Agenda and minutes

Venue: David Hicks 1 - Civic Offices, Shute End, Wokingham RG40 1BN. View directions

Contact: Madeleine Shopland  Democratic & Electoral Services Specialist

Media

Items
No. Item

47.

Apologies

To receive any apologies for absence

Minutes:

Apologies for absence were submitted from Councillors Gee and Loyes.

48.

Minutes of Previous Meeting pdf icon PDF 247 KB

To confirm the Minutes of the Meeting held on 30 November 2021.

Minutes:

The Minutes of the meeting of the Committee held on 30 November 2021 were confirmed as a correct record and signed by the Chairman subject to the following amendment:

 

Item 40 - Helen Thompson commented that the most prominent estimates that were included were around Property, Plant and Equipment valuations and the IAS 19 Pension Liability reported in the Financial Statements. 

 

Councillor Shepherd DuBey referred to the Climate Emergency audit being requested by the Audit Committee in addition to the Overview and Scrutiny Committee and sought further clarification.  The Assistant Director Governance agreed to update as part of the Corporate Risk Register item.

49.

Declaration of Interest

To receive any declarations of interest

Minutes:

Councillor Imogen Shepherd-DuBey declared a general Personal Interest on the grounds that she had money in the Berkshire Pension Fund.

 

50.

Public Question Time

To answer any public questions

 

A period of 30 minutes will be allowed for members of the public to ask questions submitted under notice.

 

The Council welcomes questions from members of the public about the work of this committee.

 

Subject to meeting certain timescales, questions can relate to general issues concerned with the work of the Committee or an item which is on the Agenda for this meeting.  For full details of the procedure for submitting questions please contact the Democratic Services Section on the numbers given below or go to www.wokingham.gov.uk/publicquestions

Minutes:

There were no Public questions.

 

 

51.

Member Question Time

To answer any member questions

Minutes:

There were no Member questions.

 

52.

Corporate Plan - Annual Review pdf icon PDF 270 KB

To consider the Corporate Plan – Annual Review.

Additional documents:

Minutes:

This item was deferred to the 30 March meeting to enable it to be considered alongside the Statement of Accounts.

 

Councillor Shepherd-DuBey asked that it be updated for the next Committee meeting.

53.

Wokingham Borough Council Audit Committee Progress Report - update on the 2020/21 statement of accounts pdf icon PDF 161 KB

To receive the Wokingham Borough Council Audit Committee Progress Report.

Minutes:

The Committee received an update on the 2020-21 statement of accounts.

 

During the discussion of this item, the following points were made:

 

·       Helen Thompson advised that the report had been co-authored with Council officers.

·       The audit was well progressed.  However, both the Council and EY teams had had to balance priorities and sickness.  In addition, the delayed start to the audit had had an impact on progress.

·       At the end of December there had still been 60% of local audits in progress and this number was gradually reducing.

·       Helen Thompson went on to highlight how progress was assessed.

·       It was noted that even had all the work within the Council’s and EY’s control been completed it would not have been possible to sign the Financial Statements following the Committee meeting as the letter received from the Pension Fund auditor had stated that work was ongoing and that there could still be issues arising.  They were expected to report in early March, allowing the accounts to be presented at the Committee’s extraordinary meeting at the end of March.

·       With regards to Housing Benefits, the report had stated that the deadline was the 31 January.  This had since been extended by the Department of Work and Pensions, to 28 February.  Procedures were in place to monitor the Housing Benefits audit.

·       The Interim Assistant Director Finance emphasised that his previous local authority had been in a similar position and faced similar challenges.  He felt that the Council and EY teams had a positive relationship and way of working. He was confident that the March deadline would be met. 

·       Councillor Sargeant commented that the report stated that it was not possible to access the detailed models of the actuaries and that EY were producing their own estimates.  He questioned whether these estimates were being used by other auditors of Berkshire authorities, and what would be the outcome should there be a material difference between EY’s estimates and those of the actuaries.  Helen Thompson explained that the 2021 audits had been impacted by the revised auditing standards ISA on estimates, which had brought in more rigorous requirements in terms of looking at models.  A range rather than a precise materiality level was being worked to, so that if when the liability was recalculated using the same information as the actuaries, the figure arrived at was within 2% (plus or minus) of the total liability.  Helen Thompson indicated that of the audits that she had been involved in, they had all come within range apart from one, and this had been as a result of an error by the actuaries, which had then been corrected.  The report was expected imminently, and it was anticipated that there would be any issues.

·       Councillor Shepherd-DuBey referred to the valuation of land, building property, plant and equipment, and investment properties.  She questioned whether there were any material differences in the valuation of properties that remained unresolved, and if so, how much they amounted to, and the differences that would result  ...  view the full minutes text for item 53.

54.

Treasury Management Strategy 2022-2025 pdf icon PDF 630 KB

To receive the Treasury Management Strategy 2022-2025.

Additional documents:

Minutes:

The Committee considered the Treasury Management Strategy 2022-2025.

 

During the discussion of this item, the following points were made:

 

·       The Committee had received the Mid Year report in November 2021.

·       Councillor Sargeant referred to the graph detailing the Capital Funding Programme 2022/23 to 2024/25, and questioned whether the CIL and S106 forwarded funding was expected to continue beyond 2022/2023.  The Interim Assistant Director Finance indicated that this represented the CIL that was currently being funded in advance of receiving, and could be subject to change.

·       With regards to capital assets, such as Carnival Pool car park, Councillor Shepherd-DuBey questioned whether the impact of losses to property values had been taken into consideration and what impact they would have on the Strategy.  The Interim Assistant Director Finance commented that the immediate effect of a loss on the valuation would not affect the General Fund.  An adjustment was made so that the Revenue Account properly reflected the financial rather than the accounting position.  The Chief Accountant indicated that a revaluation exercise would be carried out as part of the accounts.  Any losses or gains would be at the point that an asset was disposed of, in terms of realisable losses or gains.

·       Councillor Shepherd-DuBey stated that some local authorities were not charging Minimum Revenue Provision (MRP) on debt related to certain assets.  Whilst some authorities were making Minimum Revenue Provision for commercial investments funded by borrowing, some were still not paying MRP regarding borrowing related to borrowing associated with investment assets or capital loans.  The statutory guidance was clear that financing for investment assets and capital loans required the provision to be made.  She asked what the Council was doing to prepare for these changes and what the implications would be for revenue and services.  The Interim Assistant Director Finance advised that the current provision was in line with the regulations which allowed for the Chief Financial Officer to make a prudent provision.  There was currently a consultation to change those arrangements, which would finish on 8 February.  Officers were feeding into this. 

·       In response to a question from Councillor Ross regarding the rate of inflation, the Interim Assistant Director Finance, indicated that future borrowing could become more expensive as interest rates grew.  Advice from external partners around future borrowing was being sought.  Inflation could affect the cost of capital programmes.  Monitoring was being undertaken and contingencies were being built into a number of the capital programmes.

·       In response to a question from Councillor Shepherd-DuBey, the Interim Assistant Director Finance stated that the Strategy and approach were kept under review and would be changed as required.  The Chief Accountant added that with regards to the Town Centre regeneration, all the income generated was covering the financing costs so there was no impact to the tax payer.  It was forecasted that this income would be in excess of financing costs over the next few years and would contribute returns to the General Fund.  The Deputy Chief Executive added, that with all the supported  ...  view the full minutes text for item 54.

55.

Corporate Risk Register pdf icon PDF 520 KB

To receive the Corporate Risk Register.

Additional documents:

Minutes:

The Committee considered the Corporate Risk Register.  In addition the Deputy Chief Executive took Members through risks that related to his Directorate.

 

During the discussion of this item the following points were made:

 

·       There were no new risks. 

·       The Assistant Director highlighted follow up actions taken with regards to three areas previously raised. 

·       More detail had been provided about the Climate Emergency risk.  Members were advised that the internal audit of Climate Emergency was underway, and the Internal Audit team were working in collaboration with Price Waterhouse Cooper.  It was expected that the findings of the audit would be reported to the next Committee meeting.  A query had been raised around carbon accounting, which was a very new area for local authorities.  Options were being looked at around the 2022/23 internal audit plan to provide assurance around that particular specialist area.  Climate Emergency UK, another independent source of assurance, had rated the Council’s Climate Emergency Action Plan as 8th in the country amongst single tier authorities.  The Deputy Chief Executive added that it had been rated 1st for governance and development.

·       With regards to the Adult Social Care supplier risk a more detailed description had been provided around the mitigations.

·       With regards to the High Needs Block risk and the delay around the opening of the Winnersh Farm School, which was now due to open in 2023, the impact was being quantified and would continue to be monitored.

·       A correction to the summary matrix was noted.

·       The Deputy Chief Executive provided an update on the financial risks.  The nature of local government finance meant that work was undertaken to mitigate the risks, but additional risks and challenges continued to arise.  The Chief Finance Officer’s report highlighted many of these risks.  There was a significant number of unknowns in terms of impact.  Monitoring and mitigations would continue to be carried out.

·       The level of inflation over the course of the next year and beyond was unknown.  The Council would try to provide for the impact of inflation, in the context of individual schemes and a corporate contingency.  The Deputy Chief Executive emphasised the need for a sufficiency of safeguard but not an over sufficiency.

·       The Adult Social Care reform did not start until October 2023 although onboarding staff to deal with its implications would begin prior to this, so costs would be felt earlier.  The reforms could potentially have an impact on the Council of over £20million a year, although the full impact was not likely to be felt until year 5, suggesting a graduated impact. 

·       The Local Government Finance settlement was another area of uncertainty, which had been received for 2022/23 only.  A longer-term settlement had been expected and would have provided more financial security, which helped the Council’s financial planning.  A strong levelling up agenda was not likely to be favourable to Wokingham, which was the lowest funded unitary.  The Council would continue to make the case for funding.

·       The outcome of the MRP consultation was awaited.  ...  view the full minutes text for item 55.

56.

Independent Member of Audit Committee pdf icon PDF 311 KB

To receive a report regarding an Independent Member of the Audit Committee.

Additional documents:

Minutes:

The Assistant Director Governance presented a report regarding an independent member of the Audit Committee.

 

During the discussion of this item, the following points were made:

 

·       The Audit Committee had undertaken a self-assessment against CIPFA guidance on best practice for audit committees in local government.  One of the areas identified for further consideration was the inclusion/appointment of an independent member to the Committee.  The Corporate Peer Challenge had also highlighted that it should be considered whether the appointment of an independent member to the Audit Committee would strengthen governance.

·       It was noted that the primary considerations when considering Audit Committee membership should be maximising the committee’s knowledge base and skills, being able to demonstrate objectivity and independence, and having a membership that will work together.

·       It was clarified that an independent member would not have voting rights.

·       Councillor Shepherd-DuBey queried how the independent member’s performance would be assessed and what action would be taken (e.g., no longer paid) should they not attend meetings.  The Assistant Director Governance indicated that there would be a robust selection process.  What would be expected of the independent member would be made clear and built into the selection process as would any assessment criteria.

·       Members questioned how the appointment of an independent member would re-enforce political neutrality and the independence of the committee.  The Assistant Director Governance indicated that the CIPFA guidance advised they would help ensure that the Committee focused on the Council’s overall governance arrangements, as apolitically as possible.  Councillor Sargeant added that he felt that the level of debate and political neutrality was already good, but an independent member would help to give the debate an even more open and neutral feel.

·       Councillor Younis commented that it was important that it was made clear to the independent member, what the consequence would be should they not meet expectations. 

·       Councillor Ross asked whether job descriptions used by other Council’s when appointing an independent Audit Committee member had been consulted and was informed that they were.

·       Councillor Ross questioned whether the allowance amount should be referred to in the recommendation to Council.  The Assistant Director Governance explained that this would be taken from an existing budget so additional funds would not be required.

·       It was confirmed that it would be a 5 year appointment and that this would be made clear at the time of appointment.

 

RESOLVED:  That the proposal to co-opt an independent member onto the committee having been reviewed and discussed, Audit Committee agree that:

 

1) the independent member role profile be approved.

 

2) it be recommended to Council that:

a)    an Independent member be co-opted on to the Audit Committee on a non-voting basis and that the Constitution be updated accordingly to reflect this.

b)    the role profile be approved.

c)     the appointment of the independent member be delegated to the Audit Committee

d)    the process for selecting and recommending an appropriate candidate be delegated to the Assistant Director Governance in consultation with the Chair of the Audit Committee.