Report of the Head of Strategic Finance

This report informs the Committee of the Strategic Risk Register which was reviewed and approved by Leadership Team on 6 March 2012.

The Committee received a report of the Head of Strategic Finance which informed Members about the Strategic Risk Register.  The register had been reviewed and approved by the Leadership Team on 6 March 2012. 

The Head of Strategic Finance explained that the register set out the strategic risks for the Council and not all services’ risks.  He suggested Members should not be surprised if a risk rating began as red; this denoted a high risk.  If it were green, low risk, then it should probably not be on the register.  The register set out the controls which had been put in place to reduce risk.  The register was kept under review as it was a changing situation.

Members raised concerns about the risks associated with the Health Campus.  One Member asked that Audit Committee was kept informed and received regular reports.  It was noted that the longer projects took the higher the risk that contractors’ costs increased.  Another question raised was whether a change in government would affect the project.

The Head of Strategic Finance informed the Committee that the Major Projects Board received regular reports about the Health Campus.  The majority of political parties nationally inferred that more investment was needed in infrastructure projects. 

Following a question from the External Auditor regarding item 20 on the list, Business Rates Retention and Local Council Tax Benefits schemes, the Head of Strategic Finance advised that the first report related to this subject would be presented to Cabinet on 20 March.  The issue was whether there would be a countywide scheme.  The Council could decide not to pass on any loss to the client.  The Cabinet report suggested a way forward.  The maximum risk was a loss of £120,000 to the Council (but a greater risk to the County Council). 

The Portfolio Holder for Finance and Shared Services added that some local authorities had been trying to get a countywide agreement.  This would mean that when clients moved from one Hertfordshire authority to another their benefit concessions would not change.  The concessions offered needed to be considered particularly as the client base was different in each district. 

Further to a question about the worst case scenario, the Head of Strategic Finance replied that the Council did not know the bottom line for some of the schemes, including the Health Campus and Charter Place.  It was necessary that the Council was satisfied.  In respect of the Health Campus project the Council owned 60% of the land and if the scheme did not proceed the Council could sell the land.  This project, however, involved reputable companies.  The Council would have a better idea in three or four months time. 

The reference to the Olympics and Paralympics was to ensure that there was a friendly experience for those visitors staying in and around Watford. 

One Member referred to the service delivery section and that it appeared to refer to cuts rather than income generation.

The Portfolio Holder responded the opportunity for a growth in income was limited.  The major generation for income was tied into property and retail lettings.  There was a limited growth in this area due to the current economic climate.  It was therefore necessary to look at a reduced cost base.

RESOLVED –

that the Strategic Risk Register at Appendix 1 of the report be approved.