Agenda item

The Director - Finance and the Deputy Chief Internal Auditor summarised the key areas of the report for the benefit of the Committee and the following discussion points followed:-

1.      The Director – Finance clarified that a new CIPFA Financial Management Code came into effect on 1 April 2020. CIPFA understood that LA’s would not be able to demonstrate compliance in 2020/21 due to Covid so it was considered a ‘shadow year’ with full compliance required by 31 March 22.

2.      CLB and the Cabinet Member for Finance had commented on the AGS and final sign off would take place when the Statement of Accounts for 20/21 were ready for signing;

3.      The Director – Finance confirmed that BCC did have a Section 25 Statement but had decided to include it in the body of the AGS report rather than attached as an appendix as it was a key statement which should have visibility;

4.      Councillor Gollop suggested that the Dedicated School Grant (DSG) and SEND in Section 7 should be viewed as two separate items and not listed as one. He also highlighted why adult social care pressures which were significant had not been referenced and whether the governance issues at WECA were a threat to funding projects for BCC. The Director – Finance replied that SEND and DSG were two separate issues but the increase in spend on SEND in tackling the backlog and delivering EHCP’s in the timeframe was about delivering against need and it had been merged for this purpose. She added that adult social care was in the VFM report so did not need to be duplicated. Transformation and recurrent savings would be delivered as part of that work. The white paper coming through regarding reforming the service and the impacts on BCC would also be reflected. She acknowledged WECA governance would impact on the broader partnership as there were significant projects to be delivered collaboratively and there were therefore wider issues to overcome;

5.      Councillor Gollop, in response, stated that adult social care was such a significant issue it should be a governance issue. There was an unknown funding gap for EHCP’s which was potentially larger than the current deficit and he was not convinced it was being managed. The Director – Finance replied that it was not suggested that it was being managed. A deficit management plan was being developed in order to mitigate and turn the curve. It was recognised that it was a key issue and the work of scrutiny should not be duplicated;

6.      The Chair stated that that there might be some future joint Audit/OSMB deep dive work and that a lot of governance changes were coming through which would impact on how issues were addressed;

7.      In relation to DSG and SEND backlog Councillor Goodman asked at what point did officers declare that it was not possible to cope. It was a non-manageable level of risk and caused great stress to officers. The Director – Finance replied that the challenges had been reported nationally for some time and BCC was not unique. She recognised it was also a local issue and there was a need to act sustainably as the schools did not have the reserves. There was going to be a need to make tougher decisions and the deficits were unsustainable. BCC continued to make representations to DfE for assistance so that a sustainable plan could be achieved and the books could be balanced. The Chair observed that the challenge of local government funding had been a major issue for some time.

Resolved –

1.      That the draft Annual Governance Statement be agreed as a fair reflection of the internal control and governance environment during 2021/22 and to date, prior to it being finalised and signed by the Mayor, the Chief Executive, Section 151 Officer and Monitoring Officer;

2.      That the FM Code Self-Assessment and improvement action planning be noted;

3.      That progress in improving code compliance be monitored by Audit Committee.