City Council agrees an action plan to improve governance following auditor’s report

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City councillors have agreed a comprehensive series of actions to improve governance arrangements at the council as well as for Robin Hood Energy and other council companies.

The Action Plan addresses recommendations made by the council’s external auditor in a Report in the Public Interest into the council’s governance of Robin Hood Energy Ltd, the energy firm it set up in 2015 to tackle fuel poverty.

The council held an extraordinary full council meeting today (Thursday August 27th) to discuss the Action Plan, just over two weeks after the auditor issued the report which made 13 recommendations to the council. The recommendations included urgently determining the future of Robin Hood Energy, with options properly evaluated and risks assessed,; a review of how councillors are best used and supported on the boards of companies; ensuring that all board members have required knowledge and experience to challenge the management of companies; and ensuring that risks relating to the council’s companies are considered for inclusion in its overall risk management process, with appropriating reporting, rather than being seen in isolation.

Ahead of agreeing the Action Plan, the council has already carried out a range of measures, including suspending senior staff at RHE, appointing industry experts and a new management team, setting up new arrangements to strengthen governance of RHE and starting a strategic review to consider all options for the company’s future.

City Council Leader, Cllr David Mellen, told today’s meeting: “I want to make it clear that Nottingham City Council fully accepts the findings of this report which, despite our setting up of this energy company with good intentions to reduce fuel poverty in the city, reveals failures in the council’s governance of Robin Hood Energy.

“We very much regret those failings but we are here today to present a clear and robust approach as to how we will not only review our current approach to company governance, but also build on the changes that have already been put in place over the last year, and demonstrate our resolute commitment to do what’s right for Nottingham people.”

The full Action Plan agreed by councillors is available to view here and includes:

• Reviewing the council’s approach to the ownership of companies and to councillor membership of its company boards
• Providing mandatory training for councillor and officer representatives on its company boards
• Reviewing the council’s approach to its own risk management and governance as well as risk management and governance of its companies
• Improving the clarity of roles of different committees involved in different aspects of the council’s companies
• Using external advice and best practice from elsewhere to help shape the way forward.

Cllr Mellen added: “We will ensure that not only our company but our overall council governance arrangements are robust and strong, by learning from good practice in other companies we own and from other councils. We will learn from the mistakes identified and we will give reassurance that our actions are more than just mere words of regret. Constructive and meaningful change will follow.

“We are elected to represent the people of this city, and it is a privilege we do not take lightly. As custodians of the city, we will ensure that the best interests of Nottingham people are at the forefront of our improvement journey.”

Many of the changes identified in the action plan will come into effect before the end of the year while longer-term solutions aim to be completed  next year. There will be quarterly public reports to the council’s Executive Board and regular feedback provided to the auditor and updates on the council’s website, followed by a full report back to council in 12 months on progress in carrying out the actions in the plan.

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