Agenda item

To receive a report by Julie Masci, The Engagement Leader, Grant Thornton.

The Engagement Leader Grant Thornton, Julie Masci introduced the report.

The assessment that Grant Thornton gave the Council last year in the first year of Audit, two significant weaknesses were identified. One was in relation to the funding position and the outturn position in relation to the dedicated school grant. The second area was in relation to some of the emerging findings in relation to the building health safety issue. There were some fundamental issues that needed to be addressed, but at that point the detailed reports had not been finalised. In 2024-25, Grant Thornton followed up that work this year, the DSG significant weakness from the previous year, was retained this year. Particularly, in terms of the position of the DSG. The in-year position had deteriorated quite significantly, in terms of the in-year position for the Council and indeed where the projection was going. The trend was showing a challenging trajectory, and this was a national issue but the scale of change and how big the overspend had increased within the current period was a cause for concern. The previous years weakness in relation to the investigation that had been broken into two key recommendations this year. One specifically, of the failures identified in terms of the governance aspects, lack of budgetary control, lack of governance and oversight, and the procurement aspects fall under the 3 E’s part of the value for money assessment. There was a key recommendation, that had been reported within the 3E section of the VFM findings.

Co-opted member Simon Roach commented that in the Value for Money section of the report assessment of arrangements for 2023, 24 and 25, financial sustainability was red, governance - red, improving the economy efficiency - red. He referenced the follow up to 23,24 recommendations, two of the key recommendations – no progress, one with limited progress. For improvement recommendations, six were outstanding, one limited progress, and four had been completed. He explained that this was a damning indictment of value for money as an assessment for the last two years. As discussed previously, about having the right processes, controls and governance, he linked to item 12 of the agenda. One of the key things was about the cultural and attitudinal approach in the organisation to value for money the Council gets from that activity. If the Council does not have very specific actions, around cultural change in the organisation to focus on value for money. He only saw system changes, process changes, organisation responsibility changes but he did not see anything about culture.

Sean Cremer responded that this was a backwards looking opinion and opinion as of 31^st March this year. Over 8 months ago, the paper on the agenda showed that the actions identified had been addressed. The starting point was systems closing down the ability for officers to act in a particular way and once the systems and processes had been changed, then going through that training and learning process. He did not want members left with the idea that this was something that had been identified and had been left for 2 years. The timing that the Council found out was late 2024, so there was limited ability within the 23-24 financial year to close given the length it took to conduct the investigation. That meant that the 24-25 audit opinion carried over. The changes described in item 12 were not in place by the 31^{st of} March given the timing. The red opinion continued partly due to timing and given the scale of the organisation it took some time to conduct training and change the culture within the organisation. The timing of this report was 8 months behind and would be able to demonstrate a lot clearer next year. The cumulative DSG position which was a national issue would remove some of the risk and if the government did announce a solution to the reform by early 2026. There was progress and officers were taking it seriously.

Noted.