Apologies for absence were received from Councillor David Andrews.

Councillor Jill Makinson-Sanders attended as an Observer.

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

·       Councillor Colin Davie asked it to be be noted that he was a Member of the Towns Fund Board.

To confirm the Minutes of the Meeting held on 5 October 2022.

The Minutes of the Meeting held on 5 October 2022 were agreed as a correct record.

A Member queried why the Invest East Lindsey (IEL) had not been presented to Committee, Minute No. 20 of the Meeting held on 5 October 2022 refers.  It was highlighted that IEL would form part of the budget setting process, therefore it must be presented to Committee in January 2023. 

The Section 151 Officer advised Members that the report was still with Internal Audit, however would chase this up.

The Chairman advised Members that the briefing on Towns Fund Non-Deliveries Team would not be delivered at the close of the Meeting as arranged.  The Assistant Director (Economic Growth) had advised that the presentation with information pertinent to an update on external Town Fund projects was not yet complete. This would be presented at the next meeting to be held on 25 January 2023.

Actions from the previous meeting.

The actions from the Meeting held on 5 October 2022 were confirmed as in hand or completed.

Action No. 19 ‘Work Programme’, page 11 of the Agenda refers.

The Section 151 Officer advised Members that with regards to the Council’s position to Carbon Reduction, this was an item to be considered for future scrutiny by Overview Committee at its meeting to be held on 29 November 2022.

Action No. 25 ‘Work Programme’, page 11 of the Agenda refers.

The Section 151 Officer advised Members that with regards to the Annual Safeguarding Report, this had been followed up and would circulate an update to Members after the meeting.

Following a brief discussion, it was agreed that a copy of the Work Programme be added as a standard item to the Agenda moving forward.

To receive a report.

John Machej was in attendance on behalf of Mazars LLP, External Auditors, to present the Audit Planning Update and Progress Report - November 2022, pages 13 to 30 of the Agenda refer.  The report provided the Audit and Governance Committee with an update on progress made by Mazars LLP in delivering its responsibilities as East Lindsey District Council’s external auditors.

Members noted that the Audit Completion Report for 2020/21 had been presented to Committee at its meeting held on 15 September 2021, Minute No 28 refers which noted a number of areas of work as remaining outstanding at that point in time.  On 29 November 2021, Mazars issued its Follow Up Letter to this report setting out its progress against these matters.  The current position was summarised on the key elements of Mazars’ work that still remained outstanding and was set out at page 16 of the Agenda.

With regards to 2021/22, Members were advised that work was progressing well and Mazars was approximately 80% of the way through and no new risks had been identified since the audit plan was issued in April 2022.  Members were referred to the outstanding work set out at page 17 of the Agenda,  however noted that some of this work had progressed since the report was written.

Members were invited to put their comments and questions forward.

• A Member referred to the report where it related to the timeliness of local government audits in general and queried how ELDC compared with other local authorities in relation to this, page 28 of the Agenda refers.  Mr Machej advised Members that ELDC compared very favourably compared to some Local Authorities even though it was late in the process and nationally there were still audits for 2020/21 that were still outstanding and had not yet been signed off. 

No further questions or comments were received.

Following which it was,

RESOLVED:

That the Audit Planning Update and Progress Report - November 2022 be noted.

To receive a report.

The Chairman welcomed Sean Howsam, Interim Treasury Investment Manager, PSPS Limited to the meeting to present Members with the Mid Term Treasury Management Report 2022/23 on the Council’s Treasury Management Strategy Statement and Annual Investment Strategy for the period ending 30 September 2022, pages 31 to 36 of the Agenda refer.

The Interim Treasury Investment Manager detailed and highlighted pertinent information to Members from the Treasury Management Update at Appendix A, pages 37 to 56 of the Agenda refer.  Members were advised that the Council’s Investment Policy and Strategy was kept under constant review with the aim of balancing risk and reward.  Currently, the Council had a higher level of surplus funds available for investment following receipt of New Towns funding and in addition to this there were less counterparties currently available to the Council resulting in an increased difficulty to invest short-term funds for longer durations at higher rates. 

This would require approval from Council, therefore it requested that Committee noted the contents of the report and Members recommended to Council that the Sovereign Country Limit be increased from £5m to £10m (excluding the UK that had no limit), full details were set out at Paragraph 3.9 of the report, page 33 of the Agenda refers.

Members were invited to put their comments and questions forward.

• A Member highlighted the Icelandic banking crisis that occurred in 2008 and stated that it was the £5m sovereign limit that prevented the Council from losing a higher amount of money at that time and although a lot of the money was recuperated it tied the Council’s money up for a long period of time.  It was acknowledged that the Council was quite constrained on how to best invest for its residents, therefore an increase in the sovereign credit limit was required but it was not considered appropriate to increase the sovereign country limit to £10m, particularly due to the current volatility of the worldwide economic crisis and the war in Ukraine. 

• Concerns were further raised on the treasury strategy as it had no consideration of Environmental, Social, and Governance (ESG) criteria on the way the Council invested.  It was further highlighted that the Council had received negative publicity with regards to investment in Qatar and other middle eastern countries and considered that this was an insult to East Lindsey LGBT residents.  It was also considered that the way the Council determined its investment criteria and judged the countries to invest in was not divided by the size of those economies when it should be.  Following which, it was considered that the sovereign country limit be set at £8m for larger countries and £6m for smaller countries.

The Interim Treasury Investment Manager advised Members that following the situation in 2008, the majority of the funds invested in Icelandic banks had been received back.  With regards to investment criteria advice, this was taken from Link Asset Services and as a result of the Icelandic banking situation it had amended its counterparty criteria and how  ...  view the full minutes text for item 33.

To receive a report.

Richard Steele, Data Protection Officer (ELDC and Boston Borough Council) presented Members with the Information Governance Annual Update, pages 101 to 106 of the Agenda refer.

The report provided Members of the Audit and Governance Committee with an overview of activity in relation to information governance, including data protection for the Authority and highlighted any changes or risks for the forthcoming year.

Key information was highlighted to Members at Paragraphs 1, 2 and 3, pages 58 to 60 of the agenda refer.

Members were invited to put their comments and questions forward.

• A Member referred to the level of detail contained within the report at Section 2 and did not consider that this was sufficient to be presented to an Audit and Governance Committee.  It was highlighted that transparency was very important and the information must be presented so that it could be scrutinised in a careful way and contained within a report that was available to members of the public and other Councillors. 

Following a brief discussion, it was agreed that the report would be brought back to the next meeting to contain a greater level of detail.

• A Member referred to Section 3.3 relating to the difficulties in controlling data and how this was managed across the three councils operating with different systems.  It was requested that some assurance be provided that this issue was being tackled and what steps were being put in place to address this problem.  The Section 151 Officer agreed that this should be provided, however assured Members that a lot of work was being undertaken from an IT perspective to ensure that the information was suitably partitioned.

• The Chairman highlighted that there had been a fairly significant increase in the requests for information under the Freedom of Information Act and Environmental Information Regulations, Page 59 of the Agenda refers and queried whether there was a specific incident that had caused this.  The Data Protection Officer responded that there had been a similar increase at Boston Borough Council and was consistent with other local authorities.

No further comments or questions were received.

Following which it was,

RESOLVED:

That the Information Governance Annual Update be brought back to Audit and Governance Committee in January 2023 to provide more detail in Sections 2 and 3.

To receive a report.

Martin Gibbs, Head of Procurement & Contracts, PSPS Limitedpresented Members with a report that detailed proposed amendments to the Council’s Contract Procedure Rules and Financial Procedure rules, pages 65 to 102 of the Agenda refer.

The purpose of the report was to present to the Committee a revised draft set of Contract Procedure Rules with appropriate delegations that provided additional clarity around the procedures to be followed and reflected the Council’s management structure.  There was also a recommended change to the Financial Procedure Rules which would allow alignment with the new finance system used across all 3 councils when authorising payments.

Members were invited to review the revised set of Contract Procedure Rules and to consider recommending them for adoption to Council.

The Head of Procurement & Contracts referred Members to the background and expected benefits to the Partnership and referred to the specific proposed amendments to the contract procedure rules and financial procedure rules set out in Appendices 1A, 1B, 1C, 2 and 3, pages 71 to 102 of the Agenda refer.

Questions and comments were received as follows:

• In relation to ‘local’ being referred throughout the report, a Member asked for clarification as to whether this related to East Lindsey or Lincolnshire as a whole.  It was highlighted that if a larger contract was awarded out of the area as the service could not be procured locally, it was important that any sub-contracting went to local businesses.  It was further queried whether sufficient engagement was being undertaken with business with regards to the approved contractors list and how they could be added to the list to work with and provide a service to the district council.

The Head of Procurement & Contracts agreed that a definition of ‘local’ was definitely required and would look to propose this as part of the draft procurement strategy that was currently being drafted.  With regards to the larger contracts, Members were advised that social value clauses looked to include a weighted award criterion, for example whether the supply was locally sourced and if local apprentices would be engaged as part of a big contract.

The Head of Procurement & Contracts informed Members that there was not an approved contractors list in place as it was considered that this became more prohibitive rather than inclusive.  A solution would be in place for the new procurement contract service which was currently being procured and would be implemented shortly.  This would be made widely available on websites and at ‘meeting buyer event’ opportunities for local suppliers to offer advice to those who may have difficulties in submitting an open tender, for example.

• A Member queried whether there should be a necessity in terms of contract award to look at the carbon impact of the decision to those companies that may be adding to the carbon footprint, particularly as the Council had a responsibility to reduce this.  The Head of Procurement & Contracts advised Members that with regards to the carbon impact of a decision this could be incorporated as  ...  view the full minutes text for item 35.

The programmed date for the next Meeting of this Committee will be 25 January 2023.

The date of the next Meeting was confirmed as Wednesday 25 January 2023.

To consider excluding the public and press for the following items and if appropriate the Chairman to move:

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 at paragraph 3 Part 1 of Schedule 12A to the Act (as amended).

It was proposed and seconded that the public and press be excluded from the meeting.

RESOLVED:

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

N.B.  Rebecca James, Procurement Officer and Martin Gibbs, Head of Procurement and Contracts left the Meeting at 12.07pm.

To receive an exempt report.

A confidential report was submitted by the Interim Treasury and Investment Manager, PSPS Limited which enabled Members to consider an update on property fund matters.

The Interim Treasury and Investment Manager set out the background to the report and the matter was duly considered by Committee Members.

RESOLVED:

That the information contained within the exempt minute be noted.