Agenda item

The July 2020 Audit Committee meeting raised a question on the Housing Infrastructure Fund (HIF) processes and funding requirements and requested that a report be submitted to the Committee. This report describes the interrelationships between the spend of the £170million HIF budget and the legal status of the signed Grant Determination Agreement (GDA).

Discussion:

This report provided details interrelationships between the spend of the £170 million Housing Infrastructure Fund (HIF) budget and the legal status of the signed Grant Determination Agreement (GDA). It also provided details of the measures that the HIF team had put in place, in awareness of the requirements of the GDA and also for accurate budget, risk and programme management.

The Head of Regeneration Delivery advised the Committee of the aim of the HIF programme which was to deliver infrastructure improvements to the Hoo Peninsula. He explained the process that the HIF Team was currently engaged in with Finance and Audit and Counter Fraud to establish governance, programme management and financial processes to manage risk and to meet the GDA requirements. He advised that he expected the Audit and Counter Fraud team to complete their work on this by the end of November. He also explained that monitoring was being undertaken on a monthly basis and that the Audit and Counter Fraud team would undertake a full audit of the processes in a year’s time. He also referred to the financial implications of the programme noting that there was £170 million in the Capital Programme and that the Council would be required to pay the first 1% of any overspend before resorting to other ways of addressing any overspend, for example, by using section 106 funds.

Members then raised a number of questions and comments which included:

Liability for any overspends – in response to a question as to whether the Council would be restricted to paying no more than 1% of any overspend, the Head of Regeneration Delivery stated that any overspend beyond 1% could be paid for by other means such as the use of section 106 monies although it was hoped there would be no overspends.

Contingency testing – in response to a question as to the measures in place to deal with any unexpected issues, the Head of Regeneration Delivery explained the internal processes in place and that this would include escalation to senior management, including the Officer Project Board as appropriate. Such matters would also be reported to the Member Advisory Board, which would meet on a quarterly basis, as appropriate. He also informed the Committee that the Leader of the Council would be briefed once a month on progress and that the Deputy Leader and Portfolio Holder for Housing and Community Services and the Portfolio Holder for Front Line Services would also be briefed on matters relating to their respective portfolios. Ward Councillors would also be briefed on matters as appropriate.

Governance documents and processes – in response to a question as to whether there may be a delay in the Audit and Counter Fraud team completing their review by the end of October because of the redeployment of some team members owing to the pandemic, the Head of Audit and Counter Fraud explained that one of his team was currently in the process of completing this work. He also provided information about the ongoing role of his team once the programme was up and running. In response to a question, the Head of Regeneration Delivery confirmed that the team would follow the Council’s procurement processes and he provided a recent example of a contract being submitted to Procurement Board.

Regular monitoring of progress – in response to a question on whether the Committee could monitor progress on the ongoing risks on a regular basis, it was clarified by the Chief Finance Officer and Chief Legal Officer that such a matter would fall outside the Committee’s terms of reference. However, it was noted that the Committee would have an opportunity to review matters relating to this project, when they are submitted to Committee via existing reporting mechanisms, in due course.

Risk – in response to a question as to why only one risk was set out in the report, the Head of Regeneration Delivery explained that the remit given for this report was quite general in nature and that further detail could be provided in future. In response to a question on the risk set out in section 4 of the report and whether there was a process in place to ensure that deadlines would be met, the Head of Regeneration Delivery confirmed that the team were currently submitting claims on time which were being paid by Homes England and that whilst this would be a significant piece of work, the team was currently well resourced in this area. It was also clarified that risk E2 represented a low likelihood of happening and a high impact.

Decision:

The Committee noted the report.