| Place: | Cross Room, Civic Centre, West Paddock, Leyland, PR25 1DH |
| Present: | Councillor Foster (in the chair) Councillors W Bennett, Michael Green, Mrs Mort, Patten |
| In attendance: | Jane Blundell (Principal Management Accountant), Darren Cranshaw (Scrutiny & Performance Officer), Susan Guinness (Head of Shared Financial Services), Andy Houlker (Senior Democratic Services Officer), Lindsay Roberts (Auditor), Clare Ware (Internal Audit Manager) and Gordon Whitehead (Principal Financial Accountant) Councillors Mrs M Smith (Leader of the Council) and S Robinson (Cabinet member for Finance & Resources) Representatives from the Audit Commission (council?s external auditor): Fiona Blatcher, Peter Buckley and Gareth Winstanley |
| Public attendance: | None |
| Other Officers: | Councillor P Smith and 2 officers |
| Item | Description/Resolution | Status | Action | |
|---|---|---|---|---|
| OPEN ITEMS | ||||
| 12 |
Apologies for Absence An apology for absence was submitted on behalf of Councillor O?Hare. |
Noted | ||
| 13 |
Declarations of Interest There were no declarations of interest. |
Noted | ||
| 14 |
Minutes of the Last Meeting Minutes attached RESOLVED (unanimously): That subject to committee members present being identified as ?councillors?, the minutes of the meeting held on 27 June 2012 be approved as a correct record and signed by the chairman. The Chairman took the opportunity to mention Gordon Whitehead?s retirement and thank him for his pivotal role in shared financial services and assistance to the committee and its members. |
Agreed | ||
| 15 |
South Ribble Borough Council Audited Statement of Accounts 2011/12 (including the External Auditor's Annual Governance Report) Report attached Appendix A - Annual Governance Report attached Appendix B - Audited SoA 2011/12 attached The Cabinet member commended the statement of accounts to the committee and highly praised council officers for their work which had resulted in the very positive comments from the external auditor. The committee echoed the Cabinet member?s positive comments. The committee was informed that the external auditor had issued an unqualified audit opinion. The auditor had identified three minor issues (referred to in appendix 2) which had not affected the cost of service or balance sheet. The report also confirmed that this was a significant achievement for the Council. The external audit report also covered Value for Money (VFM) and confirmed there had been another good performance by the council and appreciated the help of the Shared Financial Service?s staff. The council had made good progress on delivering efficiency saving and maintaining service standards. There would be more work needed, particularly with large uncertainties on the horizon but it was felt the council?s arrangements and financial position put it in a good position. The committee was also informed that this was the last meeting they would attend representing the Audit Commission. Therefore this year the Annual Audit Letter 2011/12 would simply be a letter not a report. In respect of the level of the council?s reserves, the external auditor considered that in the current uncertain climate, the current level of balances acted as a safety margin and put the council in a good position to address eventualities. It was commented that the level of this council?s reserves were healthier than some other local authorities and therefore it was better placed to address issues in the current climate. The committee was complimentary that the statement of accounts was clear and concise and very well presented. It was also noted that the council?s stewardship was strong and effective. The committee noted that under members allowances (page 42), no cost was identified against expenses. Whilst advised that expenses had been included within the allowances figure, there was a request this be checked. It was noted that the number of senior officer?s had reduced and their remuneration had levelled out, showing the council operated a tight ship and was in control of officer remuneration. In response to an enquiry regarding the ?26.437m pension liability and that the pension contributions for senior officers was around 20.3%, the Cabinet member commented this was not sustainable and a reason why pensions needed to be looked at by the government. It was envisaged in the future that there might be a move to an average salary for lifetime and a tiered approach for contributions, percentage level of contributions would vary according to salary. The idea was to take the cost out of the pension scheme. On page 47 under members of the council, there was reference to council grants to voluntary organisations in 2011/12 (?21,000). However, the way it was phrased gave the impression something might have been underhand. There was a request closer attention be given to wording. The Chief Executive, in the audience, took the opportunity to refer to the transfer of the external auditor from the Audit Commission to Grant Thornton (November 2012). He had recently been contacted by a Director of Grant Thornton who had offered to meet the committee (probably also with Fiona Blatcher and Gareth Winstanley). If the committee was interested he would arrange for their attendance at a future meeting. The chairman commented that the agenda for the next meeting (27 November 2012) was not heavy and felt such an introduction was better sooner than later. The committee was informed that this Director of Grant Thornton was the lead partner for the public sector across the country and, specifically was the lead in the North West. The committee expressed its appreciation for the service it had received from the Audit Commission and that it expected nothing less from Grant Thornton. The auditor stated she was sure this was what Grant Thornton wanted to do plus provide additional benefits. RESOLVED (unanimously) that: 1. the contents of the external auditor?s Annual Governance Report be noted; 2. the Statement of Accounts for 2011/12 be approved; 3. the Chief Executive be authorised to sign the letter of Management Representation as set out in the Annual Governance Report; and 4. the committee looks forward to receiving an addressed by representative(s)from the council?s new external auditor (Grant Thornton) at its next meeting. |
Agreed | ||
| 16 |
Budget Monitoring Statement - Q1: April to June 2011/12 Report attached Appendix 1 attached Appendix 2 attached Councillor S Robinson commented that at Quarter 1 (Q1), it was not easy to extrapolate budget performance over the 12 month period. At the moment the budget was on track, in deed some areas were in a better position which was hoped would extend to the whole year. This included a net underspend to date of ?293,000. However, looking forward overall there was a great deal of uncertainty of the exact impact on the budget of a number of issues. This included reduced government funding with the Localisation of Council Tax Support Scheme (wef 01/04/2013) and implementation of the Local Retention of Business Rates regime (wef 2013/14). The committee acknowledged that the performance against the budget to date was positive but there were factors that needed the council to proceed with caution. In respect of the changes to the business rates regime, the committee asked to be kept informed and wondered if an update could be provided to the next meeting. It was advised that whilst it was possible to provide a broad overview, the scheme had not yet been finalised and was only expected to be published late in the calendar year. However, the risk would essentially be passed to local authorities who in future would need to be more aware of the business rate tax base (and its fluctuations). It was noted that Enterprise Zones would be treated separately in the new system. Bearing in mind the need to keep members informed a Member Learning Hour (Local Government Resource Review and the Localisation of Business Rates: What?s it all mean for the Council?s Budget?) had been scheduled for 14 January 2013. The Cabinet member expressed some concern regarding the tight timescales of implementing the new system and the settlement announcement as it significantly impacts on the council?s budget setting and its ability to process the information. In respect of the budget efficiency programme, the committee referred to the ?89,000 saving under review of vehicle fleet. It was informed that the council had looked at difference ways to finance the fleet, had some very good deals on second-hand vehicles and carried out its own maintenance/servicing. The council was mindful that whilst a reduction in maintenance might give a short term saving, costs would increase in the long term. The committee then asked about the ?122,000 saving under base budget review commenting a little more detail would be helpful, it was informed that this was a large number of items of relatively small amounts. The committee was also advised that the ?43,515 saving under Gateway staffing-reduced contingency had been achieved because although more services had transferred to Gateway they had been absorbed and the contingency was no longer required. The committee was pleased to note that planning fee income was significantly above budget. It was wondered if developers had decided to take the opportunity to submit applications whilst the council was between the old local plan and adoption of the local development framework. This increased income was largely due to five major planning applications being submitted in Q1 totally ?141,000. There were a lot of approved housing sites to be developed, in the North West there was no shortage of development land. It was felt there was in fact a lack of finance and this would not really improve until the credit crunch cleared. The committee was informed that it was felt the planning teams could cope with the increased planning applications as the LDF process was nearing completion and there was now capacity to re-allocate staff to dealing with planning applications. It was confirmed that the employee related underspend was in respect of vacant posts. The committee commented positively that the council had to date allocated/spent over ?1m from its Capital Programme and awaited the report for Q2. It also felt in the current climate that if the council had such projects to progress they should be, as it was in a good negotiating position and the subsequent expenditure put money back into the economy. RESOLVED (unanimously) that: 1. the committee notes the report; 2. the committee commends the council on achieving its required efficiency savings; and 3. the committee looks forward to receiving the report for the next quarter (Q2) mindful of the current uncertainties affecting the budget. |
Agreed | ||
| 17 |
Treasury Management Activity - Mid year review Report (156K/bytes) attached The committee received a report on the mid-year review of the council?s treasury and investment strategies and on performance in the first half of the year and compliance with prudential indicators. There were no proposals to change the strategy. It was reported that economists had indicated that interest rates would remain around 0.5% until 2015 which affected the level of return the council received from its investments. The only change in the period had been to open an additional Money Market Fund (MMF) and another was proposed in the near future. The MMFs gave additional flexibility at time when cash balances were high due to cash flow trends. The return on investment income was very close to projection and there was reason to suppose there would be a significant variation at the year end at this stage. The committee was pleased to note that in respect of the monies in Iceland, the council had now received from Landsbanki 43% (expected 100%) and Heritable 75% (expected 86-90%). There were a couple of issues to note. Firstly the Icelandic Central Bank now controlled currency movements and had to sanction the distribution of monies. Secondly the debt in Landsbanki was recovered in Icelandic Krona (ISK) not GBP and what exchange rate value of the Krona was to be used (2009-191ISK/? or 2012 200ISK/?). The general feeling was that local authorities should remain with the April 2009 exchange value. In view of the restrictions on the release of ISK part of the council?s first repayment had been held back and there was now an offer from the Icelandic Central Bank to redeem this at a 10% premium, which was felt possibly to be the best offer. In respect of the deposit of ?3m placed in the Primate Rate MMF, the MMF pooled all deposits and placed with a number of short term instruments thus spreading the risk across many institutions. The council investments were on short term with instant return (virtually on call), its rate of return had initially been 0.70/0.78% but this was now 0.6%. The committee asked about reports concerning the county council and its investments and was advised that the issues concerning its treasury activity had now been addressed and this council?s officers had no concerns placing deposits with it. It was confirmed that it was possible to invest in Community Banks and they could be looked at in accordance with the required criteria. The Cabinet member commented on the exceptionally low investment interest rates during this very difficult period when the stock market had little confidence. The council had to be very careful and over the next six months it was felt the treasury management strategy could be slightly altered whilst retaining the level of safety. Councillor S Robinson took this opportunity to thank the Principal Financial Accountant on behalf of the Cabinet for his assistance and clarity of reports. RESOLVED (unanimously) that: 1. the report be noted; and 2. the committee requests that the council looks at the possibility of investing in Community Banks. |
Agreed | ||
| 18 |
Internal Audit Progress Report as at end of July 2012 Report attached The committee considered a report on the work undertaken in respect of the Internal Audit Plans for South Ribble and Shared Services up until 31 July 2012, gave an appraisal of the Internal Audit Service?s performance to date and informed members of any general developments involving or impacting upon the work of the Internal Audit Service. She was pleased to report that, at this stage, the Internal Audit Plan was on target to be achieved and all the reviews completed to date had been given either a substantial or adequate assurance rating. Following the discussion at the June meetings of this and the Shared Services Joint Committee on Internal Audit Performance Indicators (KPIs), it was explained that it was now recommended a baseline review of those indicators be carried out. The subsequent proposals would then be reported to the January meetings to enable any changes to take effect from 2013/14. The committee expressed its support for this approach. Further to the report, the committee was pleased to note that the service had secured another 30 days work next year at St Catherine?s Hospice. The committee was informed the hospice had been advised the council would not take more than 30 days. The committee noted that a principal auditor had left the service and support had been secured from the county council, it asked to be informed if this became a cause for concern. Also the committee was pleased to note that another member of the service had achieved the Diploma in Internal Audit Practice. In respect of Appendix 2 (% agreed management actions implemented on time), the committee was informed that whilst the service worked very closely with service areas and agreed realistic dates those occasionally did slip, often due to other pressures. If there was concern, it would be brought to the committee?s attention. RESOLVED (unanimously) that: 1. the report be noted; 2. the committee supports the review of Internal Audit Performance Indicators (KPIs) and looks forward to receiving a report at its meeting on 30 January 2013; and 3. the committee?s gratitude be sent to Jan Minchinton and congratulations to Struan Jackson. |
Agreed | ||
| 19 |
National Fraud Initiative - Members? Briefing 2012 Report attached Appendix 1 (Audit Commission Members' Briefing) attached Appendix 2 (SRBC Response to Audit Commission) attached A report was presented which outlined the work undertaken by the council in respect of the Audit Commission?s National Fraud Initiative (NFI) and demonstrated how the council was complying with and contributing to the exercise. The exercise had been carried out every two years since 1996 and involved over 1300 organisations. Whilst identifying what could be achieved when organisations worked together, every year there was significant fraud across the public sector (?20.3bn (local government ?2.2bn)), mainly relating to council tax, housing benefit and pensions. Since 1996 ?939m of fraud, overpayment and error had been identified. It was confirmed this exercise was in addition to the Department of Works and Pensions (DWP) monthly data matching process. The Committee was surprised at the level of fraud nationally, however, it was commented that the recovery of ?939m since 1996 only represented was less than 5%, if the headline figure of ?20.3bn was correct (it was wondered how that figure had been reached). It appeared no progress was being made, suggesting that national systems were not good enough or the annual fraud figure was wrong. The committee was advised that this council was well managed and would not have cases such as those reported in the news, however, it would not be a surprise in areas where there was a high itinerant population. RESOLVED (unanimously): That the report be noted. |
Agreed | ||
| 20 |
Complying with the Equality Act 2010 Report attached The Leader explained that last year the Equality Act 2010 came into effect with statutory requirements the council had to meet. The report updated the committee on steps taken to ensure this. This included building on and refreshing the council?s existing strengths, such as being an equal opportunities employer. The Act?s requirements and actions taken by the council to meet those were detailed on pages 2/3 of the report and the committee commended the progress made. The consensus of the committee was the council?s ethos in its actions was to act fairly and reasonably, not always realising how good it was, and that it already did some of the aspects of the Act. In response to a question regarding requirement no.2, the Leader indicated that the council?s report template now included a specific item under implications ?the impact on equality?. Also the impact assessment process had been refreshed for use on major changes to services or policies, such as the current Consultation on the Localisation of Council Tax Support Scheme. There would be , producing documentary evidence (assessments) should the council face a challenge that it had not adhered to the requirements of the Act. RESOLVED (unanimously): That the report be noted. |
Agreed | ||
| 21 |
Review of the Constitution 2012/13 The chairman strongly encouraged all members of the committee to try and attend the proposed review meetings. The timetable was accepted without further debate. RESOLVED (unanimously): That the committee?s timetable for the 2012/13 review be: 6.00pm Monday 15 October, Oaks Room ? Call in 6.00pm Monday 10 December, Oaks Room ? Procurement ? grants and income 6.00pm Monday 28 January, Paddock Room ? Working Groups ? Procedure rules 6.00pm Monday 4 March, Oaks ? ?Mop-up? |
Agreed | ||
| 22 |
Forward Plan Forward Plan (41K/bytes) attached The committee received its Forward Plan. Further to the comments by the external auditor (min no.15 refers), it was agreed to remove the Annual Audit Letter 2011/12 from the Forward Plan. Also in view of min. no.18(2) an item on the Review of Internal Audit Performance Indicators (KPIs) be included for the meeting on 30 January 2013. RESOLVED (unanimously): That subject the above amendments, the committee noted its Forward Plan. |
Agreed | ||