AGENDA ITEM
REPORT TO AUDIT COMMITTEE
7 December 2009
REPORT OF CORPORATE DIRECTOR OF RESOURCES
CORPORATE RISK REGISTER PROGRESS REPORT
QUARTER 2(2009/10) – PERIOD ENDING 30 SEPTEMBER 2009
PURPOSE OF REPORT
The Committee is reminded that quarterly reports on the Corporate Risk Register are presented for the purpose of reviewing the key risks that have been identified as having the potential to deflect services from achieving their objectives over the next 12 months and beyond. They also set out the actions being taken to ensure that the risks, and possible adverse outcomes, are minimised.
DETAIL
1.The Committee has requested that, in the absence of substantial changes to the register, quarterly reporting should be confined to highlighting significant additions and amendments since the previous update, with a detailed report incorporating a review of the Council’s risk management process being produced annually at the end of Quarter 4.
2.This interim report covers the period 1 July to 30 September 2009. All Service Groups have been contacted subsequently and the returns indicate that there have been some changes to the Authority’s risk profile over the months in question. These comprise the addition of one new risk, the deletion of an existing risk,together with the update of a number of the existing entries, as more particularly described later in the report.
3.The changes since the last reported position are detailed in the attached appendices as follows:
Appendix A – New risk added to the register.
Appendix B – Deletion from/amendments to the register.
- The new risk added to the register can be summarised as under:
Service Area / Corp. Risk No. / Risk Issue / Risk Score / Comments
DANS / 9 / The successful transfer of the ownership, management and maintenance of the Council’s housing stock to a newly created Registered Social Landlord organisation. / 16 / The main issues defining the risk are as follows:
Timescales – There are very tight timescales for submitting the application to the Homes and Communities Agency (HCA) and for receiving its response, and any delays could impact negatively on the transfer timetable.
If the deadlines are missed and/or the General Election delays the tenants’ ballot in spring 2010, then the opportunity to transfer could be missed.
Financial – if the HCA does not write off the existing housing debt, the Council could not fund this post-transfer and therefore the stock transfer would not be viable.
If the HRA review is completed and the decision is to make the changes prior to the transfer, this may affect the results of the ballot (i.e. confuse the message for tenants). It could also mean that extra work will be required on the offer document resulting in the Council having to resubmit to the HCA.
Communication – Lack of engagement or support from members could ultimately sway the ballot.
Tenant apathy due to the length of the process may result in poor turnout for the ballot
Lack of knowledge amongst staff may mean the messages to tenants are not consistent and could affect the ballot
Negative feedback from market research may necessitate postponing the ballot
Failure of the stock transfer proposal to be successfully achieved is likely to result in a significant shortfall in revenue to meet future on-going property and service improvements
5.More detailed risk identification, assessment and management information for the above can be viewed at Appendix A.
- Appendix B sets out details of the risk that has moved below the corporate reporting threshold, and which has therefore been deleted fromthe register. Also recorded are changes to the general management information for individual risks, and to the numbering sequence of entries in the register.
7. As one risk has been added and another deleted, the total number of significant risks in the Corporate Risk Register thus remains unchanged at 14 at the end of the current Quarter.
- For purposes of record, the changes referred to above have been incorporated in the latest version of the full Corporate Risk Register. This will be made available in the Member’s Library and an electronic copy incorporating the supporting risk assessment details (accessed by double-clicking the embedded risk issue logo), is to be placed on the intranet (Toolkit/Risk Management & Insurance/Risk Management/Corporate Risk Register).
J Danks
Corporate Director of Resources
Contact Officer: Jim Bell – Corporate Risk and Insurance Manager
Telephone: 01642 526786. E-mail:
Financial ImplicationsThe successful identification, assessment and management of risks are fundamental to proper performance of the Council’s fiscal duties and responsibilities.
Environmental ImplicationsGood risk management practice supports the Council’s objectives for securing a safe and attractive environment for current and future generations.
Community Safety ImplicationsEffective risk management is an essential element of fulfilling objectives in relation to community safety and well-being.
Background PapersAnnual Risk Management Report toAudit Committee 26June 2008
SBC Guidance for Strategic Risk Identification and Assessment.
Report to Cabinet 30.5.02 – A Code of Corporate Governance.
CIPFA/SOLACE Corporate Governance Publication (2001)
Risk Management Guidance Notes for Elected Members – December 2006
Education Related Item?No.
Risk AssessmentAs the risk management programme is achieving its objectives and there has been an improvement in the Audit Commission’s assessment of how well the Council manages its risks, this can be considered a low risk area.
Ward(s) & Ward CouncillorsNot Ward specific.
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C:\Documents and Settings\bellp\Local Settings\Temporary Internet Files\OLK6\Audit C'tee CORPORATE RISK REGISTER Report Sep-09.doc
RISK IDENTIFICATION & ASSESSMENT / RISK MANAGEMENTService / Corp.
Risk No. / Business / Service
Objective / Risk Issue / Previous
Risk Score / Present Risk Score / Risk Category / Risk Type(s) / Measures already in place
to control risk / Effectiveness
of proposed
controls / Measures planned
for next year / Target Date / Officer Responsible
DANS / 9 / HSG7 / The successful transfer of the ownership, management and maintenance of the Council’s housing stock to a newly created Registered Social Landlord organisation. / N/A / I = 4
X
L = 4
= 16 / High / Professional Managerial Social
Economic
Reputation
Service Quality
Financial
Political
Legal / Timescales
Additional meetings have been set up with the Housing Futures Customer Group to work on the offer document and a strict timetable has been put in place to achieve deadlines
Financial
Monthly budget meetings to review spend and monitor costs
Communication
Regular member briefs planned along with some drop in sessions, all members agreed to stock transfer proposal.
Monthly Newsletters and Questions and Answers to affected staff along with offer of attending team meetings.
Communication with other staff who are not affected but may come into contact with tenants (Care call, concierge, etc).
Regular Market research carried out with a random sample of tenants. This is carried out by an external company and the survey designed by a consultancy with vast experience of stock transfer. / 1) Timescales agreed with customer group to develop draft text for offer document
2) Agreed dates with customer group to sign-off offer document principles
3) Ongoing Project Budget Reviews
4) Ongoing communications to staff, members to keep them fully informed
5) Road shows, door knocking and hand delivered newsletters to ensure residents fully informed
6) Follow-up survey to ensure understanding and to identify any area for improvement in terms of communications / 30.4.10 / Jane Edmends
Service
Area / Previous
Risk Nos. / Revised Risk No. / Risk Issue / Amendment Details
DANS
RED / 10 / Removed from Register / TS KELLINGTON - Failure to remove the Kellington from the river in the short term may result in her sinking and causing environmental pollution plus possibly incurring substantial financial cost to the Council. There is also a risk to the regeneration of Stockton Riverside due to the negative effect of the vessel. / Dismantling is now complete. The hull has been safely lifted from river and final cutting and scrapping works were undertaken on shore. The final cost of the works is estimated to be in the region of £300k. SBC has grant-aided the Marine Society £200k and has also spent around £30k on security/fencing etc. The remaining issues are the payment of the final £70k and ultimately, the approach to the MOD for full reimbursement of the Council’s expenditure.
The residual risk rating has now reduced to 6.
DANS
Housing Regeneration / 3 / Unchanged / The Regeneration of Parkfield, Mandale and Hardwick Housing Areas / Sales at Mandale continue with both builders still on site. Barratts have now started construction on Phase 2 under licence, and a land receipt of £569,441 will be paid in March 2010. The Rent to Buy scheme has been taken to CMT and will be presented to Cabinet on 5th November 2009. This will stimulate build activity on site and provide much needed intermediate tenure for local people wanting to get on the property ladder. Parkfield Phase 1 - the contractors are still off site. Parkfield Phase 2 - the application for the Aldi supermarket was approved on the 14th October 2009. A report will be taken to Cabinet on 26th November 2009; this is to identify risks associated with future funding and community consultation to extend the boundary.
Corporate / 4 / Unchanged / The effects and unpredictability of the current economic downturn and global recession on the local economy jobs and residents, and on the ability of SBC to deliver the Council Plan and Strategy. / The economy continues to be difficult although there are small signs of minor improvements. Thornaby & YarmTown centres with reasonably high levels of occupancy and trading well. Billingham high occupancy levels and refurbishment plans coming forward. New retail occupiers in all town centres. Marginal increase in house sales. Future jobs fund commencing delivery, and housing finance schemes beginning to encourage uptake. Sign of starts in house building. GAIA power plant received planning permission and other low carbon developments coming forward. Corus secured further business to December. Initial CAA assessment looking favourable, Building Schools for the Future (BSF) business case submitted to government with appropriate risk assessment. Unemployment forecast to continue rising. Council plans been developed to mitigate future financial scenarios. Major bus scheme and highway improvements through RFA progressing, planning permission secured for new hospital.
CESC
Adult Strategy / 6 / Unchanged / Personalisation Agenda / To limit potential impact notional budget amounts have been reduced by 20%. However given demographic changes potential impact and likelihood remain at 4.
Service
Area / Previous
Risk Nos. / Revised Risk No. / Risk Issue / Amendment Details
DANS
RED / 8 / Unchanged / Billingham House / At the first hearing of the case at Teesside Magistrates Courts on 14 July 2009, Bizzy B produced a copy of Heads of Terms with a local developer intending to refurbish the building. Rather than requesting Bizzy B enter a plea of 'guilty' or 'not guilty' the Court agreed to adjourn the case until 11 August 2009 so that progress could be made on the potential development. At the second hearing on 11 August 2009, officers were not of the opinion that sufficient progress had been made to induce the Council to withdraw its prosecution, and Bizzy B were forced by the Court to enter a plea. Bizzy B's legal representatives entered a plea of 'not guilty' and a trial date was set for 12 October 2009, when Bizzy B will argue their case against the proceedings. If Bizzy B are found not guilty the Council could be liable for £10k of legal fees for both parties, however, if Bizzy B are found guilty they could be fined up to £2500 plus £2 per day for every further day that they are in breach of the notice, plus be ordered to cover the Council's legal costs. Officers from Regeneration are still working with all parties to bring about a solution for the site.
At the hearing on 12 October 2009, Bizzy B pleaded and were found 'guilty' of failing to comply with the S79 notice and were fined £1,650 with SBC Legal costs of £2704.04. Bizzy B has named Python Properties as the local developer who will refurbish the property. If a lease agreement between the two companies has not been agreed within a timely manner then the Council will take Bizzy B back to court. The risk score will be reviewed at Q3 once it is apparent how proceedings are developing.
DANS
RED / 9 / 10 / Northshore – failure to progress the project to the required timescale and quality. Detrimental rather than beneficial effect on the town centre / The section 106 agreement has now been signed. The Home Zone should be on site April 2010.
DANS
RED / 11 / Unchanged / Brunswick Chapel / Q2 A potential purchaser has re-emerged and this possibility is being tested. English Heritage is deliberating on the provision of funding for urgent works on this building from their national reserves.
Control Measures and Action Plan revised in light of discussions with English Heritage.
Various / 1, 2, 5, 7, 12, 13, 14. / Unchanged / Various / No changes to risk information, ratings or entry numbers