Public Document Pack
Finance Committee
Date: TUESDAY, 26 JUNE 201 2 Time: 1.45pm Venue: COMMITTEE ROOM - 2ND FLOOR WEST WING, GUILDHALL Members: Roger Chadwick (Chairman) Alderman Sir Paul Judge Ray Catt (Deputy Chairman) Deputy Alastair King George Abrahams Anthony Llewelyn-Davies Deputy John Barker Deputy Edward Lord Alderman Sir Michael Bear Jeremy Mayhew Nigel Challis Deputy Janet Owen Deputy Dennis Cotgrove Henry Pollard Nicolas Cressey Alderman Neil Redcliffe Simon Duckworth Matthew Richardson Deputy Anthony Eskenzi John Scott Alderman Jeffrey Evans Ian Seaton Deputy Robin Eve Deputy Dr Giles Shilson Kevin Everett Deputy Sir Michael Snyder Deputy Revd Stephen Haines David Thompson Deputy Pauline Halliday John Tomlinson Brian Harris Mark Boleat (Ex-Officio Member) Tom Hoffman Stuart Fraser (Ex-Officio Member) Wendy Hyde Deputy Michael Cassidy (Ex-Officio Member)
Enquiries: Claire Sherer tel. no.: 020 7332 1971 [email protected]
Lunch will be served for Members in Guildhall Club at 1pm
Chris Duffield Town Clerk and Chief Executive AGENDA
Part 1 - Public Agenda
1. APOLOGIES
2. DECLARATIONS BY MEMB ERS OF ANY PERSONAL OR PREJUDICIAL INTERESTS
3. MINUTES OF THE PREVI OUS MEETING To agree the public minutes and non-public summary of the meeting held on 29 May 2012. For Decision (Pages 1 - 6)
4. MINUTES OF THE EFFIC IENCY AND PERFORMANC E SUB -COMMITTEE To note the minutes of the meeting held on 18 May 2012. For Information (Pages 7 - 10)
5. MINUTES OF THE FINAN CE GRANTS SUB -COMMITTEE To note the minutes of the meeting held on 29 May 2012. For Information (Pages 11 - 14)
6. MINUTES OF THE INFOR MATION SYSTEMS SUB -COMMITTEE To note the minutes of the meeting held on 17 May 2012. For Information (Pages 15 - 18)
7. REVIEW OF TH E GOVERNANCE ARRANGE MENTS IMPLEMENTED IN 2011 Report of the Town Clerk. For Decision (Pages 19 - 30)
8. LOCAL AND SME PROCUR EMENT POLICY Joint report of the Chamberlain and Director of Economic Development. For Decision (Pages 31 - 38)
9. PROCUREMENT & PROCUR E TO PAY (PP2P) UPDA TE Report of the Chamberlain. For Decision (Pages 39 - 56)
10. BUDGET MONITORING RE PORT Report of the Chamberlain. For Information (Withdrawn)
11. CHAMBERLAIN 'S DEPARTMENTAL RISK MANAGEMENT UPDATE Report of the Chamberlain. For Information (Pages 57 - 90)
12. CITY OF LONDON BAD D EBT PROVISION 2011 -12 Report of the Chamberlain. For Decision (Pages 91 - 100)
13. HOLBORN CIRCU S AREA ENHANCEMENT S CHEME Report of the Director of the Built Environment. For Decision (Pages 101 - 130)
14. SPITALFIELDS MUSIC G RANT 2013, 2014, 201 5 Report of the Director, Culture, Heritage & Libraries. For Decision (Pages 131 - 136)
15. DECISIONS TAKEN UNDE R DELEGATED AUTHORIT Y AND URGENCY PROCEDURES The Town Clerk to be heard.
16. QUESTIONS ON MATTERS RELATING TO THE WORK OF THE COMMITTEE
17. ANY OTHER BUSINESS T HAT THE CHAIRMAN CON SIDE RS URGENT
18. EXCLUSION OF THE PUB LIC MOTION - That under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting for the following items on the grounds that they involve the likely disclosure of exempt information as defined in Part I of the Schedule 12A of the Local Government Act.
Item No. Paragraph(s) in Schedule 12A 19 - 22 3 23 - 24 -
Part 2 - Non-Public Agenda
19. NON -PUBLIC MINUTES OF TH E PREVIOUS MEETING To agree the non-public minutes of the meeting held on 29 May 2012. For Decision (Pages 137 - 140)
20. GIFT FOR THE DIAMOND JUBILEE OF THE CORON ATION IN 2013 Report of the Remembrancer and the Private Secretary and Chief of Staff, Mansion House. For Decision (Pages 141 - 144)
21. EXTENSION OF CURRENT FLEXIBLE ENERGY PROC UREMENT ARRANGEMENT (CS 380/11) Report of the City Surveyor. For Decision (Pages 145 - 156)
22. NON -PUBLIC DECISIONS TAK EN UNDER DELEGATED A UTHORITY AND URGENCY PROCEDURES Report of the Town Clerk. For Information (Pages 157 - 158)
23. NON -PUBLIC QUESTIONS ON MATTERS RELATING TO THE WORK OF THE COMMITTEE
24. ANY OTHER BUSINESS T HAT THE CHAIRMAN CON SIDERS URGENT AND WHICH THE COMMITTEE AGREE SHOULD BE CONSIDERED WHILST THE PUBLIC ARE EXCLUDED
Agenda Item 3
FINANCE COMMITTEE
Tuesday, 29 May 2012
Minutes of the meeting of the Finance Committee held in Committee Rooms 3 & 4 - 2nd Floor, West Wing, Guildhall on Tuesday, 29 May 2012 at 1.45pm
Present
Members: Ray Catt (Deputy Chairman) Anthony Llewelyn-Davies Deputy Dennis Cotgrove Deputy Edward Lord Nicolas Cressey Jeremy Mayhew Simon Duckworth Henry Pollard Deputy Anthony Eskenzi Alderman Neil Redcliffe Deputy Robin Eve Matthew Richardson Kevin Everett John Scott Deputy Pauline Halliday Ian Seaton Brian Harris Deputy Dr Giles Shilson Tom Hoffman John Tomlinson Wendy Hyde
Officers: Susan Attard - Deputy Town Clerk Daniel Hooper - Town Clerk's Department Katie Odling - Town Clerk's Department Claire Sherer - Town Clerk's Department Chris Bilsland - Chamberlain Caroline Al-Beyerty - Chamberlain's Department Suzanne Jones - Chamberlain's Department Michael Cogher - Comptroller and City Solicitor Peter Bennett - City Surveyor Philip Everett - Director of Department of the Built Environment David Smith - Director of Markets and Consumer Protection Sue Ireland - Director of Open Spaces
1. APOLOGIES Apologies for absence were received from the Chairman Roger Chadwick, George Abrahams, Deputy John Barker, Alderman Sir Michael Bear, Nigel Challis, Deputy Reverend Stephen Haines, Deputy Janet Owen, Deputy Sir Michael Snyder and Mark Boleat.
2. DECLARATIONS BY MEMBERS OF ANY PERSONAL AND PREJUDICIAL INTERESTS There were no declarations.
Page 1 3. MINUTES OF THE PREVIOUS MEETING
RESOLVED: That the public minutes of the meeting held on 1 May 2012 be approved.
4. APPOINTMENT OF MEMBERS TO THE INFORMATION SYSTEMS SUB COMMITTEE Consideration was given to a report of the Town Clerk which set out the expressions of interest received from Members of the Court of Common Council to serve on the Information Systems Sub Committee and sought consideration for the appointment of 5 additional Members to the Sub Committee.
There being 6 members indicating a willingness to serve, a ballot was undertaken and the results of this ballot would be reported under item 14 on the Agenda.
RESOLVED : That the results of the ballot be announced under Item 14 on the Agenda.
5. CITY'S CASH CONTINGENCY FUND FOR NATIONAL AND INTERNATIONAL DISASTERS Consideration was given to a report of the Town Clerk which informed Members about the City’s Cash Contingency Fund for National and International Disasters and the approach taken to choosing which appeals receive funding from it.
Further to a discussion, the following amendment was made to the Disaster Relief Donations Guidelines (Appendix A to the report) was agreed : -
“2. The City Corporation maintains a flexible approach to grant giving for humanitarian aid in terms of assisting aid agencies or appeals although it will respond primarily to appeals launched by the British Red Cross.”
This would enable the British Red Cross to be assessed on its own merits.
RESOLVED : That the report be approved subject to the amendment to the Disaster Relief Donations Guidelines.
6. PROVISIONAL OUTTURN 2011/12 Consideration was given to a report of the Chamberlain which reported that the 2011/12 provisional outturn was an overall better than budget position of £32.7m comprising £17.1m, £12.3m and £3.3m for City Fund, City’s Cash and Bridge House Estates respectively. The report analysed each of these figures by committee and provided the key reasons for variations.
Members noted that Deloitte would commence its audit on 28 May 2012, initially concentrating on Bridge House Estates and the Sundry Trusts before including City Fund and City’s Cash from 11 June 2012. The
Page 2 audited financial statements would be submitted to the Audit and Risk Management and Finance Committees in July 2012 as normal.
A request was made to ensure that all future reports were both in plain English and descriptive to which the Chamberlain agreed to take these useful comments on board. The presentation of the accounts would also be looked at.
RESOLVED : That the provisional revenue outturn position for the year ended 31 March 2012 be noted.
7. PROCUREMENT & PROCURE TO PAY (PP2P) UPDATE Consideration was given to a report of the Chamberlain which provided an update on the progress of Year 2 of the PP2P programme. The last report focussed on the milestones for year 2 which have been updated in Appendix A. The report also set out the way in which the savings were scrutinised to allow for budget adjustments and the payment of fees to Accenture.
Following a brief discussion, it was agreed that the Comptroller and City Solicitor should report back on all Access Agreements which had been signed off.
Change Tracking Survey - Members were informed that the results of the survey held in November 2012 would be reported in a report to a future Committee meeting.
RESOLVED : That: - • the progress with respect to the work for Year 2 of the project be noted; and • the Comptroller and City Solicitor be authorised to sign Access Agreements following approval of the terms by the Chamberlain including giving an indemnity where insisted on by the Lead Authority and that these be reported back to the Committee.
8. UPDATE ON THE PROGRESS OF LEGISLATION AFFECTING LOCAL GOVERNMENT FINANCE Consideration was given to a report of the Chamberlain which advised Members on the progress of the draft legislation and the likely timescales for receiving further consultations.
RESOLVED : That the contents of the report be noted and further papers be presented when more consultations had been issued.
9. CARBON REDUCTION COMMITMENT (CRC) APPOINTMENT OF ACCOUNT REPRESENTATIVES Consideration was given to a joint report of the Chamberlain and City Surveyor which updated Members on the Carbon Reduction Commitment carbon allowance scheme.
Page 3 The report reiterated the financial impacts to the City of London Corporation and the necessity to appoint Account Representatives for the purchase and exchange of allowances.
RESOLVED : That it be noted that the following Senior officers in the Chamberlain’s Department were to be appointed as Account Representatives for the purpose of purchasing the City’s carbon allowances estimated to cost in the region of £550,000 – £600,000 a year: - • The Financial Services Director; • The Business Support Director; and • The Corporate Treasurer.
10. DEPARTMENT OF THE BUILT ENVIRONMENT - UNIDENTIFIED SAVINGS 12-13 Consideration was given to a joint report of the Chamberlain and the Director of the Built Environment which provided details of the budgetary resource pressures which had arisen from the effects of the economic downturn on building control income and from changes to the building control charging regime. This has resulted in unidentified savings for 2012/13 revenue estimates of £320,000 still to be found after the 12.5% savings had already been taken.
There was further pressure from the impact of the Agency Workers Regulations (AWR) 2010 on the costs of the public convenience service resulting in an increase in staffing costs of £180,000 per annum.
The Director was therefore seeking Members agreement to utilise the balance on the Landfill Allowance Trading Scheme Reserve (LATS) to assist in meeting the immediate shortfall in his resources; the balance no longer being required for its original purpose.
RESOLVED : - That, a) the pressures on the Director’s local risk resources for 2012/13 be noted; and
b) the recommendation of the Port Health Committee held on 1 May 2012 to agree the funds available in the LATS reserve may be used in 2012/13 and any remaining balance in 2013/14 to ease the pressure on the Director’s budgetary resources be endorsed.
11. EPPING FOREST - BRANCHING OUT PROJECT (HERITAGE LOTTERY FUND) - PROGRESS UPDATE REPORT Consideration was given to a report of the Superintendent of Epping Forest which provided an updated budget and progress report on the City’s £6.83 million Branching Out project, which began in August 2009 with a grant of £4.76 million from Heritage Lottery Fund.
RESOLVED : That: - a) the budget variances detailed in Table 2 and the appendices to the report be approved; and
Page 4 b) £209,195 of contingency funds be allocated to cover the increase in costs for the Coach House and Butler’s Retreat.
12. DECISIONS TAKEN UNDER DELEGATED AUTHORITY AND URGENCY PROCEDURES The Town Clerk reported that no decisions had been taken under Urgency Procedures since the last meeting of this Committee.
13. QUESTIONS ON MATTERS RELATING TO THE WORK OF THE COMMITTEE Feedback on the new format of Agendas following the implementation of the new Committee Management Software was provided and it was agreed that these comments would be fed back to the Town Clerk’s department following the meeting.
14. ANY OTHER BUSINESS THAT THE CHAIRMAN CONSIDERS URGENT
Appointment of Members to the Information Systems Sub Committee - Pursuant to Item 4, the Deputy Town Clerk announced the results of the ballot for the appointment of Members to the Information Systems Sub Committee.
RESOLVED : That the following Members be appointed to the Information Systems Sub Committee : - • Deputy Douglas Barrow • John Chapman • Mrs Sylvia Moys • Chris Punter; and • Hugh Morris
15. EXCLUSION OF THE PUBLIC RESOLVED : - That under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting for the following items on the grounds that they involve the likely disclosure of exempt information as defined in Part I of the Schedule 12A of the Local Government Act.
16. NON-PUBLIC MINUTES OF THE PREVIOUS MEETING The non-public minutes of the meeting held on 1 May 2012, were considered.
RECEIVED.
17. PROCUREMENT & PROCURE TO PAY - MINOR WORKS Consideration was given to a joint report of the Chamberlain and City Surveyor regarding Procurement and Procure to Pay – Minor Works.
RECEIVED.
18. CAXTON'S POLYCHRONICON The Town Clerk reported that this report had been withdrawn from the Agenda.
Page 5 19. SMITHFIELD MARKET LEASE NEGOTIATIONS - LITIGATION FEES IN RELATION TO EXTERNAL SOLICITORS AND CHARTERED SURVEYORS Consideration was given to a report of the Director of Markets and Consumer Protection regarding Smithfield Market Lease negotiations.
RECEIVED.
20. NON-PUBLIC DECISIONS TAKEN UNDER DELEGATED AUTHORITY AND URGENCY PROCEDURES The Town Clerk reported that no non-public decisions had been taken under Urgency Procedures since the last meeting of this Committee.
21. NON-PUBLIC QUESTIONS ON MATTERS RELATING TO THE WORK OF THE COMMITTEE There were no questions from Members.
22. ANY OTHER BUSINESS THAT THE CHAIRMAN CONSIDERS URGENT AND WHICH THE COMMITTEE AGREE SHOULD BE CONSIDERED WHILST THE PUBLIC ARE EXCLUDED Two items of urgent business were considered: 1) An urgent report in respect of 28 Great Tower Street, EC3 – Gateway 3 Outline Options Appraisal. 2) Verbal update from the Comptroller and City Solicitor regarding the Corporations Highways Maintenance Contract. RECEIVED.
The meeting ended at 3.00p.m.
Chairman
Contact Officer: Katie Odling tel. no.: 020 7332 3414 [email protected]
Page 6 Agenda Item 4
EFFICIENCY AND PERFORMANCE SUB COMMITTEE OF THE FINANCE COMMITTEE
Friday, 18 May 2012
Minutes of the meeting of the Efficiency and Performance Sub Committee of the Finance Committee held at Committee Rooms 3 & 4 - 2nd Floor, West Wing, Guildhall on Friday, 18 May 2012 at 2.15 pm
Present
Members: Roger Chadwick (Chairman) Ray Catt (Deputy Chairman) Nigel Challis Deputy Anthony Eskenzi Deputy Revd Stephen Haines Anthony Llewelyn-Davies Jeremy Mayhew
Officers: Susan Attard - Deputy Town Clerk Neil Davies - Town Clerk’s Department Claire Sherer - Town Clerk’s Department Chris Bilsland - Chamberlain Suzanne Jones - Chamberlain’s Department Paul Nagle - Chamberlain’s Department
Part 1 – Public Agenda
1. APOLOGIES Apologies for absence were received from Deputy Edward Lord, Deputy Dr Giles Shilson and John Tomlinson.
2. DECLARATIONS BY MEMBERS OF ANY PERSONAL AND PREJUDICIAL INTERESTS There were no declarations.
3. MINUTES OF THE PREVIOUS MEETING
MATTERS ARISING The Deputy Town Clerk highlighted the action in relation to improving the use of the City Corporation’s CRM database and advised Members that work was continuing although further work was required on joining up the departmental diaries to create a central Corporation diary.
RESOLVED: That the minutes of the meeting held on 16 March 2012 be approved as an accurate record.
Page 7 4. FUTURE WORK PROGRAMME The Sub Committee were asked to consider and endorse the proposals for its future work programme. Members were broadly happy with the proposals, so long as the programme was flexible, allowing for matters to be added or removed as necessary. In particular, Members endorsed the new focus on wider City Corporation issues (rather than departmental reporting) so long as they reserved the right to review individual departments as and when particular issues arose. The Chamberlain agreed to report on possible trigger points and metrics which could be used by the Sub Committee to decide whether a department should be reviewed in detail.
The Deputy Chairman requested that a list of all the follow up action items from all the previous Departmental reviews held during the period March 2011 - March 2012, together with an update on all outstanding items, be provided to this Sub Committee at the next meeting.
RESOLVED: That:- (i) the list of proposed issues for further research (as set out in the report) be endorsed on the basis that it would be adapted as required; (ii) the Chamberlain would report on possible trigger points and metrics which could be used by the Sub Committee to decide whether a department should be reviewed in detail; and (iii) an update report on agreed actions from the departmental reviews be brought to the meeting on 12 July 2012.
5. TRANSFORMATION AND EFFICIENCY BOARDS UPDATE The Deputy Town Clerk advised Members that £150,000 efficiency savings within the HR department had been achieved as planned with a further £150,000 savings anticipated as part of phase 2. She also advised Members that the newly appointed Comptroller & City Solicitor had updated the Transformation Board on his experience of cross-borough working. Members requested that he be invited to the next meeting as they were interested in hearing this first hand.
Members were then advised of two minor corrections to the report in that the role of ‘HR Consultant’ (as at paragraphs 3 and 7 of the report) should have been ‘Head of Corporate HR’ and the subtotal (as at Table 3 on page 18 of the report) should be 17,279, not 177,279.
RESOLVED - The report was received and that the Comptroller & City Solicitor would be invited to the next Sub Committee meeting in order to provide an overview of his experience in cross-borough working.
6. INCOME GENERATION INITIATIVES The Sub Committee were advised of a new corporate project being set up to identify new income streams for the City Corporation. Members were supportive of the approach and were keen to receive updates on how the project progresses, particularly in sharing current good practice and embedding a more commercial approach within certain areas of the organisation.
Page 8 RESOLVED: That:- (i) A Corporate Project is to be initiated to work with Chief Officers to identify new income streams and identify priority areas to increase the level and scope of charges made for existing services; and (ii) Within this, consideration will be given to identifying services which, in accordance with the Local Government Act 2003, might require the establishment of trading accounts in order to exploit income generation opportunities.
7. QUESTIONS ON MATTERS RELATING TO THE WORK OF THE COMMITTEE There were no questions.
8. ANY OTHER BUSINESS THAT THE CHAIRMAN CONSIDERS URGENT There was no other business.
9. EXCLUSION OF THE PUBLIC MOTION - That under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting for the following items on the grounds that they involve the likely disclosure of exempt information as defined in Part I of the Schedule 12A of the Local Government Act.
Item No. Paragraph(s) in Schedule 12A 10 3 11 - 12 -
Part 2 – Non-Public Agenda
10. NON-PUBLIC MINUTES OF THE PREVIOUS MEETING
MATTERS ARISING The Chamberlain advised Members that the overall financial position of the Guildhall School of Music & Drama, including an update on fundraising activities for the new Milton Court building, would be brought to the next meeting on 12 July 2012.
RESOLVED: That the non-public minutes of the meeting held on 16 March 2012 be approved as an accurate record.
11. NON-PUBLIC QUESTIONS ON MATTERS RELATING TO THE WORK OF THE COMMITTEE There were no questions.
12. ANY OTHER BUSINESS THAT THE CHAIRMAN CONSIDERS URGENT AND WHICH THE COMMITTEE AGREE SHOULD BE CONSIDERED WHILST THE PUBLIC ARE EXCLUDED There was no other business.
Page 9 The meeting ended at 3.15 pm
Chairman
Contact Officer: Claire Sherer tel.no.: 020 7332 1971 Email: [email protected]
Page 10 Agenda Item 5
FINANCE GRANTS SUB (FINANCE) COMMITTEE Tuesday, 29 May 2012
Minutes of the meeting of the Finance Grants Sub (Finance) Committee held at Committee Room - 2nd Floor West Wing, Guildhall on Tuesday, 29 May 2012 at 12.00 noon.
Present
Members: Ray Catt (Deputy Chairman) Simon Duckworth Tom Hoffman Wendy Hyde Alderman Sir Paul Judge Anthony Llewelyn-Davies Deputy Edward Lord Jeremy Mayhew John Scott
Officers: Katie Odling - Town Clerk’s Department Ignacio Falcon - Town Clerk’s Department Barbara Riddell - Independent Grants Assessor Steven Reynolds - Chamberlain’s Department
1. APOLOGIES Apologies for absence were received from the Chairman Roger Chadwick and Nigel Challis.
2. DECLARATIONS BY MEMBERS OF ANY PERSONAL AND PREJUDICIAL INTERESTS IN RESPECT OF ITEMS ON THIS AGENDA Mrs Wendy Hyde declared a personal interest in respect of Item 8 due to being on the Court of the World Traders Livery Company and knowing the Vicar and Chaplain to the company - All Hallows and remained in the meeting during discussion and voting thereon.
3. MINUTES The Minutes of the meeting held on 15 November 2012, were confirmed and signed as a correct record.
4. GUIDELINES FOR GRANTS Members received the guidelines for the Finance Grants Scheme.
5. QUESTIONS ON MATTERS RELATING TO THE WORK OF THE COMMITTEE There were no questions.
Page 11 6. ANY OTHER BUSINESS THAT THE CHAIRMAN CONSIDERS URGENT There were no items of urgent business.
7. EXCLUSION OF THE PUBLIC RESOLVED : - That under Section 100A(4) of the Local Government Act 1972, the public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in Part 1 of schedule 12A of the Local Government Act.
8. GRANT APPLICATIONS The Sub Committee considered a report of the Chamberlain outlining applications for Finance Committee assistance received since the last meeting.
Reference was made to an earlier discussion in which the Chairman, with the support of the Sub-Committee, expressed his wish for the under-spend accumulated in the 2011/12 grants budget being carried forward to this year’s allocation. The Sub-Committee therefore agreed to put this recommendation to the Resource Allocation Sub-Committee.
RESOLVED : That:-
1. the following applications be agreed to and that they be funded from the City Educational Trust Fund:-
a) Dr Johnson’s House – A revenue grant commencing 2012/13 of £10,000 in year one, £8,750 in year two and £7,500 in year three, plus a one-off contribution to special projects of £10,000, on a match- funding basis.
b) The Engineering Development Trust - A one-off contribution of £19,250 towards the costs of two educational programmes for London children and young people, commencing 2012/13 subject to the involvement of the City’s Academies (Hackney, Islington and Southwark) if possible.
c) Freightliners City Farm – A one-off grant of £10,000 towards the cost of replacing and refurbishing animal housing.
2. the following applications be agreed to and that they be funded from City’s Cash:-
a) Flowers in the City – A one-year grant of £2,500 towards the running costs of the organisation, with any future grants being strictly subject to satisfactory monitoring on use of the funding and full accounts being submitted.
b) All Hallows by the Tower – A one-off grant of £4,000 towards the cost of repairing the church’s tower clock.
Page 12 3. the following applications be not agreed to:-
a) St Johns Church of England School of Epping – That no contribution be awarded towards the costs of portable computer equipment and support for student placements as this was not considered to be the most appropriate use of funds available.
b) The 1Click Charitable Trust : - That no contribution be awarded towards the cost of research and development of a touch screen computer for use by elderly people as this was not considered to be the most appropriate use of funds available.
c) SKMBCIC - That no contribution be awarded towards the costs of office equipment and transport costs as this was not considered to be the most appropriate use of funds available.
d) The Arab British Society - That no contribution be awarded towards the costs of the Film Festival as this was not considered to be the most appropriate use of funds available. However, the Sub- Committee would welcome a further request from the Arab British Society for alternative projects, particularly if they demonstrated a connection to City businesses.
4. The Resource Allocation Sub-Committee be recommended to agree to carry forward the under-spend accumulated in the 2011/12 grants budget to this year’s allocation.
9. ANALYSIS OF GRANTS AGREED FOR THE FIVE YEARS 2007/08 TO 2011/12 Consideration was given to a report of the Chamberlain which provided records of the grants that had been agreed by the Finance Committee, Policy & Resource Committee, the Sir William Coxen Trust Fund and the Combined Relief of Poverty Charity between April 2007 and March 2012. Excluded were grants agreed by the Economic Development Unit and The City Bridge Trust Committee. The schedule had been analysed between main categories of grant, for example, ‘buildings and grounds’, ‘culture and leisure’.
RECEIVED.
10. REPORTS FROM RECIPIENTS OF GRANTS Consideration was given to a report of the Town Clerk which provided Members with information on those organisations that had been awarded grants by the Finance Grants Sub Committee.
RECEIVED.
Page 13 11. QUESTIONS ON MATTERS RELATING TO THE WORK OF THE SUB- COMMITTEE There were no questions.
12. ANY OTHER BUSINESS THAT THE CHAIRMAN CONSIDERS URGENT AND WHICH THE COMMITTEE AGREE SHOULD BE CONSIDERED WHILST THE PUBLIC ARE EXCLUDED There were no items of urgent business.
The meeting ended at 12.55 pm
Chairman
Contact Officer: Katie Odling tel. no.: 020 7332 3414 katie .odling @cityoflondon.gov.uk
Page 14 Agenda Item 6
INFORMATION SYSTEMS SUB (FINANCE) COMMITTEE
Thursday, 17 May 2012
Minutes of the meeting of the Information Systems Sub (Finance) Committee held in Committee Rooms 3 & 4 - 2nd Floor, West Wing, Guildhall on Thursday, 17 May 2012 at 11.30am
Present
Members: Roger Chadwick (Chairman) Ray Catt (Deputy Chairman) Deputy Pauline Halliday John Tomlinson
Officers: Susan Attard - Deputy Town Clerk Lorraine Brook - Town Clerk's Department Daniel Hooper - Town Clerk's Department Claire Sherer - Town Clerk's Department Chris Bilsland - Chamberlain Graham Bell - Chief Information Officer Chris Anderson - Chamberlain's Department Colin Ashcroft - Chamberlain's Department Keith Harvey - Chamberlain's Department Neil Hocking - Chamberlain's Department Ellen Murphy - Chamberlain's Department John Saberi - Chamberlain's Department
By invitation: Deputy Doug Barrow - City of London Corporation Member Hugh Morris - City of London Corporation Member Sylvia Moys - City of London Corporation Member
Part 1 - Public Agenda
1. APOLOGIES No apologies were received.
2. DECLARATIONS BY MEMBERS OF ANY PERSONAL AND PREJUDICIAL INTERESTS There were no declarations.
3. MINUTES OF THE PREVIOUS MEETING
RESOLVED: That the public minutes and non-public summary of the meeting held on 17 January 2012 be approved as an accurate record.
Page 15 4. UPDATE ON IMPLEMENTATION OF COMMITTEE MANAGEMENT SOFTWARE (MODERN.GOV) The Sub Committee were advised that the City Corporation’s new Committee Management Software (Modern.Gov) was due to go live on 25 May 2012. A further upgrade would be installed on Members’ iPads to ensure integration with Outlook calendars at a later stage. In addition, drop-in sessions to assist Members with using the features would be arranged.
The Chairman welcomed the update and looked forward to the introduction of the software which would aid efficiency and could support a move towards reducing printing costs.
RECEIVED
5. VERBAL REPORT OF THE CHIEF INFORMATION OFFICER The Chairman welcomed Graham Bell, the new Chief Information Officer, and invited him to update the Sub Committee on his current strategy and priorities for the City Corporation. A particular priority was launching the new corporate website within the agreed timeframe as it had recently experienced some workflow issues. Members were assured that although the project was currently behind schedule, additional staff had now been deployed to address any slippage in the timetable and it was still intended that the website would be launched on time and within budget.
RECEIVED
6. SHAREPOINT OVERVIEW PRESENTATION The Chairman advised Members that the City Corporation had recently received an award from the Worldwide Government Solutions Forum 2012 in recognition of ‘delivering value to citizens, businesses, visitors and government workers’ and the Sub Committee were shown a short video which summarised the work that had gone in to achieving this award.
Members were then provided with an overview of ‘Sharepoint’, highlighting its key features which, amongst other things, would improve document management within the organisation.
RECEIVED
7. MEMBERS' EQUIPMENT REFRESH - UPDATE The Sub Committee considered a report of the Chamberlain which provided an update on Members’ equipment. For particular highlight was the proposal to issue iPads to all Members on request. This move had been supported by the fact that information was more secure on the iPad than in hard copy and could provide some cost savings if Members agreed to access Committee papers online instead of hard copy.
The Chamberlain advised Members that the rollout of iPads may not meet strict cost/benefit criteria at present but would bring other benefits such as more efficient working practices. He agreed to bring a report to the next Sub
Page 16 Committee meeting which set out both the potential for savings along with other less quantifiable benefits.
The Sub Committee discussed whether it would be useful to meet more regularly and it was agreed that it would be more effective to have informal meetings as an when particular matters arise.
RESOLVED – It be noted that:- (i) the security review of iPad, Blackberry and the Modern.Gov application currently underway is completed to confirm that there is appropriate protection in place for the sensitivity of the data to be stored on these devices; (ii) following the satisfactory outcome of this review, that iPads are added to the list of equipment available to Members and moved from a pilot into business as usual; and (iii) the savings from reduced printing enabled by these devices are used to offset their costs.
8. PROGRESS REPORT ON KEY PROJECTS The Sub Committee considered a progress report on the 18 key projects in the IS work programme and were advised of a revised list of 16 projects for 2012/13.
RECEIVED
9. QUESTIONS ON MATTERS RELATING TO THE WORK OF THE COMMITTEE There were no questions.
10. ANY OTHER BUSINESS THAT THE CHAIRMAN CONSIDERS URGENT There was no other business.
11. EXCLUSION OF THE PUBLIC MOTION - That under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting for the following items on the grounds that they involve the likely disclosure of exempt information as defined in Part I of the Schedule 12A of the Local Government Act.
Item No. Paragraph(s) in Schedule 12A 12 - 13 3 14 - 15 -
Part 2 - Non-Public Agenda
12. NON-PUBLIC MINUTES OF THE PREVIOUS MEETING
RESOLVED: That the non-public minutes of the meeting held on 17 January 2012 be approved as an accurate record.
Page 17 13. PP2P ICT CATEGORY BOARD REPORT ON PROGRESS AND PLANS The Sub Committee considered a report of the Chamberlain which updated them on the Procurement and Procure to Pay (PP2P) ICT Category Board.
RECEIVED
14. NON-PUBLIC QUESTIONS ON MATTERS RELATING TO THE WORK OF THE COMMITTEE There were no questions.
15. ANY OTHER BUSINESS THAT THE CHAIRMAN CONSIDERS URGENT AND WHICH THE COMMITTEE AGREE SHOULD BE CONSIDERED WHILST THE PUBLIC ARE EXCLUDED There was no other business.
The meeting ended at 1.15pm
Chairman
Contact Officer: Claire Sherer tel. no.: 020 7332 1971 [email protected]
Page 18 Agenda Item 7
Committee(s): Date(s): Finance Committee 26 June 2012 Subject: Public Review of the Governance Arrangements implemented in 2011 Report of: For Decision Town Clerk (on behalf of the Post Implementation Governance Review Working Party
Summary
The Court has agreed that a Working Party should be established to undertake a post-implementation review of the revised governance arrangements agreed in March 2011 after twelve months of their operation, to take stock of the new governance arrangements and how they are working. The purpose of this report, prepared on behalf of the Working Party, is to seek comments, if any, from each Committee on the governance arrangements introduced last year and the impact that they may have had on the operation of your Committee. Recommendation : It is recommended that this Committee considers whether it wishes to make any representations to the Working Party on the revised governance arrangements in so far as it affects this Committee.
Main Report
Background 1. The Court has agreed that a Working Party should be established to undertake a post-implementation review of the revised governance arrangements agreed in March 2011 after twelve months of their operation, to take stock of the new governance arrangements and how they are working.
2. For the purposes of clarification, this review is not, therefore, in relation to any new governance initiatives but is restricted to considering the operation and effectiveness of the revised arrangements implemented last year. A summary of the revised governance arrangements is contained Appendix A.
Views on the Governance Arrangements
3. The Working Party has agreed that the most effective and inclusive way of identifying whether there are any issues arising out of the operation of the revised arrangements is to seek the views of the various City Corporation Committees and all Members of the Court individually. This will enable Page 19 comments to be expressed in the context of the operation of the various Committees (including observations from non-City Corporation Members) and will also allow all Members to have their say individually and raise any points; all of which will help to inform the work of the Working Party.
4. The purpose of this report is to seek a view on whether any representations should be made to the Working Party on the revised governance arrangements in so far as they affect this Committee. All of the views expressed will be collated and submitted to a further meeting of the Working Party in September.
Background Papers: Summary of the revised governance arrangements agreed by the Court of Common Council in March 2011.
Appendix A: S ummary of the revised governance arrangements
Contact: Simon Murrells | [email protected] | 0207 332 1418
Page 20 Appendix A
Summary of the Governance Changes Implemented in April 2011
Set out below are the changes agreed by the Court on 3 March 2011 which have been in operation since 1 st April 2011.
A. The Court of Common Council A1. Not less nine Court meetings are now held each year (reduced from eleven) and a short spring recess now takes place on an annual basis. A2. At least two informal or private Member meetings (at which no decisions could be taken) are arranged each year. This is on the basis that they do not proceed if there is insufficient business; A3. Any Member, provided that he or she has the support of twenty other Members, can requisition a report and/or a decision of any of the City Corporation’s Committees for consideration and final decision by the Court of Common Council, provided that such action does not preclude a decision being taken and/or implemented that was necessary for legal reasons or for the efficient conduct of the City Corporation’s business; A4. Standing Order No.11 governing the conduct of debate in the Court of Common Council has been amended as follows: • in addition to the current arrangements governing debate, a further provision be made enabling all Members to speak on a second occasion for no longer than two minutes; and • should the mover of an amendment to a motion choose to speak for a second time (on the amendment), he or she shall be the penultimate speaker on the amendment (the mover of the original motion being the final speaker on the amendment). A5. Standing Orders governing the number of supplementary questions that may be asked has been amended so as to increase from two to three the number of other Members (ie not the Member asking the question) allowed to ask two supplementary questions provided that the supplementary questions arise naturally out of the original question and the answer to it; A6. Standing Orders have been amended so as to increase the time limit for putting and answering questions, including supplementary questions, from 30 minutes to 40 minutes; A7. To avoid the period allocated for asking and responding to questions being taken up with issues concerned with awards, prizes and memorials, a regular item is now placed on the summons for meetings of the Court to enable such matters to be reported upon in writing.
Page 21 B. Ward Committees B1. The Planning & Transportation, Port Health & Environmental Services, Markets, Finance and Community & Children’s Services Committees remain as Ward Committees. B2. All Wards are now able to choose whether or not to nominate a Member (or Members) to serve on Ward Committees rather than being obliged to nominate a Member (or Members) or ‘pair’ with another Ward; B3. Where there are vacant or unfilled places on a Ward Committee by virtue of a Ward not making a nomination(s), the vacant or unfilled place can be advertised to all Members and filled by the Court; B4. Any Ward having six or more Members can nominate up to two Members to a Ward Committee irrespective of whether a Ward has sides; B5. In addition to the Chairman of the Policy & Resources Committee, the Deputy Chairman of the Policy & Resources Committee is now an ex-officio Member of the Finance Committee. This complements the current arrangement whereby the Chairman and Deputy Chairman of the Finance Committee are ex-officio Members of the Policy & Resources Committee; B6. The remit of the Finance Committee has been widened to include performance monitoring and its terms of reference adjusted to reflect this. The performance monitoring was to be undertaken by the Estimates Working Party (EWP) or such body determined by the Finance Committee. (NB: Finance Committee subsequently agreed to dispense with EWP and created an Efficiency and Performance Sub-Committee to deal with this area of activity). B6a. In addition to the above, the constitution of the Finance Committee was amended by the Court on 8 September 2011 to include the Chairman and Deputy Chairman of the Investment Committee, creating a reciprocal arrangement between the Policy and Resources, Finance and Investment Committees (see F2 and J4 below). B7. All Wards that have 200 or more residents (based on the ward list) are able to nominate a maximum of two Members to the Community & Children’s Services Committee; under this arrangement, the current provision for four Members to be elected by the Court, at least two of whom shall represent the main four residential wards, was discontinued; and B8. The Community & Children’s Services Committee was asked to consider giving oversight of its housing management activities (excluding the Barbican Estate) to a sub-committee (with power to act) to enable greater focus in that area. (NB: The Community & Children’s Services Committee subsequently created the Housing Management Sub-Committee to oversee the City Corporation’s housing activities) .
C. Culture, Heritage and Libraries Committee C1. A new Culture, Heritage and Libraries Committee was established with responsibility for matters relating to culture, heritage, tourism and visitors
Page 22 including overseeing the development of policies and strategies in those areas. It also took on : • the responsibilities of the Libraries, Archives & Guildhall Art Gallery Committee which ceased to exist; • the various tourism, heritage and Benefices activities and responsibilities currently undertaken by the City Lands & Bridge House Estates Committee which also ceased to exist; • oversight of the City Corporation’s Visitor Strategy, the City of London Festival and the management of the City Information Centre from the Policy and Resources Committee; and • the management of Keats House from the Keats House Management Committee. A Consultative Committee should continue to operate although the detailed arrangements would be a matter for the Culture, Heritage and Libraries Committee to determine.
D. City Lands and Bridge House Estates Committee D1. The City Lands and Bridge House Estates (CLBHE) Committee ceased to exist and its work merged with the work of other Committees, such as the new Culture, Heritage and Libraries Committee and the new Investment Committee. Other elements of CLBHE Committee’s work was transferred to the Policy & Resources Committee and is managed by dedicated Sub- Committees. For example, the management of operational property is now undertaken by the Corporate Asset Sub-Committee and hospitality and Members’ privileges activities are undertaken by the Hospitality Working Party and the Members’ Privileges Sub-Committee both of which are chaired by the Chief Commoner. D2. Where previously the CLBHE Committee would have hosted an event of City Corporation hospitality, the Chief Commoner now oversees the detail for that event in line with parameters set by the Hospitality Working Party. The number of Members to comprise the host element is also determined by the Hospitality Working Party on the basis of a rota maintained by the Town Clerk, together with other Members with a special connection with or interest in the guest organisation.
E. The office of Chief Commoner E1. Candidates for the office of Chief Commoner are nominated by not less than 10 other Members and he or she is elected by the whole Court of Common Council from amongst the Common Councilmen (the expectation is that Aldermen will not vote in the election for Chief Commoner); E2. For 2011, the election of Chief Commoner was held in April and thereafter, the election is held in September of each year, prior to the successful candidate taking office in April, to enable a period of ‘lead-in’; E3. The ‘job description’ for the office of Chief Commoner was approved; E4. The Chief Commoner remains an ex-officio Member of the Policy and Resources Committee and is also Chairman of any sub-committees
Page 23 responsible for City of London Corporation hospitality and Members’ privileges; E5. Provision has been made in Standing Orders to enable the Chief Commoner to report on and speak to activities and responsibilities of the sub- committees referred to in E4 above in the Court of Common Council; and E6. The Chief Commoner is not able to be Chairman of any City of London Corporation committee with the exception of the sub-committees referred to above. However, as with other chairmanships, the Chief Commoner is able to continue an existing chairmanship until the next meeting of the relevant committee when a new chairman shall be elected.
F. Investment Committee F1. This new non-ward committee was established. The Investment Committee has responsibility for managing and overseeing the City Corporation’s property and non-property investments in accordance with approved strategies and policies; F2. The Investment Committee comprises 14 Members elected by the Court of Common Council, 8 Members appointed by the Policy and Resources Committee from amongst all Members of the Court, together with the Chairmen and Deputy Chairmen of the Policy and Resources and the Finance Committees in an ex-officio capacity but with voting rights; F3. The Investment Committee appoints and maintains two Boards, one for each investment area (property and non-property) for the purposes of detailed scrutiny and decision taking, with the Chairman of the Investment Committee is also able to be Chairman of one of the Boards; F4. The Boards are empowered to co-opt people with relevant expertise or experience, including non-Members of the Court, to assist in their deliberations; and F5. Provision has been made in Standing Orders to enable the Chairmen of both Boards to report on and speak to their respective activities and responsibilities in the Court of Common Council and to ensure that any decisions, especially those relating to property, are taken without undue delay.
G. Audit and Risk Management Committee G1. A new non-ward committee, Audit and Risk Management was with responsibility for the City Corporation’s activities and responsibilities in these areas (with the Finance Committee relinquishing its current responsibilities for audit and risk); and G2. The Audit and Risk Management Committee shall comprise 9 Members elected by the Court of Common Council (the Chairman of the Policy and Resources, Finance and Investment Committees not being eligible for election to the Committee), 3 external Members (ie non-Members of the Court of Common Council), the Chairman and Deputy Chairman of the Finance Committee (ex-officio with no voting rights) and a representative of the Policy and Resources Committee also in an ex-officio capacity with no voting rights.
Page 24 G3. The Deputy Chairman of Audit and Risk is not able to be Chairman of another committee.
I. Open Spaces Committees I1. The management of the City Corporation’s open spaces is now maintained by three Non-Ward Committees, as follows:- (i) Open Spaces, City Gardens and West Ham Park Committee comprising 8 Members elected by the Court of Common Council together with the Chairmen and Deputy Chairmen of the Hampstead Heath, Highgate Wood and Queen’s Park and the Epping Forest and Commons Committees (see below) in an ex-officio capacity. The Committee is responsible for setting overall strategy for the operation of the City Corporation’s open spaces and for the management of City Gardens. It is also responsible for the management of West Ham Park. This area of work is undertaken separately from the Committee’s other business and the Committee’s composition includes 4 representatives nominated by the Heirs-at-Law of the late John Gurney, 1 representative nominated by the Parish of West Ham and 2 representatives nominated by the London Borough of Newham; (ii) Hampstead Heath, Highgate Wood and Queen’s Park Committee comprising at least 12 Members elected by the Court of Common Council together with the Chairman and Deputy Chairman of the Open Spaces, City Gardens and West Ham Park Committee (see above) in an ex-officio capacity. The Committee is responsible for the management of Highgate Wood and Queen’s Park. It is also responsible for the management of Hampstead Heath with this area of work being undertaken separately from the Committee’s other business. The composition of the Committee includes at least 6 external representatives which must include 1 representative of the London Borough of Barnet, 1 representative of the London Borough of Camden, 1 representative of the owners of Kenwood lands and 3 persons representing local, ecological, environmental or sporting interests; and (iii) Epping Forest and Commons Committee comprising 12 Members of the Court of Common Council including 10 Members elected by the Court of Common Council together with the Chairman and Deputy Chairman of the Open Spaces, City Gardens and West Ham Park Committee (see above) in an ex-officio capacity, to be responsible for the management of Burnham Beeches and the City Commons. The Committee also manages Epping Forest and this area of work is undertaken separately from the Committee’s other business. The composition of the Committee includes 4 Verderers elected or appointed pursuant to the Epping Forest Act 1878. If the Chairman and/or Deputy Chairman of the Open Spaces, City Gardens and West Ham Park Committee are already Members of the Epping Forest and Commons Committee in their own right, the vacancy(s) are filled by the Court of Common Council.
Page 25 J. Policy and Resources and Police Committees and the Boards of the Governors of the City Schools Policy and Resources Committee J1. Of the five vacancies that becomes available on the Policy Committee each year, one place is now reserved for a Member with less than 10 years’ service on the Court, resulting in at least four places on the Committee for Members with less than 10 years’ service at the time of their appointment; J2. In view of the synergies between the work of the Energy Working Party (previously of the City Lands and Bridge House Estates Committee) and the Sustainability Working Party (of the Policy and Resources Committee), the work has been be merged and transferred to the Policy Committee and is operated through a dedicated Sub-Committee (the Energy and Sustainability Sub-Committee) whose membership can be drawn from the whole Court; J3. The Policy and Resources Committee is responsible for providing additional scrutiny, oversight and challenge for the management of major projects and programmes of work, including, amongst other things, considering all proposals for capital and supplementary revenue projects (including those which may be funded from external sources), and determining, at detailed options appraisal stage, whether projects should be included in the capital and supplementary revenue programme as well as the phasing of any expenditure. This work is undertaken by a dedicated sub- committee, the Projects Sub-Committee, which comprises 3 Members appointed by the Policy and Resources Committee, 2 Members appointed by the Finance Committee. The Projects Sub-Committee is also able to co-opt 2 further Members from the Court of Common Council with relevant experience. J4. The Policy & Resources Committee was asked to review its various ex- officio appointments. A review was subsequently undertaken and the outcome reported to the Court on 8 September 2011. Whilst it was felt that the current ex-officio places were still relevant, the Court acknowledged that culture was an area which over the years had become more prominent and which also had substantial resource implications. It was therefore agreed that the Chairman of the new Culture, Heritage and Libraries Committee should become an ex-officio Member of the Policy Committee. Similarly, the development and management of the City Corporation’s investment portfolio (property and non-property) was considered to be of great significance and the Court also agreed that the Chairman and Deputy Chairman of the Investment Committee should also serve as ex-officio members, creating a reciprocal arrangement between the Policy and Resources, Finance and Investment Committees.
Police Committee J5. For the purposes of continuity the length of service of the Chairman of the Police Committee was extended to a term not exceeding four years; J6. The current restriction whereby no Member of the Court of Common Council is eligible to serve on the Police Committee until such time as they have served a minimum of two years on the Court, should be removed (NB:
Page 26 The constitution of the Police Committee has been reviewed since the governance review).
Boards of Governors of the City of London School, the City of London School for Girls and the City of London Freemen’s School J7. The three City School Boards were recommended to consider establishing a Working Party comprising key Members from each Board such as the Chairmen and Deputy Chairmen, to discuss important issues that may be of common interest, for example pay awards. J8. The restriction whereby no Member can serve on more than one Board of Governors was removed.
K. Service on City Corporation Committees and Outside Bodies Reserving places on Non-Ward Committees for ‘newer’ Members K1. With the exception the Policy and Resources Committee which has separate arrangements, 10% of places (where 10% results in a fraction it should be rounded down, subject to at least one place being reserved on every non-Ward Committee for a Member falling in to this category) on all elected committees are reserved for Members with less than 5 years’ service at the time of their appointment.
Limiting the number of Grand Committees on which a Common Councilman can serve at any one time K2. The number of grand committees on which a Common Councilman can serve at any one time (excluding appointments or nominations to committees in an ex-officio capacity) is limited to no more than eight.
Limiting the number of Outside Bodies that a Member can serve on K3. The number of outside bodies that a Member can serve on at any one time (excluding appointments that are by virtue of Office or in an ex-officio capacity) is limited to no more than six. If a vacancy cannot be filled from the Common Council, then such vacancy can be filled by non-Members, including officers on the basis that there are no issues of major concern to the work of the City Corporation likely to arise; K4. Appointments to outside bodies are made by the Court of Common Council at meetings other than the meeting at which the appointment of Committees is undertaken.
L. Other Committee Issues Publishing data of attendance by Members at Committee Meetings L1. Data relating to the attendance of Members at committee, sub-committee and Court meetings was to be more accessible and placed on-line on the City Corporation’s website provided that the figures are put in context (ie attendances should be shown together with the actual number of opportunities to attend).
Page 27 Submission of supporting statements L2. Members seeking election as Chairmen and Deputy Chairmen of committees are now able voluntarily to submit a statement of no more than 300 words in support of their candidature in advance of the meeting at which the election is to be held.
Frequency of Committee meetings L3. The frequency of Committee meetings be reviewed and determined by individual Committees, as was presently the case.
Sub-Committees, Working Parties and ‘Workshop’ style meetings L4. The constitutional position of sub-committees and working parties and informal ‘workshop’ style meetings or Member and officer working groups was noted and the Court requested that all Committees review their current arrangements to ensure that they conform to the principles outlined; and L5. The concept of informal ‘workshop’ style meetings in appropriate circumstances was accepted in order to improve communication and increase interaction, particularly between Members and officers, at an early stage in major complex, costly or contentious proposals.
Committee Papers and Minutes L6. Committee reports, minutes and papers are to be concise and to the point and that no late papers should be dispatched without the relevant Committee Chairman’s consent having first been obtained; L7. Agendas, reports and other papers shall continue to be dispatched in hard-copy, but greater use of electronically circulated papers be made; and L8. A standard of seven working days after the Court of Common Council or Committee meetings should be set within which officers will seek to circulate the draft minutes to all Members (or Members of the relevant Committee).
Outgoing Chairmen L9. In addition to the above it was subsequently agreed that in order to assist with arrangements for the election of a deputy chairman, outgoing Chairmen should be required to give notice of their intention to stand down.
M. Terms of Reference, Delegations and Standing Orders M1. A scheme for the Appointment of Members on Committees and Terms of Reference for the City of London Corporation Committees was approved; M2. The Framework for Accountability and Delegation approved by the Court in January 2005 was endorsed and individual Committees asked to review delegations to officers to ensure that they are appropriate and relevant. M3. Revised Standing Orders were agreed and the Town Clerk authorised, in consultation with the Chairman and Deputy Chairman of the Policy and Resources Committee, to make any necessary consequential changes to
Page 28 Standing Orders to take account of the decisions relating to the new governance arrangements.
N. Post Implementation Review N1. Subject to the Court approving these new arrangements, a post- implementation review be undertaken after 12 months of their operation, with the membership of the working party being agreed by the Court, in order to take stock of the new governance arrangements and how they are working. This would include the operation of the Policy and Resources Committee. The Court subsequently approved the membership of the Post-implementation Review of the Governance Working Party on 8 September 2011.
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Page 30 Agenda Item 8
Committee(s): Date(s): Finance Committee 26 th June 2012 Subject: Local and SME Procurement Policy Public
Report of: For Decision Director of Economic Development Chamberlain
Summary
1. To support and regenerate our local area, the City of London’s Local Procurement Policy advocates competitive procurement from Small and Medium Sized Enterprises 1 (SMEs) in 8 boroughs; the City, Islington, Camden, Hackney, Tower Hamlets, Southwark, Lambeth and Newham. Since this policy was developed in 2003, areas of deprivation have changed. As a result, the Finance Committee suggested that our local procurement target areas be reviewed.
2. The City of London’s Responsible Procurement Strategy (approved by Finance Committee, November 2011), states that direct procurement from SMEs should not fall below the Coalition Government’s suggested 25% of procurement expenditure. Although led by a drive for efficiency and better value, the PP2P review may have an impact on the number of procurement opportunities for SMEs. The PP2P team are currently in the process of analysing any potential impact. To help meet this 25% target, it is suggested that we encourage competitive procurement from SMEs generally and not just in our local boroughs.
3. Some procurement categories are more relevant for local and SME procurement than others. It is proposed that the new City of London Procurement Service (launched September 2012) takes the Local and SME Procurement Policy into account when developing the sourcing plan.
1 <250 employees and <50million Euros turnover (£42,137,864.80 at time of writing) and/or an annual balance sheet total not exceeding 43million Euros (£36,353,173.26 at time of writing). Further clarification can be found at http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/index_en.htm Page 31 Recommendations
4. It is recommended that Members approve:
• Expansion of the Local Procurement Policy to Greenwich, Haringey, Lewisham, Barking and Dagenham and Waltham Forest; all of which fall within the 10% most deprived boroughs in England, in addition to our existing 8 target boroughs.
• A focus on competitive procurement from businesses of any size, within the above target areas.
• A focus on competitive procurement from SMEs generally and not just in our local boroughs.
Main Report
Background
1. Responsible Public Procurement is high on the Government agenda. The Coalition’s ‘Plan for Growth’ Paper (released May 2011) includes an aspiration to see 25% (in value) of Government contracts awarded to Small and Medium-sized Enterprises (SMEs) 2. The Public Services (Social Value) Act, passed in February 2012, means that for the first time, all public bodies in England and Wales are required to consider how the services they commission and procure might improve the economic, social and environmental well-being of the area. Local authorities however, under their duty to achieve best value, are already required to consider social, economic and environmental value 3.
2. The City of London has a strong policy background in support of responsible purchasing. To support economic development within the deprived boroughs surrounding the Square Mile, the City of London developed its Local Procurement Policy in 2003. The policy encourages competitive procurement from SMEs based in the City
2 <250 employees and <50million Euros turnover (£42,137,864.80 at time of writing) and/or an annual balance sheet total not exceeding 43million Euros (£36,353,173.26 at time of writing). Further clarification can be found at http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/index_en.htm
3 Best Value Statutory Guidance, Communities and Local Government, September 2011
Page 32 and its neighbouring boroughs (Islington, Camden, Hackney, Tower Hamlets, Southwark, Lambeth and Newham).
3. Local procurement is encouraged through the City of London’s Local Procurement Directive. The directive requires Officers to invite at least one local supplier (of any size) to quote for supplies, services and consultancy contracts valued between £500 and £50,000, and for works contracts valued between £500 and £400,000.
4. In response to EU procurement law, our policy requires the majority of supplies, services and consultancy contracts valued over £50,000 and works contracts valued over £400,000 to be publically advertised (on the Procontract London Tenders portal). These contracts are therefore accessible to any business, regardless of size or geographical area.
5. Contracts above the European Union threshold 4 are subject to the City of London’s Community Benefits Scheme. This scheme encourages suppliers to enter into voluntary agreements to employ, subcontract and procure in areas defined as ‘Most Deprived’ in the English Index of Deprivation, to the value of 10% to 20% of the contract value. Performance is monitored by the Strategic Procurement Unit on a 6 monthly basis.
6. As the Local Procurement Policy was initially developed to encourage procurement from local SMEs specifically, and the Local Procurement Directive and Community Benefits Scheme support local businesses of any size, the City of London also has a number of schemes in place to specifically support SME procurement.
7. We were the first London local authority to sign and adopt the Small Business Friendly Concordat on 21st December 2005 (a joint initiative of the then Office of the Deputy Prime Minister (ODPM) and the then Small Business Service). The Concordat outlines what small suppliers can expect when trading with the City of London.
8. In 2008, the City of London introduced a policy of accelerated payment of SME invoices (within 10 days rather than the usual 30 days), along with simplified terms and conditions for low value less risky contracts. To further support SMEs, financial checks during the pre-contract stage are only required for contracts over £150k.
4 £156,442 (for supplies and services) or £4,845,000 (for works) Page 33 9. In December 2011, the City of London also publically pledged, via London Councils’ ‘Procurement Pledge on Employment and Skills’, to commit to creating jobs and training through our supply chain.
Current Position
10. In 2011/12, 44% of our total spend (£180 million) was with SMEs, with 9% spent with SMEs within our local procurement target areas 5 (the majority within the City, Islington and Southwark). Our local expenditure (with businesses of any size) was baselined in 2003 at 22% and this percentage has remained more or less constant since then.
11. The Procurement and Procure to Pay project (PP2P) aims to transform and improve the City of London’s procurement capacity. It aims to achieve this by introducing a category management approach to procurement, training and up skilling staff and creating a new centralised City of London Procurement Service (CLPS) from September 2012. Category management seeks to aggregate spend to drive better value. The resultant larger contracts mean that the City of London will procure from fewer suppliers in the future and will have more centralised control when selecting suppliers.
12. With fewer and larger contracts, it is likely that the City of London will procure from fewer SMEs directly. This poses a reputational risk, especially as SME support is currently on the Government agenda. As a result, in November 2011 the Finance Committee agreed the Responsible Procurement Strategy 6, which states that SME procurement should not fall below 25% of the total procurement spend. To meet this target, this report suggests an amendment to the existing Local Procurement Policy, which currently focuses on procurement from local SME suppliers only.
13. The current Local Procurement Policy advocates procurement from SMEs in 8 boroughs; the City and 6 of its surrounding boroughs (Islington, Camden, Hackney, Tower Hamlets, Southwark and Lambeth 7) plus Newham. Since this policy was developed in 2003, areas of deprivation have changed. As a result, Finance Committee suggested that our local procurement target areas be reviewed. Furthermore, it is proposed that our local procurement target areas be
5 Islington, Camden, Hackney, Tower Hamlets, Southwark, Lambeth, Newham, the City 6 Responsible Procurement, Finance Committee paper 15/11/11 ( Document 108114 ) 7 Westminster was not included as it has a sufficiently large business base, that is able to procure from local SMEs Page 34 reviewed every three years, in accordance with the latest Index of Deprivation.
Proposals
Local Procurement
14. The 2010 Index of Deprivation shows that ten London boroughs 8 are within the 10% most deprived in England. Some of our neighbouring boroughs have, according to the Index, however, become less deprived over time e.g. Southwark, Camden. To reaffirm our policy of supporting our neighbouring boroughs, all of which have pockets of deprivation, it is suggested that we continue to focus on our existing 8 target areas, and expand the target area to include an extra 5 boroughs, all of which fall within the 10% most deprived in England; Greenwich, Haringey, Lewisham, Barking and Dagenham and Waltham Forest.
15. Although procurement from SMEs is critical for economic regeneration, it is suggested that within these 13 target boroughs, we encourage procurement from all businesses (large and small). It is thought that procurement from larger business can have a Local Multiplier effect i.e. they will, in turn, procure and recruit locally and regenerate the local economy.
16. City of London commissioned research 9 found that certain procurement categories can provide potential opportunities for local businesses.
• Security and Investigation • Events and Seminars • Combined facilities support activities • Event catering activities • Local Transportation • Printing • Postage and Couriers • Employment
8 Tower Hamlets, Hackney, Islington, Lambeth, Greenwich, Haringey, Lewisham, Barking and Dagenham, Waltham Forest, Newham.
9 The City of London's Supply Chain and its Relationship with the City Fringes (2008) http://www.cityoflondon.gov.uk/NR/rdonlyres/E96B1354-8626-46D3-BD51- 94131A096C25/0/BC_RS_SupplyChain_FR.pdf
Page 35 17. As instructed by the Responsible Procurement Strategy, approved by Finance Committee, if a non-local supplier is contracted for such categories, suppliers are asked (and measured on) how they might include local firms in the supply chain.
18. The new E-Marketplace is due to be launched in advance of the CLPS, it will serve as an online supplier catalogue for use by City of London departments. It is suggested that where possible local suppliers be invited to join the E-Marketplace, especially within the eight categories above.
SME Procurement
19. As shown in paragraph 10, only 9% of our current spend is with SMEs from our target local areas. With a goal of 25% SME expenditure, it is suggested that our Local Procurement Policy be amended to focus on competitive procurement from SMEs generally and not just in our local boroughs. This revision is consistent with the nationwide reference within our Corporate Plan (paragraph 27).
20. As with local procurement, City of London commissioned research 8 found that certain procurement categories can provide potential opportunities for SMEs.
• Local Transportation • Entertainment • Events and Seminars • Property Advisors • Public Relations and Affairs • Marketing Services and Advertising • Management Consultancy • Tax and Consultancy • Legal Services • I.T Consultancy • Print and Publishing • Secretarial, Administration and Translation
21. When developing large contracts (>£250k) i.e. those less suitable for SMEs, it is proposed that the CLPS assess whether any of the above categories will be involved further down the supply chain. Where this is the case, the large supplier could be asked how they might include SMEs in the supply chain. Their response could then be committed to the contract terms and measured accordingly, as referred to in our
Page 36 Responsible Procurement Strategy and approved by Finance Committee.
22. Where there is an opportunity to split contracts into smaller elements, it is proposed that an impact assessment be developed by the CLPS team, when developing the sourcing plan for procurement projects.
23. For smaller contracts (<£250k), particularly those within the 12 relevant categories, the City of London’s new shorter SME contracts (approved by Finance Committee in November 2011) be used, to simplify the procurement process. These contracts are now available on the City of London Internet, Intranet, Pro Contract and the internal CBIS system. Four recently awarded contracts have been let to SMEs.
24. The City of London advertises all contracts over £50k on Pro Contract (an online procurement portal used by local authorities). When advertising on Pro Contract, it is suggested that an ‘SME friendly’ flag be attached, to indicate to bidders that the City of London would welcome bids from SME’s and that the contract processes have been designed to make it easier for them to bid.
25. Once the CLPS is live (September 2012), it is suggested that an annual report on SME procurement be produced, detailing numbers of SMEs bidding, being shortlisted and winning City of London contracts, plus overall spend. This, and the impact assessments mentioned above (paragraph 22) will help identify specific barriers for SMEs, and processes can be amended accordingly.
26. As with local procurement, it is suggested that where possible SME suppliers be invited to join the E-Marketplace, especially within the twelve categories above. Currently there are three suppliers on the e- marketplace, one of which is an SME.
Corporate & Strategic Implications
27. Encouraging expenditure from SMEs, our neighbours and additional deprived areas of London supports the City of London’s strategic aims and policy priorities, as stated in our Corporate Plan.
“To provide valued services to London [and the nation]”
“Maximising the opportunities and benefits afforded by our role as a good neighbour”
Page 37 Conclusion
28. Since the development of the Local Procurement Policy in 2003, patterns of deprivation have changed, meaning some of our target boroughs are no longer classified as ‘most deprived’. In order to have a bigger impact on London’s economic regeneration, it is suggested that we expand our focus, supporting not only our neighbouring boroughs but also those London Boroughs falling within the 10% most deprived boroughs in England. To meet SME procurement targets outlined in the City of London’s Responsible Procurement strategy, it is suggested that we engage in competitive procurement from SMEs generally, not just from those based in our local boroughs.
Page 38 Agenda Item 9
Committee: Dates: th Finance 26 June 2012 Subject: Public Procurement & Procure to Pay (PP2P) Update Report of: For Decision Chamberlain
Summary
This regular report gives an update on the progress of Year 2 of the PP2P programme. The last report focussed on the way savings are scrutinised to allow for budget adjustments and the payment of fees to Accenture. This report outlines how the savings for Building Repairs and Maintenance, and Highways are broken down and provides an update on other sourcing projects. It also advises on a proposed changed role for the Category Boards, and an update on the progress made in the setting up of the City of London Procurement Service (CLPS).
Based on a comparison of the tender submissions to baseline expenditure it is estimated that the headline savings figure for the fixed price elements of the Building Repairs and Maintenance contract and the Lifts Maintenance contract is £7.1m over 5 years. In terms of PP2P the savings are estimated at £5m over the remaining life of the PP2P contract. Work is still ongoing to calculate further savings for reactive repairs works. For the Highways contract the headline savings figure is £10.3m over 5 years of which £7.3m is attributable to the remaining life of the PP2P contract.
Part of the overall PP2P sourcing strategy is to perform periodic reviews with a focus on ensuring the overall saving target can be made by making adjustments as necessary and as new opportunities arise. For example a new initiative for sourcing of radio microphones for the Barbican Centre was introduced into the Year 2 programme with the City’s first eAuction. The details on this initiative have been included within this report.
The Category Boards overseeing the sourcing initiatives are progressing well with the Year 2 programme. As new contracts are put in place the emphasis of the Category Boards will shift away from the delivery of these particular initiatives, towards the best future utilisation of these contracts and ensuring the on-going overall category strategy. As this transition occurs the Category Boards scope and make up will be reviewed to ensure they continue to be effective.
Page 39
One of the roles of the Category Boards is to examine in detail the proposed sourcing initiatives and to challenge any projected savings. Not surprisingly in some cases this has revealed a lower than desired return and some of the Category Boards, such as the Soft FM Category Board, are now considering new areas to examine and possibly bringing forward some of the proposed Year 3 works.
The major challenge for the second year continues to be the significant transformation that is required to set up the City of London Procurement Service (CLPS).
Professional consultation with staff has now begun and the organisation will nd be finalised and reported to the Establishment Committee on June 22 with individual consultation following in July. Work has continued on mapping how we currently deliver the procurement and purchasing activities which will enable validation of the Target Operating Model of the future world class service.
The CLPS transition plan is currently undergoing a review of the implementation timetable. Once this has been finalised milestones, deliverables and associated timelines will be shared at the Joint Review Board for agreement and then shared with this committee if there are any significant changes to the programme.
Progress in both sourcing and CLPS projects is good with recognition that, like Year 1, the targets for Year 2 are ambitious and challenging, but will deliver significant savings and the main part of the transformation element of the PP2P programme.
th At the previous Committee on 29 May 2012 a recommendation was approved to give delegated authority to the Comptroller and City Solicitor to sign Access Agreements to enable the City to utilise frameworks set up by other local authorities or public bodies. You further asked to be subsequently informed when such access agreements were signed. The City’s Procurement Regulations now need to be amended to reflect the decision and the requirement for officers to report back to Committee.
Recommendation : Members are asked to
1. Note the progress with respect to the work for Year 2 of the project; and the progress in establishing the new centralised procurement service (City of London Procurement Service); and
Page 40
2. Approve the proposed wording changes to the Procurement Regulations outlined in this report.
Main Report
Purpose of Report
1. This regular report updates members on the progress of PP2P with a focus this month on; the changing role of the Category Boards, reporting on the successful outcome of the City’s first eAuction, providing the breakdown of estimated savings for the new Buildings Repair & Maintenance and Highways contracts, reporting progress on agreeing a methodology for calculating revenue savings relating to Construction projects let via the iESE framework, and providing an update on the setup of the City of London Procurement Service (CLPS).
Highways Repairs and Maintenance
2. The challenge which was issued by one of the tenderers has now been concluded. As a result, mobilisation is continuing and a letter of intent has been issued to the successful bidder to ensure services can commence
on 1 July 2012 as planned.
3. Based on a comparison of the tender submissions to baseline expenditure it is estimated that overall savings will be £10.3m over the contract period (1 July 2012 to 30 June 2017). For routine maintenance and resurfacing works the savings, which will be retained by the Corporate Centre, are anticipated to be £2.7m. The savings on Construction and Section 106 works, which will accrue to third parties, are estimated to be £7.6m. However, given the potential for significant variations in both the number and type of construction schemes, an annual reconciliation will be carried out to confirm the actual level of savings attributable to the PP2P contract for this type of work. Further details of the savings and the main assumptions are provided at Appendix A.
4. In terms of the PP2P contract (which ends 28 February 2016) the saving is estimated to be £7.3m, of which £1.1m attributable to PP2P Year 2. Subject to final verification by the Finance Leadership Group it is intended to submit the savings, via the Savings Realisation Forum, for approval by the PP2P Joint Review Board at the end of June.
Page 41 Building Repairs and Maintenance
5. The contract award was concluded following the end of the 10 day Standstill Period on May 3rd 2012. The preferred suppliers have moved on site and are progressing mobilisation activities working in close co- ordination with the contract management team. Both parties are also working on finalising all contract documents to complete contract start nd date of 2 July.
6. Based on a comparison of the tender submissions to baseline expenditure it is estimated that for the fixed price elements of the Building Repairs and Maintenance contract and the Lift Maintenance contract the savings will be £7.1m over 5 years (1 July 2012 to 30 June 2017). Of the £7.1m it is currently anticipated that some £5.7m will be attributable to the Corporate Centre, £1.0m to the City of London Police and £0.4m to third parties. More detailed work will be required in conjunction with the contractors to analyse their forecasts at an individual budget level at which point the actual saving can be finalised. Further details of the savings and the main assumptions are provided at Appendix B.
7. In terms of the PP2P contract (which ends 28 February 2016) the saving from the fixed price element is estimated to be £5.0m, with £0.8m attributable to PP2P Year 2 and a further £1.4m p.a. in Years 3 to 5. Subject to final verification by the Finance Leadership Group it is intended to submit the savings, via the Savings Realisation Forum, for approval by the PP2P Joint Review Board at the end of June.
8. In addition to the fixed price element of the Building Repairs and Maintenance contract there is a schedule of rates element for reactive repairs works. A process for calculating and tracking savings against the National Schedule of Rates has been developed. However, the calculation of savings from this element is pending the completion of a National Scheme of Rates (NSR) matching exercise for which further information has been requested from NSR.
Construction Major Works
9. As reported previously, the Improvement and Efficiency South East (iESE) Framework is now in live use on two trial projects (1 Alie St and the Freemen’s School). Results from these projects will be available towards the end of this year.
Page 42 10. Using a framework for major works has already shown its worth in terms of enabling a faster and more efficient procurement process and it is anticipated that these benefits will also apply once the City’s own framework for minor works is in place. The nature of the projects that the frameworks will be used for make it more difficult to calculate savings than it is for the other procurement exercises. This is because there is a need to assess what costs have been avoided by using the framework compared to previous methods of procuring these projects. Discussions are continuing between the City Surveyor, the Finance Leadership Group and the PP2P team towards developing a savings model based on 1 Alie Street which could be applied to all projects using the iESE framework. However, this model will need to be adjusted on a project by project basis depending on the nature of each project.
Construction Minor Works
11. This stream of work has now been evaluated and a separate report to this Committee was approved for the selection of contractors. There has been a delay in awarding the contract due to the need to take the Committee th paper through the Property Investment Board on 25 June prior to the Court of Common Council which means it will not go to the Court until th its meeting on the 19 July. Contract award preparations and mobilisation actions are on-going pending this final approval.
Professional Services
12. As previously reported, the Construction Category Board has agreed three projects in Year 2 covering Professional Services. These are for Engineering, Architects, and Construction, Design and Management (CDM). Following investigation in to various different framework options, the PP2P team are awaiting final approval to access the Construction Related Consultant Services (CRCS 2012) framework, managed by Haringey local authority, thereby named the Haringey Framework to determine its suitability for these three professional service areas.
13. The Lead Authority for such Frameworks will often, for reasons of confidentiality, require that any other parties wishing to access the Framework sign an Access Agreement before releasing full details of the terms of the Framework. To avoid the need for separate reports to be considered each time the existence of a potential Framework contract becomes known to officers, a recommendation has already been approved by this Committee to authorise the Comptroller & City Solicitor to sign
Page 43 such agreements on the City’s behalf following approval of the terms by the Chamberlain. A requirement of this approval is that any such access agreements would be reported back to the relevant Spending Committee for information.
14. At the time of writing this report agreement has been reached subject to signature to access the Haringey Framework for which approval was given at the last meeting.
Amendments to Procurement Regulations
15. The Procurement Regulations need to be amended to reflect the recommendation regarding framework access agreements. The following wording is proposed:-
“In the search for Best Value and more collaborative methods of procurement many Local Authorities, and other public bodies which are Contracting Authorities for the purposes of the Public Contracts Regulations 2006, are establishing Framework Contracts. Such contracts create a pool of contractors, consultants or suppliers procured by competitive and EU compliant tender procedures which are available for engagement by other Local Authorities without the need for an extended tender period.
The ability to access the Framework is generally governed by a formal Access agreement. The Lead Authority for the Framework will often, for reasons of confidentiality, require that any other parties wishing to access the Framework sign an Access Agreement before releasing full details of the terms of the Framework. Without the full details officers are not in a position to report to Members about the potential benefits of accessing any such Framework.
Aside from confidentiality obligations such agreements often contain a requirement for the party wishing to access the Framework to give indemnities to the Lead Authority to protect the Lead Authority from claims. The form of such indemnities vary so it is not possible to be specific as to what types of indemnity may be required, although breaches of confidentiality and Data Protection breaches would not be uncommon subjects.
To avoid the need for separate reports to be considered each time the existence of a potential Framework contract becomes known to
Page 44 officers a resolution has been passed by Finance Committee authorising the Comptroller & City Solicitor to sign such agreements on the City’s behalf following approval of the terms by the Chamberlain, including any indemnity.
It is a requirement that the signing of any access agreement should subsequently be reported to the relevant Spending Committee for information.”
16. It is anticipated that further amendments to the City’s Procurement Regulations will be recommended to the next Committee to reflect the Court’s approval of the City’s own framework for Construction Minor Works in order to guide officers in its use.
Category Boards
17. The Category Boards overseeing the sourcing initiatives are progressing well with the Year 2 programme with a focus on finalising the Highways and Building Repairs and Maintenance contracts, and finalising other construction related elements of the sourcing strategy. Once these contracts are in place the emphasis of the relevant Category Boards will shift away from the delivery of these particular initiatives, towards the best future utilisation of these contracts and ensure the on-going overall category strategy.
18. With this shift in emphasis the current Construction and Buildings Repairs and Maintenance Category Board structures and representatives are being reviewed. It has been proposed that under the overarching responsibility of a single Category Board Sponsor the areas of Facilities Management and Construction are divided into three Category Boards; Soft Facilities Management, Technical Facilities Management, and Projects.
19. The roles and responsibilities of these groups are now being considered, but it is recognised that the representatives on these groups may need to be adjusted as a result of the restructuring within the City Surveyor’s Department. However the intention is that information on Performance Management and Service Delivery across all contracts will feed up into the Category Boards.
20. Part of the overall PP2P sourcing strategy is to perform periodic reviews with a focus on ensuring the overall saving target can be made by making adjustments as necessary and as new opportunities arise. For example a
Page 45 new initiative for sourcing of radio microphones for the Barbican Centre was introduced into the Year 2 programme with the City’s first eAuction.
21. One of the roles of the Category Boards is to examine in detail the proposed sourcing initiatives and to challenge any projected savings. Not surprisingly this has revealed a few cases where there is likely to be a lower than desired savings return. Some of the Category Boards, such as the Soft FM Category Board, are now considering new areas for examination and possibly bringing forward some of the proposed Year 3 works. eAuction for the provision of microphones for the Barbican Centre
th 22. On the 28 May the PP2P team completed the first eAuction run by the City of London. This was for the provision of radio microphones for the Barbican Centre. The end result was a 15% saving which represents £25k (exact number to be confirmed following review of the baseline).
23. This project was included into scope in addition to the Year 2 target projects to support the Barbican Centre, and given the potential savings recognised as achievable by utilising an eAuction approach. An eAuction is effectively a reverse bidding process, where the price falls instead of increasing. This was conducted as a managed eAuction by our e- Tendering system provider Due North on our behalf, using the Pro Contract system (London Tenders portal).
24. The PP2P team worked closely with the Barbican Centre stakeholders to ensure that all suppliers could provide microphones that met their specific requirements. 12 suppliers were invited to participate in the eAuction after passing the quality/technical requirements. These suppliers then participated in the eAuction. After multiple bids from all suppliers over a 45 minute period, GV Multimedia eventually won with a price of £141,800, which is approximately 15% lower than the baseline (the baseline is being agreed with the Barbican Centre and will be confirmed through the Head of Finance and Savings Realisation Forum process).
25. The diagram below is a graph taken from the eAuction which displays the supplier bids (in pounds) and how they fell over the course of the eAuction. Each line represents a supplier and the price of their bid. The horizontal axis represents time (in minutes) and the vertical axis represents price.
Page 46 eAuction Live Graph
26. Given the success of this pilot, the PP2P team with support of the Category Boards, will now consider what current or additional projects could take advantage of an eAuction approach. All categories of spend including goods and services can potentially use an eAuction approach. However, PP2P are now in the process of building a toolkit to help identify which projects would be most appropriate. As an example the key success criteria is not limited to but is expected to include:
• Are the products or service characteristics generic? • Can the specification be clearly defined from the outset? • Is the industry competitiveness high? • Can standard terms and conditions be applied? • Are there 3 or more suppliers willing to compete for the contract? • Is the supplier relationship non-strategic?
27. As mentioned above, this first e-Auction was managed on our behalf by Due North. This was at no cost to the City as our contract with Due North included a free managed eAuction. An analysis will now be completed to consider if it is worth purchasing similar managed services for future auctions, or for the City to purchase the software module and to manage its own auctions in future.
Page 47 Scrutiny of the Savings, Cashflow and Fees
28. The Building Repairs and Maintenance and Highways savings figures will now be taken to the PP2P Joint Review Board (JRB) for approval and the next report to this Committee will include the detail of the latest scrutiny of the savings, cashflow and fees in the same tabular and graphical form as previous presented. There are currently no material changes to the figures reported to the last meeting.
29. The figures due to be presented to the JRB for Highways Maintenance Buildings Repairs and Maintenance are set out in the Appendices A and B of this report. The following table shows the savings that the City of London Corporation will benefit from over the full life of each of the contracts and also the savings that are attributable to the PP2P programme. The contracts will continue to run after the end of the programme.
Total Savings saving on attributable to the contract the PP2P target £m £m Highways Repairs and Maintenance 10.3 7.3 Buildings Repairs and Maintenance 7.1 5.0
Change Tracking Survey
30. Change Tracking is a tool which is used to measure and track the impact of transformational change programmes. It takes the form of a survey of approximately 50 questions distributed to staff that have been identified as impacted or involved in the PP2P programme. The feedback produced from the tool illustrates what drives business success and what needs to be done through practicable, actionable reports. The survey is run 3 times, at 6 monthly intervals, with the first survey results showing City of London’s benchmark position with regards to organisational change due to PP2P. The following surveys will show how the City is adjusting to and implementing the new practices of the programme as PP2P transitions and then becomes Business As Usual.
31. Phase 2 of the Change Tracking survey took place in May where a response rate of 62% was achieved. Staff inputs are currently being
Page 48 analysed by the Change Tracking team and Aimie Chapple, Managing Director of Accenture Management Consulting will deliver the results with members of the Transformation Board and Joint Review Board on st 21 June.
32. The results will then be shared with the Change Network to distribute across their respective departments. The PP2P Change team will then work with the Change Partners to prepare targeted departmental action plans for endorsement by Chief Officers to ensure readiness for the incorporation of the CLPS into the City of London.
33. A review of the outcome from this survey will be reported to the next meeting of this committee.
Creation of City of London Procurement Service (CLPS)
34. The CLPS high level target operating model, organisation structure, associated funding underpinning the organisation design and the implementation plan to transition to the CLPS was presented at the Chief Officers Group on 22nd May 2012, with a request to endorse and support the proposal to enable staff consultation to commence. Questions were raised by Chief Officers regarding scope for consultation. In response the Chamberlain sent additional correspondence to all Chief Officers setting out how the data had been calculated for the relative proportion of roles in scope. Chief Officers were then asked to verify the list of individuals in scope by 30th May.
35. Targeted letters were sent, on 6th June, to individuals with between 5%- 19% of their current role in scope for the CLPS and to their line managers, inviting them to attend one of five Roadshows. 39 individuals with more than 20% of their current role in scope for the CLPS received a letter and a consultation document outlining the changes and proposed structure and have been strongly encouraged to attend Roadshows. The purpose of the Roadshows will be to present the proposed CLPS structure and to provide an opportunity to ask questions. A dedicated email address [email protected] has been set up in order that comments or questions regarding the CLPS can be posted.
36. Both the GMB and Unite unions have been fully briefed about the proposals and have been invited to attend a Roadshow. The period of professional consultation will be from 6th June until 22nd June. A recording of one of the Roadshows and the materials from the presentation is available via the intranet and individuals not directly invited will have the option to request to attend.
Page 49
37. The organisation will be finalised post professional consultation and will be reported to the Establishment Committee on 28th June. Individual consultation will follow in July and all directly impacted staff will be invited to a personal consultation meeting regarding their personal position. A summary of the proposed structure will be included in the next report to this Committee.
38. The CLPS transition plan is currently undergoing a review of the implementation timetable. Once this has been finalised milestones, deliverables and associated timelines will be shared at the Joint Review Board for agreement and a summary will be given in the next committee report. Part of this planning exercise is to consider some scenarios to explore the possible impact of the Olympics.
39. Meanwhile detailed process workshops continue with identified departmental Local Process Experts to gain a detailed understanding of how things are done today and to determine the new processes to be implemented. The detailed process workshops commenced at the beginning of May and the focus from the end of June will be on mapping the future state processes.
Conclusion
40. The PP2P programme continues to make good progress despite its scale and inherent challenges that any major transformational project has. Much of the effort from Year 1 is now coming to fruition with the mobilisation of the Buildings Repair and Maintenance contract. Year 2 is heavily focussed on starting the major transformational work to create the CLPS which will be very challenging but deliver one of the main objectives of the project when it was approved in December 2010 and the plan for establishing this service is currently being reviewed.
Contact: Suzanne Jones 0207 332 1280 [email protected]
Page 50 Background Papers
Procurement & Procure to Pay report and Addendum – (Finance Committee 24/01/12) Procurement & Procure to Pay – Due Diligence (Finance Committee 26/07/11) Efficiency Review – Procurement and Procure to Pay (Finance Committee 23/11/10) Procurement and Procure to Pay Efficiency Review (PP2P) – Further Report (Finance Committee 14/12/10) PP2P Update Report (Efficiency & Performance Sub Committee 23/5/11) Procurement & Procure to Pay Updates (Finance Committee 28/6/11, 20/9/11, 18/10/11, 15/11/11, 13/12/11, 24/01/12, 21/02/12, 20/03/12, 01/05/12, 29/05/12)
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Page 52
Appendix A: Highways
Provisional Attribution of Saving over Contract Period (01/07/12 – 30/06/17) Saving Baseline Forecast
Corporate Third Party Centre (Developers)
£M £M £M £M £M
Highways & Drainage Maintenance and Resurfacing 14.3 11.6 2.7 2.7 0.0 Construction Works 34.3 26.7 7.6 0.0 7.5 Grand Total for Five Year Contract Period 48.6 38.3 10.3 2.7 7.5 Page 53 Assumptions Baseline: Historic spend for the 2010 calendar year, inflated by 3.68% p.a. This is based on the change (January 2010 to December 2010) in the indices applicable to the previous highways maintenance contract. Forecast: Based on tender submission. Mobilisation: 100% on day one of contract. Attribution of Saving/(Cost): the provisional attribution is calculated pro rata to baseline expenditure in each of the categories (corporate centre and third party). Where savings do not accrue to the Corporate Centre it is intended to recoup the cost of procurement where possible.
PP2P Project: Of the savings of £10.3m set out in the above table the following amounts are attributable to the PP2P 5 year target savings: Savings By PP2P Year £M Year 2 1.1 Year 3 1.9 Year 4 2.1 Year 5 2.2 7.3
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Page 54
Appendix B: Building Repairs & Maintenance
Provisional Attribution of Saving/Cost over Contract Period (01/07/12 – 30/06/17) Saving/ Third Party Baseline Forecast (Cost) Corporate Ringfenced (Investment Centre (Police) Properties & Markets) £M £M £M £M £M £M Building Repairs & Maintenance Fixed Price Element Operational Properties 21.2 14.3 6.9 5.5 1.0 0.4 Investment Properties 8.6 9.1 (0.5) 0.0 0.0 (0.5) Barbican/Guildhall School 1.8 2.5 (0.7) (0.7) 0.0 0.0 Total Building Repairs & Maintenance Fixed Price Element 31.6 25.9 5.7 4.8 1.0 (0.1) Lift Maintenance Operational Properties 1.9 1.0 0.9 0.9 0.0 0.0 Page 55 Investment Properties 0.9 0.4 0.5 0.0 0.0 0.5 Barbican/Guildhall School 0.5 0.5 0.0 0.0 0.0 0.0 Total Lifts Maintenance 3.3 1.9 1.4 0.9 0.0 0.5 Grand Total for Five Year Contract Period 34.9 27.8 7.1 5.7 1.0 0.4 Assumptions Baseline: Historic spend for the 2010 calendar year. Inflated in line with corporate assumptions i.e. 0% p.a. for first three years and 2.5% p.a. thereafter. Baseline for operational and investment properties verified and confirmed. Baseline for Barbican/Guildhall School subject to final confirmation. Forecast: Based on tender submissions by Mitie (BRM) and Apex (Lifts). Mobilisation: 100% on day one of contract. Attribution of Saving/ (Cost): the provisional attribution is calculated pro rata to baseline expenditure in each of the categories (corporate centre, ringfenced and third party). Where savings do not accrue to the Corporate Centre it is intended to recoup the cost of procurement where possible. PP2P Project: Of the savings of £7.1m set out in the above table the following amounts are attributable to the PP2P 5 year target savings: Savings By PP2P Year £M Year 2 0.8 Year 3 1.4 Year 4 1.4 Year 5 1.4 5.0
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Page 56 Agenda Item 11
Committee(s): Item no. Finance Committee 26 th June 2012 Subject: Public Chamberlain's Departmental Risk Management Update Report of: For Information Chamberlain
Summary
This report provides Members with a summary of the significant risks faced by the Chamberlain’s department, as captured within a risk register (Appendix 1). This is presented in the format consistent with that agreed by the Audit and Risk Management Committee. In addition to presenting the existing departmental risk register, this report summarises work currently in progress to refine and classify a number of IS related risks. Recommendation Members are asked to note the contents of the Chamberlain’s Risk Register.
Main Report
Background 1. In accordance with the requirements of the City Corporation’s risk management framework, all Chief Officers are required to report regularly to their Service Committees on the significant risks faced by their department and the actions in place to mitigate these risks. The Finance Committee was presented with the Chamberlain’s Departmental Risk Register at its meeting on 21 st February 2012, commencing this cycle of regular review and reporting.
Current Position 2. As part of the on-going development of risk management arrangements, the Audit and Risk Management Committee has approved a more sophisticated corporate risk register template. This template will be trialled initially for the Strategic Risk Register and, given responsibility for oversight of the corporate risk management framework, by the Chamberlain’s Department. The main changes to the risk register format and presentation are summarised below:
• Assessment of Gross (un-mitigated) risk is now incorporated in addition to Net (mitigated) risk, enabling readers of the risk register
Page 57 to form an opinion as to the effectiveness of mitigating actions in place.
• A Control Evaluation column has been added, this provides an assessment of the degree of confidence in the stated controls, ranging from “Existing controls are not satisfactory” to “Robust mitigating controls are in place with positive assurance as to their effectiveness”.
• A set of brief guidance notes is included as page 1 of the risk register, providing a key to the terminology and abbreviations used.
3. The Chamberlain’s risk register is attached for information as Appendix 1, the risk assessment framework is incorporated within the final pages of the register. The profile of the department’s key risks is shown as Appendix 2, where all risks are plotted on the risk assessment matrix.
4. Following the initial transfer of information to the revised risk register template, further work is now in progress to finesse the detail shown against individual risks. No changes have been made to the overall assessment of risks since the last review, the following risks are, however, highlighted for Members’ information:
CHB6: Data Loss or Unauthorised Disclosure (Risk Owner – Graham Bell, Chief Information Officer) AMBER 5. Data loss has been recommended for consideration as a strategic risk, it is anticipated that Chamberlain’s risk CHB6, Data Loss or Unauthorised Disclosure will form the basis of this, expanding on the current focus on electronic data, network and device security to include information of all formats and the wider people and policy issues in relation to good information governance. Consideration of this risk has not yet been concluded.
6. Following the appointment of the Chief Information Officer, further work is also in progress to classify the risk in relation to malicious attack on the City Corporation’s IS infrastructure. This risk has two streams, the more significant of which will evaluate likelihood and impact of an attack leading to the loss of sensitive data and the resulting loss of confidence in the organisation. The second aspect of this risk will examine the likelihood and impact of an attack that results in a denial of service, that is, our external website becoming either corrupted by a third party or removed entirely from service. Further detail will be provided to Committee as the evaluation is completed.
Page 58 CHB20: Performance of Captive Re-insurance (Risk Owner – Paul Mathews, Corporate Treasurer) GREEN 7. The performance of the City’s Captive Re-insurance company in its first year has exceeded expectations delivering a profit of approximately £1million against a target of £600,000. Claims experience to date provides no evidence to suggest that the profit target for the current year would not be achieved and so this risk is recommended for closure from the Departmental Risk Register, to be monitored by the Corporate Treasurer.
CHB21: Olympic IS Risk (Risk Owner – Graham Bell, Chief Information Officer) AMBER 8. This risk describes a range of issues in relation to the delivery of IS services and support to departments during the Olympic period, including planned operation outside of usual working conditions and vulnerability to unanticipated disruption. With regard to the latter, while departments have responded to consultation confirming that no requirement exists for additional remote network access capacity, further work is being undertaken by the IS Division to build resilience should, for example, disruption to the London transport network significantly hinder the ability of key staff to reach their place of work.
Conclusion 9. The Chamberlain’s Risk Register is being actively reviewed and updated by risk owners in line with the requirements in the Risk Management Handbook.
10. Finance Committee is presented with the Chamberlain’s risk register, a schedule of the key risks faced by the department and the actions being taken to manage and mitigate effectively those risks.
Appendices APPENDIX 1 Chamberlain’s Risk Register APPENDIX 2 Chamberlain’s Risk Profile
Contact: Matt Lock | [email protected] | 020 7332 1276
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Page 60 APPENDIX 1 City of London Corporation
Chamberlain’s Department Risk Register 12 th June 2012
Contents Page
Guidance Notes 1 Summary Risk Register 2 Risk Supporting Statements SR3 Financial Stability 8 CHB1 Revenue Position 9 CHB2 Investment Performance 10 CHB3 Revenue Collection 11 CHB6 Data Loss or Unauthorised Disclosure 12 Page 61 CHB7 Internal Audit Effectiveness 13 CHB9 Embedding Risk Management 14 CHB11 PP2P 15 CHB12 Reduction in Oracle Support of CBIS 16 CHB13 ICT Projects Failure 17 CHB14 IS Systems Failure 18 CHB15 IS Strategy 19 CHB16 Effective Procurement 20 CHB18 Budgeting and Accounting 21 CHB19 Impact on Workload of Rating Changes (Liberata & City) 22 CHB20 Performance of Captive Re-insurance 23 CHB21 Olympic IS Risk 24 Risk Assessment Framework 25
Owned By Chamberlain Version 2012 - 4 Department Name Risk Register Administered By Matt Lock Date 012/06/2012 Guidance Notes The following Guidance notes have been prepared to assist users of this document.
1. Risk Register Headings:
Heading Description Risk No. Unique reference for the risk. Risk Details Description of the risk. Gross Risk Assessment of the risk before taking into account any existing mitigating controls, Likelihood and Impact having been assessed against the risk assessment framework. Risk Owner/Lead Officer Officer responsible for the management of specific risks and key tasks associated with the mitigation of these. Existing Controls Controls in place to mitigate the risk. Net Risk Assessment of the risk having taken into account the mitigating controls in place. Risk Status & Direction Overall status of Red, Amber or Green calculated in accordance with the assessment of Likelihood and
Page 62 Impact, having applied the risk assessment matrix. Planned Action Details of further action required to mitigate the risk to an acceptable level. Control Evaluation An assessment of the adequacy of controls in place
2. Likelihood, Impact and Risk Status:
Likelihood and Impact Risk Status High risk, requiring constant monitoring and deployment of robust R KEY 1 2 3 4 5 control measures. Almost Medium risk, requiring at least quarterly monitoring, further mitigation Likelihood Rare Unlikely Possible Likely A Certain should be considered. Low risk, less frequent monitoring, consideration may be given to Impact Insignificant Minor Moderate Major Catastrophic G applying less stringent control measures for efficiency gains.
3. Control Evaluation:
Control Evaluation: R: Existing controls are not satisfactory A: Existing controls require improvement/Mitigating controls identified but not yet implemented fully G: Robust mitigating controls are in place with positive assurance as to their effectiveness
1
Summary Risk Register
Gross Risk Net Risk Risk Risk Owner/ Control Risk Details Existing Controls Risk Status Planned Action No. Likelihood Impact Lead Officer Likelihood Impact & Evaluation Direction * Reducing investment income and central government grants or unexpected Medium term financial requirements for planning. Efficiency significant Additional resilience Board and Efficiency expenditure results in to be developed and Performance Corporation being TO BE Chris Bilsland/ from savings SR 3 Sub-Committee 3 4 A ↔ unable to maintain a POPULATED Chris Duffield realised through established to balanced budget and PP2P and further scrutinise progress in maintain healthy savings plans. implementing 12.5% reserves on City's savings.
Page 63 Cash & City Fund significantly impacting on service delivery levels.
Failure to achieve planned income levels and failure to retrench expenditure Careful planning and resulting in insufficient monitoring, revenue to achieve maintaining sound CHB objectives. Failure to TO BE income and Chris Bilsland 3 3 A↔ n/a 1 properly control POPULATED expenditure expenditure and strategies, make the necessary enforcement of efficiencies, poor efficiency regime. service delivery, criticism from stakeholders.
2 KEY 1 2 3 4 5 Control Evaluation: Likelihood Rare Unlikely Possible Likely Almost Certain R: Existing controls are not satisfactory Impact Insignificant Minor Moderate Major Catastrophic A: Existing controls require improvement/Mitigating controls identified but not yet implemented fully * Direction relates to change in assessment since last review (up/down/no change) G: Robust mitigating controls are in place with positive assurance as to their effectiveness
Summary Risk Register
Gross Risk Net Risk Risk Risk Owner/ Control Risk Details Existing Controls Risk Status Planned Action No. Likelihood Impact Lead Officer Likelihood Impact & Evaluation Direction * Poor investment Careful planning and performance resulting delivery of investment CHB TO BE Caroline in failure to achieve strategies. Close 2 3 ↔ n/a 2 POPULATED A planned income Al-Beyerty monitoring systems levels. maintained.
Risk to be Careful planning and Failure to collect monitored, impact monitoring planned income and likelihood CHB TO BE Carla-Maria activity/sound resulting in insufficient 2 2 ↔ expected to 3 POPULATED Heath revenue strategy. G revenue to achieve increase with Timely billing and Page 64 objectives prolonged adverse recovery action. market conditions.
Completion of Mandatory training for Confidential data is Information all staff, encryption in lost or disclosed to Governance CHB TO BE use, Information persons not Graham Bell 4 3 ↔ Framework, 6 POPULATED Management A authorised to receive appointment to two Governance Board it. information established manager posts.
Regular monitoring Ineffective operation and reporting of Succession of the Internal Audit progress against the planning to prepare CHB Section, failure to 4 4 Paul Nagle audit plan, IA staff 2 3 ↔ for anticipated 7 provide adequate A G skills and experience retirement of key assurance to key assessment, audit team members. stakeholders. team restructure.
3 KEY 1 2 3 4 5 Control Evaluation: Likelihood Rare Unlikely Possible Likely Almost Certain R: Existing controls are not satisfactory Impact Insignificant Minor Moderate Major Catastrophic A: Existing controls require improvement/Mitigating controls identified but not yet implemented fully * Direction relates to change in assessment since last review (up/down/no change) G: Robust mitigating controls are in place with positive assurance as to their effectiveness
Summary Risk Register
Gross Risk Net Risk Risk Risk Owner/ Control Risk Details Existing Controls Risk Status Planned Action No. Likelihood Impact Lead Officer Likelihood Impact & Evaluation Direction * Risk and Assurance Manager, responsible for developing and Recruitment delivering the risk Failure to embed the exercise initiated, CHB management risk management 5 4 Paul Nagle 3 3 ↔ interim 9 framework (post A G process. st arrangements in vacant from 1 July place 2012). Risk Management improvement plan.
Established
Page 65 governance arrangements, regular oversight by Further work to Failure to deliver and Transformation CHB TO BE ensure Senior sustain savings from Linda Atkins Board. Project 2 4 ↔ 11 POPULATED A Management PP2P. management engagement. arrangements (including work stream risk registers) in place.
CHB Reduction in Oracle TO BE Proposals for upgrade Emma Drury 2 2 ↔ Upgrade to R12 12 Support of CBIS POPULATED to R12 in draft. G
Individual ICT Project planning and Projects being late, management CHB over budget, failing to TO BE Graham Bell methodology, role of 2 3 A↔ n/a 13 meet user POPULATED IS Strategy and requirements or Project Boards abandoned 4 KEY 1 2 3 4 5 Control Evaluation: Likelihood Rare Unlikely Possible Likely Almost Certain R: Existing controls are not satisfactory Impact Insignificant Minor Moderate Major Catastrophic A: Existing controls require improvement/Mitigating controls identified but not yet implemented fully * Direction relates to change in assessment since last review (up/down/no change) G: Robust mitigating controls are in place with positive assurance as to their effectiveness
Summary Risk Register
Gross Risk Net Risk Risk Risk Owner/ Control Risk Details Existing Controls Risk Status Planned Action No. Likelihood Impact Lead Officer Likelihood Impact & Evaluation Direction * Strict protocol for Action to maintain Major IS systems implementation and Manhattan system CHB failure due to TO BE Graham Bell operation of systems, 2 4 ↔ until a replacement 14 hardware/software POPULATED A DR/BCP system faults, bugs etc. arrangements. implemented.
Role of IS Strategy Expansion of Inappropriate IS Board, Business Business CHB TO BE Strategy and poor Graham Bell Change Team, 2 2 G↔ Relationship 15 POPULATED implementation. Communication with Management Stakeholders function. Page 66 Maintenance of contracts register, on- Failure to deliver an going monitoring of off Appointment of CHB efficient, effective and TO BE contract spend, Linda Atkins 2 2 G↔ interim staff to 16 legally compliant POPULATED communication. cover vacancies procurement function Increased compliance through use of e- tendering system.
5 KEY 1 2 3 4 5 Control Evaluation: Likelihood Rare Unlikely Possible Likely Almost Certain R: Existing controls are not satisfactory Impact Insignificant Minor Moderate Major Catastrophic A: Existing controls require improvement/Mitigating controls identified but not yet implemented fully * Direction relates to change in assessment since last review (up/down/no change) G: Robust mitigating controls are in place with positive assurance as to their effectiveness
Summary Risk Register
Gross Risk Net Risk Risk Risk Owner/ Control Risk Details Existing Controls Risk Status Planned Action No. Likelihood Impact Lead Officer Likelihood Impact & Evaluation Direction * Qualification of accounts, poor financial reporting and advice. Errors in Ensure resource budgets or accounts, allocation and missing statutory financial planning is deadlines resulting in CHB TO BE properly managed poor decision making Steve Telling 1 2 G↔ n/a 18 POPULATED and that accounts and a worsening process is controlled. financial position. Rigorous monitoring Criticism by Members of timetable. and external audit.
Page 67 Possible penalties for late accounts. Loss of confidence.
Impact on workload of both City and Liberata staff as a result of Monitoring outcomes CHB TO BE Carla-Maria Resource planning rating revaluations of valuation test 3 3 A↔ 19 POPULATED Heath for peak. because of over cases. supply of business premises.
6 KEY 1 2 3 4 5 Control Evaluation: Likelihood Rare Unlikely Possible Likely Almost Certain R: Existing controls are not satisfactory Impact Insignificant Minor Moderate Major Catastrophic A: Existing controls require improvement/Mitigating controls identified but not yet implemented fully * Direction relates to change in assessment since last review (up/down/no change) G: Robust mitigating controls are in place with positive assurance as to their effectiveness
Summary Risk Register
Gross Risk Net Risk Risk Risk Owner/ Control Risk Details Existing Controls Risk Status Planned Action No. Likelihood Impact Lead Officer Likelihood Impact & Evaluation Direction * City Captive Re- insurance company Regular performance fails to meet the monitoring of the predicted level of CHB TO BE Captive, providing financial savings, Paul Mathews 2 2 G↔ n/a 20 POPULATED early warning of resulting in need to adverse financial make compensatory performance. reductions elsewhere in the budget.
Change freeze, Major disruption or Close monitoring Page 68 evaluation of failure of IS in the run during the Olympic CHB TO BE extended support up to or during the Graham Bell 3 4 ↔ period to identify 21 POPULATED requirements, A 2012 Olympic and and respond to assurance from key Paralympic Games issues. partners
7 KEY 1 2 3 4 5 Control Evaluation: Likelihood Rare Unlikely Possible Likely Almost Certain R: Existing controls are not satisfactory Impact Insignificant Minor Moderate Major Catastrophic A: Existing controls require improvement/Mitigating controls identified but not yet implemented fully * Direction relates to change in assessment since last review (up/down/no change) G: Robust mitigating controls are in place with positive assurance as to their effectiveness
Risk Supporting Statement SR3
Gross Risk R Reducing investment income and central government grants or unexpected requirements for significant Risk expenditure results in Corporation being unable to maintain a balanced budget and maintain healthy Likelihood Impact reserves on City's Cash & City Fund significantly impacting on service delivery levels. TO BE POPULATED
To a large degree, this risk has already been realised, the organisation is now in the process of managing the impact of Detail reductions in funding and negating the impact on reserves. Two significant projects are underway to build resilience against further financial pressures.
Specific Issues Mitigating Controls n/a Scrutiny of efficiency proposals by the Efficiency Board and Efficiency and Performance Sub- Committee. Work with London Councils and direct lobbying of Central Government. Independent assurance work undertaken by Internal Audit regarding efficiency proposals. Page 69
Summary and Further Action Net Risk A It is anticipated that savings generated through the 12.5% departmental efficiency programmes will balance the budget, Likelihood Impact with further savings resulting from PP2P and the accommodation review building resilience to further funding reductions. As these savings materialise, it is anticipated that the impact of this risk will reduce. 3 4 Control Evaluation
8
Risk Supporting Statement CHB1
Gross Risk
Failure to achieve planned income levels and failure to retrench expenditure resulting in insufficient revenue Likelihood Impact Risk to achieve objectives. Failure to properly control expenditure and make the necessary efficiencies, poor service delivery, criticism from stakeholders. TO BE POPULATED
While many of the controls in operation to mitigate this risk are similar to SR3, this risk relates to the on-going revenue position Detail and financial control. The Chamberlain is the designated risk owner, Caroline Al-Beyerty is responsible for the mitigating actions.
Specific Issues Mitigating Controls Failure to achieve planned income levels. Careful Planning and monitoring, income and expenditure strategy in place. Failure to re-trench expenditure. Top slicing of budgets, strong efficiencies regime in place. Page 70 Failure to properly control expenditure. Close monitoring system for expenditure.
Summary and Further Action Net Risk A Position may need further review in the context of the Strategic Finance Review to ensure that the appropriate balance Likelihood Impact is maintained between operations and monitoring/oversight. 3 3 Control Evaluation
9
Risk Supporting Statement CHB2
Gross Risk Risk Poor investment performance resulting in failure to achieve planned income levels. Likelihood Impact TO BE POPULATED
Poor investment performance (i.e. performance below anticipated levels, having considered current market conditions) resulting Detail in failure to achieved planned income levels. The impact of this risk may be erosion of balances/reserves or insufficient revenue to achieve objectives.
Specific Issues Mitigating Controls No significant indicators of poor Investment Strategy in place. Independent review of strategy undertaken by consultants Aon investment performance at present time. Hewit, outcome includes proposals to reduce volatility of investments through diversification, projected 3% increase in returns over a 10 year period.
Monitoring of strategy.
Page 71 Face to face meetings with fund managers on a regular basis.
Summary and Further Action Net Risk A Likelihood Impact This risk is vulnerable to external factors, current market conditions and economic stability in particular, while we 2 3 cannot ensure “good” performance in the current climate, we can monitor to ensure that investments are performing well in the current climate. The investment strategy and monitoring investments in accordance with this provides a Control good level of control over the security of investments. Evaluation
10
Risk Supporting Statement CHB3
Gross Risk Risk Failure to collect planned income resulting in insufficient revenue to achieve objectives Likelihood Impact TO BE POPULATED
A significant proportion of income due to the City relates to commercial rents, market rents continue to fall in the City and there is a large volume of vacant property. There is an increased risk of tenant default as a result of increased risk taken on by Surveyors to secure tenancies in a more challenging/competitive market. Detail Further pressure on income streams is anticipated as a result of proposals around business rates retention, while there will be an opportunity to retain a share of growth of the rates pool, a greater proportion will be due to central government – this risk will need to be revisited in light of this.
Specific Issues Mitigating Controls
Page 72 Difficulty in recovering debts, particularly Monitoring of NNDR, Ctax, commercial rents and Miscellaneous Income. as a result of current market conditions, Regular aged debtor analysis and account follow up. resulting in failure to achieve income Regular inspection of empty properties. targets, impacting upon reserves/erosion Monthly and weekly monitoring of Liberata. of balances, ultimately resulting in failure to achieve objectives. Prompt billing. Up to date income collection strategy. (Review of misc. income collection to be reported to COG July 2012)
Summary and Further Action Net Risk G While at present, this risk is considered to be low, the position should be monitored closely, while current evidence Likelihood Impact indicates that collection rates remain high, impact and likelihood may increase with prolonged adverse market conditions. Similarly, reforms to rates retention will have an impact on revenue. 2 2 Control Evaluation
11
Risk Supporting Statement CHB6
Gross Risk Confidential data is lost or disclosed to persons not authorised to receive it, resulting in financial or Risk Likelihood Impact reputational loss, vulnerable people/service users could be affected. TO BE POPULATED
This is a corporate wide issue, led by IS Division. The Chief Information Officer is the Senior Information Risk Owner (SIRO). While at present there is considerable focus on electronic data, this risk relates to the security of all types of information/data in Detail all formats. The consensus of opinion in other authorities is that data loss is likely to occur at some point in time. Provided that sufficient training, policy and communications are in place, it is anticipated that, in the event of data loss, the Information Commissioners Office would take a balanced view in applying sanctions. Specific Issues Mitigating Controls Poor staff awareness/understanding of Mandatory training (e-learning module) for all staff – completion monitored by HR. information risk, deliberate mishandling of Employee code of conduct, staff vetting. information. Information risk “insight” briefings.
Page 73 Vulnerability of data on laptops/mobile Encryption in place. devices Vulnerability of electronic data in transfer GCSX encryption standard in place (includes mobile devices) Information Management Governance Board established (Chaired by Director of the Built Environment) – Sub-committee reporting to the IS Strategy Board. Further Controls: Information Governance Framework in development (procedures, principles, guidelines and policy) Creation of 2 information manager posts within the new organisation. Summary and Further Action Net Risk A A number of mitigating controls are in place with several more in development. The focus is, however, heavily centred Likelihood Impact on electronic data/IT systems and controls, with insufficient attention toward all other formats of information – ownership for which rests with the relevant information asset owners. 4 3 Further Action Control A key area of risk relates to the need for further development and application of a corporate data classification system Evaluation and protective marking scheme, enabling more consistent/thorough identification of information/data at risk.
12
Risk Supporting Statement CHB7
Gross Risk R Ineffective operation of the Internal Audit Section, failure to provide adequate assurance to key Risk Likelihood Impact stakeholders. 4 4
A number of factors exist that may contribute to the ineffective operation of Internal Audit (listed below). Internal audit failure could lead to an inability to provide an appropriate level of assurance on an operational level and as part of the Annual Governance Statement/ CIA opinion on the Internal Control Environment. May result in criticism from external inspection agencies (e.g. External Audit). There remains some uncertainty around the future of local public audit and what national Detail inspection regime may be introduced.
Non delivery of planned audit work may also contribute/result in non-detection of control failure/degradation, leading to operational losses through fraud and error.
Page 74 Specific Issues Mitigating Controls Poor focus of audit work Risk based approach to audit planning, engagement with Chief Officers and External Audit. Recruitment and retention of suitably No vacancies at present, market conditions contributing to staff retention. Succession planning skilled staff (including anticipated commenced. retirement of 3 specialist team members in the next 2-4 years). Non delivery of audit plan Regular monitoring/reporting to Audit and Risk Management Committee, Revised arrangements being considered to improve timeliness of audit finalisation. Poor quality audit work. Skills and experience evaluation undertaken for all staff, recent team restructure. Efficiency of individual team members Revised performance management arrangements introduced from April 2012
Summary and Further Action Net Risk A Likelihood Impact This risk is Unlikely to materialise, it is anticipated that the impact would be Moderate in the first instance, but could 2 3 lead to more significant issues over time should there be sustained ineffectiveness. As the future of public audit becomes more certain, there may be a reintroduction of formal external assessment of Internal Audit (replacing Control CAA/UoR), increasing the reputational aspects of this risk. Evaluation G
13
Risk Supporting Statement CHB9
Gross Risk R Risk Failure to embed the risk management process. Likelihood Impact 5 4
Transfer of operational responsibility to Internal Audit and recent development activity has raised the profile/visibility of Chamberlain’s corporate oversight of risk management in the organisation. A key feature of the current improvement plan is to Detail introduce consistency in approach and engagement with the RM process. As well as failure to derive operational benefits (corporately) from the development of effective risk management, there will be reputational issues for the department should this risk materialise.
Specific Issues Mitigating Controls Insufficient resource within the Appointment of replacement Risk and Assurance Manager (Target date October 2012). Interim department to deliver Risk Management arrangements established and handover plan in place.
Page 75 Improvement Plan and support development of the RM framework. (Risk and Assurance Manager post vacant with effect from 1 st July 2012) Poor officer engagement Communication with Chief Officers and departmental Risk Management Champions. Extensive on-going support to champions. Ineffective application of Risk Support to departments, regular monitoring and reporting to Audit and Risk Management Management Handbook Committee.
Summary and Further Action Net Risk A Likelihood Impact Good senior management and Audit and Risk Management Committee engagement, the new risk management framework has been approved, the corporate roll out is now underway, one to one meetings already held with a 3 3 number of departments. Control Evaluation Momentum needs to be maintained to ensure that risk management continues to have a high profile. G
14
Risk Supporting Statement CHB11
Gross Risk Risk Failure to deliver and sustain savings from PP2P. Likelihood Impact TO BE POPULATED
The financial risk of this project is partially offset as a result of the fee/contract structure with Accenture, the strategic partner, the project is scheduled to break even at month31. There are two main elements to this risk; delivery of savings and delivery of Detail organisational change. The project is now in Year 2 which involves the Year 2 Savings Target Projects and the Transformation phase which involves the creation of the City of London Procurement Service (CLPS). Risk analysis is being undertaken by the project team for individual work streams.
Specific Issues Mitigating Controls Poor top level engagement Governance arrangements established, regular oversight by Transformation Board.
Page 76 Poor officer engagement/Staff Communication/updates to officers as the project progresses, road shows and communication displacement via COG Lack of understanding of accountability First 2 Change Tracking Surveys complete and Change Partner Network fully in place. for procurement and the PP2P project across the organisation
Summary and Further Action Net Risk A Likelihood Impact This project is intended to build financial resilience through the introduction of considerable procurement efficiency 2 4 savings, project failure would not in itself result in a major impact, it would, however, result in failure to capitalise on a Control business opportunity of this magnitude and reputational damage. Evaluation G
15
Risk Supporting Statement CHB12
Gross Risk Increased vulnerability of CBIS following the forthcoming downgrade of supplier (Oracle) support for the Risk Likelihood Impact current version of Oracle Financials. TO BE POPULATED
To maintain an acceptable level of support from Oracle, the City needs to move from the current version 11.5.10 of the Oracle application (CBIS) to a later version, ideally before November 2013, after which Sustaining Support would apply. Whilst this Detail includes technical support, it specifically does not include new tax, legal and regulatory updates, or new updates, fixes, security alerts, data fixes, and critical (security) patch updates. It also excludes certification with new third-party products/versions and new Oracle products, so updates to Windows and Microsoft, for example, would carry a risk. Specific Issues Mitigating Controls Reduction in supplier support for current Proposals in draft for upgrade to Oracle Release 12 version of Oracle Financials Various elements associated with
Page 77 proposed upgrade, to be explored if proposal is agreed (e.g. impact on major projects, lack of in house IS resource to support upgrade, interdependencies with other City systems)
Summary and Further Action Net Risk G Likelihood Impact The move to Sustaining Support will reduce the long term viability of CBIS, while the system may continue to operate 2 2 without incident, should a problem arise, or a significant change be made to Third Party products, the likelihood of a fix Control being available from Oracle is greatly reduced. Evaluation G
16
Risk Supporting Statement CHB13
Gross Risk Individual ICT Projects being late, over budget, failing to meet user requirements or having to be Risk Likelihood Impact abandoned. TO BE POPULATED
Failure of IS projects may result in an inability to follow desired strategy/policy, resulting in additional costs and possible service Detail delivery failure, criticism by stakeholders and general loss of confidence. The IS Project Board is linked to the Corporate Project Management Working Party, providing the review point for all IS projects governed by the Working Party.
Specific Issues Mitigating Controls Insufficient framework for project Project planning and management methodology in place. management. Adequate training for staff – PRINCE 2 and MSP. Inappropriate projects pursued, projects IS Strategy Board approves and monitors all significant projects, IS Project Board for smaller
Page 78 fall behind schedule. projects Improved controls in relation to project oversight as a result of the new organisation.
Summary and Further Action Net Risk A Likelihood Impact 2 3 Corporate project governance arrangements and those within IS division have been refined, there are improved controls to mitigate this risk as a result. Control Evaluation G
17
Risk Supporting Statement CHB14
Gross Risk Risk Major IS systems failure due to hardware/software faults or bugs. Likelihood Impact TO BE POPULATED
This risk is linked to the Strategic Risk SR7 - IS Failure:
Major failure in information systems leading to significant disruption to business, inability to meet legal or regulatory Detail requirements, effect on health and safety, financial or reputational loss.
On an operational level, this relates to IS service delivery failure, resulting in an inability to function, additional costs and failure to collect income. Specific Issues Mitigating Controls High standards applied in the implementation and operation of all systems. Resilience measures and backup procedures. Page 79 Business continuity and disaster recovery arrangements in place and tested regularly. Introduction/application of industry best practice IT Infrastructure Library (ITIL) processes. The Manhattan system is very old, A report analysing the risks, showing how these change over time, and identifying mitigation running on old hardware and under an old and associate costs, was received by the IS Strategy Board, February 2012. It was agreed that operating system. As time moves on the action would be taken to mitigate current risks and maintain the Manhattan system until a risk of failure increases. replacement system is implemented. Summary and Further Action Net Risk A Likelihood Impact This risk and the mitigating actions describe the core business activity of the IS Division in supporting the City 2 4 Corporation through the effective use of information systems and technology. The Manhattan system is identified as a Control specific concern at present – this is under review. Evaluation G
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Risk Supporting Statement CHB15
Gross Risk Risk Inappropriate IS Strategy and poor implementation. Likelihood Impact TO BE POPULATED
Poor strategy or poor implementation of strategy may result in inappropriate investment or misdirection of staff resources, Detail leading to inferior service delivery, missed opportunities to improve service delivery, increased costs or missed opportunities to reduce costs. There may also be reputation damage. Specific Issues Mitigating Controls As described above Role of IS Strategy Board: Thorough research and consultation. Regular review and revision. Regular monitoring of implementation. Page 80 Communication with stakeholders. Business Change Team established as part of the new organisation. Extended Business Relationship Management team in place. Summary and Further Action Net Risk G Likelihood Impact 2 2 Two key activities are being implemented to improve corporate engagement; expansion of the Director level reference group. Control Evaluation G
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Risk Supporting Statement CHB16
Gross Risk Failure to deliver an efficient, effective procurement function, that is compliant with relevant legislation and Risk Likelihood Impact City of London regulations TO BE POPULATED
This risk may materialise as a result of failure to re-tender contracts appropriately or poor procurement advice provided to Detail departments, resulting in the City being tied in to inappropriate contracts, increased likelihood of supplier challenge (particularly in current economic climate) and breach of EU Directives. Specific Issues Mitigating Controls Departmental deviation from/non- e-tendering system in place, driving compliance with rules. compliance with procurement rules Forward planning and maintenance of contracts register. (legislation and City of London Education and training for officers. regulations). Key activity and Committee approval time line tool in place for procurement activity. Breach of EU directives Controls as above.
Page 81 Potential lack of capacity in advance of Interim staff have been appointed, plus a PP2P Project Support Officer. Two interim additional CLPS, compounded by recent loss of two project managers have also been recruited to assist the programme manager. senior members of staff.
Summary and Further Action Net Risk G Likelihood Impact 2 2 This risk will be phased out as the organisation migrates to PP2P and the CLPS, though it may be beneficial to recruit to some of the sourcing support roles in advance of CLPS launch. Control Evaluation G
20
Risk Supporting Statement CHB18
Gross Risk Qualification of accounts, poor financial reporting and advice. Errors in budgets or accounts, missing Risk statutory deadlines resulting in poor decision making and a worsening financial position. Criticism by Likelihood Impact Members and external audit. Possible penalties for late accounts. Loss of confidence. TO BE POPULATED
Detail No further detail. Specific Issues Mitigating Controls Threats listed in risk above Resource allocation and financial planning in place. Accounts process controlled centrally. Adequate timetable in place and progress against this monitored.
Page 82 Summary and Further Action Net Risk G Likelihood Impact Assessed as a low risk on the basis of past performance and low impact should the risk realise, the risk should be 1 2 monitored in the short term to consider the impact of the Strategic Finance Review, after which this could be Control considered for deletion from departmental risk register. Evaluation G
21
Risk Supporting Statement CHB19
Gross Risk Impact on workload of both City and Liberata staff as a result of rating revaluations because of over supply Risk Likelihood Impact of business premises. TO BE POPULATED
A peak of rating revaluations is anticipated during 2012, a number of test cases are in progress at present. Following this, a number of refunds are expected, creating short term demand for additional resources far in excess of contract and in house Detail resources (similar to peak in 2006). Additional resources will be required to manage the refunds, and to avoid service breakdown, major errors and late billing. Specific Issues Mitigating Controls Peak of revaluations because of over Monitoring test cases and of volume of revaluations supply Major impact on workload Resource planning required.
Page 83
Summary and Further Action Net Risk A Likelihood Impact Further detail on the likely impact of the rating revaluations is still forthcoming. At present, the Valuation Office has made no concessions regarding reductions in rateable values (announced 11/01/12), it is still anticipated that this risk 3 3 may materialise in the current climate. Consideration has been given to likely resource requirements/sources of Control additional resource, although it is noted that, until there is some indication as to the likely volume of revaluations, it is Evaluation not possible to quantify the resource shortfall. G
22
Risk Supporting Statement CHB20
Gross Risk City Captive Re-insurance company fails to meet the predicted level of financial savings (£750,000), Risk Likelihood Impact resulting in need to make compensatory reductions elsewhere in the budget. TO BE POPULATED
At present, the City Captive is performing well, a significant claim, however, will adversely affect the profitability of the Captive. Detail Monitoring of potential claims provides early warning to enable the identification of compensatory savings elsewhere in the budget. The target of £750,000 is based upon performance of the Captive in an “average” year. Specific Issues Mitigating Controls No claims anticipated at present that may On-going monitoring of claims/potential claims impact on ability of Captive to deliver anticipated returns.
Page 84
Summary and Further Action Net Risk G Likelihood Impact The Captive performed well in 2011/12, exceeding the profit target, securing £997,747, with a further £250,000 held 2 2 over as a reserve for the current year. Claims experience to date provides no evidence to suggest that the profit target for the current year is in jeopardy. This is, however, a dynamic risk fluctuating in accordance with the level of claims Control and so the position may change in year. Evaluation G
23
Risk Supporting Statement CHB21
Gross Risk Risk Major disruption or failure of IS in the run up to or during the 2012 Olympic and Paralympic Games. Likelihood Impact TO BE POPULATED
A significant factor within this risk is maintaining business as usual during the games; enabling service departments to deliver operational commitments during an extended period of disruption to normal operating conditions. There may also be an increased threat level in relation to network security. A major change freeze will be in place from 28/05/12 with a minor change Detail freeze from 25/06/2012, reducing the possibility of systems failure/service disruption resulting from any such changes.
IS Division have identified a number of specific threats that exist in the run up to and during the Olympic period, the most significant are listed below.
Specific Issues Mitigating Controls
Page 85 Disruption as a result of change freeze Change Advisory board convened. Insufficient back office support to meet Extended operational hours for support staff, minimum staff levels/service cover agreed and to demands of departments/service users. be enforced. Arrangements in place for key staff to be on call outside of core hours. Insufficient capacity for remote Departments have confirmed no additional dependency on Citrix/remote working expected, working/lack of understanding of remote situation to be monitored during peak periods with priority given to critical users. working functionality across the organisation. Supply failure (critical services) Assurance obtained from critical service partners that they will continue to meet their obligations under existing SLAs, although should be noted that this does not ensure that arrangements won’t fail in any given circumstance. ( Possible – external factors may inhibit ability to control, could have a Major impact – may affect multiple departments) Increased bandwidth usage resulting from Temporary increase to internet bandwidth, situation to be monitored and, should operational staff streaming live video. difficulties be detected, consideration will be given to blocking access to live streaming. Summary and Further Action Net Risk A Likelihood Impact Support arrangements are agreed and in place to accommodate operational variations during the Olympic period, with 3 4 contingency arrangements in place to respond to the specific threats identified above, close monitoring required during Control the games. Evaluation G
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Risk Assessment Framework
LIKELIHOOD
ALMOST RARE UNLIKELY POSSIBLE LIKELY CERTAIN
CATASTROPHIC 14 20 22 24 25
MAJOR 11 17 18 21 23
IMPACT MODERATE 6 10 13 16 19
MINOR 3 5 8 12 15 Page 86 INSIGNIFICANT 1 2 4 7 9
Likelihood Indicators Rare Robust mitigating controls in place, the risk may occur only in exceptional circumstances, (e.g. not likely to occur within a 10 year period or no more than once across the current portfolio of projects). Unlikely Adequate mitigating controls in place, the risk may occur in remote circumstances (e.g. risk may occur once within a 7-10 year period or once across a range of similar projects). Possible Reasonable mitigating controls in place, but may still require improvement . External factors may result in an inability to influence likelihood of occurrence (e.g. risk event could occur at least once over a 4-6 year period or several times across the current portfolio of projects). Likely Mitigating controls are inadequate to prevent risk from occurring, the risk may have occurred in the past (e.g. risk event could occur at least once over a 2-3 year period or several times across a range of similar projects). Almost Mitigating controls do not exist or are wholly ineffective to prevent risk from occurring. The risk has Certain occurred recently or on multiple past occasions (e.g. risk event will occur at least once per year or within a project life cycle). 25
Risk Assessment Framework
Impact Description Indicators Insignificant An event where the impact can be easily absorbed without No real impact on service delivery. management effort. Short term loss up to £5k , adverse variances across one or more budget subjective, although largely on target or within total budget. Very minor injuries. No sustained reputational damage, does not result in adverse media comment.
Minor Impact can be readily absorbed although some management Disruption on a divisional/business unit level, Impact on service delivery of little/no input or diversion of resources from other activities may be concern to stakeholders. required. The event would not delay or adversely affect a key Short term loss of up to £10k , or adverse budget variance of up to 10%. operation or core business activity. Slight injuries. Minimal localised reputational damage with minor short-term adverse media comment, early recovery possible.
Moderate An event where the impact cannot be managed under normal Serious disruption to service delivery from one department, affecting an isolated group operating conditions, requiring some additional resource or Senior of customers, short term impact on the environment. Management input or creating a minor delay to an operation or Short term loss of £100k , or adverse budget variance of 10-25%. core business activity. Major/serious injuries. Breach of regulation/law leading to sanctions or legal action Page 87 Local adverse media comment/public perception, possible medium/long-term impact .
Major Major event or serious problem requiring substantial Serious disruption to service delivery from more than one department, affecting a management/Chief Officer effort and resources to rectify. Would range of customers, recovery possible in the short term. adversely affect or significantly delay an operation and/or core Sustained loss of £5-10m , or short term loss in excess of £1m , or adverse budget business activity or result in failure to capitalise on a business variance of 25-50%. opportunity. Single fatality /medium-term impact on quality of life. Serious breach of regulation/law causing intervention/sanctions/legal action Short-term adverse media comment on a National level with prolonged comment on a local level leading to long-term damage and a general loss of confidence .
Catastrophic Critical issue causing severe disruption to the City of London, Catastrophic impact on service delivery across the organisation, protracted recovery requiring almost total attention of the Leadership Team/Court of period , possibly requiring organisational structure or process change. Common Council and significant effort to rectify. An operation or Sustained loss in excess of £10m per annum or adverse budget variance of greater core business activity would not be able to go ahead if this risk than 50%, inadequate resources to fund essential operations. materialised. Multiple fatalities /long-term impact on quality of lives or permanent impact on the environment Substantial breach of regulation/law resulting in prosecution of directors/Corporation Substantial adverse media comment on an International/National level, with long-term impact that may threaten the City Corporation’s ability to continue to operate as a service provider .
The descriptors above are indicative of likely outcomes/materiality measures at each impact level, this table has been developed to assist in ensuring that risk is considered and assessed within the appropriate context. As part of the assessment process, due consideration must be given to the lifetime of a risk; the project lifecycle or duration of the activity, whether this is a one off or recurring activity and the general proximity of the risk.
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Page 88 Chamberlains Department – Risk Profile June 2012 APPENDIX 2
CATASTROPHIC
MAJOR CHB11 CHB14 SR3 CHB21
CHB2 CHB7 CHB1 CHB9 MODERATE CHB6 CHB13 CHB19
CHB3 CHB12 Page 89
IMPACT IMPACT MINOR CHB18 CHB16 CHB15 CHB20
INSIGNIFICANT
ALMOST RARE UNLIKELY POSSIBLE LIKELY CERTAIN
LIKELIHOOD
Red/High Amber/Medium Green/Low KEY: Risk Risk Risk
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Page 90 Agenda Item 12
Committee(s): Date(s): Item no. Finance Committee 26 June 2012
Subject: Provision for Bad Debts Public
Report of:
The Chamberlain For Decision
Summary
The total draft provision for bad and doubtful debts at 31 March 2012 amounts to £4.6m and is calculated through a combination of judgements from officers responsible for pursuing individual debts and various aged debt percentages applied on the basis of past experience and recent knowledge.
The Finance Committee currently receives ad-hoc requests for write offs and it is proposed to rationalise the process with the Chamberlain’s Department collating such requests and seeking Finance Committee approval on a quarterly basis.
Members are requested to approve: • the general approach adopted in calculating the bad debt provisions; • the resultant bad debt provisions totalling £4.6m; and • that requests for write offs should be reported to the Finance Committee on a quarterly basis.
Main Report 1. The Finance Committee regularly receives requests for write offs in accordance with Standing Order 52 (1) (c) which requires amounts in excess of £10,000 to be approved by the Committee – with the exception of write offs relating to the Barbican Centre which may be approved by its Board. Whilst most write offs are a fait accompli by the time they reach the Finance Committee, the calculations of the financial provisions for such debts require significant assumptions. However, these estimates have not been regularly considered by the Finance Committee, an anomaly which is now addressed.
2. The total draft provision for bad and doubtful debts at 31 March 2012 amounts to £4.6m as summarised in the table below. This excludes the provisions for National Non Domestic Rates and Council Tax which are the subject of a separate annual report.
Page 91
Estimated Total Total Annual Debt Provision Committee Income 31-3-12 31-3-12 £000 £000 £000 Property Investment Board 112,505 12,258 1,904 Planning and Transportation (Penalty 3,850 2,272 1,549 Charge Notices) Community and Children's Services 13,552 1,219 532 Barbican Centre 19,886 847 179 Barbican Residential 12,181 1,867 114 Other Committees 92,468 7,633 351 Totals 254,442 26,096 4,629
3. A more detailed breakdown of the provision is set out in Appendix 1. This analyses the £4.6m by Committee within each income system; for example Manhattan for commercial rents and service charges, Accounts Receivable for general debtors, and Penalty Charge Notices. Where the provision is £100,000 or more for a Committee, comments and/or the bases of calculation have been provided.
4. In general, the approach adopted is: • larger debts are reviewed by the officer responsible for managing the properties or providing the service; • for smaller debts, varying percentages are applied based on past debt collection experience and recent knowledge of the categories of debt; and • for many debts over 12 months old or those relating to former tenants a 100% provision is made.
5. Following assessments of the adequacy of provisions any required ‘top-up’ is a charge to existing revenue budgets and any excess provision is credited back to such budgets. Write offs are funded directly from the provisions.
6. Rather than the Finance Committee continuing to receive ad-hoc requests for write offs, it is proposed to rationalise the process with the Chamberlain’s Department collating such requests and seeking Finance Committee approval on a quarterly basis.
7. Members are requested to approve: • the general approach adopted in calculating the bad debt provisions; • the resultant bad debt provisions totalling £4.6m; and • that requests for write offs should be reported to the Finance Committee on a quarterly basis.
Page 92 Contact: Caroline Al-Beyerty Financial Services Director 0207 332 1164 [email protected]
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Page 94 Appendix 1
City of London Bad Debt Provision - 31 March 2012
Estimated Debt Outstanding Bad Debt Provision Annual Committee <3 3-6 6-12 >1 Total <3 3-6 6-12 >1 Total Comments Income months months months year Debt months months months year Provision £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Manhattan System (Property rents and service charges excluding Social Housing)
Property Investment Board Current Tenants C&CS - assessed as bad debt 14 13 27 33 86 13 13 27 33 86 Management Surveyor review & advice 2,526 555 283 383 3,748 73 60 9 50 192 Debt is sorted into former and current tenants. The top 75% of Reviewed - assessed as good 1,839 538 839 195 3,409 0 0 0 0 0 debt by value over 3 months old is reviewed taking the C&CS Balance - Aged debt percentages applied 1,818 138 81 85 2,122 0 7 20 61 88 comments into account in respect to bad and doubtful debts and 112,505 6,196 1,244 1,229 696 9,365 86 80 56 144 366 then individually by tenant case with the management surveyors Former Tenants to determine likely recoverability. The remainder of the debt is C&CS - assessed as bad debt 1 3 53 614 670 1 3 53 613 670 then aged and provision is calculated using the CIPFA aged Management Surveyor review & advice 353 70 78 502 1,003 0 2 34 329 365 debt percentages. Reviewed - assessed as good 0 0 26 664 690 0 0 0 0 0 Page 95 Balance - Aged debt percentages applied 60 54 38 378 529 43 44 38 378 503 0 414 127 195 2,158 2,893 44 49 125 1,320 1,538 Total Property Investment Board 112,505 6,610 1,370 1,424 2,854 12,258 130 129 181 1,464 1,904 2% 9% 13% 51% 16% See Note (1)
Community and Children's Services This debt relates to HRA long lessee service charges and to commercial properties. The City can make a charge on long Current Tenants 2,434 260 53 101 58 472 1 13 50 58 122 lessees' properties (although debt recovery will be subject to the equity remaining after the payment of preferential creditors) and holds rent deposits for many commercial tenancies. There Former Tenants 0 0 0 3 9 12 0 0 3 9 12 have been very few write-offs in recent years. Total Community and Children's 2,434 260 53 104 67 484 1 13 53 67 134 Services 0% 25% 51% 100% 28% See Note (1)
1 of 4 Appendix 1
Estimated Debt Outstanding Bad Debt Provision Annual Committee <3 3-6 6-12 >1 Total <3 3-6 6-12 >1 Total Comments Income months months months year Debt months months months year Provision £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Barbican Residential This debt relates to rents and service charges. The City requires rent deposits for tenancies and can make a charge on long Current Tenants 12,181 1,711 44 19 8 1,782 0 11 10 8 29 lessees' properties (although debt recovery will be subject to the equity remaining after the payment of preferential creditors). There have been very few write-offs in recent years; Former Tenants consequently, a low provision is required. 0 3 15 13 54 85 3 15 13 54 85 Total Barbican Residential 12,181 1,714 59 32 62 1,867 3 26 23 62 114 0% 44% 72% 100% 6% See Note (1)
Other Committees 6,254 149 8 32 72 261 2 2 9 46 59 2% 21% 27% 64% 23% See Note (1)
Social Housing - rents and other charges Page 96
Community and Children's Services The main debts are for HRA tenants' rents and service charges, car parking and rents for Spitalfield's residential properties. Few Current Tenants write-offs are required due to estate officers' management of 10,466 93 23 15 5 136 0 5 8 5 18 rent arrears. However, as write-off is more likely once a tenant has left the property, a 100 % provision is made for former Former Tenants tenants' arrears. 0 12 76 0 0 88 12 76 0 0 88 Total Community and Children's 10,466 105 99 15 5 224 12 81 8 5 106 Services 11% 82% 53% 100% 47% See Note (1)
2 of 4 Appendix 1
Estimated Debt Outstanding Bad Debt Provision Annual Committee <3 3-6 6-12 >1 Total <3 3-6 6-12 >1 Total Comments Income months months months year Debt months months months year Provision £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Accounts Receivable (General debtors)
Community and Children's Services HRA 160 55 4 18 31 108 0 1 8 31 40 HRA rechargeable works and store sheds.
Invoices raised in cases of Housing Benefit overpayment. These debts can take a long time to be cleared as the amount the Housing (non-HRA) 31 12 9 13 149 183 0 3 7 149 159 client can repay each week is generally small. Many of these debts take several years to recover.
Of the total provision, £60,000 relates to older people's contributions towards their care packages. The financial assessment of one client is being reviewed (debt amounts to £31,000, which has been 100% provided for), at least two other
Page 97 clients have passed away and their debts will be reviewed with Social Services and Education 461 81 8 11 85 185 0 2 4 80 86 write-offs possibly being required. £8,000 of the provision relates to the Meals on Wheels service. The remainder of the provision is largely due to outstanding fees for after school services. Aged debt is reviewed on a monthly basis with budget holders.
Service transferred to an external contractor together with Recreation 0 27 1 0 7 35 0 0 0 7 7 responsibility for new debt. 652 175 22 42 272 511 0 6 19 267 292 0% 27% 45% 98% 57% See Note (1)
3 of 4 Appendix 1
Estimated Debt Outstanding Bad Debt Provision Annual Committee <3 3-6 6-12 >1 Total <3 3-6 6-12 >1 Total Comments Income months months months year Debt months months months year Provision £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Barbican Centre An overseas exhibitor pulled out and another went into liquidation. The legal recovery process has been unsuccessful Barbican International Enterprises 1,682 6 0 21 62 89 0 0 21 62 83 and write-offs are likely to be requested.
Debts too small to continue recovery processes cost effectively. Conference 3,030 257 146 14 29 446 0 5 1 29 35 Two of these debts have been pursued through legal channels unsuccessfully.
Retail 383 0 0 12 7 19 0 0 12 7 19 Retailer went into liquidation - legal recovery unsuccessful. Debts too small to continue the recovery process. One of these Box Office & Secondary Income 14,791 226 25 9 33 293 0 1 8 33 42 debts has been pursued through legal channels but unsuccessfully. Barbican Centre totals 19,886 489 171 56 131 847 0 6 42 131 179 0% 4% 75% 100% 21% See Note (1) Page 98
Other Committees 45,154 5,012 205 82 186 5,485 0 13 17 163 193 0% 6% 21% 88% 4% See Note (1)
Parking Charge Notices (PCNs)
Planning and Transportation The provision for PCN (Penalty Charge Notices, or parking Pre-Notice to Owner 57 9 2 0 68 25 4 1 0 30 tickets) debts of £1.549m has accrued over the period 2008/09 Notice to Owner 178 110 74 0 362 80 49 32 0 161 to 2011/12. Recoverable income in this period was some £15.226m. The City has an average collection rate of some 90% Charge Certificate 353 121 309 769 1,552 157 54 138 733 1,082 of recoverable income (which reflects the fact that we recover in full the value of 80% of PCNs issued - the highest in Registered at Court 0 0 0 290 290 0 0 0 276 276 London). See Appendix 2 for full details.
3,850 588 240 385 1,059 2,272 262 107 171 1,009 1,549 45% 45% 44% 95% 68% See Note (1) Other Systems (School Fees, Student Fees)
Other Committees 41,060 33 1,756 22 76 1,887 0 30 7 62 99 0% 2% 32% 82% 5% See Note (1)
Grand Totals 254,442 15,135 3,983 2,194 4,784 26,096 410 413 530 3,276 4,629
Notes Note (1): Bad debt provision as a proportion of debt outstanding - by age of debt.
4 of 4 Appendix 2
Planning & Transportation - PCNs
The provision for PCN (Penalty Charge Notices, or parking tickets) debts of £1.549m has accrued over the period 2008/09 to 2011/12. Recoverable income in this period was some £15.226m and is defined as the value of PCNs issued less cancellations. The bad debt provision therefore represents some 10% of the recoverable income. The City has an average collection rate of some 90% of recoverable income (which reflects the fact that we recover in full the value of 80% of PCNs issued - the highest in London). An analysis of collection rates over the period 2004/05 to 2011/12 shows an average of 79% of PCN income is recovered in the year of issue with a further 10% collected in year two. Beyond the second year, recovery is rate is less than 1% hence the operational focus on early recovery.
Of the provision of £1.549m, £1.008m relates to debts predating 2010/11 against an outstanding debt of £1.058m in the same period. This assumes forecast future income on these debts of £50k for which debt registration costs of £32k will apply. The delay in registering these debts has a negligible impact on recovery hence the decision to focus on the early debt.
The aim of this debt monitoring is to provide a reasonable forecast of income from PCNs. PCNs can take from 1 day to 4 years to process depending on various factors. There are both Tribunal and Court processes which provide motorists with the opportunity to challenge PCNs. These sections of the process are labour intensive and, unlike other Court processes, we are unable to claim our costs in defending appeals and Court challenges. Our previous IT system meant that court cases had to be manually selected, placed on floppy disk and sent to Northampton Court. The new system will provide electronic registration of cases managed by our IT supplier. This will streamline the process to ensure debt is processed effectively and efficiently and debts will typically be registered within 6 months of the PCN being issued.
Unlike other debt provision, PCNs are not debts per se. We are not providing goods or a service as they are fines issued for alleged parking and traffic contraventions. Drivers are entitled to challenge the PCNs on statutory and other grounds. Circa 12% of all PCNs issued are cancelled as the motorist makes a valid claim (proof of loading, proof of breakdown, etc) or we accept their mitigation circumstances (disabled driver, emergency, etc). Circa 7% of PCNs are written off as we are unable to recover the debt (warrant – gone away, unable to trace, void PCN, etc). Similarly a 30% increase in PCNs issued, as we had last year, will result in more challenges, more debt being carried on the system and more income than anticipated (£1.85m last year). We are not permitted to set
Page 99 Appendix 2 income targets as the aims of the service are increased compliance rather than income.
An Audit report in 2011 recognised as an amber risk the need to improve the regularity of debt monitoring within the service which had historically been tracked annually, this being largely limited by the laborious processes involved. The monitoring of the bad debt position will be introduced through the new IT system in July and this will see the bad debt monitoring move to a monthly basis from August of this year. This revised process has been agreed with Internal Audit.
Page 100 Agenda Item 13 Committee(s): Date(s): Streets and Walkways 18 June 2012 Projects Sub 20 June 2012 Finance 26 June 2012 Subject: Public Holborn Circus Area Enhancement Scheme Report of: For Decision Director of the Built Environment
Summary
This is a Gateway 4, Detailed Options appraisal report which considers a range of options to deliver an area enhancement scheme at Holborn Circus which is the worst personal injury accident hotspot in the City. City officers have been working with TfL and the London Borough of Camden for several years to agree how best to redesign this junction and meet construction costs. This report explains that a fixed sum of £2.5m has been made available by TfL to fund the scheme with the condition that money must be spent this financial year. This represents an achievable but very tight timescale for delivery and the scheme must now be moved forward at a much faster pace than hitherto in order to secure the TfL funding. A number of options for the junction design have been developed in conjunction with TfL and LB Camden. No specific materials were presented to TfL as part of the design work however in discussion with TfL at their ‘Design Review Panel’, TfL specified that they would want this major junction to deliver a high specification public realm. The total cost of each option and proposed funding strategies is summarised below. An option (Option 1), ‘do nothing’ has also been considered in the main report. Members are also asked to consider whether they wish to include or exclude a sustainable urban drainage system (SUDS) from the detailed design of options 2-5. The table below shows the SUDS included within options 2-5.
Page 101 Option 2 Option 3 Option 4 Option 5 Traffic Traffic Measures Traffic Measures Description Measures and Traffic Measures and and Relocation of and Relocation of Relocation of Relocation of Statue Statue Statue Statue York stone York stone Paving / York stone Paving / Granite Setts on Mastic Asphalt Paving Granite Setts on Hatton Garden & St Hatton Garden Andrews Street £ £ £ £ Cost before contingency & 2,291,198 2,748,731 2,758,201 2,849,107 SUDS Allowance for potential 313,192 313,192 313,192 313,192 Utility works SUDS 20,000 20,000 20,000 20,000 Total Cost 2,62 4,3 90 3, 081,9 23 3, 091,3 93 3,182,2 99
Funding Strategy TfL Major Bid Funding 0 2,500,000 2,500,000 2,500,000 London Borough of 20,000 20,000 29,470 29,470 Camden S106 Contributions 253,000 253,000 253,000 253,000 On Street Parking Reserve 2,351,390 308,923 308,923 399,829 Total Funding 2,624,390 3,081,923 3,091,393 3,182,299 Requirement
In none of the options is there any difference to the proposed layout of the new junction; the options are put forward only to propose changes in the materials used.
Material Options
Optio n Main materials Increase in Main risks cost over Option 2 2 Footway – Asphalt _ Likely loss of TfL funding Street Surface – as they require a high Asphalt specification public Raised Tables - realm for this junction. Asphalt 3 Footway – Yorkstone £457,533 • LB Camden have Street Surface – stated preference for Asphalt granite setts in Raised Tables - Hatton Gdns. Asphalt • Expected to be acceptable to TfL. 4 Footway – Yorkstone £467,003 • Acceptable to TfL Street Surface – • LB Camden yet to Asphalt confirm acceptance Raised Table (Hatton of construction and Gdns) – Granite Setts maintenance costs. Raised Table (St Andrew Street) – Asphalt 5 Footway – Yorkstone £557,909 • As 4 above. Street Surface – • Increased Asphalt maintenance costs Raised Table (Hatton likely for granite sett Gdns) – Granite Setts table in St Andrew Raised Table – Street. Granite Setts Page 102
Whilst Option 2 is shown as the cheapest option (£2,624,390) officers advise that there is a high risk that this option would not obtain TfL approval and therefore would fail to realise the external funding available. The use of mastic asphalt, as a footway material, is likely to be considered inappropriate by TfL in both the setting of a listed building and for a major junction undergoing significant redesign of the public realm. If TfL funding was not received, progression of the scheme would be dependent on the relevant S.106 receipts (£253,000), Camden funding (£20,000), and on significant underwriting from the On Street Parking Reserve (OSPR) (£2,351,390). With the OSPR being fully committed throughout the planning period to 2015/16, such a significant level of over- commitment would require a considerable amount of scheme reprioritisation. For these reasons, Option 2 is not recommended. Subject to the London Borough of Camden confirming the acceptance of the conditions set out above (i.e. funding the additional cost of granite setts and ongoing maintenance), option 4 is recommended otherwise option 3 will be recommended at Gateway 5. The total estimated cost of Option 4 is £3,091,393 including the allowance made for any unforeseen utility works and SUDS, which together total £333,192. This sum is likely to be further reduced given the new Highways Maintenance term contract that is expected to commence on the 1st July 2012. However the extent of any further savings through the new contract will depend upon the agreed works programming and the extent of any out of hours working (which attracts a premium) required. Financing of option 4 will require a call on the OSPR and this will result in an over commitment of £308,923. The Chamberlain advises this level of over commitment should be manageable over the planning period of the OSPR up to 2015/16, taking into account possible slippage etc in other projects and other possible savings. Details of the proposed funding strategies covering the options considered is set out in the main report; these have been developed in conjunction with the Chamberlain. This is based on Members prioritising this project and allocating certain funding streams towards its cost in comparison with other potential calls on such funds including, in particular, underwriting from the On street Parking Reserve (OSPR) which is already fully committed throughout the planning period to 2015/16. Therefore, if agreed, there may be the need to reprioritise existing schemes. This report is seeking authority to progress to gateway 4c at which point it is intended that the detailed financial implications will be set out along with any impact on other scheme(s) for Member agreement. It should be noted that such a call on the OSPR represents the worst case as it includes provision for the contingency and the SUDS system. Therefore, in the case of Option 4, if it transpired that these items (totalling £333,192) were not required then the call on the OSPR would be eliminated. In the meantime, it is proposed to review in further detail the funding of this project alongside all other similar schemes and programmes financed from the OSPR and other related funding streams. This work will be carried out by the reconstituted Highway and Planning Funds Officer Group which is kept by the Town Clerk’s department. It is envisaged that a proposed OSPR forecast will be reported to the Resource Allocation Sub-Committee as part of the autumn resource allocation process. It is proposed that a detailed assessment of costs addressing all of the above issues be presented at Gateway 4c along with funding proposals / options. This report further seeks approval for the preparation of a design report for the recommended Option 4 at a total estimated cost of £194,000 (as summarised in Appendix A, Table 6) to be fully funded from within the £2.5m Transport for London Page 103 Major Bid Grant. It is recommended that Members:- i) Approve the major junction improvement works (Option 4) at an estimated total cost of £3,091,393 (including SUDS and contingency), subject to further Member approval of the detailed design and authority to start work reports. This is also subject to the London Borough of Camden agreeing to fund the additional costs (£9,470) associated with granite setts in Hatton Garden, and any future maintenance costs. ii) Consider the option for excluding SUDS from the recommended Option 4 which will reduce the overall cost of the scheme by £20,000 and result in a corresponding reduction in the call on the On-Street Parking Reserve. iii) Approve the progression of Option 4 to Detailed Design and Authority to Start Work Stages at a cost of £194,000 to be fully funded from within the £2.5m Transport for London Major Bid Grant. iv) Confirm the overall prioritisation of this project and the Funding Strategy set out in the main report and Appendix A, Table 4, subject to the further confirmation at detailed design stage. iv) Authorise an application for Listed Building Consent to be submitted in order to relocate the Grade II listed Prince Albert Statue.
Page 104 Gateway 4: Detailed Options Appraisal
Committee(s): Date(s): Item no. Streets & Walkways 18 June 2012 Projects Sub 20 June 2012 Finance 26 June 2012 Subject: Holborn Circus Area Enhancement Public Scheme
Report of: For Decision Director of the Built Environment
Overview
Context This is a Gateway 4 report which considers various options and seeks agreement of the preferred option to be taken to detailed design and Gateway 5 stage.
The City, in partnership with the London Borough of Camden and Transport for London (TfL) has undertaken extensive feasibility and consultation studies at Holborn Circus to develop options aimed at delivering an appropriate package of measures which will reduce accident rates, ease pedestrian flows and create a high quality public realm, making the area more pleasant, safer and easier to navigate. Between 2004/05 and 2011/12 TfL has provided the City with some £281,132 to fully fund these feasibility studies and related consultation.
In September 2011, a bid for £4.4m was made to TfL, via the City’s Local Implementation Plan, for major junction improvements at Holborn Circus. In March 2012, TfL confirmed a fixed contribution of £2.5m would be made available subject to TfL’s agreement of the final design and the balance of any additional funding required being met by the City.
Holborn Circus is the worst personal injury accident hotspot in the City. Through the City’s Local Implementation Plan (LIP) officers have for some time been seeking to encourage financial support from TfL to fund improvements. A sum of £2.5m has been offered to the City by TfL to facilitate an
Page 105 improvement project. This funding is a fixed sum and subject to the condition that it is spent in 2012/13 and that the City meet any shortfall in costs. Therefore the decision making and delivery is extremely urgent.
Holborn Circus forms a key western gateway to the City. The Circus works as a complex six-armed signalised junction revolving around a central island on which is located the Grade ll Listed Prince Albert Statue. The statue blocks sight-lines for road users, causing confusion and accidents particularly for the more vulnerable road user. The local authority border between the City and Camden runs through the junction.
Holborn Circus has an average of 7.6 personal injury accidents per annum over the last 3 years, compared to an annual average of 3.0 for junctions across the City and 2.9 for Camden respectively.
Tables 1 and 2 summarise the accident record at Holborn Circus.
Table 1: Severity by 12-month period Accidents in 12 Fatal Serious Slight Total Months Ending
31 Dec 2009 1 0 6 7
31 Dec 2010 0 0 7 7
31 Dec 2011 0 3 6 9 (To end of November) Total 1 3 19 23
Of the 23 accidents, 16 involved vulnerable road users. These are broken down as follows:-
Table 2: Vulnerable road user Mode No. Personal Injury Accidents (PIAs) recorded Pedal Cycle 12 (52%) *
Pedestrian 1 (5%) *
Motor Cycle 3 (13%) *
Total 16 (70%) *
Page 106 * Percentage of the total number of accidents at the junction The junction forms a major barrier to pedestrian movement in the area and pedestrians struggle to cross the junction as there is only one signal controlled crossing point. Despite the high volume of pedestrians, the area is dominated by traffic, with narrow and highly congested footways and a patchwork of materials. There is also a distinct lack of good public spaces, which was highlighted during the recent consultation exercise where more seating and more places to dwell were requested by the public. London Borough of Camden have given political support to improving Holborn Circus and the proposals for this report have been developed in conjunction with London Borough of Camden and TfL.
Brief description of project Background In July 2004 the Planning & Transportation Committee and Policy & Resources Committees approved a Capital Bid Report for Holborn Circus to evaluate alterations to the layout of Holborn Circus. At the end of the 2005-06 financial year and in conjunction with the City, the London Borough of Camden employed a specialist consultant to undertake a preliminary public consultation that highlighted concerns and perceptions of members of the public living and working in the area. Since approval during the 2006-07 financial year TfL has continued to fund the scheme allowing more feasibility work to be undertaken. Additional areas of investigation have included the potential relocation of the Grade II Listed Prince Albert Statue, continued design and traffic modelling, and structural analysis of the carriageway to help assess the foundation requirements for the Statue at the new location. In July 2009 the Policy & Resources and Finance Committees, alongside the Streets and Walkways Committee, approved the continued evaluation and public consultation on the scheme. After drawn out, but ultimately fruitful discussions Page 107 with English Heritage and TfL, a scheme has been developed to improve safety and accessibility at this location, as shown in Appendix B. This involves significant carriageway realignment, together with the relocation of the Prince Albert Statue. The scheme has the support of LB Camden, TfL and English Heritage. In March 2011 the City, in partnership with Camden, launched a major public consultation exercise seeking comments on the scheme proposals. In July 2011 an update report was presented to the Streets and Walkways Committee informing members of the results of the public consultation for the Holborn Circus Area Enhancement Scheme.
Current Position In September 2011 an application for major bid funding of £4.4m was submitted to TfL. In March 2012, TfL announced that £2.5 has been ring- fenced for the Holborn Circus scheme in the financial year 2012/13. The TfL bid was successful as the scheme meets the criteria for three of the key objectives for TfL major scheme funding; - Improving safety; - Making a transformational improvement to the area; and - Creating a more pleasant street environment by creating a high quality public realm. This project is highly complex in nature due to the need to: (a) implement a scheme that not only improves safety, but also enhances Holborn Circus as a whole whilst still being practical for local residents and businesses; (b) relocate Grade II Listed Prince Albert Statue; and (c) agree a joint approach with the London Borough of Camden as the boundary with the City runs through the middle of Holborn Circus.
Success Criteria • Reduced accident rates. • Improved road safety and ease of movement for all modes of transport, particularly for the more vulnerable road Page 108 user. • Improved sight-lines at the junction. • Reduction in traffic congestion and journey times. • Improved accessibility and connectivity for pedestrians. • Improved cycle parking throughout the area. • Creation of a more pleasant street environment with the introduction of a new public space, trees and seats. • Preservation, improved public access and ease of maintenance of the Grade II Listed Prince Albert Statue. • Improving the existing drainage system in the area as Holborn Circus is an area at risk of flooding.
Notable Exclusions There are no notable exclusions.
Link to Strategic Aims A key aim of the City of London’s LIP is to reduce road traffic casualties in the City, particularly fatal and serious casualties and casualties among vulnerable road users. The City together Strategy: The Heart of a world class City 2008 – 2014 sets out a priority to ‘encourage walking and cycling safety’. It highlights that there are ‘competing interests in road usage’ and that ‘the number of cyclists is likely to grow, which is to be encouraged’. It also states that the City should ‘encourage improvements to transport safety, especially road safety’. The options being considered support the Core Strategy Vision of the LDF ‘The City’s streets will be managed to improve conditions for pedestrians and cyclists, while providing for essential private vehicle movements’.
The London Borough of Camden Transport Strategy/ Local Implementation Plan sets out the future direction and vision for transport in Camden. It includes the key transport objectives, the policies
Page 109 and measures to deliver them, and the targets and indicators to monitor and measure the success of the Strategy. Camden’s objectives include improving road safety and personal security for people travelling in Camden. It also includes developing and maintaining high quality, accessible public streets and spaces and recognise that streets are about more than movement. Within which category does the Category 7a: Asset Enhancement/ Improvement. project fit
Resources Expended To Date To date the total cost to evaluate the scheme is £281,132 which has been fully funded by TfL. A breakdown of these costs is set out in Appendix A Table 7.
Detailed Options Appraisal Recommendation
List of options described There are five potential options for Members to consider. Four of these propose a package of measures aimed at reducing the accident rate, which includes the relocation of the Grade II listed Prince Albert Statue, making the area more pleasant, safer and easier to navigate for workers, residents and visitors, as shown in Appendix B. The options are:- Option 1 – Do nothing; Option 2 – Major junction improvement works in asphalt; Option 3 – As option 2, but with York stone paving to be used on the footways; Option 4 – As option 2, but with York stone paving to be used on the footways, and granite setts to be installed at the raised courtesy crossing in Hatton Garden (LB Camden); and Option 5 - As option 2, but with York stone paving to be used on the footways, and granite setts to be installed at the raised courtesy crossings in both Hatton Garden and St Andrews Street. In addition to the above options, members are also requested to decide whether a Sustainable Urban Page 110 Drainage system (SUDS) should be included within any of the options 2, 3, 4 or 5. The options above have been presented to the TfL design review panel and their comments have been included within the recommendation sections of this report.
Option recommended to Option 4 is recommended to progress to Authority progress to Authority to Start to Start Work Stage at an estimated total cost of Work stage £3,091,393 with the proviso that the London Borough of Camden Meet the additional cost of construction of the granite setts table and any associated ongoing revenue costs. Please refer to Appendix A, Table 3 for further details. This option is supported by London Borough of Camden (although funding not yet confirmed) and is expected to also be supported by TfL. Should funding for the granite setts not be agreed by the London Borough of Camden, it is proposed that Option 3 be progressed to Gateway 5.
Funding Strategy In 2011 a bid for £4.4m was made to Transport for London (TfL), via the City’s Local Implementation Plan, for major junction improvements at Holborn Circus. At the time the bid was submitted it was anticipated that the scheme would be fully funded by TfL (£4.1m) and other external funding sources (£0.3m). In March 2012, TfL confirmed a fixed and time limited contribution of £2.5m would be made available for major improvement works at Holborn Circus in 2012/13. This contribution is subject to TfL’s agreement of the final design and the balance of any additional funding required being met by the City.
The tables in Appendix A provide a breakdown of the estimated costs and corresponding funding strategies for the options being considered. Option 2 is presented as the least expensive option (£2,624,390), however, Officers advise there is a high risk that this option would not obtain TfL approval as TfL have indicated that they would want to see a high quality public realm in this area. If TfL did not support the design option the City would fail to realise the external funding available. Consequently, should Members choose to approve this option and the TfL contribution of £2.5m be Page 111 withdrawn, the implementation of this scheme would be dependent on the relevant S.106 receipts (£253,000), Camden funding (£20,000), and on the availability of the On Street Parking Reserve (OSPR) (£2,351,390).
The latest projection of the OSPR indicates that the reserve is fully committed over the financial planning period to 2015/16. Approval of Option 2 would create an over-commitment of the Reserve by some £2.35m. This over-commitment would have to be eliminated over the planning period by either the re-prioritisation of existing schemes presently included in the Reserve Programme or through the identification of alternative funding for such schemes.
Table 3, Appendix A also details three further options: 3, 4 and 5. It is understood that all three of these would be acceptable to TfL, however, Option 4 is preferred. This is because this option includes the specification of works to the Hatton Garden arm of the junction that LB Camden prefer. Given that TfL are not willing to fully fund the scheme the financing of the three remaining options will also require the use of funding from s106 agreements and a call on the OSPR.
At this stage an allowance to meet the cost of possible unforeseen utility works has been provided within each option. This has been based on a tolerance of 20% of the basic option works cost. This is a worst case scenario and it is anticipated that this risk will be more robustly quantified at the detailed design stage, as costs are further refined, with any reduction in the contingency reducing the City’s commitment from the OSPR.
The total estimated cost of the recommended Option 4 is £3,091,393 including a works contingency of £313,192 and SUDS £20,000. It is proposed that this scheme is funded via the £2.5m major bid grant from TfL, £308,923 from the OSPR, £253,000 from residual interest on two S.106 agreements and a contribution of £29,470 from the London Borough of Camden. Should members recommend Option 4, it is proposed that LB Camden would fund the use of granite setts on Page 112 Hatton Garden, and enter into an agreement for any future maintenance associated with their use. This would be set out at the detailed design stage.
Whilst the financing of Option 4 will require a call on the OSPR (£308,923) this level of over- commitment is deemed “manageable” over the planning period to 2015/16; taking into account likely slippage etc. in other projects and other possible savings.
Members are effectively being asked therefore, to approve the allocation of £308,923 from the OSPR, toward Holborn Circus on the basis that this represents a priority use of such funds and that through careful management of the Reserve, this over-commitment can be eliminated over the financial planning period. The funding strategies have been developed in conjunction with the Chamberlain.
In the event that potential other relevant S.106 agreements become available, a revised funding strategy will be presented at detailed design stage to reduce the proposed over-commitment of the OSPR.
The cost required to complete the design of options 2 to 5 is £194,000 as set out in Appendix A, Table 6. This is in addition to the £281,132 already provided by TfL to facilitate feasibility and options appraisal works at Holborn Circus between 2004/05 and 2011/12. The full cost to evaluate and design the measures will therefore total some £475,132.
Resource requirements to reach The resources required to reach authority to start Authority to Start Work and work stage are detailed below. source of funding Option 1 There are no further costs associated with this option. Options 2 to Option 5 The estimated cost to develop a detailed design and to reach Authority to Start Work stage is £194,000 as set out in Appendix A, Table 6. The funding required to complete the detail design Page 113 for options 3, 4 and 5 is fully recoverable from the £2.5m TfL major bid grant, with no expected contribution from the City. The cost to develop the detailed design for option 2, however, is likely to need to be met from OSPR as TfL are unlikely to support this option; with the OSPR being fully committed throughout the planning period to 2015/16, this level of over-commitment would have to be eliminated over the planning period.
Plans for consultation prior to Extensive consultation has been undertaken as Authority to Start Work part of the evaluation of this scheme. During March and April 2011, the City, in partnership with the London Borough of Camden, undertook a public consultation on the principles of the proposals. A consultation leaflet seeking comments on the proposal was distributed to 5,500 local businesses and residents in the vicinity of Holborn Circus including those in the administrative boundaries of the London Boroughs of Camden and Islington. The consultation was formally launched by the (then) Deputy Chairman of Streets and Walkways alongside Councillor Sue Vincent, Cabinet Member for Environment at Camden. Both fully supported the proposals and highlighted the significant benefits that the scheme would bring to the local community.
The formal launch took place on 3rd March 2011 at St. Andrews Holborn Church. This was followed by a six week consultation/ exhibition at the Church.
The consultation and exhibition were advertised on the City’s website, in E-Leader and City Resident as well as by Camden using their Change Act Share newsletter to businesses. The consultation material was available to download from the City’s website and comments could be submitted electronically to a dedicated email address.
A total of 147 responses have been received and officers have also received valued feedback on the proposals through the launch event and exhibition held at St Andrews Church.
The results of this consultation were overwhelmingly positive, as was reported to the Streets and Walkways Committee in July 2011.
Page 114 A number of views were expressed over the impact on cycling permeability of making Hatton Garden one way under the scheme proposals. This issue has been resolved by allowing 2 way cycling for cyclists at the Hatton Garden junction of Holborn.
A Gateway 4C detail design report will need to be Level of approval for Detailed submitted to Committee for decision. Design (if required)
Procurement Strategy It is proposed that the City’s highways term contractor will be used. Procurement will be in line with term contract procedure.
Tolerances Any significant deviation from the project programme would delay the start of construction and prevent the expenditure of TfL funding in 2012/2013.
Detailed Options Appraisal
Option Option 1 – Do Nothing
Description Selecting the Do Nothing option would mean that Holborn Circus would continue to be one of the most dangerous junctions in the City of London and the London Borough of Camden. The junction will continue to form a major barrier to pedestrian movement in the area, and there will continue to be a lack of public space in the vicinity of the junction.
Option Option 2 – Traffic measures and relocation of statue, environmental enhancements, mastic asphalt footways and asphalt courtesy crossings. • Description Simplify junction operation, making it much clearer to drivers, cyclists and pedestrians to see how the junction works;
• Move the Prince Albert Statue west onto High Holborn to help improve sight-lines;
• A reduction in carriageway space and increase in pedestrian space, opening up
Page 115 Option Option 2 – Traffic measures and relocation of statue, environmental enhancements, mastic asphalt footways and asphalt courtesy crossings. opportunities for public realm improvements, particularly adjacent to the western gardens of St Andrews Church;
• Redirection of St Andrew Street into New Fetter Lane;
• New controlled pedestrian crossing points on all arms except Hatton Garden;
• Provide raised courtesy crossings at Hatton Garden and St Andrew Street;
• Provide cyclists with advanced stop lines and lead in-lanes on Hatton Garden making the junction safer and easier to use for them;
• Hatton Garden to operate as one-way northbound, with a 2 way cycle facility at the junction of Holborn; and
• The raised courtesy crossings to be constructed using tarmac, and the footway areas to be paved using mastic asphalt.
It has been identified that the Grade II Listed Prince Albert Statute that lies in the centre of the Circus is a significant contributor towards the accident rate at the junction. The position of the statue creates confusion and sight line problems, particularly for the more vulnerable road user who account for 70% of the total number of personal injury accidents at the junction.
Reducing the number of arms entering the junction and relocating the Prince Albert Statue will simplify traffic movements whilst improving forward visibility which should result in a significant reduction in personal injury accidents. In its revised location, the Prince Albert Statue will be located to the west of Holborn Circus, set within a central reserve, allowing the Statue to be appreciated at close quarters. This will also allow for much easier maintenance of the statue, and reduced vehicle damage. Page 116 Option Option 2 – Traffic measures and relocation of statue, environmental enhancements, mastic asphalt footways and asphalt courtesy crossings.
In terms of traffic management, the junction capacity would be increased since the number of arms entering the junction would be reduced from six to four arms. This enables the installation of staggered pedestrian crossings on all arms of the junction, except Hatton Garden where an uncontrolled crossing is proposed. The right turn from St Andrew Street will be prohibited to all vehicles, except cyclists, and a 2 way cycling facility will be installed on Hatton Garden. The changes to traffic operations at Holborn Circus will require rerouting of traffic operations and further traffic modelling will be undertaken during detail design to ensure that the junction is fully optimised and that any safety issues regarding the proposed signal layout have been removed.
Softening the street environment with trees will provide shade in the summer months and enhance biodiversity. The newly created public space area adjacent to St Andrews Church will provide space for trees and seating, although the number, type and positions of the trees would be restricted by the location of the piped subway and underground cables and services.
The option will address the spatial balance and relationship between footway and carriageway at Holborn Circus to create a more inclusive environment, one that recognises the need for enhanced pedestrian movement. The improvements around Holborn Circus would mitigate the access and connectivity issues associated with the junction.
Advantages/ Disadvantages Refer to the recommendation section below. and strategy for achievement
Scope and exclusions No notable exclusions.
Constraints and assumptions It is assumed that listed building consent approval to relocate the Prince Albert Statute will be
Page 117 Option Option 2 – Traffic measures and relocation of statue, environmental enhancements, mastic asphalt footways and asphalt courtesy crossings. received within 3 months of submitting the application. Assumptions have been made regarding the costs for diverting underground utilities within the vicinity of the junction and are to be met from the 20% contingency identified. Assumptions have been made regarding the costs of installing a Sustainable Drainage System within the newly created area of open space adjacent to St Andrews church. The above will be confirmed in the Gateway 4C report (detail design).
Programme The project programme is detailed below in table 8. Table 8: Outline programme
Task Date
Detailed design, traffic June - Sep 2012 modelling, safety audit, traffic management plans and revised cost estimate
Gateway 4C “Detailed Sep/ Oct 2012 Design” report and Gateway 5 “Authority to Start Work” report
Enabling works Nov - Dec 2012
Implementation Jan- May 2013 NB TfL-funded elements must be completed by 31 st March 2013.
Risk implications See Appendix D
Legal implications The City has general powers to improve highways in section 62 of the Highways Act 1980 as well as more specific improvement powers (e.g. to vary the widths of footway and carriageway (s.75), alter the level of highway (s.77) and plant trees (s.96)). Page 118 Option Option 2 – Traffic measures and relocation of statue, environmental enhancements, mastic asphalt footways and asphalt courtesy crossings.
As the City will be carrying out works in the area of the London Borough of Camden, it will need to enter into agreement under s.8 of the Highways Act 1980 prior to doing so.
HR implications N/A
Anticipated stakeholders and Key stakeholders will be kept informed during the consultees detail design process. Notices will also be installed around Holborn Circus to keep local residents/ businesses updated on scheme progress.
Results of consultation carried See consultation prior to authority to start work out to date section.
Financial Implications
Estimated capital cost (£) The total estimated costs of the Highway improvement works is £2,624,390, as set out in Appendix A, Table 3.
Please refer to funding strategy above and Source of capital funding Appendix A, Table 4. The progression of this option would require significant underwriting from the On- Street Parking reserve and lead to the over- commitment of the Reserve by some £2.35m over the planning period to 2016/17. This over- commitment would have to be eliminated by either the re-prioritisation of existing schemes presently included in the Reserve Programme or through the identification of alternative funding for such schemes.
Anticipated phasing of capital The anticipated phasing of capital expenditure is expenditure as follows: 2012/13 £2,510,828 2013/14 £102,562 Later years £11,000
Estimated capital value/return N/A (£)
Page 119 Option Option 2 – Traffic measures and relocation of statue, environmental enhancements, mastic asphalt footways and asphalt courtesy crossings.
Fund/budget to be credited N/A with capital return
Estimated revenue implications Although the City’s geographical boundary runs (£) through the middle of Holborn junction, the City’s maintenance boundary includes the whole of the junction and therefore extends into the London Borough of Camden. Consequently any future maintenance works required at Holborn Circus fall under the responsibility of the City. At this stage, however, it is not anticipated that there will be any additional cleansing and maintenance costs as a result of the proposed area enhancements. This will be further refined at detailed design stage. The scheme also includes the installation of 6 new trees. It is expected that the first five years maintenance and establishment costs for these trees (estimated at £2,200 per year) will be met from the relevant S.106 deposits, after which the ongoing maintenance costs would be met by the Department of Open Spaces.
Source of revenue funding N/A
Fund/budget to be credited N/A with income/savings
Anticipated life N/A
Investment Appraisal N/A
Benchmarks or comparative N/A data
Proposed procurement The City’s Highways term contractor would be used approach to deliver the chosen option.
Affordability See proposed funding strategy above and Appendix A, table 4.
Recommendation Not Recommended
Reasons Whilst this option will help to achieve most of the success criteria as set out in this report, the proposal to pave the footways in mastic asphalt is Page 120 Option Option 2 – Traffic measures and relocation of statue, environmental enhancements, mastic asphalt footways and asphalt courtesy crossings. not considered appropriate in a setting adjacent to a listed building and in an area of major change, as set out in the review of materials report which was approved by Committees in December 2010. Furthermore, the proposal to construct the raised courtesy crossings in Hatton Garden and St Andrew Street using tarmac will not provide the same visual contrast and therefore safety benefits as would be achieved by using granite setts. The use of mastic asphalt for the footways would also fail to meet one of the key objectives for TfL major scheme funding, which is to create a more pleasant street environment by creating a high quality public realm. Consequently there is a high risk that this option would not obtain TfL approval and therefore would fail to realise the external funding available.
Next Steps Should members approve this option, detail design will be undertaken and an application for listed building consent approval will be submitted. Costs will be refined and a Gateway 4C and 5 reports will be prepared prior to implementation.
Option Option 3 – Traffic measures and relocation of statue, environmental enhancements, York stone footways and asphalt mastic courtesy crossings.
Description This option is the same as option 2 but it is proposed to pave the footways in York stone paving.
Advantages/ Disadvantages Refer to the “Recommendation” section below. and strategy for achievement
Scope and exclusions No notable exclusions.
Constraints and assumptions As option 2.
Programme As option 2.
Page 121 Option Option 3 – Traffic measures and relocation of statue, environmental enhancements, York stone footways and asphalt mastic courtesy crossings.
Risk implications See Appendix D .
Legal implications As option 2.
HR implications N/A
Anticipated stakeholders and As option 2. consultees
Results of consultation carried As option 2. out to date
Financial Implications
Estimated capital cost (£) The total estimated costs of the Highway improvement works is £3,081,923, as set out in
Appendix A table 3.
Source of capital funding Please refer to funding strategy above and Appendix A, Table 4.
Anticipated phasing of capital The anticipated phasing of capital expenditure is expenditure as follows: 2012/13 £2,510,828 2013/14 £560,095 Later years £11,000
Estimated capital value/return N/A (£)
Fund/budget to be credited N/A with capital return
Estimated revenue implications As option 2. (£)
Source of revenue funding N/A
Fund/budget to be credited N/A with income/savings
Page 122 Option Option 3 – Traffic measures and relocation of statue, environmental enhancements, York stone footways and asphalt mastic courtesy crossings.
Anticipated life N/A
Investment Appraisal N/A
Benchmarks or comparative N/A data
Proposed procurement As option 2. approach
Affordability See proposed funding strategy above and Appendix A, table 4.
Recommendation Not Recommended
Reasons Although the use of York stone meets one of the key objectives for TfL major scheme funding, to create a more pleasant street environment by creating a high quality public realm, the proposal to construct the raised courtesy crossings in Hatton Garden and St Andrew Street using tarmac will not provide the same visual contrast and therefore safety benefits as using granite setts. In addition, the TfL design review panel recommended that the raised courtesy crossing at Hatton Garden should be constructed in granite setts, as this area is very different in scale and character to St Andrew Street.
Next Steps Should members approve this option, detail design will be undertaken and an application for listed building consent approval will be submitted. Costs will be refined and a Gateway 4C and 5 reports will be prepared prior to implementation.
Option Option 4 – Traffic measures and relocation of statue, environmental enhancements, York stone footways and a granite sett courtesy crossing in Hatton Garden.
Description This option is the same as option 2 but it is proposed to pave the footways in York stone paving, construct the raised courtesy crossing in Hatton Page 123 Option Option 4 – Traffic measures and relocation of statue, environmental enhancements, York stone footways and a granite sett courtesy crossing in Hatton Garden. Garden in granite setts, and construct the raised courtesy crossing in St Andrew Street in tarmac.
Advantages/ Disadvantages Refer to the “Recommendation” section below. and strategy for achievement
Scope and exclusions No notable exclusions.
Constraints and assumptions As option 2.
Programme As option 2.
Risk implications See Appendix D .
Legal implications As option 2.
HR implications N/A
Anticipated stakeholders and As option 2. consultees
Results of consultation carried As option 2. out to date
Financial Implications
Estimated capital cost (£) The total estimated costs of the Highway improvement works is £3,091,393, as set out in Appendix A, Table 3.
Source of capital funding Please refer to funding strategy above and Appendix A, Table 4
Anticipated phasing of capital The anticipated phasing of capital expenditure as expenditure detailed in Appendix A, Table 5 is as follows: 2012/13 £2,510,828 2013/14 £569,565 Later years £11,000
Estimated capital value/return N/A (£)
Page 124 Option Option 4 – Traffic measures and relocation of statue, environmental enhancements, York stone footways and a granite sett courtesy crossing in Hatton Garden.
Fund/budget to be credited N/A with capital return
Estimated revenue implications As option 2. (£)
Source of revenue funding N/A
Fund/budget to be credited N/A with income/savings
Anticipated life N/A
Investment Appraisal N/A
Benchmarks or comparative N/A data
Proposed procurement As option 2. approach
Affordability See proposed funding strategy above and Appendix A, table 4.
Recommendation Recommended
Reasons This option will help to achieve all of the success criteria as set out in this report. The proposals aim to reduce the accidents at the junction whilst creating a high quality public realm making the area safer, more pleasant and easier to navigate. It is proposed to construct the raised courtesy crossing in St Andrew Street using tarmac. Although this will not provide the same visual contrast and safety benefits as using granite setts, due to the high axle loading and turning movements of buses into St Andrews Street, tarmac is considered the most suitable material to use at this location. As part of the landscaping it is proposed to replace the existing concrete slabs and mastic asphalt with
Page 125 Option Option 4 – Traffic measures and relocation of statue, environmental enhancements, York stone footways and a granite sett courtesy crossing in Hatton Garden. York stone paving, which is the appropriate material to use adjacent to a listed building, and in an area of major change. This option also meets one of the key objectives for TfL major scheme funding, which is the creation of a more pleasant street environment by creating a high quality public realm. The TfL design review panel recommended that the raised courtesy crossing at Hatton Garden should be constructed in granite setts, as it is very different in scale and character to St Andrew Street.
Next Steps Should members approve this option, detail design will be undertaken and an application for listed building consent approval will be submitted. Costs will be refined and a Gateway 4C and 5 reports will be prepared prior to implementation.
Option Option 5 – Traffic measures and relocation of statue, environmental enhancements, York stone footways and granite sett courtesy crossings in Hatton Garden and St Andrew Street.
Description This option is the same as option 2 but it is proposed to pave the footways in York stone paving, and construct the raised courtesy crossings in Hatton Garden and St Andrews Street in granite setts.
Advantages/ Disadvantages Refer to the “Recommendation” section below. and strategy for achievement
Scope and exclusions No notable exclusions.
Constraints and assumptions As option 2
Programme As option 2.
Risk implications See Appendix D.
Page 126 Option Option 5 – Traffic measures and relocation of statue, environmental enhancements, York stone footways and granite sett courtesy crossings in Hatton Garden and St Andrew Street.
Legal implications As option 2.
HR implications N/A
Anticipated stakeholders and As option 2. consultees
Results of consultation carried As option 2. out to date
Financial Implications
Estimated capital cost (£) The total estimated costs of the Highway improvement works is £3,182,299, as set out in Appendix A, table 3.
Source of capital funding Please refer to funding strategy above and Appendix A, Table 4.
Anticipated phasing of capital The anticipated phasing of capital expenditure is expenditure as follows: 2012/13 £2,510,828 2013/14 £660,471 Later years £11,000
Estimated capital value/return N/A (£)
Fund/budget to be credited N/A with capital return
Estimated revenue implications As option 2. (£)
Source of revenue funding N/A
Fund/budget to be credited N/A with income/savings
Anticipated life N/A
Page 127 Option Option 5 – Traffic measures and relocation of statue, environmental enhancements, York stone footways and granite sett courtesy crossings in Hatton Garden and St Andrew Street.
Investment Appraisal N/A
Benchmarks or comparative N/A data
Proposed procurement As option 2. approach
Affordability As option 2.
Recommendation Not Recommended
Reasons This option will help to achieve all of the success criteria as set out in this report. The proposals aim to reduce the accidents at the junction whilst creating a high quality public realm making the area safer, more pleasant and easier to navigate. However, due to the high axle loading and turning movements of buses into St Andrews Street, there could be additional costs associated with the maintenance of a granite sett courtesy crossing in this location. Consequently, the use of tarmac is considered to be the most suitable material in this instance. As part of the landscaping it is proposed to replace the existing concrete slabs and mastic asphalt with York stone paving, which is the appropriate material to use adjacent to a listed building, and in an area of major change. This option meets one of the key objectives for TfL major scheme funding, which is the creation of a more pleasant street environment by creating a high quality public realm. It is proposed to construct the raised courtesy crossings in Hatton Garden and St Andrew Street using granite setts which will provide safety and accessibility benefits to pedestrians.
Next Steps Should members approve the option, detail design will be undertaken and an application for listed building consent approval will be submitted. Costs will be refined and a Gateway 4C and 5 Page 128 Option Option 5 – Traffic measures and relocation of statue, environmental enhancements, York stone footways and granite sett courtesy crossings in Hatton Garden and St Andrew Street. reports will be prepared prior to implementation.
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Page 130 Agenda Item 14
Committee(s): Date(s): Culture, Heritage & Libraries 28 May 2012 Finance 29 May 2012 Subject: Public Spitalfields Music Grant 2013, 2014, 2015 Report of: For Decision Director, Culture, Heritage & Libraries
Summary
Spitalfields Music has been in operation since 1976 and funded by the City of London Corporation since 1996. It has a clearly defined role within the City arts portfolio with a programme which joins world-class artists with the Tower Hamlets community through festivals and Learning and Participation Programmes. This summer this is illustrated by its very distinctive contribution to the Celebrate the City weekend. This report sets out Spitalfields Music funding application for 2013/14, 2014/15 and 2015/16. Recommendations • To fund Spitalfields Music for 2013/14, 2014/15 and 2015/16 with a grant of £45,000 per annum. This represents a 10% cut to the previous level of grant to Spitalfields Music, in line with that applied to other City arts organisations.
Main Report
Background 1. Spitalfields Music has received grants from the City of London Corporation since 1996. The grant is given to support the full range of the charity’s work including its two annual music festivals and its year round Learning and Participation Programme. The grant is made from the City Educational Trust Fund, which is controlled by the Finance Committee. Following on from the governance review and the subsequent rationalisation of funding responsibilities for festivals, it was agreed that confirmation of the grant will continue to be the responsibility of the Finance Committee, but it will take advice from the Culture, Heritage and Libraries Committee as to whether Spitalfields Music is worthy of continuing funding, on artistic and cultural grounds and in the context of the City’s Cultural Strategy.
2. The City of London’s grant sits alongside grants from the London Borough of Tower Hamlets and Arts Council England, London. Together these sources provide a bedrock of support which amounts to 20% of Spitalfields Music’s income. Together they act as a powerful lever for the rest of the Page 131 income which is earned or fundraised on an annual basis. In 2011/12 Spitalfields Music will generate £22 in income for every £1 donated by the City of London Corporation.
3. Spitalfields Music was founded in 1976 and five years later it established its year-round Learning and Participation Programme. Now it reaches a live audience of 30,000 people, a broadcast audience of c. 1.2million and offers c. 250 music workshops each year in Tower Hamlets for participants aged 2 days – 97 years old.
4. The aim of the charity is to change lives and aspirations through music in Tower Hamlets. Its reputation and unique characteristic is that its festivals and its Learning and Participation Programme have equal status for the charity and these two aspects have a strong influence on each other. World- class artists and local people are at the heart of both.
5. The charity’s impacts are wide ranging within the area – these are three examples:
• an economic impact in Spitalfields of £2.5 million a year through its festivals, employment and training • helping the Royal London Hospital reduce the length of hospital stay for newborn babies by placing music projects in its post-labour wards • helping increase academic attainment in 15 primary schools in Tower Hamlets.
6. Spitalfields Music has strong relationships with other City arts charities and a distinctive role to play within the City’s arts portfolio. This summer, for example, Spitalfields Music is organising a community day in and around Spitalfields Market as part of the Celebrate the City weekend. Its contribution will involve partners from Crisis, Spitalfields Community Group, Spitalfields City Farm, Providence Row, Toynbee Hall, Swanlea School, bringing a range of community partners into the Celebrate the City project. Through regular dialogue with City partners, Spitalfields ensures that it can bring something distinctive to the portfolio both in terms of geography and its creative approach.
Current Position 7. Spitalfields Music is currently riding high artistically. In the past three years, audiences have increased by 20% and media coverage has increased by 100%. In May 2012 they won two Royal Philharmonic Society Awards for Learning and Participation and for Audiences and Engagement, were shortlisted for a Civic Society Award and in June 2011 received a commendation from the Royal Society for Public Health.
8. Spitalfields Music produces a Summer Festival (June), a Winter Festival (December) and a year-round Learning and Participation Programme. Page 132 9. Festivals take place in 11 different venues and locations in Spitalfields. The music presented by Spitalfields Music is primarily early and contemporary music, often unusual in some way and brings together world-class artists with chances for local people to perform. No matter who is performing, they will be treated in the same way and profiled equally. Tickets are priced so that anyone can attend. A third of tickets are free or £5. Regular audiences have donated the value of 1,000 free tickets in the past 2 years, which are given to local residents who have not previously attended an event and who might not have the means to do so.
10. The Learning and Participation Programme is currently focused on three areas:
• Neighbourhood Schools – 15 mainstream schools and 3 Special Education Needs Centres with whom they work regularly to provide creative music projects for young people, training for teachers and projects for parents to encourage their involvement in their children’s education. • Community Programme – currently focused on families and providing many different points of contact for families in Tower Hamlets through weekly workshops in local libraries, Sure Start Centres and in the hospital. They also run two community choirs. • Continuing Professional Development - training musicians to work in education and participation settings.
11. In 2011/12 the charity’s turnover was just under £1million. 20% of this is core public funding, 20% is earned through ticket sales and 60% is fundraised through trusts, companies and liveries. The charity is led by Chair Sir Alan Moses and Chief Executive Abigail Pogson.
Options 12. Prior to 2010, the City made an annual grant to Spitalfields Music of £50,000. In 2010, this was cut by 20% to £40,000, anticipating financial challenges to the corporate budgets. It would be possible to retain the funding at this level but this would represent a larger percentage reduction than the 10% applied to other festivals and artistic activities. It would be more equitable to apply the 10% formula to the original Spitalfields Music grant of £50,000, leading to a grant of £45,000 p.a. To help with stability for future planning, the level of commitment should be guaranteed for three years (2013/14 – 2015/16).
Proposals 13. The Culture, Heritage & Libraries Committee should recommend to the Finance Committee that the annual grant to Spitalfields Music be set at £45,000 a year for three years.
Page 133 14. Restoring the grant to £45,000 (from the £40,000 level of 2010-11) would have two significant impacts for the festival:
• It will enable them to run a crucial strand of activity for which there is now a pressing need: a series of sessions with parents in 15 local schools. Research confirms that the more involved parents are in the education of their children, the higher the attainment levels. It also shows that securing parental engagement in the most deprived areas is both extremely hard and, where it happens successfully, has a proportionally greater impact upon children’s learning. The schools based work is proving very successful with pupils and in training their teachers to use music through the year. However it is known that to really secure this work it is necessary to engage with parents. A further £5,000 will enable them to run a series of short music sessions at the beginning and the end of the day at primary schools for parents, giving them tools to support their children as they sing or play an instrument. In a borough where over 100 different first languages are spoken, using a non-verbal means of communication is an extremely effective way of building confidence and peer support amongst parents.
• It will give new impetus to their leverage at a time when fundraising is becoming ever harder. This will enable them to work with city companies encouraging them to match this £5000. It is an ideal entry level for a business or a livery company as a corporate donation and using the City’s renewed commitment as a lever will be a powerful tool. Donors are increasingly motivated by the idea of matching others efforts and this £5,000 could be used in a campaign to bring in new corporate support.
15. Whilst Spitalfields Music is on a high in terms of its artistic and educational impact, fundraising remains a very significant challenge. In 2010/11 the charity received income from 89 different sources (individuals, companies, trusts and statutory grants), not including donations from our patrons schemes. For a charity of this size, this volume of different relationships is a very significant number to manage and whilst achieving this is testament to the need for the work and the trust which a wide range of stakeholders have in the charity, it brings both high risk and can take its toll. Both of these factors are becoming ever more acute as the fundraising environment becomes harder. Whilst the City’s grant is a small part of Spitalfields Music’s income, it is nevertheless significant both as a kite-mark and a lever to others. It sits alongside similar sized grants from London Borough of Tower Hamlets and Arts Council England and both of these organisations have recently renewed their commitment to us and have sent comments.
Page 134 Corporate & Strategic Implications 16. Spitalfields Music has become a valued member of the City’s portfolio of financially supported cultural activities, and is acknowledged as such in the Cultural Strategy. It provides a splendid manifestation of the City taking the opportunity to develop a cross-borough partnership which supports communities, promotes opportunities, and leverages significant amounts of money from others through a relatively modest investment.
17. A number of beneficial outcomes may be summarised as follows:
• association with quality, innovation and consistency in the City fringe • demonstration of the City’s commitment to its neighbouring boroughs • investment in activity which enhances the life of a neighbouring borough and makes a significant contribution to reducing potential future costs (through healthcare and benefits for example)
18. On the basis of track record, the risk level in supporting Spitalfields Music is extremely low as it has consistently delivered:
• high quality and distinctive arts activity • significant impacts for a wide range of people within the Tower Hamlets community • a positive influence on the London-wide and national reputation for Spitalfields • strong economic benefit for the area • an exceptionally high level of match funding for the City’s investment • association with funding from Arts Council England, London Borough of Tower Hamlets, many livery companies and city firms
Conclusion 19. Spitalfields Music is a high achieving and flexible charity which combines both very strong roots into its local community and a fantastic reputation within the national arts scene. It is a valuable part of the City’s arts portfolio both because of the nature of its creative output (and effectiveness thereof) and its geographical reach.
20. Continuation of funding for the charity will bring very significant value back to the City in return for a modest grant.
Appendices None
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