management group meeting 12.00noon, friday 6 september ... · cllr martin hill declared an interest...

Management Group Meeting

12.00noon, Friday 6th September 2019

Loxley House Nottingham City Council

AGENDA

1. Apologies 2. Declarations of Interest 3. Minutes of meeting held on 24th May 2019 * 4. Matters Arising

5. Political Advice and Leadership *

(Cllr Martin Hill)

6. Budgets and Financial Control *

7. Performance Management *

8. Corporate Governance *

9. Conduct and Standards * 10. Executive Board (20th September 2019)

* Papers attached

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EAST MIDLANDS COUNCILS MANAGEMENT GROUP MEETING MINUTES OF THE MEETING HELD ON 24TH MAY 2019

Present: Cllr Martin Hill - Lincolnshire County Council Cllr Roger Blaney – Newark & Sherwood District Council Cllr David Bill – Hinckley & Bosworth Borough Council Cllr Chris Millar – Daventry District Council Stuart Young - East Midlands Councils

Steve Charlesworth - East Midlands Councils Lisa Hopkins – East Midlands Councils

Apologies: Cllr Anne Western – Derbyshire County Council

ACTION 1. Apologies

1.1

Apologies were received from Cllr Anne Western.

2. Declarations of Interest

2.1

Cllr Martin Hill declared an interest in land on the edge of Melton Mowbray – this is a standing Declaration of Interest held on file since September 2015.

3. Minutes of the meeting held on 1st March 2019

3.1 These were confirmed as a true and accurate record.

4. Matters Arising

4.1

These are all covered in the agenda.

5. Political Advice and Leadership

5.1 5.2

Cllr Martin Hill introduced this report and confirmed the changes in the leadership of a number of councils across the East Midlands. In relation to the CSR, the delay to its commencement will likely involve the

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ACTION 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10

CSR being rolled over for at least a further year. Stuart Young informed members that the Home Office had confirmed the outcome of the UASC funding review. There will not be full cost recovery but funding is at better rates than current. This funding announcement will mean a further £2.75million into Children’s services budgets of council in the East Midlands. Care leaver costs now need to be reviewed. Cllr Chris Millar informed members that in Northamptonshire Children’s trust has now been set up. Unitary shadow elections will be held in 2020. There are to be 93 members in the West Northamptonshire Unitary and 78 in East Northamptonshire. Members discussed election results and the implications of these. Forthcoming nominations to the boards of Midlands Connect and Midlands Engine board were discussed. There are 4 places available on Midlands Engine and 3 on Midlands Connect. There are likely to be new EMC Executive Board members for Derbyshire, Nottinghamshire and Northamptonshire district councils. Members considered whether to continue with a nominated lead member for Infrastructure and Growth. Given different arrangements with roles shared more equally amongst member councils/leaders, it was agreed not to re-appoint to this role currently but to review the position in 12 months’ time. Stuart Young highlighted to members the anomaly in the rounding of figures for added places and board places. Members agreed to round up the Independent/other allocation in line with the proposal party number as this was the highest figure. Resolution Members of the Management Group:

Considered the outcomes and implications of the local government elections.

Confirmed arrangements for allocation of seats to added places and Boards, as highlighted in paragraph 3.3 of the report.

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ACTION 6. Budget and Financial Control

6.1 6.2 6.3 6.4 6.5

Steve Charlesworth introduced this report and updated members on the latest financial position. The anticipated surplus has increased due to South Holland continuing in membership, Northamptonshire County Council have also agreed to pay subscriptions for 2019/20 and also the Regional Migration Manager vacancy. Steve tabled investment/interest rates for EMC reserves of £500,000. Members agreed that this should be invested between 6 and 9 months at the best rate available. Stuart Young informed members there is a joint session with the LGA for new councillors following on from the EMC AGM on 12th July. Resolution Members of the Management Group:

Noted the actual financial position for the period to the middle of May 2019 and the associated forecast outturn to 31st March 2020.

Agreed the proposal to invest £500,000 of current reserves in a fixed term interest bearing account or bond.

7. Performance Management

7.1 7.2

Stuart Young introduced this report. He highlighted the member attendance KPI for specific consideration and whether this remained a useful measure of EMC activity. Members agreed to amend this to ‘maintain attendance at formal meetings’ Resolution Members of the Management Group: Considered and endorsed the proposed key performance indicators for

2019/20. Considered any areas of risk to the achievement of these KPIs.

8. Corporate Governance

8.1 Stuart Young introduced this report and highlighted the completion of the

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ACTION 8.2 8.3

internal audit. He asked members to consider any issues in which internal audit should look at. Resolution Members of the Management Group: Noted the internal audit overall opinion and arrangements for an external

audit review. Noted the summary position on organisation risk. Considered arrangements and supporting material for Executive Director’s

annual appraisal.

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9. Conduct and Standards

9.1 9.2

Stuart Young introduced this report and confirmed there have been no standards complaints submitted or corporate governance issues highlighted. Resolution Members of the Management Group noted the contents of the report.

10. Executive Board

10.1

Members agreed the agenda for the EMC Executive Board: Board updates HS2 Update East Midlands Rails Franchise

Members discussed the possibility of a presentation from Abellio at the AGM in relation to the East Midlands Rail Franchise.

SY

11. Any Other Business

11.1 Stuart Young highlighted to members EMC’s ongoing support to DfT in relation to the rail franchise. DfT have agreed funding of £148,000 per annum (index linked) over 10 years. This has to be match funded.

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Management Group

6th September 2019

Lead Member Report

Cllr Martin Hill OBE

Political Advice and Leadership

Summary The following report provides a summary of developments that relate to local government and the governance of East Midlands Councils. Recommendation Members of Management Group are invited to note board membership for 2019-20 and consider the issues highlighted in this report.

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1. Introduction 1.1 The following report provides a summary of significant developments that relate to

local government and wider governance in the East Midlands. 2. EMC Board Membership 2.1 Management Group is reminded of the political balance of the East Midlands:

Political Balance All authorities 2018/19 2019/20 Conservative 51.7% 48.8% Labour 36.1% 34.1% Liberal Democrats 5.7% 7.4% Independent/Others 6.5% 9.7%

2.2 This equates to the following number of places on EMC and its boards:

Cons Labour Lib Dem Other Total

48.8% 34.1% 7.4% 9.7% 100%

Added Places (46) 22 (22.45) 16 (15.69) 3 (3.4) 5 (4.460) 46 REB (15) 7 (7.32) 5 (5.115) 1 (1.11) 2 (1.455) 15 Migration (15) 7 (7.32) 5 (5.115) 1 (1.11) 2 (1.455) 15

2.3 Figures are calculated to two decimal places and any group whose balance is above

0.5 is rounded up, and those below 0.5 rounded down. The strict application of EMC’s normal approach to allocation of places would result in 1 fewer places being allocated for both ‘added places’ and boards than actually required; the agreed numbers being 46 and 15 seats respectively.

2.4 As a result, it was agreed by Management Group in May 2019 that the Independent

Group (that recorded the greater increase in share, and is the closest to 0.5) should be allocated the additional seat for both added places and board seats.

2.5 EMC board membership is determined by political group leaders with reference to

geographical balance and inclusion of county, district and unitary councils. The Membership of the Regional Employers’ Board and Regional Migration Board is as follows:

Regional Employers’ Board Cllr Tom Beattie, Corby BC (Labour) Chair Cllr Byron Rhodes, Leicestershire CC (Conservative) Vice-Chair Cllr Gale Waller, Rutland CC (Liberal Democrat) Vice-Chair Cllr Mick Barker, Derby City Council (Conservative) Cllr Garry Purdy, Derbyshire Dales DC (Conservative)

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Cllr Robert Parkinson, Erewash BC (Conservative) Cllr Ian Jelley, Kettering BC (Conservative) Cllr Terri Eynon, Leicestershire CC (Labour) Cllr Robert Parker, Lincolnshire CC (Labour) Cllr Ian Fleetwood, Lincolnshire CC (Conservative) Cllr Kate Foale, Nottinghamshire CC (Labour) Cllr Oliver Hemsley, Rutland CC, (Conservative) Cllr Kevin Richards, South DC, (Labour) TBC (Independent) TBC (Independent)

Regional Migration Board Cllr Ivan Ould, Leicestershire CC (Conservative) Chair Cllr Sarah Russell, Leicester City Council (Labour) Vice-Chair TBC (Ind) Vice-Chair Cllr Chris Poulter, Derby City Council (Conservative) Cllr Patricia Bradwell, Lincolnshire CC (Conservative) Cllr Richard Wright, North Kesteven DC (Conservative) Cllr Sandra Naden-Horley, Northamptonshire CC (Conservative) Cllr Philip Owen, Nottinghamshire CC (Conservative) Cllr Ken Ritchie, Daventry DC (Labour) Cllr Steve Fritchely, Bolsover DC (Labour) Cllr Tony Aslam, Wellingborough Council (Labour) Cllr Rebecca Langton, Nottingham City Council (Labour) Cllr John Boyce, Oadby & Wigston BC (Liberal Democrat) TBC (Conservative) TBC (Ind)

The following appointments are not subject to formal political balance requirements:

HS2 Executive Board Cllr Kay Cutts (Nottinghamshire County Council) Chair Cllr Simon Stevens (Derbyshire County Council) Vice-Chair Transport for the East Midlands Mayor Sir Peter Soulsby (Leicester City Council) Chair Cllr Richard Davies (Lincolnshire County Council) Vice-Chair Midlands Engine Cllr Martin Hill (Lincolnshire County Council) Cllr Barry Lewis (Derbyshire County Council) Cllr David Mellen (Nottingham City Council) Cllr Chris Poulter (Derby City Council)

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Midlands Connect Cllr Kay Cutts (Nottinghamshire County Council) Cllr Nick Rushton (Leicestershire County Council) Sir Peter Soulsby (Leicester City Council)

3. Midlands Engine 3.1 Local Government Secretary Rt Hon Robert Jenrick MP has been confirmed as the new

Ministerial Champion for the Midlands Engine. 3.2 The Government is currently developing a refreshed Midlands Engine strategy. Whilst

the strategy will be a Government document, the Communities Secretary, as Midlands Engine Champion, is committed to working closely on developing the strategy with regional partners to enable a clear focus on the right areas and the delivery of the strategy.

3.3 Officials are working with the Partnership including theme groups, the Midlands Engine

Economic Observatory and LEPs to build upon the ideas, evidence and work that has already been completed. It is important that there is a good fit between published or developing Local Industrial Strategies and the refreshed Midlands Engine Strategy.

4. Brexit 4.1 Councils have been ‘asked’ by MHCLG to appoint a ‘Brexit lead’ to work with central

government in order to ramp up Brexit preparations and ensure councils are fully prepared to leave the European Union by the end of October 2019. Their roles will be to liaise with central government and oversee teams in local communities, who will work with stakeholders in planning for Brexit.

4.2 Of the £58m so far announced by government to help councils prepare for Brexit

(including £1.5m additional funding for ports), 78% (£44.9m) has already been allocated. It is understood that £10m of the £58m funding pot was held back for the 2019-2020 financial year and is expected to support activities such as communications, training and the recruitment of staff, and a new £10m of funding (not part of the £58m) will be handed to councils specifically to pay for their designated Brexit official.

3. HS2 3.1 There has been considerable uncertainty in relation to HS2 – and this is further

exacerbated by significant increases in (re-profiled) cost. The initial budget for the high speed rail line had been £57bn, new estimates put this figure closer to £100bn.

3.2 The Prime Minister has confirmed that a review into HS2 will be undertaken. While

this has led to speculation the project could be cancelled, Boris Johnson has tempered

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concerns by stating that he was not intending to scrap any major infrastructure projects.

3.3 Rail expert Doug Oakervee (previous HS2 Chairman) has been asked to chair the

review with the apparent brief being to look for waste or cost re-profiling rather than to lead to cancelling the scheme.

3.4 However, others may point to the fact that Boris Jonson has also appointed an arch-

critic of HS2 as his transport adviser - the journalist Andrew Gilligan. 4. Wider Issues 4.1 Fast-Tracked Spending Round for 2020-21. Chancellor Sajid Javid has announced a

one-year spending review to ‘give Government Departments financial security’ as they prepare for Brexit. Spending reviews, that typically happen every 2-3 years, are carried out by the Treasury to fix firm expenditure limits and set out public spending commitments.

4.2 While this one-year spending review is welcome in providing immediate certainty about how local services will be funded next year, and it may bring extra cash to deal with the potential fall-out from a no-deal Brexit; there is concern that it doesn’t help the longer term planning of public services as it will be another year before the real spending review takes place.

4.3 Devolution. The Prime Minister has pledged more devolution to councils and

communities with a commitment to give communities a greater say on transport, housing, public services and infrastructure.

4.4 The promised devolution framework has still not been published with no commitment

from Whitehall as to its likely shape or timings. 4.5 Government’s emphasis appears to continue to be upon the mayoral model in face of

continued concern from many councils that, for example, it is a model unsuited to large and diverse county areas.

4.6 Public Investment. See Appendix 5(a), an update and summary analysis of the latest

regional public expenditure statistics. 5. Recommendation 5.1 Members of Management Group are invited to note board membership for 2019-20

and consider the issues highlighted in this report.

Cllr Martin Hill OBE Chairman East Midlands Councils

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Item 5, Appendix (a)

Levels of Public Investment in the East Midlands 2019

1. Introduction

1.1 The following report provides a summary analysis of latest HM Treasury regional expenditure data (2017/18) published July 2019.

2. Levels of Public Investment in the East Midlands

2.1 The most recent HM Treasury report1 confirms the region is continuing to lose out in terms of public investment. Of particular concern are the comparably low levels of infrastructure and economic development funding – with an obvious implication for future rates of local and regional economic growth.

2.2 The lack of public investment has been a catalyst for collective work and lobbying by council and business leaders and MPs. While it may be too soon to expect any significant improvement in investment levels – glimmers of hope are difficult to see - in summary, it remains that the East Midlands has: The lowest level of public expenditure on ‘economic affairs’. The lowest level of public expenditure on transport, in total and per head. The lowest level of public expenditure on rail per head. The 3rd lowest total of public expenditure on services per head. Total UK public expenditure per head indexed (UK = 100); the East Midlands = 90, North

East = 105, North West = 105, London = 111.

2.3 Table 1 shows the total identifiable expenditure on services per head in real terms, 2013-14 to 2017/18; examples include spending on health, transport, economic affairs, education, and social protection.

2.4 Between 2013-14 and 2017-18, total expenditure on services has remained consistently below the England average (£692 per head lower in 2017/18 – and this gap has widened over the past year). If the Northern Powerhouse is seen as a primary competitor for investment funds, then it has been given a head start (£1,138 per head better funded than the East Midlands). The West Midlands, at a little over £579 per head better off, fares comparably well too.

1 The data has been drawn from the HM Treasury publication Public Expenditure: Statistical Analyses 2019 published in July 2019. The most recent data available is 2017-18.

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https://www.gov.uk/government/statistics/public-expenditure-statistical-analyses-2018


Table 1: Total identifiable expenditure on services in real terms 2013-14 to 2017-18 (£ per head, in descending order for 2017-18 outturn)

2013-14 outturn

2014-15 Outturn

2015-16 Outturn

2016-17 outturn

2017-18 Outturn

London 9,900 9,887 10,105 10,089 10,378 North West 9,125 9,292 9,420 9,445 9,807 North East 9,367 9,473 9,643 9,664 9,805 UK 8,825 8,973 9,074 9,144 9,350 England 8,571 8,722 8,825 8,885 9,080 West Midlands 8,501 8,795 8,717 8,863 8,967 Yorks & Humber 8,519 8,716 8,837 8,847 8,966 South West 8,169 8,345 8,383 8,491 8,628 East Midlands 8,053 8,236 8,250 8,286 8,388 East 7,828 8,056 8,170 8,136 8,359 South East 7,711 7,812 7,944 8,141 8,299

2.5 Table 2 show the level of expenditure on economic affairs, per head for 2013-14 to 2017-18. This area of expenditure includes enterprise and economic development, science and technology, employment policies, agriculture, fisheries and forestry, and transport. For this important element of public investment, the East Midlands remains the lowest funded region per head of the population.

Table 2: Identifiable expenditure on Economic Affairs (per head, 2013-14 to 2017-18, £m)

Economic Affairs 2013-14 outturn

2014-15 outturn

2015-16 outturn

2016-17 Outturn

2017-18 Outturn

London 882 871 1,106 1,140 1,300 UK 615 551 685 719 806 North West 511 498 592 595 764 England 553 609 639 670 763 South East 466 455 547 623 720 East 495 501 569 571 683 West Midlands 465 487 500 564 650 South West 453 471 509 589 630 North East 555 505 570 601 616 Yorks & Humber 566 564 629 584 568 East Midlands 465 476 489 495 550

2.6 Table 3 and corresponding graph shows the level of regional transport expenditure, per head for 2013-14 to 2017-18. The situation is similar to that of public investment in economic affairs more generally, i.e. the region consistently receives the lowest funding per head on transport investment than elsewhere in the country. What is interesting however, and as the graph shows, is not that London continues to enjoy its stratospheric levels of transport investment per head (‘twas ever thus) – it’s that the regional disparities in levels of transport funding has worsened over the past five years to the obvious detriment of the East Midlands.

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Table 3: Identifiable expenditure on Transport (2012-13 to 2017-18, £ per head, in descending order - excludes inflation)

Transport 2013-14 outturn

2014-15 outturn

2015-16 outturn

2016-17 outturn

2017-18 outturn

London 652 677 859 944 1,019 North West 246 264 382 370 528 UK 319 332 417 435 483 England 297 316 409 425 475 West Midlands 213 251 329 314 412 East 237 256 333 333 402 South East 250 255 329 370 370 North East 213 236 280 291 320 Yorks & Humber 284 279 371 335 315 South West 177 203 263 305 290 East Midlands 200 222 255 220 245

Source: https://www.gov.uk/government/statistics/public-expenditure-statistical-analyses-2018

2.7 Table 4 shows the level of regional rail expenditure, per head for 2015-16 and 2016-17. The situation here is particularly concerning. Not only is the East Midlands the lowest funded region – but it has also seen a reduction is its rail investment from £91 to £79 per head over a 3 year period.

£0

£200

£400

£600

£800

£1,000

£1,200

2013-14 2014-15 2015-16 2016-17 2017-18

Identifiable Expenditure on Transport (£ per head)By English Region (2013/14 - 2017/18)

London NW WM East SE NE Y&H SW EM

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https://www.gov.uk/government/statistics/public-expenditure-statistical-analyses-2018


Table 4: Total Identifiable Expenditure on Railways, per head 2015-16/2017-182

2015-16 2016-17 2017-18 % Change London 746 773 834 +11.7% England 251 249 279 +11.2% North West 203 175 243 +19.2% West Midlands 143 150 233 +62.9% South East 180 201 200 +11.1% East 191 144 160 -16.2% North East 110 110 141 +28.2% South West 94 136 140 +48.9% Yorks & Humber 180 137 132 -26.7% East Midlands 91 70 79 -13.2%

3. Some Thoughts….

3.1 This is HM Treasury data - official, national statistical analysis. It is therefore robust and incontrovertible; being consistent, credible and comparable (and independent from regional and local partners).

3.2 The data confirms ongoing underfunding of the East Midlands, both in real terms and when compared to other regions. This places the importance of the Autumn Budget and associated CSR announcements in sharp contrast.

3.3 The low levels of relative and absolute public investment in the East Midlands, particularly transport spend, remains an important and concerning issue. The region remains at the bottom of the table, and is perhaps ‘decoupling’ from other regions such as the West Midlands and the North West that have seen notable uplifts in levels of investment – perhaps related to the establishment of powerful Metro-Mayors.

3.4 In consideration of this decline over a 4-5 year period, it may be seen as firm justification for the current joint work through Midlands Engine and Midlands Connect. However, the East Midlands cannot simply transact away responsibility for improving this situation to these wider partnerships. There will inevitably be a need for a collective approach through partnerships such as TfEM, and the ‘chasing down’ of agreed regional investment priorities – alongside that, and in partnership with, Midlands Connect and the Midlands Engine.

3.5 The argument for securing greater investment must be built upon ‘opportunities for growth’ rather than that the ‘region is losing out’ or other ‘equity’ arguments. For example, there is a persuasive case that this region delivers proportionately higher rates of GVA growth per £ of public transport expenditure than elsewhere – so intuitively, increasing the level of transport expenditure will deliver proportionately higher levels of regional and therefore national economic growth.

2 Caution, these figures compares PESA 2015-16 outturn with 2016-17 and 2017-18 outturn, i.e. 3 datasets from consecutive yearly publications and so do not allow for any HMT adjustment of 2015-16/2016-17 figures.

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3.6 If there is reinvigorated commitment to ‘turbo-charge’ regional investment, growth and productivity, a realistic programme of priority investment schemes that have local and regional support, and will deliver the greatest level of return, should be accompanied by an expectation that Government will deliver on the agreed strategic priorities and the level of investment will increase.

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Management Group 6th September 2019

Lead Member Report

Audit and Finance Control

Budget Monitoring Report Period - April 2019 to August 2019

Summary

This report presents the accounts for the period April 2019 to August 2019.

This is the second set of management accounts presented to Management Group for the financial year 2019/20 continuing the format showing the main budget heads, specifically: Core Services, Contracts and Grants, Consultancy, Member Learning and Development, Fee Paying Events and Services.

Recommendation

Members of the Management Group are invited to:

Note the actual financial position for the period to late August 2019 and the associated forecast outturn to 31st March 2020.

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1. Key Points

1.1 The budget set for 2019/20 showed a surplus of £6,400. Since then £4,000 net savings emanating from a staff vacancy have been found and Northamptonshire County Council have agreed to renew their subscriptions of £9,500, which means the end of year forecasted surplus has increased to £19,900.

1.2 The longer term viability remains vulnerable as much of the grant and contracted income is only secured on a short term basis. During the course of the year, these reports will include updates on the budget position for 2020/21. The first of these updates is included in paragraph 9, below.

1.3 This report, and appendices, highlights the current financial position for each of the cost centres, together with an end of year forecast. Actuals to around the 28th August include only ‘banked’ or ‘committed’ savings and/or additional income invoiced at this time. Work continues in identifying and achieving further savings. Any concerns during the year are raised with staff and, if necessary at Management Group meetings. In this way, Management Group are able to monitor the progress made to achieve the surplus and make timely contingency arrangements if necessary.

2. Financial Report Period Ending August 2019

2.1 The financial statement, attached as Appendices 6 (a-f), details the summary financial position for the period up to the end of August 2019; in total and for each of the cost centres. It also provides a forecast for the outturn as at 31st March 2020.

2.2 The staffing budgets are allocated to each cost centre on the basis of the estimated time spent by staff on each activity.

2.3 Corporate staff, those not working on specific grant funded projects, and other corporate costs are allocated on an agreed percentage basis across all of the 5 key areas of work. The corporate staff costs have been assimilated into the staffing costs for each cost centre and the other corporate costs (rent, service level agreements, etc.) and are shown as overhead costs across all cost centres.

3. Staffing

3.1 The staffing budget stands at £691,600 and includes the 2% pay award, paid from April 2019, plus any associated incremental payments.

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3.2 Three members of staff are employed on fixed term contracts, which are based on the continuance of specific grants and contracts.

4. Income

4.1 Income to East Midlands Councils is split between: Membership Subscriptions. Grants, of which there are six specific grants: Migration Grant, Vulnerable

Persons’ Resettlement Grant, Unaccompanied Asylum Seeking Children’s(UASC) Grant, English as a Secondary or Other Language (ESOL) Grant,Midlands Connect and HS2, all of which are secured through contracts.

Earned Income, which consists of a mix of consultancy work, services,events and courses provided to member authorities.

Seconded staff to local authorities, of which there is now only one. Sponsorship, which has hitherto been generated to cover event costs.

4.2 Membership Subscriptions budget includes South Holland District Council who have continued in membership. It also includes Northamptonshire County Council who remain as a member authority and have renewed their subscription.

4.3 Grant levels are at a similar level to last year and these are secured by contracts / agreements.

5. Direct Costs

5.1 Direct costs relate to, and are charged directly to, cost centres from source, they include: room hire, catering, professional fees, travel costs/mileage and event publicity costs.

6. Corporate Costs

6.1 These costs include premises rent; computer and office equipment; service level agreements; external / pension valuation costs; publicity / website costs; telephone, stationery, printing and materials. The cost of these are initially charged in full to the Core Funds cost centre and then apportioned across all cost centres as overhead costs, though the largest proportion is retained within core services.

6.2 The allocation of corporate costs charged as overheads to cost centres totals £77,200 which is £1,200 less than last year and is due to savings made following negotiations for a new photocopying contract.

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7. Rechargeable Items 7.1 In addition to all costs and income associated with the five cost centres, there

are currently a number of projects that have either started, or are in the process of being set up, where EMC acts as a conduit to disperse the funding provided to be spent in pursuance of the specified activity. The financing and spending for these activities are not shown in the attached appendices.

7.2 The current rechargeable projects are: East Midlands Franchise; Strategic

Transport Policy; UASC Regional Fund; and, previous years’ grant for English as a Secondary or Other Language (ESOL).

7.3 The current position for each of these is shown below:

a) East Midlands Franchise £ Balance b/fwd from 2018/19 14,176 Invoice raised to date ____ 0

14,176 Payments made in 2019/20 8,190 Balance currently held 5,985

b) Strategic Transport Policy £ Balance b/fwd from 2018/19 65,000 Invoices raised in 2019/20 0

65,000 Payments made to date 0 Balance currently held 65,000

c) ESOL (2016/17 to 2018/19) £

Balance b/fwd from 2018/19 69,250 Payments made to date 0 Balance currently held 69,250_

d) UASC Regional Fund £

Balance b/fwd from 2018/19 30,570 Payments made to date 0 Balance currently held 30,570_

7.4 The funding from these projects is held by Nottingham City Council in the

same way as all EMC funding is managed and interest earned on the sums held is credited to EMC at the end of the financial year.

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8. Reserves and Liabilities

8.1 As at the beginning of the financial year 2019/2020 the level of reserve was estimated to be around £581,800, allocated as below: £260,000 to an earmarked reserve for staffing liabilities (except pension

liabilities). £60,000 to an earmarked reserve for renewals. £145,000 to an earmarked reserve for the LCC Pension Sub-fund liability; £116,800 to an unallocated reserve to manage unforeseen financial

events.

8.2 The figures shown above include the previous year’s opening balance plus last year’s surplus, net of last financial year’s contribution of £40,000 towards the LCC Pensions Sub-Fund liability.

8.3 All these reserves are invested on EMC’s behalf by our accountable body in accordance with their investment policies which means that any interest being earned by our reserves is allocated back to EMC at the end of the financial year, of which £500,000 is invested in a six month fixed term deposit earning 0.9% interest (endorsed by Management Group at their May 2019 meeting) which matures on 27th November 2019. Remaining reserves earn around 0.3% annually.

8.4 The investment of £500,000 was short term because it was felt that, with the uncertainties around Brexit, we should not be locked into a longer term investment if there is likely to be a hike in interest rates shortly after making the investment. All other balances will attract around 0.3% interest and are liquid. A proposal to re-invest this sum beyond 28th November will be presented at a future Management Group meeting.

8.5 EMC made a commitment to reduce the pension deficit which remained with Leicestershire County Council (this covers the pension cost of existing EMC retirees), following the transfer of accountable body to Nottingham City and, based on the actuarial valuation carried out in Autumn 2016, the remaining deficit will be financed from the earmarked reserve with payments scheduled, as agreed by Management Group, over the next few years. A payment of £40,000 is due to be made during October 2019 which is the last of the current three-year agreement. A further actuarial valuation is due in the Autumn after which a payment strategy can be determined.

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9. Update on 2020-21 Budget Position

9.1 When the budget was agreed in March 2019, the forward plan showed a potential deficit for 2020-21 of between £25,350 and £73,050 which was derived from three sources: loss of subscriptions as a result of the re-organisation of Northamptonshire local authorities; loss of Home Office Migration related grants; and, loss of contracts for work carried out on Midlands Connect and HS2; and depended on different assumptions being made for each.

9.2 Since then, Local Government re-organisation of Northamptonshire has been postponed and is now due to take effect from April 2021 which means that, for 2020-21, the worse projected loss is reduced by £33,000 to £40,000 and this is based on the assumption that Home Office grants and other contracts are all lost. Should these continue at their current levels during 2020-21 the budget for that year will be balanced.

9.3 Further updates will be provided to Management Group as and when any new information becomes available.

10. Summary

10.1 Members are advised that in securing the anticipated budget out-turn, the following financial risks are identified as the most significant to EMC and will require active management:

a) The Earned Income budget (£308,500) includes all forms of incomeexcept Subscriptions, Grants, Secondments and Sponsorship and isderived essentially from courses, events and consultancy opportunitiescreated by EMC staff. It is therefore vulnerable to the demands andcapacity of the sector. The budget has been constant for a number ofyears and remains at a level set when EMC was a larger organisation.Achieving actual income to the level of the budget has always proveddifficult, and so achieving the budget will again be challenging.

b) Sponsorship Income (Budget £10,000) includes funding provided byoutside organisations towards the cost of events and courses orexpenditure directly paid by an outside organisation. This budget hasbeen reduced from previous years’, as in the three years since asponsorship budget was first set, we have struggled to achieve the target.

20

Item 6

c) Expenditure budgets (totalling £956,150) are monitored closely. Staffingcosts (Budget £691,600), which account for more than 70% of the totalexpenditure, are set and manageable which just leaves £264,550 as OtherExpenditure and though some of this is variable, variances are picked upquickly.

d) Grants and Contracts (Budget £335,750) are secure for the current yearbut there is no real certainty currently for any grant beyond March 2020.

11. Recommendation


11.1 Note the actual financial position for the period to late August 2019 and the associated forecast outturn to 31st March 2020.

Steve Charlesworth East Midlands Councils

21


Summary Position to the end August 2019:

All profile budgets are calculated towards the end of August, Subscriptions which are invoiced during May to July for the full financial year and Grants which are paid quarterly and are therefore profiled until the end of June.

Staffing costs are below budget. This is due to a Migration post which was vacant until June 2019. The £4,000 saving covers the whole period of the vacancy.

Northamptonshire County Council have agreed to pay their subscriptions for 2019/20 which has allowed us to cancel a bad debt provision within Direct Costs which now shows a positive variance of £9,500.

EMC

Approved Budget 2019/20

Profiled Budget 2019/20

Actual to Aug 2019

Forecast to March 2020 Variance

£ £ £ £ £ Income Subscriptions 270,900 270,900 270,900 270,900 0 Grants – Migration 76,450 19,113 0 76,450 0 Grants - Other 259,300 64,825 33,993 259,300 0 Earned Income 308,500 128,541 133,890 308,500 0 Secondments 37,400 37,400 37,400 37,400 0 Sponsorship 10,000 4,167 0 10,000 0

Total 962,550 524,946 476,183 962,550 0

Expenditure Staffing 691,600 288,391 277,391 687,600 -4,000 Members Allowances 24,500 10,208 8,421 24,500 0 Premises 22,000 9,167 9,167 22,000 0 Service Level Agreements 18,500 8,313 8,313 18,500 0 Other Direct Costs 199,550 83,146 75,628 190,050 -9,500

Total 956,150 399,001 378,920 942,650 13,500

Surplus/-Deficit 6,400 125,945 97,263 19,900 13,500

22

Item 6, Appendix (b)

Position to the end of August 2019:

Subscriptions income budget now includes South Holland District Council following their decision to remain as members for the current year. Northamptonshire CC have agreed to pay their subscriptions this year, which was included in the original budget, together with a debt provision included in the Direct Costs budget, which offset the income due, therefore there is a saving of £9,500 under Other Direct Costs which relates to this bad debt provision.

Service Level Agreements, Premises costs, Members Allowances and Direct Costs remain in line with the budget.

Corporate and Core Services



Actual to Aug 2019


£ £ £ £ £ Income Subscriptions 270,900 270,900 270,900 270,900 0 Interest 3,000 1,250 0 3,000 0 Sponsorship 2,000 833 0 2,000 0

Total 275,900 272,983 270,900 275,900 0

Expenditure Staffing 199,400 83,083 78,398 199,400 0 Members Allowances 24,500 10,208 8,421 24,500 0 Premises 22,000 9,167 9,167 22,000 0 Service Level Agreements 18,500 8,313 8,313 18,500 0 Other Direct Costs 64,000 26,668 18,521 54,500 -9,500 Overhead Costs 24,850 10,354 10,354 24,850 0 Recharged to Cost Centres -77,200 -32,167 -32,167 -77,200

Total 276,050 115,626 101,007 266,550 -9,500

Surplus/-Deficit -150 157,357 169,893 -9,350 -9,500

23

Item 6, Appendix (c)


Expenditure items are all in line with anticipated spend levels.

Invoices for all the Grants are paid quarterly in arrears each year. The first quarter has been claimed, some of which have been paid. The second quarter will be claimed after the end of September 2019.

Staffing costs are lower than budget, which is due to the Migration related post which was vacant between April and June 2019.

Contracts & Grants



Actual to Aug 2019


£ £ £ £ £

Income Grants

- Migration 76,450 19,113 0 76,450 0 - Mid Con / HS2} 109,300 27,325 16,031 109,300 0 - VPR /

UASC/ESOL} 150,000 37,500 17,962 150,000 0 Sponsorship 2,000 833 0 2,000 0

Total 337,750 84,771 33,993 337,750 0

Expenditure Staffing 267,200 111,333 105,733 263,200 4,000 Direct costs 48,000 20,000 18,877 48,000 0 Overhead costs 18,900 7,875 7,875 18,900 0

Total 334,100 139,208 132,485 330,100 4,000

Surplus/-Deficit 3,650 -54,537 -98,492 7,650 4,000

24

Item 6, Appendix (d)

Position to the end of August 2019: Income is at a higher level than the profiled budget which is encouraging. Income is expected to reach / be close to budget because the District and Unitary elections took place this year and new Councillors will require additional training. Member Development is an area that requires re-positioning and should be dealt with when the EMC review takes place later in the financial year.

Member Development



Actual to Aug 2019


£ £ £ £ £ Income Development 16,100 6,708 8,300 16,100 0 Sponsorship 3,000 1,250 0

3,000 0

Total 19,100 7,958 8,300 19,100 0 Expenditure Staffing 39,300 16,375 16,610 39,300 0 Direct costs 6,000 2,500 5,117 6,000 0 Overhead costs 3,850 1,604 1,604 3,850 0

Total 49,150 20,479 23,331 49,150 0

Surplus/-Deficit -30,050 -12,521 -15,031 -30,050 -0

25

Item 6, Appendix (e)


Secondment invoice for the full year costs was raised in July.

Earned Income includes some work carried out and invoiced up to the end of July.

Consultancy



Actual to Aug 2019


£ £ £ £ £

Income Earned Income 150,000 62,500 51,102 150,000 0 Secondments 37,400 37,400 37,400 37,400 0 Sponsorship 0 0 0 0

Total 187,400 99,900 88,502 187,400 0

Expenditure Staffing 142,600 59,417 58,376 142,600 0 Direct costs 18,000 7,500 10,593 18,000 0 Overhead costs 15,750 6,562 6,563 15,750 0

Total 176,350 73,479 75,532 176,350 0

Surplus/-Deficit 11,050 26,420 12,970 11,050 0

26

Item 6, Appendix (f)


Expenditure is generally within the profile and budgetary expectations.

Income has exceeded budget expectations for the last two years for this cost centre and that trend appears to be continuing. It includes some income for services which are paid for at the start of the financial year together with income raised during the year.

Fee Paying Events/Services



Actual to Aug 2019


£ £ £ £ £

Income Earned Income 139,400 58,083 74,488 139,400 0 Sponsorship 3,000 1,250 0 3,000 0

Total 142,400 59,333 74,488 142,400 0

Expenditure Staffing 43,100 17,958 18,274 43,100 0

Direct costs 63,550 26,479 22,520 63,550 0 Overhead costs 13,850 5,771 5,771 13,850 0

Total 120,500 50,208 46,565 120,500 0

Surplus/-Deficit 21,900 9,125 27,923 21,900 0

27

Item 7


Performance Management

Key Performance Indicators 2019-20 against Business Plan

Summary

This report updates Members of the Management Group on performance management of EMC against its agreed Business Plan 2019/20.

Recommendations


Consider progress in meeting the agreed key performance indicators for 2019/20. Consider any areas of risk to the achievement of these KPIs.

28

Item 7

1. Introduction

1.1 The Management Group, as agreed in its terms of reference, has responsibility for performance management specifically, ‘to ensure that non-financial performance is properly monitored and to review EMC progress in delivering its annual key performance indicators and report appropriately to the Executive Board’.

1.2 The Business Plan is a formal statement of EMC’s objectives for 2019/20. The Business Plan was developed in consultation with Members, and agreed by Executive Board at its meeting in May 2019.

1.3 This report details progress in meeting the objectives of the KPIs for the 2019/20 business plan and reflect the continued 4 pillar approach of EMC. Members previously agreed that budget/finance performance be removed from KPIs as subject to separate finance and audit arrangements within Management Group.

2. Summary of Performance against Business Plan

2.1 The KPIs reflect the focus of the Business Plan. Performance is measured against the following KPIs (for Q1-Q2, 2019/20).

a) KPI 1 - Pillar 1: All-Member Organisation

2.2 To maintain attendance levels at formal meetings of East Midlands Councils and associated Boards. On Target

2.3 To maintain levels of council membership of EMC (46 councils, as at 1st April 2019). On Target

2.4 To undertake an annual satisfaction survey of member councils (both councillors and chief executives) on the provision of direct support services and ‘strategic added value’. On Target

2.5 Provide direct membership benefits to councils through maintaining the number of councillors participating in the EMC development, skills and briefing programme (baseline 2018/19; 241 councillor places). Not on Target The Local Elections held in May 2019 undoubtedly had an effect as the

numbers are significantly below those for this time last year. This period of electoral uncertainty is then compounded by the summer (July/August)

29

Item 7

months where engagement has traditionally been low. It doe sput into stark focus the importance of the member development programme for the remainder 6 months and additional sessions are being considered.

2.6 Provide direct membership benefits through the provision of high quality and relevant councillor development, skills and briefing programmes. At least 75% of all course feedback is rated as ‘effective/good’ or ‘highly effective/very good’. On Target

2.7 Provide direct membership benefits to councils through increasing by 10% the number of officer delegate places in EMC supported continuous professional development [baseline 2018/19; 1823 officer places]. Not on Target The numbers attending the 2 CPD programmes have been slightly down

in the first quarter. One event was rescheduled (to Q4) to avoid the clash with the Local Elections held in May 2019.

b) KPI 2 - Pillar 2: Policy Development

2.8 Establish an effective relationship and joint approach between councillors and MPs through: Holding at least 3 joint events and/or summits. The agreement of joint priorities as the basis for collective work. On Target

2.9 Develop a portfolio of agreed policy positions on issues as identified in the Business Plan, e.g. UASC care leaver costs review, Economic Growth and Infrastructure. On Target

2.10 To make demonstrable progress in delivering on core EMC policy priority areas: On Target

c) KPI 3 - Pillar 3: Collective Work and Lobbying

2.11 Working with LEPs and local councils to: Secure the implementation of the 6 agreed infrastructure priorities for

2019/20. Develop a shared long-term approach through ‘Midlands Connect’. Make progress in the development and delivery of Midlands Engine

proposals. On Target

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Item 7

2.12 Provide strategic political and organisational leadership for the delivery of HS2 through support for: The EM HS2 Strategic Board and associated groups; and The HS2 East Partnership On Target

2.13 Secure Parliamentary debate on securing additional investment into the East Midlands. On Target

2.14 Leadership and support in the development of Strategic Alliance proposals. On Target

d) KPI 4 - Pillar 4: Improve Communication

2.15 To provide EMC Councillors with a weekly policy brief and monitor feedback on a 3 monthly basis. On Target

2.16 To provide monthly MP and MEP policy briefs and monitor feedback on a 3 monthly basis. On Target

2.17 To improve the effectiveness of the EMC website as measured by: 10% increase in website ‘hits’ 10% increase in pages per visit 10% increase in time on site 10% reduction in the bounce rate Not on Target

2.18 To increase by 25% the number of followers of EMC Twitter account [baseline 31st March 2019; 798 followers]. On Target

e) KPI 5 - People Management

2.19 Maintain staff sickness rate at less than 6 days per full time equivalent (local government average 10.5 days) [2018/19 EMC sickness rate; 1.2 days with long-term sick, 1.2 without long-term sick]. On Target

2.20 Wherever possible, to meet all staff learning and development needs, as identified by annual Staff Development Interviews (SDIs). On Target

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Item 7

f) KPI 7 - Membership Service Standards

2.21 To respond and fully answer 95% of advice requests from member councils within 2 working days. On Target

3. Recommendations


3.1 Consider progress in meeting the agreed key performance indicators for 2019/20.

3.2 Consider any areas of risk to the achievement of these KPIs.

Stuart Young Executive Director East Midlands Councils

32

Item 7, Appendix (a) Proposed Key Organisational Performance Indicators (2019/2020)

1. Pillar 1: All-Member Organisation

Key Performance Indicators 2019/2020

Percentage Attendance

a) Maintain attendance at formal

meetings of East Midlands Councils and its Boards

2014/15 – 2017/18 2018/19 2019/20 Progress

East Midlands Councils 56% 50% 64%

EMC Boards 65% 65% 63%

This is broken down into the following Boards

Percentage Attendance 2014/15 – 2017/18 2018/19 2019/20

Executive Board 71% 86% 76%

Management Group 75% 57% 80%

Regional Employers’ Board 55% 65% 50%

Regional Migration Board 61% 60% 69%

HS2 Executive Board 63% 57% 38%

Transport for the East Midlands - - 67%

Progress in Achieving Objective

Activity successfully completed

Activity on target for completion Activity not on target for completion Activity subject to review

33


c) To maintain levels of councilmembership of EMC (46councils, as at 1st April 2019).

South Holland District Council are on notice to leave membership wef from 31st March 2020.

d) To undertake an annualsatisfaction survey of membercouncils on the provision ofdirect support services.

To be undertaken by end Q4

e) Provide direct membershipbenefits to councils throughmaintaining the number ofcouncillors participating in thedevelopment, skills and briefingprogrammes.

Baseline 2018/19

Quarter 1 Quarter 2 (Cumulative until

31.7.19)

Quarter 3 Quarter 4

241 40 79

f) Provide direct membershipbenefits through the provision ofhigh quality and relevantcouncillor development, skillsand briefing programmes. Atleast 75% of all course feedbackis rated as ‘effective/good’ or‘highly effective/very good’.

97% 90% 97%



Activity on target for completion

Activity not on target for completion

Activity subject to review 34


g) Provide direct membershipbenefits to councils throughmaintaining the number ofofficers participating in EMCsupported continuousprofessional development.

Baseline 2018/2019

Quarter 1 Quarter 2 (Cumulative until

31.7.19)

Quarter 3 Quarter 4

1823 314 360







2. Pillar 2: Policy Development


Progress - Financial Year 2019/20 Progress

a) Establish an effective relationship andjoint approach between councillors,MPs, MEPs and other partners,through: Holding at least 3 joint events

and/or summits. The agreement of joint priorities as

the basis for collective work.

The EM APPG met in July 2019 on HS2. The co-chairs confirmed work programme for 2019-20 with focus upon: HS2 East Midlands Rail Franchise Inclusive Economic Growth and Health Midlands Engine and Regional Investment







b) Develop a portfolio of agreed policypositions on issues as identified in theBusiness Plan including: Complete review of UASC care

leaver costs to inform UASC NTSwork.

Lead member networks forchildren’s services to meet on aquarterly basis.

Third Infrastructure Summit to beheld in February 2020.

Progress delivery of 6 JointTfEM/Midlands Connect StrategicPriorities

UASC Care Review underway and data/evidence gathering largelycomplete. Analysis will be completed by Q4 2019/20 to informHome Office review.

Children’s Service Lead Members continue to meet and supportedby EMC.

Initial development work underway in advance of February 2020Infrastructure Summit.

Progress achieved against each infrastructure priority is regularlyreported to Executive Board and EMC. A summary note isattached as an appendix 7(b) to this report.







c) To make demonstrable progress indelivering on core EMC policy priorityareas: Migration Health Housing and Planning

Migration To meet VPRS resettlement ‘pledge numbers’ by March 2020. To support effective transition of new asylum dispersal

arrangements.

Health Meetings held with Directors of Public Health and PHE, and the

development of follow-up proposals to support collective leadership, e.g. wellbeing opportunities ref Midlands Engine.

Housing and Planning Delivery of a Housing CPD programme. Planning and Housing Summit to be held in October 2019.







3. Pillar 3: Collective Work and Lobbying


Progress - Financial Year 2019/20

Progress

a) Working with LEPs and local councils to: Secure the implementation of the 6

agreed infrastructure priorities. Develop a shared long term approach

through ‘Midlands Connect’. Make progress in the development

and delivery of Midlands Engine proposals.

Progress achieved against each infrastructure priority is regularly reported to Executive Board and EMC. A summary note is attached as appendix to this report.

Contribute to the delivery of the Midlands Engine strategy refresh and provide advisory support to the region’s ME Executive Board Members.

b) Provide strategic political leadership for the implementation of HS2 through support for: The EM HS2 Strategic Board and

associated groups; and The HS2 East Partnership

Support new chairing and working arrangements for HS2 Executive Board.

HS2 East continues to raise the political profile of the Eastern leg of HS2 across the Midlands, Yorkshire, the North East and Scotland. Further information is available here.

c) Secure Parliamentary debate on securing additional investment into the East Midlands.

Ongoing – through the work of the EM APPG (Q3/Q4).

d) Leadership and support in the development of Strategic Alliance proposals.

On-going support in the development of final report and recommendations. Draft to be considered by Leaders and CXs in October 2019.



Activity on target for completion Activity not on target for completion Activity subject to review

39

http://www.hs2east.co.uk/


4. Pillar 4: Improve Communication

Key Performance Indicators 2019/2020 Progress - Financial Year 2019/20 Progress

a) To provide EMC Councillors with a weeklypolicy brief and monitor feedback on a 3month basis.

Monitoring to be undertaken in Q4 as part of annual satisfaction survey.

b) To provide monthly MP and MEP policybrief and monitor feedback on a 3 monthbasis.

Provided in conjunction with East Midlands Chambers of Commerce.

c) To improve the effectiveness of the EMCwebsite as measured by (from 2017/18levels):

10% increase in website ‘hits’. 10% increase in pages per visit 10% increase in average time on site 10% reduction in the bounce rate

Baseline 2018/2019

Quarter 1 Quarter 2 (up until 31.7.19)

Quarter 3 Quarter 4

43,379 2.04

1min 29 secs 37.02%

11,992 2.05

1min, 24 secs 35.70%

16,590 2.12

1min, 22 secs 36.33%







d) To increase by 25% the number offollowers of EMC Twitter account [Baseline798 on 31st March 2019; target for2019/20, 998 followers].

835 followers as at 31st July 2019







5. People Management



a) Maintain staff sickness rate at lessthat 6 days per full time equivalent(10.5 days local governmentaverage; EMC baseline [2018/19];1.22 days with L/T sick, 1.22 dayswithout LT sick).

Q1 Q2 (up until 31.7.19)

Q3 Q4

With L/T* Sick 0.20 0.30 Without L/T* Sick 0.20 0.30

* L/T = long term.

b) Wherever possible, to meet all stafflearning and development needs, asidentified by annual StaffDevelopment Interviews (SDIs).

All staff development interviews to be completed by the end of October 2019.







6. Membership Service Standards



a) To respond and fully answer 95% ofadvice requests from member councils within 2 working days.

1 received and responded to within 2 working days – 100%






Item 7, Appendix (b)

Joint TfEM/Midlands Connect Priorities for the East Midlands: Status as at July 2019

Priority Update Making the most of HS2 • Revised business case & design for conventional-compatible link at EM Hub at Toton nearing completion.

• HS2 themed bids for Housing Infrastructure Fund and the Transforming Cities Fund have been submitted to HMG• Proposals to establish a Development Corporation for Toton and surrounding sites under discussion.• EM Gateways Connectivity Study due to reach final report stage in September 2019.• RIS2 development funding for A52/M1J25 prioritised by Midlands Connect – but no clarity on process by DfT.

A Midland Main Line fit for the 21st Century

• Upgrade measures, including Derby remodelling, substantially complete.• Government has confirmed electrification to Market Harborough and between Clay-Cross and Sheffield – no decision

on the remaining 38% of the MML.• Improved services and complete replacement of rolling stock by 2023 secured through new East Midlands Franchise.

Improving Access to East Midlands Airport

• Proposals to improve service pattern to EM Parkway to be secured through new East Midlands Franchise.• Proposals for strategic public transport links between Hub Station and EMA will form part of EM Gateways Study.• Some Discussions on ‘last mile’ road access to EMA have taken place – but no firm proposals yet.

A46 Growth Corridor & Newark

• A46 Newark Northern bypass has been prioritised by Midlands Connect for delivery for RIS 2 – DfT appear supportive.• An Assessment of the wider Strategic Case for the Newark bypass has been submitted to Highways England.• Midlands Connect Humber Ports-Lincoln-Nottingham Rail Corridor Study to complete in September 2019• HE and Network Rail have formed a joint working group to inform proposals for road and rail investment in Newark.

A5 Growth Corridor • Longshoot-Dodwells pinch-point improvement still outstanding - but due to be completed by end of RIS1.• Strategic Study of the A5 between M69 and M42 has commenced.

Transforming East-West Connectivity

• Strategic Outline Business Case for Midlands Rail Hub agreed by Midlands Connect Strategic Board on 20th June 2019.As well as links to Birmingham it will also include the case for direct rail services between Nottingham-Leicester-Coventry.

44

Item 8


Corporate Governance

Summary

The following report provides detail on matters of corporate governance, specifically: a) Confirm lead member responsibilities for corporate governance, performance

management and conduct and standards. b) The management of organisational risk.c) Arrangements for undertaking internal and external audit reviews.

Recommendations


Confirm lead member responsibilities for corporate governance, performancemanagement and conduct and standards.

Consider the key strategic risks for East Midlands Councils, the key controls in place andany proposed action to be taken.

Consider arrangements for undertaking internal and external audit reviews.

45

Item 8

1. Member Lead

1.1 The roles and responsibilities of the Management Group are focused upon: a) Corporate Governance (including legal and accountable body arrangements)b) Performance Managementc) Audit and Financial Controld) Conduct and Standardse) Political Management

1.2 To support leadership and accountability, the Management Group agreed in 2014 to allocate from within its membership ‘lead member roles’ on the following basis: a) Audit and Financial Control - EMC Principal Vice-Chair.b) Political Management, Advice and Support - EMC Chair.c) ‘Corporate Governance’, ‘Performance Management’ and ‘Conduct and Standards’.

1.3 Cllrs Chris Miller and Anne Western both stood down at the July 2019 AGM from their respective roles as Vice-Chair EMC and Labour Group Leader, replaced by Cllrs Jonathon Morgan and Alan Rhodes respectively. Executive Mayor Kate Allsop lost her seat at the May 2017 local elections.

1.4 Cllr Chris Millar was lead member for ‘corporate governance’, Executive Mayor Kate Allsop for ‘conduct and standards’, and Cllr Anne Western was lead member for ‘performance management’. Members will therefore need to appoint to these 3 separate lead member roles.

1.5 Lead role responsibilities are allocated on the basis of political proportionality. Consequently, Labour, Independent and Conservative members are each invited, in the first instance, to nominate to one of these roles referred to in paragraph 1.2(c).

2. Risk Register

2.1 EMC’s risk register reports against each of the key risks identified by EMC and, for each risk, includes information such as potential impact, key controls and suggested response to mitigate each risk.

2.2 Included as part of the risk register is the 'owner' of each risk identifying responsibility for actions relating to that risk.

2.3 Against each risk identified, specific and detailed action plans may be developed, as appropriate, to inform further work.

2.4 An updated risk register, reviewed by officers, is attached as Appendix 8(a) to this report.

46

Item 8

2.5 All risks identified are significant and require an organisational response. The risks identified within the red section of the ‘risk grid’ are those identified as being critical to the organisation.

2.6 By identifying the likelihood of those risks occurring, it does not mean that the risk will

necessarily occur, rather that the risk requires specific focus and action to mitigate against its occurrence, and without this action, then in all likelihood, it will occur and this will be of significant impact to EMC.

2.7 The risk register has been considered by all staff at EMC and subsequently agreed by

the Management Team. Members are advised that staff are regularly consulted on risks and associated controls in relation to their areas of work. This is through both formal and informal 1:1s, in additional to full team meetings.

2.8 Since risk management was last considered by Management Group in March 2019,

Members are advised of the following issues that may impact upon the consideration of risk. However, at this time, officers do not suggest any changes to actual assessment of risk although mitigation measures continue to be required. One council, South Holland District Council, remains on notice to leave EMC

membership (wef 31st March 2020). Local Government reorganisation in Northamptonshire (2021) - while delayed by a

year from the date originally proposed, the abolition of the County Council and the 7 District/Borough Councils and creation of by two new Unitary Councils i.e. Northamptonshire North and West.

3. Internal Audit 3.1 Included within our Accountable Body SLA with Nottingham City Council are provisions

for undertaking an internal audit. 3.2 EMC remains in discussion with NCC Audit to confirm the scope of the 2019 internal

audit review. In light of the on-going management of risk in relation to organisational and financial resilience, and to align with a wider review of EMC roles and responsibilities, EMC officers have proposed that the internal audit review focuses on ‘organisational resilience’.

3.3 The internal audit is expected to commence in October 2019. 4. Certification Office – External Audit Requirements (2019/20) 4.1 Members are reminded of the need for a statutory audit and the production of a set

of accounts to comply with the requirements of the ‘Certification Office for Trade Unions & Employers’ Associations’ as part of EMC’s role as an Employers Organisation.

47

Item 8

4.2 Through a procurement exercise (undertaken by Nottingham City Council on EMC’s behalf) the contract for Rogers Spencer Ltd to undertake the external audit of EMC has been extended.

4.3 The audit commenced early August 2019 and will be completed by end-September 2019 with a full report presented to Management Group at its November 2019 meeting. Once considered and endorsed by Management Group, the external audit opinion will be forwarded to Nottingham City Council (as our accountable body) and the Certification Office, in accordance with our statutory responsibilities.

5. Recommendations

Members of Management Group are invited to:

5.1 Confirm lead member responsibilities for corporate governance, performance management and conduct and standards

5.2 Consider the key strategic risks for East Midlands Councils, the key controls in place and any proposed action to be taken.

5.3 Consider arrangements for undertaking internal and external audit reviews.


48


Risk Register

East Midlands Councils

Date Prepared: September 2019

Prepared by: EMC Management Team

Risk

Impa

ct

likel

ihoo

d Key Controls in Place Further Action To Be Taken Risk Owner

1. Loss of Authoritiesin Membership South Holland District Council on-notice

A 2 Communicating the benefits of EMC membership.

Understanding local pressures; both service delivery and financial.

Follow-up discussion with South HollandDistrict, building on previous discussionswith Chief Executive.

Political engagement with South HollandDistrict Council.

Management Group Executive Director

2. Lack ofengagement from Members

B 2 Member engagement is part of the KPIs reported on a quarterly basis to Management Group. Group Leaders are informed of non-attendance.

Group Leaders’ review Group nominationsto Boards.

EMC secretariat reminds Members ofmeetings and reports attendance to GroupLeaders (both pre and post-meeting).

Group Leaders Management Group

3. Lack ofengagement from Staff

B 3 Regular team meeting and 1 to 1s; staff appraisals.

Full knowledge of income and expenditure profiles; and engagement in developing and rolling-out the work programme.

Management Team

4. Insufficientcapacity and resilience (including staff and financial) to deliver work programme.

B 2 Annual KPIs to monitor progress in the delivery of the business plan.

Annual staff appraisals and regular businessplan planning meetings.

Revised approach to delivery of workprogramme.

3 month review against business plan and budget

Management Group Management Team

49


5. Inability to secureconsultancy and other earned income to balance budget

A 2 Agreed rates and charges schedule in place for 2019/20.

Monthly financial reporting and oversight. Proposed 2019/20 income target consistent

with that delivered for 2018/19.

All opportunities will continue to beexplored including ‘Non-local government’markets.

Targeted promotion of EMC service offer.

Management Team

6. Inability to securegrant funding to balance budget. Uncertainty remains in relation to 2020/21 HS2 and Midlands Connect grant funding.

A 2 100% of grant confirmed for 2019/20 budget. New sources of income actively explored. External grant now represents 34% of EMC’s

total income, thereby balancing EMC sourcesof income although exposing organisation tovulnerability if grant reduced (potentially forreasons outside of EMC’s control).

All opportunities will continue to beexplored, including Midlands Engine andHS2.

Regular programme management andoversight to meet requirements anddemonstrate value-added.

Management Team

7. Loss of StrategicMigration Grants from Home Office

B 3 Regular meetings with Home Office, at both Ministerial and senior officer level.

Delivery of programme milestones and widercommitments, as per Grant Agreement.

Importance of asylum and refugeeresettlement emphasised by additionalnational programmes, i.e. VPRS, UASC.

Home Office confirmed ‘Enabling’, SVPRS andUASC grants confirmed for 2019/20.

Ongoing risks to be managed for 2019/20including current Home Office review andfuture of VPRS post-March 2021.

Ongoing dialogue with Home Office. Demonstrate value-added of partnership

(supported by grant), includingperformance management of programmedelivery.

Management Team

8. EmergingPartnerships and local government reorganisation

B 2 Local government reorganisation in Northamptonshire.

Advisory support and engagement with localauthorities in the development of ‘StrategicAlliance’ and Metro Strategy proposals tosupport complementarity with EMC activity,e.g. TfEM.

To maintain neutral position and not to takeany partisan line in relation to localgovernment re-organisation discussions.

Consideration of developments by EMCManagement Group and Executive Boardfor political guidance.

Management Group Management Team

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KEY

SEVEREA 1,5,6

SIGNIFI-CANT

B 3, 7 2,4,8

MODERATEC

MINORD

4 3 2 1

VERYUNLIKELY

NOT VERY

LIKELY

QUITE LIKELY

VERY LIKELY

Likelihood

Some Extra Risk Management Action

No Extra Risk Management Action

Impa

ct

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Item 9


Conduct and Standards

Summary

The following report provides an update on the oversight and operation of the Members’ and Officers’ Codes of Conduct.

Recommendation

Members of the Management Group are invited to note this report.

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Item 9

1. Member Lead

1.1 Executive Mayor Kate Allsop was the nominated lead member on behalf of the Management Group for conduct and standards. This position is currently vacant as a result of the recent elections.

2. Declarations of Interest

2.1 All EMC Members that are required to complete and submit an annual declaration of interest have done so.

2.2 Similarly, all EMC staff members are required to do so and this is reviewed on at least an annual basis.

3. Other Matters

3.1 No standards complaints have been submitted to the Monitoring Officer.

3.2 No corporate governance issues that relate to whistle blowing and complaints handling have been highlighted.

3.3 No other issues that relate to conduct and standards have been highlighted to EMC secretariat.

4. Recommendations

4.1 Members of the Management Group are invited to note the contents of this report.


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management group meeting 12.00noon, friday 6 september ... · cllr martin hill declared an interest...

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