The Audit and Standards Committee of Gateshead Council were scheduled to meet on 30 September 2025 to discuss the strategic risk register, oversight of management processes, and the council's status as a going concern. The committee was also scheduled to review the assurances provided by Service Directors to inform the 2024/25 Annual Governance Statement. Finally, the committee was scheduled to receive a verbal update from external auditors regarding the audit of the council's statement of accounts.

Strategic Risk Update

The Audit and Standards Committee were scheduled to review the council's strategic risk register. The register is a tool used by the council to identify, monitor and manage risks that could significantly impact its long-term health and success.

The report pack included a copy of the strategic risk register, which detailed the risks, their potential impact, their risk owners, and their unmitigated and current mitigated risk ratings.

The report noted several changes to the strategic risk register since the previous version:

• Financial risk SR1 was separated into five more detailed financial risks, referenced RD-S01 – RD-S05.
• Managing demand and expectations to achieve the thrive agenda, risk SR2, was removed as a strategic risk.
• Safeguarding children and adults, risk SR3, was split and incorporated into two separate strategic risks, CSCLL-S06 and IASCS-S02.
• Risks SR4, SR6, SR7 and SR9 remained on the register and were updated.
• Non-compliance with statutory requirements, risk SR5, was updated to focus on the strategic risk relating to maintaining a culture of compliance and good governance, reference CED-S02.
• Failure to comply with building and housing legislation, risk SR10, was removed from the strategic risk register and managed as an operational risk.
• A risk relating to climate change was included on the strategic risk register, EIG-S02.
• An additional 13 new risks were added to the register.

The report stated that future reports to the committee would include only those risks with the most significant residual risk score and outstanding mitigations.

Strategic Risks

The strategic risk register included the following risks:

• Workforce Planning (CED-S01): The risk that the council could fail to effectively address current and future workforce requirements.
• Culture of Compliance and Good Governance (CED-S02): The risk that the council does not comply with the Local Code of Governance[^2]. [^2]: The Local Code of Governance defines how the council complies with the principles of good governance laid down by the Independent Commission on Good Governance in Public Services.
• Equality, Diversity and Inclusion (CED-S03): The risk that the council could fail to effectively implement and monitor its strategic plans and objectives to remain compliant with the Equality Act 2010[^3] and embed a culture of equality, diversity and inclusion. [^3]: The Equality Act 2010 is a law that protects people from discrimination.
• SEND Support Demand (CSCLL-S01): The risk that the council does not effectively plan for and manage rising demand for special educational needs and disabilities (SEND) support.
• School Places Sufficiency (CSCLL-S02): The risk that the council does not have enough school places to meet demand.
• Demand for Children's Social Care (CSCLL-S03): The risk that insufficient children's social care places are available to meet demand.
• Youth Justice Service (CSCLL-S04): The risk that increasing numbers of children enter the criminal justice system.
• Sufficiency of Workforce – Children's Social Care (CSCLL-S05): The risk that the council is unable to recruit and retain qualified social workers in sufficient numbers to deliver children's social care services.
• Safeguarding Children (CSCLL-S06): The risk that the council fails to provide the context and conditions for safe and effective social work practice.
• Strategic Infrastructure Development (EIG-S01): The risk that lack of effective planning and programme management may result in developments which fail to meet the needs of the local population, or which do not align to the priorities of the council and central government.
• Environmental Targets and Net Zero (EIG-S02): The risk that competing priorities could result in the council failing to achieve its environmental targets, and in particular its target of being 'Net Zero' by 2030.
• Economic Growth (EIG-S03): The risk that the council fails to attract inward investment and deliver sustainable, long term economic growth.
• Housing Demand (HEHC-S01): The risk that the council is unable to meet government targets for housing due to a lack of viable land to build on and resistance to releasing greenbelt land from local residents.
• Optimal Use of Non Residential Property Assets (HEHC-S02): The risk that ineffective strategic decision-making or a lack of sufficient monitoring and management could result in inefficient use of council assets.
• Playing Pitch, Swimming Pool and Sports Hall Sufficiency (HEHC-S03): The risk that the council is unable to maintain sufficient playing pitch, swimming pool and sports hall facilities based on the population in Gateshead.
• Demand for Adults' Social Care (IASCS-S01): The risk that the council could fail to maintain effective mechanisms to minimise and manage demand for adults' social care.
• External Resourcing in Adults' Social Care (IASCS-S02): The risk that the council must compete with the private sector for the same knowledge and skills required within Adults' Social Care.
• Adults' Social Care Funding (IASCS-S03): The risk that funding for adults' social care must be monitored, forecast and optimised through effective decision making to ensure it is sufficient to maintain an effective and compliant service.
• Addressing Inequalities in the Public's Health and Wellbeing (PHW-S01): The risk the public's health and wellbeing in the borough declines over the medium / long term and that inequalities become more pronounced.
• Resilience and Major Incidents (PHW-S02): The risk that the council fails to design, embed, test and maintain effective procedures and mechanisms to respond to major incidents or business interruptions.
• Financial Sustainability of the Council (RD-S01): The risk that failure to maintain the overall financial health of the council could result in a lack of long-term financial sustainability.
• Financial Sustainability of the Council's Housing Revenue Account (RD-S02): The risk that the council fails to minimise future financial risks to the ringfenced HRA account.
• Capital Funding (RD-S03): The risk of failure to develop and implement an agreed capital strategy could lead to a lack of investment in the council's assets.
• Financial Resources (RD-S04): The risk of failure to implement a sound Treasury Management Investment and Borrowing Strategy, resulting in loss of resources or a less than optimum interest rate position.
• IT and Cyber Security Strategic Planning (RD-S05): The risk of failure to keep pace with emerging threats, update legacy systems and understand and adapt to changing technologies could result in vulnerabilities within the IT network.

Oversight of Management Processes

The Audit and Standards Committee were scheduled to discuss a report detailing how the committee exercises oversight of management processes in certain areas of governance in order to provide assurance to the external auditors.

The areas of governance under consideration, together with an explanation of how oversight is exercised by the Audit and Standards Committee, were detailed in an appendix. These included:

• Undertaking an assessment of the risk that the financial statements may be materially misstated due to fraud or error.
• The effectiveness of controls and management of risks within key financial systems.
• Identifying and responding to risks of fraud in the council.
• Communicating to employees the council's views on business practice and ethical behaviour.
• Communicating to those charged with governance the processes for identifying and responding to fraud or error.
• Overseeing management processes for identifying and responding to the risk of fraud and possible breaches of internal control.
• Gaining assurance that all relevant laws and regulations have been complied with.

The report stated that the external auditor is required to develop a good understanding of the council's management processes as part of their work in respect of auditing the council's financial statements and value for money conclusion.

Annual Governance Statement 2024/25 – Internal Audit Review of Managers' Assurances

The Audit and Standards Committee were scheduled to be informed of the outcome of the work by the Internal Audit and Risk Service in reviewing the assurances provided by Service Directors to inform the 2024/25 Annual Governance Statement.

Service Directors were asked to complete a self-assessment assurance statement detailing the level of assurance they felt they could place on their key control and governance processes. Internal Audit undertook an annual review of the assurance statements.

The 2024/25 Annual Governance Statement audit was carried out using a theme-based approach across the council. All Service Directors were required to provide evidence to support their declarations made on the Assurance Statement in response to the following questions:

• The Service can evidence that it has clear and effective plans in place to deliver the Service's savings targets, and risks around achievement are identified.
• There are effective business continuity arrangements in place which are reviewed and tested on a regular basis. There are effective plans in place to manage change and ensure business continuity during any transition period.

The audit concluded that systems and controls are operating well and no recommendations have been made. The overall conclusion of this work is that the systems and processes for the completion of the Managers' Assurance Statements are effective and that they provided a good level of assurance for the 2024/25 Annual Governance Statement.

Achievement of 'Going Concern Status' 2024/25

The Audit and Standards Committee were scheduled to consider the council's status as a going concern.

The report stated that as local authorities are created and abolished only by statutory changes, there is an underlying assumption in the 2024/25 CIPFA/LASAAC Code of Practice on Local Authority Accounting that their accounts will be prepared on a going concern basis.

The report outlined the assessment of the council's status as a going concern in line with best practice.

The report noted that the council agreed the revenue budget for 2024/25 on 22 February 2024, which was set at £306.277m with a requirement to use £5.000m of reserves. The overall 2024/25 outturn position for the council including non-service budgets and financing results in a surplus of £4.7m.

The report also noted that the council originally approved a Capital Programme of £113.9m for the 2024/25 financial year. At the third quarter review the capital programme was set at £77.8m, £52.7m General Fund schemes and £25.1m HRA. The Capital Programme outturn for 2024/25 was £64.8m, £44.3m General Fund and £20.5m HRA £13m lower than the third quarter review.

The HRA outturn required £0.5m use of reserve. The HRA budget was initially set on 22 February 2024 to deliver a surplus budget of £0.316m however at the third quarter, on 21 January 2025, the projected overspend on the HRA was £0.738m. The HRA is ringfenced and does not form part of the General Fund reserve.

The draft statement of accounts includes the Annual Governance Statement which was approved by the Audit and Standards Committee on 17 June 2025 following the Committees review of the evidence of assurance provided on the Council's internal controls, risk management and governance arrangements. The statement concluded that the Governance arrangements continue to be regarded as fit for purpose in accordance with the governance framework.

The report stated that the council's Chief Finance Officer's view is that the council is aware of the financial challenges it faces and is prepared to deliver its services in the future taking account of the future known risks and therefore the council is a going concern, and the Statement of Accounts should be prepared on that basis.