Agenda and draft minutes

Lay Member Nigel Rudd declared a personal interest as he was a member of the Conwy County Borough Council Governance and Audit Committee.

The Chair, Lay Member David Stewart declared a personal interest as he was a recipient of a Clwyd Pension fund pension noted in agenda item 5 and was a member on the Governance and Audit Committee at Wrexham County Borough Council.

Lay Member Paul Whitham declared a personal interest as he was a recipient of a Clwyd Pension fund pension noted in agenda item 5.

None.

To receive the minutes of the Corporate Governance Committee meeting held on 6 March 2024 (copy attached).

The minutes of the Governance and Audit Committee meeting held on 6 March 2024 were presented for consideration.

Matters of accuracy –

Page 7 – should read Bob Chowdhury is Chief Internal Auditor.

Page 9 – item 5 – Statement of Accounts Closedown - make clear 22/23 statement of accounts.

Audit Wales work completed at the end of March but did not state ready for April Committee meeting.

Page 16 - Item 8 – third paragraph should read “A key element of the requested work was where the governance arrangements lie …..”

Page 19 – Item 9 – towards bottom of page should read “Governance and Audit Committee had a wider responsibility for the financial affairs of the authority”.

Matters Arising –

Page 8 – good idea to have a local government code.  The Monitoring Officer would have a report before the Annual Governance Statement produced.

Page 9 – re: Arlingclose.  The Head of Finance stated that confirmation in writing would be sent imminently.

Page 10 – members had received an update note from the Head of Finance.  There was more work to do on the accounts and likely to receive further information with the Audit report at the September meeting.  Work was taking place with Audit Wales to work as efficiently as possible.  Both sets of accounts were likely to be available for the September meeting.

Page 12 – last bullet point on the page – the Chair had circulated a copy of the plan to all members of the Committee and also uploaded the document to the library. It was understood that a draft report in June with the final report in July.  It was confirmed a copy of the draft report would be circulated to the Chair and Vice-Chair.

RESOLVED that, subject to the above, the minutes of the Governance and Audit Committee held on 6 March 2024, be received and approved as a correct record.

At this juncture, there was a change of order of items on the Agenda.

To receive a report from the Monitoring Officer regarding the Terms of Reference of Governance and Audit Committee (copy attached).

The Corporate Director: Governance and Business introduced the Governance and Audit Committee Terms of Reference report (previously circulated) to see the Committee’s recommendation of the adoption of amended terms of reference for the Committee.

At the request of the Committee, the terms of reference had been reviewed.  They were updated in accordance with the Chartered Institute of Public Finance and Accountancy (CIPFA) guidance.

The previous terms of reference had reflected the statutory functions of the Committee as set out in the Local Government (Wales) Measure and subsequently amended by the Local Government and Elections Act.  They had not been a comprehensive terms of reference and did not reflect the importance of the role of the Committee within the council structure.  The Chair had proposed some changes based upon the model.

A meeting had taken place with the s151 Officer, Chief Internal Auditor and Chair and Vice Chair of the Committee to look at the draft terms of reference.

Under the new terms of reference, there was a section at the beginning of the document which set out the statement of purpose of the Governance and Audit Committee.  As well as setting out the statutory requirements placed the Committee in its context as an important part of the Council’s governance. 

CIPFA’s sub headings were then followed for the terms of reference.

Key points - Financial affairs – suggested terms of reference from CIPFA referred to mainly the financial statements but they did not necessarily reflect the statutory provision in the Local Government (Wales) Measure which referred to reviewing and scrutinising financial affairs.  The Welsh Government had produced statutory guidance regarding the operation of Governance and Audit Committees and they were keen to point out there should be a demarcation between the role of the Governance and Audit Committee and the role of Scrutiny.  The Guidance suggested that the Governance and Audit Committee should be ensuring there were robust processes and controls in respect of the council’s financial affairs, the way it set budgets, the way it monitored spending etc.    Scrutiny regarding spending decisions was for the Scrutiny Committees of the Council and the Constitution of the council should demarcate those.

Under the first bullet point of Financial Affairs the terms of reference stated “to obtain assurance that the Council has effective and robust processes in place to identify, assess and manage risks and pressures, and a realistic and achievable strategy for setting balanced budgets, with any concerns arising properly raised with the responsible officers, members or auditors as necessary”.    This was not in the CIPFA model but the terms of reference had been enhanced in our model document.

The sections under Governance, Risk, Control and Performance – the Chair had requested Strategic Planning approved the second bullet point regarding the risk management processes.  It was confirmed colleagues in Strategic Planning agreed that was their understanding of their interaction with the Committee and had approved the wording.

Strategic Planning did respond in relation to the draft Annual Performance Self-Assessment (fourth bullet point) that the Committee was to receive the Council’s draft Annual Performance Self-Assessment report and, if necessary, make any recommendations for changes to the council. 

The fifth bullet point stated “to receive the Council’s finalised Annual Self-Assessment report for the respective financial year”.   The draft Self-Assessment report was brought to the Committee but not the final Self-Assessment report.  The view of the Corporate Director was that the bullet point needed to stay in the terms of reference.  In future, the Local Government and Elections (Wales) Act 2021 required that the Governance and Audit Committee comment on the draft Self-Assessment, that Council  ...  view the full minutes text for item 5.

To receive a report from the Head of Finance to provide an update to Medium Term Financial Strategy and Plan for 2025/26 – 2027/28 and Review of the Council’s Financial Resilience and Sustainability (copy attached).

The Head of Finance and Audit introduced the Update to the Medium Term Financial Strategy and Plan for 2025/26 – 2027/28 and review of the Council’s Financial Resilience and Sustainability report (previously circulated). 

Unfortunately, the Lead Member for Finance, Councillor Gwyneth Ellis, was unable to attend the meeting and had put forward her apologies.

The report provided an update on outstanding matters relating to 2024/25 budget, setting the scene for budget setting in the medium term (2025/26 – 2027/28), and self-assesses the council’s current level of financial resilience and sustainability.

The Head of Finance summarised the report and appendices.

During discussions, the following points were raised –

·         A risk of capacity of the Finance team was raised.  The team were currently working with Audit Wales on the audit of the 2022/23 accounts and also the closure of the 2023/24 accounts in April/May.   There has been the added complexity of a new financial system which was being introduced and that would cause disruption to all users until things settled down.  The prioritisation was the budget.  The capacity was currently being managed but was being assessed regularly.  Officers expressed their gratitude to members of the finance team for all their hard work.

·         The question was raised what would trigger a problem with the tracker.  Discussions were taking place with the Lead Member for Finance around setting some flags and some triggers around tracking.  Tracking or budget monitoring took place on a monthly basis.  The monthly reports which were presented to Cabinet were of a very high standard.   Tracking of the major proposals would be bigger in number and more details would be required on those.  As a collective, if there were a number coming forward which were not being achieved they would need to be flagged at Cabinet but could also be something Scrutiny would want to scrutinise.  If don’t achieve some of the proposals then would go to make more savings in the year or use reserves. Important when taking decisions that the implications of those decisions were made clear. 

·         Major savings of the voluntary exit scheme.  Report that over 90 people had applications refused.  The report mentioned £800k saving but there had been an opportunity to save more.   It was clarified that for each voluntary exit application, a business case had been prepared by the relevant Head of Service and that business case considered the impact on the service.  Services needed to be delivered and that was the reasoning why business cases had to be prepared.   33 applications had been accepted out of over 130 who had applied.

·         Staff briefing sessions had taken place.  3 online for office workers and 5 in person at various locations.  They had been well received for staff to have a better understanding of the current financial position of the Council.  One of the main issues was better engagement with the public around the council’s financial position and understanding how complicated local government finances are. 

The following questions were referred to each individual appendix –

Appendix 1 –

Strategic savings and non-strategic savings.  It was queried whether there was likely to be a declining curve of savings identified and achieved over a period of time.  Originally used efficiency savings and now budget reductions which turns into reductions in services and cuts.  Efficiencies had been made in the past but it had become more challenging.  It later years it would require something more transformational in order to make savings.  Change had been driven by necessity.

Summary of how the Council makes its money.  Within the 25% council tax funded, there was an area which was not  ...  view the full minutes text for item 6.

AT THIS JUNCTURE (12:15 PM) THERE WAS A 15 MINUTE BREAK.

THE MEETING RECONVENED AT 12:30 PM

To receive a report from the Head of Finance with the Treasury Management Update 2023/24 (copy attached).

The Head of Finance introduced the Treasury Management Update report 2023/24 (previously circulated).

It had been agreed by Council on 27 October 2009 that the governance of Treasury Management be subjected to scrutiny by the Governance and Audit Committee.  Part of the role was to receive an update on the Treasury Management activities four times per year.

The Chair suggested substantive reports be presented at January and July meetings and information reports to be presented at April and November meetings.

RESOLVED that –

·         Members noted the Treasury Management Update report for Performance 2023/24

·         The Committee confirmed it had read, understood and taken account of the Well-being Impact Assessment (Appendix 2) as part of its consideration.

To consider the committee’s forward work programme (copy attached).

The Governance and Audit Committee’s Forward Work Programme (FWP) was presented for consideration (previously circulated).

The Monitoring Officer confirmed work was taking place with the Chief Internal Auditor to go through the last 3 years of Agendas to balance the workload of the Committee.  This work was ongoing.  The Chair requested that he and the Vice Chair have early sight of the work programmes and Agendas.

June meeting – nomination of Chair and Vice Chair as this would be the first meeting of the municipal year. 

The Corporate Risk Register would move from June to July meeting.

July meeting – the Complaints Process would be a substantive report and thereafter be presented as an information item.

RESOLVED that, subject to the above, the Governance and Audit Committee’s forward work programme be noted.

To receive, for information, the Audit Wales report entitled Digital Strategy Review (copy attached).

The Chair introduced the Audit Wales – Digital Strategy Review which was presented for information.

Recommendation 2 – Nigel Rudd stated he had commented on the partnership working audit at the previous meeting and the current response did not reflect the position of the Authority in relation to partnerships at the moment.  It was a comment he would disagree with fundamentally.  The recommendation stated there was no further work required regarding partnerships. There was not a comprehensive list of what the partnerships were and did not necessarily have the performance monitoring arrangements in place in order to ensure the best value for money and that they were being delivered effectively.

Officers responded that the recommendation related to the partnership working in respect of digital issues so it was talking about joint procurement, working in collaboration around cyber security and other initiatives.  It was not necessarily talking about the partnership arrangements generally that the council was involved with in the delivery of other services. 

The Chief Internal Auditor clarified that there was not a complete list of partnerships, that was something which was currently being worked on.   He had agreed at the last meeting that a list would be provided by September.  Individual arrangements were in place for partnerships around the council and with the digital ones it was assumed the Head of Service had done the action with the service and they were satisfied they had additional and appropriate partnerships in place.

RESOLVED that, subject to the above, the Governance and Audit Committee note the contents of the Audit Wales – Digital Strategy Review Information report.

To receive, for information, the Councils Performance Management Guide (copy attached).

The Chair introduced the Councils Performance Management report which was presented for information.

It was stated that it was important the terms of reference were linked in with the performance management report. 

Paul Whitham raised the point regarding page 148 of the pack, improving services for our communities project register, the project register is a record of current projects being delivered by the council.  He was not aware of any agreed council wide definition of what a project is.  In his view it should not just be a physical exercise.

Officers confirmed there was a project register which was regularly seen  by the Senior Leadership Team and the Corporate Executive Team which was managed by the programmes office.  That was a complete list of key significant projects the council was taking forward.  Significant projects of great value and reputational importance, they would be on the project register.  Lower level projects such as activity that required less resource and input they would be monitored through service plans. 

RESOLVED that, subject to the above, the Governance and Audit Committee note the contents of the Council’s Performance Management Guide information report.

To receive, for information, the Corporate Risk Register (copy attached).

The Chair introduced the Corporate Risk Register which was presented for information.

The Corporate Risk Register would be put forward as a substantive report at the November meeting. 

RESOLVED that the Governance and Audit Committee note the contents of the Corporate Risk Register Information report.

To receive, for information, the Climate Ecological Report (copy attached).

The Chair introduced the Climate Ecological Report which was presented for information.

The Climate Ecological report was to be presented at each Member Area Group as part of the Climate and Ecological Change Strategy.  There was a cross party member group which was also looking at the report.  It would then go to Cabinet, Cabinet Briefing, Scrutiny and Council for an updated and reviewed Climate and Ecological Change Strategy to be adopted by the Council.  It is a planned review and when the Strategy was set it was to be reviewed every three years and this would be the first of those reviews.

The Chair and members agreed to have a further report in September for information.

RESOLVED that –

·         The Governance and Audit Committee note the Council’s key performance indicator performance for 2022/23 and direction of travel in achieving Net Carbon Zero Council, Ecologically Positive Council and 35% reduction in Supply Chain Emissions by 2030.

·         The Governance and Audit Committee note the consultation on Year 3 update of the Climate and Ecological Change Strategy and governance for adoption.

MEETING CONCLUDED AT 1.10 P.M.