Agenda and draft minutes

Venue: Committee Rooms 1 & 2 - Deanes. View directions

Contact: Democratic Services Team 

Link: Video Recording

Items
No. Item

29/19

Apologies for absence and substitutions

Minutes:

Apologies were received from Councillor G James.

30/19

Declarations of interest

Minutes:

There were no declarations of interest.

31/19

Urgent matters

To consider any items of business, other than those shown on this agenda and which, by reason of special circumstances to be stated at the meeting, in the opinion of the Chairman, should be considered at the meeting as a matter of urgency.

 

Minutes:

 

There were no urgent matters.

32/19

Minutes of the meeting held on 29 July 2019 pdf icon PDF 209 KB

The Chair will move that the minutes of the meeting be signed as a correct record. The only part of the minutes that can be discussed is their accuracy.

Minutes:

Councillor Potter wished for it to be recorded that following the Committees discussion at the previous meeting on the Audit results report (ISA260) regarding the ownership of Manydown, that subsequent information had been circulated to the Committee which he felt supported the comments made by some members that EY’s statement was inaccurate.

 

The Chair gave an overview of the items in the recommendation tracker and confirmed that they had been actioned.

 

The minutes of the meeting held on the 29 July 2019 were confirmed as a correct record and signed by the Chair.

 

33/19

Property Investment Strategy Annual Report for Quarter 1 2019 pdf icon PDF 461 KB

Contact Officer: Charles Hawkeswood

This report outlines the activity within the council’s property services team in implementing the approved Property Investment Strategy for the property investment portfolio for the period between 1st April and 30th June 2019.

 

Minutes:

The Asset Manager introduced the report which outlined the activity within the council’s Property Services team in implementing the approved Property Investment Strategy for the property investment portfolio for the period between 1st April and 30th June 2019.

 

Members questioned the types of properties that had been identified for potential investment and whether the old post office building had been considered as a potential opportunity.

 

The Asset Manager confirmed that both commercial and residential properties had been reviewed and that the post office had been considered although is was felt that it would not be suitable.

 

Clarification was sought in regard to the target yield figures and whether the Council would expect to receive the same returns for residential properties. Members also questioned whether the community benefits of regenerating a particular asset were also taken in to account.

 

The Asset Manager confirmed that the investment yield target was between 6-8% and that the current yield for all of the acquisitions was just over 7%. He also explained that the primary aim was to have income producing assets and that if it resulted in the regeneration of area it was an added benefit.

 

Members raised the issue of the recent Thomas Cook collapse and what the implications on the council would be. The Asset Manager confirmed that the travel operator was no longer trading and explained that the rental income for the unit was £80,000 per annum, there were currently no arrears but they were unsure as to what would happen with the payment due for September Officers would be proactive in trying to fill the vacant unit.

 

The Executive Director for Finance and Resources confirmed that the additional £5M (earmarked over the original £30M) had not yet been utilised and therefore there was no information to update the Committee with. It was further confirmed, that if this funding was utilised, as agreed, this additional element would be ‘repaid’ from capital receipts received from asset disposals.

 

Clarification was sought on the income that was to be generated from the fund. The Head of Financial Services agreed to provide clarity.

 

Resolved: The Committee notes the report.

 

34/19

Housing Options for Investment pdf icon PDF 782 KB

Contact Officer: Pam Wharf

This report responds to a request from the Audit and Accounts Committee for an update in relation to housing development and investment within the borough.

Minutes:

The Cabinet Member for Homes and Families introduced the report which responded to the request by the Committee for an update on what actions had been taken in relation to housing development and investment within the borough, particularly in reference to the Invest to Grow Fund and the use of investment monies to generate a housing rental income for the council.

 

The Committee discussed the report and raised a number of questions:

 

·         What work had been carried out in relation to the development of a new Housing strategy? The Cabinet Member confirmed that an initial meeting had taken place in order to scope out the initial outline and that it would also include some of the feedback from the Scrutiny Committee on the allocations policy, with a view for the completed strategy to be adopted before May next year.

 

·         Clarification was sought in regard to the breakdown of figures for Chineham House. The Cabinet Member explained that he would confirm the figures with the relevant officers and respond after the meeting.

 

·         Members questioned whether there were currently any Housing opportunities available for any of the Councils schemes. Officers confirmed that there were no current housing opportunities for either the Property Investment strategy or Invest to Grow fund.

 

The Cabinet Member explained that he shared the Committees disappointment that no housing schemes had come to fruition.

 

Some Members expressed support for council housing and options such as modular building but were opposed to container living. There were also examples of previous good practice within the Borough that could be used as evidence.

 

Questions were also raised in relation to Existing Satisfactory Purchases and whether it had generated the return that the Council had sought. The Cabinet Member clarified that they were not intended to drive a return and instead were to enable the Council to assist the housing associations in providing homes to those who need them. 

 

The Cabinet Member confirmed that the outcome from the soft market testing would be used to help shape the housing strategy and that it would also be reviewed by the cabinet, there would be an opportunity to engage with members at EPH in due course.

 

Resolved: The Committee:

 

1)    Thanks the Portfolio Holder for his attendance

2)    Notes the report.

 

35/19

Invest to Grow Fund - First Quarter Report 2019/20 pdf icon PDF 236 KB

Contact Officer: Phillip Hood

This report accords with the Invest to Grow Fund scheme of delegation which included a requirement for regular fund monitoring reports to Cabinet and the Audit and Accounts Committee.

Minutes:

The Head of Financial Services introduced the report and informed the Committee that all activity on the fund had ceased, the fund manager had been notified that their contract has been terminated. Consideration would be given, as part of the budget setting process for 2020/21 and future years, of alternative uses of the fund.

 

Some members commended Officers on their decision to cease the activity of the fund when it was clear that it was not working in the way it had been intended.

 

Questions were raised in relation to Eli Lilly and the arrangements and timeline for the development

 

The Head of Financial Services clarified that once the building was completed it would change from the Invest to Grow fund to the Property Investment Strategy. He further explained that the council received interest from the Invest to Grow fund on the advance funding that it provided and that once it was let to Eli Lilly the Council would receive rent income from the Property Investment fund.

 

The Committee agreed that regular reports at every meeting were no longer required and would therefore be removed from the work programme but the Committee would still receive an annual report.

 

Some members questioned whether there was an opportunity to create a “green fund” providing short term loans to enable local businesses to purchase items such as new vehicles for taxi companies in light of the recently declared climate emergency. The Chair confirmed that the Cabinet were in the process of reviewing the future of the fund.

 

Resolved: The Committee notes the report.

36/19

Summary Of Investment Income 2019/20 pdf icon PDF 110 KB

Contact Officer: Phillip Hood

As requested by this committee, the following table provides a summary of investment income budgets for the year and the forecasts against those budgets as at 30 June 2019.

Minutes:

The Chair introduced the report which provided the Committee with the income budgets for the year and the forecasts against those budgets.

 

Resolved: The Committee notes the report.

 

37/19

Treasury Management Monitoring Report Q1 2019/20 pdf icon PDF 944 KB

Contact Officer: Dean Pletts

This report shows the activity within the council’s treasury management function from 1 April 2019 up to 30 June 2019 and also includes forecasts for the year ending 31 March 2020.

Minutes:

The Head of Financial Services introduced the report which showed the activity within the council’s treasury management function from 1 April 2019 up to 30 June 2019 and also included forecasts for the year ending 31 March 2020.

 

Some Members were concerned in regard to the level of risk due to the current economically volatile situation and potential reduction to the base rate and questioned what risks had been identified and what the proposed mitigations were.

 

The Head of Financial Services confirmed that liquidity was one of the main risks as the Council needed to ensure that it had enough cash available to be able to meet spend requirements.  The Council also regularly reviewed the credit rating of its investments, had a diversified approach, and employed experts in the market who look at future forecasts in order to reduce the level of risk.

 

Clarification was also sought in relation to fixed term investments and benchmarks for risk and returns.

 

Resolved: The Committee notes the report.

 

38/19

Litigation report pdf icon PDF 314 KB

Contact Officer: Ann Greaves

This reports responds to the committees request to receive a report upon litigious cases against the Council.

 

Minutes:

The Legal Services Manger introduced the report which responded to an issue which arose out of the assurance letter that the Chair of the committee was required to sign in relation to the annual statement of accounts external audit process.

 

The report also provided further information on litigation activity generally and about the appropriate threshold for reporting litigation matters to the committee.

 

The Committee discussed the report and made a number of comments:

 

·         Details of the larger projects should be included where the Senior Leadership Team had been made aware of red risks on the risk register.

 

The Legal Services Manager responded that the report referred to materiality in relation to financial effects on the accounts only. She further explained that it was often difficult to predict whether a case would need to be reported as it could be for example a routine prosecution that may go wrong and was then reported in the local news.

 

·         Stressed that they would like to know the details of any case which was likely to impact on the council.

 

·         Some members questioned whether the Council should employ an expert in risk management due to the scale of the projects that were being undertaken.

 

The Legal Services Manager confirmed that she was mindful of the Committees comments, and noted that in relation to litigation cases the Committee would want to be informed if there was the potential for reputational impact on the council or to incur costs of £100,000. A report would be brought to the Committee as and when a case may arise with an annual report also brought to the Committee

 

Resolved: The Committee notes the report.

 

 

39/19

Internal Audit Progress Report (June-August 2019) pdf icon PDF 359 KB

Contact Officer: Richard Bevan

This report is to inform members of the Committee of the work completed by the Internal Audit Team during the period June - August 2019 and the current position with outstanding audit recommendations.

Additional documents:

Minutes:

The Senior Auditor introduced the report which informed members of the Committee of the work completed by the Internal Audit Team during the period June - August 2019 and the current position with outstanding audit recommendations.

 

The Committee raised concerns in relation to the Audit that had recently been carried out within the car parking team.

 

The audit had raised a number of issues such as staffing issues and issues with the banking processes, which had shown variances in the ticket machine income which had increased over time.

 

The Chief Internal Auditor confirmed the process for overdue recommendations and explained that the Committee could choose to summon the relevant manager to a meeting of the Committee if they deemed it necessary.

 

The Committee also questioned whether there had been a response or commitment from SLT in relation to the findings of the audit.

 

The Committee agreed to invite the Manager to attend the December meeting if the audit actions had not been resolved by October.

 

Members made reference to the fact the business continuity panel hadn’t met for some time. The Senior Auditor explained that although the panel had not met the current procedures were still fit for purpose.

 

Members suggested that where completion dates were amended they should be listed in the overdue recommendations sections. Officers confirmed that they would look to ensure that date changes were highlighted more clearly in the report.

 

Resolved: The Committee notes the Report.

 

40/19

Review of the Corporate Risk Register pdf icon PDF 338 KB

Contact Officer: Paul Gundry

This report presents the committee with the current status of the corporate risk register as reviewed by SLT.

Additional documents:

Minutes:

The Chief Internal Auditor introduced the report which presented the Committee with the current status of the corporate risk register.

 

The Committee were pleased that the mitigations and risk scores of the corporate risk register would be reviewed as part of the risk management audit that was currently underway and a report would be being brought to the December meeting as part of the regular internal audit progress report.

 

Members questioned whether staff turnover was a risk to the risk management process. The Chief Internal Auditor advised that all managers received training at the management team meetings.

 

The Committees main concern was in relation to the risk ratings for the council’s projects.

 

The Committee wished for it to be recorded that they were unhappy that the Audit and Accounts committee were not responsible for reviewing the individual risk ratings for the council’s large projects such as Manydown and felt that the fact that they were discussed at performance panel should not prohibit the Committee from also discussing the matter.

 

The Committee felt that the risk register in its current form, did not properly describe the risks. The Committee felt that this was incorrect and would like to see both the overall risk assessment and risk rating for each project and a statement for each project on what had been considered and mitigated against.

 

The Chair requested a full response from Officers as to why it was not appropriate for the Committee to review the matter.

 

The Executive Director advised that under the current risk management matrix the RAG status had been correctly assigned to the risks. She also explained that the Audit and Accounts Committee were only responsible for ensuring that the correct controls were in place in regard to risk management and therefore reviewing the projects individually was not the role of the Committee. The Chair suggested that the Committee should review the papers of the Performance Panel if they wished to review the individual projects.

 

Resolved: The Committee notes the report.

41/19

Regulation of Investigatory Powers Act 2000 - Annual Review of Policy pdf icon PDF 435 KB

Contact: Jackie Tatam

The purpose of this report is to seek the approval of the Committee on the revised policy and procedure on the use of covert surveillance under RIPA.

Additional documents:

Minutes:

The Chair introduced the report which sought approval from the Committee on the revised policy and procedure on the use of covert surveillance under RIPA.

 

Resolved: The Committee approves the revised Policy and procedure on the use of covert surveillance.

42/19

General Data Protection Regulation - Notification of Data Breaches reported to the ICO pdf icon PDF 526 KB

Contact Officer: Jackie Tatam

This report informs Members of the Committee that two incidents have occurred which were considered to pose a risk to individuals.  Both incidents have been reported to the ICO.

Minutes:

The Legal Services Manager introduced the report which informed the Committee that two incidents had occurred which were considered to pose a risk to individuals. 

 

The Legal Services Manager gave an overview of the cases and gave an update on the actions which had taken place since.

 

In relation to case a) Legal Bundle, the Committee acknowledged that a typing error was difficult to mitigate as it was due to human error.

 

Members questioned whether sensitive paperwork could be sent by recorded delivery. The Legal Services Manager explained that certain papers were sent by recorded delivery but not all as occasionally, due to delays at the post office it could work against the Council in relation to court proceedings.

 

Reference was made to the Data Protection complaint to the ICO and whether any apology had been made to the individuals concerned.

 

The Legal Services Manager advised that any discussion of the matter should be discussed in private session

 

The Chair proposed that due to the confidential nature of certain information contained within the agenda item, the Committee pass a resolution that by virtue of paragraph 1, 2 of Schedule 12A of the Local Government Act 1972, the public be excluded from the meeting.      

 

On resumption of the open session, the Committee had a further discussion on the report and made the following comment:

 

Had Officers considered going out to the address to try and recover the bundle? The Legal Services Manager confirmed that if they did not receive a response to the follow up letter then they would consider trying to collect the bundle.

 

The Chair advised that internal audit should review the new legal procedures for double checking paperwork before it was sent out.

 

Resolved: The Committee notes the report.

 

43/19

Viewing of Social Networking Sites and RIPA Inspection Update pdf icon PDF 236 KB

Contact Officer: Jackie Tatam

This report provides the Committee with a summary of the viewing of individuals’ social networking sites in an investigatory capacity for the period 1 June to 31 August 2019.

Minutes:

The Legal Services Manager introduced the report which provided the Committee with a summary of the viewing of individuals’ social networking sites in an investigatory capacity for the period 1 June to 31 August 2019.

 

Some members disapproved of the use of RIPA and felt that it was not the role of the Council. The Legal Services Manager confirmed that RIPA was used very rarely and as a last resort.

 

Resolved: The Committee notes the report.

 

44/19

Audit and Accounts work programme pdf icon PDF 99 KB

The Committee is asked to note and review it’s work programme.

Additional documents:

Minutes:

The Chair introduced the work programme and advised that the following changes would be made:

 

The Invest to Grow report would be removed from all meetings except March when the Committee would receive the annual report.

 

Members requested that an additional line be added to the Summary of Investment Income report to show the £8M Invest to Grow legacy for the Eli Lilly development.

 

The Internal Audit Progress report scheduled for December would include the outcome of the risk management audit that was currently underway.