Agenda and minutes

Governance Committee
Wednesday, 29th November, 2017 6.00 pm

Venue: Wheel Room, Civic Centre, West Paddock, West Paddock, Leyland PR25 1DH

Contact: Dave Lee  Email: dlee@southribble.gov.uk

Items
No. Item

32.

Apologies for absence

Minutes:

An apology for absence was received from Councillor Margaret Smith.

 

33.

Declarations of Interest

Members are requested to indicate at this stage in the proceedings any items on the agenda in which they intend to declare an interest. Members are reminded that if the interest is a Disclosable Pecuniary Interest (as defined in the Members’ Code of Conduct) they must leave the room for the whole of that item. If the interest is not a Disclosable Pecuniary Interest, but is such that a member of the public could reasonably regard it as being so significant that it is likely that it would prejudice their judgment of the public interest (as explained in the Code of Conduct) then they may make representations, but then must leave the meeting for the remainder of the item.

 

Minutes:

There were no declarations of interest.

34.

Minutes of the Last Meeting pdf icon PDF 109 KB

Held on Wednesday, 13 September 2017, to be signed as a correct record.

Minutes:

In respect of Minute No.21, the Committee was informed that the re-structure of Democratic services had not yet been finalised to ensure it had capacity and was fit for purpose, but would be very shortly. A copy of the proposal was offered to members of the Committee.

 

Referring to Minute No.24, the Committee was conscious that it had still not received information on the City Deal Resource Review.  This review was being conducted by the City Deal Partnership Board and information would be provided to members when available and be included into the Council’s MTFS.

 

RESOLVED:

 

That the minutes of the meeting of the Committee held on 13 September 2017 be approved as a correct record.

35.

External Audit - 2016/17 Annual Audit Letter pdf icon PDF 79 KB

Report of the Acting Chief Finance Officer/External Audit attached.

Additional documents:

Minutes:

The Chair welcomed Mark Heap and Simon Hardman from the Council's External Auditors, Grant Thornton, who presented their Annual Audit Letter for 2016/17.

 

The audit letter had concluded that the accounts were generally of a good quality and the Finance Team responded as required to queries identified. It had been agreed that some disclosure issues which were identified would be addressed for 2017/18.

 

As previously advised, the statutory deadlines for approval and publication of the audited accounts had been brought forward for 2017/18 and future years. The accounts would need to be available for audit by 31 May and the audited accounts published by 31 July 2017 (two months earlier than in 2016/17). Officers were working with the external auditors to ensure these deadlines could be achieved and Governance Committee dates were being revised to meet these new requirements (this was an item later on the agenda).

 

It was confirmed that the certification of grants would be completed by 30 November 2017 and it was unlikely that the fee would be much different to that in the report (£6968). In respect of aspects of the medium term financial planning, this would be part of the forthcoming 2017/18 audit.

 

RESOLVED (Unanimously):

 

That the findings in the Annual Audit Letter for 2016/17 (Appendix A to the report), be noted.

36.

External Audit - Update Report pdf icon PDF 77 KB

Report of the Acting Chief Finance Officer/External Audit attached.

Additional documents:

Minutes:

The External Auditors presented their progress report and provided a brief summary of emerging issues and developments in the report.

 

The progress report included information in relation to the following:

 

·         2016/17 statutory audit

·         certification of the 2016/17 Housing benefits final claim

·         issue of the auditor’s fee letter 2017/18

·         accounts audit plan 2017/18

·         interim and final accounts audits 2017/18

·         value for money conclusion 2017/18

·         update on technical and local authority matters

 

Whilst the External Auditors had not seen the LGA’s review of the Council’s financial planning and budget, they were keen to as part of their overall work.  In respect of the Interim Accounts Audit, the External Auditors confirmed that February 2018 had been suggested and was suitable. The External Auditors confirmed that any changes in the code of practice presented a challenge but there were no radical changes and this was a relatively quiet year. Referring to a Manifesto for a Vibrant Economy and the example of Manchester, the External Auditors posed to the Council a question – what was your natural area – and they indicated that the Council’s basket of indicators might look quite different those for Manchester.

 

RESOLVED (Unanimously):

 

That the progress report be noted.

37.

Budget Management Report as at 30 September 2017 pdf icon PDF 77 KB

Report of the Head of Shared Financial Services attached.

Additional documents:

Minutes:

The Committee considered the report of the Acting Chief Financial Officer detailing the Council’s overall financial position compared to the financial plan for the second quarter 2017/18 financial year. Attached to the report was the Budget Management Report (Appendix One) and the Council’s Capital Expenditure (Appendix Two).  There was slippage in the Capital Expenditure and those schemes would be reviewed.

 

During the discussion the Committee commented on areas which included:

·         business rates pooling arrangements -  there had been legal advice and an assurance from the Government that whilst Burnley BC had been re-admitted to the scheme this would not negate/adversely affect the current pooling arrangements;

·         governance & business transformation – it was accepted that on page 53 of the agenda pack this should read as an ‘underspend’ in line with the figures on page 52;

·         provision for repayment of debt – this was explained as a revenue charge relating to the financing of capital vehicle procurement;

·         budget figure (change) – whilst the report indicated that the budget had changed the overall figure had not, there had been a change in the way City Deal monies were shown in the budget;

·         council tax profile – this figure was currently zero as Council tax income was only transferred to the revenue account at year end;

·         severance payments – it was confirmed that these had not been included in the budget;

·         pest control fees – the income figure was in line with the half year estimate; and

·         interest on investments – the Council was constrained on the level of investments by its Treasury Management Strategy which was due to be refreshed 

 

RESOLVED (Unanimously):

 

That the Budget Management Report as at 30 September 2017 be noted.

38.

Closure of Annual Accounts 2017/18 Timetable pdf icon PDF 81 KB

Report of the Interim Corporate Governance Manager attached.

Minutes:

The Committee considered the report of the Interim Corporate Governance Manager informing them that the deadline for the closure of accounts for 2017/18 would be the end of May in 2018 and for subsequent years.  This had previously been the end of June. This was to comply with new statutory accountancy requirements providing clarity on the finance position of all the local authorities.

 

This change needed to be reflected in the Council’s Committee Timetable for 2018/19 with the Statement of Accounts needing to be considered earlier in the year. Hence it was proposed that the committee would meet on 24 May 2018 and then 26 July 2018 to consider the Closure of the Annual Accounts for 2017/18.

 

Assurances were sought and given that both External Audit and the Council’s Shared Financial Services Team had plans in place and would closely liaise and share information to ensure that this new deadline would be met.  It was suggested that at its next meeting in January, the Committee receive a presentation on how this was proposed to be achieved including relevant resourcing plans. 

 

It was also noted that in the proposed timetable for 2018/19 there were no meetings of the Committee scheduled between July and November 2018.  This was felt to be a large gap and an additional meeting might be required.  

 

RESOLVED (Unanimously):

 

That:

(1)  the need for meetings of the Governance Committee to be held on 24 May 2018 and 26 July 2018 to meet the deadlines for the Closure of the Annual Accounts 2017/18 be noted;

(2)  the Committee receive a presentation of plans by theExternal Audit and the Council’s Shared Financial Services Team about how they would meet the new earlier deadline for the Closure of the Annual Accounts; and 

(3)  consideration be given to scheduling an additional meeting of the Committee between July and November 2018.

39.

Investment Property Strategy pdf icon PDF 77 KB

Report of the Director of Neighbourhoods, Environmental Health and Assets attached.

Additional documents:

Minutes:

The Chair brought consideration of this agenda item forward to enable the External Auditors to be in attendance during the discussion and contribute if felt appropriate.

 

Further to Minute No. 27 of the meeting held on 13 September 2017, the Committee considered the report of the Director of Neighbourhoods, Environmental Health and Assets which provided details of the draft Investment Property Strategy and the proposed governance arrangements, the use of commercial experts and their procurement. 

 

The strategy document was appended to the report and set out the context for investment in commercial property and identified a range of criteria to be considered for each investment along with the due diligence and governance arrangements to be followed.

 

The Council had previously identified investment in property and assets as a source of income to support the delivery of the Medium Term Financial Strategy. An income target of £300,000 had been established and a Borough Investment Fund of £3.824m was created to fund this investment initially. Additional funding could be identified if other investment opportunities arose.

 

The Committee was asked to agree and recommend the strategy along with associated governance arrangements to Cabinet.

 

It was explained and confirmed that a decision on the strategy was a matter for the Cabinet and not full Council. Whilst members had previously been provided with a flow chart on the decision making roles of Cabinet and Council it was felt that not all members might have appreciated the significance and it was requested that some explanatory text be included and circulated to members.  This was accepted.

 

The Committee went through both the report and strategy document in detail.  During consideration the discussion included comments from the Committee on the following areas

 

·         rates of return on investment – the anticipated return was influenced by the type of tenant/length of tenancy (usually the higher the risk, the higher the rate of return);

·         procurement of expert/professional services – the process to be followed and whether local agents were to be considered and advised the Council was going through the Crown Commercial Services; Framework. This included an explanation of the period of commission and threshold level of future acquisitions; 

·         existing assets – this was a wider approach and these would be reviewed, looking at retention, investment or disposal. Going forward assets would link into the Council’s Vision and Corporate Plan around growth;

·         it was confirmed that this strategy was separate to any shared service arrangements with Chorley BC;

·         due diligence – if the process regarding an item was finalised after a meeting of the Cabinet, a special meeting of the Cabinet would be convened and any decision would be subject to Call-in;

·         it was confirmed that the Chief Executive was the Corporate Property Officer;

·         approval of any additional amount to invest outside the Budgetary Framework or for additional borrowing would be subject to confirmation by full Council;

·         it was accepted that investment in property by the Council should take factors into account such as economic growth and social benefit, although the  ...  view the full minutes text for item 39.