A meeting saw Tees Valley Combined Authority (TVCA) Cabinet discuss past, present and future arrangements after a critical letter from their auditor.
TVCA Cabinet, chaired by Conservative Tees Valley Mayor Ben Houchen, met on Wednesday 14 May to discuss a letter from Ernst and Young (EY) that criticised the combined authority, and the recommendations that came from it. The cabinet accepted these recommendations whilst also approving actions to address them.
Over the 40-minute meeting, questions from constituent council leaders were directed at TVCA’s top officers, with much focus on capacity in the past, at present and looking to the future. Problems with capacity was a theme of EY’s letter to the combined authority, which was copied to Secretary of State Angela Rayner, that resulted in numerous recommendations.
Gary Macdonald, TVCA’s Group Director of Finance and Resources highlighted the summary of the “key three substantive recommendations” that EY had made, which members were being asked to accept.
The combined authority was recommended to review the capacity within the finance team, “to ensure that there is sufficient capacity to support the breadth of its activities”. Additionally, TVCA was told to review its process around the public inspection period “to ensure it fully understands the statutory requirements”.
Finally, the combined authority was asked to set out a clear timetable for the production of its 2024/25 Statement of Accounts.
Cabinet members were asked to approve the actions that would be taken to address EY’s comments as well as the method by which such progress would be reported.
Tom Bryant, Interim Chief Executive of TVCA said: “We absolutely recognise the significance of this letter, and we fully accept the recommendations and the other action points that they make in the letter.” He added that TVCA “clearly” need to address the short-term, immediate issues, but also make sure that this “doesn’t happen again”.
Labour Cllr Brenda Harrison, who leads Hartlepool Council, said: “It is a serious situation, but I think listening to what the response is, it seems there is a robust plan there to put things right.” She added that the situation regarding capacity “worries me” and she asked why capacity had been a problem.
Mr Macdonald responded that EY had touched upon the topic in their letter, saying there is ‘almost’ an attempt to deal with several financial years at once, due to delays with the audit programme, locally and nationally. Specific to TVCA, he said: “You get leavers from time to time within the team, you sometimes lose knowledge”, adding that the Audit and Governance committee had looked at having “robust resilience and guard rails in” when it comes to accommodating any “shocks” within the system.
Tom Bryant confirmed TVCA had the resources that they need now to deal with the immediate challenges “but we absolutely need in parallel to that to think about what we need going forward so that we’ve got a sustainable finance function that means this never happens again”.
Redcar and Cleveland Labour leader Cllr Alec Brown asked for some specific figures of people in the team and what percentage increase of capacity this equals. Mr Macdonald responded that there were 15 members as a baseline finance team, and there has been a net increase of four, “with these new starters as well who are coming in as we speak”.
Cllr Brown later asked if any capacity in the finance team had been lost in the last year from sickness and stress, referring specifically to mental health. Mr Macdonald confirmed that “significant” sickness days had not been taken through that explanation, adding: “It doesn’t mean to say it doesn’t have a bearing on the team, in terms of the pressures that they’re managing and we keep a careful eye on that from a welfare perspective.”
After the recommendations and plans of action were approved by cabinet members, Mayor Houchen asked when the next update would come to cabinet. Mr Macdonald responded that a written update would be circulated at the end of the month to members.
Mayor Houchen pushed for more detail on this matter, adding: “The last thing we want is for it to feel like a transmission from us and we get further down the line to a future meeting and there are things that people wanted to raise in the interim that could have further accelerated the change in the interim period.”
Towards the end of the meeting, Emma Simson, TVCA’s Chief Legal Officer said: “As part of our review of our governance structure, we need to look at how we can do things that are less reactive, so more proactive.” She said that the structure of governance processes would be dealt with as part of the Best Value Notice, which was pinned on TVCA in April.
