Agenda, decisions and minutes

Apologies were submitted by Councillor Ian Corkin (Councillor Liam Walker substituting).

There were no declarations of interest.

To approve the minutes of the meeting held on 8 November 2017 (AG3) and to receive information arising from them.

The minutes for the meeting of 8 November 2017 were agreed and signed subject to the following corrections:

Item 62/17 append to the 9th bullet point:

Asked what proportion of these were in the City Council area Mr Jenkins said that he did not have that figure to hand but would provide it later.

Item 66/17

Insert after the third bullet point:

·         It is not possible to insure against fines being imposed, however one can insure against the costs of incidentals and managing breaches.

Regarding item 67/17, training on risk management will be provided on the day of the next meeting of the Committee.

2.10pm

Report from the Director of Finance

The report contains the annual Treasury Management Strategy Statement and Annual Investment Strategy for 2018/19 in compliance with the CIPFA Code of Practice. The report sets out the borrowing and investment strategies for 2018/19 and relevant background information.

The Committee is RECOMMENDED to:

a)         endorse the Treasury Management Strategy for 2018/19 as outlined in the report;

b)        note that due to the early timing of this report, Prudential Indicators i to vi have not been included in Appendix A as they are dependent on updates to the 2018 capital programme. Full indicators will be included when the report is considered by Council in February.

Mr Chapple introduced the report.  He stated that the Council now has the facility to deal in asset-backed securities.  A new Code of Practice will be published in the middle of 2018 following this year’s consultation.

Officers responded to issues raised by Members as follows:

·         The risk associated with the loan to OxLEP is considered to be low because it is linked to expected income from business rates.

·         Whether the Council borrows under the PWLB’s new Certainty Rate depends on other rates and would be decided by the Treasury Management Strategy Team and reported to this Committee and Cabinet.

·         The Council is legally obliged to have treasury advisors.  Sometimes the Council’s Strategy Team takes a different view, such as on base rates.

·         Setting higher targets would have implications for the Council’s budget if they are not reached.

·         Using investment strategy to pursue socially beneficial outcomes would be a decision for the budget process and not for Treasury Management.

Members agreed to recommend to Cabinet that the Strategy be amended to include a commitment to investigate whether the Council should consider Environmental, Social and Governance (ESG) investments.  It was also agreed that there should be a reference to reviewing the risks associated with Brexit and that the targets for return on investments should be higher to reflect a more ambitious approach.

RESOLVED to:

a)            endorse the Treasury Management Strategy for 2018/19 as outlined in the report, with two recommendations to Cabinet. The Committee considered that the strategy does not have ambitious targets for getting a higher return on investments that could be achieved through a less cautious approach; and, the Committee resolved to investigate whether the Council should consider Environmental, Social and Governance (ESG) investments in the future.  In addition, the Committee asked for the Strategy to be amended to reflect that during 2018/19 a review of the risks to Treasury Management resulting from Brexit will be undertaken. The Committee recommends that

                   i.          the strategy be amended to clarify the intent to adopt a less cautious approach, with a more ambitious target stated for any return on investments.

                  ii.          a paragraph be inserted to reflect the Committee will be investigating the impact of including Environmental, Social and Governance (ESG) investments in the future;

b)           note that due to the early timing of this report, Prudential Indicators i to vi have not been included in Appendix A as they are dependent on updates to the 2018 capital programme. Full indicators will be included when the report is considered by Council in February.

2.40pm

A representative from the external auditors, Ernst & Young, will attend to present the following item:

·         External Audit Progress Report

Mr Guest introduced the update.  Initial planning for the 2017/18 Audit is largely complete and the Auditors are working with the Finance Team on the earlier closing date.  With regard to IBC, Ernst & Young are also auditors for Hampshire County Council so savings can be made there by avoiding duplication.

Members welcomed the completed work on the Council’s Teachers’ Pension Fund and noted that very small errors were picked up.

RESOLVED: to note the report.

3.00pm

Report from the Director of Law and Governance and Chief Monitoring Officer.

Under the Constitution, the Monitoring Officer is required to monitor and review the operation of the Constitution to ensure that its aims, principles and requirements are given full effect. This includes making recommendations to Council on any necessary amendments.  The Monitoring Officer is authorised to make any changes to the Constitution which are required to:

- Comply with the law

- Give effect to the decisions of Council (or Cabinet, Committees etc.)

- Correct errors and otherwise for accuracy or rectification

Other changes will only be made by Full Council, following a recommendation of the Monitoring Officer.

This report therefore asks the Audit & Governance Committee to consider the changes that will need to be notified and considered by Full Council in March 2018.

The issues are:

- A legal update of the Constitution to clarify the process on the re-election of a leader of the council, to comply with the Local Government Act 2000, for endorsement

- A summary of changes made by the Monitoring Officer in year for the reasons in paragraph 1 above, for noting.

The Committee is RECOMMENDED to:

a)                  endorse the proposed change to the Part 2, Article 6 (‘The Cabinet’) set out in paragraph 5 of this report;

b)                 recommend the adoption of the change in (1) to Full Council; and

c)                  note the changes made to the Constitution by the Monitoring Officer under delegated powers since the last annual Constitution Review report to Council (as outlined in Annex 1).

Mr Graham introduced the report.  There is one constitutional change for which Council approval is required – the re-election of a leader of the Council.

Mr Graham responded to Members’ questions as follows:

·         Asked if the report should reference the Governance Review in progress, Mr Graham responded that the report focuses on changes he is authorised to make and the one recommendation that requires Council approval.  However, he can add a reference in the final report to Full Council.

·         There is no requirement in law to use gender neutral terms for Council positions such as Chairman but Council itself could decide to change them.

RESOLVED: to

a)            endorse the proposed change to the Part 2, Article 6 (‘The Cabinet’) set out in paragraph 5 of this report;

b)           recommend the adoption of the change in (1) to Full Council; and

c)            note the changes made to the Constitution by the Monitoring Officer under delegated powers since the last annual Constitution Review report to Council (as outlined in Annex 1).

3.20pm

Report from the Director for Law and Governance and Monitoring Officer

On 25 May 2018 the European Union General Data Protection Regulation (GDPR) will come into effect and will replace the Data Protection Act 1998 (DPA).  Despite leaving the EU in 2019 the UK will still adopt the GDPR.

The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world that is vastly different from the time in which the Data Protection Act came into force in 1998. Although the key principles of data privacy still hold true, the new regulation reflects advances in technology, and represents a step increase in responsibilities for safeguarding personal data, and maintaining audit trails of what has been done with personal information, when it was done and why.

The report provides a high-level overview of the changes in the GDPR, the actions planned to implement and progress against those plans.

The Committee is RECOMMENDED to

a)                  note the contents of the report; and

b)                 advise of areas of concern.

Mr Graham introduced the report and expressed confidence that the team will meet the implementation deadline in May.

Officers responded to Members’ questions as follows:

·         We are confident that we have the resources to meet demand following the implementation deadline but nobody knows how many applications to be ‘forgotten’ are likely to be received.

·         Officers are attending training and getting feedback from other Local Authorities on the implications of the regulations.

·         There will be more than one date provided for training Members.

·         Members are responsible for their own data when doing constituency business but have no personal liability if the Council was to be fined.

·         Systems are in place to ensure that partner organisations and contractors are compliant where sensitive data is involved.

·         The Monitoring Officer will be the Data Protection Officer initially.

RESOLVED: to

a)            note the contents of the report; and

b)           advise of areas of concern.

3.50pm

Report from the Director of Finance.

This report presents the Internal Audit progress report for 2017/18.

The committee is RECOMMENDED to note the progress with the 17/18 Internal Audit Plan and 17/18 Counter Fraud Plan and the outcome of the completed audits.

Ms Cox summarised the report.  The team is in a better position regarding resources and the outcomes of the external assessment were very positive.  The one red report related to S106s was discussed at the Audit Working Group and will be on their agenda again in February.

Members raised issues on the report and Officers responded as follows:

·         A solicitor was fined £980 plus costs for misuse of a Blue Badge and 20 more badges were seized recently.

·         The one Private Residential Care Home provider that is being closely monitored due to overpayment issues would be difficult to drop.  There are no issues with the quality of care.  The Council is working with them on checklists to resolve the problem.

·         With regard to consideration of fraud risks, the correct processes are being followed - the problem is in documenting it to be able to demonstrate that.

Members expressed disappointment that the briefing note on fostering, where there is an amber report, was not prepared in time.  The Chairman asked for it to be ready for the February AWG meeting.

RESOLVED: to note the progress with the 17/18 Internal Audit Plan and 17/18 Counter Fraud Plan and the outcome of the completed audits.

4.10pm

This report presents the matters considered by the Audit Working Group Meeting of 6 December 2017.

The Committee is RECOMMENDED to note the report.

Ms Cox introduced the report and Officers responded to questions as follows:

·         The February AWG meeting will deal with S106, Mental Health, Risk Management and the partnership with the City fraud team.

·         Data on diversity in the workforce is available by Directorate.

·         The Director of HR would be able to provide data related to the gender pay gap issue.

RESOLVED: to note the report.

4.20pm

To review the Committee’s Work Programme.

The Committee agreed the following additions:

7 March 2018: Transformation Update

25 July 2018: Risk Management Strategy

Issues associated with Brexit will be discussed at the April Audit Working Group meeting.