This meeting was scheduled to discuss a range of topics, including a verbal financial update, a risk deep dive, the Council's value for money risk assessment, a draft of the Council’s new procurement rules and financial regulations.

Risk Deep Dive - Health and Social Care Integration

This topic was scheduled for discussion to help the committee gain a deeper understanding of how the council is managing the potential risks caused by the ongoing integration of local health and social care systems. The committee were scheduled to be told that “Health and Social Care Integration is a key priority for Islington and a national government priority.” and that “The publication of the Health and Care Act 2022 set out significant change to the configuration of the health system and the local authorities' role in that system.”

The report pack explained that a new statutory body called the North Central London Integrated Care Board was formed in 2022. It is a partnership that covers a five-borough area that includes Islington, Camden, Barnet, Enfield and Haringey and brings together local NHS organisations, councils, and voluntary sector organisations.

According to the report pack, the Board is responsible for the planning and delivery of a wide range of health services across this wider five-borough area.

The report pack highlighted that the creation of the North Central London Integrated Care Board carried a number of potential risks for the council, including the risk that the Board might reallocate funding away from Islington to other boroughs, or that it could reduce services or the council's control over the system.

The report pack also explained that the council and the Integrated Care Board have a number of shared budgets, including “pooled budget arrangements with the ICB” for adults with disabilities and/or mental health support needs. These are managed contractually through what is known as a Section 75 agreement¹, and were last updated in 2016.

The report pack explained that there was some concern about whether the new arrangements might lead to the Integrated Care Board withdrawing from these pooled budgets. It acknowledged that this had not yet happened, but said that the Board, like the council, had to make savings, and that it had already started to look at ways to reduce its contribution to the pooled budgets.

The report pack said that in April 2024 the Integrated Care Board removed funding for a number of council commissioning roles across adults and childrens services, with the result that commissioning activity across the organisations had “moved from a joint to an aligned model”.

The report pack suggested that Islington was working to mitigate these risks by:

• working collaboratively with the Integrated Care Board in a number of forums including the Islington Borough Partnership and Islington Children’s and Families Board
• developing “strategies with our partners” including the Islington Carers Strategy and the Islington Dementia Strategy
• developing a shared workplan with the Integrated Care Board to deliver integrated services

Value for Money Risk Assessment - Council

The report pack contained the Council's value for money risk assessment for 2023-24. The document was prepared by the Council’s external auditors, KPMG, who are required to consider whether the Council “has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources” under the Local Audit and Accountability Act 2014.

The risk assessment considered a number of risks, including:

• The risk of budget overspends.
• The risk of fraud and corruption.
• The risk of cyber security incidents.
• The risk of failure to deliver value for money.

For each risk, the report pack contained an assessment of the likelihood of the risk occurring and the potential impact of the risk, as well as the Council’s plans to mitigate the risk.

Constitution Review - Financial Regulations and Procurement Rules

The report pack contained draft versions of the Council’s proposed financial regulations and procurement rules. These were prepared for discussion as part of a wholesale review of the Council’s Constitution, designed to ensure that it is “up to date and fit for purpose”, as was agreed by the Audit and Risk Committee on 13 March 2023.

The report pack explained that the proposed financial regulations set out a “framework for managing the council’s financial affairs” and include an updated Scheme of Authorisation which sets standardised limits for officer approvals for things like writing off debts and approving spending commitments.

The report pack explained that the existing regulations for managing capital expenditure had been “rewritten to make them more streamlined and clearer to follow and understand”.

It proposed a number of changes to how budgets are managed. Under the current regulations, a corporate director is allowed to approve transfers of up to £500,000 between capital schemes. Under the proposed regulations, this limit is raised to £1,000,000 for the Section 151 Officer and to £5,000,000 for the Executive. Transfers over £5,000,000 will require approval by Full Council.

The report pack explained that these proposed changes would “take away some powers from Full Council and give them to the Executive” but argued that this was necessary because of “the magnitude of the capital programme and pattern and frequency of budget reprofiling requests in recent times”.

The report pack also explained that the proposed procurement rules were prepared to ensure that the council was in compliance with the new Procurement Act 2023² when it comes into effect on 24 February 2025. The new act introduces “new duties to publish notices and contract information”, new procurement procedures and a “new watchdog with powers to investigate the council and assist suppliers to challenge council decisions”.

The report pack highlighted that in addition to ensuring compliance with the new act, the proposed new rules aimed to:

• underpin delivery of the council’s Progressive Procurement Strategy 2020/27
• maximise social value delivery and impact
• maximise value for money from external spend

The report pack said that, where possible, contracts should be awarded to Local Suppliers: those from Islington and its adjoining boroughs. It highlighted the Council’s commitment to award contracts in such a way as to:

• increase the number of local people employed on a contract, including those with the greatest barriers to work
• increase the number and percentage of local people offered training and apprenticeships
• increase the number of “local small and medium businesses”, social enterprises and co-operatives that are awarded contracts

The report pack said that advertised contracts between £5,000 and £24,999 should be awarded to Local Suppliers “whenever suitable suppliers are within reason identified, affordable and available”, and that this should also be the case for contracts worth more than £25,000 “as a matter of policy”.

The report pack explained that a minimum of 20% of the marks available in tender evaluations should be awarded for social value, and that this should also be the case where possible for quotations. The report pack said that officers should set out social value asks clearly in all tender documentation.

The report pack said that, as a matter of policy, officers should consider the following “matters of policy” during the procurement process:

• reducing waste, improving resource efficiency and contributing to the move towards a circular economy
• considering whole life costs, including energy, maintenance and end of life disposal costs
• using fair employment practices including the payment of the London Living Wage
• improving supplier diversity, innovation and resilience
• encouraging innovation in the supply chain
• working collaboratively with the Islington Anchor Institution Network to help boost jobs and employment, support local businesses and reduce carbon emissions
• co-designing services with service users
• increasing opportunities for businesses owned by people from less represented groups
• working with mutuals and co-operatives
• improving opportunities for people from disadvantaged communities
• increasing community participation, empowering strong and supportive communities
• driving change that supports more effective service delivery
• safeguarding the borough

The report pack proposed that responsibility for ensuring the financial viability of suppliers for all contracts over £5m be delegated from the Executive to Corporate Directors. It also proposed that Corporate Directors be given the authority to agree to accept contracts that contain lower than usual levels of insurance cover.