North Somerset Council

REPORT TO THE COUNCIL

DATE OF MEETING: 18 JULY 2017

SUBJECT OF REPORT: PROPOSED AMENDMENTS TO THE CONSTITUTION

TOWN OR PARISH: ALL

OFFICER/MEMBER PRESENTING: HEAD OF FINANCE AND PROPERTY AND

HEAD OF LEGAL AND DEMOCRATIC SERVICES

KEY DECISION: N/A

RECOMMENDATIONS

i. That the Contract Standing Orders and Financial Regulations set out in Appendices

1 and 2 of the report be adopted to replace current Contract Standing Orders and

Financial Regulations in the Council’s Constitution

ii. That the changes to the Council nominations to the Alliance Homes Board be

approved

1. SUMMARY OF REPORT

The report seeks approval of amendments to the Constitution to ensure that it is legally compliant and up to date. The amendments, which largely relate to Financial Regulations and Contract Standing Orders, will ensure transparent, timely and open decision making at the appropriate levels. The report also seeks approval for changes to Council nominations to the Alliance Homes Board.

2. POLICY

The Council has approved a constitution which sets out how the Council operates, how decisions are made and the procedures which are followed to ensure that these are efficient, transparent and accountable to local people. Some of these processes are required by the law, while others are a matter for the Council to choose. The Constitution is divided into 16 Articles, which set out the basic rules governing the Council's business. More detailed procedures and codes of practice are set out in the separate rules and protocols in Part 4 of the document, which includes Financial Regulations and Contract Standing Orders.

3. DETAILS

Financial Regulations Paragraph 2 of Financial Regulations provides for a review of the procedures and thresholds contained within Financial Regulations. The main areas of proposed change are as follows:-

Clarification of, and changes to, various approval thresholds to reflect a number of

factors, including:-

o the passage of time,

o the changing nature of Council business (including changing funding

opportunities, the need to be more commercial, and the growth and regeneration

agenda),

o the setting up of a Property Investment Board to make decisions on how to invest

the Council’s Commercial Investment Fund

o the need to be more flexible and agile in decision making

o a need for more consistency and transparency

o the regularity of meetings identified in the Municipal Calendar, and

Inclusion of new approval thresholds for loans and financial guarantees, to reflect the

likelihood that these may become more common

Clarification of how the financial implications of decisions should be recorded

Changes to the mechanism for approving the final accounts in light of the earlier

statutory deadlines

Changes to the approval mechanism for the setting of the Council Tax Base for budget

and council tax setting purposes, as a result of a change in the timing of the calculation

Reference to the posts of Finance Business Partner(s) and Head of Corporate

Accountancy as Deputy Section 151 Officers

The proposed revised Financial Regulations are included in full at Appendix 1. Contract Standing Orders The current Contract Standing Orders have been in place since May 2014. The main areas of proposed change are as follows:

General update to reflect current legislation

Addressing previous inconsistencies around advertising contracts and the use of the

Council’s supplier Portal

Introduction of a 3 stage approval process, with member approval/engagement earlier in

the process, with award approval decisions generally delegated to officers

To reflect the role and input required from the new Strategic Procurement Team

To drive a focus on local supply for lower value contracts

To provide a clearer process, and realistic rationale, for exceptions

The proposed revised Contract Standing Orders are included in full at Appendix 2

Alliance Homes representation Alliance Homes has approached the Council seeking a review of Council appointments to the Board of Alliance Homes, to tie in with a wider review of the Board. At present the Board comprises twelve members – five independent members, two Council members, and five tenant members (of which two are currently vacant). The Council members are currently appointed directly to the Board by the Council and their appointment is not subject to any approval by Alliance’s Board or shareholders. Since Alliance took the decision to pay its Board Members this has had the impact that the Council has not been able to nominate councillors. Alliance would like to reduce the overall Board size whilst focusing on ensuring a broader range of skill sets amongst the Board membership. It hopes to reduce the total Board size to ten – seven independent members, one Council member, one tenant member and the final member being Alliance’s Chief Executive. Alliance has suggested that the Council retain its ability to nominate to the Board but with the appointment being formally made by Alliance. This would allow the Council to nominate a councillor (unlike the present position) or non-councillor. Alliance would commit to not unreasonably failing to appoint a nominee who met the required skills set. The desired approach would allow Alliance to seek members with appropriate skills sets to support the work of the Board and allow the Council to nominate any candidate it chose rather than the current restriction on councillor appointments. It is therefore recommended that the Alliance proposal is adopted.

4. CONSULTATION

The revised arrangements have been discussed with Group Leaders, the Financial Strategy Board, Corporate Management Team and the Senior Leadership Forum.

5. FINANCIAL IMPLICATIONS

There are no direct financial implications relevant to this report, however, the rules and regulations under review enable the Council to adopt sound financial management and governance arrangements and establish value for money.

6. RISK MANAGEMENT

The proposed changes are designed to improve consistency and transparency in decision making and, as such, should mitigate risks associated with procedural challenge.

7. EQUALITY IMPLICATIONS

The proposed changes should not have any material impact on equality or diversity groups. The Constitution refers in many places to the responsibilities of Members and Officers in relation to equality and diversity.

8. CORPORATE IMPLICATIONS

As already indicated throughout the report, the Constitution is a single point of reference, which contains the principal operating structures and procedures of the authority. It is the cornerstone of corporate governance and sets out how the Council operates, how decisions are made and the procedures which are followed to ensure that these are efficient, transparent and accountable to local people.

9. OPTIONS CONSIDERED

Various options were considered in relation to the appropriate delegated thresholds for the various types of financial transactions. Those contained in this report are designed to balance the various needs in relation to accountability, responsibility, consistency and flexibility.

AUTHORS

Katherine Sokol, Finance Business Partner, 01934 634613 katherine.sokol@n-somerset.gov.uk Mark Roddan, Head of Strategic Procurement, 01275 884464 mark.roddan@n-somerset.gov.uk

BACKGROUND PAPERS

Current Constitution 2015