Cheshire East Council: External assurance review

That a SharePoint spreadsheet is developed as a single dashboard of information on the expected actions and deficit mitigations across the council and the single plan against which progress in delivering expected savings, additional income, asset sales and reduction in borrowing is monitored by Officers and scrutinised by Members.

That the Strategic Finance Board develops the appropriate scenario analysis and modelling capacity to make appropriate decisions.

The council maximises delivery of mitigations in 2024/25 so use of the capitalisation direction is not required. If it is required, it should as far as possible be funded by capital receipts rather than borrowing.

That there is close working between the Strategic Finance Management and Transformation Boards, so their respective streams of activity are aligned.

That the senior leadership team ensure they retain sufficient focus on and oversight of the initiation of the more medium-term transformational projects despite the fire-fighting that will be required to survive 2024/25.

Develop a revised, simpler and shorter format for the MTFS report

A review of financial services should identify the future skills and competencies that will be required to sustain transformation, such as expertise in data and scenario analysis and strategic financial management and how they will be developed.

See recommendation 6.

CEC should develop a continuing programme of financial training to Members and officers. It should conduct a survey or assessment to determine existing knowledge of local government finance and financial management skills and help tailor the training or support offer to meet need.

Committee papers should draw attention to the risks associated with decisions, including the risks of deferring or not making decisions

Provide all Committee members with training on risk management

That the health check of the ERP is broadened out to address all the implementation issues that are impacting on the council

The Finance Service builds into its Service Plan the practical steps it will take to ensure officers are able to exploit the unused functionality of the ERP and to provide support and training to users

CEC makes sure its planning for digitalisation and other IT-enabled transformation pays adequate attention to the HR and reskilling aspects that will also be involved

CEC works with its transformation partner to identify as part of the plan the practical steps that need to be taken so that the council has a culture of continuous improvement.

The council needs to continue to work closely with the Department for Education so that it is accepted on the SV programme as the only realistic solution to bringing its DSG deficit to sustainable levels over the medium term.

The council should establish a schedule of regular reviews of the DSG deficit recovery plan to ensure the plan remains on track to bring the deficit under control

The DSG Management Board needs to commission evaluations of early delivered measures in the DSG management plan to learn what has been effective and what might need refinement

CEC action any recommendations made by its Treasury management advisors in support of balancing the books this year.

The council needs to review its capital programme and where overall Value For Money (VFM) is not threatened cut or defer individual projects.

The council needs to improve its future capital programme management by:

- Strengthening communication between the project implementing departments and finance at regular stages to ensure that all aspects of a project are considered in the financial forecasting process

- Strengthening corporate scrutiny of new projects against the council plan and priorities

- Implementing a more robust and consistently applied risk assessment framework across the programme that include financial, operational, regulatory and (where relevant) funding risks

- Using standardised financial modelling software or agreed techniques to help simulate various scenarios and help anticipate risk

CEC should abandon or defer projects that require match funding and borrowing where overall VFM is not threatened, or savings are not delivered

CEC should review whether the pace of its carbon reduction ambition is achievable given current financial challenges

CEC should review whether its farms strategy remains good value for money and a strategic fit and is in accordance with the direction of the target operating model being developed. It should consider whether a phased and controlled sale or partial sale could not contribute to the budget deficit over the life of the Medium-Term Financial Plan (MTFP).

CEC need to make sure they obtain accurate, up-to-date valuations of potential disposals from qualified professionals and consider market conditions in determining the optimal timing for each disposal.to secure VFM

CEC should conduct a post-disposal review on disposals in the early part of the MTFP to learn from the process and improve future asset disposal strategies.

CEC need to operate robust risk management in the in-housing of ANSA so as to identify and mitigate potential risks, including financial, operational and reputational.

CEC should develop a benefits realisation plan for the in-housing of ANSA to help identify, direct and monitor the savings and improved services that should result.

CEC needs to review whether its interest in Alderley Park Limited can contribute to the funding gap at some stage over the life of the MTFP.

Internal Audit should undertake follow-up work in 9-12 months' time to see if understanding and practice has improved and whether there is any impact on the speed of decision-making.

The council needs to develop a plan to engage officers and communicate the revised delegation arrangements through multiple channels. There needs to be mandatory training sessions especially for those currently affected by the delegation and offer ongoing support and refresher training to ensure that employees stay informed and compliant.

The council needs to ensure there are sufficient resource within the Monitoring and Governance Directorate to provide ad-hoc advice on issues of delegation and Officer Delegated Reports to appropriate deadlines.

The council review what quick steps can be taken to prioritise urgent and strategic financial issues, identifying the critical path and ensuring they move through the committee system more quickly. This can involve fast-tracking important decisions or holding additional meetings when necessary.

The council should develop a decision-making matrix outlining the types of decisions that will require input from one or both committees (and where relevant the Service Sub-Committee) and provide integrated reports that address both policy and financial implications of proposed decisions.

CEC should consider what further training, advice and support can be provided to Committee "scrutiny champions"

The council needs to review its Code of Corporate Governance to ensure it reflects the many changes in structure, process and governance that should have been implemented by then. And to provide renewed assurance that the council is operating in line with the Nolan principles.

CEC needs to improve recruitment procedures so they do not impede development of the Children's Services improvement plan.

CEC should review how cross-Directorate and cross-Service working can be more encouraged and incentivised.

CEC needs to make sure it has clear protocols and procedures governing all requests for legal advice and where an officer in unsatisfied with the initial legal advice there should be a formal procedure for reviewing the advice internally.

CEC should investigate the validity of the indicator and investigate the implications for VFM.

Report to Corporate Policy Committee could be improved by providing more consistent trend data across the range of activity in support of CEC priorities and including benchmark data where appropriate.

The council needs to continue to keep the pressure up on the planning department to improve its performance in addressing the planning application backlog and the need for better custody of S106 monies, including through scrutiny by the relevant Committees.

CEC needs to review whether it can apply any sS106 deferred income to the Genera Fund this year and contribute to the funding gap