LOCAL CODE OF CORPORATE GOVERNANCE – 2008/09

NORTH EAST LINCOLNSHIRE COUNCIL LOCAL CODE OF CORPORATE GOVERNANCE – 2008/09

Framework for Developing the Local Code of Corporate Governance

The framework for the Council’s Local Code of Corporate Governance reflects the guidance set out in the Chartered Institute of Public Finance and Accountancy (CIPFA)/ Society of Local Authority Chief Executives (SOLACE) publication ‘Delivering Good Governance in Local Government – Framework’.

The original CIPFA/SOLACE framework, upon which the Council’s first Local Code of Corporate Governance was based (October 2004) placed an emphasis on the key good governance principles of Openness, Inclusivity, Integrity and Accountability.

In 2004, the Independent Commission for Good Governance in Public Services (set up by CIPFA and the Office for Public Management) published a set of common principles that it recommended all public sector organisations adopt as a standard.

The Principles of Governance

‘Good Governance Standard for Public Services’ sets out six core principles that underpin the governance arrangements of all bodies and which form the basis of the Council’s Local Code of Corporate Governance: Core Principles Reflected in the Code of Corporate Governance Appendix Principle 1 Focusing on the purpose of the Council and on outcomes for the community and creating and implementing a vision for the local area.

Principle 2 Members and officers working together to achieve a common purpose with clearly defined functions and roles.

Principle 3 Promoting values for the Council and demonstrating the values of good governance through upholding high standards of conduct and behaviour.

Principle 4

Taking informed and transparent decisions which are subject to effective scrutiny and managing risk.

Principle 5

Developing the capacity and capability of members and officers to be effective.

Principle 6 Engaging with local people and other stakeholders to ensure robust public accountability.

Supporting each of the six principles is a series of supporting principles, each of which in turn translates into a range of specific requirements of the Code. The details of this are set out under the section headed, ‘Applying the Principles of Good Governance’, below.

Responsibilities for Reporting on Good Governance

The Monitoring Officer, Section 151 Officer and the Head of Internal Audit are officers of the Council “charged with governance responsibilities”.

The Standards Committee is responsible for the Council’s ethical framework. The Standards Committee will produce an Annual report for Full Council on the effectiveness of the Local Assessment arrangements and make such recommendations deemed necessary to modify or improve the Council’s ethical governance arrangements.

The Audit Committee is responsible for monitoring the Council’s internal control environment. The Section 151 Officer and/or the Head of Internal Audit report regularly on the effectiveness of the Council’s internal control environment to the Audit Committee making such recommendations deemed necessary to modify or improve the internal control environment as considered necessary.

The Monitoring Officer and the Section 151 Officer have statutory powers to report to the Executive (Cabinet) and Full Council in respect of issues of legality or financial management if it is reasonably considered that a proposed Council action is likely to be ultra vires or outside of the budgetary framework and following consultation with the Chief Executive (Head of Paid Service).

The Audit Committee is responsible for the development and review of the Annual Governance Statement (AGS), advised, as appropriate, by the officers charged with governance responsibilities. The Audit Committee will review the effectiveness of the AGS on at least an annual basis. The AGS must include:

an acknowledgement of responsibility for ensuring that there is a sound system of governance within the Council an indication of the level of assurance that the systems and processes that comprise the Council’s governance arrangements can provide; a description of the key elements of the governance framework; a description of the processes that have been applied in maintaining and reviewing the effectiveness of the governance arrangements, including a comment on the role of the Council, Cabinet, Audit Committee, Scrutiny, Standards Committee, Strategic Risk Management Board, Internal Audit and other explicit review /assurances mechanisms; and an outline of the actions taken, or proposed to deal with significant governance issues, including an agreed action plan.

Applying the Principles of Good Governance Applying the Principles of Good Governance – Principle 1 Principle 1: Focusing on the purpose of the Council and on outcomes for the community and creating and implementing a vision for the local area: Supporting Principles The Code Requires the Council to: The Supporting principles:

Exercising strategic leadership by developing and clearly communicating the Council’s purpose and vision and its intended outcome for service users. Develop and promote the Council’s purpose and vision; Review on a regular basis the Council’s vision for the local area and its impact on its governance arrangements; Ensure that partnerships are underpinned by a common vision of their work that is understood and agreed by all partners; Publish an annual report on a timely basis to communicate the Council’s activities and achievements, its financial position and performance. Ensuring that users receive a high quality of service whether directly, or in partnership, or by commissioning. Decide how the quality of service for users is to be measured and make sure that the information needed to review service quality effectively and regularly is available; Put in place effective arrangements to identify and deal with failure in service delivery. Ensuring that the Council makes best use of resources and that tax payers and service users receive excellent value for money. Decide how value for money is to be measured and make sure that the Council or partnership has the information needed to review value for money and performance effectively. Measure the environmental impact of policies, plans and decisions.

Principle 2: Members and officers working together to achieve a common purpose with clearly defined functions and roles.

Supporting Principles:

Ensuring effective leadership throughout the Council and being clear about executive and non-executive functions and of the roles and responsibilities of the scrutiny function. Set out a clear statement of the respective roles and responsibilities of the Executive (the Cabinet) and of the executive’s members individually and the Council’s approach towards putting this into practice; Set out a clear statement of the respective roles and responsibilities of other Council members, members generally and senior officers Ensuring that a constructive working relationship exists between Council members and officers and that the responsibilities of members and officers are carried out to a high standard. Determine a scheme of delegation and reserve powers within the constitution, including a formal schedule of those matters specifically reserved for collective decision of the Council, taking account of relevant legislation, and ensure that it is monitored and updated when required; Make a chief executive or equivalent responsible and accountable to the Council for all aspects of operational management; Develop protocols to ensure that the leader and chief executive negotiate their respective roles early in the relationship and that a shared understanding of roles and objectives is maintained; Make a senior officer (the S.151 officer) responsible to the Council for ensuring that appropriate advice is given on all financial matters, for keeping proper financial records and accounts, and for maintaining an effective system of internal financial control; Make a senior officer (the monitoring officer) responsible to the Council for ensuring that agreed procedures are followed and that all applicable statutes and regulations are complied with. Ensuring relationships between the Council its partners and the public are clear so that each knows what to expect of the other. Develop protocols to ensure effective communications between members and officers in their respective roles; Set out the terms and conditions for remuneration of members and officers and an effective structure for managing the process, including an effective remuneration panel; Ensure that effective mechanisms exist to monitor service delivery; Ensure that the organisation’s vision, strategic plans, priorities and targets are developed through robust mechanisms,and in consultation with the local community and other key stakeholders, and that they are clearly articulated and disseminated; When working in partnership : o ensure that members are clear about their roles and responsibilities both individually and collectively in relation to the partnership and to the Council; o ensure that there is clarity about the legal status of the partnership; o ensure that representatives of organisations both understand and make clear to all other partners the extent of their Council to bind their organisation to partner decisions.

Principle 3: Promoting values for the Council and demonstrating the values of good governance through upholding high standards of conduct and behaviour.

Supporting Principles: Supporting Principles The Code Requires the Council to: Ensuring Council members and officers exercise leadership by behaving in ways that exemplify high standards of conduct and effective governance. Ensure that the Council’s leadership sets a tone for the organisation by creating a climate of openness, support and respect; Ensure that standards of conduct and personal behaviour expected of members and staff, of work between members and staff and between the Council, its partners and the community are defined and communicated through codes of conduct and protocols; Put in place arrangements to ensure that members and employees of the Council are not influenced by prejudice, bias or conflicts of interest in dealing with different stakeholders and put in place appropriate processes to ensure that they continue to operate in practice. Ensuring that organisational values are put into practice and are effective. Develop and maintain shared values including leadership values for both the organisation and staff reflecting public expectations and communicate these with members, staff, the community and partners; Put in place arrangements to ensure that systems and processes are designed in conformity with appropriate ethical standards, and monitor their continuing effectiveness in practice; Develop and maintain an effective standards committee; Use the organisation’s shared values to act as a guide for decision making and as a basis for developing positive and trusting relationships within the Council Ensuring that organisational values are put into practice and are effective In pursuing the vision of a partnership, agree a set of values against which decision making and actions can be judged. Such values must be demonstrated by partners’ behaviour both individually and collectively.

Principle 4: Taking informed and transparent decisions which are subject to effective scrutiny and managing risk.

Supporting Principles:

Being rigorous and transparent about how decisions are taken and listening and acting on the outcome of constructive scrutiny. Develop and maintain an effective scrutiny function which encourages constructive challenge and enhances the Council’s performance overall and that of any organisation for which it is responsible; Develop and maintain open and effective mechanisms for documenting evidence for decisions and recording the criteria, rationale and considerations on which decisions are based: Put in place arrangements to safeguard members and employees against conflicts of interest and put in place appropriate processes to ensure that they continue to operate in practice; Develop and maintain an effective audit committee which is independent of the executive and scrutiny functions or make other appropriate arrangements for the discharge of the functions of such a committee; Ensure that effective, transparent and accessible arrangements are in place for dealing with complaints. Having good-quality information, advice and support to ensure that services are delivered effectively and are what the community wants/needs. Ensure that those making decisions whether for the Council or the partnership are provided with information that is fit for the purpose – relevant, timely and gives clear explanations of technical issues and their implications; Ensure that professional advice on matters that have legal or financial implications is available and recorded well in advance of decision making and used appropriately. Ensuring that an effective risk management system is in place. Ensure that risk management is embedded into the culture of the Council, with members and managers at all levels recognising that risk management is part of their jobs; Ensure that arrangements are in place for whistle-blowing to which staff and all those contracting with the Council have access. Using their legal powers to the full benefit of the citizens and communities in their area. Actively recognise the limits of lawful activity placed on the Council by, for example, the ultra vires doctrine but also strive to utilise powers to the full benefit of the Council’s communities; Recognise the limits of lawful action and observe both the specific requirements of legislation and the general responsibilities placed on local authorities by public law; Observe all specific legislative requirements placed upon the Council, as well as the requirements of general law, and in particular to integrate the key principles of good administrative law – rationality, legality and natural justice – into the Council’s procedures and decision-making processes.

Principle 5: Developing the capacity and capability of members and officers to be effective.

The Supporting Principles:

Making sure that members and officers have the skills, knowledge, experience and resources they need to perform Provide induction programmes tailored to individual needs and opportunities for members and officers to update their knowledge on a regular basis; Ensure that the statutory officers have the skills, resources and support necessary to perform effectively in their roles and that these roles are properly understood throughout the Council. Developing the capability of people with governance responsibilities and evaluating their performance as individuals and as a group. Assess the skills required by members and officers and make a commitment to develop those skills to enable roles to be carried out effectively; Develop skills on a continuing basis to improve performance, including the ability to scrutinise and challenge and to recognise when outside expert advice is needed; Ensure that effective arrangements are in place for reviewing the performance of the executive as a whole and of individual members and agreeing an action plan to address any training or development needs. Encouraging new talent for membership of the Council so that best use can be made of individuals’ skills and resources in balancing continuity and renewal Ensure that effective arrangements designed to encourage individuals from all sections of the community to engage with,contribute to and participate in the work of the Council; Ensure that career structures are in place for members and officers to encourage participation and development.

Principle 6: Engaging with local people and other stakeholders to ensure robust public accountability.

Supporting Principles: Supporting Principles The Code Requires the Council to: Exercising leadership through a robust scrutiny function which effectively engages local people and all local institutional stakeholders, including partnerships, and develops constructive accountability relationships. Make clear to ourselves, all staff and the community to whom the Council is accountable and for what; Consider those institutional stakeholders to whom the Council is accountable and assess the effectiveness of the relationships and any changes required; Produce an annual report on the activity of the scrutiny function. Taking an active and planned approach to dialogue with and accountability to the public to ensure effective and appropriate service delivery whether directly by the Council, in partnership or by commissioning. Ensure that clear channels of communication are in place with all sections of the community and other stakeholders, and put in place monitoring arrangements to ensure that they operate effectively; Hold meetings in public unless there are good reasons for confidentiality; Ensure that arrangements are in place to enable the Council to engage with all sections of the community effectively. These arrangements will recognise that different sections of the community have different priorities and establish explicit processes for dealing with these competing demands; Establish a clear policy on the types of issues the Council will meaningfully consult on or engage with the public and service users about, including a feedback mechanism for those consultees to demonstrate what has changed as a result; On an annual basis, publish a performance plan giving information on the Council’s vision, strategy, plans and financial statements as well as information about its outcomes, achievements and the satisfaction of service users in the previous period; Taking an active and planned approach to dialogue with and accountability to the public to ensure effective and appropriate service delivery whether directly by the Council, in partnership or by commissioning. Ensure that the Council as a whole is open and accessible to the community, service users and its staff and ensure that it has made a commitment to openness and transparency in all its dealings, including partnerships, subject only to the need to preserve confidentiality in those specific circumstances where it is proper and appropriate to do so Making best use of human resources by taking an active and planned approach to meet responsibility to staff. Develop and maintain a clear policy on how staff and their representatives are consulted and involved in decision making

Reviewing the Local Code The Council will review this Local Code on an annual basis. In particular, it will regularly review its governance arrangements to ensure compliance with the best practice principles outlined in this Local Code. During the 12 months following each annual review of this Local Code, the Council, through the officers charged with governance and via reports to the Audit Committee, will : Review the extent to which its arrangements comply with the requirements of good governance set out in this Local Code; Identify systems, processes and documentation as evidence of compliance; Identify individuals and committees responsible for monitoring and reviewing systems, procedures and documentation; Identify any areas for improvement, consider how they are to be addressed and assign a responsible office; Regularly review this Code of Corporate Governance to ensure its ongoing application and effectiveness. The Council will ensure that the Local Code is made available to all members and officers and is published on the Council’s website.

The Annual Governance Statement will report publicly on the extent to which the Council complies with the Local Code, focusing particularly on the effectiveness of the Council’s governance arrangements and recommending actions for improvement as appropriate.