Agenda and minutes

Any substitute members should declare their substitution.

Councillor Bellasis substituted for Councillor Parkin

Members and officers must declare any disclosable pecuniary interests in relation to any business on the agenda.  Declarations should also be made at any stage such an interest becomes apparent during the meeting. 

If in doubt contact the Legal or Democratic Services representative for this meeting.

Councillor Andy McGregor declared an interest as a West Sussex County Council councillor and member of Sussex Yacht Club

To approve the minutes of the Joint Overview and Scrutiny Committee meeting held on 19th November 2024, copies of which have been previously circulated.

The minutes of the meeting of the 19th November 2024 were approved as a correct record and be signed by the Chairman

So as to provide the best opportunity for the Committee to provide the public with the fullest answer, questions from the public should be submitted by 12.00 noon on Friday 24th of January 2025

Where relevant notice of a question has not been given, the person presiding may either choose to give a response at the meeting or respond by undertaking to provide a written response within three working days.

Questions should be submitted to Democratic Services democratic.services@adur-worthing.gov.uk 

(Note: Public Question Time will operate for a maximum of 30 minutes.)

There were no public questions

Councillors who are not members of this committee can ask questions under CPR 12  Questions should be relevant to the committee where the question is being asked and also relevant to an item on the agenda. Please contact Democratic Services for more information

Members question time is 30 minutes and questions should be submitted no later than 12.00 noon on Friday 24th of January 2025.

Questions should be submitted to Democratic Services democratic.services@adur-worthing.gov.uk 

(Note: Members’ Question Time will operate for a maximum of 30 minutes.)

There were no questions from Members

To consider any items the Chairman of the meeting considers to be urgent.

There were no urgent items

To consider a report by Ernst & Young, copy attached as item 7

The Committee had a report before it attached as item 8, which had been circulated to all Members, a copy of which is attached to a signed copy of these minutes.

Members asked about difficulties in obtaining detailed debtor and creditor listings, the effect of local government reorganisation, the materiality of £1.5 million, the impact of uncorrected misstatements, if there was detail as to why properties were undervalued, the Council’s implementation of IFRS 16 and if the Strategic Property Investment Fund aim of an annual 1% return was on par with other authorities.

Members were informed that while the Councils had these listings, it was difficult sometimes to extract information out of them due to the cross council purpose of them; that as no decisions had yet been taken on reorganisation it was difficult to predict but historical accounts would still exist; that materiality was the concept of how much something can be wrong before you got a completely misleading statement of council finances and that if incorrect statements were found they would expect to be corrected but if something was found that was deliberate fraud, it would be much more likely to be a bigger issue even if it was lower on the materiality level. Members were also informed that the cumulative impact of misstatements had not been deemed to be cumulatively material; that the majority of under valuations were due to methodology; that IFRS was not coming into force until 1st April 24/25 and that work was ongoing; and that different authorities invested for different reasons so it was difficult to answer if Adur and Worthing were on par with others, without understanding the reasons behind the investments.

Resolved:

The Joint Audit and Governance Committee noted the report

To consider a report by Mazars copy attached as item 8

The Committee had a report before it attached as item 9, which had been circulated to all Members, a copy of which is attached to a signed copy of these minutes.

Members asked if anything could be done to gain more assurance about reports being completed, the Council’s capability to move all the high priority recommendations through, the assurance level linked to the Council’s savings targets and the importance of internal audit of building controls and capital programme.

Members were informed that the report remained in draft so that the number could be improved and that it wasn’t always the case that they weren’t responded to; that responses were with management and there was ongoing issues around resource capacity; that the Council had met the majority of its’ saving targets and that all audits were important, involving long discussions and that there was a separate review for capital programmes.

Resolved:

The Joint Audit and Governance Committee noted the report

To consider a report by the Assistant Director for Regenerative Development copy attached as item 9

The Committee had a report before it, attached as item 10, which had been circulated to all Members, a copy of which is attached to the signed copy of these minutes.

Members asked about an estimated completion date for the flood defences, would there be any objections to the WSCC consultation, the possibility of the defences never being built and what could be done to mitigate flood risks in the meantime.

Members were informed that the completion date was tied to the outcome of the WSCC consultation and was completely outside of ADC control, that officers believed an objection to be unlikely; that while possible if an agreement could not be reached with the landowners (Sussex Yacht Club) but this was unlikely due to work and discussions already had and that ADC were meeting with WSCC Flood Authority to discuss and consider what flood mitigation measures could be considered.

Members also discussed the ongoing history of this project, the scope of the committee’s role regarding this particular issue and the wider issue of flooding.

Resolved:

The Joint Audit and Governance Committee:

·         Noted the updating contents of this report and note the ongoing process underway by West Sussex County Council to modify the Definitive Map

·         Noted that Officers will bring a further report on the risk management to the Committee at the end of the consultation periods for the Definitive Map Modification Order and thereafter report on next steps.

·         Requested that if the risk of flooding in Shoreham increases due to further delays of the construction of the flood defences being built, officers bring an updated report to the committee.

·         Requested that the matter of the progress of the building of the flood defences be submitted as a scrutiny request to the Joint Overview and Scrutiny Committee for review and consideration as to whether or not it is added to the work programme.

To consider a report by the Assistant Director for Regenerative Development copy attached as item 10

The Committee had a report before it, attached as item 11, which had been circulated to all Members, a copy of which is attached to the signed copy of these minutes.

Members asked about the assets and income from them and how that could be protected for Worthing should it be made part of a larger unitary, a Member asked for it to be noted that should a unitary be formed, Worthing would inherit the debt of another authority while the authority would gain the income generated from Worthing’s assets. Members also asked if there were any assets jointly owned by Adur and Worthing, if the income from Worthing’s portfolio equated to an estimated £6.3 million per year, the potential for the Council’s to transfer assets to Town and Parish Councils ahead of a local authority reorganisation, were the Council’s still restricted on what property investments they could make in terms of location, could properties be bought at auction, the purposes for buying Southern House, the meaning of investment yields and the annual provision for the management of voids in Adur figures.

Members were informed that it was still too early to comment on exactly what effect the local government reorganisation would have, though when a local authority was subsumed into a larger one, so too were the risks and liabilities. Members were also informed that there were no jointly owned assets, that while the exact figure was not to hand the 6.3 figure was accurate; that under legislation there would be rules in place to dictate how assets can be disposed of; that the Councils’ were still bound and could not invest outside of their functional areas or purely for profit generation but assets purchased before the new legislation were still owned by the Councils; that while possible it was unlikely through auction as most were short dated and few properties would meet the criteria; that Southern House offered opportunities with neighboring areas and a number of regeneration options; that for a given level of rent the capital value had decreased which meant the rent as a percentage of the capital value had increased and that there was a transfer into Adur’s reserves from this in 23/24 and that void allowances existed as a risk budget.

Members also discussed the implications of potential devolution and unitary formation, the topics that should be considered and brought up during the consultation period of devolution and whether Councils should look at how Town and Parish Councils could be utilised.

Resolved:

The Joint Audit and Governance Committee noted the contents of the report

To consider a report by the Director for Sustainability & Resources copy attached as item 11

The Committee had a report before it, attached as item 12, which had been circulated to all Members, a copy of which is attached to the signed copy of these minutes. 

Members asked about the removal of the 25% fund limit, the fluctuation in the figures relating to prudential indicators of capital expenditure, 

Members were informed that the limit predated a lot of strategy statements and the position of Worthing Borough Council had changed significantly in that time; that fluctuation was due to the nature of how the capital programme moved through governance and when the outturn report was published, it would show how things had changed, that in terms of governance the decision hadn’t been taken and future predictions based on zero capital, didn’t predispose the capital would be that low.

Resolved:

The Joint Audit and Governance Committee noted the report (including the Prudential Indicators and Limits, and MRP Statements) for 2025/26 to 2027/28. Including the addition of State Street Global Advisors MMF as an approved counterparty, to be governed within the same limits as other Money Market Funds and proposed changes to specified investment limits as detailed in 6.1.3.

To consider a report by the Director for Sustainability & Resources copy attached as item 12

The Committee had a report before it, attached as item 13 which had been circulated to all Members, a copy of which is attached to the signed copy of these minutes. 

*The Chair moved this item to be heard after agenda item 7, due to its close association with item 7* 

Members asked about the net effect of Ernst & Youngs recommended valuation on assets would have on Worthing’s balance and was the deficit funded by reserves.

Members were informed that the exact figure could not be provided due to pension adjustments, the distinct set of accounts and the recommendations from auditors around amendments being specific to those accounts; that it would depend on the outturn set out in the narrative report, with income from the expenditure statement and capital adjustments in terms of draw on reserves.

Resolved:

The Joint Audit and Governance Committee:

·         Approved the amended Adur District Council and Worthing Borough Council Statement of Accounts for the financial year ended 31st March 2024 in appendix 1.

·         Agreed to delegate to the Chairs of this Committee the ability to approve, the amended final version of the accounts including any changes agreed with auditors as the audit was concluded, enabling sign off before the statutory back stop date; and

·         To delegate to the Chairs of the Joint Audit and Governance Committee the ability to approve the final versions of the requested letter of representation for their respective council, which, depending on the outcomes of final audit procedures, may require modifications from the current versions included at appendix 2 (ADC) and appendix 3 (WBC).

To consider a report by the Director for Sustainability & Resources copy attached as item 13

The Committee had a report before it, attached as item 14 which had been circulated to all Members, a copy of which is attached to the signed copy of these minutes.

Members asked whether a further report looking at how this happened and the processes would come back to the Joint Audit and Governance Committee. Members were informed that it would due to the terms of reference of the JAGC.

Resolved:

The Joint Audit and Governance Committee noted the contents of this report and the further action to be taken at paragraph 6.

To consider a report by the Director for Sustainability & Resources copy attached as item 14

The Committee had a report before it, attached as item 15, which had been circulated to all Members, a copy of which is attached to the signed copy of these minutes.

Members asked how long the current limit had been in place, the impact on time saving, relation to the Strategic Property Investment Fund (SPIF) and ensuring proper documentation and processes are in place before disposal.

Members were informed that the previous limit of £50k had been in place for many, many years, that the uplift would negate the need for reports to be published for five days before a Member could make a decision, that a special process was in place for SPIF assets and that clear parameters were in place for asset disposal and that the Councils were bound by the Local Government acts.

Members also discussed what limits other councils may have in place, how many decisions this change would affect and the handing of responsibility from Cabinet Members to Officers.

Resolved:

The Joint Audit and Governance Committee approved recommendation 2.4 of the attached JSC Report and recommended the proposed constitutional amendment to both Full Councils for adoption.

To consider a report by the Director for Sustainability & Resources copy attached as item 15

The Committee had a report before it, attached as item 16, which had been circulated to all Members, a copy of which is attached to the signed copy of these minutes.

Members asked about the proper title of the Adur Homes Management Board/Adur Homes advisory Board. Members were informed that the Monitoring Officer would seek clarity on the correct title.

The committee took time here and recorded its thanks to Simon Norris-Jones for his service as both an Independent and Co-opted Member of the Joint Audit and Governance Committee.

Resolved:

The Joint Audit and Governance Committee:

·         Noted the use of the Monitoring Officer’s delegation to make minor and inconsequential amendments.

·         Endorsed the amendment to the Constitutions proposed by the Monitoring Officer at Paragraph 5 and recommended the proposed amendment to both Full Councils for their approval.