Agenda item

The Committee had before it a report by the Head of Legal and Democratic Services which provided an update on (1) the Arm’s Length External Organisation (ALEO) Assurance Hub meetings of 1 November and 9 November 2017 and to outline the Hub’s level of assurance on the six ALEOs within its remit and future oversight arrangements; and (2) Audit Scotland’s ongoing Performance Review of ALEOs including their visit to Aberdeen on 1 November 2017.

The report recommended:

That the Committee -

(a)      note the level of assurance provide by each ALEO on risk management, financial management and governance;

(b)      note the future oversight arrangements for each ALEO and to further note that this had been predicated on the level of risk to the Council and the level of assurance provided by the ALEO;

(c)      instruct the Head of Commercial and Procurement Services to discuss with ALEOs, during the ongoing review of Service Level Agreements, the possibility of holding Board meetings in public where appropriate;

(d)      instruct the Head of Commercial and Procurement Services to discuss with ALEOs, during the ongoing review of Service Level Agreements, internal audit arrangements or, where appropriate, the undertaking of audit needs assessments;

(e)      note that the Assurance Hub officers will discuss any outstanding issues with representatives of each ALEO with a view to improving the assessment ratings at the next Hub meeting; and

(f)       note the update on the Audit Scotland Performance Review of ALEOs.

Councillor Duncan sought clarification on the legal definition of an ALEO following ALEOs questioning their status, wherein Mr Robertson advised that there is no legal definition and that each Local Authority determines the definition with Aberdeen City Council using the Audit Scotland definitions.  He further advised that during the review of the Service Level Agreements this would be picked up.

Councillor Duncan sought guidance on whether the Council could advise ALEO’s on the structure of their boards, specifically in relation to gender balance.  Mr Robertson advised the Gender Bill was currently being discussed however this was for national public bodies not ALEO’s however this could be looked at to offer advice on best practice.

The Vice Convener sought clarification as to whether the group accounts would be affected by ALEOs questioning if they were an ALEO.  The Head of Legal and Democratic Services advised that there were a number of factors taken into consideration when determining if an ALEO was an ALEO.  Mr Dixon advised that the factors taken into account when deciding if an ALEO would be in scope for the Group Accounts would be the extent to which the Council is able to exercise control and influence over the decision making of the organisation, which may be determined by ownership, the voting rights held or the extent to which the organisation is dependent upon Council funding, and the significance of the financial size of the organisation i.e. annual turnover and/or balance sheet values.

Councillor Cooke sought clarification in relation to the legal risk identified in paragraph 6.6 of the report.  The Head of Legal and Democratic Services advised that this may be a contractual dispute with the ALEO not providing sufficient information for assurance to this Committee and that if the information was not provided and a dispute was in place, a report would be submitted to this Committee.

Councillor Lumsden sought guidance on other organisations that received funding from the Council but had not been deemed to be an ALEO.  Mr Robertson advised that there were several factors to be taken into account as well as looking at the definitions provided by Audit Scotland.

Councillors asked specific questions in relation to each of the ALEOs.

The Committee resolved:-

(i)       to request the Service Lead for the Aberdeen Sports Village to liaise with the ALEO  to relay the concerns of the Committee relating to their Boards contention regarding their ALEO status and the requirement to report to the Committee;

(ii)      to request the Service Lead for Aberdeen Performing Arts to liaise with the ALEO to ensure that the documentation provided was robust and that Business Continuity Planning had been undertaken and documentation provided;

(iii)      to request the Service Lead for Garthdee Alpine Sports to liaise with the ALEO  to relay the Committees concerns about their approach towards Business Continuity Planning and lack of capacity to support the Hubs efforts to provide assurance to the Committee; and

(iv)     to otherwise approve the recommendations contained in the report.