Agenda item

To consider the controls being implemented to manage the strategic risk relating to sustainability.  

The Committee considered a progress report outlining the individual risks identified within the Strategic Risk – Sustainability of the Council.

Mr Steve Thompson, Director of Resources provided an overview of the sub-risk ‘Insufficient funding to deliver services.’ He summarised the existing controls and mitigations and highlighted that ongoing financial modelling would be undertaken to assess the impact of funding cuts given the level of uncertainty beyond 2020/2021. Mr Thompson reported that the monthly financial monitoring would ordinarily be reported externally from month three through to year end but due to the current uncertainties around the impact of the pandemic, reporting had been extended to include month two and also included details of the financial monitoring in relation to the Council’s eight Wholly Owned Companies. He further reported that the impact of Covid-19 on the Council’s companies also had a potential impact on the Council as it would assume the transferred risk as parent company.

Mr Thompson informed the Committee that the Council had to date received approximately £116 million of government assistance via a number of grants and Covid-19 related funding and anticipated further financial support to come. He reported that central government had been honouring its intention to recompense local authorities and regular updates and communication between both parties was ongoing. With regards to the future impact of the pandemic on the Council’s financial sustainability, Mr Thompson stated that it was an uncertain situation which made longer-term financial planning more difficult to undertake.

The Committee questioned whether analysis of the Council’s debt profile had been undertaken in order to identify any exposure. In response Mr Thompson informed Members that continuous benchmarking was undertaken with other similar local authorities in relation to the Council’s debt and reported that Blackpool fell in the mid-range.

Members questioned if any positives from the current situation had been identified which could be reported. Mr Thompson praised the efforts of the Council’s ICT department in the successful integration of home working, thanks in part to the work undertaken over previous years to upgrade ICT equipment and encourage the use of flexible home working across departments.

The Committee asked whether any particular departments had been more severely impacted by the pandemic than others with Mr Thompson reporting that the income-generating services had been most effected but that the government compensation scheme should address some of these losses.

Members sought assurance that should concerns be raised regarding the governance arrangements and financial stability of the Council’s Wholly Owned Companies then processes were in place to ensure that the Audit Committee would be informed of such concerns. Mr Thompson confirmed that any such issues would be raised via the external monitoring process and as part of the financial governance framework via the Shareholder’s Advisory Board. Mr Mark Towers, Director of Governance and Partnerships clarified that the Shareholder’s Advisory Board’s terms of reference included the role of seeking assurance that appropriate controls were in place around good governance and risk management. He explained that this was further strengthened via the joint roles of himself as Company Secretary along with Mrs Greenhalgh as Head of Audit and Risk and Mr Jonathon Pickup as Data Protection Officer to both the Council and its companies. The Committee requested that further assurance around the governance framework be provided to Members via a briefing session.

The nett risk score for the sub-risk had been identified as 15, with the Committee questioning whether this was appropriate and suggesting that an increased risk score would better reflect the current situation. Mr Thompson agreed that the nett risk score should be increased to 20.

Sub-risk ‘Insufficient central government funding for Social Care’ was considered, with Mrs Diane Booth, Director of Children’s Services confirming that the financial sustainability of Children’s Services still remained a significant concern. She reiterated the previously-outlined drivers for rising expenditure within the service as the number of children in care and the number of those children in costly residential placements or independent foster homes. Mrs Booth reported that due to improved management of the service, Blackpool now had less children being placed into care however, as a result of the impact of Covid-19 on courts’ ability to hear casework, release from care had temporarily stalled.

With regards to the Medium Term Financial Plan (MTFP), Mrs Booth explained that the plan aimed to reduce spend by 33 per cent over a five year period. The MTFP had been jointly developed by colleagues in the Corporate Delivery Unit and Finance departments on the basis of already agreed projects and approaches and was made up of several strands. Mrs Booth outlined each strand and assured the Committee that key performance targets aimed at budget reduction would be linked to each strand and overseen by the Medium Term Financial Project Board.

Mrs Booth informed Members that she had contributed to the National DPS Submission and Spending Review, with an estimated additional investment of between £4.1 billion and £4.5 billion being required for each year of the spending review. She summarised the key areas of the submission.

The Committee received an update regarding the Commissioner for Children’s Services review, with Mrs Booth reporting that the final review originally scheduled for July 2020 had been delayed until December 2020 due to the pandemic. The service had recently received a positive interim review which highlighted the Council’s effective response to the Covid-19 emergency and indicated that the necessary plans and leadership were in place to support the required improvement.

The Committee asked whether any areas of the MTFP had been impacted by Covid-19. Mrs Booth informed Members that the potential impact of the pandemic had been included within the MTFP and gave the examples of the delayed implementation of the therapeutic unit due to the necessity of Ofsted to register the facility as well as experiencing additional challenges to the recruitment process as areas which had been directly affected by Covid-19. She also highlighted the lived experience of Blackpool’s children and families as an area of significant risk of impact from Covid-19, reporting that the full extent of this impact was not yet understood although the return to school had started the process.

The Committee sought assurance that all commissioned service contracts included a process of follow-up to ensure that adequate services had been delivered and questioned whether the current monitoring framework was sufficiently robust. Mrs Booth advised that improvements had been implemented in this area, with significantly clearer outcomes and expectations provided as part of the commissioning process, along with the inclusion of get-out clauses within contracts should expectations not be met.

Details were requested of any health and wellbeing measures in place to support Council employees through the pandemic. Mr Neil Jack, Chief Executive provided a summary of the measures in place to support staff, explaining that employees were rotated around to different services as necessary in order to relieve others, as well as ensuring that annual leave was taken to guarantee sufficient breaks from work.

With regards to the Adult Services element of the risk register, Mr Jack reported that the service had experienced additional costs as a result of the pandemic particularly in relation to the purchase of Personal Protective Equipment (PPE), uplifts to providers and also changes to hospital discharges. Fee levels paid to residential care facilities had been increased by 10 per cent to allow for appropriate staff cover and sick pay costs, as well as to provide additional financial support due to the necessary reduction in the number of residents in some settings. The Committee was informed that a consolidated financial position relating to the impact of Covid-19 was in place as part of the Healthy Lancashire and South Cumbria partnership and that the Council continued to work with care providers as part of the Regulated Care Group, providing support as required. Mr Jack reported that positive feedback had been received from suppliers in relation to the work that Blackpool Council had done. The Council continued to monitor the financial position to support the sustainability of providers to ensure that service users had access to appropriate support when they needed it.

Mr Jack outlined the various streams of funding which had been available to Adult Services during the pandemic and informed the Committee of the recent announcement of additional funding for infection control which would be released to ease pressures on Adult Services as they headed into winter and to ensure that the most vulnerable continued to be protected and prioritised.

Mr Thompson reiterated that Adult Social Care was the Council’s biggest service area with a budget of £80 million and which had reacted rapidly and effectively to the medical emergency in partnership with providers. The Committee questioned whether any lessons had been learnt in respect of partnership working which would be taken forward into the second wave. Mr Thompson reported that daily communication with providers had been positively received and would continue going forward. Members agreed that the enhancement of partnership working was an area which could be considered in greater depth by the Adult Social Care and Health Scrutiny Committee.

The Committee raised a question from the previously reported Risk Services Quarter One report in relation to the zero reported cases of corporate fraud within Adult Social Care. Assurance was sought that staff had been made aware of the potential areas of fraud which should be included and that all employees were aware of their reporting responsibility in this area. Mr Jack advised that the reporting of corporate fraud fell within the Resources Directorate under the responsibility of Mr Thompson.

The Committee considered the final sub-risk area of ‘Climate emergency, unsustainable carbon emissions,’ with the Committee noting that this issue was due to be considered more fully by the Audit Committee at a future meeting as part of its work programme. Mr Jack advised that many of the commitments towards climate change mitigations were scheduled to be implemented several months in the future and therefore agreed that further consideration by the Committee would be appropriate. In addition to the work undertaken across the Council, Mr Jack also identified several energy-efficient projects implemented by its Wholly Owned Companies.

Mr Thompson informed Members that the Energy Management Group met on a bi-monthly basis, with steps being taken to assess the feasibility of linking energy efficiency schemes with the budget and final accounts in order that the impact of such schemes could be demonstrated.

The Committee questioned whether the sub-risk title was too broad and failed to be specific to Blackpool, with Mr Jack in agreement that the title should be made more focused.

[Mrs Booth left the meeting on conclusion of this item.]