Agenda and minutes

The Chair welcomed all present to the meeting and read out the Building Evacuation Procedure.

To receive any declarations of interest.

The minutes of the Audit Committee meeting held on 5 December 2024 were submitted and approved as a correct record.

The minutes of the Audit Committee meeting held on 12 December 2024 were submitted and approved as a correct record.

The Director of Legal and Governance Services presented a report, the purpose of which was to provide the Committee with an annual update in relation to the Council’s decision-making process.

The Director noted several points, which included the following:

·        The appendices attached to the report set-out a list of Executive decisions/ officer delegated decisions that had been taken.

·        Sections 3.3 and 3.4 of the report referred to the Council’s Constitution.  A review of the Constitution was currently underway, with work being overseen by the Constitution Committee and an associated working group.  Recommendations would be made to full Council in due course, though the intention was to have the review completed by the AGM in May 2025.

·        Section 3.20 referred to officer delegated decisions.  It was explained that work was currently taking place with regards to an Officer Scheme of Delegation, which would provide the necessary support to officers.

A Member referred to the review of the Constitution and queried whether consultants were being paid for this work.  In response, Members were informed that due to a reduction in resources in the department, an interim Solicitor had been appointed to undertake the work.  The intention, going forward, was to have a Governance Solicitor position incorporated into the departmental structure.  The Member queried the cost associated with the review of the Constitution; the Director advised that further information would need to be sought. 

A Member referred to page 33 of the agenda pack and an Executive decision taken in relation to the 2024/2025 Transport and Infrastructure Capital Programme - decision no. 24; it was queried what infrastructure was being improved.  In response, the Director advised that this would be looked into and a response provided to the Member.

A Member referred to the Constitution Committee working group and advised that papers had not been received.  The Democratic Services Officer would look into this and respond to the Member accordingly.

A Member referred to section 3.20 and queried the reasons for the work to the Officer Scheme of Delegation.  In response, the Committee was advised that the existing scheme was being updated to streamline and facilitate understanding of the process.

The Chair thanked the officer for the report.

AGREED that:

1.     The costs associated with the review of the Council Constitution would be sought.

2.     Regarding the query raised in respect of the Executive decision and the 2024/2025 Transport and Infrastructure Capital Programme, a response would be sought and provided to the Member directly.

3.     Regarding the query raised in respect of the Constitution Committee working group and meeting papers, a response would be sought and provided to the Member directly.

4.     The information, as presented, was noted.

The Director of Legal and Governance Services submitted a report, the purpose of which was to outline the Council’s approach to business continuity management and summarise activity in the past year and planned activity for 2025.  This was to provide the Committee with assurance that the Council had robust arrangements in place, as required by the Civil Contingencies Act 2004.

The Head of Policy, Governance and Information outlined the content of the report.  A Business Continuity Policy was now in place for Executive, in addition to the Audit Committee.

A discussion ensued in relation to plans concerning natural disasters, with specific reference made to flooding.  A Member commented on changing floodplains and the potential impact that this could have on the town.  Members heard that where staff were presently located, there were no potential issues.  There were emergency plans for the town in place, but no specific plans for Council buildings as it was a different discipline.  The Member indicated that this would be raised at a future meeting of the Corporate Health and Safety Committee; a separate discussion with the Risk and Health and Safety Manager was also suggested.  Details of the points raised at this meeting would be provided to the Risk and Health and Safety Manager, for information.  In response to a query from a different Member, it was confirmed that no Council records were stored in basement areas below sea level.

A Member queried if there was a Lead Officer dealing with the arrangements that were in place.  The Head of Policy, Governance and Information advised that this sat within their remit.

A Member referred to the term ‘massive financial losses’ and queried what would constitute this.  In response, it was explained that the Risk Register definition would be applied, which referred to losses of over £3m.

A Member referred to the fuel plan and queried the type of fuel being referenced.  In response, it was explained that in the event of petrol and/or diesel ever being restricted, a plan was in place to help deliver critical functions.  It did not refer to gas and electricity.

In response to a query from a Member regarding agreement of the 2024 Business Continuity Plan, it was explained that this had been agreed by the Mayor in December 2024 at an Individual Executive Member Decision-making meeting.  The decision sat within the Mayor’s portfolio; the report was available in the public domain.

A Member referred to the Local Government Association (LGA) incident response exercise and queried the outcome.  In response, it was explained that the result had been positive.  Feedback had been shared with the Leadership Management Team (LMT) but would not be released publicly for operational reasons.

A Member referred to ICT Services and queried the position of the Windows 10/11 update that was currently taking place.  A Member provided an account of his experience; an update of the current position would be sought from ICT Services.

A Member referred to service attacks and the recent attempts of outsiders  ...  view the full minutes text for item 24/63

The Head of Governance, Policy and Information presented a report, the purpose of which was to report the outcome of the annual review of the Council’s Local Code of Corporate Governance (LCCG).

It was explained that, because no changes had been made in the past year to the CIPFA / SOLACE guidance document ‘Delivering Good Governance’, no changes were being proposed to the Council’s current LCCG.

A copy of the current LCCG was shown at Appendix 1 of the report.

NOTED

The Council’s HR Manager and Organisational Development Manager delivered a HR Annual Assurance presentation to the Committee.

The presentation covered the following topics:

·        2024 in review;

·        Recruitment workshops;

·        Staff networks;

·        Absence management;

·        Top absence reasons;

·        Turnover by year;

·        Reasons for leaving;

·        Organisational development;

·        Coaching;

·        Mentoring programme;

·        Induction programme;

·        Work experience programme 2025;

·        Insights programme; and

·        Next steps.

A Member referred to an Occupational Flu Vaccine Scheme that had been delivered in partnership with Public Health, and to other matters such as workplace stress.  It was queried whether workplace schemes to address such issues could be extended to include Elected Members.  In response, the Committee heard that, in terms of the Flu Vaccine Scheme, Public Health was currently looking at funding options to assess whether this could be further rolled out.  Any resulting communications could go to Elected Members.  It was explained that Elected Members had been supported with other matters, such as mental health; the Council’s help service, which was delivered via telephone and face-to-face appointments, was delivered by Alliance.  It was acknowledged that increased promotion could be undertaken to reach Elected Members.

A Member referred to stress and noted this as being one of the top reasons for absence between 2021-2024.  It was queried what work was being undertaken to address this.  In response, the Committee heard that several initiatives had taken place, including the relaunch of Mental Health First Aiders – 72 were currently trained; working with business partners and managers to identify potential support activities and programmes to help build resilience; offering counselling services; and formally building health and wellbeing into the annual appraisal framework.

A Member referred to the staff network and the terminology/ description associated with race, religion and belief.  It was suggested that the website description be amended to ‘non-religious beliefs’ to reflect that individuals may still hold moral and other beliefs, if not religious ones.  In response, the HR Manager advised that this would be fed back to the relevant working group(s) and any required changes arising from that would be implemented.

A discussion ensued in relation to stress, anxiety and depression.  Consideration was given to different trigger points; recording this on HR systems; the stigma associated with these; and the activities that had been undertaken to help raise awareness in traditional work areas, such as depots and warehouses.  In response to a query, it was explained that engagement work with different outside bodies, such as Alliance and Andy Mans Club, had been undertaken to help reach as many diverse groups as possible.  A Member congratulated the officers for the work that had been undertaken in supporting staff.  Further consideration was given to the management of stress, specifically in instances where the cause was senior personnel and the impact that this could potentially have if a Member of staff had a grievance.  The HR Manager outlined the procedures for assisting in these circumstances.

A Member referred to staff networks and commented how positive these were in terms of supporting and investing in staff.  ...  view the full minutes text for item 24/65

Auditors from Forvis Mazars were present at the meeting to provide a progress update in respect of the 2023/24 Audit.

With regards to the Council accounts 2023/24, the auditors raised the following points:

·        As a result of the legislative backstop arrangements introduced by the amendments to the Accounts and Audit Regulations 2015, the auditors indicated that completion of the audit, as originally planned, in advance of the backstop date of 28 February 2025, would not be achievable.  Consequently, it was anticipated that a disclaimed opinion would be issued for the 2023/24 accounts.

·        When an opinion was disclaimed the auditor did not express an opinion on the financial statements and, consequently, no assurance was provided on the financial statements.

·        Amendments were currently being made to the accounts for 2023/24.  Once the accounts had been completed and the signed forms received, subsequent work to close the accounts would be undertaken.

·        The auditors would continue to work closely with officers to take the necessary steps to rebuild assurance over future accounting periods.

With regards to the Teesside Pension Fund accounts 2023/24, the auditors explained that, because of the change to the backstop arrangements and the amount of work required within a condensed period, despite their best efforts to obtain evidence for a safe and modified opinion, this could not be achieved.  In their view, the effects of the resulting lack of assurance was both pervasive and material to the financial statements as a whole.  As a result, the auditors intended to issue a disclaimer of opinion on the Pension Fund’s financial statements.  The auditors were keen to notify the Audit Committee of the position to ensure that Members were made fully aware of the situation.

A Member expressed disappointment with this update, but acknowledged that the auditors were on a particularly difficult timescale with this task.  In response to a query regarding the assistance received from Council officers, it was explained that officers had been tested in highly unusual circumstances, with effectively three separate audits being completed together.  The support provided by officers had been well received.

A Member commented on the potential impact of this situation on other organisations and employers in the pension scheme, such as Cleveland Fire Brigade.  In response, this point was acknowledged; it was indicated that work was taking place to design procedures to help mitigate the impact. 

A Member referred to resources and queried whether the Council had enough staff to undertake the required work for the auditors.  In response, it was explained that in an ordinary year, yes – there was sufficient staff.  However, the work required this year had presented significant challenge, with several audits taking place with two different audit providers.  The timescales had conflicted and this had presented issues.  Going forward, proposals for additional staff had been made as part of the Council’s budget setting process, which full Council would be considering on 19 February 2025.  However, it was explained that should the proposals be approved, further challenges of recruiting appropriately qualified personnel  ...  view the full minutes text for item 24/66

The Director of Finance and Transformation submitted a report, the purpose of which was to provide a summary of the Council’s procurement activity over the last financial year, including compliance with Contract Procedure Rules, practice changes and contracts awards.

The Specialist Commissioning and Procurement Manager highlighted the following:

·        The financial thresholds worked to were set by the government.  These had increased following a bi-annual uplift in January 2024; the light touch regime threshold had and would not increase.  In relation to Brexit arrangements, contract values were required to be inclusive of VAT.

·        From 1 April 2023 to 31 March 2024, the Procurement and Commissioning Team had been involved and supported service areas with 325 procurement activities, which had equated to approximately £29,028,719 worth of contracts being awarded in the year.  It was noted that the £29m was not the annual contract spend in the financial year, it was the total contract value of all contracts awarded in that period.  This activity was broken down into the procurement routes as follows:

o   76 – Quotations;

o   10 – Tenders;

o   79 – Exemptions;

o   60 – Dynamic Purchasing System (DPS) further competitions;

o   98 – Direct Awards/Further Competitions via Framework Agreements; and

o   2 – Provider Selection Regime (PSR).

• The new Procurement Act 2023 was due to go live at the end of October 2024, but was then delayed until 24 February 2025.  The new act would bring significant change which officers were now preparing for and had been involved in a range of training and workshops that the Government had been holding.
• With regards to the North East Purchasing Organisation (NEPO), Middlesbrough Council paid a small member fee of £46,000 annually.  However, in return, the Council received a rebate of approximately £140,000 per annum due to the flexible procurement solutions available through membership of the organisation.
• In 2023/24, about 25% of the Council’s procurements utilised a NEPO framework.  Without this investment, the Council would require additional resource in the procurement team to meet the demands of the procurement activity of the Local Authority.  Middlesbrough Council had annual conversations with NEPO to review the available frameworks and discuss opportunities for future commissioning plans.
• OPEN was the Council’s new tendering portal and had gone live in October 2024.  It was developed and fully maintained directly by the NEPO team.  The new portal had been in development for a considerable period and the benefits of the system would develop as the system matured, and officers worked to understand how it could best meet the Council’s needs.  The first quotation had been published via the system and, in next year’s report, the Committee would receive more detail on how the system was working and had developed over time.
• NEPO continued to work on the North East Environmental, Social and Governance (ESG) model which was being developed and would deliver the North East’s priorities.  Over the course of the next year, Middlesbrough’s social value would be developed.
• With regards to purchasing cards, it was  ...  view the full minutes text for item 24/67

A copy of the current work programme for the Audit Committee had been circulated for information.  This was a live document that was updated after each meeting.

NOTED

None.