Agenda item

To take evidence from the Council’s Monitoring Officer

The Committee received a presentation from the Monitoring Officer regarding good capital governance which included:

• Risks within capital projects. It was explained that there were common reasons why capital projects encountered risk, e.g. ground conditions, hidden utilities, structural constraints, or changing regulatory requirements, and therefore it was important to manage risk. Good governance made sure that risks were identified as early as possible and recorded properly to enable members and officers to make informed decisions.
• The improvements implemented in the governance of capital projects which had provided a strengthened framework, with structured lifecycle stages, documentation for recording, highlight dashboards, and clear reporting and decision routes. There was a team to bring the information together and provide an early warning of issues with projects therefore these should be escalated to Cabinet much earlier than they historically had been. The decision-making structure provided transparency, and it was important for both officers and members to understand their roles within the structure.
• Member information and oversight, and the importance that members received clear, consistent, and timely information as projects evolved. Ward members should be aware of what was happening in their ward, and members needed to know when there were delays and changes to costs, particularly understanding why a project was where it was at, to ensure transparency. It was noted that there were issues with commercial sensitivity that affected the information that could be published, to protect negotiation positions and confidential relationships, however members had rights to access sensitive information they reasonably needed to discharge their functions through the appropriate channels. This did not apply to only Cabinet members but to all members.
• The new arrangements for lessons learned and continuous improvement, with the requirement to complete closure reports to identify successes and challenges which were considered by the Placemaking Mission Board and shared across directorates. The importance of lessons learnt being embedded in enhancing governance resilience, design management and stakeholder engagement was noted.
• Areas for ongoing governance improvement which included more clarity in relaying risks to members e.g. in Cabinet reports, more consistent member updates on the capital programme, continued development of skills and capacity within the organisation to match the scale of the programme, and embedding the governance arrangements and culture across all services.

Members questioned the routes for raising questions when decisions on capital projects were made. It was noted that members were able to ask questions at Council, Cabinet, and at Select Committees. Scrutiny had the power to summon officers and hold them to account. Members also had the right to call-in Cabinet decisions for Executive Scrutiny Committee to examine before they were implemented. Previous call-ins had resulted in improved Cabinet reports.

A discussion took place regarding communications between members and officers. It was suggested by members that there was a positive bias within Cabinet reports, with risk not fully outlined, and this therefore created concerns when issues arose. Members were able to make legitimate requests for information however it was felt that communications with members could be improved. It was noted that the Council’s Concordat for Communication and Consultation had not been reviewed in recent years and strengthen this could improve communications.

Situations where the cost of a project increased was discussed. It was noted that the governance process provided a check and challenge at the Placemaking Misson Board on projects spend. Officer delegation rules were broad, therefore if the cost of the project was still within the agreed capital programme budget for that project it would not go back to Cabinet for a decision. If it was outside of the budget then it would need to go to Cabinet for a decision, or Council if borrowing was required. Consideration was given to whether clarity was needed within the Constitution to bring projects back to Cabinet/Council when costs increased by a set level to ensure that members were fully informed. Officers noted that assumptions were made before carrying out detailed work when applying for external funding and officers were often working from estimates therefore this may not be appropriate.

Decision Records were raised. It was noted that key decisions, those that would incur expenditure of £500,000 or more and seen as significant in terms of its impact on communities, were published. In addition, significant decisions which incurred expenditure of £250,000 or more were also published. Officers working on projects were obliged to record all decisions made, whether these be large sums that required a decision record to be completed or a smaller sum that did not require publishing, to demonstrate to the Council’s external auditors why the decisions had been made.