Agenda item

The Overview & Scrutiny Committee made the following recommendation to Governance, Risk & Audit Committee at the meeting on 15 November:

‘To request that Governance, Risk & Audit Committee reviews the risks presented by the Coastwise Project in respect of the likelihood and impact elements of the risk scores (pre and post the mitigation actions) so that there is clarity about how those actions will work and thus provide greater reassurance that they are being managed effectively and who owns them.’

The Chairman explained that this item had come to the Committee as a recommendation from Overview & Scrutiny Committee:

‘To request that Governance, Risk & Audit Committee reviews the risks presented by the

Coastwise Project in respect of the likelihood and impact elements of the risk scores (pre and post the mitigation actions) so that there is clarity about how those actions will work and thus provide greater reassurance that they are being managed effectively and who owns them.’

The Coastal Transition Manager (CTM) introduced this item. He explained that Coastwise was one of a small number of nationally funded coastal transition accelerator projects which were looking to work with communities in high risk coastal erosion areas to prepare transition plans and practical actions for the future. Approximately £15m of funding had been confirmed by the Environment Agency (EA) earlier in the year and, as required by the programme, governance arrangements had been set up and a risk register had been developed. It had originally been prepared as part of an outline business case to the EA to seek approval of the funding and this had been reviewed by the EA’s Large Project Review Group which made one addition to the register. It then went back to NNDC’s Coastwise Governance Board which undertook a risk workshop and consequently the scoring mechanism was updated and consolidated and added in any additional risks identified for Coastwise. In summary the top 5 risks were changes in Government direction, meeting the proposed financial projections, land availability for coastal transition, the consenting timeframes needed to deliver practical actions for transition and the impact of nutrient neutrality when moving residents into new properties. He then outlined the risks that had been mitigated down.

The Chairman invited members to speak:

Cllr C Cushing said that the overall register was quite detailed and the format was sufficient but although there was a description of the risk, there was no detail regarding the impact of it and it wasn’t clear what would happen if one of the risks occurred. He said that this additional information would help quantify the impact of the risk.

Cllr J Boyle agreed with Cllr Cushing and said it would be helpful to have additional information setting out the consequences of any risks. She commented on the risk that the allocated funding may not be spent within the required timescales and said that this caused some concern.

The Chairman said that it was a ‘living document’ which would change as the project progressed. All major risks had been identified and he did not see any others that needed to be included in this list. He also commented on the risk of being ‘unable to spend allocated funds in projected years’ and asked what would cause this. The CTM replied that when NNDC was developing the project assurance was given that the Council would not be held to the projections of allocated spending over the years of the programme. The EA then advised that they were now fixed and consequently, it had been highlighted as a risk. A financial contingency approach had been included in the outline business case, where essentially it was proposed that unallocated funds and contingency funds which were not spent in the year could be claimed down and placed in a ‘Coastal Transition Fund’ which would be managed by NNDC and which could generate interest which could then be spent on coastal transition projects outlined within the programme. This de-risked the programme from a financial perspective for NNDC, meaning that the team could concentrate on delivery rather than the pressure to spend money within a tight timeframe. It also de-risked the EA as they would not be chasing for completion all the time. In addition, it provided the opportunity to explore an area which was a key work package for coastal transition which was future transition funding. There was a shared post with East Riding of Yorkshire and the National EA team which would be exploring this whole area and developing a transition fund with alternative funding mechanisms feeding into it and a management potentially of this fund with ways of ‘tapping off’ the funding for specific projects in the future. The management of this fund was an interesting idea and the contingency fund approach facilitated the opportunity to explore this. He said that the worst scenario would be not being able to spend the funding and then losing it as well as the opportunity to learn.

The Chairman thanked the CTM for his detailed explanation. Referring to the risk ‘land required to deliver the scheme is not available’ he asked whether this was fall-back land that would be purchased rather than land lost to erosion. The CTM confirmed this. The Chairman asked whether there was a further risk that this could increase land prices if people were aware that it may be needed for future purchase by the Council. The CTM acknowledged that this was a possibility but was often the case when a known project was underway in an area.

The Chairman said that in response to the Overview & Scrutiny Committee, the Governance, Risk & Audit Committee had reviewed the risks as requested and had made two recommendations to assist members in understanding and quantifying the risks. He said that the evidence presented to the Committee provided the requested assurance that the risks were being managed effectively.

The Chairman then spoke about risks around key players involved in the project and whether resilience within the team was an issue at all. The CTM replied that the team was still in the process of being constructed, adding that skills and recruitment were a risk and there was still one role that was vacant. He was confident that regular updates on the progress of the project ensured that the team could pick up work and cover if anyone was away.

The Chairman thanked the CTM for providing such an informative report to the committee.

The Policy & Performance Manager (PPM) asked whether the Coastwise project and the risk of not delivering it should be included within the overarching Corporate Risk Register. It was agreed that this should be considered for inclusion in the Councils’ corporate risk register.

The Committee RESOLVED to provide the following statement to the Overview & Scrutiny Committee:

‘The Governance, Risk & Audit Committee reviewed the risks and having clarified several key points, was satisfied that the additional evidence presented to them demonstrated that the proposed mitigation actions will work and therefore provide assurance that they are being managed effectively, with clear evidence of ownership for each action.

The Committee made the following recommendations:

To help members understand and quantify the risks, the risk register for the Coastwise project should include the following:

·         Additional information setting out the consequences of the risks.

·         Additional information setting out the impact of the mitigation actions.’