Audit & Governance Committee - Monday 16 February 2026, 7:00pm - Epping Forest District Council webcasts

Audit & Governance Committee
Monday, 16th February 2026 at 7:00pm 

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  1. Cllr Jon Whitehouse
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  1. Laura Kirman
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  1. Owen Sparks
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  3. Cllr Nigel Bedford
  4. Owen Sparks
  5. Cllr Nigel Bedford
  6. Owen Sparks
  7. Cllr Nigel Bedford
  8. Cllr Darshan Sunger
  9. Owen Sparks
  10. Cllr Darshan Sunger
  11. Owen Sparks
  12. Cllr Jon Whitehouse
  13. Sarah Marsh
  14. Sue Linsley
  15. Cllr Jon Whitehouse
  16. Sue Linsley
  17. Cllr Jon Whitehouse
  18. Cllr Martin Morris
  19. Sue Linsley
  20. Cllr Martin Morris
  21. Sue Linsley
  22. Cllr Martin Morris
  23. Cllr Jon Whitehouse
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  1. Sarah Marsh
  2. Cllr Jon Whitehouse
  3. Cllr Michael Owen
  4. Cllr Jon Whitehouse
  5. Owen Sparks
  6. Cllr Darshan Sunger
  7. Sarah Marsh
  8. Cllr Darshan Sunger
  9. Owen Sparks
  10. Cllr Nigel Bedford
  11. Cllr Jon Whitehouse
  12. Cllr Darshan Sunger
  13. Sarah Marsh
  14. Cllr Jon Whitehouse
  15. Sarah Marsh
  16. Cllr Jon Whitehouse
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  1. Sarah Marsh
  2. Cllr Jon Whitehouse
  3. Cllr Nigel Bedford
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  5. Cllr Martin Morris
  6. Sarah Marsh
  7. Cllr Martin Morris
  8. Sarah Marsh
  9. Cllr Jon Whitehouse
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  1. Owen Sparks
  2. Cllr Jon Whitehouse
  3. Cllr Michael Owen
  4. Owen Sparks
  5. Cllr Michael Owen
  6. Cllr Jon Whitehouse
  7. Cllr Michael Owen
  8. Cllr Jon Whitehouse
  9. Owen Sparks
  10. Cllr Jon Whitehouse
  11. Cllr Nigel Bedford
  12. Cllr Jon Whitehouse
  13. Cllr Michael Owen
  14. Cllr Jon Whitehouse
  15. Owen Sparks
  16. Cllr Jon Whitehouse
  17. Cllr Darshan Sunger
  18. Cllr Jon Whitehouse
  19. Owen Sparks
  20. Cllr Jon Whitehouse
  21. Owen Sparks
  22. Cllr Jon Whitehouse
  23. Cllr Martin Morris
  24. Owen Sparks
  25. Cllr Martin Morris
  26. Cllr Jon Whitehouse
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  1. Owen Sparks
  2. Cllr Jon Whitehouse
  3. Cllr Nigel Bedford
  4. Cllr Jon Whitehouse
  5. Owen Sparks
  6. Cllr Jon Whitehouse
  7. Owen Sparks
  8. Cllr Jon Whitehouse
  9. Owen Sparks
  10. Cllr Jon Whitehouse
  11. Cllr Martin Morris
  12. Owen Sparks
  13. Cllr Martin Morris
  14. Owen Sparks
  15. Cllr Michael Owen
  16. Owen Sparks
  17. Cllr Jon Whitehouse
  18. Cllr Michael Owen
  19. Owen Sparks
  20. Cllr Jon Whitehouse
  21. Owen Sparks
  22. Cllr Jon Whitehouse
  23. Cllr Michael Owen
  24. Owen Sparks
  25. Cllr Jon Whitehouse
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  1. Owen Sparks
  2. Cllr Jon Whitehouse
  3. Cllr Martin Morris
  4. Owen Sparks
  5. Cllr Martin Morris
  6. Owen Sparks
  7. Cllr Jon Whitehouse
  8. Cllr Nigel Bedford
  9. Owen Sparks
  10. Cllr Jon Whitehouse
  11. Owen Sparks
  12. Cllr Jon Whitehouse
  13. Cllr Michael Owen
  14. Cllr Jon Whitehouse
  15. Owen Sparks
  16. Cllr Jon Whitehouse
  17. Owen Sparks
  18. Cllr Jon Whitehouse
  19. Owen Sparks
  20. Cllr Jon Whitehouse
  21. Cllr Darshan Sunger
  22. Owen Sparks
  23. Cllr Jon Whitehouse
  24. Webcast Finished

1 Webcasting Introduction

Cllr Jon Whitehouse - 0:00:00
Nice to see some less frequent faces as well as some frequent faces, so both officers and
members, so thanks for coming along.
Let me read the webcasting announcement.
The meeting is to be webcast, so I'd like to remind everyone that it will be filmed
live and recorded and uploaded to the internet and so capable of repeated viewing, so by
participating, your consenting to be filmed and the use of those images and
recordings. If you are on Teams and don't want to be captured you can turn your
video off but it's helpful when you speak to actually see people speaking
and please turn your microphones on before you speak and off when you've

2 Apologies for Absence

finished. Thanks very much. Do you have any apologies for absence? We have an
Laura Kirman - 0:00:56
Apology for absence from Councillor Hadley and we have a substitute for Councillor Hadley, which is Councillor Bedford

3 Declarations of Interest

And from the vice -chairman I think
Sorry, I'm from Cecil. Sorry Cecil in your absence
Okay, are there any declarations of interest?
Cllr Jon Whitehouse - 0:01:16
Nope the minutes on pages four to six any issues of accuracy on the minutes
Are there any matters arising?
There's one we'll deal with under the work programme.
So shall we move on to the work programme?

4 Minutes

5 Matters Arising

That's on page seven.

6 Audit & Governance Committee - Work Programme

Obviously, we're coming to the end of the year.
There's one item you'll see in the minutes that we asked to
look a bit more about some of the issues that have come up at
the committee relating to procurement over the year,
particularly where we've got procurement policies,
making sure they're embedded in the way the organisation actually works in practise.
So we're looking to slot something into a future agenda.
Possibly March, did we say, was possible for that?
Okay, so if members are happy with that, we'll add that to March's work programme.
And yours has got the emails about the additional meeting happening on the 24th to look at the accounts.
Just to warn you, the papers may come out later than usual for that, because there's a lot of work going on to dot the i's and cross the t's.
But we'll have something to look at on the 24th, I'm assured.
Did you want to add anything on that?

7 Risk Management

or is there enough? Okay. So we can move on to our next item, which I think is the risk
management. Owen.
Owen Sparks - 0:02:58
So this is the quarterly update on the corporate risks. So members are asked to review the
approval. So the register's been reviewed by the senior
district team and the corporate governance group and there are two changes since the
committee last reviewed the risk register. One is to deliver in a balanced budget a sustainable
median term financial plan. So that risk has been reduced from a 15 to a 10 which reflects
the fact that we should hopefully be approving a balanced budget on Thursday at Council and
the MTFP, the medium term financial plan, the forecast across the period is looking
more sustainable than it was previously. So it's reflecting that progress that's been
made during the year on that one. The other risk that we've adjusted is the
community cohesion risk. That was a 20. Members were a member from last time. There was quite
a lot of discussion at this meeting around it previously. We have reduced that to a 16,
which is reflecting slight easing of tensions in the town and strengthened partnership arrangement
and training internal controls around that.
But what we will be doing is keeping an ongoing review
of that because we appreciate that is fluid
and can change from day to day almost.
So we'll be keeping a review of that.
So they are the two changes.
The other risks remain as they were previously.
Again, you couldn't expect too much movement
in the corporate risks
because they are those high level risks.
And some of the key areas remain,
homeless and special security, those sorts of risks that really we spoke about on previous
occasions.
As I said, the Order of Government Committee is asked to consider the updated corporate
risk register and to refer to cabinet for approval and suggest any changes they may
feel is appropriate.
Thank you.
Okay, thank you for that.
Councillor Bedford.
Cllr Jon Whitehouse - 0:04:55
Thank you, Chairman.
Good evening.
Cllr Nigel Bedford - 0:04:58
I did have a question.
When I was looking through the corporate risks and STR001 local government reorganisation,
I'm just a bit concerned that the risk is only recorded at around 12 on page 10.
I wonder if there's any comments on that because on the risk basis I would have thought there
is a possibility that it's either going to be delayed or knock on.
Does the risk not need to be higher?
I would have thought it was closer to a red than sitting in an amber.
Thank you.
Owen Sparks - 0:05:31
I think again this is one of these areas that we need to keep a constant view of.
It was reduced really to reflect the fact that the business cases have been submitted,
that there's sort of cross Essex joint working, there's work streams that have been set up
to manage the implementation of LGR, but obviously there are ongoing risks.
Obviously we'll get the mighty two decisions soon and we'll review it on an ongoing basis.
But it is very live, but that's why it was downgraded, to reflect business case submitted,
that infrastructure has now been reformed and there's project governments around the
delivery of the project.
Yeah.
Thank you.
Just come back on that.
Cllr Nigel Bedford - 0:06:16
Obviously with today's news you couldn't have predicted what's come out today with regard
to central government and the change in going through the local elections.
Do you think that might have an impact now that we might need to consider in raising
that risk?
Owen Sparks - 0:06:32
I think political uncertainty is certainly going to add to the risks of delivering LGR.
I think again we'll need to look at it in the round over the coming weeks again to see
that needs to go up.
Definitely it's going to impact on it.
Okay, thanks for that.
Councillor Sringo.
Thank you, Chairman.
Cllr Nigel Bedford - 0:06:54
Cllr Darshan Sunger - 0:06:55
I just wanted to raise on page 9, HRA 001, increasing demand from homeless, increasing
financial need.
Now, we had a residual risk score of 16 and it's still a 16.
Have we taken into account emerging risks?
For instance, the Renters' Rights Act 2025, which may have some sort of implications for
our own housing stock.
Maybe you want to comment on that.
Thank you.
Owen Sparks - 0:07:25
I think we can, yes we have.
I think the implications for the Act have been coming almost in advance of the Act becoming
law as well with the private landlords, that market's shrinking.
So yes it is.
Again, we are predicting significant increase in demand over the forecast period, although
we have got some mitigations in place to try and manage that demand.
But we think obviously it's not going to go away, that pressure from vulnerable residents,
so we expect it to carry out level.
I wouldn't have thought over the short to medium term that risk is going to reduce significantly
at the moment the way things are going and the various things that are impacting that risk.
Cllr Darshan Sunger - 0:08:14
So, are you saying then that the risk is going to be mitigated over a period of time, yet
the score is still at 16 and the direction of travel is either way, so you're saying
it's going to go the other way, yeah?
Thank you.
Owen Sparks - 0:08:30
There are mitigations in place to try and manage the increase in demand, but we expect
the demand to continue to increase, so further mitigations will be required as time progresses
that the service is working on what they may be over the medium term.
So we have a number of mitigations in place,
we know demand is increasing, but we expect it to carry on increasing
so that it will increase and we'll need more mitigations
and more capacity in the market.
And again, a lot of that will be dependent on wider macroeconomic
national issues as well.
Thank you, Chairman.
Okay, thanks for that.
Cllr Jon Whitehouse - 0:09:04
There's a bit more about the mitigations in the appendix,
And I was going to ask about the business continuity plans, which has been a risk that's
been in here for a long time. You look at the current controls column, and the last
action there is December 2024, and then there's further actions happening this spring. And
I just wondered what was making it so challenging to get business continuity arrangements in
place.
Sarah Marsh - 0:09:47
Yes, so I've just completed an audit of business continuity arrangements and looked at the
corporate risk as part of the review.
So the controls that are down there are actually in place and the further actions are also
in the audit recommendations and it's most likely it's down to probably resource to see
some of these over the line.
But a lot of work has been done in this area,
Sue Linsley - 0:10:30
and the completion dates and recommendations are actually
going to be fairly soon.
Cllr Jon Whitehouse - 0:10:39
So it's the expectation that completing those recommendations
and getting them actioned will then have an impact on the risk
assessment here?
Yes, that's right.
Sue Linsley - 0:10:47
I think once they've been completed,
then we will be able to reduce that risk.
Okay, thank you for that.
Cllr Jon Whitehouse - 0:10:53
Was there anything else on this report?
So this report will go to cabinet, but as you said, we've got the option to comment,
we've got the option to make recommendations for changes if that's what members want to
recommend.
Otherwise we can note as it is, officers have heard the questions we've asked and we can
move on. Oh, beg your pardon. Councillor Moyes.
Yes, I just want a quick question on the business continuity.
Cllr Martin Morris - 0:11:27
Likelihood has changed, certain to highly likely.
But didn't seem, just wondered why that had happened.
Sorry.
I'm sorry, can you repeat the question?
Sue Linsley - 0:11:38
Cllr Martin Morris - 0:11:41
Yeah, it's just the corporate risk summary position, January 26.
So you've got CRS002.
Is that right?
Am I reading this correctly?
Business continuity.
Sue Linsley - 0:11:54
OS002 is the community cohesion.
Oh, is it?
Cllr Martin Morris - 0:11:57
Okay, so that's mine.
Okay, thank you.
Cllr Jon Whitehouse - 0:12:02
Okay, so we're happy with that.
Thank you, everyone.
And we can move on to the internal audit progress report,

8 Internal Audit Progress Report

which starts on page 16.
Sarah Marsh - 0:12:18
I am going to go through the whole report and then happy to take questions afterwards
rather than interrupting me, if you don't mind.
The internal audit plan for 2526, I am asking for deferral of three of them.
So the local plan delivery, it felt that with LGR coming along and it's a long -standing
plan whether there is be value to actually look at that.
After speaking with the chair today, it looks like that one will go ahead and we can defer
that to next year and do it earlier in the year.
And then we've got the QALYST Commercial and Terra Verde services.
We're going to look at the governance arrangements there.
So there's been a member working group looking at the governance arrangements and maybe how
we're going to maybe doing that differently.
So there's absolutely no point doing it at the moment.
And Owen has asked internal audit to have a look at his proposals to make sure it looks
sensible.
We then have three final reports that we issued since our last meeting.
So we've got the IT strategy, we've given that substantial assurance.
that's the highest rating that we can give. Really pleasing that we do have an IT strategy,
it's covering the next three years and it has already incorporated LGR and transformation
type work. A couple of areas that just needs a little bit more work around the web content
accessibility guidelines and making sure that around the inclusion and the inclusivity as well.
They are already in hand and being dealt with.
We have looked at accounts payable.
Again, that is good news.
It is substantial assurance.
This is an audit that we call a key financial control audit.
It is a bog standard audit that we do to make sure processes are working as expected and
those controls are in place.
We are really pleased to say that they are all in place and working as expected, especially
around supplier set up, which is where you can find an area of fraud happening.
So there's a little bit of work being done around the DMA, the decision making matrix,
and this is a separate document to the, you've got contract standing orders and financial
regulation sets out exactly what you have to do and you have to follow that. This just
pulls, it's a document that just pulls out the authority levels for people so they, at
at a glance they can see exactly what they can authorise,
what their limits are, and it wasn't quite aligned,
so just a little bit of work around there.
We've got tree strategy,
this has been given limited assurance,
which is never a good news storey,
but on a positive note is that when we started the audit,
we have got a tree policy, so that's really good,
The majority of trees are mapped onto our IT system.
Daily inspections are being taken place by the tree team, but they're not formally documented.
We've got no evidence of them happening.
Also, on a positive note, we've got the safety risk assessments in place.
We're making sure that our tree people are acting safely while they're out there.
Why it's been pulled down to a limited assurance is we had an informal arrangement with Essex
County Council to deal with their trees, their highway trees, but we had no formal agreement.
So the liability was resting with us and it should be resting with Essex County Council.
We are now pulling out of that arrangement. So that's a good example where we terminate
a risk where we don't want to accept it. The tree team, when we brought to their attention
about the lack of formality around documenting every single tree and all the works that do
take place, they've taken that on board and they're working to get that done, as we said.
So on the tracker you'll see that there are three high risk recommendations in there to
show you that they have taken on board what we have said and we have deadlines to make
sure that they are actually implemented.
Moving on to the recommendation tracker at the top of page 19. You can see the three
high priority ones there. The previous one high priority one has now been completed.
With all recommendations, we don't take any recommendation off until we get the evidence
that it is in place. We don't take people's word for it.
And we've got a full medium one there as well.
I'd like to remind the Audit Committee that
we don't, I don't get my annual assurances just from the
work of the Audit Plan, so we do a lot of work in the background.
So we were asked to do some work around debt write -offs and
we were making sure that the evidence was in place
and we were doing everything we could before we had to write off a debt.
And we've also been doing a lot of work around the Economic Crime and Corporate Transparency Act.
This is a new act that came in in 23, and the duty to prevent fraud came in in September 1st last year.
This makes sure that organisations actually have the procedures and the knowledge
and the processes to make sure that we're making sure
that fraud isn't happening within our organisation.
So we have developed an action plan
and we'll be rolling that,
and we are rolling it out as we speak.
Item seven is the usual update
from the corporate fraud team.
If you remember, we had a real deluge of right to buys
that the corporate fraud team had to look at
and we vet every single one of them.
That is finally coming to an end.
We can see the light at the end of the tunnel, which means that the team will be able to
focus more on proactive work rather than reactive work.
There's details of other parts of work that they're doing there.
The last part of the report is around the Annual Governance Statement Action Plan.
It's really important that we make sure that what we said we were going to do, we're going
to do, and we're making really good progress on all of those different areas.
and we've actually got time scale to make sure that they are completed.
Thank you.
OK, thank you very much for that.
Cllr Jon Whitehouse - 0:18:58
Lots in that report.
We'll need to make decisions on the audit programme itself.
Councillor Owen.
Thank you, Chairman.
Cllr Michael Owen - 0:19:09
I just want to say something very positive, actually.
We raised in this forum probably like six months ago the AI strategy,
and I think it was safe to say at the time it was pretty non -existent.
And then I'm seeing in here
There is now a policy, training has been undertaken and I just want to say well done to all the
staff because it's really good to see and I think it can help you in lots of areas so
it's great to see.
Cllr Jon Whitehouse - 0:19:30
There will be member training on that as well, we'll be rolled out soon so keeping all that
for that folks.
Owen Sparks - 0:19:36
Thanks Councillor Shugga.
Cllr Darshan Sunger - 0:19:42
Thank you Chairman, I just wanted to pick up, thank you for the report Sarah, it's very
detailed and thank you for what you do.
Can you just confirm that the internal audit plan can confirm that it's risk -based and
has been benchmarked against the public sector internal audit standards?
Sarah Marsh - 0:20:01
So, yes, it's very much a risk -based plan.
The plan for next year will be coming to the March meeting and what we do there is list
out the corporate risks.
We put what the first line of assurance is, the second line of assurance is, and then
And then the third line of assurance is your independent insurance from internal audit.
And by doing that piece of work, by mapping the work that we've done or going to do to
the corporate risk, we make sure that we've hit every single risk or we have other assurances
for why we're not doing a particular piece of work.
We no longer have the public sector internal audit standards.
We now have the global internal audit standards as applicable to the UK public sector.
They came into effect from 1 April 2025.
As part of my year -end report that we are doing in June, I am doing a gap analysis to
make sure I am compliant with every single area in the global standards.
If I am not, I have an action plan to make sure that we will be compliant.
Thank you for correcting me there.
Cllr Darshan Sunger - 0:21:06
You are obviously well up on legislation.
Just one other question I've got for you.
You got the debt write -offs, which are actioned by the Section 151 officer.
You say, how do the debts that we wrote off in the last phase, compared to other years,
variance -wise, are we on the increase or are we getting more debts being written off?
Because that would be a concern.
Thank you.
Owen Sparks - 0:21:37
I think one of the reasons we've been looking at the Sunday debtors, and I've asked all
the people to look at the process, I think historically we perhaps haven't written off
debts and they've been uncollectable.
So what we're doing is reviewing the debts, and what happens, it means our bad debt provision
goes up offset it.
So what we're really doing is reviewing our bad debt provision at the level of debts,
and we're going through and reviewing old debts and debts that all the activity that
is economically viable has been undertaken
and then reviewing whether they're in a process
to be written off.
And obviously I can write off debts up to a certain level
and then it comes to member decisions.
So again, high level debts come to members for approval.
Okay, Councillor Epid's.
Thanks, Sarah.
Just a quick question really,
Cllr Nigel Bedford - 0:22:17
bit of praise as well at the same time, I think,
because you referred to the tree strategy
and the limited assurance,
and then in your delivery you were talking about trees
when they were not being recorded,
although being checked and not recorded,
that obviously is a high risk for the council
and it needed to be addressed.
From the second part of your report,
I think that has been addressed.
Just a bit of assurance on that.
It is important because in light of the recent incidents
that we've had, it's leaving us open to evidencing
that we are doing something about it.
So, congratulations to the team.
Yeah, I think that shows why internal
Cllr Jon Whitehouse - 0:22:56
It's not just about making sure that it sums that up.
It is about systems and risks and processes and making sure
that it's about assurance as well as financial audit.
I wanted to come back to the audit plan,
because obviously we've not done as much
as we originally planned to and I think the rest of your report demonstrates how much other work that's been going on and explains why
you can't necessarily get to every single audit as originally planned.
As we heard, I did have some concern about not looking at local plan delivery because that is something we've deferred before.
And obviously it's quite fundamental to all sorts of bits of the council and bits of the
district as a whole that we deliver what the local plan and its daughter documents expects
us to deliver.
So I think it's been agreed to look at exactly perhaps, I mean local plan delivery is a massive
subject, but possibly focusing it down to a more focused part of work to make sure that
we are on track with where we need to be.
And back to that risk thing, we're not taking on too much risk by not delivering what the
local plan expects us to deliver.
Yeah, Councillor Sinner.
Thank you, Chairman.
Cllr Darshan Sunger - 0:24:48
I just wanted to pick up on something on your report, number seven, emergency cover and
succession planning, about short staffed and lean teams creating some difficulties, some
cross training is required to cover staff absence, succession planning is not fully
developed in all the teams. Now you've put action to date as at January 26, is that going
to be monitored closely because that's really fundamentally important, especially with LGR
on our doorstep in a few years' time.
Sarah Marsh - 0:25:18
I've attended a workshop that's been given to service managers and above around LGR readiness,
and one of the key things that we're focusing on is around people's strategy and making
sure that we do have the cover and the succession planning.
So each team has been given a template to fill out where we've got to think about what
our resourcing requirements are, especially if people get pulled off into work streams
to deliver LGR. There's also going to be around have we got all our contracts, do we know
where all our data is, so the Council is very much on top of this.
Cllr Jon Whitehouse - 0:25:59
Okay, thanks. And it's still on the audit plan. Obviously, the ones which we aren't
reaching given we've got a month left, can you just update the committee on what's happening
Sarah Marsh - 0:26:14
with those? I'm not quite sure of the people strategies ones going ahead. I'm just finding
out I think there's talk about having a brand new people strategy so there's it's probably
a timing issue on that one. The climate emergency action plan we're definitely going to be doing
Hannah and I are going to be doing the health and safety compliance one for housing and
I have another auditor lined up to do the grounds maintenance one.
With the economic development one, I am not quite sure whether that is going to go ahead
or not.
We are just talking to people.
There are another three audits that we will definitely start before the end of the year
and get finished before we have to report June or July time.
Thanks very much.
Cllr Jon Whitehouse - 0:27:00
Were there any more questions or comments on this report?
Okay, so ask to approve the deferral of the QALYST and the TVS audit, really on the basis
that there's parallel work going on with the Portfolio Holder Advisory Group that's looking
at that governance and those recommendations will be looked at by internal audit when that
piece of work is complete.
The team are going to look again at the local plan audit and the other two items are for
and members happy with that.
Okay, thank you.
So we can move on to item 9,

9 Strategy and Policy Review - Audit and Governance

which is the strategy and policy review, which is Sarah again.
Sarah Marsh - 0:27:46
Thank you. So on an annual basis, this committee looks at our anti -fraud and corruption strategy
and we also note the whistle blowing policy.
So there haven't been any major changes to either document.
The anti -fraud and corruption strategy makes a referral now to the Economic Crime and Corporate
Transparency Act.
Do you like how I keep saying that?
Because I could learn what it means, or ECTA.
So you'll be hearing a lot about this, and we're going to be giving some training, hopefully,
to members around their duties around the Economic Crime and Corporate Transparency
Act.
With the whistleblowing policy it still fit for purpose and the main changes
around there was just around the contact details of who people can go to and also
pleased to say that we've introduced a whistleblowing email address. We already
have a phone number that people can call but we're going to have an email one as
well and after this meeting we're going to be publicising that to staff,
reminding them about the whistleblowing policies so we do that on a regular
basis and also about the anti -fraud the fraud response plan so that if people
have got any queries or concerns they know how to to raise that yeah thank you
Cllr Jon Whitehouse - 0:29:09
okay lots of paperwork they're relatively few changes did members have
any questions or comments they wanted to raise on either of those policies
Councillor Bedford.
Cllr Nigel Bedford - 0:29:20
Just on the document on page 31, I wonder if actually you could have put the, I know
it is further in the document, but as this is like a front cover page summary, could
we not have put the email address after the bullet point where it says introduction of
a dedicated, whistle -blowing email address, then add the email address in?
Okay.
Cllr Jon Whitehouse - 0:29:42
Okay, I think that's an odd was it?
Oh, yes, I think, yeah.
OK, well, thanks for that.
Yes, that we just asked to note.
The other policy, the anti -forwarding corruption strategy gets referred to council.
So you'll see that again when it comes up at full council.
So we can move on now to the supplementary.
Oh, sorry, Councillor Morris.
I've not got vice chairman today, so that's why I keep.
Cllr Martin Morris - 0:30:18
For the whistleblowing policy, do we know if it's effective?
I mean, is it used?
Sarah Marsh - 0:30:26
Because we often see places that have them but they never use.
Cllr Martin Morris - 0:30:27
Sarah Marsh - 0:30:30
So as I put in the report, we actually didn't have any whistleblowing referrals last year,
but we definitely had one the year before we had a really big one that we looked at,
which actually nothing untoward was found, which is a good thing.
So yes, I think it's an effective one because when it is used it definitely is a good thing.
That's why we need to remind staff on a regular basis where to find it and that they can use
it.

10 Any Other Business

Cllr Jon Whitehouse - 0:31:01
Okay, so now we can move on to the supplementary items which start with the treasury management

11 Exclusion of Public and Press

12 Treasury Management Quarter 3 Update 2025/26

update and that is Owen again. So this report is the usual Treasury Management
Owen Sparks - 0:31:21
update that we do on a quarterly basis. It sets out the Council's Treasury Management
activity and performance for the first nine months of the year. And again, that's in accordance
with the Treasury Management in the Public Sector Code of Practise that we adhere to.
So really the Council's remained fully compliant with the regulations about 43 and all the
treasury management retention indicators limits were complied with.
Again, they're set out in the body of the report.
External borrowing stood at £276 million, which is an increase of 22 .8 million since
the start of the year and borrowing continues to be solely through the Public Works loanboard,
the PWLB.
Treasury investments totalled £20 million, diversified across bank deposits,
government facilities and money market funds and that's purely, mainly for liquidity purposes really,
so we've got available cash when we require it.
Again, in line with SITFA and other guidance, the portal survives oversight on non -treasury investments
held for service for commercial purposes.
So as at the end of December, that included loans to Qolis and home assistance loans of just under £56 million.
And we had a commercial property portfolio valued at £170 million and external investments, commercial external investments of £30 million via Qolis.
So Treasury and management risks, I managed through the approved Treasury and management strategy.
Again, we'll come onto that at the next item when we're refreshing that.
And also we have external advice from Ireland Close, who are our specialist advisors for
treasure management and capital financing.
As I said, the key indicators covering liquidity, credit risk, interest rate exposure, refinancing
risks and borrowing limits were all met and they are set out in detail in the report.
And again, the recommendation is for the committee to consider the report and the update for
the quarter three position.
Okay, so this report's for noting.
Cllr Jon Whitehouse - 0:33:29
Any questions that members have got or comments?
Councillor Owen.
Yeah, I've got a question on page 12.
Cllr Michael Owen - 0:33:35
Our industrial units, the yield on this is like 3 .48 % if my mass is correct.
The shops seem to do all right, the other seems to do all right.
How often do we like review the assets and work out what we're doing here and should
we get rid of them or are they like strategic assets that we have some sort of benefit on
that compensates us for having the lower yield is my first question.
Second question was we own a public house and petrol station, so kind of linked to the
first one, but should we be owning assets like these or maybe should we have a review
and get rid of them if we can make some good money?
And then I've got a follow -up question if it's all right, but it's more a request to
the committee.
Thank you.
Yeah, sure.
Owen Sparks - 0:34:20
So we have a commercial asset strategy that really looks at the assets we own and how
they're managed on a long -term basis.
The main thrust of the strategy is to maintain the assets so they provide significant income
through to the Council to support the revenue budget.
Again, that does look at potential disposals.
There are a range of assets in the portfolio, as you say, from public houses, industrial
units and lots of premises.
We're not looking at disposing of anything at the moment.
Obviously, we could do that if required and if the situation arises.
Cllr Michael Owen - 0:34:59
And then, yeah, my follow -up is a request to the committee.
I was wondering if it would be possible, could we get – I always find it frustrating when
I look at this and the accounts, that you only ever look on like three months, six months,
nine months, and then if we do the accounts year on year, could we get like a 10 -year
picture and look at the change over 10 years?
Because it would be quite useful to see how much of the loan's gone up per cent year on
year versus the revenue versus the cash and try and work out is the strategy of the council
right?
Are there areas that perhaps there's like multiples on that, you know, cash to debt
or revenue to debt that we're actually maybe we could improve on basically.
It would be my request to the committee.
Talking about how the debt position changes over time.
Just everything.
Cllr Jon Whitehouse - 0:35:40
Cllr Michael Owen - 0:35:43
I mean you've got revenues, how the revenue changes, how the council tax income changed,
you know, how the commercial assets income changed.
There's lots of things we could look at, but just high level, there's a few things that
you could look at on a 10 year basis.
Because like if the debt's gone up 3 % a year, for example, but the revenue's gone up 3 %
I'm not that bothered. If the assets of the council have gone up 4%, I'm quite happy.
So it doesn't really tell a picture on its own unless you can see it all together is what I'm saying.
Cllr Jon Whitehouse - 0:36:09
Okay, I mean there's certainly been massive changes certainly over time. I mean I remember
the council was a pre -council and that was a thing and then it obviously the housing HOA situation
changed and then we moved into developing and so forth. So I don't know if you've got any comments
on that, Owen?
Owen Sparks - 0:36:23
We can look at doing some longer term views. I suppose it can be very complicated because
like changes in external market, COVID affecting values, so sometimes it does need a lot of
explanation alongside the bare figures, but we can have a look at some longer term assumptions
behind it.
Cllr Jon Whitehouse - 0:36:45
We'll have to decide the best way to take that forward is, but it comes to Bedford.
It sounds like an interesting piece of work, but I know offices are quite stretched, but
Cllr Nigel Bedford - 0:36:51
I'm wondering if that would be something that could fit in with more of a task and finish
sort of project as opposed to drawing officers away from what they're actually doing, which
is like monitoring it over a period of time and doing the three months, six months, nine
months.
I know that with staff changes now, we are obviously quite short on staff, but also it's
important to understand where we've come from or where we're going to with regard to the
assets.
Cllr Jon Whitehouse - 0:37:19
Yeah, I mean the recent briefings that we've had on the accounts and so on have gone down very well.
I mean, I'm going to have to watch the recordings because I was clashed with things.
But they weren't around for two reasons.
First of all, you know, I think they're about relevant stuff, you know, that members could see how they sort of linked to the wider sort of council business.
And secondly, they were quite short.
And it may be we start with something like that.
And then having seen that, members can pick up any items
they want to explore further.
But then Casa Remini wants to come back.
Yeah, I mean, this is something we could get AI to do.
Cllr Michael Owen - 0:37:56
We could say, get the accounts for the last 10 years,
show us the revenue, show us the assets.
And granted, someone might have to cheque it,
and someone then might raise questions
that need further digging into.
This is exactly the sort of thing
that it could do quite quickly.
OK, so you're happy if people take that away and see?
Cllr Jon Whitehouse - 0:38:12
Because I do take the point of actually seeing
the day -by -day stuff in the wider tree context
is quite important.
I think if members allow us to have a look at that,
Owen Sparks - 0:38:22
I'm also conscious that a candidate in regards to change
and things aren't quite that straightforward.
And I think we'd need to focus on a particular area
rather than looking at everything in one go,
just so we can do something that's manageable.
and then we can sort of come back to members.
I'm also conscious as well, really the role of this committee versus Ovi and Scootney as well,
so we just need to be clear where that would sit.
It's probably not a controlled process, it's more of a review of strategy and where we've gone.
So I think perhaps we just need to get some clarity on that as well.
Yeah, and the other thing that's of course changed massively is where the money comes from,
Cllr Jon Whitehouse - 0:38:56
you know, the balance of where income comes from in terms of council tax and commercial income
and government grant and so forth. Yeah.
Yeah, I think, Chairman, Councillor Owen's got a point because if you, what we're looking
Cllr Darshan Sunger - 0:39:09
at is a bird's eye view of where we are, where we're going and where we've been and our forward
planning as well, future proofing of our assets, liabilities, et cetera.
But I think if you can come back to us perhaps for something, but I agree with our section
151 officer as well, maybe it's not for us to decide where the money could be spent,
but us to scrutinise where we're going.
Cllr Jon Whitehouse - 0:39:31
Yeah, it's far the sort of continuous training and development of the committee, you know,
understanding that sort of stuff is quite relevant.
Okay, so just back to the other questions. The page before the one that Councillor Owen
was talking about, page 11, talks about the Springwood Grove loan. And obviously originally
the expectation was that by this stage in the process we'd be receiving money from
QALYST rather than lending money to QALYST.
I just wondered if you could give us an update on how we are with security of those loans
and the repayment schedules and so on.
I think we had the quarter three.
Owen Sparks - 0:40:18
QALYST forecast went to cabinet, last cabinet.
That's a long goal, isn't it?
Time flies, doesn't it?
So that sets out the forecast for the Qolis loan,
so we expect there to be a deficit.
Again, that is being addressed as part of the MTFP,
so that's set out in the budget how that's gonna be addressed
and we're hoping that Springwood will get
practical completion in Spring or early summer.
Cllr Jon Whitehouse - 0:40:50
Are we expecting to have to make further loans
for other ongoing projects with Qualis?
Owen Sparks - 0:40:56
So expect there to be no further loans required after the first half of next year, again because
the pipeline is on hold awaiting LGR and future strategic decisions in the organisation, we're
not expecting any further loans passing.
Cllr Jon Whitehouse - 0:41:11
Okay, that would be quite an important point, back to Councillor Owen's point about what's
coming in and going out.
Okay. If there's no more questions, Councillor Moyes.
Cllr Martin Morris - 0:41:23
I just wanted to only, on the section about, the introductory section, credit default swaps
are mentioned quite a bit. There's no explanation about why, really. I might have missed it,
but he sort of starts talking about credit default swaps. I don't know where everybody
would be familiar with why a credit default swap is important in assessing credit risk.
Have you jumped an item? Are you on the next?
Owen Sparks - 0:41:56
I think there's some regular themes coming through these next three faults, aren't there,
really. Credit default swaps, they're another measure for really the standing of finance
institutions. There's a market that sort of trades credit default swaps, and by monitoring
the prices, it can give an early indication of if an organisation's in financial trouble.
So what we do, we use that through our advisors, our in close, to help us understand if there's
a risk of a particular counterparty. So that's what they're used for.
Cllr Martin Morris - 0:42:26
Yeah, I was just thinking that might be helpful to put that small explanation in rather than
just start talking about CDS, because other people might struggle to read the report.
Cllr Jon Whitehouse - 0:42:35
Okay, thanks for that. That noted, if you're happy to note the report.

13 Treasury Management Strategy (including investment Strategy) 2026/27

Okay, so we can move on to item 13, which is the 2627, Treasury Management and Investment Strategy. Mr Sparks.
Owen Sparks - 0:42:53
Thank you. So, again, this is a annual report that we've been to the committee and then goes to Council for approval.
So that will go to Council on Thursday, thank you, for approval.
And this report and the next one, they're sort of intrinsic to the capital programme
and linking that with the revenue consequences in the budget.
So the Treasury Management Strategy and the Investment Strategy, they're both required
to comply with the SIP for guidance and government regulations.
And they're prepared annually in accordance with the Treasury Management in the Public
Services Code of Practise 2021 edition.
And it sets up really how the Council will manage its borrowing cash flow and investments
during the year associated with this.
That's the day -to -day borrowing and Treasury management and investment activity.
There's also additional statutory government guidance.
and as part of that we set out an annual investment strategy that's attached to the report as
well. So again, both strategies continue to prioritise
security and liquidity and affordability over yield. What that means is we make sure our
money is secure, that we can get it when we need it over investing in more risky longer
term potentially investments get a higher yield. The Council's remaining compliant with
it for guidance and the restrictions on borrowing primarily for yield. So members will remember
a couple of years ago if councils borrow primarily for commercial purposes, they're not allowed
to do that for the PWLB anymore. If they do, they're not allowed to borrow for another
purpose for a period of time from the PWLB. So we don't undertake activities to have full
access to that source of borrowing. I confirm that the strategy is representing
an appropriate balance between risk and cost effectiveness.
Again, that security versus yield ratio.
So as of 31st December, the council held
276 million pounds of borrowing
and 20 million pounds of treasury investments,
as we spoke about previously.
The council continues to maximise internal borrowing
where it can to really limit external borrowing costs.
That's part of the strategy.
And that's why we don't hold large amounts of cash
for investment because we use internal borrowing
rather than investing it in that way.
As I said, all borrowing is undertaken through the PWLB
and we do expect that to continue,
although we do have discussions with our Treasury Advisors
if alternative arrangements may seem appropriate
or look at that on a case -by -case basis.
Again, there's lots set out in the strategy
about the economic environment,
and we do expect short -term internal borrowing
and short -term borrowing to be more cost -effective
over the medium term, but what we'll do is continue to monitor that again as the situation
changes.
So again, the Council's looking to maintain a liquidity balance of 15 million pounds.
So you'll see at the moment we've got 20 million pounds in cash and that's to ensure
that we can meet our day -to -day cash flow investments so that we can pay the payroll,
that we can pay creditors.
We've got that money in the bank and available to us.
And investments restricted to high quality counter parties, so that means we only invest
in people with a higher credit standing, so again, so we can ensure that our investments
are as secure as possible and they're diversified across banks, money market funds and government
facilities.
There's a number of risks around treasury management and these are set out in the report
We manage those through adhering to the potential indicators, again, are detailed there.
Regular monitoring, so again, we bring these reports to members on a quarterly basis.
We have our external advisors, Arlen Close, provide an ongoing advice on interest rates
and movements in potential counterparties, credit worthiness.
Data activities are delegated to myself within the officer corps, but within the parameters
is set out in this strategy and we have detailed procedures that are set out as well that the
team adheres to. And as I say, again, the performance comes on a regular basis to this
committee. Just as a note really that investment income
for the year is budgeted at £3 .77 million for the HRA and General Fund and debt charges
are £3 .52 million for the General Fund and just over £6 million for the HRA, so they
significant sums hence we need to manage them robustly. So members are asked to
consider the strategy and recommend it for approval to Council. Okay thanks very
Cllr Jon Whitehouse - 0:47:43
much so an awful lot in there covering the sort of whole range of Council's
work. Any questions or comments? Councillor Bedford. Yeah thank you. My only question
Cllr Nigel Bedford - 0:47:53
really is on page 32 regarding the investment amount and returns. Really
around the NatWest Bank one where it's one, I know it says only 1 .6 which it is a lot
of money but it isn't a lot of money in a big scheme of things but it's only paying
you a return of 2 % where all the others are paying out like 3 .7 to 3 .9%. Was there an
opportunity of moving that or is there an opportunity of moving it or is that a day -to -day
account that you use for the wages etc?
Cllr Jon Whitehouse - 0:48:26
That's our bank so obviously try and minimise it but we need to make sure there's money
there for those transactions.
Owen Sparks - 0:48:31
Just following up on that, no, come on, customer.
Cllr Jon Whitehouse - 0:48:34
Is that sort of, obviously that is the date on the 31st of December.
On a day -to -day basis, does it oscillate within a range or have you got a sort of target balance
you always seek to hold?
Owen Sparks - 0:48:47
So the target balance is the £15 million that we...
That's overall though, I'm thinking about specifically...
That's overall.
What we want to do is to spread that around those core areas, so banks, money market funds,
and that DMADF, that's the government basically giving it back to the government to hold for
us.
So we split it across those, and what we do to maintain it at £15 million or above, that's
when we need to borrow basically.
So when we obviously run out of cash we need to borrow, and that's when we invest it again.
It does go up and down a little bit depending on the cycle of the year basically in the month.
Yeah, but only picking up on Councillor Bedford's point specifically about the current account.
Cllr Jon Whitehouse - 0:49:31
Obviously you need the liquidity there to pay the transactions.
Does a current account bounce around the lot of trying to minimise it or is it fairly consistent?
We try and minimise it, but it does go up and down, but we try and keep it as low as possible.
Yeah, yeah, okay.
Owen Sparks - 0:49:51
Councillor Morris.
Cllr Jon Whitehouse - 0:49:53
Yeah, sorry, just wanted to ask.
Cllr Martin Morris - 0:49:55
I mean, on page 41, there's a set of approved limits, and I've noticed there are limits in other tables,
which is obviously part of risk management.
You set limits for things and then monitor against them.
There's a number of points where that's done.
Who sets the limits and how are they arrived at?
I mean, we've got development loan, I'm just, this is one is for Qalis, I think, development
loan, 68 million.
Who sets these limits?
Who decides what they should be and do they get reviewed regularly and, you know, how
does that sort of system of control work?
So it does vary on the indicator.
Owen Sparks - 0:50:33
So obviously we review them on an annual basis as we do the strategy.
So in this particular case, they were set out when the Qalis business plan was done
number of years ago, which set out the maximum amount of the actual credit facility that
was available. And you'll see that the actual balance owing is a lot less than that approved
limit as obviously debts aren't as high as they were originally, debts being repaid.
Some of it is best practise, so we look at what is deemed to be best practise. And then
we have others where we look at what our, for example, our total borrowing might be
based on our projected capital programme and our need to borrow. And there's a little bit
of headroom in there because you can both cite in advance of need. So some it's best
practise, some it's because there's an agreement in place that shows it and some there's, it's
not a, it's not a set formula but there's a rationale for why those limits are set like
that based on capital programme, forecast amount of cash we've got.
Cllr Martin Morris - 0:51:32
And do you think that method of setting limits and monitoring them is being, is an effective
way? Do you think it's effective at the moment, it's something that works for the council?
Owen Sparks - 0:51:42
Yes it does. What it makes sure is that members are aware of the total borrowing limits and
that is affordable and then there's back to that link back to the budget to make sure
that is sustainable which I think is key to make sure that capital programme, the Treasury
activities and the revenue budget all link together. And that's why they're all going
to a meeting to council so you've got that holistic picture.
Cass, question on the service investment loans.
Cllr Michael Owen - 0:52:09
They're 51, they're going to go to 65.
Could you just remind me what these are?
And also I noticed the loan rate's going to go from 4 .5 down to 3 .2, so 130 basis points
saving on the loan for that, which is quite substantial.
So could you just give us a bit of colour around that?
It's page 47 if you want to have a look.
Owen Sparks - 0:52:47
So the level of the Cessna's investment loans, that will tie back to the cash flow forecast,
So basically to finish off Springwood development as we were talking about previously.
The commercial investment loans, they relate to the four properties that are out of Boer
Investments that the quality undertook every half, I think in 2022 a number of years ago.
That relates to those.
And the actual property, that relates to where the actual assets in the first place were
transferred to Qolis, so Qolis bought the assets off of the council to then develop.
So there are three sorts of loans that are set out there.
So the actual returns, so Treasury management investments, they will vary depending on where
they are invested and what the forecast interest rates are that we've been given. We basically
take the Bank of England forecast interest rates, so they will be decreasing. From the
other investments, again, it's looking at the forecast, the amount of loans that are
outstanding when they're being paid back, and some loans on different interest rates
depending on when they were taken out, so that has an impact on how that looks on average.
Cllr Jon Whitehouse - 0:54:20
Cllr Michael Owen - 0:54:22
So service investment loans, I've just realised above it says investment rate of return, so
this is a loan we've given someone else that's paying us, right?
Okay, thanks.
Owen Sparks - 0:54:34
That's obviously we have an on loan lending percentage that we lend, we get a surplus
back on top.
Cllr Jon Whitehouse - 0:54:43
I'm the striking thing there, I suppose, is that service investment loans used to have
a bigger rate of return than just putting money in the bank, as it were, and now it's
a lower level of return than effectively just putting money in the bank.
Going back to the point that Councillor Morris made and the response that their slightly historic approved limits because they were set when the strategy of QALYST was very different to the strategy of QALYST is now.
Is there a case for reviewing those limits and bringing them down?
Or is the point slightly moot because the trajectory is going down anyway?
Owen Sparks - 0:55:32
A bit of both. They're legal agreements, so we can't obviously just, you can actually change them.
We will potentially be reviewing them as part of the governance review that we're doing.
So it's likely we'll do them as part of that.
But as you say the trajectory is going down and the council won't there won't be more loans
post the current development so they won't get to that level and
Obviously the business plan will come to members again and they'll then be able to prove those that that trajectory and those activities
Okay
Cllr Jon Whitehouse - 0:56:02
Cllr Michael Owen - 0:56:03
It's just one I thought of now actually these are consolidated right so this includes Qalis, but does it include Terra Verde?
Because I don't see them anywhere
Owen Sparks - 0:56:11
They're not in here because we haven't actually got investments, we don't lend
TVS money as such so it's not a capital service investment. They have a few
assets but they're very minor so that's why it's not in there. Obviously quality
Cllr Jon Whitehouse - 0:56:31
is a lot more substantial. Okay so that's quite a lot on the Treasury Management
Strategy. We're asked to recommend it for approval to full council and also the
investment strategy. Are members happy to do that? Okay, thank you very much. Which

14 CAPITAL STRATEGY 2026/27 - 2028/29

means we can move on to our final item, which is the capital strategy. And once again, it's
Mr Sparks.
Owen Sparks - 0:56:56
Mr Sparks, thank you members. So again, members are asked to consider and approve the capital
strategy from 26, 27 to 28, 29. And that includes the minimum revenue provision statement that
again is attached to the report.
Strategy is required under potential code
and it must be approved by full council annually.
And hence again, it will go to full council on Thursday.
So the key messages is strategy confirms
that the council's approach to capital investments
remains prudent and affordable and sustainable.
So all those links very closely
with the treasury management strategy
is about the capital programme,
making sure its scale is appropriate,
making sure it's affordable over the longer term.
So it's more focused on the borrowing
and the size and proportion of capital strategy
as opposed to day -to -day treasury management.
The council remains compliant
with the potential code restrictions.
So again, this links to the fact that we,
because we don't do investments primarily for yield,
we can still access the PWLB
and that is our main source of borrowing.
It also provides a clear governance framework
and suite of pension indicators.
again so members can get comfort that activity is working within approved limits as agreed
as part of the statutory. So key points to note from the capital programme,
so planned capital expansion 2627 is just over £52 million with £143 million planned
across the three year period. Just to say the general fund capital programme is fairly
modest at £10 .7 million. Obviously there's been lots of activity over this in the previous
year with sort of the depot, the control tower, the leisure centre. But again with LGR in
that context we're not doing significant developments at the moment. But the HOA programme which is
just over £132 million is still very significant and that does include some investment in new
build and acquisition as well as sort of the planned investment in the stock to keep it
up to good condition for our tenants.
From capital financing and borrowing,
so capital expenditure is either financed
through a combination of capital receipts,
revenue contributions, external grants and borrowing,
and we're expecting new borrowing for next year
to be in the region of just over 19 million pounds.
And that gross debt remains below
our capital financing requirement.
and that is the amount of debt that underline need to borrow.
It's called capital financing requirement.
And what we're not allowed to do
is to borrow in advance of that.
Again, that comes back to borrowing.
You don't need the money and invest it to make a return.
So you're not allowed to do that.
The minimum revenue proficient statement
that sets out how the council will make prudent provisions
for the repayment of borrowing.
So that's a bit like your mortgage.
That's when you pay a little bit of the principal off
and we have to set out how are we gonna make sure
we do that in a proven way.
Again, that's directly to the revenue budget
because that is, as well as interest,
that is the revenue cost of actually borrowing
to support the capital programme.
So there are a number of risks and affordability criteria
within the capital strategy,
and they are set out in the reporting detail.
So again, there are a range of potential
and local indicators to demonstrate
the affordability and sustainability.
A lot of that again just reflects a scale as well.
The General Fund financing costs remain in acceptable proportions of net revenue stream
and the HRA Borrowing is monitored using a loan to value interest cover for the assets.
That's also supported through the 30 year HRA business plan that members will see set
out in the budget report as well that shows how the HRA is sustained over a 30 year period.
And again linking back to Treasury management again this supports that prioritisation of security and liquidity over yield.
Cllr Jon Whitehouse - 1:01:02
So again members are asked to approve the capital strategy and the minimum revenue provision and recommend it to Council.
Cllr Martin Morris - 1:01:09
Any questions on the capital strategy?
the, um, cats and mice. Page 51, I was just interested, the financing for capital expenditure
is listed here. So you're going to finance in the current budget, we're going to be financing
about the same amount, about 20 million from internal capital resources we are from external.
And then we've got internal revenue resources, which I assume is money that we're going to
take from our income, whatever that is, either rental or, I don't know, council tax or whatever.
And then there's the external sources.
I don't know, what does that mean, external sources, if it's not borrowing and it's not
revenue or internal capital?
Owen Sparks - 1:01:56
So, again, as you sort of mentioned there, this is for the HRA and the General Fund Capital
Programme.
Yes, I'm assuming it's for everything.
Yeah, they find it in different ways, which is why I was sort of making the point.
So internal capital resources, we have a lot of capital programme in the HRA is funded for
right to buy receipts.
I think as Sarah sort of alluded, we're expecting there to be high numbers of right to buy receipts
because we got a lot more before the subsidy level changed.
We also fund HRA capital.
If members remember, last year there was some underspend
on the HRA last year, which meant we had additional reserves
so again we're spending some of those
to really catch up on capital works
that didn't happen previously.
External sources, some of that is government grants.
So for example, for Sable facilities grants,
we get funded externally.
A number of other small capital grants that we get.
Obviously the remainder is then funded from debt.
Cllr Martin Morris - 1:03:01
And obviously what we try to do is maximise other sources and minimise that level of debt
that goes towards funding the capital programme.
So is the, in terms of the internal rates on, the rate on internal capital resources,
do you set that the same as the external borrowing rate
Owen Sparks - 1:03:20
or do you have your own separate internal rate for capital?
We don't do it quite like that.
So what we do, we do capital financing in its entirety.
So we do basically a forecast of how we're going to fund capital, what borrowing we need,
and obviously we've got investment income and borrowing income, and the two sort of
offset, so it's done that way.
Cllr Jon Whitehouse - 1:03:44
So it's based on the actual income we would have got from putting that money into POSSET.
Cllr Nigel Bedford - 1:03:47
Councillor BEDFORD.
Councillor BEDFORD.
Thank you.
It might be a silly question really, but you've got the—on page 56, 4 .2 .8 about the borrowing
indicator, I'm just looking at the value of the 6 ,431 properties.
It gives a balance sheet value of $828 million.
Is that an estimated value or does that regularly get changed or altered or is it linked to
Owen Sparks - 1:04:14
a spreadsheet that actually calculates that value.
So they're valued as part of the closure accounts process.
So again, assets are valued
in site different time scales and basis,
but basically they're valued as part of that process.
So it's an actual valuation
or an index valuation in the timeline.
Cllr Jon Whitehouse - 1:04:34
Yeah, and again, that reflects
the social value use of properties as well.
I can't quite remember the context,
but I remember at one point,
there's some discussion with the auditors
about to what extent do you value the components
and what extent do you value the overall value of things.
And it just seemed like a nightmare
to try and get an accurate value
for something which you actually,
you can't actually do much against the asset base in a way
because there's so many regulatory constraints with it.
And I thought one of the most interesting things in here
was the change in the right to buy receipts,
which are expected to go right down, which makes you think whether there's money coming in,
but the point you've just made about the asset base actually means, you know, we're keeping the assets
otherwise we'd lost at a discount. So financially, that reduction in receipts and sort of balance sheet terms
Owen Sparks - 1:05:29
makes the council stronger, doesn't it, if I've understood that right.
Obviously, when we sell the assets, that value gets written out.
But obviously what we're also doing is we've got that acquisition development programme as well,
So it was a bit from both sides.
But obviously this year was exceptional, the amount of right to buy.
Cllr Jon Whitehouse - 1:05:46
Yeah, but we never seem to replace as many.
I mean, we always seem to sell more houses and we actually create.
It's not a one for one replacement, is it generally?
Cllr Michael Owen - 1:05:53
Certainly over a long period of time.
Anyway, Councillor Owens, sorry.
Yeah, good to see the borrowing is projected to go down after a spike this year.
And I take this with a pinch of salt because we've got LGR and other stuff.
But it is my view that Qualis needs some sort of restructuring, help, whatever you want
to call it.
So rather than paying down the debt over time, maybe we should have a discussion as a council
what we do with Qualis and how we could potentially help it out, i .e. writing off loans or whatever's
needed to make it thrive so that it can generate more income for the council in profits, not
Cllr Jon Whitehouse - 1:06:26
just in loan repayments, to help it out.
Owen Sparks - 1:06:28
That's my only comment.
Thanks.
Do you want to expand on the governance review?
Yeah.
So we're undertaking a member -led governance review
that's looking at basically governance
and the financial sustainability of QALYST as well.
And in the MGP we have made provision
really for supporting QALYST over that longer time period.
And then again, the business plan will come forward
because obviously that focus of QALYST
and that development activity is reducing.
So again, what they're actually undertaking
is more focused now on that.
Cllr Jon Whitehouse - 1:07:01
Operational service delivery through grounds maintenance
Owen Sparks - 1:07:03
to sort the housing and power service.
So it's that change of emphasis.
What's the reporting route back for that group?
So obviously the group will make recommendations
and then depending on what they are,
that will come probably back to,
probably to over -inscribing
and then to cabinet for approval.
Cllr Jon Whitehouse - 1:07:20
But it will depend on what is required
Owen Sparks - 1:07:22
depending on what is actually recommended.
Okay, and do a timescale on it?
We're hoping it will be early springtime.
Cllr Jon Whitehouse - 1:07:32
It will be ready, so it's making good progress, so we're hoping we'll be in time for that.
Okay, thanks very much.
Cllr Darshan Sunger - 1:07:49
Okay, so again this is something that we report to Council or comment to Council on, and we'll be looking at again next Thursday.
Councillor Soongar.
Thank you, Chairman. Can I just, table 11 on page 61.
on total net income from service and commercial investments.
So we've got an actual for 2025 of 12 .2,
but then it dips, your forecast needs to dip this year.
Is there a reason for that?
Owen Sparks - 1:08:16
From last year?
So there's a slight dip.
There will be some reasons within the forecast.
I'd have to look to see what they are.
that's just obviously forecasted what we think we're going to get from investment income.
I couldn't, I couldn't say off hand, but it will be as part of the forecasting process.
I mean just, sorry, just to add to that, I think it may be where we've had rent reviews on
properties that it's generated more backdated income in the prior year and then we've settled
back down to a normal amount of income for certain properties as policy has done various
Cllr Jon Whitehouse - 1:08:55
of our reviews on our commercial base over the last two years.
Thank you. That's really helpful. Thanks for sitting for the meeting for that.
Okay, if there's no more comments or questions, I'm happy to recommend that for Council.
Okay, well that brings us to the end of the meeting. Hope to see lots of you back here
on the 24th. Thank you for your time everyone.
Cllr Nigel Bedford
District councillor for North Weald Bassett ward
Conservative Party
View profile Cllr Nigel Bedford
Laura Kirman
Democratic Services Officer
Epping Forest District Council
View profile Laura Kirman
Sue Linsley
Senior Auditor
Epping Forest District Council
View profile Sue Linsley
Sarah Marsh
Chief Internal Auditor
Epping Forest District Council
View profile Sarah Marsh
Cllr Martin Morris
District councillor for Waltham Abbey North ward
Labour Party
View profile Cllr Martin Morris
Cllr Michael Owen
District councillor for Loughton Forest ward
Loughton Residents Association
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Owen Sparks
Interim Strategic Director / S151 Officer
Epping Forest District Council
View profile Owen Sparks
Cllr Darshan Sunger
District councillor for Chigwell with Lambourne ward
Conservative Party
View profile Cllr Darshan Sunger
Cllr Jon Whitehouse
District councillor for Epping East ward
Liberal Democrats
View profile Cllr Jon Whitehouse