Agenda item

To approve the assessment of compliance with the Financial Management Code and to agree to receive an annual monitoring report on progress against the Code. 

49.1          The report of the Financial Services Manager, circulated at Pages No. 97-111, asked Members to approve the Assessment of Compliance with the Financial Management Code and to agree to receive an annual monitoring report on progress against the Code.

49.2          Members were advised that the Chartered Institute of Public Finance and Accountancy (CIPFA) had published the new Financial Management Code in October 2019 which was designed to support good practice in financial management and to assist local authorities in demonstrating their financial sustainability.  In terms of background, the Trainee Accountant explained that, in July 2018, an independent inspection of Northamptonshire County Council had found that failures at the Council were not due to a lack of funding but a result of poor management, a lack of budgetary control and a culture which discouraged challenge.  CIPFA had subsequently developed the Financial Management Code to align the Prudential Code, treasury management and the Code of Practice.  The Financial Management Code was based on six principles, as set out at Page No. 99, Paragraph 2.2. of the report, and beneath those were 17 standards which all authorities had to comply with as a minimum. 

49.3          The Financial Management Code had been due to come into effect from 1 April 2020; however, after further consideration of the ambitions within the Code and the wider resource challenges facing local authorities, particularly during the pandemic, CIPFA had concluded that, by 31 March 2021, local authorities should be able to demonstrate that they were working towards full implementation of the Code and the first full year of compliance would therefore be 2021/22.  Due to unprecedented pressures on Council services, the decision had been taken to delay full implementation of the Code until 2022/23; notwithstanding this, work had commenced and the self-assessment had been completed which had shown that, in comparison to other authorities, Tewkesbury Borough Council was performing well in terms of its day-to-day actions.  Appendix A to the report attached a draft Assessment of Compliance which included a number of identified actions to be taken forward to assist with the Council’s compliance with the 17 standards within the Code.  This would continue to be reviewed and refined and a formal assessment would be presented to the Committee on an annual basis.

49.4          A Member drew attention to Code Ref 1A on Pages No. 101-102 which referred to the Council having the sixth lowest Council Tax in England and questioned whether this was supposed to be viewed as a positive given that Cheltenham Borough Council received £2.5m more than Tewkesbury Borough Council because it had a “normal” Council Tax rate.  In response, the Head of Finance and Asset Management explained that was in the context of value for money for the taxpayer; the Council provided a good level of service at a very cheap price.  The Member felt it was important to take the opportunity to educate people and raise awareness of the implications of the low Council Tax rate.  Another Member indicated that she could not see any mention of training for Members and budget holders within the Assessment and she raised concern that she had no financial background training but was expected to understand local government finance.  The Finance Manager indicated that she would circulate a Member Update attaching the CIPFA Introductory Guide to Local Government Finance which aimed to help local Councillors, those working with and for local Councils, and anybody with an interest in the sector to understand the complexity of local government finance.  The Head of Finance and Asset Management pointed out that, unfortunately, the current Council term had been very much disrupted by the pandemic so Members had not received the financial training that would normally be offered following the Member induction programme in 2019.  He provided assurance that Officers would be looking at how better financial training could be delivered as part of the induction programme for 2023.  A Member expressed the view that training often needed to be repeated so it was important that the training programme was ongoing throughout the course of the Council term and not just during the induction.

49.5          With regard to Code Ref 5L, set out at Page No. 108, a Member noted that a Citizens’ Panel was used for targeted engagement on issues and she indicated that she had previously been on that Panel but had removed herself when she became a Member so it would be worth checking there were no other Members on the Panel.  She suggested that introducing a Citizens’ Panel for other elements, such as the environment, may be beneficial.  The Head of Finance and Asset Management undertook to feed these points back to the Head of Corporate Services following the meeting.

49.6          It was

RESOLVED          1. That the Assessment of Compliance with the Financial Management Code be APPROVED.

2.That it be AGREED that an annual monitoring report be brought to the Audit and Governance Committee in order to consider progress against the Code.