An apology for absence were received from Councillor Danny Brookes.

The Chairman advised that he would be running slightly late for the meeting.

Those present were noted as in attendance.

At this point in the meeting, Members were invited to declare any relevant interests.

Councillor Colin Davie and Councillor Adrian Benjamin asked that it be noted that in respect of Item No.14, Update on the Procurement and Programme Management Framework around the Towns Fund Projects, that they were both Members of the Connected Coast Board (CCB).

To confirm the Minutes of the Meeting held on 9^th February 2022.

Members queried some updates under previous actions, under Minute Number 52, Action Sheet, (Pages 2-4 of the report refers):-

Action No.36, Information on Kingfisher Caravan Park Re. legal costs. (Minute Number 52, page 2-3 of the report refers).  The Section 151 Officer advised that a confidential note would be circulated to Members to update on this.

Deputy Chief Executive Corporate Development advised that this would be re-circulated.

Action No. 39, Internal Audit Progress Report November 2021, A paper to be provided on the whole issue of HR across the partnership in relation to staffing issues, in particular how it impacted on ELDC.  That it was agreed that this would be taken back to the Assistant Director for a response.

This was attached at Appendix A and further new queries regarding staffing were raised with officers.

Action No. 43, (Information Governance Annual Update – Information to be provided in relation to action taken for people illegally living on caravan sites and what cost to the Council.  That it was requested that this be followed up and an update be circulated to Members ahead of the next meeting.

The Democratic Services Officer advised that this would be re-circulated.

Regarding the exempt minute Members requested a move into exempt session later in the meeting to discuss specific information in more detail.

The Open Minutes of the Meeting held on 9^th February 2022 were agreed as a correct record.

The Vice- Chairman advised that there was no update to report.

Actions from the previous meeting.

The actions from the Meeting held on 9 February 2022 were confirmed as in hand or completed.

Report to follow.

The Monitoring Officer presented to Members the Combined Assurance Report.  Members were advised that this was a significant piece of work that had been led by the Internal Audit Team.

It was noted that it was difficult to compare assurance ratings on a service-by-service basis, given that there had been a significant management restructure since the last report.  It was possible however to compare overall assurance, (page 3 of the report refers).  It was noted that red ratings were down from 5% to 2%, Amber was down from 52% to 42% and Green was up from 43% to 56%.

Members were advised that separate assurances had been given in each directorate, with each directorate being given a list of critical activities and a rating of Red, Amber or Green and a narrative provided by Officers across the Partnership.

Also, in terms of the Strategic Risk Register, it was noted that there were two new key risks; technical infrastructure and cyber risks.

Members were invited to put their comments and questions forward: -

·         Members asked how the overall assurance compared with other Local Authorities in terms of common themes etc.

The Internal Audit Manager confirmed he would provide a response at a future meeting.

·         Disappointment was expressed that a representative from each of the Directorate’s was not present at the meeting.  This was noted by Officers.

·         In terms of the Towns Fund, Members asked whether any specialist support would be brought in and how this would be monitored?

·         It was queried why the Towns Fund Projects featured in more than one area?

The Deputy Chief Executive Programme Delivery explained that prior to submission to Government, the projects fell within the Growth Team, and after submission they would fall under the Delivery Team.

• A comment   was made that in terms of supporting transformation, and the quantity of change anticipated, and specialist nature of some projects, would it not be wise to allocate a wider budget?

• A question was raised around whether the Council was planning for the future in the correct way in terms of the caravan industry and investing in materials/new vans.

·         Members wished to note the difficulties for businesses in obtaining people with the right skills and recruitment of staff generally due to Covid.

·          

• The Council should recognise the global situation that was developing and the potential for a recession, given the current crisis in the Ukraine and associated material and construction costs. The Council should be planning for the worst-case scenario.

In response to queries raised, the Section 151 Officer advised that in terms of concerns around procurement/resources this would be picked up later on the agenda under Item 11, Procurement Audit.

Furthermore, it was confirmed to Members that there was capacity within the budget that could be quantified for Members. 

In response to concerns around emerging risks around the jobs market, it was acknowledged that this was a risk however Officers considered it should be categorised as amber at this time.  This required pro-active management; however it should  ...  view the full minutes text for item 69.

To receive a report.

Matt Waller, Internal Audit Manager presented a report on the draft Internal Audit Plan 2022/23.

The report set out the proposed Internal Audit Plan for 2022/2023 which detailed the activities to be audited and the indicative scope for each audit.  The purpose of the report was to give Members an opportunity to comment on the plan and the priorities that had been established.

The Internal Audit Manager referred Members to the current planned audits, (Appendix A, Internal Audit Plan, page 40 of the report refers).  The Internal Audit Manager outlined the headings within the plan explaining the assurance rating and how they scored the different areas.

Overall, this gave Members a clear indication of what areas would be looked at and why this area has been chosen.

Members were invited to put their comments and questions forward:-

• In terms of Value for Money (VFM) how would the Council ensure that VFM was being obtained if the Council no longer benchmarked against other authorities?

The Internal Audit Manager advised that they worked with Managers on this, and that the comments would be incorporated into the External Auditor’s Value for Money Report.

• Reference was made to the Companies Internal Audit Plan being 57 days, (paragraph 3, page 38 of the report refers) and a Member asked how many people were working on this plan?

The Internal Audit Manager advised that they worked closely with management on this and that the reasoning behind the Local Authority Report and Audit Plan, was to ensure that it focused on where the risks were.

• An error was noted at paragraph 2, (page 37 of the report refers) it was confirmed that the Audit Plan for 2022/23 was 170 days.

• A Member made reference to ‘cross cutting audits’ and it was confirmed that this was an audit that looked at several directorates and was a more corporate view.

• A further Member queried ‘sensitivity’, (page 37 of the report refers) one of the criteria for determining the priorities for the audit work. It was confirmed that a weighing system was used to establish how the team focused on risks.

The Internal Audit Manager wished to introduce Amanda Stanislawski, Principal Auditor also part of Assurance Lincolnshire, who was in attendance at the meeting.

Further Comments and questions were raised: -

• In terms of the ICT Project Management Joint Audit, what standards were being used to audit this against?

This detail would be reported back.

Furthermore, the Internal Audit Manager confirmed that they had specific ICT auditors and assured Members that these standards would be complied with.

• In terms of the Finance System Review given that an ICT Project was also taking place how would Internal Audit ensure there was some coordination?

The Internal Audit Manager assured members that they were always very careful not to duplicate things, and that they would work together to ensure this took place effectively.

• Reference was made to the CIPFA Code of Guidance, Members considered it important that the Chief Executive attend this Committee  ...  view the full minutes text for item 70.

To receive a verbal update.

A verbal update was provided by the Internal Audit Manager.

Members were advised that every five years, internal auditors were audited to ensure they were following the Public Sector Internal Audit Standards (PSIAS).

It was noted that although the report from CIPFA had not yet been received, there was just one minor advisory around the Audit Charter.  It was pleasing to report that the Internal Audit team had passed with great success.  It was also important to note that internal audit team had been found to be fully compliant with PSIAS.

RESOLVED

That the update be noted.

To receive a report.

John Machej was in attendance on behalf of Mazars LLP, External Auditors, to present the External Auditor’s Annual Report for 2020/21, (pages 49 to 68 of the Agenda refer). 

The purpose of the report was to provide a summary of the work undertaken as the external auditor for East Lindsey District Council for the year ending 31 March 2021.  This included the audit of the financial statements and commentary on Value for Money (VFM) arrangements.

It was highlighted to Members that work had been underway with some VFM Risk Hunting, which allowed auditors to specifically hunt for risks in order for these to be brought to the Council’s attention.  The External Auditor explained that their role was to monitor how the Council was managing their risks.

Members were invited to put their comments and questions forward: -

• Reference was made to the VFM arrangements, (page 11 of the report refers) specifically paragraph 9 that referred to an identified theme around the lack of oversight, monitoring and accountability by Senior Leadership Team.  A Member was concerned how this would be dealt with.

The External Auditor confirmed that a further response could be provided to Members on specific details, after speaking with the report author, Mark Surridge.

Further reference was made to the VFM arrangements, (Paragraph 5, page 9 of the reports refers) in relation to the pension fund.  It was noted that the Council’s share of the pension fund net liability was in a deficit position of £66.5m up from £48.9m in the previous year, Members asked whether there was anything to mitigate this in the future?

• Reference was made to Procurement (page 16 of the report refers) in particular concerns were raised that No ELDC Procurement Strategy existed to demonstrate how services/goods the Council commissioned might improve social, environmental wellbeing of the area and deliver savings.  Further concern was also raised that testing of contracts awarded over £5k identified 57% had not been included on the Contracts Register.

• Furthermore, reference was made to the fact that there was no review of aggregate spend across the Council.

In response to queries raised, the external auditor advised that the pension fund was subject to long term viability, and the valuations fluctuated each day.  It was highlighted there was a review of contributions every three years.  Pension funds were widely in deficit, however the nature of them meant that there were no specific risks arising.

The External Auditor provided further reassurance that this Authority would be in a position to meet those liabilities long term.

Members were reminded that there was an opportunity to ask these questions at an upcoming pension fund session around how this worked over the longer term.  In terms of concerns raised around procurement there was now a Procurement Action Plan in place and the committee had already had oversight of a Corporate Government Action Plan following the Internal Audit Assurance report last year.

RESOLVED

That the External Auditor’s Annual Report be noted.

To receive a report.

John Machej was in attendance on behalf of Mazars LLP, External Auditors, to present the Audit Strategy Memorandum for Year ending 31 March 2022.

The purpose of the report was to summarise the audit approach and highlight significant audit risks and also areas of key judgements and provide Members with details of the audit team.

The External Auditor advised that there was very little change however wished to highlight the need to look at the Council’s new finance system to ensure balances were transferred over.  There was also expected to be some additional work on the financial statements for Invest East Lindsey Limited.

Members were referred to Section 4, significant risk and other key judgment areas (pages 13-18 of the report refers).  In particular reference was made to Management override of controls, net defined benefit of liability valuation, valuation of land and buildings, investment properties and assets held for sale and IT systems changes.

Members were invited to put their comments and questions forward:-

·         Reference was made to the ICT System change, (page 18 of the report refers) and assurance that the same standard was being used and some coordination.

The External Auditor advised that the topics were very much the same and included process and management aspects. Members were further assured that auditors would be looking at data migration to ensure that balances had transferred.

RESOLVED

That the Audit Strategy Memorandum 2021-22 be noted.

To receive a report.

The Assistant Director Finance presented a report on the Procurement Audit.

The purpose of the report was to provide the Committee with an update on actions taken following last year’s procurement audit report. This included details of the work programme drawn up in response to this, and progress against activities identified including timescales for each piece of work.

The Assistant Director Finance referred Members to the Contracts Register, (Paragraph 2.8, page 105 of the report refers) noting that 57% of contracts awarded had not been included on the Contracts Register.  The newly appointed Procurement Manager was now working with colleagues to rectify the situation.

It was further noted that additional consultancy support had been purchased to support the procurement function, (Paragraph 2.10, page 105 of the report refers).

Reference was made to a shared contract register, and how the Council could look to create commonality across the partnership.

Members were invited to put forward their questions and comments:-

• How many contracts did the Council have in force?

Officers advised that the exact figure to was not to hand.

• What were the timescales for completion of the Procurement Strategy?

The Procurement Strategy would be written in the coming months and work had already started across the partnership.  It was hoped this could be fully complete by the end of June 2022, however it should be noted that this was quite a large piece of work to align across the partnership.

• How would the Council ensure it would get VFM through its procurement process?

Officers assured Members that VFM was picked up through social values and through Key Performance Indicators (KPI)’s.

• What criteria was being used to ensure VFM was incorporated in all our contracts?

Officers confirmed that VFM on each contract depended upon the value on price and performance, Members were assured that more detail would be included around this within the strategy.

• A Member made reference to the Contract and Procurement Procedure Rules (CPPRs) (page 104 of the report refers) and the importance of ensuring that those contracts awarded prior to 1^st April 2020 were also procured properly.

• Further reference was made to Procurement Options, (Paragraph 2.10, Page 105 of the report refers) in terms of Crown Commercial Services (CCS) being appointed to support the Towns Fund project with its procurement requirements. 

In response to queries raised, the Procurement Manager advised that the date of 1^st April 2020 was the date specified by the Councils auditors, anything prior to this date was a separate piece of work taking place to ensure the contracts were recorded correctly.

The Procurement Manager further advised that not all the contracts had been uploaded onto the system.  With regards to training, the team had begun the process of identifying which staff used the system and what training was required.

Members were referred to Appendix A, Procurement Strategic Plan 22-23 (pages 109-110 refer). 

• Reference was made to the Exemption Log, (Paragraph 2.7, page 105 of the report refers) Members asked if the Committee could  ...  view the full minutes text for item 74.

To receive a report.

The Deputy Chief Finance Officer, Public Sector Partnership Services (PSPS) Ltd, presented a report on the Financial Statements and Accounting Policies.

The purpose of the report was to review and approve the Accounting Policies for inclusion in the Financial Statements for 2021/22.

The Deputy Chief Finance Officer advised that unless there were any major changes to accounting rules and regulations, accounting policies did not change significantly.  The report presented the proposed accounting policies to be adopted for the 2021/22 financial year.  The policies were prepared in line with CIPFA’s Code of Practice.

Members were advised that since Boston Borough Council had become a shareholder of PSPS on 1^st April 2021, the shares of assets liabilities, income, and expenditure that the authority was required to include within its Financial Statements regarding the joint operation had reduced from 63%to 48%.  This was reflected in the financial liabilities section of the accounting policies and would be fully disclosed in the joint operations note, (Paragraph 2.2, (page 114 of the report refers).

Furthermore, the unaudited Financial Statements would be presented to Audit and Governance Committee during July 2022.  The accounting policies would be included with the Statements and any minor changes made during the Statements production process would be agreed with the Section 151 Officer and highlighted to the Committee at this time.

It was noted that only one small change had been made.

(N.B Councillor Will Grover entered the meeting at 12:25pm)

(COUNCILLOR GROVER IN THE CHAIR)

Members were invited to put forward their comments and questions:-

• A Member made reference to the Business Improvement District (BID) scheme and considered the word ‘currently’ needed to be included after the word scheme, (paragraph 3, page 119 of the report refers).

Members wished to clarify with regard to BID’s the position should a person not pay their subscription and who would be responsible for taking that person to court?  It should be noted that cost would be incurred in this instance.

In response to queries raised, the Section 151 Officer advised that it was the Billing Authority that would take the party to court, effectively this was like a precept, if the funds did not come in, then it would not be made available. In terms of legal costs, it was confirmed that all these costs would be duly incurred as part of that process.

The recommendations within the report were duly proposed and seconded.

Following which it was

RESOLVED

That the Accounting Policies for 2021/22 at Appendix A of the report now submitted be approved.

To receive a report.

The Monitoring Officer presented a report to Members on the Model Code of Conduct.

The purpose of the report was to present to the Committee the Local Government Association (LGA) Model Code of Conduct and associated guidance.

Members were informed that the Localism Act 2011 required every Local Authority to adopt a Code of Conduct that dealt with the conduct that was expected of members and co-opted members of the authority when they were acting in that capacity.

The Monitoring Officer set out the background to the report explaining that back in 2019, the House of Lords Committee on Standards in Public Life issued a report on Local Government Ethical Standards, (paragraph 1.3, page 134 of the report refers).  The Committee had noted that some key matters were missing from local authority codes, such as social media use, bullying etc and that these issues be included in any Model Code.

Members were advised that East Lindsey District Council’s current Code of Conduct was robust and aligned in part with the LGA Model Code, however it did not include all the obligations present in the Model Code.

Members were referred to the significant changes and key obligations within the Model Code, (Paragraph 2.3, pages 135-138 of the report refers).  Furthermore, the Monitoring Officer recommended that Members also read the associated LGA Guidance, a useful narrative.  In addition, Members were also referred to the flowchart (pages 195-200 of the report refers) which explained the process well for declaring interests correctly.

Members were reminded that the Draft Model Code of Conduct had now been considered by the Constitution Working Group and had gained full support.

The Monitoring Officer wished to draw attention to an additional Recommendation 4 (page 134 of the report refers), regarding voluntary sign-up to the New Model Code and associated register.  It was highlighted that this would be a sensible proposal to take forward.  Should Members approve the report today this report would subsequently be considered by Executive Board on 27^th April and then Full Council on 12^th May.

Members were invited to put their comments and questions forward.

In response to queries raised, the Monitoring Officer advised that Members had been given the opportunity to attend training on the Model Code of Conduct last year.  There would also be an All-Member Briefing Session on the Model Code of Conduct taking place remotely on 4^th May and subsequent training thereafter.

In terms of concerns raised around the lack of sanctions, the Government had recently released a response to the House of Lords Committee around stronger sanctions however had chosen not to introduce stronger sanctions at this time.

The recommendations within the report were proposed and seconded.

Following which it was,

RESOLVED to recommend to Council:

1.That the Model Code of Conduct set out at Appendix A of the report now submitted be adopted without amendment as this Council’s Code of Conduct, including those parts in square brackets and being relevant to the Executive Board model operated by  ...  view the full minutes text for item 76.

RESOLVED

That under Section 100(a)(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following item on the grounds that, if they were present, there could be disclosed to them exempt information as defined in paragraph(s) 3 of Part 1 of Schedule 12A of the Act (as amended).

To receive a presentation.

A presentation was provided by the Deputy Chief Executive, Programme Delivery on the Procurement and Project Management of the Towns Fund Projects.

The presentation focused on:-

• the 5 projects that were to be managed internally,
• the progress made with the Procurement,
• Programme Management,
• Audit risks and regular monitoring.

Members were reminded that for all projects a full business case was submitted by 31^st March this year.  A report had also been submitted to Full Council on 30^th March providing full detail on the projects.

It was noted that there had already been an audit consultancy piece of work completed to highlight any issues with the Towns Fund, however it was pleasing to report that the risks were all either amber or green, it was hoped this would provide members with some comfort.  The Council hoped to hear back shortly from Government whether the Business Plans had been successful.  It was assumed at this stage they would be.

The Deputy Chief Executive, Programme Delivery provided Members with an overview of the current position with the projects.  It was also highlighted that the Council was supported by an organisation called Crown Commercial Services, that provided professional support.  It was also noted that this was built into the contract cost that came back over the next 2-3 months.

Questions and responses were provided as follows:-

• How did the Council fund this?

It was confirmed that this was added into the construction cost and was all part of the scheme.

• What flexibility had we incorporated for inflation in terms of the Councils Bid being for slightly less?

Members were assured that the value of the Towns Fund Project which was the bid that was put to the Government, was around £50m there was also some match funding in there, around £10-£20m, the whole scheme being in the region of £60-£70m.

• Assurances that the contract was closely sealed.

This point was acknowledged and would be taken forward.

• What confidence did Officers have in Skegness Foreshore, in terms of expressions of interests for marketing companies?

There were a number of reasons around why some of the expressions of interest were not successful, one being due to a lockdown period.  It was also hoped that a National Estate Agent Organisation would be far better in bringing in more national interest for Skegness.  It was noted that there were ongoing discussions around investments coming into Skegness.

• The National picture was worsening in terms of investments could any assurance be provided?

An exact figure could not be provided but Members were reassured that the right process was in place.

• Given the international position concerns were raised around the continuing rising costs of building materials?  Contingency plans within budgets were around 7%, Members questioned whether this was enough?

It was confirmed that there were contingencies built into the bids, however the costs were put together around 2 years ago, and a business case submitted only a few weeks ago, and as such these were still viable, although Officers  ...  view the full minutes text for item 78.