To approve as correct the minutes of the meeting held on 27 July 2023 and authorise the Chairman to sign them.

The meeting minutes of the Committee held on 27 July 2023 were agreed as a correct record and would be signed by the Chairman.

Report attached.

At the request of Members, a report that detailed the financial impact of the ULEZ enforcement that comes into force on the 29 August 2023, impacting across a wide range of council vehicles and departments.

The Sub-Committee was informed that the council operates a fleet of c. 200 vehicles across its various functions and the ULEZ compliance status summarised as follows by service:

Highways – operate vehicles 7500kg > 18,000kg and all are compliant for the up and coming ULEZ changes. The Highways vehicles are manufactured from 2014 > 2018 and the Highways contract is due for reprocurement in April 2024 at which point it is likely that the remaining in-house activities will be outsourced. It was stated that there is a freeze on replacing these operational vehicles which all have an operating life of 7 years. As these vehicles are all Euro 6 and are not subject to daily ULEZ charges.

Passenger Transport Services (PTS) – operate 62 vehicles ranging from 3500kg > 12000kg (15 seats to 73 seats). PTS had intended to replace 27 ‘out of life’, non-compliant buses last year and were at the award stage in November 2022 when they were asked to defer most of the replacements pending a review of Home to School Transport policy. It was agreed that PTS would apply to TfL for Community Grace Period Certificates, which allow a temporary exemption period up to October 2025. This has now been completed. The current PTS fleet which is a mixture of Euro 5 and Euro 6 Vehicles are currently ALL exempt from ULEZ daily charges. 

Grounds Maintenance and Environment/Neighbourhoods – both of these services have been the subject of deferred fleet replacement due to potential inclusion within procurement of larger contracts.

The Environment/Neighbourhoods function (mechanised sweepers) is now within scope of the new waste contract commencing with Urbaser in Autumn 2023.

It was stated that a decision was recently taken, when scoping the forthcoming Highways contract, to retain the grounds maintenance function in-house. A Non-Key ED is being prepared seeking permission to replace these vehicles and a procurement Gateway meeting is taking place this month to establish the agreed route to tender. However, pending delivery of the new grounds maintenance fleet assets, up to 32 vehicles will be subject to the ULEZ charge of £12.50 per day.

Housing – Most of the housing fleet is hired and ULEZ-compliant (Euro 6). There are also 8 x 3.5 tonne vehicles that are due for replacement and they will be subject to the daily ULEZ charge of £12.50 up to the point where replacement vehicles are available. Specifications are being agreed with the Housing service and a business case is being prepared to replace them.

Bereavement Services – The fleet are currently linked to the procurement of the grounds maintenance vehicles and all 4 vehicles are ULEZ non-complaint and are subject to the daily fine of £12.50. All are due to be replaced this year.

Pool Cars – The fleet usage is monitored over time relative to demand  ...  view the full minutes text for item 114.

Report attached.

The Committee received an update on the mid-year report on the treasury management activities as required by The Chartered Institute of Public Finance and Accountancy’s (CIPFA) Treasury Management Code (“TM Code”).

The report stated that the Authority’s Treasury Management Strategy Statement (TMSS) for 2023/24 was approved at the Cabinet meeting on 8 February 2023 and at Full Council on the 1 March 2023. The TMSS aims to bring together the Council’s capital programme and its Budget to ensure borrowing decisions are affordable and sustainable in line with regulation. 

The report covered activity on treasury managed investments and borrowings and the associated monitoring and control of risk.

The key highlights of the mid-year report were as follows:

·               At the end of August 2023 the investment portfolio yield was 5.18% - this was achieved keeping investments on very short maturities thereby tracking successive increases in bank rate over the period.

·               The Authority weighted average rate of return was 4.65% compared to Link’s benchmarking club return of 4.38% for the last published quarter to the end of June – this was virtually risk free as all investments were placed with the Government Debt Management Office and a number of Local Authorities and NatWest Bank.  

·               Net interest outturn, expense is expected to be within budget.

·               According to the Office for Local Government this Authority has one of the lowest debt servicing cost at 4.6% of core spending power, compared to other authorities in 2021/22.

·                The Authority fully complied with the prudential and treasury indicators set out in the (TMSS) for 2023/24.

Members received responses to questions raised about the council’s approach to borrowing and lending and risk in particular.

Officers stated that there has not been a shift in terms of re-profiling debt from the capital programme to the HRA.

It was clarified to Members that the council’s fixed term investment deposit were being monitored on a day to day basis. The current position was that there is very little risk in terms of losing the authority’s deposits.

Officers indicated that the council’s treasury advisers have not raised any issues on the council’s risk profile.

A Member asked that auditors look at the viability of each of the housing regeneration schemes.

The Committee noted the treasury management activities to August 2023 as detailed in the report.

Report attached.

The Committee was presented with a report that informed Members on the work undertaken by the Assurance Service (internal audit and counter fraud) during the period from 1 April to 30 September 2023. 

The following summary of work undertaken by Internal Audit was detailed:

The report indicated that some of the work undertaken by internal audit does not result in an opinion being provided such as advisory reviews and grant claims. 

In giving an overall Audit opinion on the system control environment within the areas reviewed, there are two levels of assurance as follows:

The tables below detailed the results of the work undertaken during quarter one and two of 2023/24. These recommendations were provided with the limited assurance summary reports.

It was noted that Internal Audit follows up all high and medium risk audit recommendations with relevant service management.  There is a rolling programme of follow up work with each auditor taking responsibility for tracking the implementation of recommendations made in their audit reports. The implementation of audit recommendations in systems where limited assurance was provided is verified through a follow up audit review. 

It was stated that the work is of high importance given that the Council’s risk exposure remains unchanged if management fail to implement the recommendations raised in respect of areas of control weakness. Part of the Audit Committee’s role is to monitor the extent to which recommendations are implemented as agreed and within a reasonable timescale, with particular focus applied to any high risk recommendations.

All high and medium risk recommendations due as at the end of September 2023 have been followed up and confirmed with management as implemented.  ...  view the full minutes text for item 116.