Agenda item

Consideration was given to the report presented by Michael Green, Grant Thornton, which detailed the External Auditor’s 2024-25 annual report for Value for Money (VFM).  Under the Local Audit and Accountability Act 2014, External Auditors were required to be satisfied whether the Council had made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.  The National Audit Office Code of Practice required External Auditors to assess arrangements under 3 areas i.e. financial sustainability, governance and improving economy, efficiency and effectiveness.  The new Code required auditors to share a draft Auditor’s Annual Report (AAR) with those charged with governance by a nationally set deadline each year and for the audited body to publish the AAR thereafter.  This new deadline requirement was introduced from November 2025. 

It was a really positive report reflective of a strong and stable Council.    Whilst there were challenges around Children and Young People’s Services and the Dedicated Schools Grant, the Council had managed the challenges much better than many of its peers across the country.

Grant Thornton reported on the 3 specified criteria in their Value for Money review and confirmed:-

Financial Sustainability – No significant weaknesses in arrangements identified.  2 Improvement Recommendations made to support the Council with further strengthening arrangements for financial sustainability based on its current risks and priorities

-           Improvement Recommendation 1 - Ongoing pressures that could impact financial sustainability including the Dedicated Schools Grant deficit and delivery of planned savings in Children and Young People’s Services

Recommendation:– The Council should ensure financial sustainability by fully addressing pressures faced in the short and medium term including:-

·     Placing an emphasis on delivering its agreed financial trajectory in line with the Safety Valve Agreement and consider alternative arrangements to lower its forecasted deficit for 2025/26

·     Fully delivering its Children and Young People’s Services savings targets in 2025/26

-           Improvement Recommendation 2 – An opportunity to ensure the Council’s approach to performance reporting on performance and benefit realisation of major projects reflected the strategic importance of key capital projects

Recommendation:-  The Council should ensure that regular reports to Cabinet included specific performance updates on major capital projects against planned expectations.  At the appropriate stage, this should include assessments of both economic benefits delivered and financial returns compared to original projections.  Insights from these evaluations should be used to inform the planning and delivery of future major capital investments

Governance – No significant weaknesses in arrangements identified.  2 Improvement Recommendations retained from 2023/24 and one further Improvement Recommendation raised surrounding waiver reporting to Members

-           Improvement Recommendation 3 (recommendation retained from 2023/24)

The Council should strengthen its risk policy by including risk escalation and de-escalation arrangements between the tiers of risk registers and including risk types and applying risk appetite to each type

-           Improvement Recommendation 4 (retained from 2023/24)

The Council should continue to strengthen its counter-fraud controls by developing a Corporate counter-fraud risk register and ensuring counter-fraud risks in Departmental risk registers were updated

-           Improvement Recommendation 5 (retained from 2023/24)

The Council should develop and publish a Procurement Strategy.  This should set procurement strategic priorities that aligned with the Council’s priorities such as net zero and capture changes to procurement following the Procurement Act (2023) and the national Procurement Policy Statement (2024).  It should include measurable actions and indicators with clear accountabilities and an annual review process.  The Strategy should be widely communicated to staff and members to raise awareness of their responsibilities

Improving Economy, Efficiency and Effectiveness – One significant weakness in arrangements continued to be identified though with substantial progress on the key recommendations from 2023/24 which were updated.  Two Improvement Recommendations retained from 2023/24 and one Improvement Recommendation raised to strengthen contract management arrangements

-           Key Recommendation 1 – The Council should continue to build on improvements and ensure that the stock condition survey progressed as planned.  Stock condition data should be used to inform asset management and capital investment plans and should also be kept updated to manage the Council’s housing stock effectively

-           Key Recommendation 2 – The Council should continue to strengthen arrangements and ensure that stock condition surveys progress sufficiently.  Once it was ready to do so, it should seek independent assurance over compliance with relevant standards

-           Improvement Recommendation 6 (Retained from 2023/24) – The Council develop a corporate data quality policy and ensure this was used to inform a data quality review

-           Improvement Recommendation 7 (Retained from 2023/24) – Consideration be given, as part of ongoing improvements in contract management, introduction of contract tiering (gold/silver/bronze), managing contracts based on risk, seeking further assurance that new arrangements in place were embedded and effective and introduced reporting on waiver activity and SFI breaches to a relevant Member-led committee

Discussion ensued with the following issues raised/clarified:-

·        There had been a lot of recent changes in relation to procurement and the new Legislation that had come into force.  It was an opportunity for the Council to demonstrate it prioritised a Procurement Strategy

·        Grant Thornton had no concerns with regard to the progress of the stock condition survey

·        Implementation of the new CAF system was not in place as yet as further work was being undertaken as to what exactly was wanted and needed and then the necessary procurement process progressed.  It was not an issue of concern at the present time.  Regular compliance reports were submitted to the Directorate Leadership Team and Strategic Leadership Team on compliance arrangements

·        The majority of the improvement recommendations would be completed within the current financial year.  However, consideration was required around the timeframes of the Data Quality Policy and how it would be delivered

Resolved:-  That the update be received and the contents noted.