Agenda item

To consider a report on the Corporate Risk Register from the Strategic Planning and Performance Officer reviewing the risks facing the Council and the Council’s risk appetite statement (copy enclosed).

10:10am – 11:00am

The Lead Member for Corporate Strategy, Policy, and Equalities alongside the Head of Corporate Support: Performance, Digital and Assets, and the Insight, Strategy and Delivery Manager presented the Corporate Risk Review, September 2024 report (previously circulated).

The report was an update on the September 2024 review of the Corporate Risk Register and the Council’s Risk Appetite Statement. It also informed the Committee of the amended risk appetite statement regarding project financing which attempted to reflect the present financial environment.  Therefore, it was suggested that it would be appropriate to amend the Council’s ‘cautious’ risk appetite in relation to project financing to ‘open’.

The Corporate Risk Register was developed and owned by the Senior Leadership Team (SLT) alongside the Cabinet. It was reviewed twice yearly by the Cabinet at Cabinet Briefing. Following the February and September reviews, the revised register was presented to the Performance Scrutiny Committee and the Governance & Audit Committee. A summary of reviews was shared for information only to both committees ahead of their January and July meetings.

The Council currently had 13 Corporate Risks on the Register. Summaries of the conclusions following the latest review for this period were provided at the start of each risk in Appendix 2. No risks had been de-escalated during this review. However, a new risk, risk 53 (the risk that Transformational Programmes and Major Project benefits are not fully realised), was proposed to be added to the Register. This proposed addition would increase the total number of Corporate Risks on the Register to 14 risks.

Regarding the risk appetite, officers clarified that seven risks, 01, 21, 34, 45, 50, 51 and 52 (54%), were currently inconsistent with the Council’s Risk Appetite Statement (appendix 3). Nevertheless, this was expected as the register contained the Council’s most serious risks. Officers stated that it was timely for the Authority to review the Council’s Risk Appetite Statement (appendix 3), which was last revised in April 2024, as the statement needed to reflect its appetite now reflecting on the key external factors (Political, Economic, Sociological, Technological, Legal and Environmental) that influence an organisation along with internal dynamics and demands. An initial discussion had taken place at the Budget and Transformation Board in July 2024 and at the Corporate Executive Team (CET) in October 2024  to provide feedback on the appropriateness of the Risk Appetite Statement as it stood at that time.

The Committee was also informed that discussions at the Budget and Transformation Board and CET drew particular attention to the Council’s cautious risk appetite regarding financial projects. As a result, it was proposed to move this risk appetite to “open” to provide a more appropriate framework to support the organisation's transformation to achieve financial sustainability and creative responses to residents' requirements.

Following the comprehensive introduction by officers, members discussed the following further –

• The committee queried the newly proposed risk, risk 53; Transformational Projects – the timeline for the transformational programmes or major projects to commence, be delivered, and the benefits realised, and when would they be presented to Scrutiny? Officers clarified that any capital projects would need to be discussed with the Capital Scrutiny Group and the Budget and Transformation Board (BAT) before the business cases would be sufficiently developed to be consulted upon with members.  Performance Scrutiny Committee has been allocated the committee to consider transformational projects which formed part of the ‘Influencing Demand and Digital’ Workstream of the Transformation Programme with scrutiny proposal forms completed for scrutiny chairs and vice chairs consideration as business case development progresses and projects go for approval and into delivery Once transformation projects had been approved their delivery, along with the benefits realised on implementation, would be regularly monitored via a suite of key performance indicators (KPIs).  Officers were advised to submit the scrutiny proposal forms early as the Committee’s work programme was already nearing capacity for the forthcoming calendar year.
• Whether the Council had been too late in identifying new risk 53 and adding the risks associated with transformation to the Register. Should this have been done earlier? Responding officers clarified that projects had been monitored for risks for a long time as all projects had a project risk register attached to them, these captured the risks at a project level. However, there was now a collective view that a new risk should be included on the Corporate Risk Register in order to highlight the risk posed to the Authority in general in relation to business transformation projects and the need to get them right.  Whilst the pace of travel in relation to the projects was currently slow, it was increasing and therefore it was important that the sufficient regard and mitigation measures were put in place to monitor and manage the risks associated with them. National statistics and information would in the near future be used to when assessing and monitoring the risks associated with service transformation projects.
• Members queried whether the Council was too reliant on Reporting of Incidents, Diseases and Dangerous Occurrences Regulations (RIDDOR) statistics when determining Risk 11 relating to ‘unexpected or unplanned event occurring’.  Should the Council, for example, be using more data and evidence produced by the Emergency Planning Service?  Officers confirmed that this needed to be strengthened, but regional, Wales and UK-wide data was used when assessing this particular risk.  Officers were due to meet with representatives from the North Wales Counties – Regional Emergency Planning Service (NWC-REPS) in the near future to discuss risk management in relation to unexpected or unplanned events.
• As risk scores did not seem to change or improve it was queried whether there was a statutory requirement for Scrutiny to consider the Corporate Risk Register on an annual or 6-monthly basis and if the Authority was permitted to compare itself against other local authorities in Wales or the UK? Officers confirmed that the Committee was not required to consider the risk register.  However, identification of risks and their management was a key pillar of good governance and covered by legislation. The Governance and Audit Committee (GAC) had a statutory role to perform in ensuring the Council had appropriate risk measures in place, whilst Scrutiny’s role was to examine the Authority’s performance in managing all identified risks.  It was therefore advisable that performance in managing risks was scrutinised on a regular basis as the Register was an integral document which formed a key part of assessing the Authority's corporate health. The objective of scrutinising the Register was to give members and officers assurances that all corporate risks were being effectively monitored. Making the document more visually appealing was difficult as all documents were required to be accessible to allow all citizens to be able to read or receive the information. Officers agreed to explore options for providing comparative data.  However, this may be difficult as different authorities had different metrics of scoring risks and KPIs.
• Risk 34 relating to ‘insufficient regulated care’— members enquired on whether the Council had confidence that sufficient controls were in place to manage this risk going forward? This risk continued to be a cause of concern.  While it was being managed demand for care was continuing to rise whilst resources to provide the level of care required were proving difficult to source. This was a national problem and Scrutiny may wish to examine it in detail, including the costs of employing agency staff, by inviting representatives from Social Services to a future meeting to discuss the matter.  With respect of staffing concerns and what steps were being taken to address recruitment and retention problems in Children and Adults’ Social Care and other services across the Council, members were advised that the issues of recruitment were a broad issue not unique in Denbighshire.  All departments and services were working alongside HR to get a detailed picture of the situation and the matter was due to be discussed thoroughly at March’s meeting during the Recruitment, Retention & Workforce Planning item.
• Risk 50 – WG’s commitment to eliminate profit from the care of Children Looked After, which could result in an unstable or unsuitable supply of placements and the mitigating actions being taken in an attempt to address this risk.  Members were advised that recruitment and effective staff retention in a what was a very competitive market was key. The Committee was reassured that the Head of Children's Service was assessing the matter thoroughly and was studying all the information as it became available. It  was difficult to provide definitive answers at present as the matter was continuously changing and developing.  The latest information available indicated that both Welsh and UK Governments were currently considering delaying the implementation of the new legislation relating to eliminating profit from this sector until 2030.  Members may therefore wish to consider including the risk as a topic for inclusion on a Scrutiny forward work programme for a future meeting, vis the completion of a Scrutiny proposal form.

At the conclusion of a comprehensive discussion, the Committee:

Resolved:  subject to the above observations and the provision of the requested information –

(i)   having considered and discussed the suggested amendments to the Corporate Risk Register as at September 2024, to confirm the amendments made including the inclusion of new risk number 53 as detailed in Appendix 4 to the report;

(ii)  having regard to the status and risk appetite classifications and descriptions detailed in Appendix 3, along with the answers provided to the questions raised during the meeting, to confirm the appropriateness of the risk owners identified and the effectiveness of the risk controls put in place; and

(iii)                  acknowledging the present financial environment within which public services operated and having taken into account the Budget and Transformation Board (BAT) and the Corporate Executive Team’s (CET) rationale with respect of amending the Authority’s risk appetite in relation to financial projects, to support the recommendation to amend the risk appetite categorisation for financial projects from ‘cautious’ to ‘open’.