Agenda and minutes

Apologies were received from Councillor Angela Turner.

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.

No declarations were made by members, however, the Council’s External Auditor indicated an interest in Item 5 Appointment of External Auditors and provided that they would be happy to leave the meeting at this point.

The Deputy Monitoring Officer advised that the External Auditors could remain in the meeting for this item.

Minutes of the last meeting held, Wednesday 29 September 2021 are attached as a correct record for signing by the Chair.

Resolved: (Unanimously)

The minutes of the meeting Wednesday, 29 September 2021 were agreed as a correct record for signing by the Chair.

Report of the External Auditors attached.

The committee considered a report of the Council’s External Auditor, Grant Thornton which sought to provide a general sector update and information for members on various reports of interest.

The External Auditor’s explained that an unqualified opinion had now been given on the financial statements and the value for money work was still ongoing. The External Auditors were hoping to report the annual report at the next meeting of the committee, with the certification work starting soon to meet the end of January deadline.

In response to a member enquiry, it was confirmed that value for money considers whether the council has arrangements in place to provide value for money. When looking at capital projects and overspends the auditors would consider various factors such as how soon the overspend was identified, how it was corrected and the reasons behind the overspend. The auditors would only be concerned if the overspend was identified at the end of the project.

Resolved: (Unanimously)

That the report be noted.

Report of the Director of Governance and Monitoring Officer attached.

The Service Lead (Audit and Risk) presented a report that set out the options available to the council for the appointment of an external auditor for the period 2023/24 to 2027/28. Following abolition of the Audit Commission in 2018 the council opted into the Public Sector Audit Appointments Limited (PSAA) scheme to appoint the external auditors and it had now come to the end of the appointment period.

The Service Lead (Audit and Risk) explained that the recommendation was to opt back in to the PSAA scheme and committee were requested to refer the decision to opt back in to full Council for ratification.

Members enquired how PSAA allocate external auditors. It was explained by the Service Lead (Audit and Risk) that PSAA would undertake a procurement exercise, identify the available firms and allocate local authorities to them. Previously PSAA had tried to allocate External Auditors based on the geographical locations.

Resolved: (Unanimously)

That the committee recommend to Council to opt into the Public Sector Audit Appointments national scheme for the appointment of the external auditor.

Report of the Director of Finance attached.

Members considered the report of the Director of Finance which sought to report on the Treasury Management performance for the financial year, 2021/22 to the end of September.

The Principal Financial Accountant advised that the continuing effects of the pandemic were visible on both the cash flow and the level of interest on investments. In terms of cash flow, there was still relatively high levels of cash balance in the accounts averaging around £54 million. The balance within the accounts were currently over £60 million and it was expected to tail off before the end of the year.

Members noted the limited investment opportunities, and it was explained that it was because local authorities had more cash than usual and were not looking to borrow. The Principal Financial Accountant provided that interest earned averaged at 0.11% and had exceeded the council’s target of 0.10%.

In the recent Corporate Peer Challenge of the council reference was made to Treasury Management activities in two areas. The Principal Financial Accountant explained that the first was treasury management training for members, which should happen regularly. This would be arranged over the next three months. Secondly, the investment policy was seen to be overly cautious by Peers. Officers were of the view that the investment policy was appropriately cautious rather than excessively, this had been discussed with treasury advisers who were of the same view.

Members noted an error within Appendix B in the table of Investments as at 30 September 2021, the amount lent to Plymouth City Council was £4 million and the appendix would be amended.

In response to a member enquiry, the Principal Financial Accountant explained that the placement with Goldman Sachs was a termed deposit and it would have been ideal to place the extra £2 million with them, however they weren’t looking for the investment at the time.

Members asked if the council were still receiving the 0.4% interest rate from Santander and noted that this was the rate being received on 30 September 2021, although this had varied.

The Leader of the Council asked how the two notice accounts which had been invested for 4 or 5 years (Appendix B) fitted in with the Treasury Management Strategy. The Principal Financial Accountant explained that the accounts had been invested but were still available at short notice for withdrawal. The investments continued on a roll over basis and remained within the limit as the investment would only be invested for under six months. Further clarification would be given outside of the meeting and it was agreed that the rollover date would be added to the report moving forwards.

Members commented on the results of the Peer Review and stated that it might be time to be less risk averse and make better use of investment. It was provided that the Investment Policy would be reviewed as part of the budget process.

Resolved: (Unanimously)

That the report be noted.