Agenda item

The Committee considered the External Auditors Interim Annual report which was presented by Mr Stocks. Under National Audit Office (NAO) Code of Practice regulations, external auditors were also required to make a Value for Money assessment to consider that local authorities had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

The report detailed the Council’s overall arrangements, as well as key recommendations on any significant weaknesses in arrangements identified during the audit. Grant Thornton’s conclusion of the Council’s Value for Money detailed assessment was provided in appendix A and summarised in section 1.5 of the report.

The Committee noted that the report was for the 2020/21 period so a portion of the contents had since been superseded. The report was ‘interim’ until the 2020/21 accounts were signed off.

During discussion, key points raised included:

·   The report was, on the whole, positive and covered the respective areas of financial sustainability; governance; and improving economy, efficiency and effectiveness.

·   It was noted that the recommendation which related to the children’s services improvement plan had progressed since the 2020/21 period which had been a particular time of weakness for the service. Children’s Services had since progressed to a ‘requires improvement to be good’ Ofsted rating. As this report covered the first year of the new Council, and the Ofsted judgment had changed, the external auditor would revisit whether it remained at the same level of material weakness for the 2021/22 year. The Committee was advised that much would depend on how sustainable the changes made by the service were considered to be.

·   In relation to the governance section of the report and the references and recommendations referring to associated companies and joint ventures, the Committee recognised that the Shareholder Committee had been established and the external auditors would look at how this had been embedded and what areas had been looked at by the Committee in its first year. Whilst the Shareholder Committee was responsible for carrying out executive functions, as delegated by Cabinet, the Committee believed it would be appropriate for it to receive an annual report on the governance of these companies, should its remit allow. The external auditor agreed that this would be an entirely appropriate action to take given that the subsidiary companies were a significant investment.

ACTION: Mr D Skinner and Mr G Watson to establish what would be most appropriate for the committee to review, whether there would require a change to terms of reference and to produce an annual report on companies’ governance.

·   The Chairman raised that the financial sustainability recommendation on page 26 of the reports pack ‘There should be a continued keen focus from the Council on identifying and agreeing savings over the next three years, to meet the shortfall identified in the Council’s MTFP’ was already underway and this was not necessarily a recommendation as the keen focus remained. The Chairman suggested that it could be built in to the body of the report, although as ‘the next three years’ referred to were coming to a close at the end of this financial year, it was not believed that this required noting as an improvement recommendation.

·   The report covered the medium term financial plan and how the Council was ensuring financial resilience and it was considered that the Council was in a positive place in terms of managing overall finances.

·   The Committee was advised that there had been no member/officer relationship issues that were of concern and little had been through the Council’s Standards and General Purposes Committee to suggest otherwise.

·   The national pressures experienced by local authorities relating to Adult Social Care, Children’s Services and Statements of Educational Needs were recognised, although until there was a long term financial settlement from Government, assumptions had to be made on the resources available.

·   The importance of maintaining strong partnerships, particularly with the new NHS Integrated Care Boards was discussed and this was an area which would be focused on in future reports as would the Council’s devolution plans.

·   The 2021/22 external auditor’s annual report was in the process of being drafted and would likely be presented to the Committee at its May meeting.

RESOLVED:

That the findings in the report by the external auditor on the Council arrangement for securing Value for Money (VfM) in its use of resources, the recommendations made and management’s response be noted.

Note 1: Councillor N Hussain left the meeting at 11.00 a.m.