Agenda and draft minutes

Venue: Brunswick Room - Guildhall, Bath. View directions

Contact: Enfys Hughes  01225 394410

Items
No. Item

41.

EMERGENCY EVACUATION PROCEDURE

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

Minutes:

The Democratic Services Officer drew attention to the emergency evacuation procedure as set out on the agenda.

42.

APOLOGIES FOR ABSENCE AND SUBSTITUTIONS

Minutes:

There were none.

43.

DECLARATIONS OF INTEREST

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 4.4 Appendix 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.

 

Minutes:

There were none.

44.

TO ANNOUNCE ANY URGENT BUSINESS AGREED BY THE CHAIR

The Chair will announce any items of urgent business.

Minutes:

There was none.

45.

ITEMS FROM THE PUBLIC - TO RECEIVE STATEMENTS, PETITIONS OR QUESTIONS

Clare Minchington has registered to make a statement on the Liveable Neighbourhoods Programme.

Minutes:

Clare Minchington addressed the Committee on the subject of the Liveable Neighbourhoods Programme. A copy of the statement will be attached as an online appendix to these minutes and a summary is set out below.

 

‘I should like to draw the committee’s attention to failures in the governance and decision-making surrounding the Liveable Neighbourhoods (LNs) programme.

 

In June 2021, an LN Bid for Walcot (including Camden Road) was rejected by the Cabinet and instead, a smaller LN initiative for London Road and Snow Hill was approved.

 

The scaled down Phase 1 LN was approved by Cabinet and consultation was subsequently undertaken with local residents in London Road and Snow Hill. This generated excellent suggestions to improve the liveable nature of the area – unsurprisingly a bus gate on Camden Road was not discussed, as a bus gate on Camden Road which by the Council’s own figures carries 6,000 vehicles a day, cannot be seen as small-scale, or as adjacent to London Road, Snow Hill and Kensington Gardens.

 

A FOI request to BANES in 2023 revealed that the expansion of the scheme from that approved by Cabinet would be a single-member decision, but we have not found such a decision in the Weekly List.

 

The Council has failed to follow the correct procedure before successfully applying for WECA funding in September 2024 for the Camden bus gate, which was previously rejected by Cabinet. They have also failed to properly consult on the proposal as the focus of consultation activity was rightly around a LN for London Road and Snow Hill.

 

I would ask the committee to:

 

1.  Reconsider the scoring of the Corporate Governance Risk in the Council’s risk register in light of the high likelihood of successful legal challenges to the validity of this ETRO in particular and other ETRO’s being implemented across Bath.

 

2.  Commission an internal audit of the LN programme focussing on compliance of BANES with its own consultation and decision-making frameworks, policies and processes.

 

3.  Pay particular attention to the ‘independent’ examination of financial records conducted by the internal auditors to provide assurance that WECA LN grants are being used in compliance with their Terms and Conditions.

 

The Chair commented that it was not within the scope of the Committee to talk at length about the Liveable Neighbourhoods Programme, but would ask that they focus on the three final points raised in the statement.

 

The Director of Financial Services, Assurance & Pensions thanked Clare for the points she had raised and said that a full written response would be given in due course. He added that in terms of Corporate Governance Risk there were mechanisms in place for decision making within the Council and said that it would be raised as a separate risk if it had been deemed that a decision had been wrongly made. He added that he would speak with the Council’s Monitoring Officer for clarity on this matter and include any comments from them in the response to the statement.

 

He explained that  ...  view the full minutes text for item 45.

20250205 BANES Audit Committee Statement Clare Minchington pdf icon PDF 63 KB

46.

ITEMS FROM COUNCILLORS AND CO-OPTED AND ADDED MEMBERS

To deal with any petitions, statements or questions from Councillors and, where appropriate, co-opted and added Members.

Minutes:

There were none.

47.

MINUTES: 27th November 2024 pdf icon PDF 91 KB

Minutes:

The Committee RESOLVED that the minutes of the meeting held on 27th November 2024 be confirmed as a correct record and signed by the Chair.

48.

SEND Collaboration for BaNES (Safety Valve) - Risk Management Update pdf icon PDF 139 KB

This report gives an update on the Council’s plans to manage the Dedicated Schools Grant (DSG) deficit position and progress being made in relation to the Safety Valve.

 

This report also forms part of a series of risk management update reports to the Audit Committee to give it assurance on the system of risk management. This specific risk area sits on the Council’s Corporate Risk Register and was highlighted as a significant issue on the Council’s Annual Governance Statement and as significant on the External Auditor’s VFM report in 2024.

Minutes:

The Director of Children's Services & Education introduced the report to the Committee and highlighted the following points.

 

·  The report forms part of a series of risk management update reports to the Audit Committee to give it assurance on the system of risk management.

 

·  Since 2019/20, the Council has exceeded the allocated funding, resulting in a deficit primarily within the high needs block, which supports services for individuals with special educational needs and disabilities (SEND).

 

·  In 2022/23, the Council successfully joined the SV program, with an agreed recovery plan and ministerial approval. B&NES secured £19.22m, receiving £7.68m in March 2023. However, due to slippage, the agreement with the DfE is under review, grant payments have been suspended pending a revised agreement. In the 2023-24 financial year, the total paid under the agreement was £0.55m.

 

·  The Council was put into an Enhanced Monitoring pool, which meant it has received additional support from 3 x DfE appointed advisers. The Service also appointed ISOS Partners to review the original submitted plans, and requested, and was granted dedicated support from the Council’s Business Change Hub. External expertise was also granted to refine the financial modelling required. The programme is now called the SEND Collaboration for BaNES.

 

·  Updated plans for the SEND Collaboration for BaNES were submitted to DfE on time on 24th May 2024. Detailed feedback was received from DfE advisers on 27th June 2024.

 

·  Following a review of the feedback, a date was agreed with DfE to re-submit the plans, taking into account the comments from the advisers. This was agreed as 1st October and the plans were submitted again on the 30th September 2024. No further feedback on the plans has been provided by DfE and the Council is still awaiting a formal DfE response.

 

·  Internal Audit reviewed the governance and programme management framework for the SEND Collaboration in Q2 and 3 2024, and the report in September 2024 judged there to be substantial assurance.

 

·  Over the past 5 years the growth in EHCPs and requests for EHCPs has grown significantly. The numbers of EHCP requests have increased by 125% over the 5-year period whilst the numbers of EHCPs granted have increased by 75%.

 

·  The SEND Collaboration for BaNES programme has robust governance in place. The Executive Group meets fortnightly to review progress, and reports regularly to ELT and to the Business Change Steering Group.

 

·  A fortnightly briefing is held with the lead member for Children’s Services and the Executive Group is responsible for agreeing the updates to the Lead Member, the Children, Adults, Health and Wellbeing Policy Development and Scrutiny Panel, Informal Cabinet and Cabinet.

 

·  Discussions are ongoing with the DfE to ascertain:

 

o  Whether / when the plans may be signed by the DfE and remaining tranches of funding received.

 

o  When a clear decision will be made for the development of the Sulis AP and Green Ways SEN Academies.

 

The Director of Children’s Services & Education said that this was both a regional and national challenge and that  ...  view the full minutes text for item 48.

49.

External Audit - Update pdf icon PDF 71 KB

The External Auditor will update the Committee on their work in relation to their Audit Plan.

 

Additional documents:

Minutes:

Beth Bowers, Grant Thornton (External Auditors) introduced the report to the Committee and highlighted the following areas from within it.

 

·  Work in Progress – February 2025

 

o  Financial Statements Audit – We will undertake our initial planning for the 2024/25 audit in March 2025, and discuss with management a suitable timetable for the interim audit. We begin our work on your draft financial statements in June.

 

o  We will issue a detailed audit plan, setting out our proposed approach to the audit of the Authority’s 2024/25 financial statements at the April Audit Committee.

 

·  Value for Money

 

o  Under the 2020 Audit Code of Practice, we are required to undertake work to satisfy ourselves that the Authority ‘has  made proper arrangements for securing economy, efficiency and effectiveness in its use of resources’.

 

·  Audit deliverables

 

o  Audit Plan – We are required to issue a detailed audit plan to the Audit Committee setting out our proposed approach in order to give an opinion on the Council’s 2023/24 financial statements. (April 2025)

 

·  Sector Updates

 

o  IFRS 16 – Leases: Lesse accounting from 1st April 2024 – From the adoption of Local Government of IFRS 16 leases on 1st April 2024, the distinction between operating and finance leases for lessees has been removed. Now all leases, apart from those that are deemed low value or short term, are accounted for on balance sheet by lessees.

 

o  Public Sector adaption: In the public sector, the definition of a lease has been extended to include the use of assets for which little or no consideration is paid, often called ‘peppercorn’ rentals. This is one instance where the right of use asset and its’ associated liability are not initially recognised at the same value. For peppercorn rentals, the right of use assets are initially recognised at market value. Any difference between market value and the present value of expected payments is accounted for as income. This has similarities with the treatment of donated assets.

 

o  Large undertaking for the Council

 

·  Local Audit backlog

 

o  On 19th November 2024, the Financial Reporting Council (FRC) shared the latest Public Sector Audit Appointments Ltd (PSAA) data on the number of local government audits outstanding nationally.

 

o  The FRC showed that on 30th September, on average every local authority buying their external audit services through PSAA had two years audits outstanding.

 

o  We are pleased to be able to show that Grant Thornton rates of delivery are well ahead of the national average. PSAA data shows that by mid November 2024, Grant Thornton had signed off 74% of all opinions due up to and in respect of 2022/23. For prior year value for money audits , 99% have been completed, putting us significantly ahead of the national average.

 

o  The 2024/25 audit is planned to conclude earlier than in previous years.

 

Beth Bowers apologised to the Committee and explained that the title of the section of the report on page 44 on the agenda pack should read  ...  view the full minutes text for item 49.

50.

Treasury Management Strategy Statement 2025/26 pdf icon PDF 109 KB

Treasury risk management at the Authority is conducted within the framework of the Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice 2021 Edition (the CIPFA Code) which requires the Authority to approve a treasury management strategy before the start of each financial year. This report fulfils the Authority’s legal obligation under the Local Government Act 2003 to have regard to the CIPFA Code.

 

Additional documents:

Minutes:

The Group Accountant for Financial Accounting & Treasury introduced the report to the Committee and highlighted the following points from it.

 

·  Treasury risk management at the Authority is conducted within the framework of the Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice 2021 Edition (the CIPFA Code) which requires the Authority to approve a treasury management strategy before the start of each financial year. This report fulfils the Authority’s legal obligation under the Local Government Act 2003 to have regard to the CIPFA Code.

 

·  Treasury management is the management of the Authority’s cash flows, borrowing and investments, and the associated risks. The successful identification, monitoring and control of financial risk are therefore central to the Authority’s prudent financial management.

 

·  Investments held for service or commercial purposes are considered in the Capital and Investment Strategy within the Budget Report which is also included on the agenda for Cabinet & Council for February.

 

·  Economic background - The Bank of England’s (BoE) Monetary Policy Committee (MPC) held Bank Rate at 4.75% at its December 2024 meeting, having reduced it to that level in November and following a previous 25bp cut from the 5.25% peak at the August MPC meeting.

 

·  The November quarterly Monetary Policy Report (MPR) expected Gross Domestic Product (GDP) growth to pick up to around 1.75% (four-quarter GDP) in the early period of the BoE’s forecast horizon before falling back. The impact from the Budget pushes GDP higher in 2025 than was expected in the previous MPR, before becoming weaker.

 

·  ONS figures reported the annual Consumer Price Index (CPI) inflation rate at 2.6% in November 2024, up from 2.3% in the previous month and in line with expectations. Core CPI also rose, but by more than expected, to 3.6% against a forecast of 3.5% and 3.3% in the previous month. The outlook for CPI inflation in the November MPR showed it rising above the MPC’s 2% target from 2024 into 2025 and reaching around 2.75% by the middle of calendar 2025.

 

·  Credit outlook - Credit Default Swap (CDS) prices have typically followed a general trend downwards during 2024, reflecting a relatively more stable financial period compared to the previous year. Improved credit conditions in 2024 have also led to greater convergence in CDS prices between ringfenced (retail) and non-ringfenced (investment) banking entities again.

 

·  Interest rate forecast - The Authority’s treasury management adviser Arlingclose expects the Bank of England’s MPC will continue reducing Bank Rate through 2025, taking it to around 3.75% by the end of the 2025/26 financial year. The effect from the Autumn Budget on economic growth and inflation has reduced previous expectations in terms of the pace of rate cuts as well as pushing up the rate at the end of the loosening cycle.

 

·  Arlingclose expects long-term gilt yields to remain broadly at current levels on average (amid continued volatility), but to end the forecast period modestly lower compared to now. Yields will continue to remain relatively higher than in the past, due  ...  view the full minutes text for item 50.

51.

Internal Audit Plan 2024/25 Update and Consultation on the Development of the Internal Audit Plan 2025/2026 pdf icon PDF 297 KB

This report:

 

1) provides an update on progress in completing the Internal Audit Plan 2024/25 audit reviews (following the Update Report presented to Committee on 25th September 2024).

2) informs the Audit Committee on the methodology to be used to compile and maintain the Internal Audit Plan 2025/26.

3) asks for Committee Member input on Council activities, areas or themes they would like to be considered for inclusion in the Internal Audit Plan 2025/26.

 

Minutes:

The Head of Audit & Assurance introduced the report to the Committee and highlighted the following points.

 

·  The report provides an update on progress in completing the Internal Audit Plan 2024/25 audit reviews.

 

·  Appendix 1 records progress on completing the Internal Audit Plan 2024/25 core audit reviews.

 

o  8 Final ‘Assurance’ Reports or ‘Briefing’ Reports Issued

 

o  4 Draft Reports Issued

 

o  9 Audits Work-In-Progress / Audit Brief Agreed

 

o  5 Audits to start – linked to the agreed operation of a ‘flexible’ Audit Plan, the Head of Audit & Assurance has liaised with the Director of Children’s Services & Education to replace the Brokerage audit with a review of Adult Care Adaptations as concerns have been highlighted in terms of delays in provision of necessary adaptations (reliant on effective co-ordination between Council Occupational Therapy and Housing Teams and also property landlords e.g. Curo).

 

o  The planning process is based on the fundamental requirement that the Audit Plan proposed will deliver sufficient work to enable the Chief Internal Auditor to independently assess the internal control framework of the Council and provide a ‘reasonable assurance’ opinion at the end of each year. The model we have adopted, and use is the ‘Reasonable Assurance Model’.

 

o  The Audit Committee is a key stakeholder and has responsibility for approving the Internal Audit Plan. The purpose of this report is to obtain Committee Member views and feedback on areas / themes which should be considered during the planning process for potential inclusion in the Internal Audit Plan. The Plan is to be submitted to the Committee at its next meeting on 30th April 2025.

 

o  From the planning work carried out to date, the following ‘themes’ are emerging which need to be considered further to scope Internal Audit core audit reviews:

 

o  Children’s Services - Special Educational Needs / Designated Schools Grant – Safety Valve Delivery Plan; provision of services in compliance with statutory responsibilities.

 

o  Adult Services – Safeguarding, fulfilling statutory responsibilities and responding to CQC findings and recommendations.

 

o  External funding and delivery of projects

o  Debt Management – effective management of Council income / debt.

 

o  IT – Cyber Security and Artificial Intelligence

 

o  Contract Management

 

The Chair said that he welcomed the guidance that had been given and that it was his view that the Liveable Neighbourhoods Programme should be considered, depending on the outcome of the officer’s report following the public statement that had been made earlier in the meeting.

 

John Barker proposed whether the new Procurement Act could be added to the scope for potential reviews.

 

The Director of Financial Services, Assurance & Pensions replied that this was a new piece of legislation and that the Council itself was still awaiting ministerial guidance on it. He added that there would need to be sufficient samples within this work area to be able to audit.

 

Councillor Malcolm Treby suggested the following two topics for review:

 

·  Ransomware Attacks – Preparedness

·  Effectiveness of Policy Development & Scrutiny (PDS) Panels

 

The Head of Audit & Assurance replied that  ...  view the full minutes text for item 51.

52.

Annual Governance Statement 2024/2025 pdf icon PDF 158 KB

The aim of the report is to inform the Committee on the Annual Governance Review process, update on significant issues from last year and enable the Committee to fulfil its responsibilities associated with the publication of the Council’s Annual Governance Statement 2024/25.

 

Additional documents:

Minutes:

The Head of Audit & Assurance introduced the report to the Committee. He explained that in November 2024 the Audit Committee received a presentation on the Council’s Statement of Accounts and this included slides on the Council’s Annual Governance Statement 2023/24 and the ‘significant’ reportable issues of Financial Challenge (Service Demand & Cost Pressures) and Children Services (Dedicated Schools Grant Deficit & the Safety Valve Agreement).

 

He stated that an update on the position with regard to the DSG Deficit and Safety Valve Agreement had earlier been presented to the Committee including details on actions and progress. He added that it was still highly possible that this issue will remain significant in relation to the Annual Governance Statement in 2024/25.

 

The Financial Challenge issue remains severe, work on the Children’s Transformation Plan progresses well but service demand remains very high putting extreme pressure on the Council’s overall budgets. A £1.42M forecast overspend was presented to Cabinet in November reflecting our quarter 2 position and a further Q3 update will be presented to Cabinet in February.

 

The Chair thanked the Head of Audit & Assurance for all the work he has undertaken on behalf of the Council over many years and wished him a very good retirement.

 

The Head of Audit & Assurance thanked him and said his role had been both enjoyable and challenging over the years and thanked the Director of Financial Services, Assurance & Pensions for all his support over the years.

 

The Committee RESOLVED to note the report.

53.

Audit Committee - Draft Workplan pdf icon PDF 72 KB

The draft workplan for the Committee is attached at Appendix 1 for comment.

Additional documents:

Minutes:

The Director of Financial Services, Assurance & Pensions introduced this item to the Committee. He highlighted that a Section 106 Update – Risk Management Update Report was due for the April meeting and that the Committee could consider how much further independent assurance is required following the receipt of that report.

 

Councillor Malcolm Treby reiterated the earlier point raised by Councillor Simon that the IT Services Recovery Management review should be shared with the Committee.

 

The Director of Financial Services, Assurance & Pensions replied that this report would be contained within the Internal Audit Annual Report for 2024/25 which was due for the Committee’s April meeting.

 

John Barker asked if an update could be provided on the Local Audit proposals following the recent consultation.

 

The Director of Financial Services, Assurance & Pensions replied that this issue was on their watching brief list, pending the outcome of the consultation. He added that a response to the consultation was submitted and that they strongly supported the areas that had been highlighted by the members of the Committee.

 

Councillor Malcolm Treby asked if an update could be provided on the previously reported External Audit findings.

 

The Director of Financial Services, Assurance & Pensions replied that this would be provided to the Committee.

 

John Barker asked if any progress had been made on training dates for the Committee.

 

The Director of Financial Services, Assurance & Pensions replied that an email had been sent during the course of the meeting inviting members to a training session on March 19th 2025.

 

The Committee RESOLVED to note the 2024/25 workplan for the Committee.