CKWCB-12-185a_Cluster_Governance_and_Risk_Report_-_Sept_12__2___3_

DATE OF MEETING:

Agenda Item: 10 Enclosure: CKWCB/12/185 Category of Paper Tick()

27 September 2012 Paper Title:

Decision and Approval

Governance and Risk Report

Position statement

Responsible Director:

Discussion

Gill Galdins, Director of Corporate Development and Transition

Information

Paper Author:

FOI Status: Open



Andrea McCourt, Head of Corporate Governance Executive Summary:

This report provides information to the Cluster Board on governance and risk arrangements, and requests decisions on a number of related issues. The report covers: •

Clinical Commissioning Group governance issues

•

NHS Commissioning Board Local Area Team

•

Revised terms of reference for the Governance Committee for approval

•

Terms of reference for a Procurement Committee for approval

•

Proposed amendment to Scheme of Delegation and Reservation – Section

•

Risk Management

Outcome of Equality Impact Assessment:

N/A

Sub Group/Committee:

Governance Committee Clinical Commissioning Executive Committees Audit Committee

Recommendation (s):

Appendices

It is recommended that the Board: i.

receive the Governance and Risk report and note its contents

ii.

approve the proposal for CCG Clinical Commissioning Executive Committees (CCE) to act as shadow Boards and meet in public from the point of authorisation

iii.

will adopt a revised CCE membership following confirmation of authorisation by the NHS Commissioning Board

iv

approve that CCGs can have autonomy in financial decision-making relating to expenditure for 2013 onwards, with ratification by the Board

v

to note that arrangements are in place for the recruitment to the West Yorkshire LAT

vi

approve the Governance Committee terms of reference

vii

approve the establishment of a Procurement Committee and a terms of reference

viii

approve the deletion of item 13 of the Scheme of Delegation and Reservation as detailed above

ix

note the critical risks identified from the Risk Register

Appendix 1 – Letter from David Nicholson Appendix 2 – Letter from Richard Barker Appendix 3 – Governance Committee Terms of Reference Appendix 4 – Procurement Committee Terms of Reference Appendix 5 – Critical Risk Report

1.0

Purpose of Report This report provides information on governance and risk across the Cluster and asks for the Board to approve a number of recommendations. The report is structured into two sections, the first being a governance update and the second being a risk management update. The following is included within the report: Governance Update •

Clinical Commissioning Groups (CCGs) - Clinical Commissioning Executive Committees and lay member recruitment

•

NHS Commissioning Board Local Area Team

•

Terms of reference for the Governance Committee (revised)

•

Terms of reference for the Procurement Committee

•

Amendment to Scheme of Delegation and Reservation – Section C

•

Chair’s Action Risk Management Update

2.0

•

Critical risks from the Risk Register

•

Board Assurance Framework Governance Update 2.1

Clinical Commissioning Groups (CCGs)

The four CCGs within the cluster are currently going through the authorisation process in the following waves: Wave 1 – NHS Calderdale, NHS Wakefield District Wave 2 – NHS Greater Huddersfield Wave 4 – NHS North Kirklees Part of being a statutory public body is the need to demonstrate public accountability and transparency. In preparation for full operation as a statutory body, CCGs need to begin to hold meetings in the public arena. Currently as sub committees of the Cluster Board, the Clinical Commissioning Executive Committees (CCEs) meet in a closed environment. Following successful authorisation and subsequent establishment on 1 April 2013 CCGs will be required to conduct their main Board business in an open and transparent manner within their respective communities.

The Cluster Board is therefore advised that it would be appropriate for the Clinical Commissioning Executive Committees of the CCGs to become the shadow Board for CCGs from the point of authorisation, holding meetings in public as CCGs prepare to become statutory organisations and adjust to meeting in an open environment. The timing of this will vary with the wave of authorisation. The Board is also asked to note that a revised membership of CCEs will need to be adopted following confirmation of authorisation by the NHS Commissioning Board.

It is also advised that, as CCGs prepare to take on the full financial governance responsibilities as a statutory body, CCGs have autonomy in decision-making that allows CCGs to commit to expenditure for 2013/14 with ratification of this by the Cluster Board for the period between authorisation and establishment.

Lay Member Recruitment – the process for lay member recruitment for CCGs has commenced, with a joint advert for the four CCG posts placed in the Yorkshire Post and through local press. The recruitment process follows the best practice approach to lay recruitment issued by the NHS Commissioning Board.

The following number of lay posts has been advertised: NHS Calderdale CCG NHS Greater Huddersfield NHS North Kirklees NHS Wakefield

-

1 lay member 2 lay members 3 lay members 1 lay member

The deadline for applications was 7 September 2012. There has been positive interest in the roles and shortlisting is currently taking place. The recruitment process for NHS Calderdale and NHS Wakefield, as wave 1 applications for authorisation, will be completed by the end of September 2012, with the process for NHS Greater Huddersfield and NHS North Kirklees completed by the end of October at the latest.

One lay member has already been appointed through a ring-fenced process for NHS Calderdale, John Mallalieu, a former Non Executive Associate. It is expected that a similar recruitment process also takes place within NHS Wakefield following authorisation.

Within each CCG area in the Cluster there are Non Executive Associates (NEAs) in place. As part of the transition process and preparation for CCGs becoming statutory bodies, the process for recruitment for lay members for CCGs is now underway. Once the outcome of this recruitment is known, there will be a process of handover between Non Executive Associates and lay members to be agreed locally within each CCG. The role of Non Executive Directors of the Cluster Board continues as each of three PCTs within the Cluster maintains responsibility for these organisations until 31 March 2013.

Recommendations for the Board ii to approve the proposal for CCG Clinical Commissioning Executive Committees to act as shadow Boards and meet in public from the point of authorisation iii to adopt a revised CCE membership following confirmation of authorisation by the NHS Commissioning Board iv to approve that CCGs can have autonomy in financial decision-making relating to expenditure for 2013 onwards, with ratification by the Board.

2.2

NHS Commissioning Board Local Area Team

Prior to the NHS Commissioning Board (NHS CB) taking on its full statutory responsibilities from April 2013, from 1 October 2012 the Local Area Teams (LAT) of the NHS CB will have responsibility for system oversight as system change takes place.

Sir David Nicholson has written to Chairs of PCTs and SHAs to personally thank them for their professional commitment as the final phase of transition to the new health and care system is approached. He has also written to leaders across the healthcare system setting out the next major step in the transition process outlining how he will work with SHAs and PCTs to agree robust local arrangements (see Appendix 1). He has reiterated that there will be no formal transfer of statutory functions, accountability, budgets or staff employment ahead of the agreed timetable for the new organisations until they establish their operational services. Until April 2013, PCTs and SHAs will retain their statutory functions and governance arrangements and the new bodies will only be accountable for responsibilities that are consistent with their preparatory powers and planning for 2013/14.

The Regional Director for the North of England (NoE), Richard Barker, has commenced recruitment to the nine Local Area Teams in the NoE. Currently the West Yorkshire Local Area Team has not appointed to the Director post and this is out to national advert. The letter attached in Appendix 2 confirms transitional arrangements until this appointment is made. It is expected that most of the senior posts will be recruited to by 1st October when the NHS CB regional Directors take on management responsibility for 2012/13 operational delivery and planning for 2013/14. For the NHS CB, people appointed to future regional and local leadership roles will take on management responsibility for their teams responsible for managing both 2012/13 operational delivery and planning for 2013/14.

Once the West Yorkshire LAT is in place in the autumn, the Cluster will need to ensure that the appropriate linkages are made with the LAT and any changes to governance arrangements are made as required.

Recommendations for the Board v to note that arrangements are in place for the recruitment to the West Yorkshire LAT 2.3

Governance Committee

The Governance Committee meeting scheduled for 29 August 2012 was cancelled to allow for a review of the role of the Governance Committee within the context of changes to the commissioning architecture of the NHS. A meeting of key parties, including Non Executive Directors, took place in early September. The outcomes of this discussion is reflected in a revised terms of reference for the Governance Committee which is enclosed for review and approval by the Board (Appendix 3).

It is proposed that the Governance Committee meets more frequently (on a monthly rather than two monthly basis), with a Non Executive only membership. It is acknowledged that there are governance arrangements in place within CCGs which will be scrutinised through the authorisation process. Therefore the focus of the Governance Committee, in its last six months, should be on seeking assurance during this transitional period, focussing on areas of change such as Public Health transfer of

functions, the closedown of the three Primary Care Trusts within the cluster and the quality legacy. It is also proposed that the Transition and Close Down Steering Group report to the Governance Committee. A matrix is enclosed within the terms of reference detailing where responsibility for governance sits during this transition period.

Designate Chief Officers are requested to consider the terms of reference within their governance structures to ensure that there are no gaps in responsibility within the system changes.

The next meeting of the Governance Committee is scheduled for 10 October. It is proposed that, subject to the approval of the Governance Committee terms of reference by the Board, the Governance Committee meets on 10 October within its new terms of reference.

Recommendations for the Board vi to approve the Governance Committee terms of reference 2.4

Procurement Committee

As the move towards the new NHS architecture progresses, the Board reviewed it’s meeting schedule on 3 July 2012 and agreed to reduce the number of Board meetings.

The Board was keen to ensure that decisions relating to procurement were not held up due to the reduced frequency of Board meetings and it was therefore proposed that a Procurement Committee be established as a sub-committee of the Board to enable procurement decisions to be taken in a timely way.

A draft terms of reference for the Procurement Committee has been developed, with input from the Director of Finance and Non Executive Directors. This is enclosed for review and approval by the Board (see Appendix 4). The draft terms of reference is being presented to the Audit Committee on 18 September for review. As part of the Board discussion, the Audit Committee Chair will have the opportunity to feedback on the Audit Committee discussion on the terms of reference to the Board at the Board meeting on 27 September.

During August 2012 a Board Committee met to discuss two procurement decisions in line with delegated authority from the Board meeting of 3 July 2012. The minutes of this Board Committee are presented in the minutes section of this agenda.

Recommendations for the Board vii to approve the establishment of a Procurement Committee and a terms of reference 2.5

Changes to Scheme of Delegation and Reservation – Section C

The Scheme of Delegation and Reservation on decisions was previously updated to reflect the delegation of responsibilities to the Clinical Commissioning Executives.

Included within the Scheme of Delegation and Reservation, within the section on decisions reserved to the Board ‘Strategy, Operational Plan and Budgets’ was item 13 which states:-

- approve Clinical Commissioning Executive proposals on individual contracts (other than NHS contracts) of a capital or revenue nature amounting to, or likely to amount to over £100,000 over a 3 year period or the period of the contract if longer.

It is proposed that this line is deleted from the decisions reserved to Board. The value does not reflect the intention by Board when it delegated budgets to the CCEs and it does not fit with the detailed list of authorised financial limits included within the standing orders. The authorised financial limits allow a Director (including CCG shadow accountable officers) to authorise expenditure up to £100,000, two Executive Directors to authorise expenditure up to £250,000, the Chief Executive and Director of Finance if acting jointly to authorise expenditure up to £500,000 and the Trust Board to authorise expenditure above £500,000.

A paper on this issue will be presented to the Audit Committee on 18 September 2012 prior to discussion at the Board meeting on 27 September 2012.

Recommendations for the Board viii to approve the deletion of item 13 of the Scheme of Delegation and Reservation as detailed above 2.6

Chair’s Action

There are a number of instances in which Chair’s action has been taken since the 3 July Board meeting. A report on these specific items is given in the minutes section of this agenda.

2.7

Annual General Meetings

The dates for the Annual General Meetings for the three PCTs are as follows: NHS Calderdale NHS Kirklees NHS Wakefield District

- Wednesday 26 September 2012 - Thursday 27 September 2012 - Tuesday 25 September 2012

The annual report, Director of Public Health report and Annual Accounts for 2011/12 will be presented.

3.0

Risk Management Update 3.1 Risk Register Review The cluster operates a single risk register database that is populated by all three PCTs. The review cycle for July to September 2012 has been completed and the cluster Board can be assured that; •

Each organisation has reviewed the risk register within risk owner, senior manager and Head of Service /Director deadlines

•

Senior management teams within each organisation have reviewed and agreed the high level risk log (i.e. those with a risk score of 15 or above) for their own organisation including the triangulation of finance and performance reporting

•

Organisations board sub groups have received and approved the HLRL for its own organisation

•

Cluster executive have received, reviewed and approved the HLRL on behalf of the cluster for Cluster Board.

Discussion is scheduled for the Cluster Executive Team to ensure that during the transition period the risks for the existing statutory organisations are managed appropriately.

To support the transition process work is on-going to identify the future risk destinations within the CKW risk register. Regular risk reports will be presented to the Governance Committee for more detailed consideration.

In addition the four CCGs have been developing their own risk agendas and Board Assurance Frameworks.

Regular reports to the Cluster Board, via the Designate Chief Officer report, ensures that the Board is sighted on governance and risk issues in CCGs as well as risks relating to authorisation.

3.2 Critical Risks The Cluster Board is notified of any risks on the risk register scoring 20 or above. The current risk cycle continues from the previous cycle. There is one critical risk (scoring 20) for NHS Calderdale (risk 290) relating to a risk of breaching the MRSA target for 2012/13.

The details of this risk are enclosed in the critical risk report for information at Appendix 5.

Board Assurance Framework The Board Assurance was most recently presented to the Board on 8 May 2012.

Internal Audit confirmed to the Audit Committee at its meeting on 18 September that, on behalf of the cluster, a review of the Cluster Board Assurance framework had taken place in June. The outcome of this review was an assurance from Internal Auditors that they were content with the format of the Board Assurance Framework.

The Board Assurance Framework is currently being reviewed to ensure that it is a dynamic document, and also in light of PCT closedown prior to an update being presented.

The updated Board Assurance Framework will be presented to the Governance Committee in November 2012, Audit Committee (27 November 2012) and the Board at its meeting on 22 January 2013.

Recommendations for the Board ix to note the critical risks identified from the Risk Register

4.0

Recommendations It is recommended that the Board i.

receive the Governance and Risk report and note its contents

ii.

approve the proposal for CCG Clinical Commissioning Executive Committees to act as shadow Boards and meet in public from the point of authorisation

iii

will adopt a revised CCE membership following confirmation of authorisation by the NHS Commissioning Board

iv

approve that CCGs can have autonomy in financial decision-making relating to expenditure for 2013 onwards, with ratification by the Board.

v

to note that arrangements are in place for the recruitment to the West Yorkshire LAT approve the Governance Committee terms of reference

vi

vii approve the establishment of a Procurement Committee and a terms of reference viii approve the deletion of item 13 of the Scheme of Delegation and Reservation as detailed above ix note the critical risks identified from the Risk Register 5.0

Appendices Appendix 1 – Letter from David Nicholson Appendix 2 – Letter from Richard Barker Appendix 3 – Governance Committee Terms of Reference Appendix 4 – Procurement Committee Terms of Reference Appendix 5 – Critical Risk Report