Agenda item

To note the Quarter 3 2023/24 update on risk management provided in the report and make any observations to the Executive.

The Executive Member for Corporate Policy and Resources highlighted developments relevant to the Council’s strategic risks and explained that, as these have taken place since the end of quarter 3, they were not included in the reports presented to this meeting of  the Committee.

They included:

Strategic Risk 1 – Financial Sustainability - approval of a balanced budget for 2024/25 by Full Council, only drawing on earmarked reserves to address specific funding risks.

Strategic Risk 6 - Local Government Reorganisation. Surrey’s County Deal had been confirmed by the Government as part of the Spring Budget. The Deal did not require any structural changes to local government in Surrey but provided Surrey County Council with some additional areas of responsibility, including new economic development functions. This Council would continue to work with Surrey to make the Deal a success.

The Executive Member commented that it was good to note that the Council was seeing positive movement on a number of strategic risks in Quarter 3, and in relation to the previously red rated operational risk.

He explained that the second risk management report on the agenda introduced the strategic risks for 2024/25. In proposing updated risks for the year ahead, the Council has been able to reflect positive movement and it was anticipated that the Council would be recommended to approve the closure of some risks next quarter.

The Head of Corporate Policy, Projects and Performance introduced the Quarter 3 report, explaining that this provided an update on risk management in the period from September to December 2023.

No new strategic risks had been identified and no strategic risks were recommended for closure in the quarter. Updates on controls and mitigations for each risk were recorded in Annex 1 of the report.

As well as receiving an update on strategic risks, Members were also provided with updates on RED rated operational risks. At the end of Q3 there were none.

However, Members were provided with information about the operational risk that was reported RED in the previous quarter to help explain the reasons for the change in risk rating. Additional detail on this risk was provided in the part 2 exempt annex.

Following this Audit Committee meeting, the report would be considered by the Executive on 21 March.

Any observations made by the Audit Committee on the report’s contents would be communicated to the meeting of the Executive on 21 March.

A number of advance questions on this item had been raised and the responses were circulated to Members prior to the meeting.

In response to a Member’s questions on SR4, it was explained that in terms of capacity and capability risks there were a number of actions that were being considered, including workforce planning to run alongside the annual service planning process. This would also allow the Council to plan for resourcing key priorities in tandem with preparations for the next Corporate Plan.

In early April, the staff survey would also be launched, to gauge how staff felt with regard to their position in the organisation and their role in delivering the Council’s priorities. The outcome would be a detailed action plan.

It was confirmed that there had been no significant workforce changes and there was nothing of concern coming out of exit interviews.

Overall the workforce remains the Council’s biggest asset.  However the employment market was very buoyant, and it was difficult to recruit to some professions. How the Council recruits and retains staff remains important and capacity and capability would always be a risk. Overall the risk was under control.

A drafting error was highlighted on page 22 of the report. SR2 (Commercial Investment) should have had a risk rating of 9 across all the quarters reported, rather than 6.

In response to a question about timescales for reducing risk, it was confirmed that currently the Council did not set target dates for achieving target risk levels. It was suggested that target dates could be considered. Officers agreed to look at options, however it was noted that some strategic risks, given their very nature, would inevitably remain on the risk register for a long time.

In terms of targets for reducing risk, Members asked whether these were genuine targets or aspirational targets. In response it was stated that the Council could only control what was in its power to influence.

The Chair asked for confirmation, in relation to SR5, how much the Council had spent on fees for advice on commercial opportunities and how many opportunities the Council had turned down. Also what was the value of the commercial portfolio and of recent disposals?

Members were advised that, over recent years, the constraints on local government powers to invest commercially had been severely curtailed and that any business cases to be considered were reported to the Partner, Shareholder and Trustee Executive Sub-Committee. The majority of investment now focussed on place shaping and regeneration. A written answer to be supplied following the meeting with further details.

RESOLVED that the Committee notes the Q3 2023/24 update on risk management provided in the report and associated annexes and makes any observations to the Executive.