The Audit and Governance Committee reviewed progress on implementing previous recommendations and noted changes to the committee's work plan. The committee also discussed and noted reports on alternative provision commissioning for children, the Treasury Management Strategy Statement, the External Auditor's Annual Report, the Counter Fraud and Corruption Strategy, and the mid-year complaints performance report. Finally, the committee was updated on proposed changes to the standards and conduct framework for English local authorities.

Alternative Provision Commissioning for Children

The committee received an update on Surrey County Council's progress in improving the experience of children and young people accessing alternative provision (AP), following an internal audit in summer 2025 which identified weaknesses in governance and commissioning. Since the audit, the council has improved brokerage times for AP through its dynamic purchasing system, increased internal AP options, and reduced delays. Clearer guidance for officers, particularly Education, Health and Care Coordinators (EHCCs), has been provided, and a draft AP strategy and guidance for schools have been completed. Collaboration across internal teams and with external partners has been strengthened, and family-friendly AP guidance has been published.

Of the 12 key recommendations from the audit, all have been completed. A particular focus was placed on recommendation number eight, regarding the development of internal attendance monitoring mechanisms. While this action is complete, and attendance is monitored according to Department for Education guidelines, the council is exploring a business case for an external system to enable real-time attendance monitoring of children accessing AP.

Concerns were raised about the clarity and adaptability of centralised guidance, with different versions now available for families, EHCCs, and a draft for schools. The committee heard that complaints from parents regarding AP are less frequent than issues arising when children are not receiving an education, often due to delays in placing children in alternative provision when they are not attending school. Schools have primarily raised concerns about the Department for Education's guidance. The council clarified that LA-commissioned AP is typically for children awaiting school placements or when there is a statutory duty to provide alternative education. Further assurance work on the embedded actions is planned for later in 2026-2027. The committee agreed to note the actions taken in response to the internal audit report.

Treasury Management Strategy Statement

The committee was asked to comment on and note the Council's Treasury Management Strategy Statement (TMSS) for 2026-27. This statement, required by the Chartered Institute of Public Finance and Accountants (CIPFA) Treasury Management Code of Practice, outlines the council's approach to managing cash flows and associated risks. The overarching strategy remains unchanged from the previous year, with a focus on prioritising security and liquidity over return. Borrowing will continue to be solely for funding capital expenditure, balancing long and short-term borrowing to minimise costs and ensure prudent provision for debt repayment.

A key change noted is that, as a result of Local Government Reorganisation (LGR), a one-year capital programme has been prepared rather than a full Medium Term Financial Strategy (MTFS). The TMSS presented to the committee did not contain final figures, as some changes to the capital programme had been considered by the Council. The committee noted that there is a differential between the borrowing requirements of the new East Surrey and West Surrey unitary authorities, with one being in a significantly healthier position on its balance. The council is exploring options to manage increased borrowing requirements in 2026-27, including potentially entering long-term markets if interest rates become favourable. The committee was assured that the council's treasury activity will continue beyond March 2027. The committee commented on and noted the TMSS, with the final strategy due for approval by the Council on 3 February 2026.

External Auditor's Annual Report for 2024-25

The committee received the External Auditor's Annual Report for the 2024-25 financial year. The report summarised the work undertaken, including a value for money commentary and confirmation of the financial statement opinion, both of which were unqualified. The report contained no new information beyond what had been discussed at previous meetings. The value for money commentary, which assesses financial sustainability and governance, found no significant weaknesses or outstanding recommendations from prior years. The auditors confirmed that Surrey County Council had proper arrangements in place for managing its finances. The committee noted the report.

Counter Fraud and Corruption Strategy

The committee reviewed and endorsed the updated Counter Fraud and Corruption Strategy. This refresh is primarily a light update to contact details and external links, aligning with the national Fighting Fraud and Corruption Locally strategy. The council maintains a zero-tolerance approach to fraud, investigating and sanctioning any instances found. The strategy is supported by several linked policies, including whistleblowing, anti-bribery, anti-money laundering, and sanctions.

Discussions focused on the mechanisms for addressing identified gaps and the use of technology. The fraud risk assessment is a live document, regularly refreshed based on investigations and irregularities. The team utilises data analytics and data matching, with proactive elements such as checking fuel and purchasing cards for anomalies. The strategy also involves participation in the biannual National Fraud Initiative (NFI), which includes data matching for concessions, blue badges, and pensions. The council is exploring the potential benefits of data sharing with new unitary authorities following LGR. The committee was assured that the default position for criminal activity is referral to the police, with a balance struck between disciplinary action and the cost of prosecution.

Mid-Year Complaints Performance Report for 2025-26

The committee received a summary analysis of complaints received by Surrey County Council between 1 April 2025 and 30 September 2025. Complaint volumes remained relatively stable, with a slight increase compared to the previous year but remaining lower than the year before that. Notably, education complaint volumes decreased due to ongoing improvements in that area.

Timeliness of responses has generally improved, although Stage 2 corporate complaints performance decreased to 73%, with education responses at 54%. Adult social care performance remains strong at 99% within its six-month target. Delays in decision-making were identified as a root cause for over half of complaints. There was a slight decrease in the amount paid out for financial redress compared to the previous year, with 95% of these payments relating to education, primarily due to the timeliness of SEND-related assessments and annual reviews. Work is ongoing to increase capacity and timeliness in this area, including staff recruitment.

Regarding Local Government and Social Care Ombudsman (LGSCO) performance, fewer complaints were upheld (44% compared to 83% in the previous mid-year report). The council is working to align its complaint handling with LGSCO recommendations, with revised policies to be submitted for Cabinet approval in February. The committee noted the report and the council's performance in handling complaints, as well as ongoing efforts to strengthen accountability and improve services.

Changes to the Standards and Conduct Framework for English Local Authorities

The committee was provided with an update on the government's consultation regarding strengthening the standards and conduct framework for local authorities in England. This includes proposed changes to remove members' home addresses from published registers of interest. The report was for noting, providing an update on the consultation and intended legislative next steps. The committee noted the outcomes of the government consultation and the proposal within the English Devolution Community Empowerment Bill regarding the automatic removal of members' home addresses from published registers of interest.