Agenda item

This report presents the Council’s External Auditor’s Annual Report on value for money as part of the 2023 - 24 audit of the year end accounts. It also sets out the key recommendations made within the Annual Report.

Members are asked to note that a representative of the Council’s External  Auditor’s (Grant Thornton) will be present at the meeting to present the report and respond to any issues raised.

In accordance with the change in the order of business agreed at the start of the meeting, the Mayor then invited Paul Dossett (Grant Thornton) as the Council’s External Auditor Partner to introduce the External Audit 2023-24 Annual Report on Value for Money (VFM).

In introducing the report, Paul Dossett summarised the approach towards the VFM audit and drew Members attention to the focus of the Annual Report on the Council’s arrangements in relation to three areas, Governance, Financial Sustainability and Improving economy, efficiency along with the key findings detailed within the Annual Report.  Members were advised that work to finalise sign-off of the Council’s 2023-24 Financial Statement of Accounts was now in the process of being completed, with the Executive Summary providing an overview in relation to the Value for Money assessment of the Council’s arrangements.

As part of the auditor’s work, members were advised that whilst no significant weakness had been identified in the Council’s arrangements for Governance or Improving Economy, Efficiency and Effectiveness a significant weakness and key recommendation had been raised in respect of the Council’s Financial Sustainability, highlighting the use of reserves in 2023/24 and 2024/25 to fund in year overspends arising from the unprecedented pressures in homelessness and temporary accommodation.  This had been identified as a key risk in the Council’s financial sustainability and resilience on the basis that the continued use of reserves to manage these pressures would be unsustainable.  In recognising the significant pressures and challenges on local government funding, Paul Dossett advised this was a position faced by a number of other local authorities, with the report including a detailed commentary on the review of arrangements in relation to maintaining the Council’s financial sustainability.  These included the plans in place to address the significant financial pressures in relation to short and medium term plans, action being taken to address the funding gaps identified and deliver achievable savings in response, plans to support the sustainable delivery of services in accordance with strategic and statutory priorities and other key programmes as well as identify and manage risks to financial resilience (including unplanned changes in demand).  In order to stabilise its financial position, the report had recognised that the Council had been compelled to make difficult decisions in order to balance its budget and ensure it maintained its finances on a sustainable footing avoiding the continued use of reserves to meet unplanned expenditure resulting in £16m of new savings having been proposed for delivery in 2025-26 with the auditors having found that the Council’s financial planning both short and longer term had been based on sound judgements.

In terms of the arrangements relating to Governance and Improving Economy, Efficiency and Effectiveness members were advised that whilst a number of improvement recommendations had been identified, these had been designed to enhance existing processes rather than in response to any weaknesses identified.  In commending the report to Council thanks were expressed to all officers involved in supporting the audit process.

The Mayor then invited Councillor Mili Patel, as Deputy Leader & Cabinet Member for Finance& Resources, to respond to the Annual report on behalf of the Council.  In welcoming the report, she felt it important to recognise and value the independent nature of the audit opinion and findings identified with all recommendations acknowledged and accepted. Management response had been provided on all issues, as detailed within the report and in highlighting the value of continued collaboration given the ongoing financial and economic challenges faced, the opportunity was taken to thank Paul Dossett and his team along with the Council’s finance officers and Audit & Standards Advisory Committee for the diligent work undertaken on the audit.

The Mayor then invited contributions from other members, with the following comments received.

In response to further assurance being sought by Councillor Kansagra on the basis of the assessment relating to the significant weakness which had been identified in relation to the Council’s Financial Sustainability Paul Dossett advised that this had reflected, in line with many other local authorities, the significant challenges and cost pressures being driven by the unprecedented increase in demand for services.  The challenging nature of the measures taken by Brent in seeking to balance its budget and ensure it maintained a sustainable budget position moving forward had been recognised, with no need identified at this stage to consider the issue of a Section 114 notice.

In response to the outline of the audit process provided, Councillor Lorber sought further detail as to whether this had included any review of the costs incurred as a result of delivery of the Altamira Morland Gardens housing scheme not being progressed along with the arrangements for management of the Barham Park Trust accounts and way in which Gifts and Hospitality were currently required to be registered by members.  In responding on the issues raised, Paul Dossett advised that the scope of the audit had been focussed on the Council’s overall arrangements for delivering Value for Money as prescribed within the National Audit Office Code of Audit Practice rather than on the delivery of specific schemes or projects.  Whilst again not focussed on specific schemes, an assurance was provided that should concerns be raised External Audit would be able to consider whether any further audit activity was required with the issue regarding the level of disclosure provided by members when registering Gifts & Hospitality involving “exceptional items” having also been recognised and identified as an improvement recommendation in order to enhance transparency.

As no other members indicated they wished to speak the Mayor once again thanked Paul Dossett for his attendance and then put the recommendations in the report to the vote which were declared CARRIED.

It was therefore RESOLVED to note the External Auditor’s Annual Report on Value for Money as part of the 2023-24 audit of the year end accounts.