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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 11/07/2006
INTERIM MANAGEMENT ARRANGEMENTS – AMENDMENT OF GOVERNANCE RULES



Summary & Purpose
With the recent redundancy of the post of Chief Executive, it is necessary to make amendments to the Council’s Contract Procedure Rules, Financial Regulations and Scheme of Delegation, which are all written around a scenario where there is such a post. It is necessary to make it clear as to which officers are to take actions in the absence of a Chief Executive. This will avoid ambiguity and enhance transparency and accountability.

The full current text of the rules in question is not given in this report and members will find it within the Members’ Handbook which is issued to all Council members, and on the Waverley website.

APPENDIX C
Waverley Borough Council

EXECUTIVE – 11TH July 2006
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Title:
INTERIM MANAGEMENT ARRANGEMENTS – AMENDMENT OF GOVERNANCE RULES
[Wards Affected: N/A]
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Summary and purpose:

With the recent redundancy of the post of Chief Executive, it is necessary to make amendments to the Council’s Contract Procedure Rules, Financial Regulations and Scheme of Delegation, which are all written around a scenario where there is such a post. It is necessary to make it clear as to which officers are to take actions in the absence of a Chief Executive. This will avoid ambiguity and enhance transparency and accountability.

The full current text of the rules in question is not given in this report and members will find it within the Members’ Handbook which is issued to all Council members, and on the Waverley website.
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Environmental implications:

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.

E-Government implications:

There are no direct implications for e-government service delivery, except insofar as changes to rules will again have implications for decision-making. All documents referred to within this report are available on the Waverley website.

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.
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Introduction

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).

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 necessary 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 and the Scheme of Delegation. 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 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 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 yet 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.

8. There are many instances in the Scheme where a director or one of their members of staff are required to consult the Chief Executive where legal action is required or being considered. 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.

9. 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.

10. There are some other miscellaneous references to the Chief Executive. These are also listed in Annexe 1 together with a suggested replacement reference or suggestion to delete the reference entirely.

11. Further to the comment regarding the references to both “Solicitor to the Council” and “Head of Legal Services” to refer to the same post, it would be prudent to standardise references to “Solicitor to the Council” throughout the Scheme of Delegation. This would bring the Scheme into alignment with Contract Procedure Rules.

Contract Procedure Rules

12. 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.)

13. 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.

14. 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, an the Managing Director, if also the relevant Director as defined by CPRs, is required to obtain the approval of the Chairman of the Executive.

15. Similarly, the Director of Finance has to be consulted and his approval sought on may aspects of CPRs. Whereas at present he is required to consult the Chief Executive in instances where he is the relevant Director (CPR W103), he will need to consult the Managing Director except at times when 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 3. Additional words are underscored, deleted words are struck through – the proposed wording assumes approval is given to replacing “Chief Executive” with “Managing Director”.

16. Since the last review of CPRs in March 2006, the Chief Officer Group has been renamed “Management Team”. It is therefore necessary to approve a wording change within CPRs. The specific references have not been given but an overall change is suggested in Annexe 2.

17. There are a few minor amendments that have been identified since the review in March, and approval is now sought, as set out in Annexe 3. Again, additional words are underscored and deleted words are struck through.

Financial Regulations

18. There are just 2 references to the Chief Executive with Financial Regulations, both of which can appropriately replaced by reference to the Managing Director. These are in C403 and D203.

Staffing establishment - savings

19. 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 such decisions should be undertaken by the Executive, and therefore item 3b in the Scheme of Delegation would require amendment accordingly.

Other matters

20. Further to the comment made under the CPRs section above, concerning the requirement that the Managing Director takes responsibility for whatever arises during his term of office even if something commenced when another director was serving in the role, it would be prudent to determine who should serve as a deputy Managing Director. As a timetable has been agreed which sets out the periods when each director will be serving as Managing Director, the simplest option would appear to be that the next director to assume the role be the deputy.

Conclusion

21. 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. The nomination of a deputy Managing Director in accordance with a clear scheme would also ensure that there is adequate cover to ensure continuity in the conduct of business.

Recommendation

It is recommended that:

1. the changes to the Scheme of Delegation, as set out in Annexe 1, 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 Contract Procedure Rules, as set out in Annexes 2 and 3, be approved;

4. references to the “Chief Executive” as contained in Financial Regulations C403 and D203 be replaced by “Managing Director”;

5. savings to be achieved from the staffing budget be delegated, in future, to the Executive; and

6. the Director who is next due to serve as Managing Director fulfills the role of deputy Managing Director.

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Background Papers (DoF)

There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.
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CONTACT OFFICER:

Name: Mr M Hill Telephone: 01483 523240. E-mail: mhill@waverley.gov.uk

Comms/exec/2006-07/074


ANNEXE 1


Scheme of Delegation items where reference to the Chief Executive should be replaced with a reference to the “Solicitor to the Council (in consultation with the Managing Director)”.

1
4
10
11
12
15 – 21
23
28
29(ii)
30
32
50
86
104
109
110
113 – 114
139
141
153
157
160
163 – 166
172
175 – 176
178
181
191
195
209
217
219
223E


Scheme of Delegation items where reference to the Chief Executive should be replaced with “Head of Committee and Member Services”.

224
226 – 230
236 – 237
241 – 244
250
253 – 263


Scheme of Delegation items – other references to Chief Executive.

1. Managing Director
2. Delete
3b. Executive (see recommendation e.)
8. Managing Director
13. Managing Director
33. Delete
34. Managing Director
35. Managing Director

ANNEXE 2
Replacement of references to the Chief Executive in Contract Procedure Rules

The following CPRs contain references to the Chief Executive or Chief Officer Group and the suggested replacement references are given next to the CPR number.

CPRSubjectProposed responsible officer
B103Signing contract under sealSolicitor to the Council
B105Approval to start contract before documents are signedManaging Director (subject to their not being the relevant chief officer and the provisions of CPR W)
J102Receipt and storage of tendersHead of Committee and Member Services
K103Recording contracts openedHead of Committee and Member Services
K108Opening of tenders received lateHead of Committee and Member Services
L103Approval of persons other than officers to be members of evaluation panelManaging Director
L104Signing of documentation to be used in evaluating tendersManaging Director
U101Maintenance of register of contractsHead of Committee and Member Services
W101Approval to waive CPRs to varying extentManaging Director
W103Director of Finance to refer to Chief Executive in cases where he is the relevant chief officer (where otherwise the relevant chief officer is required to consult the Director of Finance)Managing Director except when the Director of Finance is also Managing Director, in which case he should consult the Chairman of the Executive as in Annex 3.
W104Where the Chief Executive is the relevant chief officer (where otherwise the relevant chief officer is required to consult the Chief Executive)Managing Director (to consult with the Chairman of the Executive as in Annex 3).
W105Approval of a waiver (provision of evidence)Managing Director
VariousChief Officer GroupManagement Team

ANNEXE 3

Revised wording to Contract Procedure Rules

W103 In any instance where the relevant chief officer is required to consult the Director of Finance, where the Director of Finance is the relevant chief officer the Managing Director shall be consulted and their approval or advice sought. If the Director of Finance is, at the time being, also the Managing Director, the Chairman of the Executive shall be consulted and their approval or advice sought.

W104 In any instance where the relevant chief officer is required to consult the Managing Director, where the Managing Director is the relevant chief officer, the Chairman of the Executive shall be consulted and their approval or advice sought. If the relevant chief officer is, at the time being, also the Managing Director, the Chairman of the Executive shall be consulted and their approval or advice sought.

L110 [renumber as L111] In the event that during the assessment of tenders or quotations the relevant chief officer identifies a need to hold post tender/quotation negotiations discussions, the Director of Finance shall

L111 [renumber as L110] [wording to remain unaltered]

P SECURITY TO BE PROVIDED BY THE CONTRACTOR IN RESPECT OF THE CONTRACT AND EXTENSIONS TO THE PERIOD OF THE CONTRACT

P102 For contracts over threshold 3 and up to and including threshold 4 in value, the relevant chief officer shall discuss with the Director of Finance to agree what assessment of the risks associated with the contract shall be undertaken. A bond or other form of appropriate security shall be obtained if, after this assessment has been considered by the Director of Finance, determines it is determined that the circumstances and nature of the contract warrant it. For contracts below threshold 3 in value, security will not be sought unless the relevant chief officer, in considering the nature and profile of the contract, considers that there are circumstances to warrant an appropriate form of security subject to obtaining the formal agreement of the Director of Finance.

Q101 Contract Procedure Rules shall not apply in the following circumstances (N.B. this CPR should be read in conjunction with Q103):
[rest of CPR unaltered]