Purpose
: for Decision
Committee: FULL COUNCIL
Date : 14 SEPTEMBER 2005
Title : CONSTITUTIONAL AMENDMENTS –
SCRUTINY AND AUDIT COMMITTEES
REPORT OF HEAD OF LEGAL AND DEMOCRATIC SERVICES
PURPOSE
1.
To make further amendments to the Constitution to
reflect evolving governance arrangements in relation to Scrutiny and Audit
Committee work, to continue to disapply the requirement for political
proportionality in relation to the Scrutiny and Audit Committees, and to
approve a scheme of co-option.
BACKGROUND
2.
The new Council has already made amendments to the Constitution to
reflect new and emerging governance structures. This report takes this process further and also implements
recommendations from CIPFA and the District Auditor in order to strengthen the
Audit Committee function.
CONSULTATION
3.
Consultation has been exclusively internal, with the added benefit of
the views of the District Auditor.
FINANCIAL/BUDGET
IMPLICATIONS
4.
Changes to the governance structures can be
accommodated within an existing budget allocated to support these member
governance functions.
LEGAL
IMPLICATIONS
5.
The Local Government Act 2000 sets out the requirement
for a Scrutiny function, co-optees are provided for by the Local Government Act
2003. An Audit Committee is a
requirement of good governance.
OPTIONS
6.
The proposed structures are one mechanism of delivering
the aspiration of independent scrutiny and a robust, apolitical Audit
Committee. The proposed changes also
enshrine for the first time, a Town and Parish Council perspective within the
Local Authority’s governance structure.
7.
It is proposed that one co-opted member of the
Scrutiny Committee be nominated by Town and Parish Councils. The principal criteria for appointment
should be that the nominee has the confidence of Town and Parish Councils and
it is therefore proposed that the nomination mechanism be suggested by the
Association of Town and Parish Councils.
8.
The merits of alternative ways of delivering the
stated objectives are entirely within the discretion of elected members.
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RECOMMENDATIONS
9.
It is recommended:
(i)
That the Constitutional provisions set out in the
Appendices 1 to 4 be approved.
(ii)
That requirement for political proportionality in
relation to the Audit and Scrutiny Committees be disapplied to this report.
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APPENDICES
10.
Appendix 1 - Article 5 Scrutiny Committee and Article
9 Audit
Committee
Appendix 2 - Job Profile –
Scrutiny Committee Members
Appendix
3 - Person Specification for Co-opted Member
Appendix
4 - Scheme for Co-option.
Contact
Point : John Lawson, Head of Legal and
Democratic Services ' 823203
[email protected]
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JOHN
LAWSON
Head
of Legal and Democratic Services
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COUNCILLOR
ANDY SUTTON
Leader,
Isle of Wight Council
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APPENDIX 1
ARTICLE 5 - SCRUTINY COMMITTEE
Terms of Reference & Membership
9 members, comprising:
i.
A chair who
is not a member of the majority political group;
ii.
Two co-opted
members appointed in accordance with Section 115 of the Local Government Act
2003;
iii.
Two
opposition members;
iv.
Three members
of the majority political group;
v.
One member to
be nominated by Island Town or Parish Councils, representing a Town and Parish
Council perspective.
No Cabinet Member, Commissioner or Cabinet Secretary
will be a member of the Scrutiny Committee.
(1)
To undertake the
statutory functions of overview and scrutiny except insofar as:
(a)
they relate to health
scrutiny, or
(b)
statutory education
scrutiny functions
where, in each case those overview and scrutiny functions are
undertaken by one of the Policy Commissions, or
(2)
In order to prevent
duplication of policy development and scrutiny, and unless exceptional
circumstances dictate otherwise, no enquiry will be undertaken by the Scrutiny
Committee where the proposed enquiry is the subject of an ongoing enquiry by
one of the Policy Commissions; has been the subject of such an enquiry
completed within the last 6 months, or will be the subject of such an enquiry
planned to commence within the next 3 months.
(3)
To undertake enquiries
into the budget and policy framework of the Council, exclusively at a political
and strategic level.
(4)
To adopt and deliver a
work programme which reflects the priorities of the administration, corporate
strategic objectives and the priorities of scrutiny members and the communities
they serve.
(5)
To play the leading
role in the development of and challenge to
an annual revenue budget.
(6)
To play a leading role
in the development of and challenge to the Policy Framework.
(7)
To maintain and
operate a system of call-in as a safety net in the event of a Cabinet decision
which proves unexpectedly controversial.
(8)
Enquiries will be time
limited, to published terms of reference and lead to recommendations which are
directed to named individuals and are clear, measurable, achievable, resourced,
time bound and based on evidence received.
Quorum
Quorum
will be 4 members. In the absence of
both the Chair and Vice Chair the Committee will elect a chair for that
meeting.
Agenda
The
Chairman of the Scrutiny Committee in consultation with the Proper Officer will
agree an agenda for each meeting. There
will be a presumption that no agenda will require more than two hours to
complete.
Meetings
Meetings will be
held at 6.00 pm on weekday evenings, other than in exceptional circumstances
when the timing must, with the agreement of the Chairman/Commissioner and the
Leader of the Council, be varied to ensure a quorum or to suit the needs of
members of the public or stakeholders attending the meeting. The reason for any variation in timing will
be set out on the face of the agenda.
Any
member of the Committee may place an item on the agenda by giving notice to the
Proper Officer in sufficient time to allow consultation with the Chairman.
Call-in
Any 4
members of the Scrutiny Committee may sign a call-in notice in relation to any
decision by the Cabinet member or an officer exercising a delegation from the
Leader of the Council. On receipt of a
call-in notice the Proper Officer will:
·
Stop implementation of the decision.
·
Call a meeting of the Scrutiny Committee, to meet within seven
working days
When
considering a call-in notice the Committee may:
(i)
Endorse the decision.
(ii)
Refer the decision back to the decision-maker with recommendations.
(iii)
Refer the decision to another body, with recommendations.
(iv)
Add an enquiry to its own work programme
(v)
If advice has been received that the decision is outside of the
Budget and Policy Framework refer the advice to Full Council with a recommendation
that the Budget or Policy Framework be amended.
Only in (v) is implementation of the decision prevented after the
meeting of the Committee has disposed of the call-in.
Attendance and Speaking at the Scrutiny Committee
·
Unless the law requires or allows otherwise meetings of the
Committee will be in public.
·
The Chairman has an obligation to enable members of the public,
stakeholders and community representatives to make representations to the
Committee in order to assist to agree a work programme and to undertake
specific enquiries.
Reports
The
Scrutiny Committee may take reports to the Cabinet, Cabinet Members, Policy
Commissions or the Full Council.
Urgency
Decision
makers may need to take decisions under the urgency provisions in the Access to
Information Rules and/or the Budget and Policy Development Rules.
In such exceptional cases the Call-in arrangements may be abridged
or disapplied if to do so is necessary to safeguard the interests of the
Council or of the public. In any such
case reasons for the disapplication will be given on the face of the report to
the decision maker and by this means made available to the Scrutiny Committee
Chair..
Task and Finish Groups
The
Scrutiny Committee may establish working parties or other task and finish
groups. These groups will be time
limited, have clear terms of reference, may include members other than elected
members and will not be committees or sub-committees under the law.
Voting
Any
vote shall be by show of hands. A simple majority prevails and in the event of
a tied vote the chairman has a casting vote.
ARTICLE 9 – AUDIT COMMITTEE
Role
To provide assurance of the adequacy of
risk management structures; scrutiny of the Council’s financial and
non-financial performance (to the extent that it affects exposure to risk) and
to oversee financial reporting processes – including approval of the Council’s
accounts.
Composition
The Audit Committee will comprise of 7
members selected for their interest in audit committee business rather than
political affiliation. Members
nominated by Group Leaders preferably should have a background in accounting or
budgetary control or able to demonstrate a commitment to and interest in the
finances of the Council. Quorum will be
4 members.
Chairman
The Chairman shall be appointed on an
annual basis by the members of the Full Council. In the absence of the Chairman at the meeting a Chairman for the
day shall be elected from the Committees membership.
Terms of Reference
·
Annually,
approve the internal audit strategy, plan and performance.
·
Review
summary internal audit reports and the main issues arising, and seek assurance
that action has been taken where necessary.
·
To consider
reports on deficits in trading operations, future liabilities, investments in
operating terms and underspends in the capital budget.
·
Consider the
reports of external audit and inspection agencies.
·
Consider the
effectiveness of the authority’s risk management arrangements, the control
environment and associated anti fraud and anti corruption arrangements. Seek assurances that action is being taken
on risk related issues identified by auditors and inspectors.
·
Be satisfied
that the authority’s assurance statements, including the Statement on Internal
Control, properly reflect environment and any actions required to improve it.
·
Ensure that
there are effective relationships between external and internal audit,
inspection agencies and other relevant bodies, and that the value of the audit
process is actively promoted.
·
Review the
financial statements, external auditor’s opinion and reports to members, and
monitor management action in response to the issues raised by external audit.
·
Approve the
Council’s accounts.
·
To make
recommendations (to any member body, any officer of the Council and/or to any
other interested party or stakeholder) as it sees fit under these terms of
reference.
·
To receive
periodic reports from the Chairman of the Investment Panel identifying risks
associated with management of the pension fund and the strategies to address
those matters.
Entitlement
·
Senior
Officer input sufficient to enable at least 4 meeting per year – including
attendance by statutory officers.
·
Access to the
External Auditor, at least annually in a public meeting, and at other times by
request.
·
Access to
other member bodies, including the Cabinet.
·
The ability
to commission and submit reports directly to the Cabinet and/or Full Council.
APPENDIX 2
Scrutiny Committee Members
Scrutiny
Committee Members are the Chairman, Vice Chairman and members appointed
annually by Full Council together with two co-opted voting members appointed
under Section 115 of the Local Government Act 2003.
No
Cabinet member, Cabinet Secretary or Commissioner may be Scrutiny Committee
Members.
Role
To determine a programme of work reflecting exclusively
at a political and strategic level the policy priorities of the administration,
corporate strategic priorities and the priorities of Scrutiny Committee members
and the communities they serve.
To scrutinize, by being a critical friend,
the services of the Council and to make recommendations to improve quality and
efficiency in service delivery.
To
maintain a call-in procedure as a safety net in the event of unexpectedly
controversial decisions.
Duties
1.
To drive and participate in programmes of
policy review and development, both as decided by the Scrutiny Committee and at
the request of the Full Council and of the Cabinet. The programme of review may
include consideration of anything which is of interest to the area or its
inhabitants, even where the issue is not the responsibility
of the Council.
2.
To scrutinize both decisions of the Cabinet
(including the individual Cabinet Members and Officers taking key decisions) and
existing policies, procedures and processes of the Council, in accordance with
the Committees’ work programme.
3.
To
play the leading role in developing and challenging the Council’s Budget
processes.
4.
To play a
leading role in developing and challenging the Council’s Policy Framework.
5.
To
participate, when required, in the Call In procedure.
6.
To
apply, when undertaking these duties, the Constitution of the Council, and
particularly the Scrutiny Committee Procedure Rules, the Access to Information
Rules and the Budget and Policy Framework Procedure
Rules.
7.
To commission and receive expert
witness.
8.
To
undertake additional functions as required by the Council or by statute.
9.
To
undertake Scrutiny functions in a constructive, positive and non-partisan way and exclusively at a political
and strategic level.
10.
To
co-ordinate with Policy Commissioners and Policy Commission Members to ensure
each Commission and the Scrutiny Committee agree complementary work programmes.
Entitlements
1.
The
Chairman and Vice Chairman of the Scrutiny Committee receive (in addition to
the basic allowance) a Special Responsibility Allowance (SRA) as set out under
the scheme of Members
allowances.
2.
The
two Co-opted members will receive an allowance as set out under the Council’s
scheme of members allowances.
3.
Scrutiny
Committee Members have additional rights to access information of relevance to
their areas of responsibility. These rights are set out in the Scrutiny
Committee Procedure Rules.
4.
Mandatory
and further specialised training in overview and scrutiny is provided for
Members who are encouraged to ensure that they are well informed and able to
develop the skills to undertake these responsibilities.
APPENDIX 3
SCRUTINY COMMITTEE – CO-OPTED MEMBERS
PERSON SPECIFICATION
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Independence
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- Not
having been a candidate for election to the Isle of Wight Council, or
another principal council, since May 1995.
- Not to
have been an employee of the Isle of Wight Council since May 1995.
- Not
currently holding a management position in a statutory public sector
body.
- Not a
close relative or friend of, any member or senior officer of the Isle of
Wight Council.
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Integrity
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- A
track record of impeccable standards of probity in personal, working
and/or public life.
- Ability
where appropriate to take an independent view which varies from that of
other members of the Committee.
- Prepared
to declare and register financial or other interests.
- Never
been bankrupt or have unpaid or unexpired composition or arrangement
with creditors.
- Never
been convicted of a criminal offence leading to a three month (or
longer) prison sentence.
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Experience
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- Current
or recent experience of complex service delivery in the private,
voluntary or public sector.
- Experience
of participating in a Committee environment.
- Should
be IT literate and be able to use a variety of methods to engage with
members of the public, elected members and officers of the Council and
other stakeholders outside of formal meetings.
- Some
knowledge or experience of consultation techniques.
- Must
live or work on the Island.
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Political awareness and sensitivity
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- Knowledge
and/or experience of democratic (or other political) environment.
- Must
not be actively involved with a political party or similar organisation.
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Credibility
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Able to grasp new concepts, attune to new environments and become
credible and confident with new responsibilities.
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Engaging
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A commitment and ability to apply the principles of equality of
opportunity in all aspects of the Scrutiny process.
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Strategic vision
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An ability to identify and focus on issues affecting the whole
Island, over a period of time, rather than immediate or local issues.
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Availability
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- Formal
meetings will be held monthly at 6.00pm in accordance with the Council’s
calendar of meetings and constitution.
- A time
commitment of approximately 1.5 days per week in addition is envisaged.
- Willing
to attend appropriate training courses operated by the Council or
relevant nationally recognised organisation.
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APPENDIX 4
ISLE OF WIGHT COUNCIL
SECTION 115 LOCAL GOVERNMENT ACT 2003
SCHEME OF CO-OPTION TO THE COUNCIL’S
OVERVIEW AND SCRUTINY FUNCTIONS
Number of Co-opted members – Two.
Voting rights – Yes.
Period of co-option - Two years.
Committee for which co-option applicable – Scrutiny Committee.
Background required – Should be from a
voluntary or public sector background, demonstrate independence, integrity,
relevant experience and personal credibility and have a commitment to equality
and diversity. The skills of the co-optees should compliment rather than
duplicate each other.
Role and Duties – Attendance at regular
monthly evening meetings together with background preparation and liaison with
elected members, officers and the wider community where appropriate together
with all other roles and duties contained within the Job Profile for
Scrutiny Members as contained in the
Council’s Constitution.
Allowances – There will be an allowance
payable, to be determined by the Independent Remuneration Panel, together with
reasonable travel and subsistence expenses.