The Insurance and Risk Management Officer presented a report to the Committee that explained the outcome of the Authority’s Annual Risk Assessment, attached at Appendix 1, which identified the main risks facing the Council, the likely impact of those risks on Council services and the wider County Borough, and also outlined what was being done to manage the risks and allocated responsibility to individuals for the Council’s response. 

He advised that a Risk Assessment had been developed in consultation with Corporate Directors, Business Managers and Senior Management Teams, and had gone to the Corporate Management Board (CMB) in December 2014.  A summary of the residual risk scores was contained in Appendix 2 and the Corporate Risk Management Policy was attached at Appendix 3.  He advised that the Risk Assessment was reviewed quarterly alongside reports to CMB, covering the changes throughout the year.

The Insurance and Risk Management Officer took Members through the list of risks and reported that Welfare Reform was affecting Wales more than England, with social housing tenants having had their benefits reduced by 20.4%, as opposed to 19% in England and 15.3% in Scotland.  The report highlighted increased poverty amongst social housing tenants as a result of the rising cost of food, fuel and utilities.  He reported that 50% of those people surveyed were in greater debt and the level had risen by a quarter since the introduction of the bedroom tax with those who were in rent arrears up by 23% and referrals to food banks had increased by 48%.

A Member asked how the earmarked reserve would be used.

The Chief Accountant advised that it would be used for any pressures facing the Council as a result of Welfare Reform and there was a further sum to help the more vulnerable in society.

The Insurance and Risk Management Officer then referred to the second risk which was “using resource effectively” and reported that during the coming year the Council is required to make savings of £11.25m which included an increase in Council Tax of 4.8%.  The total amount of savings required over the following three years is £37.6m, making a total of £48.8m over the next four years and built into that amount is an assumed increase in Council Tax of 4.9% per annum.  Directorates are expected to make savings of 8.6% for 2015-16, which include retendering for Learner Transport, Waste Management, Health and Social Care, Cultural Services, Regulatory Services, Youth Offending, as well as staff restructures as the staffing spend currently accounted for 69% of the budget.

One Member questioned the £200k pump priming to establish core staff capability to deliver the programme, and asked whether this would mean paying twice if staff were seconded from another department within the Authority.

The Chief Accountant advised that pump priming had been used to fund a core team of Project Managers and a specific Project Accountant to assist in delivering projects such as collaboration and outsourcing of certain areas.  The Project Managers have been appointed on fixed two year contracts, funded from earmarked reserves, and would ultimately help to attain the required budget savings.  She added that a saving would be made elsewhere if those staff were recruited internally.

The Insurance and Risk Management Officer informed Members that Local Government Reorganisation was a new risk area for the Council.  He advised that the Council had expressed interest in merging to the east of the borough and the advantages identified to justify this were that the two Councils had a similar tertiary education system, as well as the Council becoming part of the Cardiff City region.  He explained that there were a number of negatives to this merger: the Council would straddle two separate health board areas; harmonisation of Council Tax; the long term impact on the European funding was not known; the unknown cost of a merger as the Welsh Government were not in a position to meet those costs, which would inevitably add to the Medium Term Financial Strategy on top of the £48.8m required savings.  Furthermore, senior managers would be distracted from prime tasks of delivering services by the need to discuss the detail with colleagues in other Councils on how those services might be brought together.

He then described some of the main risks to the Council.  The first was “supporting vulnerable people” and the need to remodel those services as more people were living longer; the number of people over 65 was likely to increase by 24% between now and 2020 and would place increased demand on complex services.  Secondly, whilst budgets are decreasing, people’s expectations are not.  It was noted that staff numbers would decrease due to annual wastage and the reduction of hours.  However more emphasis was now being placed on prevention and the Early Response Team in order to avoid admissions to hospital. 

During the last 12 months there had been a change of emphasis in “supporting vulnerable children and young people and their families” regarding the recruitment and retention of Social Workers and the increased number of Looked After Children (LAC) with complex needs which had placed greater strain on resources.  In the period 2007-8 to 2012-13 the LAC population had increased by 40% from 291 to 412 and during last year had increased by a further 6.5%.  He advised that there was now however enhanced data sharing with health workers and other partners and the Community Care Information Solution (CCIS), a single integrated solution available to all health and social care organisations across Wales, which it was hope would address one issue.

The Insurance and Risk Management Officer then reported on the “schools modernisation programme”, which was part of the Council’s capital programme.  He explained that the Welsh Government were committed to fund 50% of Band A projects, dependent upon the Council funding the other 50% and the production of a robust business case.  The main part of the match funding, £13.4m, would come from the sale of some of the Council’s properties, £4m from Section 106 Agreements and £5m core funding.

The Insurance and Risk Management Officer reported that for the first time since the start of the financial crisis wages were growing faster than inflation at a rate of 1.8% between August and October 2014.  There was also a rise in the number of people in work, although there had been a slight fall in Bridgend.

He then reported on “educational Attainment” and advised that the Estyn Inspection was completed in 2012 and reported in 2013 with five recommendations.  At the last meeting there had been good progress and the risk had come down.  Estyn returned in December and the Council came out of monitoring, which reflected the good progress which had been made.

RESOLVED:         That the Committee considered the Annual Risk Assessment and updated Risk Management timeline contained within Appendix 2 of the Risk Management Policy.