Agenda and minutes

Apologies for absence were received from Councillors Ali, Berry, Cooper and Spinella.  Apologies for lateness were received from Councillors Aref-Adib and Khatoon.

There were no declarations of interest.

Broadcast of the meeting

The Chair to announce the following: ‘In addition to the rights by law that the public and press have to record this meeting, I would like to remind everyone that this meeting is being broadcast live by the Council to the Internet and can be viewed on our website for twelve months after the meeting. After that time, webcasts are archived and can be made available upon request.

If you have asked to address the meeting, you are deemed to be consenting to having your contributions recorded and broadcast, including video when switched on, and to the use of those sound recordings and images for webcasting and/or training purposes.’

Any other announcements

Broadcasting of the meeting

The Chair announced that the meeting was being broadcast live by the Council to the internet and could be viewed on the website for twelve months after the meeting.  After that time, webcasts were archived and could be made available on request.  Those who were seated in the meeting room or participating via Teams were deemed to be consenting to having their contributions recorded and broadcast and to the use of those sound recordings and images for webcasting and/or training purposes.

Requests to speak at the Committee meeting on a matter on its agenda must be made in writing to the clerk named on the front of this agenda by 5pm two working days before the meeting.

There were no deputations.

There was no notification of urgent business.

To approve and sign the minutes of the meeting held on 15^th June 2023 as a correct record.

RESOLVED –

THAT the minutes of the meeting held on 15^th June 2023 be approved and signed as a correct record.

Report of the Director of Finance

This report provides an update on the current status of local government financial reporting and audit following the recent Public Accounts Committee (PAC) enquiry.

Consideration was given to a report of the Director of Finance.

In response to questions, the Director of Finance remarked that officers were involved in the discussions regarding how to address the audit backlog and effect longer term systemic change and were making representations on what changes they wished to see, such as the need for the accounts to be simplified so that they could more easily be understood by lay people.  He added that workforce planning needed to be prioritised in order to address the difficulty in recruiting public sector auditors.

The Director of Finance undertook to provide Members with a list of the outstanding audits referred to in the report.

                        ACTION BY:             Director of Finance

In response to a question about whether the audit backlog might be a contributory factor to the recent spate of authorities issuing Section 114 notices, the Director remarked that they were many contributory factors, such as failures in governance, unrealistic savings targets and overuse of reserves.  Uncompleted accounts may have been a contributing factor in some cases, but not a major one.

A Member remarked that it was difficult to provide residents with reassurance on these issues when there were so many factors beyond the Council’s control, and this could affect public confidence in the Council. 

A Member commented that the risks set out at 3.10.1 and 3.10.2 of the report were concerning and it would be important to work in partnership with the external auditors to ensure that they did not materialise.  Suresh Patel of Mazars, the external auditors, remarked that if the government imposed a backstop date it would have to be adhered to and there would be difficult decisions to be made by local authorities and their auditors.  The Department of Levelling Up, Housing and Communities had three working groups of the various stakeholders, which were looking at the detail of how this would work and the mitigation of risk.

In response to further questions, the Director of Finance remarked that the Council had brought in additional resource to progress the accounts and this was now bearing fruit.  However, there was a limited amount of capacity in the system and wider workforce planning would take time.  There was also an issue of proportionality around the current requirements, such as the onerous requirements around valuation of council assets, and this was undoubtedly feeding into the issues.

A Member remarked on the fact that the proposals to address the backlog and effect future change seemed to carry a fair amount of risk and the situation thus remained fairly unsatisfactory.

RESOLVED –

THAT the report be noted.

Report of the Executive Director Corporate Services

This report presents to the Audit and Corporate Governance Committee the draft Audit Completion Reports from Mazars on the 2020/21 Statement of Accounts, together with the audited 2020/21 Statement.

Consideration was given to a report of the Executive Director Corporate Services.

A Member asked whether costs had increased during the pandemic and whether there had been any savings.  The Director of Finance undertook to provide a written response to the Member.

                        ACTION BY:             Director of Finance

A Member enquired about the impact of the retirement of the Council’s key valuation expert on the production of these accounts.  The Director remarked that an external company was contracted to provide this service and it was for them to ensure that they had the capacity to deliver.  This would however be considered in future when commissioning this service.  The Financial Reporting Manager added that officers had done what they could to mitigate the risks of the change in personnel at the external valuers, but problems still arose when questions were asked by the auditors considerably after the fact and it was no longer possible to get a definitive answer.  Suresh Patel of Mazars added that another consequence of the audit delays was that questions were sometimes being asked about a valuation two years after it had taken place.

In response to a question about why the audit had found that there was a lack of clear record keeping around cash held on behalf of third parties, the Financial Reporting Manager remarked that the Council invested money for the North London Waste Authority (NLWA) alongside the Council’s working balances.  This was done on a daily basis and there was then a year end exercise to allocate the investment balances and interest earned appropriately between the Council and the NLWA.

A Member expressed concern about the finding that there had been an initial lack of understanding of the requirements of the CIPFA code in relation to valuation.  The Financial Reporting Manager remarked that this issue was raised in the 2019/20 audit findings, and stemmed from the 5 year valuation cycle and the fact that some assets had fallen outside of that timeline.  There had also been a reclassification of some properties.  Auditors had not been comfortable with the classification of some commercial units as investment properties so this had been taken on board and adjusted in the accounts.  This issue had not been raised in relation to subsequent sets of accounts.

RESOLVED –

(i)            THAT the External Auditor’s reports for the 2020/21 statement of accounts at Appendices A and B of the report be noted;

(ii)          THAT the amended 2020/21 Statement of Accounts at Appendix C of the report be approved;

(iii)         THAT authority be delegated to the Executive Director Corporate Services, in consultation with the Chair of the Audit and Corporate Governance Committee, to approve any remaining amendments to the Statement of Accounts as the auditors complete the final outstanding matters as listed in Appendices A and B of the report;

(iv)         THAT it be noted that officers will report back on any such amendments made at the following Audit and Corporate Governance Committee meeting for the Committee’s information;

(v)          THAT the Chair  ...  view the full minutes text for item 8.

Report of the Head of Procurement and Social Value

The Council spends approximately £460m per annum on external goods, works and services, with a variety of local, national and international organisations and businesses. The Council is taking a larger role in the commissioning of services in the local economy and is increasingly challenged to deliver value through collaboration, innovation and the use of technology throughout the supply chain.

Contract Standing Orders set out how the Council authorises and manages spending and contracts with other organisations and have been in place since 2001, with revisions in 2011 and 2017. Since the approval of the current version further revisions are now required due to changes in government legislation, internal practice and revised financial thresholds stemming from year on year increases in inflation. This report therefore sets out the proposed amendments to Contract Standing Orders (and includes other minor/self-explanatory changes as highlighted in the appendix).

These proposals will support the We Make Camden ambition that the borough’s local economy is strong, sustainable and inclusive. They will also seek to maximise quality and enable innovation in the delivery of goods and services in the wider achievement of We Make Camden.

Consideration was given to a report of the Head of Procurement and Social Value.

A Member commented that the proposals seemed sensible in the context of the current fast moving market.

In response to questions, the Borough Solicitor commented that some of the post-Brexit trade deals were reliant on the UK remaining subject to the same procurement rules as those that applied within the EU.  The government was reviewing procurement legislation at present and was suggesting a lightening of the bureaucracy around procurement, but the concept of competition and the obligation to advertise would remain.

A Member asked what percentage of contracts let by the Council fell in the £25,000 to £45,000 range.  The Borough Solicitor undertook to provide this information in writing, but observed that there were fewer and fewer in this range in recent years and raising the threshold under which Heads of Service could award contracts to £45,000 reflected the rise in costs in the period since the £25,000 threshold was set.  Officers were committed to reviewing these thresholds more regularly going forward, in order to more realistically reflect the situation in the market.

                        ACTION BY:             Borough Solicitor

In response to a question about how to ensure that processes were fair and transparent, the Borough Solicitor commented that this was reliant on auditing and record keeping, which was very good in Camden, and Chief Officers who were spending Council money were aware that they needed to be able to evidence and justify their decisions.

RESOLVED –

THAT the proposed changes to Contract Standing Orders, shown as tracked changes on Appendix 1 of the report, be agreed and recommended to Council for approval.

Report of the Borough Solicitor.

This report summarises plans for the Committee’s work programme and training and provides an action tracker detailing progress on actions arising from the previous meeting.

Consideration was given to a report of the Borough Solicitor.

RESOLVED –

(i)            THAT the work plan for the remainder of 2023/24, as set out in Appendix A to the report, be noted;

(ii)          THAT the training sessions that took place for members of the Committee in 2022/23 be noted; and

(iii)         THAT the action tracker for actions arising from the previous meeting, as per Appendix C of the report, be noted.

There was no urgent business.