Agenda and minutes

Apologies were received from Councillor Chan, Councillor Kabir and Stephen Ross (Independent co-opted Member).

Members are invited to declare at this stage of the meeting, the nature and existence of any relevant disclosable pecuniary or personal interests in the items on this agenda and to specify the item(s) to which they relate.

David Ewart (Chair) declared a personal interest as a member of CIPFA.

Councillor S.Butt declared an interest in relation Item 7 as one of the Directors of i4b and First Wave Housing.

To hear any deputations received from members of the public in accordance with Standing Order 67.

None.

To approve the minutes of the previous meeting held on Tuesday 18 July 2023 as a correct record and note the action log arising from previous meetings.

RESOLVED that the minutes of the previous meeting held on Tuesday 18 July 2023 be approved as a correct record.

Members noted the updates provided in relation to items listed on the Action Log.

To consider any matters arising from the minutes of the previous meeting.

None.

The purpose of this report is to update the Audit and Standards Advisory Committee on gifts and hospitality registered by Members, member training and a recent case highlighting action taken as a result of non-compliance with s85 Local Government Act.

Debra Norman, Corporate Director of Governance, introduced a report updating the Audit and Standards Advisory Committee (ASAC) on gifts and hospitality registered by Members and Member training. The Committee noted the following key points:

·         The details of Gifts and Hospitality registered by members in the second quarter of 2023/24 were detailed in Appendix A of the report.

·         Following a recruitment exercise to fill the outstanding Independent Co-opted Member post, two candidates were recognised as appointable, with Stephen Ross being offered the position on a 4-year term as agreed by Full Council on 10.07.23.

·         Following the resignation of Independent Co-opted member Rachael Tiffen, the second candidate, Rhys Jarvis was offered the newly vacant position, which was approved by Full Council on 18.09.23.

·         In relation to member attendance at mandatory training sessions, the Committee was advised that all members had completed their core mandatory refresher training with the exception of Data Protection & Information Security. A repeat virtual training session was scheduled to take place on 5.10.23 to enable the outstanding members (as listed in Appendix B) to complete the training.

The Committee re-iterated that they felt it was particularly important that Cabinet Members who had not completed the outstanding training did so, as by virtue of their Cabinet positions they would be exposed to significantly increased levels of sensitive data.

As no further issues were raised the Chair thanked Debra Norman for the update provided and it was RESOLVED to note the content of the report.

To provide an update on i4B Holdings Ltd.’s and First Wave Housing Ltd.’s draft accounts, recent performance, risk register and recent audits.

7.1 First Wave Housing Ltd

7.1.1 Report from Chair of First Wave Housing Ltd

This report provides the Audit and Standards Advisory Committee (The Committee, ASAC) with an update on First Wave Housing Ltd.’s (FWH; The Company) draft accounts, recent performance, housing companies’ development strategy, risk register, and recent audits.

7.1.2 First Wave Housing Ltd Guarantor Report

7.2 I4B Holdings Ltd

7.2.1 Report from Chair of i4B Holdings Ltd

This report provides the Audit and Standards Advisory Committee (The Committee, ASAC) with an update on i4B Holdings Ltd.’s (i4B; The Company) draft accounts, recent performance, housing companies’ development strategy, risk register, and recent audits.

7.2.2 i4B Shareholder Report

Ahead of the formal introduction of the item, the Chair advised the Committee of a change in the reporting of i4B and First Wave Housing as it was recognised that the role of the Audit & Standards Advisory Committee was to scrutinise the Council oversight of the companies as opposed to scrutinising the companies themselves.

Ravinder Jassar, Deputy Director of Finance introduced the reports that updated the Committee on the work of both First Wave Housing Ltd (FWH) and i4B Holdings Ltd (i4B) to deliver against their business plans.

Key issues highlighted were as follows:

·                The Committee was advised that following a review of the Committee’s arrangements and in consultation with the Chair and Vice Chair, it had been agreed that the Committee would receive bi-annual reports from the Council’s Chief Executive and Corporate Director of Finance & Resources to provide assurance on the arrangements the Council, as Guarantor of FWH and shareholder in i4B, had in place to oversee the good performance and governance of the companies. It was recognised that this revised approach was in line with best practice as recommended by CIPFA.

·                The Committee’s attention was drawn to Section 3.4 of the reports that laid out the governance arrangements in place.

·                It was highlighted that both business models remained in financially strong and stable positions.

·                Voids and rent collections continued to be areas that required focus.

The Chair invited the Committee to ask officers any questions or clarifying points in relation to both i4B and FWH.

The following points were discussed:

·                The Committee felt there should be enhanced regular scrutiny of i4B and FWH, Peter Gadson, Corporate Director of Resident Services, advised that there were plans to hold a joint scrutiny Committee meeting in January 2024 with both the Resources & Public Realm Scrutiny Committee and Community & Wellbeing Scrutiny to examine the companies in more detail, and if it was felt to be an effective way forward, regular opportunities for scrutiny of the companies could be undertaken  via their  inclusion on the Committee’s work plans. The Chair agreed as a forward action to liaise with the Chairs of both Scrutiny Committees to explore this further.

·                Specifically in relation to i4B, the Committee queried the issue of tax inefficiencies, Ravinder Jassar, Deputy Director of Finance advised that as i4B had become more profitable, the company was required to pay more tax, consequently discussions had taken place with a tax consultant to ensure that the company was operating as tax efficiently as possible.

·                Following a Committee query on i4B’s buying strategy, it was confirmed that now that house prices had started to fall, buyers acting on behalf of the Council had been instructed to start purchasing again after a brief pause due to the rising interest rates and unstable market conditions that had begun to stabilise.

·                The Committee questioned what was being done to increase void turnaround times for both companies, in response the Committee was advised that the revised operational changes that had been made to manage the reduction of void  ...  view the full minutes text for item 7.

This report provides the Committee with an update on the Council’s Strategic Risks as of September 2023. The update has been prepared in consultation with risk leads and the Council Management Team and summarises the risks that are considered to be of an impact and/or likelihood of materialising, and which may have an adverse effect on the achievement of the Council’s corporate objectives. The report also presents the Committee with a new Risk Management Strategy. The strategy seeks to outline the Council’s approach to risk management to support a robust and consistent process for managing risk and opportunities.

Darren Armstrong, Head of Audit & Investigation, introduced the report providing the Committee with an update on the Council’s Strategic Risks as of September 2023 and the new Risk Management Strategy that outlined the Council’s approach to risk management to support a robust and consistent process for managing risk and opportunities.

In considering the report the Committee noted:

• The Strategic Risk Register had been prepared in consultation with risk leads, Departmental Management, Senior Leadership Teams and the Council’s Management Team in accordance with the key elements of the Council’s Risk Management Policy and Strategy.
• Since the report was last updated in February 2023, the Council had continued to operate in a heightened risk environment due to several external factors that included the unstable economic climate and the Cost of Living crisis.
• The Committee’s attention was drawn to Appendix 1 - Strategic Risk Register that detailed the four new risks that had been added to the Strategic Risk Report, one of which reflected the growing demand from homeless households coupled with the lack of affordable accommodation that had resulted in the increased use of costly emergency temporary accommodation. The three further risks identified within the Strategic Risk Report (Risk E – Non -compliance with statutory housing duties, Risk G – Serious child protection incident or wider safeguarding concern and Risk H – Safeguarding incident – Adults) had previously been held on departmental risk registers as inherent risks. The Committee noted that Risks E – H were not new risks nor had they been escalated due to increased risk scores; they had been added to reflect a change in the Council’s risk management approach as part of ongoing efforts to continue to improve and enhance the Council’s risk management framework.
• The new Risk Management Strategy – Appendix 2 had been produced in response to a previous recommendation made in an external assessment and was felt to be significantly improved from the previous strategy in place with the addition of a Risk Appetite Statement and a comprehensive resource guide to risk management in Brent.

The Chair thanked Darren Armstrong for his report and invited Committee members to ask any questions they may have, with the following responses provided:

• In response to a Committee query in relation to how the risk of the overspend for temporary accommodation could be mitigated, the Committee was advised that with the overspend projected to be £13m it would be reported in the Q2 forecast report and taken to Cabinet with a report that would detail the range of actions the Council could take to relieve the pressures in the short and longer term.
• In response to a Committee query in relation to whether risks were benchmarked against other local authorities, it was confirmed that reviewing of the risk register framework was regularly compared with colleagues from other Council’s to look for common themes and share best practice, additionally, Councillor M.Butt, Leader of the Council advised that Cabinet Members regularly met with their counterparts across London to share intelligence  ...  view the full minutes text for item 8.

To provide an update on the progress of the Statement of Accounts and to review the Audit Findings Report for 2022/23. 

Ahead of the updated Audit Findings Report being presented to the Committee, the Chair clarified that the final Audit Findings Report remained in progress, therefore final approval of the accounts could not be confirmed at the meeting. An additional meeting was scheduled for 12 October 2023 to enable final consideration of the accounts and recommendation for approval to the Audit & Standards Committee.

Ben Ainsworth, Head of Finance was then invited to introduce a report that provided the Committee with an update to the Statement of Accounts 2022/23 and the External Audit Findings Report.

In considering the report the Committee noted the following key points:

·         Grant Thornton (External Auditors) was in the process of completing the audit of the 2022/23 accounts and their final Audit Findings Report.

·         Adjustments to the accounts had been agreed by the Council and Grant Thornton and would be detailed in the final auditor’s report.

·         Grant Thornton had made a number of recommendations to support further improvements in the Council’s processes, the recommendations identified would come into effect with a revised plan for closing the 2023/24 accounts.

·         Three objections had been received in relation to bus lane enforcement, the Council was in the process of reviewing the objections and seeking legal advice; it was noted that similar objections had been received by several other London Councils.

·         The Committee was advised that providing that the objections were not classified as material, they would not delay the sign off of the accounts; however, the accounts could not be fully certified until the objections had been addressed.

The Chair thanked Ben Ainsworth for introducing the item, before inviting Ciaran McLaughlin, Key Audit Partner, Grant Thornton to update the Committee on the Council’s Audit Findings Report:

The following key points were highlighted:

·         It was highlighted that Brent’s Finance Team had collaborated well with Grant Thornton to get the audit to the current stage of nearing completion. Work had continued to progress well with only a small number of outstanding areas to complete, this included the Housing Revenues Account (HRA), General Fund re-evaluations work and IAS 19 assurance letters. Once any outstanding areas had been completed the audit would be ready for the auditor’s internal review process.

·         The Annual Auditors Report (Value for Money Audit) was being finalised with a draft report expected to be shared with the Council within the next week.

·         Auditors were satisfied with the management responses received in relation to the risks and observations identified.

·         Key judgements were in line with the auditors’ expectations and would continue to be monitored on an annual basis.

·         Auditors were awaiting final confirmation that the 3 objections received were not material, the Committee was advised that if the objections were found to be material it could delay the signing of the accounts.

The Chair invited the Committee to ask any clarifying questions in relation to the update, the following responses were provided:

·         In response to a Committee query in relation to the higher than usual number of journals submitted as part of  ...  view the full minutes text for item 9.

To note the Committee’s Forward Plan and agree a draft agenda for the next meeting, which would be reviewed and finalised by the Chief Finance Officer, the Head of Audit and the Chair of the Committee one month after the date of the current meeting.

It was RESOLVED to note the Committee’s Forward Plan.

Notice of items to be raised under this heading must be given in writing to the Head of Executive and Member Services or his representative before the meeting in accordance with Standing Order 60.

The Chair recommended that Committee members attend the Section 114 training that the Council were providing. Members were advised that if they were unable to attend, a recording of the training would be made available.

The next meeting was scheduled for Thursday 12 October 2023

The meeting closed at 7:28pm

David Ewart

Chair