Agenda item

(Chief Internal Auditor) To consider the attached report (AGC-013-2012/13).

The Director of Finance & ICT presented the latest Local Government reports to be published by the Audit Commission, which were relevant to the Council's responsibilities, functions and areas of responsibility.

The first report was entitled "Tough Times 2012" and was concerned with the responses of Councils to the challenging financial climate. The report found that Councils in 2011/12 largely delivered their planned savings and even added to their reserves in many cases. However, signs of financial stress were visible and some Councils were having to make further in-year cuts, find additional funding or restructure efficiency programmes in order to meet their budgets. The Director of Finance & ICT stated that, although the Council suffered a reduction in Government support, the monies received as a result of the New Homes Bonus had made up some of the shortfall. There had also been substantial savings from the Waste Management Contract and the transfer of non-housing assets from the Housing Revenue Account to the General Fund. The increase in the Council's reserves had arisen from the success in meeting the planned savings targets and reducing underspent budgets. The Director confirmed that there were no plans to remove discretionary spending from the Council's budgets at the current time. 

The second report was entitled "Striking a Balance" and highlighted the level of reserves that Councils held across the country. Councils were encouraged to focus more attention on their reserves, which totalled £12.9billion and was equivalent to nearly a third of their net spending on services. The report called for Officers to provide clearer & more comprehensive advice to Members to enable better informed decisions about the level of reserves to be made, and greater clarity from Councils about their reasons for holding reserves. The Director of Finance & ICT advised that there were reports to the Finance & Performance Management Cabinet Committee during the budget setting process which included information on the level of the Council's reserves, and there was a separate report from the Section 151 Officer at the budget setting Council meeting that gave assurance about the adequacy of the Council's reserves. Therefore, Members were aware of the Council's level of reserves and the policy regarding the minimum level of reserves to be kept.

The final report was entitled "Auditing the Accounts 2011/12" and was concerned with the quality and timeliness of financial reporting by local public bodies. The report noted that principal and small public bodies had improved their standard of performance for financial reporting during 2011/12, despite the continuing financial constraints facing such bodies. The Director of Finance & ICT reassured the Committee that the Council had met its obligations for financial reporting under the various regulations.

The Committee was informed about a Local Government Governance review published by Grant Thornton each year. It was suggested that the Council should compare its performance against the councils listed in the report to give an indication of its own performance. The External Auditor informed the Committee that there would be one final round of reports from the Audit Commission before it was disbanded.

Resolved:

(1)        That the National Local Government reports and studies recently published by the Audit Commission be noted; and

(2)        That the Council's performance be compared against the Local Government Governance review published by Grant Thornton each year.