Agenda and minutes

An apology for absence was received on behalf of Councillor Nyear Nazir and Councillor Roger Bennett attended as her substitute.

To invite Councillors to declare any Disclosable Pecuniary Interests and/or Other Disclosable Interests they may have in items on the agenda, and to confirm the nature of those interests.

There were no declarations of interest.

RESOLVED that

the minutes of the meeting of the Audit, Governance and Standards Committee held on Monday 29^th July 2019 be approved as a true and correct record and signed by the Chair.

Members of the public have an opportunity to speak at meetings of the Audit, Governance and Standards Committee.  In order to do so members of the public must register by 12 noon on the day of the meeting.  A maximum of 15 minutes will be allocated to public speaking.

The Chair confirmed that there were no registered speakers on this occasion.

The Executive Director of Finance and Corporate Resources presented the Section 24 Action Plan, which detailed the Council’s response to the Section 24 Notice that had been issued by the external auditors, Grant Thornton, to the authority. 

The external auditors had confirmed that the Council’s accounts for 2018/19 were unqualified.  The auditors also issued a Value for Money (VfM) assessment, which focused on the Council’s financial sustainability moving forward.  The Council had been issued with an adverse VfM assessment because the external auditors had concerns that the authority was not financially sustainable in the long-term.  The Section 24 was intended to provide a warning to the Council that it needed to take action to change the way the authority’s budget was managed moving forward.  Local authorities that were subject to a Section 24 Notice needed to determine whether to accept the external auditor’s recommendations and then to demonstrate how the Council would respond to those recommendations.  The Audit, Governance and Standards Committee had already accepted the Section 24 notice and recommendations in July 2019.  Should the Committee approve the Section 24 Action Plan the report would be considered by the external auditors the following day and they would subsequently monitor the progress achieved by the Council.

A Section 24 Notice would be followed by further action should the Council not secure a balanced budget moving forward.  Should the Section 151 Officer have concerns about the budget position by January/February 2020 it was possible that she would need to issue a Section 114 Notice against the authority.  This is the action that had been taken in relation to Northamptonshire County Council some years previously.  However, Members were advised that progress was being achieved by Officers and the Executive Committee in terms of realising savings and identifying new opportunities for income generation and it was not therefore anticipated that a Section 114 Notice would need to be issued.

There remained financial challenges for the Council.  In particular there was uncertainty about the financial settlement from the Government which made it difficult to balance the budget over the course of the full four years of the Medium Term Financial Plan (MTFP).  Lots of other Councils faced similar uncertainty but many did not deliver the same number of services as Redditch Borough Council nor did they necessarily have the same demand placed on their services by local residents.  The Government had announced that there would be no change to the New Homes Bonus (NHB), which meant that the local authority would receive over £100,000 more than had been budgeted for from this source of funding.  However, the Government had also indicated that local authorities would only be able to increase Council Tax by a maximum of 2% in future, rather than the 2.99% that had been possible in recent years and this would have a negative impact on the Council’s budget position.

The Executive Director of Finance and Corporate Resources addressed each of the recommendations from the external auditors in turn.  The  ...  view the full minutes text for item 21.

Members were advised that the following meeting of the Committee was scheduled to take place on 31^st October 2019.