To approve as a correct record the minutes of the meeting held on 26 November 2024.

The minutes of the meeting held on 26 November 2024 were submitted for consideration as a correct record.

In respect of AC/24/39 (Governance and Management of Complaints and Information Requests 2023/24) and with specific reference to redaction procedures in the governance of Subject Access Requests (SAR); a member referred to a matter regarding a complaint about the management of a constituent’s SAR. In the context of the Committee’s role in respect oversight of the effectiveness of the Local Authority’s (LA) systems of internal control and risk management arrangements, he requested that the Committee is provided with an explanation of the approach that is followed when redacting particular sections of subject access requests. This information should include an explanation of why the LA’s approach may differ from approaches that are taken by organisations that are at arms-length to the LA or are Contractors of the LA.

The Member also asked that the minutes record his request to meet with the City Solicitor to discuss any matters of concern that may arise from the constituent’s allegations. The Chair agreed to this.

Decision

To approve the minutes of the meeting held on 26 November 2024 as a correct record, noting the comments above.

Report of the External Auditors (Forvis Mazars) attached

The Committee considered the report of the External Auditors (Forvis Mazars) that presented the Audit Completion Report for the statement of accounts for Manchester City Council for the year ended 31 March 2024. The purpose of the report was to summarise the audit following their Initial Audit Strategy Memorandum which had been presented to the Committee’s November 2024 meeting.  It referred to how the statutory backstop arrangements introduced by the Accounts and Audit (Amendment) Regulations 2024, had affected the completion of the work and the reporting.

The Engagement Partner,(Forvis Mazars) introduced the report and explained that the disclaimed opinion was no reflection on the Council or its ability to prepare and publish its financial statements but was purely as a result of the statutory backstop requirements set by Government.. The opinion had been prepared in line with government issued guidance and guidance prepared by the National Audit Office (NAO). He gave an outline of the procedures that had been carried out one of which included Value For Money work that had been completed in full. He outlined the requisite steps that would follow consideration by this committee, adding that formal certification of it’s completion could not take place until NAO guidance had been received in respect of the Council’s Whole of Government Accounts Assurance Statement.

The Engagement Partner (Forvis Mazars) responded to questions from the Committee about the wording used for the basis for the disclaimed opinion. The Committee heard that this was the firm’s agreed wording that had been universally applied where that the reason for the disclaimed opinion was solely due to insufficient time to complete the work. He also outlined the differences between performance and trivial materiality and advised that whilst no questions had been received from electors, two items of correspondence were received as part of the process. He also clarified that the submission of letter of representation from management formed part of auditing standards and was therefore required as part of the audit.

The City Treasurer responded to questions about the impact of the disclaimed audit opinion on the Council’s borrowing position. He advised that it was currently recognised by entities such as the Ministry for Housing, Communities and Local Government (MHCLG) and the Financial Reporting Council (FRC) that there would be no adverse impact. He also said that there had been no impact on the Public Work Loans Board (PWLB) rate.

Decision

To note the report.

Report of the External Auditors (Forvis Mazars) attached

The Committee considered the report of the External Auditor’s (Forvis Mazars) that summarised the work they had undertaken as the auditor for Manchester City Council (‘the Council’) for the year ended 31 March 2024. Whilst the report was addressed to the Council, it was designed to be read by a wider audience including members of the public and other external stakeholders. The external auditors’ responsibilities were defined by the Local Audit and Accountability Act 2014 and the Code of Audit Practice (‘the Code’) issued by the National Audit Office (‘the NAO’). The remaining sections of the Auditor’s Annual Report outlined how they had discharged those responsibilities and the findings from their work.

The report concluded that the Council had in place the expected arrangements in relation to its financial sustainability; the expected arrangements in place in relation to its governance; and expected arrangements in relation to improving economy, efficiency and effectiveness in its use of resources. No significant weaknesses or risks associated with significant weakness had been identified in the Council’s arrangements for securing value for money and this was consistent with the previous year.

Decision

To note the report.

Report of the City Treasurer attached

The Committee considered a report of the City Treasurer which presented the updated 2023/24 accounts and explained the key adjustments to the draft accounts which were last presented to the meeting held on 23 July 2024 and were published for public inspection on 1 August 2024. The accounts had since been updated, reflecting the final changes agreed with the external auditors, as part of the 2022/23 audit process which concluded on 5 December 2024. The changes were mainly in relation to adjusting the opening balances following the formal sign off the 2022/23 accounts. The background to the disclaimed opinion on the Councils 2023/24 accounts was also referred to, with emphasis given to there being no implied weakness with the Councils financial position or its arrangements around financial matters.

The City Treasurer introduced the report across its main themes and responded to questions from the Committee. Members discussed the report’s reference to the audit reform strategy and the creation of a new statutory and independent local audit body, The Local Audit Office (LAO). Noting that the LAO would take on functions that were currently fragmented across the framework and bring together strategic oversight and technical expertise, he urged the Committee to note that, despite this positive step, it did not address the current national shortage of auditors across the sector. He welcomed the consultation’s proposals as broadly positive. 

A member suggested that a detailed paper that was recently considered by the Resources and Governance Scrutiny Committee about the Council’s borrowing position could be circulated to members of this Committee for information.

Decision

1.       To approve the revised annual accounts including the accounting policies contained within them

2.       To request that a detailed paper that was recently considered by the Resources and Governance Scrutiny Committee about the Council’s borrowing position is circulated to Audit members outside of the Committee for information.

Report of the Assistant Director, Assurance and Risk attached

The Committee considered a report of the Assistant Director, Assurance and Risk that provided an update of progress on the agreed audit plan and details of assurances from the Internal Audit Service for quarter three 2024/25.

In introducing the report the Assistant Director, Assurance and Risk highlighted his proposal to defer seven audits to 2025/26 as outlined in the report with accompanying reasons. Priority would be given in 2025/26 to the deferred audit of social Care Payments (Childrens) with a likely reporting timescale of Quarter 1.  Further priorities were listed as compliance with Global Internal Audit Standards, recruitment and a review of counter fraud policies and caseloads.

With regard to school financial health checks the Assistant Director, Assurance and Risk agreed to clarify in the next Internal Audit report which checks had been done by a third party. Themed reports were planned on the School Financial health checks with reporting arrangements to the Executive Member and this committee. An overview of emerging themes was also shared across the schools sector. The approach taken would also be reviewed next year as a result of learning from this year’s exercise with a focus on incorporating a strengths based approach. The Assistant Director, Assurance and Risk also noted a comment from a member about the future reporting of audit mechanisms  for capital expenditure increases (with specific reference to the Town Hall project).

Decision

To note the report.

Report of the Assistant Director Assurance and Risk attached

The Committee considered a report of the Assistant Director, Assurance and Risk that provided an overview outstanding high priority recommendations made by Internal and External Audit. It was highlighted that there were four categories of recommendation priority: critical, significant, moderate, and minor. The report provided the details of progress to address outstanding recommendations in the high risk (critical and significant) categories and an update on proposed next steps. The report focused solely on Internal Audit recommendations, as there were currently no External Audit recommendations being tracked. The current implementation position was therefore set out for recommendations that were made over 12 months ago, 6-12 months ago and between1-6 months ago.  He acknowledged the Committee’s agreed approach to request that Strategic Directors of relevant  services will be called to address the committee where the implementation of recommendations were highlighted as being overdue in excess of 6-9 months

Following on from the Committee’s last meeting, the Assistant Director, Assurance and Risk provided an update on the Avro Hollows Tenant Management Organisation (AHTMO). There continued to be a lack of progress regarding the implementation of the Improvement Plan, with particular reference to governance and finance recommendations which was a matter of concern to the officers and the Executive Member. Whilst assurances from the TMO had been given, the quality and robustness of the work that had been delivered had not met required standards. Support continued to be offered around a variety of specialist areas however those offers had not been taken up and the TMO were refusing to meet with senior officers because of a dispute over their allowances. With regard to the installation of an Independent Person (IP) to the TMO’s Board, despite repeated efforts, due to a lack of agreement from the TMO regarding an agreed and accredited list, attempts to co-opt and IP had been significantly stalled. As a result, alternative legal routes were being explored on this alongside other legal considerations requiring progress. 

In response to questions on this specific matter, the Assistant Director, Assurance and Risk stated that in his opinion, in view of the TMO’S weak finance and governance arrangements it was likely that residents were not getting the best use of that resource that had been allocated by the Local Authority. Residents were also struggling to get engagement and representation as a result of poor access to meeting minutes etc. Tenant engagement and involvement was also felt to be poor. There was felt to be a level of frustration amongst residents regarding a lack of alignment with the Council which had impacted the delivery on services. The Assistant Director, Assurance and Risk also spoke about the difficulties in being satisfied with the management of void (empty) properties and repairs. All of these factors contributed to a lack of assurance around core processes, however none of those impacts on residents were felt to be currently ‘in extremis’.

With regard to the longstanding nature of the concerns, the Assistant Director, Assurance and Risk  referred to a timescale of  ...  view the full minutes text for item 6.

Report of the City Treasurer attached

The Committee considered the report of the City Treasurer that described Treasury Management activities of the Council during the first nine months of 2024-25.

The Commercial Finance Lead introduced the report across its main themes. He advised members that this was the first occasion on which the report had discussed matters relevant to Quarter 3.  He also advised that the following item of business (Treasury Management Strategy Statement 25/26) had been submitted to provide context to the position referred to in this report. He asked members to note that the Strategy Statement is also considered by the Resources and Governance Scrutiny Committee, the Executive and Full Council.

The Commercial Finance Lead responded to questions about projections on the Council’s borrowing for this financial year. He told that Committee that whist external borrowing had increased it had remained in line with earlier projections. He advised that the capital programme had slipped and where this was the case, the impact would affect the future programme rather than the in-year programme.

The City Treasurer responded to questions about the Council’s debt position and the implications of capital financing requirements and the authorised limit. He gave assurance that the Council’s level of borrowing remained affordable and the capital financing reserve remained prudent and sustainable. He agreed to provide more depth and detail on this area in an upcoming outturn report to this committee.

There was a discussion about the reports reference to an extremely limited capacity to fund additional capital schemes using council reserves. The City Treasurer gave assurance that the current capital programme remained fully funded and affordable. He provided an outline of potential funding options to be considered for new projects, and referred to the impact of rising interest rates as a significant factor.

The Commercial Finance Lead responded to a question about the scrutiny of forecasted overspends in capital programming. He gave an outline of reporting arrangements to the Executive and referred to the Commercial Finance team’s role in providing challenge to forecasted overspends. He concluded that in specific circumstances overspends were a consequence of the types of buildings and/or projects that had been undertaken.

Decision

To note the report.

Report of the City Treasurer attached.

The Committee considered the report of the City Treasurer that set out the proposed Treasury Management Strategy Statement and Borrowing Limits for 2025/26 and Prudential Indicators for 2025/26 to 2027/28. The Treasury Management Strategy Statement sets out the risk framework under which the Council’s treasury management function would operate. By detailing the investment and debt instruments to be used during the year the Strategy detailed the risk appetite of the Authority and how those risks would be managed.

The report described that The Local Government Act required the Council to have regard to the CIPFA Prudential Code, which required that local authorities considered as part of the budget process the impact on the balance sheet of the capital investment decisions being taken.

The Commercial Finance Lead introduced the report across its main themes and responded to a technical question about Lender Option Borrower Option (LOBO) loans and the role of the National Wealth Fund.

Decision

To note the report.

Report of the Executive Director of Adult Social Services attached

The Committee considered the report of the Executive Director of Adult Social Services that provided information on the intention to move forward with the ‘Decision in Principle' to fully transfer mental health statutory social work functions and duties from Greater Manchester Mental Health Foundation Trust (GMMH) back to the Adult Social Care Directorate. A new mental health social care delivery model would be implemented via a 24-month programme of transformational work to repatriate the functions.

The “Decision in Principle” would ensure that the Adult Social Care (ASC) Directorate had clearer governance, oversight and accountability of the social work function (and associated delivery model) to ensure it could more effectively address the various statutory duties under the Care Act 2014, and Mental Health Act (1983), amended (2007). At present the delivery of the social work function was delegated to GMMH, which resulted in added layers of complexity and distance from operational delivery, business systems and a day-to-day management oversight.

In response to questions the Head of Commissioning, Adult Social Care Mental Health said that the need to engage and support those GMMH staff affected was fully recognised and a programme of staff engagement events was being delivered. He referred to the priority theme in the Programme Blueprint that had been provided to Committee that discussed the case load audit and capacity management work.  With regard to reporting outcomes, he stated that there was a suite of statutory metrics and Key Performance Indicators relating to social work activity. 

The Executive Director of Adult Social Services acknowledged the comment made regarding the importance of governance, oversight and accountability and said that the programme was estimated to take 24 months. This included a minimum period of 12 months for analysis, planning and phased repatriation of the functions, scheduled during the first year. This would be followed by a further 12 months of stabilisation. She said this would be done collaboratively with GMMH to ensure a safe transition. She said that this work was supported by HROD, using their best practice and learning from previous TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) experiences, to fully support the transition of GMMH staff to the Council, adding that this work was also supported by colleagues in IT. She said that a Risk Register would be established and reported around this emerging work.

Decision

To note the report.

[Dr Downs declared a personal interest in the item as his wife works for Greater Manchester Mental Health Trust]

Report of the Governance and Scrutiny Support Unit attached.

The Committee considered a report of the Governance and Scrutiny Support Unit which set out its future Work Programme for the remainder of 2024/25 municipal year.

Decision

To approve the work programme.