Agenda and minutes

The Chair will draw attention to the emergency evacuation procedure as set out under Note 7.

The Democratic Services Officer read out the emergency evacuation procedure.

Councillor Brian Simmons sent apologies for the meeting. 

Councillor Lucy Hodge was late attending due to an overlap with the Planning Committee on which she was also a member.

At this point in the meeting declarations of interest are received from Members in any of the agenda items under consideration at the meeting. Members are asked to indicate:

(a) The agenda item number in which they have an interest to declare.

(b) The nature of their interest.

(c) Whether their interest is a disclosable pecuniary interest or an other interest,  (as defined in Part 2, A and B of the Code of Conduct and Rules for Registration of Interests)

Any Member who needs to clarify any matters relating to the declaration of interests is recommended to seek advice from the Council’s Monitoring Officeror a member of his staff before the meeting to expedite dealing with the item during the meeting.

There were none.

There was none.

There were none.

There were none.

RESOLVED that the minutes of the meeting held on 23 September 2021 were confirmed and signed as a correct record.

The Head of Financial Management Gary Adams gave a presentation on the report. He explained it would cover the areas of change, future changes, the main statements, the annual governance statement and audit findings.  The main change was in response to the Redmond Review which had extended deadlines for the 2020-21 and 2021-22 accounts.  Future changes to IFRS16 accounting for leases were delayed until 2022-23 due to resourcing and Covid. 

As regards the main statements, the main changes in expenditure and income were related to the impacts of Covid.  The Original estimate of Covid pressures (before any government funding) was £42m, with significant impacts on Heritage, Parking and Commercial Estate Income. In response, a Financial Recovery report was approved by Cabinet including recovery measures of £20.7m, of which £14.8m was delivered in full.  Government grant funding of nearly £12m was received in respect of general Covid Support and £17.7m from the Sales, Fees and Charges income compensation grant.  Other specific Covid grants came to £14m and the Council also distributed Covid Business Support grants totalling £69m during the financial year. The capital spend was £62m which represented 63% of budget, primarily reflecting the delivery time to complete projects requiring re-phasing of budgets to future financial years.

In respect of the Movement in Reserves Statement, it showed a net transfer of £55m to earmarked reserves. This included a technical accounting adjustment in respect of s31 Business Rate Retail Relief Compensation Grant of £39m to offset the Collection Fund deficit that accrued from granting these reliefs in year as well as transfers of some Covid funding for use in 2022/23. There was a decrease in Unusable Reserves of £132m, relating to statutory accounting movements which included £42m in respect of the Business Rate Collection Fund, £38m increase in future Pensions Liabilities and £47m of capital accounting movements relating to valuation changes.

He explained the key balance sheet movement, including: –

• Land and Buildings value reduction of £5m
• Assets Under Construction increase of £13m
• Investment Properties reduction of £48m, due to revaluation loses
• Long-Term Debtors reduction of £6.5m
• Short-Term Debtors increase of £30m
• Reserves Movements in line with the Movement in Reserves Statement

The Cashflow Statement showed the level of cash and cash equivalents had increased by £26m, reflecting the maturity profile of investments held at 31^st March 2021. 

The Collection Fund Statement showed a deficit on Business Rates of £42m, mainly due to the accounting impacts of the Retail Relief granted to businesses due to Covid and a small surplus on Council Tax of £0.2m.

It was the second year that Group Accounts had been produced to incorporate Aequus, the Council’s owned housing company.  The impact of income and expenditure and consolidated movement in reserves showed a net increase in Aequus’ reserves of £3.1m, taking their reserves to £3.2m.

The Annual Governance Statement came to this Committee so that Corporate Audit could oversee the process.  The Council Leader and Chief Executive had reviewed and signed the statement.  In outline,  ...  view the full minutes text for item 19.

The Service Director – Commercial and Governance Jeff Wring explained that the Council had been written to by PSAA in respect of the procurement of external auditors from 2023-24 to 2026-27.  95% of local authorities had joined this national exercise and there were benefits to BANES to join.

During discussion the following points were raised:

·  This was a pragmatic solution (John Barker, Independent member)

·  No other local authorities wanted to do it themselves joining with BANES so there was no other option (Section 151Officer)

RESOLVED that the Audit Committee recommend to full Council that they approve the use of (PSAA) to carry out the re-procurement of External Auditors to the Council (all agreed).

The Head of Financial Management Gary Adams presented the report. He explained that the report had already been to Council and Cabinet in November.  He outlined the main highlights – the average rate for investment performance was 0.27%, this was above the benchmark and reflected the low interest rates.  The average investment balance over the period was £80 million and the forecast investment income was estimated at £30k above budget. 

In line with the Environmental, Sustainability and Governance Investment policy included in the Treasury Management Strategy, £5m was deposited in the Lloyd’s Sustainability 95 day notice investment account and investment in the two selected LT ESG focussed investment funds was made at the end of November.

In respect of borrowings, the total at the end of the period was £226m, which reflected the repayment of a £15m 1 year fixed loan that was taken at the start of the Covid pandemic in response to potential liquidity concerns.  There was no further borrowing in the period.  The forecast borrowing costs are £630k below budget as a result of the delayed borrowing need.  In respect of the potential LOBO refinancing mentioned in the report, the projected savings have been impacted by interest rate movements so this is currently being kept under review.  The Bank of England was meeting shortly to review interest rates, the decision on whether to increase rates was finely balanced as the Bank needs to consider both the impact of the Omicron variant on the economy and the current high level of inflation.

During questions the following issue was raised:

·  in respect of the £630k underspend, various capital projects were being re-phased due to Covid delay including Bath Quays North, this resulted in savings on borrowings.

RESOLVED that

1)  the Treasury Management Report to 30th September 2021, prepared in accordance with the CIPFA Treasury Code of Practice, is noted; and

2)  the Treasury Management Indicators to 30th September 2021 are noted.

The Head of Audit & Assurance Andy Cox presented the report. He stated that the majority of audit reviews that were carried forward at the last meeting were now completed.  In the 2021-22 audit plan there were 36 to review, as of 19^th November, 22 were a work in progress, 10 were finalised, 8 had an assurance rating of level 3 or above.  7 of the 36 related to Covid government funding – Adult Social Care, Supplier Relief, DWP Winter Support and the Emergency Assistance Grant.  He was about to issue the draft report for which they used data analysis to review the payments made and the recovery of £240,000.  Internal audit had contributed £100,000.  He commented it had been well administered.

He explained that £1.7 million had been received for next debtor accommodation, relating to rough sleepers and one of two properties had been purchased.  All 7 of the funding reviews would be completed by February.  The grant certification provided independent assurance to the Chief Executive.  In relation to anti-fraud work, 8 follow-up reviews were identified as good implementation and 2 were for further monitoring.  In respect of property compliance the Chief Operating Officer would attend the next Committee to give a further update.

RESOLVED that

1)  the Corporate Audit Committee notes the progress in delivery of the 2021/22

Annual Audit Assurance Plan; and

2)  the Corporate Audit Committee requests the attendance of the Chief Operating Officer and other Officers to a meeting of the Committee in early 2022 to provide an update report on progress related to implementation of recommendations in response to the weaknesses highlighted by the 2021 Property Compliance Audit.