Agenda item

Purpose: To allow the committee to review the Annual Governance Statement prior to signature by the Leader and Chief Executive

The Committee considered a report (Agenda Item 8) concerning the Annual Governance Statement for 2014/15. Agenda Items 8a and 8b were considered alongside this item.

The report outlined the purpose of the Annual Governance Statement (AGS) and explained how the necessary assurance to support the AGS had been obtained. This was to enable the Governance and Ethics Committee to make an informed judgement as to the effectiveness of the processes followed in conducting the annual review of the system of internal control within the Council. The report concluded that the Council had effective governance arrangements that were kept under constant review.

Andy Walker brought attention to Item 8a. As part of the Annual Governance Statement, CIPFA guidance recommended that the S151 Officer provide assurance that the Council’s systems and procedures of internal control were effective, efficient and being complied with. The S151 Officer was required to ensure that all parts of the Council acted in accordance with the budgetary and policy requirements in connection with the setting of the budget and financial administration standards within the Council.

The S151 Officer was required to report to all the local authority’s Members, in consultation with the Head of Paid Service and the Monitoring Officer, if there was, or there was likely to be, unlawful expenditure or an unbalanced budget. This report was known as a Section 114 report and Members were required to have regard to the S151 Officer’s advice in this report. There had been no necessity to implement the Section 114 process during 2014/15. However, the Council was facing a number of significant financial pressures in the current and following year and would need to rely heavily on the financial and budgetary frameworks in place in order to deliver a balanced budget for 2016/17.

Overall it was the S151 Officer’s assessment that all parts of the Council had acted in accordance with the budgetary and policy requirements in connection with the setting of the budget and met financial administration standards as set out in legislation. There had been no formal reports required by the S151 Officer to Council under the relevant legislation.

Throughout the year, the Governance and Audit Committee (now the Governance and Ethics Committee) was referred to amendments to the Council’s Constitution and its rules of procedure where amendment was necessary. Subject to its view, matters were then referred to Council for adoption. This ensured that administrative processes remained effective, efficient and pertinent.

Reviews of risk registers had been carried out by the Monitoring Officer and S151 Officer in their roles as members of Corporate Board. Liabilities likely to impact on the Council’s operations from a legal perspective had been identified.

Overall there had been an increase in the number of instructions received by Legal Services from services throughout the Council. The Council commenced two judicial reviews against central government departments during the year, the outcomes of which had potential for impact on services in Planning and Communities as well as budgetary implications.

The Monitoring Officer was of the view that the Council's governance arrangements were robust and effective. There had been no formal reports required by the Monitoring Officer to Council under the relevant legislation.

Councillor Jones requested that the Section 114 process to be explained. Andy Walker explained that he had an obligation to report if there was any unlawful expenditure or if the Council was proposing an unbalanced budget. Councillor Webb asked if there were any areas for concern which might require robust monitoring although they did not reach the Section 114 criteria. Andy Walker responded that he had an increased awareness of the organisation’s financial standing and that as the cost base exceeded the income further cuts would need to be made to services.

Councillor Beck asked for an update on the progress of the two measures for implementation during 2015/16 as identified on page 134 of the agenda. Andy Walker advised that he could circulate an email with this information.

Councillor Cole acknowledged that in financially difficult times, risk management became more important and asked if the Council would be liable for the overspend of £900k by John O’Gaunt school. Councillor Webb observed that the answer to that query would depend on what action the school took. Andy Walker added that it was intended for John O’Gaunt to become an academy and the Council would be seeking for the Academy Trust to take on the funding deficit. Ultimately, however, the Council underwrote the financial risk.

Councillor Cole commented that risk management should be proactive and did not feel that the report also included this view. Ian Priestley advised that Corporate Board saw a register of risks monthly and otherwise had sole responsibility to maintain this register. Councillor Cole commented that in the absence of a colleague, the responsibility to ensure effective management of risks were the relevant Heads of Service.

Councillor Bridgman identified some corrections to the formatting of the report.

Councillor Jones sought elucidation on the recommended action of the reports. Councillor Webb advised that the Committee were asked to approve the actions taken as described within the Annual Governance Statement 2014/15 in order to allow the Leader and Chief Executive of the Council to sign it off.

Councillor Beck proposed that the Committee approve the items on block. This proposal was seconded by Councillor Webb from the Chair and accepted by the Committee.

RESOLVED that the report be noted.