Agenda and minutes

To receive any declarations of interest.

There were no declarations of interest received at this point in the meeting.

The minutes of the Corporate Affairs meeting held on 15 October 2020 were submitted and approved as a correct record.

A report of the Director of Finance was presented to provide a summary of the Council’s position with regard to procurement activity over the last financial year including compliance with Standing Orders, practice changes, and contract awards.

As part of the Council’s Constitution, Contract Procedure Rules were in place to provide governance in respect of procurement practices.  The current financial thresholds were detailed at paragraph 4 of the submitted report.  Approval to reduce the lower finance threshold from £15,999 to £10,000 had been granted but had not yet been implemented due to the Covid-19 pandemic.  The change would be formalised from 1 January 2021 with the intention of directing more contract opportunities to local suppliers and further challenging value for money. 

The monitoring of local commissioning was reported via the balanced scorecard and quarterly information was provided on spend with the local market.  From April 2019 to March 2020, the 40% target was achieved in one quarter only.  However this target had increased from 25% in the previous year and the other three quarters had achieved 34% and over.  The actual spend in monetary terms with Tees Valley suppliers was £24,353,494 which was a slight increase of £3,434,650 on the previous year, with £14,253,655 spent directly with Middlesbrough suppliers.  The strategic objective remained in place for 2020/21 with the quarterly target of 40%.

The Buy Boro campaign had been picked up and drive by Regeneration and Marketing in order to support local businesses and inspire residents to spend locally.  Procurement would continue to work closely with Regeneration and Marketing to further develop this work.

Quarterly reports of all spend from the financial system against the contract register were completed and used to highlight where Standing Orders might not have been adhered to.  This process enabled the Procurement Team to identify any areas of non-compliance and identify any areas for improvement or tendering opportunities. 

Purchasing cards continued to be monitored and managed and were subject to an annual Internal Audit review.  There were just over 400 active cards at the end of March 2020 which was a considerable reduction since the start of the financial year when there were over 500.  Spend continued to be high volume and low risk.  During 2019/2020 a total of £8,610,802 was spent via the cards, which would have been the equivalent of processing 33,288 invoices. 

A new project focussing on the benefits of an early payment scheme via Business World was under development and if implemented would see a further reduction in the use of purchasing cards.

Within Standing Orders there were circumstances where exemptions could be requested.  During 2019/2020, 62 exemptions were approved.  This was a minimal increase compared to the previous year when there were 60.  A breakdown around the number of exemptions for each service area and why they were approved was contained at paragraph 19 of the submitted report.

There had been 55 contracts awarded during 2019/2020 which were the outcome of 34 quotations and 21 tenders.  There were currently 394  ...  view the full minutes text for item 20/39

The Head of Internal Audit presented a report to provide Members with an update on progress with the delivery of internal audit work and on reports issued and other work completed since the last update report to the Committee.

Appendix 1 to the submitted report summarised the progress made in delivering 2020/21 audit work.  Work was underway on a number of audits.  Where a specification for the audit had been agreed and fieldwork had commenced, this was noted as ‘specification issued’.

The audits listed were those that had been agreed with management as a priority for review during the year and which had either commenced or had been scheduled to take place.  Further audits would be added as the year progressed. 

All audits continued to be carried out remotely through virtual meetings and sharing information electronically and this had led to some delays in obtaining information.  Regular meetings were held with the Section 151 Officer and other key contacts to address any difficulties that arose.

The Audit Team was currently focussing on financial system audits that were not completed in 2019/2020 due to the Covid-19 pandemic. 

A summary of the work completed to date and any issues identified was detailed at Appendix 2 to the submitted report.  Work completed to date included a number of pieces of grant certification work and other assurance for external providers of funding to the Council. 

At the Committee’s request a list of audits completed since May 2019 had been compiled and would be circulated via email.  The Chair invited all Members to raise any items on the list for further discussion by the Committee.

AGREED that the information provided was received and noted.

A report of the Head of Internal Audit was presented to inform the Committee of changes to two policies that formed part of the Council’s counter fraud framework:  the Whistleblowing Policy and the Anti-Money Laundering Policy.

Both policies were out of date and required updating to reflect current arrangements and contact details.  The new whistleblowing arrangements within the Council would be publicised in 2021.

The Chair of the Committee commented that in addition to the recent updates to the Whistleblowing Policy, junior Officers of the Council should be actively engaged to contribute to further improvements to the policy to make it more user friendly.

AGREED as follows that:

1. The revised Whistleblowing and Anti-Money Laundering Policies were received, approved and noted.
2. A further review of the Whistleblowing Policy and consultation with Officers across the Council would take place.

A joint report of the Director of Legal and Governance Services and the Executive Member Finance and Governance was presented to provide an update on Legal Services’ response to the OFSTED inspection of Children’s Social Care Services.  This briefing followed the report presented to the Committee on 5 March 2020 that outlined the steps Legal Services would take to improve on the issues raised by OFSTED in respect of Legal, and assistance provided in respect of Children’s Social Care Services.

The submitted report detailed the issues in relation to capacity, recruitment to legal posts and how Legal Services had contributed to the improvement journey for Children’s Services, both strategically and operationally.

It was highlighted that there had been a vacancy for a Solicitor/Chartered Legal Executive since July 2020 and this post had now been filled.  This was a positive move and would reduce the service’s spend on agency workers as well as increase capacity.

Feedback on the recruitment process had been really positive and tribute was paid to the Council’s Human Resources Service, who had devised alternative ways of advertising in order to recruit.

One of the key improvements highlighted was improved communication across the service and relationships with Children’s Services and partner agencies, where new ways of working had been implemented and were progressing well.

The Chair requested that the Committee was kept updated on progress.

AGREED as follows:

1.      the information provided was received and noted.

2.     the Committee would receive progress updates every 6 to 12 months.

The Director of Legal and Governance referred to an investigation by Internal Audit which was triggered by a whistleblowing concern.  The previously exempt audit report: Transporter Bridge – Whistleblowing, had recently been released by the Monitoring Officer, in the public interest.   The Director of Legal and Governance invited the Committee to consider the lessons learned and their wider application to the management of maintenance of the Council’s assets.  

The Director of Finance provided reassurance that the anonymity of the whistle blower had been preserved, and anyone wishing to bring issues forward could do so with the confidence that confidentiality would be maintained.  The Director of Finance thanked the whistle blower for raising concerns and the Internal Audit Team for their report.

The Committee received a presentation from the Director of Finance.  Opened in 1911, the Tees Transporter Bridge was Grade II listed and was the longest working transporter bridge in the world and an iconic symbol of the area’s engineering and industrial heritage.  Middlesbrough Council managed the bridge in line with an agreement with Stockton Borough Council under section 101 of the Local Government Act 1972.   The bridge had been closed since August 2019 to allow for essential investigation and maintenance works.

A whistleblowing report regarding health and safety and the overall maintenance and management regime for the Transporter Bridge was received by the Council’s internal auditor at that time: Tees Valley Audit and Assurance Services (TVAAS) on 8 August 2019.  An audit investigation started on 28 August and was reported on 23 December 2019.  It was agreed with Director of Finance and Governance and Executive Director of Growth and Place, at that time, that the audit would go back 10 years.

There were three key points in terms of arrangements for looking after the bridge for Internal Audit to consider:

1.         Did the Council understand the requirements of what was needed to maintain the bridge. 

2.         Did the Council ensure that the necessary expertise was in place to apply those requirements and be able to maintain the bridge properly.

3.         Did the Council undertake the work to understand the situation the bridge was in and what needed to be done to it, and very importantly, keep appropriate records of the outcomes and make evidenced-based maintenance decisions on what needed to be done.

Overall audit found that TVAAS found Cause for Considerable Concern in relation to the areas examined, meaning fundamental failures existed within the control environment and the Council was exposed to unacceptable levels of risk. 

TVAAS concluded that most of the allegations made by the whistleblower were accurate. While no evidence was found that repeated requests for maintenance or requests for the bridge to be closed were refused, it identified a mostly passive and ineffective management approach to the Transporter Bridge over the previous decade.

It found that the lack of specifically qualified or trained bridge or structural engineering staff engaged by the Council to manage the facility ultimately led to the deterioration of the structure to the  ...  view the full minutes text for item 20/43

There were no other urgent items.