Agenda and draft minutes

An apology for absence was received from Councillor S Dark.

To approve the minutes from the Audit Committee held on 16 January 2024

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The minutes for the meeting held on 16 January 2024 were agreed as a correct record, subject to Councillor de Winton’s apologies being recorded.

Please indicate if there are any interests which should be declared.  A declaration of an interest should indicate the nature of the interest (if not already declared on the Register of Interests) and the agenda item to which it relates.  If a disclosable pecuniary interest is declared, the Member should withdraw from the room whilst the matter is discussed.

These declarations apply to all Members present, whether the Member is part of the meeting, attending to speak as a local Member on any item or simply observing the meeting from the public seating area.

There were no declarations of interest.

To consider any business which, by reason of special circumstances, the Chairman proposed to accept as urgent under Section 100(b)(4)(b) of the Local Government Act 1972.

There was no urgent business.

Members wishing to speak pursuant to Standing Order 34 should inform the Chair of their intention to do so and on what items they wish to be heard before a decision on that item is taken.

There were no Members present under Standing Order 34.

There was no Chair’s correspondence.

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The Financial Services Manager explained that the report was for quarter 3 as at the 31 December 2023.

The Committee was advised that the Quarterly Review Report had been prepared in compliance with CIPFA’s Code of Practice, and drew attention to the following sections of the report:

·         1:  The Treasury Management Quarterly Review 2023/2024.

·         2:  Economic Update.

·         3:  Annual Investment Strategy - 3.4:  Creditworthiness, 3.5:  Investment Counterparty Criteria, 3.8:  Approved limits.

·         4:  Borrowing – 4.2:  The Public Works Loan Board (PWLB) lending facility,

·         6:  Compliance with Treasury and Prudential Limits.

The Financial Services Manager outlined the supporting information as set out below:

Appendix 1 – Economic Update

Appendix 2 – Interest Rate forecasts.

Appendix 3 – Prudential and Treasury Indications for 2023/24.

Appendix 4 – Investment Portfolio.

Appendix 5 – Approved countries for investment.

Appendix 6 – Glossary.

The Chair thanked the Financial Services Manager for the report.

The Chair reminded the Committee that its role was receive the quarterly report and to scrutinise the Treasury Management Strategy and to confirm that the Council was not borrowing to support its revenue expenditure.

The Chair invited questions and comments, a summary of which is set out below.

In response to comments made by Councillor Coates regarding the abbreviations set out on page 23, the Financial Services Manager explained that they were not included in the Glossary but had been taken verbatim from the documents from the Council’s Treasury Advisors, Link and undertook to look at adding a key to include the abbreviations to assist with the interpretation.

The Financial Services Manager and Assistant Director – Resources responded to questions from Councillor de Winton on credit worthiness and local authority lending/ borrowing, investing surplus money within the next quarter, monitoring the cash flow and the capital programme.

In responses to questions from Councillor Bearshaw on surplus being invested, the Assistant Director – Resources explained that the Council worked with brokers to look at options for investment.

Councillor Bearshaw referred to page 23, Appendix 1, second bullet point – A sharp fall in wage growth, with the headline 3myy rate declining from 8.0% in September to 7.2% in October, although the ONS “experimental” rate of unemployment had remained low at 4.2%.  The Assistant Director – Resources explained that the statistical information was supplied by the Office for National Statistics and added that the UK response to wage increases had impacted on inflation which was why it had taken longer than anticipated to come down.  It was noted that even in the fluctuation where it was 3.9% back to 4% had been as a result of the wage growth but had now started to stabilise and was compared year on year.

Councillor Bearshaw drew attention to Appendix 2 – Interest rate forecasts and commented that it was reassuring to see that bank rates had been accessible to the Council since 1 November 2012 and was therefore reassurance that the Council had got  ...  view the full minutes text for item A156

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The Financial Services Manager presented the report and drew the Committee’s attention to the following sections of the report:

·         Summary.

·         Introduction.

·         Revenue Budget 2023/2024.

·         Budget Summary.

·         Turnover Savings.

·         Opportunities/Risks

·         Capital Budget and Spend 2023/2024.

·         Reserves.

·         Risk Management Reserves.

·         Age Debt Analysis.

·         Council Tax and Business Rates..

·         Treasury Management 2023/2024.

·         Prudential Indicators.

·         Conclusion.

·         Appendix A – Budget Monitoring Variances December 2023.

·         Appendix B – Capital Programme 2023/2027.

·         Appendix C – Age Debt Analysis.

·         Appendix D – Purpose for Earmarked Reserves.

It was explained that the quarterly report had been prepared in compliance with CIPFAs Code of Practice on Treasury Management, and covered the following:

·         An economic update for the first nine months of the 2023/24 financial year.

·         A review of the Treasury Management Strategy Statement and Annual Investment Strategy.

·         A review of the Council’s Investment portfolio for 2023/24.

·         A review of the Council’s borrowing strategy for 2023/24.

·         A review of any debt rescheduling undertaken during 2023/24,

·         A review of compliance with Treasury and Prudential Limits for 2023/24.

Members were advised that the budgeted turnover savings for 2023/2024 was £1,000,000.  Cabinet (2 August) and Council (24 August) approved the cost of living pay award, which included £860k provision from reserves to fund the costs.  At this stage of the year assumptions for recruitment to vacant posts had to be estimated for the final half of the year along with the impact for reliance on costs of backfilling those vacant posts.  With consideration to estimating these costs it was anticipated that the Council would meet the turnover savings target, with the use of £572k from reserves that were approved to fund the pay award.

The Financial Services Manager explained that the impact of inflation on utilities and fuel continued to be highly variable.  The price per litre of vehicle fuel increased significantly in quarter 2 but had since reduced and now expected to remain within budget.  Gas and electricity costs were monitored on the basis of unit costs and trends in consumptions levels adjusted for energy efficiency measures.  This will also be impacted by the effect of the winter.  Recent years had been mild making volume difficult to predict.  The revised budget for gas and electric combined, in this report, estimated a reduction in cost of £113k from the original budget of £2.8m.

It was noted that the impact of increased interest rates and the cost-of-living crisis had created an environment of continuing uncertainty.  This had affected service demand for supporting the vulnerable in services such as Housing Strategy and Lily Services.  These variable costs were fully offset by grants from Norfolk County Council towards LILY employee costs and partially met from DLUHC Rough Sleeper funding.

Due to a later than expected announcement from government to increase Planning Fee charges, the expected income this year was forecast to be £550k less than budgeted.  This had also been affected by a mix and volume of planning application planning fee income of £1.1m  ...  view the full minutes text for item A157

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The Committee noted the Cabinet Forward Decision List.

To note the Committee’s Work Programme for 2023/2024.

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The Committee noted the Work Programme.

The following items were suggested:

·         Overview of the Towns Fund.

·         Wholly Owned Companies

·         Empty Homes Strategy.

Following the meeting the Democratic Services Officer circulated the form – request to add an item to a work programme to the Committee to complete and return to Democratic Services to look at which Panel would be best placed to consider the requests set out above.

To note that the date of the next meeting of the Audit Committee will take place on 22 April 2024 at 4.30 pm in the Council Chamber, Town Hall, King’s Lynn

The next meeting of the Audit Committee will be held on 22 April 2024 at 4.30 pm in the Council Chamber, Town Hall, King’s Lynn.