Meeting documents

An apology for absence was received from Councillor Foster.

There were no declarations of interest.

RESOLVED (unanimously): that with the minutes of the meeting of the committee held on 1 February 2017 be approved as a correct record and signed by the chairman

The council?s external auditor presented the certification of the council housing benefit subsidy claim. It confirmed the 2015/16 subsidy of ?22.8m. The auditor had received excellent support and there were no major issues. In respect of an overpayment it was confirmed that the figure was not actual but was extrapolated. In other respects the auditor was satisfied the council had appropriate arrangements to compile complete, accurate and timely returns for certification. The indicative fee for 2015/16 was ?7,126.

RESOLVED (unanimously): that the report on the 2015/16 Grant Claim be noted.
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The committee received the External Audit Plan for 2016/17. This outlined the planned scope and timing of the audit. Mark Heap explained that there was a requirement to give an opinion on the council?s financial statements and on the council?s arrangements for securing economy, efficiency and effectiveness in its use of resources. It sought to reflect the council?s business, key developments and challenges facing the council and its corporate plan and corporate improvement plan.

Mark Heap responded to questions and comments from the committee.

In relation to the auditor?s value for money conclusion and in respect of the single criterion on page 13 of the report, the committee commented on the excellent opinion of the borough in the Channel 4 programme, the results of the recent LGA survey of residents and receipt of the customer service excellence award. The auditor indicated the wording of the criterion and its assessment (shown in the report) was set by the National Audit Office. That said the auditor was keen to show a balanced picture and reflect all information in the value for money conclusion.

Responding to an enquiry about the staff survey (page 16), the auditor indicated that he would be keen to see how the council dealt with this issue through its improvement plan.

At present the auditor confirmed he felt it was too early to have a view on the council?s progress against targets in the council?s improvement plan. However, he would be interested to see how it progressed against those targets.

Concerning the audit fee, the committee was informed that this was set on a scale of charges.

RESOLVED (unanimously): that the external auditor?s 2016/17 Audit Plan be noted.
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The external auditor reported that at present there were no issues at this stage in the 2016/17 audit work. In response to the committee the interim Audit of Accounts was on track and would soon be completed. It was also confirmed that whilst closure of the council?s accounts was the end of June, May was the target and the council was on track for this to be met, this year and next.

The auditor indicated to the committee that the council was being observed and he was in close liaison with the Head of Shared Assurance Services and the Head of Shared Financial Services in respect of the delivery of good governance and telling the story.

In response to the committee?s enquiry, it was confirmed that the challenging questions on pages 9/10 were being addressed. In respect of the final settlement it was confirmed that the council had responded to the consultation.

Regarding the proposed retention of business rates by councils, the auditor appreciated moving forward that this had a significant impact on the council?s finances but this was extremely contentious and the government was still grappling with it. He had not heard anything more.

Responding to a question as to how the council might be affected by the Apprentice Levy, the committee was advised this was being considered by senior management and information could be circulated to the committee. This was appreciated.

RESOLVED (unanimously): that
1. the report be noted; and
2. information on the impact of the Apprentice Levy be circulated to members of the committee.
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This report sought approval of the policies along with CIPFA?s ?Understanding Local Authority Financial Statements? which explained required changes to local authority statements of accounts. It was good practice for the policies to be approved annually. In respect of management accounting the financial statements were more comparable to the budget monitoring reports and increased transparency. There would be a worked example at the member learning hour in July.

The committee welcomed the notion of accounts being made simpler/easier to understand and awaited examples at the forthcoming member learning hour.

In response to the committee it was confirmed that the changes had not created any additional work, the information was already in the ledger but provided more information in the budget monitoring reports.

It was explained that in respect of CIL monies, as this income stream was considered significant that this be shown separately to grants and contributions. Although in respect of this paper there no requirement to explain that CIL monies could be split between borough and parish councils, the committee asked what the external auditor thought and was informed that this was a clarification and therefore helpful. The external auditor added that accounting policies were very serious to ensure proper practices and professional standards were carried out. In respect of the CIPFA?s document, it was acknowledged that recent years had been difficult for local authorities and this helped by increasing the reality of local authority accounts - a reflection of the overall process not just a point in time.

In response to the committee, the external auditor indicated he had no concerns at present but if arose would give plenty of notice. The draft policy would be included in the council?s Statement of Accounts and if need be amended accordingly for the final audited accounts.

RESOLVED (unanimously): that
1. the statement of Accounting Policies 2016/17 at Appendix A in the report be approved; and
2. the contents of the CIPFA document ?Understanding Local Authority Financial statements? at Appendix B in the report be noted.
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This report requested by committee aimed to explain the recurring underspend in the capital programme and the delay in delivery of some parts of the 2016/17 budget efficiency plan. In response to the committee, going forward the report included action taken for the 2017/18 budget setting to manage expectations of project delivery and reduce the recurring underspend (variation) in the capital programme. This had followed detailed assessment of the reasons behind those issues (such as monies previously included for projects not scheduled to begin for 2/3 years).

The committee commented that table 5.3 in the report showed a very poor performance. However, it was felt this could be lessened if there was an explanation of reasons why projects had been re-phased (such as technical/outside the council?s control).

In response to the committee asking how change was dealt with, it was given the example of the Bamber Bridge Project. This had started as a South Ribble project (?100K) and became a combined South Ribble/City Deal project (?3M). This had had a slight impact on other schemes in the capital programme whilst a challenge, the council tried to forecast any potential changes. It was acknowledged that there needed to be robust project management and the council was working on the introduction of an online system as soon as possible. The committee indicated that it looked forward to the introduction of an online system and information on the council?s approach to project management.

It was confirmed that in short there was a potential danger that a scheme could be delayed/re-phased due to changing circumstances and that Appendix B to the report would be updated during the budget process. The project work for the 2018/19 programme would take into account the new reported factors when considering schemes for inclusion.

The committee commented that business transformation (?150K) referred to on page 6 was very different to budget efficiency. It was informed both were progressing, and accepted they were different and would be reported separately.

The committee raised concern that if a significant number of schemes slipped/were re-phased this would have a knock on effect and they would potentially cost more. Also, in part re-phased projects which had not been intended to start/be delivered in 2016/17 but had been included skewed the figures. The charts in the report gave better information as to how the projects are managed.

RESOLVED (unanimously): that
1. the report on the Capital Programme and Efficiency Plan Performance and Improvement Actions 2016/17 be noted; and
2. the committee looked forward to the introduction of an online system and information on the council?s Project Management Framework.
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The committee received a report providing an update on how the City Deal was progressing. It was a partnership involving South Ribble, Preston and Lancashire County councils and the Homes and Communities Agency (HCA) working together to attract new investment and transport infrastructure at an unprecedented rate. The government was also a signatory to the City Deal. This would create around 20,000 new jobs and 17,000 new homes over 10 years. After three years 2,000 new homes had been completed and 1,800 new jobs created. In response to the committee at this stage it was felt this was as expected and on track.

The committee was keen to know what representation/influence this council had on the various groups in the City Deal structure. It was assured that it was represented at all levels. The Leader and Chief Executive on the Executive, the Chief Executive on the Programme Board, the Director of Development, Enterprise & Communities on the Project Team. The other groups identified (6.9, 6.11 and 6.12) in the report reported to the project team which in turn reported to the project board. In addition in respect of finance the Head of Shared Financial Services and team liaised closely with partners. As did the council?s Planning Manager. In respect of 6.10, there were always changes at a national level ? government policy (such as Brexit, NHB, Business Rates and CIL) that could impact on the City Deal model. There were regular meetings to assess any impact, income generation, value for money and costings.

Responding to enquiry about relations with government, the committee was informed that to date it liked the City Deal. In respect of NHB, the committee was told that whilst there were positive messages about this being ring fenced, it had not been confirmed in writing. The committee was also advised that this council was not waiting for monies from City Deal and was still a nett recipient of monies.

It was confirmed that in respect of 6.23, the changing climate was a risk but this had been identified. Build continued in the City Deal area with development on various sites which was moving south to South Ribble. It was confirmed that discussions about the Cuerden Site had progressed apace.

The committee asked about UCLAN in respect of 6.34 and was informed that associated with new homes/businesses created there was a need to upskill the local population. UCLAN was looking at strategies such as to match jobs and retain graduates and support businesses. In respect of the other possible asks in 6.34 the committee was advised that this council had always aspired to see a Ribble crossing link and the suggested development of Preston Railway Station would raise the of the area. It was also informed in respect of accelerated new home delivery, the HCA had speeded up its processes and the development at Altcar was such an example of the new working.

The committee referred to Appendix C (delivery fund) and when City Deal started compared to now. It was advised that as the climate changed (such as business rates) over time it was being updated to reflect those changes and was constantly evolving similar to the council?s own budget.

In response to whether it was felt the City Deal?s financial arrangements were robust, the committee was informed it was felt they were. There were ongoing discussions on the potential impact of changes (CIL, NHB etc). The financial model evolved to still deliver with different levels of income. The council had now included City Deal into its Medium Term Financial Strategy (MTFS). The council was not aware of an increase in financial risk. If a change was insurmountable or a major risk it would be reported to members.

Responding to an enquiry from the committee it was confirmed that the council would ideally prefer to have a signed detailed agreement with City Deal partners rather than just a heads of terms (setting out the principles) agreement.

The committee was conscious City Deal was identified on the corporate risk register and wondered how this was reflected in the current version. The committee was informed that the City Deal Executive considered the risk register at every meeting and the council perceived the risks were relatively low around finance and delivery.

RESOLVED (unanimously): that
1. the report be noted; and
2. the committee requested a copy of the latest City Deal risk register.
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The committee considered a report on the evaluation of the council?s compliance, including analysis and an action plan to address any areas of non-compliance. This was indicated in the table in para 5.2 of the report and Appendix 1 to the report.

In response to an enquiry if the committee would see the specific fraud and corruption risk register, it was advised that major issues would be brought to the committee?s attention.

RESOLVED (unanimously): that
1. the report be noted; and
2. the committee requested a copy of the risk register.

The proposed internal audit programme for the financial year 2017/18 was submitted for approval. To assist this process, as mentioned at the last meeting the council was introducing the Grace risk management software. This enables the process to be devolved to service areas increasing their ownership of risks with internal audit providing a more effective/supportive role.

It was confirmed that training on Grace was initially being given to SMT and Core Managers and then phased through service areas.

In response to an enquiry about a re-assessment of the audit on licensing and flexi-time/overtime, the committee was informed that internal audit supported the recent work on licensing by Commissioner Ney.

RESOLVED (unanimously): that
1. the Internal Audit Plan 2017/18 be approved subject to (2) and (3) below;
2. the committee be provided with outcomes/results of the repeat audit on the council?s Licensing Function; and
3. the committee expects to see evidence on the outcome/result of the repeat audit on the council?s flexi-time and payments for overtime.
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The committee received a report on the revised Local Code of Governance for comment which would then be submitted to the meeting of the council to be held on 24 May 2017 for adoption. The revised code was appended to the report. This had been reviewed and updated in line with current guidance.
In respect of page 11 of the appendix - D. Good governance means determining the interventions necessary to optimise the achievement of the intended outcomes, the committee was advised this was not covered by a specific protocol. The committee thought to bear this in mind whilst reviewing the Constitution.

Regarding page 18 of the appendix - G. Good governance means implementing good practices in transparency, reporting, and audit to deliver effective accountability, the committee was informed that the council was currently carrying out a lot of work on communication and the website with the production of a council Communications Strategy.

RESOLVED (unanimously): that the report be noted and that the revised Local Code of Governance would be presented to the meeting of council to be held on 24 May 2017.
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Further to min. no.45(3), 1 February 2017 and consideration by the committee?s constitution review task group, the committee received the draft terms of reference for the Standards Committee at Appendix B to the report. This would then be submitted to the meeting of the council to be held on 24 May 2017 for approval.

RESOLVED (unanimously): that
1. the draft Terms of Reference for the Standards Committee at Appendix B to the report be agreed; and
2. this now be recommended for approval to the meeting of the council to be held on 24 May 2017.
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Further to min. no.45(3), 1 February 2017 and consideration by the committee?s constitution review task group, the committee received the draft Terms of Reference and Cabinet Procedure Rules at Appendices B1 and B2 to the report. This would then be submitted to the meeting of the council to be held on 24 May 2017 for approval.

RESOLVED (unanimously): that
1. the draft Terms of Reference and Cabinet Procedure Rules at Appendices B1 and B2 to the report be agreed; and
2. this now be recommended for approval to the meeting of the council to be held on 24 May 2017.
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Further to min. no.45(3), 1 February 2017 and consideration by the committee?s constitution review task group, the committee received the draft Terms of Reference and Scrutiny Procedure Rules at Appendices B1 and B2 to the report. This would then be submitted to the meeting of the council to be held on 24 May 2017 for approval.

RESOLVED (unanimously): that
1. the draft Terms of Reference and Scrutiny Procedure Rules at Appendices B1 and B2 to the report be agreed; and
2. this now be recommended for approval to the meeting of the council to be held on 24 May 2017.
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