Director of Finance and Investment (S151) introduced her report that set out progress on the financial resilience plan that, part of the Council’s Medium Term Financial Strategy (MTFS) 2019/20 to 2022/23, that had been agreed at Cabinet on the 16 July 2018. The plan set out the approach to improving and managing financial sustainability.

The Director of Finance and Investment informed that the financial position for local councils continued to be challenging and that since 2010 all councils had faced reductions in central government funding and ongoing financial pressures in a number of core services such as social care. She further informed that additional pressures had fallen upon the Council as a result of the impact of business rates retention that included the responsibility for payment of appeals and areas previously under central government control such as Council Tax Benefit.

The Director of Finance and Investment reported that building financial resilience was a key part of the Medium Term Financial Strategy, i.e. planning for the Council’s finances. A review had been undertaken in early 2018 by the Chartered Institute of Public Finance and Accountancy (CIPFA) and an assessment of financial management arrangements had identified a number of areas of strength that included:

• The outcomes based focus of the Wirral Plan demonstrated a willingness by Members and the Senior Leadership Team to be open to new ideas on how services might be delivered in future.
• The determination and commitment of the Senior Leadership Team and the Cabinet to instil a culture of financial discipline throughout the organisation.
• A budgeting process for 2018/19 and 2019/20 - 2022/23 was becoming more grounded and rigorous.
• There were pockets of good practice in the Council.
• The Director of Finance had begun to raise the influence and profile of the Finance team on strategic issues.

The review also identified some areas for development, namely:

• There was a pressing need to agree a Medium Term Financial Strategy and associated transformation plan to address the projected spending gap.
• The future delivery of the Medium Term Financial Strategy and transformation plans were dependent on changing the existing culture within the Council.
• Members and senior officials needed to more explicitly set a tone that financial discipline was important.
• Refocus and reprioritise the finance and audit functions.
• Putting in place the enablers that provided effective financial management.

Members noted that developmental areas had already started to be addressed through mandatory training and a restructure of the finance team.

Members questioned the Director of Finance and Investment on a number of points within her report that included actions taken to deal with ‘unpredictable events’ and extending ‘good practice’ to all areas of the Council. The Director informed that much of the resilience planning involved how the Council managed risk across the organisation, and how it was vital to build contingency planning into its procedures. She added that an example of an unpredictable event could include issues such as Business Rates Appeals.

A Member questioned the Director on budget overspending, the Council’s Senior Management Structure, the matter of the independence of the Internal Auditor function and how the Internal Audit function kept pace with the massive changes currently faced by the Council.

The Chief Internal Auditor responded, and provided reassurance to the Committee on his personal role, reporting lines (which included a direct link to the Chief Executive) and how the Internal Audit function provided unencumbered reporting. He added that the Internal Audit function retained full independence and reacted well to change, addressing risk in conjunction with the full engagement of the Audit and Risk Management Committee. The Committee was also apprised that the Internal Audit function and independence was well established within the Council and was not affected at all by its location in the management structure.

Resolved – That

(1)  That progress to date on Financial Resilience Plan Programme 2018/19 be noted; and

(2)  Further update reports be presented to the Committee on a regular basis.