Agenda and minutes

Apologies for absence were received on behalf of Councillor C.A. Hotham.  It was noted that Councillor A. Bailes was a substitute member for Councillor C.A. Hotham.

To invite Councillors to declare any Disclosable Pecuniary interests or Other Disclosable Interests they may have in items on the agenda, and to confirm the nature of those interests.

There were no declarations of interest nor of any party whipping arrangements.

The minutes of the meeting of Audit, Standards and Governance Committee held on Thursday 5^th December 2024 were submitted for Members’ consideration.

RESOLVED that the minutes of the Audit, Standards and Governance Committee meeting held on 5^th December 2024 be agreed as a true and correct record.

The Principal Solicitor for Governance presented the Standards Regime Monitoring Officer’s report.

Since the last report the Council had received three new complaints.  Each were assessed and found not to be a member conduct matter.

The next meeting of the Constitution Review Working Group (CRWG) was due to take place on 29^th January 2025.  Any recommendations arising from that meeting would be reported to the Council meeting due to take place on 19^th February 2025.

The next meeting of the Member Development Steering Group (MDSG) was due to take place on Monday 20^th January 2025.

Relevant Member training sessions had taken place since the last Monitoring Officer’s report, or which were due to take place were detailed in the report.

Following consideration of the report, Members made the following comments:

• It was requested that a list of Members on the Development Steering Group (MDSG) Committee be made available to Members and if the Notes were available for Audit, Standards and Governance Members’ consideration? – Officers agreed to review the request as an action.
• Members noted that three complaints had been reported since the last meeting.  It was queried if the necessary forms had been completed and how they were assessed? – In response Members were informed that the three complaints within the report were all considered to be non-Member conduct matters, as the individuals were not acting as capacity of Councillor, in which the Code of Conduct only applied.  As part of the review, completion of the relevant forms was sometimes requested but were not always a requirement.  The Monitoring Officer or Deputy Monitoring Officer initially reviewed the complaint to determine if the complaint couldand should be investigated i.e. if the person was acting in capacity as Member.  If it was a consideration, the individual would   comment in the first instance, where possible.
• Members requested the term “independent person” be explained further. – Members were advised that if a complaint was to be reviewed formally, the views of the Independent Person would be sought.
• Members were also asked to note that a consultation (responses due by 26^th February 2025) regarding proposed changes to the Standards Framework would be discussed at a Group Leaders Meeting in early February 2025.
• Members discussed whether an Independent Member with an accountancy background should be present during Audit, Standards and Governance Committee meetings as good practice. – Members were informed that there was a difference between an Independent   Member and an Independent Person.  The consultation is seeking views on whether Independent Members should be given voting rights.
• Members queried if Parish Councillors were reported as part of the monitoring process. – Members were informed that Parish Councillors did form part of the monitoring process but confirmed that the three complaints received and contained within the report were confirmed as District Councillors.
• It was queried if County Councillors were part of reporting. – It was confirmed that complaints concerning County Councillors would be sent to the Monitoring Officer at County Council.  ...  view the full minutes text for item 50/23

The Section 151 Officer provided the Financial Compliance Report for Members’ consideration.

The Financial Compliance report began in January 2023, following the Section 24 reports which set out how the Council complied with its financial legislative requirements.  One of the legislative reporting requirements the Council had not achieved was the delivery of the 2020/21, 2021/22 and 2022/23 Statement of Accounts, which resulted in the issuing of a Section 24 Statement for the Council.  Redditch Borough Council (RBC) were also issued with a Section 24 Statement for the same non delivery of these accounts.  Following the issuing of the Section 24 Statements and a review of why the Council were issued with the Notice (undertaken by a Task Group of this Committee), the decision was taken to increase the frequency of Audit Committee meetings to six times a year until the Council had rectified its accounts.  With the Council having provided its accounts as per the “backstop legislation” up to the 2023/24 financial year requirements, it was proposed that the frequency of Audit Committee meetings revert to quarterly.  It was important that the processes that were put in place following the issuing of the Section 24 Statement continue via the quarterly Financial Compliance Report.

The 2024/25 budget was approved at Council on the 21^st February 2024.  Table 2.7 of the report sets out the finance legislative requirements up to March 2025, showing that the Council was compliant in terms of delivery and timescales.  The report also set out the plethora of financial reports and strategies that were required to be formulated and complied with.

The key returns which had not been delivered were the Revenue and Capital Outturn forms for 2021/22 and the VAT returns.  Significant work had been undertaken by the Council’s Tax advisors PS Tax in liaison with His Majesty’s Revenue and Customs (HMRC) in order for the Council to return to normal VAT reporting and final version working papers had been provided to HMRC on the 19^th December 2024.

The Council’s position on the key Closure deliverables were as follows:

·         Closure 2020/21

o   Reported as per the 5^th December Audit Committee and Disclaimer Opinion received and approved.

·         Closure 2021/22

o   Reported as per the 10^th December Audit Committee and Disclaimer Opinion received and approved.

·         Closure 2022/23

o   Reported as per the 5^th December Audit Committee and “Disclaimer Opinion” received and approved following the completion of the public consultation period on the 7^th January 2025.

·         Closure 2023/24

o   Draft accounts were placed on the Council’s website on 15^th January 2025.  The Council complied with the 2023/24 Backstop requirements for consultation.

o   An opinion from Ernst and Young would not be received until the onboarding process had been completed.

The Assistant Director of Finance and Customer Services presented the 2023/24 accounts for Members’ consideration as follows:

·         The Expenditure and Funding Analysis in the report showed the outturn position revenue overspend was £1.954m which had moved by £1.150m since reported previously. 

Key movements related  ...  view the full minutes text for item 51/23

The Section 151 Officer presented the Capital Strategy 2025-26 including Treasury Management Strategy report to Members.

The report for 2025/26 was required following changes in the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Ministry of Housing Communities and Local Government guidance. It combined an overview of how capital expenditure, capital financing, treasury and other investment activity contributed to the provision of local public services along with an overview of how associated risk was managed and the implications for future financial sustainability. The strategies set limits and indicators that embodied the risk management approach that the Council believed to be prudent. The strategies were set against the mid-term financial strategy, the context of the UK economy and projected interest rates.

The Council were required to set a balanced operating budget. The role of the treasury function was to manage cash flow within the Authority so that the demands of expenditure could be met. The policies included in the report set out the criteria in which the Council could manage its Treasury management function.

The CIPFA Code of Practice for Treasury Management in Public services (the CIPFA TM Code) and the Prudential Code required Local Authorities to set the Treasury Management Strategy Statement (TMSS) and Prudential Indicators each financial year. The TMSS also incorporated the Investment Strategy as required under the CLG’s Investment Guidance. In addition, the Council was to receive a report on treasury management, which was reported on a quarterly basis and included within the Quarterly Monitoring Report.

The Council regarded the successful identification, monitoring and control of risk to be the prime criteria by which the effectiveness of its treasury management activities would be measured. Treasury management risks were identified in the Council’s approved Treasury Management Practices.  In formulating the Treasury Management Strategy and the setting of the Prudential Indicators, the Council adopted the Treasury Management Framework and Policy recommended by CIPFA.

The Council had closed its 2020/21, 2021/22, 2022/23 Accounts and the 2023/24 accounts were out for consultation to comply with the Governments “backstop requirements”.  However, like many other Councils, “Disclaimer Opinions” have been received for 2020/21 through to 2022/23 as per the “backstop requirements” and the implications of these opinions were still not clear. The strategies would be updated, if required, once the Accounts had been closed and approved.

Given that the Council had only recently delivered its 2023/24 Accounts which did input into the returns, Members were advised that the report would be deferred to written representations.

RECOMMENDED that:

Cabinet are asked to:

• Note the Council’s Treasury performance for Q2 of the financial year 2024/25.
• Note the position in relation to the Council’s Prudential indicators.

The Council’s Risk Champion, Councillor R. Bailes presented to the Board.

A meeting was arranged with Chris Green, Internal Audit Manager on 3^rd January 2025 concerning discussions and confirmations of Audit opinion regarding the risks for 2025/26. 

The meeting followed publication of the English Devolution White Paper which impacted on the risk outlook and profile for BDC.  The paper published on 16^th December 2024 was reviewed by the Risk Champion to assess and highlight the risk appetite and impact to the Council.

The Risk Champion felt that it was imperative that all Members fully read, digest and understand the outcomes of what was included within the paper.  The information given to Local Authorities would have a major impact on all aspects for BDC which had ultimately changed the risk profile and altered the assessment of risks.  The Risk Champion advised that all Members should be aware of the changes that would be taking place, to be well informed and to make considered decisions.  It was felt that all Members shared accountability to manage risk and considered mitigating future risks to the Council.  It was also considered that a Members’ role was to serve the residents and manage a smooth transition.

The Risk Champion posed the following rhetorical questions to Members, associated with the White Paper:

1.    Have Members read the White Paper?

2.    How easy was it to understand?

3.    What more can the Council do to assist Members’ understanding of what is included in the White Paper?

4.    How can Members ensure to act in a fit, legal and decent way?

5.    If Members wished to share thoughts with the Risk Champion directly.

The critical risks after consideration of the English Devolution White Paper were identified as follows:

Workforce

1.    The effects on workforce which could affect productivity and attendance rates.

2.    Would Line Managers be effective in their role to motivate Teams through the changes.

3.    Having a fallback position to keep services running if employees considered to leave the Authority.

4.    Motivating teams and staff to deliver the required standard.

5.    Decision making structure to operate effectively.

6.    Would the appointment of future Senior Executives be affected.  Would they possess the skills necessary for a different landscape? What was their experience of winding down a service whilst maintaining service delivery?

 Operational Impact on District Council

1.    Finance and Budget Management had announced changes to the local Government funding.  Members were required to assess the impact of the changes through Audit, Standards and Governance Committee.

2.    No inflation markers on funding received.

3.    Set increases on Council Tax could result in a shortfall of the budget.

4.    Projects that were underway and had an extensive completion date.

5.    Managing spends appropriately and responsibly for residents.

6.    If the Portfolio Holders had the ability to cope with the impact of the extra work considerations required.

Continuity of Council Strategic Plans

1.    Making sure that all decisions were made effectively, had longevity and a positive result achieved for  ...  view the full minutes text for item 53/23

The Audit, Standards and Governance Committee Work Programme was reviewed by Members.

The Section 151 Officer informed Members that it was envisaged the new appointed external auditors Ernst and Young would be present at the next meeting.

RESOLVED that the contents of the Audit, Standards and Governance Committee Work Programme be noted.