Part 1 - Open to the Public ITEM NO. 6 REPORT OF: Assistant - - PDF document

1 Part 1 - Open to the Public ITEM NO. 6 REPORT OF: Assistant Director Legal and Governance TO: Audit and Accounts Committee ON 24 August 2016 TITLE: Annual Governance Statement 2015-2016 RECOMMENDATIONS: Members approve the council’s Annual Governance Statement 2015-16 (AGS). EXECUTIVE SUMMARY: Local Authorities are required to produce an annual statement of corporate

• governance. This statement is a public document and is available on the Salford City

Council website. The statement contains details of the mechanisms that we have in place to ensure that the City Council’s interests are sufficiently protected and that decision making is transparent and auditable. The updated statement takes account of changes to structures, governance procedures, policies and corporate objectives which have

• ccurred since the last update.

The statement shows an “as-is” view of the governance structures but also looks at the issues we are facing in the coming financial year. Comments from Corporate Management Team and The City Mayor have been incorporated into the statement. A draft version of the AGS was presented at Audit and Accounts Committee Meeting

• n 22 June 2016. Comments were also made on the draft AGS by the council’s

external auditors, Grant Thornton. Following these comments, amendments to the AGS have been made and this report presents the final version of the 2015-16 AGS for the City Council at Appendix

• 1. The AGS has now been signed by the City Director and City Mayor.

BACKGROUND DOCUMENTS: City Plan; Code of Corporate Governance

2 KEY DECISION: NO DETAILS: 1) The City Council is required to produce a statement of corporate governance; this statement should be updated on at least an annual basis. The statement follows a format recommended by CIPFA. The narrative provided seeks to describe the governance issues that the City Council has faced during 2015/16 and the actions that were taken to mitigate risk and ensure accountability with agreed roles and responsibilities 2) The statement covers the governance framework and the actions of officers and elected members. It also adheres to and compliments the code of corporate governance. 3) Obviously there have been a number of notable changes since the last statement was published including the election of a new City Mayor in May

• 2016. There have also been senior management structural changes and re-

assignment of responsibilities. 4) Members were asked to consider a draft statement at the last meeting of Audit and Accounts Committee on 22 June and highlight any areas that may not have been covered sufficiently and to correct any errors. 5) Comments were also made on the draft statement by Corporate Management Team, the City Mayor and the council’s external auditors, Grant Thornton. 6) Following these comments, amendments to the AGS have been made and a final version of the 2015-16 AGS for the City Council is attached at Appendix

• 1. The AGS has now been signed by the City Director and City Mayor.

7) Members are asked to approve the council’s Annual Governance Statement 2015-16. 8) The Annual Governance Statement will then be published on the Council’s web site alongside the Council’s Financial Accounts. KEY COUNCIL POLICIES: City Plan EQUALITY IMPACT ASSESSMENT AND IMPLICATIONS: Included within the body

• f the report

ASSESSMENT OF RISK: Supplied by Miranda Carruthers-Watt Risk Management is key to our governance procedures and is addressed in the body

• f the report.

3 LEGAL IMPLICATIONS Supplied by: Miranda Carruthers-Watt Local authorities have a legal responsibility to conduct, at least annually, a review of the effectiveness of their governance framework including their system of internal control (Regulation 4(3) of the Accounts and Audit Regulations 2011). Following the review an Annual Governance Statement (AGS) must be produced, approved and published. FINANCIAL IMPLICATIONS Supplied by: Joanne Hardman and included in the body

• f the report

PROCUREMENT IMPLICATIONS supplied by: Andy White and Included within the body of the report HR IMPLICATIONS Supplied by: Sam Betts and included within the body of the report OTHER DIRECTORATES CONSULTED: All CONTACT OFFICER: Andy Roberts TEL NO: 686 6274 WARDS TO WHICH REPORT RELATES: All

4 ANNUAL GOVERNANCE STATEMENT 2015-16

1 SCOPE OF RESPONSIBILITY

Salford City Council is responsible for ensuring that:

• its business is conducted in accordance with the law and proper standards;
• public money is safeguarded, properly accounted for and used economically,

efficiently and effectively. The Council also has a duty under the Local Government Act 1999 to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness. In discharging this overall responsibility, the Council is responsible for putting in place proper arrangements for the governance of its affairs, facilitating the effective exercise of its functions, which includes arrangements for the management of risk. Salford City Council has approved and adopted a code of corporate governance which is consistent with the principles of the CIPFA/SOLACE framework “Delivering Good Governance in Local Government and the CIPFA code of practice 2016/17”. A copy of the authority’s code is on our website at http://www.salford.gov.uk/corporategovernance or can be obtained by writing to the council’s Assistant Director, Legal and Governance and Monitoring Officer. This statement explains how Salford City Council has complied with the code and also meets the requirements of Accounts and Audit (England) Regulations 2011, regulation 4(3) which requires all relevant bodies to prepare an annual governance statement. 2 THE PURPOSE OF THE GOVERNANCE FRAMEWORK The governance framework comprises the systems, processes, cultures and values by which the Council is directed and controlled and activities through which it accounts to, engages with and leads the community. It enables the Council to monitor the achievement of its objectives and to consider whether those objectives have led to the delivery of appropriate services and value for money. The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. It cannot eliminate all risk of failure to achieve policies, aims and objectives and can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an

• ngoing process designed to identify and prioritise the risks to the achievement of

the Council’s policies, aims and objectives. It is also used to evaluate the likelihood

• f those risks being realised and the impact should they be realised and to manage

them efficiently, effectively and economically. The governance framework, as described below has been put in place at Salford City Council for the year ended 31 March 2016 and up to the date of approval of the annual report and accounts. Appendix 1

5 3 THE GOVERNANCE FRAMEWORK The Council’s control environment encompasses the strategies, policies, plans, procedures, structures, processes, attitudes, behaviour and actions required to assure the people of Salford of the Council’s sound governance. This document covers those arrangements which were in place during 2015/16. The 2015/16 good governance arrangements in Salford City Council are described in detail in the Salford City Council Code of Corporate Governance described above.

• In 2012, Salford elected a City Mayor as a political, strategic and community
• leader. The Elected City Mayor is democratically accountable to all residents of

the city of Salford and operates a cabinet system including delegation to Lead Members who are members of the Cabinet as defined in the Council’s Constitution with a range of thematic portfolios. The Cabinet consists of two Deputy City Mayors and seven Lead Members with voting rights. This cabinet system with a clearly defined decision making process has worked well. A review

• f Cabinet took place in 2015 when a number of Executive Lead Member

portfolios changed. A further review of the Cabinet took place in May 2016, following the election of a new City Mayor on 5 May and the cabinet system is now as described above. Prior to this the Council operated an Assistant Mayor system.

• The Elected City Mayor’s vision and priorities for the City were articulated in the

City Plan published in October 2013. A mid-term City Plan progress report was produced and presented at Council on 17 September 2014 to report on outcomes and achievements. During the course of 2015 the Authority has been developing a radical new way of thinking about its role, entitled: Shaping our City”. This initiative describes how the council works with partners and how we engage with

• residents. It is a true partnership approach to developing and providing services

and involves staff, residents and partners playing an active role in shaping the

• City. To replace the City Plan, a new single City Strategy will be developed in
• 2016. This City Strategy will set out the future intended outcomes for the City and

will also take into consideration the views and ambitions of the new elected City Mayor who was appointed on 5 May 2016. It will be for the new City Mayor to state his priorities as well as specify any changes to our governance structures in the coming year.

• The City Council leads the Salford City Partnership, bringing partner
• rganisations from across the public, private and voluntary, community and social

enterprise sectors across the city together, to work to deliver a shared vision for

• Salford. The theme of the Partnership Conference held on 11 November 2015

was “Greater Manchester devolution and how it affects you”. The Conference provided an opportunity for discussion and sharing the latest information on developments, what they will mean for the City, how they will affect the people of Salford and how partners could work together to maximise the benefits of

• devolution. The structure of the City Partnership will be reviewed in 2016 to

deliver the requirements of the new City Strategy.

• Salford is one of the ten local authorities of Greater Manchester that make up

AGMA (Association of Greater Manchester Authorities). AGMA works in partnership with a wide range of organisations including private, public and

6 voluntary within the city region and beyond. AGMA Chief Executives and Council Leaders meet regularly to work together on a range of key strategic and policy issues which impact on Greater Manchester. AGMA also provides a range of joint services across the conurbation via cross authority professional groups. AGMA’s current Constitution and associated governance structure were agreed by the Executive Board in January 2010. The Constitution sets out the principles under which AGMA will operate and the powers and functions of the Executive Board which the ten Districts have agreed it can provide on their behalf.

• Salford is also a member of the Greater Manchester Combined Authority (GMCA)

which is the top-tier administrative body for the local governance of Greater

• Manchester. The combined authority was established on 1 April 2011 and

consists of eleven indirectly elected members. The Authority’s Constitution is incorporated within an Operating Agreement which has been approved by all constituent councils. The GMCA has an Audit Committee responsible for approving the Statement of Accounts and reviewing the Authority’s Risk Register and Annual Governance Statement and a Standards Committee. Elections for a directly elected mayor for Greater Manchester are taking place on 4 May 2017 so there will need to be clarity over which functions will be vested from Salford to the new Mayor of Greater Manchester.

• The Council has a robust Constitution in place that sets out how the Council
• perates, how decisions are made and the procedures that are followed to

ensure that these are efficient, proportionate, transparent and accountable. A total review of the Constitution with the Shared Legal Service took place in 2014 to ensure it was fit for purpose. The Constitution contains details of the respective roles and responsibilities of elected members, named officer roles and all officers employed by the Council. Appendix 2 of the Council’s Constitution lists statutory roles for the Head of Paid Service, certain Strategic Directors, Section 151 Officer and the Monitoring Officer which ensure legality, financial prudence and transparency in transactions. The Council undertook a wholesale review of its constitution and scheme of delegation in 2015. In February 2016 the City Mayor amended the general delegations to all Strategic Directors and Chief

• Officers. Further amendments are underway to reflect the priorities of the new

administration and will be reported to council in July.

• A number of committees have been established to carry out non executive
• functions. These include:
• Planning and Transportation Regulatory Panel;
• Workforce Panel;
• Audit and Accounts Committee;
• Health and Wellbeing Board.
• A Health and Wellbeing Board was established in April 2013 when it became a

statutory body. This Board is committed to working in partnership with other

• rganisations to promote and improve health in Salford. The Terms of Reference

for the Health and Wellbeing Board were agreed in April 2013. These contain arrangements for how the Board operates as a committee of the Council. An annual review of Board performance was published in May 2014 and this contains an assurance relating to the Board’s effectiveness. In early 2015, the

7 Health and Wellbeing Board took part in a national Peer Review process managed by the Local Government Association and the results of this were used to develop an action plan for improvement during 2015/16.

• The Council appointed a new Head of Paid Service in June 2014 in the role of

City Director. Following this appointment, the Council took the opportunity to develop a greater clarity of the role of its Corporate Management Team. The Corporate Management Team is responsible for ensuring that it establishes and maintains effective systems of internal control, complying with legislation, the Council’s Constitution, Standing Orders and Financial Regulations. This includes responding to recommendations made by Internal Audit, External Audit and other Inspectorates such as CQC and OFSTED. Where necessary and appropriate they will take advice from the Shared Legal Service.

• The role of S151 Officer continues to be performed by the Director of Finance

and Corporate Business (whose role conforms to the guidance laid down in the CIPFA statement on the Role of the Chief Financial Officer in Local Government (2010)).

• The Council’s scrutiny arrangements were reviewed in 2014. North West

Employers undertook a review

• f

scrutiny arrangements and all recommendations have been implemented. New scrutiny arrangements were put in place in January 2015 and the number of Scrutiny Committees reduced from 7 to 5 following the recommendations of this review. The five Scrutiny Committees monitor and scrutinise the performance and decision making of the authority. They may make reports and/or recommendations to the full council, the elected City Mayor, or Members on any matters affecting the council’s area or its

• inhabitants. They are also a forum for citizens to have a greater say in Council

matters by holding public consultations into matters of local concern.

• The political and managerial leadership of the Council ensures that the Council

manages risk effectively and achieves its objectives through the development of an all-encompassing Corporate Risk Management Strategy. The Corporate Risk Management Strategy is reviewed and updated on an annual basis and was last reviewed by CMT and approved by Audit and Accounts Committee on 25 March 2015. Responsibility for reporting on Risk Management was transferred to the corporate Strategy and Change Team in 2015 in order to more closely align risk management in the corporate performance framework linking with business planning and performance management.

• To monitor key corporate risks the Council has a Strategic Risk Register. A full

review of the Register is undertaken on an annual basis and approved by Corporate Management Team (CMT) and Audit and Accounts Committee. The Risk Register is then updated and progress reported to CMT and Audit and Accounts Committee on a quarterly basis.

• Following a report to the Audit and Accounts committee in 2015, the Council

appointed an Assistant Director, Legal and Governance as its legally qualified monitoring officer. This new position has seen the establishment of a new division – Legal and Governance which brings together the Council’s governance

8

• functions. The Assistant Director is also the council’s SIRO (Senior Information

Risk Officer) and provides strategic legal advice to the council, oversees a cohesive complaints and commendations practice and also oversees information governance, including any data security breaches. The council is also in the process of mandating each service area to nominate a senior member of staff to be an Information Asset Owner (IAO). These staff will have responsibility for ensuring that information systems and content are not compromised in any way. Training will be provided for each IAO through an e-learning course that will be available later this year. Future e-learning modules will include Data Protection and Responsible for Information courses which will be rolled out across the Authority.

• In March 2016 the Council formed a Corporate Governance Group to support

planned improvements to governance structures and the council’s Annual Governance Statement. The Group is chaired by the council’s Monitoring Officer and is made up from Assistant Directors from all council Service Groups and specialists in key areas such as Information Governance, Internal Audit and Policy, Performance and Risk. Terms of reference have been developed for the Group who will bring regular reports on Governance to Corporate Management Team, Audit and Accounts Committee and the City Mayor.

• The Council seeks to obtain value for money which is supported through effective

commissioning and procurement arrangements, a robust procurement strategy, business plans and scrutiny of decision making.

• The Procurement Board became a constituted decision making body in October
• 2013. It has responsibility for contract expenditure over £100,000. The Board is

chaired by the Lead Member for Finance and Support Services and the Elected City Mayor and Deputy City Mayor are also members of the Board (by decision of the council). The Council has further enhanced these arrangements by electronic tendering and the use of a procurement portal (The Chest). In addition, the consideration of social, environmental and economic well-being is an integral part

• f all commissioning and procurement processes and fully complies with the

requirements of the Public Services (Social Value) Act.

• The Authority has adopted codes of conduct for both elected Members and
• employees. Officers have a clear understanding of their roles and responsibilities

through an approved scheme of delegation and through job descriptions and person specifications. The Staff Code of Conduct was revised in September 2014 and all staff were asked to confirm that they had read and understood the revised Code, Disciplinary Rules and Communications and Media Policy. The Code of Conduct is underpinned by the launch of the new council values in 2015

• the four Ps – Pride, Passion, People, Personal Responsibility. In conjunction

with the launch of the new council values an Employee Performance and Development Review Scheme has been introduced.

• The Council has a whistle blowing policy and an “Honesty Action” whistle-blowing

hotline telephone number which is advertised both inside the Council and in the wider community. The Council also updated its Whistleblowing Policy in 2014 to encourage and enable staff to raise serious concerns within the Council.

9

• The Council maintains a Head of Internal Audit and an Internal Audit Section

which operates to the Standards set out in the UK Public Sector Internal Audit

• Standards. Internal Audit is responsible for monitoring the quality and

effectiveness of systems of internal control within group activities and where relevant, making recommendations for improvement. The implementation of recommendations is subsequently checked. Work has also been undertaken to ensure that a strong control environment is in place by those who provide services for Salford City Council in formal Joint Ventures and partnerships via their own external auditors as part of their own financial reporting requirements. Up until February 2016 the Head of Internal Audit was also the Money Laundering Reporting Officer and the Deputy S151 Officer. The Council appointed a new Head of Internal Audit in March 2016; this is a shared arrangement with Warrington MBC. The Head of Internal Audit has direct access to Corporate Management Team, the Elected City Mayor, the Chair of the Audit and Accounts Committee and elected members.

• Salford City Council has a well established Audit and Accounts Committee which

is currently chaired by a member of the official opposition party, in line with good practice and constitutional requirements. The Audit and Accounts Committee has clearly defined terms of reference and responsibilities for the oversight of governance, risk management and the approval of the City Council’s Annual Accounts.

• Consultation and community involvement undertaken by the Elected City Mayor

and the Council involved a number of events with members of the public and staff held throughout 2015/16. Most notably this included the 2016/17 budget conversation which ended in January 2016. This also involved the development

• f “Shaping our City” which encourages the council, partners, businesses and

citizens to think differently about how to make the most of public funds.

• The Salford Safeguarding Children’s Board and the Children’s Trust are both

multi-agency forums which hold shared responsibility for promoting and safeguarding the children of Salford. They are both made up of members whose role and seniority enable them to commit their organisation/agency to the development and maintenance of effective inter-agency working to safeguard children and young people in Salford. Since December 2014 the Council’s Strategy and Change team have supported the process of transformation of the SSCB’s reporting processes. This has included work to improve recording and production of data.

• The Council has clear objectives with regards to the safeguarding of adults. The

code by which we operate is that “All persons have the right to live their lives free from violence, abuse and neglect”. Our policy on safeguarding adults articulates a zero tolerance towards abuse. The Adult Safeguarding Board oversees safeguarding issues and ensures that systems are in place to protect adults.

• The Council currently delivers a wide range of services which involve working in

partnership with others often under contractual arrangements, many of which involve considerable levels of funding. The Council has implemented robust governance arrangements for all of its partnership arrangements including our legal Section 75 partnership arrangements, the Alliance Agreement and other

10 formal arrangements with partners e.g. Salix Homes and Salford Community Leisure etc. There is also Board representation as appropriate and regular client monitoring arrangements to oversee performance.

• Salford is divided into eight neighbourhoods, each of which has a Community
• Committee. This provides the city partnership with a consistent and well

established means of engaging with our communities. Each community committee produces an annual action plan which lays out the priorities for the neighbourhood.

• Property is dealt with on the basis of good asset management planning and in

compliance with standing orders and the council constitution. This approach seeks to use the property resource in line with council plans and policies, to improve the utilisation and efficiency of operational property; to produce returns from non-operational and surplus property in addition to supporting prosperity and growth within the city.

• The Community Safety partnership is a multi-agency commitment with 2
• verarching objectives:
• To build stronger safer, more confident communities; and
• To improve community safety and reduce the fear of crime

The Community safety strategy will be updated during the course of 2016. 4 REVIEW OF EFFECTIVENESS Salford City Council has responsibility for conducting, at least annually, a review of the effectiveness of its governance framework including the system of internal

• control. The review of effectiveness is informed by the work of the Corporate

Management Team who have responsibility for the development and maintenance of the governance environment, the Head of Internal Audit’s annual report and also by comments made by the external auditors and other review agencies and inspectorates. In March 2016 a full review against the Code of Corporate Governance was carried

• ut and this can be found on the council’s website:

http://www.salford.gov.uk/corporategovernance This review was undertaken by Corporate Management Team and overseen by the Assistant Director, Legal and Governance. This draft Governance Statement has been reviewed by the Elected City Mayor, the Corporate Management Team, Director of Finance and Corporate Business; the Monitoring Officer; and the Head of Internal Audit before being presented to the Audit and Accounts Committee for approval as a true and fair view of the Council’s governance and its effectiveness during 2015/16.

11 The following actions have taken place in order to maintain and review the effectiveness of the system of governance:

• The Council’s Cabinet meets on a regular basis to consider policy issues and key

decisions to be made by the Council.

• Service Groups have worked with the City Director to develop a robust
• rganisational approach to business planning and performance management. An

approach was agreed that clearly linked Business Plans to the priorities in the City Plan, the delivery of the budget strategy and the council’s transformation

• programme. The framework is supported by regular performance reports. The

Corporate Performance Framework was approved at City Mayor’s Budget Briefing on 27 July 2015. Quarterly performance reports are now produced for all Service Groups. The Corporate Performance Report summarises Service Group performance reports and consists of the City Plan Core Indicator Set and the Strategic Risk Register. The City Plan Core Indicator Set consists of those indicators which have been identified by Strategic Directors as their core performance measures for the year to monitor progress against City Plan

• themes. These will be reviewed to meet the priorities of the City Mayor’s

emerging City Strategy.

• All Service Groups produced two year business plans for 2015-17 in accordance

with corporate business planning guidance. Two year plans have been developed to align with the Council’s two year budget strategy and business plans will undergo an annual refresh for 2016-17. The business plan consists of the Service Group’s business action plan, equality action plan and risk management plan. The business plans detail the outcomes, activities and key performance indicators for which the Service Group are responsible. Progress against the actions in Service Group Business Plans are monitored and reported on a quarterly basis as part of the Corporate Performance Framework.

• The Council operates an Overview and Scrutiny function. Scrutiny Panels and

Members can “call in” decisions that have been made but not yet implemented, to enable them to consider whether the decision is appropriate. New scrutiny arrangements were put in place in January 2015 and the number of Scrutiny Committees reduced from 7 to 5 (Panels) following the recommendations of a review by North West Employers.

• The Standards Committee comprises seven Members of Salford City Council

plus co-opted independent Members and regulates and oversees the Code of

• Conduct. The Standards Committee takes an active approach to ensuring high

levels of good governance, ethical behaviour and transparency throughout the Council’s decision making processes. Co-opted membership has been reviewed to ensure that co-opted members have no political affiliation.

• The Corporate Management Team (CMT) has responsibility for developing the

Corporate Risk Management Strategy and processes, including the communications and reporting structure for strategic risk. The Risk Management Strategy is reviewed and updated annually. CMT oversees operational risk at a Service Group level as part of the corporate performance framework in order to achieve the Council’s strategic objectives. From March 2016 the Council’s newly

12 formed Corporate Good Governance Group will oversee Risk, Business Continuity and Information Governance progress against objectives.

• The Director of Finance and Corporate Business is the designated section 151
• fficer and reports regularly to Members and senior officers on the discharge of

those statutory duties.

• In line with CIPFA best practice guidance, the Audit and Accounts Committee

performs an annual self-assessment of their own effectiveness and acts on recommendations identified. The Audit and Accounts Committee also produces an annual report to Cabinet of the work performed by the Committee during the year.

• Internal Audit is responsible for the examination and evaluation of the adequacy

and effectiveness of the organisation’s governance, risk management and internal control processes. A risk model is used to formulate the annual work programme that is approved by the Audit and Accounts Committee. On the basis

• f the systems reviewed and reported on by Internal Audit during 2015/16 and
• ther sources of information available to Internal Audit, an overall satisfactory

assurance can be given on the Council’s system of internal control. The quality of the Internal Audit process is reviewed regularly by the External Auditor who reviews work carried out by the section.

• The Internal Audit Section is subject to regular scrutiny by the Audit and Accounts

Committee which approves the annual plan and the audit work produced. The work of the Internal Audit Section is also subject to quality review by the service groups for whom the work is performed.

• Under the Accounts and Audit Regulations (2015) and in accordance with the

Public Sector Internal Audit Standards an annual review of effectiveness of Internal Audit should be performed. This review has been conducted by the Director of Finance and Corporate Business and found that the Internal Audit Team is operating effectively. The results of the review are reported annually to the Audit and Accounts Committee.

• The Audit and Accounts Committee have responsibility for overseeing the

effectiveness of the Council’s risk management arrangements. The Strategic Risk Register is updated and presented to this committee on a quarterly basis and the effectiveness of the actions taken to mitigate the risks are considered. The Audit and Accounts Committee have been advised on the implications of the result of reviews of the effectiveness of the governance framework by our internal and external advisors and that the arrangements continue to be regarded as fit for purpose in accordance with the governance framework. The areas already addressed and those to be specifically addressed over the coming year are outlined below.

13 5 SIGNIFICANT GOVERNANCE ISSUES In 2014/15, the Annual Governance Statement identified 8 significant governance issues. Action taken during 2015/16 includes: a) Delivery of 2 year budget strategy including efficiencies and cuts amounting to £56 million. Setting the medium/longer term budget has been a challenging process. Over the period 2010/11 to 2015/16 we have had to deliver savings totalling £149m.The government has provided indicative funding levels up until 2019/20 and this together with service pressures and inflationary factors means we must find £63.5m'of savings and additional income to 2019/20. By moving budgets to meet emerging priorities and customer demand and by de-commissioning some services we have managed to ensure that we have a balanced budget and kept council tax rises to a minimum. b) New models of service delivery Several new models of service delivery are being introduced during the year and these will require strong governance arrangements.

• The creation of Social Enterprise Mutual

A pioneering staff owned not for profit company set up to protect £11 million worth of adult social care services was launched on 1 June 2015. Aspire, established by 375 staff from Salford City Council, now runs a range of care services which were previously run by the council. The new mutual, which took 18 months to plan and develop, has a five year contract with Salford City Council to run a variety of

• services. These include specialist day services and centres, respite and intermediate

care, intermediate care (which is short term to help people’s rehabilitation after hospital or illness), supported tenancies (where people with learning disabilities are helped to live independently in the community) and adult placement (akin to foster care for adults). Aspire will also be able to raise its own income by offering extra services to people that want to buy them privately and by bidding to supply services to other local authorities to reduce the core funding from Salford City Council. All the money raised will be ploughed back into the company. Service users and staff will decide how services are offered in the future to get the best quality available. They will be involved in developing innovative responses to present and future needs and will have a strong voice in how the company develops.

• Integration of Health and Social Care

We are a leading organisation in the pursuit of joined up health and social care services as evidenced through our work on Public Sector Reform.

14 Under the Integrated Care Programme for Older People we developed a unique Alliance Board, comprising the four statutory Health and Social Care commissioners and providers in Salford:

• Salford City Council;
• Salford Clinical Commissioning Group;
• Salford Royal Foundation Trust (SRFT); and
• Greater Manchester West Mental Health Foundation Trust (GMW).

Formation of the Alliance Board enabled the implementation of a jointly agreed Service and Financial Plan. This Plan sets out commissioning intentions, areas of investment/disinvestment and efficiency plans. The agreement is for a four year period and details locally agreed strategic objectives and performance measures approved by all four statutory partners. The agreed strategic objectives are:

• Better Outcomes for Salford People;
• Improved Service user experience of services; and
• Reduced Health and Social Care Costs.

Integrated Care: Alliance Agreement The Board and Alliance for Older people services is underpinned by several important business agreement documents which achieve the following:

• pooled health and social care budget and financial risk share;
• joint outcomes, measures and standards;
• integrated management of health and social care services for older

people. These arrangements have led to the decision to move to integrated health and social care arrangements. Integration – next steps During 2015/16 the Council took a decision to adopt a new structure for Adult Social Care in Salford. The change is a transformational proposal which has created an Integrated Care Organisation that will see Adult Social Care assessment and service delivery placed in an organisation outside the Council, with the transfer of staff and responsibility for arranging care. The Integrated Care Organisation (ICO) consists

• f:
• Adult Social Care – assessment (micro commissioning), support planning and

care delivery; and

• A range of community, acute and mental health services provided by SRFT

and GMW The ICO has been placed within the legal entity of SRFT. The City Council has developed a service contract between the Council and SRFT, clearly identifying the responsibilities assigned to the ICO, which in financial terms is approximately £82m (gross).

15 The Council retains statutory accountability for Adult Social Care. This integration will require a significant programme management approach to ensure the Council is clear about:

• commissioning and governance arrangements;
• the allocation of Adult Social Care responsibilities and accountabilities

between the Council and the ICO;

• the arrangements for good quality enabling and support services.

The evaluation of this development and final decision has been informed by a series

• f “gateway” decisions, each defining greater detail of the proposal. Initially the

decision about scope was considered by the Council in December 2014 (Strategic Outline Business Case) followed by further gateway decision points at outline and full business case stages. This ensures the Council can understand as fully as possible the implications for the change. The process included the development of:

• an Outline Business Case – December 2015;
• a Full Business Case – April 2016; and
• Transfer and Implementation of Adult Social Care within an ICO – with a

target date from 1 July 2016. The Council and Salford Clinical Commissioning Group (CCG) have created a pooled budget to deliver these services together with an integrated Commissioning Joint Committee made up of 6 elected members and 6 nominees from the CCG. This will be chaired jointly by the Council Lead Member and a representative from the CCG. As well as weekly scrutiny by the City Mayor, these proposals were considered by Council and Policy Council. Due diligence exercises were further undertaken with regard to the Council’s financial and legal responsibilities. c) Transformational programme With the Council’s funding from government reduced by 41% since 2010 and further savings to come, the council needed to develop radical new ways of thinking about its role, how we work with partners and how we engage with residents. The council’s transformation programme “Shaping our City” identified five current priorities for

• change. Work on all these projects is now underway and developments over the last

several months have included:-

• Customer business model – Will help provide a quicker, easier and better

experience to all customers. Our services will be personalised, easy to use and accessible. New digital solutions are being developed – a new website, internal portal and mobile working. Our Customer Strategy sets out the key priorities for delivering the Customer Business Model.

• 0-25 Services – Together with a range of partners a shared vision for

children, young people and their families is being developed.

• The Salford Bridge Partnership has been created - staff from different
• rganisations work together to act as a “single front door” for all concerns

16 and information requests about Salford families.

• The Albion Pilot is testing new ways to build positive aspirations and test

ways of influencing young people’s choices by influencing the communities around them.

• Early Years New Delivery Model for 0-5 Services.
• Little Hulton Integrated Locality Pilot – Piloting a way of working to

support families who would benefit from Early Help.

• Integrated neighbourhoods – This project is focusing on
• Developing a shared and consistent vision for the city and our

neighbourhoods

• Designing a model for leadership across agencies including better use of

data and insight, to shape how we design services that more effectively respond to people’s needs.

• Creating a community hub to help residents and businesses find services

that meet their needs.

• Integrated Care Organisation – The NHS in Salford together with Salford City

Council formed the Salford Together Partnership. Salford Together is transforming the health and social care system, promoting greater independence for older people and delivering more integrated care. To measure its success the Partnership has identified some improvement measures, with targets set up to 2020.

• Integrated Commissioning

All these projects are supported by a dedicated Business Analyst/Project Manager. The individual projects and the overall Transformation Programme will be monitored using the council’s performance management system to ensure that progress is maintained and efficiencies/savings targets are achieved. d) Structural changes within the Council The Council is constantly evolving to meet new challenges and further reductions in

• budgets. The senior management structure is no exception to this process. The

Strategic Director for Community, Health and Social Care took early retirement in June 2015. This presented an opportunity to merge Adult’s and Children’s Services into one coherent Service Group and maximise the synergies between the services. Consequently we now have one Strategic Director responsible for both services. The functions themselves in these areas are also changing. Aspire was created on 1st June 2015 as the new provider of adult social care services for people with complex needs. Early indications are that this new arrangement is working well and meeting residents’ needs. Agreement has been reached to establish a new Integrated Care Organisation which went “live” on 1st July 2016. This will bring together the Salford Royal Foundation Trust, Salford Clinical Commissioning Group, Greater Manchester West Mental Health Foundation Trust, together with Salford City Council, to deliver integrated health and social care for older people. Staff from the City Council will transfer over to SRFT as prime provider, subject to TUPE (Transfer of Undertakings (Protection of Employment) Regulations).

17 The Assistant Director for Joint Commissioning in Community, Health and Social Care moved to Public Health, Reform and Commissioning to lead the development and delivery of integrated commissioning arrangements. To complete the changes, a new position of Director for Service Reform and Development has been created to lead the transformation agenda. This position has been filled by the previous Assistant Director for Human Resources whose position has been back-filled by her deputy. These changes illustrate the emphasis that the Authority is giving to working in different ways in order to reduce cost and modernise services. e) Care Act 2014 The Care Act (2014) “Stage 1” responsibilities became operational in April 2015. The “Stage 2” reforms that were proposed to be introduced in April 2016 have been postponed until April 2020; these being:

• The cap on the amount self-funders have to contribute to their care costs.
• A duty on councils to meet the eligible needs of self-funders in care homes at

their request.

• A different means test for residential care.

The implementation from April 2015 has resulted in a change of operational practice to ensure legal compliance and improve outcomes, most notably in the following areas:

• Information and advice: A plan had been produced and actions have started

to be implemented to ensure delivery of an improved information and advice

• ffer regarding care and support.
• Assessment and eligibility: Revised documentation has been introduced to

ensure the new eligibility criteria are applied.

• Independent advocacy: The delivery of independent advocacy is established

within a wider advocacy contract.

• Deferred payments: The revised process is in operation to meet requirements.
• Care and support planning: Although Salford practice was well developed and

met many of the aspects of the Care Act we will be focussing on further practice improvements to ensure support planning is person centred and

• utcome focussed.
• Carers’ Personal Budgets: The policy and procedure has been revised to

ensure an improved offer and support for carers.

• Safeguarding: The Safeguarding Adults Board is established with designated

sub-groups. A strategic plan with associated detailed action plans and annual report have been published. Changes to practice and relevant documentation to deliver “making safeguarding personal” has been established including delivery of a training programme.

• Partnerships and integration: Significant progress has been made building on

a major transformation programme of integrated care, the award of Vanguard status and the proposal that Adult Social Care in Salford will be delivered as part of an Integrated Care Organisation (ICO) with Salford Royal NHS

18 Foundation Trust being the lead provider.

• Transition to adult care and support: Dedicated time is established to ensure

appropriate strategic planning between Adults’ and Children’s services, and further development of person-centred transition planning. Additional appointments have been made to further develop requirements.

• Meeting the social care needs of prisoners: Protocols and process have been

established with care workers directly employed by the prison health care provider and the locality social work team resulting in appropriate care delivery. In order to deliver the above changes additional staff have been recruited in key areas and a programme of training and staff development has been delivered to adult social care staff and key partners. The training has included Care Act e- learning for all staff (comprising 13 modules), targeted “Making Safeguarding Personal” training, assessment, eligibility and evidence based decision making. Reporting of Care Act progress is being overseen by Senior Managers (Directorate Management Group). It is recognised that there are further practice changes required supported by a robust quality assurance framework to truly embed the

• verarching objectives of the reforms in the culture and behaviour of the health and

social care workforce. The ongoing Care Act requirements and associated actions will be incorporated into the Health and Social Care Transformation Plan following the establishment of the ICO. f) Fraud Risk During the 2015/16 financial year the Internal Audit team have continued to be involved in investigating a number of fraud cases, one of which resulted in a referral to the Police. The Council has a Whistleblowing Policy in place and staff are encouraged to raise serious concerns within the Council. Internal Audit continues to work with schools and Council management teams to identify controls which require improvement and to strengthen systems. In February 2016 the Benefit Fraud Investigators transferred to the Single Fraud Investigation Service (SFIS) in the Department for Work and Pensions (DWP). The Director of Finance and Corporate Business took the opportunity to create a dedicated corporate fraud team situated within the internal audit team to extend the Council’s ability to detect and prosecute fraud. During 2016/17 a full counter fraud work plan will be developed and an assessment against the CIPFA Code of Practice on “Managing the Risk of Fraud and Corruption” will be carried out. Any gaps in compliance will be identified and an action plan will be produced to address any weaknesses identified. The Council’s insurance team have a dedicated fraud officer to investigate and challenge fraudulent claims. g) Greater Manchester Devolution Agreement On 3 November 2014, the Chancellor of the Exchequer and Leaders of the Greater Manchester Combined Authority - which includes Salford, signed a devolution agreement that will result in new powers and responsibilities for Greater Manchester

19 along with a new directly elected Mayor for the city region from 2017. The region built on this innovative agreement with further devolution in the Summer Budget 2015 along with additional powers in the November 2015 Spending Review and Autumn Statement. A further devolution agreement was then agreed in the March 2016 Budget. As a first step to a fully elected position, an interim mayor has joined the Greater Manchester Combined Authority (GMCA)’s ten decision making council leaders. The first election for Mayor of Greater Manchester will take place on Thursday 4 May 2017. The regions’s new powers include:-

• more control of local transport, with a long-term government budget to help

plan a more modern, better-connected network.

• new planning powers to encourage regeneration and development.
• a new £300m fund for housing: enough for an extra 15,000 new homes over

ten years.

• extra funding to get up to 50,000 people back into work.
• Incentives to skills – providers to develop more work-related training.
• extra budget to support and develop local businesses.
• the role of the Police and Crime Commissioner being merged with the elected

Mayor.

• control of investments through a new “earn back” funding arrangement which

gives extra money for the region’s infrastructure if we reach certain levels of growth. The elected mayor will also be responsible for the fire service and have more control of planning through a new Greater Manchester Land Commission. h) Devolved Greater Manchester NHS Budget In February 2015 the 31 NHS organisations and local authorities in Manchester signed a landmark devolution agreement with the Government to take charge of the £6 billion health and social care budget from the start of April 2016. The GM Heath and Social Care Strategic Partnership Board published a five year Strategic Plan “Taking charge of our health and social care in Greater Manchester” in December

• 2015. The Greater Manchester goal is to see the greatest and fastest improvement

to the health, wealth and wellbeing of the 2.8 million people in the towns and cities of Greater Manchester. The Plan focuses on four big areas:-

• Start well, live well, age well – prevent more ill health.
• Local community services working better together.
• Hospitals working more closely together.
• Sharing buildings, roles, ideas and ways of working.

Aims for some big benefits for the people of Greater Manchester by 2021 include the following, and more are being developed:-

• 1,300 fewer people dying from cancer.
• 600 fewer people dying from cardiovascular disease and 580 fewer people dying

20 from respiratory disease.

• More children reaching a good level of social and emotional development with

3,250 more children ready for the start of school aged 5.

• Supporting people to stay well and live at home for as long as possible, with

2,750 fewer people suffering serious falls. A Greater Manchester financial plan is also currently being produced to show how the £2 billion funding gap will emerge over the next five years and the actions that need to be taken across our health and care systems to change that scenario. The Taking Charge together campaign took place between 15 February and 31 March 2016. The campaign was designed to capture the voice of the people of GM

• n what they believe stops or helps people from taking charge of their health and

making healthy choices. Implementation plans are currently being developed which will contain more detailed plans on what will need to happen over the next five years and a refreshed Plan will be published in 2016. If and when there are changes which may affect the way services are provided, formal consultation will take place with those who might be affected – including staff and the public. Salford Locality Plan There are ten draft Locality Plans which underpin the GM five year vision, one of which is Salford’s Locality Plan. The Salford Locality Plan is the strategy and implementation plan for the health and care of Salford residents. It explains how providers of public services – like the NHS, Salford City Council, Fire Service and Police will work closely together with the private and voluntary sector so services work better and cost less. The Plan looks at how people’s lives in Salford could change for the better if we have better housing, more jobs, more money and a nicer environment to live in. The Health and Wellbeing Board are responsible for the governance of the Locality Plan and report directly to Cabinet within Salford City Council as well as being accountable to the Clinical Commissioning Group’s Governing Body. Alongside these formal arrangements there is an informal Locality Leadership Group which meets on a monthly basis and involves the Leaders from each part of Salford’s Health and Social Care system. 6 THE SIGNIFICANT GOVERNANCE ISSUES AT THE CURRENT TIME ARE:-

• Production of new Single City Strategy in 2016 to replace City Plan

A new single City Strategy will be developed in 2016. This City Strategy will set

• ut the future intended outcomes for the City and will also take into consideration

the views and ambitions of the new elected City Mayor, Paul Dennett who was appointed on 5th May 2016.

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• Election of new Salford City Mayor

In May 2016, Salford elected a new City Mayor who will serve a four year term of

• ffice. This is likely to have an impact on the way that the authority operates and

its governance arrangements in the future.

• Election of Manchester Mayor in 2017

The Mayor of Greater Manchester will be responsible for the strategic government of Greater Manchester including health, transport, housing, strategic planning, policing and skills. An Interim Mayor for Greater Manchester was appointed in May 2015 and the first election for Mayor of Greater Manchester will take place on Thursday 4 May 2017. As Salford is the only Greater Manchester authority with an elected City Mayor it is important to ensure that the City Mayor role is fully represented in the new arrangements.

• Greater Manchester Devolution Agreement

Greater Manchester Combined Authority (GMCA) were required to review its functions and how it is run and have published a GMCA Governance review and

• Scheme. Views are currently being sought on the legal powers proposed and the

associated governance arrangements. Between 21 March and 18 May 2016, the Combined Authority consulted with people in Greater Manchester about the new powers and how GMCA propose to use them. The results of the consultation are due to be published in July 2016.

• Budget/Savings Programme

Over the past 6 years the council has saved a total of £149m and must find a further £38m over the next 2 years.

• Transform Agenda – “Shaping our City”

The Shaping our City programme sets the Council on a radical transformation path which will alter the way services are delivered. “Shaping our City” is the council’s radical new way of thinking about its role, how it works with partners and how we engage with residents. This is a true partnership approach to developing and providing services and involves staff, residents and partners playing an active role in shaping the City.

• Citywide Equality Strategy and Salford Equality Network

The Salford Equality Network has been established with a three year citywide action plan and equality objectives. These will be progressed during 2016/17 with the establishment of an Equality Charter for the city; increased voice in decision making; a refreshed Community Cohesion Policy, action plan and toolkit; community and service mapping; citywide equality training materials and pooled resources; shared workforce policies, practices and monitoring procedures; and improved access to opportunities and maximising aspiration for communities and residents, in particular those that are currently under represented. The City Mayor has restated his commitment to equalities as part of his strategic plan.

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• Demographic changes

Salford has one of the youngest and fastest growing populations in Greater

• Manchester. By 2034 it is projected to increase from its current 242,000 people

to 284,000 - with a notably higher proportion of younger people compared to the rest of Greater Manchester. By 2021 the number of:

• Primary school children is projected to increase by 1,500 or 50 classes.
• Secondary school children is projected to increase by 2,300 or 77 classes.
• The older population aged over 65 is projected to increase by 1,900 (5%).

Ethnic diversity in Salford is also increasing rapidly. The population of Black and Minority Ethnic (BME) increased from 5% in 2001 to 14% in 2011. If this trend is maintained, a third of Salford’s population could be BME by 2021. Clearly, service delivery will have to be re-shaped to address these changes.

• Safeguarding

Salford Safeguarding Children Board (SSCB) is a multi-agency forum that holds shared responsibility in promoting and safeguarding the children of Salford. SSCB has a statutory responsibility to ensure this principle is embedded in the work of each key agency. SSCB members are senior representatives of key statutory agencies and others in Governance roles who have sufficient understanding and knowledge of safeguarding and welfare concerns to commit to agreed actions of their staff groups.

• ASPIRE

ASPIRE is an Adult Services Mutual Organisation which was launched in June 2015 and is run by 375 council employees. The Mutual has a five year contract with the Council and was set up as a way of maintaining high quality services in the face of reduced government funding. The Council will need to ensure that robust contract monitoring arrangements are in place to deliver the desired

• utcomes.
• DOLS (Deprivation of Liberty Safeguards)

Since the Supreme Court’s decision in the “Cheshire West” case, the Deprivation

• f Liberty Safeguards (DOLS) arrangements of Local Authorities have come

under greater scrutiny. It is essential that the Authority takes all necessary precautions to ensure that those vulnerable people who lack mental capacity do not have their Human Rights compromised in any way. Particular vigilance is therefore made in assessing if a deprivation of liberty is necessary in order to prevent harm to the person and it is a proportionate response to the likelihood and seriousness of that harm and is in the person’s best interests. All such cases are carefully monitored and reviewed by adult care professionals.

• Shared officers within the North West – Director of Public Health and Head
• f Audit

In response to the need to take measures to improve efficiency, a number of senior posts are being shared across authorities. For example, the Director of Public Health in Salford is now also working with Bolton MBC. Salford Council also employed a new Head of Audit in 2015 who is also the Head of Audit at Warrington MBC. Whilst improving efficiency, these shared posts also provide the opportunity to share knowledge and best practice across organisations.

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• Creation of Legal and Governance Division

The Authority strengthened its commitment to corporate governance with the appointment of an Assistant Director, Legal and Governance. This post is

• ccupied by a qualified solicitor and acts as the Monitoring Officer, strategic legal

advisor and Senior Information Risk Officer (SIRO) to the Authority. A Deputy Monitoring officer is being appointed from the Shared Legal Service. Since the Assistant Director took up her post in September 2015 she has established a corporate governance group to provide greater rigour to governance related issues. This group will have responsibility for risk, statutory compliance, complaints, codes of conduct, accountability, local government

• mbudsman matters and consider amendments to the Council’s constitution. The

Assistant Director has now considered the Schemes of Delegation under the previous administration and is currently reviewing them again to support the current City Mayor.

• Greater Manchester Spatial Framework

Salford is working with nine other local authorities in Greater Manchester to develop a new spatial framework. The Greater Manchester Spatial Framework (GMSF) will support the city region to make the most of its town and neighbourhoods and will identify the land Greater Manchester needs to meet demand for housing and business development. A draft vision and a set of strategic objectives for the framework were published for consultation between November 2015 and January 2016 and the results are being used to shape the

• ngoing development of a draft framework.
• Capital Schemes

An Internal Audit review of the new Gateway Centre identified major failings in the project governance arrangements. The review identified a generally poor level of project management and risk management for the capital project, and a number of critical and high priority issues were raised. In view of the significant control issues highlighted in the report, the City Director; the Monitoring Officer; and the S151 Officer instigated a formal management review of the controls in

• place. The review was formulated to include proposals to strengthen governance

arrangements; improve project management procedures; improve capital schemes financial reporting; and develop guidelines for large scale capital projects in order to prevent similar weaknesses occurring in future projects. This review will be concluded by the summer of 2016 with recommendations for management action.

• Port Salford

Port Salford is a £138 million development and the UK’s only inland multimodal distribution park served by rail, road and short sea shipping. Delivered through collaboration between the Council and The Peel Group and supported by the Regional Growth Fund, this development is one of the biggest in Greater

• Manchester. It will provide a significant boost for local businesses and boost

economic prosperity by creating up to 3,500 jobs over its lifetime. There will also be environmental benefits from the building of Port Salford, including a reduction in road use that will save millions of tons of carbon, as waterway and rail use increases.

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• RHS Bridgewater

As a result of collaboration between the Royal Horticultural Society (RHS), Peel Land and Property and the Council, the RHS will be creating their fifth garden in

• Salford. RHS Garden Bridgewater will be a 156 acre garden, planned to open in

2019, that will secure enormous economic and environmental benefits for the

• city. Phase one of the creation of the garden will begin in 2016 including the

acquisition, planning approvals and the clearance. The RHS will begin making strong links with the community and involve volunteers and people within the

• region. This initiative is dependant on negotiating land transfers and funding

between the 3 partners and will need to be project managed with full scrutiny of decision making.

• Development of a city-wide Social Value policy

The Authority is currently developing a social value policy which will be integral to all commissioning and procurement decisions. There will be a strong emphasis

• n the use of local contractors and sub contractors and ensuring that local

communities extract the maximum benefit from all commissioned services and

• works. In addition, encouragement will be given to contractors to provide

employment and training opportunities to local people within the context of the

• contract. The social value policy will be complemented by a procurement strategy

that seeks to maximise social value at every opportunity and weighting will be given to those tenders that seek to benefit our local communities. The in-coming City Mayor is committed to embedding this on a city wide basis. 7 ELECTED CITY MAYOR AND HEAD OF PAID SERVICE STATEMENT OF ASSURANCE We propose over the coming year to take steps to address the above matters to further enhance our governance arrangements. We are satisfied that these steps will address the need for improvements that were identified in our review of effectiveness and will monitor their implementation and operation as part of our next annual review: …………………………………. Jim Taylor City Director, Salford City Council Date: 5 July 2016 …………………………………. Paul Dennett City Mayor Date: 5 July 2016