Agenda item

The Divisional Director – Risk and Assurance Services reminded Members that the Committee had approved the Annual Governance Statement 2010/11 at the meeting of 28 June 2011.

The Group Manager (Audit/Risk) presented the report. He summarised the annual governance process and commented on progress with the significant issues identified in last year’s Annual Governance Statement 2010/11. These were listed in Appendix 2.

Members discussed the second significant issue, the loss of a judicial review of a planning enforcement decision, from which the Council incurred damages and costs. Councillor Curran (Chair of the Development Control Committee) explained the process followed by the Development Control Committee in reaching, and subsequently reversing, its decision. He said that main ground of the judicial review had been the lack of an environmental impact assessment (EIA). The Committee had reversed its decision after receiving legal advice that its original decision had been unsound. He thought that the local planning authority had become more risk averse because of this case. Councillor Sandry wondered whether the omission of something as basic as an EIA suggested that the planning process was not robust enough. Councillor Curran acknowledged that there had been an error, but efforts were being made to put a process in place to ensure it did not happen again. Councillor Macrae thought this was an old case and expressed concern that the governance process might become retrospective rather than forward-looking. The Divisional Director – Risk and Assurance Services replied that while the risk management process was about the here and now, there was inevitably a retrospective element in statutory and legal processes. Councillor Ward noted that a QC had been engaged to deal with this case, which must also be a substantial cost to the Council. He was concerned that three planning cases in the space of eighteen months had been subject to legal action, and wondered whether there were issues in the Planning Service that merited investigation. Councillor Simmons felt that the Council had historically been considered ineffective in planning enforcement. He suggested that a QC was necessary if the Council was to defend a legal action robustly. Councillor Curran commented that there were many hazards and pitfalls in the planning system; planning applications had to be determined, but there was the risk of costs if the applicant appealed and if objectors sought judicial review.

The Head of Human Resources commented on three payroll issues, which though not identified as significant, were considered by the Committee at its June 2011 meeting to require monitoring.

1. HMRC returns. The Council’s returns had been challenged and there had been the possibility of a penalty for non-payment. The issue had been largely resolved, and it now appeared that HMRC might owe the Council money. However, there were ongoing difficulties with reconciliation between the payroll software used by Mouchel and the Council’s ledger. The errors were not consistent, with Mouchel’s software sometimes reporting over and sometimes under the true figure. This situation has existed for some years.

2. Teacher’s Pension Fund Return (TR17). A number of schools used a neighbouring local authority as their payroll provider. This provider had not been helpful in allowing access to their records to resolve the problem. It was now believed that the returns were correct.

3. Avon Pension Fund.  Errors had been identified in employee contributions. The total sum was not large, but a large number of employees were affected. He understood that the issue had now been resolved.

The Head of Human Resources said that Mouchel had appointed a new and more experienced payroll manager. There would be a need for the Council to invest in new payroll software. A decision would also have to be taken about the future of payroll provision in 2013 when Mouchel’s current contract ended. In relation to future HMRC returns, he had said that he would be initially prepared to pay for a maximum of five days reconciliation work. John Barker said that as several partners were involved in this issue, there needed to clear accountability. If the Committee was being asked to support investment in new software, then there should be a report to the next meeting on what the unresolved issues were and who was accountable for their resolution. The Head of Human Resources responded that the improvement plan agreed with Mouchel was due to be refreshed and could be reported. However following discussion it was proposed that a report should only come back to the committee if actions were not happening as agreed or errors were still occurring.

RESOLVED

1. To note action taken to date in relation to the ‘Significant Issues’ recorded in the Annual Governance Statement Review 2010/11.

2. To note the process and timetable for the Annual Governance Review 2011/12.

3. To support the planned investment in improving the effectiveness of the Payroll Client.