Agenda and draft minutes

Apologies for absence were received from Councillor Blacker, for whom Councillor Elavalakan substituted.

It was RESOLVED:

that the Minutes of the meeting held on 15 October 2024 be signed as a true record.

It was RESOLVED:

that the Order of Business be confirmed as printed on the agenda.

There were no declarations of interest.

38.1.     Tracey Woods, Head of Pensions at Suffolk County Council, presented the Pensions Update.

38.2.     The fund value trend was positive, and it was noted that at the end of March 2024 this was at £4.5b which was a historic high for Suffolk however, was subject to change. 2024 was a historic year for the world with elections held in 50 countries and it was possible that international changes could impact the asset value. The next valuation would be undertaken in March 2025.

38.3.     The performance of the fund over the last 10 years showed how volatile performance could be. From last year to March 2024 the performance had been at 12.9% which when compared to other Local Authority funds, was above average. The performance in 2023/24 was strong which was largely due to equity and bond performance. Due to performance volatility, it was important to ensure there were a range of assets to minimise risk.

38.4.     With regards to the allocation of assets, a number of changes had been made due to the strong performance in 2023/24. Some money had been taken out of UK equities and the allocation to BlackRock and Newton had been reduced to 5%. Two new global equity managers, Longview and Baillie Gifford, had been taken on. Other changes included slightly increasing investments with Columbia Threadneedle Investments and coming out of a number of Government bonds. It was expected that less changes would be made next year when the valuation was undertaken however, it was anticipated that some changes would be made in private equity as the asset pool had completed a process of establishing private equity managers and this would provide the option to put more investment into the pool.

38.5.      At the last valuation the funding level was at 107% which was the first time the fund had been over 100%. It was noted that this was a position statement and until March 2025, it was unknown where the performance fund would be at this time and what this would mean for contribution rates. The funding level had increased largely because of the way liabilities were valued. Liabilities were tracked with UK gilt values. The responsibility of the fund was to ensure pensions could be paid in the long term. Work was undertaken with the Actuary when proposing appropriate employer contribution rates, of which lots of assumptions would be built in and all risks considered. Early modelling was taking place so that early estimates could be provided to all Council’s to support them with their financial planning. It was noted that the Actuary decided what the contribution rates would be.

38.6.     Discussions would take place over the upcoming months around what assumptions would be used for the valuation, employee contribution rates, and funding strategies. All investment gains could not continue to be re-invested as some of this would need to be withdrawn to pay benefits to members. It was important that when making investments that this could be easily moved when needed and  ...  view the full minutes text for item 38.

39.1.    Ian Blofield, Director – Resources & Housing, confirmed that this report had been circulated to all members of the Audit & Governance Committee prior to the meeting. It was noted that a disclaimed opinion had been given to the 2022-23 Statement of Accounts due to the issues faced nationally.

It was RESOLVED:

that the audit of the 2022/23 Statement of Accounts had been completed and that the final Accounts were available on the Council’s website.

40.1.     Shirley Jarlett, Assistant Director – Governance, presented the IBC Corporate Risk Register 2024/25. The Corporate Management Team reviewed the Corporate Risk Register monthly and a comprehensive review of the Register was undertaken in November 2024. The changes had been set out in the appendix to the report which were mainly around the planned control measures.   

40.2.     Councillor Fisher asked for further clarification regarding the methodology used to agree the impact rating for the risks, noting that Climate Emergency had been given a higher grading than Finance. Ms Jarlett explained that the grading and risk matrix was used when reviewing the risk register and each risk would be considered by all members of the Corporate Management Team to discuss the impact and agree the grades given to each risk. It was noted that the impact rating   was on a scale of 1-4 and judgement was used to decide what grade would be given and identify which grade related to Red, Amber and Green. Red areas required significant mitigations to try and reduce adverse impact.

It was RESOLVED:

that the reviewed Corporate Risk Register for 2024/25 be agreed.

41.1.    Ian Blofield, Director – Resources & Housing, presented the report and highlighted the key areas.

41.2.    The Budget Delivery Plan approved by Executive in September 2024 expected to add to the balances of the General Fund and work continued on the large savings programme which had been incorporated. 

41.3.    The £674k variance in the Housing Revenue Account was in  Maintenance & Contracts and the reduction in the repairs budget. It was originally believed that all alarm systems within the housing stock would need to be upgraded however; following professional advice this was only desirable and not a mandatory requirement.

41.4.    The accuracy and monitoring of the Capital Budget was being improved which included internal monthly monitoring and ensuring projects were all on track.

41.5.    A large write-off had been considered this Quarter which related to St Clare House. This has been agreed following a number of years of attempting to collect the debts for the building and the company had gone into Liquidation. It was noted that debts could be written back on if the opportunity for this arose. In response to a question about if due diligence was undertaken at an early stage with companies such as this, it was confirmed that the Council did not choose the businesses that operated in the town and was only responsible for collecting business rates. Payment performance of companies was monitored and there was a robust escalation of recovery in place including early reminders and enforcement bailiffs when required. 

41.6.    Councillor Fisher raised that the Council was borrowing to support its cashflow and investing a lot in Capital Spend and noted that it appeared that considerable borrowing would be required for a number of years. Councillor Fisher asked from a governance perspective, if there was a target number that should not be exceeded with regards to how much of the Council’s income was being used to repay its debt.

41.7.    Mr Blofield advised that the Council was not currently borrowing as much as the average Local Authority partly due to high interest rates and available money within the HRA that had previously been loaned to the General Fund as a cheaper alternative to borrowing. As this was no longer an option, it was likely borrowing from both the HRA and General Fund would increase. Although there was no specific target to work within, the Council aimed for this to be as low as possible and tended to track within the 15-25% range on the liability benchmark. This was monitored to ensure any significant movement year on year was considered. At present, there were no concerns about borrowing and the Council was well within its borrowing limits.

41.8.    Councillor Fisher asked if the Public Works Loan Board borrowing was linked to interest rates or the gilt market and if this could raise issues for the Council. Mr Blofield confirmed that the PWLB was strongly linked to the gilt market as it was owned by the Government. The Council tracked interest rates on a daily  ...  view the full minutes text for item 41.

41.1.    Ian Blofield, Director – Resources & Housing, presented the report and confirmed that this would be considered by Full Council at the meeting in January 2025.

41.2.    Mr Irvine asked for clarification regarding the external loans outstanding and the repayments that had been made thus far. Mr Blofield advised that £231m was the debt for the whole of IBC’s Council stock. The repayments were made taking into account a range of things including fixed rate interest loans and the maturity of the loan. It was always expected that between £3-4m would be paid back per year however, this was dependent on a number of things and was not always predictable.

41.3.    Councillor Forster asked if the date that the loan matured was the date by which the Council had to repay. Mr Blofield confirmed it was and noted that there were a number of loan repayments due in 2025. For some loans, the company would repay the Council first and then the Council would repay the loan. In some circumstances and depending on the market, debt could be rescheduled. The Council had a cashflow forecast which allowed forward repayments of debt.

41.4.    Councillor Forster noted that a total of £12.5m was due to be repaid over the next 7 months and asked if it was expected that this would be paid. Mr Blofield explained that the company loan due in June 2025 was expected to be rescheduled which would be undertaken in accordance with the operational plan that dealt with all repayments. There were a number of circumstances which determined what action would take place and plans for repayment would be tailored around the pattern of cashflow.

41.5.    It was confirmed that the two loan repayments due in December 2024 had been paid.

RESOLVED:

that the Treasury Management operations for the period 1 April 2024 to 30 September 2024 be noted.

Reason: This sets out how the Treasury Management operations have been conducted in accordance with the strategy agreed by Council.

40.1.    Shirley Jarlett, Assistant Director – Governance, presented the Standards Update which was an annual report provided to the Audit & Governance Committee relating to all matters connected to Standards and the Code of Conduct.

40.2.    The report set out the number of complaints which had been received this year which, as a credit to Councillors, was low and no complaints had been considered as potential breaches of the Code of Conduct. Therefore, no action was required in relation to local resolution or referral to the Audit & Governance Committee.

40.3.    It was noted that there was only one independent member currently in the pool shared by Suffolk Council’s. This had not caused any difficulties however; the Monitoring Officer at Suffolk County Council would start the recruitment process to the pool early next year.

40.4.    Training was provided as part of the induction to new Councillors at the beginning of the Municipal Year and every month a meeting was held between fellow Monitoring Officers to discuss experiences and Code of Conduct matters.

40.5.    It was noted that the LGA was running a consultation in relation to the Code of Conduct of which a questionnaire about this should have been circulated to all Councillors with a return date of 9^th January 2025.

40.6.    Councillor Fisher noted that the complaints process could be stressful for Councillors and that the 9 complaints received had not been assessed as a breach of the Code of Conduct. Councillor Fisher asked if there was a set timescale that complaints had to be assessed and responded to. Ms Jarlett acknowledged that Code of Conduct matters could be concerning to Councillors and advised that once a complaint was received, the Councillor would be contacted as soon as possible. There were a number of variables when dealing with these matters; this included requiring further clarification from the complainant and ensuring all forms were completed. Once the Councillor was contacted, they would be asked for feedback and then discussion would take place with the Independent Person. Complaints were dealt with as quickly as possible however, it was possible that the process could take longer when Councillors were “twin-hatters” as this required liaison with the other Council’s Monitoring Officer. The Council also offered the support of an Independent Person to Councillors whilst a complaint was considered.

40.7.    The Chair noted the importance of having the Code of Conduct to ensure people who felt dissatisfied could raise this and that any complaint was considered fairly, transparently, and efficiently.

It was RESOLVED:

that the report be noted.

44.1.    Siobhan Martin, Head of Internal Audit, presented the Internal Audit Progress Report 2024/25.

44.2.    Ms Martin highlighted the key areas which showed what reports had been issued over 24-25. Agency staff had been used to support the plan which was a sufficient plan of work to cover the size of the Council. This work allowed a Head of Internal Audit opinion to be given at the year end. The Internal Audit Plan was flexible, and discussions took place halfway through the year with Senior Officers to establish the progress of the areas being audited.

44.3.    The areas of coverage of each service area were explained within the report. It was noted that the reports issued so far this year had all been issued an audit assurance opinion of ‘reasonable’ or ‘effective’.

It was RESOLVED:

i.             that the activity of Internal Audit Services between the period 01/04/24 and 30/11/24 be noted;

ii.            that the refreshed Internal Audit Plan for 2024/24 be reviewed and approved.

44.1.    Siobhan Martin, Head of Internal Audit, presented the Corporate Fraud Progress Report 2024/25 which showed the output works taking place by the Corporate Fraud Team which included Right to Buy and Housing matters.

44.2.    Throughout the year the team had been involved with International Fraud Awareness week. This included promoting the work of the Corporate Fraud team to other areas within the Council and raising awareness with employees. The team had frequent contact with other anti-fraud organisations and intelligence would be transferred between organisations.

44.3.    The Chair noted the notional savings made to the Council with regards to tenancy fraud and right to buy.

44.4.    In response to Councillor Fisher, Ms Martin explained that for any high-volume impact areas, such as Housing, the Corporate Fraud Team were involved as part of the gateway checks and due diligence work required at the start. It was noted that the Corporate Fraud Plan 2025-26 identified the areas within the Council which had risk profiles in place and an in-depth exercise had been undertaken with each Head of Service to record what corporate fraud risks were within that area, which would then be considered as part of the Fraud Risk Wheel. This was a good governance practice for anti-fraud which had been established by CIPFA.  Ms Martin reassured the Committee that risk profiling was undertaken across the Council frequently and that national fraud alerts were provided regularly which enabled advice to be given to service areas to prevent similar attacks that had occurred in other Local Authorities.

44.5.    A fundamental aspect of the team’s work was prevention, pursue and in rare circumstances, prosecution.

It was RESOLVED:

that the work of the Corporate Fraud Service between 01/04/2024 and 15/11/2024 be noted.

46.1.    Siobhan Martin, Head of Internal Audit, presented the Whistleblowing Annual Report 2024/25. The report identified the number of Whistleblowing reports made. Whistleblowing was the common phrase used under the Public Interest Disclosure Act which was an important piece of legislation that provided people protection. Whistleblowing was taken very seriously by the Council, and all were investigated. The number of whistleblowing reports was low, and the outcome of the investigation was always provided to the whistleblower.

46.2.    For each of the incidences which had been occurred, recommendations were raised internally for improvements and ‘lessons learnt’ to be implemented. The whistleblowing policy was promoted throughout the Council and sessions around this process were held with Senior Officers.

46.3.    Mr Irvine noted the number of reports made within Parks & Cemeteries. Ms Martin advised that this was in relation to a couple of incidences around Health & Safety but had not been any breaches in law. Sometimes following other escalation procedures, a person may report a concern under whistleblowing. It was noted that whistleblowing had a threshold and criteria which had to be met to be considered as whistleblowing and taken further.

46.4.    Mr Irvine asked how malicious reports under whistleblowing would be identified. Ms Martin advised that a malicious whistleblowing accusation had not been made at Ipswich Borough Council in the last 15 years however, all whistleblowing was considered to identify the reasoning behind them. 

46.5.    Councillor Fisher noted that no whistleblowing reports had occurred in the last 12 months and asked if employees were aware of the whistleblowing procedures or if more publicity of this was required to enable employees felt safe reporting concerns. Ms Martin confirmed that the whistleblowing policy was promoted frequently at the Council, raised at Senior Management meetings. Training on this would also be provided to senior officers by Protect, who was the UK’s leading whistleblowing charity.

46.6.    Councillor McSweeney asked if WhatsApp could be used as an alternative route of contact for employees to use as this would provide a quicker way of reporting if an event happened whilst an employee was active at work. Ms Martin advised that in her view, there were a number of privacy issues with WhatsApp but the suggestion could be considered further. It was noted that whistleblowing was very different to normal complaints, which would be considered via the usual reporting processes, however instances such as this could meet the threshold of whistleblowing if repeated incidents were taking place and not being dealt with satisfactorily.

46.7.    Councillor Frost asked if a question regarding the awareness of the whistleblowing policy could be included within a staff survey. Ms Martin agreed to discuss this suggestion further.

It was RESOLVED:

that the report be noted.

47.1.     Siobhan Martin, Head of Internal Audit, presented the Upcoming Changes to Public Sector Internal Audit Standards. The PSIAS had been revised and in January 2024, the new Global Internal Audit Standards (UK Public Sector) was published which would go ‘live’ on 1^st April 2025. This refined the standards already in place and the key changes were listed within the report which would ensure the Council was globally aligned.

47.2.     A training session on the new standards would be held with the Corporate Leadership team and with all members of the Audit & Governance Committee.  

It was RESOLVED that:

i.               the main changes and implications arising from Global Internal Audit Standards (UK Public Sector), the expected IASAB Application Note for the same, and the proposed CIPFA Code of Practice for the Governance of Internal Audit in Local Government be noted;

ii.             that the timeline and proposals for transition be endorsed.

48.1.    Siobhan Martin, Head of Internal Audit, presented the Recently Issued Reports and confirmed that 5 were issued a ‘reasonable’ assurance opinion and 2 had been issued ‘effective’.

48.2.    Councillor Fisher referred to the Housing Benefits 2023/24 report and raised concerns regarding the 3^rd Action which had been given a target date of 31 March 2025. All Council employees had a mandatory responsibility to report concerns if they believed a child was at risk and Councillor Fisher asked if a refresh for relevant service areas was required. Ms Martin confirmed that in this instance the issue was immediately rectified, and the processes would be changing in response to this. Ms Jarlett, Assistant Director - Governance, advised that the suggestion for further safeguarding training would be considered further. It was confirmed that all employees received safeguarding training as part of their mandatory induction.

RESOLVED:

that the following Audit Reports be noted:

1.    Council Tax and NNDR 2023/24 [Effective]

2.    Housing Benefits 2023/24 [Reasonable]

3.    Treasury Management 2023/24 [Reasonable]

4.    Debtors 2023/24 [Reasonable]

5.    Cash & Bank Reconciliations 2023/24 [Reasonable]

6.    Payroll 2023/24 [Effective]

7.    Housing Rents 2023/24 [Reasonable]

49.1.     Siobhan Martin, Head of Internal Audit, confirmed that there were currently no overdue recommendations.

49.2.     The Chair thanked Ms Martin and her team for their hard work ensuring there were no outstanding recommendations.

It was RESOLVED:

that the report be noted.

50.1.    Councillor Fisher raised the potential Local Government reorganisation in the future and asked from a governance point of view if, as and when the decision took place, the Work Programme should include a set procedure around this that could be considered on a regular basis. 

50.2.    Shirley Jarlett, Assistant Director – Governance, advised that this would be considered when the Risk Register was reviewed, with the expectation that a new risk would added.

50.3.    Ian Blofield, Director – Resources & Housing, noted that the External Auditor required the 2023-24 Audit of the Statement of Accounts to be signed off by 18^th February 2025. It was suggested that the similar process used for the 22/23 audit be followed whereby after discussion with the Chair, the completion report would be issued with a disclaimed opinion and circulated to all members of the Audit & Governance Committee.

It was RESOLVED:

that the Audit & Governance Committee Future Work Programme 2024/25 be noted.

To consider excluding the public (including the Press) from the meeting during consideration of the following items under section 100 (A) of the Local Government Act 1972 as it is likely that if members of the public were present during that item there would be disclosure to them of exempt information as defined within paragraphs 3 & 4 of Part 1 of Schedule 12A of the Act.

Resolved:

that the Public (including the Press) be excluded from the meeting during consideration for the following items under Section 100 (A) for the Local Government Act 1972 as it was likely that if members of the public were present during these items there would be disclosure to them of exempt information defined within paragraphs 3 of Part 1 Schedule 12A of the Act.