Agenda and minutes

There were no apologies for absence at the meeting.

There were no substitute members at the meeting.

If you have a Disclosable Pecuniary Interest* in an item of business:

§  if it is not yet on the council’s register, you must declare both the existence and details of it at the start of the meeting or when it becomes apparent;

§  you may choose to declare a Disclosable Pecuniary Interest that is already in the register in the interests of openness and transparency. 

In both the above cases, you must leave the room without participating in discussion of the item.

If you have a personal interest in an item of business and you intend to speak or vote on the item you must declare both the existence and details of it at the start of the meeting or when it becomes apparent but you may participate in the discussion and vote on the item.

*(a) Employment, etc - Any employment, office, trade, profession or vocation carried on for profit or gain.

(b)   Sponsorship - Any payment or other financial benefit in respect of your expenses in carrying out duties as a member, or of your election; including from a trade union.

(c)   Contracts - Any current contract for goods, services or works, between you or your partner (or a body in which one of you has a beneficial interest) and the council.

(d)   Land - Any beneficial interest in land which is within the council’s area.

(e)   Licences- Any licence to occupy land in the council’s area for a month or longer.

(f)   Corporate tenancies - Any tenancy between the council and a body in which you or your partner have a beneficial interest.

 (g)   Securities - Any beneficial interest in securities of a body which has a place of business or land in the council’s area, if the total nominal value of the securities exceeds £25,000 or one hundredth of the total issued share capital of that body or of any one class of its issued share capital. 

This applies to all members present at the meeting.

There were no declarations of interest made at the meeting.

The Chair highlighted the Committee had received notice, at the last Audit and Risk Committee meeting, of variances and the reasons for them outlined in the Q2 Budget Monitoring report that went to Executive on the 28 November. It had been explained that there was growth in temporary accommodation.  

The minutes of the previous meeting held on the 18 November were agreed as an accurate record and the Chair was authorised to sign them. 

The Corporate Director of Resources explained the council’s position was stable, particularly in relation to the bottom line. The Council was close to breaking even in the current financial year, which considering the current financial pressures and demands on the council was a good position for the council to be in. The Capital Programme was also in a fairly good place, in particular the housing acquisition programme was very successful. The HRA was also relatively stable. The key pressures were in temporary accommodation and inflation, and there were other ongoing risks and pressures. Adult and Children’s Services however were stable, which was relatively unusual for councils and an improvement on the council’s previous performance in those areas.

The Chair explained the Net General Fund was negative £4,329,000 at Quarter 2 and asked whether the figures had changed for Quarter 3. It was explained there were some negative variances, e.g in parking but also some positive variances that had led to an overall stable position, and no spending of reserves would be required.

The Committee received a principal risk update from the Head of Internal Audit and the Shared Service Risk Manager. The update included the highest scoring risks, which were those scoring between 15 and 20 and those with an increasing forward trend. It was highlighted that there was a slight increase in pressures around homelessness. It was also explained that the council’s insurers were going to conduct a review of the council’s risk management framework in quarter 4, at no additional cost to the council. This would feed into the council's risk framework review in quarter 1.

It was requested that the committee agree four areas for deep dives for 2025-26. The committee agreed to discuss this at the Audit meeting on the 18 February 2025.

The committee raised and discussed the following main points:

·         A committee member asked what was being measured in terms of the new build programme, whether it was the risk of incompletion or the financial risk of going ahead with the programme. It was highlighted that some members had concerns about the viability of the scheme due to financial pressures in construction and volatility in the private sector housing market. It was explained that the risk was formulated on the affordability challenges of delivering the programme and meeting the target of building 750 affordable homes by December 2027. The Chair felt the risk needed to be quantified in a way that allowed the council’s leadership to assess options if there were multiple claims on resources.

·         On point 3.15 in the report, a committee member asked whether the identified risks to the capital delivery programme were considered medium or high risks. It was explained that they were high risk and, the committee could consider the capital programme and the new build as one deep dive.

·         A committee member asked whether in lieu of the update to the Procurement Regulations, managers would receive training that including risk management. It was confirmed that work was underway with the contract management team to strengthen the content in terms of risk management.

·         The committee considered the council’s commitment to delivering net zero carbon by 2030. It was explained that it would be a challenge but retrofitting homes; the council’s work around liveable areas and the reducing levels of motor vehicle journeys were moving the council in the right direction. It was suggested this could be a deep dive topic.

RESOLVED:

To note the update

The Committee received the Internal Audit Interim Report 2024-25 from the Head of Internal Audit and the Shared Service Risk Manager. The report provided an update on the delivery of the 2024-25 audit plan. The committee were informed internal audit were working towards new internal audit standards to be implemented by 1April. The service had been undertaking a self-assessment and working alongside the London Audit Group to assess whether any changes to work practices could be refined. It was highlighted that the next report to the audit committee would be under the new standards.

The Committee raised and discussed the following main points:

·         The Chair observed that three services had high priority recommendations, and one included nine recommendations related to an affordable workspace provider. It was explained the review had been commissioned by the Chief Executive and led to the current wide-ranging recommendations covering those nine key areas. The report had been issued to the Chief Executive and a working group and task and finish group had been put together to work on implementing the recommendations. The Chair of the Corporate Resources and Economy Scrutiny Committee requested to see the reports to aid the Corporate Resources and Economy Scrutiny Committees scrutiny review into progressive procurement.

RESOLVED:  

To note the report

The Director of Finance introduced the Committee to the Tax Base Report and CF Forecast. The report covered the councils taxbase estimate for the budget year 2025-26, and the council tax forecast for the current financial year 2024-25.

The committee raised and discussed the following main points:

·         Following a question on collection rate figures, it was explained the council achieved a collection rate of approximately 94% in year but 97% over the life of the debt and, 1% of council tax was broadly equivalent to £1.2 million.

·         On discounts, it was explained the council had to balance the need to ensure discounts were claimed by only eligible residents with respect for residents.   

RESOLVED:

a)    To approve, as required annually, the council taxbase for the whole area for 2025/26 of 82,672.17 Band D equivalent properties after adjusting for the collection rate of 97%. (Paragraph 4.7 and Appendix A)

b)    To approve, as required annually, the council taxbase consistent with meeting the special expenses issued by the Lloyd Square Garden Committee for 2025/26. This is 43.25 Band D equivalent properties after adjusting for the collection rate of 97%. (Paragraph 4.9 and Appendix B).

c)    To note a 100% premium will be charged on second homes, and to properties that have remained empty for over one year but less than five years, as agreed by Full Council on 14 December 2023. (Paragraph 4.4)

d)    To note the council tax forecast for 2024/25 and distribution of this in 2025/26 between the council and Greater London Authority (GLA). (Paragraph 6.1 and Table 2)

e)    To note that taxbase estimates for 2025/26 will be fully incorporated in the final version of the 2025/26 budget report and council tax calculations to be considered by the Executive on 13 February 2025 and Full Council on 27 February 2025. (Paragraph 7.1)

The Director of Finance introduced the draft budget report and highlighted that a balanced budget that did not use any reserves to support it was being proposed. There was a reducing level of reserves that was within what the section 151 deemed a safe level. The reserves would support delivering ongoing benefit to the council, such as transformation programmes with cost efficiencies and service improvements, for which specific reserve amounts were earmarked. The biggest risks were identified as the delivery of savings, school balances and temporary accommodation.

The committee raised and discussed the following main points:

·         The committee considered the reserves, which showed a depletion over the MTFS period. It was explained the reserves had been artificially inflated by covid and this was levelling out. The reserves could also be impacted by fluctuations in the collection fund.

·         The Committee considered the risk of school balance deficits on the council. It was explained the backstop would be the General Fund. The Committee were informed that if a school had a significant deficit and closed the local authority would have to meet that deficit and if the school decided to become an academy the council would also have to meet the deficit. There was some disagreement about this, and officers agreed to check whether it was correct. It was also highlighted that there was an opportunity for schools with healthy balances to financially support other schools, but this was not a popular option

·         It was clarified that reserves had not been used for overspends and the budget contained a contingency amount of £5 million.  

·         A committee member asked how much confidence there was that reserves would not be drawn down and that the contingency would cover the overspends that could occur. It was explained that some risks, such as energy costs, have become less volatile however risks such as savings and temporary accommodation had grown. There were mechanisms in place to try to avoid spending the contingencies.

• The committee considered the Pay Policy Statement and noted that a previous long-standing provision relating to Chief Officer honorarium payments had been omitted from the 2024/5 Statement and is not in the draft 2045/6 Statement. The Committee resolved unanimously to propose re-instating the provision which requires the Chief Executive to consult with (previously) the Chair of the Audit and Risk committee.Recognising that the Employment and Appointments committee is now a full committee rather than a sub-committee of Audit & Risk, the committee agreed that the chair of Employment and Appointments committee should be the relevant Member consulted before agreeing an honorarium payment to any Chief Officer.The committee further recognised that there might need to be a supporting provision in the Constitution and, if required, recommended a consequential change be considered in the Constitution Working Group and incorporated as a Constitution change at the next full Council meeting.

RESOLVED:

To note the report ‘Draft Budget Proposals 2025/26 and Medium-Term Financial Strategy’ considered by the Executive on 16 January 2025, and included with this covering report.  ...  view the full minutes text for item 170.

The Deputy Director of Finance provided the Committee with an update on the Annual Governance Statement Mid-Year Review. The focus was on the governance risks and how they were progressing over the year.

The committee raised and discussed the following main points:

·         A committee member asked about compliance with the Local Government Transparency Code. It was explained there was an internal audit scheduled for quarter 1 that would review it.

·         A committee member asked whether there were risks associated with equal pay claims. It was explained it was an ongoing risk as although nothing had been identified a review was currently underway.  

RESOLVED:

a)    To note the Council’s reporting of a mid-year review of the 2023/24 Annual Governance Statement (Appendix 1) for the first time in the public domain. This is a progress update report on previously identified and new governance issues respectively for 2022/23 and 2023/24; which have been reported to Audit and Risk Committee on 21 May 2024.

b)    To note the progress made against the workplan identified by the responsible officers for the 16 areas of governance concerns for the Council as of November 2024. Please refer to details in section 3, paragraphs 3.7, 3.8 and 3.9 which summarises contents of Appendix 1 in tables

The Committee received an update on the Islington Polling District and Polling Places Review from the Electoral Services Manager. The review was carried out as part of the council's statutory obligation under the Electoral Registration and Administration Act 2013 to ensure that voting arrangements remained suitable, accessible and efficient for all voters in the borough.

The committee raised and discussed the following main points:

·         A committee member highlighted that the 2022 Boundary Review had created a long, thin ward at Caledonia Ward, which had impacted voter turnout. They were therefore grateful for work to rectify this.

·         A committee member felt the boundary lines in the North of London were not fit for purpose and there were a number of anomalies that required further attention.

RESOLVED:

(a)  To agree to the changes set out in this report in relation to polling districts and polling places in Caledonian Ward, subject to an additional minor amendment to include addresses 270 to 290 Caledonian Road in polling district SCAD.

(b)  To note that all other polling districts and places remain unchanged.

The committee received the Local Audit Reform Consultation for information.