Agenda item

The Committee considered a report of the Assistant Director of Corporate Governance and Strategic Financial Management which brought to the attention of Members the following issues:

1. The outcome of the Best Value Inspection at Thurrock Council following the production of a public report in May 2023 setting out the detailed findings of the Best Value Inspectors. This included recommendations which if accepted, could impact on the work of this Committee in undertaking its governance role.
2. The initial reported findings of the Best Value Commissioners appointed at Woking Borough Council, and the subsequent issuing by the Council of a Section 114 Notice.
3. An update on financial issues at other Authorities including Nottingham City Council following the latest report in the public domain highlighting improvements are required in financial administration.
4. A report produced by the Public Accounts Committee on the timeliness of External Auditors on delivering an audit opinion on the accounts of Local Authorities by the statutory deadline.
5. The requirements of the Department of Levelling Up, Housing and Communities that Councils ensure that their S151 Officers could satisfy the role of the Accountable Officer in line with the requirements of the Department on the major grant schemes for the Future High Streets Fund, the Towns Fund and the Levelling Up Fund.
6. The creation of the Office for Local Government (Oflog) as an initiative to improve the oversight of Authority’s performance and adherence to Best Value legislation and the announcement by the Department for Levelling Up, Housing and Communities about a consultation on the proposed Best Value Standards and Interventions which will be applied to a Local Authority.

The issues detailed above (a – f), alongside the plans for change aligned to the creation of the Audit Regulation and Governance Authority (ARGA) which were reported to this Committee on 8^th June 2023, highlighted that there was a potential for significant changes to the future oversight of governance nationally, including the setting up of Oflog.

In addition, after a significant period of stability in the management of Local Government finances by Local Authorities, there were some high-profile cases where, due to poor financial management, four Authorities had become reliant on capitalisation directions from Central Government to enable them to set balanced budgets. As interest rates continued to increase it was possible that other Authorities who had invested large amounts in commercialisation projects compared to their annual revenue budget, would require financial support and therefore issue  a future Notice under Section 114(3) of the Local Government Act 1988 (a Section 114 Notice) advising that they were unable to manage their finances within the resources available to them. Whilst, it was reported, the Audit Committees in the four Authorities could not have prevented past events, they should have acted as an important check and balance in providing challenge.

The events, detailed above, could potentially impact on the work of both the Audit Committee and the Council’s four Scrutiny Boards in the future and all relevant information was therefore included in the Committee’s report, so that Members were as well briefed as possible on matters pertinent to their role.

Resolved:
That the Committee approves and endorses the approach undertaken by the Assistant Director of Corporate Governance and Strategic Financial Management, in respect of dealing with the issues outlined in the report.