The Chairman explained that the meeting would be conducted in accordance with the Local Authorities and Police and Crime Panel (Coronavirus) (Flexibility of Local Authority Police and Crime Panel Meetings) (England and Wales) Regulations 2020 No. 392.

In welcoming all Members and members of the public, the Chairman explained which Swale Borough Council officers were in attendance.  The Chairman also welcomed Trevor Greenlee and Darren Wells from Grant Thornton.

To approve the Minutes of the Meeting held on 30 September 2020 (Minute Nos. 140 - 149) as a correct record.

The Minutes of the Meeting held on 30 September 2020 (Minute Nos. 140 – 149) were taken as read, approved and signed by the Chairman as a correct record.

Councillors should not act or take decisions in order to gain financial or other material benefits for themselves or their spouse, civil partner or person with whom they are living with as a spouse or civil partner.  They must declare and resolve any interests and relationships.

The Chairman will ask Members if they have any interests to declare in respect of items on this agenda, under the following headings:

(a)          Disclosable Pecuniary Interests (DPI) under the Localism Act 2011.  The nature as well as the existence of any such interest must be declared.  After declaring a DPI, the Member must leave the meeting and not take part in the discussion or vote.  This applies even if there is provision for public speaking.

(b)          Disclosable Non Pecuniary (DNPI) under the Code of Conduct adopted by the Council in May 2012.  The nature as well as the existence of any such interest must be declared.  After declaring a DNPI interest, the Member may stay, speak and vote on the matter.

Advice to Members:  If any Councillor has any doubt about the existence or nature of any DPI or DNPI which he/she may have in any item on this agenda, he/she should seek advice from the Monitoring Officer, the Head of Legal or from other Solicitors in Legal Services as early as possible, and in advance of the Meeting.

No interests were declared.

The Chief Financial Officer introduced the report which set-out the outturn position on treasury management transactions 2020/21, including compliance with treasury limits and Prudential and Treasury Performance Indicators.  He explained that the half-year annual reports were being reported slightly later than usual due to the impact of the Covid-19 pandemic.  The report would be considered by Council on 6 January 2021.

The Chief Financial Officer advised that there were no issues of concern or breaches of treasury management practice to report.  He drew attention to Appendix I of the report (Investments and Borrowing as at 30 September 2020, and reported that the Council’s short-term borrowing was at an extremely low rate of interest, at 0.1%.  He drew attention to paragraphs 2.10 and 2.11 of the report which showed that the Council had achieved an average sum invested of £41.1m compared with an original budget of £26m and an average rate of return of 0.43% which was 0.33% above the average Bank of England Base Rate.

The Chief Financial Officer reported that the Council was achieving little return from the State Street Global Advisors Money Market Fund but the Church Charities and Local Authorities Property Fund income return was holding-up pretty well.

The Chairman invited Members to ask questions.

In response to a Member’s question, the Chief Financial Officer advised that the £41.1m figure was higher than budgeted for largely due to receipt of Government grants.

A Member asked what the shortfall on investment income was likely to be?  The Chief Financial Officer reported that the financial management report going to Cabinet on 16 December 2020 showed a £60k shortfall on investment income.

In response to queries from a Member, the Chief Financial Officer advised that the £20m borrowing was for Sittingbourne Town Centre regeneration and that the Council was not setting-up a property company but a Local Housing Company.  He further advised that approval was required from Cabinet to set-aside funding for projects and the Council set its own internal borrowing limits.  Local Authorities would no longer be able to borrow to fund investment in commercial property and the cost of borrowing for the Rainbow Housing Company would not come from the taxpayer, but the tenants or the company.

A Member asked whether officers thought that the Council would be reliant on its own reserves to cover the cost of the Covid-19 pandemic?  The Chief Financial Officer stated that was a budgetary position question and that the budget for 2021/22 would be considered by Cabinet at their meeting on 16 December 2020.

Recommended:

(1)  That the performance information be noted.

(2)  That the prudential and treasury management indicators within the report be approved.

Appendices I and II to-follow.

Appendix II published 23.11.20.

Appendix I published 23.11.20.

The Chairman advised Members that there had been a delay in presenting two of the appendices to Members which was due to the impact of the Covid-19 pandemic and its impact on working practices.

The Financial Services Manager introduced the report which sought the Audit Committee’s approval of the Council’s Annual Financial Report for 2019/20 and included the external auditor’s Audit Findings Report for consideration.

The Financial Services Manager referred Members to Appendix III, Annual Financial Report for the year ended 31 March 2020.  He explained that the Annual Accounts showed the Council finances in accordance with accounting regulations.  He drew Members’ attention to the significant items in the Expenditure and Funding Analysis; the Comprehensive Income and Expenditure Statement; the Movement in Reserves Statement, the Balance Sheet and the Cash Flow Statement.

Mr Darren Wells (Grant Thornton), introduced Appendix I, their audit findings for Swale Borough Council (SBC).  Mr Wells spoke about the impact of the Covid-19 pandemic which had affected the normal working arrangements of the Council and the additional responsibilities the Council had been required to take.  Mr Wells reported that it was their opinion that the Council’s financial statements provided by the Council were of a high standard.  He thanked the Council’s finance team for their excellent cooperation and also on being able to complete the financial statements prior to the 30 November 2020 deadline.

Mr Wells drew attention to page 4 of the report, which highlighted some issues in respect of the Council’s property, plant and equipment (PPE) and investment properties.  He explained that the issues raised did not affect the audit opinion.  Mr Wells reported that the Covid-19 pandemic would impact on the Council’s income levels, as it would all local authorities in the country, however they considered that the Council did have appropriate measures in place to cover this and they had no concerns in that respect.

A Member asked how SBC compared to other local authorities in terms of their financial arrangements.  Mr Wells reported that 30% to 40% of local authorities would not be able to finalise their accounts before the 30 November 2020 deadline, so SBC were in a strong position.

In response to questions from a Member, Mr Wells reported that the impairment allowance for debtors had not been adjusted to take account of the pandemic and he drew attention to the Action Plan on page 27 of the report and the recommendation in respect of debtors.  The Financial Services Manager drew attention to the financial management reports to Cabinet  which included the impact of the Covid-19 pandemic on debtors, and said that they would continue to monitor the situation. 

A Member asked if the external auditors had any concerns about the future finances of the Council?  Mr Wells explained that with regard to PPE, they were not suggesting an error or problem with regard to the valuations, but it was difficult for professionals to give accurate valuations given the uncertain times but that applied to all local authorities not  ...  view the full minutes text for item 275.

The Head of Audit Partnership introduced the report which provided an update on progress so far towards completing the 2020/21 Internal Audit & Assurance Plan.  The report also provided the updated information required by Audit Standards including an assessment of available audit time, results of audit work and commentary on performance of the audit services.

The Head of Audit Partnership reported that they continued to conform with the Standards and the Code of Ethics and continued to be able to have complete access to officers and records of the Council.  In his opinion, management were not taking any risks which were unacceptable to the authority.  The Head of Audit Partnership referred to Appendix I (Interim Internal Audit & Assurance Report) of the report and highlighted progress on the Audit Plan for Members.  He drew attention to page 119 of the appendix which set-out the current position in relation to agreed key actions.

The Head of Audit Partnership referred Members to page 120 of the appendix which set-out progress on the recommendations identified by the External Quality Assessment, and expected that all the actions  highlighted would be completed by spring 2021. 

The Head of Audit Partnership spoke about the assurance ratings consultation they would be undertaking as part of the external quality assessment.  He advised that they would shortly be circulating a survey to consult stakeholders and Members.  He stated that the link to the survey would be sent to Audit Committee Members.  The results of the consultation would be reported to Members in spring 2021.

The Chairman thanked officers from SBC and Grant Thornton for their hard work in producing the reports for the meeting. 

Resolved:

(1)  That the progress against the 2020/21 Internal Audit and Assurance Plan and findings so far be noted.