The Charter Trustees for the City of Durham were scheduled to meet to discuss governance, finance, and honorary appointments. The meeting included reviewing and approving the risk assessment for governance arrangements, the annual governance statement, the revenue outturn for the year ending 31 March 2025, the annual return for the year ended 31 March 2025, and honorary freedom arrangements. Councillors were expected to discuss and approve these items.

Honorary Freedom Arrangements

The Charter Trustees were scheduled to consider a report regarding arrangements for dealing with honorary appointments, specifically the Honorary Freedom of the City.

James Etherington, Clerk to the Charter Trustees, wrote in his report that on 11 December 2024, the Charter Trust considered a report proposing arrangements for dealing with the Honorary Freedom of the City, noting that the Charter Trust did not have an adopted process in place to deal with applications for awards of the honour.

The report outlined that the Charter Trustees have the power to bestow the honorary freedom of the city upon persons of distinction and persons who have, in the opinion of the authority, rendered eminent services to that place or area, according to section 249 of the Local Government Act 1972. The report noted that the honorary freedom of the city is the highest honour that [the Charter Trustees] can bestow and, in the view of many, should not be given too often. It can only be granted at a special meeting of the Charter Trust and must be approved by at least two thirds of those members present.

The report recommended that applications or nominations for the Honorary Freedom should be considered by a panel consisting of the Mayor, Deputy Mayor and the Clerk. Those deemed by the panel to meet the statutory tests would then be put forward to Trustees at an Extraordinary Meeting, and those that were not, would not be put forward.

The consideration of applications or nominations in private by a small, informal panel is a practice which has been adopted by councils such as Northumberland, Newcastle, Gateshead and South Tyneside.

Some councillors supported these proposals, but others were concerned that not all members would be involved in the decision making. Some members were also concerned that the statutory tests were too subjective and asked if additional criteria could be considered.

It was proposed that on receipt of an application or nomination, the Clerk will forward a copy of the name and any supporting information to councillors and ask for private confirmation within 14 days as to whether they would support the nomination. If two thirds of members respond positively, then a private Extraordinary Meeting of the Charter Trust will be arranged to consider the application or nomination formally.

It was suggested that the statutory test will be fulfilled by a candidate who can demonstrate one or more of the following:

• That they have brought distinction to City life and enhanced the City's reputation nationally or internationally in the area or activity concerned
• The promotion, achievement or delivery of exceptional community services in which a significant personal contribution has been made
• Demonstrated innovation and entrepreneurship which is delivering significant results in the City
• A contribution which is seen to stand above the contributions of almost all others

Councillors may also wish to give preference to a person who performs in a voluntary capacity but should not preclude the honour being awarded to a person whose dedication and contribution is significantly above that expected for their occupation.

Annual Return for the year ended 31 March 2025

The Charter Trustees were scheduled to review and approve the Annual Return for the year ended 31 March 2025. According to the report of Rob Davisworth, Treasurer, in accordance with the Accounts and Audit Regulations 2015, small relevant bodies in England with an annual turnover of £6.5 million or less must complete an annual return summarising their annual activities at the end of each financial year. To comply, the Annual Return must be approved by the Charter Trustees no later than 30 June 2025. The return is then subject to a limited assurance review by external auditors appointed by the Audit Commission. On completion, the external auditors' report will be incorporated into the published version of the document. The final audited version of the return must be published by the Charter Trust before 30 September 2025.

The annual return is made up of three sections plus the Annual Internal Audit Report:

• Annual internal audit report
• Section 1 Annual Governance Statement, to be signed by the Chair and Clerk of the meeting approving the statement
• Section 2 Accounting Statements, to be signed by the Responsible Finance Officer (Treasurer) and the Chair of the meeting approving the accounting statements
• Section 3 – External Auditor's Report and certificate

Revenue Outturn for the year ending 31 March 2025

The Charter Trustees were scheduled to discuss the Revenue Outturn for the year ending 31 March 2025. According to the report of Rob Davisworth, Treasurer, at 31 March 2025 actual net expenditure was £66,273: an underspend of £12,152 (or 15.5%) against a budget of £78,425. The original budget agreed a contribution from reserves in 2024/25 of £19,085. Based upon the final underspend of £12,152 and the £2 variance in the council tax support grant, there will be a transfer from reserves of £6,935.

The underspend was mainly as a result of a net underspend on the Mayor's hospitality and an underspend on staff administration costs.

Actual expenditure on transport was £13,831 at the financial year end which was £991 (or 6.7%) less than the original budget. This was mainly due to the underspend in respect of the use of the civic car.

The total expenditure on supplies and services was £17,371 which was £1,232 (or 7.6%) more than the annual budget of £16,139. This is mainly as a result of an overspend on the Mayor's hospitality budget, although this is offset by income relating to the Mayor's civic dinner.

The total expenditure on support services was £34,782 which was £4,084 (or 10.5%) less than the annual budget of £38,866. This is mainly due to an underspend on staff administration costs.

The general reserve balance at 1 April 2024 was £67,887. With an underspend of £12,152 a contribution of £6,935 has been taken from the reserve, rather than the original budget draw from the reserve of £19,085. Consequently, the reserve balance has reduced to £60,952 as at 31 March 2025. In 2025/26 there is a commitment to draw £12,859 from the reserve which would result in a reserve balance of £48,093 as at 31 March 2026.

Annual Governance Statement 2024/25

The Charter Trustees were scheduled to review the Annual Governance Statement (AGS) for the year April 2024 to March 2025. The AGS demonstrates how the Charter Trustees comply with the requirements of the Accounts and Audit Regulations 2015 in relation to the annual review of the effectiveness of its system of internal control. The statement is contained within Section 1 of the Annual Governance and Accountability Return and must be considered and approved in advance of the approval of the annual accounts.

There are eight assertions within the statement relating to good governance, financial management and internal control. Evidence is provided within the report setting out how the Charter Trustees have complied with each assertion, providing Trustees with assurance that governance arrangements are sound and operating effectively.

The eight assertions relevant to the Charter Trust are summarised as follows:

• We have put in place arrangements for effective financial management during the year, and for the preparation of the accounting statements.
• We maintained an adequate system of internal control including measures designed to prevent and detect fraud and corruption and reviewed its effectiveness.
• We took all reasonable steps to assure ourselves that there are no matters of actual or potential non-compliance with laws, regulations and Proper Practices that could have a significant financial effect on the ability of this authority to conduct its business or manage its finances.
• We provided proper opportunity during the year for the exercise of electors' rights in accordance with the requirements of the Accounts and Audit Regulations.
• We carried out an assessment of the risks facing this authority and took appropriate steps to manage those risks, including the introduction of internal controls and/or external insurance cover where required.
• We maintained throughout the year an adequate and effective system of internal audit of the accounting records and control systems.
• We took appropriate action on all matters raised in reports from internal and external audit.
• We considered whether any litigation, liabilities or commitments, events or transactions, occurring either during or after the year-end, have a financial impact on this authority and, where appropriate, have included them in the accounting statements.

Yearly Approval of Risk Assessment of Governance Arrangements

The Charter Trustees were scheduled to approve the risk assessment for governance arrangements. James Etherington, Clerk to the Charter Trustees, wrote in his report that the Charter Trustees are required to maintain sound systems of internal control and risk management in accordance with the Accounts and Audit Regulations 2015 and the JPAG Practitioners' Guide 2025. This includes the preparation and adoption of a comprehensive risk assessment to ensure the effective management of potential risks that could impact the Trustees' operations and objectives.

The attached risk assessment identifies and evaluates risks across various areas, including governance, finance, civic assets, public events, reputation, continuity, data protection and procurement. Each risk is assessed based on its likelihood and impact and appropriate controls are implemented to mitigate these risks. The risk assessment is reviewed annually or when significant changes occur.

Adopting the risk assessment is crucial for the following reasons:

• Ensures compliance with statutory and governance requirements
• Enhances the Trustees' ability to manage and mitigate potential risks effectively
• Supports the preparation of the Annual Governance Statement (Section 1 of the AGAR), particularly assertions 5 (risk management) and 6 (internal control)
• Demonstrates the Trustees' commitment to maintaining sound systems of internal control and risk management