The Audit and Governance Committee is scheduled to meet to discuss internal audit progress, strategic risks, treasury management, and a post-implementation review of governance arrangements. The meeting will also cover the committee's workplan and a review of the council's constitution.

Strategic Risk Register

The committee is scheduled to receive an update on the council's strategic risks. The report pack includes the Isle of Wight Council Strategic Risk Register, and the Isle of Wight Council Risk Scoring Matrix.

The strategic risk register was most recently reviewed at the Corporate Management Team (CMT) on 16 September 2025 and all risk owners reviewed the content and verified the current risk ratings.

Some of the strategic risks that are scheduled to be discussed include:

• Lack of financial resources and the ability to deliver the council's in-year budget strategy.
• Lack of financial resources and the ability to deliver the council's medium-term financial strategy.
• Failure to build organisational capacity and foster a positive culture.
• Failure to observe, understand and implement effective corporate governance arrangements.
• Failure to improve educational attainment.
• Failure to deliver statutory duties relating to special educational needs and/or disabilities.
• Failure to identify and effectively manage situations where vulnerable children are subject to abuse.
• Failure to identify and effectively deliver the councils statutory corporate parenting duties.
• Failure to identify and effectively manage situations where vulnerable adults are subject to abuse.
• Failure to champion the 'place-based agenda' within the Integrated Care System (ICS) to ensure that the needs of our citizens are being appropriately considered within the Integrated Care Board (ICB) agenda.
• Failure in the Sustainability of the Independent Social Care Sector (Care Homes and Home Care)
• Failure to manage unmet need in adult social care and housing services
• Failure of the adult social care electronic records management including client personal data, care assessment and information
• Failure of the Highways PFI contract resulting in significant financial and operational disruption for the council and its residents
• Failure of the Waste contract resulting in significant financial and operational disruption for the council and its residents
• Risk Title: Failure to protect the health of the Island population in the event of a pandemic or other significant infectious disease outbreak through the delivery of the Council's public health duties.
• Risk Title: Failure to effectively manage the ending of the Hampshire County Council (HCC) and Isle of Wight Council, Public Health Partnership.
• Failure to deal effectively with threats to business continuity (including cyber incidents)
• Failure of coastal defences (where the policy is to hold the line ) resulting in high risk to people, property, infrastructure and land, significant impact on communities and the council finances. The Isle of Wight Council has a vested responsibility for controlling coastal erosion under the Coast Protection Act 1949.
• Description: Failure to manage coastal erosion and the impact on the Island's infrastructure, roads and utilities including the financial implications that could bring.

Governance Arrangements: Post Implementation Review

The committee is scheduled to discuss a report regarding a post implementation review of the council's committee system of governance arrangements that were introduced in May 2025.

The report seeks approval from committee members to the project management arrangements considered necessary to undertake the planned post implementation review. It also seeks approval of specific pieces of work that have been concluded prior to the review taking place which assist with general tidying up of the constitutional provisions and which can be referred to Full Council for formal adoption of changes being proposed.

The report also seeks to address the preparation and actions required by the English Devolution and Community Engagement Bill 2025 that will require the Council to revert to a Cabinet and Leader system of governance once enacted and at a yet to be defined date.

The report pack includes a Project Initiation Document, draft Terms of Reference - Committee Member Forum, a Map of Committee Functions, and an Equality Impact Assessment.

The report states that Government has proposed through the draft English Devolution and Community Empowerment Bill to abolish the use of the committee system of governance, which will require the council to return to a Cabinet and Leader model of governance within a timescale yet to be determined.

The Audit and Governance Committee, under its terms of reference, are charged with undertaking oversight of the post implementation review and arrangements for reverting to a Cabinet and Leader model of governance in accordance with new legislative provisions and making recommendations to Full Council for consideration of any proposed or required changes to be made.

The report sets out the proposed arrangements for taking this third phase of work forward as set out in detail in the Project Initiation Document, which also contains a high-level overview of the snagging list . This sets out the work to be completed, the project arrangements for successful delivery and the expected outcomes and outputs.

Phase three project will comprise of five workstreams, led by senior officers of the council and who will be responsible for the delivery of the agreed activities, outputs and outcomes and which will be monitored through an officer working group using project management methodology. The workstreams are:

• Workstream one: Effective governance in a committee system.
• Workstream two: Administration and support in a committee system.
• Workstream three: Communication, engagement and reporting.
• Workstream four: Learning and development.
• Workstream five: Governance transition to Leader and Cabinet Model.

It is proposed that members of the Audit and Governance Committee once again establish a committee member forum in between formal committee meetings with the support of officers to allow for the progression of the workstream activities. The draft terms of reference are set out at Appendix Two.

The report also sets out that a review of the map of committee functions has been undertaken to reflect some minor omissions in the current version.

Treasury Management

The committee is scheduled to receive two reports from the Director of Finance and Section 151 Officer, Chris Ward, regarding treasury management.

The first is the Treasury Management Annual Report 2024-25, which provides an overview of treasury management policies, practices, and activities for the twelve months ending 31 March 2025. According to the report, the council's activities have remained within the set prudential indicators for the period. The report in Appendix 1, has been produced from a template provided by the council's treasury management advisor, Arlingclose Limited. It sets out a summary of the council's treasury management activities during the twelve months to 31 March 2025, and its performance against the prudential indicators that were approved as part of the Treasury Management Strategy.

The report also states that the combination of reduced borrowing costs and increased investment income has resulted in a net saving of £4.4 million, £4.0 million of which formed part of the in-year formal budget update in February 2025 contributing to wider council pressures, and the remainder contributed towards the overall financial position of the council for 2024-25.

The second report is the Treasury Management Report Q1 2025-26, which covers the three months ending 30 June 2025. The report notes that the council's activities have fallen within the boundaries of the prudential indicators set for the period.

The report in Appendix 1, has been produced from a template provided by the council's treasury management advisor, Arlingclose Limited. It sets out a summary of the council's treasury management activities during the three months to 30 June 2025, and its performance against the prudential indicators that were approved as part of the Treasury Management Strategy.

The report also states that the combination of reduced borrowing costs and increased investment income has resulted in a net forecast saving of £1.0 million contributing to wider council pressures.

Internal Audit Progress Report

The committee is scheduled to receive the Internal Audit Progress Report from the Chief Internal Auditor, Elizabeth Goodwin. The report summarises the results of audits finalised between March 2025 and September 2025 for the 2025/26 financial year.

The report pack includes the Internal Audit Progress Report itself.

The report notes that there were 30 reviews set out in the Audit Plan for 2025/26. Since the Plan was agreed in March 2025 two follow-up reviews and five grants has been added to the Plan.

The report also provides summaries for reports rated 'reasonable assurance' or better, including the Safety Valve Agreement, Multiply Grant, and European Regional Development Fund (ERDF).

Other Items

• The committee will note any apologies and substitutions.
• The committee will be asked to approve the minutes from the meeting held on 28 July 2025.
• Councillors will be invited to declare any interests they may have in the matters on the agenda.
• The committee will consider its workplan.