Local democracy

Agenda, decisions and minutes

Venue: Committee Room 1 - City Hall, Bradford. View directions

Contact: Fatima Butt - 01274 432227 

Items
No. Item

8.

DISCLOSURES OF INTEREST

(Members Code of Conduct - Part 4A of the Constitution)

 

To receive disclosures of interests from members and co-opted members on matters to be considered at the meeting. The disclosure must include the nature of the interest.

 

An interest must also be disclosed in the meeting when it becomes apparent to the member during the meeting.

 

Notes:

 

(1)       Members may remain in the meeting and take part fully in discussion and voting unless the interest is a disclosable pecuniary interest or an interest which the Member feels would call into question their compliance with the wider principles set out in the Code of Conduct.  Disclosable pecuniary interests relate to the Member concerned or their spouse/partner.

 

(2)       Members in arrears of Council Tax by more than two months must not vote in decisions on, or which might affect, budget calculations, and must disclose at the meeting that this restriction applies to them.  A failure to comply with these requirements is a criminal offence under section 106 of the Local Government Finance Act 1992. 

 

(3)       Members are also welcome to disclose interests which are not disclosable pecuniary interests but which they consider should be made in the interest of clarity.

 

(4)       Officers must disclose interests in accordance with Council Standing Order 44.

 

Minutes:

In the interest of transparency all those who were Members of the West Yorkshire Pension Fund disclosed an interest.

 

Action:            City Solicitor

 

9.

INSPECTION OF REPORTS AND BACKGROUND PAPERS

(Access to Information Procedure Rules – Part 3B of the Constitution)

 

Reports and background papers for agenda items may be inspected by contacting the person shown after each agenda item.  Certain reports and background papers may be restricted. 

 

Any request to remove the restriction on a report or background paper should be made to the relevant Strategic Director or Assistant Director whose name is shown on the front page of the report. 

 

If that request is refused, there is a right of appeal to this meeting. 

 

Please contact the officer shown below in advance of the meeting if you wish to appeal. 

 

(Fatima Butt - 01274 432227)

 

Minutes:

There were no appeals submitted by the public to review decisions to restrict documents.

 

10.

REGULATION OF INVESTIGATORY POWERS ACT 2000 (RIPA) - LEVEL OF USE (QUARTERLY REVIEW) pdf icon PDF 191 KB

The City Solicitor will submit Document “E” which provides information relating to:

 

·         The number of authorised and approved covert surveillance operations by the Council for the periods 1January 2019 to 31 March 2019 and 1 April 2019 to 30 June 2019.

·         The Council’s use of covert surveillance by its own officers or the use of its CCTV equipment by the Police or Department of Work and Pensions (DWP) which must be lawfully authorised.

 

Recommended-

 

(1)     That the contents of the report be noted.

 

(2)     That the Councils continued compliance with RIPA be noted.

 

                                                                        (Richard Winter – 01274 434292)

 

Minutes:

The City Solicitor submitted Document “E” which provided  information relating to:

 

·         The number of authorised and approved covert surveillance operations by the Council for the periods 1January 2019 to 31 March 2019 and 1 April 2019 to 30 June 2019.

·         The Council’s use of covert surveillance by its own officers or the use of its CCTV equipment by the Police or Department of Work and Pensions (DWP) which must be lawfully authorised.

It was reported that the returns for Quarter 1 (1st January 2019 to 31st March 2019) and Quarter 2 (1st April 2019 to 30th June 2019) were set out at paragraph 2.3 of the report. A NIL RETURN was shown for all relevant departments which indicated that the enforcement services investigators were able to obtain evidence without the need for covert surveillance. Where not applicable appears (N/A) the criminal offences investigated by the service did not fall within the definition of serious criminal offence under RIPA 2000 namely carrying a penalty of more than six months imprisonment and thus covert surveillance of such none serious crimes could not be authorised under RIPA.

 

Members were informed that the Council owned a substantial CCTV system which assisted in the prevention and detection of crime within the City Centre and was occasionally used by the Police or Department for Work and Pensions.

 

In response to a Member’s question it was reported that the Council’s use of RIPA was similar to other local authorities.

 

Resolved-

(1)     That the contents of the report be noted.

(2)     That the Councils continued compliance with RIPA be noted.

 

                                               

 

11.

INTERNAL AUDIT ANNUAL REPORT 2018/19 pdf icon PDF 560 KB

The Director of Finance will submit Document “F” which reviews the service Internal Audit has provided to the Council during the financial year 2018/19.

 

Recommended-

 

That the work carried out by Internal Audit during 2018/19 be recognised and supported.

 

                                                (Mark St Romaine – 01274 432888)

 

Minutes:

The Director of Finance submitted Document “F” which reviewed the service Internal Audit had provided to the Council during the financial year 2018/19.

 

The purpose of the report was to inform members of the Committee about the service Internal Audit had provided to the Council during the financial year 2018/19.

 

In particular Members were advised of the following:-

 

·         Internal Audit completed 93% of the 2018/19 audit plan which, was above the target of 90%.

 

·         Internal Audit’s Client satisfaction identified that 98% of the respondents said that the “recommendations were useful and realistic” and believed that the audit was “of benefit to management.”

 

·         100% of all high priority recommendations made from the work undertaken were accepted by management.  

 

It was reported that significant progress had been made in relation to the Internal Audit Peer Review which was highlighted in the actions taken in the Internal Audit Quality Assurance Improvement Plan (Appendix “C” to Document “F”).

 

Members were informed that on going concerns included computer audits; no computer audits were performed in 2018/19; the service did not have a specialised computer auditor following the cessation, in October 2017, of the joint working arrangement with Wakefield Council.  The lack of computer audit coverage and assurance in 2018/19 represented a risk exposure for the Council, which was being addressed in 2019/20, where Salford Council, who provide Computer Audit Services for a number of Councils and organisations in the North West, would be completing an Audit Needs assessment of Bradford’s ICT functionality.  Once this had been completed a decision would be made how to fulfil this requirement in 2019/20.  Salford Council had indicated they would be willing to provide Computer Audit Services for Bradford Council on a Service Level agreement or contractual basis.

 

Members were informed that the other significant concern related to the two follow up audits of Direct Payments reported in April 2018 and March 2019 as both gave an ineffective opinion. The March 2019 report acknowledged that some progress had occurred but repeated the same concerns and recommendations made in the April 2018 report for management to action as implementation had been delayed until October 2019. As a consequence the safeguarding and fraud vulnerabilities reported in the direct payments system had not yet been resolved and there was increased exposure to these risks since they were first reported to management in September 2016.   

 

In relation to the significant concerns relating to direct payments the Assistant Director, Commissioning reported that:

 

·         There were 1066 people in receipt of direct payments.

·         Good progress was being made with actions from the follow up report.

·         A new suspension and termination policy had been developed and was being embedded in practice.

·         A new manager was now in place and trajectories to bring the backlog of audits to completion was being developed.

·         A business case would be prepared if demand could not be met with current resources. Additional administrative support was now in place.

·         A proportionate risk based matrix to determine frequency of audit, from Wakefield authority  ...  view the full minutes text for item 11.

12.

EXCLUSION OF THE PUBLIC

Recommended –

 

That the public be excluded from the meeting during the

consideration of the items relating to minutes of the West

Yorkshire Pension Fund Investment Advisory Panel meeting

held on 25 April 2019 because the information to be considered is exempt information within paragraph 3 (Financial or Business Affairs) of Schedule 12A of the Local Government Act 1972.  It is also considered that it is in the public interest to exclude public access to this item.

 

Minutes:

Resolved –

 

That the public be excluded from the meeting during the

consideration of the items relating to the minutes of the West

Yorkshire Pension Fund Investment Advisory Panel meeting

held on 25 April 2019 because the information to be considered is exempt information within paragraph 3 (Financial or Business Affairs) of Schedule 12A of the Local Government Act 1972.  It is also considered that it is in the public interest to exclude public access to this item.

 

13.

MINUTES OF WEST YORKSHIRE PENSION FUND (WYPF) INVESTMENT ADVISORY PANEL HELD ON 25 APRIL 2019

The Council’s Financial Regulations requires the minutes of meetings of the WYPF be submitted to this Committee.

 

In accordance with this requirement, the Director of West Yorkshire Pension Fund will submit  Not for Publication Document “G” which reports on the minutes of the meeting of the WYPF Investment Advisory Panel held on 25 April 2019.

 

Recommended –

 

That the minutes of the West Yorkshire Pension Fund Investment Advisory Panel held on 25 April 2019 be considered.

 

                                                            (Rodney Barton – 01274 432317)

Minutes:

The Council’s Financial Regulations requires the minutes of meetings of the WYPF be submitted to this Committee.

 

In accordance with this requirement, the Director of West Yorkshire Pension Fund submitted  Not for Publication Document “G” which reported on the minutes of the meeting of the WYPF Investment Advisory Panel held on 25 April 2019.

 

Resolved –

 

That the minutes of the West Yorkshire Pension Fund Investment Advisory Panel held on 25 April 2019 were considered.

 

                                               

 

14.

WEST YORKSHIRE PENSION FUND REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2019 pdf icon PDF 348 KB

The Director of West Yorkshire Pension Fund will submit Document “H” which provides the West Yorkshire Pension Fund’s financial position for the year ended 31 March 2019.  The accounts have been prepared in accordance with:

 

·         CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2018/19

·         CIPFA Guidance on Accounting for Local Government Pension Scheme Management Costs.

·         Pensions Statement of Recommended Practice 2007

·         International Financial Reporting Standards (IFRS), as amended for the UK public sector

 

Recommended-

 

That the West Yorkshire Pension Fund Audited Report and Accounts for 2018/19 be approved.

 

                                                            (Ola Ajala – 01274 434534)

 

Additional documents:

Minutes:

 

The Director of West Yorkshire Pension Fund submitted Document “H” which provided the West Yorkshire Pension Fund’s financial position for the year ended 31 March 2019.  The accounts had been prepared in accordance with:

 

·         CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2018/19

·         CIPFA Guidance on Accounting for Local Government Pension Scheme Management Costs.

·         Pensions Statement of Recommended Practice 2007

·         International Financial Reporting Standards (IFRS), as amended for the UK public sector

 

It was reported that:

 

·         The value of the Fund increased from £13.6 billion in 2018/19 to £14.4 billion by end of 2019/20. The increase in value was the result of positive market movement during 2018/19.

·         During the 2018/19 financial year a large scale bulk transfer of assets for First Bus West Yorkshire of £492.1m (estimate of £450m was used in the 2017/18 account) to Greater Manchester Fund was completed. The increase was due to favourable investment performance during 2018/19.

·         In 2018/19 the Fund made a total of £0.91 billion return on investments, this was made up of investment income of £0.48 billion and increase in market value of £0.43 billion. Investment performance for the year was 7%, this was provided in a report by Portfolio Evaluation Ltd (PEL) an independent investment analytic firm. This was 1% above the benchmark target of 6%.

·         The actuarial valuation at 31 March 2016 determined that WYPF funding level was 94% one of the highest funding levels within LGPS in the last valuation. The latest update provided by Aon gave a funding level of 108%. This improvement is due to the strong financial markets since the 2016 valuation. As this was merely an updated funding level, it would not provide any cash flow benefit to employers.  2019 was a valuation year and work was in progress with Aon to provide the latest funding result for WYPF. 

·         Membership numbers increased by a moderate figure from 286.5k to 291.5k an increase of 2%. Employer number increased by 2 from 471 to 473. Whilst there were moderate increases in member and employer numbers, pension administration workload continued to increase due to new regulations, covenant work and changes in employers profiles especially new academies and academies merging to form new groups.

·         The cash flow position was positive; assets were not being sold to pay  pensions this position would continue for another 10 years; the fund was quite robust.

·         The latest cost of services data collected across the UK for 2017/18 showed the Fund to have the lowest costs again, WYPF total cost was £36.45. The comparative figure for 2018/19 for WYPF was £34.16 a small reduction. Putting the service and cost performance together showed that the Fund delivered a very high level of value for money for members and employers.

·         20 key performance indicators had been selected from a list of services delivered to WYPF members in 2018/19 to report in the account, the following five performance indicators were important, all having met the target timescale in over 90% of cases:

 

          Payment  ...  view the full minutes text for item 14.

15.

AUDIT COMPLETION REPORT 2018/19 - AUDIT OF WEST YORKSHIRE PENSION FUND pdf icon PDF 107 KB

The External Auditor will present Document “I” which summarises the findings of the audit of West Yorkshire Pension Fund’s Financial Statements for the year ended 31 March 2019.

 

Recommended-

 

That the Committee:

 

·         Consider the unadjusted misstatements schedule (Section 4); and

·         Approve the letter of requested management representations (Appendix A) including the reasons for not amending the unadjusted misstatements.

 

(Sharon Liddle – 07881 283343)

 

Additional documents:

Minutes:

The External Auditor presented Document “I” which summarised the findings of the audit of West Yorkshire Pension Fund’s Financial Statements for the year ended 31 March 2019.

 

It was reported that the audit work had been substantially completed and, subject to satisfactory completion of the outstanding work, at the time of issuing the report External Audit had:

 

  • Anticipated issuing an unqualified opinion, without modification on the financial statements.
  • Anticipated concluding that the Pension Fund Financial Statement’s within the Pension Funds Annual Report were consistent with the Pension Fund financial statements within the Statement of Accounts of the Council.
  • The 2014 Act required External Audit to give an elector or any representative of the elector, the opportunity to question External Audit about the accounting records of the Pension Fund and to consider any objection made to the accounts. No questions had been received.

 

An update on the outstanding matters was reported as follows:

 

  • The review of material journals was complete there were no issues to report.
  • Work on unquoted investments was complete and there were no issues to report.
  • IAS19 Assurance letter had now been issued.
  • Information within the Pension Fund Annual Report was consistent with the financial statements within Bradford Council’s Statement of Accounts.
  • Work had been completed with a number of disclosure amendments.

 

Members were informed that the Committee would receive an outstanding matters follow up letter prior to signing the auditor’s report. None were issued by the auditor.

 

In relation to Disclosure amendments:

 

  • Note 15: The fair value of hedge funds and property funds had been classified between quoted and unquoted in the current and prior year. There was previously one balance for hedge funds and property.
  • Note 18: Sensitivity of assets at level 3: Comparative table amended to correctly reflect level 3 property funds.
  • Note 18 Valuation hierarchy: Comparative table amended to correctly reflect property funds between levels.
  • Note 19 Financial Instruments:  Amended to remove direct property of £7,250,000 from disclosures.

 

 

 

 

 

In response to a Members’ question it was reported that the new User Management forms and workflow to be launched later in 2019 by Bradford ICT would improve the closure and withdrawal of access to systems for staff who exit the Council’s employment.

 

Resolved-

 

That the Committee:

 

·         Considered the unadjusted misstatements schedule (Section 4); and

·         Approved the letter of requested management representations (Appendix A) including the reasons for not amending the unadjusted misstatements.

 

Action:           External Audit

16.

AUDIT COMPLETION REPORT 2018/19 - AUDIT OF CITY OF BRADFORD METROPOLITAN DISTRICT COUNCIL pdf icon PDF 114 KB

The External Auditor will present Document “J” which summarises the findings from the audit of the City of Bradford Metropolitan District Council for the year ended 31 March 2019.

Recommended-

 

That the Committee is asked to:

 

·         note the contents of the Audit Completion Report prior to approving the Statement of Accounts including consideration of the summary of misstatements at Section 4; and

·         approve the letter of representations requested at Appendix A.

 

(Mark Dalton –  0113 387 8735)

 

Additional documents:

Minutes:

The External Auditor will present Document “J” which summarised the findings from the audit of the City of Bradford Metropolitan District Council for the year ended 31 March 2019.

 

It was reported that subject to the satisfactory completion of the outstanding work which was almost complete and areas of work completed to date, External Audit had the following conclusion:

 

  • Anticipated issuing an unqualified opinion, without modification, on the financial statements.
  • Anticipated concluding that the Council had proper arrangements in place to secure economy, efficiency and effectiveness in its use of resources, except for the areas assessed as inadequate by Ofsted in their report on children’s social care services in October 2018.
  • Anticipated completing the work on Whole of Government Accounts submission, in line with the group instructions issued by the National Audit Office, by the deadline of 13 September 2019.  External Audit anticipated reporting that the Whole of Government Accounts submission was consistent with the audited financial statements.
  • The 2014 Act required External Audit to give an elector, or any representative of the elector, the opportunity to question on the accounting records of the Council and to consider any objections made to the accounts. No objections had been received in respect of the 2018/19 statement of accounts.

 

Members were provided with an update on the matters outstanding in the report which included:

 

  • In completing the work on Property, Plant and Equipment (including Investment Property) the following matters had been identified and had been adjusted for by management: the revaluation of 3 secondary schools was based on building indices as at 1 April 2018 rather than 31 March 2019.  This required an amendment of £2.302m to the in year land and building revaluation figure and the revaluation reserve; the valuation movement for 4 swimming pool buildings had correctly included the revalued amount for land and as such the land element had been double counted, resulting in assets being overstated by £1,039K; there were no other matters in relation to this to bring to Members attention.
  • Pensions work had been completed and there were no matters to bring to Members attention.
  • Work had been completed on the physical verification/existence testing of a sample of heritage assets and there were no matters to bring to Members attention.
  • Work on cash and cash equivalents had been completed and there were no matters to bring to Members attention.
  • Work had been completed on expenditure and remuneration disclosures had been completed and there were no matters to bring to Members attention.
  • Work had been completed on non material notes to the financial statements and there were no matters to bring to Members attention.
  • Work on the Council’s Whole Government Accounts remained in progress, as reported in the Audit Completion Report. External Audit anticipated completing the work by the National Audit’s Deadline of 13 September 2019.
  • The final versions of the Annual Government Statement and amended financial statements had been completed and there were no matters to bring to Members attention.
  • Final post balance sheet events review  ...  view the full minutes text for item 16.

17.

STATEMENT OF ACCOUNTS 2018/19 pdf icon PDF 166 KB

The 2018-19 Statement of Accounts (SOA) have been externally audited and are now presented to the Committee for approval. The External Auditor (Mazars) has reported their findings in two separate Audit Completion Reports, one for the Council and another for the West Yorkshire Pension Fund. Members are asked to consider these before approving the SOA.

 

The Director of Finance will submit Document “K”  which presents the 2018-19 audited Statement of Accounts (Appendix A) and summarises the key financial points.

 

Recommended-

 

That the 2018-19 Statement of Accounts be approved and signed by the Chair of the Committee.

 

                                                  (James Hopwood - 01274 432882)

 

 

Additional documents:

Minutes:

The 2018-19 Statement of Accounts (SOA) had been externally audited and were now presented to the Committee for approval. The External Auditor (Mazars) had reported their findings in two separate Audit Completion Reports, one for the Council and another for the West Yorkshire Pension Fund. Members were asked to consider these before approving the SOA.

 

The Director of Finance submit Document “K”  which presented the 2018-19 audited Statement of Accounts (Appendix A) and summarised the key financial points.

 

The key financial implications as at 31 March 2019 from the 2018-19 statement of accounts were summarised:

 

·         The General Fund Balance ended the year at £15m and earmarked reserves on £166m. Both these amounts represented cash funds, but which could be spent once only. The General Fund Balance was held in accordance with statute; the purpose was as a safety net against unexpected variations in the Council’s annual expenditure – which was £1.1 billion as shown in the cost of services in the Comprehensive Income and Expenditure Statement. The earmarked reserves were held to protect against specific risks and commitments. For example, this included the increasing volatility of the Council’s funding as Government grants reduce.

·         The Council spent £84m on long term infrastructure, as part of its Capital Programme. £31m of this spend was financed by borrowing. £5m was financed by receipts from the sale of property. £43m was financed by grants, with the remainder from miscellaneous sources.

·         At the end of the year, the Council also held £47m of grants provided by external public sector bodies, which would be used in the future to finance the Capital Programme.

·         Working capital was positive with short-term debtors and available cash higher than short-term creditors.

·         The Council had £700m of borrowing for infrastructure spend. £220m was temporarily borrowed from the Council’s own cash held in earmarked reserves in order to reduce interest payments. £4m relates to miscellaneous historical debt. £314m was actual borrowing from the Public Works Loan Board. £162m was in the form of contractual Private Finance Initiative liabilities. This last part of the borrowing was funded by an annual revenue grant from the Government, so currently there was no cost to the Council. However, this grant would be used up over a shorter period than was being used to repay the borrowing, so eventually there would be an annual cost arising from Private Finance Initiative Liabilities.

·         Borrowing was in line with projections. Amounts previously set aside to pay for it were estimated at a higher proportion than outstanding usage on related land and buildings. As a result, the Council paid back to itself £23m in 2018-19 from these amounts set aside, transferring the cash amount into earmarked reserves. This followed a transfer for a similar amount in the 2017-18 financial year.

·         Against the £700m of borrowing, the Council had £1,050m of land, buildings, equipment and other infrastructure. The value of the Council’s long-term property was therefore significantly higher than the outstanding debt relating to it.

·         Other considerations in any comparison  ...  view the full minutes text for item 17.