Audit and Governance Committee - Monday 14 July 2025, 4:00pm - Cotswold District Council Webcasting

Audit and Governance Committee
Monday, 14th July 2025 at 4:00pm 

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  1. Councillor Helene Mansilla
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  1. Christopher Bass
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  2. Councillor Len Wilkins
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  7. Councillor Jeremy Theyer
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  1. David Stanley, Deputy CEO
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  3. Councillor Len Wilkins
  4. David Stanley, Deputy CEO
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  6. Christopher Bass
  7. David Stanley, Deputy CEO
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  12. Christopher Bass
  13. David Stanley, Deputy CEO
  14. Councillor Helene Mansilla
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  16. David Stanley, Deputy CEO
  17. Councillor Nick Bridges
  18. David Stanley, Deputy CEO
  19. Councillor Helene Mansilla
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  21. David Stanley, Deputy CEO
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  4. Angela Claridge
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  8. Councillor Len Wilkins
  9. Councillor Helene Mansilla
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  11. Christopher Bass
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  14. Councillor Helene Mansilla
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  10. David Stanley, Deputy CEO
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  13. Christopher Bass
  14. Councillor Helene Mansilla
  15. Councillor Nick Bridges
  16. Councillor Helene Mansilla
  17. Officer
  18. Councillor Helene Mansilla
  19. David Stanley, Deputy CEO
  20. Councillor Helene Mansilla
  21. Councillor Michael Vann
  22. Officer
  23. Councillor Michael Vann
  24. Councillor Helene Mansilla
  25. David Stanley, Deputy CEO
  26. Councillor Michael Vann
  27. Officer
  28. David Stanley, Deputy CEO
  29. Councillor Helene Mansilla
  30. Councillor Michael Vann
  31. Councillor Helene Mansilla
  32. Officer
  33. David Stanley, Deputy CEO
  34. Councillor Helene Mansilla
  35. Officer
  36. Councillor Helene Mansilla
  37. Councillor Helene Mansilla
  38. David Stanley, Deputy CEO
  39. Officer
  40. Councillor Helene Mansilla
  41. Councillor Helene Mansilla
  42. Angela Claridge
  43. Councillor Helene Mansilla
  44. Officer
  45. Councillor Helene Mansilla
  46. David Stanley, Deputy CEO
  47. Councillor Helene Mansilla
  48. Councillor Helene Mansilla
  49. Angela Claridge
  50. Councillor Helene Mansilla
  51. Angela Claridge
  52. Councillor Helene Mansilla
  53. David Stanley, Deputy CEO
  54. Councillor Helene Mansilla
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  7. Councillor Helene Mansilla
  8. Angela Claridge
  9. Councillor Helene Mansilla
  10. Webcast Finished

1 Apologies

Councillor Helene Mansilla - 0:00:16
Good afternoon, everyone.
This is a meeting of the Audit and Governance Committee of the Coast Wall District Council.
I would like to welcome all members, officers and anyone joining us, either here in Nethamba
or online.
Before we begin, may I remind members to speak clearly into the microphone and to indicate
either ways to speak.
Please also ensure mobile phones are on silent.
We will now move to the first item on the agenda.
Let's begin with apologies for absence.
Kieran, could you please confirm any apologies we have received?
Yes, we have received apologies from Councillor Nigel Robbins, Councillor Tony Dale and John
Cheshire.
Thank you, Kieran.
We also have a substitute member today, Councilor Wang, and he is acting as Vice -Chair for this
meeting.
Are there any declarations of interest?

2 Substitute Members

3 Declarations of Interest

4 Minutes

We have a set of minutes from the previous meeting to approve. I will go through them
page by page. Please do interrupt me if you have any corrections or amendments.
So I start with page number five, I believe. Is it in point? No? Yes? Yes, number five.
Any comments or corrections?
Christopher Bass - 0:02:09
We could perhaps add this as a standing agenda item. I'm missing from the minutes again.
Councillor Helene Mansilla - 0:02:23
Thank you.
Any further comments on page number five?
Page number six?
No comments?
Page number seven?
11. Are we all alright for page number 8? Page 9. 10. 11.
12, 13, 14 and finally 15.
No comments or corrections?
That's fine.
We will take the minutes as accurate.
Members, please raise your hands to confirm approval.
Thank you. In that case, we will move to the next item.
Are there any public questions?
Are there any members' questions?
Thank you.
The next item is the annual summary of complaints and statistics
from the local government and social care Ombudsman,
year -ending 31 March 2025.
As a brief context, in February 2024,
In 2024 the Ombudsman introduced new complaint handling code.
Councils were asked to start using it without delay and two years to make any changes.
This Committee approved updates to the Council complaints process in November 2024.
From April 2026 the Ombudsman will begin assessing councils against the Code.
This afternoon, we are simply asked to note the report and the annual review letter for
24 -25. I will pass it over to Cheryl to introduce the report and take us through the main points.
Officer - 0:05:29
Thank you, Chair. So this report just sets out the annual ombudsman letter, so it's

5 Public Questions

6 Member Questions

7 Annual Summary Of Complaints Statistics From The Local Government And Social Care Ombudsman - Year Ending 31 March 2025

a letter received every year, which sets out the complaints that have been referred to
the Ombudsman. So you'll see for the last financial year there were seven complaints
referred to the Ombudsman and of those seven complaints, four referred back. They tend
to come back when the complainer hasn't gone through the internal processes. One was closed
after initial inquiry, one was deemed as not valid or not having sufficient information
and then one was investigated but not upheld. So in terms of all complaints, there were
none are upheld by the Ombudsman for complaints referred by Cotswold District Council.
So a completely clean slate, which is brilliant.
In terms of the number of complaints that we've received during the year,
so there was 50 complaints in total and of those obviously seven were referred to the Ombudsman.
So that's 14 % but that's 6 % down on last year.
What we tend to see in terms of complaints is a lot of them are around people aren't happy with
decision making.
So if you look at the chart, you've got a lot sort of
around planning and housing.
So it often is where decisions may be made on
somebody's planning application or a housing
application and they're not happy with the response.
Those sort of complaints we can actually say we're not
going to answer because they fall out of the complaints
process if somebody's not happy with a planning
application because there's a separate process in terms
of the appeals process.
But what we tend to see is they sort of slide over
both. So we know that they're actually not happy with the outcome, but there may be a
complaint around the process, et cetera. So we still take them through the complaints
process. So as the chair referred to at the start, the process will now change for complaints.
So in November we brought a new complaints policy, and that is compliant with the new
Ombudsman Code. So moving forward, what we'll now have is a two -stage internal process rather
rather than the three stage. So the first stage goes to the service, the second stage
is an independent review. If the complainant remains dissatisfied they can then go to the
ombudsman. So that was all I was going to say, Chair, and I'll take any questions. Thank
you.
Councillor Helene Mansilla - 0:07:38
Thank you, Cheryl. Does the Committee have any comments on the report?
Yes, Councillor Wilkins.
Councillor Len Wilkins - 0:07:49
Sorry, Chair, it's just a question. I'm delighted we've got no upheld against 66 % average, but
how does our 50 complaints compare to the average in the UK, do we know?
Councillor Helene Mansilla - 0:08:04
Cheryl, would you like to take that?
Councillor Len Wilkins - 0:08:06
I probably, no, I haven't done that benchmarking, to be honest. I could certainly look to see
Officer - 0:08:13
how it compares. If we look at partner councils, it's around the same. We sort of get around
of sort of 40 -50 complaints received so not a huge amount given the number of
services that we're providing throughout financial year.
Councillor Helene Mansilla - 0:08:26
Councillor Jeremy Theyer - 0:08:30
Thanks a lot Thalia. On the complaints it shows housing is higher than any what
sort of thing is that because that can be quite broad spectrum. It is tend to be
Officer - 0:08:43
where there's decisions made, so it may be benefits,
it may be homelessness applications, housing applications.
We tend to get a lot where maybe somebody's been put
on a banding for housing, they're not happy
with that banding, but majority of them,
we very rarely upheld them, it is a process,
they follow the process, but the complainant
isn't happy with it.
So it tends to be where we've got a decision,
but we do follow the policy, it's just the complainant
isn't happy with that.
Councillor Helene Mansilla - 0:09:15
Councillor Nick Bridges - 0:09:19
I just wanted to ask what the antisocial behaviour was.
Officer - 0:09:36
I would have to come back to you if I can.
Councillor Helene Mansilla - 0:09:45
Councillor Thiessen.
Councillor Jeremy Theyer - 0:09:50
please. Just to reiterate on that, was that internal or external?
That's the only thing probably with it, it probably doesn't show. Yeah, because
parking that could be internal as well if you really get stuff out there.
Councillor Helene Mansilla - 0:10:26
Any other comments? Thank you. In that case we move on to the next item.

8 Treasury Management Outturn

This is the Council's statutory annual Treasury Management Report.
It shows how the Council managed its finances, including cash, borrowing and investments,
over the last financial year from 1 April 2024 to 31 March 2025.
It also reviews performance against the Treasury Management Strategy agreed in February 2024,
and confirms whether the Council complied with national rules, including the Chartered
Institute of Public Finance and Accountancy Code and the potential indicators.
We have been asked to note the Council's performance and agree any comments to pass
onto full Council.
I will pass over to the Council's Deputy Chief Executive and Section 151 Officer David
David Stanley, Deputy CEO - 0:11:38
Stanley to present the report. Thank you chair. I don't have an awful lot of
detail to add I think what we've got is a very positive performance during the
year in terms of the council's investments so broadly speaking we
budgeted for around 1 .2 million pounds of investment income we got around 1 .6
million in so around about a four hundred thousand pound improvement on
that budgeted position. That was largely due to two things, sticky interest rates, they're
always quite fast at going up, they're much slower at coming down, so the rate of reduction
in that Bank of England base rate was much slower than was originally forecast several
months ago, probably the best part of 18 months ago, therefore, and also the cash balance
that the council had available on a day -to -day basis to make those investments was higher
due to the slower spend, particularly on the capital program.
As the chair set out, this report shows the performance
against the strategy that was approved by council
back in February of 2024, so quite some time ago.
Quarterly reporting was provided to this committee
and also the mid -year report,
which was around about October, November time,
which is another one of those required reports
under the SIPFAA code goes into more detail on that performance, particularly around whether
or not the Council has complied with that Treasury management strategy.
Probably the best place to take members in terms of the overall performance is the graph
on page 39 of the packs.
Hopefully in your printed packs that's in colour, because it does help in colour to
spot the sort of red orangey line around about the middle
of that graph.
So what this graph shows is the income only return
that was achieved and the relative position
of Cotswold District Council represented by that red line
in amongst all the other clients that Arlene Close has.
The graph is relatively flat so it doesn't show a drop
from say 6 % down to 0%.
there's some outliers both at the top end
and at the bottom end.
And generally speaking, the return that most authorities
got was at around about the same level,
which is where Cotswold have been.
So in previous years when the interest rates
were significantly lower in terms of the base rate
and what the council was able to earn
on its short -term deposits,
having those longer -term investments in the pooled fund
and the returns they gave being three, 4 %
intended to push you up towards the top end of that graph.
But clearly with interest rates on short -term deposits
around four or 5%, councils haven't had to necessarily
do significant treasury management activity
in terms of the use of notice accounts
and other variations on those short -term deposits
to see that level of return.
In terms of where we're going,
I think interest rates currently 4 .25%.
There are, according to Arlene Close, likely to be two further reductions in the interest
rates during the calendar year.
Their assessment is they will be aligned to the Bank of England quarterly reports.
The next one is due in August, with another one in November.
Or those of you with a keen ear to the radio or to the websites might have heard that the
Bank of England was starting to suggest, given the sluggishness of growth, that those interest
straight cuts may need to come sooner rather than later in order to stimulate demand. So
we'll have to keep an eye on that in terms of the overall investment performance. But
we have, through the MTFS for the current year, tapered off some of those gains that
we've seen in this report being above our overall position.
Just to give you a sense of the other side of the coin, which is our borrowing, the Council
hasn't undertaken any new borrowing in the year that we're reporting against. The borrowing
that's shown in the various tables in the report relates to the climate bond
that the council took out two three years ago with abundance that was half
a million pounds and what we're showing each year is the amount that's due to be
repaid within the short term i .e. within the next 12 months and the amount due to
be repaid in a slightly longer term but that short -term investment in terms of
its overall length was for a five -year period so relatively short term that
funding has been used to fund climate change initiatives
such as the solar PV on the roof of Trinity Road
and the installation of electric vehicle charging points.
So that was at around about 2 .15 %
in terms of the interest rate.
If we went to borrow money today,
the current PWLB rates for annuity
in much the same way as a mortgage works
where you're paying significant chunks
of interest at the front and the significant amounts of principal towards the end of the
term period, a 50 -year annuity loan alone would be 6 .14%. For 30 years, which is generally
at the moment the most expensive period on a maturity loan, but on an annuity loan is
6%, and for a relatively short -term PWOB loan, which is 10 years, 4 .84%. So you can see the
cost of borrowing is exceedingly high relative to where it's been over the last 10 to 12
years. Those rates in particular for 50 -year borrowing were as low as about 1 .5%. So that
makes some of the treasury management much more interesting in terms of how does the
council support its capital program when it's got reducing balances available to invest
but the cost of borrowing is significantly higher.
But that is something that we'll need to consider
both in November, in December's meeting
in terms of the mid -year position,
but also when we're framing the Treasury management strategy
for the forthcoming financial year,
where there is an underlying need to borrow
on the capital programme, given the position there.
The Council is budgeting for around the replacement
of waste and recycling vehicles as part of its day management
of the UBICO contract. All of that is in the future. What this is looking at is the performance
from the prior 12 -month period. I'm happy to take any questions.
Councillor Helene Mansilla - 0:18:18
Councillor Len Wilkins - 0:18:34
On page 29 we are looking at a loan from the Council to Cotswold.
3 .25%. On page 33 you're saying that a PWLB loan will be 5 .7%. I'm not comparing apples
and apples because the PWLB is a 20 year. The one we're suggesting is a 50 year. So
why are we being so generous?
So in terms of that particular loan that was agreed at council about three years
David Stanley, Deputy CEO - 0:19:20
ago the terms of that loan specified either then so 3 .25 % or the 50 -year PWRB
rate whichever was the lower. Now myself and Michelle have been having an ongoing
conversation with Cotsway recognising that the current position of 50 -year
borrowing is significantly above 3 .25%. We're just finalising that agreement
because there is a change to that position and that was a delegated
decision I could take as the CFO in terms of what interest rate was set when
that initial short -term loan was converted into a 50 -year loan. That
reflective of the average borrowing rate over a longer time period. If you looked at the
average rate the Bank of England have held for the last 30, 40 years on interest, it's
not currently where it is, it's slightly lower than that, and that's where we've tried to
get to. But until we've got the legal documents signed off, I won't reveal what that rate
is, but certainly the leader is aware because he was the deputy leader and cabinet member
finance and I know other members have asked particularly around this loan but
it is something I was conscious of that once there was that point in the loan
where it was conversion from short term to long term we needed to revisit that
rate to ensure that the council wasn't providing a loan that in in the end
might cost it money if it needed to borrow subsequently and those rates were
higher.
Councillor Helene Mansilla - 0:20:55
Thank you.
Christopher Bass - 0:20:57
First of all, it is great to see that the investment income came in higher than budgeted.
That is always helpful.
Just looking at the table 4 on page 34, the overall investment value has dropped over
the 12 -month period.
I was trying to pick apart, is that because cash has been reallocated to capital programmes
or is that underlying performance of some of those investment funds and the principal
has reduced?
David Stanley, Deputy CEO - 0:21:35
I'm sure Michelle will correct me if I veer off the detail, but it's more to do with the
amount of cash the council had available between the two dates being looked at, which could
be movements in balance sheet items around debtors and creditors and so on.
Certainly in terms of the longer term pooled funds elsewhere in the report it
says there was an overall 75 ,000 pound reduction in the capital value of those
pooled funds. They've not necessarily moved much themselves just the amount of
cash at the two balance sheet dates is the bigger contributor to that. Michelle
might have some detail to that.
Officer - 0:22:13
Yeah, that's spot on, absolutely right. The pooled funds have fallen slightly in value,
but as David said, the banks and building societies and the government and the money
market funds lines in that table is just a result of available surplus cash that we've
invested. So it's just really a sort of timing issue. But it's the, yeah, the pooled funds,
it is based on the performance of those.
Christopher Bass - 0:22:39
Is that because as part of the investment strategy we're looking at pooled funds that
are driving income rather than capital growth?
Officer - 0:22:44
That's right, yeah, they're held for the long term, that is the view, so we wouldn't be
looking to sell or dispose of them at the moment because we'd have to realise they're
a loss.
Councillor Helene Mansilla - 0:22:58
Any further comments or observations?
Christopher.
Yeah, there was another one on this one.
Christopher Bass - 0:23:06
Maybe it was a comment rather than a question,
and just to check my understanding,
because there's the check, and I think you mentioned it
when you were making your comments, David,
about the compliance, and it kind of reads,
and it's correct, but it reads incorrectly to me
that it says it's non -compliant because we can't possibly have
a crystal ball and know what the interest rates were going to do.
So I guess that's just a factor of how it has to be written up.
David Stanley, Deputy CEO - 0:23:34
Yes, I mean, there's in paragraph 7 .3 it shows the
target for interest rate exposure.
What we're trying to show here is if there was a movement in
interest rates of a particular level,
what effect that would have.
And you're trying to stay within that.
but clearly we won't comply with that given the level of cash balances and the movement in particular.
Councillor Helene Mansilla - 0:23:59
Council of Bridges, please.
Councillor Nick Bridges - 0:24:01
If I wanted to do further research about what the pooled funds are, is there an easy way to do that?
David Stanley, Deputy CEO - 0:24:13
In terms of what, I suppose, what may benefit the committee, and we do it annually, is we
bring Arlene Close, our Treasury Management Advisors in to do a presentation to all members,
but particularly for this committee, in terms of the more technical aspects of Treasury
Management. What that can cover is the pooled funds and the different pooled funds we've
So we've got an initial investment around 12 million
that's worth slightly less than that at the current
point in time.
That was deliberately diversified in terms of which
pooled funds were selected.
So we haven't got everything, say, in a property fund.
Some of it's in a property fund, some of it's in an
equities fund, some of it's in a REIT, which I'm trying
to remember whilst I'm talking, but it's something
to do with the Housing Investment Trust.
So there's a number of different funds we've got,
and what we tried to do with that is spread that
performance risk across the wider number of pooled
funds that you can have, because what you don't want
with pooled funds is to throw everything in equities,
and then suddenly you have one particular year where
equities perform exceptionally badly, you
don't receive any dividends, and the capital value of
what you've got plummets.
So there is a broad diversification, and what
in close would be able to provide in that presentation is some more information but
we can get you that information Councillor Bridges in terms of giving you an overview
of what the funds are, what they cover, the relative size of the funds because some funds
have more in them than others so we might have a let's say a two million investment
in a 200 billion pound fund and that will give you a sense of whether or not there's
at particular exposure local government or parts local government got to particular funds.
The one I'm thinking of is the CCLA funds. They're generally targeted at local governments.
A particular CCLA property fund is one that I would also encourage you to have a conversation
with the leader of the council who also provides that support to the LGA in terms of sitting
on a particular board where they're looking at this from a
more corporate point of view.
Councillor Nick Bridges - 0:26:27
I was more thinking are we involved with tobacco
or the arms trade?
David Stanley, Deputy CEO - 0:26:33
We did a piece of work with Arlene Close,
I think it's probably about 18 months ago,
where we looked at the corporate governance on our environmental,
social and other, I don't remember what the ESG
standard for.
But it looked at that particular issue.
Have we got investments in fossil fuels?
Have we got investments with arms manufacturers?
Have we got this?
So it looked at that and it tried to find a way
through because it's not necessarily as clear as we
don't have any fossil fuel investment because if our
investment is say with a bank and that bank then
lends to someone else, who then lends it to someone
else, you might through that relationship end up
with that type of investment.
But what I can provide is that report that was given to members informally in terms of
that particular exposure to understand where we are.
Because where that was coming from was there were particular concerns that some councils
had largely those with pension funds, so not us but the larger pension funds, Oxfordshire
in particular, where they were coming under pressure from their members to say are you
diversified from those fossil fuels.
And this was a way of us understanding what our
exposure was, but also tried to navigate through that
because you do need the funds to provide you with
that information in terms of what they're investing in
to be able to give you that clarity.
But we can provide that for you.
And you've had questions.
Councillor Helene Mansilla - 0:28:12
Christopher, please.
Christopher Bass - 0:28:15
It's a general point actually on the papers for this agenda item and the next agenda item.
I'm wondering if maybe they were prepared originally for the last meeting and deferred
because there's a few references in there that are now slightly out of date across both
of those. For example, in this one it talks about Bank of England base rates and then
says that May is considered to be the likely month for the next reduction. I haven't listed
them all out but there's a few in this one and the next agenda item as well that just
need a review.
David Stanley, Deputy CEO - 0:28:49
So just in terms of this particular item, Annex A, I always say to members that's the
economic background for the year and I always tell members take that with a degree of skepticism,
things have moved on at pace. So this would have been drafted by Arlene Close for all
their clients back end of April.
We have not updated it because it is an all in close
economic commentary.
Christopher Bass - 0:29:14
That makes sense.
Thanks, David.
Councillor Helene Mansilla - 0:29:19
Any further comments?
I am just going to take a brief second to personally welcome
Councillor Thayer who wasn't here at the beginning
of the session.
and the cabinet member for finance, Councillor Coleman.
I don't know whether you would like to make any comments regarding this report, Councillor?
Councillor Helene Mansilla - 0:29:47
Thank you.
If not, I propose we make the following comment to full council.
The Committee notes the Treasury Management Out -turn Report 2024 -25 and is satisfied,
based on the information provided, that Treasury activities were carried out in accordance
with the approved strategy, prudential indicators and statutory guidance. No breaches have been
reported. Based on the report, no new external borrowing appears to have been undertaken
during the year, and internal cash balances were sufficient to meet operational and capital
needs. Investment activity prioritised security and liquidity, while delivering stable returns
in the context of ongoing market volatility.
The Committee acknowledges the support provided by Ardling Close in Treasury advice
and notes that the continuation of the services appears appropriate.
Finally, the Committee suggests that future reports may benefit from greater clarity
around the basis for expected long -term investment performance.
I ask members to raise their hands to confirm approval, please.
Thank you.

9 Draft Annual Governance Statement

Councillor Helene Mansilla - 0:31:40
We now come to the Annual Governance Statement for 2024 -2025, an action plan for 2025 -26.
As members will recall, this statement forms part of the Council's statutory financial
reporting and reflects how the Council has complied with the principles set out in its
local Code of Corporate Governance, which was reviewed and adopted by this Committee
in January of this year.
The statement outlines the governance arrangements in place during 2024 -2025, including any areas
for improvement or significant governance issues.
Cheryl, would you like to introduce the report, please?
Officer - 0:32:34
Thank you, Chair.
So not a whole lot to add, actually, to your introduction.
The draft annual governance statement is basically a backward -looking document, so this looks
that the governance controls that we've had in place for 24 -25.
You'll then see an updated action plan for 24 -25,
so this shows the progress that was made last financial year.
And you'll see that a couple of the actions remain in amber,
and they've been carried over into this financial year.
And then there's the new action plan for 25 -26.
That's a forward -looking document,
and that's under eight key areas
that are detailed in the report under 2 .3.
As part of our updates we will bring progress updates against the action plan to the Audit
and Governance Committee and we normally bring those on a six monthly basis.
That is all I was going to add, Chair Fincke.
Councillor Helene Mansilla - 0:33:26
Thank you, Cheryl.
If I appropriate you all, Angela, you may also wish to comment on any emerging risks
governance implications in the event that local government
reorganisation or further devolution proposals come forward.
This relates to item number five of the plan.
Officer - 0:33:55
So yes, we have an item in there around LGR.
In terms of the risks, so that would be captured as part of the
Strategic Risk Register and also as we move forward into sort of
for LGR then there's likelihood that we'd have a specific risk register in terms of
that LGR much like we did for the transition because it is such a significant project and
a lot of unknowns at the moment. So yeah we've got excited with the action plan but there'll
be a lot more that sits around that in terms of making sure that we're covering the risks
of.
Angela Claridge - 0:34:27
Thank you and just to add to that, members might be aware that there is a briefing coming
up on local government reorganisation for you which is being planned in shortly so that
will give you an opportunity then to ask officers, share any concerns or be reassured about the
risks and what we're doing as officers to mitigate them. And also on the forward plan
for November's council is going to be an item about local government reorganisation. That
in it as all standard reports do, chair, will outline the risks and what's in place to mitigate
those but you're right as Cheryl's outlined it's a significant
significant piece of piece of work and will be ongoing for a while yet.
David Stanley, Deputy CEO - 0:35:11
Thank you chair. Just in terms of this action plan this is covering the year
we're currently in so it's looking at the what will need to be delivered by
the 31st of March 2026 and whilst there will be discussions around local government
reorganization and devolution the services this council provides will still need to
be delivered and will still be responsible for delivering those services.
So I would provide a little bit of context to the LGRD evolution in terms of the annual
governance statement that there is still decisions we will need to make as a sovereign council
around the delivery of services up until midnight the day before vesting day.
So we do need to ensure that that LGRD evolution discussion doesn't obscure decisions and governance
around current service delivery.
Thank you, David.
Thank you, Angela.
Councillor Helene Mansilla - 0:36:01
Any questions, please?
Councillor Helene Mansilla - 0:36:13
Councillor Len Wilkins - 0:36:19
Did it happen?
That's the transition of the latest services.
So we had more services transfer over on the 1st of July this month.
So it's just making sure scheme delegation reflects any changes that may have brought.
Okay. Last I heard it was all going to happen in November last year.
We had two. One in November, one in July.
Okay, thank you.
Here's the code please.
Councillor Helene Mansilla - 0:36:59
Councillor Len Wilkins - 0:36:59
Thank you.
Christopher Bass - 0:37:02
Yeah, so I was just zooming in on the business continuity planning and it looks like really
nice progress made and I can see that the action for the next 12 months is about testing
those plans as well because everybody thinks they've got great business continuity plans
until they go to use them, so the testing is really important.
I was just wondering how deep into the supply chain the BCP goes because if I think about
big services that are provided, waste would be one of them as an example, which is outsourced.
So does the BCP go right into the supplier's BCP?
Officer - 0:37:37
So the piece of work actually we've carried over is the BCP elements.
There was a huge amount of work that was done around emergency planning.
BCPs we didn't get as much work done as we wanted to, so this will be a focus over the next 12 to 18 months
to look at the business continuity planning, the policy, the templates that we use.
That will be a key focus to make sure that they are detailed enough.
In terms of going into supplies and things, yes, they will.
So the team is starting to look at things like Yubico's plans.
So they are wide and just the services specifically
or directly delivered.
So it will start to look at elements of that.
But it is a priority for this year because the focus has been
very much with the transition of services, bringing those
emergency planners to a locality base, whereas they were
previously done across the three councils.
They're now responded to by council.
So that would be a key area of focus, which is why we've had
Christopher Bass - 0:38:29
carry this one over. Sounds good, thank you. I was partly thinking about the bins
in Birmingham when I asked the question.
Councillor Helene Mansilla - 0:38:38
Councillor Len Wilkins - 0:38:46
Any further comments? It's following on from the previous question in some ways.
It's page 65. The action will carry financial year when phase two transition
of services was completed. I understood it was completed in November. Is phase two now over?
David Stanley, Deputy CEO - 0:39:09
So the transfer of services for phase two was completed on the first July and I've just
signed off payroll to ensure that those staff that transferred from Publica to the council will be
paid the right amount at the right time.
There is still some work to do around phase two,
which is also linked to phase one,
which is ensuring that the council's values and culture
are embedded in those service areas,
that the council where those services have come across
pretty much on a lift and shift basis
where we now have responsibility for those.
And this was discussed to an extent at cabinet last week
around the planning advisory service report that highlighted some things that
the council needed to do to ensure that the planning service was fit and proper
and was able to deliver the objectives that we needed to. So whilst staff have
transferred and services have transferred there is still
clearly work that we need to be doing on an ongoing basis to make sure those
services are the shape, size and responsiveness that we as a council
would like them to be.
Councillor Helene Mansilla - 0:40:28
In relation to the Action Plan 2025 -2026, I propose that the Committee receive progress
updates every six months to support oversight and delivery. Unless there are any objections,
I think we can take that as agreed.
We will have to go forward then Chair.
Councillor Helene Mansilla - 0:40:58
Any further questions?
Right. Can I ask the committee to confirm whether it is content to
First, approve the Annual Governance Statement 2024 -25.
Second, approve the Annual Governance Action Plan 2025 -26.
And, as proposed, agree to receive six monthly progress updates on the Action Plan.
Please see a show of hands to confirm agreement on all three points, please.
Councillor Helene Mansilla - 0:41:45
Thank you.

10 Internal Audit Annual Opinion

We now come to the internal audit annual opinion report for 2024 -2025. This report provides
the annual opinion of the head of internal audit delivered by SWOP on how well the Council's
internal controls are working, based on the audit work carried out over the past year.
It also helps inform the annual governance statement approved in item 10.
The opinion is drawn from a risk -based audit programme and doesn't cover every area, but
focuses on key risks and systems. For clarity, and as set out in the report on page 6, reasonable
assurance is a positive opinion. It indicates that controls are generally sound and support
the Council in achieving its objectives. We are joined today by the Head of Internal Audit,
who will present the report and take any questions. This item is for consideration only, no formal
Officer - 0:43:22
vote is required. Members are very welcome to comment or ask questions. Over to you,
to add to that. But thank you very much. Yes, this is your annual audit opinion for 24 -25
and we're happy to give Cotswold District Council a reasonable assurance for this year.
The key pages for the committee to look at, I believe, are in your pack page 82 where
you can see the audits that have had a really good assurance for the year, which includes
to counter payable, housing benefit, leveling up grants.
And there were some significant risks
we identified in data protection and data breaches
and sickness absence reporting,
but we can confirm that those agreed actions
are being followed up and actioned.
The other pages that you may want to consider,
there are a couple of final reports
included in your pack tonight.
and we also continue to follow up all the agreed actions.
So happy to take any questions.
Councillor Helene Mansilla - 0:44:44
Any questions, Christopher?
Christopher Bass - 0:44:48
Yeah, I've got a couple actually, they're quite different.
So the first one, just looking at the summary pie chart,
table two, and actually for some bizarre reason,
I was thinking about this when I was walking over here,
ICT, and so IT compliance,
seems like quite a small chunk on that pie chart.
I wonder if you could just comment on the scope
for IT compliance under the internal audit remit.
Officer - 0:45:14
At the moment, it's been a bit limited,
and we understand that.
So what we've been doing is working with the ICT team so we get assurances from the PSN
submission that they undertake, so we get the copies of certificates for that, so we
can take assurance in those areas.
The audit that that refers to is the disaster recovery audit where the team go in and sit
with ICT, they break the system for want of a better phrase, and then everything comes
back up.
But for the year 25 -26 we've got more proactive discussions going on with internal audit and
we've got a meeting booked with John Chilton somewhere in the middle of August or even
before to discuss future areas of ICT audit that we can undertake.
Christopher Bass - 0:45:57
That sounds sensible when I think about the risk environment, things like system access
in particular provide opportunities so yeah, it would be good to get that included.
Thank you.
May I continue?
Please.
Thank you.
Second question, I was looking at the actions and there's one, this maybe isn't a question
for you, it's maybe a question for one of the officers, but there's one which is a priority
one which has been open for some time and has been extended a couple of times.
So I wonder if somebody could comment on the progress on that one and why it needed to
be extended.
It is the 5346, the budget monitoring.
Councillor Helene Mansilla - 0:46:47
Christopher Bass - 0:46:49
Councillor Helene Mansilla - 0:46:52
Christopher Bass - 0:46:53
Thank you, Chair.
David Stanley, Deputy CEO - 0:46:55
This relates to the report on members' allowances and expenses.
And the priority one recommendation was to ensure that the service undertook budget monitoring
of members' allowance expenses to ensure that amounts paid during the course of the year
were in line with the members' allowances scheme as published in the constitution.
So the reason this has been rolled forward is also to do with the way in which that information
is made available to the service to enable them to undertake that critical role in checking
that on a regular basis. So we've been working through ABW, the aggressive business world,
the financial system to ensure that those reports are as readily available and accessible
as they need to be. The reason that slipped is because it wasn't available in February,
which is the original timetable, and we're still in shock about working through the menus,
and there are several layers of menus individuals have to go through to get to the one report
they're looking for, is made as simple as possible. So there is a piece of work being
led by Karen Bess, who is, no relation to you, Christopher,
the interim finance lead for Publica, who is also an ex -unit
for employee, unit for being the company that provide ABW,
to ensure that we're clearing off the historic reports from
the menus and replacing those with relatively slimmed down
menus to make that available.
But certainly the liaison between the service and finance
remains, and we are supporting them through that,
but where we want to be is that the service is able to do that without finance service
intervention.
Christopher Bass - 0:48:36
So is there a date that we know we're going to, is there a new committee date?
Because I think the last date on here was the 31st of May.
David Stanley, Deputy CEO - 0:48:45
We will provide an update to the next committee which will be in September.
Christopher Bass - 0:48:50
Thank you.
Any more questions?
Councillor Helene Mansilla - 0:48:56
Just a little question.
Councillor Nick Bridges - 0:48:59
It is due with, let's see if I can find the number.
There you go.
3175 on page 101, PUB, ICT, business continuity, disaster recovery, and we have got a time
scale for that to be completed by the end of this month. That seems to have fallen over
since 23 -24. If we talk about making emergency arrangements, it strikes me that the word
emergency suggests it is important.
Councillor Helene Mansilla - 0:49:40
Officer - 0:49:43
This agreed action has more to do with the response to an emergency is in place, it is
all around the formalising of that, so putting policies and procedures in place for someone
to follow that. But ICT have everything in place that they would need if there was an
emergency and that we pick up as part of our disaster recovery audit.
So it all happened at the end of the month?
We'll be following up to find out.
Councillor Helene Mansilla - 0:50:14
David Stanley, Deputy CEO - 0:50:17
Just to reassure members, there is on Microsoft Teams a channel for duty officers which has
a regularly updated list of contacts of everyone across public, the councils and our partner
organisations as to what happens should there be an emergency. I think what this particular
Another issue is referring to, given the change in service responsibility and individuals,
clearly as individuals move from public to the council, and in some cases they didn't
move to this council, they might have moved from public to another council, having that
updated list of service responsibilities that the chief technology officer is looking at
clearly couldn't be undertaken in full until phase two was complete.
But to reassure members on a day -to -day basis as part of the duty officer packs that are
available, and I think we're probably on version 47 or 48, that is regularly updated as staff
change.
And it was recently updated to reflect the contact number for the new interim Chief Executive
Officer Jane Portman.
So it's as live as that, and it is changing almost on a weekly basis in terms of who to
be contacting in the sense of an emergency.
but from the planned point of view for technology and disaster recovery.
Clearly, that's more around, if I gave you the example of finance, this building burnt
to the ground, how would we ensure that invoices can be paid?
And that's ensuring that Michelle's contact details, my contact details are available
and we have a process in place to ensure that invoices and payments can be made despite
this building not being here.
Councillor Helene Mansilla - 0:51:59
Councillor Michael Vann - 0:52:03
Yes, on page 86, we identified significant weaknesses in the following order.
Data protection and data breaches.
Well, one reads about data protection breaches every week of the year in all parts of the
outside world and thumping fines are levied.
I'm really puzzled as to how this came about.
That's my first question.
Officer - 0:52:48
It was an audit we undertook during the year and I can't remember, it's not in front of
me because I think this was a report we presented a number of months ago, but if it would help
can I email the report to you so you've got a copy of it for information? Because it's
a public record now.
Councillor Michael Vann - 0:53:17
Thank you very much. I was on the Audit Committee and I'm pretty certain I recognised the page.
I wasn't going to be, to say that. I am right, I have read it before.
That's right. The second one, members allowances. What I cannot comprehend is how any money
is released from here to any member without everything being in order.
Councillor Helene Mansilla - 0:53:54
David Stanley, Deputy CEO - 0:53:57
There is a process in which the council, I myself and Michelle, sign off all payroll
transactions.
up until 31 October 2024, that process was part of a wider public process. What this
particular audit identified is whilst the payments were made to the right recipient
and didn't vary one month from the next, the actual payment amount was higher than it should
have been. And that's where the regular budget monitoring would come in, because when you're
matching the individual to the level of special responsibility allowance they are attributed
and are entitled to, that would have been flagged up.
So absolutely agree with the point, Councillor van, that there shouldn't be any payments
released to staff or members that they're not contractually entitled to.
And part of the process around budget monitoring is to ensure you're doing that three -way check
between what the budget says and what you know the payment should be against the actual
payments going through and that weakness was exposed in that particular audit and is being
significantly strengthened in terms of internal controls.
Councillor Michael Vann - 0:55:16
Thank you very much.
My final one is reasonable.
Now, page 87, 19 % is reasonable.
I really would appreciate just a short explanation as to how reasonable becomes the majority.
Officer - 0:55:47
When I draft your annual opinion, I take into account all the assurance levels we have given
into all the audits over the course of the year,
and I have a scoring mechanism, if you like,
and that gives me an average score.
So for this year, it's come out at six point something,
which is slap bang in the middle of reasonable.
The other thing I also take into account when doing that
are the number of priority agreed actions we've given.
So as Chris spotted earlier,
He mentioned on the priority one, there's three priority ones in your list for this
year and at the moment they haven't been actioned.
So it's also taken into account how long it takes for agreed actions to be implemented
as well.
So there's a bit of a scientific calculation but there's also audited judgement that sits
with that.
David Stanley, Deputy CEO - 0:56:49
So as the recipient, I suppose along with the committee of the annual audit opinion
I'll give you a non -scientific view.
When you look at the table on page 80, particularly referring
to the number of priority actions that were identified,
the median point is priority two, generally speaking.
There's only three priority one, that's three too many,
and is clearly a deterioration on the number that was found
in the previous year.
And when you look at the assurance levels on the audits
on the TACEM, five were substantial, six were
reasonable, one was limited.
In terms of the overall opinion, reasonable, satisfactory, okay.
Is that acceptable?
It gives you assurance as a committee that the internal
controls are working as intended.
What it also says is those internal controls can and should be improved.
However, I would caution against receiving an audit opinion that said everything was
wonderful and substantial.
The whole point of an audit is to test the robustness of those internal controls.
I welcome audits that prod, poke and get underneath what's going on and report it as it is.
So I would be horrified if we ended up with a no or a limited assurance, because that
would suggest that the controls aren't working at all.
I'd be equally sceptical to get one that says everything's perfect, because I don't think
any public body is in that position to say everything's working as intended.
Yeah, Councillor Lecun.
Councillor van der Heer.
Councillor Helene Mansilla - 0:58:35
Councillor Michael Vann - 0:58:37
Very reassuring.
Seriously, the work has been done, the judgement call is made, it's very much appreciated.
Councillor Helene Mansilla - 0:58:51
Just to comment on page 18.
Yes, while this is in a significant rise, it does indicate that internal audit continues to highlight areas for improvement across several services.
I am talking about the table, the figures that David was just quoting.
So priority items, the number of priority 1 and priority 2 agreed actions have slightly
increased compared to last year, from 1 to 3 and from 10 to 12 from priority 2.
So the question, it begs the question of whether there are any concerns that the committee
should be aware of.
Officer - 0:59:43
At this precise moment in time I don't believe so. Of the agreed actions that we have made
this year, two of the priority twos have been actioned and two of the priority threes, which
is the table. My page says 91, but I think that might be your 89.
I'm looking at the PAC number.
Yeah, the PAC number on my screen says 91, but it might be your 89. And you see all the
agreed actions every time we have a meeting. So I think that is your opportunity if there
are some agreed actions that sit there for far longer than they should be, that perhaps
you ask an officer to come and explain why they haven't been actioned yet. But I don't
have any concerns at this point in time.
Thank you.
Thank you, Lucy.
David Stanley, Deputy CEO - 1:00:49
I think it's worth making a point, Chair, that this committee at its May meeting considered the proposed internal audit plan for the current year that we're in.
That plan is agile, so it can be amended, and I think you've heard from Christopher
particularly highlighting the environment that ICT operates in.
And I suppose rather than looking at what audit have reported as being sort of backward
looking, this is how the controls were working at the point those audits were undertaken.
taking that on board with the plan that was considered by this committee and you
having that liaison with Lucy as your head of internal audit to seek
assurances that the scope and coverage of that plan is adequate enough for you
to be assured that we're as an authority or as a body swap looking in all the
right places so I would be reviewing that as on an ongoing basis through
dialogue with Lucy.
Councillor Helene Mansilla - 1:01:53
.
Officer - 1:02:52
I would just for clarification, these are payments made for all the councils and partners
that Publica do the AP transactions for.
So you've got four councils, Publica and Ubico.
So this is, we're talking about 73 rows of duplicates over six bodies.
This doesn't take, this has nothing to do, this is just physical invoices being paid
And we even do testing where we can say for example look at the G4 client which is Cotswold
and compare that to what's on P8 and we can see if there's any duplicates paid that way
as well.
And sometimes there is.
So a lot of this is just human error and sometimes there's duplicate invoices that come in where
a one for example has been accidentally been read as an I. That's identified as a duplicate.
We do this piece of work on a quarterly basis and we speak to the AP manager at that point
in time and that's when she starts investigating so those nine items are
Councillor Helene Mansilla - 1:03:56
Councillor Helene Mansilla - 1:04:02
the ones that were probably found in just quarter four. David please.
David Stanley, Deputy CEO - 1:04:06
Thank you chair and just in terms of the I suppose the audit recommendation it's
substantial audit opinion but that doesn't mean to say that the council
shouldn't be doing something to improve that position and one of the things that
has appeared in previous audit reports is moving towards a invoice processing
of a no purchase order and we won't pay the invoice that's certainly something
that we have committed to do as a result of concerns raised in audit reports and
is currently in discussion with the aforementioned Karen Vess
in terms of how we can implement that across a multi -client ABW
system.
So if we wanted to do no PO, no pay,
we also kind of need Forrester Dean, West Oxfordshire,
and Publica, and the other clients
to do it, because we can't suddenly
say to a supplier that might supply all of us,
well, for Cotswold, you need a PO number,
but you don't need one for West Oxfordshire,
and you don't need one for Forrester Dean.
So there's a little bit of scoping to do in that.
But we are aiming to deliver that for the start of the new financial year, which will
be April 2026. The number of unresolved payments, 9, 13 ,000, the usual way that occurs is the
way those invoices are received. So you can have a timing difference in terms of invoices
come into, let's say, Bob, Fred, George, Bungle, Zippy, and they all end up going through accounts
payable. It might say invoice number 101, and someone might key that in as invoice number
101, O as in the letter. That won't then be matched when the next invoice gets keyed in
as invoice number 101, but it's that vigilance that the accounts payable team have got to
identify, that looks a bit odd.
We've paid an invoice like that.
Some of those are really difficult at times, so you can
end up with, it's not necessarily what happens here,
but from a previous authority, every single invoice you had
from HM Court Service was 151 pounds, and they didn't put
invoice numbers on it.
And you were dependent on the text on the invoice in terms of
which case it related to, to determine whether that was a
new invoice or is a copy invoice from before. So in proving that communication with suppliers
to indicate this is how we will process your invoice, if it doesn't have this information
on or it doesn't have a purchase order on, can reduce that down. But clearly, nine isn't
a significant number, but it is still, it could have been nine with a value of much
Officer - 1:06:48
higher than 13 ,000. I would just also add they may not, there
may not be any Cotswold District Council ones in that nine that are remaining. I can check
it and let you know for definite tomorrow because we've got the data but...
Councillor Helene Mansilla - 1:07:09
Thank you, David. Thank you, Lucy. Any further questions? I would like myself to make two
comments or two further questions, if I may. One of them refers to the internal audit opinion
and the annual governance statement under item 9.
The 2024 -25 internal audit opinion, which informs the AGS,
the annual governance statement identified on page,
I don't know, my pack is completely different
to what I have online, sorry, on those.
You know, identify significant risk in the data protection breaches and sickness absence,
you know, those areas listed in there.
So I'm looking at my pack here, the hard copy, and it's page number 80.
And it's the second paragraph.
I can go through them if it's any easier.
The risk has been referred in the 2024, 2025 annual governance statement.
Councillor Helene Mansilla - 1:08:48
Angela Claridge - 1:08:50
I have been there with David. Thank you, Chair. My response to that would be that the annual
governance statement takes into account, as you do at this committee, a number of issues.
audit reports are clearly important. The local code of corporate governance. There
are a number of areas that are looked at when we do our work on the annual
government statement. So I wouldn't have particularly pulled out these areas but
it is important that we acknowledge that audits are done, that this committee
takes notice and that the council responds to recommendations. So not
I wouldn't not specifically but obviously it is for this committee we've
already talked about comments in the audit for the audit and governance
statement and if you want to if this committee wants to make any
recommendations of course we can we can do that it's not cast in stone we follow
the sit for guidance in terms of how we present it but this is a document that's
Councillor Helene Mansilla - 1:09:54
Officer - 1:09:55
for your purposes as well as you know reassuring others it's it is action
number eight in the AGS action plan it's something we discussed at the corporate
governance group the other week so it does say that the council will ensure
all agreed actions are completed and any issues identified are appropriately
followed up and that's something that we continue to do throughout the year and
this will be reported to corporate governance group on this committee.
Councillor Helene Mansilla - 1:10:20
David Stanley, Deputy CEO - 1:10:23
I was going to add in terms of what Angela said that reiterate that the annual
governance statement takes a wider breadth of assurance issues into its assessment of
the AGS position. Clearly the annual audit opinion contributes to that assessment and
if the annual audit opinion was less than substantial or actually the internal audit
service was unable to give assurance because it hadn't completed the number of audits,
hadn't had meaningful responses from managers,
then clearly you would be considering a slightly
different annual governance statement.
I think in particular, given the overall audit opinion
was reasonable, satisfactory, that would suggest that the
overall impact that has on the annual governance
statement isn't disproportionate.
But I think one individual audit within that has
highlighted some significant weaknesses around
data breaches which needs to be followed up and that is part of the annual governance
statement action plan.
Thank you, David.
Councillor Helene Mansilla - 1:11:32
Councillor Helene Mansilla - 1:11:38
Sorry, my mic was off.
Is that?
Fine, thank you.
Right, so if I take you to, I think it's page 98.
The second paragraph, the last line, that is very helpful, Lucy. It is a very helpful
suggestion and I agree that providing clearer public information on section 106 contributions,
perhaps through dedicated pages, on the CDC website could support engagement with residents
and town and Paris councils and broader governance oversight.
Could this be noted for consideration either by the relevant service area or as a potential
action under the governance plan?
Would you like me to respond, Chair?
Angela Claridge - 1:12:52
Councillor Helene Mansilla - 1:12:53
Angela Claridge - 1:12:54
So just so everyone's clear, this is the item, Town and Parish Councils could benefit from
information in respect of Section 106 being made available on dedicated pages on CDC's
website.
So my proposal is, Chair, with everyone's endorsement that we take this away and talk
to colleagues who work on Section 106 payments to see if this is feasible and provide a note
Councillor Helene Mansilla - 1:13:18
back to the committee members. David, please. Thank you, Chair. Just in terms of the annual
David Stanley, Deputy CEO - 1:13:22
governance statement, when I'm providing my assurance statement to the organisation, I'm
thinking about significant governance risks that I think should be part of the action
plan. So particularly, for example, let's say the Council had been subject to a number
of cyber attacks that got through. I would consider that something worthy of being on
annual government statement.
I think the issue identified in the Section 106 audit report
highlights some best practice rather than how I would view it
as a significant governance issue.
So I think there are improvements that can be made
in the way in which Section 106 is administered, monitored,
and how that information is provided to all stakeholders.
I think that is part of the audit recommendation
that will be followed up.
I personally don't view that as a significant governance concern for it to be part of your AGS.
Councillor Helene Mansilla - 1:14:22
Councillor Helene Mansilla - 1:14:27
Councillor Helene Mansilla - 1:14:31
I think that we can now move on to the draft statement of accounts.

11 2024/2025 Draft Statement of Accounts

As noted, this item is being introduced through slides rather than a cover report and members
will receive a link to the full draft accounts.
Since this is the first opportunity that we have had to see the complete document, I suggest
we note in the minutes that the committee received at the meeting and that members may
ways to review the detail in due course. I will now invite David to present the draft
David Stanley, Deputy CEO - 1:15:17
accounts and talk us through the key points. Thank you, Chair. So whilst Michelle is putting
the slides up on the screen, I shall just talk you through very briefly what you may
see on the Council's website tomorrow, which is the full set of the draft accounts. That
quite a detailed document. Unfortunately, that wasn't ready to be included in your PACS.
We're still working through some of the final numbers and the final narrative. But also,
importantly, from my perspective, we would make – I was making a review of said document
to ensure that when the external orders come up, we can demonstrate that we have considered
the content of the draft accounts prior to publication. It's been subject to review,
and I think that was a really important piece of work
that I needed to do before this came to this committee
in its current format.
What the draft accounts will contain
is quite a detailed overview
of the financial aspect of the council.
There will be an opportunity in September
to run through that in more detail
for all members of the council,
but again, particularly for audit and governance members
ahead of the 30th of September meeting.
And that's where we would highlight particular items in
the accounts that either are ones that we think you should
note because they're material, or from a disclosure point of
view, as I would put it in the training, the notes in
particular where we tell you what we've paid staff, what we
paid for staff to not be here, what we paid members, what we
paid the external auditors.
And in particular, dwelling on the pension note and to deal
with the issue that the pension could be both an asset and a
liability, depending on the way in which we have to treat the
accounting of the pension fund, given it can be both in a given
year, but we have to consider particular things.
But rather than me wittering on at length about what you may or
may not see, what we've got is a series of slides that cover the
or financial statements with an outline of when you as members can expect to see more
detail on that when it will be published but also when we'll bring stuff back to this committee
and subsequently when we would be expecting external audit Bishop Fleming to provide that
assurance back to the committee with their audit opinion on both the financial statements
and their value for money judgment which is equally as important. I'll hand over to Michelle
if that's okay, Chair.
Yes.
Well, good evening.
Officer - 1:17:54
So in front of you, hopefully you can see now,
I've prepared a short presentation, not too many slides.
It's not a training session, as David said,
that will be coming later in September,
but I just thought it was important
to give a little bit more context
to the summary statements that you've received.
As David mentioned, the full statement
runs to about 110 pages, so you'll have,
it should be available tomorrow, we'll send you the link,
and you'll have the summer to look over that and come back to us with any questions at
the training session hopefully.
So firstly just wanted to highlight some of the key dates and milestones over the next
couple of months.
So as we said, tomorrow we'll hopefully publish those accounts for you, just subject to a
few final reviews between Dave and myself.
And then we'll move into later in July into a public inspection period.
So the accounts are available online and members of the public can come in and ask us specific
questions about any individual entries in those accounts.
It's not something that we often experience but yet it is certainly a possibility that
someone can come and ask us a query on that.
From the beginning of August, Bishop Fleming have arranged to come in.
So they'll be here over, I imagine, about six to eight weeks, they're what it normally
takes.
So that will run into late September, I suspect, and that is a very detailed review.
Lots of sampling, lots of questions and queries, so that keeps us busy right the way through
to September.
As we said, there will be some training in September, for yourselves as members, and
then by the 30th of September, I think we have an audit committee actually on the 30th
of September, we hope, that might be a little bit optimistic based on, I think, last year
we had the sign off in April March or April February was it yeah before it was
April's name but we're hoping to move that move that that forward to the end
of September hopefully this year if we can so yeah at the next audit committee
Bishop Fleming will be here to present to you their findings you'll have the
final statement of accounts and hopefully that'll then give you the
assurance as a committee to approve those accounts and that is the
deadline on the 30th September. So they're the key dates and all I was going to
propose to do is just take you through some of the key statements that you've
got in your packs at the moment. So you should have a comprehensive income and
expenditure statement, a movements and reserve statement and a balance sheet. So
I just said it's not a you know not a technical training session but just try
and highlight a few key points and give you a little bit more context. So
the comprehensive income and expenses statement, what I've tried to do on the
slide there on the right is just try and reconcile that surplus, it's about
two -thirds of the way down, you'll see a figure 3 .1 million 3153027, try and
give that some meaning by showing how it reconciles to the surplus that we
reported in our out -term report to cabinet last month. So we started with
surplus, further statement 3 .1, then there's a transfer to earmarked reserves
which we'll see in the next statement of 2 .1 million and that's that's really
around moving grants that we may have received or money that we want to set
side for future projects. It's largely grants particularly around business
rates as well. There's a section 31 relief compensation grant that we get from the
government and any surplus business rate income as well. That's what's making up
a lot of that figure. Then there's a further adjustment below for 200 ,000.
Now this is a specific sort of local government adjustment. The comprehensive
income expenditure statement includes all the entries we need to comply with
with accounting standards but there are certain statutory regulations in local
government which means we have to do an adjustment to reverse those figures.
That's things like depreciation, specific pension adjustments, re -evaluations to
our investment properties or our financial instruments as well. There's
numerous things and that's a whole separate note in the account so you
can see tomorrow if you wanted to look at that in more detail. And that
That then brings us down to the surplus that we've actually reported in our cabinet and
O &S report that you probably may also have seen.
So that gave us a surplus of $778 ,000 which we've actually then transferred into our financial
resilience reserve.
So some of that was plans budgeted, the $516 ,000 of that was budgeted and the remaining balance
of 262 was additional that we've transferred into our transformation and
change reserve. The next slide is of more interest to you I suspect it's that it's
our movement in reserve statement so it's it summarizes all the reserves that
we hold as a council. Probably the ones on the left -hand side the
usable reserves of most interest and that's actually money that we set aside
So from our general fund, which you might see as our rainy day pot, our earmarked reserves.
So as I said before, pots of money set aside for specific projects or things that we know
we're going to spend in the future or risk reserves.
So we have, for example, a business rate risk reserve and a treasury management risk reserve
just to give us some contingency there for any years where we might not achieve the income
levels we expect.
We've also got a capital receipts reserve there as well which is where we fund the majority
of our capital programme.
You'll see that's reducing year on year and once it's gone it's gone other than if we
sell more assets.
Historically that's been quite high because it dates back to when our housing stock was
transferred I think in 97 I think it was.
Yeah, so it's been getting less and less since then really.
But obviously once that runs out, as David mentioned earlier in the Treasury presentation,
we'd be looking to have to borrow or apply our revenue financing or grants to fund our capital programme.
You've also got a capital grants and applied column there as well,
and that's largely the community infrastructure levy that we receive from developers.
So that income is recognised in the year and then it's transferred into this reserve and
held there until there's a suitable infrastructure project to spend that on.
And going back to the general fund column, it just kind of goes back to what I said in
the slide previously.
You'll see we had an opening balance on our general fund reserve of 1 .7 million and at
the end of the year we've come back to that balance again.
So you'll see in there you've got the movement between reserves, so the 2 .1 million that
we mentioned going into earmarked reserves, and then we've got that 778 ,000 below which
was our budgeted surplus and our unbudgeted surplus that we've moved into the financial
resilience reserve and transformation reserve.
That figure there, the 3 .153 is what you saw on the previous slide as our surplus, and
Then the 228 is those adjustments that I mentioned previously, so things like depreciation, amortization
and revaluation adjustments.
So that brings you back to the 1 .7.
The next slide is just probably what I've already covered.
I think so, as I said, General Fund held at 1 .7 million, that's our rainy day balance.
EMR reserves, obviously they've increased by 2 .9 million.
So that does include things like grants we've received but not spent, our surplus set aside
and the majority of it as you'll see is our business rate, grant, income and surplus that
we're setting aside for future years as we expect our retained business rate income to
reduce.
And I think I've talked about the capital receipts reserve there and capital grants
and applied.
So I shall move on to the next slide which is the balance sheet which again I
hope you've got in your packs. To highlight some of the key movements, so
you'll see property, plant and equipment at the very top, that's the first line
balance sheet. There's a movement of around 1 .7 million there, that's
largely a result of capital additions in the year, so work that we've done on
Trinity Road, the council offices here as well as Syrinshire Leisure Centre.
Investment property, you'll see that the values there have fallen by about 670 ,000.
That's following a valuation exercise undertaken by our
internal valuers here at the council and that's largely due to some voids in
rental and some where leases have been renegotiated that they're coming out
slightly less than they maybe had in the past that has an impact on the value of
those properties. You'll see that non -current debtors up in the top section
of the balance sheet as well have increased by around a million. That's
largely to do with money owed from developers in terms of community
infrastructure levy, the Cotsway loan which we mentioned earlier the loan that
we've given to the Housing Association, as well as amounts owed from UBICO for
vehicles that they've leased from us. We've purchased the vehicles on their
behalf. Investments and cash there's been some changes there but that's largely
just really timing issues in terms of what the surplus cash is available.
You'll see there's a new category asset held for sale that's because at the
31st of March we had the Broughton Visitor Information Centre, Old Station and
the Memorial Hospital that were were all for sale at that point in time so that's
that's what that 548 ,000 is. Some other key movements I've just highlighted
debtors have increased by 1 .7 million again that's that's some of the short -term community
infrastructure levy seal payments that are due and also some government grants as well
that are due that we didn't have at the 31st of march that's things like UKSPF and Royal
England Prosperity that we're due to actually receive the cash from those departments and also
balance with HMRC as well so that accounts for most of that 1 .7. And
finally on balance sheet movements, predators you'll see it's gone the other
way that's reduced and that's largely where we had a big a big balance in 23
24 that's not replicated in 24 25 in relation to to NDR. Grant that we had to
repay, capital grants, receipts in advance has reduced by just under a million as well.
Again that was just in the year we've repaid some grants that weren't used.
And finally, probably one of the other big swings is you'll see that the pension liability
has actually increased by one million. That's following our actually, Hyman Robertson's
report to us, which gives us a lot of detail on our accounting IAS 19 liability. And as
David said, we've got a strange position where we started off with an asset, but we're not
really allowed to have a pension asset. And there's something called an asset ceiling
adjustment which they actually had to look at and it actually came out with
having a 13 million pound liability which sounds a bit bonkers. We can talk
more about that at our training maybe but it's largely because we've got
commitments that we're committed to to make further deficit payments so that
adjustment results in a 13 million liability. I think that's it unless
Councillor Helene Mansilla - 1:31:00
Officer - 1:31:02
anyone has any questions. So just a very quick point in terms of the general fund
balance which Michelle's referred to as the rainy day balance. I also refer to as
the members can't spend it balance.
So this is a risk -assessed amount of money that we hold
in the general fund for absolute emergencies or those unforeseen
events that come through that aren't part of your day -to -day
budget setting.
So the example I would give is one based on previous authority
many years ago.
Buntsfield blew up.
I was in Hertfordshire County Council at the time.
Clearly, that was a very expensive piece of work.
It burnt down most of the oil depot, but it had an
impact across a wide area, including schools,
highways, and stuff.
So, whilst the government committed to reimbursing the
local authority for that through something called
the Bellwin scheme, the Bellwin scheme operates on
a you've got to spend a certain level before you
can even submit a claim, and the government don't
always fund all of it.
So part of that 1 .76 million is in anticipation that if there was something like that that
happened that the council needs to spend money on, it's got to have that readily available
funds to spend.
Some of it is also should we ever be in the position where the council is being taken
to judicial review, to a court scenario outside the usual reasons we would go through a JR
process which is usually around planning and housing land supply.
there is an amount that has been assessed as an appropriate amount
to hold on the balance sheet for that, is around $250 ,000.
So there is quite a detailed breakdown of what that $1 .76
million is that gets reviewed every year.
And in terms of the other re -emarked reserves,
members will be aware, and this is where some of the training
will come in in September, there is a significant budget gap that
we're forecasting from the next financial year, 26 -27.
So when looking at the movement in reserve statement, one of the questions you would
need to ask us, are those reserve balances adequate to mitigate the financial risks and
challenges that the council has got coming at it?
And given some of the other points that were made both in the AGS and elsewhere around
the government reorganisation, there may be a contrary view saying they're over adequate
because we won't exist in two years' time as a local authority.
so why aren't we spending those reserves?
We can cover that particular issue off in September,
but you'll clearly understand that with services
that we need to be providing on an ongoing basis
up until the point that we don't exist,
we do need to keep some of that reserve balance available
to support the Council's priorities,
but also to support service delivery.
Councillor Helene Mansilla - 1:33:58
Thank you, David.
Officer - 1:34:00
Councillor Helene Mansilla - 1:34:01
Any questions?
Officer - 1:34:03
One question. It comes on the heading of a city question. What's an unusable reserve?
It's not a stupid question at all. I should have covered that. It was in my notes and
I skipped over it. Sorry, apologies. As we said, usable reserves are ones that you can
actually access and use albeit some of them might be ring -fenced or specific. So
the unusable is really more like the technical accounting adjustments so it
will hold at the other side of a lot of those funny local government
adjustments I was talking about earlier. So it will be like the pension reserve
that's it that'll be one, the revaluation reserves that will hold the balances
from the revaluations of the Council's assets. There's a reserve called the
Capital Adjustment Account which holds all the financing balances in
connection with the financing of our capital programme. There's a
lovely one called the Collection Fund Adjustment Account which again holds a
lot of technical entries which I'm sure we could go into more detail at the
My second one is now on the balance sheet, assets held for sale, 584.
Now that didn't just appear because the old station, for example, was owned for years.
In the previous year, did that 584 live in the top left hand corner, 74 million?
It did, yes.
Right, that's where it lived.
It might have had a slightly lower valuation, I think.
But yeah, the assets were there.
Yeah.
So they're not new.
It's not new.
Great.
Thanks a lot.
Move categories, yeah.
David.
Councillor Helene Mansilla - 1:36:09
Officer - 1:36:11
So just in terms of the balance sheet,
we are required to classify those assets at the point of
the balance sheet.
And the time the balance sheet was prepared,
we were actively marketing those assets and there was a guide
price on them, it's why it's quite a specific number, it's not just half a million pounds
or £750 ,000, so we were marketing properties. So every time we prepare a balance sheet we
need to look at the nature of our asset holding and determine is it an asset under construction,
is it surplus assets, is it an asset oil for sale. We don't generally have many assets
under construction but say we had a housing revenue account, we owned housing stock and
you're halfway through knocking some houses down to clear some land to rebuild
some houses how much of that are operational assets how much of it is a
development piece of land and how much of it is stuff that you're knocking down
and those are some of the judgments that come into preparing the balance sheet
and we've got relatively straightforward position that we're not really built
anything we're not in the progress of knocking things down but that switch
between operational assets and surplus assets held for sale is one that's worth
members understanding and asking what might be seen as a silly question but
there you could see more being added to that as the council works through its
overall asset holding position in line with the asset management strategy.
Councillor Helene Mansilla - 1:37:41
Officer - 1:37:44
The two cottages were included in that one yeah as well. There were three assets
It was the old memorial cottages, 282 ,000 was the estimate that we had on that.
Old station, which we actually achieved, that's completed shortly after the end of the financial year, that was 80 ,000.
And the other one that we had exchange contracts on but not completed was the former Visitor Information Centre in Borton on the water, that was 242 ,000.
or thereabouts might be another £500 on it, but those were the three assets that at the balance sheet date were held for sale.
Councillor Helene Mansilla - 1:38:22
Thank you. Any further questions?

12 Audit and Governance Committee Work Plan

Officer - 1:38:26
Councillor Helene Mansilla - 1:38:27
Right, so before we close, the final item is the Committee's work plan which runs through to January 2026.
As agreed earlier, six monthly updates on the annual Governance Action Plan will be
added. Are there any comments?
Officer - 1:38:52
Councillor Len Wilkins - 1:38:55
Sorry, Chair, it's not a comment, it's a question. We've got the date 30 September,
there's no date for the training that I know of. You said it's early September, but
have we actually got a date?
Councillor Helene Mansilla - 1:39:05
David, would you like to take that?
David Stanley, Deputy CEO - 1:39:11
Sorry, Councillor Wilkins, can you repeat the question?
I was otherwise distracted.
Councillor Len Wilkins - 1:39:14
Yeah, have we got a date for the training early in September?
David Stanley, Deputy CEO - 1:39:19
So, in terms of statement of accounts training, we'll seek a suitable date.
We haven't put a date in the diary yet, but we'll give members as much notice as possible.
but we try and do it within two weeks of the committee to make sure that we
haven't given you training right at the beginning of September and by the time
you get to the committee on the 30th September you've forgotten it all. So
probably within two weeks of the committee.
Councillor Helene Mansilla - 1:39:47
Angela Claridge - 1:39:49
Angela you wanted to... Thank you chair. Just wanted to highlight to the
committee's attention that for September you've actually got the Ombudsman report
25 -26 listed to come but actually we've had it today so nice and early so thank you Cheryl.
So that one's that one's dusted off and as the chair has already commented we will add to the
27th of January 2026 meeting the AGS six monthly update. Thank you Angela. Any further questions?
Councillor Helene Mansilla - 1:40:18
Thank you for your time and contributions today.