The Standards and General Purposes Committee of Merton Council met on Thursday 7 November 2024, discussing revisions to Contract Standing Orders, internal audit progress, and fraud updates. Key decisions included recommending amendments to Contract Standing Orders to align with the Procurement Act 2023 and noting progress on internal audit and fraud investigation reports.

Revisions to Contract Standing Orders

The committee recommended to the Council the approval of amendments to the Contract Standing Orders (CSOs) to comply with the Procurement Act 2023. These revisions include administrative changes to reflect departmental restructures, updates to procurement law references, and the introduction of email quotes for procurements under £5,000. Thresholds for when Commercial Services must lead procurement projects are increased from £100,000 to £170,000, and a provision is included to request quotes from local providers or SMEs where possible for contracts under £170,000. Procurement strategies for contracts over £3 million will now go to Cabinet for approval, with contract awards over £3 million delegated to Executive Directors in consultation with Lead Members, while retaining the right to call-in decisions. The threshold for procurement reports going to Cabinet will also increase from £2 million to £3 million. These changes aim to facilitate better resource allocation, accommodate inflationary increases, and ensure more meaningful member involvement in the procurement process. The proposed changes will be presented to Full Council on 20 November 2024.

Internal Audit Progress Report

The committee noted the progress of the Internal Audit function, which is on track to deliver its Annual Audit Plan for 2024/25. As of October 2024, 46% of the planned chargeable days had been booked, with 35 reviews completed or in progress. The report highlighted that 19 audit assurance opinions had been issued, with the majority being Reasonable Assurance. Eight Priority 1 recommendations, requiring immediate attention, were issued to management, with nine outstanding from previous years. Key areas of focus included the control and monitoring of agency and interim staff, and procurement cards, where Priority 1 actions are being addressed by management. The committee also noted the upcoming changes to the Global Internal Audit Standards, which will come into effect for local authorities on 1 April 2025.

Fraud Update Report

The committee noted the Fraud Update Report, which detailed the work undertaken by the South West London Fraud Partnership (SWLFP) up to 30 September 2024. The SWLFP, a partnership of five boroughs including Merton, continues to investigate fraud and corruption. For 2024/25, 79 fraud cases have been worked on, comprising 49 new cases and 30 carried over from the previous year. The report highlighted progress against key performance targets, including properties brought back into housing association or council control following fraud identification. The report also provided a summary of fraud referrals and the value of overpayments and notional savings identified. The committee was informed about developments in fraud detection and prevention, including the establishment of the Public Sector Fraud Authority and the use of data analytics and data cleansing.

Annual Review of Risk Management Strategy and Strategic Risk Register

The committee reviewed the Annual Risk Management Strategy and the Key Strategic Risk Register (KSRR). The strategy, approved in March 2024, outlines Merton's approach to identifying, assessing, and managing risks. The KSRR currently lists nine Key Strategic Risks and three Key Strategic Issues, with seven of these scored as red, indicating a high level of risk. These include the implementation of the Climate Action Plan, the risk of cyber-attacks, the DSG Safety Valve, the Corporate Business Plan and Balanced Budget, Housing Supply, and School Budget Deficits. The committee was informed that officers are reviewing Q2 information for the risk management system, as the current contract is due to expire in May 2025.

Corporate Complaints Report

The committee agreed to recommend the publication of the Corporate Complaints Report for 2023/24, along with separate reports for Adult Social Care and Children's Social Care complaints. The publication of the social care reports is a statutory requirement, while the corporate report is considered good practice by the Local Government and Social Care Ombudsman (LGSCO). The LGSCO's annual letter noted concerns about delays in providing information and completing recommended actions, although Merton's uphold rate per 100,000 population (5.1%) compares favourably to the average for similar organisations (8.2%). The report detailed that 940 stage 1 corporate complaints were received, a 5% increase from the previous year, with 56% upheld or partially upheld. Timeliness of responses remains an area for improvement, with only 54% of stage 1 complaints and 25% of stage 2 complaints responded to within statutory timescales. The committee also agreed to devolve responsibility for final amendments to the Children's and Adult Social Care reports to the relevant Executive Directors.

HR Update - Temporary and Contract Staff and Demographics Update

The committee received an update on the use of contingent workers, senior recruitment, and apprenticeship levy spend. There has been a significant reduction in agency worker headcount and spend, with a decrease of £535,798 in agency spend for April-June 2024 compared to the same period last year. This progress is attributed to enhanced scrutiny by the Corporate Leadership Team (CLT) and a focus on replacing interims with permanent staff. All Tier 1 and 2 senior recruitment positions have been filled with permanent staff, attracting candidates from diverse backgrounds. The council is also making good progress in utilising its Apprenticeship Levy, with a reduction in the amount of levy returned to the government. The report also highlighted a steady increase in job applications and website visitors, alongside a significant rise in temporary workers converting to permanent employees. Casework data indicated a slight increase in formal casework, suggesting managers are more willing to progress procedures to formal resolution. Sickness absence data showed a slight increase in minor conditions and mental health-related absences.

Work Programme

The committee noted the Work Programme for the upcoming months, with an additional meeting scheduled for December due to the external auditors not being ready for the November meeting. This was noted as unsatisfactory. The committee was informed that the Executive Director for Finance and Digital would be meeting with the Senior Lead to pass on feedback regarding the auditors' readiness.