To seek the view of the committee as to whether the draft Annual Governance Statement (AGS) for 2025/26 properly reflects the internal control environment the council is operating in and the appropriateness of actions identified to improve governance arrangements.

The Head of Strategic Finance introduced the draft Annual Governance Statement (AGS), which is a statutory part of the Statement of Accounts. The following principal points were noted;

1. The AGS is brought to the committee separately from the financial statements so governance and control arrangements can be reviewed in advance. It is a retrospective review of the 2025–26 financial year, assessing how effective the council’s governance and control framework has been.
2. It is structured around the CIPFA Code of Governance and its seven core principles. For each principle, the report describes the arrangements in place, assesses their effectiveness and Identifies areas for improvement.
3. The statement is informed by multiple sources, including Internal and external audit work, risk management processes, directorate assurance statements and ongoing operational activities.
4. It will be reviewed and updated during the external audit process, then finalised and published with the audited accounts (expected September).

In response to committee questions, it was noted.

1. The major projects delivery dashboard is in place, regularly reviewed by Cabinet, and is considered effective for monitoring project performance, risks, and budgets.
2. Clarification was sought on the role of the Chief Executive with regards to “strategic direction”. Officers acknowledged this may reflect a statutory definition but agreed to review and clarify wording to avoid confusion with the role of elected members and Cabinet. (Action 2026/27-2)
3. The description of the shareholder committee would be reviewed to ensure clarity and accuracy. (Action 2026/27-3)
4. The council has an AI policy and governance arrangements (including an information governance steering group). The terms of reference for the Information Governance Steering Group would be shared with the committee. (Action 2026/27-4). Guidance had been issued limiting use to approved tools (e.g. Microsoft Copilot).
5. Officers to consider including quality circles for Children’s Services as an example of improved staff engagement and feedback mechanisms. (Action 2026/27-5)
6. The statement is still a draft, and members can propose changes before final approval later in the year following external audit review.

The report was noted.