Agenda item

            The Committee considered the undernoted report:

1.0       Purpose of Report/Summary of Main Issues

1.1           The purpose of this report is to provide Members with an update on the progress being made to manage the corporate risk that is of direct relevance to the Belfast Waterfront and Ulster Hall (BWUH) Ltd Shareholders’ Committee.

2.0       Recommendation

2.1       That the Committee notes the reduction in the risk evaluation for 2017/2018 and the arrangements in place to manage this risk. Committee is also asked to note the progress being made to implement controls / measures to reduce the level of risk further and the proposed six monthly process for reporting. 

3.0       Main Report

3.1       Managing Corporate Risks to an Acceptable Level

            The risk of particular relevance to the Belfast Waterfront and Ulster Hall (BWUH) Ltd Shareholders’ Committee is as follows:

3.1.1    ‘Inability to effectively manage business performance as set out in the contract in order to meet the terms and conditions of the Letter of Offer.’

            Progress in managing this risk is set out below.

3.2       Risk Assessment

3.2.1    Following a review of the corporate risk by the Audit Governance and Risk Service, this risk was assessed in terms of ‘impact’ and ‘likelihood’ (using the Council’s risk scoring system, available on modern.gov) as follows:

            Impact – 3 (moderate)

            Likelihood – 3 (possible)

3.2.2    This assessment reflects that ineffective performance management would have significant financial and reputational consequences. Performance management at BWUH Ltd is a key strand of the Belfast Agenda and the ability to achieve some of the anticipated strategic outcomes will require the support of key stakeholders and a number of external partners. Failure to meet agreed objectives and achieve targets would have financial consequences for the Council and impact on the rate setting process.

3.2.3    The impact of this risk is currently evaluated at a 3 and whilst it is difficult to reduce the potential impact if the risk materialises, we are committed to doing all we can to reduce the likelihood of the risk occurring. The risk is subject to regular review and is updated through the Councils corporate system in line with the corporate risk manage update process.

3.3       Current Measures in place to Manage the Risk

3.3.1    There are a variety of controls in place to help manage the risk:

·        Legal agreements (Shareholders Agreement and Services Contract) are in place with BWUH Ltd which were developed and finalised with independent legal advice.

·        A Shareholders’ Committee has been established and meets quarterly. Capacity building and induction training has been completed and the Committee is now well established. The Committee holds the BWUH Ltd to account on contract and business performance issues; they scrutinise the quarterly finance and performance reports ensuring social and financial return on the Council and other funders investments; they control and make decisions on reserved matters; authorise the annual business plan; they also agree and monitor performance framework targets, including decreasing dependency on Council subsidy. BWUH Ltd provides risk assurance on a quarterly basis to the Shareholders Committee.

·        The Standing Orders have been amended to reflect the establishment of this new Committee with a review of governance arrangements taking place after 3 years.

·        A Business Plan for 2016/17 was presented to and agreed at Committee in June 2016 with the 2017/18 Business Plan due to be presented at Committee in January 2017. Member briefings on the business plan were facilitated in December 2016 where the drat business plan for 2017/18 was presented and discussed with Members.

·        The BWUH Ltd Board has been set up and meets bi-monthly. Capacity and induction training has been delivered to the Board. The Board is collectively responsible for ensuring the success of the BWUH Ltd and ensuring compliance with all legal and regulatory obligations; they set and monitor the strategic direction of the organisation. The Councils Chief Executive and Director of Finance sit as observers to the Board. The BWUH Board has also established its own Audit and Risk Committee of which two Board Members sit on and an external Auditor has been appointed. A Strategic Change Committee has also been established and again is governed by two Members of the Board.

·        SLA’s have been set up with internal BCC providers and are in operation.

·        Project governanceGovernance arrangements were established in 2016/17, and a contract and business plan is in place which clearly sets of the expected performance of the company. Contract management and relationship management arrangements have been built in to the governance arrangements and at present BCC have sought to strike a balance between strict adherence to the contract and the need to develop relationships with the BWUH management team. At present, the governance arrangement involve monthly meeting with the SRO and senior management of BWUH. In addition, the Councils Chief Executive and Deputy Chief Executive & Director of Finance attend the BWUH Board meetings as no-voting members. A benefits realisation and governance workshop was held in January 2017 with Tourism NI and other key partners to support the delivery of the project’s objectives and ensure appropriate governance with our funders going forward.

·        A handover process from the SRO of the construction phase to the SRO of the operational phase has been finalised and is due at CMT for sign-off.

·        A Venue Event Management System (VEMS) is now in place within BWUH Ltd and has been operational since 1^st October 2017, and a time & attendance system is now also in place. These systems will support the performance of the BWUH Ltd and help inform the management of this risk.

3.3.2    An independent Gateway Review was conducted in August 2016 which provided an ‘amber’ assessment and made a series of recommendation. A further Gateway Review is planned for 2017.

3.3.3    The controls listed against the risk were found by the Audit Governance and Risk Service to be adequate, effective and relevant to the management of the risk.

3.4       Areas for Future Consideration

3.4.1    To ensure future management of this risk, the relationship, performance and risk management between the Council and BWUH Ltd needs to continue with the governance arrangements being reviewed as appropriate to ensure they are operating effectively. It is important the projections for future years are monitored closely and that any longer term challenges are dealt with effectively along with any future uncertainties that may arise in the market. Financial performance and future projections will be considered in terms of the potential impact on funding received for the project and any potential future financial claw back if the Letter of Offer conditions in relation to the funding are not fully met.

3.5       Progress Updates to Committee

            In order to ensure that members have an understanding of the corporate risks that relate to their Committees and have clear information on how they are being managed, it is proposes that Committee is provided with a progress update reports in a further six months.

4.0       Financial and Resource Implications

            None.

            Equality or Good Relations Implications

            None.”

            In response to a Member’s question regarding the recent terrorist attacks in Manchester and London, the Managing Director advised the Committee of the security checks which were being carried out at the venues.  She outlined that the current policy would be in place for three months and would be reviewed after that time.  She also reported that all visitors, apart from those attending ticketed events, had to sign in at reception.  The Members were also advised that a number of staff had recently participated in Project Griffin training, which was the national counter terrorism awareness initiative for businesses.

            The Committee noted the recommendations within the report.