Agenda and minutes

Members are asked to declare any disclosable pecuniary or affected interests in respect of any matter to be considered at this meeting.

Any Member with a Disclosable Pecuniary Interest in a matter should withdraw from the meeting when the matter is under consideration and should notify the Democratic Services Officer in attendance that they are withdrawing as they have such an interest. If the Disclosable Pecuniary Interest is not entered on the register of Members interests the Monitoring Officer must be notified of the interest within 28 days.

Any Member with an affected Interest in a matter must disclose the interest to the meeting.  There is no requirement to withdraw from the meeting when the interest is only an affected interest, but the Monitoring Officer should be notified of the interest, if not previously notified of it, within 28 days of the meeting.

There were no declarations of interest.

To approve as a correct record the minutes of the previous meeting of the Committee

RESOLVED that, subject to the amendments above, the minutes of the meeting of the committee held on the 19 June 2024 be approved as a correct record and signed by the Chairman.

There were no urgent items of business.

To receive the 2024 Annual Governance Statement and an update on progress against the Action Plan.

Sanjay Prashar. Borough Solicitor presented the Annual Governance Statement and action plan.

The Annual Governance Statement was a statutory publication to be prepared and approved each year to review the effectiveness of the authority’s system of internal control, in advance of the approval of the Statement of Accounts. The statement was arranged around the CIPFA principles of good governance.

The following key areas and key successes were highlighted:

·        Development of the Council Plan 2023-27

·        Development of the Council’s Climate Change Strategy

·        The initiation of a Business Change programme

·        The publication of the borough’s Local Plan

·        The development of a new Economic Strategy

·        The instigation of a Berkshire-wide Prosperity Board

·        Progress on the joint venture at Coopers Hill and Market Street

Sanjay also drew members attention to the challenges of the year, including a budget overspend albeit a smaller overspend than had been forecast, and continuing challenges in recruitment and retention which was a common concern across local government.

The statement also drew on the previous year’s action plan, of which one action had been carried over regarding whistleblowing procedures.

In response to questions, the following points were noted:

·        A typo was highlighted under principle E, Leadership & Management Development Programme which should read ‘45% of managers have not completed this training due to lack of time’.

·        Sanjay commented that he would endeavour to complete the review of the whistleblowing policy before its final target date of 31 March 2025. The current whistleblowing policy had been reviewed in terms of compliance with legislation and had been found to be compliant. Efforts needed to be made to ensure the policy and related procedures were fully communicated across the Council, and officers needed to be sure that people who brought complaints felt protected.

·        A separate report on Councillor Code of Conduct complaints would be drafted to come to this Committee’s meeting in September 2024.

·        Work was underway to address the weaknesses identified in 2023/24 Budget Monitoring Internal Audit, which was identified on the 24/25 action plan. All budget managers were now required to sign to indicate their understanding of their own budget, and accepting of the responsibility of it, in order to spread financial ownership across the organisation.

·        It was clarified that the Contract Monitoring work listed under the 2023/24 action plan was ongoing under the strategic procurement group. A contracts register was being developed, and the matter was now concluded in respect of the action plan.

·        It was clarified that the member officer protocol was already in place to set out the relationship between members and officers, but work was ongoing to ensure it was fit for purpose in the new political environment.

·        A constitution review group was in place for members to review changes to the constitution, and changes would be brought to this Committee beginning with the Contract Standing Orders later on this agenda. In 2017, the Governance & Audit Committee had approved a process of delegation to the Borough Solicitor to make minor consequential changes to the constitution, for example job  ...  view the full minutes text for item 11.

To seek endorsement of changes to Contract Standing Orders to bring them into line with the requirements of the Procurement Act 2023.

Alistair Little, Head of Corporate Procurement presented the revised Contract Standing Orders.

The Contracts Standing Orders in the constitution advise how the Council procures goods, works and services. The Government had brought in the Procurement Act 2023, and had delayed adoption of the Act until October 2024 to give commissioners time to take account and adjust to the changes. The new legislation drove the new contract standing orders, which implemented the changes locally.

In addition to the new legislation, audit activity in the Council had highlighted a number of areas of the internal processes which could be improved beyond the legislative requirement.

The amended Contract Standing Orders aimed to introduce a more proportionate and balanced approval procedure, giving greater autonomy to officers for lower level spends and strengthening governance arrangements and member oversight for higher level spends. The new requirements also gave clarity around the publication of such decisions.

In response to questions, the following points were noted:

·        Officers had been working to implement the new legislation for the last 14 months, including redrafting these Contract Standing Orders, engaging the wider organisation in consultation on procurement processes, recruiting additional temporary resource to prepare for the change, and developing templates and guidance documents to support officers with the changes. It was noted that it was likely that officers would be working to implement the changes right up until the October 2024 deadline, but that this was common across local authorities.

·        Members recognised the wholesale change in the Contract Standard Orders and commented on the greater level of detail in this version.

·        The Committee welcomed the delegation of authority to officers for lower level spends.

·        It was clarified that if the same requirement would be procured several times, commissioners were required to group the spends together. Alistair gave an example of procurement of care services, which would be grouped together to get its appropriate sign-off.

·        The current Contract Standing Orders stipulated that payments between £400k and £1m required Executive Member sign off, and any payments £1m and above needed Executive sign off. The new Contract Standing Orders proposed to lower the point for Executive Member approval from £400k to £213,577 to meet the requirements of the Procurement Act. The strategic procurement plan would be improved to give members and officers greater clarity and certainty around methodology and value for money.

·        Members clarified that where reference was made to the ‘member’ in the revised Contract Standing Orders, this should either read Executive Member or the Executive.

·        It was clarified that the links in the revised Contract Standing Orders would not be completed until the amendments to the public website were made after the legislation was adopted in October 2024.

·        The threshold would be updated every two years to match European levels, and the Council would maintain a separate threshold guide on the intranet for officers to refer to without requiring constitutional changes.

·        Any procurement and contract which had started before 28 October 2024 had the current legislation applied to it for the duration  ...  view the full minutes text for item 12.

To enable the Council’s appointed External Auditor for the 2022/23 accounts (Ernst & Young) to present to the Committee their interim Value For Money report for that accounting year.

Andrew Brittain, Ernst & Young presented the Interim Value for Money report for 2022/23 and highlighted some key areas.

There had been no significant weaknesses for the year ending March 2023. It was noted that the Annual Governance Statement for 2022/23 had not been available until September 2023 which was not in line with requirement however it was not anticipated that any investigation was necessary.

The report also investigated the SEN provision and action plan. While auditors were assured that this was being addressed, it was brought to the Committee’s attention as a key area of interest.

The Committee was asked to note the report, which would be finalised following the issue of expected legislation and guidance to clear the backlog of audit work.

The report was noted by the Committee.

To enable the Council’s appointed External Auditor for the 2023/24 accounts (KPMG) to present their audit plan for this accounting period.

Andrew Cardoza, KPMG presented the 2023/24 plan and drew members’ attention to a few key areas.

Andrew highlighted the misstatements which would be reported to the Committee above £301k.

KPMG planned to review the 2022/23 audit with Ernst & Young.

Andrew highlighted the fact that KPMG would work with the Council’s internal audit team, and KPGM’s own Real Estate Valuation Experts and Pensions Centre of Excellence to inform their risk assessment work.

It was noted that the significant risks in this audit were related to valuation of land and buildings, valuation of investment property, valuation of post-retirement benefit obligation and management override of controls. Expenditure recognition and classification was also noted as a possible audit risk.

The risk assessment had highlighted risks around financial sustainability due to the internal audit report on financial control and budget holders, and around appropriate governance with a significant number of new Councillors.

In response to questions, the following points were noted:

·        Members requested an executive summary of this report for better transparency with residents. It was noted KPMG would produce a 1-page summary for any reports possible, but that it was difficult to summarise this particular plan.

·        It was clarified that the valuation of land and buildings and valuation of property had been included as the most significant risk due the high value in the accounts. Valuation required lots of judgements, and KPMG’s own valuation team would verify the assumptions of the Council’s valuers. It was important for these asset values to be correct for any decisions made on them.

·        While the audit would not look at whether the Council’s assets were delivering value for money, the audit would look at whether the Council’s assets were being used to their full potential.

·        KPMG would moderate across the Local Authorities under its remit and would make recommendations based on their experience across the wider public sector.

·        Money Market Funds were not part of the audit process but could be assessed through treasury management arrangements.

The report was noted by the Committee.