Agenda and minutes

The following apologies were received:

• Councillor Benea, who was substituted by Councillor S Butt
• Darren Armstrong (Deputy Director Organisational Assurance and Resilience, Brent Council)

David Ewart (as Chair) also welcomed Amanda Healy in her new role as a Deputy Director Investment and Infrastructure.

Members are invited to declare at this stage of the meeting, the nature and existence of any relevant disclosable pecuniary or personal interests in the items on this agenda and to specify the item(s) to which they relate.

David Ewart (Chair) declared a personal interest as a member of CIPFA.

Councillor Kabir declared a personal interest in relation to Item 6 – DSG Deficit Management Plan Update as a Trustee of Compass Learning Partnership and the Chair of Governors at the Village School, both of which were special needs schools.

Independent Co-Opted Member Rhys Jarvis declared he was a Trustee of Multi Academy Trusts although none were operating within Brent.

To receive any deputations requested by members of the public in accordance with Standing Order 67.

There were no deputations considered at the meeting.

4.1   To approve the minutes of the previous meeting held on Wednesday 12 June 2024 as a correct record.

(Agenda republished to include the attached minutes on 22 July 2024)

4.2   To note the updated log of actions arising from previous meetings of the Committee.

RESOLVED that the minutes of the previous meeting held on Thursday 28 March 2024 be approved as a correct record of the meeting, subject to the following amendments:

• Removal of reference within the list of those present at the meeting to David Ewart as a Councillor.

• A correction to page 3, bullet point 6, to the spelling of ‘compared’ within minute 7: Annual Counter Fraud Report 2023-24.

• A correction to page 4, bullet point 5, to add in the word ‘to’ before ‘Tenancy and Housing’ within minute 7: Annual Counter Fraud Report 2023-24.

• A correction to page 7, paragraph 2 of bullet point 3, to change ‘response’ to ‘respond’ within minute 8: Internal Audit Annual Report 2023-24.

Members also noted the updates provided in relation to the following items listed on the Action Log:

• In relation to the Draft Statement of Accounts 23-24 - the Chair advised the Committee that it was still possible for members to raise queries with officers regarding the accounts prior to their final consideration by the Committee.

• In relation to the Strategic Risk Report – the Committee sought clarification over whether the new government budget update would affect the timetable of the next update coming to Committee.  Officers responded that risk registers were being updated on a more regular basis at Darren Armstrong's request and the timeline should not be affected. The Chair highlighted the importance of risk registers continuing to be monitored at all levels across the organisation.

With no further issues raised, the Committee RESOLVED to note the Action Log.

To consider any matters arising from the minutes of the previous meeting.

In relation to page 2 of the minutes – Action Log members were advised that the Committee would continue to be updated on development of the role for scrutiny in relation to overview of i4B and First Wave Housing and the relationship with the Audit & Standards Advisory Committee remit with a meeting scheduled with the Scrutiny Chair’s to ensure the necessary roles were clarified.

This report informs the committee of the Dedicated Schools Grant (DSG) deficit which has arisen mainly from overspend against the High Needs Block (HNB) of the DSG that is used to support children and young people with Special Educational Needs and Disabilities (SEND).

The report provides the historical context to the deficit and an update (as requested by the Committee) on the progress that has been made against the DSG Deficit Management Plan to address the deficit along with an update on Brent’s participation in the Department for Education's (DfE) Delivering Better Value (DBV) in SEND programme, aimed at supporting a reduction in expenditure against the High Needs Block of the DSG.

(Agenda republished to include the update report on 18 July 2024)

Nigel Chapman (Corporate Director of Children and Young People, Brent Council) introduced the report, informing the Audit and Standards Advisory Committee of the Dedicated Schools Grant (DSG) deficit which had arisen due to overspend against the High Needs Block (HNB) used to support children and young people with Special Educational Needs and Disabilities (SEND). The report also provided the historical context to the deficit and detailed progress made against the DSG Deficit Management Plan to address the deficit.

In considering the report the following key issues were noted:

·             The Committee noted that the deficit addressed in the paper was not a unique challenge to Brent alone, with many local authorities holding similar or higher deficits. The deficit challenges were described as a national systemic issue in the way local authorities were funded to support children and young people with SEND. The primary factor driving the deficit was the increase in demand for services in recent years, with Education Health and Care Plans (EHCPs) rising 44% in Brent over the past 4 years. This was due to more children’s needs being identified, and more children’s needs being met within mainstream settings.

·             Officers advised members that the situation was not improving and national reform was essential, with the previous government setting out a SEND Improvement Plan in 2023 to meet the challenges. The plan noted the systemic nature of the problem, partly driven by market issues and a reliance on the independent sector to provide placements for children in school where the local system could not meet demand. Brent was part of a Department for Education (DfE) programme trying to mitigate some of those pressures through the ‘delivering better value’ programme and had received DfE funding to mitigate pressures on the HNB.

·             There were a number of activities in place to manage demand more effectively and reduce growth in EHCP numbers by supporting families at an earlier stage. Brent was building more capacity in the system, with 400 additional placements and a new special school being built which would be managed by the RISE Partnership.

·             In terms of scrutiny of the deficit position, this happened internally within the Council with the Section 151 Officer taking part in regular challenge sessions with the Children and Young People department to consider progress. The Schools Forum considered the role of the DSG and pressures in the system, and there was quarterly reporting to the DfE on progress against the deficit management plan. In addition, the department would be attending the Community and Wellbeing Scrutiny Committee in September 2024 which would review broader issues in relation to SEND.

·             Minesh Patel (Corporate Director of Resources and Finance (and Sec 151 Officer)) addressed factors relating to the statutory override set out by government to allow councils to carry a deficit reserve on the balance sheet. Brent’s deficit was around £13.5m currently. He noted that when the override came to an end in 2025/26, the council would need to have funds in the General Fund to offset the deficit  ...  view the full minutes text for item 6.

This report sets out the outturn for the Council’s Treasury Management Activities for 2023-24 updating members on both  borrowing and investment decisions in the context of prevailing economic conditions and the Council’s Treasury Management performance.

Amanda Healy (Deputy Director of Investment and Infrastructure, Brent Council) introduced the report, giving a brief outline of the Treasury management report before handing over to Nadeem Akhtar (Senior Finance Analyst, Brent Council) to outline the following key points:

·             CIPFA guidelines required the Council to submit the report for scrutiny at the Audit and Standards Advisory Committee prior to going to Cabinet for approval and Full Council.

·             The report outlined how the council complied with its prudential indicators for 2023-2024 as approved by Full Council in February 2024. This was detailed in Appendix 4, which included estimates for capital expenditure compared to capital financing requirements and loan balances against operational boundary limits for external debt.

·             External loan balances were noted to have sat at £814m on the 31^st of March, representing a 5% change from 1 April 2024 as a result of the council raising £130m pounds worth of new external loans and repaying £91m of maturing debt.

·             In relation to borrowing, the Council’s reasoning behind declining the proposed loan rate of 5.76% for a LOBO loan was detailed in section 3.5.12 of the report.

·             Loan rates had now moved in the market and the total Capital financing requirements had changed from £1.14b to £1.24b, equating to a £100m difference which represented the amount of borrowing undertaken to fund the capital programme at year end.

·             The Council’s average debt pool rate had moved from 3.49% in March 2023 to 3.89% in March 2024 due to changing interest rate environments in the UK.

The Chair then invited the Committee to raise questions on the report, with the responses summarised as follows:

·             Discussing the economic background of the report, the Committee wished to know how the report impacted the council's strategy over the next few years. Amanda Healy noted that she did not foresee any change to the strategy, which was broad and enabled the Council to react to different scenarios. Where the Council could foresee rates increasing, for example, there was flexibility and the Council could seek advice on the best route forward. The fall in inflation had not resulted in prices declining, so any future capital projects would need to deal with higher prices. Currently, the necessary income of cashflow to help repay borrowing was not catching up with inflation, making it challenging to fulfil the Capital Programme. CFR models showed that capital expenditure plans over the next three to five years had dropped due to increased costs and officers expected that there would be a general decrease in new demand for borrowing.

·             Regarding investment, the Committee noted the liquidity figure of £20m and asked if the ability to deposit in particular places and still get a high rate of return were utilised. Amanda Healy explained that legislation required a minimum balance of £10m at any point in time to be able to access any products on the market.  Officers explained that the investment portfolio generally used money market funds as the more common option and the Council did  ...  view the full minutes text for item 7.

To receive a verbal update providing on progress in delivering Grant Thornton’s responsibilities as the Council’s external auditors.

The Committee received a verbal update from Asad Khan (External Auditors – Grant Thornton) on the progress of delivering Grant Thornton’s responsibilities as the Council’s external auditors.

In presenting the report the Committee noted:

·             The ongoing progress in deliver of the audit on the Council’s Statement of Accounts including the risk areas identified in relation to land and building valuations, council dwelling revaluations, pension fund liability, and overall management controls.

·             Daily and bi-weekly meetings were occurring consistently, and it was also reported hot review had been scheduled for early August.

In response to the update provided the Committee highlighted comments on a number of issues, with the following responses provided:

·             Noting the work programme for the September Committee meeting, members asked for assurance there would be sufficient time to fully review the statement of accounts and audit findings.  The Chair advised he would discuss the structure of the September meeting with the Vice-Chair and officers to ensure sufficient consideration could be given to all agenda items.

·             Members asked whether there were any issues the auditors needed to flag at this stage. Minesh Patel responded that there was nothing of note, but officers were conscious that the hot review stage could add new elements resulting in additional queries, that could cause delays. Officers would ensure the Committee was kept up to date with any arising issues.

As no further issues were raised the Committee RESOLVED to note the progress update provided by External Audit at the meeting.

To consider the Committee’s Work Programme for the 2024-25 Municipal Year.

It was RESOLVED to note the Committee’s Forward Plan and Work Programme for the 2024-25 Municipal year. In considering the programme, the following points were raised:

• A further review would be undertaken on the number of items listed for the Committee agenda in September 24 in order to seek a more balanced approach and effective management of the agenda and consideration of items at the meeting.

• In order to support the effective management of the agenda for the next meeting members were encouraged to feedback any comments relating to the draft Statement of Accounts 23-24 to officers in advance of the accounts being submitted for formal approval to the Committee.

• The Vice-Chair advised he would provide further updates on the following items once available - temporary accommodation, progress/lack of progress made on blue badges, GT external audit training session and treasury management training. (Cllr. Chan)

• Members were advised that the Chair and Vice-Chair were in discussions about an external audit development session and another treasury management strategy session.

No items have been identified in advance of the meeting that will require the exclusion of the press and public.

There were no items of business considered at the meeting which required the exclusion of the press and public.

Notice of items to be raised under this heading must be given in writing to the Deputy Director Democratic Services or their representative before the meeting in accordance with Standing Order 60.

The Chair invited Minesh Patel to provide a brief update on the global IT outage that had affected many users of Crowd Strike on 19 July 2024.  Members noted that Brent Council was a customer of Crowd Strike, which was a cyber security product and had been impacted by the outage.  Once picked up, an emergency response team was put together to immediately respond who utilised backups available prior to the update installation.  By 10:30am on the morning of the outage all of Brent’s Tier 0 applications were running and by 2pm all applications were running. Officers felt that Brent plans and response had been effective and it was an overall successful recovery from a major event.

The Chair requested members to send any questions to Minesh Patel via email and for Minesh to pass the Committee’s thanks on to the team and officers involved.