Agenda and draft minutes

Councillor Ted Fenton and the independent member Kate Cartwright sent their apologies for absence, which were accepted.

The Director of Law and Governance and Monitoring Officer also sent an apology for absence. The Head of Legal and Governance Services (Deputy Monitoring Officer) was present on her behalf.  

There were no declarations of interest.

The Committee is RECOMMENDED to approve the minutes of the meeting held on 26 November 2025 and to receive information arising from them.

The Committee noted the following:

-       External auditors had an outstanding action with respect to a question about the proportion of pension funds arising from Level 3 investments.

-       The Director of Transformation, Customer Experience had written to the Committee, as requested, concerning Strategic Risk 11 – Section 106.

-       The Strategic Finance and Investment Manager had addressed the minimum repayments for loans from the Public Works Loan Board during earlier training.

-       The Deputy Chief Executive (Section 151 Officer) would address the High Needs Dedicated Schools Grant (DSG) Deficit during the meeting.

RESOLVED to approve the minutes of the meeting held on 26 November 2025 as an accurate record of proceedings.

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.

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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.

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 September 2025 Committee.

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

The Chief InternalAuditor introduced the report.

The Committee agreed that the two red reports pertaining to Safeguarding Transport and School Attendance, respectively, would go up in full to the Audit Working Group at its next meeting on Wednesday, 25 March for them to review.

The Committee asked about changes to dates in the Audit Plan and noted that internal auditors and directors of service monitored those changes closely. Members of the Committee were invited to review any deferred items alongside senior officers.

The Committee also asked about ongoing contractual negotiations and noted that contract management was now the responsibility of the Head of Commercial and Procurement Service, who reported to the Audit Working Group on this matter.

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

The Treasury Management Strategy & Annual Investment Strategy for 2026/27 outlines the council’s strategic objectives in terms of its debt and investment management for the financial year 2026/27. 

The forecast average cash balance for 2026/27 is £345m. The council will maintain its investment in strategic pooled funds with a purchase value of £88m (25%). The remaining £257m (75%) will be managed internally with a mixture of short, medium and long-term deposits.

The Bank of England Base Rate is forecast to start the year at 3.75 or 3.50%, reducing to 3.25% by the end of the financial year.

UK Government Gilt yields are forecast to fall from 4.80% to 3.80% over the medium term.

As the council’s Capital Financing Requirement (CFR) is proposed to increase significantly over the medium term, the strategy will aim to decrease long term investments to allow for greater internal borrowing.

Changes to the Treasury Management Strategy will be recommended to Council to be delegated to the Executive Director of Resources & Section 151 Officer in consultation with the Leader of the Council and Cabinet Member for Finance

The Committee is RECOMMENDED to endorse the Treasury Management Strategy & Annual Investment 2025/26.

The Strategic Financing and Investment Manager introduced the report.

The Committee noted that none of the Council’s long-term borrowing was rated at BBB+.

The Committee noted that changes to treasury policy could yield an additional £1.5 million in 2026-27 but that that figure could not be guaranteed.

In relation to Local Government Reorganisation (LGR), the Committee sought and received assurance that proactive steps were being taken for any new local authority to deal with future issues including the end of the International Financial Reporting Standard (IFRS) 9 statutory override in 2029.

ACTION

The Committee asked whether data from Arlingclose from November 2025 could have been more up to date, and the Strategic Finance and Investment Manager said he would take that question away.

RESOLVED to endorse the Treasury Management Strategy & Annual Investment 2025/26.

The Chartered Institute of Public Finance and Accountancy (CIPFA) launched the Financial Management Code of Practice (FM Code) in November 2019.  The FM Code was developed on behalf of the Ministry of Housing, Communities and Local Government (MHCLG) in the context of increasing concerns about the financial resilience and sustainability of local authorities. 

The FM Code clarifies how Chief Finance Officers should satisfy their statutory responsibility for good financial administration as required in section 151 of the Local Government Act 1972 and emphasises the collective financial responsibility of the whole leadership including the relevant elected members.

The FM Code requires local authorities to demonstrate compliance on an annual basis, with assessments taking a retrospective view of the current financial year. This approach ensures that financial management practices are reviewed against actual performance rather than projections. The assessment aligns closely with the Annual Governance Statement (AGS), which is a statutory requirement under the Accounts and Audit Regulations. Together, these form the key elements of the authority’s assurance framework, providing evidence that sound financial management and robust governance arrangements are in place to support transparency, accountability, and financial sustainability.

The report sets out the outcome of the compliance self-assessment undertaken for 2025/26 which has found that the Council is well placed to meet the requirements of the FM Code. 

The Committee is RECOMMENDED to endorse the assessment of compliance against the Financial Management Code for 2025/26 (Annex 1).

The Head of Corporate Finance and Deputy Chief Executive (Section 151 Officer) introduced the report.

The Committee asked about the Council’s value for money and noted that work needed to be done with respect to consistency of processes involved in monitoring this, which included comparison with other local authorities. The redesign of Financial and Commercial Services was also discussed in relation to saving money without affecting service delivery.

Officers apologised that the word ‘team’ was missing with respect to the new data team on p. 74 of the agenda pack.

The Committee discussed the High Needs DSG Deficit and noted that the government had committed to cover this from April 2028, when local authorities would be permitted to deploy general funds to make up the shortfall, which could be £300 million. The Committee noted challenges with respect to the budget and the Executive Director of Resources and Section 151 Officer’s Statutory Section 125 Statement in February, given ongoing uncertainty in relation to how the High Needs DSG deficit would be managed.

RESOLVED to endorse the assessment of compliance against the Financial Management Code for 2025/26 (Annex 1).

On 4 June 2025, this Committee approved the Annual Governance Statement (AGS) for the year 2024/25. Local authorities are required to prepare an AGS to be transparent about their compliance with good governance principles and to give an opinion on the effectiveness of those arrangements. As part of the process, authorities are expected to highlight areas of focus for the year following.

The Director of Law & Governance, and Monitoring Officer presented an update to Committee on 26 November 2025 on the eight specific areas of focus identified in the 2024/25 AGS for action in 2025/26. This report is therefore a report on only those actions where an additional update is required.

The Committee is RECOMMENDED to receive this update on the actions from the Annual Governance Statement 2024/25 and to make any comment upon them.

The Senior Governance Lead introduced the report.

The Committee noted that actions that had not been completed were progressing as reported on 26 November, except for Contract Management now that the redesign was complete.

ACTION

The Head of Legal and Governance Services (Deputy Monitoring Officer) said that she would respond to a question about whether the Commercial and Procurement Service included the new data team by email.

RESOLVED to receive this update on the actions from the Annual Governance Statement 2024/25.

The Audit Working Group (AWG) met on 10 December 2025. The group received an update on the implementation of management actions arising from the audit of Strategic Contract Management and the audit of Income Collection Street Works and Parking, which were both undertaken on 2024/25.

The Committee is RECOMMENDED to note the report.

The Committee noted that the Audit Working Group would have a further update from the Head of Commercial and Procurement Service on Strategic Contract Management on 25 March.

RESOLVED to note the report.

The Committee noted that the Chief Internal Auditor would circulate a draft annual report to Council in February, for approval on 11 March.

The Committee asked for:

-       Review of future balances in the county fund in March 2028 on 20 May

-       Regular review of the Constitution Working Group

-       Review of Local Government Reorganisation (LRG) as it progressed

-       A separate session for the Committee’s Self-Assessment in May/June

RESOLVED to note the Committee Work Programme to November 2026