Agenda item

Report from the Director of Finance attached

The Leader of the Council Councillor Eamonn O’Brien presented a report setting out the Progress Update from the Council to the Statutory Recommendation received from the External Auditor under schedule 7 of the Local Audit and Accountability Act 2014.

It was explained that the report provides the second update on activity and delivery against this action plan with the previous update being brought in April 2025 and highlights the improvement work that has been carried out by the Assurance Boards. In addition to the work carried out by the Boards there have been Council wide briefings, Senior Management sessions and Strategic Leadership Team engagement with the improvement work and compliance sprints.

The progress made in the Improvement Action Plan was set out and it was explained that there continues to be progress made within the expected target date.

The plan was split into the following areas:

·         Financial Resilience – All actions on track or complete. The Finance Board overseeing key milestones around zero based budget workstream and development of the 26/27 budegt proposals on track.

·         Finance Capacity and Transformation - All actions are complete or on track apart from recruitment to phase 1 as per the last report. There was a slight delay following the conclusion of the consultation process whilst a recruitment partner was procured to support the first round of recruitment and increase the likelihood of a successful recruitment process in a very challenging labour market.

·         Governance and Compliance including Estate Management and Leadership and Governance Arrangements -

·         The work to review long leases has now been completed. An exercise was undertaken by Land and Property in which they reviewed a sample of leases, they considered the demise, term, commencement date, rent reviews, repairing obligations (including an extract of the clause) and insurance obligations. The work carried out by Land and Property was validated by the legal team. No issues were found from this assurance work. All of the new six assurance boards have been set up and meet on a monthly basis, each assurance Board provides a highlight report of their activity which is reviewed by the Executive Leadership Team. The establishment of the Corporate Landlord team is overdue however staff consultation has commenced and will end on 18th August 2025.

Councillor O’Brien explained that the work had established better processes and challenged the way in which work was carried out and identified where change to working cultures was required. 

The assurance framework which supports the six Assurance Boards has been developed further and finalised with a detailed Improvement Work Plan accompanied by quarterly milestones which are tracked through each Board’s Highlight Report.

The assurance framework details roles and responsibilities of Chairs, Deputies and Leads of the Board. It determines attendance and sets out meeting expectations. Improvement activity is on going across all Boards.

Those present were given the opportunity to make comments or ask questions and the following points were raised:-

·         Councillor Gartside referred to the delay in recruiting finance posts and using agencies to assist with this and asked whether there was a benefit to doing this?

The S.151 Officer explained that the best chance of recruitment was to use a partner to make sure that the right people were attracted to apply. 6 agencies had been seen in relation to the recruitment process.

·         Councillor Bernstein referred to 90% of appraisals being completed and stated that this was encouraging and asked how this compared to the GM benchmark for appraisals.

·         Councillor Bernstein also asked whether the time that was being input into the Assurance Boards by the Leader and Executive Members was sustainable?

Councillor O’Brien noted that it wasn’t only political time being invested in the Boards, but also the time of chief officers. However, the positive outcomes already achieved would not have been possible without leadership and commitment from the top of the organisation.

Councillor O’Brien explained that there were already some areas that were running on their own steam following the input of the Boards. It was also explained that financial sustainability needs to be a Member priority.

The cultural changes that were being made were for the positive and when the time was right the Boards would be in a position to take a step back.

·         Councillor McGill stated that he welcomed the internal improvements that had been reported but asked about external aspects such as commissioned valuations.

Councillor O’Brien explained that the external issues were out of the Council’s control but that relationships could be worked on with external partners and requirements needed to be specified which may require improved contract management and requirements. The Council would have to be the best client possible when working with external providers.

·         Councillor Hook referred to the Asset Management Register and asked which board had oversight of this area?

The S.151 Officer stated that the Property and Estates Board had oversight of this area.

·         Councillor Hook asked about the RAAC surveys and whether these had been complete.

It was reported that the external provider had confirmed that the work was complete and they were in the process of providing the evidence. It was hoped that a positive outcome would be reached.

·         Councillor Hook asked if the Audit Committee could be advised if projects were overdue or delayed and also that an explanation of the acronyms used be provided to Members.

·         Councillor Bernstein stated that the Council would be fortunate to fill the outstanding posts and asked what the knock on effect of not filing would be?

The S.151 Officer explained that the posts were currently filled with interim appointments. It was hoped that the posts would be filled by the autumn but there was the option to extend if the timescale was longer.

·         Councillor Moss referred to the Q1 financial performance report that was due to go to Cabinet in September. Councillor Moss was concerned that the September meeting was 6 months into the financial year but the report only contained figures up to the end of June.

Councillor Moss asked whether the Cabinet would receive early warnings prior to the report being submitted if required?

The S.151 Officer explained this was not unusual. Work was done to produce forecasts with a robust process undertaken in July. The Council recess was in August which meant that the 1^st available meeting would be September.

Councillor O’Brien explained that the Executive Member with responsibility for finance and the Leader would have had discussions and conversations with officers leading up to the report being submitted to cabinet for scrutiny. It was also explained that there was always an option to convene a meeting of the appropriate people if required.

• Councillor Moss referred to there being 61 recommendations included in just four Internal Audit reports and asked whether this was excessive.

Councillor O’Brien stated that there was a historical backlog that internal Audit were working through which also brought up other issues to look at. Internal Audit had been undertaking work to support managers to understand the audit process to they would know what to expect during their audits and how to respond to recommendations so that fewer follow ups were required. It was explained that this would make to audit process more positive.

The Director of Law and Governance explained that anything that remained outstanding after the second review automatically reports to the relevant board and Member assurance group. It was also explained that the boards and assurance groups also had sight of progress and tracking.

• Councillor Berry referred to the various boards and asked how the Audit Committee would receive reports and assurances from the boards.

Councillor O’Brien explained that the boards had been established to assist the Audit Committee rather than replace the work of it. The boards were cutting through barriers and challenges and were providing Internal Audit with some weight that had also kickstarted the culture change and breaking the cycle.

It was agreed:

1. That the contents of the update noted

2. That the progress of the Boards be recognised.