Agenda and minutes

Audit and Pensions Committee
Tuesday, 18th September, 2018 7.00 pm

Venue: Courtyard Room - Hammersmith Town Hall. View directions

Contact: David Abbott  Tel: 020 8753 2063

Items
No. Item

1.

Minutes of the Previous Meeting pdf icon PDF 645 KB

To approve the minutes of the previous meeting and to note the outstanding actions.

Additional documents:

Minutes:

Councillor Rebecca Harvey noted that her comments on Item 7 had not been recorded and asked that the minutes be updated to include them.

 

RESOLVED

With the correction above, that the minutes of the previous meeting held on 17 July 2018 were approved and signed by the Chair.

 

2.

Apologies for Absence

Minutes:

There were no apologies for absence.

3.

Declarations of Interest

If a Councillor has a disclosable pecuniary interest in a particular item, whether or not it is entered in the Authority’s register of interests, or any other significant interest which they consider should be declared in the public interest, they should declare the existence and, unless it is a sensitive interest as defined in the Member Code of Conduct, the nature of the interest at the commencement of the consideration of that item or as soon as it becomes apparent.

 

At meetings where members of the public are allowed to be in attendance and speak, any Councillor with a disclosable pecuniary interest or other significant interest may also make representations, give evidence or answer questions about the matter.  The Councillor must then withdraw immediately from the meeting before the matter is discussed and any vote taken.

 

Where Members of the public are not allowed to be in attendance and speak, then the Councillor with a disclosable pecuniary interest should withdraw from the meeting whilst the matter is under consideration. Councillors who have declared other significant interests should also withdraw from the meeting if they consider their continued participation in the matter would not be reasonable in the circumstances and may give rise to a perception of a conflict of interest.

 

Councillors are not obliged to withdraw from the meeting where a dispensation to that effect has been obtained from the Audit, Pensions and Standards Committee.

Minutes:

Councillor Alex Karmel declared a general non-pecuniary interest in pensions matters as a deferred member of the Local Government Pension Scheme.

4.

Investing in Asset Backed Securities pdf icon PDF 375 KB

This report asks the Committee to consider an investment in Asset Backed Securities (ABS) and approve the required amendments to the 2018/19 Treasury Management Strategy to enable this investment.

 

NOTE: Supplementary item published 11/09/2018

Minutes:

Hitesh Jolapara (Strategic Director of Finance and Governance) introduced the item, noting that the Committee had requested a report on investing in Asset Backed Securities following consideration of the Treasury Management Strategy at the previous meeting.

 

Phil Triggs (Director of Treasury and Pensions) added that the request had arisen from a proposal that the portfolio could be subject to an enhanced level of risk to achieve a higher return. The higher level of risk related to the fact that these investments would be illiquid for a minimum period of two years.

 

Phil Triggs informed the committee that officers were hesitant to recommend a change in strategy at this time due to the economic uncertainty around the UK's exit from the European Union in March 2019. Of particular consideration were comments made by the Governor of the Bank of England about the significant potential negative impacts of a 'no-deal' scenario. Officers recommended postponing this decision until the impact of these events on the markets was more clearly understood.

 

Councillor Matt Thorley asked that when the proposal came back to members, it included what the investment parameters around the higher levels of risk.

 

RESOLVED

That the Committee postponed the decision to invest in Asset Backed Securities.

5.

Corporate Health and Safety Compliance Oversight Report - December 2017 to July 2018 pdf icon PDF 404 KB

This report provides an overview of the performance of the organisation to comply with its health and safety duties.

Minutes:

Richard Buckley (Head of Environmental Health) presented the report that provided an overview of the performance of the organisation to comply with its health and safety duties in law for the period December 2017 to July 2018. He highlighted the expanded audit programme in the wake of the Grenfell Tower fire – including compliance work on housing placements for vulnerable adults, and audit of lifts, fire risk assessments, and the use of fire wardens in tower blocks. Richard Buckley noted that there had been a welcome fall in the number of accidents and incidents across the organisation – though there was still a lot of work to do.

 

The Chair noted an issue that had been raised before by the Committee around how information about violent or threatening individuals was shared between services. Recently, an individual who had been temporarily banned from the Town Hall due to threatening behaviour towards staff had been invited to a public meeting by the website communications team. Richard Buckley said there was a corporate system in place to share information but GDPR requirements had made the process of logging issues more complicated. This area was on the audit programme for a review of systems across the organisation.

 

The Chair noted that in other organisations it had been reported that GDPR had meant staff weren't being frank about the danger of individuals because they know those people have a right to see what's written about them. Richard Buckley said he would take this away and consider as part of the systems review.

 

Councillor Alex Karmel asked for clarification of the issues with Linford Christie stadium noted in 5.4 of the report. Richard Buckley said they related to high legionella counts at the facility due to the size of the water tank and how well used they were. While those issues were being resolved there would be regular testing and monitoring of the water. He added that a new Assistant Director was now in place with responsibility for this area of work and they had produced a detailed report which was currently being actioned.

 

Councillor Alex Karmel asked if the updated alarm system at the mortuary would present problems with access for undertakers. Richard Buckley assured members that the alarm system wouldn't disrupt access.

 

Councillor Rebecca Harvey, in reference to 5.2 of the report, asked if the Committee was the place to raise the issue of Hammersmith Bridge's surface being unsafe for cyclists. Richard Buckley said the report was referring to the training and equipment used by contractors doing works on the bridge – but he would raise the cyclist safety issue with highways colleagues.

 

Councillor Jonathan Caleb-Landy, in reference to 5.2, asked if the Council was logging common complaints about contractors and if they were fed into the audit process. Richard Buckley said, in the case of this report, officers had looked at KPIs in the contract relating to health and safety, and accident and incident stats.

 

Councillor Rebecca Harvey, in reference to 5.3,  ...  view the full minutes text for item 5.

6.

Internal Audit Quarterly Update Report pdf icon PDF 371 KB

This report summarises internal audit activity during the period 1 April to 30 June 2018 as well as reporting on the performance of the Internal Audit service.

Minutes:

David Hughes (Director of Audit, Fraud, Risk and Insurance) presented the report that summarised internal audit activity during the period 1 April to 30 June 2018. He noted that there were no outstanding audit recommendations from the quarter. The Chair thanked officers for the impressive progress.

 

RESOLVED

That the Committee noted the report, and the progress made in reducing outstanding audit recommendations.

7.

Final Audit Report - LBHF Ventures Limited 2017-18 pdf icon PDF 554 KB

This report presents the findings of an audit of LBHF Ventures Limited, a trading company that allows the Council to trade commercially.

Minutes:

Lisa Redfern (Director of Social Care and the Interim Director of Public Services Reform) gave a short introduction to the report before handing over to Simon Davis (Assistant Director of Contracts and Procurement) and Sarah Bright (Assistant Director, Public Services Reform).

 

Councillor Alex Karmel noted that the company was reported to have been incorporated in June 2016 but Cabinet approval for the incorporation was not given until the following month, in July 2016. Officers said they would check the dates.

ACTION: Lisa Redfern

 

Councillor Alex Karmel asked officers to put this venture into context – was the company meeting its targets or falling behind? Kim Dero (Chief Executive) explained that the LBHF Ventures vehicle was established as an umbrella for the Council to undertake particular commercial ventures - but it hadn't been used for those projects. The commercial vehicle had been established but not fully utilised. The projects it was designed to encompass all became standalone vehicles.

 

Councillor Alex Karmel asked if the company, when it was set up, had budgets for income and expenditure. Hitesh Jolapara (Strategic Director for Finance and Governance) said it was assigned a small initial set-up budget of £5-10k.

 

Councillor Matt Thorley asked for officers to explain the future of the company. Kim Dero said it was important to recognise that LBHF Ventures was led by the Commercial Director at time (who has since left) and he saw it as critical to this area. Now the Council was doing this work in different ways and re-evaluating its commercial income projects and targets.

 

Simon Davis outlined a number of commercial projects, including selling business intelligence services to other Councils, ethical debt pilots, and increasing revenue from advertising hoardings in the borough. Sarah Bright added that there had been a review of ten of these programmes to identify where resources should be focused to achieve the best outcomes.

 

Councillor Alex Karmel asked if LBHF Ventures had an income target for the current financial year. Hitesh Jolapara said this particular vehicle didn't, but there was a Council-wide income target and the latest budget monitoring report that went to Cabinet showed the Council falling short of that target.

 

Councillor Jonathan Caleb-Landy asked for clarification that the board had met but hadn't signed off the accounts. Hitesh Jolapara said the accounts would be finalised at the next board meeting, scheduled for 17 December 2018. Officers added that the Governance around the company was being reviewed due to a number of role changes within the Council leading to Directors stepping down.

 

Councillor Alex Karmel noted that both Councillor members of the Board had stepped down and asked why neither had been replaced. Kim Dero said officers would take this away as part of the review of the Governance arrangements. Councillor Karmel asked for an update report in six months.

 

ACTION: Lisa Redfern

8.

Internal Audit Charter pdf icon PDF 340 KB

This report presents an update on the Council’s Internal Audit Charter, a requirement of the Public Sector Internal Audit Standards.

Minutes:

David Hughes (Director of Audit, Fraud, Risk and Insurance) presented the report, noting that the Internal Audit Charter was reviewed annually in accordance with the requirements of the Public Sector Internal Audit Standards. He added that there were no significant changes to the charter since the previous report.

 

RESOLVED

That the Committee noted the report.

9.

Risk Management Highlight Report pdf icon PDF 399 KB

This report provides an update on risk management within the Authority, and presents the Corporate Risk Register for consideration.

Minutes:

David Hughes (Director of Audit, Fraud, Risk and Insurance) presented the report that provided members with an update on risk management within the Council, including the key corporate risks and how management are addressing them.

 

The Chair noted that the risk level against the coroner’s office had been substantially reduced and asked for an update on the situation. Mike Sloniowski (Risk Manager) noted that there had been an independent review of the service and an action plan was in place that could be reported to the next meeting. Kim Dero added that the six boroughs served by the coroner had agreed a joint action plan and investment to improve the service.

 

The Chair asked what the outcome of the case against the Senior Coroner had been. Kim Dero said the coroner had been issued a reprimand by the Lord Chief Justice and Lord Chancellor for bullying a member of Coronial staff and that his behaviour amounted to serious misconduct. The Senior Coroner had since undertaken a schedule of training and was assigned a mentor to support him and the Chief Coroner said he was fit to return to work. The Council had judicially reviewed the lack of reasons for the decision and subsequently the process leading to the decision, the proceedings are ongoing.

 

Councillor Alex Karmel asked how robust the Council’s defences against cyber attacks were. David Hughes said the Council was required to do an annual review of IT security, including firewall penetration testing, to be able to access the Government’s Public Service Network. This year’s test was scheduled for next week. Officers added that the Council’s network was attacked every day and it was very closely monitored.

 

Councillor Jonathan Caleb-Landy, noting the Brexit risk, asked if that was to be taken as a general risk or if it led to a multitude of more specific risks. Hitesh Jolapara replied that this was a wide-ranging risk due to the potential consequences of a number of outcomes. A ‘no deal’ scenario was of particular concern given the likely impacts on citizenship, the financial markets, and the labour markets (particularly affecting staffing for the NHS and social care sector). Mike Sloniowski noted that the Government had published 90 risk scenarios but they were very high level, lacking the detail required for detailed risk modelling. A key area of risk for the Council was the impact on the procurement market - that affected services across the Council and there was very little information on it from the Government or other public bodies.

 

Kim Dero said that of particular concern to her was the workforce - the Council employed a number of EU citizens and there needed to be assurances about their status. Councillor Rebecca Harvey asked how many staff had permanent right to residence. Officers said they would check and provide that information to the Committee after the meeting.

 

ACTION: Mark Grimley

 

The Chair added that this also applied to the Council’s contractors. He also noted, by way of an example, that  ...  view the full minutes text for item 9.

10.

Dates of future meetings

The next meeting will be held on 12 December 2018. More information can be found on our website: www.lbhf.gov.uk/committees

Minutes:

The date of the next meeting – 12 December 2018 – was noted.

 

More information can be found on the Council’s website: www.lbhf.gov.uk/committees