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16 May 2024 — Minutes of the meeting of the Board of Commissioners

Minutes of the meeting of the Board of Commissioners, Thursday 16 May 2024

Location: Victoria Square, Birmingham

Commissioners:

  • Marcus Boyle (Chair)
  • Stephen Cohen
  • Charles Counsell
  • Helen Dodds
  • Sheree Howard
  • Claudia Mortimore
  • Helen Phillips
  • Andrew Rhodes
  • David Rossington

Executive team:

  • Helen Child
  • Lucy Denton
  • Katharine Diamond
  • Sarah Gardner
  • Helen Gibson
  • Natasha Harris
  • Tim Miller
  • Alistair Quigley
  • Kay Roberts
  • John Tanner

Other participants: REDACTED

Expert Group Chairs: REDACTED

External attendees: REDACTED

Observing: REDACTED

Apologies: None

1. Welcome, apologies and declarations of interest

The Chair welcomed attendees to the meeting.

There were no apologies.

There were no new declarations of interest.

2. Minutes, Actions, Forward look

The minutes of the meeting held on 19 March 2024 were approved subject to minor stylistic amendments. REDACTED In the future, such items will be minuted and will be agreed by the Board in the usual way.

The Board noted the actions log.

The Board noted the forward look.

3. CEO’s report

The Board noted the report for information.

The CEO drew the Board’s attention to some specific points:

  • there has been stakeholder engagement on the industry code
  • the first anti-money laundering (AML) workshop with the industry has taken place - no examples of where AML checks are having unintended consequences have been received
  • at the Chief Coroner’s meeting, the Gambling Commission was offered the opportunity to set out its position in a newsletter and to have a slot at their conference
  • the Commission held its Leaders Live conference event on 8 May 2024. There will be a second conference for those who could not attend due to a rail strike
  • attrition at the Commission is falling and headcount is 16 percent higher, with long term sickness down by 46 percent
  • forecasting accuracy on expenditure is much improved, with a variance of less than 1 percent, which is particularly pleasing
  • REDACTED
  • REDACTED
  • Commission stakeholder engagements average over one per working day which is impressive, and press coverage has given lots of reference to the Commission engaging with stakeholders. There is still more to do on stakeholder engagement but the Commission is moving in the right direction.

The Board asked questions and made comments.

On investor roundtables, the REDACTED is engaging with the investor groups in gambling operators on our views, in addition to open banking. This engagement provides opportunities to dispel a lot of myths and to talk about good working practice across international businesses. The Commission has previously done this, and it is a very good way to land messages with investors, who may then play back to operators.

4. Chair’s report:

The Board noted the paper for information.

The Chair highlighted key areas of interest:

  • the Chair’s quarterly meeting with the REDACTED took place on 14 May 2024. It was a very positive meeting and the Department of Culture, Media and Sport (DCMS) are particularly appreciative of the Commission’s work of late, especially on the handling of affordability
  • the Chair and 2 other Commissioners visited the Hippodrome Casino in London on 15 May 2024 which was very interesting, and the Chair would encourage other Commissioners to take part in future visits. REDACTED
  • a number of Commissioners attended the last Industry Forum meeting to observe, and the Chair would encourage other Commissioners to observe a future meeting.

5. Board Effectiveness Review (BER) report

The Board noted the BER report for decision.

The Board received a brief update. It was noted that the field work for the report was carried out a while ago when some Commissioners were very new, so it was hoped that the action plan was still relevant.

The Board asked questions and made comments:

  • on the action plan, the suggestion of DCMS attending Board meetings as observers from time to time is a well-judged action particularly given the prospect of a general election. DCMS input is likely to be most useful when the Board is focusing on strategy
  • the decision to stop pre-Board Non-Executive Directors (NEDs) only calls was welcomed.

The Board approved the action plan as set out in the paper.

6. Finance

March year end finance report: the Board noted the paper for assurance.

The Board received a brief update:

  • on expenditure, there is a full year surplus of £903,000, an increase of £225,000. Expenditure for the full year is 1 percent (£230,000) underspent. The increase in surplus from last month is mainly due to lower expenditure (£144,000) driven by the holiday accruals which is only done annually, and cost recovery on legal cases. End of year adjustments have not yet been applied
  • on income, the outturn is £26.7 million, 0.8 percent above the revised budget. There has been an £111,000 increase compared to figures reported in February largely due to the completion of 2 high value change of corporate control applications. The increase in surplus in the accounts is closer to £200,000 and the Commission is still within 1 percent on expenditure before depreciation.

The Board asked questions and made comments:

  • although there is a slight increase in underspend, it is not significant which is extremely positive. The main variation is on 4NL, which will continue to be variable due to litigation
  • on vacancies, the Commission is 25 to 50 posts behind where it was expected to be at this point. This is due to the fact that there was a pause on recruitment during budgeting, and April 2024 has seen a lot of progress in recruitment, although the Executive team are carefully monitoring vacancies. People Services are recruiting for 2 new senior roles, one of which will focus on talent acquisition
  • a large part of the forecasting accuracy in income is credit to the Finance team who have worked closely with colleagues to track what is happening in the industry
  • the Board and Executive team need to be mindful that they approved a business plan to draw down over £4 million of reserves, so recruitment needs to be a priority to ensure that the commitment to spend those reserves is met. There has been an increase in the use of agency staff in Ops, Finance and People Services, where there had been issues in recruiting Commission staff, but the team is now only looking to use agency staff when absolutely necessary
  • on procurement, it would be helpful to have more details on the list of current contracts and more narrative around the numbers and renewal dates
  • REDACTED.

Action: Finance to bring procurement reporting, showing contracts and their renewal dates to the 11 July 2024 meeting.

The Board received an update on the Annual Report and Accounts (ARA):

  • preparation of the ARA is on track, and a draft was provided to the Audit and Risk Committee (ARC) this morning for review
  • the National Audit Office (NAO) have started their review of the document. Once the Commission has received the NAO opinion, a draft will be sent to DCMS (early next week)
  • one outstanding section in the ARA is the pension entitlements but this is a wider issue and does not just concern the Commission
  • a final draft will go to all parties in the first week of June with ARC sign off planned for 24 June 2024.

7. NL delegations

The Board noted the paper for decision.

REDACTED

  • REDACTED
  • REDACTED
  • the content of the schedule change control policy was approved, with a request to tidy up editing.

Action: REDACTED to tidy up the drafting of the schedule change control policy. This action has been completed.

Subject to the drafting tidy-up above, the Board approved:

  • the terms of reference for the 4NL Programme Board
  • the 4NLC schedule change management policy
  • the 4NL regulation scheme of delegations.

8. REDACTED

9. Transparency

The Board noted the paper for discussion.

The Expert Group Chairs introduced themselves to the Board.

The Board received a brief update on the paper:

  • as a public body, the Commission has duties to be as open and transparent as possible
  • the ICO guidance and the statutory requirements of the Regulator’s Code are annexed to the paper. It was noted that the Information Commissioner's Office (ICO) code is guidance, which must be balanced with statutory requirements like the accessibility of the information we publish. External engagements of the Chair and CEO have already been identified as an area which should be published routinely.

10. Expert Group Chairs

The Expert Groups gave their views on the Commission’s Corporate Strategy (CS) and transparency:

Advisory Board for Safer Gambling (ABSG): the principle of transparency and being open is an accepted process across all public bodies and the annexes provided seem to be a good start, with most of what is on the list for publication mapped against the ICO guidance. The part where there is an overlap with the business plan and the CS is how much information on industry statistics the Commission publishes. ABSG would advise the Commission to prioritise compliance information and customer activity by operators. Compliance data is not currently visible and would create incentives for operators to compete with their peers. One of the roles of the Commission as a regulator is to support and influence and it would be really positive to see a stronger narrative of duty of care and harm reduction, as well as zero tolerance for underage gambling and gambling related suicide

Lived Experience Advisory Panel (LEAP): as consumers, the operator part would be of some interest, but not to a great extent. Of more interest would be Alternative Dispute Resolutions (ADRs) and outcomes – what complaints have been made and the results, and the trust scores of operators. Everyday consumers, not just those harmed by gambling, are more interested in compliance data and not so much in the Commission’s CS. It is really positive to see online protections, advertising, branding, land-based gambling, illegal gambling etc. in the CS and also to keep in mind to pull on LEAP resources early on in the process of drafting such documents

Digital Advisory Panel (DAP): when the data project is more advanced, the Commission will start to bring in an increased amount of data. The Commission’s duties regarding access to information and transparency need to be factored into negotiations with operators and suppliers

Industry Forum (IF): in public policy terms the industry has gone from a ‘vanguard’ to a ‘health threat’ however, when taking operators on a journey to deliver change, the way in which the Commission thinks about what is published should be considered. The Commission should also consider lag times in publication – meaning how quickly after the introduction of a new requirement are industry to be judged compliant or non-compliant. The IF would encourage the Commission to publish performance against its own Service Level Agreements (SLAs). Operators do not know where to find that SLA information, so more transparency around this area would be helpful. There needs to be a sweet spot for transparency, where both operators’ and consumers’ need for information is fulfilled. Separately, there is a question to be answered on whether the Commission has sufficient resources to deliver the CS, or otherwise.

The Board raised questions and made comments:

  • the Board were in favour of increasing transparency where possible, and discussed how data could be used to inform consumers regarding product risks or expectations when winning
  • the Commission’s own data on consumer complaints is not particularly high quality, coming from a range of sources. Trust scores and so on are provided by Alternative Dispute Resolution providers, who draw from their own consumer insight
  • the impact of increasing transparency might be a useful area of inquiry for internal audit.

The Board thanked the Expert Group Chairs for their time and insight.

11. Gambling Act Review (GAR) update

The Board noted the paper for decision.

The Board received a brief update:

  • a tranche of consultation responses was published on 1 May 2024
  • REDACTED.

The Board asked questions and made comments:

  • REDACTED
  • REDACTED
  • REDACTED.

The Board:

  • approved the recommendations as set out in the paper
  • REDACTED
  • REDACTED
  • REDACTED
  • REDACTED.

REDACTED

12. Quarter 4 (January to March 2024) performance report

The Board noted the paper for discussion.

The Board received a brief introduction:

  • this is the full year performance pack for 2023 to 2024 which also provides an end of year update on the delivery of the business plan
  • of note is the impact of the performance focus within operations, particularly in Licensing, where the work in progress across all license types has reduced
  • reduced numbers of operating license applications were received, and this trend is expected to continue
  • pack includes a prototype for a revamped Board performance scorecard which the team is looking to introduce from quarter 1 (April to June 2024), with further iterations through the year.

The Board asked questions and made comments:

  • the quantum of regulatory settlements and financial penalties have reduced significantly in 2023 to 2024. This is because Ops have focused on compliance at the earliest opportunity, meaning a number of operators are now more compliant. That has reduced the number and quantum of regulatory settlements and fines
  • there is a range of activity to hopefully reduce the rate of staff turnover. The People Strategy includes consideration of career pathways, performance monitoring, increased learning and development and a continuing focus on building an inclusive environment. It is worth noting that a number of comparable organisations have a higher staff turnover. Attrition at the Commission has been stable for quite some time however, the Commission still pays about 20 percent less salary wise than equivalent organisations. Another issue is that when people are recruited from within, there is a need to backfill posts, which can create a lot of churn
  • the Board would like to receive more information on the exit interviews category which was the second lowest score.

Action: REDACTED to bring to Board more explanation around the exit interviews category (second lowest score)

  • as a result of a technical error, many leavers in quarter 4 (January to March 2024) did not receive the exit survey, so the completion rate is only 28 percent. This information is very useful to the Commission, so REDACTED will reach out to individuals to complete the exit interview survey, and are striving for 100 percent completion
  • on regulatory cases, in number terms from quarter 1 (April to June 2024) to quarter 4 (January to March 2024), the number of issues are the same. There is a management process in place around consistency, whereby assessors meet each other at the end of the assessment to double check the decisions made. Board invited Ops to consider whether developing a separate Quality Assurance team would be sensible
  • no current cases are outside of SLA. However, there is a need to establish SLAs that the Commission considers to be realistic, which is more difficult in enforcement
  • there has been a lot of movement around change of corporate control. However, with only 48 percent completion within SLA, there is a long way to go to improve. The percentages of cases within SLAs are though increasing, and by the middle of June 2024 all old cases will have been cleared. Work on SLAs will come back to the Board, but is dependent on the implementation of the CMS system
  • some more flow data would be welcomed, especially on enforcement. Flow data on licensing is currently only the average days to complete, but more useful data could be produced.

13. Strategic Risk Register (SRR) review

The Board noted the paper for assurance. They were asked to review the content and identify gaps or scoring anomalies.

The Board received a brief update.

The Risk Assurance team had been asked to refresh the SRR to ensure that risks to the new CS had been identified. A phased approach has been taken; phase 1 being a top-down view from the Executive team, phase 2 (currently in progress) being a team-based identification of risk.

REDACTED

The Board asked questions and made comments:

  • REDACTED
  • REDACTED
  • REDACTED
  • REDACTED
  • REDACTED
  • REDACTED
  • REDACTED.

14. Culture

The Board noted the paper for assurance.

The Board received a brief update:

  • the Commission is doing well culturally and has progressed against a number of people indicators, but is not being complacent
  • there has been and still is a lot of emphasis on inclusion but there is a need to do more for disabled colleagues and the People Services team have connected with some FCA colleagues around the work they do on culture
  • there is a need to keep focusing on leadership, how the Commission recruits and how that is communicated to colleagues within the organisation
  • on diversity, a lot of work has been carried out, with a Diversity Steering Group now in place, and the Commission is on a more positive trajectory in terms of having a more representative organisation, but also recognising there is more work to do
  • the Commission has 3 internal network groups: parents and carers, neurodiversity and LGBTQ+, as well as having a network of mental health first aiders and menopause advocates. There is currently no criteria or policy document on setting up internal network groups. It might be helpful for People Services to think ahead and to have some guidelines and/or a policy should a network group idea be raised that is not appropriate, which needs to set parameters and needs to be aligned with the inclusion strategy
  • L&D is an area which has historically scored negatively in staff surveys. This has driven action, and the investment in L&D has been quite significant, but scores remain relatively low. It is possible that the timing of the survey might not have been optimal, or colleagues may not have recognised some opportunities as L&D. There is work being carried out on a core L&D offer for new joiners
  • there was some concern around Commission staff workloads and deadlines and staff sickness – it would be beneficial to understand more about the themes that can be identified as leading to that work pressure
  • the Commission currently does not have a formal hybrid working policy. The expectation is that every Commission colleague has a level of office attendance. There is an appetite for colleagues to come into the office on a regular basis and connect with other colleagues. There is the expectation of every Executive Director to set attendance expectations for their teams but attendance is not tracked as such and there is no overall metric on the frequency of attendance in the office, although swipe card data can be used if necessary.

Action: REDACTED to consider some guidance and/or policy on parameters around setting up Commission network groups.

15. Audit and Risk Committee (ARC) report

The Board noted the report for assurance, with no comments.

REDACTED.

16. Audit and Risk annual report to Board

The Board noted the item for assurance, with no comments.

17. Any other business

REDACTED

Action: REDACTED

18. Commissioner only session – not minuted

19. Below the line items:

REDACTED

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