To seek the view of the committee as to whether the draft Annual Governance Statement (AGS) for 2024/25 properly reflects the internal control environment the council is operating in and the appropriateness of actions identified to improve governance arrangements.

The Director of Finance (DOF) introduced the report, the key points included:

• The Annual Governance Statement (AGS) is a document that the Council is required to publish as part of the council’s statutory accounts and is a retrospective document which reports on the effectiveness of the governance arrangements and the internal controls that have been in place during the year ended 31st of March 2025.
• The report is prepared by reference to the seven core principles of good governance as identified by CIPFA, and the statement identifies the arrangements and activities that have been in place during the year, as well as areas where the council’s arrangements could be strengthened.
• In January, the committee were provided with an update on the actions identified from the previous year's AGS as part of a midyear progress update.
• The report is informed by director Assurance statements, a review of compliance with laws and regulations and the work and opinion of both internal and external audit.
• The document will be tested by Grant Thornton, as part of their audit work and the final version will be brought to this committee at the meeting in September.

In response to committee questions, it was noted.

1. Previously consultation with residents and stakeholders was conducted through market town events, but this proved costly with very little engagement. The online budget simulator tool had been developed and widely promoted through social media, to increase and enable more residents and other stakeholders to consider funding choices and the impact of changes in income and expenditure on the delivery of services. More work would be done to strengthen promotion and raise awareness of this tool through the 2026/ 27 budget setting process.
2. Public and member questions and answers are published on the council’s website but not explicitly mentioned within the AGS under the “Core Principle G: Implementing good practices in transparency, reporting and audit to deliver effective accountability”.
3. In terms of accessibility there is a hard balance to strike in presenting technical content and using plain english. Any suggestions that could be made to improve presentation could still be made and the team was still working on strengthening ahead of the final accounts being published. The council’s internal sculpt team had contributed and the requirements of the CIPFA code and external audit were being met.
4. The council has an AI ethics and governance board comprised of membership across different areas of the council who have oversight to ensure ethical use and accountability, to evaluate the risks and harms associated with AI. The board will evolve as this technology develops and the council’s reliance on it increases or the way it Is used changes. The board is thought to be a valuable source of assurance in terms of the council's testing of this new technology moving forward.
5. The DOF was committed to investigating opportunities presented by AI but highlighted the dangers of using it for documents such as the AGS which is technically prescribed by the CIPFA code and could risk losing technical aspects by oversimplifying. It was highlighted that no element of the AGS or the statutory accounts had been AI generated.
6. In terms of the Improvements in Children’s Services, although committee was not actively involved in its journey, they could take assurance from key mechanisms such as in their wider roles as councillors, having received dedicated member updates on the progress, all statutory and Ofsted reports are in the public domain, in terms of governance arrangements, the children’s scrutiny committee hold improvements and the cabinet member and director to account and additionally it is included as a key risk on the corporate risk register, which will come to the committee after cabinet have agreed and reviewed it on a quarterly basis to update mitigations and controls against each corporate risks.

The committee noted the report.

Actions

2023/24-053 The DOF to increase activity around the promotion and raising awareness of the online budget simulator tool to increase public engagement.

2023/24-054 Public and member questions and answers to be included within the statement alongside decision notices, agendas and minutes as detailed in Core Principle G:

2023/24-055 Disclaimer to be added to indicate there had been no AI contribution in the creation of the document.