Agenda and minutes

Councillor Eunice Regan – personal

Councillor Sajid Mohammed – personal

None

To confirm the minutes of the meeting held on 14 February 2025

The Minutes of the meeting held on 14 February 2025 were confirmed as a true record and were signed by the Chair.

To agree to meet on an additional date at 9.30am at Loxely House:

25 April 2025

The Committee agreed to meet on an additional date of 25 April 2025 at 09:30 at Loxley House, Nottingham.

To note

The Chair presented the Committee’s Work Programme advising that that there is planned business for the additional April 2025 meeting, however the Annual Governance Statement report originally scheduled for April has been moved to June 2025. Members noted that the 2025/26 Work Programme is currently in development.

The Committee agreed to note the Work Programme.

To note

The Committee noted the Recommendation Tracker.

Report of the Corporate Director of Finance and Resources and S151 Officer

Clare Williams, Interim Director of Finance and Deputy S151 Officer, presented a report outlining the 2024/25 Accounting Policies and assessment of going concern for consideration and approval. The following information was highlighted:

a)  The Accounting Policies form part of the Council’s Statement of Accounts and as part of best practice it is recommended that these are reviewed by Audit Committee.

b)  One significant change to the Accounting Policies was highlighted relating to lease accounting standards under International Financial Reporting Standards (IFRS) 16. In 2016, the code was amended with Councils having until 2024/25 to implement the changes due to the amount of work which needed to be done. The changes have now been made in full, and this was delayed due to the issues with the Council’s accounts.

c)  The report also contains the Council’s assessment of going concern. A view has been taken from the Council’s balance sheets, cash flows, projections for the next 12 months, in-year financial position, and the 2025/26 Budget. The Council remains a going concern in 2024/25 and for the following 12 months.

The following points were raised in discussion:

d)  The S151 Officer highlighted that Accounting Policies is a concern for all Local Authorities who are testing their policies and implementing the latest changes.

e)  The Executive Member for Finance and Resources highlighted that at P10 of the 2024/25 financial year, the Council has underspent on a net basis by £1.4 million, with a gross overspend of £10.7 million. Senior leaders have made substantial mitigations throughout the year to bring the Council back into balance. The Executive Member found this to be an encouraging position and hoped by the end of the year the Council would be demonstrating it has a grip on its finances.

f)  The Committee asked why it was only recently required that Councils demonstrate they are of going concern. It was explained that as Councils increasingly engaged in commercial practices and debt borrowing, it resulted in some overborrowing, and the large levels of debt accumulated made their viability as a going concern questionable if they did not have the resources to pay off that debt. Rules were then implemented so that a view could be taken on the short and long term prospects of an organisation to continue and to give assurance to the public.

g)  The Committee asked whether there are any known risks to the Council’s going concern status over the next year. Assurance was provided that there are currently no known risks. The Council has recently set a budget that reduces the structural deficit and has received confirmation on the level of grant funding available to it. It therefore has a stable base over the next 12 months. There are indications that in December 2025, a multi-year settlement will be provided which will give even greater stability and certainty.

h)  The Committee queried what the governance process is around the Reserves Policy. It was explained that the Policy aims to be as transparent as possible with a  ...  view the full minutes text for item 81.

Report of the External Auditor

Andrew Smith, representing the Council’s External Auditors – Grant Thornton, presented the auditors annual Value for Money report for the year ended 31 March 2024. The following information was highlighted:

a)  In respect of an overall view, although some progress has been made, a number of the external auditors recommendations remained outstanding as of 31 March 2024.

b)  Four new key recommendations were issued as part of weaknesses identified from the work done in 2023/24. These covered areas around governance, financial sustainability, and improving economy, efficiency, and effectiveness.

c)  Five new improvement recommendations, centred around areas of best practice were also identified.

The following points were raised in discussion:

d)  The Council’s S151 Officer thanked Grant Thornton for their work and highlighted that a letter had been sent to Mr Smith in February 2025 outlining the Council’s response to the recommendations issued within the value for money report, and improvements made. Further assurance was provided that the Council now has a grip on its finances with the structural deficit reduced to £55 million over the Medium-Term Financial Plan period. Substantial changes have also been made to the budget setting process, including a rest of relationships between Finance and Resources and the Council’s other directorates. The Council is in a much stronger financial position including being on track to achieve a net underspend for the 2024/25 financial year, a strong net debt position and Debt Repayment Strategy in place to repay legacy debt, and recruitment within internal audit to address the challenges identified. There is also vast improvement work taking place through the Improvement Board which is chaired by Commissioners. Senior leaders within the Council are aware, however, that further work is needed as part of the Council’s improvement journey.

e)  The Executive Member for Finance and Resources highlighted that from an Executive perspective, the budget setting process for 2025/26 felt different from previous years, with Corporate Directors taking ownership of proposals within their directorates, and additional oversight in respect of detailed business plans to deliver the budget and transformation savings. There is also almost a new leadership team in place who are providing the Council with a fresh steer.

f)  Risk management is an active item within the Improvement Plan, and embedding it in everyday thinking within the Authority. The Council also wants to reduce the number of interim finance business partners and employ more permanent staff.

g)  The Committee asked about embedding risk management into the Organisation, and areas of best practice from other local authorities that is not prevalent at Nottingham City. It was explained that it involves up-to-date risk registers which are regularly reviewed, proactively assessing risks and putting appropriate mitigation plans in place, and there was little evidence of this taking place at the Council during the 2023/24 period.

h)  The Committee asked Grant Thornton about the orange book process in respect of risk management, and their experience of it in other local authorities. Members noted that it could be of value if applied properly and  ...  view the full minutes text for item 82.

Report of the Chief Executive and the Corporate Director of Finance & Resources

Debbie Bowring, Corporate Risk and Assurance Manager presented a report on the Corporate Risk Register, with further detail provided in the exempt appendix. The following information was highlighted:

a)  There has been a complete refresh of the Corporate Risk Register which is now monitored regularly by the Council’s Corporate Leadership Team. It is also taken to Finance and Resources Board on a regular basis.

b)  Work is being done with individual services to ensure the Register contains the correct risks. 

c)  As part of the refresh, a benchmarking exercise has taken place with various other local authorities to compare risk management processes.

d)  Work is also underway on a refreshed Risk Management Strategy which will be aligned to best practice.

e)  The Risk Register will be converted on to a shared point platform where documents will become live and can be edited regularly by risk owners.

The following points were raised in discussion:

f)  The Committee raised concerns with the formatting of the reports and how readable they are.

g)  The Committee emphasised the importance of risks being picked up by the Emergency Planning Team so that plans are in place to deal with them if they arise.

h)  The Committee emphasised that risk management is about risk analysis rather than issue management. In this context, the Committee queried whether the Council could monitor how many situations risk analysis has identified and prevented a risk from materialising.

i)  The new Risk Management Strategy will look to take parts of all relevant best practice guidance, including the orange book, that will work well for Nottingham City.

j)  The Committee asked about the Council’s appetite for risk. There will be further training to staff on risk appetite and this will involve establishing risk tolerance levels.

k)  The Committee discussed the next steps in the Council’s improvement journey, particularly in the context of embedding risk management into the Organisation. The Corporate Risk Register and Risk Management is currently being reviewed as part of programme 10 of the Council’s Improvement Plan, and this work will be summitted to the Committee’s April meeting for Member input.

Resolved to note the refresh of the Corporate Risk Register

To consider excluding the public from the meeting during consideration of the remaining item(s) in accordance with Section 100A(4) of the Local Government Act 1972 on the basis that, having regard to all the circumstances, the public interest in maintaining the exemption outweighs the public interest in disclosing the information

The Committee resolved to exclude the public from the meeting during consideration of the remaining agenda items in accordance with Section 100A(4) of the Local Government Act 1972 on the basis that, having regard to all the circumstances, the public interest in maintaining the exemption outweighed the public interest in disclosing the information, as defined in Paragraph(s) 3 of Part 1 of Schedule 12A to the Act.

Report of the Chief Executive and the Corporate Director of Finance and Resources

The Committee considered the exempt appendix within the report on the Corporate Risk Register.

Resolved as set out in the Exempt minutes

To confirm the exempt minutes of the meeting held on 14 Feburary 2025

The Exempt Minutes of the meeting held on 14 February 2025 were confirmed as a true record and were signed by the Chair.

To note

The Chair presented the Committee’s Exempt Recommendation Tracker.

The Committee noted the Recommendation Tracker.