Agenda item

To inform the Committee of the result of Grant Thornton’s consideration of whether the Council has put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources. 

Item 9 was taken before item 8.

Witnesses:

Paul Dossett, Grant Thornton

Nikki O’Connor, Strategic Finance Business Partner (Corporate)

Key points raised in the discussion:

1.    The Grant Thornton representative noted that under the National Audit Office (NAO) Code of Practice regulations they were required to provide a Value for Money (VfM) assessment which considered whether the arrangements were adequate to facilitate that.

2.    The Grant Thornton representative noted that the three arrangements reviewed were: financial sustainability, governance, and improving economy, efficiency and effectiveness:

·         Financial sustainability was rated Amber, it was Red in many other local authorities with more Section 114 notices likely to be issued; Grant Thornton recognised the huge challenges ahead around the medium-term financial plan, but due to the Council’s understanding of the risks and willingness to take some difficult decisions the Council was in a lower risk category compared to others.

·         Governance included arrangements for risk management, internal audit and counter fraud; that was rated Amber as the Council was in a strong position with embedded arrangements.

·         Improving economy, efficiency and effectiveness contained two aspects: the work of external inspectors such as Ofsted, and internal arrangements and processes to ensure VfM, such as how the Council works in partnership with others. It was rated Green and was an outlier compared to many councils, the Council was in the top quartile.

3.    A Committee member presumed that the recommendations relevant to the Committee were being factored into its work plan. She asked who the Council could be compared to in the top quartile. The Grant Thornton representative noted that Surrey’s position was strong, towards the top of the group compared to other counties in the area which had significant financial challenges such as: Kent, West and East Sussex, Essex, Hertfordshire, Hampshire. However, no council was more than a few bad decisions away from an issue particularly around financial sustainability and demand pressures in children’s services. The Committee member noted that was useful for Surrey to benchmark itself against.

4.    The Chairman noted the hard work and in terms of Surrey ever achieving a Green rating for financial sustainability he noted that the Council would have to eliminate the risks around the budget gap which would be almost impossible with the financial challenges it faced. The Strategic Finance Business Partner (Corporate) was pleased with the report noting the hard work undertaken over several years to improve the Council’s financial sustainability and financial management arrangements and stressed that the challenging financial environment should not be underestimated. The Cabinet Member for Finance and Resources agreed with the comments made, he believed that the Council had both the processes and the governance in place to deal with those challenges ahead; the transformation programme would help address that.

5.    A Committee member welcomed the report which was transparent containing a detailed level of information, he thanked Finance officers and Grant Thornton.

6.    The Chairman thanked Grant Thornton for all their work over the years.

RESOLVED:

Noted the report and considered the improvement recommendations outlined in Grant Thornton’s Annual Report on Surrey County Council for 2022/23 (page 14, 21 & 27 of the Annex).

Actions/further information to be provided:

None.