Agenda and draft minutes

Apologies for absence were received from Councillors Barwick, Burke, Field, Khadka, Round and Trzebinski.

The following Substitute Members were noted:

·  Councillor Cleator for Councillor Barwick

·  Councillor Fort for Councillor Trzebinski

·  Councillor Parfitt for Councillor Round

·  Councillor Russell for Councillor Burke

The Chairman stated that there were urgent updates to the following items:

·  Items 9 - Minutes (Part I and II) of the Meeting held on 11 April 2024 and 21 - Minutes (Part II) of the Meeting held on 11 April 2024 which had been uploaded after the publication deadline;

·  Item 14 – Information Governance Report - Annual Report for 2023-2024, which had been accepted as it contributed to the item’s consideration; and

·  Item 18 - Draft Annual Accounts 2023/24 which had been accepted as it contributed to the item’s consideration.

There were no Visiting Members.

There were no disclosures by Members or Officers.

There were no disclosures of lobbying.

RESOLVED: That all items be taken in public, unless any Member of the Committee wishes to discuss Item 21 – Minutes (Part II) of the Meeting held on 11 April 2024, in which case the Committee would enter into closed session due to the possible disclosure of exempt information, for the reason/s specified having applied the public interest test.

RESOLVED: That the Minutes of the meeting held on 21 May 2024 be approved as a correct record and signed.

RESOLVED: That the Part I Minutes of the meeting held on 11 April 2024 be approved as a correct record and signed, subject to deletion of the final paragraph on Item 93 - Revised Members' Code of Conduct and Arrangements for Dealing with Councillor Conduct Complaints.

There were no petitions.

There were no questions from Local Residents.

There were no questions from Members.

It was noted that the Code of Conduct Matters - Six Month Update would be moved to the meeting on 23 September 2024.

RESOLVED: That the Committee Work Programme be noted.

The Information Governance Manager and Deputy Data Protection Officer introduced the report and urgent updates and outlined the following key points:

·  Performance had been varied with an increase in performance responding to stage 2 complaints and rights requests, but a decrease in response to stage 1 complaints. This was attributed to increasing and more complex queries, unclear and repeated requests from customers on the same issues and large amounts of changes in staffing;

·  The implementation of new complaint handling code had already started, with Maidstone Borough Council being a pilot council to provide feedback to the Ombudsmen. The annual report and an analysis from the Local Government and Social Care Ombudsman (LGO) were circulated as urgent updates and showed a total of 6 upheld complaints against us in 2023/24 representing 0.7% of the 911 complaints; and

·  There had been an increase in data breaches which were largely low risk and had been reported to the Information Commissioners Office (ICO). They had not imposed any sanctions, reprimands or fines.

Queries were raised concerning whether allowing 12 months to submit a complaint was too long and if it was reasonable that a reason was not required for a stage 2 complaint. The Information Governance Manager and Deputy Data Protection Officer advised that this practise followed a national code and was not too dissimilar to MBC’s existing practice.

RESOLVED: That the Annual Information Governance Report for 2023-24 be noted.

The Director of Strategy, Insight and Governance introduced the report and stated that the Appendices contained listed areas identified for action from last year and progress made, including training to prepare for all-out elections and review of the constitution. They also set out actions for next year including responding to the recent staff survey, preparing for the new complaint handling code and monitoring the implementation of recommendations from those Audit reports with a weak rating.

During the discussion, the Parish representatives raised concerns around the Code of Conduct as it applied to Parish Council use. They advised that guidance would be produced through the Kent Association of Local Councils (KALC) to be agreed by the Monitoring Officer and to help Parish Councillors in this regard.

RESOLVED: That the Annual Governance Statement at Appendix 1 to the report be approved and submitted to the Leader and Chief Executive for signature.

The Head of Mid-Kent Audit introduced the report and stated that Maidstone Borough Council had adequate and effective risk management, control and governance processes in place to manage the achievement of objectives. There were three strong audits, twelve and a half sound audits and three and a half weak audits. Staffing issues in the team were addressed and an increased number of nineteen audit reports were issued this year. There were no outstanding actions to be taken.

In response to concerns raised around Subsidiary Company Governance, the Head of Mid-Kent Audit agreed to follow up on meetings of the enforcement groups established to monitor MBC developments. She also assured Members that there were follow-up procedures in place to ensure that actions for risk were completed and also agreed to consider including time scale data for Member information in future reports.

RESOLVED: That

1.  The Head of Audit Partnership’s opinion be noted; and
 

2.  The work underlying the opinion and the Head of Audit Partnership’s assurance of its independent completion in conformance with proper standards be noted.

The Finance Manager introduced the report and set out details of the activities of the Treasury Management function for the 2023/24 financial year in accordance with CIPFA’s Code of Practice on Treasury Management in Local Authorities. It was noted that:

·  The key elements of the 2023/24 Treasury Management Strategy, agreed by Council on 22 February 2023 were to:

o  Utilise cash balances, as far as possible, rather than loan debt to finance the capital programme in the short term, due to high borrowing interest rates;

o  Diversify the current portfolio as much as possible to reduce counterparty risk; and

o  Keep investments short term to meet demand of liabilities when they come due.

·  The investments balance at the start of the year was £8.54m and balances had peaked to £61.6m. The Council had £33.24m invested as at 31 March 2024, all in call accounts, instant access money market funds and short term deposits with other local authorities;

·  Investment income totalled £1.072m during the year. Forecast UK rates from the Council’s Treasury Advisors show the bank rate falling from September 2024. This will have an impact on investment rates moving forward;

·  Total loan debt at the end of the year was £45m, all long term debt. The Council procured forward borrowing of £80m 2 years ago, 50 year borrowing with Aviva Life and Pensions at a rate of 2.87. £40m of this funding was received in February 2024 where part was used to repay the short term debt and the remainder being invested with Local Authorities until funds required for funding capital programme. Current Public Works Loan Board (PWLB) borrowing is 4.9%;

·  The remaining £40m of forward borrowing will be received in the next 2 years, £20m in February 2025 and £20m in February 2026; and

·  All Prudential and Treasury Indicators had been complied with throughout the year.

In response to queries, the Head of Finance advised the underspend in Capital Expenditure was due to delays in the housing programme and that it would be spent in the next year.

RESOLVED: That

1.  The review of the financial year 2023/24 in accordance with CIPFA’s Code of Practice on Treasury Management along with the prudential and treasury indicators be noted; and

2.  No amendments to the current treasury management procedures are necessary as a result of the review of activities in 2023/24.

The Senior Finance Manager (Client Accountancy) introduced his report setting out the unaudited draft Statement of Accounts for 2023/24. It was noted that:

·  The statement did not include the annual asset revaluations as there was not enough time to process them. These would be updated before the final draft is submitted and would not have an impact on cash resources available;

·  The audit of the 2022/23 statement was delayed until October 2024, meaning the 30 September deadline would not be met. A notice would be published on the council's website to reflect this and the audited accounts would come back to the January meeting for final approval;

·  The headline messages from the Statement of Accounts could be summarised as follows:

o  There was a significant rise of £23 million in the value of property plant equipment reflecting continuing investment in housing, acquisition of land and buildings for future development and houses being used for temporary accommodation;

o  Significant investment was made in new vehicles for the waste collection contracts;

o  In terms of borrowing and investment, most of a loan of £40 million from February last year was still available for investment at the end of March. This was reflected in the increase in short-term investments;

o  There was an increase short-term debtors and creditors related to our role as the lead Authority in the Kent Business Rates Pool, which reflected monies owed and due from participants in the pool; and

o  The value of our net pension liability fell by £65 million from 21/22 due to the impact of interest rate changes on the pension fund. The value had fallen less drastically by £2 million this year.

In response to queries, the Director of Finance, Resources and Business Improvement stated that:

·  They were going out to tender for an external valuer of assets to mitigate risks to time scales in the future;

·  One of the factors that affected commercial income in 23/24 was the vacant units at Lockmeadow, with progress being made to fill these in 24/25; and

·  A more detailed analysis of the increase in grant levels from 2022 to 2023 would be provided at a later date.

RESOLVED: That the unaudited Statement of Accounts for 2023/24 be noted.

Sophia Brown, the Key Audit Partner with Grant Thornton, introduced the report setting out the External Auditor’s Audit Plan 2023/24. Particular attention was drawn to:

·  The three significant risks to the audit were the management over-ride of controls, valuation of the pension fund net liability and valuation of land and buildings. Risk of fraud and error in Revenue recognition was rebutted for all council income streams after review;

·  Materiality was determined at £1.9 million, similar to the previous year and which equated to around 2% of the prior year gross operating cost. Any errors identified above the £90,000 trivial level would be included in the audit findings report when presented to the Committee. In response to a point raised in the previous item, it was advised that exit packages and Senior officers remuneration were sensitive areas that the public would have an interest in and had a lower level of materiality at £20,000 for an individual officer's remuneration;

·  The value for money work was not yet completed, but no significant weakness had been found so far or in the two previous years;

·  The improvement recommendations from last year would be followed up. The audit for 2023/24 was planned to take place from 1 October, and the findings report would be presented at the meeting in January 2025; and

·  The fee was now around the level it was in 2011, accounting for inflation.

The Committee raised some points for clarification from the information in the report, but were otherwise happy to note as per the recommendations.

RESOLVED: That

1.  The external auditor’s audit plan for 2023/24, attached at Appendix 1 to the report, be noted; and

2.  The management response to the external auditor’s planning inquiries, attached at Appendix 2 to the report, be approved.

The Director of Finance, Resources and Business Improvement introduce the report and outlined the following points:

·  The Council remained within budget for 2023/24 and has set a balanced budget for 2024/25, but there are several risks that could threaten delivery in the upcoming year. Temporary accommodation had been highlighted a volatile, demand-led budget, which was highlighted as a separate risk in the register;

·  There were external risks that could influence beyond 2024/25 summarised in the report including impact of changes in government policy and rebalancing of finances provided to Councils; and

·  There were concerns around the size of the Capital Programme and financing it. £80 million of finance was obtained at a relatively low cost but, at current rates and given inflation of construction costs, it would be more difficult to fund and keep sustainable. This was listed as one of the top five risks.

In response to queries, the Director of Finance, Resources and Business Improvement gave clarification on the prioritisation of the issues presented as significant risks. The Committee then agreed to note the report.

RESOLVED: That the risk assessment of the Budget Strategy provided at Appendix A to the report be noted.

RESOLVED: That the Part II Minutes of the meeting held on 11 April 2024 be approved as a correct record and signed.

6.30 p.m. to 8.30 p.m.