Audit and Governance Committee - Tuesday 19 September 2023, 6:30pm - Start video at 0:03:49 - Tunbridge Wells Borough Council Webcasting

Audit and Governance Committee
Tuesday, 19th September 2023 at 6:30pm 









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  1. Webcast Finished

good evening and welcome to the audit and governance committee on Tuesday, 19th September 2023, I am Councillor Mark Munday and I am the Chair of this Committee, before we get into the agenda items, please give your full attention to the following announcements from our Clerk, Mrs. Marion,
thank you Chairman, Good evening everybody in the event of the fire alarm ringing continuously, you must immediately evacuate the building at walking pace officers will escort you via the most direct available route, and no one is to use the lift.
we will make our way to the fire assembly point, which is why the entrance to the Town Hall Yard, car park, on Munson, Way once outside a check, will be made to ensure everyone has safely left and no one has to re-enter the building until advised that it is safe to do so.
this is a public meeting and proceedings are being webcast live online, a recording will also be available for playback on the Council's website shortly afterwards,
can I remind everyone to use the microphones when speaking the red light indicates that the microphone is on and any comments that are not recorded for the webcast will not be included in the minutes of the meeting.
you should all be aware that any third party is able to record or film council meetings unless exempt or confidential information is being considered, the Council will not accept liability for any third-party recordings.
it is very important that the outcomes of the meeting are clear at the end of each substantive item, the Chair will ask whether the matter is agreed in the absence of a clear majority, or if the Chair decides a full vote is desirable, a vote will be taken by a show of hands, Members should raise their hands to indicate their vote when called and keep their hands up until the count has been announced. members requesting a recorded vote must do so before the vote is taken. Thank you Chair.
the British of the recording we are going to take a roll call.
thank you to expected Members here this evening, Councillor Alan
presence, Councillor Francis present Councillor Sankey,
present Councillor White
present, Councillor McMillan, present Councillor Munday, present
Independent Member, Edward Elliott.
Parish Council representative Councillor, mechanically present Councillor Edwards Britain for the recording Councillor, Barrass and Councillor Lidstone on at present at the moment.
Councillor Barrett has just joined us
expected officers here this evening, Joanne Brown,
Lee Collier present, Jane Feynman.
present heartless home
present, Lucy Natalie, present
Claudette Feldman
present, Katherine Woodward, present.
thank you Chair.
clung to here, my apologies for absence.
as Chair, we've had apologies from Independent Member Jeff Turner this evening.

1 Chair's Introduction

2 Apologies for Absence

3 Declarations of Interest

ITEM 3 declarations of interest do any members of the committee have any declarations of interest to make for this evening?
I believe this none.

4 Notification of Visiting Members wishing to speak (in accordance with Council Procedure Rule 18):

notifications of persons registered to speak
at this time, we note whether any members of the public or visiting members of the Council have registered to speak this evening, do we have any such persons,
we have no speakers this evening Chair.

5 Minutes of the meeting of the Audit and Governance Committee dated 25 July 2023

ITEM 5 minutes of the meeting of the Audit and sorry audit and governance committee dated Tuesday, the 25th of July 2023 Members are asked to confirm that the minutes of the previous meeting are a true record of the proceedings. Please were please, may I remind members that only matters would discussion this evening is their accuracy. Do Members have any comments
thank you, Chair, yes,
I have already discussed with the club, but there was a mission based on page 11 says that officers advised that the overall excuse to make an Overview and Scrutiny Committee was the most appropriate committee to approach with regard to creating a framework and a policy around consultations to make sure they were built rigorously each and every single time,
however, it's completely missing the section where yourself,
and said that under 7 of the recommendation that we put over to Owens, the Borough questionnaires and surveys,
I think the clerks got the full verbatim thing,
this was then voted for unanimously, and I can't see reference to this anywhere, nor have the O and S Chair, Vice Chair or Clerk to their knowledge hadn't had noticed that this committee's decision on that matter that has not been put forward to them
and I just would have thought that this was permanent considering that later on in the meeting Katherine Woodward, whose boss is a knight, confirmed that our surveys and questionnaires were or are on her radar of risk as Councillor Lidstone very helpfully on earth for us later on, and that can be found at 1.37 on the recording as well, thank you.
yes, the them in we did discuss it and, and
it was agreed that it would be put to the Overview and Scrutiny the structure and conformity of the questionnaires that the Bach issues so.
following this meeting, the the minutes of this evening's meeting and the previous meeting will be sent to the Chair Vice Chair and Clerk of the Overview and Scrutiny Committee.
thank you to her.
thank you any other amendments tonight.

6 Future Work Programme as at 22 August 2023

OK. thank you, then can I move the motion to agree the minutes subject to those amendments?
it provides a great Dr.
OK item 6, the future work programme as actually 22 of August. the Committee future work programme is set out on pages 13 and 14 for reference Members also asked to take note of the following upcoming dates for the training sessions, so the role of internal audit on the 28th of November and the role of external audit on the 12th of March 2024
are there any comments or questions for now?
OK, thank you, the motion is to note the work programme, are we agreed, agreed?

7 Audit Governance Committee Annual Report

ITEM 7 audit and governance committee annual report,
the report starts on page 15 of the agenda, Ms Woodward, your report, please.
thank you, Chair,
so agenda item 7
is the audit and governance committee's annual report for 2022 23, it's considered best practice for this committee to produce an annual report which looks back at the previous year to demonstrate how it has discharged its duties and then to present this report to Full Council.
this report looks at the purpose of the committee and the CIPFA guidance to support it
attendance at Committee meetings, complaints about members and the reports that came to the Committee and how these reports and member discussions relating to them provide the sources of assurance that are necessary to demonstrate that the Committee has appropriately and effectively fulfilled its duties.
so once the Committee has agreed this report, it will be presented to Full Council
by the Chairman, so the cover sheet of this report states that the full Council date of 13th of December,
however, if the report is agreed tonight we would like to take it on the 4th October 23
I'm happy to take any questions, anybody's got any on the report.
thank you, do Members have any questions at this time?
OK. the recommendations are set out in the report that won the audit and governance committee,
agree the annual report
and that the Chairman of the audit and governance committee present the report to a future meeting of the Full Council to demonstrate how the Committee has discharged its duties. are we agreed?
I agree, thank you,
thank you Chair.

8 Code of Conduct Complaints

ITEM 8 code of conduct complaints this report starts on page 29 of the agenda today. Ms Brown wanted your report, please,
thank you Chair good evening members,
this report is an update on complaints received under the Members' Code of Conduct,
the report is an update on complaints received under the code of conduct for the period 1st March 2023 to 27 until 31st August 2023.
details of the complainant and subject members are not included in the report, as the Localism Act 2011 repealed the previous statutory process under which names are published in the absence of that statutory process, the Data Protection Act 2018 requires the names to be kept confidential.
at a meeting of this Committee on 14th March 2023, it was reported that there was one outstanding complaint against a Borough Councillor, this complaint has now been concluded,
the complaint concerned an allegation that a Borough councillor had brought their office or the authority into disrepute the monitoring officer concluded that a breach of the Code had not been established as the complaint was relatively minor, and dealing with the complaint would have had a disproportionate effect on both public money and officers, and Members time
since the last meeting, the monitoring officer has received two further complaints. Both complaints concerned the allegation of behavior against borough councillors. One of these complaints has now been concluded,
and the complaint concerned an allegation that the borough councillor had brought their office or the authority into disrepute. the monitoring officer concluded that a breach of the code had been established and that the complaint should be resolved informally by way of a written apology from the subject member
since then, a new complaint has been received which is currently being reviewed, and the outcome of that report will follow at the next Committee meeting, thank you.
if I take any questions, thank you,
thank you to remember so many questions at this time, or do we wish to enter into a debate?
the recommendations are set out in the report are that the Members take note on the updates on complaints received under the Members' Code of Conduct and we agreed.
thank you.

9 Strategic Risk Register Review September 2023

item 9, the Strategic Risk Register review September 2023 report starts on page 39 of the agenda, each meet at each meeting of the Committee, a risk owner was invited to discuss the risks for which they are responsible. This evening, Carlos Hone Head of Planning
you report, please,
thank you, Chair
and good evening,
yes, as you set out for the cover report, sets out a number of the Council's risks, I I then, which have been identified and are managed by senior management. risks 6.
specifically relates to the delivery of the right mix of housing tenures.
the Council, as local planning authority, has a statutory duty to have in place a liquid development plan to cover strategic and local policies, this helps the delivery of housing for young people, families and those who need genuinely affordable housing through the right mix of housing being delivered in the borough and it helps with the decision-making process also.
development through the planning process is the main way that housing is delivered in the borough in order to determine planning applications, decisions have to be made in accordance with the development plan. currently, the Council has a Core Strategy Plan that was adopted in 2010 Site Allocations Plan in 2016 and saved policies from the 2006 plan where policies are out of date, decisions have to be made in accordance with national policy.
in order to manage the risk engagement and support,
cross-party support has been given to the production of the currently emerging Local Plan, which was submitted to the Planning Inspectorate in November 2021, whereby the examination of that plan started, the Local Plan has been subject to significant public consultation as well so that it could be positively prepared, justified
and effective as a strategy in accordance with national policy, the local plan is required to
deliver appropriate sites and to identify land to meet housing need.
through strategic planning, which is the the effective way to meet local housing need.
this a local housing need is objectively calculated through evidence undertaken at early stages of the plan making process.
policies in the Local Plan set out how the subjectively assessed need will be delivered through development sites spread out over the term of the Local Plan across the borough, including affordable housing delivery,
the Local Plan sets the allocation policies and development management policies as well
and, as I said, the Local Plan the emerging Local Plan is at examination.
the Inspector's initial findings letter has been received
and it sets out some strategic matters that need further consideration by the Council officers are working on.
evidence to resolve these matters and bring forward a plan that can be adopted and implemented.
general housing delivery through the planning application process allows the Council to meet meet its needs. it is therefore crucial to have a plan in place to defend the Council's strategic position against speculative developments against appeals and to provide a level of certainty to the community about where development will come forward and how the Council will meet its need,
and hopefully the summary sets out the plan-making process and the importance of having an up-to-date local plan in place but I wanted to take questions
thank you do Members have any questions or wish to move into debate.
thank you some my questions sort about the presentation of the risk on the risk map.
the risk is presented as being or the first limb of it is insufficient housing for young people, families and those who need genuinely affordable housing
on the potential impact consequences, lack of affordable housing to meet the need for young people, families and those are in genuine need.
it's very low down, it's on sick from bottom on the
list of impacts, considering that seems to be the primary.
primary aim of the risk.
it feels like that should be significantly higher first or second, I was just wondering if there's a reason for that
also on the current controls and mitigations, it talks a lot about the Local Plan and the way that's going through it or doesn't actually sort of identify how the Local Plan.
actually mitigate that you spoke and obviously by the consultation and the sort of thing, but it doesn't talk quite so much about
how that local plan and whatnot. deals with insufficient housing for young people, I'm sure it does, but
it's not explicit.
that's a bit of a statement rather than a question I acknowledge.
thank you Chair,
I don't think the list of potential impacts and consequences are in priority order, but certainly it could be raised in a future version of that there's no problem with doing that,
I suppose the implications of not having a local plan in place that is up to date
means that you're subject to.
planning applications aspects to maybe the it delays the process of delivering housing to meet that need. Specifically,
the local plan sets out through a number of its allocations and set policies how certainly affordable housing. We will be able to deliver than the other
sort of acute areas where housing need is necessary and how that will be delivered through allocation of sites. That's the importance of having the local plan in place. As I set out at the start, there's a local development plan in place. Already this just is getting a bit old, so we've got that delay between the existing Local Plan and the adoption of the emerging Local Plan. So there there's a some some, whatever a gap or delay between the two,
but certainly that the policies are there to help to meet that need.
Councillor Sankey,
thank you. This is more about the presentation again, actually, but right at the top, and I'm just wonder if I get a prize for the deliberate spotting the deliberate mistake because it took me forever and it gave me a headache, but on page 40 you can see this. It sounds really simple by certainly mad,
the impact axis is on the left and the likelihood access is on the bottom.
Last month there were the other way round, so
when you're looking to
see patterns of these things changing because we get a lot of these papers,
you can't see them and indeed it drove me a little bit potty so
is there a reason why that was done to confuse us, or can we just make sure it's done the same way each time please?
it used to drive me potty chairman being the wrong way round I was used to reading the x axis and first then wax is how you deal with in the real world, unfortunately, the insurers did it the other way round, so I thought I would correct it to my logic way of thinking but very well done for spotting that
if you're happy I'd like to continue with the way I've now presented it. it helps my understanding between the experts, the Member why, but I probably should have made that point, thank you.
thank you, they do it, however you wish to do it but at the same time each month, a big grey, thank you.
OK, Councillor McMillan.
them, because if we get the if we do get our local plan forward and the members vote for it and we get, we get that, the planning for planning action.
where we we are, we talk about this, this moderate impact in terms of what the the the risk is and the likelihood, but when can you handle how we, how can we be assured, by passing a local plan that we will get affordable housing or social housing because surely we're still dependent upon the the builders who, who have though who have access to those sites to actually build those houses right so even if we pass the local plan if the if the buildings themselves the contractors decide not to build we won't be filling, we will solve that problem is that correct?
thank you, so that the local plan sets out that the the policies of the Council, in order to
the to help determine planning applications so where there is a policy that sets out what affordable housing should be delivered on any proposed sites,
decisions should be made in accordance with the development plan, so if you have an up-to-date development plan, say something that's fairly new and in accordance with national policy policy that has enormous weight in the decision making process. however, if your Local Plan is
slightly out of date or out of step with national policy, it's more difficult, so the importance of the adoption of the Local Plan is is, is there in order to secure that affordable housing, the plan is subject to rigorous assessment and supported with evidence in particular with regards to viability. so the affordable housing figures are set so that they can be deliverable, so
that's what it's important to get that local plan in place.
unacceptable that colours prove I'm trying to get to the point. So we're in a marketplace where, where we're seeing prices come down at the moment, property price, coming down, no bad thing, but we're also seeing the situation where we're a bit doubting developers such Barrett since I was saying that while we know they're not gonna be rushing out to build at the moment because because of viability, it has to be at a point in time when we do this study. The viability is at this point in time, if, if the fact is that house price of 15%, lower or whatever, although that does make housing become more affordable, the amount of affordable housing will be surely that will be impacted because the developers say we can't make make as much money on the site any more, because house prices have come down. Is that correct, or am I
so the plan itself sets the high level strategy and the figures entitled to help to meet the the local need in including the affordable housing need where possible.
the planning application process comes forward at a moment in time so to speak, whereas the plan itself is a broad ranging strategy over a longer period, so when planning applications come forward if they are affected by market conditions and we have to consider them on the merits of the case as they come forward, there are occasions where applications come forward and the viability just just doesn't stack up for whatever reason because of, for example, abnormal costs on a site that might not been considered at the very high level plan-making stage, so
the policies are there to set the direction of travel and to ensure that there's an overall concept of how much affordable housing should come forward but when the applications are considered those policies have to be considered in the round.
any other questions.
in that case, then, the recommendations are set out in the report are that the committee considers and notes the strategic risk register and the arrangements made for managing the risks are we agreed.
thank you.

10 Draft Financial Report and Audit Findings 2022-23

okay, item 10, the draft financial reports and audit findings 2022 2023
this report starts on page 2 of the supplementary pack.
I'd like to remind members that recently a training session was held when the members of this committee on the draft statement of accounts and I think almost everyone attended, which is excellent. This should mean that should already be in a strong position to consider and hopefully approve the reports this evening with Simon your report, please.
thank you.
this report is the conclusion of the external audit process for the 22 23 accounts
the Committee is asked to approve the statement of accounts and the annual governance statement and to authorise the Chairman and the Director of Finance Policy and Development to sign our letter of representation,
the draft annual financial report was published on our website on the 31st of May for the public inspection period and there have been no material changes from that version
there have been some small amendments as agreed with Grant Thornton, but none of the financial statements have been changed at all.
despite energy prices increasing and inflation rising, the Council was able to increase the General Fund balance by 18,000 pounds.
this was made possible mainly by savings due to staff vacancies and increases in interest income.
usable reserves fell by 3.7 million to 28.8 million, although around 1.3 million of this is really unusable, as it is set aside to repay the collection fund in 23 24
property, plant and equipment on the balance sheet. increased by 1.9 million in the year,
mainly due to a 6 million increase in the value of the Amelia Scott. plus, the value of the 22 23 capital programme
offset by an 8 million reduction in the value of the Royal Victoria Place shopping centre.
our pensions liability decreased this year by a sizeable 56.5 million.
bond yields are assumed to improve considerably and consumer price indices are forecast to reduce depressing salary levels and therefore pensions.
actual Council pension contributions are reviewed by the actuaries on a tray annual basis, the last review was the 31st of March 22, which increased the budget contributions from the revenue budget by 174,000 between 22 23 and 23 24.
Grant Thornton has issued its draft audit findings report, and that's attached at Appendix B,
and this says that they expect to issue an unqualified audit opinion and that they have no recommendations for management.
whilst Grant Thornton have substantially completed their work, there are a few outstanding issues that they need to complete before signing, and we're currently working on those with them.
I have to say I'm really delighted to be able to present a clean and unqualified audit gain for the 14th year running,
considering the audit has been managed entirely remotely and the financial reporting Council has heaped huge amounts of additional testing requirements upon us, it's a massive achievement that should be recognised,
I want to thank Joe and Lucy and their team from Grant Thornton who have delivered this audit in similarly very difficult circumstances we've all worked hard together to achieve this result.
I'd now like to invite Joanne Brown from Grant Thornton to present her audit findings report, and I know that you've already had the report
for three and a half months and we've had the training session, but if you do have any residual questions afterwards we'd be happy to answer them, thank you.
thanks Jane and thanks, committee and cheer as Jean outlined what we have is are a final draft audit findings report and that a couple of matters that were just closing out and when closing out I will update this report at the point of signing the accounts.
I'd like to obviously welcome the thanks they are from Jean and the Finance Team and to acknowledge the hard work of the Finance team, as always, we've had good audit working papers, as you can see there's no material adjustments to the draft accounts, there was barely minor disclosure and edit switch to be honest were worth listing out in that report, they were so tiny and I think that's testament to the good quality of the accounts that the finance team produce and they're working papers. and they have really supported the audit team in a quick turnaround, with our audit queries,
on page 5 of our report and apologies and drift dancing on page numbering rather than the PAC's numbering, but we do draw attention to the well documented delays across local government and, to be honest, the councillors and a video wacky possession that we're setting at this stage, ready to close out on the 22 23 set of financial statements, and that is down to the hard work of the Finance team.
There are some minor edits with this report in terms of tidying up some of the tapers and just connecting that.
Page 3 of the report summarises the minor matters that were outstanding at the point of drafting this. These are all being tidied up as June referenced by the audit team. There's nothing in there. That gives me a concern around our material impact to the financial statements
they want to draw attention to is we do rely on a pension fund, shouldn't cease from the Kent County Council pension fund and I believe that we will receive those next week in advance of our plans to sign the accounts next Brady.
we do plan to give an unmodified opinion
that a report sets out the delay around the value for money arrangements, a, this is something that's not new, this is something that we've applied in the previous years where we do have an extension to complete our wider scope value for money work under the annual code and work is commenced and VFM and we expect to conclude on that no later than the 30th of November and we've included a later just to explain that delay in the pack.
there are no significant matters to draw attention to the Committee will be familiar with the audit plan, there was no changes to the Audit Plan, our materiality benchmarks stayed the same, so we were up
a 2% on materiality, which was what we set out in the plan and that is a materiality level of 1.4 million.
the report itself concludes on the significant audit risks we identified in the plan and that was Management override of controls which you see in all external audit reports, the valuation of land and buildings and the valuation of the pension fund liability, and there was no matters arising from our tasting in those three idiot that I wish to draw the Committee's attention to.
As in previous years we have continued to focus then on the key judgements and estimates by management which were concluded on in our report are reasonable there based unavailable information and the from our perspective, the bid aligned with what we see in other local authorities.
we confirm just on page 14 of the report, there has been no matters that, with a weirdo of around fraud or irregularity which would have impacted on our audit, we will receive a written representation letter from management at the point of signing the accounts versus our standards letter of representation and we expect to issue a standard audit opinion.
we have concluded that the Council as a going concern, and our practice obtain in our report sets out the rationale for that and, as Jane mentioned, there's no substantive matters for management action.
there are some slight tape, was just around the done in order of the appendices, but there were no unadjusted deficiencies so all in all, from our perspective of a very clean audit aim, it's with us to disclose out, working with the Finance team the residual points with the intention of signing these accounts as presented to you tonight in next week and am happy to pick up any questions on the external audit itself.
thank you to Members or any Christians who do wish to enter into a debate.
I got on with
him not just as looking through there and in terms of
Tunbridge Wells, the property company that we have held 100% of do you audit that, separately or as part of the audit?
there are two aspects to that the property company is a completely separate limited company registered at companies House, and there is a separate audit that's undertaken by local from Perry's
and they audit the the tempestuous property holdings company accounts and they are they are filed with companies House.
the reference that we have in the Tunbridge Wells Borough Council accounts.
are to do with it being a wholly owned subsidiary, and we have made a decision not to do group accounts, because there there isn't the requirement to, because the turnover of the property holdings company is so small it's only a couple of 100,000, so there's no need for us to do that now we have
planned for if there is the necessity to do it into the future, we've set up proper ledgers, we do the accounts in exactly the same way under IFRS, so if we ever had to do group accounts we can do that, but there's no need to at this stage just because of the size of of the property company itself.
retain its right, approximately in terms of the income, I understand that it's about 300,000, but the assets involved are more substantial, surely given that, given its number of council properties that we own Tunbridge Wells owns this lease to that companies that are correct.
there are leases to the property company there under 22 years, but the the leases
don't have to be at the moment recognised
in in the same way, yes, that the they're not. on the balance sheet of the property company they're not valued, as per the value of the property they're valued, as per the value of the lease, which is for 22 years, so, irrespective of that, it's still not material enough to worry about
so the assets lay on the Tunbridge Wells within out within our on our balance sheet, just the leisure stay on the property companies voluntary.
the asset remains with the Council and those properties are leased to the property company for 22 year leases.
I can answer there, but I think the fantastic job, by the way, to can you if you can give their thanks to you and your team, then have got a fantastic, absolutely excellent job, I know how difficult it can be, so we'll say thank you thank you to grandfather the daughter.
any other questions.
okay and recommendations are three of them, as set out in the report, are one that the Audit Committee notes the Grant, Thornton audit findings, independent, speak to your Committee approved the draft statement of accounts and the annual governance statement in Appendix A and three. The Audit Committee authorised the Chairman and the Director of Finance Policy and Development to sign a letter of representation based on Appendix A and the Audit findings report. Are we agreed,
thank you, the motion is carried.

11 Urgent Business

12 Date of Next Meeting Tuesday 28 November 2023

okay, item 11, urgent business, I can confirm there is no such urgent business this evening, then Item 12 Date of Next Meeting next meeting is scheduled to take place on Tuesday, the 28th of November 2023, thank you, the meeting is now closed and thank you for your attendance, thank you Chair,
thank you.