Draft Annual Governance Statement 2024/25

The culture of the organisation sets the foundation for ethical behaviour, staff / member conduct and the prevention of fraud and corruption, by creating an environment that is based on openness and honesty in all council activities.  The culture is founded upon good organisational performance, external recognition, highly ethical staff and good employee attitude to internal controls.

The Equalities & Diversity framework (and associated Human Resources policies) sets the tone of the council's respect agenda, with a revised Equality, Diversity & Inclusion Policy adopted in 2022.  The council has a Children, Young People and Adults At Risk - Safeguarding Policy, including considerations arising out of the Care Act 2014, and in March 2023 the council adopted an Anti-Modern Slavery Pledge.  The council continues to publish its annual gender pay gap data, as required by central Government.

In 2024/25, as part of the One Arun work on culture change to progress the Council Vision 2022-26, a set of 'Our values' has been adopted for all staff.  These cover internal and external dealings with colleagues, our customers and the community requiring:

• Trust.
• Proactivity.
• Communication.
• Respect.
• Kindness.

The standards of conduct and personal behaviour expected of members and officers of the council are defined and communicated through codes of conduct and protocols.  The current Members' Code was adopted in 2021 and reflects the LGA's model Code of Conduct and is reviewed periodically by the council's Standards Committee. The council has an adopted Protocol on Member and Officer Relations together with an Employee Code of Conduct.  The conduct of elected members is monitored by the council's Standards Committee and Monitoring Officer, and allegations of breaches of the Code of Conduct are investigated by the council's Monitoring Officer and reported to the Standards Committee, with the council's Assessment Panel considering any investigations which in the Monitoring Officer's view require consideration at a hearing.  This process is supported by the council's Local Assessment Procedures and the Local Hearings Procedures which were reviewed and updated in early-2024.

The council operates under a committee system of governance under the provisions of the Local Government Act 2000.  There are currently six 'service' committees and four regulatory committees reporting to Full Council, with their roles and responsibilities contained within Part 3 of the Constitution.  (A diagrammatic representation of how the various stakeholders in this governance process interact is included as Appendix 1 to this document).

Following the district elections held in May 2023, the council remained in a position of 'No Overall Control'.  While the Conservative group remains the largest party, an administration comprising an alliance of the Liberal Democrat, Labour, Green and one of the two separate Independent groups ('the Independent Group') has political leadership of the council.

The council's Constitution provides clear guidance on the roles and responsibilities of the Chief Executive, Senior Officers, the council's Leader and its Committees.  The operation of the Constitution is overseen by the Monitoring Officer and other officers on the Corporate Leadership Team (CLT) on a regular basis and proposed changes to the Constitution are considered by the Constitution Working Party (of members), prior to recommending adoption by Full Council.

The Constitution also contains details of the authority's scheme of delegation, which in 2023 was supplemented with a scheme of CEO authorisation to Directors and identifies the roles and responsibilities of Senior Officers of the council, with specific responsibilities also incorporated into individual job descriptions.  The Leader and the Committee Chairs and their deputies receive briefings from senior officers on a regular basis, including financial, legal and technical advice.

The council takes the prevention of fraud, corruption and maladministration very seriously and has the following policies in place, which aim to prevent or deal with such occurrences:

• Anti-Fraud, Corruption & Bribery Policy (updated in 2024).
• Whistleblowing Policy, in respect of the Public Interest Disclosure Act 1998 (updated in 2025).
• HR policies regarding discipline of staff.
• Registers of Interests for members and staff.

The Group Head of Finance & Section 151 Officer will continue to assess the risk of fraud in the council's operations, and the ongoing counter-fraud activities undertaken, against the CIPFA 'Code of practice on managing the risk of fraud and corruption', the updated 'Fighting Fraud & Corruption Locally' strategy, the UK Anti-Corruption Plan and general / professional best practice.  As part of this work, a review of the resources required to manage the risk of fraud will be undertaken by the Group Head of Finance & Section 151 Officer during 2025/26.  An annual Counter-Fraud Report is provided to the A&GC and current / future risks are monitored.  

The council is committed to the highest possible standards of openness, probity and accountability.  It has a published Whistleblowing Policy, which aims to encourage officers, contractors and members of the public to report any instances of unlawful conduct, health and safety risks, damage to the environment and possible fraud, irregularity or unauthorised use of council funds.

A Feedback and Complaints Policy is in place (updated in 2022) and is available along with forms and guidance on the council's website.  Results of complaints which have been investigated are, where appropriate, used to drive service improvement and performance monitored through Corporate Plan indicators.

The council's Constitution sets out how the council operates and the process for policy and decision-making.  Certain decisions, identified in the council's Constitution, can only be taken by the Full Council.  Under the committee system, other decisions will be taken by Full Council or delegated to an appropriate Committee or to officers.  There are no longer 'key decisions' contained in a Forward Plan, or any decisions made by individual (Cabinet) members.  Reports presented to Committees and Full Council are reviewed on a risk / professional basis by Legal Services and Finance before being presented and appropriate officers attend Committees to answer specific queries raised by members.

The council aims to ensure that clear channels of communication are established with all areas of the community and other stakeholders, ensuring accountability and encouraging open communication.  The council believes that the current governance structure improves the openness and transparency of the council and its decision making and the council increasingly makes use of social media to inform and update residents.

The council's publication 'Arun Times' is distributed to all residents (currently twice-yearly) and is available on the council's website.  The website contains key published information and over the last few years has been rewritten to make it clearer and easier to use for as many people as possible.  To support that goal, new accessibility tools have been added to assist certain user groups and ensure it meets the Web Content Accessibility Guidelines (WCAG) 2.1 AA standard for websites.  The council has an ICT Service Strategy supplemented by a Digital Strategy and will be looking at the best ways to provide more digital opportunities to make dealing with us easier, to improve customer service and increase efficiency.  In July 2024 the council launched its new smartphone app to enable residents to access council services on their mobile device and keep them up to date with the latest council news and information.

Full Council and Committee meetings are held in public, with the press and public only excluded when a report (or part of it) is presented as an 'exempt' item in accordance with Part 1 of Schedule 12A to the Local Government Act 1972. Meeting agendas and public supporting documents are published at least five clear days in advance of meetings and made available at council offices and on the website.  Members of the public are also allowed to speak and ask questions at Full Council and Committee meetings, under the Rules of Procedure contained in the Constitution.

The ModernGov meeting management system was implemented for use by the council in 2019 and assists in the administration and provision of council papers for members, staff and the public.  

The council has adopted a Filming and Photographic Policy for key council meetings, to meet transparency requirements contained in the Local Audit & Accountability Act 2014.  Full Council and Committee meetings are live-streamed and recorded to allow public viewing. 

Various council activities have, over many years, brought together a wide range of local organisations in all sectors of the Community and there is ongoing engagement with the voluntary and community sector.  The council believes that by engaging with local people and other stakeholders this ensures robust accountability.

Members continue to be engaged with Sussex Police regarding concerns over policing, crime and anti-social behaviour in the district.  Full Council appoints a representative to the Sussex Police & Crime Panel on an annual basis and updates are provided to the Housing & Wellbeing Committee who also consider the provision of health services and wellbeing throughout the district.

The priority themes contained in the council's Vision 2022-2026 were drawn up with the involvement of a wide range of consultees including staff, members and the general public.  This was reviewed in 2023/24 and the revised document including the Vision themes, overall aims and objectives, and measures of outcomes and progress for 2024-25 and 2025-26 agreed by Full Council.

The council engages in public consultation exercises to inform the decision-making process, with several undertaken recently in relation to current and future developments e.g. the Housing Strategy, the Homelessness and Rough Sleeping Strategy, preparation of the Local Plan, updates to the Wellbeing Strategy, Bognor Regis Creative Vision and the council's Budget 2025-2026.

The council gathers views from its residents in several ways, which helps to inform the priorities adopted by the council and to identify the views of residents on proposals for new or changed services, projects and initiatives being considered by the council.  Customer satisfaction with its services is included in the council's Vision indicators and is informed by a biannual Residents' Survey with results reported to CLT and members.

The council also has agreed and published a Petitions Scheme, allowing the public to raise issues of concern with a formal response procedure to be followed by the council.  Details of the use of the scheme and petitions received are published on the council's website.

The council aims to deliver high quality services that provide value for money and best fit the needs and priorities of the local community.

In 2021/22 the council developed and agreed its Council Vision 2022-2026 which contains four themes:

• Improving the wellbeing of Arun.
• Delivering the right homes in the right places.
• Supporting our environment to support us.
• Fulfilling Arun's economic potential.

These were reviewed by members in 2023 following local elections and confirmed, with some minor changes to detail.

In March 2025, the Council adopted the following Core Foundations which are intended to provide an internal framework setting out the way the organisation will work to deliver these four externally facing themes:

• Develop our working practices, adopting a one council approach, delivering a seamless service for our customers in an effective and efficient way.
• To drive continual improvement and innovation, using new technologies and ideas to meet the evolving needs of our community and colleagues.
• Promote meaningful engagement with the community and stakeholders, ensuring transparency and accountability in all services.
• Being a sector leader and innovator, developing our compliance and governance frameworks to demonstrate the highest standard of behaviour and regulatory adherence.

Linked to these are key performance indicators / outcomes.  In addition, the council has agreed a set of revised Corporate Vision indicators from April 2022 to support achievement of these themes.  Progress against these is reported to members and published by the council. 

Within these themes, the council will deliver services and progress initiatives for improvement and change to make things better for:

• our residents and everyone who visits this area.
• our businesses.
• those people who need the council to step up and help them when it counts.

Year on year, the council has faced additional pressure to achieve cost-savings without impacting the delivery of important front-line services.  The council's medium term financial forecast anticipates the need for further funding reductions. While the council currently has sufficient reserves to ensure financial resilience, balances are anticipated to reduce significantly in the coming years and the 2025/26 Budget required further funding from the Usable Revenue Reserves (although the level of drawdown was significantly less than previous years).  The council will continue to consider ways to increase income and / or reduce costs to minimise the anticipated budget deficit in future years.  In January 2024 Full Council approved a Financial Strategy 2024-28 with the aim of identifying savings, additional income sources and cost avoidance measures that would lead to the eradication of its structural budget deficit.  In 2024/25, savings in excess of £1 Million have been successfully identified and removed from the budget, with various other workstreams outlined in the Financial Strategy being developed to make further savings, which should assist the council in producing a sustainably balanced budget.

Following a judicial review in December 2024 brought by the Littlehampton Harbour Board (LHB), significant additional funding may be required from the council and West Sussex County Council (jointly responsible for supporting the LHB) in the future which will have a major impact on the council's revenue budget.  It is probable that these extra costs will result in cuts to other council services.  

Value for money continues to be a key factor, with the council looking to reduce costs and improve efficiency, and progress also being made on specific initiatives e.g. by specialist officers in respect of the identification of empty homes and returning them to permanent use.  This in turn results in a financial benefit to the council by way of additional New Homes Bonus (NHB) grant, although central government have indicated that this funding will cease from 2026/27.

The council also continues to consider the impact on residents of the Welfare Reform Act 2012 and of central government changes to the social housing regime and relevant strategies and policies have been reviewed and updated.  Funds have also been allocated by the council and the Ministry of Housing, Communities & Local Government (under its Local Authority Housing Fund scheme) to assist in addressing homelessness issues, by funding the acquisition of properties to provide quality accommodation for emergency cases and reduce the reliance on the use of bed and breakfast accommodation.  

The council is committed to working with others to bring about real change for the benefit of the community.  It already has several joint working arrangements in place and will further explore opportunities for partnerships, where this can be demonstrated to provide the best value.  The council's Chief Executive meets regularly with other CEOs across West Sussex and West Sussex Chief Executives & Leaders meet periodically via the West Sussex Leaders' Board.  Members of the Senior Leadership Team (SLT) hold regular meetings with key businesses, stakeholders and third sector partners such as the University of Chichester, Citizens Advice Bureau, Aldingbourne Trust, Age UK, etc.  There are also regular liaison meetings with the three Town Councils (Arundel, Bognor Regis and Littlehampton) each of which has a lead contact member from the CLT.

The council continues to work with, and provide support to, Town and Parish Councils wishing to develop a Neighbourhood Development Plan and maintains a register of 'assets of community value' (introduced as part of the Localism Act 2011).

The Government recently announced its devolution agenda:

• East Sussex County Council, West Sussex County Council and Brighton & Hove City Council have been successful in their bid to become part of the Government's Devolution Priority Programme.  It is anticipated that this will result in the creation of a combined Sussex Mayoral Authority with mayoral elections in 2026 and some powers then being handed down from Westminster to the elected Mayor.  
• Alongside the plans for devolution are separate but related plans for re-organising local authorities.  The government is looking to create unitary authorities (most likely to be in 2028 for Sussex) in places where the two-tier system of district, borough and county councils currently exist.  The council is liaising with other West Sussex CEOs and Leaders as to how the county might be divided into unitary authorities to operate most day-to-day services currently delivered by the county, district and borough councils.  An outline plan was submitted to the government in March 2025 and a full business case proposal will be submitted in September 2025.

The council's overarching priorities are used to drive other key strategies for consultation, agreement and publication.  The most significant of these are:

•  Arun Economic Development Strategy 2020-2025.  An update to this strategy is currently being commissioned.
• Local Plan 2011-2031 - following a lengthy review, consultation and examination process, the final Local Plan was adopted by Full Council in July 2018.

A review of the Local Plan was agreed by Full Council previously as part of its altered priorities but paused to await details of the Government's new plan making system.  In mid-2023, it was agreed to recommence this review, while having regard to the new system and Regulations due in November 2024.  However, early in 2025 the council deferred appointing a lead consultant pending further information on new / revised legislation and proposals for devolution / local government reorganisation.  Planning staff continue to gather the key evidence required to support the Local Plan and the situation will be reviewed again later in the year.

• Customer Services Strategy 2021-26.
• Housing Strategy 2024-2029.
• Homelessness and Rough Sleeping Strategy 2024-2029.
• Leisure & Cultural Strategy 2013-2028.
• Arun Wellbeing Strategy 2025-2028.
•  Bognor Regis regeneration:
  • the council is now progressing proposals to bring the upper floors of the Bognor Regis Arcade back into use to improve its overall appearance and provide additional residential accommodation.  The ground floor and Arcade structure will also be improved, and initial studies are looking at how that might look.  Repairs to the clock and stained-glass panels will be undertaken during 2025.
  • the council continues to liaise with local partners on improvements (e.g. the University of Chichester's new Tech Park) and to attract new businesses / investment (e.g. the Rolls-Royce technology & logistics centre).
• Enterprise Bognor Regis - planning permission was secured in 2019 by the landowners of the Saltbox site to provide approximately 30,520 square metres of new mixed-use employment floor-space and between 500 and 1,000 new private sector jobs.  Most of this site is now developed and occupied and Phase 2 has now received planning permission.
• External funding was secured to deliver the Littlehampton town centre public realm improvements - Phases 1, 2 and 3 have been completed but Phase 4 and 5 will only progress if external or central government funding becomes available.
• in March 2021 it was agreed that a working party be set up to look at preferences and priorities for bidding against the Levelling Up Fund announced by the Government, for further projects in Littlehampton and Bognor Regis.  The resulting bid by the council was successful and £19.4M was provided to progress projects for improvements to the Alexandra Theatre in Bognor Regis and the Littlehampton seafront:
  • the Littlehampton improvements have been subject to public consultation, a planning application was approved, and construction is progressing and due to complete in Summer 2025.
  • the Alexandra Theatre works have also had the planning application approved and works have commenced and are due to complete in mid-2026, with additional and contingency funding provided by the council.

Linked to this, as part of the overall Regis Centre site, the council is exploring the potential to bring the former Brewers Fayre pub back into use and a 116-bedroom Premier Inn hotel is also to be built.

• the council has also been successful in a bid for funding to contribute to providing new Changing Places Toilets in the district which are all now in place.
• progress of the Arun Growth Deal (extended for 2024-2029) - identifying the Arun 'economic growth offer' and contributing to the overall West Sussex Growth Plan developed by WSCC.
• the council is a member of the Greater Brighton Economic Board.
• a programme of capital expenditure approved as part of the council's annual Budget.

A review of council strategies and policies is under way in 2025 to ensure they are relevant and up to date.           

The council has produced and sustained the Arun Developer & Partner Charter Plus and, in line with the Public Services (Social Value) Act 2012, encourages companies and partners to subscribe to this, to facilitate co-operative working, local employment, training opportunities, procurement and development within the district.  In addition to this, funding was obtained in 2018/19 for 'Journey to Work' and retail training projects to assist both those without employment and independent retailers, with further funding extending this through 2023/24.  The council has worked closely with local Job Centres to hold Jobs and Cost of Living Fairs which have been well attended and resulted in several employment opportunities being taken up.  The One-to-One Retail support service continues to be well received and has recently secured funding from the UKSPF budget for further work.  The council has also received funds from the Economic Recovery Fund, held by WSCC, to assist in town centre economic recovery projects.

The council has a key role in several local partnerships, working for the benefit of residents and the community to improve the local quality of life, including:

• Safer Arun Partnership (the statutory community safety partnership).  Current council anti-social behaviour initiatives include:
  • a Public Spaces Protection Order (PSPO) covering the consumption of alcohol and associated anti-social behaviour in designated areas within the district and litter and dog fouling enforcement.
  • the local Peer Group Conference (PGC) to discuss emerging extra familial harm risks to children and young people; a multi-agency approach which includes schools and other agencies who work with young people in the district.
• Arun Local Community Network / Arun Wellbeing Programme
  • The Arun Local Community Network is a multi-agency group which aims to address local health and wellbeing inequalities in the Arun district.  The Arun LCN recognises the importance and value of working together to deliver tangible health and wellbeing improvements. 
  • The Arun Wellbeing Programme is commissioned by Public Health West Sussex to develop a prevention and wellbeing programme for adults of all ages who live and work in the Arun district. The team has a particular focus on supporting behaviour change in people with increased risk of developing cardiovascular disease, stroke, type two diabetes and some preventable cancers through providing information, signposting and motivational support.
• Safer West Sussex Partnership.
• Hate and Anti-Social Behaviour Risk Assessment Conference (HASBRAC).
• West Sussex Fraud Prevention Working Group.
• Arun and Chichester Road Safety Action Group.
• Littlehampton Town Centre Action Group.
• West Sussex Safeguarding Children Partnership.
• West Sussex Violence and Exploitation Reduction Partnership.
• West Sussex Civilian Military Partnership Board.
• Arun Business Partnership.
• Arun Business Crime Reduction Partnership.  A Business Crime Reduction Partnership Manager has now been recruited.  The BCRP Manager position is a full-time role, with hours split equally between issues affecting the two focus areas of Littlehampton and Bognor Regis.  This will include a physical presence in both town centres over the course of their working week, as well as regular meetings with the council's Community Team, Sussex Police and the Sussex PCC's Office.

It also participates in national, county-wide and local partnership initiatives, including:

• West Sussex Fuel Poverty Partnership.
• Coastal West Sussex & Greater Brighton Strategic Planning Board.
• Greater Brighton Economic Board.
• WSCC Joint Climate Change Board.
• Arun Local Community Network.

and in response to the recent storms and flooding impacting the area has set up a Flood Forum to consider contributing factors, impacts and solutions with the various responsible parties.

The council is clear about its responsibilities for services, whether provided directly or through partners / other third parties.  The council works closely with partners and influence third parties to make sure they deliver to agreed levels of quality and are accountable for what they do.  There will need to be significant infrastructure improvements in the district to support the predicted increase in housing numbers and the council will continue to liaise with appropriate strategic partners and developers as to the required improvements.  Since 2020, in accordance with amended regulations, the council has approved and published its annual Infrastructure Funding Statement and has also updated its Arun Infrastructure Investment Plan for 2025-27 (prioritising the use of Community Infrastructure Levy funds received).

The council has a clear commitment to ensure services deliver the most appropriate combination of quality, value and choice to all residents.  As part of this process, the council has reviewed and let several of its major contracts in recent years (e.g. Combined Cleansing Services, Greenspace Management, Leisure Management) and continues to provide the best level of service, while achieving both cost-savings and partner investment in improvements.  With the cost-of-living crisis and significant increase in energy prices, the council has worked through its staff and partners to minimise the impact on the delivery of key services.

The council continues to liaise with West Sussex County Council in respect of potential changes in its support for waste and recycling initiatives and in a reduction in grant funding for charitable and support organisations.  These changes will have an impact on the council, both financially and through additional burdens placed upon it.

• The council conducted a successful food waste collection service trial in 2022 and has let a new Combined Cleansing Services contract from 2026 to include mandatory food waste collection as required by Government.
• It also provides grants to a number of organisations providing support and services to the community across the district (e.g. Citizens Advice, AGE UK West Sussex & Brighton and Voluntary Action Arun & Chichester) and has distributed funding received from the UK Shared Prosperity Fund (UKSPF) to multiple local partners for qualifying projects as part of the government's levelling up agenda.

The council actively considers environmental issues in its policies and decisions and supports and promotes environmental initiatives for itself and its residents, including carbon management and energy efficiency schemes through its Energy Efficiency & Fuel Poverty Strategy.

The council's strategic priorities include an increased focus on environment and climate change issues and the council formally declared a 'climate emergency' in January 2020.  The council appointed a Climate Change & Sustainability Manager to progress its aim for the council to be carbon-neutral by 2030 and has contracted to obtain its electricity supply from renewable sources.  At its meeting of September 2020, in response to a Motion from members, the Full Council recognised that although much good ecological work is ongoing, further action is required, and it agreed to review and update the bio-diversity policies within the Local Plan.  The council has also agreed and reviewed its:

• Carbon Neutral Strategy.
• Climate Action & Biodiversity Work Plan 2024-25.
• Greenspace Tree Planting Strategy 2021-2031.

The Bersted Brooks Park Project is also to progress, to enhance the open spaces in terms of biodiversity and accessibility for the public.

The council publishes its annual financial accounts in accordance with the CIPFA Local Authority Code of Practice and MHCLG reporting requirements.  The annual Budget is approved by Full Council and regularly monitored during the year and reported to members each quarter.  In the event of significant variation, requiring additional expenditure, a Supplementary Estimate may be requested for approval by Full Council.

CIPFA's Financial Management Code came into effect from April 2020, with compliance required by 2021/22.  This is designed to support good practice in financial management and to assist local authorities in demonstrating their financial sustainability.  An assessment against the Code has been undertaken (and updated in 2024) to confirm that the council is compliant and follows best practice.

The council has a range of performance indicators, used to measure progress against its key priorities in the Council Vision.  The effectiveness of these indicators is considered annually.  In support of the new council Vision for 2022-2026, vision indicators and outcomes and revised Corporate Plan indicators have been agreed, and these are monitored and performance reported to members.  

The council regularly surveys users of its services, and this process has been enhanced, with residents' surveys including customer satisfaction questions undertaken to assess key elements of the delivery of its new priorities.  Results are published and the information provided is used as a resource which informs the Council Vision process and future policy decisions.  Service and value for money reviews may also be undertaken (both via internal audits and Member Working Groups) and the council's external auditors provide a value for money conclusion as part of their annual review of the council's accounts.  

Performance indicators are in place and regularly monitored, with periodic reports provided to the CLT and relevant service committees (and published as agenda items on the council's website).

Via the embedded monitoring and reporting processes that the council has in place, performance, audit, risk and finance information is used to identify areas of concern and for appropriate interventions to be planned and implemented to optimise the achievement of outcomes.

The council's Chief Executive (Head of Paid Service) is responsible and accountable to the authority for all aspects of operational management.  Their objectives are set, and their performance monitored, by a panel of senior members from the controlling group and the Leader of the main opposition group.  In the absence of a Chief Executive, the two Directors continued to act as joint Chief Executives on an interim basis until the new permanent Chief Executive took office at the end of July 2024.

The Group Head of Finance is the designated Section 151 Officer.  The council's Constitution contains specific details of the overall financial responsibilities of the role and an update of the council's Financial Regulations was recently undertaken with the resulting changes included in the Constitution.

The Monitoring Officer (Group Head of Law & Governance) has overall responsibility for legal compliance and works closely with officers and members to advise on legal issues which affect the council.  Under the Localism Act 2011, local authorities were granted the 'general power of competence', allowing greater freedom to work in partnership and to develop more innovative ways of providing services.

As reported in previous AGS documents, the council worked with staff and members on its 2020 Vision programme in order to ensure that the council's agreed outcomes can be delivered and to identify the need for change to best position the council for the future challenges facing the public sector resulting in its 5-year Vision 2022-2026.

However, it was always anticipated that there will be further funding reductions and additional burdens placed upon local government in the immediate future.  The council has considered these as far as possible when preparing its Financial Prospects Report, used to inform its annual budget changes and further annual cost-savings will be required in the short to medium term to maintain the council's financial stability.  The council will continue with its commitment to seek ways to provide quality frontline services with the funds available while also seeking additional income sources and appropriate potential income generating opportunities.

As already noted, the council required a transfer from reserves to fund its 2025/26 budget (which was agreed by Full Council in February 2025) and the financial position for future years has been reflected in the updated Medium Term Financial Forecast 2025-26 to 2029-30 report presented to members.  In view of the anticipated future funding deficit and the changes in the way the council has been operating, efficiency and cost-saving initiatives continue to be investigated, together with consideration of additional income streams arising from the council's Financial Strategy 2024-28.

Work has progressed to consider culture change and organisational values to progress the council Vision 2022-26.  This work is branded as 'One Arun' and has been developed by staff and Members, along with external expertise.  However, elements around the future operating model within the council, including structure / resourcing and consideration of the effective use of corporate properties to ensure that the council's offices and facilities are fit for the future provision of services to the public have now been superseded by the new Financial Strategy and this is a key area for consideration and progress by the new Chief Executive.

Human Resources procedures and policies are in place to facilitate the recruitment and retention of capable staff.  There is an induction and training programme for all staff, as well as apprenticeship opportunities.  All staff are required to participate in a continuous performance review process and an IT system specifically designed to assist with the recording of performance objectives and training and development needs was implemented in 2021.

Arun councillors are elected on a four-year term with the most recent elections held in May 2023.  Elected members to the council have a Member Induction programme, which was reviewed and updated in advance of the 2023 district council elections, and this includes specific training for members in respect of the main regulatory Committees.  Members have ongoing training that incorporates understanding the aims and objectives of the council, understanding and dealing with current / new legislation and developing their personal skills.  They also receive training from the Monitoring Officer on the council's Member Code of Conduct, which is reported to the Standards Committee.

With the implementation of the committee system of governance from May 2021 there is no longer a separate scrutiny committee / function, as it is held that the current system 'self-scrutinises'.  The Constitution does however contain provision for 'Referral and Recovery Procedures' allowing members to require a decision be considered and taken by Full Council rather than by a committee.

The A&GC is embedded as part of the council's overall governance framework.  Its terms of reference incorporate the core functions, as identified in the appropriate CIPFA guidance.  The Committee is responsible for issues relating to the council's system of internal control, risk management, financial reporting, treasury management and counter-fraud, as well overseeing the arrangements, and providing a forum for, reporting and discussion of issues raised by, both internal and external audit.

From April 2022, the council joined the Southern Internal Audit Partnership (SIAP) for the provision of internal audit services to the council (replacing the former in-house arrangement).  The new arrangement provides greater resilience in respect of resource than previously and access to specialist audit skills when required.  The Internal Audit Charter, annual plan and progress reports are provided to the A&GC as before and the arrangements will continue to have regard to the requirements of the CIPFA Statement on the Role of the Head of Internal Audit in Public Sector Organisations (2019).   

Internal Audit also carries out key financial audits of the council's major systems as part of the International Standards on Auditing, in conjunction with the external auditors.  The A&GC receive all the external assurance reports and makes recommendations to Full Council where appropriate.  

The council chose to opt-in to the sector led body approach for external auditor appointments (with a procurement exercise undertaken by the Government-appointed body Public Sector Audit Appointments).  As a result, Ernst & Young LLP were appointed to perform the audit of the council's accounts for a 5-year period (covering the accounts from 2018/19 to 2022/23).  In 2021, the council again opted-in to the sector led body approach for procurement of external audit services (from 2023/24) with E&Y appointed as the council's auditors for a further 5-year period.

The council operates a Publication Scheme, as required by the Freedom of Information Act 2000, and publishes information to meet current local government data transparency requirements.  Planning matters are also covered in the published annual Authority Monitoring Report, as required by the Localism Act 2011.

Details of payments made under the Members' Allowances Scheme are published on the council's website.  The current scheme was adopted by Full Council in July 2019.  An interim review of the scheme was progressed in 2020 to support the decision of the council to move to a committee structure from May 2021 and consider the change of allowances from Cabinet members to committee chairs and vice-chairs.  Following a review by the Members' Independent Remuneration Panel in 2023/24, the council agreed changes to the scheme which were implemented in the 2024/25 municipal year. 

The council annually reviews the effectiveness of its governance framework, including the system of internal control.  The review is informed by the work of the managers who have responsibility for the development and maintenance of the governance process, the internal audit annual report and by comments made by the external auditor and other appropriate review agencies / inspectorates.

Information to provide assurance to support the content of the AGS is available across the council in various sources.  In preparing the AGS for the CLT, consideration has included:

• CIPFA guidelines in respect of the production of an AGS (the best practice suggestions identified by CIPFA in their review of the framework included the suggestion that a diagrammatic representation of the systems, processes and documents that contribute to the council's governance be drawn together on a single sheet.  Based on the example provided, this has been prepared and is attached as Appendix 2 at the end of this document)
• CIPFA's 2016 guidelines in respect of the new CIPFA/SOLACE Delivering Good Governance in Local Government: Framework.
• review / update of the council's local Code of Corporate Governance.
• an annual assessment of compliance with the local Code (and effectiveness of governance arrangements).
• annual assurance statements from CLT members, including input from their service Group Heads.
• Service area Operational Risk Registers.
• the council's Corporate Risk Register, including updates for significant and emerging risks, common themes, etc. identified in the Service area ORR's.
• assessment of other relevant sources of information that provide assurance.
• the Internal Audit Annual Report & Opinion 2024/25 (to be presented by the SIAP manager to the A&GC on 22 July 2025 in conjunction with this document), which contains an assurance statement regarding internal control.
• consideration of the council's IT governance arrangements, to ensure they continue to be adequate to meet the authority's objectives.
• the findings and comments of external audit raised in their annual Audit Completion Reports. 

The arrangements required for gathering assurances for the preparation of the AGS provide an opportunity for the council to consider the robustness of the governance arrangements in place, affecting all areas of the organisation, and helps to identify those areas where improvement is required. 

The AGS has been reviewed by the CLT and the A&GC.  The process of preparing the AGS has added value to the corporate governance and internal control framework of the council.

While the governance arrangements in place continue to be regarded as fit for purpose in accordance with the current framework, a small number of specific risks have been identified which have been discussed with appropriate management and actions to mitigate them agreed.

The annual compliance review identified several issues requiring actions for improvement (some of which had not yet been completed from previous years), and these are identified in the action plan shown on the following pages.  These will be considered and monitored by the CLT, with action plans, timescales and a responsible officer agreed.  Progress to address these issues will also be reported to the A&GC.

Governance Risks Identified

Issues identified in past annual governance statements:

Issues identified in past annual governance statements:

Issue	Mitigating Action(s)	Responsible Officer	Target Date
The council has limited resource going forwards to undertake counter-fraud activity.  The only specific fraud resource is Fraud Investigation & Enforcement Officer covering Housing. There will be a need to identify how more general fraud matters, including maintenance of policies and the administration / conduct of the council's involvement in the mandatory National Fraud Initiative (NFI) will be handled in the future.	A SIAP review of the council's fraud framework has completed and this considered the governance arrangements to prevent, detect and investigate fraud and irregularities. Their report contained recommendations for the process in the future and that an appropriate resource / process be identified. All recommendations have been implemented except for the following: 1.     Fraud awareness training 2.     Fraud Investigation resource Item 1 - the Section 151 Officer is awaiting a proposal from a provider. Item 2 - In May 2024, a Local Government association (LGA) review of the Finance function was undertaken and in 2025, a restructure of the Finance Section is taking place with recruitment of new staff including the requirements for and positioning of in-house counter-fraud staff.	Group Head of Finance / CLT	June 2025
The council has a published Procurement Strategy; however this covers the period 2016-2022 and is linked to the priorities of the old council Vision. The strategy requires review and update and also needs to reflect any legal changes from the Procurement Act 2023 which came into force in February 2025.	The LGA review of the Finance function has concluded and we have identified a resource to provide a client management link with Hampshire County Council (HCC). Furthermore, HCC will develop a draft strategy for our review as part of the SLA charge for 2025/26.	Group Head of Finance	Sept 2025
In January 2024 Full Council approved a new Financial Strategy 2024-28 and a proposal to reduce the SLT as part of an organisational restructure aimed at making immediate cost-savings, with measures to make further savings / generate additional income also under consideration. Achievement of savings will need to be monitored / reported and proposals for further cost-savings / income generation progressed.	CLT approved several work streams as part of the Strategy delivery and many of these are either complete or work in progress.  Progress was reported to members as part of the 2025/26 budget setting process.  Further delivery of work streams is expected during 2025/26.  The key aim of the Financial Strategy was to bridge the structural budget deficit, and this will need to be reviewed once the outcome of the Fair Funding Review has been announced by central government. As at 2024/25, annual savings of in excess of £1M had been taken from the base budget.  Finance continues to monitor the achievement of planned savings, but further cost savings / income generation are still required.	Group Head of Finance / CLT	Ongoing

New issues identified from the governance review for the preparation of the 2024/25 Annual Governance Statement:

New issues identified from the governance review for the preparation of the 2024/25 Annual Governance Statement

Issue	Mitigating Action(s)	Responsible Officer	Target Date
In the course of their 2023/24 Value for Money review, the council's external auditors noted the risk of a significant weakness in that the council's draft Accounts for 2023/24 were not completed and published for public viewing and external audit review until October 2024.  They recommended that In order to meet its statutory reporting responsibilities, the council needs to ensure that it has adequate arrangements in place to prepare its internal and external financial reporting in a timely manner.	Management accepted that there had been technical issues with financial reporting, which has been improved, and a restructure of the Finance Department and subsequent recruitment exercise has been concluded, which should address the points raised by the external auditors.  It should also be noted that the external auditors were unable to identify sufficient resources to complete the 2023/24 audit in a timely fashion.  The proposed Local Audit recovery plan announced by central government should alleviate this pressure.	Group Head of Finance	July 2025
In 2024, the new government progressed proposals to address the national backlog on the audit of local authority accounts.  The Accounts and Audit (Amendment) Regulations 2024 ( SI 2024/907 ) came into force on 30 September 2024 and these set dates for the approval and publication of audited local authority accounts for years up to and including 2027/28.  It also requires draft accounts to be available for public inspection on or before the first working day of July of the financial year immediately following the end of the financial year to which the statement relates.	See also above response.  Finance management will: - ensure that there are appropriate resources available to meet the publication date for the draft accounts - liaise with external auditors to ensure audits progress to meet the annual deadlines - liaise with Committee Services on the dates of meetings of the A&GC to enable the Accounts and key reports to be presented for consideration and approval in line with the dates set.	Group Head of Finance	Ongoing
Under the Government's devolution agenda it is anticipated that a combined Sussex Mayoral Authority will be created with mayoral elections in 2026, with some powers then being handed down from Westminster to the elected Mayor.  Alongside the plans for devolution are separate but related plans for re-organising local authorities.  The government is looking to create unitary authorities (most likely to be in 2028 for Sussex) in places where the two-tier system of district, borough and county councils currently exist.	The council is liaising with other Sussex CEOs and Leaders as to how the county might be divided into unitary authorities to operate most day-to-day services currently delivered by the county, district and borough councils with the initial progress to be submitted to government in March and a full business case proposal in September 2025. A new entry for Devolution has also been added to the Corporate Risk Register	CEO / CLT	Ongoing
Following a judicial review brought by the Littlehampton Harbour Board (LHB), significant additional funding may be required from the council and West Sussex County Council (jointly responsible for funding the LHB's operational deficits and capital investment plans) in the future.  This will have a severe impact on the revenue budget and borrowing requirement.  It would almost certainly impact on the provision of existing services.	An application to appeal the decision of the judicial review has been unsuccessful and the council will consider its options / next steps. A new entry has been added to the Corporate Risk Register.	CLT	Ongoing

 

 Issues identified in the 2023/24 Annual Governance Statement that have now been resolved:

Issues identified in the 2023/24 Annual Governance Statement that have now been resolved

Issue	Mitigating Action(s)	Responsible Officer	Target Date
As of July 2021, the council's external auditors advised that national resourcing issues meant that they would not be able to complete all their audits by 30 September and scheduled audit work for the council in November 2021.  This was not completed until early in 2022 and this meant the audited Accounts were not presented to the A&GC until February 2022. As at March 2022 Ernst & Young advised that the resourcing issues continued and that their audit work was again delayed.  The 2021/22 Accounts were presented to the Committee in February 2023, but some work remained to be completed. E&Y has advised that work on the 22/23 Accounts would again be delayed, and the audit took place in late-2023 meaning the audited Accounts were not presented to Committee until December 2024.	The issue was reported to the Chief Executive and Chair / Vice-Chair of the A&GC and raised with Ernst & Young when presenting reports to the Committee. External audit resourcing issues and completion of outstanding work meant the 2021/22 Accounts were not finally signed off until March 2024. A 'backstop date' of 30 September 2024 was set by the Government for the completion of external audits on council accounts up to and including those for 2022/23. The Group Head of Finance will continue to liaise with the external auditors to ensure that the audited Accounts are presented to the Committee at the earliest opportunity and an appropriate explanatory note will again be posted with the draft Accounts. The new Government (from May 2024) progressed measures to clear the backlog of audits.  Backstop dates of 13 December 2024 for the completion of outstanding audits and publication of Accounts up to 2022/23 and 28 February 2025 for the 2023/24 Accounts were set which have been met by the council and its external auditors.	Group Head of Finance	Complete
The council's risk appetite, risk management strategy and corporate risk register were reviewed / updated in 2022 and staff training also provided to better embed risk management into the council's operations and to link to the achievement of the council's future priorities. The council's operational risk registers (ORR) now require review and update to reflect the revised risk management strategy and to ensure that all services are covered following structure and staffing changes.	A review of operational risk registers for all service areas under the new risk management framework has been completed.  Significant risks are regularly reported to CLT and considered for inclusion in the corporate risk register (CRR).  Changes to the CRR are now reported at each meeting of the A&GC.	Finance & Risk Manager	Complete
The council's CEO resigned and left the council at the end of May 2023. The resignation coincided with the pre-election period for the district elections and delayed decisions on the arrangements for the recruitment of a new CEO. The Director of Growth and Director of Environment & Communities were placed in temporary charge.	Full Council considered and agreed the process for recruiting a replacement CEO.  Senior members were involved in the process. A new Chief Executive was appointed and commenced employment at the end of July 2024.	Full Council	Complete
The council's internal auditors (Southern Internal Audit Partnership) have issued limited assurance reports for 2 audits relating to lack of compliance with Contract Standing Orders.  These relate to the use of agency workers and general procurement practices.	CLT have reviewed the reports and taken appropriate actions in the findings, as agreed with SIAP. The council has reviewed the situation to comply with Standing Orders and significantly reduced the number of agency workers employed. Recommendations from the audit relating to general procurement practices have been considered and addressed by management.  A new resource has been identified within the Group to provide more robust support to the client procurement function.	Group Head of Organisational Excellence           Group Head of Finance	Complete               Complete
The annual review of governance and drafting of the AGS has been undertaken by the same member of staff for several of years.  The staff member will be leaving the council in 2025, and the role will no longer exist internally. A new resource will need to undertake the process of producing the annual AGS.	In 2023, SIAP completed a review of the existing process for the preparation of the AGS.  This confirmed that an appropriate resource / process will be required to progress this in the future. In 2025, a restructure of the Finance Section has taken place with recruitment of new staff.  Responsibility for preparation of the AGS has been assigned within the new structure.	Group Head of Finance	Complete

It is our opinion that Corporate Governance, along with supporting controls and procedures, remained strong for the council through 2024/25 despite the pressures on the council, staff and partners.  Where governance risks have been identified, mitigating actions have been advised by appropriate officers (as documented above).

Signed by:

Councillor Martin Lury - Leader of Council

Dawn Hudd - Chief Executive

on behalf of the members and senior officers of the Council

Dated:  May 2025

Appendix 1

Appendix 2 - Corporate governance framework

Principles, statutory obligations and organisational objectives are:

• A. Behaving with integrity, demonstrating a strong commitment to ethical values and respecting the rule of the law
• B. Ensuring openness and comprehensive stakeholder engagement
• C. Defining outcomes in terms of sustainable economic, social and environmental benefits
• D. Determining the interventions necessary to optimise the achievement of the intended outcomes
• E. Developing the entity's capacity including the capability of its leadership and the individuals within it
• F. Managing risks and performance through robust internal control and strong public financial management 
• G. Implementing good practices in transparency, reporting and acting to deliver effective accountability

Corporate governance comprises the behaviours and values, systems and processes, by which the council is directed and controlled and its activities through which it accounts to, engages with and, where appropriate, leads the community.  

Key documents - annual review/production include:

• annual treasury management report
• capital strategy
• corporate plan / Vision indicators
• corporate risk register
• counter-fraud report
• external audit reports
• financial prospects / medium-term financial forecast
• financial strategy 2024-28
• HRA business plan 2017 - 2047
• local code of corporate governance 
• members' allowances scheme 
• pay policy statement 
• Prudential Code
• revenue and capital budget
• risk management framework
• statement of accounts
• treasury management strategy 
• Vision 2022-2028

Key documents - ad hoc review/production include:

• anti-fraud, corruption & bribery policy
• anti-modern slavery pledge
• Arun economic development strategy 2020-2025
• Arun growth deal
• Arun wellbeing strategy 2025-2028
• business continuity framework
• carbon neutral strategy
• climate action & biodiversity work plan
• constitution
• council housing compliance strategy
• digital strategy 2019-2025
• energy efficiency & fuel poverty strategy
• equality, diversity & inclusion policy
• financial regulations
• freedom of information / publication scheme
• homelessness and rough sleeping strategy 2024-2029
• housing strategy 2024-2029
• ICT service strategy
• leisure and wellbeing strategy 2025-2027
• local development scheme 2025-2028
• local plan 2011-2031
• member code of conduct
• officer code of conduct
• officer scheme of delegation
• performance management framework 
• petitions scheme
• record of decisions
• safeguarding agenda
• whistleblowing policy

Contributory processes/regulatory monitoring include:

• annual governance statement
• Arun Times
• audit & governance committee
• authority monitoring group
• budgetary reporting
• CLT/ service assurance statements
• committees work programme
• consultations
• corporate H&S
• corporate intranet (SharePoint)
• corporate website
• customer services strategy
• customer satisfaction surveys
• data protection
• data transparency
• declarations of interest
• developer & partner charter plus
• external audit
• external regulatory & review bodies
• feedback & complaints policy
• filming & photographic policy
• gender pay gap data
• H&S framework
• human resources policies 
• infrastructure funding statement
• infrastructure investment plan
• internal audit
• job descriptions
• legislative compliance
• member/officer protocol
• member training
• Members' Independent Remuneration Panel
• Monitoring Officer
• partnership arrangements / reporting (e.g. Safer Arun Partnership)
• pay profiling system
• personal development review process
• procurement regulations
• residents' surveys
• schedule of council meetings
• Section 151 officer
• staff induction
• staff surveys
• standards committee
• supplier charter
• Unison

NB - a review of council strategies and policies is under way in 2025 to ensure they are relevant and up to date