Mr Matthew Mannion, Head of Democratic Services presented the Code of Corporate Governance Annual Review. He said the code set out the Council’s commitment to uphold the highest standards of good governance and was annually reviewed as part of a suite of documents which sit under the Annual Governance Statement. He said the code was split into various themes and had been updated in consultation with officers from across the council. He asked members to review and comment on the code presented to them.

In response to questions and comments made by members the following was noted:

• Councillor Francis stated that he did not agree with the contents of the report particularly paragraph 3.1 and questioned the ‘effectiveness’ of the Council’s corporate governance arrangements. He said he did not believe it was effective and felt the council needed to strive harder to achieve this, with evidence showing how the seven core principles appended to the report were being met.
• He questioned if Principle B of ‘ensuring openness and comprehensive stakeholder engagement’ had been demonstrated adequately. He said he did not believe this to be the case and cited member enquiries as an example. He said his request for information were often delayed by the need to demonstrate why it was needed. Councillor Francis said whilst steps had been taken to improve stakeholder engagement, he did not feel the Council had achieved this principle.
• Regarding the other principles, Councillor Francis said the list of documents cited in the report did not say how the Council had achieved them. For example, referring to Principle D and performance management at senior and political level, he questioned if challenge was robust i.e. were chairs of committees challenged sufficiently. He said he believed more work was required on performance.
• Councillor Francis added that praise of Overview and Scrutiny did not reflect his experience and said there was a distinct separation between the Executive and Overview and Scrutiny. He said there should be more recognition of the work of Overview and Scrutiny as well as backbenchers and the value that others can bring to the political structure of the council.
• Councillor Francis said he’d encourage senior managers and CLT to re-examine the code and reflect on if the council was achieving the principles as well as look at ways to improve the governance of the Council.
• Ms Charlotte Webster, Independent Person referred to the Foreword and said the sentence saying the council continued to ‘uphold the highest possible standards of good governance’ was incorrect, especially following the discussions that had taken place at this meeting and at previous meetings. She said it was important to move forward and be candid about the challenges facing the Council.
• Councillor Wood referred to the Croydon and Liverpool reports and asked if something similar happened at Tower Hamlets would the Council’s governance structures, be able to recognise and stop it?  He said in his opinion he did not think this to be the case. Councillor Wood cited an example of £140m spent in 2017 in relation to affordable housing and said he did not know what had happened to this.
• In response to comments made by Members, Mr Will Tuckley, Chief Executive said that he needed to reflect on the contributions made by members of the committee and said he agreed with what had been said. A more considered view was needed which reflected the ups and downs of the current governance arrangement.
• With respect to the Foreword, Mr Tuckley said it ought to say, ‘that we aspire to continue to uphold the highest possible standards of good governance’ and agreed with Ms Webster that this was not always achieved.
• Mr Tuckley acknowledged the points made by Councillor Francis and said these had been debated in the past. He said it was fair to say that systems did not always work. However, he disagreed with the points made about the power of Overview and Scrutiny. He said he respected members views that they did not feel they were influential in respect to the Executive however Overview and Scrutiny did exert influence in respect to policies and practices of the Council. He said he was respectful that this may not be as extensive as some members wanted it to be.
• Regarding the Croydon and Liverpool reports, Mr Tuckley said this was a key concern, not just because of the failings the reports had identified at those local authorities but also because of the history at Tower Hamlets. He said it was imperative that the mechanisms of governance are strengthened and that the Council continuously questions itself, as to if the correct procedures are being followed both by officers and members so to ensure that the organisation isn’t at risk and what the consequences would be. Mr Tuckley said this would be the test that requires constant answering. 
• Lastly, Mr Tuckley said he would be happy to bring back the Code of Corporate Governance and come back to the committee with an amended version.

The Audit Committee RESOLVED to:

1. Note the comments made by Members; and
2. To receive a revised and updated Code for Corporate Governance report at a future meeting of the Audit Committee.