There are no direct environmental implications, although the amendments to rules will affect the taking of actions in accordance with statutory duties and in the achievement of Waverley’s policies and priorities.
Social / community implications:
The same comments apply as for environmental implications, but additionally the amendments to rules will enhance public accountability.
There are no direct implications for e-government service delivery, except insofar as changes to rules will again have implications for decision-making.
Resource and legal implications:
The report concerns internal responsibilities, and as such has no financial or other resource implications, as any changes will be accomplished within existing budgets. There will be legal implications, as actions formerly taken by the Chief Executive will now be taken by different officers. There is also the need to acknowledge that the statutory role of Head of Paid Service will need to be formally and officially confirmed with the four directors, who must distinguish between tasks that they undertake and actions they approve in that role are distinct from their other service responsibilities.
There are implications for partnerships, as different officers will represent Waverley where in cases the Chief Executive formerly undertook that role.
1. Waverley’s internal rules have been written in such a way that the Chief Executive has been given responsibility for taking specific decisions and actions. With the deletion of the post of Chief Executive, the rules need to be revised so as to avoid, or reduce the scope for, ambiguity in the current situation where the four directors are to assume the role of Head of Paid Service (to be referred to as Managing Director). The SIG stressed that these are interim arrangements that may need to be reviewed as the Council’s restructuring process develops. There is no intention to, in any way, anticipate or pre-empt the outcome of that review.
2. The current rules are designed to introduce appropriate checks and controls. The involvement of two officers, specifically the Chief Executive and the relevant director, brought about such a check and control. Now a service director will, for a two-month period, also have to make decisions as Managing Director in respect of the services for which he is responsible. There is a potential for a conflict of interest to arise, and it is therefore necessary to make alternative arrangements to maintain the appropriate checks and controls. It is also important for the Directors to be aware of this potential and to distinguish between actions and decisions taken in their temporary role as Managing Director and those taken as a service director.
3. The rules that specifically need to be revised are Contract Procedure Rules, Financial Regulations, the Scheme of Delegation and some Procedure Rules. The proposed course of action for each is discussed in turn and appropriate recommendations made. It must be stressed that the issues raised are not intended to question the honesty and integrity of any of the officers involved, but members will appreciate that clear frameworks are essential to maintain confidence in the systems of internal control and high standards of corporate governance, and this is the aim of this report.
4. Throughout the period when the current interim arrangements are in place, it will be important that whichever director is fulfilling the role of Managing Director he accepts responsibility for actions initiated or instigated when another director fulfilled the role of Managing Director.
Scheme of Delegation
5. The Scheme of Delegation is post-specific when it gives authority to officers. For example, in some property related matters it will bestow authority on the Director of Planning and Development, and in others upon the Property and Development Manager. In other cases, it requires these two officers to consult each other. Sometimes it might require either of these officers to consult with the Chief Executive.
6. This is an illustration of the potential for a conflict of interests. The Director of Planning and Development is the line manager of the Property and Development Manager, and when required to consult together, the Director in his role as Managing Director, the intended control is potentially lost.
7. The Scheme has evolved over a period of time, and it appears that as a consequence the post titles sometimes given will not be the actual officer involved. For example, in many cases directors are required to consult the Chief Executive on legal matters, and it would be reasonable to interpret that as meaning the Head of Legal Services (sometimes referred to as Solicitor to the Council*). In such instances, the Head of Legal Services would be acting as one of the Chief Executive’s staff, and it would be deemed that the Chief Executive had delegated responsibility to the Head of Legal Services.
9. There are many instances in the Scheme where a director or one of their members of staff is required to consult the Chief Executive. In each of these, the subject matter involves a variety of legal matters. It would be within the spirit and style of the Scheme if these references to the Chief Executive were replaced with references to the Solicitor to the Council with the proviso that that officer consults the Managing Director. The relevant Scheme of Delegation items are listed at Annexe 1; members are asked to refer to the Members’ Handbook should they wish to read the full text.
10. In respect of licensing matters, the Scheme refers to the Chief Executive for some of the items between 224 and 263 inclusive. It would be reasonable and, again, within the intention and spirit of the Scheme to amend these references to read “Head of Committee and Member Services”, who is responsible for the licensing service, and the instances are also listed in Annexe 1.
Contract Procedure Rules
11. The Contract Procedure Rules (CPRs) refer to the “relevant chief officer” in respect of a contract, and this means the director who is responsible for the project (he may or may not be the line manager of the project leader). Some CPRs make reference to the Chief Executive, and in some instances these could be easily substituted as detailed in Annexe 2. (As with the Scheme of Delegation, the full text can be found in the Members’ Handbook.)
12. With reference to paragraph 4 above, whoever is the incumbent Managing Director at a point may be required to approve an action in respect of a project that commenced prior to their taking up the position. They will have to act as they would if taking up a position with a new employer, and will need to observe the date upon which they assumed the role and not seek the preceding director to retrospectively approve or authorise an action.
13. The circumstances under which there is potential for a conflict of interest is in respect of seeking a waiver for a contract where, as a relevant chief officer as defined in CPRs, the director who is also acting as Managing Director needs to seek the Chief Executive’s approval if they consider that a waiver is the best course of action and urgent approval is sought and the matter cannot wait until the Executive next meets or can be convened. The current requirement for a relevant chief officer to seek the Chief Executive’s approval is an important control. In such instances it will be necessary to regard this as falling under CPR W104, and the Managing Director, if also the relevant chief officer as defined by CPRs, is required to obtain the approval of the Chairman of the Executive.
14. Similarly, the Director of Finance has to be consulted and his approval sought on many aspects of CPRs. Whereas at present he is required to consult the Chief Executive in instances where he is the relevant chief officer (CPR W103), he will need to consult the Managing Director except at times when he is serving as Managing Director. At these times, he will also be required to consult the Chairman of the Executive. Revised wordings for CPR W103 and W104 are included in Annexe 4. Additional words are underscored, deleted words are struck through – the proposed wording assumes approval is given to replacing “Chief Executive” with “Managing Director”.
15. Since the last review of CPRs in March 2006, the Chief Officer Group has been renamed “Management Team”, and CPRs still refer to the Chief Executive. An overall change is recommended to replace such references with “Management Team” and “Managing Director” respectively.
16. There are a few minor amendments that have been identified since the review in March, and approval is sought to seek these, which are also set out in Annexe 5. Again, additional words are underscored and deleted words are struck through.
17. There are just 2 references to the Chief Executive within Financial Regulations, both of which can appropriately be replaced by reference to the Managing Director. These are in C403 and D203.
Staffing establishment - savings
18. At the meeting of the Executive on 6th September 2005, it was agreed that decisions to achieve savings in the staffing budget could be made by the Chief Executive (after consultation with the Leader and the Portfolio Holder for Finance and Human Resources). Now that the post of Chief Executive has been deleted, there is a need to replace this delegation. The Council’s Management Team recommends that the Executive should undertake such decisions by recommendation to the Council. This is covered by the Scheme of Delegation, item 3b and is included in Annexe 3 as an item to be deleted.
Council Procedure Rules
19. A number of sections of Waverley’s Constitution and Procedure Rules similarly contain references or delegations to the Chief Executive. A proposed reallocation of these roles is attached as Annexe 6. The guiding principles have been that roles relating to policy or leading the Management Team have been allocated to the Managing Director whilst routine matters such as notifying absences for purposes of substitution have been allocated to the Head of Committee & Member Services.
20. The deletion of the post of Chief Executive has ramifications for Waverley’s internal rules and governance arrangements. There is potential for conflicts of interest to arise, or for there to be ambiguity, and the recommended amendments to the Scheme of Delegation, Contract Procedure Rules and Financial Regulations would reduce the potential.
21. The SIG commended the changes as an interim solution and agreed it would meet again if necessary when the structure review is completed. The SIG also noted that the proposed Government White Paper on the role of local government, and developments in closer partnership working, may also need the SIG to review parts of the Constitution.
It is recommended to the Council that:
1. the changes to the Scheme of Delegation as set out in Annexes 1, 2 and 3 be approved;
2. all references in the Scheme of Delegation to “Head of Legal Services” be replaced by “Solicitor to the Council”;
3. the changes to CPRs as set out in Annexes 4 and 5 be approved;
4. references to “Chief Officer Group” and “Chief Executive” contained in CPRs be replaced with “Management Team” and “Managing Director” respectively;
5. references to the “Chief Executive” as contained in Financial Regulations C403 and D203 be replaced by “Managing Director”;
6. the changes to the Constitution, as set out in Annexe 6, be approved.
Background Papers (DoF/MD)
There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.
Name: Mark Hill Telephone: 01483 523240