A question session with the Lead Councillor for Finance and Property, Councillor Richard Lucas.
Councillor Lucas’s specific areas of responsibility: Finance and Accounting (General Fund/Housing Revenue Account); Internal Audit; Procurement; Revenues and Benefits; Property and Land Assets; and Engineers and Facilities.
Minutes:
The Chairman welcomed the Lead Councillor for Finance and Property, Councillor Richard Lucas and invited him to make an introductory statement.
The Lead Councillor for Finance and Property referred to the challenges experienced during the municipal year since May, including turnover in personnel, organisational change, and financial issues, and concluded by praising the work of the Council’s finance officers.
In response to a question from a Committee member about organisational challenges revealed within the Council’s finance function, the Lead Councillor for Finance and Property outlined the Council’s financial problems and concerns with the capability of the Council to address such issues. He indicated to the Committee that the Council had been short of both skills and capacity to deal with its financial issues, the Council’s organisational structure was unsatisfactory, and there had been an apparent lack of sound financial reporting to inform timely decision-making within Council services. In addition, the Lead Councillor for Finance and Property advised the Committee that failings within the financial reporting at the Council in the past had made control of expenditure more difficult. He indicated the need to balance the Council’s budget and reduce the Medium Term Financial Plan and suggested the importance of establishing improved processes and systems that would enable improvements in financial accountability and delegated decision-making by officers at the Council.
A member of the Committee expressed concerns about costings relating to the Housing Revenue Account (HRA) and queried the impact of the large overspend and asked whether a budget had been set aside for possible legal challenges that might result. In addition, the cost of related investigations and the apparent lack of financial oversight were questioned. In reply, the Lead Councillor for Finance and Property advised of improvements in the reporting of contract-spending at the Council. The Joint Executive Head of Finance advised that £300k had been set aside for governance reviews, most of the overspend had occurred through the HRA’s capital programme, and specialist lawyers had been instructed to ensure the Council avoided giving grounds for any legal challenges.
In response to a query from another member of the Committee, the Joint Executive Head of Finance advised that most of the £300k set aside for governance reviews had been allocated from the General Fund and a small element might come from the HRA.
In reply to a question, the Joint Executive Head of Finance confirmed that service accountants now met monthly with budget holders within services to monitor spending, with reports sent monthly to heads of service and directors.
In response to questions, the Lead Councillor for Finance and Property noted the importance of financial reporting within local government and the value to the Council of interim financial personnel to help establish lasting practices and behaviours.
In reply to a query about past financial management at the Council, the Lead Councillor for Finance and Property referred to the impact from the Council’s Future Guildford transformation programme and the introduction of a new computer system to manage the Council’s budget, together with the emergency accounting requirements necessitated by the Covid pandemic.
The Lead Councillor for Finance and Property and the Joint Executive Head of Finance outlined the effect on the Council of the backlog in local authority audits and the actions the Council was taking in preparation for the next audit of annual accounts.
The Chairman thanked the Lead Councillor for Finance and Property for his attendance.