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Agenda and minutes

Venue: Siambr Hywel Dda, Council Offices, Caernarfon, Gwynedd, LL55 1SH

Contact: Bethan Adams  01286 679020

Media

Items
No. Item

1.

APOLOGIES

To receive apologies for absence.

Additional documents:

Minutes:

Councillors Berwyn Parry Jones, Huw G. Wyn Jones, John Pughe Roberts and Gethin Glyn Williams.

2.

DECLARATION OF PERSONAL INTEREST

To receive any declaration of personal interest.

Additional documents:

Minutes:

Councillor Alwyn Gruffydd declared a personal interest in item 5 on the agenda 'Revenue Budget 2018/19 - End of November Review', as he owned an empty property.

 

The member was of the opinion that it was not a prejudicial interest, and he did not withdraw from the meeting during the discussion on the item.

3.

URGENT ITEMS

To note any items which are urgent business in the opinion of the Chairman so they may be considered.

Additional documents:

4.

MINUTES pdf icon PDF 121 KB

The Chairman shall propose that the minutes of the meeting of this committee, held on 29 November 2018, be signed as a true record.

Additional documents:

Minutes:

The Chair signed the minutes of the previous meeting of this Committee, held on 29 November 2018, as a true record.

5.

REVENUE BUDGET 2018/19 - END OF NOVEMBER REVIEW pdf icon PDF 221 KB

To submit the report of the Head of Finance.

Additional documents:

Minutes:

The report was submitted by the Senior Finance Manager, she set the context and elaborated on the content of the report that had been submitted to Cabinet on 22 January 2019. She highlighted that since 2015 the Council had faced realising savings of approximately £27 million, and this was a challenge to achieve. She noted that the end of November review of the budget showed a mixed picture with acceptable financial control in a number of Council departments. She explained that significant overspend was anticipated by the Education Department, Children and Families Department together with the Highways and Municipal Department and there were specific actions to ensure control of their budgets by 31 March 2019.

 

Attention was drawn to the Cabinet's decision:

 

"To accept the report on the end of November 2018 review of the Revenue Budget and note the latest financial position in respect of the budgets of every department/service.

·           To ask the Cabinet Member for Adults, Health and Well-being, together with the Head of Department, to get to the root of the Provider service overspend and take steps to reduce the overspend, and report to the Cabinet on the response plan.

·           Due to an increase in the overspend on a number of budget headings by the Children and Families Department since the last review, to consider the situation when receiving the Cabinet Member’s performance report (29/01/19 Cabinet) with a view to attempt to reduce the overspend by the end of the financial year.

·           Because of the level of overspend on pupils’ transport by the Education Department, to consider the situation when receiving the Cabinet Member’s report (29/01/19 Cabinet).

·           To allow the Environment Department to allocate (£60k) of the department's underspend to conduct a review by commissioning research by the University and employing extra officers to collect evidence in the Public Transport field following a number of issues over recent years.

·           Harvest (£2,984k) of the net underspend on Corporate budgets,

Ø  with (£700k) associated with the Council Tax premium to be allocated to a specific fund to be considered for the Housing Strategy.

Ø  (£435k) relating to capital costs to be transferred to the capital programme’s financing fund.

Ø  with the remainder namely (£1,849k) to be transferred to the Supporting the Financial Strategy Fund to assist with inevitable one-off pressures on the Council's budgets."

 

During the ensuing discussion, officers and the Finance Cabinet Member responded to members' observations and enquiries as follows:

·        That the overspend on pupil transport had been discussed at the Cabinet meeting on 29 January 2019, in the context of the Education Cabinet Member's performance report. A solution to reduce the overspend would take time. It was intended to change the method of providing transport in order to get a cheaper provision, because it was a long-term solution additional funding was placed in the 2018-19 budget to address the overspend.  The additional funding did not address all the overspend as a solution was expected from the Education Department and the Environment Department.

·        In terms of the  ...  view the full minutes text for item 5.

6.

CAPITAL PROGRAMME 2018/19 - END OF NOVEMBER REVIEW pdf icon PDF 216 KB

To submit the report of the Head of Finance.

Additional documents:

Minutes:

Submitted - the report of the Head of Finance Department, providing details of the revised programme and the relevant sources of finance.

 

The Senior Finance Manager set out the context and elaborated on the contents of the report submitted to Cabinet on 22 January 2019. The officer noted that there was an increase of £4.249 million in the budget for the capital programme since the previous review, with a slippage of an extra £3.4 million into the 2019/20 financial year, but there was no funding loss. It was explained that firm plans were in place to invest approximately £28.5 million in 2018/19, with £9.2m (32%) funded by attracting specific grants. Attention was drawn to the Cabinet's decision.

 

RESOLVED to note the situation and the relevant risks in the context of the Council’s capital programme.

7.

SAVINGS OVERVIEW: PROGRESS REPORT ON REALISING SAVING SCHEMES pdf icon PDF 198 KB

To submit the report of the Head of Finance.

Additional documents:

Minutes:

The report of the Head of Finance Department was submitted which gave the latest situation on realising the saving schemes.

 

The Senior Finance Manager set the context and elaborated on the content of the report that had been submitted to Cabinet on 22 January 2019. It was noted that over 95%, namely £23m of the total £24m of savings schemes for the period 2015/16 - 2017/18, had been achieved with only a little slippage with 15 schemes. 

 

Attention was drawn to the fact that over £2.5m of savings had been planned in the 2018/19 Financial Strategy, and 62% of the 29 schemes had been realised, with seven on track to be delivered on time with slippage on only five. The officer elaborated that one of the slippages was the 'End to End' scheme in the Children and Families Department, with savings of £250,280 for 2018/19.  It was explained that the scheme had been the subject of a joint review between the Children and Families Department, Finance and the Research and Information Manager, in which the assumptions of the original 'End to End' model were revisited. It was noted that the number of nights for looked-after children in residential placements had reduced, however, due to the change in profile and the complexity of cases there had been an impact on the average cost of placements. There was also a reduction in the contributions from the Health Service.

 

She noted that it was inevitable that realising nearly £27 million in savings since April 2015 had been challenging. It was confirmed that progress had been made across the Council to realise the savings. Attention was drawn to the Cabinet's decision.

 

In response to a question from a member regarding the reduction in contributions from the Health Service, the Senior Finance Manager explained that changes in the types of cases meant that the Health Service's contributions were less.

 

In response to an observation by a member, the Finance Cabinet Member noted that the Cabinet constantly considered the position in terms of realising savings. He explained that a slippage in achieving the savings plans was the responsibility of the Head and the relevant Cabinet Member. He noted that although he was not happy that savings had to be found he was content in terms of the savings realised and that firm arrangements were in place to ensure that savings would be realised.

 

RESOLVED to note the situation and the relevant risks in the context of the savings overview.

8.

2019/20 BUDGET pdf icon PDF 144 KB

To submit the report of the Head of Finance.

Additional documents:

Minutes:

Submitted – the report of the Cabinet Member for Finance on the Council Budget for 2019/20, providing an opportunity for the Audit and Governance Committee to scrutinise the information in terms of its financial propriety prior to the report being submitted to the Cabinet on 19 February.

 

The Cabinet Member for Finance set out the background and context of the report. He explained that all members had an input to this in workshops and that a public consultation had taken place on the Council Tax together with the savings plans. He noted that detailed discussions had led to the recommended budget.

 

The Head of Finance Department gave further details on the content of the report, and noted that there was a financial gap of £13 million, which included inflation costs of £7.5 million and the inevitable demand for services of £4 million. He noted that the grant increase from the Welsh Government to local authorities was insufficient to meet these costs. He made reference to Appendix 2 of the report which detailed the unavoidable financial bids to respond to the pressures on services, total value of £2.5 million. He elaborated that the financial bids had been discussed in workshops in December where members consented that the expenditure was inevitable. He highlighted that the 2019/20 expenditure requirements, before savings, was £253.2 million.

 

He noted that £2.48 million of savings had already been approved, that £2.45 million of proposed savings, £0.5 million of further efficiency savings, which came to a total of £5.4 million savings to reduce the gap. 

 

He drew attention to what was recommended to the Cabinet for approval, namely:

 

"(a)  To recommend to the Council (at its meeting on 7 March 2019) that:  

 

1.       A budget of £247,797,900 should be established for 2019/20, funded by a £176,551,790 Government Grant and £71,246,110 Council Tax income, with an increase of 5.5%.

 

2.       £18,316,130 should be added to the capital programme for spending in 2019/20 in order to establish a capital programme with a value of £34,991,250 by 2019/20 to be funded from the sources noted in Appendix 4 of the report.

 

(b)   To approve proceeding to implement the saving schemes list in Appendix 3, in order to establish the budget recommended to the full Council.

 

(c)  To note the Medium Term Financial Strategy and the projections in Appendix 8, and adopt the plan in section 18-20."

 

He noted that what was being recommended was subject to the Cabinet's decision to approve proceeding to implement the savings schemes listed in Appendix 3, or not to implement some schemes, as suggested in Appendix 12. He explained that if the decision was not to implement the five schemes in Appendix 12, the figures would change to:

·         establish a budget of £247,869,620 for 2019/20,

·         to be funded via a Government Grant of £176,551,790,

·         and £71,317,830 Council Tax income with an increase of 5.6%.

 

He referred to the equality impact assessment, the well-being assessment in terms of the requirements of the  ...  view the full minutes text for item 8.

9.

CAPITAL STRATEGY REPORT 2019/20 pdf icon PDF 103 KB

To submit the report of the Head of Finance.

Additional documents:

Minutes:

The Senior Finance Manager submitted the report, and noted that it was a new requirement by CIPFA (Chartered Institute of Public Finance) on Councils, that came into effect for the 2019/20 financial year onwards. It was explained that the report's intention was to give the long-term context to capital expenditure decisions and investments by Councils and considering the risks. The report brought the capital programme and the usual Treasury Management report together within one report. 

 

Details were given on the contents of the report and attention was drawn to the intention to spend £35 million of capital expenditure in 2019/20, and nearly £18.8 million for 2020/21 and £9.3 million in 2021/22. It was noted that the main capital projects for 2019/20 included expenditure of £8.7m on Twenty First Century Schools, £2.7m on highways repair and £2.7m on the Housing Strategy, with £11.7m for the Assets Management Plan to be allocated. It was highlighted that the Treasury Management section of the report included information about the borrowing strategy, investment, commitments, liquidity management, economic forecast and credit forecast with the supporting information and details included in Appendix C.  

 

It was explained that the Committee was required to adopt the information in the report and to consider any risks that would arise from the strategy prior to its submission to the Full Council on 7 March 2019.

 

A member noted appreciation of the training held on 16 January, 2019 for Committee members in treasury management with consultants from Arlingclose company, namely the Council's treasury management consultants, and that thanks should be conveyed to the consultants. 

 

In response to an enquiry from a member about finance for the Housing Strategy, the Chief Executive noted that the Adults, Health and Well-being Department were discussing specific plans with the Housing, Leisure and Culture Cabinet Member and the Housing Strategy would be submitted to the Cabinet soon.

 

In response to a further enquiry, the Chief Executive explained that the £2.7 million for highway repairs was a grant received from the Welsh Government and that the £2.7 million for the Housing Strategy was Council Tax Premium income. The Head of Finance elaborated and stated that the Housing Strategy was ambitious and looked at an extended period of 5 to 10 years and was currently being fine-tuned. The member noted that he was looking forward to hearing about the plans attached with the Housing Strategy.

 

In the context of past decisions, a member enquired about Council borrowing and were any changes anticipated in interest rates. In response, the Head of Finance Department explained that there were higher interest rates on loans dating back to the 1980s and most of them were coming to an end. He added that this would be a positive adjustment to the budget as the Council would not pay higher interest rates and it was  ...  view the full minutes text for item 9.

10.

INTERNAL AUDIT OUTPUT 19/11/18 - 1/2/19 pdf icon PDF 211 KB

To submit the report of the Audit Manager.

Additional documents:

Minutes:

Submitted - the report of the Audit Manager outlining the Internal Audit section’s work for the period. It was noted that 12 reports on audits from the action plan and one grant audit had been completed. Attention was drawn in terms of follow-up audits that acceptable action had been taken on 71.17% of the agreed steps, namely 116 out of 163.

 

Consideration was given to each individual report and during the discussion reference was made to the following main matters –

 

Safeguarding Arrangements - Establishments

 

In response to an enquiry by a member, the Audit Manager explained that the system highlighted when it was necessary to renew a disclosure by the Disclosure and Barring Service (DBS). She expanded that it was a long process and that it was the individual's responsibility to submit an application. She added that weaknesses had been identified in terms of presenting safeguarding training modules to staff and as a result an audit in the context of a review of training arrangements on the range of safeguarding modules had been included in the 2019/20 Internal Audit Plan. 

 

A member noted her concern regarding the variety in the number of staff who had completed the safeguarding modules at the leisure centres. She asked what the arrangements would be following the transfer of the leisure centres to Byw’n Iach Cyf. In response, the Audit Manager noted that follow-up work on leisure centre audits would be completed before transfer to the company on 1 April 2019, and the findings would be reported to Committee. She elaborated that the audit reports would be presented to Byw'n Iach Cyf Board following transfer. 

 

In response to a further question, the Audit Manager noted that it was likely that the company would operate in accordance with the Council's procedures in the context of disclosures. 

 

A member noted that the audit should receive consideration by the Controls Improvement Working Group as deficiencies had been highlighted.

 

In response to a comment, the Audit Manager noted that as it was a corporate issue training arrangements varied and with seasonal workers it was more problematic, but it was also important that they received training. It was explained that if the audit received the consideration of the working group, that it was the Chair of the Safeguarding Operational Panel who would be present and it would be difficult for him to explain the situation in terms of beach and harbour staff. It was noted that the Operational Panel sent a message to the departmental management teams and this should be cascaded to managers to ensure action.

 

Attention was drawn to the action to continue to raise the awareness of Council workers of corporate safeguarding arrangements and the need to complete training, however, additional work was required to improve the level of assurance that was currently limited. 

 

General Data Protection Regulation

 

A member noted that the audit should be considered by the Controls Improvement Working Group as the audit had received a level of limited assurance. 

 

Welsh  ...  view the full minutes text for item 10.

11.

INTERNAL AUDIT PLAN 2018/19 pdf icon PDF 119 KB

To submit the report of the Audit Manager on the progress made on the 2018/19 Internal Audit Plan.

Additional documents:

Minutes:

The report of the Audit Manager was submitted, providing an update on the current situation in terms of completing the 2018/19 internal audit plan.

 

It was reported that the Internal Audit Service up to 1 February 2019 had completed 58.33% of the plan, with 35 of the 60 audits in the 2018/19 plan released in a finalised version. Attention was drawn to the amendments to the Plan.

 

RESOLVED to accept and note the contents of the report as an update of progress against the 2018/19 audit plan.

12.

DRAFT INTERNAL AUDIT PLAN 2019/20 pdf icon PDF 98 KB

To submit the Draft Internal Audit Plan for the year 1 April 2019 – 31 March 2020.

Additional documents:

Minutes:

Submitted – the report of the Audit Manager, in which details of the draft plan of the Internal Audit Service's work for the 2019/20 financial year were set out for comment and approval by the Committee. It was noted in order to ensure that the correct matters are reviewed, that firstly consideration was given to the Corporate Risk Register as well as the risk registers of each department.

 

It was envisaged that approximately 766 days of audit resources would be available to complete the 2019/20 audit plan. 

 

In response to a member's observation in the context of trends seen across Council departments,the Senior Revenue and Risk Manager noted that recording risks identified trends with departmental risk registers able to feed into the Corporate Risk Register. He added that highlighting trends was dependent on the quality of information and the Insurance and Risk Service would contact each department to support them to ensure that risks are recorded appropriately.

 

A member asked if it would be possible to look at corporate plans and how they can be packaged to respond to cross-departmental aspects. The member asked further regarding the number of days designated for the 'Culture and Ethics' audit and noted that it was a complex issue and the number of days designated for the audit should be re-considered to get a more comprehensive picture.  

 

In response, the Audit Manager noted that she referred to the Council Plan when drafting the audit plan.  Attention was drawn to the fact that it was the project managers who are responsible for corporate plans and with the scarcity of audit resources it was difficult to earmark many days to undertake an audit in a specific area, however, they did look at project management in terms of the time-schedule, that it had been planned correctly and if a record of the financial elements was maintained. 

 

A member noted that measuring 'Culture and Ethics' would be difficult to achieve and asked how it was proposed to measure this. In response, the Audit Manager noted that it was proposed to draft a simple questionnaire asking questions on issues such as recording hours correctly and the implementation of the Whistle Blowing Policy.

 

In response to further observations from members regarding the 'Culture and Ethics' audit, the Audit Manager noted that she would undertake research into this area. 

 

RESOLVED to approve the draft Audit Plan for the period 1 April 2019 to 31 March 2020.

13.

GWYNEDD COUNCIL'S ANTI-FRAUD, ANTI-CORRUPTION AND ANTI-BRIBERY STRATEGY AND RESPONSE PLAN pdf icon PDF 54 KB

To submit the report of the Senior Manager Revenues and Risk.

Additional documents:

Minutes:

Submitted - the report of the Senior Revenue and Risk Manager that gave an update on the Council's anti-fraud and anti-corruption arrangements together with the work programme for the next three years. 

 

It was noted that although 'Risk of Fraud, Bribery and/or Corruption' was considered a low risk the Council continued to be aware of the risk and the Council had suffered as a result of major fraud in the past.  Further details were given on the contents of the report.

 

It was explained that the Committee would receive regular reports (approximately every six months) on the Council's anti-fraud, anti-corruption and anti-bribery efforts. 

 

A member noted that the fraud linked to Express Motors had been shocking and it would be useful to have a sub-group of the Committee to look in detail and to learn lessons from this case. Reference was made to the Strategy and it was asked how regular did workshops take place with relevant officers to discuss issues that arise, apparent risks and to share good practice. It was asked which agencies the Council cooperated with and how regularly the Strategy was reviewed.

 

In response to the above observations, the Senior Revenue and Risk Manager noted:

·         That the Committee had already received a report on the Express Fraud at its meeting on 29 November 2018 and had discussed the matter in detail. At the time, the Environment Department was asked for a report regarding mitigating the risks to the Council of committing to a new agreement with the Welsh Government's Concessionary Fares Scheme. That it was a decision for the members if they wished to discuss the two cases of fraud in public transport at the Controls Improvement Working Group, however, there was a danger that by focusing on this fraud that they would lose sight of other risks bearing in mind that the Council has a wide range of services.

·         The Council did not have a specific anti-fraud resource, the work will be completed within the resources with internal audit undertaking the research. It was intended to conduct regular workshops with officers from different services such as audit, benefits, tax and others, looking at risks that arose from the experiences of other authorities.

·         Although the Response Plan had not been revised since 2013, it continued to be fit for purpose with only changes in job titles.

·         The Wales Audit Office led on the National Fraud Initiative that is held every two years by comparing agency data and if anything was highlighted then the relevant agency would be contacted. It was noted that once there was sufficient evidence to be presented to the police following an investigation by internal audit then the information would be referred to the Monitoring Officer.

 

A member noted that he was of the opinion that consideration needed to be given to the  ...  view the full minutes text for item 13.