Agenda item
Annual Governance Statement
This report sets out the proposed Annual Governance Statement for inclusion in the council’s accounts for 2010/11 as required by the Accounts and Audit Regulations 2003 (as amended).
Minutes:
The Committee considered a report that set out the proposed Annual Governance Statement for inclusion in the council’s accounts for 2010/11 as required by the Accounts and Audit Regulations 2003.
In introducing the report, Clive Heaphy, Director of Finance and Corporate Services set out a number of significant governance issues which had been identified, a summary of the actions taken to date and the progress made against those issues raised in the 2009/10 Annual Governance Statement.
The Director continued that the One Council programme which was the key area of focus for the Council going into 2011/12 had continued to progress during 2010/11 with robust governance arrangements in place. Delivery against the programme was fundamental to the financial health of the Council and to the delivery of efficient and effective services to the public. The Director pointed out that one of the key drivers of the One Council programme was the need to achieve significant savings over the period 2010-2014. The situation had been made even more difficult as a result of the cuts made by central Government during the year, coupled with additional demands on services. Out of the required savings of £41.7, £21million would be found from the One Council programme, leaving the remainder to be found through other means including staffing reductions. He stressed that consultation with residents and all other key stakeholders would continue to assume a significant importance during this period.
The Director advised the Committee that the Council had made a significant progress with the construction of the new civic centre which was expected to be in use by March 2013, It would be the “greenest” building in the country, and would deliver net savings of approximately £2million per year through reduced running and maintenance costs. He also advised members that the Government’s decision to abolish the Building Schools for the Future (BSF) programme during 2010/11 had had a significant impact on the Council’s resources. As this represented a key area of challenge which needed to be addressed, actions were being determined to avoid the Council failing to meet its statutory duty to ensure sufficiency of school places so as to avoid the potential of approximately 188 unplaced Reception pupils for September 2011. On a plus note, the Director drew members’ attention to the Treasury Management Strategy and Annual Investment Strategy for 2010/11 and added that about 50% of the original investment with Heritable Bank had been recovered and that the recovery of funds deposited with Glitnir (Icelandic) Bank was progressing satisfactorily.
He continued that Environment & Neighbourhoods recognised monitoring and forecasting of income as a key risk, together with the actual level of income received in key areas including parking, planning, land charges and building control. Waste management costs had also been difficult to forecast. This had been identified in previous years and work had been progressing on developing more sophisticated models of the financial performance in those areas. Further work would be needed though in 2011/12, both in respect of waste management and the parking account.
Clive Heaphy highlighted the main areas of concern including significant budget overspend in the service for children with disabilities and children’s Social Care Placements within Children & Families. In addition to the above, leasing arrangements had been entered into by some schools without the review and approval of the Council’s Director of Finance. There were also control weaknesses in relation to the education capital portfolio, following the transfer of responsibility from Children & Families to the newly formed Regeneration & Major Works department. In outlining the measures that were being taken to address the above concerns, the Director stated that a joint governance action between Children & Families, Finance & Corporate Services, and Legal & Procurement was being taken to address the issues with leasing. In concluding the presentation, the Director added that the Council proposed over the coming year to take steps to address the above matters to further enhance our governance arrangements. He added that the steps identified would address the need for improvements that were identified in our review of effectiveness and would monitor their implementation and operation as part of the next annual review.
Councillor Choudhary expressed concerns about the consistent budget overspends on Children & Families and Adult Social Care and enquired about measures to ensure that those did not recur. The Director responded that those areas had traditionally suffered from systemic under-funding and that their budgets had not been increased in past years to cope with service demand. He added that in addition to robust monitoring measures, the Council was spending on essential services and maintaining a grip on administrative costs. Councillor Van Kalwala noted the likely impact of the changes to the benefit system on the Council and enquired as to whether appropriate measures were being put in place to minimise the impact. In response, the Director stated that the council was fully aware of the impending changes but that the Government had yet to confirm many of the critical details in the future.
The Chair noted that BHP could represent organisational risks with potential impact on pension funds. In responding to this, the Director informed the Committee that specific risks associated with ‘opt outs’, monitoring and control and rent arrears were being addressed. Andrea White, District Auditor, added that she expected the Council to make the changes very quickly and that this would form part of the audit to be reported to the Committee at its meeting in September 2011. In bringing the discussion to a close, the Chair suggested the inclusion of key management risk and risk management strategy on the agenda for the next meeting.
RESOLVED:
(i) that the report Annual Governance Statement be approved subject to adding in further issues (there were 2 in the internal audit annual report and 1 other to do with funding) these amendments were to be made by Clive H
(ii) that the Director of Finance and Corporate Services submit a report to the next meeting on key management risk and risk management strategy.
Supporting documents:
- 10- AGS 2010-11 - Cover Report, item 10. PDF 70 KB
- 10a- Annual Governance Statement 201011 app, item 10. PDF 257 KB