The Lancashire Combined County Authority's Audit and Governance Committee met on 14 January 2026. The committee received updates on the authority's financial assurance framework, internal audit progress, and the corporate risk register. The committee also discussed the development of VAT recovery.

Appointment of Independent Chair

The committee was informed of the appointment of Mr Greg Gottig as the new independent chair of the Lancashire Combined County Authority (LCCA) Audit and Governance Committee.

Key Updates for LCCA Committees

Matthew Sidgreaves, the LCCA's Interim Chief Operating Officer, provided an update on the authority's activities. Key points included:

• First Anniversary: The LCCA had recently marked its first anniversary, with communications highlighting progress and future priorities.
• Devolution and Funding: The government had invited new devolution proposals, and the LCCA had secured £250,000 in core capacity funding for the next financial year. Concerns were raised about disparities in capacity funding between foundation strategic authorities and mayoral strategic authorities, which council leaders intended to discuss with the Minister for Devolution, Faith and Communities.
• Phase Two Development: The authority was transitioning into Phase Two, focusing on delivery. This includes the transfer of transport responsibilities from constituent councils from 1 April 2026 and the devolution of the adult skills budget later in the year. Recruitment for the Director of Transport post was underway, and the leadership team and statutory officer arrangements were being reviewed.
• Consultations: The LCCA had responded to several government consultations, including those on overnight visitor levies (supporting their extension to all strategic authorities), Local Government Reorganisation (a neutral response due to differing constituent council preferences), spatial development strategies (supporting the LCCA's area as the appropriate footprint), and the licensing of taxis and private hire vehicles.
• Work Programme Sharing: It was suggested that the LCCA Audit and Governance Committee's work programme would be shared with the LCCA Overview and Scrutiny Committee, and vice versa, for information.

LCCA Financial Assurance Framework

The committee received an overview of the LCCA's initial financial assurance framework, designed to provide confidence that the authority's governance arrangements are being implemented effectively. The report detailed key financial documents in place, including the Constitution's Financial Regulations, Financial Procedure Rules, Contract Procedure Rules, the Chief Financial Officer's report on the robustness of revenue budget estimates and reserves, the Capital Strategy, Treasury Management Strategy, and Investment Strategy.

The report also outlined the support services agreement with the three constituent councils, Lancashire County Council, Blackpool Council, and Blackburn with Darwen Council, noting that most services were provided in kind for the first twelve months. The separation of strategic finance (with Lancashire County Council) and operational finance (with Blackpool Council) was explained. The complexities surrounding VAT recovery were also highlighted, with the authority awaiting Royal Assent for the Finance Bill 2025/26 to confirm its eligibility to reclaim VAT. The report confirmed that KPMG had been appointed as the external auditor with an indicative fee of £164,000.

Internal Audit Progress Report

The Head of Internal Audit presented a progress report detailing the work undertaken as part of the 2025/26 audit plan. As of 27 November 2025, 28 days of audit activity had been completed, representing 33% of the planned 85 days. Key areas of work included the assurance framework for support services, financial management and governance, and risk management, which was reported as completed with reasonable assurance. The report noted that the audit universe had been updated to reflect committee requests, and that grant reviews would be undertaken in 2026.

Counter Financial Crime and Anti-Money Laundering Governance Framework

The committee was presented with three key governance policies for discussion: the Whistleblowing Policy, the Counter Financial Crime Policy, and the Anti-Money Laundering Policy. These policies are designed to prevent, detect, and respond to misconduct, financial crime, and money laundering risks, aligning with legislation such as the Public Interest Disclosure Act 1998, the Fraud Act 2006, the Bribery Act 2010, and the Money Laundering and Terrorist Financing Regulations 2019. The policies aim to uphold high standards of integrity, transparency, and accountability within the LCCA.

Corporate Risk and Opportunity Register - Quarterly Update

The Head of Governance presented an update on the Corporate Risk and Opportunity Register. Since the last update, the risk score for 'Local Transport Authority Functions' had increased from 9 to 12. A new risk, 'Engagement of Third-Party Providers,' had been added due to a lack of clarity regarding forward plans, processes, and roles. The risk score for 'Operational Capacity and Resources' had also increased, reflecting budget arrangements for 2026/27, which include partial financial contributions from constituent councils for support services. The committee received the updated register.

Audit and Governance Committee Work Programme 2025/26

The committee received the draft work programme for 2025/26. The programme was noted as an evolving document, subject to change based on emerging priorities. The committee was asked to consider the programme and make any necessary revisions.

The meeting also included the confirmation of the appointment of Mr Greg Gottig as the Independent Chair of the committee. Apologies were received from Councillors Mustafa Desai, Yvonne Gagen, Simon Hore, and Elaine Whittingham. No pecuniary or non-pecuniary interests were declared. The minutes of the previous meeting held on 22 September 2025 were not confirmed as an accurate record at this meeting.