Issue - meetings

The Executive Member for Finance and Governance submitted a report for Executive’s consideration.

The purpose of the report was for Executive to consider the independent assessment and recommendations of the Council’s financial management arrangements undertaken by the Chartered Institute of Public Finance and Accountancy (CIPFA).

Executive was advised that strong financial management was essential to the organisation’s ability to deliver Best Value. It ensured that public money was used well and provided leaders and managers with the information that they need to make robust, evidence-based decisions, manage performance and resources effectively, whilst delivering the organisations objectives.

The Council remained subject to a Best Value Notice issued by the Secretary of State for Local Government that commenced in January 2023 in relation to its inability to secure best value in its operations and decision making. The Notice was extended for 6 months in January 2024 and was due to be reviewed by MHCLG following a review of the Council’s progress in July 2024 which would report to the Secretary of State subsequently.

The possible outcomes of the Best Value review ranged from allowing the Council to exit formal Government intervention, through to an escalation of intervention measures if it is considered that insufficient progress in delivering the required improvement has been made. MHCLG officials have confirmed that they will consider the CIPFA FM report as evidence to inform their Best Value assessment of the Council’s progress in relation to delivering its financial recovery and achieving financial sustainability.

The Council was also subject to a further independent review by Grant Thornton LLP (GT) who had recently been commissioned by MHCLG to assess the Council’s financial position and arrangements for recovery as part of their due diligence in progressing the Council’s application for Exceptional Financial Support (EFS) in 2024/25. The review commenced on 2 July for a period of approximately eight weeks and would make recommendations for improvement and report back to the Secretary of State to enable a firm decision on EFS to be made and published in due course.

The Executive Member highlighted that Middlesbrough’s current rating of two out of a possible five stars was deemed reasonable. It was also commented that the improvement journey would be challenging.

NOTED

1.    Findings and recommendations of the CIPFA Financial Management report

2.    Intention to develop an action plan in response to the CIPFA recommendations.

OPTIONS

Executive could reject the findings and recommendations of the CIPFA FM review. This, however, would be counterproductive to the achievement of the Council’s financial recovery and would likely to be assessed unfavourably by MHCLG and the External Auditor.

REASONS

To enable the Council to secure effective management of its finances in accordance with recognised professional standards of good practice.