Apologies for absence were received from Councillor Sam Kemp.

It was noted that in accordance with Regulation 13 of the Local Government (Committees and Political Groups) Regulations 1990, notice had been given that Councillor Alex Hall had been appointed to the Committee in place of Councillor Will Grover for this Meeting only.

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

interests.  There were no disclosures of interest received. 

To confirm the Minutes of the Meeting held on 22 November 2023.

The Minutes of the Meeting held on 22 November 2023 were agreed as a correct record.

Actions from the last Meeting.

Members were referred to the Action Sheet, pages 19 to 22 of the Agenda

refer.

Members noted that the actions from previous meetings were confirmed as completed or in hand as follows:

Action No. 40 (a) and (b) from the meeting held on the 22^nd November 2023, page 19 of the Agenda refers.

A Member requested clarification on whether the final report on S106’s was to include information on the reporting mechanisms in place.  The Section 151 Officer advised that the Annual Report was due to be published online and confirmed that it detailed all information and processes.

It was further queried if updates on Invest East Lindsey’s outstanding action in relation to dividend policies was to return to Audit and Governance, and what guidance was recommended to protect the Council’s investments by ensuring Invest East Lindsey continued to operate.  The Section 151 Officer advised that a timeline on formalising arrangements for the payment of dividends was to be reported back to the Committee as a separate action.  It was further advised that Invest East Lindsey was not currently in a position to make a dividend and that there were other options to pursue which would be considered by Invest East Lindsey and Shareholders in due course.

The Chairman informed the Committee that today’s meeting had a shortened Agenda due to delayed reports, and that an extra-ordinary meeting was being scheduled specifically for these items.  The Chairman reminded Members that training relating to a review the Committee’s effectiveness was being undertaken following the meeting.

In relation to training, the Chairman informed Members that she was attending CIPFA audit training for Chairs on 31st January 2024 on emerging developments in governance, and a Schroders webinar had been attended on 15^th January 2024 on global economic trends. The Chairman further advised that she had met with KPMG, the Council’s new external auditor on 15th December 2023 and had discussed progress to date.

To receive a report from the Section 151 Officer.

Councillor Richard Fry, Portfolio Holder for Finance presented Members with the Draft Budget Report 2024/25 - 2028/29.

Members were invited to review the papers and provide comment and feedback to Executive Board for consideration at its Meeting to be held on 14 February 2024. The report and associated documents were attached to the Agenda, pages 23 to 64 refer.

The Portfolio Holder for Finance advised that this was his last budget presentation as he was stepping down from the role of Portfolio Holder.  Recognition was placed on the dedication and expertise of the Finance team; the service area teams and Portfolio Holders in the context of the budget challenge process and he was pleased to report that the 2024/25 budget was balanced and retained the Council’s current baseline service levels.

The Portfolio Holder for Finance further advised that final checks on the budget were being undertaken and that the Capital Programme remained in draft as final adjustments were made.  Significant improvement had taken place on last year’s timelines with more opportunities for Portfolio Holders to be involved.

A copy of the budget presentation delivered by the Portfolio Holder for Finance is attached at Appendix A to the Minutes.

Key information was highlighted as follows:

·         The previous Medium Term Financial Strategy (MTFS) committed to a Council Tax increase in line with the maximum allowed under the recent Local Government Settlement. For ELDC in 2024/25 this was a £4.95 (3.06%) per annum increase (for band D properties). This was to generate additional income of £370k and the increase was to be reflected throughout the life of the MTFS.

·         The proposed budget showed that efficiencies would be required to support the medium-term financial strategy (MTFS).

·         Efficiency Target of £424k allowing for £1.4m IDB support and significant contributions to reserves were budgeted for.

·         Minimum Revenue Provision (MRP) approach was being utilised for future replacements of assets rather than use of reserves.

·         Revenue budget was in draft and loaded into the finance system.

·         The capital programme was proposed with a total financing requirement of £54.4m and a final version of the programme was being presented to Council on 28^th February 2024 for approval.

·         Following the premature repayment of borrowing in 23/24, the budget included the pro rata discount credit of £834k.

·         Areas for priority investment and consultation included market towns and rural areas, driving and supporting economic growth, the delivery of affordable housing, supporting the vulnerable, healthy living, decarbonisation and continued investment in green initiatives and invest to save. 

·         A new Corporate Priorities reserve had been established to facilitate the delivery of these areas of focus.

Members were invited to put their comments and questions forward.

·         A Member queried how many Councils in areas with IDB’s paid levies rather than precepting and whether these Councils had been working together to address the issues.  It was further queried why external information had suggested the increase on IDB’s was 0.75% compared to the 2-10% increase reported.

In response, the Section 151 Officer advised that all Council  ...  view the full minutes text for item 56.

To receive a report from the Treasury and Investment Manager PSPS.

Sean Howsam, Interim Treasury and Investment Manager, PSPS Limited presented Members with the Draft Treasury Management Policy and Strategy Statement for the 2024/25 financial year, pages 65 to 112 of the Agenda refer.

Members were informed that the report was being presented to Overview Committee for prior scrutiny and was included as part of the Budget Setting Report that was being presented to the Executive Board on 14^th February 2024 before being submitted to Council for approval on 28th February 2024.

The following areas were highlighted to Members:

•      Reporting requirements and compliance with Treasury and Prudential indicators

•      No changes were proposed to the Treasury Management Policy included as Appendix A (pages 73 to 74 of the Agenda refer)

•      A review of the Treasury Management Strategy Statement, Minimum Revenue Provision Policy and Annual Investment Strategy 2024/25 included as Appendix B (pages 75 to 112 of the Agenda refer)

•      A review of the Council’s borrowing strategy and investment policy for 2024/25 and the Council’s Debt rescheduling

Members were invited to put their comments and questions forward.

• A Member praised the report which demonstrated that a good solid approach was being undertaken.

• Referring to Paragraph 5.4 ‘Approved countries for investments’, a Member queried if the Council had taken into account situations occurring in the far East and sought clarification if money was held in any areas that were associated with greater risk, pages 99 and 107 of the Agenda refer.  In response, the Treasury and Investment Manager advised that the Section 151 Officer had the discretion to take various circumstances into account and the Council was not investing in areas of current concern, despite having invested in some of those countries in the past.  It was further advised that the Section 151 Officer had ultimate responsibility for all investment decisions, and it was the role of the Treasury and Investment Manager to highlight what opportunities existed and the rates that were available.

There were no further comments or questions received.

The Chairman thanked the Treasury and Investment Manager for his comprehensive report.

Following which it was,

RESOLVED:

That the Draft Treasury Management Policy and Treasury Management Strategy Statement, Minimum Revenue Provision Policy Statement and Annual Investment Strategy 2024/25 report be approved and presented to the Executive Board on 14^th February 2024.

To receive an update from KPMG, External Auditors.

The Chairman welcomed Rosie Kelly a representative from KPMG to provide Members with an update. 

Members were informed that KPMG was the Council’s incoming external audit manager for 2023-24 and an audit plan was underway.  It was advised that a meeting had been held with the Chairman of Audit & Governance, the Council’s previous auditors and PSPS managers, and that further progress was needed to initiate the process.

The KPMG representative advised that further updates were to follow and that weekly catch-up meetings had been scheduled with PSPS.  It was emphasised that all audit planning procedures required completion by March 2024.

The Chairman thanked the representative from KPMG for attending and providing an update.

To receive an update.

The Chairman advised Members that the Working Group had interviewed one candidate and had not been able to appoint.  The intension was to re-advertise  the position  following the report of the Independent Remuneration Panel (IRP) which was being presented to Council in February 2024. 

In response, the Assistant Director (Governance) & Monitoring Officer confirmed that the IRP was to make a recommendation on co-optee allowances, and that this could support recruitment of a second Independent Co-opted Member.

Committee Members indicated their support for the position to be re-advertised following the Council’s consideration of the IRP report.

To consider the Audit & Governance Committee Work Programme 2023/24.

Members were presented with the Audit & Governance Committee Work Programme 2023/24, pages 113 to 116 of the Agenda refer.

The Chairman informed Members that an extra meeting was being scheduled for the outstanding reports (financial statements 2021/22 and 2022/23 and various external audit reports) and a date was yet to be confirmed.  In response, the Section 151 Officer advised that the delay related to challenges from finalising the year end 22/23 accounts, which had coincided alongside preparing Q3 2023/24 and the budget.

The Internal Audit Manager provided an update to the March meeting on the Work Programme and requested that a duplication of the Internal Audit Progress Report was rectified, pages 114 and 115 of the Agenda refer.  It was advised that the S106 follow-up was preferable being reported in the standard progress report.

Further to a discussion, it was agreed that the S106 audit update would be presented to the Committee as a separate report.

A Member commented on the Procurement Card Item that had not been included as an item on the January 2024 Agenda, page 114 of the Agenda refers.  In response, the Section 151 Officer advised that the item had moved to the March 2024 Agenda and that Assistant Directors were being invited to attend that meeting.

No further comments or questions were received.

Following which it was,

RESOLVED:

That the Work Programme 2023/24 be noted.

The programmed date for the next Meeting of this Committee was noted as 27 March 2024.