Agenda and draft minutes

The Chair welcome everyone to the meeting, especially the Cabinet Member for Finance, Property and Transformation; the new independent members and Laksmi Lal, the new principal auditor. There were no apologies for absence.

There were no declarations of interest.

To approve the minutes of the meeting held on 16 July 2025 and to receive information arising from them.

The Committee amended and approved the minutes of the meeting of 16 July 2025 for the Chair to sign. 

Members of the public who wish to speak on an item on the agenda at this meeting, or present a petition, can attend the meeting in person or ‘virtually’ through an online connection.

Requests to present a petition must be submitted no later than 9am ten working days before the meeting.

Requests to speak must be submitted no later than 9am three working days before the meeting.

Requests should be submitted to committeesdemocraticservices@oxfordshire.gov.uk

If you are speaking ‘virtually’, you may submit a written statement of your presentation to ensure that if the technology fails, then your views can still be taken into account. A written copy of your statement can be provided no later than 9am on the day of the meeting. Written submissions should be no longer than 1 A4 sheet.

There were none.

Report by the Executive Director of Resources & Section 151 Officer

The Audit Working Group (AWG) acts as an informal working group of the Audit & Governance Committee, reviewing in detail matters of governance, risk and control. It supports the Audit & Governance (A&G) Committee in discharging its responsibilities. The terms of reference for the AWG are agreed by the Audit & Governance Committee.

The Committee is RECOMMENDED to review and agree the updated Audit Working Group Terms of Reference.

The audit team introduced the report. 

The Committee agreed that independent members Kate Cartwright and Paul McGinn should join Councillors Batstone, Fenton, Mclauchlan, Rawlins, and Shiri on the Audit Working Group.

RESOLVED to agree the updated Audit Working Group Terms of Reference for 2025-27.

Report by the Executive Director of Resources & Section 151 Officer

Treasury management is defined as: “The management of the organisation’s borrowing, investments and cash flows, including its banking, money market and capital market transactions, the effective control of the risks associated with those activities, and the pursuit of optimum performance consistent with those risks.”

The Chartered Institute of Public Finance and Accountancy’s (CIPFA’s) ‘Code of Practice on Treasury Management 2021’ requires that committee to which some treasury management responsibilities are delegated, will receive regular monitoring reports on treasury management activities and risks. This report is the first for the 2025/26 financial year and sets out the position at 30 June 2025.

Throughout this report, the performance for the first quarter of the year to June 2025 is measured against the budget agreed by Council in February 2025.

As at 30 June 2025, the council’s outstanding debt totalled £270m and the average rate of interest paid on long-term debt during the quarter was 4.41%. No external borrowing was raised during the quarter, whilst £2m of maturing Public Works Loan Board (PWLB), was repaid. The council’s forecast debt financing position for 2025/26 is shown in Annex 1.

The Treasury Management Strategy for 2025/26 agreed in February 2025 assumed an average base rate of 4.00%.

The average daily balance of temporary surplus cash invested in-house was expected to be £303m in 2025/26, with an average in-house return on new and existing deposits of 3.25%. 

During the three months to 30 June 2025 the council achieved an average in-house return of 4.74% on average cash balances of £420.335m, producing gross interest receivable of £4.964m. In relation to external funds, the return for the three months was £0.670m, bringing total investment income to £5.634m. This compares to budgeted investment income of £3.191m, giving a net overachievement of £3.443m.

At 30 June 2025, the council’s investment portfolio totalled £518.048m.  This comprised £365.500m of fixed term deposits, £52.833m at short term notice in money market funds and £99.715m in pooled funds with a variable net asset value.  Annex 4 provides an analysis of the investment portfolio at 30 June 2025.

The Audit & Governance Committee is RECOMMENDED to note the council’s treasury management activity at the end of the first quarter of 2025/26.

The Treasury Manager introduced the report.

The Committee asked how it was that the Council had decided to cap borrowing at 5 per cent per year of the net operating budget. The Treasury Manager said that the Council set a potential indicator each year, which was based on capital finance requirements or the underlying need to borrow. He added that this was due to peak at £559 million, whereas external debt was expected to be £270 million, in 2025/26.

The Committee asked about environmental factors in relation to borrowing. The Treasury Manager said that the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Treasury Management stipulated that the security and liquidity of any loans should be prioritised above all other factors when loans were obtained. He said that if two investments presented the same level of liquidity and financial risk, the greenest one would be chosen in accordance with the Council’s environmental policies and objectives. He said that all loans obtained by the Council complied with the UN Charter on Ethical Investments. The Chair said that she wanted to see the Council invest in more green bonds.

The Committee asked whether the Council had plans to pay off some of its debt. The Treasury Manager said that the Council was earning 4.5 per cent more than it was paying on its historic debt for long-term capital projects. He said that Public Works Loan Board (PWLB) loans could be repaid early but that it would not be financially prudent to do so given that interest rates could rise on any future loans. He said that the capital programme was forecast to increase over the next 3-4 years to up to £600 million but that cash balances were forecast to go down over the same period, so the Council had no plans to pay off some of its debt.

The Committee asked if council tax could be reduced given that the Council was earning money on its debt. The Treasury Manager said that funds were borrowed to finance the Council’s capital programme, unlike council tax, which was for revenue spending. The Cabinet Member for Finance, Property and Transformation said that the government expected the Council to raise the maximum level of council tax and made any grants subject to that requirement, so it was not going to be reduced.

The Committee asked what the Council was doing to ensure that government put money towards negative Dedicated Schools Grant (DSG) balances relating to High Needs. The Head of Corporate Finance said that the Executive Director of Resources and Section 151 Officer was working with other local authorities to lobby government and highlight the risk that DSG balances posed to councils’ financial resilience. The Chair said that she expected DSG balances to be discussed further by the Committee in its November meeting.

The Treasury Manager said that he would take a question about the cost to the Council of managing existing funds away for a fuller response.

The Chair thanked  ...  view the full minutes text for item 67/25

Report by the Executive Director of Resources & Section 151 Officer

This report provides an update on the Internal Audit Service, including resources, completed and planned audits.

The report includes the Executive Summaries from the individual Internal Audit reports finalised since the last report to the June 2025 Committee. Since the last update, there have been no red reports issued.

The Committee is RECOMMENDED to note the progress with the 2025/26 Internal Audit Plan and the outcome of the completed audits.

The audit team introduced the report. In response to a question, they confirmed that there were no outstanding management actions that caused them concern.

The Committee expressed concern that the Council did not have an IT disaster recovery plan. The audit team said that management had already agreed to address all issues identified and that there were no Priority 1 management actions; the IT Disaster Recovery Audit was amber, not red. They added that if the AWG wanted to examine the issue, they should wait until management had had time to respond.

The Committee also expressed concern about the systems in place for the recording and monitoring of Freedom of Information (FOI) requests. The Chair said that she was concerned that there was no consistent process within the Council for sharing information on trends/themes and lessons learned. The audit team said that they would report back on this issue and that it could be scrutinised by the AWG. 

The Committee expressed concern, thirdly, about the cost the Council of the Didcot Garden Town Housing Infrastructure Fund (HIF1). The Director of Law and Governance and Monitoring Officer assured the Committee that the contractual agreements and overall projected cost was already established. The Chief Executive Officer said that in terms of litigation, the Council had the most experienced technical advisors on value engineering linked to homes in England, on the HIF1 project. He said that he met weekly with the Director of Environment and Highways to discuss risk around future contractual work relating to HIF1 and its cost to the Council.

The Committee asked more broadly about how serious risks were managed. The Director of Law and Governance and Monitoring Officer said that relevant directors received the outcome of all audits. The Chair said that she was assured by the Chief Internal Auditor that senior management and the Chief Executive were kept well informed of risks to the Council

The Committee asked the auditors to ensure that they defined all terms and acronyms in future reports and made it clear when actions were started, in process, or resolved. The audit team indicated that they would be happy to do so.

The audit team also said that they would circulate definitions of Priority 1 and Priority 2 management actions to the new members of the Committee.

The Chair thanked the audit team for their work and members for their questions.

REOLVED to note the progress with the 2025/26 Internal Audit Plan and the outcome of the completed audits.

The external auditor updated the Committee, firstly, with respect to the Pension Fund. He said that the audit for 2023-24 was now complete and that there were no significant issues to bring to the Committee’s attention. He said that one adjustment had to be made to the Council’s financial statements; however, this adjustment was because information around the value of the fund’s assets was now more accurate than at the time of the initial valuation.

The external auditor updated the Committee, secondly, with respect to the County Council’s Audit for 2023-24. He said that this was still in progress and that amendments would have to be made to the draft financial statements to disclosures in relation to the International Financial Reporting Standard (IFRS) 16. He said the Committee would be updated with respect to this at the next meeting.

The Chair thanked the external auditor for the work that he and his team were doing.

Report by the Director of Law & Governance & Monitoring Officer

This report provides a comprehensive overview from the Monitoring Officer of democratic and ethical governance activities during the municipal year 2024-25 (from 1 April 2024 to 31 March 2025). The report is aligned with the functions of the Audit and Governance Committee, which is responsible for ensuring high standards of conduct among councillors and co-opted members.

The Committee's key responsibilities include:

-       Promoting high standards of conduct by councillors and co-opted members.

-       Granting general and individual dispensations to councillors and co-opted members from requirements related to interests as set out in the code of conduct. Individual dispensations under Section 33 of the Localism Act 2011 and the Members' Code of Conduct are delegated to the Monitoring Officer.

-       Reviewing the arrangements for dealing with complaints against Members and advising the Council on the adoption or revision of these arrangements, as well as the Members' Code of Conduct.

Throughout the year, the Committee has diligently worked to uphold its responsibilities, ensuring that ethical standards are maintained and that any complaints or allegations of misconduct are addressed promptly and fairly. This report highlights the Committee's activities, achievements, and the progress made in fostering a culture of transparency, accountability, and integrity within the Council.

The Committee is RECOMMENDED to consider and endorse the Monitoring Officer’s annual report for 2024-25.

The Director of Law and Governance and Monitoring Officer introduced the report.

She said that she would further circulate:

-        Details of the outcomes of the 725 complaints received by the Council in relation to Children Social Care, Adult Social Care and Corporate in 2024-25

-        A figure for how many individual members of the public engaged with Council, Cabinet and Committee meetings in 2024-25

-        Details of how many officers were involved in dealing with complaints and FOI requests throughout the year

The Committee asked whether Artificial Intelligence was used to respond to subject access requests. The Monitoring Officer said that the Council used Microsoft Copilot to facilitate its work but that in relation to subject access requests, officers were still required to ensure that sensitive information was not leaving the organisation.

The Committee expressed an interest in reviving the Constitution Working Group (CWG) from December 2025, for discussion under Item 14 on the agenda. The Monitoring Officer stressed that a successful group would require cross-party engagement. The Chair said that recommendations made by any CWG should be considered by the Committee before going to Council.

The Committee asked about the Code of Conduct consultation, which ran until 26 February 2025. The Monitoring Officer said that the Council was still waiting for details of the outcome of this. In response to a further question, she said that the Council’s existing Code of Conduct was satisfactory; the consultation was about themes experienced across the country.

The Committee, in continuing the conversation about councillors’ conduct, referred to an MPs’ loss of office in the event of criminal conviction and suggested that the same procedure could be extended to county councillors. The Monitoring Officer stressed that everyone at the Council had a role to play in maintaining standards of conduct.

The Chair thanked the Director of Law and Governance and Monitoring Officer for the report and members for their questions.

RESOLVED to endorse the Monitoring Officer’s annual report for 2024-25.

Report by the Director of Law & Governance & Monitoring Officer

The Council may occasionally need to carry out covert surveillance. The Regulation of Investigatory Powers Act 2000 (‘the Act’) and supporting Codes of Practice provide the legal framework under which public bodies may lawfully undertake covert surveillance. Compliance with the Act and the supporting Codes of Practice provides protection to the Council in the event that an individual challenges the actions of the Council on the basis that those actions were an infringement of the individual’s human rights. It also reduces the likelihood that any evidence obtained through covert surveillance and used in legal proceedings is ruled inadmissible.

Codes of Practice under the Act require that elected members review the Authority’s use of activities within the scope of the Act periodically and review the Authority’s Policy annually. This report provides a summary of the covert activities undertaken by the council between April 2024 and March 2025 for review by the Committee.

The Council’s Policy for Compliance with the Investigation of Regulatory Powers Act 2000 (‘the policy’) is updated annually and received a significant refresh in 2023. This included incorporating feedback from the Investigatory Powers Commissioner’s Office (IPCO).  This year, officers are not recommending any changes to the policy.

The Committee is RECOMMENDED to:

a.    note the Policy for Compliance with the Investigation of Regulatory Powers Act 2000 included in the annex of this paper and to comment on any changes to the policy that the committee would wish the Director of Law & Governance and Monitoring Officer to consider; and

b.    consider and note the use of any activities within the scope of the Regulation of Investigatory Powers Act by the Council.

The Head of Prevention, Protection and Trading Standards introduced the report. He said that there had been no changes to the Regulation of Investigatory Powers Act Policy and that the Council had not deployed investigatory powers over the last year.

The Committee asked for a line to be inserted to the Flow Chart of Authorisation Procedures and Considerations for Covert Surveillance (Appendix 2 to the report) to make it clear that no activity should be entered into by the Council without a magistrates’ prior approval. 

The Chair thanked the Head of Prevention, Protection and Trading Standards for his work and the work of his team and encouraged members of the Committee to engage with it in the future.

RESOLVED to note:

a)    the Policy for Compliance with the Investigation of Regulatory Powers Act 2000 and

b)    the use of activities within the scope of the Regulation of Investigatory Powers Act by the Council.

Report by the Executive Director of Resources & Section 151 Officer

Since 2020/21 the Government has provided Exceptional Financial Support (EFS) for councils who made a request for financial assistance to handle pressures that they considered unmanageable and to enable them to set balanced budgets. The support is provided on an exceptional basis, and where relevant, on the condition that a local authority may be subject to an external assurance review.  Some of the councils in receipt of EFS have also issued a Section 114 notice.

Councils have sought EFS for a variety of reasons but in almost all cases, multiple issues have combined impacting on financial resilience. An assessment of the causes of financial strain indicates that in most cases where councils have upper tier responsibilities persistent pressures in adult and children’s social care has been coupled with a low level of reserves.  Other causes of financial strain include costs relating to homelessness, Special Educational Needs and Disabilities (SEND) deficits impacting on cash balances, debt costs, transformation delays, legacy issues and accounting corrections.

While Oxfordshire County Council needs to continue to take action to manage demand and costs, the year-end position for both 2023/24 and 2024/25 and the assessment against the Financial Management Code for 2024/25, demonstrates strong financial control and resilience.  However, there are significant risks around the growing deficit against High Needs Dedicated Schools Grant funding as well as the potential impact of funding reform from 2026/27. 

The level of reserves is fundamental to financial sustainability so while the council is not currently in the same position as the councils that have sought EFS this report sets out an assessment of the current position and the controls in place to help mitigate risks. 

The Committee is RECOMMENDED to note the report.

The Head of Corporate Finance introduced the report.

The Committee noted the Council’s rising expenditure. The Cabinet Member for Finance, Property and Transformation said that the government was aware of the financial pressures faced by the Council; however, other Councils found themselves in a worse position.

The Committee asked about the impact that financial management of other councils would have on plans for Local Government Reorganisation (LGR). The Head of Corporate Finance said that she would take this question away.

The Committee asked what the plan was should the government fail to cover the High Needs Dedicated Schools Grant (DSG) Block cumulative deficit. The officer said that intervention from the government was essential for this to be sustainable in the future; however, borrowing was an option; the Council could use the £4 million contributed to the Demographic Risk Reserve each year to cover some of the cost.

Finally, the Committee asked what the payback time was for Exceptional Financial Support (EFS). The Head of Corporate Finance said she would take this question away. The Treasury Manager said it was 1 per cent more expensive to borrow from EFS compared to normal Public Works Loan Board borrowing.

The Chair thanked the Head of Corporate Finance for the report. She said that she expected the Committee to return to the Council’s financial management, controls and governance, possibly in November.

RESOLVED to note the report.

Report by the Executive Director of Resources & Section 151 Officer

In April 2025 Council agreed a number of changes to the Constitution.   As part of that the threshold for a Key Decision for capital expenditure was increased to £2.0m. 

Section 5 of the Financial Regulations which sets out the arrangements for Capital expenditure needs to be updated to align with the threshold for a Key Decision.  It is proposed to increase the threshold for Cabinet approval for new inclusions and variations to the programme to £2.0m (from £1.0m).  The Strategic Capital and Commercial Board would approve any expenditure above £0.5m up to £2.0m.

The Committee is RECOMMENDED to recommend to Council

a)    to approve amendments to Section 5 of the Financial Regulations increasing the limit for Cabinet approval for new inclusions and variations to capital schemes from £1.0m to £2.0m to align with the key decision threshold of £2m; and

b)    to approve that in exceptional circumstances up to £0.500m funding for exploratory feasibility works can be approved by the Executive Director of Resources and Section 151 Officer (following discussion and recommendation at, and with the support of the Strategic Capital and Commercial Board).

The Head of Corporate Finance introduced the report.

The Committee asked when the limit for Cabinet approval for new inclusions and variations to capital schemes from £1.0m was decided. The officer said that she did not know the exact date but that it had been reviewed when the constitution was last updated to account for inflation. In response to a further question, she said that that limit equally applied to revenue expenditure.

The Chair proposed an additional recommendation; namely, that any funding up to £0.500m approved by the Executive Director of Resources and Section 151 Officer should be reported to the Cabinet Member for Finance and to the Leader of the Council.

The Chair thanked the Head of Corporate Finance for the report.

RESOLED to recommend that Council:

a)    approve amendments to Section 5 of the Financial Regulations increasing the limit for Cabinet approval for new inclusions and variations to capital schemes from £1.0m to £2.0m to align with the key decision threshold of £2m; and

b)    approve that in exceptional circumstances up to £0.500m funding for exploratory feasibility works can be approved by the Executive Director of Resources and Section 151 Officer (following discussion and recommendation at, and with the support of the Strategic Capital and Commercial Board); and

c)    approve that any such funding approved in exceptional circumstances up to £0.500m, as in recommendation b, be reported to the Cabinet Member for Finance and the Leader of the Council for additional oversight.

To make appointments of Council representatives to

• Oxfordshire Buildings Trust Ltd (2 positions)
• South East Reserve Forces’ and Cadets’ Association”

The Committee approved the following appointments to Category B Outside Bodies:

a)    South East Reserve Forces’ and Cadets’ Association

Councillor Robin Jones

b)    Oxfordshire Buildings Trust

Councillor Ian Middleton

Councillor Roz Smith

The Committee is RECOMMENDED to note the updated work programme for 2025-26.

The Committee agreed to include the CWG on the agenda for the meeting on 26 November. The Chair asked members to consider putting themselves forward for this and to find out if members in their political group who were not on the Committee were interested in sitting on such a group, before the November meeting.

The Committee discussed including LGR on the work programme for 2025-26. The Director of Law and Governance and Monitoring Officer said that decision about the shape of LGR in Oxfordshire was not within the scope of the Committee, which dealt with assurance of governance matters.

The Committee agreed to cancel the AWG meeting scheduled for 22 October

RESOLVED to note the updated work programme for 2025-26.