a negotiated basis (NTP) whereby the NTP was necessitated due to a failed tender process (open or restricted) that received either no bids that were unable to meet the requirements; or insufficient number of bids to demonstrate best value. (6) Framework Agreement Yes Multi supplier agreement. Framework openly advertised with all bids reviewed based on quality and price with selected contractors awarded a place on the framework. (7) Call-Off from Framework: Mini Competition Yes Selection of contractors from framework issued with Invitation to Tender and contract awarded to contractor with MEAT based on agreed price/quality ratio. Quality evaluation from framework can be used to establish quality score. If only one bidder responds, there will be reduced competition as no other bids for comparison or to enable assessment of best value. (8) Call-off from Framework: Direct Award Yes, when established on the framework Selection of single contractor from framework, usually contractor with highest price/quality score. No competition at point of contract award, competition undertaken to become established on the relevant framework. Note - some frameworks may have multiple contractors and the offerings available through the framework are very clear i.e. contain a price list for a range of supplies with each contractor, which allows the procuring service to quickly identify which Contractor will represent best value for their requirements. This would be a further reason for Direct Award. (9) Extension Dependent on competition at point of original contract award Extension to existing/original contract which included option to extend. No competition at contract extension, extent of competition at point of original contract award dependent on procurement route originally followed. Contractor must continue to meet selection requirements, have had satisfactory performance during original contract period and extension must secure best value. Page 110 of 240
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2022-23/0550.2023.001 Procurement - Single Tender Responses/A - FINDINGS AND REPORT/A07a 20230623 Procurement - Achieving Best Value final report v1.0 as issued.docx 13 Appendix 4 – Selected performance data: 2018-19 to 2021-22 Source: Annual Procurement Report 2021-22 Regulated Procurements - Type 2021/22 2020/21 2019/20 2018/19 Number % Number % Number % Number % Third Party Framework: Direct Award 18 22% 28 35% 20 27% 13 19% Third Party Framework: Mini Competition 13 15% 7 9% 17 22% 16 24% Advertised Contracts: Open and Restricted 38 45% 32 40% 33 44% 37 56% Negotiated Tender Process 15 18% 13 16% 5 7% 1 1% Total 84 100% 80 100% 75 100% 67 100% Percentage of advertised contracts that resulted in only one bid 0 0% 8 10% (Note 1) 7 9% (Note 1) 2 3% (Note 1) Note 1: The Internal Audit report on Procurement (dated 25/11/21) identified errors in the calculation of the percentage of advertised contracts that resulted in only one bid as an incorrect denominator was used in the calculation. The correct percentages (based on advertised contracts that resulted in only one bid / all advertised contracts) are: for 2020-21 – 25%, 2019-20 – 21% and 2018-19 – 5%. See action plan point 4 above. Page 111 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KA/LM/ASP/September 2023 Date 04/09/23 Internal Audit: Follow up of actions previously agreed by management in response to audit recommendations From Ken Adamson E-mail adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to update the Panel on the results of Internal Audit’s follow-up work reviewing the extent to which management have implemented actions previously committed to in response to previous Internal and External Audit recommendations. Information is contained in respect of the last two years External Audit outputs and those actions agreed in response to ‘High’ and ‘Medium’ Internal Audit recommendations which were due to be completed in the period up to the end of June 2023. The Panel should note that where actions are not yet ‘complete’ this does not mean that no relevant activity has been undertaken by management and that the actions taken/progress made to date will often have reduced the risk exposure in respect of the weaknesses previously identified even if the action is not yet complete. Those recommendations which were previously reported to the Panel as partially implemented but not yet complete are now monitored against revised target implementation dates agreed with management and previously reported to the Panel. Seven of the 12 actions agreed in respect of External Audit outputs have been completed, three are partially implemented, one is not yet due and one is no longer relevant. Four of the 19 actions agreed in response to relevant Internal Audit recommendations due in the period have been fully completed and 15 have been assessed as partially implemented. Recommendations The Panel is invited to: (1) note the contents of this report; (2) note the recommendations made by Internal Audit at Appendix 1; and (3) consider whether there are any issues arising from this report on which they wish to receive further information from relevant management. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Item 7 Page 113 of 240
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1. Background 1.1 Internal and External Audit reports contain management responses to audit recommendations which generally include a commitment to specific actions by a stated date. This report presents an overview of progress by management in addressing all External Audit recommendations made in the last two years and all ‘High’ and ‘Medium’ Internal Audit recommendations which were previously reported as outstanding or where the proposed actions were due to be completed by the end of June 2023. 1.2 The format of this report is designed to allow the Panel to focus on those issues where non-implementation of agreed actions presents the most significant ongoing risk to the Council and to enable the Panel to hold relevant senior management to account. 1.3 Internal Audit’s arrangements for following-up audit recommendation include, in certain circumstances, agreeing a revised implementation date and monitoring and reporting against these revised dates where we are provided with a strong rationale for the non- implementation of the audit recommendation by the originally agreed date. This avoids repeatedly reporting and focusing on actions which are ‘late’ where there are sound reasons for non-implementation by the originally agreed date. 1.4 This report presents the assessment of the potential risks arising from those planned actions agreed in response to Internal Audit recommendations due in the period (April to June 2023) which are not yet fully completed. 1.5 The updates from management on progress to date have been verified on a sample basis by Internal Audit as part of the preparation of this report. However, it should be noted that this review has focused on whether planned actions have been completed and has not included detailed substantive testing of whether the implemented actions have been effective in addressing previously identified weaknesses. 2. Report Actions previously agreed by management – Internal Audit recommendations 2.1 Table 1 below shows whether management have implemented those actions previously agreed to in response to ‘High’ and ‘Medium’ Internal Audit recommendations which were due to be completed by the end of June 2023. Overall, four of the agreed actions have been completed and 15 have been assessed as partially implemented. Table 1 Complete Partially implemented No longer relevant Total Chief Officer Area Asset and Procurement 1 0 0 1 Audit and Risk 0 3 0 3 Business and Digital 0 2 0 2 Education 1 3 0 4 Finance 1 1 0 2 Legal and Democratic 0 1 0 1 People Resources 1 4 0 5 Place 0 1 0 1 TOTAL 4 15 0 19 2.2 Internal Audit has reviewed the management updates and agreed with relevant management revised implementation dates for all 15 recommendations listed as partially implemented at Table 1. These recommendations will now be monitored in Page 114 of 240
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line with the agreed revised date and will be reported back to the Panel in accordance with this revised timescale, at which time consideration will be given as to whether previously identified weaknesses have now been addressed. 2.3 Detail in respect of each of these recommendations and the current residual risk assessed by Internal Audit because of partial implementation is provided in Appendix 1, in which we have also made suggestions as to how the Panel may wish to consider these issues. Definitions of the residual risk ratings are provided at Appendix 2. Actions previously agreed by management – External Audit recommendations 2.4 Table 2 shows the status of actions agreed by management in response to External Audit reports issued as part of the 2020-21 and 2021-22 audits. Internal Audit has concluded that seven of the agreed actions have been completed, three have been partially implemented, one is not yet due and the remaining action is no longer relevant. Table 2 Completed Partially implemented Not yet due No longer relevant Total Report Title/Year 2020-21 Interim Audit Report 3 0 0 1 4 Annual Report 3 0 0 0 3 2021-22 Annual Report 1 3 1 0 5 TOTAL 7 3 1 1 12 2.5 The External Audit action assessed as ‘no longer relevant’ relate to issues on which External Audit have made a similar recommendation in a subsequent audit report. 3. Measures of success 3.1 Internal Audit report each cycle to the Audit and Scrutiny Panel on the progress made by management in implementing actions previously committed to in response to Internal and External Audit reports 4. Supporting documentation Appendix 1 Internal Audit recommendations: Management actions assessed as ‘not yet complete’ in this cycle Appendix 2 Residual risk rating definition Ken Adamson, Chief Officer (Audit and Risk) Page 115 of 240
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Failure by Services to address previously identified issues and/or weaknesses will impact on the effectiveness of the relevant control framework. This, depending on the nature of the issue, will be captured and should be reflected in the relevant service risk register or the corporate risk register (as appropriate). 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 116 of 240
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Appendix 1 Internal Audit recommendations - Management actions assessed as ‘not yet complete’ in this cycle Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Audit and Risk) Risk Management (July 2022) Risk: The absence of a fully documented corporate risk register, subject to regular monitoring and challenge may mean that key stakeholders may fail to fully understand the key risks the Council faces and in turn may consequently fail to take appropriate action to mitigate them. Recommendation: The Head of Audit and Risk should ensure that the replacement and/or new corporate risks detailed in the finding are documented, assessed and moved to ‘live’ status with a reasonable timescale. Category: Medium The corporate risks on Supply Chain and the Scottish Child Abuse Inquiry have been developed, agreed and are now ‘live’. The corporate risk in relation to the National Care Service proposals has been documented as much as can be based on current information available and scored accordingly. This will continue to be developed as the national policy direction progresses and the current significant level of uncertainty hopefully begins to reduce. The corporate risk on Educational Outcomes has been finalised and a report on this matter is included as a separate agenda item at the May meeting of the Audit and Scrutiny Panel. The corporate risk on the Target Operating Model is currently in draft format and will be finalised, after the holiday period, in consultation with relevant stakeholders. Original timescale: September 2022 Revised timescale: December 2022 Further revised timescale: September 2023 Whilst we acknowledge that there has been significant activity to address the recommendations, we note that the corporate risk on the Target Operating Model is still very much in ‘draft’ format and has not, yet, been updated to reflect the new Programme of Work. Given that further action is required to finalise this action, we have assessed the residual risk as ‘High’ and consider it appropriate that the remaining risk is finalised in line with the revised timescale. Accordingly, we would suggest that the Panel may wish to consider requesting a further update from relevant senior management at the next meeting of the Panel. Risk: Without appropriate training, staff may not be aware of their roles in respect of risk management. Recommendation: The Head of Audit and Risk should: (1) remind Services of the need to complete and monitor uptake of the mandatory risk management training by staff; (2) determine how best to capture/monitor the uptake of mandatory training module for each Service and the Council as a whole in accordance with expected timescales, ensuring that this is regularly monitored, and action taken as appropriate on any issues arising, by the Corporate Risk Team and RMCWG; and (3) ensure the risk network training is finalised and implemented within a reasonable timescale. Category: Medium Services have been reminded of the need to complete and monitor uptake of mandatory risk training. Data on the uptake of the mandatory risk management training module is now available and the RMCWG members will now seek to agree and implement an approach to monitor the uptake. Significant training activity has been undertaken across Services to ensure that staff with key roles as part of Services wider Risk Networks are aware of their roles, responsibilities and key expectations. Further catch-up sessions are planned to ensure that all relevant staff who have key roles have had the opportunity to access required training. Original timescale: October 2022 Revised timescale: June 2023 Further revised timescale: October 2023 Having considered the update provided by management and evidence provided, we consider points (1) and (3) of the recommendation to be complete. Whilst there has been significant action taken in relation to point (2), further action is required to finalise and implement the approach to monitor the uptake of mandatory risk management training. We consider the revised timescale to be reasonable and have assessed the residual risk for this recommendation as ‘Low’. Accordingly, we would suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 117 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Audit and Risk) Risk Management (July 2022) Risk: Management may lack assurance on the extent to which key expectations/requirements contained in the strategy are being complied with. Without formal processes in place for reporting issues, management may not be able to take appropriate or timely action to address these risks. Recommendation: The Head of Audit and Risk should ensure that: (1) work continues to develop a framework, including suitable KPIs, to appropriately monitor compliance with key aspects of the Risk Management Strategy, with areas for improvement being captured and thereafter tracked and monitored; and (2) clear expectations regarding consideration, monitoring and reporting of risk are incorporated into the revised Risk Management Strategy so that Services can incorporate this into their individual governance arrangements. Category: Medium A compliance strategy has now been developed and was incorporated into the revised Risk Management Strategy which was presented to the Policy and Strategy Committee in March 2023. Guidance has now been issued to enable Service Management Teams (SMTs) to receive regular reports which provide a mechanism for senior management to receive information on risks and assess their own compliance with corporate expectations. The timetable and plan of compliance activity expected in 2023 has been prepared and will be implemented throughout the remainder of 2023- 24 in line with specific timescales. Original timescale: December 2022 Revised timescale: April 2023 Further revised timescale: March 2024 We acknowledge that there has been significant action taken to address the recommendations made and that the compliance strategy is now incorporated in the revised Risk Management Strategy but consider it important that the timetable and plan of compliance activity is implemented in line with the expected timescales. We consider the revised timescale to be reasonable and have assessed the residual risk for this recommendation as ‘Low’. Accordingly, we would suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 118 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Business and Digital) Governance of Capital Projects (December 2019) Risk: If Services are aware of the projects which will be reviewed, they are more likely to follow the guidance for those projects and the results of any such reviews may not provide a true representation of the extent of compliance with expected arrangements, including use of the relevant guidance and control template documents. Recommendation: Management should review the ‘project management model review programme’, particularly in relation to: • expanding the sample of projects being reviewed to incorporate some capital and non-capital projects that Services have not received advance notification; and • reviewing and updating the checklist to include consideration of the adequacy and effectiveness of the completed control document templates, determination of whether established processes have been documented and confirmation that key stakeholders have been adequately updated on the progress of the project, in line with the suggested improvements at Appendix 3. Category: Medium The process for Services to update / submit their Project Registers as at end March each year has been incorporated into the Chief Officers annual assurance certificate and checklist process. The deadline for 2022/23 returns was May 2023 and as of July 2023, some Chief Officers have still to provide their updated Project Register. Notwithstanding this, an updated corporate Project Register has been produced and shared in the Teams site with all Programme of Work groups. The purpose of this Register is twofold - to assist with work currently underway to develop the high-level Delivery Plans for each Programme of Work, and to inform the Quality Assurance process which is currently under development to ensure that projects are being managed, delivered, and evaluated in line with good practice / good governance and the Project Management Framework. This process will start off with an online survey which will be issued to Project Managers / SROs in Cycle 3 of 2023. The updated Project Registers, referenced above, are required to ensure the right people/projects are surveyed. Original timescale: June 2020 Revised timescale: September 2022 Further revised timescale: March 2024 Whilst we acknowledge that significant action has been taken with regards the project risk register and this is now in place, the Quality Assurance process to monitor compliance with the refreshed Project Management Framework still requires to be further developed and implemented. As such, we have assessed the residual risk as ‘High’ and consider it important that thew revised timescale is adhered to. We would suggest that the Panel may wish to consider requesting an update on this issue from relevant senior management at a future meeting of the Panel. Page 119 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Business and Digital) Cyber Security (January 2023) Risk: A lack of appropriate and detailed guidance (and/or understanding of such guidance) may result in the inability of Services to fully consider the impact of a loss of IT at a service level and the steps necessary to respond to minimise disruption to the Council and/or service areas. The absence of up-to-date, comprehensive ICT Disaster Recovery Plans could result in the inability to restore corporate or service infrastructure in line with expectations. Recommendation: Business and digital management should: (1) ensure the ICT Disaster Recovery Plan refresh progresses in line with expected timescales to ensure that fully documented plans are in place; (2) communicate with system owners to ensure that Services are clear on their responsibilities and planned recovery times in relation ICT disaster recovery and the need for this to be aligned with their Service business continuity plans; and (3) ensure appropriate oversight/review of Services/System Owners ICT disaster recovery arrangements/plans to ensure these are consistent with and fully meet the requirements of the Council’s disaster recovery standard. Category: Medium A fully documented process has been developed to provide explicit direction on ICT disaster recovery planning within NLC. This highlights responsibilities for disaster recovery and includes links to templates/testing records etc which all services (as product owners) within the Council are required to use. This is supported by a new Major ICT Incident Plan, for managing what would be seen as once in a generation types of ICT incident, such as that which happened to SEPA. In the period January – March 2023, product owners were advised of the new model for ICT disaster recovery planning, and the requirement to update and refresh any existing plans and ensure they would be stored as per requirements documented in the ‘ICT Disaster Recovery – Operational Procedure’ publication. The new ICT disaster recovery processes have been further outlined through the Data Management Team, supported by the spinning up of a Communities of Practice ‘team channel’ established to facilitate ongoing discussion and collaboration. The Data Governance Board and individual SMTs will now take responsibility for the oversight of disaster recovery plans. Meetings between Information Risk & Security and owners of ‘Gold’ and ‘Silver’ products are being scheduled to ensure disaster recovery planning processes continue to be operated and identify any non- compliant and/or high-risk areas as appropriate. Following the initial tranche of meetings at the start of 2023, the Information Risk & Security Team is co-ordinating follow-ups with product owners to ensure requested actions (including disaster recovery plan updates) have been undertaken. Original timescale: June 2023 Revised timescale: December 2023 We acknowledge that there has been considerable action taken in this area which demonstrates a positive direction of travel and have thus assessed the residual risk as ‘Low’. We recognise that while the Service have completed all planned deliverables and established processes to ensure ongoing oversight of the Services ICT disaster recovery arrangements, however we consider that the identified follow-up by the Information Risk and Security Team needs to be completed and actions arising identified to ensure the Services/System Owners ICT disaster recovery arrangements fully meet the requirements of the Council’s disaster recovery standard. Accordingly, we would suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 120 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Education) Education: Quality Assurance Arrangements (January 2023) Risk: The service may fail to adequately review school performance and/or improvement progress in a timely and ongoing manner, resulting in a failure to identify and then progress appropriate actions to secure improvement. Recommendation: Education and Families should ensure that: (1) the refreshed quality assurance framework is fully implemented in a timely manner across all primary and secondary schools; (2) regular monitoring is undertaken to ensure that all planned quality assurance activities are undertaken in a timely manner consistent with an updated quality improvement framework calendar; and (3) a formal review of the adequacy and effectiveness of recently revised/updated processes (particularly VSE and SIDS) is undertaken, after a sufficient period, to assess how well they are operating, identifying and taking any necessary adjustments and/or improvement actions as appropriate. Category: High The refreshed quality assurance framework has been implemented for session 2022-23 and the Service are currently reviewing the impact of the new reporting processes and identifying any further training requirements (e.g. improving evaluative writing). The Quality Improvement Framework Calendar for 2022-23 was distributed and used to outline and monitor key planning and reporting activity. The implementation of a planned programme of VSEs was undertaken in session 2022-23 and a suite of supporting materials created to ensure a consistency of approach across the Service. A formal review is currently underway to evaluate the impact of new processes prior to implementation in session 2023-24. Key findings from VSEs will be collated to inform future planning and service improvement priorities as applicable. The inclusion of additional cluster data/information will be used in session 2023-24 as part of improvement discussions. Original timescale: June 2023 Revised timescale: September 2023 We acknowledge that there has been considerable action taken to date and that there is a need for the Service to obtain and review data from a whole school session to enable them to fully evaluate the impact of the new approach. We consider the revised timescale to be reasonable and have assessed the residual risk for this recommendation as ‘Low’. Accordingly, we would suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 121 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Education) Education: Quality Assurance Arrangements (January 2023) Risk: The Service may find it difficult to demonstrate or evidence that appropriate and timely support and challenge has been provided to schools in the preparation and finalisation of their School Improvement Plans (SIPs) and School Improvement Reports (SIRs). Recommendation: Education and Families should: (1) remind all Head Teachers and Education and Families Managers of the importance of ensuring that SIPs and SIRs are prepared in accordance with expected timelines and ensure that any overdue SIPs or SIRs are pursued as a matter of urgency; and (2) remind Education and Families Managers of the need to populate their review spreadsheets for SIRs and SIPs to fully evidence their oversight/scrutiny activity including recording key details such as dates of receipt and review, key qualitative comments and issues arising, and key feedback provided to Head Teachers to address. Category: Medium All relevant staff (Headteachers and Education and Families Managers etc) were reminded of, and understand, their roles, responsibilities and of the key submission dates. In addition, Lead Officers regularly remind officers of key submission dates and the importance of ensuring timeous submission of key documentation. For session 2022-23, a Glow form was introduced to support monitoring and collection of key data from annual improvement reports. This allows officers to quickly identify and respond to any non or late submissions of improvement reports. It allows facilitates a consistent approach to scrutiny of plans and submissions. Further work will now be undertaken to develop a more consistent approach to monitoring mid-year progress submissions. Original timescale: May 2023 Revised timescale: June 2024 While the recommendations have been addressed in full, the Service has recognised the need to review a full year’s School Improvement Documentation to inform improvement discussions and to further develop a more consistent approach to monitoring mid-year progress submissions. We consider the revised timescale to be reasonable and have assessed the residual risk for this recommendation as ‘Low’. Accordingly, we would suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 122 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Education) Income and Cash Collection – Leisure Sites (January 2023) Risk: Procedures may be inadequate resulting in processes being undertaken unnecessarily. Procedures and/or arrangements may not be operating as expected and/or may not be being applied consistently across all leisure sites with an increased risk that income collected may not be fully recorded and/or properly accounted for. Recommendation: Service management should ensure that a comprehensive review of all aspects of the control framework for income/cash-handling at leisure sites is undertaken with a view to ensuring that up-to-date written procedures clearly setting out expected controls and actions are prepared and then implemented. These should reflect the current operating environment and include consideration of each of the issues identified above. Once finalised, revised guidance should be circulated to all staff and training delivered as appropriate. Category: High A review of appropriate procedures has been undertaken and new written procedures have been circulated to staff. Training has been provided on a one- to-one basis as needed and will continue to be delivered on-site as required. Learn NL modules for annual certification are currently at the design stage and are scheduled to be completed later in the year. Original timescale: April 2023 Revised timescale: October 2023 We acknowledge that significant action has been taken to address the recommendations with a review having been undertaken and refreshed procedures written and issued. However, there is no evidence/confirmation obtained that the procedures have been read and understood by the managers and thereafter communicated to the staff within their venues who are involved in the handling and processing of Active NL income. Furthermore, there have been no compliance checks undertaken to ensure that the procedures, including accurate and full completion of the relevant documentation, are being complied with. The Service have confirmed that they are considering the next steps required to address these issues. We consider the revised timescale to be reasonable and have assessed the residual risk for this recommendation as ‘Low’. Accordingly, we would suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 123 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Finance) Sundry Debtors/ Debt Management (October 2022) Risk: Policies and procedures may be inadequate, resulting in processes which do not effectively contribute toward maximising income. Debt management arrangements may not be operating efficiently and effectively and may not be applied consistently across the Council, resulting in delays receiving payments, loss of income or inequitable treatment of debtors. Recommendation: Head of Financial Solutions should ensure that a formal review of the debt management framework is undertaken to revisit and refresh all aspects, including policy, procedures and operational arrangements with a view to improving the efficiency, timeliness, effectiveness and equity of the Council’s current approach to debt management. This review should include consideration of the purpose and objectives of debt management activity and cover areas such as: • Establishing which activities are best done at a corporate-level and within Services; • Ensuring between corporate and Service roles and responsibilities are clear and documented; • Examining whether Services are minimising the need for raising invoices by ensuring wherever possible that payment for good and services is obtained in advance of service provision; • Producing clear guidance detailing key requirements for all aspects of the debt management process (e.g. holding appropriate documentation to support debts raised and expectations for monitoring outstanding debt and recording debt recovery action taken); and • Identification of the most effective methods for monitoring compliance and performance of debt management activities. Category: High A focus group consisting of key staff from across the services was established to gain a deeper understanding of current processes and where improvements could be made. In addition, a new procedure manual for debt recovery is being prepared and “how-to” guides are being developed for Ash Reporting, which will enable users to self-serve and access the debt reports on the system as and when required, instead of reports being produced and issued quarterly by the Sundry Debt Team. The Corporate Debt Policy is also undergoing a review. The Chief Officer (Finance) reported an update to BMT on 6/7/2023 outlining next stages which includes engagement at a more senior managerial level to agree and implement improvement actions and recommendations. The intention is that Chief Officers nominate a 'responsible person' for debt recovery within their service. The Service plan to introduce a standard Senior Management Team quarterly reporting regime in relation to debt recovery, to improve consistency in monitoring and reporting, and ensure there is greater accountability. The format and content of such reports remains under consideration. Original timescale: April 2023 Revised timescale: September 2023 We acknowledge that significant action has now been taken to review and refresh the debt management framework, including establishing a focus group, identifying and undertaking some ‘quick wins’, defining accountability between service and corporate roles and reviewing and updating the procedures. Furthermore, we note that the next stages in the process have been agreed for taking forward. We have therefore assessed the residual risk as ‘Medium’ and consider it appropriate that the outstanding actions are progressed and fully implemented in line with the revised timescales. In response to a request made by the Panel, a separate report is included on the agenda from the Service regarding this recommendation, progress made and proposed actions. Page 124 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Legal and Democratic) Corporate Governance – Principles C & D (May 2023) Risk: Without regular review, key corporate policies may not be appropriate or accurately reflect the Council’s arrangements and/or staff and other key stakeholders may not be aware of the most up- to-date policies and procedures. Recommendation: The Chief Officer (Legal and Democratic) should ensure that the Scheme of Delegation to Officers is reviewed and updated in line with the revised timescales (June 2023). Category: Medium A review of the Scheme of Delegation for Officers has been concluded following input from a number of Chief Officers. The revised Scheme will be submitted to CMT on 18th August for approval, prior to submission to the full Council meeting on 5th October. Original timescale: June 2023 Revised timescale: October 2023 The Scheme of Delegation for Officers has been concluded and will be submitted to both CMT and the full Council meeting after the Summer recess. As such we have assessed the residual risk as ‘Low’. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Chief Officer (People Resources) Corporate Governance - Principles A & B (February 2022) Risk: Without effective workforce planning, there is a risk the Council may not have in place (or identified the actions it needs to progress to ensure it has in place) the staff and skills it needs to enable it to deliver services and achieve planned outcomes. Recommendation: The Head of People and Organisational Development should ensure that the service workforce plans are completed and reported in accordance with the revised timescales to inform future workforce planning activity. Category: Medium Chief Officers have completed service workforce plans. The key highlights from these plans will be included in the One Workforce report due to go to Policy and Strategy Committee in September 2023. Original timescale: June 2022 Revised timescale: June 2023 Further revised timescale: September 2023 The workforce plans have been completed by Chief Officers and will be included in the One Workforce report scheduled to be submitted to the Policy and Strategy Committee in September 2023. As such we have assessed the residual risk as ‘Low’. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 125 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (People Resources) Equalities (November 2022) Risk: Without an effective performance management framework, management would not be able to measure whether the Equality Outcomes and the actions taken to address these were having the expected impact, and/or may not be able to take appropriate action to address areas of ‘under- performance’. Without formal processes, reports may not be published in accordance with the agreed committee and/or statutory timescales. Recommendation: The Head of People and Organisational Development should ensure that: (1) a robust performance monitoring framework is developed that will allow management to measure performance and impacts more effectively and accurately against the equality outcomes and allow for periodic assessments to be undertaken. This should include identifying clear and realistic targets for each outcome and consideration of current and future planned actions which are designed to contribute to the achievement of these outcomes; (2) ensure that robust arrangements are in place to enable accurate and up to date information to be collated and reported to key stakeholders in accordance with the committee and statutory timescales; and (3) seek to ensure greater transparency underpins the process for identifying/setting/prioritising Equalities outcomes/targets and associated activities and actions. Category: Medium A new Equalities Board has been established to oversee the work to mainstream equalities across the Council as well as the progress in relation to the Council's 9 equality outcomes. The Board members are currently working with the Equalities Team to develop SMART action plans for each of their services and within these plans the equality outcomes will also sit - adjacent to the service where they belong to ensure the outcomes are not only SMART but mainstreamed. Services have been asked to have the action plans ready by September 2023 as agreed with Internal Audit. The Equality Outcomes Progress Report, required by the Public Sector Equality Duties to be published every 2 years was approved by the Wellbeing and Tackling Poverty Committee on 5 May 2023 and has been published on the Council website. Equality outcomes are to be reviewed and set every four years taking reasonable steps to involve and consider relevant evidence. The next set of outcomes will be set by 30 April 2025. The Equality Board will ensure the necessary steps are in place to develop a process which aligns with the recommendations of the audit. The Panel should also be aware that the Scottish Government is expected to imminently publish its findings of the review of the Scottish Specific Duties which includes the duty to publish equality outcomes and report on progress. Any changes to the duties will need to be taken into consideration when the Service review and set the Council's outcomes in 2025. Original timescale: April 2023 Revised timescale: March 2024: We acknowledge that significant action has now been taken to address this action and that delays in implementation of the actions in line with the previously agreed timescale are largely due to the timescales around completion of the action plans in line with the performance framework and the timing of the next review of equality outcomes. We have therefore assessed the residual risk as ‘Medium’ and consider it appropriate that the outstanding actions are progressed and fully implemented in line with the revised timescales. In response to the Panel’s request following consideration of an update on progress against recommendations made in the Equalities audit report, a separate report is included on the agenda from the Service regarding this recommendation, progress made and proposed actions. Page 126 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (People Resources) Supporting Attendance (August 2022) Risk: Without formal documented processes outlining how performance information should be prepared, staff may not be aware of how to calculate the performance measures which may result in inaccurate performance data being reported by stakeholders. Recommendation: People and Organisational Development should ensure that the processes for preparing/calculating sickness absence performance information for LGBF, SMT and JCC are formally documented, with pro-forma definition sheets clearly setting out the definition of the performance measure and the methodology for its calculation in accordance with the Council’s performance management arrangements. Category: Medium Informal processes have been agreed with key stakeholders and are in operation, but formal documentation of this process has not been completed. A technical library for all reporting has been created for Workforce Analytics Team and this provides a breakdown of each report and the calculations required for each element of the report. Reports have been reviewed as per LGBF guidance, which sets out calculation of Sickness days lost for Teaching & Non-Teaching groups. Work is currently underway to ensure that the definition of teaching staff laid out in Section 6a of LGBF guidance is accurately reflected in reporting. Data for each month is reviewed and compared to previous month and previous year to ensure consistency of information. All information extracted from iTrent is reviewed by Workforce Analyst and thereafter passed to Employee Relations Employment & Policy Officer for final confirmation. An ongoing review of all absence reporting from iTrent is being undertaken with Employee Relations Team to ensure all absence reporting is accurate and fit for purpose. Work is underway to build Absence Dashboards which will be built from the ground up, with calculations based on LGBF guidance and compared to existing reports to ensure accuracy and consistency. Original timescale: April 2023 Revised timescale: December 2023 We acknowledge that there has been significant action taken to address the recommendation made and that further actions required to fully implement this recommendation have been identified and are being progressed. We have assessed the residual risk as ‘Medium’ and consider it important that the agreed extension date of December 2023 is achieved. Accordingly, we would suggest that the Panel may wish to consider agreeing to note the progress made and the revised timescale for completion and to monitor progress made as part of the next follow-up report. Page 127 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (People Resources) Payroll – Selected Key Controls (June 2021) Risk: Overtime is currently being paid which has been authorised but is not being authorised (and paid) in accordance with employees’ agreed terms and conditions. Recommendation: The Head of People and Organisational Development should undertake a review to determine whether Section 7.2 of Schedule A remains appropriate and take steps to amend or remove it from the Council’s terms and conditions. Category: Medium A report was presented to the Joint Consultative Committee in June 2023 advising on the proposal changes to the approval process for overtime as outlined with the Council’s Core Conditions of Service. It was proposed to change the detail within the Core Conditions of Service to be more reflective of the current practices and structure within the Council. This would mean the removal of any authorisation requirements from an Executive Director, moving to the Line Manager and Service Manager as appropriate and allowing employees to earn beyond the earnings ceiling of SCP35 if their substantive salary is below SPC35. Those with a salary at SCP35 or above, will be able to work overtime as appropriate but will receive this overtime based on SCP35. The Trade Unions have requested time to consider the proposals before they are presented to the BMT and implemented. Arrangements will be made to amend the Core Conditions of Service with a revised version thereafter being made available to employees through MyNL. Original timescale: December 2021 Revised timescale: April 2023 Further revised timescale: September 2023 We acknowledge that there has been significant progress made in addressing the recommendation and recognise that the delay in full implementation is as a result of consultation with the Trade Unions. We have therefore assessed the residual risk as ‘Low’ and consider it important that the revised timescale for implementation is adhered to. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 128 of 240
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Place) Creditors (January 2023) Risk: Expenditure may not be properly incurred. Increased potential risk of fraud and/or error and that any relevant issues would not be identified in a timely manner. Recommendation: The Chief Officer (Place) should ensure that completion of the interface between PECOS and eFinancials via the Purchase to Pay (P2P) project is progressed in line with proposed timescales. Once complete, appropriate guidance on its use and any associated expectations should be prepared and communicated to Services. Category: Medium There has been good progress made to resolve the technical issues that were previously preventing there being a successful interface between PECOS and eFinancials to enable an automated process for matching and paying invoices. Final User Acceptance Testing will be undertaken with users from different services during July and August. Thereafter, there is a planned roll out of communication and training in September 2023 prior to the interface going live in October 2023. Original timescale: June 2023 Revised timescale: October 2023 We acknowledge that there has been significant progress made in addressing the recommendation and are pleased to note that the Service have given a firm commitment for the full implementation of the recommendation. We have therefore assessed the residual risk as ‘Low’ and consider it important that the revised timescale for implementation is adhered to. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Appendix 2 Residual risk rating definition Internal Audit assessment of residual risk from non-implementation High Non-implementation of actions has the potential to significantly undermine the relevant control environment. Medium Non-implementation of actions has the potential to impact upon the achievement of the control environment. Low Other issues which require management attention but which pose less significant or less immediate impacts to the control environment. Page 129 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No ☐approval ☒noting Ref KA/ASP/Sept23 Date 04/09/23 Accounts Commission – Local government in Scotland overview report (May 2023) From: Ken Adamson, Chief Officer (Audit and Risk) E-mail: adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to present to the Panel the contents of the Accounts Commission report ‘Local Government in Scotland overview 2023’ which was published in May 2023. Full copies of the report can be found at Local government in Scotland: Overview 2023 (audit- scotland.gov.uk). The report examines how the pandemic has affected Council’s performance, reviews current and future challenges facing local government and considers how well-placed councils are to deal with these challenges. The findings of the report are drawn from 2021-22 annual audits, performance and best value work carried out during 2022 and from specific research and analysis of available data and intelligence. The key message from the Accounts Commission is that councils have never faced such a challenging situation, with demand and workforce pressures deepening after the Covid-19 pandemic and funding forecast to reduce in real terms. The Accounts Commission comment that radical change, achieved through greater collaboration, is urgently needed if council are to maintain services and address community needs and inequalities. The report makes a series of recommendations for councils, the Scottish Government and COSLA. Finally, the report provides a high-level overview of how the Council has, and is, responding to the issues identified by the Accounts Commission. Recommendations The Panel is invited to: (a) note the findings, conclusions and recommendations contained within the Accounts Commission report; (b) consider whether there are any issues raised by the Accounts Commission report which the Panel consider are sufficiently significant to require a further report from management to be submitted to a future meeting of the Panel; (c) otherwise note this report. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Item 8 Page 131 of 240
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1. Background 1.1 The Accounts Commission is the public spending watchdog for local government in Scotland. As part of its role, the Commission publishes annually an overview report on local government which brings together its wider work across the sector. 1.2 The overview report published in May 2023, is the third and final overview report in a series of reports assessing the impact of the Covid-19 pandemic on the sector. The report builds on the previous two reports and examines how the pandemic has affected councils’ performance, reviews current and future challenges facing local government and considers how well-placed councils are to deal with these challenges. 1.3 Members should note that the Accounts Commission report was published before the signing by representatives from COSLA and the Scottish Government in late-June of the Partnership Agreement, known as ‘The Verity House Agreement, which set out a shared vision for a more collaborative approach to delivering shared priorities for the people of Scotland. 2. Report Key findings 2.1 The Accounts Commission key findings and conclusions are as follows: • On councils’ performance: Service performance was beginning to stall before the pandemic as a result of long-term reductions in funding and wider pressures. The pandemic has affected performance across all service areas. Some services are showing signs of recovery, but there are also signs of growing backlogs, declining performance in some areas and services at capacity. The extent and impact of needs not being met is not clear. • On finance and resources: Budget constraints and increasing cost pressures are putting councils’ finances under severe strain. An increasing proportion of funding is ringfenced or directed for national policy initiatives. While this is important to help deliver national priorities, it prevents councils from making decisions about how funds can be used at a local level, to meet local need. Councils have had to make significant savings to balance their budgets. Increasingly difficult choices about spending priorities and service provision are having to be made. • On addressing community needs and inequalities: The pandemic has affected performance across all service areas. There are signs of growing backlogs and declining performance in some service areas. Councils have a clear focus on tackling inequalities but the extent and impact of needs not being met is unclear. Some communities are facing crisis, with persistently high levels of poverty and increasing financial hardship putting additional pressure on services, at a time when councils have less capacity to support them. • On collaboration: The scale of the challenges ahead means that radical change is needed. It is only by working more collaboratively that councils and their local partners, communities and the third sector will be able to provide sustainable local services and deliver a significant programme of national reform to tackle issues such as climate change, child poverty and inequalities. The pandemic demonstrated the benefits of partnership working and shared local goals. This needs to continue. Few councils provide services jointly or share professional support services. Many councils engage well with communities and local partners to better understand local priorities and needs. Now councils must better involve service users and communities, including those with lived experience, as they redesign services Page 132 of 240
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2.2 The Commission also highlight at some length the challenges facing councils with councils are operating in an increasingly volatile and uncertain landscape, as pressures increase after Covid-19 and funding forecast to be reduced in real terms. Some communities are facing crisis, with increasing poverty and financial hardship putting additional pressure on services at a time when councils have less capacity to support them. The Commission highlight that: • Budget constraints and increasing cost pressures are putting councils’ finances under severe strain with increasing cost pressures jeopardising the sustainability of local services, councils relying on reserves to bridge budget gaps and increasingly ring-fenced and directed budgets reducing councils’ financial flexibility; • Changing demographics, the pandemic and the cost-of-living crisis increase pressure on council services and people already experiencing inequality are most affected; • Councils are managing an increasing programme of national reform, including plans for a national care service, which comes with substantial funding implications and increased uncertainty; • Increasing workforce challenges such as recruitment difficulties and high sickness absence levels are putting councils under continued pressure; and • While many councils demonstrated strong collaborative leadership during the pandemic, ineffective leadership and high levels of change in senior officers identified at several councils present a risk. 2.3 The report also assess how councils are responding to these challenges and comment that councils must focus on solutions that will deliver a sustainable future for local government. In particular, the report highlights that councils need to challenge old ways of doing things and take urgent action to reform. The Commission highlight that: • Councils need to balance immediate financial pressures with planning for and delivering long-term sustainable services; • Leaders need to invest time and capacity into thinking radically about their councils’ future operating model, how it will be achieved and be open with communities and staff; • Councils need to collaborate with communities, other councils and the wider public sector to tackle the challenges; • Workforce planning must improve so that councils have the staff, skills and leaders needed to bring about change and create a resilient workforce for the future; and • Councils have a clear focus on tackling inequalities and strengthening the use of data will help them to better understand community needs and focus fundamental change on improving long-term outcomes. How is the Council placed in relation to the Accounts Commission findings? 2.4 Senior management of the Council accepts and shares much of the Accounts Commission’s analysis of the significant challenges facing councils and would argue that many of the issues identified are already recognised in the Council’s strategic and operational planning processes and plans. Indeed, the Council undertakes environmental scanning, including considering external reports by relevant external bodies including the Accounts Commission, to ensure that plans and policies are properly informed and reflective of the key issues and challenges facing the Council. Page 133 of 240
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2.5 The well-established Plan for North Lanarkshire (TPFNL) sets out clearly the Council and key partners’ ambitions and priorities. The TPFNL, the recently refreshed associated Programme of Work to 2028 and the recently approved Medium Term Financial Plan 2024/25 to 2028/29, all reflect the challenges and constraints within which the Council must operate, but also continue to reflect the Council’s ambitious agenda and desire to maximise positive outcomes for the people and communities of North Lanarkshire. 2.6 Partly in response to the challenges and pressures facing local government, the Council’s senior management arrangements have recently been refreshed with revised governance arrangements designed to provide appropriate consideration of assurance, risk and performance management arrangements whilst also providing a clear focus on the delivery of key activities forming part of the Plan for North Lanarkshire. 2.7 The Plan for North Lanarkshire and the associated Strategic Performance Framework includes the use of a wide range of performance indicators, many of which continue to show positive trends since 2018-19, particularly around improved economic activity, wage levels and inward investment. 2.8 The Council is also committed to a range of actions designed to address poverty and inequalities including continuing to improve education outcomes, addressing educational inequalities and improving the areas skills base. While significant ongoing workstreams, underpinned by significant capital investment facilitated by the Community Investment Fund, are also allowing the Council to address some of the challenges facing our local town centres, to ensure our asset base is modern, efficient and fit for purpose and to address the need to expand and modernise our local housing stock. 2.9 Although it has a successful track record in sound financial planning, including three- year budgeting, and delivering required budget savings, it is recognised that the increasingly challenging financial situation facing the Council makes doing so in a way which maintains core services and ensures service provision and future plans are financially sustainable is becoming increasingly difficult year-on-year and will require increasingly difficult decisions and choices about spending priorities. 2.10 As part of its response to these challenges the Council continues to seek to ensure that its structure, service delivery models and operational processes remain fit for purpose and maximise efficiency and effectiveness. This is underpinned by robust corporate governance arrangements including a range of self-evaluation and/or review mechanisms outlined in the Strategic Governance Framework. 2.11 Detailed information in respect of the revised Programme of Work will be reported to Policy and Strategy Committee in late-September, whilst performance information is reported regularly to elected members via Service Committees, Policy and Strategy Committee and the Audit and Scrutiny Panel in line with frequencies/timetables outlined in the Strategic Performance Framework. 3. Measures of success 3.1 The Council is able to continue to deliver on its strategic ambitions and deliver positive outcomes consistent with the Strategic Performance Framework against the challenging backdrop set out in the Accounts Commission report. 4. Supporting documentation Appendix 1 Accounts Commission recommendations Ken Adamson, Chief Officer (Audit and Risk) Page 134 of 240
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If yes, please provide a summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Effective responses by management to the weaknesses, control issues and/or areas of improvement identified by Internal Audit will increase the likelihood of the Council achieving its ambitions by improving control frameworks and more effectively mitigating potential risks and threats to the achievement of planned outcomes. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex-Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ 5.11 Childrens rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 135 of 240
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Appendix 1 Accounts Commission Local Government Overview Report 2023 – recommendations On finance and resources 1. The Scottish Government and COSLA need to take urgent action to finalise the New Deal for local government (paragraphs 71–73) and agree: • a new partnership agreement with councils that supports collaboration • a fiscal framework for local government that supports sustainable funding and greater financial flexibility and transparency 2. The Scottish Government needs to provide more detailed financial information (e.g., breakdown of type of funding and individual council allocations) to support councils longer-term financial planning. 3. Councils need to set out medium- to long-term financial plans that detail: • how they will make recurring savings and reduce reliance on reserves to fill budget gaps • how council resources are targeted to achieve their long-term policy and performance priorities. On community needs and inequalities 4. Councils should be more transparent with the public about scale of service demand, the extent of backlogs and changes to eligibility criteria necessary to ration access to services and any impact this has on unmet need. 5. Councils should have a clear plan for strengthening their use of data to understand needs, make decisions and direct resources. This includes equalities data, and learning from those with lived experience. On collaboration 6. Councils need to maximise the potential of collaboration by demonstrating they are: • working with other councils, the wider public sector and the third sector to redesign and provide services • involving service users and local communities in the redesign of services Page 136 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref: ASP/Aug23/KA Date 04/09/23 National Fraud Initiative – Update From Chief Officer (Audit and Risk) E-mail adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to inform the Panel of the progress made to date by the Council in response to the 2022 National Fraud Initiative (NFI) data matching exercise and to highlight where further action is required by the Council and/or relevant Services. The NFI is a data matching exercise, organised by Audit Scotland, which is undertaken every two years and is recognised as an important tool in preventing and detecting fraud. It involves comparing data sets from across a wide range of public bodies using criteria which allows for the identification of inconsistencies and anomalies which may be indicative of possible fraud and/or error. This information then enables public bodies to follow-up matches on a targeted and prioritised basis to establish if fraud has occurred and to take appropriate action. Recommendations It is recommended that the Panel note the contents of this report, progress made to date and future planned action in relation to the follow-up of matches. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Item 9 Page 137 of 240
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1. Background 1.1 The NFI is a UK-wide exercise which enables public bodies to take advantage of data matching techniques to assist them in detecting possible fraud and error. It is organised by Audit Scotland and is carried out by them under statutory powers added to the Finance and Accountability (Scotland) Act 2000 by section 97 of the Criminal Justice and Licensing (Scotland) Act 2010. 1.2 The NFI works by using data matching to compare a range of information held by public bodies to identify potential inconsistencies or circumstances that could indicate fraud or error. This information enables public bodies to follow-up these matches on a targeted and prioritised basis to establish if fraud has occurred and to take appropriate action. A match does not automatically mean that there is fraud or error, and therefore the Council is not expected to review and/or follow up every match. The outcomes from any investigations are recorded on the secure NFI web application. 1.3 Information in relation to payroll, housing (current tenants and waiting lists), council tax reduction scheme, blue badge parking permits, taxi licenses, and creditor payments and other relevant standing data was uploaded by the Council to the secure NFI database in October 2022. The results of the data matching for these datasets were received on 27 January 2023 and the Council has a total of 11,361 matches across 86 separate reports. 1.4 Additionally, council tax single person discount and electoral register data was uploaded separately to the NFI database in December 2022. As the matches only relate to North Lanarkshire, they were made available shortly after submission and the Council received 8,637 matches across two reports. 1.5 The submission of data in relation to the non-domestic rates Small Business Bonus Scheme (SBBS) was delayed as a revaluation was due on 1 April 2023. A request for the submission of this data has now been received and is required to be uploaded to the NFI database by 30 September 2023. Matches will be received shortly after this date and reviewed thereafter. 2. Report NFI progress to date 2.1 Audit Scotland has indicated that they do not expect every match or report to be reviewed and has advised bodies to prioritise matches. As such, they have categorised the individual reports based on the assessed quality of match (high, medium, address or information only), with ‘high’ reports often being matched on National Insurance Number. Additionally, all matches contained in reports have been allocated a ‘risk scoring’ based on a combination of the likelihood of fraud occurring and the number of times an individual appears across the NFI data. 2.2 Given the high volume of matches received, there are limitations to the number of matches that can be reviewed within the resources available. Services are responsible for determining a method of prioritising their matches for investigation, ensuring timely action and update of the NFI database. This is generally done by considering the risk scoring allocated on the NFI database. 2.3 As of 24 July, 8,325 (73%) matches have been reviewed, resulting in 622 errors with £26,518 savings identified. A summary of the results by report type is detailed in the table below. Page 138 of 240
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Report Type Matches Processed In progress Fraud Error Value (£) Housing Benefit 160 121 0 0 1 2,047 Council Tax Reduction 1,063 448 2 0 54 24,471 Payroll 158 124 25 0 0 0 Blue Badges 1,189 1,189 0 0 567 0 Creditors 5,921 5,446 29 0 0 0 Procurement 92 88 4 0 0 0 Housing Tenants 1,140 516 230 0 0 0 Housing Waiting List 1,638 59 44 0 0 0 Total 11,361 7,991 334 0 622 £26,518 2.4 Matches relating to housing benefit and council tax reduction are being dealt with by the Appeals and Adjudications team within Financial Solutions. The team has prioritised high and medium risk housing benefit reports, and review of these reports is almost complete. They have also commenced the review of high and medium risk council tax reduction reports and completion of these report is expected by December 2023. 2.5 Internal Audit assessed payroll matches where North Lanarkshire Council employees are also employed by other public sector organisations. These matches are generally innocent, although public bodies have previously identified some matches to be indicative of ‘ghost’ employees with individuals holding multiple employments whilst on sick leave with one of the bodies. Review of these matches was prioritised and initially focused on employees earning more than £10,000 per annum with both bodies, then considered the remaining matches. No issues have been identified. 2.6 The review of matches relating to active blue badges to deceased persons is complete and has resulted in 566 badges being cancelled. The number of badges cancelled during this exercise is relatively similar to that from previous NFI exercises which indicates that the ‘Tell Us Once’ process is not yet providing an effective mechanism to facilitate the cancellation of deceased persons badges timeously. Internal Audit will liaise with the relevant Service to consider and identify any alternative mechanisms to facilitate quicker identification and cancellation of blue badges for deceased persons. 2.7 Creditors matches, relating to potential duplicate payments and creditors references accounts for 52% of the total matches received and the majority of these (91%) fall into two reports matched on invoice number, invoice amount and/or creditor reference. Internal Audit has undertaken an initial review of these matches and has identified that they contain many false positives as some suppliers (i.e. utilities) have regular monthly charges using the same account reference as the invoice number. As such, review of these matches has been prioritised to focus on those where the potential for duplicate payments is greatest and the invoice value is most significant. Review of these matches remains ongoing, however, to date, only a small number of potential duplicate payments have been identified and these are in the process of being investigated further by Internal Audit. Page 139 of 240
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2.8 Matches relating to procurement involve a comparison of North Lanarkshire Council employees to Companies House information and creditor payments to identify any potential undeclared conflicts of interest. Internal Audit has reviewed these matches and has identified 13 matches which are currently being investigated further. 2.9 Review of housing tenant and waiting list matches is progressing better than in previous NFI exercises. To date, 31% of the matches have been reviewed and we have been advised that the Service has plans in place to review further matches. Of the matches reviewed, 274 (47%) require further investigation and checking by localities, and plans are in place ensure that action is taken to update the HSMS system as appropriate and ‘close off’ these matches. 2.10 The NFI has a mandatory requirement to submit council tax single persons discount (SPD) records for matching against electoral data. Finance have previously determined that there is little or no merit in allocating scarce resources to review these matches in detail. Instead, the Service outsourced a separate exercise to an external third-party to match and review council tax SPD records to credit reference data. This exercise was undertaken between July 2022 and April 2023 and the outcome is detailed in the table below. Number of SPD records SPDs cancelled Value of cancelled SPDs All SPD Records 38,251 2,350 £608,200 Of which are NFI matches 8,842 1,077 £296,127 2.11 These outcomes indicate that the data matching exercise undertaken by Finance was more constructive than simply reviewing the NFI matches as it resulted in over double the value of potential income generation. It should be noted, however, that the value of potential income generation is the additional revenue billed and not the revenue collected and that this may change because of subsequent changes in household circumstances/composition and the non-payment of council tax. 3. Measures of success 3.1 Successful participation in NFI 2022 will result in error, fraud and potential savings identified and positive assessment by the Council’s external auditor of the Council’s approach. Ken Adamson, Chief Officer (Audit and Risk) Page 140 of 240
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Future data matching arrangements will be reviewed to ensure the Council remains legally compliant with recent legislative changes. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☒ No ☐ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded and how they are managed? Failure to participate in the NFI could result in non-compliance with legislation, criticism from external audit and create additional potential for fraudulent activity not being identified at an early stage. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex-Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 141 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref: KA/ASP/August 2023 Date 04/09/23 Risk management update (and 2023-24 corporate risk register) From Ken Adamson, Chief Officer (Audit and Risk) E-mail adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary This report provides members with an update on key risk management developments with a particular focus on the results of the recent annual review of the corporate risk register, as well as providing Panel for the first time with a snapshot of the highest current residual risks within Service risk registers. The corporate risk register is formally reviewed annually to ensure completeness and continuing alignment to the council’s strategic objectives, The Plan for North Lanarkshire and the associated Programme of Work. The purpose of this report is to update Panel on the results of that process and to present the corporate risk register for 2023-24 as approved by the Council’s corporate management team (CMT). The review of the corporate risk register was informed by a number of different sources including an updated horizon scanning document (Appendix 2) which was used to support consideration of the key strategic and operational risks facing the Council. The risk team has also engaged with Services to consider whether any risks within Service-level risk registers merited escalation to the corporate risk register and undertook informal comparisons with other local authorities’ corporate risk registers to inform the process. Members should note that all corporate risks identified and agreed as meriting inclusion in the corporate risk register are subject to regular monitoring and review by relevant senior management and periodic review/consideration of individual risks by both the CMT and the Audit and Scrutiny Panel in line with their respective governance roles. Overall, although there are some changes in individual risk scores, as might be expected much of the corporate risk register for 2023-24 is substantively unchanged from the previous year. Key changes are the removal of 2 risks (‘Implementation of ERDP’ and ‘Information Governance – Data Migration’), the addition of four new risks (relating to increased fire risk following recent changes in Scottish Fire and Rescue attendance policy, home support sustainability, the Council’s power resilience and the risk of failing to corporately maximise opportunities from digital adoption), and the escalation of one risk (‘Home to School Transport Provision/Sustainability’) from the Education & Families service risk register. It should also be noted that, due to the application of the new risk ratings and thresholds as approved in the revised Corporate Risk Management Strategy approved by Policy and Strategy Committee in March 2023, the corporate risk register profile looks somewhat different than previous versions in terms of the scoring and RAG ratings. Item 10 Page 143 of 240
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Recommendations The Panel is asked to consider the contents of the report and to: (1) note the agreed corporate risk register for 2023/24 at Appendix 1 which incorporates the range of agreed changes outlined in Section 2 of the report; (2) note the information contained within the report in respect of risk management arrangements within Services (including information on those risks with the highest residual risk scores); and (3) agree to request a further report from the Chief Officer (Audit and Risk) informing a future meeting of the Panel of the results of planned work to assess compliance with the newly approved Risk Management strategy. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Page 144 of 240
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1. Background 1.1 The Risk Management Strategy requires that the corporate risk register is formally reviewed on an annual basis; led by the Corporate Risk Team, working with the Risk Management Corporate Working Group (RMCWG) on behalf of, and in consultation with, the Corporate Management Team. In addition, each Service is required to maintain its own risk register in respect of the operational risks within their areas of responsibility. 1.2 In addition to considering the wider environment within which the council operates, each year the corporate risk register is reviewed for completeness and continuing alignment with the council’s strategic objectives, The Plan for North Lanarkshire and the associated Programme of Work. 1.3 This year’s annual review exercise has recently been undertaken on behalf of CMT. This has involved discussion with members of the RMCWG, to consider potential issues arising from individual Service risk registers. Informal external benchmarking with corporate risk registers of other councils has also been carried out. Most importantly the review has been informed by, and considered against, The Plan for North Lanarkshire and the revised and evolving ‘Programme of Work to 2028’ approved by Policy and Strategy Committee in March 2023. 1.4 The environment within which the council operates and provides services continues to be dynamic. The corporate risk register must therefore continually evolve to keep pace with and accurately reflect, the ongoing challenges facing the Council. To aid this process, the Corporate Risk Team updated a ‘horizon scanning’ paper to support CMT’s considerations/discussions on risks associated with the council’s future direction and strategic planning considerations. The paper, attached at Appendix 2, is intended to highlight risks and issues relevant to the environment within which the Council operates. The paper can also be used to generate discussion and inform thinking in relation to the preparation and review of individual Service Risk Registers. 1.5 This paper presents the outcome from this year’s corporate risk register review process and allows the Panel to note the corporate risk register for 2023-24 as outlined in the table at Appendix 1. 1.6 Members will note a change in the risk profile and are reminded this is primarily due to the change in risk ratings and thresholds which was approved as part of the revised Risk Management Strategy approved by the Policy and Strategy Committee in March 2023. This means there are now five ratings categories (Very High, High, Medium, Low and Insignificant risk). 2. Report 2.1 The current corporate risk register previously approved for 2022-23 contained 25 risks as outlined in the table at Appendix 1. Risks contained within the register have been subject to ongoing monitoring and review throughout the year, with regular risk reporting to CMT and Audit and Scrutiny Panel both on the overall register, and with detail on individual risks being reported by relevant Risk Leads. 2.2 Of those existing 25 risks, 24 are classified as ‘Live’ with completed risk documentation, and 1 risk (Target Operating Model) classified as ‘Draft’ where relevant documentation is currently being finalised. Page 145 of 240
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2.3 As stated in the Corporate Risk Management Strategy, the definition of corporate risks is: ‘Risks which can impact the Council in achieving its priorities and stated objectives or which are more strategic in nature and require corporate oversight. For example, such risks may have the potential to impact many Services, and/or can impact significantly on the Council in terms of financial costs and reputational damage. The Corporate Risk Register will reflect an amalgamated position of Service-level risks and may also include significant Service-level risks which have been escalated for attention at a strategic level.’ 2.4 As previously reported, a number of methods have been used and information sources reviewed to stimulate a thorough approach to the corporate risk register review process including: • Review of the Programme of Work to 2028 considering how and whether risks in relation to key planned Programme of Work activities are adequately reflected within corporate, service and/or project risk registers; • Services were asked to highlight any key risks within Service risk registers that they considered may merit consideration for inclusion in the corporate risk register going forward; • Informal comparisons/benchmarking was done with other local authorities’ corporate risk registers, to help inform the review process and to identify any relevant areas which may have been overlooked; and • The corporate risk team has updated its ‘horizon scanning’ information to support CMT discussions and strategic planning considerations and consideration of new and emerging risks. This paper has been developed through examination of a range of external sources including public sector risk partner Zurich Municipal’s white paper ‘Rising to the Challenge’ focussing on the future of the public and voluntary sectors, as well as relevant materials from the National Audit Office, Audit Scotland and HM Treasury. 2.5 The corporate risk register should be reflective of what the Council is seeking to achieve at a strategic level with risks relating to key projects or programmes captured. The governance arrangements in respect of the recently refreshed Programme of Work to 2028 are still evolving and it will be important to ensure that appropriate risk management arrangements are embedded within these. To that end, Audit and Risk staff are involved in each of the thematic boards to provide relevant support to SROs to ensure proper consideration is given to risk management and the identification and capture of appropriate risk information. Generally though it is believed that risks in relation to key planned activities being undertaken are largely already captured either at corporate, service or project level, although it is recognised that there is scope to better reflect the interdependencies between certain key projects and workstreams and how failure to recognise this could impact the achievement of certain key objectives. 2.6 A ‘sense-check’ or informal benchmark review of other council’s corporate risk registers has also confirmed that the content of the Council’s corporate risk register remains valid and comprehensive, and broadly consistent with other council’s risk registers with no obvious omissions. 2.7 Changes because of the review process are detailed throughout the remainder of this report. Page 146 of 240
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Review of the 2022-23 Corporate Risk Register 2.8 Most of the existing risks contained within the 2022-23 corporate risk register remain relevant and are included in the approved 2023-24 version. Existing risks are subject to regular review by the relevant Risk Lead and associated governance groups. 2.9 RIS0000574: Information Governance – Data Migration was always a time limited risk in relation to target dates associated with the transfer of Council data to new operating systems/platforms. As such it has been agreed with the Risk Lead, Chief Officer (Business & Digital) that this risk should be closed and that any remaining residual risks be reflected within individual Service risk registers. As a result, CMT agreed that this risk should be removed from the corporate risk register. 2.10 Consideration has also been given to removing Risk RIS0000259: Implementation of ERDP as a corporate risk. Recognising the diverse range of activities being progressed under this heading and the long-tail nature of many of the associated programme/projects, it is considered that it would be more appropriate to remove this risk from the corporate risk register, recognising that appropriate management and oversight of associated relevant risks is achieved through the current and evolving governance and project management arrangements that will apply under the new ‘Transforming Places’ Programme of Work Board. New risks added to the corporate risk register 2.11 From July 2023, Scottish Fire & Rescue Services (SFRS) will be implementing changes to their operating arrangements, meaning in certain circumstances local authorities will be required to take on the additional responsibility in the event of an alarm activation, of providing positive confirmation of the existence of fire. This has wide-ranging implications across the organisation for existing fire risk management arrangements, with tight implementation deadlines as well as potentially significant staffing and financial impacts. Therefore a new risk relating to the ‘Impact of Scottish Fire & Rescue Service (SFRS) changes to operating arrangements’, is currently being finalised to capture the range of organisational impacts arising and to reflect current and planned mitigating actions, and it was agreed this new risk be added to the corporate risk register. 2.12 Members will be aware of the ongoing challenges faced in the delivery of Home Support Services within Adult Health & Social Care. As a result of increasing risks and issues in service delivery and sustainability, CMT agreed that a new risk ‘Home Support Service Delivery/Sustainability’ be added to the corporate risk register which will provide a high-level risk management perspective on these risks, the current efficacy of existing controls/actions and future planned actions to mitigate, with links to the resulting Home Support redesign project. It is considered important that potential threats to what is a critical service for some of the most vulnerable in our communities, are reflected in a key corporate risk with oversight at the appropriate level of the organisation. A deep dive risk assessment has been finalised and agreed with the Chief Officer (Adult Social Work Services), and has a residual risk rating of ‘25 - Very High’ as noted in the risk register at Appendix 1. 2.13 Members will also be aware of Scottish Government’s request that all public bodies should have a stand-alone Power Resilience Strategy which would be enacted in the event of any failure of the national grid system, otherwise known as ‘Black Start’. This has been the subject of separate reports to both CMT and the Panel from the Chief Officer (Community Operations), where it was noted that the absence of any strategy and/or inadequate arrangements relevant to a Black Start event could expose the Council to significant criticism and potential legal challenge, and that the risk with regards to Power Resilience should be a stand-alone Corporate risk. Page 147 of 240
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2.14 RIS0000620: Power Resilience has therefore been finalised and agreed with the Chief Officer (Community Operations) which outlines the risk of the Council having inadequate arrangements in the event of complete failure of the national electricity grid because of not being adequately prepared. The risk has been scored with a residual risk rating of 20 – HIGH, which considers that currently although there has been the introduction of the power resilience strategy and associated actions; which should result in measures which will reduce the risk to life; the scale and magnitude of the event may still result in the Council being unable to cope with all demands that will be placed upon it, some of which remain unknown and/or are difficult to predict. A number of planned actions are in place which as they are progressed are expected to help to reduce the risk rating. 2.15 The final new risk which has been added relates to the risk of the Council failing to corporately maximise opportunities from digital adoption. This risk is currently being worked-up and has yet to be scored but reflects the challenges and issues which might prevent the Council from maximising opportunities presented by new digital technologies to drive changes in the Council’s operating model and service delivery. Risks escalated and/or de-escalated from Service risk registers Escalation 2.16 Panel will be aware of ongoing challenges in the provision and financial sustainability of school transport with significant issues being encountered post-pandemic in relation to market capacity, pricing and contractor reliability. Following this and to support the ongoing review of current and future service provision, it was agreed that it would be appropriate to create a new risk around sustainability of ‘Home to School Transport provision’ more generally, with links to the redesign project underway. To this end a risk has been created and was agreed for inclusion on the corporate risk register. 2.17 There were 25 risks on the corporate risk register in 2022-23. The removal of the 2 risks above and the addition of 5 new risks means that the corporate risk register for 2023-24 has 28 risks. Currently 23 of these risks are ‘Live’ and fully documented, while 5 are in ‘Draft’ and are currently being finalised. 2.18 Ongoing monitoring and review of these corporate risks ensures that the ongoing effectiveness of current controls in managing the relevant risk is assessed and future actions to mitigate risks are planned and monitored. Further detail on the management of each risk is available within the accompanying deep dive risk assessment documentation via the Council’s Figtree risk management system. Service risk registers – risks with highest residual risk scores 2.19 Members will recall the proposal to supplement the corporate/strategic risk register information included in this report with information on service risks from service risk registers to enable members to have sight of those service risks with the highest residual risk scores. 2.20 The Corporate Risk Team has been and continues to work with Service Risk Champions to ensure that Service Management Teams are able to meet their responsibilities for monitoring and reviewing service risks/registers as noted within SMT revised Terms of Reference, which require that SMT’s will ‘Regularly review and monitor service risk registers, ensuring that registers are complete and up to date, that new and emerging risks are identified assessed and managed effectively, and that service risk registers are used to support management discussions and inform decision-making.’ Page 148 of 240
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2.21 There has been extensive ongoing activity in reviewing service risk registers to ensure that services are able to report on their ‘top Service risks’. The corporate risk team continues to provide support and co-ordination across all services and through Service Risk Champions and the recently established Service Risk Forums, to help facilitate this. Significant work has also been undertaken to ensure that SMTs are provided with appropriate, consistent and regular information in relation to risk management arrangements within Services. Crucially SMTs are expected to ensure that their Service has assessed whether risk registers are comprehensive and up-to-date and that any new or emerging risks have been properly identified and assessed, as well as considering and advising whether there are any key service risks that are not reflected and should be added to the register. 2.22 Details of the risks with the highest residual score for each Service can be found at Appendix 3. The tables below provide members with insight into the coverage and position across service risk registers. In accordance with the Council’s risk management process, the risks are categorised as Insignificant, Low, Medium, High and Very High. 2.23 In summary, the evaluation of all services’ risk registers shows the current risk profile as: Evaluation Insignificant Low Medium High Very high Total No. of Risks 101 237 171 21 0 530 2.24 The number and profile of risks between each of the services is as follows: Number and profile of risks in risk registers - Chief Executive’s Service Evaluation Insignificant Low Medium High Very high Total No. of Risks 58 83 41 5 0 187 Number and profile of risks in risk registers – Education and Families Evaluation Insignificant Low Medium High Very high Total No. of Risks 8 18 24 2 0 52 Number and profile of risks in risk registers – Adult Health and Social Care Evaluation Insignificant Low Medium High Very high Total No. of Risks 1 7 11 3 0 22 Number and profile of risks in risk registers – Enterprise and Communities Evaluation Insignificant Low Medium High Very high Total No. of Risks 33 129 92 10 0 264 2.25 Good progress has been made across services in the embedding of risk management practice, however it is important to recognise that there continues to be differing levels of maturity within services. Steps will continue to be taken to support services to ensure that the risk management processes are fully adopted and that risk registers are comprehensive and up to date and subject to regular review and scrutiny meaning risk information will become more and more reliable and robust. Page 149 of 240
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2.26 Of particular importance will be providing continual challenge and stimulus towards ensuring that registers have captured and properly articulated the key risks which they face, indeed service’s review activity so far has already identified some gaps which service risk champions and facilitators will be following up with Senior Management teams to develop and include new risks in registers. 2.27 It is particularly worth noting however, since the review of senior management arrangements at the beginning of 2023, and specifically the inclusion of risk management oversight responsibilities in SMT Terms of Reference, there is renewed focus and momentum underway across all services. This, coupled with the introduction of the newly formed service risk forums means there is now more regular input, an opportunity to share best practice and to discuss risks, with a clear level of management support targeted to help facilitate improved risk management activities and oversight. 2.28 Whilst all of this enables positive steps to be made, it is important to recognise that these arrangements are relatively new and will require some time to fully bed in and become established. The skills, experience and capacity of members of the risk network across the service will continue to evolve, and risk information and discussions will mature with each cycle of reporting. 2.29 The Corporate Risk Management Team will continue to assist Services in assessing training needs and delivering appropriate training. In addition, during the remainder of 2023-24, a particular focus for the Corporate Risk Management Team will be on work to evidence and assess compliance with the new Risk Management Strategy including arrangements within Services. The results of this compliance work will be included in future update reports to senior management and the Panel. Other risk management developments 2.30 The Corporate Risk Team continues to actively support the application of risk management in a number of key corporate projects including most recently Home Support Redesign and Home to School Transport redesign. 2.31 The Corporate Risk Team is also providing support to the newly formed Programme of Work Thematic Boards, to assist in ensuring that appropriate risk management arrangements are embedded within these new governance arrangements. Specifically working with the Senior Responsible Officers (SROs) for each theme, there is support ongoing in the development of an appropriate risk assessment methodology to enable Boards to identify high level risks which could impede their successful operation. 2.32 Building capacity within the risk network across services has also been of recent focus for the Corporate Risk Team, with four training sessions having been held during May 2023 covering 61 members of the risk network across the organisation. The sessions focussed on ensuring that all relevant staff have a clear understanding of the newly approved Risk Management Strategy, their detailed roles and responsibilities and associated risk management processes. Further sessions are being planned to build knowledge of risk management as part of the Council’s approach to project management as well as specific sessions to enhance Figtree system admin/maintenance skills. 3. Measures of success 3.1 The corporate risk management team will continue to report quarterly to CMT and the Audit and Scrutiny Panel providing an overview of key developments in risk management and updating on progress in respect of planned improvements to the Council’s risk management arrangements. 3.2 The adequacy and effectiveness of the Council’s risk management arrangements will be independently and regularly reviewed by Internal Audit, who will report directly on the results of that work to the Audit and Scrutiny Panel. Page 150 of 240
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3.3 Effective risk management arrangements assist the Council in achieving planned outcomes and/or help the Council mitigate the impacts of adverse events. 4. Supporting documentation Appendix 1: 2023-24 corporate risk register Appendix 2: Current strategic risks and issues facing the Council – May 2023 Appendix 3: Service risks with the highest residual risk scores Ken Adamson Chief Officer (Audit and Risk) Page 151 of 240
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If yes, please provide a summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g., Corporate or Service or Project Risk Registers), and how they are managed? Effective risk management arrangements will enable the Council to manage its risks more effectively, increasing the likelihood of the Council achieving its plans and ambitions by minimising or mitigating potential threats to planned outcomes. A robust Risk Management strategy lays out the framework and underpins all risk management activity across the organisation. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex-Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ 5.11 Childrens rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 152 of 240
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Appendix 1: 2023-24 corporate risk register CORPORATE RISKS (Operational) Likelihood Impact Rating Evaluation 1. Impact of proposal to create a National Care Service 5 5 25 Very High 2. Home Support Service Delivery/Sustainability 5 5 25 Very High 3. Information Security and Information Governance 5 4 20 High 4. ICT operational capability 4 4 16 High 5. Public Protection 4 4 16 High 6. Human Resources 4 4 16 High 7. Governance, Leadership and Decision-Making 4 4 16 High 8. Supply Chain risk 4 4 16 High 9. Scottish Child Abuse Inquiry 4 4 16 High 10. Health and Safety 5 3 15 Medium 11. Business continuity planning 5 3 15 Medium 12. Terrorism 3 5 15 Medium 13. Procurement risk 3 4 12 Medium 14. Resilience planning 2 5 10 Medium 15. Serious organised crime, fraud and corruption 3 3 9 Medium 16. Impact of changes to SFRS operating arrangements To be confirmed To be confirmed To be confirmed To be confirmed 17. Home to School Transport Delivery/Sustainability To be confirmed To be confirmed To be confirmed To be confirmed CORPORATE RISKS (Strategic) Likelihood Impact Rating Proximity 18. Tackling Poverty 5 4 20 High 19. Power Resilience (Black Start) 5 4 20 High 20. Climate Change 4 4 16 High 21. Financial Sustainability 3 5 15 Medium 22. Enterprise Project 3 4 12 Medium 23. Managing strategic change 3 4 12 Medium 24. Digital and IT strategy 4 3 12 Medium 25. Engagement and consultation 3 3 9 Medium 26. Improving Educational Outcomes 3 3 9 Medium 27. Target Operating Model To be confirmed To be confirmed To be confirmed To be confirmed 28. Digital adoption To be confirmed To be confirmed To be confirmed To be confirmed RISKS REMOVED FROM THE CORPORATE RISK REGISTER Information Governance – Data Migration 5 5 25 Very High Implementation of the ERDP 3 5 15 High Page 153 of 240
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Appendix 2 Current strategic risks and issues facing NLC May 2023 The Corporate Risk Team have prepared this note to support CMT discussions on the Council’s future direction and strategic planning considerations and represents an informed horizon scanning of the environment within which the Council will operate. It does not highlight all those risks currently on the corporate risk register, particularly those that relate to the management of day-to-day operations of the Council, but rather attempts to highlight where current corporate risks relate to the broad strategic themes highlighted in the document. 1. Constitutional uncertainty Links to existing corporate risks: ‘Managing strategic change’ and ‘Impact of National Care Service’. • A new First Minister with uncertainty over likely future direction in a number of key policy areas including proposals relating to National Care Service, potential moves towards greater national or regional collaboration in Education and on decisions about the future composition of Scottish local government and/or wider public sector reform. • Following Brexit, it remains unclear how the UK internal market (across England, Scotland, Wales, and Northern Ireland) will operate and how some aspects of the existing devolution structures will operate. • The process of implementing the Scotland Act 2016 remains incomplete (VAT assignment and full adoption of social security powers). The fiscal framework and decisions made by the Scottish Government continues to ensure that it faces challenging financial pressures with Audit Scotland highlighting significant uncertainties over the financial sustainability of the current Scottish public sector landscape. • The UK Government has committed to providing funding to replace previous EU programmes and as part of its levelling up agenda. It is not yet clear how these funds will operate in the longer-term. 2. Economic challenges Links to existing corporate risks: ‘Implementation of ERDP’ ‘Digital and IT Strategy’ ‘Educational attainment’ and ‘Climate change’ and ‘Tackling Poverty • The pandemic resulted in an economic downturn and some sectors of the economy may be permanently affected. Although the economy is starting to recover following the pandemic, the nature and extent of recovery remains unclear. Establishing a more digital, more inclusive economy will require time and significant investment in skills. The economy will have to reshape to enable climate change objectives to be met. Economic/inflationary pressures on household incomes may drive greater demand for public services. • Scotland’s fiscal framework means that public sector budgets are now more closely tied to economic performance (and Scotland’s performance relative to the rest of the UK) than at any time since devolution in 1999. The Scottish economy continues to display comparatively anaemic growth and productivity. • The longer-term economic effects of exit from the European Union (due to changes in access to markets and migration patterns) remain to be seen but most independent commentators expect short and long-term impacts on growth. • The war in Ukraine is having an impact on the wider economy and across the public sector, in areas including policy, procurement and supply chains with consequential impacts on rising costs, availability and a need for more focus on supply chain resilience. • Rising prices and uncertainty are putting pressure on household incomes and may drive greater demand for public services. Public sector budgets are highly unlikely to see inflation-linked increases and will have to absorb higher prices. Page 154 of 240
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3. Financial sustainability Links to existing corporate risks: ‘Financial sustainability’ • A considerable proportion of the Scottish public sector budget is spent on the NHS and social care. Along with the effects of the pandemic, demographic change and medical advances mean that despite being prioritised in successive Scottish Government budgets (at the expense of local government) the pressure on these budgets is already acute and appears insatiable. Some NHS boards have already seen overspends, despite the NHS budget having grown in real terms. • The public sector already has many long-term financial commitments (pensions, PFI/PPP/NPD payments) that extend decades into the future which constrains financial flexibility. • Prior to the pandemic, there were already concerns about the financial sustainability of certain parts of the public sector in their current form including local government, health and policing. The pandemic focused attention on short-term priorities. The need for medium and long-term financial planning remains but now needs to account for the financial impact of the pandemic as well and the need to meet climate change objectives and respond to existing budget pressures within the Scottish Government. 4. Addressing inequalities Links to existing corporate risks: ‘Tackling Poverty’, Implementation of ERDP’ and ‘Educational Attainment’. • There is still much progress to be made to reduce inequalities and protect human rights. Areas affected include wealth, health, wellbeing, and education and in many cases, existing challenges or pressures have been accentuated by the pandemic. Inequalities affect multiple different groups in complex and interacting ways. Child poverty is a major issue with significant long-term effects if not addressed. • There are profound geographical inequalities across Scotland and within individual Council areas. The aging population creates significant additional pressures and issues. • There is a need to capture users’ perspectives and enable communities to have greater power and influence over what matters to them through increased community engagement and more meaningful participation in the planning/design and delivery of public services. 5. Performance and innovation Links to existing corporate risks: ‘‘Governance, leadership and decision-making’ ‘Information security and governance’, ICT operational capability’, ‘Digital and IT strategy’ • Ten years since the Christie report, there is still limited evidence of a significant shift towards preventive spending. There is a risk that public-sector reform is not happening at sufficient pace to ensure the shift to greater preventative spending, a focus on outcomes and the renewal of public services. • Before the pandemic, financial pressures were affecting how well some public services were performing. The pandemic has exacerbated this. This may affect delivery of the outcomes in the National Performance Framework, such as reducing educational inequalities. The pandemic has exacerbated this, created backlogs and reduced access to some public services and affected systems to monitor performance. Gaps in data hinder evidence-based decision making and performance monitoring. • The proposals for a National Care Service represent one of the largest restructuring in how public services are delivered since devolution. This presents both risks and opportunities for delivery. The National Care Service proposals have the potential to create significant challenges and strategic, financial, and operational risks to the Council’s ability to deliver against its wider ambitions. Page 155 of 240
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• The pandemic has accelerated the shift to greater digital delivery of public services, but true digital transformation remains a significant challenge to deliver and generates risks around capacity, digital exclusion, cybersecurity, and fraud. 6. Leadership, workforce, and governance Links to existing corporate risks: ‘Governance, leadership and decision-making’, ‘Human Resources’ ‘Managing strategic change’, ‘Engagement and consultation’) • Leadership roles are increasingly difficult to fill in parts of the public sector with increased turnover/vacancies at senior (chief executive, director) levels. There are also challenges in recruiting some specialist skills. • To secure long-term outcomes, collaborative leadership across organisations and sectors is essential. Achieving this remains challenging when existing public sector structures and systems of incentives and accountability remain segmented. • An ageing population, increasing demands for Council services, relatively inflexible remuneration arrangements and a smaller working age population presents real challenges for local authorities to ensure they remain an attractive option for younger workers and can recruit and retain sufficient staff with the right skills and attributes. Also increased focus on ensuring our employees reflect the diversity of our local communities. • The expansion in the use of digital technology and of data and artificial intelligence demands greater attention to digital governance to ensure that ethical, privacy and equalities and human rights perspectives are properly considered. There are also heightened risks around cybersecurity, fraud and digital exclusion. 7. Other current and potential future corporate risks with strategic considerations • Public Protection: always a high-risk and high-profile issue. Increased risks arising from the pandemic and from the economic challenges facing many families and communities will likely result in continuing pressures. • Enterprise Project: refocused and narrower than originally envisaged but still a significant project which will need to be successfully delivered to underpin key aspects of service delivery and to contribute to the achievement of many of the Council’s wider ambitions. • Place-making: central to the Council’s ambitions and links the Council’s future operating model and associated asset requirements and to the wider development and delivery of the Town Centre Visions designed to create vibrant and sustainable towns across North Lanarkshire. • Working/collaborating with partners and other stakeholders – the Council increasingly needs to work in partnership to address the complex challenges facing our towns and communities. This can be challenging and requires us to rely on the willingness, capacity and ability of third parties to positively engage. • Organisational resilience and agility – while the resilience of the organisation has been well-tested, there remains a risk that our longer-term ability to anticipate and respond to external factors is impaired, for example, because of further financial and workforce pressures. The maturity and effectiveness of key enablers such as risk management, project management and contract management will directly affect how well we can, identify, anticipate and respond to certain challenges. • The Council is in the early stages of implementing revised governance arrangements designed to support the delivery of the recently refreshed Programme of Work to 2028. The adequacy and effectiveness of these arrangements will be important in ensuring that the Council can successfully progress planned actions and deliver against its intended outcomes. Ken Adamson, Chief Officer (Audit and Risk) 31 May 2023Page 156 of 240
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Appendix 2 - continued Summary assessment of the potential impact/timing of identified strategic risks and whether these are currently increasing, stable or decreasing Risk Timeframe Impacts Risk currently increasing, stable or decreasing from 2022 assessment? Impacts of constitutional uncertainties Ongoing / uncertain Potentially high Stable – Although no short-term developments are currently envisaged, the medium-term political context within which the Council operates continues to be fluid and uncertain. Impacts of Scottish Government policies such as the proposed National Care Service and potential future education reform Short-term 1-3 years Potentially high Stable – the NCS proposals creates significant operational, financial and strategic risks for the Council and along with the wider direction of travel of other SG policies suggests uncertainty and a possible future review of the current composition of Scottish local government. The election of a new First Minister has resulted in some of these developments being paused and/or reviewed. Economic challenges Immediate High Increasing – the post-Covid economic environment combined with current inflationary/cost of living pressures has and will continue to significantly impact North Lanarkshire and its communities and is likely to make the Council’s aspirations in this area more challenging to achieve. The UK and Scottish economies continue to display anaemic growth and low productivity growth. Financial sustainability Immediate and likely to be ongoing High Increasing- current/future pressures on NHS and impacts on future SG budgets of the use of devolved income tax powers is likely to result in increased pressures on future LG budgets. The additional costs of settling 2022 pay disputes and challenges around future pay awards will only create additional pressures. Also, significant risks arising from current inflationary pressures on Council budgets (and although currently expected to be relatively short-term, these could become more embedded). Inequalities: including wealth, health, wellbeing, and education Immediate and ongoing High Increasing – Covid’s impacts and the ongoing cost of living crisis and associated inflationary pressures have generally worsened pre-existing inequalities across all aspects (wealth, health, well- being, and education) making the Council’s aspirations in this area more challenging to achieve. Performance and innovation (including digital transformation) Short-term 1-3 years Medium to High Increasing – financial challenges, changing public expectations and ongoing performance challenges are likely to require difficult decisions re-service delivery models and service redesign, testing the Council’s organisational capacity to deliver. New governance arrangements are being rolled-out to progress the refreshed Programme of Work to 2028. Leadership and workforce Short-term 1-3 years Medium to High Increasing – longer-term demographic pressures have been exacerbated by Brexit and Covid impacts; existing workforce pressures have already increased and the Council faces real challenges to ensure it has the right workforce to deliver against its current and future ambitions. Increased risks arising from staff expectations that future pay awards will keep pace with current inflationary pressures. Increasing challenges around recruitment and retention of staff in some key disciplines, Place making – range of activities designed to create vibrant and sustainable towns across NL Longer term 3- 5 years Medium to High Increasing - The Council’s aim to create vibrant and sustainable towns across North Lanarkshire faces considerable challenges and the economic and wider societal impacts of the pandemic and the cost-of-living crisis have only increased the pressures on existing town centres. Page 157 of 240
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Appendix 3 Service risk registers – risks with highest residual scores Chief Executive’s Service Risk Title Residual risk rating 1. Organisational capacity and retention of staff (RIA0000039). 20 2. Potential financial impacts arising from recent child abuse legislation and claims from survivors of historical child abuse (recognised as unquantified contingent liability in the 22-23 draft annual accounts) (RIA0000212). 20 3. Potential that risk management arrangements are inadequate and/or ineffective impacting on the Council’s ability to deliver services and/or achieve planned outcomes. (RIS0000011) 16 4. Potential failure to effectively implement business change/service redesign processes impacting on the realisation of planned benefits (and the Council’s ability to deliver continuous improvement/best value). (RIA0000020) 16 5. Business continuity as related to Civic Centre responsibilities (RIA0000380) 15 Enterprise and Communities Risk Title Residual risk rating 1. Potential failure of key unsupported business systems impacting ability to generate income leading to cash flow issues for NL Properties (CIMS) (RIA0000109) 16 2. Issues arising from Microsoft Teams Migration leading to potential data loss/corruption in Town and Community Hub Delivery Programme (RIS0000576) 16 3. EV Charging requirements and challenges in Community Hubs (RIS0000634) 16 4. Inconsistencies in Statutory Authority requirements impacting delivery and cost within projects in Town and Community Hub delivery programme (RIS0000632) 16 5. Recruitment and retention of staff impacting service delivery: Housing Management (RIS0000612) 16 6. Recruitment and retention of staff impacting service delivery: Place (RIS0000617) 16 7. Impact of cost inflation on New Supply projects (RIS0000627) 16 8. IT System maintenance and development inhouse and potential lack of capacity of internal resources to support HSMS impacting service delivery. (RIA0000012) 16 9. Recruitment and retention of staff impacting service delivery: Property and Projects (RIA0000068) 16 10. Cost of living crisis, welfare system and energy costs for residents impacting income and arrears for Housing Solutions. (RIA0000089) 16 Adult Health and Social Care Risk Title Residual risk rating 1. Data migration and information governance leading to service delivery issues and/or business operations are interrupted. (RIS0000569) 16 2. Potential for enforcement action to Home Support Services (RIS0000584) 16 3. Analogue to digital transition (Telecare/Community Alarm) (RIS0000426) 16 Education and Families Risk Title Residual risk rating 1. Failure to ensure health, safety and wellbeing of learners/service users (RIA0000397) 20 2. Advocacy and representation for residents – financial inclusion (RIS0000671) 16 Page 158 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No Ref AA/SL Date 04/09/23 Self-Evaluation of the Audit and Scrutiny Panel From Archie Aitken, Chief Officer (Legal and Democratic) E-mail AitkenA@northlan.gov.uk E-mail 07939 280102 Executive Summary Members of the Audit and Scrutiny Panel are well versed in the role of the Panel and its statement of purpose to: • Provide independent assurance to the council and those charged with governance on the adequacy of the council’s risk management framework and internal control environment. • Provide independent review of the council’s governance, risk management, performance, and control frameworks and oversee the financial reporting and annual governance processes. • Oversee the council’s internal and external audit arrangements, helping to ensure efficient and effective assurance arrangements are in place. • Undertake the scrutiny function within the council’s governance framework (establishing short life task group reviews, as required) to undertake in-depth examination of particular areas of policy and/or service delivery with a view to making recommendations for improvement. The Panel is also a key component of the council’s corporate governance arrangements which are subject to various review and assessment processes. In 2021, an Internal Audit review of Principles E, F, and G from the Delivering Good Governance in Local Government: Framework (2016) considered there was a risk that “the council may not be able to adequately demonstrate that it has effective audit committee arrangements and/or arrangements to ensure Elected Members have the skills, knowledge and, where appropriate or required, access to relevant training and resources to effectively undertake their role”. In this respect, Internal Audit recommended that the Audit and Scrutiny Panel should, in line with good practice, periodically undertake a self-assessment of (a) their performance and activities against CIPFAs Audit Committees: Practical Guidance for Local Authorities (2018), and (b) the effectiveness of the performance and activities of the Panel in discharging the Scrutiny aspect of its role. To implement the Internal Audit recommendations, the self-evaluation exercise was incorporated into the review programme for the council’s Strategic Self-Evaluation Framework. The evaluation framework, process, and timetable for the self-evaluation of the Audit and Scrutiny Panel has been subsequently developed in line with the Strategic Self-Evaluation Framework and customised in order to best meet the needs, operating Item 11 Page 159 of 240
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1. Background 1.1 The Audit and Scrutiny Panel are aware of the important role they play in relation to the council’s governance framework - through the discrete functions of both audit and scrutiny - by providing an independent and high level resource to support good governance and strong public financial management. The Panel’s role and responsibilities in respect of the audit function reflect the standards set out in the Chartered Institute of Public Finance and Accountancy (CIPFA) Position Statement: Audit Committees in Local Authorities (2018) which is attached as Appendix 1. This role, and the wider Terms of Reference for the Panel which includes the scrutiny function, is set out in the Scheme of Administration which was most recently approved at the Council meeting in October 2022 (see Appendix 2). 1.2 The council’s governance arrangements are reviewed on an annual basis through the Strategic Governance Framework which is a key item of evidence that informs the development of the Annual Governance Statement. Throughout the year various aspects of corporate governance are also subject to review through the Internal Audit programme of work. These processes support the council in demonstrating compliance with, and commitment to, the good governance principles as set out in the national Delivering Good Governance in Local Government: Framework (2016), which can be found in the appendix to the Strategic Governance Framework that was approved by the Panel in June 2023. 1.3 A review of Principles E, F, and G from the Delivering Good Governance in Local Government: Framework (2016) was undertaken by Internal Audit in 2021. This focused on the aspect of corporate governance that relates to the following: • 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. environment, and desired outcomes of the function being evaluated. This report provides Elected Members on the Panel with an advance overview of the evaluation framework, process, and timetable for the self-evaluation of the Audit and Scrutiny Panel. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Are aware of the requirement to undergo a self-evaluation of the Panel in line with Internal Audit recommendations, and (2) Endorse the approach to the self-evaluation exercise which is set out in this report. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Page 160 of 240
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1.4 In relation to the effectiveness of the Audit and Scrutiny Panel, the Internal Audit report (submitted to the Panel in March 2021) considered there was a risk that “the council may not be able to adequately demonstrate that it has effective audit committee arrangements and/or arrangements to ensure Elected Members have the skills, knowledge and, where appropriate or required, access to relevant training and resources to effectively undertake their role”. In this respect, Internal Audit recommended that the Audit and Scrutiny Panel should, in line with good practice, periodically undertake a self-evaluation of how effectively it is discharging its role by introducing: a) “A formal process whereby the Audit and Scrutiny Panel periodically undertakes a self-assessment of their performance and activities against CIPFAs Audit Committees: Practical Guidance for Local Authorities (2018), with a report outlining the results of this review including any improvement actions being presented to the Panel and reported to the Policy and Strategy Committee.” b) “A formal process whereby the Audit and Scrutiny Panel periodically undertakes a separate self- assessment of the effectiveness of the performance and activities of the Panel in discharging the Scrutiny aspect of its role.” 1.5 Given the membership of the Audit and Scrutiny Panel changed following the Local Government elections in May 2022, implementation of these Internal Audit recommendations was rescheduled to allow time for the new arrangements to become more fully embedded. In the meantime the self-evaluation exercise was incorporated into the rolling review programme that supports the council’s Strategic Self-Evaluation Framework, which the Panel has oversight of on an annual basis. 1.6 Members will recall the Strategic Self-Evaluation Framework is one of six inter-related strategic frameworks (Policy, Governance, Performance, Self-Evaluation, Project Management, and Demonstrating Improved Outcomes for Communities) that aim to maintain a corporate one council approach across the organisation. These Frameworks are key to assessing the success of The Plan for North Lanarkshire and monitoring delivery of the Programme of Work, while ensuring each stage of delivery towards achieving the overall vision is appropriately aligned, planned, guided, implemented, and governed. 1.7 To ensure high level support for each self-evaluation exercise the council undertakes in line with the Strategic Self-Evaluation Framework rolling review programme, the Corporate Management Team agreed in July 2021 that a Chief Officer would be assigned as a Champion for each exercise. For the self-evaluation of the Audit and Scrutiny Panel, the Chief Officer (Legal and Democratic) has been assigned the role of Champion; responsibilities in this respect are set out below. • Provide leadership, commitment, motivation, and recognition to the introduction and execution of the self-evaluation exercise. • Communicate the purpose and the benefits, and challenge resistance. • Ensure resultant improvement actions are valid and used to inform improvements to what the council ultimately aims to achieve. 1.8 Within the aforementioned context, development work has progressed to establish the approach to be undertaken in order to fulfil the Internal Audit recommendations. This report herewith - from the Chief Officer (Legal and Democratic) in his role as Champion for the self-evaluation exercise - provides the Audit and Scrutiny Panel with an advance overview of the evaluation framework, process, and timetable for the self-evaluation of the Audit and Scrutiny Panel. While there are two specific Internal Audit recommendations in this respect, the self-evaluation exercise has been combined into Page 161 of 240
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one to avoid duplicating the use of both Elected Member’s time and officer resources, and to enable the Audit and Scrutiny Panel to be considered as a single entity and thereby ensure that any improvement actions identified complement the effective operation of both the audit and scrutiny aspects of the Panel and not just one at the expense of the other. 2. Self-Evaluation 2.1 Undertaken in line with the corporate approach set out in the Strategic Self-Evaluation Framework, the self-evaluation of the Audit and Scrutiny Panel aims to answer three simple questions - How well are we doing? How do we know? (i.e. What evidence is there to support the view of how well we are doing?), and How can we do better? (i.e. What are we going to do now?). 2.2 The Strategic Self-Evaluation Framework is supported by the same five non-negotiable standards as the other strategic Frameworks and, as such, the self-evaluation of the Audit and Scrutiny Panel has been developed so that it is: • Aligned - to The Plan for North Lanarkshire so that improvement actions contribute to the achievement of the council’s long-term vision. • Consistent - so there is a clear understanding of the purpose and benefits of the self-evaluation exercise. • Transparent - so that progress made against the implementation of the improvement actions is widely reported, understood, and acted upon to support the council’s governance arrangements. • In context - so that the self-evaluation exercise is tailored to the function being evaluated and designed within the context of that operating environment. • Balanced - to ensure the self-evaluation exercise undertaken is proportionate to the resources expended, outcomes expected, the scale of the function being evaluated, and the associated risks. The outputs must tell a balanced narrative that identifies aspects of good practice as well as areas for improvement. 2.3 Within the context noted above and in section 1 of this report - and in conjunction with the Chief Officer (Audit and Risk) in relation to the Panel’s audit function and the Chief Officer (Business and Digital) in relation to the Panel’s scrutiny function - the approach to the self-evaluation of the Audit and Scrutiny Panel is set out in paragraphs 2.3.1 to 2.3.3 below. 2.3.1 Evaluation Framework In terms of establishing an evaluation framework for each self-evaluation exercise, the Strategic Self-Evaluation Framework recommends that this should best reflect the function being assessed and the context and operating environment of that function. The framework used should also be that which is most appropriate to delivering the desired outcomes. The evaluation framework used for the self-evaluation of the Audit and Scrutiny Panel is therefore based on CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and incorporates the key principles set out in the supporting Audit Committees Practical Guidance for Local Authorities (2018) document. These are considered to be the essential factors in developing effective audit aspects for such a committee. From a scrutiny perspective, the Audit and Scrutiny Panel has a key role to play in terms of ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny. As such relevant Page 162 of 240
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statements have also been incorporated into the evaluation framework from the Best Value Statutory Guidance (2020). The evaluation framework for the self-evaluation of the Audit and Scrutiny Panel is attached in Appendix 3. This covers four themes: A. Panel purpose and governance. B. Functions of the Panel. C. Membership and support. D. Effectiveness of the Panel. Within each theme there are two sections (as set out in Appendix 3): • Context and evidence base. Context is an important first step in a self-evaluation exercise in order to ensure a clear understanding of the operating environment of the function being evaluated and ensure clarity in terms of the scope and boundaries of the exercise. Initial desktop work to gather evidence helps to ensure that the results from the self-evaluation exercise can be cross checked from multiple sources in order to increase the reliability and validity of the findings, as well as help to ensure a wider understanding of complex issues and facilitate the identification of more complete and fully informed areas for improvement. • This section has been prepopulated with the facts regarding the operation of the Panel in line with both the council’s decision making and committee arrangements as set out in the approved Standing Orders and Scheme of Delegation. This section also reflects updates in terms of the council’s corporate governance arrangements which have been set out in various reports to the Panel over the course of 2022 and 2023. • 25 good practice questions. All Elected Members who sit on the Audit and Scrutiny Panel will be provided with the opportunity to respond to each of the 25 questions listed in Appendix 3 through an online survey. There will also be an opportunity to highlight what works well and to make any suggestions for improvement. • Should a 1:1 discussion be required to support Panel Members to complete the online survey, this can be arranged. To organise this please contact the Chief Officer (Legal and Democratic) in the first instance. 2.3.2 Process and Timetable Action Responsibility Timescale 1. Initial report to the Audit and Scrutiny Panel providing an overview of the forthcoming self-evaluation exercise. Chief Officer (Legal and Democratic) Champion for the self-evaluation of the Audit and Scrutiny Panel 04/09/23 2. Online survey issued to all Elected Members who sit on the Audit and Scrutiny Panel. Chief Officer (Legal and Democratic) 05/09/23 3. Online survey to be completed. All Elected Members on the Audit and Scrutiny Panel By 19/09/23 4. Analysis of survey results and collation of report comprising the outcomes and improvement plan arising from the self- evaluation. Chief Officer (Legal and Democratic) / Strategy and Performance Manager By 26/09/23 5. Presentation of outcome report and improvement plan to the Audit and Scrutiny Panel. Chief Officer (Legal and Democratic) Conveners meeting: 24/10/23 Panel meeting: Page 163 of 240
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16/11/23 6. Discuss outcome report and agree implementation of improvement plan. All Elected Members on the Audit and Scrutiny Panel Panel meeting: 16/11/23 7. Improvement plan remitted to the Policy and Strategy Committee as per the Internal Audit recommendation. Chief Officer (Legal and Democratic) Committee meeting: 07/12/23 2.3.3 Improvement plan Where the results of the self-evaluation exercise show a high degree of performance against the good practice questions, CIPFA consider this to be an indicator that the Audit and Scrutiny Panel is soundly based and has in place a knowledgeable membership. As well as informing an improvement plan for the Panel, the self- evaluation exercise will also be able to be used to support future planning for the Panel’s work programme, training plan, and annual report. Regular updates, reporting on progress in implementing any actions arising from the self-evaluation exercise which require to be identified in the ensuing improvement plan, will be added to the Panel’s Scrutiny Work Programme. This will enable Elected Members on the Panel to monitor progress and effectiveness of the actions implemented along with the Panel’s routine activity. 3. Measures of success 3.1 Measures of success will be identified in the form of evidence which demonstrates that the council has effective Audit and Scrutiny Panel arrangements. Specifically that the Panel effectively discharges its duty in line with the council’s Scheme of Administration, that the performance and activities of the Panel is effective in discharging the audit aspect of its role in line with CIPFAs Audit Committees Practical Guidance for Local Authorities (2018), and that the performance and activities of the Panel is effective in discharging the scrutiny aspect of its role in line with ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny. 3.2 Further measures of success will reflect the skills and knowledge of the Elected Members on the Audit and Scrutiny Panel, and their commitment to ensuring they have (where appropriate or required) access to relevant training and resources to enhance their knowledge, skills, capacity, and capabilities in order to effectively undertake their role on the Panel. 4. Supporting documentation 4.1 Appendix 1: CIPFAs Position Statement: Audit Committees in Local Authorities (2018) Appendix 2: Audit and Scrutiny Panel terms of reference (as per the Scheme of Administration, October 2022). Appendix 3: Self-Evaluation of the Audit and Scrutiny Panel - Evaluation Framework Archie Aitken Chief Officer (Legal and Democratic) Page 164 of 240
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Page 165 of 240
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Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Implementation of a self-evaluation of the Audit and Scrutiny Panel contributes to the mitigation of the risk on the Corporate Risk Register for governance, leadership, and decision making. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 166 of 240
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Page 1 CIPFA’s Position Statement: Audit Committees in Local Authorities and Police The scope of this Position Statement includes all principal local authorities in the UK, the audit committees for PCCs and chief constables in England and Wales, and the audit committees of fire and rescue authorities. 1 Audit committees are a key component of an authority’s governance framework. Their function is to provide an independent and high-level resource to support good governance and strong public financial management. 2 The purpose of an audit committee is to provide to those charged with governance independent assurance on the adequacy of the risk management framework, the internal control environment and the integrity of the financial reporting and governance processes. By overseeing both internal and external audit it makes an important contribution to ensuring that effective assurance arrangements are in place. 3 Authorities and police audit committees should adopt a model that establishes the committee as independent and effective. The committee should: „ act as the principal non-executive, advisory function supporting those charged with governance „ in local authorities, be independent of both the executive and the scrutiny functions and include an independent member where not already required to do so by legislation „ in police bodies, be independent of the executive or operational responsibilities of the PCC or chief constable „ have clear rights of access to other committees/functions, for example, scrutiny and service committees, corporate risk management boards and other strategic groups „ be directly accountable to the authority’s governing body or the PCC and chief constable. 4 The core functions of an audit committee are to: „ be satisfied that the authority’s assurance statements, including the annual governance statement, properly reflect the risk environment and any actions required to improve it, and demonstrate how governance supports the achievement of the authority’s objectives „ in relation to the authority’s internal audit functions: – oversee its independence, objectivity, performance and professionalism Appendix 1 Page 167 of 240
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AUDIT COMMITTEES: PRACTICAL GUIDANCE FOR LOCAL AUTHORITIES AND POLICE \ 2018 EDITION Page 2 – support the effectiveness of the internal audit process – promote the effective use of internal audit within the assurance framework „ consider the effectiveness of the authority’s risk management arrangements and the control environment, reviewing the risk profile of the organisation and assurances that action is being taken on risk-related issues, including partnerships and collaborations with other organisations „ monitor the effectiveness of the control environment, including arrangements for ensuring value for money, supporting standards and ethics and for managing the authority’s exposure to the risks of fraud and corruption „ consider the reports and recommendations of external audit and inspection agencies and their implications for governance, risk management or control „ support effective relationships between external audit and internal audit, inspection agencies and other relevant bodies, and encourage the active promotion of the value of the audit process. „ review the financial statements, external auditor’s opinion and reports to members, and monitor management action in response to the issues raised by external audit. 5 An audit committee can also support its authority by undertaking a wider role in other areas including: „ considering governance, risk or control matters at the request of other committees or statutory officers „ working with local standards and ethics committees to support ethical values „ reviewing and monitoring treasury management arrangements in accordance with Treasury Management in the Public Services: Code of Practice and Cross-Sectoral Guidance Notes (CIPFA, 2017) „ providing oversight of other public reports, such as the annual report. 6 Good audit committees are characterised by: „ a membership that is balanced, objective, independent of mind, knowledgeable and properly trained to fulfil their role. The political balance of a formal committee of a council will reflect the political balance of the council, however, it is important to achieve the right mix of apolitical expertise „ a membership that is supportive of good governance principles and their practical application towards the achievement of organisational objectives „ a strong independently minded chair – displaying a depth of knowledge, skills and interest. There are many personal qualities needed to be an effective chair, but key to these are: – promoting apolitical open discussion – managing meetings to cover all business and encouraging a candid approach from all participants – an interest in and knowledge of financial and risk management, audit, accounting concepts and standards, and the regulatory regime „ unbiased attitudes – treating auditors, the executive and management fairlyPage 168 of 240
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CIPFA’S POSITION STATEMENT: AUDIT COMMITTEES IN LOCAL AUTHORITIES AND POLICE Page 3 „ the ability to challenge the executive and senior managers when required. 7 To discharge its responsibilities effectively the committee should: „ meet regularly – at least four times a year, and have a clear policy on those items to be considered in private and those to be considered in public „ be able to meet privately and separately with the external auditor and with the head of internal audit „ include, as regular attendees, the CFO(s), the chief executive, the head of internal audit and the appointed external auditor. Other attendees may include the monitoring officer (for standards issues) and the head of resources (where such a post exists). These officers should also be able to access the committee, or the chair, as required „ have the right to call any other officers or agencies of the authority as required, while recognising the independence of the chief constable in relation to operational policing matters „ report regularly on its work to those charged with governance, and at least annually report an assessment of their performance. An annual public report should demonstrate how the committee has discharged its responsibilities. Additional guidance to support those acting as audit committee members in local authorities can be found in CIPFA’s publication Audit Committees: Practical Guidance for Local Authorities and Police (2018), available from www.cipfa.org.uk/publications Page 169 of 240
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Appendix 2 AUDIT AND SCRUTINY PANEL (1) Statement of Purpose The Audit and Scrutiny Panel is a key component of the Council’s corporate governance arrangements. The purpose of the Audit and Scrutiny Panel is to provide independent assurance to the Council and those charged with governance on the adequacy of the Council’s risk management framework and internal control environment. It provides independent review of the Council’s governance, risk management, performance and control frameworks and oversees the financial reporting and annual governance processes. It oversees the Council’s internal and external audit arrangements, helping to ensure efficient and effective assurance arrangements are in place. It also undertakes the scrutiny function within the Council’s governance framework and will establish short life task group reviews, as required, to undertake in-depth examination of particular areas of policy and/or service delivery with a view to making recommendations for improvement. (2) Governance, Risk and Control The Audit and Scrutiny Panel’s remit in relation to governance, risk and control is:- • to review the Council’s corporate governance arrangements against relevant good practice guidance and consider annual governance reports and assurances; • to review the Annual Governance Statement prior to approval and consider whether it properly reflects the risk environment and supporting assurances, taking into account Internal Audit’s opinion on the overall adequacy and effectiveness of the Council’s framework of governance, risk management and control; • to consider the Council’s arrangements to secure value for money and review assurances and assessments on the effectiveness of these arrangements including in relation to the Council’s ALEOs; • to monitor the effective development and operation of risk management in the Council and its ALEOs, including monitoring progress in addressing risk-related issues reported to the Panel; • to consider reports on the effectiveness of internal controls and monitor the implementation of agreed actions, and • to review the assessment of fraud risks and potential harm to the Council from fraud and corruption by monitoring the Council’s counter-fraud strategy, actions and resources. (3) Internal Audit The Audit and Scrutiny Panel’s remit in relation to Internal Audit is:- • to approve the Internal Audit Charter; • to approve the risk-based Internal Audit Plan, including Internal Audit’s resource requirements; • to approve significant interim changes to the risk-based Internal Audit Plan and Page 170 of 240
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resource requirements; • to make appropriate enquiries of both management and the Audit and Risk Manager to determine if there are any inappropriate scope or resource limitations impacting on the work of Internal Audit; • to consider reports from the Audit and Risk Manager on Internal Audit’s activity and performance during the year. These will include:- - updates on the work of Internal Audit, including key findings, issues of concern and action in hand as a result of Internal Audit work; - regular Internal Audit Progress Reports (including summaries of substantive Internal Audit reports, as requested); - periodic reports on the results of the Quality Assurance and Improvement Programme, and - reports on instances where the internal audit function does not conform to the Public Sector Internal Audit Standards and Local Government Application Note, considering whether the non-conformance is significant enough that it must be included in the Annual Governance Statement; • to consider the Audit and Risk Manager’s Annual Report, including:- - the statement of the level of conformance with the Public Sector Internal Audit Standards and Local Government Application Note and the results of the Quality Assurance and Improvement Programme that supports the statement – these will indicate the reliability of the conclusions of Internal Audit, and - the opinion on the overall adequacy and effectiveness of the Council’s framework of governance, risk management and control, together with the summary of the work supporting the opinion - these will assist the Panel in reviewing the Council’s Annual Governance Statement; • to receive reports outlining the action taken where the Audit and Risk Manager has concluded that management has accepted a level of risk that may be unacceptable to the Council or there are concerns about progress with the implementation of agreed actions; • to contribute to the Quality Assurance and Improvement Programme and in particular, to the external quality assessment of Internal Audit that takes place at least once every five years, and • to support the development of effective communication with the Audit and Risk Manager. (4) External Audit The Audit and Scrutiny Panel’s remit in relation to External Audit is:- • to consider the External Auditor’s Annual Plan and all relevant reports issued to those charged with governance; • to comment on the scope and depth of external audit work and to ensure it gives value for money, and • to advise, and make recommendations as appropriate, on the effectiveness of Page 171 of 240
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relationships between External Audit and Internal Audit and other inspection agencies or relevant bodies. (5) Financial Reporting The Audit and Scrutiny Panel’s remit in relation to financial reporting is:- • to review the Annual Statement of Accounts. Specifically, to consider whether appropriate accounting policies have been followed and whether there are concerns arising from the financial statements, or from the audit, that need to be brought to the attention of the Council, and • to consider the External Auditor’s report to those charged with governance on issues arising from the audit of the accounts. (6) Scrutiny The Audit and Scrutiny Panel’s remit in relation to the challenge and scrutiny function is:- • to review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work and targets in the Council plan, specifically performance (for example in improving services and outcomes and in demonstrating Best Value); • to review performance to assess whether intended policy outcomes have been achieved; • to consider the Council's performance, improvement, and governance arrangements to ensure that approaches continues to facilitate effective and efficient delivery of planned services and outcomes and the Council's vision, and • to commission independent short life task group reviews (based on evidence), and carry out reviews recommended from service committees, to enable in- depth scrutiny of policy, practices, and performance where the challenge and scrutiny function can make an impact or add value. (7) Accountability Arrangements The Audit and Scrutiny Panel’s remit in relation to accountability arrangements is:- • to report to the Council’s Policy and Strategy Committee on the Panel’s findings, conclusions and recommendations concerning:- - the adequacy and effectiveness of the Council’s governance, risk management and internal control frameworks; - financial reporting arrangements; - internal and external audit arrangements; - the performance of the council in delivering upon its priorities, and - the adequacy and effectiveness of the Council's performance and improvement arrangements, and • to report to the Council’s Policy and Strategy Committee on a regular basis on the Panel’s performance in relation to its Terms of Reference and the effectiveness of the Panel in meeting its purpose. Page 172 of 240
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Appendix 3 Self-Evaluation of the Audit and Scrutiny Panel Evaluation framework This high-level evaluation framework incorporates the key principles set out in CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and the supporting Audit Committees Practical Guidance for Local Authorities (2018) document. These are considered to be the essential factors in developing effective audit aspects for such a committee. From a scrutiny perspective, the Audit and Scrutiny Panel has a key role to play in terms of ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny. As such relevant statements have also been incorporated into this evaluation framework from the Best Value Statutory Guidance (2020). Theme A. Panel purpose and governance Context and evidence base • Local authorities are corporate bodies created by statute and must make corporate decisions. Legislation allows local authorities to delegate most decision making to committees, sub-committees, or officers. This means that committees only operate within the remits given to them by their council. The council has delegated certain matters to committees, sub-committees and officers, and the Standing Orders set out the rules which apply to the running and operation of council and its committee meetings. The latest version of the Standing Orders (December 2022) is available on InsideNL: Corporate Governance. • The Scheme of Administration provides the details and different functions of committees and other groups of each council and the delegation of authority to carry out the functions of the council. It sets out the terms of reference for committees, sub-committees, and panels of the council. At its meeting on 6th October 2022, the Council approved new governance arrangements and the Scheme of Administration: https://mars.northlanarkshire.gov.uk/egenda/images/att98939.pdf. • The Audit and Scrutiny Panel was established in its current form in 2017, with Audit / Governance and Scrutiny being separate committees prior to that. The current Audit and Scrutiny Panel has two discrete functions - Audit and Scrutiny, with corporate governance a key aspect within both of these functions. • As per the Scheme of Administration approved at the Council meeting in October 2022, the Audit and Scrutiny Panel is a standing committee of North Lanarkshire Council and a Sub-Committee of the Policy and Strategy Committee. • The Audit and Scrutiny Panel’s remit in relation to accountability arrangements is to report to the council’s Policy and Strategy Committee on the Panel’s findings, conclusions, and recommendations concerning the adequacy and effectiveness of the council’s governance, risk management and internal control frameworks, financial reporting arrangements, internal and external audit arrangements, the performance of the council in delivering upon its priorities, and the adequacy and effectiveness of the council's performance and improvement arrangements. It is also required to report to the Policy and Strategy Committee on a regular basis on the Panel’s performance in relation to its Terms of Reference and the effectiveness of the Panel in meeting its purpose. • The Terms of Reference for the Audit and Scrutiny Panel are set out in the Scheme of Administration. Each year the Strategic Governance Framework provides the evidence for production of the Annual Governance Statement to demonstrate that the purpose, activities, and functions of the council’s Audit and Scrutiny Panel reflect the standards set out in CIPFAs Position Statement: Audit Committees in Local Authorities (2018). Good practice questions 1. Is the role and purpose of the Audit and Scrutiny Panel understood and accepted across the council? 2. Does the Panel provide support to the council in meeting the requirements of good governance? 3. Are the arrangements to hold the Panel to account for its performance operating satisfactorily? Response required Additional commentary requested • Yes • What works well? Page 173 of 240
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4. Are Members of the Panel committed to training and personal development to update and enhance their knowledge, skills, capacity, and capabilities (where appropriate or required) to deliver Best Value and perform their role on the Panel? • No • Partially • Don’t know • Suggestions for improvement? Theme B. Functions of the Panel Context and evidence base • The Terms of Reference for the Audit and Scrutiny Panel explicitly address the following areas from CIPFAs Position Statement: Audit Committees in Local Authorities (2018), i.e. good governance, assurance framework, internal audit, external audit, financial reporting, risk management, value for money, and counter fraud and corruption. • Standing agenda item number 1 on all agendas for Council and Committee meetings is Declarations of Interest in terms of the Ethical Standards in Public Life Etc. (Scotland) Act 2000. Any declarations made are recorded in the minutes. • Good governance enables the council to effectively pursue the ambition set out in The Plan for North Lanarkshire within appropriate controls and the management of risk. It is also central to ensuring effective scrutiny and delivery of statutory Best Value obligations. The changes in the national approach to auditing Best Value were reported to the Audit and Scrutiny Panel in February 2023: https://mars.northlanarkshire.gov.uk/egenda/images/att99864.pdf. This report also set out the role of Panel members in this respect. These changes move the audit of Best Value from once every five years to an annual occurrence that is undertaken as part of the external auditors Annual Audit Report (AAR) process. • Reflecting the principles in the national Delivering Good Governance in Local Government: Framework, the council’s local code of governance is set out in the Strategic Governance Framework which was initially approved in February 2020 and subsequently refreshed and approved by the Audit and Scrutiny Panel annually thereafter; the most recent in June 2023: https://mars.northlanarkshire.gov.uk/egenda/images/att100886.pdf. Good practice questions 5. Has the Panel maintained its remit as set out in the Terms of Reference in the approved Scheme of Administration? 6. Is an evaluation undertaken to assess whether the Panel is fulfilling its terms of reference and that adequate consideration has been given to all core areas in the terms of reference? 7. Where coverage of core areas in the terms of reference has been found to be limited, are plans in place to address this? 8. Has the Audit and Scrutiny Panel considered the wider areas identified in CIPFAs Position Statement: Audit Committees in Local Authorities (2018) and whether it would be appropriate for the Panel to undertake them? 9. Is the Panel’s role clear in relation to ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny? 10. Do the scrutiny structures in the council support Members in reviewing and challenging performance? Response required Additional commentary requested • Yes • No • Partially • Don’t know • What works well? • Suggestions for improvement? Theme C. Membership and support Context and evidence base • 11 Elected Members sit on the Audit and Scrutiny Panel. Membership is in line with appointments to all committees and other bodies and these places are decided upon at a meeting of the Council. • Panel meetings are held quarterly in line with the council’s arrangements for committee meetings which support the implementation of the Scheme of Administration. At its meeting on 6th October 2022, the Council approved new governance arrangements - including the membership of committees, sub-committees, panels, and outside bodies and the timetable of meetings for 2022-27: https://mars.northlanarkshire.gov.uk/egenda/public/kab190.pl?cmte=COU&meet=227 Page 174 of 240
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• The Convener and Vice Convener for all council’s committees, sub-committees and panels were approved at the Council meeting in August 2022 https://mars.northlanarkshire.gov.uk/egenda/public/kab190.pl?cmte=COU&meet=230. The latest membership changes to the Audit and Scrutiny Panel were approved at the Council meeting in June 2023: https://mars.northlanarkshire.gov.uk/egenda/images/att101005.pdf. • The Committee Services team within Legal and Democratic provide secretariat and administrative support to all of the council’s committees, including the Audit and Scrutiny Panel. • The Chief Officer (Audit and Risk) supports the Panel on matters relating to internal audit, external audit, and risk management. • The Chief Officer (Business and Digital) supports the Panel on matters relating to scrutiny, Best Value, and Arm’s Length External Organisation (ALEO) assurance reporting. Matters in relation to corporate governance can be covered by either of these two Chief Officers, depending on the particular subject matter. • The Chief Officer (Finance) supports the Panel on matters relating to financial reporting. • Any Chief Officer can be called in by the Panel to provide further support, where appropriate, on service specific queries matters. • LearnNL provides an online portal for all Elected Members training and development needs, as well as an induction programme for new Elected Members: https://learnnl.learningpool.com/login/index.php Good practice questions 11. Does the Convener of the Panel have appropriate knowledge and skills? 12. Do Members of the Panel have appropriate knowledge and skills? 13. Do Members of the Panel receive sufficient support to perform their role on the Panel? 14. Are arrangements in place to support the Panel with briefings and training? 15. Does the Panel have good working relations with key people and organisations, including external audit, internal audit, and the chief financial officer? 16. Is the secretariat and administrative support provided to the Panel adequate? 17. Does the Panel have access to clear, timely, and sufficiently detailed information that allows them to carry out their governance and scrutiny role? Response required Additional commentary requested • Yes • No • Partially • Don’t know • What works well? • Suggestions for improvement? Theme D. Effectiveness of the Panel Context and evidence base • Internal Audit undertakes a programme of work which is approved by the Audit and Scrutiny Panel on an annual basis; this is based on the Internal Audit Annual Plan. This plan is risk based and is periodically updated to reflect evolving issues and changes. The most recent was approved in May 2023: https://mars.northlanarkshire.gov.uk/egenda/images/att100639.pdf. • A log is maintained of Audit and Risk related items to allow Elected Members to track implementation of outstanding requests and recommendations made by the Panel; log as at May 2023: https://mars.northlanarkshire.gov.uk/egenda/images/att100380.pdf. • An update to the assessment and prioritisation process (previously approved in 2018 to establish a work programme for the scrutiny function of the Panel) was reported to the Panel in September 2022: https://mars.northlanarkshire.gov.uk/egenda/images/att98534.pdf. Through this process members of the Panel are able to submit items, functions, or activities requiring scrutiny which are then assessed and prioritised in line with the approved framework. This process was further updated in September 2022 to ensure scrutiny activity is framed within the context of The Plan for North Lanarkshire. • A further report in February 2023 combined the previous twofold approach to the scrutiny function of the Panel - which comprises (1) items, functions, or activities requiring scrutiny identified and submitted by Panel members, and (2) the presentation of information and reports aligned to the long-term vision set out in The Plan for North Lanarkshire and its supporting strategic frameworks - into the one composite Scrutiny Work Programme. This composite programme listed all scrutiny related reports scheduled to be presented to the Panel during each cycle of 2023/24: https://mars.northlanarkshire.gov.uk/egenda/images/att99865.pdf. Good practice questions 18. Are meetings effective with a good level of discussion and engagement from all Panel Response required Additional commentary requested Page 175 of 240
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members? 19. Does the Panel engage with a wide range of leaders and managers, including discussion of audit findings, risks, and action plans with the responsible officers? 20. Does the Panel make recommendations for the improvement of governance, risk, control, and performance and are these acted on? 21. Has the Panel obtained feedback on its performance from those interacting with the Panel or relying on its work? 22. Has the Panel evaluated whether and how it is adding value to the organisation? 23. Does the Panel have an action plan to improve any areas of weakness? 24. Does the Panel publish an annual report to account for its performance and explain its work? 25. Is the Panel assured that its scrutiny of council performance adds value to the scrutiny activity which already takes place at Service Committee level and does not duplicate efforts? • Yes • No • Partially • Don’t know • What works well? • Suggestions for improvement? Page 176 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No Ref KH/SL Date 04/09/23 Scrutiny Work Programme (mid-year update) From Katrina Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096 121 Executive Summary This report follows on from the report to the Panel in September 2022 which outlined the process by which Members of the Audit and Scrutiny Panel are able to submit items, functions, or activities which potentially require to undergo scrutiny. To support this an Assessment and Prioritisation Process was also set out to allow for the relative merits of each issue brought forward by Panel Members to be assessed objectively, thus making the approach to determining whether an issue is appropriate for inclusion in the Scrutiny Work Programme clear and transparent. It also allows for issues to be prioritised if there were potentially competing matters presented for scrutiny. A subsequent report in February 2023 set out the Work Programme for the Scrutiny function of the Audit and Scrutiny Panel. In doing so it combined all aspects of the Panel’s scrutiny function into a composite programme which listed all related reports scheduled to be presented to the Panel during each cycle of 2023/24. This composite approach aims to ensure the council fulfils both its statutory Best Value duty (with scrutiny structures that support Elected Members in reviewing and challenging performance) and the principles of good corporate governance (in line with the Panels’ remit set out in the Scheme of Administration to provide an “independent review of the council's governance, risk management, performance, and control frameworks, and oversee the financial reporting and annual governance processes”). It also aims to ensure all scrutiny activity remains framed within the context of The Plan for North Lanarkshire and is focused on improving local public services and improving local outcomes. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Are aware of the mid-year update to the composite Scrutiny Work Programme and reporting timetable for the scrutiny function of the Audit and Scrutiny Panel, as set out in Appendix 3, (2) Continue to endorse the role of Panel Members in identifying potential issues for inclusion in the Scrutiny Work Programme in line with the Assessment and Prioritisation Process (in Appendix 2) and the overall approach (in Appendix 1), and (3) Continue to carry out their scrutiny role in reviewing and challenging performance to ensure the council fulfils its statutory Best Value duty. Item 12 Page 177 of 240
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1. Background 1.1 Audit and Scrutiny Panel Members will recall the report in September 2022 which set out the updated Assessment and Prioritisation Process. This report focused on the process through which Members of the Audit and Scrutiny Panel are able to identify and submit specific items, functions, or activities which potentially require to undergo scrutiny. 1.2 A further report in February 2023 set out the Scrutiny Work Programme for the Panel, listing all scrutiny related reports scheduled to be presented to the Audit and Scrutiny Panel in each cycle of 2023/24. This composite programme brought together the Panel’s approach to scrutiny which had traditionally been twofold: (1) Items, functions, or activities requiring scrutiny identified and submitted by Panel Members (in line with the process approved by the Panel in August 2018 and subsequently updated in September 2022). (2) Presentation of information and reports aligned to the long-term vision set out in The Plan for North Lanarkshire and its supporting strategic frameworks (as per the process reported to the Panel in November 2019). 1.3 This approach supports the Audit and Scrutiny Panel to fulfil its remit (in line with the Scheme of Administration) to provide an “independent review of the council's governance, risk management, performance, and control frameworks, and oversee the financial reporting and annual governance processes.” 1.4 It also contributes to discharging the scrutiny function in line with the Panel’s specific remit to: • Review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work, and targets in the council plan; specifically performance in improving local public services and local outcomes and in demonstrating Best Value. • Review performance to assess whether intended policy outcomes have been achieved. • Consider the council's performance, improvement, and governance arrangements to ensure that approaches continue to facilitate effective and efficient delivery of planned services and outcomes and the council’s vision. 1.5 Since the Scrutiny Work Programme was approved in February 2023, various items have been scrutinised and Panel Members have submitted requests for other specific items, functions, or activities to be considered for inclusion in the Programme in line with the approved Assessment and Prioritisation Process. This report therefore provides a mid-year update to the Scrutiny Work Programme to allow Elected Members to track requests made for scrutiny, and assess progress made in submitting reports to the Panel in line with the reporting timetable. It also provides a log of scrutiny related requests, and recommendations made by the Panel, to support ongoing monitoring and management. 2. Scrutiny Work Programme The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Page 178 of 240
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Assessment and Prioritisation Process 2.1 The Scrutiny Work Programme for the scrutiny function of the Audit and Scrutiny Panel is founded on items submitted for consideration being evidence based. This is essential in order to ensure a fully informed assessment and prioritisation process. 2.2 As such, a set of principles were agreed in 2018 which were to be used to assess and prioritise items to be included in the Scrutiny Work Programme. To ensure scrutiny continues to support delivery of the programme of work for The Plan for North Lanarkshire, and focuses on improving local public services and local outcomes, these were further reviewed in September 2022. The current set of principles is listed below: 1. Is the issue an area of concern for a wide range of service users, communities, or stakeholders that has been identified by numerous sources and is supported by a substantial bank of evidence? 2. Is the issue strategically significant, i.e. would improvement in this area have a positive impact on the delivery of one or more of the five priorities in The Plan for North Lanarkshire. The five priorities aim to: • Improve economic opportunities and outcomes. • Support all children and young people to realise their full potential. • Improve the health and wellbeing of communities. • Enhance participation, capacity, and empowerment across communities. • Improve North Lanarkshire’s resource base. 3. Can scrutiny add value? Is performance, service delivery, or quality likely to improve as a result of scrutiny? 4. Will scrutiny of the issue support improved delivery of the Programme of Work or improved delivery of any of the supporting strategies, policies, or plans in the Strategic Policy Framework? 5. Does the issue pose a significant risk to the council? 6. Has the issue already undergone scrutiny, or review activity, within a recent timeframe? 7. Will scrutiny be duplicating other review work already underway, or planned, across the council? If so, does the scrutiny process align to the scope of the other review work and will it be able to support the identification of mutually beneficial recommendations for improvements? 8. Is the proposed scrutiny activity timely and can the scrutiny activity be completed within a reasonable timeframe? Approach to Scrutiny led by Members of the Panel 2.3 The Assessment and Prioritisation Process - informed by the principles set out in paragraph 2.2 above - is set out in Appendix 2. This process is applied when assessing and prioritising each proposed area of activity or issue put forward by Panel Members. For completeness in terms of the overall approach to scrutiny led by Members of the Panel, the arrangements in place that sit alongside the Assessment and Prioritisation Process are outlined in Appendix 1. 2.4 For added context a wide range of information already exists to complement the scrutiny process, this includes: • Performance indicators from the Strategic Performance Framework. • Information on the volume, nature, and outcome of complaints. • Benchmarking results and comparisons with other councils, where available and aligned to themes linked to the five priorities in The Plan for North Lanarkshire (as per the approach established by the Panel in September 2021). Page 179 of 240
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• Demographics and future projections, e.g. for population or households. • Policies in place, or under development in line with the Strategic Policy Framework review programme. • Improvements already identified and implemented arising from the Strategic Self- Evaluation Framework review programme. • Elements or mechanisms from the Strategic Governance Framework review programme. Timetable of reports to future Panel meetings 2.5 While the information set out in paragraph 2.4 above supports (a) the items, functions, or activities requiring scrutiny identified and submitted by Panel Members, it also forms the basis for (b) the presentation of information and reports aligned to long-term vision set out in The Plan for North Lanarkshire and its supporting strategic frameworks. As such, both of these areas are captured in the timetable in Appendix 3. Type of scrutiny review 2.6 Appendix 3 includes the specific areas of scrutiny identified by Panel Members as requiring to undergo a spotlight review. Members will recall the types of scrutiny review which can be undertaken were set out in the report in November 2022. To ensure the most effective approach to scrutiny, reviews can take one of three formats: • Spotlight - short, sharp focused scrutiny activity, which could form one agenda item for a Panel meeting. • In-depth - which can be undertaken by all Panel Members or, if required, a smaller subgroup. This would require a clear scope to be developed along with a timetable for the work to be undertaken. The work of any subgroup would require a report, with recommendations, to be submitted back to the full Audit and Scrutiny Panel for consideration and approval. • Focus - presentation to Panel Members to share information and raise awareness or increase knowledge of a particularly complex area of activity or issue. Next steps 2.7 The composite Scrutiny Work Programme in Appendix 3 will be kept up to date and an update provided to the Panel in cycles 1 and 3 each year. Any new items, functions, or activities requiring scrutiny will be added to the programme as they are identified, scoped (where additional information is needed to help understand the matter being put forward) and then reviewed through the Assessment and Prioritisation Process. 3. Measures of success 3.1 The key measure of success is the Audit and Scrutiny Panel discharging its scrutiny duty to identify specific areas requiring improvement which are aligned to The Plan for North Lanarkshire and will have a positive impact on the council’s ability to deliver the long-term vision and improve local services and outcomes. 4. Supporting documentation 4.1 Appendix 1 - Approach to Scrutiny led by Members of the Panel Appendix 2 - Assessment and Prioritisation Process Appendix 3 - Composite Scrutiny Work Programme with timetable of reports to Panel meetings - 2023 to 2024 (as at July 2023) Page 180 of 240
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Katrina Hassell Chief Officer (Business and Digital) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Local Government Act 1992 established the role of the Statutory Direction to direct the “publication of information as to standards of performance”. The Local Government in Scotland Act 2003 introduced the duty of Best Value; this requires that councils “make arrangements to secure continuous improvement in performance”. 5.5 Data protection impact Page 181 of 240
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Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? The Scrutiny Work Programme supports an efficient approach to the scrutiny of performance by the Audit and Scrutiny Panel (in line with their terms of reference as per the Scheme of Administration) and contributes to the mitigation of the risk on the Corporate Risk Register for governance, leadership, and decision making. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Page 182 of 240
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Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 183 of 240
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Panel Member led Scrutiny Panel Scrutiny Activity Assessment and Prioritisation Process (see Appendix 2) • Elected Members on the Audit and Scrutiny Panel can liaise with Business and Digital Officers when developing their potential items for scrutiny. • Once fully developed, Panel Members should submit their potential items for scrutiny to the Convener who will then liaise with Business and Digital Officers regarding the next steps. In advance of the Assessment and Prioritisation Process Panel Members to identify potential items for scrutiny by: • Identifying the context. • Presenting the evidence. • Reviewing the latest performance. • Carrying out site visits (if required). • Preparing a list of potential questions to be addressed. • Identifying the type of scrutiny required (i.e. spotlight, in-depth, focus). • Business and Digital Officers carry out the Assessment and Prioritisation Process in conjunction with the Convener. • At this point, further engagement may take place with the Panel Member raising the item for scrutiny in order to further scope out specifically what requires to be scrutinised. • Once a potential item for scrutiny has passed muster through the Assessment and Prioritisation process, it will be added to the Scrutiny Work Programme in line with the capacity on the agenda for each meeting and the context around the issue to be scrutinised. • Elected Members at Panel meetings. During Panel meetings • Panel Members carry out the challenge and scrutiny role. • Agree recommendations. • Monitor the Scrutiny Work Programme on a six monthly basis. • Agree follow ups required based on either (a) supplementary information to provide further details / clarity for an item currently undergoing scrutiny, or (b) a supplementary report required to address any significant matters of concern not covered in the initial report. • Scrutiny Work Programme updated and follow ups actioned by Business and Digital Officers in conjunction with the Convener and Chief Officers. After Panel meetings • Update Scrutiny Work Programme. • Action follow ups actioned by either (a) obtaining the supplementary information from the relevant Chief Officer to provide further details / clarity for an item which has undergone scrutiny, or (b) requesting a supplementary report from the relevant Chief Officer in order to address any significant matters of concern not covered in the initial report. What Who Scrutiny does: Add value to what the organisation ultimately aims to achieve in terms of: • Improving the performance of local services. • Improving the performance of outcomes for local people. • Demonstrating the council is achieving Best Value. • Supporting delivery of The Plan for North Lanarkshire. • Improving performance by assessing whether intended policy outcomes have been achieved. • Having a clear purpose. Scrutiny does not: • Deal with matters that are still subject to legal or court proceedings. • Deal with matters which have already been determined through a legal process. • Involve political considerations. • Deal with matters already determined through a regulatory process (e.g. planning, licensing), or for which an appeals process already exists. • Duplicate the work of the council’s Service Committees. • Revisit decisions already made by another of the council’s Committees. • Involve minor matters or matters involving individuals. • Consider live matters that are already subject to review within the council or by an external body. Scrutiny provides: • An opportunity for an objective focus on matters of performance or policy that have a significant impact on service delivery. • An opportunity to challenge matters of performance or policy and do a deep dive into the facts in order to drive forward better performance. Audit and Scrutiny Panel Approach to Scrutiny led by Members of the Panel Assessment and Prioritisation Process Appendix 1 Page 184 of 240
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Appendix 2 Assessment and Prioritisation Process Page 185 of 240
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Appendix 3 Annual composite scrutiny programme with timetable of reports to future Panel meetings - 2023 to 2024 (as at July 2023) The following programme will be updated as new items requiring scrutiny are identified, scoped (where required), assessed, and prioritised and pass muster in line with the Assessment and Prioritisation Process. Scrutiny items, functions, or activities for Audit and Scrutiny Panel meetings Scrutiny of this item, function, or activity aims to … Cycle 1 16th Feb 2023 Cycle 2 18th May 2023 Mid-year update Cycle 3 4th Sept 2023 Cycle 4 16th Nov 2023 Cycle 1 15th Feb 2024 Cycle 2 9th May 2024 Cycle 3 29th Aug 2024 Identified by Members of the Audit and Scrutiny Panel Supported businesses. Carry out a spotlight scrutiny review. ✓ • Report at Panel meeting on 18/05/23: https://mars.northlanarkshire.gov.uk/egenda/im ages/att100629.pdf • Supplementary information requested during the Panel meeting and circulated afterwards. • Item complete. Laundries in towers. Carry out a spotlight scrutiny review. ✓ • Report at Panel meeting on 18/05/23: https://mars.northlanarkshire.gov.uk/egenda/im ages/att100627.pdf • Item complete. Housing refurbishments. Carry out a spotlight scrutiny review. ✓ • Report on agenda for Panel meeting on 04/09/23. Compulsory purchase orders. Carry out a spotlight scrutiny review. ✓ • Report on agenda for Panel meeting on 04/09/23. Digital Broadband. Carry out a spotlight scrutiny review. • The Framework Agreement was awarded to Commsworld in December 2021; this is for an initial period of 180 months (15 years). Scrutiny of this item has therefore been scheduled for year three of the contract. ✓ Insurance. Carry out a spotlight scrutiny review. • Added to scrutiny programme July 2023. ✓ Scrutiny Work Programme Annual composite scrutiny programme with timetable of reports to future Panel meetings. Support the Best Value governance and accountability theme by ensuring the council’s scrutiny structures support Elected Members in reviewing and challenging performance. ✓ • Report at Panel meeting on 16/02/23: https://mars.northlanarkshire.gov.uk/egenda/im ages/att99865.pdf • Report on agenda for Panel meeting on 04/09/23. ✓ ✓ ✓ Strategic Performance Framework Annual Performance Reporting schedule. Support the Best Value governance and accountability theme by ensuring the council can demonstrate the existence of robust arrangements for scrutiny and performance reporting. Fulfil the Panel’s remit as per the Scheme of Administration to: • Review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work, and targets in the council plan, specifically performance in improving local services and outcomes and in demonstrating Best Value. • Review performance to assess whether intended policy outcomes have been achieved. ✓ • Report at Panel meeting on 16/02/23 https://mars.northlanarkshire.gov.uk/egenda/im ages/att99866.pdf ✓ Performance in terms of improving outcomes (level 1 health check indicators). ✓ • Quarterly performance assurance review report at Panel meeting on 18/05/23: https://mars.northlanarkshire.gov.uk/egenda/im ages/att100418.pdf • Quarterly performance assurance review report on agenda for Panel meeting on 04/09/23. ✓ ✓ ✓ ✓ ✓ Performance in improving services (levels 2 and 3 indicators, which includes Local Government Benchmarking Framework (LGBF) results aligned to the council’s strategic priorities. ✓ Strategic Government Framework Annual review and refresh of the Framework and an update to the review programme. Fulfil the Panel’s remit as per the Scheme of Administration to: • Consider the council's performance, improvement, and governance arrangements to ensure that approaches continue to facilitate effective and efficient delivery of planned ✓ • Report at Panel meeting on 29/06/23: https://mars.northlanarkshire.gov.uk/egenda/im ages/att100886.pdf ✓ Page 186 of 240
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Scrutiny items, functions, or activities for Audit and Scrutiny Panel meetings Scrutiny of this item, function, or activity aims to … Cycle 1 16th Feb 2023 Cycle 2 18th May 2023 Mid-year update Cycle 3 4th Sept 2023 Cycle 4 16th Nov 2023 Cycle 1 15th Feb 2024 Cycle 2 9th May 2024 Cycle 3 29th Aug 2024 services and outcomes and the council's vision. Ensure good governance principles are in place to enable the council to effectively pursue the ambition set out in The Plan for North Lanarkshire within appropriate controls and the management of risk. This is also central to ensuring effective scrutiny and delivery of statutory Best Value obligations. This means ensuring resources are directed in line with agreed policies, priorities, and project management procedures, and there is sound and inclusive decision making and clear accountability for the use of those resources in achieving improved outcomes for service users and communities. Note; this is part of the suite of documents that accompanies the Panel’s consideration of the Unaudited Annual Accounts, it is therefore scheduled to be presented to the Panel at the same time, usually at a special meeting in June each year. Annual Governance Statement Consider and note the Annual Governance Statement each year, and confirm the inclusion of the assurance statement regarding the management of the risk of fraud and corruption. Fulfil the Panel’s remit as per the Scheme of Administration to: • Consider the council's performance, improvement, and governance arrangements to ensure that approaches continue to facilitate effective and efficient delivery of planned services and outcomes and the council's vision. • Review the Annual Governance Statement prior to approval and consider whether it properly reflects the risk environment and supporting assurances, taking into account Internal Audit’s opinion on the overall adequacy and effectiveness of the council’s framework of governance, risk management and control. Fulfil the requirements of the Delivering Good Governance in Local Government: Framework (2016) and the Local Authority Accounts (Scotland) Regulations 2014 by ensuring that: • The council conducts a review at least once in each financial year of the effectiveness of its system of internal control. • The findings from the review are considered at a meeting of a committee whose remit includes audit or governance functions. Note; this is part of the suite of documents that accompanies the Panel’s consideration of the Unaudited Annual Accounts, it is therefore scheduled to be presented to the Panel at the same time, usually at a special meeting in June each year. ✓ • Report at Panel meeting on 29/06/23: https://mars.northlanarkshire.gov.uk/egenda/ images/att100728.pdf ✓ Strategic Self- Evaluation Framework Annual review and refresh of the Framework and an update to the review programme. Fulfil the Panel’s remit as per the Scheme of Administration to: • Consider the council's performance, improvement, and governance arrangements to ensure that approaches continue to facilitate effective and efficient delivery of planned services and outcomes and the council's ✓ Page 187 of 240
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Scrutiny items, functions, or activities for Audit and Scrutiny Panel meetings Scrutiny of this item, function, or activity aims to … Cycle 1 16th Feb 2023 Cycle 2 18th May 2023 Mid-year update Cycle 3 4th Sept 2023 Cycle 4 16th Nov 2023 Cycle 1 15th Feb 2024 Cycle 2 9th May 2024 Cycle 3 29th Aug 2024 vision. Complaints handling performance Annual report on the council’s performance in complaints handling. Report on the suite of Scottish Public Services Ombudsman (SPSO) indicators which measures the council’s performance in implementing the Local Authority Model Complaints Handling Procedure. Fulfil the requirements of the Delivering Good Governance in Local Government: Framework (2016), in particular principle A1.4 Behaving with integrity and “demonstrating, communicating, and embedding the standard operating principles or values through appropriate policies and processes which are reviewed on a regular basis to ensure that they are operating effectively”. ✓ ✓ Position statement on the six strategic frameworks Annual report to demonstrate Best Value in good governance and effective use of resources that leads to improving the functions and activities the council undertakes to deliver the best possible outcomes and services that improve the everyday lives of local people. Support the Best Value governance and accountability theme by ensuring the council can demonstrate the existence of robust arrangements for scrutiny and performance reporting. Fulfils the Panel’s purpose as per the Scheme of Administration to provide “independent review of the council’s governance, risk management, performance and control frameworks”. Ensure good governance principles are in place to enable the council to effectively pursue the ambition set out in The Plan for North Lanarkshire within appropriate controls and the management of risk. This is also central to ensuring effective scrutiny and delivery of statutory Best Value obligations. This means ensuring resources are directed in line with agreed policies, priorities, and project management procedures, and there is sound and inclusive decision making and clear accountability for the use of those resources in achieving improved outcomes for service users and communities. ✓ Project Management Framework independent strategic oversight and assurance process Elected Member oversight in terms of the quality assurance process and review programme for the Project Management Framework. Fulfil good practice in project management which recommends that a council's audit and scrutiny committee have an important role to play in providing independent assurances about the delivery of major programmes and projects. The Panel’s role in this respect is therefore to be assured that suitable review procedures have been adopted and to gain assurance about the value of independent reviews that are undertaken during the project life cycle. ✓ Self-evaluation of the Audit and Scrutiny Panel Effectiveness of the performance and activities of the Audit and Scrutiny Panel in discharging the scrutiny aspects of its role. Fulfil corporate governance principle E2.4 in line with the Delivering Good Governance in Local Government: Framework (2016) in terms of developing capabilities to ensure Elected Members have the appropriate skills, knowledge, resources, and support to fulfil their roles and responsibilities and ensuring they are • Report on agenda for Panel meeting on 04/09/23 ✓ Page 188 of 240
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Scrutiny items, functions, or activities for Audit and Scrutiny Panel meetings Scrutiny of this item, function, or activity aims to … Cycle 1 16th Feb 2023 Cycle 2 18th May 2023 Mid-year update Cycle 3 4th Sept 2023 Cycle 4 16th Nov 2023 Cycle 1 15th Feb 2024 Cycle 2 9th May 2024 Cycle 3 29th Aug 2024 able to update their knowledge on a continuing basis. Address the risk identified by Internal Audit in terms of the council being able to adequately demonstrate that it has effective audit committee arrangements and/or arrangements to ensure Elected Members have the skills, knowledge and (where appropriate or required) access to relevant training and resources to effectively undertake their role. Training and development Elected Member training on the scrutiny function, of the Audit and Scrutiny Panel, including aspects of Best Value and the supporting strategic frameworks (i.e. Policy, Governance, Performance, Self- Evaluation, and Project Management) relevant to each Member’s role on the Panel. Note, formal training will be scheduled for cycle 4 but informal 1:1s can be requested at any time. Support the Best Value vision and leadership theme in terms of Elected Members being self- aware and committed to training and personal development to update and enhance their knowledge, skills, capacity, and capabilities to deliver Best Value and perform their leadership roles, and they receive sufficient support to do so. Fulfil corporate governance principle E2.4 in line with the Delivering Good Governance in Local Government: Framework (2016) in terms of developing capabilities to ensure Elected Members have the appropriate skills, knowledge, resources, and support to fulfil their roles and responsibilities and ensuring that they are able to update their knowledge on a continuing basis. ✓ Page 189 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No Ref KH/SL Date 04/09/23 Strategic Performance Framework - Performance Reporting Schedule quarterly performance assurance review From Katrina Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096121 Executive Summary Following on from the Strategic Performance Framework - Performance Reporting Schedule 2023 to 2024 report at the Audit and Scrutiny Panel meeting in February 2023, a subsequent report in May 2023 set out the first performance assurance review that had been undertaken of performance reports which had been submitted to council committees during cycle 1 of 2023. The report in May 2023 also advised that performance assurance reviews would thereafter be reported to the Audit and Scrutiny Panel on a quarterly basis. In bringing together a summary of the council’s performance reports in one composite assurance overview in this way, this approach supports the Audit and Scrutiny Panel in maintaining strategic oversight and awareness of the council’s performance reporting arrangements in line with the Panel’s remit to provide “independent review of the council’s governance, risk management, performance and control frameworks”. It also supports the Audit and Scrutiny Panel’s governance and accountability role in terms of ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny. This report herewith provides the Panel with the outcome from the performance assurance review that has been undertaken of performance reports which have been submitted (in line with the Performance Reporting Schedule) to council committees during cycle 2 of 2023. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Review the composite overview of performance reporting provided in Appendices 1 and 2 to maintain an awareness of each report within the Performance Reporting Schedule for 2023 to 2024, and (2) Identify whether there are any significant issues arising, from the composite performance overview presented in the attached Appendices, that the Panel considers requiring additional scrutiny and a further report to be submitted to a future meeting of the Panel from the respective Chief Officer. The Plan for North Lanarkshire Item 13 Page 191 of 240
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1. Background 1.1 Members of the Audit and Scrutiny Panel will recall the report in February 2023 which contained the Strategic Performance Framework - Performance Reporting Schedule. This set out the reporting, review, and scrutiny arrangements for a range of performance information to be considered at each cycle of committee meetings for 2023 to 2024. 1.2 The Strategic Performance Framework comprises performance measurement at three levels (as per the diagram on the right). This aims to collectively provide an overview of performance to help understand the impact of council activities on improving services and outcomes for the people and communities of North Lanarkshire. The measures in this Framework allow for day to day activities, and progress towards achieving the long-term vision set out in The Plan for North Lanarkshire, to be regularly monitored, reported, assessed, and scrutinised. 1.3 The supporting Performance Reporting Schedule forms a key part of the Scrutiny Work Programme that underpins the Best Value governance and accountability theme by ensuring the council can demonstrate the existence of robust arrangements for scrutiny and performance reporting. It also aims to fulfil the Audit and Scrutiny Panel’s remit as per the Scheme of Administration to: • Review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work and targets in the council plan, specifically performance in improving local services and outcomes and in demonstrating Best Value. • Review performance to assess whether intended policy outcomes have been achieved. 1.4 The Strategic Performance Framework comprises a set of non-negotiable standards which Chief Officers are required to apply in all performance reporting that supports the Framework. These standards aim to ensure that performance reporting is: • Aligned - to The Plan for North Lanarkshire to give stakeholders an insight into the performance of council activities both in the short-term and against the long-term ambitions. • Consistent - to ensure a standard, easily recognisable, and well established process across each different audience over time. This aims to help build credibility, reliability, and a common understanding. • Transparent - to allow stakeholders to understand what is being measured, what it means, what level of performance has actually been achieved, and what difference this means in reality for the people and communities of North Lanarkshire. • In context - to avoid the So What? question and provide a coherent narrative to ensure fully informed review, reporting, scrutiny, and decision making processes. • Balanced - to ensure any text adds value and tells a balanced narrative. Performance reports should identify areas requiring improvement as well as areas of good performance. Narrative should include reasons for performance levels not in line with targets and the remedial action undertaken to address this. 1.5 The Performance Reporting Schedule shows there is a significant volume of Priority All priorities Ambition statement All ambition statements Page 192 of 240
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performance information timetabled to be reported to various council committees in each cycle of 2023 to 2024. Cycle 2 reports were reviewed by the Business Management Team in June 2023 to ensure the relevant assurances in terms of performance management arrangements that promote effective use of the council’s resources, performance information being scrutinised at a senior management level, and performance monitoring arrangements in place to effectively address areas of underperformance, identify the scope for improvement, and agree remedial action. 1.6 The volume of performance information in the cycle 2 reports has also been reviewed and summarised further in Appendices 1 and 2 attached. It should be noted that the performance information within Appendices 1 and 2 has already been reviewed by Service Committees during cycle 2. The purpose of the information presented herewith is to provide Audit and Scrutiny Panel members with a composite, but easily digestible, overview for governance and assurance purposes in line with the specific scrutiny role of the Panel. 2. Quarterly performance assurance review 2.1 The Strategic Performance Framework - Performance Reporting Schedule sets out three aspects of performance reporting which are noted below. Paragraphs 2.2 to 2.8 itemise the performance reports submitted to cycle 2 committees in line with these aspects and in accordance with the timetable set out within the Schedule. (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. (2) Corporate reporting to the Audit and Scrutiny Panel and/or Policy and Strategy Committee in line with the Strategic Performance Framework. (3) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. 2.2 The Strategic Performance Framework comprises a range of performance indicators from each Chief Officer’s portfolio and the latest results in this respect are aligned to the respective ambition statements in The Plan for North Lanarkshire. The nine reports scheduled to be submitted to the relevant committee in cycle 2 of 2023 are listed in Table 1 below, along with the corresponding hyperlink for ease of access. Note, as health and social care performance is reported quarterly there are two reports included in this review period. Table 1 Report title Committee Date Strategic Performance Framework - latest performance results for Community Operations https://mars.northlanarkshire.gov.uk/egenda/images/att1 00512.pdf Environment and Climate Change Committee 3 May 2023 Strategic Performance Framework - latest performance results for the Tackling Poverty service https://mars.northlanarkshire.gov.uk/egenda/images/att1 00521.pdf Wellbeing and Tackling Poverty Committee 5 May 2023 Strategic Performance Framework - latest performance results for Housing Management https://mars.northlanarkshire.gov.uk/egenda/images/att1 00556.pdf Housing Committee 10 May 2023 Page 193 of 240
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Strategic Performance Framework - latest performance results for Housing Property Services https://mars.northlanarkshire.gov.uk/egenda/images/att1 00557.pdf Housing Committee 10 May 2023 Strategic Performance Framework - latest performance results for Place (economic regeneration and growth) https://mars.northlanarkshire.gov.uk/egenda/images/att1 00583.pdf Enterprise and Fair Work Committee 12 May 2023 Strategic Performance Framework - latest performance results for Employability https://mars.northlanarkshire.gov.uk/egenda/images/att1 00584.pdf Enterprise and Fair Work Committee 12 May 2023 Strategic Performance Framework - latest performance results for Children’s Social Work and Protection https://mars.northlanarkshire.gov.uk/egenda/images/att1 00787.pdf Education, Children, and Families Committee 23 May 2023 Health and Social Care North Lanarkshire performance update - Quarter 3 (October - December 2022) https://mars.northlanarkshire.gov.uk/egenda/images/att1 00574.pdf IJB Performance, Finance and Audit Committee 19 April 2023 Health and Social Care North Lanarkshire performance update - Quarter 4 (January - March 2023) https://mars.northlanarkshire.gov.uk/egenda/images/att1 00911.pdf IJB Performance, Finance and Audit Committee 21 June 2023 2.3 Each council report was produced in line with a standard template and (a) provides the reader with the current context within which the service is operating, (b) highlights areas of good performance that can be evidenced in the accompanying data, and (c) provides a summary of areas of performance requiring improvement along with narrative that gives an explanation for the level of performance achieved and summarises the remedial action implemented (or to be implemented) to bring performance back on track. 2.4 A short summary analysis for each of the nine reports is set out in Appendix 1 against the five non-negotiable standards. (2) Corporate reporting to the Audit and Scrutiny Panel and/or Policy and Strategy Committee in line with the Strategic Performance Framework. 2.5 This aspect of performance reporting is in place to meet Best Value requirements and support Elected Members to carry out their independent governance, accountability, and strategic oversight role in line with the Scheme of Administration. It corresponds to the Scrutiny Work Programme for the scrutiny element of the Audit and Scrutiny Panel which was endorsed by the Panel in February 2023. • Other than the quarterly performance assurance review report itself, there were no items scheduled for reporting within this category in cycle 2 of 2023. (3) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. 2.7 This aspect relates to service specific reporting which is required to meet business and/or statutory obligations. This is included in the Performance Reporting Schedule to ensure all of the council’s performance reporting arrangements are captured in the one place and the Schedule reflects a one council approach to performance reporting. Page 194 of 240
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2.8 The six reports scheduled to be submitted to the relevant committee in cycle 2 of 2023 are listed in Table 2 below, along with the corresponding hyperlink for ease of access. A short summary for each of these reports is set out in Appendix 2. While this summary is set out against the five non-negotiable standards it also recognises there may be statutory specific approaches or standards which require to be adhered to. Table 2 Report title Committee Date Community safety hub performance and development https://mars.northlanarkshire.gov.uk/egenda/images/att100529.pdf Housing Committee 10 May 2023 Mainstreaming equality report https://mars.northlanarkshire.gov.uk/egenda/images/att100517.pdf Wellbeing and Tackling Poverty Committee 5 May 2023 Building standards annual verification performance report 2022/23 https://www.northlanarkshire.gov.uk/sites/default/files/2023- 05/Building%20Standards%20Annual%20Verification%20Performa nce%20Report%202022-23_0.pdf Submitted to the Scottish Government Published on council website on 17 May 2023 Revenue and benefits update https://mars.northlanarkshire.gov.uk/egenda/images/att100687.pdf Finance and Resources Committee 24 May 2023 Financial monitoring report - council summary (revenue) https://mars.northlanarkshire.gov.uk/egenda/images/att100693.pdf Finance and Resources Committee 24 May 2023 Financial monitoring report - council summary (capital) https://mars.northlanarkshire.gov.uk/egenda/images/att100688.pdf Finance and Resources Committee 24 May 2023 Next steps 2.9 Performance reports submitted to the respective committee (in line with the Performance Reporting Schedule) will continue to be kept under review by the senior management team of the council so that adherence to the timetable is maintained. This will also seek to ensure the relevant assurances in terms of the efficient and effective operation of the council and the ongoing delivery of the long-term ambition set out in The Plan for North Lanarkshire underpinned with corporate governance, risk management, and financial management controls. 2.10 Assurance reviews will continue to be undertaken and reported to the Audit and Scrutiny Panel on a quarterly basis in order to achieve the measures of success set out in paragraph 3.1. 3. Measures of success 3.1 Measures of success include: • Regular oversight and monitoring of performance across the organisation to gain assurances in terms of governance and accountability. • Regular review and challenge processes to scrutinise the performance of the council to ensure effective use of resources and that resources are directed in accordance with agreed policy and according to priorities, while ensuring sound decision making and clear accountability for the use of resources in achieving improved outcomes for service users and the local community. • Performance monitoring, management, and reporting arrangements that support the demonstration of improved performance in local services and outcomes, and Page 195 of 240
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the delivery of Best Value. 4. Supporting documentation Appendix (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. Appendix (2) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. Katrina Hassell Chief Officer (Business and Digital) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Page 196 of 240
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The Local Government Act 1992 established the role of the Statutory Direction to direct the “publication of information as to standards of performance”. The Local Government in Scotland Act 2003 introduced the duty of Best Value; this requires that councils “make arrangements to secure continuous improvement in performance”. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Improvements in the presentation of performance information to various audiences are being advanced in line with the development of the DigitalNL work package for the Business Intelligence (BI) Hub. Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Implementation of the Performance Reporting Schedule, which will facilitate effective review and scrutiny processes, contributes to the mitigation of the risk on the Corporate Risk Register for governance, leadership, and decision making. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Page 197 of 240
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Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 198 of 240
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Appendix 1 (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework (SPF). Report title Summary SPF - Latest performance results for Community Operations May 2023 Community Operations have 40 indicators in the Strategic Performance Framework which assess efficiency and effectiveness in terms of service delivery on a day to day basis. A suite of statutory indicators also enables performance, costs, and satisfaction to be assessed and compared nationally. Following the structural realignments in the One Place One Plan - Governance update report approved at Policy and Strategy Committee in December 2022, a single Community Operations service was created to strengthen the council’s delivery of community operations and put people and communities at the heart of the change that The Plan for North Lanarkshire aims to achieve. This realignment brought a wide range of community facing services in relation to the council’s environmental assets (i.e. Street Cleaning, Grounds Maintenance, Cemetery Services, Roads Maintenance Operations, and Country Parks for the Future) together with regulatory services (i.e. Environmental Health and Trading Standards), and services in respect of Waste Solutions, Fleet Resources, and the Built Environment. https://mars.northlanarkshire.gov.uk/egenda/images/att100512.pdf Aligned Priority: • Improve the health and wellbeing of our communities. • Enhance participation, capacity, and empowerment across our communities. Ambition statement: 14. Ensure the highest standards of public protection. 16. Transform our natural environment to support wellbeing and inward investment and enhance it for current and future generations. 17. Ensure we keep our environment clean, safe, and attractive. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Page 199 of 240
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Benchmarking indicators: • Parks and open spaces - cost per 1,000 population • Satisfaction - % of adults satisfied with parks and open spaces • Street cleaning - net cost per 1,000 population • Satisfaction - % of adults satisfied with street cleaning services • Street cleanliness score - % areas assessed as clean • Satisfaction - % of adults satisfied with refuse collection • Roads - cost of maintenance per kilometre of roads • Road network - % A class roads that should be considered for maintenance treatment • Road network - % B class roads that should be considered for maintenance treatment • Road network - % C class roads that should be considered for maintenance treatment • Road network - % Unclassified roads that should be considered for maintenance treatment • Road casualties - number of fatal and serious casualties • Road casualties - number of fatal and serious casualties involving children • Trading standards - cost per 1,000 population • Environmental health - cost per 1,000 population • Street lamps - energy usage In context The service’s operating environment has changed significantly in recent years and, as such, performance should be considered within the following context: • The extent to which the service has supported the council in terms of responding to and recovering from the pandemic over the last three years, while maintaining service delivery of critical areas of public health and safety in line with legislation, and then resuming business as usual activities at pace which involved dealing with significant volumes in terms of a backlog. • In resuming business as usual activities, many areas of the service have experienced a subsequent increase in the volume of business which has added to the caseloads which require to be dealt with (e.g. in environmental health). • New legislation implemented in the aftermath of the pandemic has impacted on inspection regimes and has required changes to processes and ways of working (e.g. in food safety). • A significant rationalisation exercise is underway across the waste service to allow consolidation of the service within key depot facilities. This in turn will result in overall efficiencies for the service with the resulting effect of freeing up space for other service areas to consolidate their own facilities and ultimately provide a capital receipt for the council through the sale of any depot deemed surplus to requirements. • There is currently an ongoing review of the overall structure of the new Community Operations service to ensure that any opportunities and service efficiencies with the recent amalgamation of the two service areas are highlighted and maximised. Balanced Performance highlights: • Council performance in respect of A class roads (i.e. major and strategic roads) and B class roads (i.e. roads serving a local purpose and connecting to strategic roads) considered to require maintenance treatment continues to remain lower than the average for Scotland and the family group of similar councils: - 17% of A class roads in North Lanarkshire are considered to require maintenance treatment compared to the Scottish average (27.6%) and the family group of similar councils (24.2%); this is the third lowest in Scotland. - 23% of B class roads in North Lanarkshire are considered to require maintenance treatment compared to the Scottish average (33.6%) and the family group of similar councils (24.3%); this is the eighth lowest in Scotland. • Latest results show 43.2% of household waste was recycled in North Lanarkshire. This is a marked improvement compared to recent years and the council is now above the national average (42.7%). Recycling also shows improvement over the period of The Plan for North Lanarkshire (from a baseline of 41.1%). Areas of performance requiring improvement: • The volume of requests for pest control visits continues to remain high although the provision of the free rodent control service up to the end of the 2022/23 financial year will have had a significant impact on this. From 1 April 2023, the council made the decision to reinstate pest control charges for rats and mice. A report to the Environment and Climate Change Committee in February 2023 ( https://mars.northlanarkshire.gov.uk/egenda/images/att99874.pdf ) provided an update on the steps that continue to be taken in respect of the action plan which was devised in order to direct resources to the areas of most significant rodent concern, co-ordinate the council’s response to the best effect, and deliver improvements. • 2021/22 results for performance in building warrants is lower than the target and previous years, although performance has picked up in 2022/23 to date. The volume of business - which had increased significantly in 2019/20 and remained high over the period of the pandemic - has returned to pre-pandemic levels. However the pandemic resulted in an increase in design work and building warrant submissions, and a shift in focus from site work to building warrant submissions. Staff shortages, support issues, and system outages have since impacted on the latest performance results achieved. 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• The service’s cost indicators for roads and environmental health (prepared by the Improvement Service through the Local Government Benchmarking Framework (LGBF)) reported an increase in spend during 2020/21 and 2021/22 that was counter to the long-term pre-pandemic trend. The increased expenditure in 2021/22, in particular, reflects a resumption in activity that had been deferred during the pandemic and also included additional funding provided to address the recovery period from the pandemic. • Overall the performance results available through the Local Government Benchmarking Framework (LGBF) suite of indicators represents a mixed picture across all councils in Scotland. In some instances councils have sustained and strengthened improvement trends in a number of policy critical areas. In other areas (particularly those community related services) there has been a decline which has often been caused, or exacerbated, by the pandemic; this includes areas which were previously improving pre-pandemic (such as street cleanliness levels). Report title Summary SPF - Latest performance results for the Tackling Poverty service May 2023 The Tackling Poverty service have 10 indicators in the Strategic Performance Framework which enable the service to monitor efficiency and effectiveness in terms of service delivery and case management on a day to day basis. This also allows year on year comparisons. The Tackling Poverty team also provide an annual activity report to committee that provides details of the income maximisation work carried out in that year. As part of the Towards a Fairer North Lanarkshire Tackling Poverty Strategy 2020-23 (approved in June 2020), the council provides general and specialist welfare rights services and supports to individuals and families in North Lanarkshire which are crucial to those who are entitled to benefits, including those on low incomes. This assists service users to claim all benefits to which they are entitled. The main focus of all welfare rights work is to support income maximisation through provision of direct advice and support for claims, consultation and guidance for fieldwork staff, representing clients at tribunals and hearings, and supporting specialist social work services. Successful welfare rights interventions (where individuals are awarded extra benefit) frequently means that, as a result of increased income, they are better able to manage their own affairs and may not require further social work services. Successful outcomes in terms of income maximisation therefore play a vital role across social work services including those for adults, children and families, justice services, mental health, and addictions as well as supporting associated health inequalities, housing sustainability, and community wellbeing, and bringing further income into the local economy. https://mars.northlanarkshire.gov.uk/egenda/images/att100521.pdf Aligned Priority: • Support all children and young people to realise their full potential. • Improve the health and wellbeing of our communities. Ambition statement: 9. Invest in early interventions, positive transitions, and preventative approaches to improve outcomes for children and young people. 11. Increase economic opportunities for adults by understanding, identifying, and addressing the causes of poverty and deprivation and barriers to financial inclusion. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Volume indicators: • Benefits - number of debt advice referrals received • Money advice - number of clients accessing service for assistance with single multi debt issues • Provision of financial education - number of pupils completing financial education In context • Local approaches to tackling poverty and reducing inequality continue to be driven in line with the Towards a Fairer North Lanarkshire Tackling Poverty Page 201 of 240
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Strategy 2020-23 which is focused on the key drivers of poverty. This strategy sets out an integrated approach to co-ordinating resources across the council (and with partners) to support effective delivery and ensure fairer outcomes for all local people can be achieved and sustained. • The effects of the pandemic impacted many individuals and communities in North Lanarkshire and brought income maximisation and the wider work undertaken to tackle poverty into a sharper focus, highlighting the impact of low paid and insecure work in particular. The subsequent impact of the war in Ukraine on the economy alongside the wider cost of living crisis (with high inflation, price increases on energy, soaring fuel and food costs, and a real term cut in wages) continue to acutely affect inequality and poverty in North Lanarkshire, impacting the most vulnerable individuals in local communities. • In 2022, the council agreed a range of measures to be introduced to respond to the cost of living crisis and assist residents in this respect. An update in terms of the implementation of these measures was considered by the Policy and Strategy Committee in March 2023, and a further update regarding future support is scheduled to be presented to the Wellbeing and Tackling Poverty Committee in cycle 3 of 2023. Balanced Performance highlights: • Council activity in terms of tackling poverty generated £35m in additional benefit income for the residents of North Lanarkshire during 2021/22. This is higher than the previous year (£24m) and the amount predicted (£30m) for the year. • In cost / benefit terms for every £1 invested by the council in income maximisation in 2021/22, this generated £27.52 for local residents and the local economy. This is higher than the previous year (£19.10). Areas of performance requiring improvement: • 21,485 benefits checks were undertaken during 2021/22 to identify if a person’s income is fully maximised or if there are any shortfalls which can be remedied via the benefit system. This is lower than predicted, but a benefit check is available to all of North Lanarkshire's residents and is carried out for all who request this service. To date in 2022/23, 17,703 checks have been undertaken as at February 2023 suggesting a slight fall in in-year checks undertaken. Further analysis will be undertaken to identify any factors behind this alongside continued promotion of the service. This will include analysis of referrals made by services as well as contact made with the first point of contact helpline whose capacity has been extended to provide wider cost of-living advice and support. • The provision of financial education for school pupils was unable to be delivered due to the pandemic. A refreshed programme has now been re-established with delivery linked to Future Fridays, and therefore it is anticipated the provision of this service will revert to pre-pandemic levels. Report title Summary SPF - Latest performance results for Housing Management May 2023 Housing Management have 14 indicators in the Strategic Performance Framework covering all aspects of the council’s social landlord role. As set out in the council’s Local Housing Strategy 2021-26 (approved at committee in February 2021), there are an estimated 157,625 dwellings in North Lanarkshire, with home ownership remaining the predominant tenure and 63% of households owning their own home. The council is the largest local authority landlord in Scotland and almost a third (29.5%) of households rent from a social landlord (23.3% from the council and 6.2% from other social landlords). The Local Housing Strategy 2021-26 recognises that an affordable, warm, and accessible home (that meets individual needs over the course of their life) is the foundation for people to achieve their full potential in all aspects of life, such as educational attainment and employment. Housing also plays a crucial role in addressing homelessness, tackling poverty, mitigating the impacts of climate change, improving health and wellbeing and promoting inclusive growth. https://mars.northlanarkshire.gov.uk/egenda/images/att100556.pdf Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 1. Ensure a housing mix that supports social inclusion and economic growth. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Page 202 of 240
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In context • As the cost of living continues to rise many council tenants are facing mounting financial pressure. A new Rent Assistance Fund has been introduced which will help council tenants on low-incomes and universal credit who don’t currently qualify for any other UK or Scottish Government financial support. • As reported to the Housing Committee (in February 2023) there are over 10,000 tenants, 70% of whom are on universal credit, who are experiencing rent arrears. The rent assistance fund will seek to ensure tenancy levels are maintained despite the challenges faced by cost of living rises. • Feedback received from frontline staff is that rising energy costs and rising food costs are causing increasing financial pressure on families in North Lanarkshire which has led to an increase in tenants contacting the council looking for assistance. In addition, the council has seen an increase in homeless presentations of approximately 12% over the year. • The council has also welcomed families escaping the conflict in Ukraine to North Lanarkshire. Two towers have been repurposed to provide safe, secure residences and offer a sense of place and community for up to two hundred families, mainly women and children. Balanced Performance highlights: • Lets to homeless has increased this year (41.1%), higher than last year’s results and the target of 37%. • The percentage of decisions made within 28 days for households under 25 years old presenting as homeless is above the target of 95% at 97.3%. • High levels of satisfaction continue to be achieved with the quality of temporary accommodation at 96.6%, above the target of 94%. This satisfaction is due to the continual review of the quality of furnishings and fittings in council accommodations as well as a high level of decoration of the properties. Areas of performance requiring improvement: • The percentage of decisions made within 28 days for households presenting as homeless is slightly below the target of 95% at 94.2%, this figure reflects the transient nature of the client group, where maintaining contact to allow staff to make decisions within timescale can be difficult. Monthly audits and training for new housing advisors, as well as the introduction of new backshift housing advisors, are measures undertaken to improve this area of service. The new backshift housing advisors will help engage with service users at other times outwith standard working hours. • The average number of days to re let properties has increased to 32.2 days due to a number of factors, with the percentage of rent due in the year that was lost due to properties being empty (void rent loss %) sitting just above target at 1.01%. Service pressures have been particularly difficult and recruitment of relevant trades by contractors continue to have a direct impact on service delivery in the turnaround of vacant properties. Regular liaison between the housing management teams, housing property teams, and main repair contractor is ongoing with weekly and daily monitoring of vacant properties takes place. Report title Summary SPF - Latest performance results for Housing Property Services Housing Property Services have 12 indicators in the Strategic Performance Framework covering all aspects of the housing property and maintenance service. As Scotland’s largest local authority landlord the council provides warm, secure, affordable homes to more than 36,000 households across North Page 203 of 240
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May 2023 Lanarkshire. As set out in the Housing Asset Management Plan (HAMP) 2021-26 (approved at committee in February 2021), improving, maintaining and repairing homes are core asset management activities. Maintenance refers to routine activities to prevent damage and extend the lifespan of property components (like roofs, windows, and doors) and ensure that homes are safe while repairs are works carried out to fix any defects in a property. Improvements are delivered through the investment programme, which generally focuses on replacing old components with new ones - for example, by installing new kitchens and bathrooms. Like all social landlords, the council has legal duties to repair and maintain its homes, to meet obligations set out in tenancy agreements and statute, and tenants rightly also expect timely maintenance and responsive repairs services. This is reflected in the importance given to maintenance and repair matters in the Annual Return on the Charter (ARC), a yearly exercise co-ordinated by the Scottish Housing Regulator to assess social landlords’ performance. Landlords must report on over 30 separate performance indicators, many of which directly relate to the condition of homes and how they are managed. https://mars.northlanarkshire.gov.uk/egenda/images/att100557.pdf Aligned Priority: • Improve economic opportunities and outcomes. • Improve North Lanarkshire's resource base. Ambition statement: 1. Ensure a housing mix that supports social inclusion and economic growth. 22. Facilitate a North Lanarkshire wide approach to asset rationalisation, including with communities and partners. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: In context • Although service delivery is no longer being impacted by the pandemic, there is still evidence of a small number of appointments being cancelled due to the tenant or a household member having covid. Service pressures have been particularly difficult and recruitment of relevant trades by contractors continues to have a direct impact on service delivery. • The freezing temperatures in December 2022 resulted in a small proportion of tenants being decanted due to burst pipes and flooding, with other tenants being able to still reside in their property while the service carried out the necessary repairs. Balanced Performance highlights: • Timescales for completing emergency repairs within council housing stock for all 3 contractors, year to date, is 3.2 hours, better than the target of 3.7 hours. • Performance for non-emergency repairs is also better than the target of 7 days at 6.7 days. • The percentage of reactive repairs carried out in the last year completed right first time is also above the target of 95% at 97.5%. • Performance in corporate property repairs (i.e. council office stock) is also above target across the range of indicators, with the percentage of emergency Page 204 of 240
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repairs completed within timescale at 97.3% and a 4.2 hours average time to compete emergency repairs. The percentage of routine repairs completed within timescale is currently 98.3% with an average time of 8.9 days to complete routine repairs. Areas of performance requiring improvement: • The corporate property repairs indicator for the average time in hours taken to complete emergency repairs is 4.2 hours, which is higher than the target of 3.3 hours; this is due to the materials and trades shortages. Remedial actions include having weekly meetings with contractors where issues are highlighted at the earliest stage to allow proactive resolution. A further issue is that the contractors’ new operatives are not closing lines in the correct way and are receiving further training to improve this process. Report title Summary SPF - Latest performance results for Place (economic regeneration and growth) May 2023 Within Place (economic regeneration and growth) there are 9 indicators in the Strategic Performance Framework that focus on assessing efficiency and effectiveness in terms of local regeneration, service delivery, and case management on a day to day basis. A suite of statutory indicators also enables performance to be assessed and compared nationally. In this respect Strategic Performance Framework reports in relation to Place are also considered by the Planning Committee and the Housing Committee in line with the terms of reference set out in the Scheme of Administration. Following the structural realignments in the One Place One Plan - Governance update report approved at Policy and Strategy Committee in December 2022, a single Place based service was created that aims to strengthen place based operations across North Lanarkshire and focus on creating local conditions that support inclusive and green growth and enable people to thrive. This realignment brought together a range of place related services in order to further focus efforts on the physical and economic regeneration of North Lanarkshire and create new opportunities that benefit all residents and help reduce poverty and disadvantage. Activity within the realigned Place service therefore comprises the following - Planning, Enterprise, Growth, New Supply, City Deal and Enterprise Projects, and Infrastructure and Transportation. https://mars.northlanarkshire.gov.uk/egenda/images/att100583.pdf Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 1. Ensure a housing mix that supports social inclusion and economic growth. 2. Refocus our town centres and communities to be multi-functional connected places which maximise social, economic, and environmental opportunities. 3. Maximise the use of our marketable land and assets through improved development in business and industrial infrastructure. 4. Market and promote North Lanarkshire as the place to live, learn, work, invest, and visit. 5. Grow and improve the sustainability and diversity of North Lanarkshire’s economy. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Benchmarking indicators: • Land allocated for employment - immediately available employment land as a % of total land allocated for employment purposes in the local development plan • Economic development and tourism - investment per 1,000 population • Town vacancy rates - % of vacant commercial units as % of total units for the local authority town centre • Business gateway - number of start ups per 10,000 population • Business survival - % of newly born enterprises surviving for at least 5 years Regeneration indicators: • Vacant and derelict land - number of hectares of land improved for business and industrial use • Active travel - km of active travel routes enhanced or created • Jobs - estimated number of gross construction jobs created Page 205 of 240
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In context • As well as meeting its statutory planning responsibilities, the Place service delivers the council’s physical regeneration and infrastructure projects and strives to attract new investment and employment to North Lanarkshire. The UK’s exit from the European Union, the pandemic, the Russia/Ukraine conflict (including increases in the price of oil, gas, and other natural resources) - followed by inflationary pressures and the cost of living crisis - have had a significant impact on service provision and the delivery of projects and the capital programme in line with original plans and timescales. Supply chain pressures (availability and costs) are expected to continue, and economic forecasters do not expect inflation to return to lower levels in the near future. Current pressures are resulting in increasing prices, delays and/or non-availability of certain items and there is no indication these pressures will disappear in the short-term. • The Planning (Scotland) Act 2019, and the recently adopted National Planning Framework 4, bring new challenges for the Place service, principally for the Planning service but also potentially impacting on the delivery of council projects which will need to meet the new requirements. During the pandemic the council played a key role in delivering a range of short-term actions and activity (including the administration of a range of grant schemes, advisory services, and employability and business support programmes) to support businesses and people at risk of becoming unemployed or economically inactive. While continuing to provide support to local businesses to help them access available funding and survive the immediate impacts of the pandemic, the council (working with partners) is striving to support economic recovery in the medium to longer term - within the added context of an increasingly competitive employment market which adds to the challenge. This support aims to not only help businesses to survive, but enable existing businesses to adapt and grow, attract new business growth, and create a more resilient and inclusive economic base for the future. Balanced Performance highlights: • The national indicator in terms of the number of new businesses supported per 10,000 population remains high in North Lanarkshire and above national and family group averages. This level of performance is encouraging in the aftermath of the pandemic as it is also reflected in the council’s measure which shows that 579 new businesses were supported through financial and non-financial assistance in 2021/22. New business formation is a good indicator of how helpful the council is in enabling entrepreneurship in the business environment. The long-term impacts of the pandemic in terms of survival rates for businesses surviving for at least five years does not yet show a decrease in the number of businesses surviving, the impact to date appears to be more on the creation of new enterprises. Development work is underway to further enhance recording, monitoring, and reporting of the extent of the council’s business support and engagement; new indicators in this respect will be introduced into Strategic Performance Framework reporting for 2024/25. • The Economic Regeneration Delivery Plan (ERDP) seeks to co-ordinate and maximise the economic impact of the council’s place-based investment in housing, town centres, infrastructure, and industrial developments. In addition to the direct benefits that these programmes bring to local communities, the council’s investment also provides construction employment opportunities which, for the period 2019/20 - 2021/22, is estimated at 1,040 jobs as a result of ERDP related investment. Areas of performance requiring improvement: • Town vacancy rates remains higher than the national and family group averages. However, this is a short-term measure that can only be impacted upon by long-term activities and the council already has in place a large-scale transformation programme for North Lanarkshire’s town centres, including, for example, ambitious plans to redevelop Cumbernauld town centre. The most recent update in this respect was reported to committee through the ERDP performance framework annual progress report in August 2022. The ERDP aims to create vibrant mixed-use towns where people live, work, shop, eat, and access local services. As such, recognition needs to be given to the fact that vacancies may temporarily increase where vacant possession of redundant retail centres or land assembly is required to enable transformative change. Report title Summary SPF - Latest performance results for Employability May 2023 Within the service area of Employability there are 10 indicators in the Strategic Performance Framework. Council funded employability programmes are adept at aligning sources of external funding available to council plans and strategies and increasing their scale and reach. The current external funding environment has been considerably bolstered in recent years by additional resources from the Scottish Government to support the No One Left Behind policy and Young Person’s Guarantee in order to alleviate the impact of pandemic restrictions on the labour market. These sources have been used alongside the long-term support the council has gained from the European Social Fund. The external funding environment is now changing with the end of EU funding and the introduction of the UK Shared Prosperity Fund. In parallel to this change, the introduction by the Scottish Government of funding in 2023/24 for local employability services to support parents into employment will create further opportunities. Work is underway to finalise contracts with current external funders and integrate and align new sources Page 206 of 240
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of funding into council priorities and plans. https://mars.northlanarkshire.gov.uk/egenda/images/att100584.pdf Aligned Priority: • Improve economic opportunities and outcomes. • Support all children and young people to realise their full potential. Ambition statement: 2. Grow and improve the sustainability and diversity of North Lanarkshire’s economy. 3. Raise attainment and skills for learning, life, and work to enhance opportunities and choices. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Benchmarking indicators: • Positive destinations - % pupils leaving school and entering a positive destination. • Participation rate - % 16-19 year olds engaged with an organisation for the purposes of learning, training, or work. • Employment support - % unemployed people assisted into work from council operated / funded employability programmes. • Living wage - % of people (age 18+) in employment earning less than the real living wage. • Out of work benefits - claimant count as a % of working age population. • Out of work benefits - claimant count as a % of the population aged 16 to 24. In context • The labour market in North Lanarkshire has significantly changed in the post pandemic period with several positive trends emerging. These include low unemployment, increases in average pay, and sustained levels of participation in the labour market for young people. • The key challenge that has emerged is the increase in economic inactivity, particularly in the numbers classified as long-term sick which in North Lanarkshire has risen from 16,500 in March 2020 to 28,400 in September 2022. A combination of these factors has also led to some local employers and sectors finding it difficult to recruit and retain employees. • Also within the context of employability is the challenge of persuading unemployed and economically inactive residents that they can be better off in work and the current cost of living crisis has intensified that challenge. Current cross service work with the Tackling Poverty team and other services continues to be integral to the work of the employability team. • For 2021/22 it is likely that the effects of the pandemic affected the choices made by some young people and this - combined with the effects of alternative approaches to certification of SQA qualifications since 2020 - will have had an impact on school leaver destinations. In addition, school leaders have highlighted increased non-attendance and mental health issues as a result of the pandemic as having an impact on post-school destinations. While the latest figures show a small percentage point decrease of 0.3% on the previous year, a significantly higher number of young people left school and entered a positive destination. The percentage of young people entering Higher Education was above the national average, with Further Education and employment both higher than the previous year. Notwithstanding this, 130 young people left school and entered the negative destination of unemployed and seeking employment. Balanced Performance highlights: • The number of unemployed residents accessing council support has grown in tandem with the increased external funding available in recent times. All council funded programmes are targeted at people who are not only unemployed, but who have additional barriers to getting a job. Alongside this the numbers supported into employment have been high with the conversion from engagement to job entry remaining consistent, despite the fast-changing labour market. Most importantly, the percentage of people supported into employment - that have sustained employment - remains at 70% or above. This performance has consistently benchmarked the council’s programmes of support above the national and family group of similar councils. • In terms of the work to close the disability employment gap in North Lanarkshire, the Supported Employment team continue to work with over 200 disabled people every year using their person-centred model of support, with consistently higher rates of employment sustainability at 6 months after job entry than mainstream programmes. In recent years the team have expanded their work in supporting young people, who have additional support needs or who are care Page 207 of 240
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experienced, to transition from school into long-term work placements leading to employment. An example of this is the new Sunnyside Café based at the Volvo Trucks site in Newhouse Industrial Estate which offers work experience and training to these young people. • The nationally recognised Pathways Programme supported 145 S4-S6 young people with multiple barriers to learning and most at risk of entering a negative post school destination; this includes school non-attenders, care experience young people, young people with additional support needs and those living in areas of highest socio-economic deprivation. Of the 145, 134 are currently in a positive post school destination or remain in continued support. 54 are in employment, with a further 39 in further education or training. Areas of performance requiring improvement: • Together with the continued delivery of large-scale employability support to all unemployed and underemployed residents there is some evidence to suggest that programmes which are more targeted on thematic groups can be more effective, based on work undertaken with Routes to Work Ltd in the last 12 months. Therefore, within employability programmes funded by the council there will be increased targeting of specific groups where employment levels or engagement with mainstream programmes is not reflective of their representation in local communities. Alongside this, an increased focus on supporting parents into employment, or into better paid work, will be undertaken as part of the drive to reduce child poverty. • As the current demand for labour for some sectors and employers is unlikely to be met without additional measures, new programmes to address the sharp increase in economic inactivity are planned for implementation using a model piloted by Routes to Work Ltd in 2022 along with the UK Shared Prosperity Fund. This aims to draw economically inactive residents into the labour market, or encourage them to return to it. Report title Summary SPF - Latest performance results for Children’s Social Work and Protection May 2023 Children’s Social Work and Protection have 8 indicators in the Strategic Performance Framework which focus specifically on a range of statutory areas of children’s social work services and providing national benchmarking information for key indicators. This complements information on social work performance and improvement activity presented annually to committee through the Annual Report of the Chief Social Worker (CSWO). The most recent CSWO report for the period 2021/22 was presented to committee in February 2023. Children’s Social Work Services are delivered within a wider partnership context with oversight and strategic direction also provided through the Chief Officers Public Protection Group and Children’s Services Partnership, for which the CSWO is lead officer. A key driver of improvement and transformation over the past three years has been the Promise as reflected in the Children’s Services Plan 2021-23. Two programmes of work (Keeping the Promise - Care and Keeping the Promise - Family Support) have been the subject of regular reporting to committee over the past two years. https://mars.northlanarkshire.gov.uk/egenda/images/att100787.pdf Aligned Priority: • Support all children and young people to realise their full potential. • Improve the health and wellbeing of our communities. Ambition statement: 7. Enhance collaborative working to maximise support and ensure all our children and young people are included, supported, and safe. 9. Invest in early interventions, positive transitions, and preventative approaches to improve outcomes for children and young people. 14. Ensure the highest standards of public protection. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent Benchmarking indicators: • Looked after children - gross cost of children looked after in residential based services per child per week. • Looked after children - gross cost of children looked after in a community setting per child per week. • Balance of care for looked after children - % of children being looked after who are cared for in the community. • Looked after children - number of looked after children as a % of the populated (aged 0 to 17). • Looked after children - % with more than one placement in the last year. Page 208 of 240
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• Child protection - number of children on the child protection register per 1,000 population (aged 0 to 15). • Child protection - average number of areas of concern recorded for each child on the child protection register. • Child protection - % of child protection re-registrations within 18 months. In context • The most recent Children’s Services Plan 2021-23 was published in spring 2021 and is framed around the foundations of the Promise and the United Nations Convention on the Rights of the Child (UNCRC); young people were integral to the development of the plan. The task groups supporting the delivery of the plan have been reconfigured in line with the updated priorities with new groups focusing on Voice and Family Support, the Corporate Parenting Task Group evolving into the Promise Partnership Care, and a refreshed Mental, Health, Wellbeing, and Resilience Task Group. • Children’s social work is uniquely placed to drive and connect the key strands of work required to support the ambitions of the Promise and the required transformation of systems, outcomes, and experience for children and families. This is due to the key statutory role social work plays in supporting children and young people and their families both for children in need and those experiencing (or who have experienced) care and the underpinning values of inclusion and empowerment alongside a culture of partnership working. • New national guidance for child protection in Scotland (published in 2021) frames the delivery of the children and families social work service. This updated guidance places the safeguarding of children and young people within the wider context of Getting It Right For Every Child (GIRFEC) and further emphasises the impact of poverty and the role of early family support while also focusing on emerging harms, including extra-familial harm (the latter a driver for the development of the contextual safeguarding approach in North Lanarkshire). • The performance report reflects the latest data available which covers a period heavily impacted by the pandemic. During this period some areas of statutory activity were suppressed, not only in North Lanarkshire, but nationally due to a range of factors (this included some aspects of harm and need being less visible and the suspension of the children’s hearing and court systems during periods of high restrictions of non-emergency business). As reflected in the CSWO report for the period 2021/22, demand on children’s social work has since risen with referrals to children and families social work services growing over the past two years and 15% higher in 2021/22 than in 2018/19. This appears to reflect an increase in the need for support from children and families within the community. Although further work is needed to fully understand the picture which sits behind this, the change is perhaps unsurprising given the evidence that the pandemic impacted disproportionately those already faced the greatest adversities, including children’s early development and wider wellbeing. Balanced Performance highlights: • 1% of the North Lanarkshire’s population (aged 0 to 17) are currently looked after by the local authority. The figures for 2021 show a decrease of 11.9% in the number of young people looked after compared to 2020. National average figures over the same period show 1.3% of children are looked after, with an 8.3% decrease over the same period. A focus on family support, strengths-based practice, and integrated working has enabled North Lanarkshire to continue to achieve fewer children looked after per head of population than the national average, however it should be noted that the biggest fall over this period (both in North Lanarkshire and nationally) related to children and young people experiencing care at home, with this change in part relating to the impact of the pandemic on children’s hearing system activity. • The council continues to show year on year improvement in terms of children looked after in the community; the latest figures show that 96.5% of children experiencing care within North Lanarkshire were looked after in the community in family placements. This compares to 90.3% nationally and a family group average of 88.7%. The council has consistently performed in the top quartile in Scotland in this indicator and the latest results show the council to be ranked at number 1 in Scotland. A significant element of this relates to the role of kinship care. • The need for a safe, stable place to live, and ongoing secure relationships is central to a child’s plan. Latest figures show there are 4.4% of children in North Lanarkshire with more than one placement in the last year 2020/21. This compares to 16.8% nationally and a family group average of 13.8%. The council has consistently performed in the top quartile in Scotland in this indicator and has remained ranked at number 1 in Scotland for the last 7 years. This demonstrates the extent of the council’s commitment to maintaining the need to secure and maintain attachments in care planning, while recognising that no two cases will be the same, and each child must be placed in a situation that is appropriate to them. However, a level of caution must be applied when considering the figures for children and young people experiencing care during this period when compared with the previous year, as again the pandemic had some impact on care planning and non-urgent moves, including permanent placements. The latest low figures may therefore not be maintained going forward. Areas of performance requiring improvement: • For this period the gross cost of children looked after in residential based services per child per week was higher in North Lanarkshire than the national and family group averages. This will continue to be monitored as - while there were some pandemic related cost pressures (e.g. related to additional cover requirements) and there are inflationary pressures in this sector (most notably with respect to external placements) - the council remains a relatively low user Page 209 of 240
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of external residential care. The primary driver of the increase in costs appears to have been a temporary reduction in numbers of young people in residential care at the specific point of reporting and the associated rise in unit costs. • While traditionally the council uses residential care proportionality less than the national average, there has been a subsequent increase in young people in the council’s own children’s houses for three main reasons - the council’s commitment to providing support to unaccompanied children seeking asylum in a nurturing and safe environment, openness to taking older young people back into care when they need and ask for it, and the growth in continuing care. • Following a drop of a third in numbers of children and young people supported in external residential placements over 2018-21, the number has plateaued despite a longer-term commitment to providing support close to home. This is due to a range of factors relating both to demand, complexity of need, and the long-term nature and supporting relationships associated with some of these placements. Nonetheless it remains a key priority of the council to ensure increased capacity to support young people with complex needs within local communities. • This also drives efforts to recruit more in-house foster carers. While there are currently slightly fewer children in foster care, the focus on supporting and encouraging young people to remain with their carers for as long as they need means a continued and sustained increase in the use of continuing care, with the effect that some foster and kinship carers are now continuing carers. • With respect to child protection, a trend over recent years has been the increase in the number of concerns recorded in relation to individual children. While this remains lower in North Lanarkshire than the national average, it reflects increased complexity and adversities impacting on children and their families. North Lanarkshire also saw an increase in the number of children and young people who were re-registered on the Child Protection Register over this period. While the primary driver of decisions in this area will always require to be individual circumstances, further focus is required on support for sustainable improvement in family circumstances and safeguarding (including after de-registration). This will be monitored closely going forward. Report title Summary Health and Social Care North Lanarkshire performance update - Quarter 3 (October - December 2022) April 2023 The Chief Officer (for the Health and Social Care Partnership) has joint quarterly performance review meetings with the Chief Executive of NHS Lanarkshire and the Chief Executive of North Lanarkshire Council. These meetings are supported by a Chief Executive Performance Framework comprising a range of performance measures from across both health and social work systems, including relevant targets and trajectories. Quarterly reports are subsequently submitted to the Integration Joint Board Performance, Finance, and Audit Committee. The purpose of these reports is to provide an update on the areas for improvement what have been identified as part of the quarterly performance review. https://mars.northlanarkshire.gov.uk/egenda/images/att100574.pdf Aligned Priority: • Improve the health and wellbeing of our communities. Ambition statement: 12. Ensure our residents are able to achieve, maintain and recover their independence through appropriate supports at home and in their communities. 13. Improve preventative approaches including self-management and giving people information and choice over supports and services. 14. Ensure the highest standards of public protection. Consistent A pre-defined template is in place to ensure a standard, easily recognisable, and well established process for quarterly reporting. Transparent Based on a traffic-light system there are areas for improvement identified within the performance framework each quarter for those areas that are flagged as Red or Amber. The areas for improvement identified are progressed as a matter of priority, and progress updates are reported at future meetings of the Integrated Joint Board and/or the Integration Joint Board Performance, Finance, and Audit Committee as appropriate. In context The joint performance review meetings (involving the Chief Officer for the Health and Social Care Partnership, the Chief Executive of NHS Lanarkshire, and the Chief Executive of North Lanarkshire Council) are used as a means for jointly agreeing corrective actions. Balanced Note, the purpose of this report is to provide an update on the areas for improvement what have been identified as part of the quarterly performance review. The quarterly report to committee sets out the corresponding narrative and corrective actions agreed for the areas identified for improvement which includes increased and targeted information provision and communications to increase cervical screening uptake, additional clinics to ensure the uptake for immunisation Page 210 of 240
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of 2 and 5 year olds remains high, a range of measures to address delayed discharge / home support / reablement issues in terms of improving the flow and referrals process for patients throughout the various aspects of the system, and prioritising the provision of integrated equipment and adaptations to support hospital discharges and prevent admissions. In addition, corrective actions have also been put in place to support child and adolescent mental health services (CAMHS) through improved flexibility of response and positive messaging around what is being delivered, waiting times for psychological therapies, adult mental health consultations, paediatric services, referrals for treatment for allied health professional (AHP) and community services, and referrals for the stop smoking service. All long-term and short-term sickness absences continue to be managed in accordance with the relevant policies of NHS Lanarkshire and North Lanarkshire Council. A number of resources remain in place to support staff who are experiencing sickness absence, including spiritual care, the SALUS helpline, and psychological support services. Report title Summary Health and Social Care North Lanarkshire performance update - Quarter 4 (January - March 2023) June 2023 The Chief Officer (for the Health and Social Care Partnership) has joint quarterly performance review meetings with the Chief Executive of NHS Lanarkshire and the Chief Executive of North Lanarkshire Council. These meetings are supported by a Chief Executive Performance Framework comprising a range of performance measures from across both health and social work systems, including relevant targets and trajectories. Quarterly reports are subsequently submitted to the Integration Joint Board Performance, Finance, and Audit Committee. The purpose of these reports is to provide an update on the areas for improvement what have been identified as part of the quarterly performance review. https://mars.northlanarkshire.gov.uk/egenda/images/att100911.pdf Aligned Priority: • Improve the health and wellbeing of our communities. Ambition statement: 12. Ensure our residents are able to achieve, maintain and recover their independence through appropriate supports at home and in their communities. 13. Improve preventative approaches including self-management and giving people information and choice over supports and services. 14. Ensure the highest standards of public protection. Consistent A pre-defined template is in place to ensure a standard, easily recognisable, and well established process for quarterly reporting. Transparent Based on a traffic-light system there are areas for improvement identified within the performance framework each quarter for those areas that are flagged as Red or Amber. The areas for improvement identified are progressed as a matter of priority, and progress updates are reported at future meetings of the Integrated Joint Board and/or the Integration Joint Board Performance, Finance, and Audit Committee as appropriate. In context The joint performance review meetings (involving the Chief Officer for the Health and Social Care Partnership, the Chief Executive of NHS Lanarkshire, and the Chief Executive of North Lanarkshire Council) are used as a means for jointly agreeing corrective actions. Balanced Note, the purpose of this report is to provide an update on the areas for improvement what have been identified as part of the quarterly performance review. The quarterly report to committee sets out the corresponding narrative and corrective actions agreed for the areas identified for improvement which includes improving the recording of alcohol brief interventions (ABI), increased and targeted information provision and communications to increase cervical screening uptake, additional clinics to ensure the uptake for immunisation of 5 year olds remains high, carrying out further investigation and analysis to understand the reason for late or no assessments in terms of 6-8 week reviews, and a range of measures to address delayed discharge / home support / reablement issues in terms of improving the flow and referrals process for patients throughout the various aspects of the system. In addition, corrective actions have also been put in place to support child and adolescent mental health services (CAMHS) through improved flexibility of response and positive messaging around what is being delivered, waiting times for psychological therapies, adult mental health consultations, paediatric services, referrals for treatment for allied health professional (AHP) and community services, and referrals for the stop smoking service. All long-term and short-term sickness absences continue to be managed in accordance with the relevant policies of NHS Lanarkshire and North Lanarkshire Council and performance in this area reflects wider performance within the partner organisations, with nursing and midwifery in NHS Lanarkshire continuing to be the most challenging area. Page 211 of 240
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Appendix 2 (2) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. Report title Summary Community safety hub performance and development May 2023 A report in 2020 provided a one off update on the performance of the Community Safety Hub following its merger into the council’s Housing service. In order to ensure ongoing performance monitoring this report has now been incorporated into the service’s programme of annual service performance reports. https://mars.northlanarkshire.gov.uk/egenda/images/att100529.pdf Aligned Priority: • Improve the health and wellbeing of our communities. Ambition statement: 14. Ensure the highest standards of public protection. Consistent A standard set of measures are in place which are recorded and monitored consistently in order to provide a live and complete picture of community safety across North Lanarkshire. These measures focus on incidents captured (criminal incidents, community safety incidents, and anti-social incidents), environmental incidents, evidence requests (evidence disks, and review requests), and missing persons. Transparent A breakdown of all types of incidents is provided in a summary table which compares current year figures with previous years. In context The Plan for North Lanarkshire aims to make North Lanarkshire a better place to live, learn, work, invest, and visit, where homes and public spaces are safe - and feel safe - for everyone. The work of the Community Safety Hub plays a key role in this respect by improving community safety through CCTV, tackling anti-social behaviour, and ensuring public protection. The Community Safety Hub currently delivers: • 24 hour/365 days per year proactive monitoring of 1,310 public space CCTV cameras in North Lanarkshire. • Evidence disks for Police Scotland, the Crown Office, and the Procurator Fiscal. • Call handling for the anti-social behaviour service 24/7. • Management of the public protection service within Housing Management. • An out of hours anti-social behaviour witnessing service. • An out of hours telephony service for homelessness and the organisation of out of hours homeless standby provision. • Co-location of Police Scotland officers. • An emergency response centre and relaying of CCTV images to support the council's resilience capacity during major incidents, adverse weather, or other emergencies. Balanced • Work to upgrade the 162 urban housing CCTV cameras on the network is nearing completion, with 130 cameras upgraded over the past two years. The remainder will be upgraded over the coming financial years. This has significantly benefited the communities with increased night-time performance from the high-definition cameras assisting in incidents that may have proven more difficult to detect in the past. • All homeless out of hours contacts are now being handled by a dedicated call handling team who operate from the Hub every evening and all weekend. This is delivered along with the anti-social behaviour service allowing a streamlined team to deliver both services. Homeless call handling activities commenced in May 2022 from the Hub. • Anti-social behaviour services for non-council tenants were due to be reviewed in line with funding, however this has now been extended and services will continue to be available to all residents of North Lanarkshire, irrespective of tenure of their property. • Sound Monitoring Equipment (SME) is currently being deployed by the night team. The current number of complainants on the waiting list is 14, this is constantly under review and additional equipment is purchased when necessary. • Options around alternative products or tools (such as the Noise App), which may be used to support the requirement for SME being deployed, are being explored. It is hoped that alternative solutions may become available in the next financial year. • A further area of development within the anti-social behaviour service is the deployment of a new Break the Cycle initiative that is planned to be Page 212 of 240
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delivered across all Primary and Secondary schools. Input is planned for Primary 7 pupils due to transmission to secondary school, this will be aimed at showing the impact of anti-social behaviour in communities. • Secondary pupils from the senior years will also be trained in delivery of an information session around anti-social behaviour and CCTV and the impact it has on the wider community. This will be presented to the younger secondary school children with the hope that the work can be accredited and added to the Personal and Social Education (PSE) curriculum for the pupils taking part. • Within the service, work has been undertaken to develop a new case management system to increase efficiency of record handling within the public protection team, work is ongoing with testing of the system to ensure all functionality required is included. This system will assist the team with workflow and information gathering for attendance at multi-agency meetings. Report title Summary Mainstreaming equality report May 2023 Every two years public bodies covered by the Public Sector Equality Duty (PSED) are required to publish a number of reports and information to evidence how they are meeting the needs of people whose characteristics are protected by the Equality Act 2010 - the PSED (General Duty). In line with the council’s requirement and timelines to publish this information for its own services and activities, the Mainstreaming Equality report therefore contains: • A full copy of the 2023 Mainstreaming Equality report, detailing how the council (including the Education Authority and the Licensing Board) is demonstrating that the general equality duty is integral to its work. • Linked and updated details on progress made to delivering against the stated Equality Outcomes for 2021-25. • An up-to-date picture of the current equalities profile of employees and employment practices. • Pay gap information as required to be published by law every two years. https://mars.northlanarkshire.gov.uk/egenda/images/att100517.pdf Aligned Priority: • All Ambition statement: • All Consistent The report follows the same format and reports a wide and consistent suite of equalities information. Transparent The report provides an account in terms of the council’s compliance with the equality duty, demonstrating that the council continues to evidence its due regard of the need to eliminate unlawful discrimination, harassment and victimisation, and any other conduct prohibited by the Equality Act 2010, advance equality of opportunity between people who share a protected characteristic and those who do not, and foster good relations between people who share a protected characteristic and those who do not. It presents a significant volume of information that reflects the council’s response to equalities across all services. In context The report reiterates that mainstreaming equality effectively requires a culture at all levels of an organisation where the needs of people with protected characteristics are not an afterthought but are integral to everything it does. As such, central to the council’s ambition for North Lanarkshire to be the place to live, learn, work, invest, and visit is a vision of inclusive growth and prosperity for all. An integral aspect of delivering the vision (in line with The Plan for North Lanarkshire) is therefore addressing the disadvantage and inequality that some groups of people experience because of societal constructs, prejudice, or direct and indirect discrimination and ensuring a commitment from all employees at all levels to understand the causes and consequences of inequality. The Equality Strategy 2019-24 (approved at committee in August 2019) sets out the council’s commitment to equality and human rights and its clear understanding of the disadvantage and inequality that exists for some people and communities. Through five working objectives for success, the strategy outlines how equality will continue to be part of the everyday work of the council thereby ensuring a mainstreamed approach. Balanced The report highlights some encouraging areas of real progress and change, alongside work being undertaken within services to ensure that the council fully considers and supports residents who are covered under the provisions of the Equality Act 2010. However, the report also notes that there are Page 213 of 240
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particular areas of inequality and disadvantage that persist. Many of these areas are not quick fixes but require a long-term strategic, partnership, and sustained approach that includes instigating positive action measures and campaigns, and include: • Tackling the disproportionate impacts of poverty on women (particularly older women), disabled people, and some minority ethnic groups. • Ensuring community engagement and communication mechanisms are accessible and work to meet the needs of different communities. • Ensuring children and young people who experience barriers to education leave school with positive destinations and futures. • Ensuring the workforce reflects the diversity of North Lanarkshire. • Ensuring procurement contracts assist to advance the council’s equality duties. Many of these areas are already the subject of action plans that are being driven by specific working groups - Equally Safe at Work, Tackling Poverty, Violence Against Women Partnership, and Disability Confident Leader - and these will continue to provide the long-term strategic response needed. The new Equality Board, which has now been established with good representation from all services, will provide the added support and co-ordination to progress matters, as well as supporting enhanced monitoring and review with regards to all aspects of equality including the equality outcomes. Report title Summary Building standards annual verification performance report 2022/23 May 2023 The building standards profession in local authorities is responsible for delivering the verification service in Scotland. The purpose of the building standards system is to protect the public interest. The system sets out the essential standards that are required to be met when building work or conversion of a building takes place in order to meet building regulations. The building standards system checks that proposed building work or conversion of a building meets standards; inspections are limited to a minimal necessary to ensure that legislation is not avoided. The control of work on site is not down to the system but is a matter for contracts and arrangements in place between a builder and client. Verifiers, appointed by Scottish Ministers are responsible for the independent checking of applications for building warrants to construct or demolish buildings, to provide services, fittings or equipment in buildings, or for conversions. The verification report is a strategic planning and management tool that provides information about the council’s building standards service, communicates the vision and strategy, and sets out performance against strategic goals and targets. Building standards verifiers in Scotland are required to use the performance report to manage, monitor, review, and develop strategies for their business, and should focus on the performance framework’s core perspectives and cross-cutting themes. https://www.northlanarkshire.gov.uk/sites/default/files/2023- 05/Building%20Standards%20Annual%20Verification%20Performance%20Report%202022-23_0.pdf Aligned Priority: • Improve the health and wellbeing of our communities. Ambition statement: 14. Ensure the highest standards of public protection. Consistent The report is produced annually in a consistent format. It includes information on service delivery, the timescales and targets to be met, and performance against these. Verifiers are required to provide returns to Scottish Government on both their performance and workload - the performance data relates to the building standards verification performance framework while the workload data relates to the numbers of building warrant applications, completion certificates, fees, costs, certificates (certification, energy performance, sustainability), and enforcement cases. The report also provides information regarding the Building Standards Charter which sets out the standards of service that all verifiers should meet. This gives customers the reassurance that a consistent, high-quality service will be delivered no matter which verifier provides the service. Transparent The national verification performance framework is based on three core perspectives (professional expertise and technical processes, quality customer experience, and operational and financial efficiency). There are also three cross-cutting themes - public interest, continuous improvement, and partnership working. The annual report is structured around this framework. 7 performance outcomes are highlighted within the report and 11 performance targets are in place to assess performance and progress against these outcomes. The report has a dedicated section outlining the latest performance data against the targets along with supporting narrative. Page 214 of 240
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In context The report sets out the place based context within which the building standards service is delivered across North Lanarkshire (i.e. the main employment sectors) as well as the operating context within the council. As part of the Built Environment team in the council, Building Standards helps to support and enable the delivery of local growth, making North Lanarkshire an attractive business location, improving employment opportunities, encouraging strong sustainable communities, and enhancing and protecting the natural and built environment. Balanced As well as the performance results, the report highlights actions completed within the last year together with a number of continuous improvement actions which will be implemented in the forthcoming year (these cover the three core perspectives of professional expertise and technical processes, quality customer experience, and operational and financial efficiency). These actions are aligned to the respective performance outcomes and indicators in order to ensure improvements implemented can be assessed in terms of performance on the ground in the future. Report title Summary Revenue and benefits update May 2023 This report provides a regular update on the payment performance for council tax and non-domestic rates, the administration of a range of welfare benefits, and the council tax reduction scheme. https://mars.northlanarkshire.gov.uk/egenda/images/att100687.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Consistent Produced quarterly, this report provides Elected Members with detailed in year performance figures which can be compared to the same period in previous years. Transparent The year to date performance set out in the report covers a wide range of service activities as well as the amount of funding paid out to help households in need in order to provide a safety net for local people on low incomes. In context The report includes the latest context within which the service is operating; this is of particular relevance given the ongoing administration of grants and support payments required for low income households. The report also advises of any new national grants when they are introduced, or will cease, and the qualifying conditions for receipt of such. Balanced In terms of grants, the report specifies the volume of applications assessed as well as the volume awarded and which were unsuccessful. Report title Summary Financial monitoring report - council summary (revenue) May 2023 This report presents the council’s revenue monitoring position for the General Fund Account, Housing Revenue Account, and Adult Health and Social Care. https://mars.northlanarkshire.gov.uk/egenda/images/att100693.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Consistent The report at each financial period end consolidates the budget monitoring position of all council services into one council summary. Transparent The report highlights and explains major variances as per the council’s approved Financial Regulations. The Financial Regulations require services to remain within their approved budgeting provision, and to report all significant deviations - defined as the higher of £100,000 or 5% - within their budget Page 215 of 240
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monitoring reports. In context All activities undertaken by the council are subject to risk, and in acknowledging the council’s approved Risk Management Strategy, services manage these as part of their overall corporate and service planning processes. The May 2023 report states that the current economic climate - such as the rising forecast of pay and non-pay inflation, ongoing pandemic impact, the cost of living crisis, and other external factors - have the potential to impact upon the council’s ability to provide quality services within approved budget levels. Balanced Where significant deviations are identified, services must provide explanatory commentary, outline the action required to rectify such deviations and where relevant, must also highlight the impact this has on other budget headings. This information is captured by Finance and summarised in the overall council report. Report title Summary Financial monitoring report - council summary (capital) May 2023 This report presents the council’s capital monitoring position for the council’s capital programmes, including general services, housing revenue account, City Deal, etc. https://mars.northlanarkshire.gov.uk/egenda/images/att100688.pdf Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Consistent The report at each financial period end consolidates the capital monitoring position of all council services into one council summary. The May 2023 also shows the 2022/23 projected outturn position and the resultant variances. Transparent The Strategic Capital Investment Programme 2021/22 to 2025/26 was originally approved at Policy and Strategy Committee in March 2021, with an updated programme profile for 2022/23 to 2025/26 approved in March 2022. It represents the total Community Investment Programme incorporating the General Services Capital Programme and HRA Capital Programmes. The programme was developed in conjunction with services and led by the Strategic Capital Delivery Group (SCDG) using the principles established by the council’s Capital Strategy. In context The May 2023 report states that the capital programme continues to face challenges in relation to the wider economic climate linked to availability of materials, contractors, and inflationary pressures and, as such, the SCDG met in February 2023 to agree reprofiling requests. However, the report states that challenges remain and, as a result, it is anticipated that the General Fund programme will underspend during 2022/23. Balanced The report provides a breakdown of the overall 2022/23 budget by service programme and associated approved budget movements. Further financial performance information regarding each of the service programmes is also included to provide a narrative in terms of the current position of the capital programme. Key to RAG status green Performance is on target and/or within acceptable thresholds red Performance does not meet target and is outwith acceptable thresholds blue Performance surpasses the target and exceeds expectations Page 216 of 240
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No Ref KH/JL Date 04/09/23 Arm’s Length External Organisations (ALEOs): Governance and Risk Management Oversight and Assurance Report 2023/24 From Chief Officer (Business and Digital) E-mail hassellk@northlan’gov.uk Telephone 07903 096121 Executive Summary The council delivers a number of services through arm’s length external organisations (ALEOs) which have been developed over the past 20 years to provide services in new ways that are innovative, responsive or more commercially driven. The council must have confidence in the quality of service delivery and obtain assurances, through robust monitoring, scrutiny and oversight, that the public purse continues to secure best value and the externalised delivery arrangements are not exposing the council to potential operational, financial or reputational risks. This report provides an overview of the ALEO landscape and the performance and financial monitoring safeguards that are in place to provide such assurance. The report confirms that ALEO Boards and Management Committees continue to demonstrate effective stewardship, financial governance and risk management. In recent years the number of council owned ALEOs has reduced following service review activity, or external factors, which highlighted that service provision via the externalised delivery vehicles no longer represented best value for the council. As such, the council has taken separate decisions to either in-source service delivery or cease provision and this report provides an update on the status of current dissolution activity within Culture and Leisure NL Ltd, NL Leisure Ltd and North Lanarkshire Municipal Bank Ltd. The report also summarises current refinancing activity within North Lanarkshire Properties LLP to secure future borrowing on the most advantageous terms for the company and outlines potential changes that may be brought forward to the Articles of Association in both Routes to Work Ltd and Fusion Assets Ltd. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Acknowledges that ALEO governance, performance reporting and financial monitoring arrangements are progressing satisfactorily; (2) Confirms that the performance monitoring and oversight arrangements are suitably robust and provide assurance that service delivery reflects Best Value; (3) Acknowledges that current activity by North Lanarkshire Properties LLP to refinance its outstanding loan balance is at an advanced stage and notes that further update reports will be submitted to the Finance and Resources Committee; Item 14 Page 217 of 240
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1. Background 1.1. Arm’s Length External Organisations (ALEOs) can be established and funded by councils to deliver a wide range of functions and services, including statutory duties. ALEOs may offer an alternative to more traditional ‘in-house’ or contract based service delivery and take the form of companies, charitable trusts, joint ventures or partnerships. In setting up an ALEO, the council relinquishes its direct operational and management responsibilities, however the council retains a degree of influence and control through its shareholding in the company and the contractual agreement setting out the services to be provided, performance monitoring arrangements and the level of funding and/or management fee to be provided by the council. The ALEO operates separately at ‘arm’s length’ to the council and is ‘external’ in that it has its own identity, management structure, decision making and staffing responsibilities. 1.2. There are various drivers behind a council choosing to deliver services via an ALEO including financial benefits (through business rates relief or the ALEO being able to secure external funding or generate income) and service delivery improvements through increased flexibility, responsiveness or developing and delivering services in innovative and more targeted ways. 1.3. Notwithstanding these benefits, councils must have a strong business case to support service delivery via an ALEO and be clear in the anticipated benefits for the council, local residents and communities. Equally councils must have robust monitoring and oversight arrangements in place to ensure that the council’s expectations are being met and the services are being delivered to a high quality and achieving best value. Accounts Commission guidance recommends that councils should periodically review their ALEOs to ensure they remain the best option for service delivery and to ensure effective governance is in place. 1.4. North Lanarkshire Council has long-standing experience in service delivery via ALEOs and our review, performance monitoring and oversight arrangements have developed over time to reflect accounting standards and Accounts Commission guidance, recommendations and best practice. 1.5. This six monthly report is a key component of our ALEO governance arrangements, providing Audit and Scrutiny Panel members with a status update on the current ALEO landscape and oversight of existing monitoring arrangements to ensure that these remain proportionate and sufficiently robust. (4) Acknowledges potential future changes to the separate Articles of Association governing: 1) Fusion Assets Ltd; and 2) Routes to Work Ltd and notes that details of proposed revisions will be reported via the Enterprise and Fair Work Committee in due course. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (22) Facilitate a North Lanarkshire wide approach to asset rationalisation, including with communities and partners (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning Page 218 of 240
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1.6. The report also provides assurance that adequate governance, financial governance, risk management and business continuity arrangements remain in place within the individual ALEOs and neither the council, nor the services provided, are exposed to any financial, operational or reputational risks. 2. Report 2.1. North Lanarkshire Council was one of the first local authorities to externalise service delivery via the separate Joint Venture Partnerships created between 2000 and 2001 with responsibility for roads; street lighting; winter maintenance; housing and corporate property repairs; gas central heating and safety; and window and door replacement. Routes to Work Limited, which continues to this day and is responsible for employability support and training services, was established in 2002 as the council’s first wholly owned ALEO. Subsequent ALEOs, established between 2006 and 2012, included Culture and Leisure NL Ltd, Fusion Assets Ltd and North Lanarkshire Properties LLP. 2.2. During the intervening period and based on the findings and recommendations from various service reviews, options appraisal and/or changes in the external operating environment, the number of individual ALEOs has gradually reduced as the outsourced service delivery arrangements were identified as no longer representing best value for the council, or opportunities for closer alignment with The Plan for North Lanarkshire and the council’s strategic objectives could be more effectively driven forward through a return to inhouse provision. 2.3. The current ALEO landscape is summarised below and further information on each ALEO, including council officers and members appointed to the various Boards and Management Committees, is provided at Appendix 1. ALEOs – where the company(ies) are wholly owned by the council through 100% shareholding Established • Routes to Work Limited (Ltd) Employability services, including training and support programmes delivered on behalf of the Scottish and UK Governments, often targeting people who are furthest from the labour market or are looking to upskill or return to work after a period of unemployment or redundancy. 2002 • North Lanarkshire Properties LLP and North Lanarkshire Property (Investments) Ltd Responsible for marketing, leasing and managing the council’s commercial properties. NLP also manages the remaining balance of the council’s investment property - the “legacy estate” and provides general advice on wider lease transactions, including managing lease arrangements where the council occupies externally owned properties. 2012 • Fusion Assets Ltd Economic regeneration and infrastructure investment, particularly in areas where there is little speculative development. Fusion Assets works in partnership with the council to secure Scottish Government Vacant and Derelict Land Funding and Regeneration Capital Grant Funding and regularly maximises the potential and value of this through innovative private sector funding agreements. 2006 Page 219 of 240
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Joint Venture Companies – formal partnership arrangements where the council has 33.33% shareholding, and the parent company holds the remaining 66.66% • MEARS Scotland Limited Liability Partnership (LLP) Housing repairs. Corporate properties’ repairs and maintenance. 2010 • Amey Public Services LLP Roads and streetlighting repairs. Winter maintenance including gritting and snow clearing. 2010 ALEO Review Activity and the Enterprise Project North Lanarkshire Municipal Bank (NLMB) Ltd 2.4. Panel members are aware that following an anti-money laundering and financial crime compliance review undertaken by the Royal Bank of Scotland in October 2021, the Board of North Lanarkshire Municipal Bank (NLMB) Ltd considered the various issues, challenges and implications in continuing to provide banking services, and agreed to cease services and take the necessary steps close the Bank. This decision was ratified by the Policy and Strategy Committee in October 2021. The Bank ceased to provide accounts for new customers from October 2021 and closed to existing customers on 30 September 2022. The resolution for dissolution of the company was approved by the NLMB Board on 2 May 2023, and the formal application for striking-off the company was submitted to Companies House thereafter. The dissolution request was published in The Edinburgh Gazette on 16 May 2023 with Notice that, as per Section 1003(3) of the Companies Act 2006, unless any objections were received, NLMB Ltd would be struck off the Register of Companies after a period of two months from publication of the Notice and the company subsequently dissolved. This has now taken place with a dissolution date of 1 August 2023. 2.5. Prior to closure, the council publicised, via various communication methods, that remaining account holders, who had not come forward to close their accounts and withdraw funds before the Bank’s closure, could submit closure requests via the council’s First Stop Shops. Following closure of the Bank, customer balances that had not been withdrawn were transferred to an account held in trust by North Lanarkshire Council. These balances do not represent assets available to the Council and are excluded from the council’s balance sheet in the annual accounts. Culture and Leisure North Lanarkshire (CLNL) Ltd and North Lanarkshire (NL) Leisure Ltd 2.6. Following the council decision in January 2020 to insource delivery of culture, leisure and related services with effect from 1 April 2021, the council has been undertaking due diligence activity to wind up the business of the predecessor ALEOs: Culture and Leisure NL Ltd and NL Leisure Ltd. 2.7. The previous report to the Audit and Scrutiny Panel in February this year summarised dissolution progress including filing of statutory accounts for 2021/22 and confirmation from HMRC that VAT deregistration was complete. Panel members noted that work remained outstanding to agree with all relevant parties the treatment of a small number of personal injury insurance claims that had previously been lodged with CLNL Ltd or NL Leisure Ltd and had not been resolved or settled prior to insourcing. Page 220 of 240
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2.8. The council has taken the place of CLNL and NL Leisure in these actions and an administrative process is ongoing regarding these claims which includes notifying the claimants in writing of the transfer to the council and of the intention to apply for CLNL Ltd and NLL Ltd to be removed from the Register of Companies. This exercise is designed to minimise the risk of any objections being lodged when the application for strike-off is published through a similar process to that described for the North Lanarkshire Municipal Bank at 2.4 above. 2.9. In the interim, the statutory accounts for 2022/23 for CLNL, NL Leisure and both Trading Community Interest Companies have been prepared, albeit at nil value. These will require to be approved by the respective Boards and submitted to OSCR and Companies House by 31 December 2023. Enterprise Project - MEARS Scotland LLP and Amey Public Services LLP 2.10. The existing service delivery agreements in place between the council and MEARS and Amey are due to come to their contractual terminations in January and June 2024 respectively. These Joint Venture Partnerships are responsible for: • Repairs to council housing stock plus corporate property repairs and maintenance – MEARS Scotland LLP • Roads and streetlighting repairs plus winter maintenance – Amey Public Services LLP 2.11. The council previously agreed in December 2018 that the above services would be in scope for delivery through the Enterprise Project which aims, through a phased approach, to integrate asset management functions across the council and to optimise further asset related arrangements and strategic supply relationships to support The Plan for North Lanarkshire’s place based ambitions. 2.12. Procurement exercises are underway via Public Contracts Scotland with the Phase 1 contract awards expected to be made for both the Housing and Corporate Property Contract and the Roads Contract in February 2024. Statutory Bodies, Associates and Joint Ventures 2.13. Services are also delivered through individual public bodies that have been established through separate pieces of legislation, either as part of local government reorganisation in 1996 or more recently with the aim of improving services through better integration. The council is represented on these joint boards: • Strathclyde Partnership for Transport; • Strathclyde Concessionary Travel Scheme; and • Lanarkshire Valuation Joint Board 2.14. All local government functions that relate to these bodies have been delegated from the constituent councils that make up the area served by each board1. The members of each Board are elected councillors and appointed by their respective local authorities in proportions specified in the legislation. Representation by North Lanarkshire Councill 1 Strathclyde Partnership for Transport and Concessionary Travel – Constituent Councils: Argyll and Bute; Renfrew; East Renfrewshire; Inverclyde; West Dunbartonshire; East Dunbartonshire; North Lanarkshire; South Lanarkshire; City of Glasgow; North Ayrshire; East Ayrshire; South Ayrshire. Lanarkshire Valuation Joint Board – Constituent Councils: North and South Lanarkshire Councils. Page 221 of 240
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is shown in Appendix 2. The council has no shares, nor ownership of any of these public bodies, however, they are included within the council's Group Accounts under the wider definition of an "associate" because the council is represented on the board of management and participates in policy-making processes. Local government legislation provides that constituent local authorities have an obligation to meet the expenditure of the Joint Boards and as a consequence, any liabilities from these Boards must be fully incorporated within the individual authorities’ Group Accounts. 2.15. Although the council has some influence over the operating policies of these public bodies, plus financial obligations and liabilities as a constituent member, they are entirely independent of the council under law and taxation. These statutory bodies are already subject to external scrutiny and public accountability and as such, governance and assurance responsibility does not generally fall within the scope of this report, however, annual performance oversight updates are considered by the relevant service committee as per the Scheme of Administration and the Strategic Performance Framework. Health and Social Care North Lanarkshire 2.16. Health and Social Care North Lanarkshire Integration Joint Board, which brings together adult social work services and NHS Lanarkshire’s community based health services through the Public Bodies (Joint Working) (Scotland) Act 2014 is consolidated in the council’s Group Accounts as a Joint Venture, on a 50% equity basis and the council has the power to exert its influence through membership of the Integration Joint Board. Again, governance responsibility does not sit with this Panel since the Health and Social Care Partnership is accountable via the Integration Joint Board (IJB) and the Performance, Finance and Audit Committee. 2.17. Appendix 2 provides further details on the statutory bodies described above. Performance Monitoring 2.18. The ALEOs are separate legal entities in their own right with their own governance and financial management obligations, however, the council remains accountable for service delivery, whether performed in-house or through alternate, arm’s length arrangements. Performance monitoring arrangements have developed over time and are well documented through the Strategic Performance Framework and previous Panel reports. 2.19. Responsibility for ongoing monitoring and ensuring that services are being delivered as per the council’s expectations and the terms set out in the Service Level Agreement or Partnership Agreement rests with the relevant client service, with separate oversight by Finance to ensure robust financial management and stewardship are in place. Chief Officers, with responsibility for services or functions delivered through an ALEO, submit a six monthly performance report to the relevant service committee and details of the most recent reporting periods are provided in Appendix 1 for the ALEOs and Joint Venture Strategic Partnerships and Appendix 2 for the statutory bodies. Financial Monitoring 2.20. The council has a duty under it’s “Following the Public Pound” obligations to ensure that the external organisations delivering services on its behalf are financially sound. The Chief Officer (Finance), as the council’s Section 95 Officer, is responsible for maintaining appropriate and proportionate processes and procedures for scrutinising ALEOs’ financial performance. The individual contractual arrangements specify the Page 222 of 240
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financial information which each ALEO must submit to the council, and this enables Financial Solutions to assess and report on any potential financial risk likely to arise as a result of the council using the ALEO to deliver services. The following paragraphs highlight, by exception, financial matters that require close monitoring by the individual ALEOs’ Board of Directors or Management Committees, along with robust, separate oversight by Financial Solutions. North Lanarkshire Properties (NLP) LLP / North Lanarkshire Property (Investments) Ltd 2.21. North Lanarkshire Properties (NLP) are continuing to be affected by supply chain labour shortages and inflationary pressures which have impacted the property and construction industry in recent months. There is a potential risk that these delays will impact on the timescales relating to re-letting properties. 2.22. NLP are continuing to review the company’s 5 year Investment Plan. As a business NLP are having to align the medium to long term investment plan with market conditions and where possible this will continue to be funded by long term rent reviews. 2.23. A joint NLP and council project team, which includes the Finance Manager acting for NLP under the Service Level Agreement and the Business Finance Manager on behalf of the council, is supporting NLP in refinancing the outstanding loan balance (approximately £33m) which must be completed by the end of October. The company procured external professional advice through Azets Holding Limited who are working with the project team and with the preferred lender to implement a new loan agreement from 1 November 2023. Specific reports on the refinancing activity have previously been submitted to the Finance and Resources Committee earlier this year as summarised below. • 1 March 2023: Explanatory background report by the Chief Officer (Finance) which also sought approval that the council continues to serve as guarantor, at up to 80%, for future loan repayments due by NLP (click on link for report); and, • 24 May 2023: Report by the Chief Officer (Finance) requesting that authority be delegated to the Chief Officer (Finance) to approve NLP’s future borrowing on behalf of the Council, including the appointment of the successful lender and finalised loan agreement terms (click on link for report). 2.24. A further progress update report, confirming the preferred lender and current credit processing and loan agreement negotiations is due to be considered by the Finance and Resources Committee on 13 September 2023 and a final report will be presented in cycle 4 confirming the agreed terms of the borrowing arrangement. Amey Public Services LLP 2.25. A change in auditors resulted in delays in the provision of the draft annual accounts for the previous 2022 financial year . This activity will be closely monitored in future years (2023 and 2024) to ensure that timescales, as stipulated within the Partnership Agreement, are met. Routes to Work Limited 2.26. As previously reported, the provision of financial information within the previous financial year was impacted by staff shortages within Routes to Work’s finance team. This has now been resolved. Page 223 of 240
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2.27. Routes to Work continue to operate with high levels of unrestricted reserves, however several contingent liabilities are being held against these reserves. Therefore, an assessment of the current reserve policy has been agreed as part of the review of the draft accounts with any proposed changes being presented at the AGM in September. Overall Assurance 2.28. The performance oversight at paragraphs 2.18 and 2.19 above and the information included in Appendices 1 and 2, together with the additional financial monitoring provided by the Chief Officer (Finance) through both the service committee reports and this report, provide assurance to Audit and Scrutiny Panel members that ALEOs’ organisation and financial performance is regularly monitored and reported. 2.29. Officers from Finance, Business and Digital and the individual Client Services regularly attend ALEO Board or Management Committee meetings providing further oversight and importantly, opportunities to consider where partnership working and joint initiatives may be developed between the council and the ALEO in support of The Plan for North Lanarkshire. 2.30. Senior officers from all ALEOs completed the council’s annual Assurance Statement and Checklist which is used to inform the Annual Governance Statement in the council’s annual accounts. 2.31. ALEOs themselves contribute to this report through the submission of a six monthly risk and assurance update template and the key elements from these in relation to governance, staffing, risk management and business continuity arrangements are captured at Appendix 3. Again, while Panel members may take assurance from this information, there are a small number of ongoing and future developments, singled out below, which require careful monitoring over future reporting periods. 2.31.1. Implementation of the Enterprise Project from early 2024 and the impact of this, including the outcomes from the procurement exercise currently underway, on the existing joint venture partnership arrangements in place through Amey Public Services LLP and MEARS (Scotland) LLP. 2.31.2. North Lanarkshire Partnership’s refinancing activity and future borrowing obligations. 2.31.3. Potential revisions to the Articles of Association for both Fusion Assets Ltd and Routes to Work Ltd with the latter also potentially seeking to increase the number of trustees/directors serving on the Board. In both cases, details of the proposed changes to the respective Articles of Association will be considered by the Enterprise and Fair Work Committee. The Enterprise and Fair Work Committee will also be required to consider potential additional appointments to the Routes to Work Board of Directors. 3. Measures of success 3.1. The following measures of success are highlighted for Panel members’ consideration: • Arm’s length service delivery providers continue to deliver high quality public services that achieve Best Value for the council. Page 224 of 240
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• Effective and timely monitoring and reporting to relevant service committees and this Panel provide assurance to the council that adequate governance, financial and risk management procedures are operating effectively in each of the ALEOs. • Panel members have adequate assurance that the council is fulfilling its ‘Following the Public Pound’ obligations and the externalised service delivery mechanisms are delivering services as per the council’s requirements and expectations with minimal risk to the council, or effectively managing risks where such are unavoidable. • Robust due diligence and legislative compliance continue to be prioritised in the winding-up and subsequent applications for strike-off in respect of Culture and Leisure NL Ltd and NL Leisure Ltd. • Effective completion of North Lanarkshire Properties LLP’s refinancing activity with the final loan agreement and the company’s future borrowing reflecting the most advantageous terms and best value. 4. Supporting documentation 4.1. Appendix 1: Summary of in-scope ALEOs and Joint Venture Partnerships 4.2. Appendix 2: Statutory Bodies: Associates and Joint Ventures 4.3. Appendix 3: ALEOs and Strategic Partnership Vehicles: Governance, Operational Delivery and Risk Management Assurance Katrina Hassell Chief Officer (Business and Digital) Page 225 of 240
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☒ No ☐ 5.2.1 5.2.2 If Yes, please provide a brief summary of the impact? Financial management within the ALEOs is reported to the service committees, as outlined in Appendix 1, every six months. An annual oversight report provides a high level summary of the statutory bodies’ performance since these are subject to external scrutiny and reporting within in their own right. The contractual arrangements in place between each ALEO and the council require the individual companies to submit monthly management accounts and additional information such as Business Plans and annual accounts to the council’s Finance Service enabling officers to assess and report any financial risk likely to arise as a result of the council using the ALEO to deliver these services. Financial governance, including any potential risks are reported to this Panel by exception allowing members to identify any additional controls which require to be implemented in addition to continued financial monitoring by the individual ALEOs and Financial Solutions. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ 5.4.1 If Yes, please provide a brief summary of the impact? North Lanarkshire Properties LLP Refinancing There are legal considerations and obligations on NLP in finalising the terms of the loan agreement with the preferred lender and NLP has procured external legal Page 226 of 240
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5.4.2 advice to advise the Management Committee during the final negotiations and ultimate execution of the loan agreement. The Council has also procured external specialist legal advice to provide guidance as required in relation to its position as guarantor. Fusion Assets Ltd and Routes to Work Ltd – Potential Changes to Articles of Association There are legal considerations for the council as sole shareholder when reviewing potential changes to company Articles of Association and solicitors from the Contracts and Commercial team within Legal and Democratic are engaging with both companies, which also have their own specialist legal advisors. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ 5.9.1 If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? The Assurance and Risk templates completed by the ALEOs, plus separate monitoring by the Client Officers and Link Officers confirm that risk management arrangements are in place and reported to the individual ALEO’s Board or Page 227 of 240
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Management Committee. The Risk Register for Business and Digital includes a risk linked to maintaining robust monitoring and scrutiny of service delivery by an ALEO and this is reviewed regularly by the management team. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). Routes to Work Ltd supports young people under 18 into employment, training and positive destinations. As such, the requirement for a Children’s Rights and Wellbeing Impact Assessment will be considered through separate performance and/or funding reporting to the Enterprise and Fair Work Committee. If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 228 of 240
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Appendix 1 Summary of in-scope ALEOs and Joint Venture Partnerships WHOLLY OWNED ALEOs BOARD OF DIRECTORS COMPOSITION SERVICE COMMITTEE AND REPORTING Routes to Work Ltd: Incorporated as a limited company with charitable status. Council is sole shareholder (100%). Maximum of up to 10 directors of whom: • Up to 2 are Category A Directors (1 elected member & 1 chief officer) appointed by NLC; • Up to 8 are Category B Directors representative of local community or possessing key skills / experience Enterprise and Fair Work Committee. Operational and Financial Performance information covering the period Q2 (2021/22) and up to Q3 (2022/23) was reported on 12/05/23. Click on link for copy of report NLC representatives appointed to serve on the Routes to Work Board: Provost Cllr K Duffy and Chief Officer (People Resources) Fusion Assets Ltd: Incorporated as a limited company. Council is sole shareholder (100%). Maximum of up to 8 directors of whom: • Up to 5 are Partner Directors (3 elected members & 2 chief officers) appointed by NLC; • Up to 3 are Co-opted Directors possessing key skills/experience Enterprise and Fair Work Committee. Operational performance during 2022/23 to 31 March 2023 and financial performance from 01/04/22 to 31/12/22 was reported on 12/05/23. Click on link for copy of report. NLC representatives appointed to serve on the Fusion Board: Councillors B McCulloch; L Roarty; and R Sullivan, plus Chief Officer (Finance) and Chief Officer (Place) North Lanarkshire Properties LLP: Incorporated as a limited liability partnership with 2 members: NLC owns 99.999% shares and NL Property Investments Ltd holds a 0.001% shares. Maximum of 6 Management Committee members: • 5 representatives are appointed by NLC (4 elected members and 1 chief officer); • 1 representative is appointed by NL Property Investments Ltd Finance and Resources Committee Operational performance from 28/07/22 to 11/01/23 plus 2022/23 financial performance as at 06/01/23 was reported on 24/05/23. Click on link for copy of report. NL Property Investments Ltd: Incorporated as a limited company. Council is sole shareholder (100%). Incorporated as a limited company. Council is sole shareholder Maximum of 6 directors appointed by NLC (5 elected members & 1 chief officer being the same individuals as those referenced above) Finance and Resources Committee (Limited separate reporting requirement since business is transacted through the LLP above.) NLC representatives appointed to serve on the NLP Board and Management Committee: Provost Cllr K Duffy; and Councillors T Fisher; G Robinson; R Sullivan; S Watson, and Chief Officer (Housing Property Services) Page 229 of 240
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JOINT VENTURE PARTNERSHIPS WHERE NORTH LANARKSHRIE COUNCIL HAS 33.33% SHAREHOLDING STRATEGIC PARTNERSHIP VEHICLES MANAGEMENT COMMITTEE COMPOSITION SERVICE COMMITTEE Amey Public Services LLP: Incorporated as a limited liability partnership with Amey LG Ltd holding a 67% shareholding and NLC holding a 33% shareholding • 5 representatives with 3 appointed by Amey LG Ltd and 2 appointed by NLC (1 elected member and 1 chief officer) Environment and Climate Change Committee Operational performance for the period 01/10/22 to 31/03/22 and financial performance at 31/12/22 was reported on 3 May 2023. Click on link for copy of report. NLC representatives appointed to serve on the Amey Management Committee: Councillor M McPake and Chief Officer (Community Operations) MEARS Scotland LLP: Incorporated as a limited liability partnership with MEARS plc holding a 67% shareholding and NLC holding a 33% shareholding • 5 representatives with 3 appointed by MEARS plc and 2 appointed by NLC (1 elected member and 1 chief officer) Housing Committee Operational performance for both housing and corporate property repairs covering the period 01/04/22 to 30/11/22 and financial performance at 30/09/22 was reported on 15/02/23. Click on link for copy of report. NLC representatives appointed to serve on the MEARS Management Committee: Councillor M Coyle and Chief Officer (Housing Management) Page 230 of 240
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Appendix 2 Statutory Bodies: Associates and Joint Ventures STATUTORY PARTNERSHIPS OBJECTIVES / SERVICES DELIVERED BOARD OF DIRECTORS COMPOSITION SERVICE COMMITTEE Lanarkshire Valuation Joint Board: Established by the Valuation Joint Boards (Scotland) Order 1995 to allow for the valuation functions of North and South Lanarkshire Councils to be discharged jointly following local government reorganisation in 1996. The Assessor and Electoral Registration Officer is responsible for preparation and maintenance of the: • Register of Electors which is published at least annually; • Valuation List - listing all heritable properties within Lanarkshire for Council Tax purposes; and, • Valuation Roll - public document containing an entry for all non-domestic properties in Lanarkshire except those specifically excluded by law and includes the Rateable Value. The Board also acts as a Joint Committee responsible for the electoral registration duties of both authorities. • 16 members: 8 from North Lanarkshire Council and 8 from South Lanarkshire Council. Finance and Resources Committee 2020/21 Annual Oversight Report reported to Finance and Resources Committee on 10 March 2022. NLC representatives appointed to serve on the LVJB Board of Directors: Councillors B Burgess; K Duffy; M Hughes; L Jarvie; T Johnston; A McVey; J Reddin; A Thomas. Substitutes: Cllr N Shevlin and any SNP Member Strathclyde Partnership for Transport (SPT): Established under the Transport (Scotland) Act 2005. SPT has a statutory duty to develop a transport strategy for its region taking account of: • Demographics and meeting all inhabited places’ needs; • Enhancing social and economic well-being; and • Promoting public safety and sustainable development. SPT subsidises socially necessary bus services, operates bus stations and the Glasgow subway. SPT maintains bus shelters and administers ticketing including the ZoneCard. • 20 elected members representing the 12 local authorities in the West of Scotland and up to 9 appointed members. Environment and Climate Change Committee 2021/22 Annual Oversight Report reported on 3 May 2023 (Click on link) NLC representatives appointed to serve on the SPT Board of Directors: Councillors G Currie; M McPake; A Smith. Substitutes: Cllrs H Loughran and J Keltie • Strathclyde Concessionary Travel Scheme Joint Committee. The Transport Act 1985 allows transport authorities to make concessionary transport schemes. • Strathclyde Concessionary Travel Scheme Committee was set up in 1999 to determine concessionary fares and criteria applicable for concessionary travel on subway, rail services and on ferry services within the Strathclyde scheme area. • Administers concessionary travel for the over 60s and disabled people (and in certain cases, concessionary travel for companions). • One member (and one substitute member) from each of the 12 constituent councils with the SPT area plus the Chair of SPT. Environment and Climate Change Committee 2021/22 Annual Oversight Report reported on 3 May 2023 (Click on link) NLC representatives appointed to serve on the SPT Concessionary Travel Scheme: Councillor W Goldie Page 231 of 240
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STATUTORY PARTNERSHIPS OBJECTIVES / SERVICES DELIVERED BOARD OF DIRECTORS COMPOSITION SERVICE COMMITTEE North Lanarkshire Health and Social Care Integration Joint Board. Established under the Public Bodies (Joint Working) (Scotland) Act 2014 and designed to improve adult health and care services through better integration and more joined-up support and care, particularly for people with complex or multiple long term conditions. Responsible for planning and delivering all community based adult health and social care services across North Lanarkshire. For example: • Health visiting and district nursing • Community addiction services • Mental Health and Learning Disability services • Adult Social Work Services • Adult protection • Home Support Services • Community paediatrics and children’s health services The functions delegated by North Lanarkshire Council (NLC) and NHS Lanarkshire (NHSL) are detailed in an Integration Scheme which must be approved by Scottish Ministers. • 8 voting members – 4 elected members and 4 non-executive directors appointed by NHS Lanarkshire. • Senior officers attend in a non- voting capacity along with representatives for staff, the third sector, service users and carers. Adult Care and Social Work Committee Adult Social Care 2022/23 Performance Reports: Q 2 (01/07/23 to 30/09/23) – reported on 21 February 2023 (Click on link) Q3 (01/10/23 to 31/12/22) reported on 16/05/23 (Click on link) Revenue and Capital Budget Monitoring reports are also reported at each cycle (Click on link for Financial Monitoring Report as at P12 01/04/22 to 03/03/23) NLC representatives appointed to serve on the Health & Social Care IJB: Councillors C Barclay; B Burgess; P Kelly; M McCulloch Page 232 of 240
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Appendix 3 ALEOs and Strategic Partnership Vehicles: Governance, Operational Delivery and Risk Management Assurance ROUTES TO WORK (RtW) LIMITED Governance and Client Service Liaison • In person Board meetings have occurred as planned in the first half of 2023/24 with a schedule in place, including the company AGM on 21 September 2023, to 31 December 2023. • Quarterly Finance, Governance and HR Sub Groups continue to meet midway between Board meetings. • Regular liaison with Client Service – Employability Support and Skills Development in Education and Families • Induction training for Councillor Duffy was completed in February 2023. • Directors approved the 2023/24 annual budgets; associated activity; and human resource requirements at the Board meeting on 22/06/23. This was slightly later than usual due to interim funding arrangements being put in place for April to June pending the announcement of UK and Scottish Government investments for 23/24. • RtW’s annual good governance action plan for 23/24 was also approved at the June Board meeting. This incorporates a review of the Articles of Association to ensure they remain fit for purpose and to consider seeking to increase the maximum number of Trustees/Directors. RtW has experienced some recent difficulties in spreading the governance workload and holding quorate meetings due to the increasing personal and professional demands of current Board members. Any proposed changes to the Articles of Association will require consideration through the Enterprise and Fair Work Committee in due course. • One existing Board member is required to stand down at the AGM due to completion of his three-year term of office, however he has indicated his interest in being re-appointed and this matter will be considered by the Enterprise and Fair Work Committee at its next meeting. Two other Directors have indicted their intention to stand down at the AGM and arrangements are in place to advertise these Board vacancies. Recommendations on these appointments will require to be considered by the Enterprise and Fair Work Committee and discussion is ongoing with RtW on the timing of this report. Summary of Recent Service Delivery - January to June 2023 • ‘Business as usual’ service delivery with public offices open and community outreach facilities in use. • Increased delivery to schools during the period as RtW assisted NLC in providing further support for Christmas leavers and preparing summer leavers towards attaining positive destinations. • Participation by RtW staff in council and partners’ Cost of Living events across the area to identify the benefits and support individuals into work and fair work as a route out of poverty • RtW hosted its own event on 30/06/23 in Bellshill YMCA. Highlighting ERSA2 Employability Day. Providing a range of information to assist residents with support to alleviate the effects of the cost of living crisis, partners included: Home Start Scotland; Citizens Advice Scotland; Social Security Scotland; Home Energy Scotland; and, Lanarkshire Community Food and Health Partnership. Summary of Planned Service Delivery – July 2023 to March 2024 • RtW’s service delivery has been updated to reflect new funding streams active from July 2023. • Rollout of RtW’s 2023/24 Operational Plan (representing the final year of the charity’s 2021/24 Strategic Business Plan) has been slightly delayed due to funding uncertainties and the recruitment activity described below. The Plan is now being developed and will incorporate a review of the Strategic Business Plan to identify any as-yet unachieved ambitions for inclusion in this final year Operational Plan. • RtW will issue a tender over the summer for consultancy support to assist the Board and Senior Management Team in developing their next three-year business plan for the period 2024 to 2027. Staffing: • Hybrid working, in place since November 2022, permits staff to work up to 40% of their weekly working hours flexibly (managed over a 4-week reporting period in line with existing flexi-time arrangements). This arrangement will be reviewed in the autumn this year. • Directors considered and agreed arrangements around the 2023 pay award at their meeting in June. Recognising the wide-ranging cost of living pressures being felt at the moment, Directors were keen to ensure that ongoing negotiations on the local government settlement did not adversely affect RtW staff and accordingly approved a 5% increase backdated to 1st April and paid in July 2023. The Board also 2 Employment Related Services Association is the is the national membership body for employment support providers including charities, small specialist organisations, local authorities, housing associations and health institutions. ERSA campaigns for high quality services for the UK's jobseekers and low earners. Page 233 of 240
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committed to monitor the local government pay negotiations and will review the rate of increase payable to RtW staff should there be a significant difference between this current level and the eventual local government settlement rate. • RtW’s approved activity in 2023/24 results in a revised project delivery headcount of 81.6 FTEs for 23/24 and an internal and external recruitment exercise will be undertaken from mid-July onwards following a staff briefing on 13/07/23. Corporate support and Senior Management Team structures remain unchanged. • Following some recruitment difficulties in appointing the temporary position of Finance Manager and the permanent position of Finance Team Leader, RtW has now filled both posts in March and April 2023, having engaged specialist recruitment agencies, and all finance functions have resumed. Risk Management RtW’s Risk Register is reviewed quarterly by the Senior Management Team and discussed at the Governance Sub-Group. A Risk Management report, identifying any new risks; the severity and proximity of existing risks; and where a risk no longer poses a threat, is considered at each Board meeting. A full review of the Risk Register was completed in April 2023 and approved by the Governance Sub Group before being reported to the Board in June. Top 5 Risks Inability to achieve reserves policy Underperformance on key contracts Loss of key management or operational personnel Lack of long term funding Inability to provide full range of financial functions Business Continuity Two business continuity issues, linked to premises, have arisen and are impacting on service delivery: • Water ingress in the Craigneuk premises (formerly Craigneuk Library) ; and, • Connectivity issues in Airdrie Business Centre Both premises are leased from North Lanarkshire Properties and discussion is underway regarding repairs, and likelihood of a reoccurrence to the building in Craigneuk and, to resolve the connectivity issue in Airdrie. Service Developments / Highlights - Support for Parents - Newmains A new place-based service for economically inactive residents from Newmains went live in July 2023, with a particular focus on parents in poverty. The service will be targeted and intense for 6 months and will then move on to another agreed area in North Lanarkshire. Page 234 of 240
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NORTH LANARKSHIRE PROPERTIES (NLP) LLP Governance and Client Service Liaison • Management Committee meetings have taken place, generally as scheduled, however the meeting due to take place on 17/05/23 was brought forward by one week to 10/05/23 to ensure alignment with the Refinancing Project Plan timeline and a special meeting was convened on 20/06/23, to consider the preferred lender and seek relevant council permissions (under authority previously delegated to the Chief Officer (Finance) ) in advance of the council recess. • The council has made a number of changes to the elected members who are appointed to represent the council on the Management Committee and the Strategic Asset Manager, who provides strategic business support to NLP under the Service Level Agreement in place between the council and the company, has provided induction briefings. • Regular engagement is in place with the Client Service and the Client Liaison Officer from Asset and Procurement through the Service Level Agreement. Summary of Recent Service Delivery - January to June 2023 • ‘Business as usual’ service delivery in place with the hybrid working model ensuring that office and onsite requirements can be met. • The requirement to refinance the company’s existing borrowing by 31/10/23 has placed additional responsibilities on the NLP staff team particularly in relation to the provision of information for prospective lenders on the property portfolio, asset valuations and tenancy profiles. This has necessitated some additional expenditure through the overtime budget, however, these costs are included within the overall earmarked funds to support the refinancing activity. Summary of Planned Service Delivery – July 2023 to March 2024 • Conclude refinancing and complete loan agreement terms with the preferred lender with the finalised agreement in place by the deadline of 31/10/23. • Finalise the company’s 5 year Investment Plan. Staffing: • NLP has a staffing establishment of 15 FTEs and the employees’ Terms and Conditions reflect those within the council. • Strategic Business Management support plus a range of professional and support services including Legal services, financial management, facility support services, surveying and cartographic services are provided and charged for by the council under a Service Level Agreement. • Hybrid working, introduced in April 2022, requires employees to undertake a minimum of 2 office days each week. This hybrid model works well for NLP as there is a natural requirement for a combination of office and on site delivery associated with the majority of the roles. Risk Management Risks are reviewed quarterly by the Management Committee. North Lanarkshire Properties (NLP) are continuing to be affected by supply chain labour shortages and inflationary pressures which have impacted the property and construction industry in recent months. There is a potential risk that these delays will impact on the timescales relating to re-letting properties. The current top five risks are summarised below. Top 5 Risks IT Systems and Software – Failure of main reporting and management systems; and failure to collect rent Business continuity management: Staff Resources – Loss of staff Planning and Resources: Financial – Reduction in income due to pandemic and/or cost of living crisis Planning and Resources: Strategic Change – Failure to align new strategies to changes in market conditions Planning and resources: Financial – Inability to make loan repayments; and/or change in bank covenant. Business Continuity Continuity of service was maintained throughout Covid as a consequence of the business’s ability to deal with transactions digitally and adopt new processes to complete contractual requirements where necessary and these are continuing as appropriate. Service Developments / Highlights • The joint NLP and council project team established to support the company with refinancing activity is making good progress and all actions are on track. Page 235 of 240
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FUSION ASSETS LTD Governance and Client Service Liaison • Board of Directors meetings have taken place as scheduled with future dates in place to the end of 2023. Meetings have returned to in-person. • Councillor Roarty has recently been appointed to the Board by the council and an induction pack along with visits to Fusion sites and potential development opportunities will be arranged. • Fusion’s Managing Director and the Chief Officer (Place) held a briefing session on the background to Fusion, the company’s remit and current developments for elected members on 20 April 2023 which was well attended. • Revisions to the company’s Articles of Association are being developed in discussion with the council. Details of these will be submitted to a meeting of the Enterprise and Fair Work Committee in due course. Summary of Recent Service Delivery - January to June 2023 • ‘Business as usual’ service delivery in place from Fusion Assets’s office in the Muirfield Community Centre. • Two of the three newly constructed industrial units at Gartcosh are now occupied with the remaining larger unit being actively marketed. A further phase of enabling infrastructure works has been completed at Gartcosh Industrial Park to prepare the land for development. • Following the sale and completion of the new Co-Op facility at Link Park, Newhouse, Fusion Assets have begun work on the construction of a second unit which will be net zero carbon enabled and incorporates a range of energy saving features. Summary of Planned Service Delivery – July 2023 to March 2024 • Planned developments for 2023 include the creation of a new joint venture company at Eurocentral to construct a speculative multi-let industrial scheme at Condor Park and completion and letting of the second industrial building at Link Park, Newhouse which is currently under construction. • Construction costs continue to rise (in part impacted now by rising energy /production costs) coupled with higher borrowing costs which means that viable speculative development continues to be challenging, however, with an overall lack of supply across North Lanarkshire for modern building premises, demand remains consistently high. This is encouraging and provides a degree of optimism as there is continuing interest both from existing local companies looking to expand and new inward investors keen to locate into the area. Staffing: • Fusion Assets directly employs the post of Managing Director and a Development Manager, employed by Enterprise and Communities’ Place division, is seconded to the company. • A hybrid working arrangement is in place with staff spending on average three – four days a week in the office in Cumbernauld. Risk Management Corporate Risk Reports, based on the Figtree management system used by the council, are presented to the Board on a regular basis. At the Board meeting on 12/06/23 Directors noted a new short-term risk linked to winding up a former Joint Venture company and this is now included in the company’s top five risks listed below. Top 5 Risks Programme delivery Property acquisition Contracts and procurement risks Accessing adequate financial resources Winding up joint venture Business Continuity There have been no business continuity issues over the past six months. Service Developments / Highlights • As well as jobs and investment in the local area, Fusion Assets has incorporated community benefits clauses into the infrastructure works contract at Gartcosh and the building construction contract at Newhouse. This has seen the contractors engage with the council’s Education and Families division to provide pupils with practical work experience as well as students on construction related courses at New College Lanarkshire. Page 236 of 240
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AMEY PUBLIC SERVICES (APS) LLP Governance and Client Service Liaison • Management Committee meetings have returned to in person and have occurred as planned in the first half of 2023/24 with a schedule in place to 31 December 2023. • Monthly Client Liaison contract monitoring meetings between APS and NLC Senior Management Teams, • Fortnightly meetings, focussing on Capital projects being delivered by APS, also introduced. • Regular communication between APS and NLC Finance Team with plans to reintroduce a more formal quarterly meeting to be held one week prior to each Management Committee meeting Summary of Recent Service Delivery - January to June 2023 APS continued to deliver routine and cyclic maintenance operations as listed below. • Road and footway surfacing and patching programmes. • Dark lamp repairs and electrical civils works. • LED lantern installations. • Routine maintenance activities (e.g. emergency response and repair, electrical testing, defect repairs, cyclic gully cleaning, road markings, flooding issues). • Enhanced standby resources and winter service operations. • Road improvement works at various locations. The 2022/23 programme of carriageway surfacing and roads and footways patching programmes was completed and the winter services were delivered without any issues being identified or raised. Capital projects during the reporting period included: • Installation of around 7,000 LED lanterns to date as part of a wider install programme of 9,000. This is due for completion by the end of this summer. • Improvements works at Woodside junction, Coatbridge which included traffic island construction, installation of new traffic signals and carriageway and footpath resurfacing works. • Installation of new speed limit signing and road lining works in Airdrie, Plains and Caldercruix. • Ongoing footway widening works and street lighting between Newhouse and Salsburgh. • Construction of high access kerbs at 36 bus laybys in Airdrie and Caldercruix. Summary of Planned Service Delivery – July 2023 to March 2024 The 2023/24 programme of carriageway surfacing; roads and footways patching programmes; routine and cyclical maintenance works; and winter preparedness is underway. Staffing: • APS operational staff (frontline, supervisors & depot managers) continue to be depot-based on a full-time basis. • Majority of remaining staff are now mainly office based with some part-time home-based working continuing depending on personal requirements/circumstances. Risk Management The Partnership Risk Register is reviewed as required at the monthly Client Liaison meetings. Any issues or risks which need to be escalated to the Management Committee are included in the Committee papers for discussion. The APS risks remain largely unchanged since the previous report, however a new risk has been identified in relation to work planning and scheduling by the council. Top 5 Risks Insufficient Revenue and Capital budgets from the council to maintain APS resource levels, productivity and utilisation. Continuing labour market pressures and competition attracting frontline staff from APS with higher wages and similar difficulties in attracting new entrants. Requirement to try and develop additional workstreams (either from within the council or externally) to offset any council budget constraints/reductions. Ongoing inflationary pressures resulting in materials costs increases which have not been fully reflect in contact indexation criteria. More reactive work tickets being issued by NLC rather than planned works impacting on most efficient use of resources. Business Continuity Although there are no significant business continuity issues at present, the ongoing conflict in Ukraine, energy costs and other global issues such as the residual impact from COVID has significantly impacted on the cost Page 237 of 240
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of a number of materials. These are monitored on an ongoing basis and any impacts reported and discussed at the Client Liaison meetings (and Management Committee meetings as necessary). Service Developments / Highlights - ADEPT Live Labs 2 Award The council, APS and Transport for the West Midlands were successfully chosen as one of 7 UK wide projects selected to examine opportunities for the long-term decarbonisation of roads materials. The plan is to create a UK centre of excellence and centralised research and innovation hub to consider alternative materials which could be used for road surfacing, crash barriers, bridges, lighting columns and landscaping. A testing facility, simulating real life road and weather conditions, will examine how waste products, such as plastics, concrete and other demolition materials, could be recycled and utilised. ADEPT Live Labs 2 programme announced – seven projects to start in 2023 £4.5m Centre of Excellence for North Lanarkshire | North Lanarkshire Council Page 238 of 240
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MEARS (SCOTLAND) LLP Governance and Client Service Liaison • The Management Committee meeting scheduled to take place in May was postponed and the next meeting will now take place on 29/08/23. • A series of meetings are in place with the council including four weekly Client Liaison meetings; monthly Finance Liaison meetings; and regular Service Improvement and Customer Success Improvement Group meetings. Summary of Recent Service Delivery - January to June 2023 • Continued delivery of the housing and corporate property repairs contract with the Year 2 extension ending on 21/01/23 and the final, Year 3 extension, covering the period 22/01/23 to 21/01/24, approved by the Housing and Regeneration Committee on 16/02/22. • Extreme weather conditions and severe frosts in late 2022 resulted in an additional 4,000 job lines over the two week period due to frozen and burst pipes and the resultant ceilings collapsing, wall and floor saturation. The council and MEARS activated the Emergency Response Plan and Senior Joint Team to deal with the emergency repairs including damage to void properties. Approximately 80 households were decanted with many more staying with family/friends. Summary of Planned Service Delivery – July 2023 to January 2024 • The Joint Venture Partnership between MEARS and the council has entered the final year of the contract extension which will see the contract through to early 2024. Staffing: • Apprenticeship Recruitment Campaign launched March 2023 to onboard 20 craft apprentices. • Workforce planning for the future underway reflecting age profile of the workforce, succession planning and future delivery requirements. • Digital Champion Initiative launched with an employee forum established to upskill key personnel across all workstreams to optimise the use of MEARS systems, new technology and enhance business continuity. • Training and Development Manager recruited to develop local strategy and approach to ensure MEARS workforce reflects the communities that the company operates within. One of the key areas of focus is to engage with organisations and work with underrepresented groups to help promote construction apprenticeships. • Full review, including engagement with staff, of Employee Benefits, particularly those which can assist staff during the Cost of Living crisis. Outcomes include: • Reintroduction of the Employee Wellbeing Fund, designed to support staff who are suffering financial hardship. • Staff discounts via Reward Gateway (financial savings across a range of retailers including all major supermarkets, utilities companies, insurance and financial services). • Cycle to Work Scheme • Employee Assistance Programme which offers compassionate guidance 24/7 covering a wide range of issues. • MEARS Communication Strategy ensures that Employee Benefits, and all other benefits, are promoted amongst the workforce through multiple points of contact including the company intranet page, secure email distribution list and face to face meetings. Risk Management MEARS Management Committee members monitor, review and manage risks on a quarterly basis and a range of specific controls are in place for each of the risks identified below which are largely unchanged from the previous period. Top 5 Risks Failure to have robust Health and Safety procedures & controls. Impact of Risk Management Failure: • Non-compliance with legislation. Resource Supply: • Labour – attraction and retention of suitably qualified labour; • Material – Market pressures on price; • Subcontractors. Partnership Finance: • Final contract year; • Demobilisation; • Council award of Enterprise Project. Failure to comply with Data Protection legislation. Impact of Risk Management Failure: • Fines up to 4% of Group Turnover; Failure to provide market competitive /comparable T&Cs and pay rates. Impact of Risk Management Failure: • Poor staff retention • Negative impact on service and failure Page 239 of 240
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• Financial penalties - HSE fine; • Reputational damage; • Employee disengagement/ concern around Mears values as an employer. • Potential for criminal action; • Reputational damage / loss of confidence in the sector. to meet demand due to vacant posts • Not perceived as an employer of choice by applicants. Business Continuity No business continuity issues in the period Service Developments / Highlights - ‘Pathway to Net Zero’ MEARS has launched its ‘Pathway to Net Zero’ strategy, setting out company ambitions to significantly reduce energy consumption and carbon emissions across the Group. The strategy outlines the ambition to reduce emissions by 90% by 2030 through five key themes: Culture; Green Travel and Transport; Climate Conscious Service Delivery; Efficient Buildings and Sustainable Procurement; and Supply Chain solutions. Planning will take place during the latter quarter of this year to identify further actions required to achieve net zero by 2045. Page 240 of 240