Agenda item

To receive the annual report from Chair of the Audit and Standards (A&S), and the Audit and Standards Advisory (A&SA) Committees.  The report covers the work of both Committees for the municipal year 2024-25 and has been prepared independently by the Chairs’ of the A&S and A&SA Committees.

David Ewart, as Chair, introduced the Annual report produced by the Chairs of both Committee’s providing a summary of the work undertaken by the Audit & Standards Advisory Committee and the Audit & Standards Committee during the 2024-25 Municipal Year, in line with the requirements and principles set out within CIPFA’s Position Statement regarding Audit Committees.

In noting the report was the third annual report produced under the current requirements David Ewart (as Chair) highlighted the following as key issues identified through the work undertaken across both Committee’s during 2024-25 which included a focus on:

• The high and increasing level of risks being faced by the Council and across local government as a whole, given the continuing pressures on local authority finances and need to ensure robust system of governance and financial control were maintained.

• The Council’s financial resilience and sustainability. Whilst noting that Brent remained in a relatively good position with regard to financial sustainability, with an adequate level of reserves, it was recognised that the Council had not been able to contain expenditure within budget.  In commending the efforts made to ensure Brent had been one of the few authorities to have the external audit of its accounts signed off before the backstop date, the Committee had noted there remained a number of ongoing issues which may lead to future problems in terms of the Council’s financial resilience.  These included ongoing pressures on demand for Council services (which had been recognised as a key issue by the External Auditors in their annual (Value for Money) report and accompanying recommendation for action) along with level of external deb,t given the impact of higher interest rates.

• The Council’s governance and internal control arrangements.  Whilst confirmed as sound within both the External Auditor’s Value for Money report for 2023-24 (with the exception of their findings concerning Financial Stability) and Head of Internal Audits report and opinion issued in June 2024 a number of areas had been identified for ongoing review particularly in relation to the continuing need to address the ‘second line’ of defence (i.e. the monitoring and reporting of information and data, by management, in respect of the effectiveness of the ‘first line’ of defence); implementation of internal audit recommendations/actions, the need to review procedures where staff reductions may have weakened existing procures or controls and the continuing need to strengthen the oversight of contract and procurement management.

• The continuing need for both Committees to review and improve their own performance, to further improve the Council’s risk management.  As part of this process, a self-assessment had been completed by members at the end of 2024-25 with the results, it was noted, due to be reported to the July meeting of the Audit & Standards Advisory Committee for more detailed review and reflection.

In support of the issues identified, Councillor Chan (as Vice Chair and Chair of the Audit & Standards Committee) felt it important to reflect on the nature and wider context of the issues which had been highlighted given the challenging financial position in which local authorities continued to operate and ongoing level of demand for key services impacting on the financial resilience on many authorities, including Brent.  Given the reputational issues identified the need to continue lobbying for reform of local government finance was seen as key which was an issue that would be highlighted when the report was presented to Full Council in July 2025.

The Committee welcomed the report which was felt to provide a good summary of the activity undertaken and in thanking all members and officers involved for their ongoing support in the work across both Committees it was RESOLVED to note the contents of the Annual Report ahead of it being presented to Full Council on 7 July 2025.