Meeting documents

None, all members of the committee were present.

There were no declarations of interest.

?

The chairman took this opportunity to comment that the item on City Deal had been deferred due to capacity issues and that the report on Budget Management had only been received that morning. This was not the first time this had occurred, timely receipt of information by the committee was critical. There was an imbalance between the workload resource and required output, if all supported the Corporate Improvement Plan this needed to be rectified. Cabinet and SMT have a collective responsibility to review the current arrangements.
?

That in respect of the minutes of the meeting held on 14 December 2016, the chairman suggested the addition of the following words at the end of the first paragraph on page 31.

? ??.. and stated he had full confidence in Councillors Mrs Moon and Michael Green as members of the committee.?

?

RESOLVED (unanimously): that with the inclusion of the above amendment, the minutes of the meetings of the committee held on 23 November and 14 December 2016 be approved as a correct record and signed by the chairman.
?

The committee received an update on the council?s financial position as at 31 December 2016 forecasted to 31 March 2017 which included revenue income and expenditure, progress on delivery of the efficiency programme and, capital expenditure. This confirmed that the council was online to meet its budget for 2016/17. Whilst this year?s projected budget might be met, the council could not be complacent as there were significant challenges ahead in future years that will see a forecast deficit in the region of ?3.0m. The MTFS will take steps to address this, such as savings and major increased income in some areas. One area of interest to the committee, City Deal?s financial structure, would be reported to the next meeting.

?

In responding to further concerns about continued slippage on the Capital Programme, the Cabinet member accepted there were issues which were being reviewed and all budget holders financial figures were challenged on ability to deliver. Whilst there had always been an element of re-phasing, the budget process had more robust challenges including provision of evidence that there are sufficient resources to deliver approved projects on time.

?

The Cabinet member re-affirmed that the council?s budget for 2016/17 would be met. She also confirmed that there had been two increases to the original 2016/17 budget for additional staffing and costs associated with the licensing function. There were concerns for the next and future years. There was substantial work underway on next year?s budget and for future years. In respect of next year?s budget there were a number of options available to achieve savings/balance the budget Which would be disclosed in the forthcoming budget report to cabinet. In respect of the Capital Programme, similar comments had been made when the Cabinet member had sat on the committee with regard to slippage of schemes and these were being addressed.

It was confirmed to the member of the public that during a given year it was possible to add funds to the Council?s budget following the requisite approval process within the Constitution.

RESOLVED (unanimously): that
1. the council?s financial position as at 31 December 2016 report be noted; and
2. the committee looks forward to receiving a report on the financial structure of the City Deal at the next meeting of the committee.
?

The committee was reminded of the changes to appointment of the council?s external auditors after 2017/18, details of the appointment options available and that the decision deadline for option 3, the sector-led body approach was 9 March 2017. This decision had to be ratified at a meeting of the council. On enquiry the committee was advised that Chorley BC had recently decided it would consider a recommendation from its Governance Committee to be become an opted-in authority at its next meeting on 28 February 2017. Similarly, it was confirmed that both councils would seek to have the same external auditors.

?

RESOLVED (unanimously): that the council at its meeting on 1 March 2017 be recommended to approve Option 3 and accept the invitation from Public Sector Audit Appointments Ltd and become an opted-in authority for the purposes of the appointment of its external auditor.
?

This item was deferred to the next meeting of the committee on 12 April 2017.

The council?s external auditor presented the conclusion of the audit for 2015/16. An unqualified opinion had been given in respect of the council?s accounts and regarding value for money, a qualified ?except for? opinion had been given. In respect of the second paragraph on page 8, whilst there was reference to powers to publish public interest reports it was explained to the committee that this was very rare. However, this could happen if it was felt progress on the council?s action plan was slow or stopped. In respect of the weakness reported on page 7 regarding assets register and the lack of specification between the council?s financial services and the valuer, the committee was advised these had been addressed.

?

In respect of the forthcoming earlier final accounts closedown dates, the external auditor indicated that if those were missed the impact would be reputational not financial. It was confirmed that due to additional work the actual fee for 2015/16 was yet to be confirmed.

?

The committee was advised that this was Gareth Winstanley?s last meeting of this council?s Governance Committee due to Grant Thornton?s policy of staff rotation. The chairman and committee thanked Gareth for his work and professionalism and wished him well for the future.

?

RESOLVED (unanimously): that the report be noted.
?

The committee considered the progress on the Internal Audit Plans between September and December 2016 and the service?s performance to date. In respect of amber ratings, it was explained that this year there had been a range of assurance ratings, the majority had been rated as adequate as was usually the case, with very few being substantial.

?

The council was acquiring GRACE ? risk and control evaluation software and Internal Audit would be providing training and support for officers. Not every area was expected to be set-up and operational on day one.

In regard to Disabled Facilities Grants, the committee was advised that from a user perspective there was no cause for concern. In respect of internal control there were weaknesses that could be improved such as using only one database. In respect of the introduction of a new housing grants programme, Internal Audit was working very closely with the Housing Team to support its introduction.

?

In discussing the merits of Appendix 2, the committee was informed that the council?s Internal Audit service was to be the subject of a peer review next year and its findings would be reported to the committee.

?

RESOLVED (unanimously): that the report be noted.
?

a) Treasury Management Activity 2016/17 ? update to 31 December 2016
The Cabinet member for Finance presented the report which reviewed the council?s approved Treasury and Investment Strategies, performance in the first nine months and compliance with prudential and treasury indicators. Whilst there had been a reduction in the level of interest rates the predicted amount of return was anticipated to be exceeded due to higher levels of cash available for investing.

?

In response to a question about borrowing, it was confirmed that in relation to the Council self-funding prudential borrowing, the only cost to the Council would be the loss of interest on cash sums invested. With regard to monitoring Counter Parties it was confirmed that the SFS team received daily updates from the Treasury Advisers along with weekly updates and urgent alerts when applicable.

RESOLVED (unanimously): that the report be noted.

?

b) Treasury Management & Investment Strategies 2017/18
The committee considered the draft Treasury Management and Investment Strategy and Minimum Revenue Provision Policy for 2017/18. There were no recommended changes to counterparties but raised some of the cash limits to ?5.0m for some categories with the estimated maximum cash limit increased to ?46.0m, also the duration of certain investments was extended. In respect of investments in other local authorities the committee was informed that whilst not under written by central government this was controlled by many regulations and a council?s financial position would be known.

?

RESOLVED (unanimously): that the committee noted the
The Draft Treasury Management Strategy for 2017/18;
The Draft Annual Investment Strategy for 2017/18, including Financial Institutions and Investment Criteria; and
The Draft Annual Minimum Revenue Provision (MRP) Policy Statement for 2017/18.
?

At its last meeting the committee considered the Annual Governance Statement (min. no. 34 refers). The report presented now sought views on the approach to adopt to review the council?s constitution, including such as initial priorities and timescales.

?

Whilst acknowledging the need to look at the 13 areas identified, this was felt to be too ambitious and not deliverable within the proposed timescale. Members were well aware how long reviews could take. The chairman suggested the review be concluded by May 2018 (accelerating where possible) and initial topics needed to be those which supported the Corporate Improvement Plan. It was suggested those prioritised be the council?s financial regulations, standards committee (referred from committee), cabinet procedure rules and scrutiny procedure rules.

?

The committee was also aware that certain resources to deliver the Corporate Improvement Plan and associated matters had been introduced on an interim/short term basis. It sought re-assurance progress could continue to be made with any review. The review of the constitution needed deliberation (not be rushed) and end up with what was wanted, such as readability and having interactive links which cross referenced through the document. Whilst scrutiny procedure rules were not part of the council?s current engagement of the Centre for Public Scrutiny they could be asked for their views. Members of the public could write to the chairman with their thoughts.

?

RESOLVED (unanimously): that
1. the requirement to review the Council?s Constitution to ensure that it was as clear as possible, up to date and fit for purpose be noted;
2. the suggested guidelines to adopt as a ?House Style? for drafting purposes together with the methodology for undertaking the review be approved;
3. the initial priorities for the review be the council?s financial regulations, standards committee (referred from committee), cabinet procedure rules and scrutiny procedure rules; and
4. the overall review be completed by May 2018.