Agenda item

The Committee considered a report of the Corporate Director, Resources which highlighted the strategic risks facing the Council and that gave an insight into the work carried out by the Corporate Risk Management Group during July to September 2016 (for copy see file of Minutes).

The Risk, Insurance and Governance Manager informed the Committee that there were 22 strategic risks and no new significant risks had been added.

Councillor Temple was concerned that the report did not show a real reflection of risks, but rather the risks that departments chose to disclose.  He could not believe that the only risk to Children and Young People’s Services was ‘failure to protect child from death or serious harm’.  He felt that the serious risk to children’s education through the teaching assistant’s dispute should also be included.  He highlighted other risks that he felt should be included on the register, such as the shared loan to equity of the Cricket Club and price inflation risks.  He suggested that all strategic risks be listed in the report.

The Risk, Insurance and Governance Manager explained that inflation risks were emerging and therefore difficult to assess.  Risks were reported above a certain criteria scoring level.  Some risks may appear quite large to an individual but they were assessed in terms of the organisational risk.  Mechanisms were in place to assess internal risks and they went through a moderating process via Corporate Management Team.  He was unable to comment on individual risks as they had come from the Service.

The Chairman suggested that this was reported to the Corporate Director of Resources with a response to be circulated to the Committee.

Councillor C Carr referred to the risks associated to Estates in terms of selling land as could often be delayed once a developer carried out their own site investigations.  The Head of Assets and Planning assured Members that a three year programme was in place and that each sale was monitored.  Sites could be brought forward for development and the service continued to deliver on capital receipts.  He assured Members that the programme was monitored on a monthly basis and reviewed annually.

Moving on, the Finance Manager for Capital and Revenue, informed Members that work had been ongoing with the External Auditors regarding the Durham County Cricket Club.  The Statement of Accounts was signed off in September and prior to that meetings took with place with James Collins and Cameron Waddell of Mazars to ascertain if we needed to make a provision in the accounts of bad debts.  It was agreed that as we did not know the debt and as we were not the only creditors therefore a degree of confidentiality applied and we could not include this.  Since the signing off of the accounts, a deal had been made whereby the Council would receive £3.74m of redeemable shares.  The balance sheet would not change and the share valuation going forward would be crucial.  Any profit would be paid out as dividends and the County Council would have the first option on those.  The deal also protected the Cricket Club.  External Audit and the Treasury Management advisor would work with the Council’s Finance team to continually monitor the situation.  The Corporate Director of Resources and Chief Executive would meet with the Cricket Club to finalise the deal and further details would be reported back to Members.

Councillor C Carr was advised that the Cricket Club had not missed any loan payments and the repayment of the loan had been put on hold.

Mr Robinson appreciated the information provided but was concerned that we had any value on shareholdings.  He said that a realistic valuation was needed and that evidence should be presented to the Committee of what the Cricket Club can offer to the Council.

Mr Kirkham, Mazars said that external audit would challenge the accounts but that the point in which they needed to be satisfied would be carried out at the year end.

Mr Robinson was assured that information would be given to Members between now and the end of March on the level of the dividend from the Cricket Club.  He stated that he had no complaint about the deal itself but was concerned about how it would be presented within the accounts.

The Head of Financial and HR Services advised that over the next few months a business plan would be developed taking on board the new Chairman’s views.  The robustness of this plan would have an impact on the valuation of the shares.  He assured Members that the County would have the full protection of payments and would see an impact from the shares.

The Finance Manager for Capital and Revenue commented that the environmental impact and economy as a whole would benefit from the deal and that it was key to have the correct business plan in place.

Councillor Davinson said that there should be a clearer picture of where things stand by the end of March.  He felt that membership would increase as people would stand behind the club and that sponsors would want to stay with the club.

Resolved:

That the report provides assurance that strategic risks were being effectively managed within the risk management framework across the Council.