A report by the Chief Executive presented the conclusions of a review of the Code of Corporate Governance for Wirral. The review had been undertaken as part of the work programme agreed by Cabinet at its meeting on 16 November 2011.  As a result of the review, a draft amended Code appended to the report at Appendix A was put forward for the Committee’s consideration.

The Committee was informed that the Wirral code was based upon the “core principles” and “supporting principles” of the CIPFA/SOLACE Framework (CIPFA/SOLACE, 2007).  This Framework was the basis of best practice for local authorities in England and was used as the basis for all of the codes examined under this review. The current Wirral code did not take account of the application note (CIPFA/SOLACE, 2010) and should be amended to account for the amendments to the original framework that it contained.

The Wirral code differed from most of the other authorities reviewed in providing a commentary to describe how the Council complied with the CIPFA/SOLACE principles.  The effectiveness of the Council’s compliance with these principles was evaluated on an annual basis by the Council’s Internal Audit service, in accordance with the CIPFA/SOLACE Framework, and the results of this review of effectiveness were the basis for the Annual Governance Statement.  However, whilst the annual review had identified weaknesses in the Council’s compliance with the principles, the Code and the evidence contained within it had not been subject to continuous review and revised to reflect these weaknesses and the action necessary to correct them. These weaknesses were also clear from the Klonowski Report.  Therefore, there was a risk that the Code sought to demonstrate compliance with the principles by utilising evidence for which there were identified weaknesses.  It was therefore, suggested that the practice of including the commentary be discontinued until such time as robust processes had been established for the ongoing review of effectiveness as part of management practice, and for addressing, as a matter of routine, the weaknesses identified as part of the formal annual review.

The Committee was told that a system of thorough audit and review of governance was essential to meet the requirements of the era of self regulation and peer review that local authorities were entering. It was recommended that the Internal Audit Service provide a report for a future meeting of the Committee on arrangements for securing good corporate governance and the role of the Annual Governance Statement.

The documents in the current code appeared not to be subject to a controlled version that was linked to a published copy.  It was, therefore, recommended that consideration be given to a project to apply the “Documentum” system (The Council’s existing document management system.) It could be used to create a single source for corporate governance documentation. This would enable document control and facilitate monitoring of review requirements

The recommended draft Code of Corporate Governance was attached to the report at Appendix A and a copy of the current code was attached at Appendix B.  It removed the commentary on compliance, added the requirements of the CIPFA/SOLACE application note and included the information applicable to each framework principle from Section 5 of the Guidance.  The code committed the Council to the specific requirements of the Framework.  As previously stated, the commentary that the current document contained to indicate how Wirral complied with good governance principles had been removed on the basis that it relied on evidence that had clear weaknesses

RESOLVED: That

(1)  the amended Code of Corporate Governance attached at Appendix A to this report be agreed and its adoption recommended to the Council;

(2)  the Internal Audit Service be requested to provide a report for a future meeting of the Committee on arrangements for securing good corporate governance and the role of the Annual Governance Statement;

(3)  consideration be given to a project to apply the “Documentum” system to create a single source for corporate governance documentation; and

(4)  Internal Audit be requested to carry out research to ascertain what training packages on corporate governance are available.