Agenda item

To approve the minutes of the Joint Governance Committee meeting held on 28 May 2020, copies of which have been previously circulated.

The minutes of the Joint Governance Committee meeting held on 28 May 2020, were agreed as a correct record.

Matters Arising:-

The Chief Executive attended the meeting, following a request from the Committee at its May meeting, to explain why the Councils had adopted their existing governance model.   

The Committee was reminded of the CIPFA document ‘Role of the CFO in Local Government’ and the 5 principles were considered as follows:

·       Principle 5 Chief Finance Officer (CFO) was suitability qualified.

The Committee was advised that there were no issues as the CFO had significant qualifications (and perhaps as importantly practical experience) as a leading officer in Local Government.

·       Principle 4 - that the CFO leads and directs a properly resourced Finance function. 

The Committee was informed that there were no concerns here (in conversations with the CFO, it had been confirmed that the Finance function was properly resourced).  At times it has been hard to attract the calibre of staff that the Councils may wish ... but a range of innovative solutions had been found to find a way around this and build a good set of skills and capacities.

·       Principle 3 - the CFO leads the promotion and delivery by the whole Authority of good financial management (so that public money is safeguarded at all times and used appropriately, economically, efficiently and effectively). 

The Committee was reminded that a year or so ago the Councils had an external Peer Review by the LGA of their Finance function.   That Review reported to the Joint Governance Committee and found no substantive shortcomings (though suggested a number of helpful issues which the Councils had been taken up and implemented).

·       Principle 2 - the CFO in a Local Authority "is actively involved" in, and able to bring influence to bear on, all material business decisions to ensure immediate and long term implications, opportunities and risks are fully considered and aligned with the Authority's overall Financial Strategy. 

The Committee was advised that the CFO was heavily involved (and at times leads) a range of the Councils financial plans (revenue, capital, borrowing etc.) as well as budget analysis and overall financial performance and capacity building.  This was done in the capacity as CFO and in practical terms that was frequently exercised through a Finance Group (chaired by the CEO).  The Finance Group comprised the CEO, all of the Directors (and various relevant Heads of Service depending upon the issue under consideration) and met on a monthly basis.  The CFO set the agendas (jointly with the CEO) and this provided the CFO with the opportunity to shape and lead conversations about financial direction, investments, decisions etc.

·       Principle 1 - the CFO is a key member of the Leadership Team helping to develop and implement strategy and to resource and deliver the Authority's strategic objectives sustainably and in the public interest. 

The Committee was advised that CFO was very much a member of the broader Leadership Team (the Operational Leadership Group or OLG).  Given the CFOs frequent attendances at CLT (and at the Finance Group referenced above) then, from the CEOs perspective, the fact that the CFO did not have a direct management reporting line to the CEO was not material.  The CEO met with the CFO and Monitoring Officer on a regular basis 1-1 (both in their statutory officer capacity) both of whom had the ability to raise any issue direct with the CEO (and frequently did so).  The Committee was advised that there was a particular problem in saying that "Heads of Professions" should be "at the top table" in that, over several years, the CEO had seen numerous professional bodies and associations lobbying for their professional expertise to be "at the top table".  How this practically was done (by way of the influence of the senior experts concerned) was, to the CEOs mind, far more important than who sat where and upon which table.

In translating the Code to Adur & Worthing, the Committee was informed that the Council Leadership Team (CLT) comprised 3 Directors and the CEO.  The Councils CFO reported directly to the Director for Digital & Resources (and had a dotted reporting line to the CEO).  The Committee noted that the CFO frequently joined the CLT meetings for agenda items about finances, financial strategy and financial performance.

The Committee was also advised that the CFO’s reporting line was into the Director for Digital & Resources, and that for at least the last 15 years at Worthing Borough Council, the CFO had not been at the Executive Director/Director level.  In essence, the structure that the Councils brought in in 2014, made no material changes to that position.  The CEO reiterated the dotted reporting line into himself, which meant monthly 1-1s. It was also noted that, over the last few months, the Councils CFO had never been more present, influencing strongly and involved in key leadership decisions.  Therefore on Principle 1, the CEO advised that whilst Adur and Worthing Councils current arrangements did not exactly comply to the letter of the CIPFA document, the CEO did not believe this was a problem at all.  The Committee was advised that the CEO had spoken to the CFO about the situation and the CFO was happy that the Councils current arrangements did not compromise the role, powers, authority or gravitas of the CFO. 

The Committee welcomed an assurance that in future, at annual reporting, the Councils would be more explicit about the arrangements they had in place for the CFO's function and would provide more detail on that in future Annual Governance Statements.