1

Introduction and scope of responsibility

1.1

Hampshire Fire and Rescue Authority is responsible for ensuring that its business is conducted in accordance with the law and proper standards; and that public money is safeguarded and properly accounted for, used economically, efficiently and effectively.

1.2

The Authority also has a duty under the Local Government Act 1999 to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

1.3

In discharging this overall responsibility, the Authority is responsible for ensuring that there is a robust framework of corporate governance and a sound system of internal control that facilitates the effective exercise of the Authority's statutory functions including arrangements for the management of risk.

1.4

In accordance with the requirements in the Accounts and Audit Regulations 2003, as amended in 2006, this Annual Governance Statement (AGS) sets out how the Authority has sought to meet these requirements during 2007/08. The AGS subsumes the previous requirement to publish a Statement of Internal Control (SIC). It is far wider in its scope and reports on the effectiveness of all aspects of the Authority's corporate governance arrangements.

1.5

The governance framework comprises the systems and processes, and culture and values, by which the Authority is directed and controlled and its activities through which it accounts to, engages with and leads the community. It enables the Authority to monitor the achievement of its strategic objectives and to consider whether those objectives have led to the delivery of appropriate, cost-effective services.

1.6

The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. It cannot eliminate all risk of failure to achieve policies, aims and objectives and can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an on-going process designed to identify and prioritise the risks to the achievement of the Hampshire Fire and Rescue Authority's policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically.

1.7

The governance framework has been in place at the Hampshire Fire and Rescue Authority for the year ended 31 March 2008 and up to the date of approval of the Statement of Accounts.

2

Assessment against the six core principles of good corporate governance

2.1

This first AGS has been prepared in accordance with guidance recently issued by the Chartered Institute of Public Finance and Accountancy (CIPFA). It is based on the outcomes of a detailed review of governance arrangements - in place during 2007/08 - using the comprehensive self-assessment matrix (also recommended in the CIPFA guidance). The matrix (presented to the Governance Committee) is available on our website. It provides supporting details about the sources of evidence of assurance. The outcomes of the assessment are summarised in the following paragraphs. Importantly, the assessment has highlighted where action needs to be taken to improve corporate governance arrangements. Overall, it is considered that the Authority has in place reasonably robust and effective arrangements for ensuring good governance. However, there is scope for improvement and some of the actions to be taken are summarised in paragraph 3.1 below.

2.1

Focusing on the purpose of the Authority and on outcomes for the community and creating and implementing a vision for the local area

2.1.2

As a single-purpose authority the Authority's statutory obligations are generally very clear and these are primarily set out in the Fire and Rescue Services Act 2004. The Authority has a constitution, originally adopted with effect from 1 April 1997. It is based on the provisions of Statutory Instrument 1996 No 2923 `The Hampshire Fire Services (Combination Scheme) Order 1996'.

2.1.3

The Authority sets out its key aims and objectives in its Integrated Risk Management Plan (IRMP). This is the Authority's primary strategic and corporate plan. It covers a rolling three-year period and is rigorously reviewed and refreshed annually. The IRMP sets out for the benefit of all our stakeholders the key corporate aims and the actions the Authority will take to achieve them. It shows how the Authority will respond to changes and challenges, identifies common aims with its partner organisations and sets priorities and targets for improvement. As part of this process we review annually the impact of the external environment in which we operate - identifying any new or emerging issues under our `STEEPLE' analysis (i.e. examining the external environment from the perspectives of `Social', `Technological', `Economic', `Environmental', `Political', `Legal', and `Ethical' factors). We have a comprehensive programme of consultation with our various stakeholders to ensure that our plans take account of their needs and any specific input they have made as well consulting them widely for views on our proposed actions.

2.1.4

The IRMP is approved by the full Authority at its February meeting when, significantly, the three-year revenue budget and capital programme is also determined and approved. The IRMP is comprehensively reviewed each year and takes fully into account the outcomes of: a comprehensive programme of consultation with stakeholders; performance results; the findings and recommendations of various reviews audits and assessments; and, external factors such as new or emerging local and national policies, expectations and initiatives. It is supplemented by a number of medium-term functional or business plans which support and complement the actions and activities that will be pursued. Group- and Station-based action plans are also significant to the planning process to ensure what we do is right for local communities. Our `Strengths, Weaknesses, Opportunities, Threats' (SWOT) analysis is reviewed annually and amended to take account of any new or emerging issues that have been highlighted during the previous 12 months. This thorough review exercise is considered essential if our IRMP is to remain dynamic and responsive to changing needs.

2.1.5

The IRMP is available on the Authority's website together with current information on actual performance against targets. It is also published in hard copy for circulation to key partners and staff. The IRMP is supported by promotional activities and campaigns to ensure that the Authority's corporate aims and targets provide a cornerstone for all internal and external communication activities.

2.1.6

The IRMP sets out an ambitious programme of improvements in the way we deliver front-line services. Some of the actions involve conducting trials/pilot schemes during which we will further consult with the local community, key stakeholders and our staff to ensure that our proposals are sound and that we can be confident that they will deliver the anticipated improvements in service.

2.1.7

The Authority's revised staff appraisal arrangements (Personal Development Review System) have been substantially improved to ensure that all personnel are fully aware and engaged in helping to achieve the Authority's corporate aims. All the Authority's plans are integrated and monitored as part of the Authority's well-established corporate planning process and performance management framework which has been in place since 2000. The improved system ensures that all our staff are fully aware of the Authority's corporate aims and, importantly, what contribution is expected from them in delivering the related strategies, actions and activities.

2.1.8

Effective performance management processes are in place to measure progress against objectives and to provide for remedial action where appropriate. The Authority has a good track record of monitoring its performance via the Performance Review Committee. All performance indicators, both national and local, are clearly set out on the Authority's website and responsibility for monitoring each indicator is allocated to a member of the Service Management Team. Significant progress has been made during 2007/08 in strengthening performance management - notably in the continued development and roll-out to managers (at all levels) of `Views' (performance management information system).

2.1.9

The financial management of the Authority is overseen by the Treasurer (who also fulfils the `Section 151' officer role for the Authority) in conjunction with the Chief Officer. Financial planning and management is fully integrated with, and driven by, the corporate planning and monitoring processes set out above. This includes processes for the forward planning of expenditure, consultation on budget proposals, setting and monitoring income and budgets, and completion of final accounts. All are intended to be accurate, informative, timely and within statutory requirements. The Authority's Budget Book, which is available on our website, is summarised in the joint (multi-authority) council tax leaflet.

2.2

Members and officers working together to achieve a common purpose with clearly defined functions and roles

2.2.1

The Constitution is supplemented by a set of Standing Orders, Codes of Conduct for members and officers, and a Protocol for member/officer relations. The Authority has a set of Financial Regulations and Scheme of Delegation to Officers (both of which were significantly updated in 2004/05 and the Scheme of Delegation was amended in respect of handling minor estates matters in 2007). In addition, the Service maintains a comprehensive set of `Service Orders' setting out policies and procedures across a wide range of front-line services and support functions.

2.2.2

The role of Monitoring Officer is combined with that of Clerk. Working together with the Authority's Internal Auditor, effective working relationships have been established with both the Standards Committee and Governance Committee. The Standards Committee has responsibility for maintaining high standards of probity amongst members through the provision of advice and training and by carrying out investigations referred to it by the Standards Board. The Governance Committee is responsible for monitoring, reviewing and reporting to the Authority the governance arrangements. The Treasurer is the Authority's designated Section 151 Officer. It has become apparent that there are distinct advantages in having the roles of `Monitoring Officer' and `Section 151 Officer' performed by the Clerk and Treasurer who are not part of the Service's `paid workforce'. It reduces the risk of potential conflicts of interest when the Service's senior officers are involved in external collaborative roles with other organisations.

2.2.3

The Corporate Management Team (CMT) - a regular joint meeting of leading Members of the Authority and the Directors - provides a valuable `sounding board' for members and officers to exchange ideas and discuss current issues. It is not, however, a decision-making body. It also plays an important role in reviewing the detail of both the Strategic Risk Register and Improvement Planning Register.

2.2.4

The Authority, its standing committees and the Chief Officer have available to them a full range of professional advisers to enable them to carry out their functions effectively and in compliance with statutory requirements. Legal and financial services are provided through contracts for services (service level agreements) with Hampshire County Council. These are supplemented by specialist legal advice (mainly for specific fire and rescue activities and occasional employment advice) by other external providers. The External Auditor is satisfied with the Authority's arrangements (Annual Audit Letter 2004/05) and aware of the actions taken following a major best value review to strengthen the day to day management of them.

2.3

Promoting values for the Authority and demonstrating the values of good governance through upholding high standards of conduct and behaviour

2.3.1

The Authority operates in an open and transparent way. All its decisions are recorded and made available on our website. There are a well-established set of core values and ethical standards which members and staff are expected to observe and promote. These values are particularly underpinned by policies and procedures covering:

· Members and Officers Codes of Conduct

· Member/Officer relationship protocol

· Equality and diversity strategy and action plan

· Complaints procedure

· Reporting concerns at work (whistle-blowing policy)

· Anti fraud and corruption policy

· Standing Orders governing the conduct of Authority business

· Financial Regulations

· Standing Orders relating to contracts

· Guidance (toolkit) on managing partnerships

· Performance management system

· Personal Development Review (appraisal) system

2.3.2

An effective Standards Committee is in force, which in the coming year, will take on responsibility from the Standards Board for England for the initial filtering of any complains made against Authority Members. In the year 2007/2008 no complaints against any Members required investigation either by the Standards Board or the Standards Committee.

2.3.3

Advice is available to members from the Clerk on any aspects of the Members Code of Conduct or conflicts of interest that may arise either before or in most cases at the point where the decision is to be made.

2.4

Taking informed and transparent decisions which are subject to effective scrutiny and managing risk

2.4.1

The Authority has a comprehensive Risk Management Policy and maintains a dynamic Strategic Risk Register. The Register is under a process of continual review which includes a quarterly review by the Service Management Team and twice-yearly review by the Corporate Management Team. The Register is presented annually to the Authority (September) with any major changes highlighted. Reviews of Register are also regarded as a valuable part of our improvement planning process and the development and prioritising of actions in the IRMP and supporting plans.

2.4.2

The Authority's Performance Review and Scrutiny Committee (PR&SC) has particular responsibility for overseeing service improvement planning and reporting on performance. It monitors progress on implementing the outcomes and recommendations of best value reviews and internal audit reports. The Committee (formerly known as the Performance Review Committee) took on responsibility for the scrutiny function and, with its wider terms of reference, now has the authority to request post-implementation reviews of major projects and decisions. The Governance Committee has taken responsibility (from the PR&SC) for monitoring progress on the implementation of all agreed audit recommendations. The Governance Committee (established in 2004) receives both internal and external audit plans and annual reports/management letters.

2.4.3

External audit (conducted by the Audit Commission) provides a further source of assurance by reviewing and reporting upon the Authority's internal control processes and any other matters relevant to their statutory functions and codes of practice. The Audit Commission's Annual Audit and Inspection Letter was presented and considered by the Governance Committee. It included a summary of the outcomes of the Use of Resources and Direction of Travel assessments. It was a very positive and encouraging Letter with the following opening statement:

"Hampshire Fire and Rescue Authority continue to demonstrate that they are performing well in comparison to other authorities, achieving one of its key aims to be in the top 10 of the best performing fire and rescue services in the country. The Authority is improving outcomes in the majority of its key priority areas and is addressing areas of weaker performance. These improvements are reflected in the high levels of public satisfaction achieved in recent surveys."

For the second year running the Authority attained the top category score of `4' for the way we deliver our services to the public and are considered to be `performing strongly'. In the use of resources assessment, we were judged to be `performing well' with a score of `3'. In our overall direction of travel, we were considered to be `improving well' with a score of `3'.

No concerns were raised about governance arrangements other than a comment about the need to establish processes for evaluating the effectiveness of partnership arrangements. This is accepted and confirmed our own self-assessment.

2.4.4

Effective, efficient and responsive systems of financial management are in place. The Authority's three-year financial management strategy is reviewed annually and incorporated in the Budget Book. The budget is monitored during the year at meetings of the Finance and General Purposes Committee. The Final Accounts report is reported to the Committee at the June/July meetings. Procedures have been reviewed to ensure that the timetable for earlier completion of Final Accounts is achieved. A new Property Management Strategy was approved in 2007 and this has subsequently been enhanced by the inclusion of a detailed property register.

2.4.5

The Authority has a well-established Health and Safety Policy (Service Order 8/1/1) which has been communicated widely to its staff. Comprehensive information and advice is available on our website.

2.5

Developing the capacity and capability of members and officers to be effective

2.5.1

Members receive good induction training and a number of `awareness' sessions on current topics are delivered during the year. These help to ensure that decision-making is based on good knowledge and understanding of the issues involved. Regular bulletins (Members' Updates) are issued and members also receive copies of key internal staff communications (e.g. `Extra's). The 25 Members are appointed to the various standing committees with the aim of spreading workloads and matching individual interests/expertise to the functions of the committees wherever possible.

2.5.2

The Authority has made excellent progress in implementing the national Integrated Personal Development System [IPDS] which provides a comprehensive process for identifying personal training and development needs against a set of role-maps. Significant investment is made in delivering training and development needs. The progress we have made in this area has been formally recognised by the achievement (in 2007/08) of the new, higher standard, Investors in People (IiP) accreditation.

2.6

Engaging with local people and other stakeholders to ensure robust public accountability

2.6.1

Details given in section 2.1 (above) demonstrates that the Authority is very committed to engaging with the public and other stakeholders. Each year an extensive and tailored programme of consultation activities is undertaken (as part of our corporate planning process) to gather feedback on new policies and proposals. We have been particularly keen to engage with harder-to-reach sections of local communities as part of our equality and diversity strategy and action plan. We provide opportunities (via focus groups and website based questionnaires) for stakeholders (including our staff) to suggest actions we might take to better meet our corporate aims and other priorities.

2.6.2

We have significantly improved our external and internal communications both through publications and use of our website. We recognise, however, that we could do more to actively promote those documents and procedures that help to improve our governance and scrutiny arrangements. In particular, we will promote more frequently our complaints procedure, whistle-blowing policy, and performance information. Consideration will be given to the cost/benefits of producing an annual report (in addition to our IRMP and annual financial statements).

3

Actions for improving our governance arrangements

3.1

The following list summarises some of the key actions (highlighted in the self-assessment matrix) that we will take to improve our governance arrangements and improve our levels of accountability to all our stakeholders.

· Use the self-assessment matrix as a dynamic document to record progress and assess compliance against the six principles of good corporate governance; incorporate the assessment as part of our wider corporate planning process and improve timeliness of producing the draft statement.

· Promote more frequently and improve visibility of, and accessibility to, existing and revised key corporate governance policies and procedures (especially on website).

· Strengthen our processes for evaluating the outcomes and success of major projects and other actions (roll-out the recently adopted evaluation tool kit).

· Seek to increase opportunities for member awareness/training sessions at, or immediately following, HFRA and committee meetings; and, explore scope for greater collaboration with other local authorities and fire and rescue authorities to deliver common member training an awareness needs.

· Report more frequently on the effectiveness of partnership arrangements; include a review of associated risks and evaluate outcomes.

· Revisit opportunities for benchmarking in light of changing set of performance indicators.

· Consider the costs/benefits of producing an annual report (separately from the IRMP).

· Publish environmental strategy/action plan (note: will arise from current best value review of environmental impact).

· Enhance quality control of reports to HFRA and its committees.

· Provide more frequent training to our managers on financial regulations and related procurement procedures.

· Consider producing a more accessible `executive summary' of our strategic risk register.

3.2

We propose over the coming year to take steps to address the above matters to further enhance our governance arrangements.  We are satisfied that these steps will address the need for improvements that were identified in our review of effectiveness and will monitor their implementation and operation as part of our next annual review.