Agenda, decisions and minutes

www.swansea.gov.uk/disclosuresofinterests

None.

In accordance with the Code of Conduct adopted by the City and County of Swansea, no interests were declared.

To approve & sign the Minutes of the previous meeting(s) as a correct record.

Approved.

Resolved that the Minutes of the previous meeting(s) of the Governance & Audit Committee were approved as a correct record.

For information.

Chris Williams, Head of Commercial Services presented a ‘for information’ report which provided the Committee with an update on the development of a Contact Management Framework.

It was outlined that following the review of the waivers audit, the Committee requested an update on one of the matters discussed: –

·       the establishment of a contract management framework that would facilitate an enhanced focus on the subject matter of the audit, i.e. appropriate contractual paperwork in place / contract compliance / appropriate knowledge.

The Committee had been advised via interim communications that the contract framework was not yet finalised and was still in development.  The draft document was provided at Appendix 1.

It was added that the new Social Partnership and Public Procurement Act (Wales) would introduce a new ‘socially responsible public procurement duty’, building upon the Well-being of Future Generations Act, which also linked to the United Nations’ sustainable development goals.

The Act would provide new obligations to consider the social, economic, cultural and environmental aspects of public procurement.  Details of the progress of the new legal framework for public procurement were also outlined.

The Committee discussed the following: -

·       The new UK central digital platform and the implications for local procurement and Sell2Wales initiatives and procurement timelines. It was commented that there was not expected to be any negative impact, it would improve access to Government contracts for small and medium companies and expectations were positive following an initial bedding in period.

·       Current contracts were not affected by the changes.

·       The objectives / priorities / scope of the new procedures, the expected high-level guidance to accompany the changes and training / guidance which will be offered to staff / schools.

·       The potential impact upon tendering within the new laws and the possible impact of how this would work.

·       Potential savings for the Council by ensuring good robust processes for public contracts.

The Chair noted that the contract management framework was currently draft.  She added that she was keen to ensure the compliance element is rigorous and robust by way of management control and requested an update on this matter. 

The Chair thanked the officer for presenting the report.

For information.

Mark Wade, Director of Place presented a ‘for information’ report which provided the Place Directorate control environment, including risk management, in place to ensure functions were exercised effectively; there was economic, efficient and effective use of resources, and; effective governance to secure these arrangements.

The executive summary detailed the sections within the department, the main directorate concerns regarding risks over the 2024-2025 period, which remained around high levels of homelessness, including use of temporary accommodation, the ability to deliver the Welsh Government public body ambition of net zero by 2030 and it was noted that pressures remained on HRA business planning.

It was acknowledged that data breaches had increased slightly, service areas continued to provide staff awareness training and briefings as appropriate. Place is a high-volume directorate in terms of customer contact but efforts continued to minimise the chances of human error.

The report outlined the procedure within the Directorate relating to risk management and it was noted that there was an expectation that the Place Directorate was fully compliant with reviewing control measures, risk wording and risk level each month as part of a joined-up approach. Appendix A outlined the (Directorate) Corporate and Directorate Risks.

The risks were shared with the responsible Cabinet Members. The Performance and Financial Management meeting makes the decision about whether Directorate risks should be escalated to Corporate Management Team for consideration as to whether they should become a corporate risk.

A risk being closely monitored during 2024-2025 was the growing homelessness pressure resulting in a ‘red’ risk status for the length of stay of families in bed & breakfast accommodation.

The councils operational Net Zero 2030 strategy continued to have a ‘red risk status due to ongoing concerns about increased costs, the national strategy and availability of further funding and resource. Additional external funding was required to enable increased capacity to take the agenda forward.

Details of risk management, business continuity, Performance management / KPI’s, planning, decision making, budget and resources management, fraud and financial impropriety procedures, and compliance with policies, rules and regulatory requirements were provided. 

It was also outlined that the directorate had developed a cross-cutting project management team to develop and deliver a wide range of projects and examples were provided.  The progress of projects was also reviewed monthly.

The report also highlighted key elements of internal controls, data security and partnership / collaboration governance.

The Committee asked a number of questions of the Officer, who responded accordingly.  Discussions included the following: -

·       Managing Absence – the Director was requested to provide details of the percentage total of the days lost in the department against the total amount of days lost across the Council. The Director would respond following the meeting.

·       Continued use of apprentices within Building Services.

·       Continued use of seasonal staff in Parks – particularly during periods of high demand, e.g. recent storm damage, which was very much appreciated.

·       The continued use of the CWOTS Team within Cleansing and their ongoing delivery of schemes within individual Wards.

·       Climate Change and Nature Recovery Projects, which were community related and assisted the public. The Director would circulate details to the Committee.

·       Budget pressures, particularly the growing homelessness issue which had risen to red status. It was explained that this was a national issue and several factors were affecting the position.

·       How the homelessness issue had grown significantly over the previous 5 years. Support had been received from Welsh Government, which that was reducing but demand was rising.

·       How the demand in homelessness was affected by individuals moving to Swansea from neighbouring areas. The Council continued to have good working relationships with neighbouring authorities to counter these issues.

·       Executive Summary – an explanation on understanding the issues around KPI’s not being achieved would be provided in future reports.

·       Clarification was provided regarding the statistics surrounding data breaches.

·       Controls operating effectively – an explanation was provided regarding the checks undertaken on the diverse workforce within the Department in respect of time recording and performance.   

The Chair thanked the Director of Place for providing his report and requested that the Directorates risk register was included with enhanced reporting in future reports.

Noted.

Rachael Davies, Head of Human Resources and Service Centre presented a report which sought to provide the Committee an update on actions being taken across the Council to respond to the latest Internal Audit review of the Accounts Receivable (AR) function.

It was explained that since the last update, the recommendation regarding unapplied credits had been completed. Two recommendations remained outstanding and were being actively addressed, with completion targeted for June 2025.

The Aged Debt Project team continued to collaborate with services and so far, since January 2024 there had been a 74% reduction in invoices aged over 365 days and a 50% reduction in the total balance owed (against the baseline of 15 January 2024).  Over the past year, 4,618 invoices totalling over £1.1 million had been cleared.

Table 1 of the report provided a detailed analysis of the remaining debt and also showed that 83 % of the outstanding balance was attributed to specific reasons for non-payment, while 17% was actively being pursued by the relevant service areas for resolution.

Table 2 of the report provided the overall outstanding debt as of 31 December 2024, categorised by age, with monthly comparisons over the past year. The final column reflected payments expected within 30 days, which were not considered overdue. The data indicated reductions across all age categories, especially in debts older than 365 days. Monthly fluctuations in debt levels were expected, but consistent reductions showed the impact of proactive recovery efforts.

It was added that the risks remained consistent with previous updates, including a potential resurgence of aged debt, staff capacity challenges, and system/process issues. The Project Team was actively managing these through increased permanent staffing in the Legal and Accounts Receivable teams and implementing new processes with external partners. Ongoing close monitoring of performance and risks would continue to prevent a resurgence in aged debt.

It was concluded that significant progress had been made in the Accounts Receivable (AR) function, with a 74% reduction in invoices aged over 365 days and a 50% reduction in total balance owed, clearing over £1.1 million in the past year. Of 28 audit recommendations, 26 were complete, with the remaining two on track for June 2025. Debt levels had decreased across all age categories and key risks were being managed through staffing increases and process improvements. Ongoing collaborative efforts continued to support the Council’s financial health and proactive debt recovery.

The Chair and Committee congratulated all involved on the progress made, which was a huge amount of work and a significant achievement.

The Committee discussed the following: -

·       £38m that stood out in September 2024 for 0-29 day debt. The Head of Service would clarify the position.

·       The impact of Oracle Fusion on the debt recovery process.

·       Regular ongoing discussions between Accounts Receivable and Legal in order to keep on top of matters.

·       Staffing levels within the Accounts Receivable / Project Teams, the risks going forward and preventing future backlogs.

For information.

Lee Wenham, Head of Communications and Marketing provided a verbal update regarding the progress being made in developing the Inphase Risk Management Application.

It was outlined that good progress had been made, the app had been largely built and the information on the risk register had been imported across.  A development day was scheduled for 23 January to outline any outstanding issues and it would be rolled-out to users from around mid-February and guidance circulated to users.

It was added that if the project progressed as planned, the 2024-25 Quarter 3 Risk Report would be produced by the Inphase system.

It was confirmed that the Inphase system would accommodate issue and risk management and was based on the risk management framework, which would be circulated to the Committee in due course.

The Chair added that a short training session on the new system would provide the Committee with a better insight into the system.

For information.

Gareth Jones, Audit Wales presented the Financial Sustainability of Local Government Report.

It was explained that Audit Wales looked at the financial sustainability of each of the 22 councils in Wales, focussing upon the following: -

·       The strategies to councils’ long-term financial sustainability.

·       Councils’ understanding of their financial position.

·       Council’s reporting arrangements to support regular oversight of their financial sustainability.

It was added that the report provided some context on the financial challenges faced by councils and summarised the key findings from the work.  It also reflected upon what this meant for the future financial sustainability of

councils and provided some reflections on how councils’ future financial

sustainability could be strengthened.

The report provided the key facts; key messages; detailed report, including practice examples, long-term planning, national findings, the UK wider context, local report findings and long-term financial sustainability of councils.

It was concluded that the current long-term future of councils was financially unsustainable if changes were not introduced.

The Chair highlighted examples of good practice within the report and would discuss further with the Director of Corporate Services to potentially improve the efficiency of the Committee.

The Committee discussed the following: -

·       Use of reserves by councils. It was stressed that the report was national and outlined the position throughout Wales.

·       Weaknesses in the delivery and monitoring of the savings programme at Swansea Council and being provided with an update on any improvements that could be made in the delivery of savings in order to provide the Committee with assurance.

·       CIPFA roadmap, particularly avoiding a Section 114 notice. The Director of Finance confirmed that he was alert at all times regarding the wider financial position of the Authority, which was closely monitored by Cabinet and Scrutiny. He added that the risks faced by the Authority were continually assessed.

For information.

The Revenue and Capital Budget Monitoring - 2nd Quarter 2024/25 Report was presented ‘for information’.

The Director of Finance highlighted that the report had been approved by Cabinet and had been discussed at Scrutiny.  He reiterated his concern at the overspends and explained the budget monitoring and scrutiny processes being followed.

The Chair noted that consideration of service redesign or deep dives to look at the efficiency of service area, be considered in respect of overspends. She also requested that monitoring of savings process be reviewed to establish if it is effective.

The Committee asked questions regarding the following: -

·       Capital expenditure on major schemes to 30 September 2024 (where spend greater than £250k) – whether the schemes provided income generation and benefits for the wider community. It was explained that whilst some schemes would provide income, the majority were completed for local public good and would benefit the wider community.

·       Tracking of qualitative / quantitative benefits.

For information.

A summary of the Annual Review of Performance 2023/24 was provided ‘for information’.

At the Committee meeting on 16 October a full draft of the Annual Review had been presented and the Committee had discussed the following:

·       The different format of the report which was welcomed.

·       The positive development of including an executive summary in the report but the need to ensure it captured the key challenges facing the council to ensure balance.

·       Whilst there was good evidence included, there was a need to review the detail to ensure consistency / flow / accuracy due to several authors contributing to the report. The need to include details of measuring carbon reduction.

At that meeting the Chair had commented that the report was very positive, but she would like to see more information on the challenges faced and areas of improvement, included in the report.

Concern was raised that the Committee’s comments had not been taken into account in the main body of this summary report.  Officers agreed to provide Committee members with a copy of the final full report which reflected their comments and was approved by the Council on 5 December 2024.

For information.

The Quarter 2 Performance Monitoring Report 2024-25 was reported for information.

For information.

The Chair requested the following: -

·       Once the Management of Absence Policy is approved, it be included in the Committee’s training programme.

·       Annual Review of Performance 2023-24 – The item, subject to receipt of the full report, be kept open.

For information.

The Governance & Audit Committee Work Plan was reported ‘for information’.  The Chair also noted the Scrutiny Programme Committee Work Plan and stated that both work plans should be monitored closely to avoid duplication of work.