Agenda item

To provide an update on risk as at the end of December 2025 (report of the Assistant Director – Governance enclosed).

Consideration was given to the report of the Assistant Director – Governance which provided an update on risk as at the end of December 2025.

The Director of Finance (Section 151 Officer) introduced the report on behalf of the Business Intelligence and Change Manager who had sent his apologies. The following main points were highlighted:

• The strategic risk profile remained largely stable, with most risks being managed at or near their target levels; and
• A new risk relating to artificial intelligence (AI) governance and oversight had been added to the register as a medium risk, with the expectation that this would continue to evolve as the organisation’s understanding and use of AI developed further.

The Assistant Director – Regulatory provided members with the following update in respect of the Health and Safety risk SHDC23:

• The risk position reflected the status at the end of Quarter 3.
• An assurance review received at the end of December 2025 had assessed the arrangements as adequate, with a small number of recommendations outstanding at that time; and
• Significant progress had been made during Quarter 4 and that, based on the work undertaken since the report was compiled, the Health and Safety risk was expected to return to its target level by the end of the financial year.

Members considered the report and made the following comments:

• Members queried the steps being taken to accelerate readiness for food waste collection requirements, given delays in vehicle procurement associated with Environment Act implementation. Additionally, could a new food waste collection service have been added to the existing service rather than implementing a new system.
  • The Director of Finance explained that work was ongoing with suppliers to mitigate delays, acknowledging national supply pressures, and that flexibility had been built into the service rollout to support residents while implementation progressed. Food waste collection could not be introduced as a simple add?on, as it formed part of a wider set of statutory changes.

• Members asked whether current route modelling sufficiently accounted for rapid housing growth areas and whether additional route optimisation software might be required.
  • The Director of Finance responded that modelling reflected assumed growth but acknowledged uncertainties, particularly around consistent take?up rates for food waste services. While in?house modelling capability could be beneficial, the cost and timing—particularly in the context of Local Government Reorganisation—meant that use of external expertise was currently considered appropriate.

• Members raised concerns about communication with residents regarding new waste and recycling arrangements, particularly for those without internet access.
  • The Director of Finance acknowledged the importance of clear and accessible communication and confirmed that learning from other authorities had informed South Holland’s approach.

• Members sought clarification on meaning of the ‘direction of travel’ risk trend arrows within the risk register, such as for ‘SELCP-02: Trust’ and queried whether a downward arrow represented a reduction in risk severity rather than the subject matter itself.
  • The Director of Finance would ask the report author to respond to this query after the meeting.

• Members requested whether additional assurance could be provided regarding cyber security risks - while at their target score, were such risks being robustly managed.
  • The Director of Finance responded that cyber risk was inherently dynamic with a degree of risk tolerated, however controls were continually reviewed and strengthened based on expert advice, with mitigation actions being implemented proactively where vulnerabilities were identified.

• Members referred to risks SELCP-07 ‘Local Government Funding’ and SELCP-08 ‘Staff Retention and Resilience’ which were both rated high, and queried whether partnership risks rated as high and not on target affected South Holland District Council specifically or reflected issues across the wider partnership.
  • The Director of Finance explained that these risks applied across all partner councils, noting that the funding risk would be reviewed following the provisional financial settlement and the setting of a balanced budget.

• Members asked whether international instability was expected to impact risk factors going forward.
  • The Director of Finance advised that potential impacts included cyber security threats, inflationary pressures, utilities costs and wider economic challenges, all of which continued to be monitored.

• Members queried whether prolonged uncertainty relating to Local Government Reorganisation was impacting partnership delivery.
  • The Director of Finance advised that some impact was being experienced, though it was not considered material at this stage.

• Members referred to SHDCRA16 ‘Emergency Repairs Service (staffing)’ risk which was not at its target level and asked whether revised contract terms and other mitigations had reduced the risk and which KPIs would demonstrate improved resilience in the service.
  • The Director of Finance advised that further information would be provided following the meeting.

• Members suggested that additional narrative within mitigation and action plan sections of the risk register would improve clarity, particularly where risks were being formally tolerated.
  • The Director of Finance agreed that incorporating standard explanatory wording as appropriate, such as ‘risk is being tolerated’, would remove any doubt to the current status of the risk.

• Members referred to risk SHDC10 ‘Introduction of Extended Producer Responsibility’ (EPR) and asked whether the £1.2m notification of funding from government was considered sufficient and whether it represented new funding.
  • The Director of Finance explained that EPR funding was intended to offset existing waste service costs rather than fund new statutory burdens for which no additional financial support had been offered. Concerns regarding funding adequacy had been raised with government but remained unresolved.

• Members referred to risk SHDC23 ‘Health and Safety’ and requested  an update on health and safety Service Level Agreements with PSPS.
  • The Assistant Director - Regulatory confirmed that revised agreements were progressing well and were on track to be signed and implemented for the next financial year.

• Members referred to risk F-04 ‘Procurement Contracts’ and asked for a status update regarding the Anti-Fraud and Corruption Strategy and Whistleblowing Policy which were due to be reviewed by March 2026.  
  • The Director of Finance confirmed that the Anti?Fraud and Corruption Strategy and Whistleblowing Policy had been approved earlier in the year and that actions were being refreshed to reflect the Council’s current position.

AGREED:

That the Quarter 3 Risk Report 2025/26 be noted.