Agenda item

Purpose: To set out the Annual Governance Statement (AGS) for the Council for 2019-20 and to outline issues that Corporate Board considered should be included in the 2019-20 AGS as requiring action to resolve.

The Committee considered the report (Agenda Item 6) which set out the Annual Governance Statement (AGS) for the Council for 2019/20. The report outlined those issues that Corporate Board considered should be included in the 2019/20 AGS as requiring action to resolve.

The AGS set out the Council’s governance arrangements and reviewed their effectiveness. The AGS needed to be reviewed and approved by the Committee on an annual basis and was published with the financial statements.

The review for 2019/20 had highlighted four key areas to include in the AGS and these were incorporated into an accompanying action plan. The four key areas of focus identified as requiring improvement were:

·         Delivering effective engagement

·         Capacity to deliver projects

·         Improving asset management

·         Commercial investment

Councillor Jeremy Cottam noted that training in the use of project management methodology was listed in the action plan and he queried the software to be used. Joseph Holmes, Executive Director for Resources, advised that training would be on the use of the PRINCE2 project management methodology. Approximately 50% of the relevant officers had been trained prior to the outbreak of the Covid-19 pandemic and the remainder would be trained via Zoom.

Joseph confirmed that it was mandatory for all projects to be managed via the project management methodology. The necessary officers would be involved in the production of business cases, all which would be presented to the Corporate Programme Board for approval.

Councillor Rick Jones queried if progress on the action to deliver effective engagement would be reported to the Governance and Ethics Committee. Joseph Holmes explained that it was his intention for the AGS to be a live working document. As part of this, a biannual report would be provided to the Committee that set out progress being made with the action plan. It was the aim to provide the first of these reports in early 2021.

Councillor Jones commended the document. The complexities of the AGS were clearly explained within the document. He pointed out a minor typographical error for correction in paragraph 5.12 of the report. This needed to state that the focus on commercial investment had been brought forward to 2020/21.

Councillor Andy Moore queried the process undertaken in reviewing the Constitution, including the involvement of the Finance and Governance Group, and how this aligned with the work of the Constitution Review Task Group. Joseph Holmes explained that the Finance and Governance Group was an officer group. A key role of the group was to prepare reports prior to submission to this Committee. It was important for the Finance and Governance Group to have the opportunity to review the Constitution on an annual basis, but he was aware that the Constitution Review Task Group was working through the Constitution in much more detail.

Councillor Cottam next queried the Council’s approach to commercial investment and the extent to which this would continue. Joseph Holmes explained that a consultation exercise had been undertaken by Central Government with regard to the ability to borrow from the Public Works Loan Board (PWLB) for investment purposes. The results of this were awaited and were expected in the coming months. Councils could still invest funds, but this was restricted to, for example, use of capital receipts. Councillor Jones reported that he was aware that the Executive had been exploring other avenues in which to invest capital funding.

Councillor Cottam followed this by querying if it was within the Committee’s remit to review the Council’s commercial investments in light of Covid-19 and how this impacted on the viability of retail properties and offices.

Joseph Holmes advised that the Overview and Scrutiny Management Commission undertook a review of commercial investment at its meeting in January 2020. However, he acknowledged the point that the situation had changed with Covid-19. Joseph felt it would be useful for the Governance and Ethics Committee to review whether property valuations had changed in recent months and the impact of this on the financial statements. This could be discussed at a future meeting with potential input from external auditors.

Councillor Cottam considered that property investment at this time would be high risk and he agreed this should be reviewed. In terms of timing to do so, it was felt that this could take place once the property market had been able to recover on the back of Covid-19. Councillor Tony Linden had discussed the Council’s existing investments with Joseph Holmes and the Portfolio Holder and had been reassured that the investments remained viable.

Standing Orders were then suspended in order to allow the external auditor (Barrie Morris of Grant Thornton) to address the Committee.

Barrie Morris agreed that property valuations should be monitored and it was the expectation that values would have decreased within this financial year. The implications of Covid-19 were ongoing and it was necessary to make considered decisions. The Grant Thornton assessment of the Council’s decision making in terms of property investment would be based upon factors including business cases and performance in terms of value for money obtained.

Mr Morris added that Grant Thornton would provide comments and any recommendations once their review of the AGS had completed.

Joseph Holmes agreed that effective governance arrangements needed to be in place. The outcome of the PWLB consultation would be carefully considered to review the impact of this on governance arrangements.

Standing Orders were reinstated.

RESOLVED to approve the AGS and the actions proposed within it to mitigate risks to the Council’s governance arrangements.