Meeting Details

On the proposal of Councillor Leach, seconded by Councillor Speca it was

RESOLVED

That the minutes of the meeting held on 8 September and 10 November be signed as a correct record. 

The Committee received report ES/2629 of the Cabinet Member with responsibility for 
Resources and Value for Money.

Councillor Langdon-Morris introduced the report which gave a high level overview of how capital expenditure, capital financing and treasury management contribute to the provision of local services along with an overview of how associated risk was managed and implications for future financial sustainability. 

The Chair invited questions.

Councillor Gandy referred to the tables at 2.1.3 and 2.1.4 in Appendix A and asked why the total in these tables were different. The Chief Finance Officer stated that the table at 2.1.3 showed updated budgets following the budget setting process, the table at 2.1.4 showed the original budgets. The Chief Finance Officer confirmed these figures are as they currently stand and potentially could change until the budget was finalised. 

Mr Jones referred to table 2.1.4 and stated that there was significant capital expenditure in 2025/26 and 2026/27 but this then dropped off and Mr Jones asked what the reason was for this. The Chief Finance Officer confirmed this expenditure was largely related to the leisure centre costs associated with the North Felixstowe Garden Neighbourhood.

Mr Jones asked for further explanation on Minimum Revenue Provision (MRP) adjustment. The Specialist Accountant stated that where the Council could not fund Capital Expenditure through grants and other contributions it had to borrow.  MRP was a statutory requirement that was set aside for this purpose.

Mr Jones referred to table 8 at point 4.2.6 highlighted a difference between that table and table 6. The Specialist Accountant confirmed this was an error, the correct borrowing figure was £119.37million. The Chief Finance Officer confirmed that the current borrowing figure shown in the report was cumulative.

Mr Jones referred to the 'authorised limit' for debt of £130m and the 'operational boundary' limit of £128m and asked if this was a big enough buffer. The Chief Finance Officer confirmed that these limits were set internally following statutory guidelines. The Specialist Accountant confirmed officers did monitor this and would not wait until they hit £128million to take action. The Specialist Accountant highlighted table 8 which showed an estimated borrowing of £126 million in 2029/30, this was already being looked at as it was near the operational boundary limit. 

Councillor Lynch stated he was disappointed in the number of errors on this report which was concerning with the amount of money being dealt with. Councillor Lynch referred to the table at point 2.1.4 and asked if there was a breakdown of the resources and value for money. The Specialist Accountant stated this was a high level report and a more detailed report would be provided to the Overview and Scrutiny Committee. The report was a combination of a number of reports which were produced at different times, it was difficult to keep track of changes but errors would be rectified before Full Council. 

Councillor Gandy asked why borrowing increasing when expenditure was going down. The Specialist Accountant stated this would fluctuate depending on the capital programme. Some work would be funded through grants, but until these were secured it had to be shown in borrowing. The Chair asked how likely it was that the Council obtained grants for this expenditure. The Specialist Accountant stated this considered a worse case scenario and generally the Council were quite successful in obtaining grant funding. 

Mr Jones referred to table 9 and asked why there was a 50% reduction in treasury investments. The Specialist Account confirmed this was due to grants received in advance of expenditure.

The Chair asked if in future reports there could be some additional explanation, particularly on the general fund and HRA summary tables, to give the committee additional context for these figures.

Councillor Lynch proposed an additional recommendation that the errors in the report be corrected ahead of it being reported to Full Council, and that additional information be provided on figures where grant funding might be achieved. This was agreed by the Committee.

On the proposal of Councillor Gandy, seconded by Councillor Lynch it was

RESOLVED

That the Audit & Governance Committee:
1. Reviews, comments upon, and recommends the Capital Strategy 2026/27 and report it to Full Council for approval.

2. That the errors in the report be corrected ahead of it being reported to Full Council, and that additional information be provided on figures where grant funding might be achieved. This was agreed by the Committee.

The Committee received report ES/2630 of the Cabinet Member with responsibility for 
Resources and Value for Money.

Councillor Langdon Morris introduced the report which set out the Council's treasury management investment strategy for 26/27 and non-treasury strategy for 26/27. The report included information on the current treasury position, treasury indicators which limit the treasury risk and activities of the Council, prospects for interest rates, the borrowing strategy, and the investment strategy. The report also detailed the economic background that the Council was operating in, the credit outlook and interest rate forecast along with the Treasury Management Indicators which aided the Council in measuring and managing its exposure to treasury management risks. 

The Chair invited questions.

Councillor Lynch referred to Appendix A which stated that rates would be at around 3.75% throughout 2026. Councillor Lynch stated that longer term interest rates were expected to come down and asked where these figures had come from. The Specialist Accountant stated this was the forecast as at November 2025 provided by external treasury advisors. There would be an update to these as the outlook was changing. Councillor Lynch noted that the prediction did not extend beyond June and asked whether there were better providers of information than Arlingclose The Specialist Accountant stated the Council had a contract with Arlingclose, this was the information that they provided. 

The Chair agreed that this perhaps had very little value in the report if it was out of date. The Specialist Account stated that because of the timing of this report information was pre-budget. A post-budget report was now available but this was not ready at the time of publishing the agenda.

Councillor Gandy referred to the changed criteria for loans from the Public Works Loans Board and asked whether the Council was limiting its activities across all borrowing as a result of this, or if it was limiting borrowing from the Public Works Loans Board only. The Chief Finance Officer confirmed that CIPFA had limited access to the Public Works Loans Board to Councils that borrowed for an asset to generate yield and so the Council would limit this activity.

Mr Jones asked if there were any derivative investments. The Chief Finance Officer confirmed there were not.

On the proposal of Councillor Gandy, seconded by Councillor King it was

 RESOLVED

That the Audit & Governance Committee:
1. Reviewed, commented upon, and recommended the Treasury Management Strategy for 2026/27 and Non-Treasury Management Strategy for 2026/27 to Full Council for approval.

The Committee received report ES/2628 of the Cabinet Member with responsibility for 
Resources and Value for Money.

Councillor Langdon Morris introduced the report which updated the committee on the progress and current position of all the Council's corporate risks including significant changes to risk scores and updates following the last risk report to the Committee on the 14 July. The Corporate Leadership team regularly regularly review, monitor and manage risks and the corporate risk register is reported quarterly. Councillor Langdon Morris confirmed that significant updates to the risks included updates to Freeport East, Sizewell C, health and safety, and housing regulation risks. Local government reorganisation had also been entered as a separate risk.

The Chair invited questions.

Councillor Lynch referred to the graph at point 3.4.4 of the report and noted that grants from Sizewell C had moved to a high and critical position. Councillor Lynch asked that as the Council were not the ones doing the work on this site, why was this so high. East Suffolk Services Limited also seemed to be a relatively low risk given some issues that had been raised at a recent Overview and Scrutiny Committee meeting. The Head of Digital, Programme Management and Customer Services stated the Sizewell C risk had recently been raised, and this was mainly related to the Council's own resourcing for the next stage of the process. An explanation would be sought from the relevant Head of Service and circulated to the committee. 

The Chief Executive stated he would see if the risk register could be circulated ahead of the papers to ensure the correct officers were present to provide an update. The Chair asked that Heads of Service for areas identified as in high, very high or major/catastrophic areas should attend the Committee. In relation to the risk from East Suffolk Services, this was shown in two risks, number 9 which was a red risk due to the financial risks, and number 27 which related to governance and was scored lower. The Head of Digital, Programme Management and Customer Services confirmed the financial elements had been separated out so they could be better monitored. Other risks around better recycling etc. were being managed within the project itself, and the deadlines for this were being hit and the financial risk was not impacting the rollout of this programme. This had not been escalated to the corporate risk register at this point but it would be raised with CLT.

The Chair referred to risk number 18 concerning water supply and stated this risk was already quite high, would it get any higher. The Head of Planning and Building Control stated that Essex and Suffolk Water were running a consultation on a water recycling project and additional sewage treatment. There was also a project for a new winter storage reservoir in either East Suffolk, Mid Suffolk or South Norfolk. The Head of Planning and Building Control stated he was confident that mitigation measures were being put in place.

The Chair referred to housing growth and greenfield development risk and asked if this related to increased greenfield development. The Head of Planning and Building Control stated this was a risk as local housing need had increased significantly and the local plan was over five years out of date. There was therefore a risk that unplanned development would come forward on greenfield sites. 

Mr Jones highlighted risk 2 on cyber attacks and noted the Council relied on services from third parties and asked if the Council performed checks on these companies to ensure they were secure. The Head of Digital, Programme Management and Customer Services confirmed the two companies provided two different services. The Council used many hosted solutions, and the network was monitored 247 for potential issues by Nomios. The other company, 3B, provided expertise and reassurance. Where data was hosted it was backed up separately by the providers and the Council into a separate cloud environment. 

Mr Jones referred to the disaster recovery plan and asked when this was tested. The Head of Digital, Programme Management and Customer Services stated this was tested in parts due to the way data was hosted between the sites. The Council would have to be taken offline for a few days to do a full test. Cyber security and disaster recovery was about to be audited and the results of this would be presented to the committee as part of the audit reports. Councillor Langdon Morris added that the Council had emergency planning officers and confirmed that the Council and town and parish councils were engaged on this to strengthen communities. 

Councillor Lynch stated planning was one of the major responsibilities of the Council and there were major changes in this area but this did not appear as much as expected in the risk register. The Head of Planning and Building Control stated planning involved a lot of risk management itself but the biggest single risk to planning in the district was resource, similar to the risks associated with Sizewell C, and other unplanned development. Additional services had been recruited to manage this, and work had been done on planning enforcement. 

The Chair asked if an additional risk on planning resource could be incorporated. The Head of Digital, Programme Management and Customer Services stated that risk 1 covered capacity to deliver, and a service level risk register would consider the risks around capacity for each team.  There was also a risk on recruitment and retention which was also escalated up by teams to the Corporate Leadership Team through individual service area risk registers. The Chief Executive added that this was reviewed by the Corporate Leadership Team, and commented that while Councillors may receive the most correspondence on certain areas, there were other areas that could be seen as much higher risk such as housing. There had to be a balance between showing risks accurately and not overloading the risk register.

Ms Durrant referred to the safeguarding risk and asked if there was any consideration to lessons learned from incidents and quality improvement strategies here, especially from other agencies. The Head of Digital, Programme Management and Customer Services confirmed she would raise this with the Head of Service. 

The Chair asked that a recommendation be added that the Corporate Leadership Team consider the risks related to ESSL and ensure this is appropriately reflected in the risk register. This was agreed by the committee.

On the proposal of Councillor Lynch, seconded by Councillor Gandy it was 

RESOLVED

That Audit and Governance Committee:
1. Note and make comment on the corporate risks outlined on the Council’s current Corporate Risk Register (CRR) which is governed and monitored by the Corporate Leadership Team (CLT).

The Committee received report ES/2624 of the Cabinet Member with responsibility for 
Resources and Value for Money.

Councillor Langdon Morris introduced the report and stated that the policy was proposed to remain in effect until March 2028 unless a change in the law or government guidance required an earlier revision.

The Head of Internal Audit highlighted changes in the report and confirmed the policy had been refreshed based on current laws. Some of the internal processes behind this had been changed and would be highlighted to officers to ensure they were aware of the requirements. The Head of Internal Audit stated that money laundering was rare, but when it did occur officers were engaged with the National Crime Agency and information was properly reported. 

The Chair invited questions.

Councillor Lynch asked how this had changed with increasing use of digital banking. The Head of Internal Audit confirmed there were trigger points which would cause an individual to be flagged, for example large overpayments of Council tax or rates, and additional checks would be carried out as a result. 

Councillor Gandy asked if there had been any incidents in the last year, and asked if there could be any training to Councillors on this issue. The Head of Internal Audit confirmed one referral had been made in 25/26. Generally this was highlighted by the finance team, but something could be produced to inform Councillors of the issue.

Mr Jones asked what the training programme for staff was. The Head of Internal Audit stated training was targeted to officers and service areas depending on national feedback of areas of concern. If the audit team thought that this was not sufficient or that issues were not being flagged then training could be widened, but the Council was not required to do this. There was compulsory e-learning for other areas such as information governance and security. 

Ms Durrant asked if an equality impact assessment had been done and if there were any risk assessments on this. The Head of Internal Audit confirmed that the policy applied equally to all regardless of any protected characteristics. There were no additional risk assessments on this area at present as it was not a regular occurrance.

On the proposal of Councillor King, seconded by Councillor Speca it was

 RESOLVED

That the Audit and Governance Committee:
1. Reviewed, provided comments upon and endorsed the refreshed Anti-Money Laundering Policy attached as Appendix A

The Committee received report ES/2625 of the Cabinet Member with responsibility for 
Resources and Value for Money.

The Head of Internal Audit stated that work was generally proceeding as planned, there were only two deferrals and these were for good reasons. 

The Chair invited questions.

Councillor Lynch asked if HRA housing refunds had been completed. The Head of Internal Audit confirmed she could not provide reassurance on this until the report had been issued, but she believed it was on track. The Chief Executive stated that this issue was reported to Cabinet. The majority had been repayed, the ones remaining were the difficult to find tenants. 

Councillor Lynch referred to the audit on planning enforcement and asked why this had been delayed. The Head of Planning and Building Control stated positive progress was being made on this and updates were being given to Strategic Planning Committee. Although the final changes in the system still needed to be reviewed, on the ground planning enforcement was effective.

The Head of Internal Audit confirmed there was sufficient resource to cover the plan. An IT principle auditor had been recruited to provide additional coverage.

On the proposal of Councillor King, seconded by Councillor Gandy it was

RESOLVED

That Audit and Governance Committee:
1. Noted progress and endorsed the current Internal Audit Plan 2025/26 following the changes incorporated since it was first approved in March 2025.

The Committee received report ES/2627 of the Cabinet Member with responsibility for 
Resources and Value for Money. The Head of Internal Audit stated this was a standing item, there were no overdue actions to report on. 

On the proposal of Councillor King, seconded by Councillor Lynch it was 

RESOLVED

That the Audit and Governance Committee considers whether any further action or explanation is necessary from service areas to ensure that agreed actions to improve East Suffolk Council’s control environment are made. Where no further action or explanation is deemed necessary, that the Committee notes the report.

The Committee received report ES/2626 of the Cabinet Member with responsibility for 
Resources and Value for Money.

The Head of Internal Audit stated there were three reports, all of which had an effective opinion. 

On the proposal of Councillor Lynch, seconded by Councillor King it was

RESOLVED

That Audit and Governance Committee considers and comments upon the presented Internal Audit report(s).