The Corporate Governance Committee of Leicestershire County Council met on Friday 18 September 2026 to review the progress of the external audit for the 2025/26 financial statements, receive an update on treasury management activities, and discuss the council's risk management framework. The committee also considered the annual insurance report and responded to a government consultation on the Best Value Duty.

External Audit of the 2025/26 Financial Statements Audit Progress Report

The committee received an update on the external audit of the 2025/26 financial statements for both the County Council and the Pension Fund. Ms Mary Wren and Mr Grant Patterson from Grant Thornton LLP, the council's external auditors, attended the meeting. They confirmed that the draft financial statements had been completed and published by the statutory deadline, and that the council and Pension Fund were up to date with their audited financial statements. An unmodified audit opinion had been issued for the 2024/25 financial statements.

During the discussion, a query was raised regarding potential impacts on the pooling of Local Government Pension Scheme (LGPS) funding due to changes in the regulatory environment and a push towards more local investment. The Director of Corporate Resources, Declan Keegan, explained that these were being considered as risks, and that discussions were ongoing to ensure a proper transition and appropriate management arrangements. Regarding Local Government Reorganisation (LGR), the auditors stated there were no current concerns identified, although regular discussions were held with senior officers regarding ongoing risk assessments. The committee resolved to note the progress of the external audit.

Quarterly Treasury Management Report

The committee reviewed the quarterly treasury management report for the quarter ending 30 June 2026. A key point of discussion was the early repayment of external debt. It was noted that £42 million had been repaid, resulting in an £8.2 million premium charge. However, the Director of Corporate Resources, Declan Keegan, explained that this was projected to lead to a net saving of approximately £1 million per annum over the next 20-30 years due to interest savings. He further clarified that the council had significant cash balances (£335 million) and was only earning around 4% on these, making it more advantageous to repay more expensive debt. The council's historic under-borrowing position was £102 million, with a potential future shortfall in the capital programme of £57 million. The report was noted by the committee.

Risk Management Update

An update on risks within the Corporate Risk Register and emerging risks was presented. A significant point of discussion was the Government's recent announcement to pause the Local Government Reorganisation (LGR) process pending a review. A member noted that some local authorities had incurred significant expenses and were seeking to recover these costs. The Director of Corporate Resources confirmed that Leicestershire County Council had incurred costs in developing its business case, partly offset by a capacity grant from the Government. The uncertainty surrounding the future direction of LGR and the process for cost recovery was acknowledged.

A new risk concerning Children's Social Care was added to the Corporate Risk Register. When questioned about the specific change leading to this, the Director of Corporate Resources stated that the risk assessment had elevated the score, necessitating its inclusion on the corporate register. A presentation providing more detail on this risk was scheduled for the next meeting. The committee resolved to approve the status of corporate and strategic risks, agreed to the presentation on Children's Social Care risk, and noted the emerging risks related to the Terrorism (Protection of Premises) Act 2025 (Martyn's Law) and the update on LGR.

Insurance Service - Annual Report 2025/26

The committee received the annual report from the Insurance Service. A member expressed concern about the increase in potholes and requested an action plan from the Growth, Environment and Transport department. Assurance was given that regular briefings were received, but a new assessment process was awaited. While the Insurance Service had seen a slight reduction in the number of claims, it was noted that the target had been set when there were fewer potholes and more staff available for repairs. A further update was promised for March. The committee resolved to note the report.

Best Value Duty - Consultation on Draft Revised Statutory Guidance (2026)

A joint report from the Director of Corporate Resources and the Assistant Director of Law and Governance presented the Government's consultation on draft revised statutory guidance for the Best Value Duty. The committee noted the report and endorsed the Council's response to the consultation. The Council's response supported the revised guidance's emphasis on prevention, self-assessment, governance, leadership, continuous improvement, and proportional intervention. However, it suggested strengthening the guidance through clearer recognition of internal assurance functions, enhanced support for self-assessment, and greater transparency regarding intervention thresholds and evidence requirements.

The next meeting of the committee was scheduled for Friday 27 November 2026.