To present to the Committee the progress on outstanding actions identified by the Committee along with general updates on other issues that fall within the responsibilities of the Committee.

The Chief Executive Officer took Members, in depth, through Appendix D, which reported the outcome from the Spendells House Capital Scheme Review.

 

Summary of Questions asked by Members:-	Summary of Answers Received:-
Would it be possible for annual training for relevant Officers on Project Corporate Governance etc. to be introduced?	(Ian Davidson) We will pick that up and add it to the Senior Managers Forum schedule. (Richard Barrett) We can also include this as part of new Officers’ induction. An action plan will be additionally produced based upon the outcome of the Spendells House/Orwell Place/Sunspot Project Review outcomes.

 

David Ousby, Head of the Project Delivery Unit (PDU) introduced himself and gave a presentation on the PDU including its staffing structure; its governance; its terms of reference; its project and programme controls including the Project Initiation Document (PID) and monthly highlight reports plus the key risks register and mitigations and finally the delivery programmes and their timelines.

 

Summary of Questions asked by Members:-	Summary of Answers Received:-
How often can we expect these updates?	(David Ousby) Members will receive the monthly highlight reports. It could be a standing item on the Committee’s agendas if required.
Could this Committee receive a report on a quarterly basis at its meetings?	(Richard Barrett) Yes, this could be done in a ‘dashboard’ reporting mechanism.
Does each individual project have a contingency built in?	Yes, and is large at the beginning due to all the potential uncertainties. The aim is to reduce that contingency as the project progresses and the uncertainties reduce.
In relation to Local Government Reorganisation, are we aware of different approaches to project management that other local authorities in Essex take?	(David Ousby and Ian Davidson) At County Council, Members are more remote and management is through various Committees. At District/Borough level it is more ‘closer’ through the relevant Portfolio Holders. We will need to understand the role and impact of an Elected Mayor under Devolution. For the new Unitary Authority, its project management ethos and structures will need to be drawn up as part of the work of the ‘Shadow Authority’. Tendring District Council will not be allowed to fetter the actions of the new Unitary Authority which will be an added complexity. A joint committee between Tendring District Council and the shadow authority may well be required.

 

The Committee was then informed of the progress on outstanding actions identified by the Committee along with general updates on other issues that fell within the responsibilities of the Committee.

 

The Table of Outstanding Issues had been reviewed and updated since it had been last considered by the Committee in January 2025.

 

There were three main ongoing elements to this report as follows:

 

1) Updates against general items raised by the Committee – Appendix A

 

2) Updates against the 2023/24 Annual Governance Statement Action Plan – Appendix B

 

3) Updates against recommendations made by the External Auditor – Appendix C

 

In terms of item 1) above, there were no significant issues to raise, with actions remaining in progress or further details set out below.

 

In respect of the 2023/24 Annual Governance Statement Action Plan, the Committee at its 13 February 2025 meeting had approved for publication the audited Statement of Accounts for 2023/24 and approved for signing the Annual Governance Statement, taking into consideration any minor amendments as agreed with the External Auditor. As part of the associated work of the External Auditor, a number of recommendations had been made which were set out within Appendix C as highlighted above. There were no significant issues to highlight at the present time with actions and activities remained ongoing.

 

Spendells House Capital Scheme Review

 

The outcome of the recent review was attached at Appendix D, which also addressed one of the External Auditors recommendations as set out within Appendix C. It was important to highlight that this investigation formed one element of the Council’s wider response to the issues identified. Those actions were referred to within the Annual Governance Action Plan set out within Appendix B, and along with the investigation, mitigation actions had already been undertaken that included:

 

·         The Chief Executive issuing a directive to all Senior Managers relating to financial and budget management, which explained the consequences and expectations of them in their roles that would be supported by further collective meetings with Senior Officers.

·         The commencement of arrangements for the implementation of a Senior Officer Project ‘Board’ that in turn would report directly to the Council’s Senior Management Team on a regular basis.

·         Statutory Officers had re-delivered governance awareness training at a recent Senior Managers’ Forum event, where attendance had been mandatory.

 

As previously discussed, it had been proposed to arrange a briefing for members of the Committee jointly with the members of the Resources and Services Overview and Scrutiny Committee. That briefing had been held on 26 March 2025 ahead of this meeting of the Committee. In terms of the Audit Committee’s assurance role and reflecting on the recent training / Member development session earlier in the year, it was worth highlighting the Committee’s relevant terms of reference as follows, especially in comparison with that of the Resources and Services Overview and Scrutiny Committee who had a different but complementary role:

 

·         To provide independent assurance of the adequacy of the risk management framework and the associated control environment;

·         To provide independent scrutiny of the Council’s financial and non-financial performance to the extent that it affects the Council’s exposure to risk and weakens the control environment;

·         Assessing external auditor and external regulatory reports and monitoring any quality improvement programmes where required.

·         Reviewing significant issues referred by the Chief Executive, Cabinet or any Council Committee.

·         Monitoring the effective development and operation of risk management and corporate governance.

·         Considering the arrangements for corporate governance and agreeing necessary actions to ensure compliance with best practice.

·         Considering the Council’s compliance with its own and other published standards and controls

 

In terms of the reference to best practice within the bullet points above, it was also worth highlighting the following relevant key elements that were set out within the Government’s best value standards:

 

·         Local Authorities must make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness;

·         Reporting on value for money, performance and the stewardship of resources is completed in a timely and understandable way, with transparent responses to recommendations from internal and external audit, and regulators;

·         Robust system of financial controls and reporting exists, which provide clear accountability and ensure compliance with statutory requirements and accounting standards; and

·         Procurement processes ensure economic, efficient and effective outcomes of contract procurement and management.

 

The review had concluded that though the Council’s underlying/current governance arrangements and internal control processes were reusable/adequate, such arrangements could be strengthened in the following areas:-

 

·         The scoping, management and adherence to the Council’s Governance Framework.

·         Specification – specifications must be robust, complete and clear. Specifications should be compiled by service area experts, and if these cannot be provided internally then services should be sought externally with an associated budget. Sufficient capacity should also be considered and allocated, with management oversight. A thoroughly prepared specification would negate the requirement for significant and numerous contract variations, although minor variations may still be expected.

·         Contingency – contingency should not only be considered at the beginning of the project, but it should also be considered when tenders are returned as this may impact on the overall budget dependent on the scale of the project.

·         Project management – the project should report progress against time, budget and potential issues. Mechanisms within the services need to be in place to ensure that senior management are aware when significant issues arise, in this instance substantial variations to the contract. Although regular meetings were occurring, these were without structure to the agenda and did not necessarily demonstrate the financial commitment of the project, and therefore opportunities to identify potential unauthorised earlier were missed.

·         Decision making – constitutional requirements do not appear to have been adequately considered during the life of this project. It is therefore recommended that for future projects, all project leads review and consider constitutional requirements at both the planning state and during the implementation of the project, to ensure that any statutory requirements are followed in addition to the contract terms.

·         Training – adequate training for Officers should be provided before undertaking any project, including specification writing, project management and contract management, especially of this scale. Appropriate supervision and support should also be provided at the inception of the project.

·         Strategic oversight – a Project Board will provide a consistent strategic approach to all projects going forward. All project managers are to report progress against targets including any potential issues that may occur. When providing financial information, this should also inclide amounts already committed, potentially using GANT charts may help. The minimum expectations of reporting standards should be agreed from the outset.

·         Contract management – the Council’s interests must be prioritised when managing contacts. This includes using the Council's own processes a d systems and not relying on contractor processes and direction, as it may be difficult to validate information and ensure that we comply with the constitutional and statutory requirements. Control must be retained by the Council, even if the expertise lies with the contractor.

·         Contract variation – contract variations must be limited by ensuring a robust specification is produced (as aforementioned). Variations should not be approved unless quotations or financial impact is provided in advance as well as being challenged when requested by a contractor. It may be beneficial to limit variation orders that can be approved in line with current constitutional requirements. The correct financial approvals must be sought in order to negate unauthorised spend.

·         Unauthorised spend – managers should be aware of their constitutional responsibilities when authorising spend. Once Cabinet has approved an overall budget, managers should update and request additional funding in necessary from the Portfolio Holder/Cabinet, at the earliest opportunity prior to committing the Council to further expenditure.

·         To include sessions within future staff inductions to raw attention to the Council’s high level governance arrangements, policies and procedures. This could be complemented via a six monthly induction ‘follow up’ session aimed at senior managers that can provide further detail in key areas such as budget and financial responsibilities long with procurement and other requirements set out within the Council’s Constitution.

 

In addition to the above and based on the detailed findings/outcomes, the matter has been referred for review against the Council’s HR policies to determine any further necessary action.

 

In terms of a practical and pragmatic response to the various issues and elements of good governance and best practice above, it was proposed to bring together the outcome from the Spendells House review set out within Appendix D, together with the outcome from reviews of other major projects such as the Orwell Place Car Park and Events space capital scheme in Dovercourt that had been reported to Cabinet on 21 February 2025. Reporting the outcome from major capital investment formed part of the Council’s underlying approach as set out within the Annual Capital and Treasury Management Strategy and highlighted within the Annual Governance Statement Action Plan within Appendix B. Along with further planned reports such as the upcoming review of the flexible workspaces in Jaywick (Sunspot), various learning points could be brought together as part of the annual review of the Council’s governance arrangements that in turn informed the associated action plan, that would be presented to the Committee in the first half of 2025/26.

 

Appointment of Independent Person(s) to the Audit Committee

 

It was reported that a draft person specification had been set out in Appendix E. It was proposed to further develop the specification in consultation with Members of the Committee in advance of a final version being presented to the June 2025 meeting of the Committee. Once agreed the actions associated with establishing and recruiting to this post would be undertaken which would include recommendations being made to Full Council, the appointment process and induction programme. A recommendation had been included within the report that reflected this proposed approach.

 

External Funding Review

 

As highlighted within the report to the Audit Committee at its September 2024 meeting, this Committee had been asked by Cabinet for their support and assurance on the associated governance processes. This item had subsequently been captured within the Committee’s proposed work programme for 2025/26 as set out elsewhere on the agenda.

 

External Audit Delays

 

Following the Committee’s consideration and approval of the Statement of Accounts for 2023/24 and associated External Auditor reports, there were no longer any years outstanding. Work was underway in terms of the Council’s 2024/25 accounts which would be subject to audit later in the year and would be reported to the Committee accordingly.

 

Local Audit Reform

 

There were currently no further updates over and above the detailed information presented to the Committee at its January 2025 meeting. Updates would be included in future reports as necessary.

 

RIPA – Regulatory Investigatory Powers Act 2000

 

To inform the Committee of any activity conducted under RIPA by the Authority – the Authority had not conducted any RIPA activity in the last quarter and it was rare that it would be required to do so.

 

Whistleblowing

 

To inform the Committee of any activity under the Whistleblowing Policy as part of the monitoring arrangements. The Authority had not received any Whistleblowing notifications since the adoption of its policy in July 2023.

 

It was moved by Councillor Sudra, seconded by Councillor Fairley and:-

 

RESOLVED that;

 

(a)  the progress against the actions set out in Appendices A, B and C be noted.

 

(b)  in respect of the Spendells review set out in Appendix D, that the findings be noted and that Officers be requested to bring these together with the outcomes from other various reviews of major projects, in addition to any associated recommendations from External/Internal Audit for consideration as part of the annual review of the Council’s governance arrangements at the earliest opportunity in 2025/26;

 

(c)   the draft Independent Person specification set out in Appendix E be noted and Officers requested to further develop the specification for consideration at the next meeting of the Committee in June 2025, with consultation undertaken with Members of the Committee in the interim period.

 

(d)  the Chief Executive Officer be invited to attend a future meeting of the Committee to give a half yearly update on the matters raised in the review of the Spendells Capital Scheme Review; and

 

(e)  that Officers be requested to explore opportunities for a ‘dashboard’ style reporting mechanism for updates on the work of the Project Delivery Unit on major projects that could be submitted to the Audit Committee and Full Council, as appropriate, on a regular basis.