Agenda item

This report presents the Council’s External Auditor’s Annual Report on value for money as part of the 2024 - 25 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 2024-25 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 and effectiveness along with the key findings detailed within the Annual Report.  Members were advised that work to finalise sign-off of the Council’s 2024-25 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 areas of risk or weakness had been identified in the Council’s arrangements for Governance, a significant area of risk and weakness had been raised in respect of the Council’s arrangements to secure Financial Sustainability.  This related to the ability to set a budget for 2025-26 that could be delivered without any further draw on reserves to fund in-year overspends, based on challenges identified in relation to delivery of the Medium Term Financial Plan and identification of a pipeline of recurrent savings and income generation schemes.  In addition, a further area of weakness had been identified in relation to the arrangements for Improving Economy, Efficiency and Effectiveness reflecting the need identified to ensure improvements in compliance in the housing service following the outcome of the Council’s self-referral to the Regulator of Social Housing in May 2025.

In recognising the significant financial pressures and challenges faced across local government, Paul Dossett advised that the report included a detailed commentary on the review of arrangements in relation to the Council’s Governance, maintaining the Council’s financial sustainability and Improving economy, efficiency and effectiveness with the recent Local Government Association Peer Challenge having identified a strong track record in delivering services and managing performance.  It was also noted that the auditors had found that the Council’s arrangements for managing risk to be adequate with further improvements identified in arrangements relating to the performance management framework.

Whilst a number of improvement recommendations had also been identified, all recommendations had been acknowledged and accepted with action plans put in place to address the matters raised and management responses provided that would be subject to ongoing monitoring.  Members were also reminded of the new timescales to be introduced during 2026-27 for completion of the Statement of Accounts and Audit requirements, which it was noted would require continued focus in terms of production of the financial statements moving forward. 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. Whilst acknowledging the challenges identified in order to ensure Brent remained on a stable financial footing it was felt the report reflected the reality faced by many local authorities such as Brent given what was felt to have been the damage caused by the systematic underfunding of local government by previous governments, with the current government’s cash injection and commitment to meaningful reform therefore welcomed.

Recognising the fact that Brent had not found itself needing to seek Exceptional Financial Support, unlike many of its peers, the work being undertaken with officers to address the recommendations with the Annual Report were highlighted with management responses being provided on all issues, as detailed within the report.  This included action to bolster the number of ear-marked reserves within the budget being presented to Council for approval (in contrast to the approach being taken by the opposition parties) with Councillor Mili Patel assuring members of the commitment towards ensuring the Council continued to deliver its financial responsibilities and was able to operate in a prudent way designed to secure maximum value for money.  In concluding her response, the opportunity was also 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 the outline of the audit process provided, Councillor Lorber sought further detail as to whether this had included any review of the costs incurred in relation to the arrangements for securing economy, efficiency and effectiveness as a result of the ongoing delay in progressing delivery of the Altamira Morland Gardens housing scheme along with the arrangements for addressing the delays in the turnaround of void housing properties (given the impact in managing housing demand) and need identified to ensure improvements in compliance in the housing service.  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.  Given the issues highlighted on the Morland Gardens Scheme when the previous Annual Report had been presented, the matter had been reviewed but no further specific audit activity had been identified under the VFM annual audit process.

In welcoming the focus within the report on delivery of the improvements identified as required, following the Council’s self-referral to the Regulator of Social Housing, within the Compliance Recovery and Performance Improvement Plan, Councillor Donnelly-Jackson (Cabinet member for Housing) spoke next to outline some of the key areas of work being delivered.  These included the completion of an audit and data review across all key compliance workstreams by a specialist independent advisor.  The findings from the audit had fed into the development of a robust action plan for improvement which included a root cause analysis (as recommended by The Regulator) to ensure permanent solutions were implemented on which progress would be monitored by the newly established Housing and Tenant Improvement Programme Board.  Following on from the audit, work was also underway to systematically review each compliance stream and complete data corrective work, which it was noted would not only include Council owned properties but also those managed by i4B and FWH in order to ensure a consistent, council-wide approach designed to strengthen both safety and assurance moving forward.  In addition, the opportunity was also taken to highlight the ongoing work being undertaken in seeking to drive forward further improvements at pace designed to strengthen oversight and provide re-assurance for tenants.  This included the onboarding of additional contractors to expedite the completion of works as a consequence of Fire Risk Assessments alongside the rebuild of the True Compliance and the NEC asset register and work relating to safety certification supported by an acceleration of the Stock Condition Survey programme.  In terms of oversight and resource to support the process, members were advised of the expansion of the Compliance Team as well as the establishment of the Housing & Tenant Satisfaction Improvement Board (chaired by the Chief Executive) with overall responsibility for providing governance and oversight by monitoring the progress of improvement initiatives and ensuring compliance with housing standards.  In response, Paul Dossett felt it important to recognise the progress made in response to the outcome of the self-referral process, with members also noting the process of ongoing engagement with the Regulator, which had resulted in a positive working relationship having been developed and the Regulator reported as being supportive and having welcomed the pace at which the Housing Management Service was working to enhance stock data and recover their position through the improvement programme.

As a final contribution, Councillor Kansagra sought further assurance on the basis of the assessment relating to the significant weakness which had been identified in relation to the Council’s Financial Sustainability.  In response, 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 with the auditors continuing to focus on the measures being taken by Brent in seeking to balance its budget and ensure it maintained a sustainable budget position moving forward.

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 2024-25 audit of the year end accounts.