The Lancashire Combined County Authority - Audit and Governance Committee met on Monday 13 July 2026. The committee reviewed the authority's governance, financial statements, and risk management. Discussions included the transition into delivery, strategic priorities, the UK Shared Prosperity Fund, and the Milburn Review. The draft Code of Corporate Governance was presented, and the draft Annual Governance Statement was reviewed. The committee also considered internal and external audit reports, the corporate risk register, and the whistleblowing policy.

Key Updates and Strategic Priorities

Matthew Sidgreaves provided an update on the Lancashire Combined County Authority's (LCCA) transition from setup and mobilisation into delivery, focusing on its three strategic priorities: transport, skills, and economy. New areas of work, such as a spatial development strategy for Lancashire, were introduced.

Councillor Gideon sought clarification on the appointment of the Director of Transport, Karen Kassar, who was due to start the following week from Lincolnshire County Council. He also enquired about the meaning of an integrated transport identity, which Matthew Sidgreaves explained was a public-facing brand for the local transport authority.

Discussions also covered the UK Shared Prosperity Fund (UK SPF), which was passported to Lancashire's districts and unitary authorities. Matthew Sidgreaves confirmed that the fund was ending in September 2026, with no direct like-for-like successor, though efforts were being made to mitigate risks associated with this. He also provided an update on the Milburn Review regarding young people not in employment, education, or training (NEETs), stating that the Skills Advisory Board would consider emerging recommendations at its next meeting.

Councillor Gideon raised questions about the Local Transport Plan (LTP) implementation plan consultation. It was noted that the consultation had closed the previous Sunday, and responses were being analysed. More responses were received for the implementation plan than for the main LTP, which was viewed positively. An interim update would be provided to the Transport Advisory Board on 29 July. Concerns were raised about the level of discussion with district councils regarding their specific areas within the plan, particularly for Ribble Valley, and Matthew Sidgreaves agreed to investigate this further.

Code of Corporate Governance

Andy Dalecki presented the draft LCCA Code of Corporate Governance, explaining that it sets out how the authority will be directed and controlled, based on the CIPFA SOLACE framework. The code aims to demonstrate good governance and drive the Annual Governance Statement.

Councillor Park raised concerns about the clarity of the distinction between the Member's Code of Conduct and the Employee's Code of Conduct, seeking explicit confirmation that officers are expected to implement the political vision given to them. He also expressed reservations about the embed equality, diversity and inclusion principles point, clarifying his preference for meritocracy and equality of opportunity rather than equality of outcomes. Matthew Sidgreaves responded that the code aligns with the Equalities Act and treats everyone fairly, focusing on principles rather than outcomes. The leaders of the three constituent councils had been consulted on the draft code. Authority was delegated to the monitoring officer and chair of the Audit and Governance Committee to make minor amendments, with Councillor Atkinson having responded favourably on 3 July.

Draft Annual Governance Statement

Hannah Race presented the draft Annual Governance Statement for the LCCA's inaugural year. The statement provides positive assurance that the authority's governance arrangements are fit for purpose, while acknowledging the need for ongoing review and strengthening. The review was informed by the work of LCCA officers, support services from Blackpool, Blackburn, and Lancashire councils, and external auditors.

Questions were raised about the TBA (To Be Announced) for lead officers in the improvement plan. Hannah Race committed to providing an update via email. Concerns were also raised about the timeline for the separation of LCCA from its constituent authorities and the inclusion of LCCA reports on county council agendas. It was confirmed that the county council's full council agenda would include an LCCA report for the first time. The current support arrangements with constituent councils are planned to continue for the financial year 26-27, with work underway to establish more dedicated LCCA resources. The impact of potential Local Government Reorganisation (LGR) for Lancashire was also discussed, with the understanding that existing authorities would continue until March 2028, with shadow authorities forming from May.

A question was raised about information accessibility and the splitting of the LCCA website from the LCC website due to system licensing issues. Hannah Race undertook to investigate this and provide an update. The committee was asked to approve the draft Annual Governance Statement for 2025-26.

Statement of Accounts

Gary Fielding, Section 151 Officer for Lancashire County Council, presented the draft LCCA Statement of Accounts for 2025-26. He noted that while overall spending was not significant, approximately £93 million in grants had been passported through constituent councils. The committee was asked to note the accounts, which had been published by the end of June in line with statutory requirements. A question was raised about the placeholder date for the Audit Committee's approval of the accounts, and Gary Fielding clarified that this was a draft statement and the date would be updated once approved, which is intended to happen before the end of the calendar year.

Internal and External Audit Reports

Laura presented the Internal Audit Progress Report, noting that reasonable assurance had been given for the authority's first year of operation, with no significant control weaknesses identified. Two audits had been published: governance framework and decision-making, and financial management and governance. She confirmed that no actions were issued for the financial management audit due to the authority's infancy.

Deborah presented the External Audit Plan, focusing on value for money. Key risks identified included governance in a new authority and improving economy, efficiency, and effectiveness, particularly concerning the reliance on in-kind services. The audit will explore arrangements in place and future plans. A discussion ensued regarding the tracking of in-kind services and the potential for capacity issues post-LGR. The committee also discussed the process for escalating operational risks and the potential for amendments to the terms of reference based on audit findings.

Hannah Race provided an update on the Corporate Risk and Opportunity Register, noting no new corporate risks had been escalated. A discussion took place regarding the timeline for reducing two key risks currently scored at 16. It was agreed that monthly email updates on these specific risks would be provided to the committee, with an interim update requested at the end of August.

Andy Dalecki presented the six-monthly update on the Whistleblowing Policy, reporting no whistleblowing allegations had been received in the past six months.

The committee also considered the current work programme and action log, with a suggestion to adopt a colour-coded system to indicate the status of logged items. The VAT recovery item was confirmed as closed.

The date of the next meeting was confirmed as Monday 28 September at 3:00 PM.