Agenda item

The report, appendix and two background documents are attached.

Andrew Felton (Assistant Director, Finance) introduced the report, stating that the recommendations emerging from the Redmond Review were generally supported by the Council. He advised that many of the recommendations were already observed by the Authority, which placed it among the better performing councils within the scope of the inquiry. He added that the narrative statement produced by the Authority was comprehensive and complied with many of the standards recommended by Sir Tony Redmond’s report.

Andrew Felton summarised the implications of the Redmond Review’s recommendations, including a recognition of funding requirements for external audit services and the likelihood of an increase in fees. Attention would also be given to governance arrangements to secure channels of communication between the external auditor and statutory officers within the Authority.

Andrew Felton commented that the new standardised statement called for by the Review would result in significant additional work, however, it would lead to greater consistency in reporting across local authorities. He added that the formation of a new national audit body was welcomed in principle, however, there was a concern that it could lead to an arrangement which replicated the defunct Audit Commission.

The Chair observed that the narrative statement produced by the Authority was orientated to be accessible and readily understandable to members of the public without specialist technical knowledge. He noted that a substantially expanded Statement could result in additional challenges to facilitate public engagement with often complex information.

Consideration was given to the profile of the work of the Audit & Standards Committee and the relatively short amount of time spent at meetings of the full Council to examine audit-related matters.

The Chair stated that the members of the Committee were trusted by their colleagues to act responsibly. It was observed that the nature of the material considered by the Committee did not always generate widespread interest, despite its importance.

Councillor Singh Birdi stated that training for new members was beneficial to help to ensure that councillors were equipped with the specialist knowledge required to make important judgements on often complex and technical matters.

Councillor Reilly stated that the recommendations emerging from Westminster should take account of the role of councillors, many of whom came from different backgrounds with different levels of expertise. In many instances, the role of a councillor was to be ‘a jack of all trades’; it was reasonable to expect guidance from professionals with expertise in budgetary and financial matters.

Councillor Horner stated that the Committee should exercise caution in its engagement with independent experts, stating that an undue dependency upon third party external advice to understand relevant issues introduced a risk. He observed that the Council had engaged the services of Grant Thornton to seek an objective opinion; this was consistent with good practice across most large organisations.

Councillor Holland stated that the role of the Audit & Standards Committee was to provide assurance to the public that the relevant procedures were in place and being adhered to, and that the role of a councillor was to represent the view of a reasonable member of the public; in this sense being a ‘jack of all trades’ could be construed to a be asset.

Rob Powell (Strategic Director, Resources) highlighted that two places on the Committee were reserved for independent members, with recruitment ongoing for the vacant position. This provided scope for independent input whilst maintaining the democratic role of elected members within the Committee.

In response to the Chair, Andrew Felton stated that the recommendations of the Review were broadly welcomed. However, they represented a mixed picture overall, some of the recommendations related to practices the Council had already adopted, others required legislation to be enacted before they could be formally adopted by local authorities.

Rob Powell indicated that elements of the Review had been welcomed, particularly simplification of the current system and improved links between internal and external audit. He stated that any increase in fees would result in an expectation to see extra value in the delivery of external audit services.

Resolved:

That the Audit & Standards Committee notes the recommendations of the Redmond Review and supports the view of the Strategic Director for Resources as set out in the report.