Agenda and draft minutes

To approve as correct records the Minutes of the meetings of this Committee held on 29 April 2025 and 15 May 2025.

RESOLVED: That the Minutes of the meeting held on 29 April 2025 were approved as a true and correct record and signed by the Chairman.

RESOLVED: That the Minutes of the meeting held on 15 May 2025 were approved as a true and correct record and signed by the Chairman.

To remind Members of the need to record the existence and nature of any personal, disclosable pecuniary or other registrable interests in items on the agenda, in accordance with the Members’ Code of Conduct.

There were no declarations of interest received.

Purpose: To consider the Forward Plan for the next 12 months.

The Committee considered the Governance Committee Forward Plan (Agenda Item 4).

Satisfied with the Plan, the Governance Committee agreed that it could be noted.

Purpose: The Public Sector Internal Audit Standards (PSIAS) require the Audit Manager to make a formal annual report to those charged with governance within the Council. The report is required to include an opinion on the effectiveness of the Council’s governance, risk management and internal control frameworks, which in turn supports the Council’s Annual Governance Statement.

The Committee considered the report (Agenda Item 5) concerning the Annual Internal Audit Assurance Report for 2024/25.

The Audit Manager introduced the report and highlighted that it was a requirement for it to be brought to the Committee annually. Members noted the conclusion of the report, that reasonable assurance could be given that the Council’s governance, risk management, and internal audit control framework were robust. The reason for this opinion was due to the low number of low opinions audits, as opposed to those considered satisfactory or above. In addition, the report also updated the Committee on the audits undertaken and completed over the past quarter.

On a question about the Council’s financial resilience, and what the consequences would be if the Council did not receive Emergency Financial Support (EFS) from the Department of Housing Communities and Local Government (MHCLG), the Audit Manager indicated that these types of questions were not covered by the Internal Audit Team. As their work was retrospective, ensuing that the Council was operating effectively, questions about policy decisions and their potential consequences would be for the Section 151 Officer and the relevant Portfolio Holder.

The Committee discussed the rate of senior management vacancies as it was considered a risk in past audits. Members were assured that only one of the top 15 positions was not filled and that, although work on recruitment was ongoing, this area was no longer considered to be a concern.

In response to a question about allegations of potential fraud/wrongdoing that had been raised, the Audit Manager confirmed that several whistleblowers had raised concerns but that, upon investigation, there was no evidence to substantiate the allegations. In addition, the Executive Portfolio Holder for Finance and Resources indicated that fraud was a risk in every organisation, but that the Council had robust internal controls and a whistleblower policy to control that risk. The Audit Manager also assured Members that the allegations were not malicious and that the staff who submitted them had not been subject to victimisation as a result of whistleblowing. 

The Audit Manager went on to confirm a number of points made in the report. For example, it was highlighted that the Committee would receive progress reports on previous audits which received a limited assurance rating and that any issues relating to corporate risk management would be dealt with by the services’ risk registers and taken to the Committee through the regular risk management reports. The risks around Local Government Reorganisation were also noted as being a part of services’ risk registers, although the internal audit team could scrutinise a reorganisation plan once it had been agreed. In addition, school audits were noted as providing recommendations, but that it would be up to the schools to implement them.

Members noted Appendix D to the report and asked if Agresso was fit for purpose, given that some tasks had been found to be unwieldy and time consuming. The Audit Manager indicated that, as a system upgrade was imminent, resources had not  ...  view the full minutes text for item 4.

Purpose: This Authority is required by regulations issued under the Local Government Act 2003 to produce an annual treasury management review of activities and the prudential/treasury indicators for 2024/25. This report meets the requirements of both the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities (the Prudential Code)

The Committee considered the report (Agenda Item 6) concerning the Annual Treasury Management Review for 2024/25.

The Deputy Section 151 Officer introduced the report and confirmed that the Council had complied with its investment and borrowing strategy, and prudential indicators. In response to a question about why loans from the Public Works Loan Board (PWLB) from 1996, maturing in 2056, had not been paid off early, she indicated that there would likely be high early redemption costs. She assured Members that officers would have assessed the efficiency of both continuing the payments as planned against the penalties of early redemption.

Members also noted the definition of some of the terms presented in the report and that the Council had set limits around how much it would allow itself to borrow as part of the regular budget approval process. The Deputy Section 151 Officer confirmed that the Council had remained within those set borrowing limits.

On a question about if the lack of earmarked reserves for property maintenance could affect a property’s value, the Committee noted that this sinking fund would be helpful but that the Council’s financial position made this untenable. However, the Executive Portfolio Holder for Finance and Resources indicated that some of the capital budget could be used for maintenance but that the current tenants were responsible for repairs until the end of their leases.

The Committee noted that the balance between investments and borrowing would not likely affect the Council’s access to future borrowing as most of this was done through peer-to-peer lending (by other local authorities) or by the PWLB. The Executive Portfolio Holder for Finance and Resources indicated that West Berkshire Council was borrowing about £1,600 per resident, whereas a number of other authorities were borrowing closer to £2,000-£3,000 per resident. He noted that the weighted average cost of borrowing was below 4%, and he also confirmed that the Council’s short-term borrowing was no more than 30 per cent of total borrowing.

The Deputy 151 Officer indicated that in terms of the scale of borrowing, the Council was in receipt of Exceptional Financial Support, there was a budget gap to close, and the amount of interest that the Council had to pay on the capital being borrowed was a pressure on the revenue budget.

In response to a question about why the value of the commercial property portfolio had reduced by around £1m, and why the Council had not moved faster to reduce its exposure, Members noted that this was due to the attractiveness of this type of property having changed over time. In addition, disposal of these properties would also impact on the revenue budget as long term tenants would contribute to this through rent.

Members were assured that the revaluation of the portfolio did not affect the Council’s general fund and, as it was not a revenue pressure, they would not have to find an additional £1m in cuts to services or increase council tax to cover the change.

In response to a  ...  view the full minutes text for item 5.

Purpose: This report is to inform Members of the key highlights within the Council’s draft/unaudited 2024/25 financial statements and summarise management’s assessment of the Council’s ability to operate as a going concern. 

The Committee considered the report (Agenda Item 7) concerning the Financial Statements 2024/25 Highlights and Going Concern Assessment.

The Deputy 151 Officer introduced the report and highlighted key elements from the Council’s financial statements and the rationale as to why the Council was still considered to be a going concern.

In response to a question regarding the Council's financial viability and ability to meet its financial obligations, the Deputy 151 Officer indicated that the report had been prepared as a management statement as to why the Council was considered to be a going concern. This reflected the view of Senior Management that the Council could continue to meet its liabilities, with support from EFS. The Council also had a healthy balance sheet of capital assets, which it could draw upon. It was confirmed that this position had not been reviewed by the Audit Team.

Members questioned the terms of the EFS provided by MHCLG, including how they would monitor the Council’s effective use of the funds, what type of loan it was, and if there were any conditions attached to it. In response, the Deputy Section 151 Officer indicated that, although there were no conditions attached to the EFS, Central Government met regularly with the Council to monitor progress on its plans and to see if it was taking prudent financial decisions. In addition, Members noted that EFS was essentially a loan as it was money that would be repaid over 20 years and that the rate of interest charged would be at the rate set by the PWLB – this was in contrast to the historic figure levied against Councils who issued a Section 114 notice which were required to pay the PWLB rate of interest plus one per cent. The Executive Portfolio Holder for Finance and Resources noted that EFS was similar to capital borrowing which had already been undertaken, the Council was not borrowing new money. He indicated that from an accounting perspective, the Council was deferring the payment and booking £20 million worth of revenue expenditure onto the balance sheet as capital expenditure, which would be released over a 20 year period back into revenue.

In response to a question regarding additional clarity on financial governance, the Executive Portfolio Holder for Finance and Resources clarified that there was a bi-monthly financial review panel, and a budgetary savings panel had been set up by the Executive Director -Resources and the Section 151 Officer.

In response to a question regarding Local Government reorganisation and the financial matters, risks, and reserves held by each Council, the Executive Portfolio Holder for Finance and Resources indicated that the Council was in the process of gathering that information, and it would be a part of decision making going forward.

The Committee discussed the effects of the Fair Funding Review 2.0, noting that it would have a potential impact on the business rates received by the Council. In addition, the new calculation of need was also raised as a potential risk as it  ...  view the full minutes text for item 6.

Purpose: The report sets out the Annual Governance Statement (AGS) for the Council for 2024-25 for approval. The AGS summarises the key governance issues for the Council and the action plan to address these. The AGS is required to be approved by those charged with governance, the Governance Committee at West Berkshire, under the Accounts and Audit Regulations 2015.

The AGS will form part of the Council’s financial statements and will be considered by the Council’s external auditors, KPMG as part of their annual audit for 2024-25. The deadline for the production of the financial statements is the 30 June, and a draft AGS has been included in the draft financial statements.  This can be amended as part of the revisions to the financial statements during the KPMG external audit. The AGS will form part of the final financial statements for approval by the Governance committee upon receipt of the external audit of the 2024-25 financial statements.

The Code of Corporate Governance details how the Council complies with the CIPFA/SOLACE (The Chartered Institute of Public Finance and Accountancy, (“CIPFA”) and the Society of Local Authority Chief Executives (“SOLACE”) framework for good governance and supports the principles of good governance contained within this.

The Committee considered the report (Agenda Item 8) concerning the Annual Governance Statement for 2024/25.

The Deputy Section 151 Officer introduced the report and highlighted that the draft Annual Governance Statement had been published in the Council’s financial statement but needed to be approved by the Governance Committee. The Annual Governance Statement examined four key areas, the general Government requirements, and areas of focus for the upcoming year. These four key areas were financial resilience, delivering better value for Special Educational Needs and Disabilities (SEND) services, the transformation programme, and senior management structures. 

In response to a question about why ‘embedding senior management structures to provide clear and consistent direction and stewardship for the organisation’ was not included in the 2024/25 Annual Governance Statement, The Audit Manager noted that this was a result of the significant work that had been completed in 2023/24.

The Executive Portfolio Holder for Finance and Resources indicated that it would be beneficial if a RAG rating and the risk heat map in the internal audit report of Appendix F was adopted so that Members could better understand what had changed across the period.

The Committee also noted that a report was recently taken to the Schools’ Forum which outlined the progress made on ‘delivering better value in SEND services programme’, and that the cost avoidance and savings outcomes outlined had been formulated using the methodology provided by Central Government.

However, a point was raised that the issues with SEND funding, and the High Needs Block (HNB) deficit, were shared by all local authorities with responsibility for adult social care and children’s services. If the Government did not put a proposal forward to deal with HNB deficits, it would continue to sit on the balance sheet and require the Council to pay significant and increasing interest payments.

On the expanded transformation programme, Members noted that the savings made in the current financial year would be presented in the quarter one 2025/26 treasury outturn report, but that progress had been made in several key areas.

As the Committee were satisfied with the Annual Governance Statement as proposed, they agreed to approve the recommendations.

RESOLVED: That the Committee approve:

A)   The Annual Governance Statement (listed as Appendix A to the report), and

B)   The updated Code of Local Governance