Decisions

The Solicitor and Data Protection Officer (SF) declared an interest and left the meeting for the duration of this agenda item.

The Director of Resources and Deputy Chief Executive addressed the Committee and advised that following the recent recruitment and selection process, internal candidate, Simon Fuller, had been recommended to be appointed to the role of Senior Solicitor and Monitoring Officer by the Appointments Committee.

It was proposed by Councillor Prowse, and seconded by Councillor Pearson “that Simon Fuller be appointed to the position of Senior Solicitor and Monitoring Officer as recommended”.

RESOLVED that Simon Fuller was appointed to the position of Senior Solicitor and Monitoring Officer as recommended.

Council considered the Letter of Representation on behalf of the Council (attached).

The Director of Resources and Deputy Chief Executive advised Council that:

·         The Letter of Representation on behalf of the Council was the final part of the Statement of Accounts process and conclusion of the external audit.

·         All relevant procedures had been followed and the appropriate representations had been made to Council.

Councillor Roome reported the recommendation of the Governance Committee held on 20th October 2021 was that of approval.

It was moved by Councillor Roome and seconded by Councillor Walker that “that the letter of representation on behalf of the Council be approved and signed by the Chief Financial Officer and the Chairman of the Council”.

RESOLVED that the letter of representation on behalf of the Council be approved and signed by the Chief Financial Officer and the Chairman of the Council.

Council considered the Annual Governance Statement (AGS) for 2020-21 (circulated previously).

The Director of Resources and Deputy Chief Executive advised that:

·         The AGS was part of the accounts and has been received by the Governance Committee at their meeting of 20^th October 2021 (which immediately preceded this meeting).

·         The Devon Audit Partnership (DAP) had given an opinion of Reasonable Assurance.

·         The Governance Committee, at its meeting on 20th October 2021, had recommended approval.

·       A series of recommendations had been presented to the Governance Committee which included items around Member Training and Code of Conduct, a review of the Corporate Plan Priorities and an update to the procurement strategy.

In response to questions from the Committee, the Director of Resources and Deputy Chief Executive advised that:

·         The Corporate Plan was being examined in detail with the Solicitor and Data Protection Officer and

·       The Corporate and Community Services team were reviewing the community engagement strategy.

Councillor Roome reported the recommendations of the Governance Committee held on 20th October 2021 and advised that a plan to address the issues raised was already being created.

It was moved by Councillor Roome and seconded by Councillor Jenkins “that the Annual Governance Statement for 2020-21 be approved”.

RESOLVED that the Annual Governance Statement for 2020-21 be approved.

Council considered the Report by the Chief Financial Officer (circulated previously).

The Director of Resources and Deputy Chief Executive advised that:

·         The draft accounts would usually be signed off by the 31^st of July each year, however this had been extended to the 30^th September. The delay to this now October meeting had been due to the Governance Committee not meeting on the 27^th September 2021 as planned.

·         It was noted that only 9% of Authorities had achieved this by 30^th September due to additional pressures on the external audit firms and delays with the the Pension Audit.

·         An Unqualified opinion had been issued.

·         A recommendation concerning transparency of reporting to Members with regards to ongoing projects had been included in the action plan and agreed with management.

·         A previous forecast at quarter 3 of a net surplus of £28k had now been increased due to additional funds such as income from planning, increased rental income on Butcher’s Row, reduced spend on temporary accommodation and accompanying reductions in costs across the Authority.

·         An increased workload on staff was noted and appreciation of the Officers for their efforts and hard work was also noted. The staff were considered a major contributor as to how the Authority remained financially viable.

·         £1.2m General fund reserve, and £16.3m earmarked reserves were achieved.

·         The earmarked reserves were artificially higher in 2020/2021 due to timing differences in the accounting treatment of Covid business rate relief from Central Government.

·         The Authority was in a strong financial position for 2021/2022 year.

·         The Medium Term Financial Strategy (MTFS) as approved in February 2021 had predicted a funding gap of £2m.

·         The Government’s Spending Review was due shortly.

·         The net worth on the balance sheet had shown a net decrease on 2019/20 due to an increase in the valuation of the long term assets, including the value of the new leisure centre build and an increase in the net liability of the pension fund.

·         The deficit in the Pension fund was offset by a pension reserve and would be made good by the employees’ contributions over their employment period. The value of this fund was reassessed every three years.

·         The final opinion on the accounts was due from the Auditors next week (w/c 25^th October 2021).

·         There would be a slight change to the wording on the material uncertainty disclosure due to the valuation and replacement costs of assets. The increase in rebuild costs were due to the prices of building materials. A disclosure note had been added to the accounts in explanation.

Councillor Roome reported the recommendations of the Governance Committee held on 20th October 2021 and advised that the efforts and hard work of the Officers had been the reason for the achievement of a surplus and the level of reserves held. He noted that the recommended level of reserves held were between five and ten percent. North Devon Council had achieved a level of 9.1%.

It was moved by Councillor Roome and seconded by Councillor Walker “that the Statement of Accounts for 2020-21 be approved”.

RESOLVED that the Statement of Accounts 2020-21 be approved.

The Committee considered a report by the Public Protection Manager (circulated previously) regarding the review of the Gambling Statement of Principles.

The Public Protection Manager highlighted the following:

·       The Council was under a legal obligation to review its Gambling Statement of Licensing Principles on a three yearly basis.

·       A consultation exercise had been undertaken in respect of a draft proposed revision to the Council’s Gambling Statement of Licensing Principles, which contained minor variations to the existing statement.  The results of the consultation were contained in Appendix A of the report.

·       The main proposed amendments to the Statement of Principles as detailed in paragraph 4.7 of the report.

·       The low number of consultation responses was not unusual and nationally Local Authorities received a low number of responses to this type of consultation.

In response to questions, the Public Protection Manager advised the following:

·       One consultation had been received from a member of the public and the other consultation received was from Gosschalks acting on behalf of the Betting and Gaming Council.  Gosschalks had also previously submitted a representation in respect of the Gambling statement of Principles 3 years ago.

RECOMMENDED that the proposed revised Gambling Statement of Licensing Principles be recommended to Full Council (a tracked changes document highlighting the amendments made to the current policy as contained in Appendix B) for approval.

The Committee considered a report by the Project, Procurement and Open Space Officer (circulated previously) regarding the allocation of section 106 public open space funds towards a number of projects within the District, across communities of Barnstaple, Chulmleigh, Newton Tracey and Witheridge.

The Project, Procurement and Open Space Officer advised the following:

·       That since the publication of the report a request had been received from Witheridge Parish Council to defer consideration of the projects at Witheridge until such a time that was mutually agreed by both parties.  If the Committee was in agreement then the recommendation in paragraph 2.2 would be required to be amended to “…vary the capital programme by £139,635….”

·       Details of the projects as detailed in paragraphs 4.1, 4.2, 4.3, 4.4, 4.5 and 4.8 of the report.

·       Financial details of the projects as detailed in paragraph 5 of the report.

Councillor Biederman declared a personal interest as a Member of Horwood, Lovacott and Newton Tracey Parish Council.

RESOLVED:

(a)  that following section 106 funds be allocated as follows:

(i)             £1,015 towards enhancement of the Square Fountain, Barnstaple (NDC).

(ii)            £80,000 to Chulmleigh Playing Field Association towards the cost of a new pavilion extension.

(iii)           £38,000 to Chulmleigh Parish Council towards the enhancement of Davy Park, Chulmleigh.

(iv)           £6,096 to Newton Tracey Cricket Club towards the provision of a Non Turf Practice Bay.

(v)            £6,096 to Horwood, Lovacott and Newton Tracey Parish Council towards the provision of a Wooden Gazebo at Lovacott Playing Field.

(vi)           £8,428 towards Tarka Play Area, Barnstaple (NDC)

(b)  That consideration of allocation of section 106 funds to Witheridge Parish Hall towards the enhancement of the Village Hall and the enhancement of the Adventure Playground be deferred until such a time that was mutually agreed by both Witheridge Parish Council and the Council;

RECOMMENDED:

(c)  That Council be recommended to vary the capital programme by £139,635 and that funds be released, subject to a Funding Agreement upon such terms and conditions as may be agreed by the Senior Solicitor, for external projects.

The Committee considered a report by the Museum Manager (circulated previously) regarding the Museum of Barnstaple and North Devon Collections Development Policy.

The Museum Manager highlighted the following:

·       The Museum of Barnstaple and North Devon was an Accredited Museum. Museum Accreditation was a national scheme for maintaining and improving the quality of museums and is managed by Arts Council England.

·       Arts Council England required a number of policies and procedures to be in place.

·       The Collections Development Policy was required to follow a certain format and include specific wording as required by Arts Council England.

·       Although the Barnstaple and North Devon Museum Development Trust and its membership organisation the Friends of the Museum have a role in raising funds for and securing items for the collection, any donations received by this route were subject to the same decision-making process as any other donation to the Museum.

·       There had been no changes to the specific wording required by Arts Council England since the last policy approved in 2015; however the collecting and disposal priorities had been reviewed to limit further expansion of the collections. This was outlined in sections 4.1 – 4.13 of the policy.

·       The museum was embarking on a programme of collections rationalisation to free up space in the stores. The likely disposals arising from this will be of unaccessioned items (excavated pottery, items in the handling collection and uncollected loans). Further rationalisation will require a formal disposal process as outlined in the policy sections 5.1 – 5.3.

In response to questions, the Museum Manager advised the following:

·       The likely disposal of unaccessioned items included excavated pottery from the Barnstaple library site.  There were approximately 2,000 boxes. The Museum Development Trust was working with Devon County Council and the Arts Council England and it was anticipated that the number of boxes held would reduce by 95%.

RESOLVED that the Collections Development Policy 2021- 2026 for the Museum of Barnstaple and North Devon be adopted.

RESOLVED that the minutes of the meeting held on 4 October 2021 (circulated previously) be approved as a correct record and signed by the Chair.

The Committee considered a report by the Director of Resources and Deputy Chief Executive (circulated previously) regarding the Performance and Financial Management for Quarter 2 of 2021/22.

The Accountancy Services Manager highlighted the following:

·       The revenue budget for 2021/22 was approved at Council on 24 February 2021 at £13,639,000.

·       As at 30 September 2021, the latest forecast net budget was £13,617,000, which produces a forecast budget surplus of £22,000. Details were shown in “Appendix A – Variations in the Revenue Budget”.

·       There was still pressure on the 2021/22 budget due to the Covid-19 pandemic with continued additional costs being incurred and forecast decline in core income sources.

·       Factored within the approved budget included a government grant in relation to Covid-19 pressures of £536,710 and also budgeted for £375,000 of additional costs and reduced income.  These were already incorporated into Appendix A along with the latest forecast for each service area.

·       The Government grant of £536,710 was approved and received and it was anticipated the Council would receive £80,000 re-imbursement for Quarter 1 loss of Sales, Fees and charges, from the continued Government 75% income reimbursement scheme.  This was an estimate as the scheme had been extended to include the period April to June 2021 only.

·       At the end of 2020/21 the Council placed £375,000 into a Covid Budget management reserve to help mitigate any further adverse variances due to the pandemic in 2021/22.  This future protection was still available if required.

·       As at 31 March 2021 the Collection Fund reserve balance was £9,810,252 as detailed in paragraph 4.1.8 of the report.

·       An additional provision had been included within the forecast figures shown in Appendix A for the National Pay Award potentially being settled higher than the original 1% budgeted amount. Negotiations were ongoing between the Unisons and the Employers and the outcome of these discussions would be included within the next report.

·       “Appendix B – Movement in reserves and Balances” detailed the movements to and from earmarked reserves in 2021/22.

·       Full details of the Strategic Contingency Reserve movements and commitments were detailed in “Appendix C – Strategic Contingency Reserve”.

·       The 2021/22 Capital Programme was detailed in “Appendix D – Capital Programme 2021/22”.

·       The Budget and Financial Framework report to Full Council on 24 February 2021 outlined the Capital Programme for the 2021/22 financial year of £22,419,916. Project underspend of £917,121 was bought forward from 2020/21 year and further variations of £1,479,065 were approved as part of the performance and financial management report to Strategy and Resources Committee, to produce a revised 2021/22 Capital Programme of £24,816,102.

·       Overall variations of £4,213,427 were proposed to the 2021/22 Capital Programme as detailed in paragraph 4.4.3 of the report.

·       Actual spend on the 2021/22 Capital Programme as at 30 September 2021 was £4,292,304.

·       The overall Capital Programme for 2021/22 to 2024/25 was £46,151,018 and was broken down as detailed in paragraph 4.4.6 of the report.

·       The Programme of £46,151,018 was funded by Capital Receipts / Borrowing (£28,274,889), External Grants and Contributions (£16,154,193) and Reserves (£1,721,936).

·       It was recommended that the funds for the Fendering and Fish Stores Enhancements project of £163,650 be released from the 2021/22 Capital Programme.

·       Treasury Management as detailed in paragraph 4.5 of the report.

·       Debt Management as detailed in paragraph 4.6 of the report.

·       General debtors as detailed in paragraph 4.7 of the report. All Heads of Service had been tasked to review their outstanding debts and review processes for effective debt recovery.  In the first two quarters of this financial year no amounts were written off due to a backlog in the Finance Team. Since 30 September 2021, 47 invoices have been written off to the value of £27,199 to bring the write offs up to date.

·       Performance information as detailed in Appendix E of the report.

In response to questions, the Director of Resources and Deputy Chief Executive advised the following:

·       The flood defence scheme at Seven Brethren had not been included within the capital programme as an approved scheme had not yet been brought forward for approval.

·       When the budget for 2021/22 had been approved, it had been anticipated that a new CCTV hub and upgrade of the system would have taken place which would have increased 3^rd party uptake. This did not take place at the beginning of the year as expected and took place part way through the year.  Therefore it was anticipated that the CCTV income would increase moving forwards.

·       £9m had been included within capital programme for 2021/22 for the purchase of the strategic asset. £2m had been included within the capital programme 2022/23 for capital enhancements to be made to the strategic asset.

In response to questions, the Accountancy Services Manager advised the following:

·       The collection of business rates achieved to date was 50.03%. It was anticipated that the collection rate would rise for the remainder of the year.

RESOLVED:

(a)  That the actions being taken to ensure that performance was at the desired level be noted;

(b)  That the contributions to/from earmarked reserves be approved as detailed in section 4.2 of the report;

(c)  That the movement on the Strategic Contingency Reserve as detailed in section 4.3 of the report be noted.

(d)  That funds be released for the capital schemes listed as detailed in section 4.4.10 of the report;

(e)  That the sections dealing with Treasury Management (section 4.5 of the report), and Debt Management (sections 4.6 and 4.7 of the report) be noted.

RECOMMENDED:

(f)   That Council approve the variations to the Capital Programme 2021/22 to 2024/25 as detailed in sections 4.4.3 of the report.

The Committee considered a report by Director of Resources and Deputy Chief Executive (circulated previously) regarding the Mid Year Treasury Management Report for 2021-22.

The Head of Governance highlighted the following:

·       The Council was required through regulations issued under the Local Government Act 2003 to produce a mid year treasury report reviewing treasury management activities and the prudential and treasury indicators for 2021/22.

·       The Treasury Management Strategy Statement (TMSS) for 2021/22 was approved by Council on 24 February 2021.

·       The underlying TMSS approved previously required revision in the light of economic and operational movements during the year. The proposed changes were set out in paragraph 4.1 of the report.

·       Section 4.3 of this report provided further information on the Capital Financial Requirement and the Operational Boundary. The change to the upper borrowing limit over 10 years would allow greater flexibility for long term borrowing.

·       Revised estimated for capital expenditure and the changes since the capital programme had been agreed as part of the budget as detailed in paragraph 4.2 of the report.

·       Changes to the capital financing requirement as detailed in paragraph 4.3 of the report.  Internal borrowing was most prudent and cost effective for the Council.

·       Annual Investment Strategy as detailed in paragraph 4.8 of the report. The Council held £40m of investments as at 30 September 2021 (£22.8m at 31 March 2021) and the investment portfolio yield for the first six months of the year was 0.05% against the benchmark 7 day LIBID of -0.08%.

In response to questions, the Head of Governance advised the following:

·       External borrowing was currently required for £0.5m at a rate of 1.43% interest.  Interest rates were kept under review.

In response to questions, the Director of Resources and Deputy Chief Executive advised the following:

·       For larger projects such as the Leisure Centre, payment of interests on external borrowing was included within the budget at a higher level than the current interest rates to allow protection should interest rates increase.  The Council produced borrowing models with its treasury advisors.

RECOMMENDED:

(a)   That the changes to the prudential indicators be approved;

(b)   That the report and the treasury activity be noted.

The Committee considered theLetter of Representation, presented by the Director of Resources and Deputy Chief Executive (circulated previously).

The Director of Resources and Deputy Chief Executive explained that the Letter of Representation formally outlined to the External Auditors, the governance arrangements in place and the Authority’s responsibilities on the financial statements presented. The Letter was presented to the Committee in advance of the Full Council meeting which would take place following this meeting. The Letter was required as part of the final process for the approval of the Statement of Accounts for 2020/21

RECOMMENDED that the Letter of Representation be approved by Full Council.

The Committee considered a report by Grant Thornton regarding the External Audit – Audit Findings report (circulated previously).

The External Auditor (PB) confirmed:

·         The date for the signing off of the accounts was set two months’ earlier than previously. The Auditors knew this would present a challenge.

·         A subset with the greatest chance of completion were chosen. NDC was part of that selection.

·         The cooperation between the Authority and the Auditors had been good.

·         There were no material errors.

·         Main issue had been material uncertainties - such as the pension liability and the asset valuations. Management had been challenged on those and it had been agreed that no changes were required to the accounts.

·         They were unable to issue the opinion until the Devon Pension Fund audit statement had been received. This was expected early next week (w/c 25^th Oct 2021). Once this was received they would be able to sign off the assurance. The accounts would be signed-off by 31^st October.

·         NDC were not alone in not yet having the accounts signed-off. As only 9% of Authorities had achieved this by the 30^th September deadline.

·         The accounts would be signed off within the threshold in terms of risks. The Auditor had been impressed with the responses from both the officers and valuer.

The Director of Resources and Deputy Chief Executive advised that the one recommendation within the audit had been reporting about projects such as the regeneration of High Streets and the transparency/updates of projects. Management had accepted these and it was noted that external experts had been involved in projects where the professional expertise was unavailable in-house. Such external professionals were assessed based on their expertise, price, and results from previous contracts.

RESOLVED that the External Audit Audit Findings Report be noted.

The Committee considered a report by the Director of Resources and Deputy Chief Executive regarding the Statement of Accounts 2020/21 (circulated previously).

The Director of Resources and Deputy Chief Executive highlighted the following points for the Committee:

·         The draft accounts would usually be signed off by the 31^st of July each year, however this had been extended to the 30^th September. The delay to this October meeting had been due to the Governance Committee not meeting on the 27^th September 2021 as planned

·         An Unqualified opinion had been issued.

·         A previous forecast at quarter 3 of a net surplus of £28k had now been increased due to additional funds such as income from planning, increased rental income on Butcher’s Row, reduced spend on temporary accommodation and accompanying reductions in costs across the Authority.

·         £1.2m General fund reserve, and £16.3m earmarked reserves were achieved.

·         The earmarked reserves were artificially higher in 2020/2021 due to timing differences in the accounting treatment of Covid business rate relief from Central Government.

·         The Authority was in a strong financial position for 2021/2022 year.

·         The net worth on the balance sheet had shown a net decrease on 2019/20 due to an increase in the valuation of the long term assets, including the value of the new leisure centre build and an increase in the net liability of the pension fund.

·         The deficit in the Pension fund was offset by a pension reserve and would be made good by the employees’ contributions over their employment period. The value of this fund was reassessed every three years.

·         The final opinion on the accounts was due from the Auditors next week (w/c 25^th October 2021).

·         There would be a slight change to the wording on the material uncertainty disclosure due to the valuation and replacement costs of assets. The increase in rebuild costs were due to the prices of building materials. A disclosure note had been added to the accounts in explanation

In response to questions from the Committee, the Director of Resources and Deputy Chief Executive advised that:

·         Any cash balances held were protected as set out in the Treasury Management Strategy. Investments were held across a number of institutions to reduce risk.

·         The build of the Leisure Centre was covered by a fixed cost construction contract - reducing financial risk to the Authority.

The Chair added that the general fund reserve balance for a District Council should be between 5% and 10%. NDC had achieved 9.1%. He commended the Chief Executive, Director of Resources and Deputy Chief Executive and the staff for their efforts in delivering the services within budget.

RECOMMENDED that the Statement of Accounts 2020/21 be approved and proceed to Council for consideration.

The Committee considered a report by the Senior Solicitor and Monitoring Officer regarding the Annual Governance Statement 2020/21 (circulated previously).

The Head of Governance advised the Committee:

·         The Devon Audit Partnership (DAP) had given an opinion of Reasonable Assurance.

·         A series of recommendations had been presented to the Governance Committee which included items around Member Training and Code of Conduct, a review of the Corporate Plan Priorities and an update to the procurement strategy.

In response to questions from the Committee, the Head of Governance confirmed that:

·         The Corporate Plan was being examined in detail with the Solicitor and Data Protection Officer and

·         The Corporate and Community Services team were reviewing the community engagement strategy.

The Internal Auditor explained that their role included the provision of an annual assurance report which referenced a number of external, independent bodies, such as the ombudsman. Their opinion agreed with the overall picture presented by the Accounts.

In response to questions from the Committee, the Director of Resources and Deputy Chief Executive advised that:

·         The DAP had audited the AGS and considered good practice at neighbouring Local Authorities and had incorporated this where applicable.

·         The Member Training programme was being reviewed. The training programme included a refresher for Governance, equality and diversity refresher, along with further training on the roles of Members

RESOLVED that the Annual Governance Statement 2020/21 be noted and proceed to Council for consideration.