Audit Committee - Thursday 29 January 2026, 6:30pm

Audit Committee
Thursday, 29th January 2026 at 6:30pm

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That's good

Well, welcome everybody. My name is Barry Barry quirk. I'm the independent chair of the Audit Committee here and

We've got a a

full agenda to consider

There are about three items. I think where I have to exercise

discretion on accepting them after the due date

And I will do that and I think one of them is actually because of me so I apologise for that

Because I asked the officers to make sure that there was sufficient information

So they met me and went through it all and I said yes there is

With I didn't do that after the due date. So one of them is my fault. So I apologise for that. But I do think that

The phrase deadline means if you go over it you should be dead

and I

You know, we've got to have a less relaxed and more compliant particularly in relation to all dick committee papers

I would say, more compliant attendance to the issues of getting things on time, timeliness,

so that the members of the committee have adequate time to read the things. They're

not sitting at home twiddling their thumbs waiting for papers to arrive. They've got

busy lives and they've got to actually schedule the reading of all this into their lives as

well. So think about the reader, not just the writer. But with that admonishment, I

I'd just like to say thank you very much and welcome to here this evening.

I am going to accept all those three reports, particularly the one that I delayed.

But I wondered if we could just go through the first items,

which are about decorations of interest.

I think while you're doing this, you do an introduction

So that the people the the the thousands are online can

Conceive so if you could introduce yourself and then do the declarations. I've got to do apologies after that declaration

I'm Jill Bailey. I'm from the representative

Okay, hello, I'm counsellor haramia and I've got nothing to declare

Thank you.

Councillor Kabea Ahmed, nothing to declare.

Councillor Abdul Wahid, nothing to declare.

Good evening.

I'm a substitute for Amin Rahman and I've got nothing to declare.

Thank you.

Good evening.

Abdul -Razza Qasim, Acting Corporate Director of Resources.

Assan Khan, Corporate Head of Financial and Technical Accounting.

David Dobbs, Hervenson and Lewis. Victoria Lewis, Risk Officer.

Steven Reid, the Council's appointed External Auditor.

Kim Bromley -Derry, Lead Ministerial Envoy.

Paul are the interim head of pensions and treasury

Andy Grant corporate procurement

John Lloyd strategic director for change and improvement

Councillor Mark Francis from Bo Eastwood no declarations

Mr. Peter busting counsellor for Island Gardens new declarations

Steve ready cop director children services

Mahan is here Democratic Services Officer supporting audit committee

And the

Members online or the officers online

Sorry

I'm Lindsay Gailey I'm investigations team leader in the full team

Councillor Mohammed Charlie Myland Ward. Thank you. Okay do we have any apologies

for absence I know there's a couple of members that are substituting. Yes chair

we've received them apologies from absence from Councillor Amin Rahman and

Councillor amadou khan is substituting for Councillor raman

Okay, can we I mean I have to say I thought the minutes of the previous meeting were more comprehensive than I'm used to

Please about that

I've got any comments on them

On the observations not comments, but I don't want a process of infinite regression

Well, we simply discussed what we've discussed before

but

Points of observation I suppose. Thank you. Yes, I agree. I think the minutes are really good and there's just one

Correction and a matter arising that I wanted to mention so on page

four of the minutes

I'm

and thought were pervasive.

So there are some things that I think are pervasive,

but the officer's response at that meeting

isn't one of them I think was persuasive.

So just if we could correct that,

I wouldn't want it to be misinterpreted.

And then there was an action at the end of that

that you said you were going to speak to the chief executive

about the presentation of the auditor's report.

So just wondered if you wanted to might be in a position to update us whether you had that opportunity. I

Haven't yet had that opportunity since then I've met the chief executive

I want to do it personally, but I have met with lots of officers about the items that we discussed

Okay.

I wonder if we could have Stephen Green, the partner from EY, to make any comments

on the introduce his considerations at this time thank you chair I just had one

comment on the minutes actually at this point which was page 21 of the park page

three of those minutes if that would be appropriate this juncture certainly I

think there is an action there and towards the bottom of page 21 member

suggested that a quarterly update could be provided in relation to appendix B

And then because I want to say the updated summary of assurance in order the committee contract progress made

Just for clarity that that summary of assurances can only be completed once we have completed an order

So I think the quarterly update be provided in relation to appendix B is more linked to the actions that management will be taking

as part of their mobilisation and implementation plans

Okay, that's understood

Wonder if if now the we move to the

meet the agenda the first item is

After is that Cassim on the internal audit and fraud anti fraud

progress update

Page 27 of the agenda that would be presented by David Dobbs

Thank You chairman

This is the regular update report which the committee receives.

During this period we've issued a number of reports including four with a limited assurance

audit opinion and they are summarised in this document.

So this builds on the progress we reported in December.

The overall position is detailed on the graph in the report which states that excluding

the schools audits 45 % of audits completed have resulted in what we would

term positive audit opinions that is those of a reasonable or substantial

assurance grading as ever this figure is subject to fluctuations more audit work

is completed and you'll see that last year's comparative out turn figure was

actually 53 % rising to 60 when you include the schools audits as a state

This, figure will be subject to fluctuation and when we report in year end you'll see what the year end out turn is then

And this will be important determinant

Because it's really the aggregation of these opinions that will help

Me form the year end conclusion on the council's in term internal control environment the

Report also includes an update on the position concerning the follow -up of management actions which is in relation to

one of the statutory recommendations on internal control

As you see, not much time has passed since we last reported.

These have improved marginally since the December Audit Committee.

As noted in the current report, the plan is subject to some fluidity as we reprioritise

the work to be completed before year end.

And therefore, planned audit activity that we haven't yet started or commenced will be

Considered and included in the audit plan for 26 27 when we present that to the next meeting of this committee

In relation to questions on the individual reports

I would just stress to members that we do make all the internal reports available via

Sharepoint or Dropbox so if people want to have a detailed look at the actual individual order reports

They're welcome to do so they're all available and anybody who can't access those. Please. Let me know

I'm happy to take any questions Jeff

Are there questions from members of the committee on this paper? Yes

Thank you chair, thank you David for your report I had a question about the staff recruitment

and pre recruitment cheques

Audit, so this has got limited

This just reminds me of the previous audit reports that we saw around DBS cheques and

we had quite a lot of discussion around that as an issue that kept recurring.

Is it the same team?

Is it the same department?

Is there a wider issue there that might require additional audit focus?

Can't say for certain if it is the same team because I think there's been some changes within the area human resources area

so I think when we

Issue the report on DBS

I think one of the management actions there was to reorganise and to reconfigure the DBS team and the way those cheques were undertaken

Agree that there's a commonality in the findings and that's something we'll need to consider going forward

But I can't really speak to the to the broader issues as to whether or not there's a there's that synergy between the two

Thank you. Maybe that's something we could take into consideration when devising the audit plan for next year. Thank you

other questions

Councillor Muhammad

So along the same lines I see

There's limited assurance around that management

I know previously we've had issues around that being not paid for a period of time.

What assurances can you give us that we are on top of that, although there are limited

assurances here?

And the second thing is what's being done to escalate and drive action on the outstanding

management actions?

Chair, if I can take the latter and perhaps other officers may wish to contribute to the

former question.

So in terms of the outstanding management actions, those are the ones I alluded to in

terms of that progress from one meeting to the next, and these are the audit recommendations

and the follow -up of that.

So there's a structured process whereby it's reported quarterly to corporate management

team and then it comes to this meeting for reporting. In the interim all corporate directors

and officers receive a full update every two weeks of the full data set covering each of

the years of audit, so 23, 24, 24, 25 and up to including the current year. Our ethos

on this is to work with officers collaboratively to ensure that progress is being driven forward

in clearing these recommendations and as part of that we offer a variety of

solutions and one of the ones that's been quite successful has been having

workshops with various teams particularly where there's been a

cluster of outstanding recommendations so if we found a specific team might be

planning for example where there's a cluster of outstanding recommendations we

will sit down with that team probably for two or three hours and we will work

through the recommendations and be very specific with them in terms of what they

need to do to demonstrate successfully to my team implementation.

I'll leave other officers to answer the question on VAT.

Yes, so the VAT one effectively, the management recommendations were to ensure that we appropriately

reported on recommendations made by PS tax in regards to our processes.

So we will intentionally take this to the finance departmental leadership team meeting

on a monthly basis in regards to progress against those recommendations.

I think one of the overarching recommendations was training in regards to VAT.

That was one of the key ones.

Some police do say we rolled out our first suite of training sessions in January and

the intention across the learning hub which is available for all council officers and

the intention is to continue that on a quarterly basis.

So those are the key recommendations and the intended actions moving forward for that.

Sorry, just to follow up on that.

And what systems do you have in place to track and monitor if that training is being done in relation to the key staff that are involved as well as the wider organisation?

So we are undertaking the training through the Learning Hub so that keeps a clear audit trail.

in terms of the training being offered and also who attends.

So we'll have a comprehensive list.

And we can expand on this and look at it in terms

of focused training as well.

So I had a discussion with the officers the other week on this

and accounts payable team really showed a keen interest in it

and getting focused training on VAT.

So we will look into that and rolling out more focused

training on specific service and areas when it comes to VAT.

So it's all going to be done on the learning hub,

which is a corporate tool that we use.

And there's an audit trail there as well.

so we can evidence that that's been undertaken.

Yes, sir.

Yeah, thank you.

David, I had a question on the implementation rates,

which is really helpful to see.

There are still some management actions, though,

that are incomplete from 2324.

Are you able to give us a sense

of what those actions relate to?

and whether they relate to limited assurance recommendations

or if they're related to something else.

I guess what I'm trying to get to is, is there a gap in assurance that we need to be aware of?

So just to confirm, this exercise comprises only those audits that resulted in a limited assurance.

So that's correct.

So all of these stats here are derived from aggregating the results of the audits that

resulted in limited assurance.

So in effect you've got the full dataset there.

Sorry, may I have a follow -up, a quick one?

I think it would just be helpful to get, I don't know if there's a way you can report

on what those actions are, just to give us a sense of are these things that we need to

be supporting you in order to get these actions implemented because you know it

could be something quite small or it could be something larger and will help us hold

apologies that was your second point and what I would say in relation to these is

clearly we want to ensure as an organisation that they are resolved they

go back some way in time to 23 24 one of the challenges is when these

recommendations were agreed and management actions developed a lot of

those offices are no longer here and time has moved on. Consequently we're

left with some actions where people are sort of I suppose in some way perplexed

or puzzled as to what they relate to because that corporate memory is gone.

Now we're left with the residual residual seven here I couldn't certainly

supply the granular data that sits behind that to the members of this

committee just so you can see which areas it relates to but I don't think

any particular cluster I think it's spread across the organisation for those particular

ones.

As I said we're left with seven which is an implementation rate of 89 % so we're doing

okay on that particular year now.

Thank you and thanks for the report.

My first question is I just wondered, you mentioned about the number where there's actions

and you also mentioned about the percentage in which there have been an opinion of reasonable.

My first question is around the choice of those that have been included in this pack

that are in the limited category. So there's some of them but not all of them.

Is that, and I appreciate that the information is held on the database,

but is that because those other ones have been reported to earlier audit committees?

In short, yes, but just to clarify, the ones that reported in this pack are the ones that

have been finalised since we last met, so those are the ones that have cycled through

and been issued as final.

Just to follow up, so what we've got are either reasonable or limited, and it does remind

us that there is a gradient of substantial as well.

could you say does the council have a view about how come none of none of them

are a substantial level of assurance is that something that we as an audit

committee should be concerned about and or is it something that you're concerned

about yourself well I can't speak for the council as a whole but there have

been audits that have been issued certainly whilst I've been there that

resulted in substantial assurance and just to be clear for everybody it's not

something that is out of the question we're not expecting a gold standard or

Nordic with no mistakes to get substantial assurance but there haven't

been many that have been issued with that particular grading in the last

couple of years that's for sure

Stephen thank you chair and given this was an area that we commented on most

I thought it would be appropriate.

Just three comments that I thought I would offer.

Firstly, it's in relation to the follow -up process

and noting, David, your comments,

that the follow -up before members only

relates to those recommendations that

were linked to a limited assurance report and not

all the recommendations that were made by internal order.

And therefore, I'm unsure, a bit like the Councillor,

what the degree of assurance gap is within the authority.

I'm used to seeing all recommendations subject to follow -up by internal audit

with a priority on those recommendations that are graded either high or medium

rather than low which that would ensure that it covers all reports in the

council that come to council. And then secondly I think the discussion tonight

has highlighted that there are actually some additional detail by way of an

appendix which each of the recommendations and the follow -up and

the grading of those would be helpful for members to be able to view them

and to make any links between those areas which are being addressed on a timely basis

and those areas which remain outstanding.

So that was just one comment on the follow -up process at the authority.

Secondly, I note in here that there's a number of rescheduling of internal audits

for perfectly understandable reasons in terms of changing priorities or resourcing in capacity.

However, in my view, the internal audit plan sits with the Audit Committee and not with

internal audit and therefore I think from a governance point of view any proposed changes

to the internal audit plan, either removals, deferment or additions to, should come back

to this Audit Committee for consideration and approval.

And then thirdly, I know in terms of the findings from a number of limited assurance reports

and there are some significant reports on here with limited assurance ratings

and to name but a few payroll, IR35, GDPR, capital, use of fuel fleet management and

my reading of those suggests to me that there may be areas of non -compliance

with laws of regulations or operational areas where there's significant risk to

Council at this stage and my question I suppose for officers is what work has

officers done to assure themselves on the committee that there are no

significant issues which are continuing to be unresolved in those very

important areas which could expose the council to fraud or loss or other risks

Such as health and safety given these reports and I contain a number in my view of potentially serious areas. I

Think your point about this committee

Approving the plan even when it changes or when post changes is correct one. I think that that would be useful in future

Don't know if people want to respond to what Stephen said because I think he's raised some important issues

But it may be that you deal with those

I'm not a centre forward, I'm a sweeper.

And so what I'm going to do is to ask my questions now.

I've got a series of questions that I'd like to ask.

small points really and I think I'd like to underscore the point that Stephen's just made

about the importance of all boats rising.

We're not just looking at the low to medium and the medium to high, we're looking at improving

the standards across.

That's absolutely right.

I've got several small questions.

One is schools.

Who audits that?

Is that a thing for us or not? Because it there's an implication that it's not who oversees that is it the school's forum?

It or is it reported here at some stage

Yeah, yeah, okay

Secondly I actually quite like the the summary on the on the vehicle fleet maintenance. I'm on the fleet maintenance

Nerd, I'm afraid I always ask

About the old licence and what's the what are people doing a bit and what the costs I was quite surprised

You only got 20 vehicles you bought in the last year when you got 355

So I'd quite like the report on there particularly about

Behaviour the conducts of people that were managing the stock that the the assets

But I think if Stevens dress raised the point about fuel management and so on. I think that I'd like a note on that

On HR, I don't really understand who hires, because it refers to hiring managers,

as though these are hundreds and hundreds of people all over the place.

Or I don't understand the process of, I suppose, centralised control,

a process of internal control on hiring.

Is this a sort of federated thing in the organisation?

Is it delegated, decentralised?

Or is there a centralised control because it seems to me

that there isn't

and

And in that regard it also applies to whether there's due diligence in the hiring of senior managers

Because it seems to me it's absolutely critical that there's due diligence on that that we've done in different ways

Using different recruitment firms and so on but it's really important that there's proper due diligence of the more senior one goes

But I do think in relation to these all these other posts the question is

Who are who?

Who says no you can't hire

Or does no one ever say that

Thank You chair, so if I might come in so what happens normally hiring manager could be someone like myself

so I will you know prepare the

the advert to support from HR, the advert will go out

and through a new system, applications come through,

and then it'll be up to the hiring manager, i .e. myself,

to make sure I can shortlist and they fulfil the criteria

with a group of interviewers.

So it'll be myself and other people,

someone from HR and someone else, for example.

Then the role of HR now is to cheque

those pre -recruitment cheques.

So, you know, references, making sure, you know, the timeliness of your, where you're

coming from in terms of your other roles.

And also if DBS is required, HR do all those cheques.

So ultimately all that will be passed back to the hiring manager who has the ultimate

decision.

If the references are sufficient, if, for example, the DBS cheques are required for that

particular role or they can have a waiver if needed.

That's how the process normally works.

How far down is it? I'm confident in your hiring. What I'm concerned about is the distribution.

How wide is the distribution? Do people just hire at the operational level, at team leader

level, at the senior manager level? What level is hiring exercised?

So it could be different levels as long as you're managing a post.

So a manager could be managing a post and they go through that process.

But there's always a panel for the interviews and the shortlisting as well.

So it's not just one person.

If I pursue this any further I'll ask a direct question of the head of HR, I think.

Because I think it's fair pursuing that here.

But it seems to me, I mean in the civil service no one hires their own staff.

They're hired centrally in local government. We tend we tended to hire locally

But then there was bias in the in the hiring

You know

Literally not hiring of refuse workers and so on so and then it was centralised and then it was centralised but coordinated

And I'm interested in the precise way

This is done the degree to which there is proper internal controls over hiring across the whole organisation

But I'll pursue that in this meeting

Questions on this paper

Yeah, just wanted to pick up the to counsel

which

One is for Rachel Keeling nursery and Virginia primary school

I'm assuming because they've transferred over to academies. That's why they're out of local authority control

That's confirmed. Yes, so we responsible for the audits of the LEA schools

Not Academy schools though academies could if they wish to buy that service back from us

Actually, I do have another question I forgot it I've never paid a PCN I've never been charged a PCN by town

Hamlet's I have to say so I

By many other places

But I'd so I don't have a declaration of interest interest in relation to this

But I noticed that the two years that you've written off were for eleven point four million

I don't know what the overall take is on

I've worked for one council is total turnover was six million another total

I was sixty so I do think it varies across London as to whatever the budget is budget for income is

But 11 .4 million for two years does seem high to me.

But you then say there's five years for which you need to make provision for a write -off.

Now, is it likely to be at the level of over 25 million?

Because that's what 11 .4 for two, and I then look at five,

and then start worrying and thinking, oh, this is a very high figure.

what is the

If you haven't got the numbers now, then it would be useful if you could sort of provide those to the committee

But what is the expectation of what is and how is that to be funded?

Sure, I'll get back to you in terms of the budgets and the amounts but just just couple of things to mention on this

We do provide forces about the provision and I'll get those numbers to yourself

However, the reason you see quite high numbers is there's been a lot of fraud in terms of cloned plates

We work with the cabinet office now to have that data sharing with the DVLA so going forward

We'll be able to identify before we issue a PC and if that is a clone vehicle, but I'll get you the budgets and the provisions

yourself I

Don't need information about clone plates, thank you. Okay. Is that okay?

Yes

Just on that note, is that due to expiry times in order to collect that debt that we're writing

off? Because I could see it goes back to 2013 -14, right the way up to 1890, that the risk areas,

the new risk areas are 1920, 2021, 21, 22. So are there kind of statutes in terms of

timeframes of collecting that money.

And it would be also good to understand

what the actual each tax year represents,

how much money because we've got a gross overall amount.

Thank you chair, yes, Councillor.

One is relating to the older the debt is,

the higher it is to collect and two years

there's a statutory limitation of what debt we can collect.

However, majority of these could be related

To this stuff that I mentioned in terms of the fraud and grown corn plates

Is that report noted yeah, great, okay. Thank you very much for that. I

Know the next report note, which is on risk management a deep dive we are

swallow diving into this

Thank you, Chair.

So this report comprises the latest corporate risk register.

And the deep dive is in the children's directorate.

We're joined by the corporate director, Steve Reddy,

to assist in any questions on this.

As we reported in late December, there

hasn't been a massive amount of change to the corporate risk

And I think there's been one risk that was previously

reported on the corporate risk register that's now been

relegated for management at the directorate level and that's detailed in

this report. In terms of the deep dive and children's directorate, we've

included details there of our analysis in the covering reports and I'll just

reflect this by saying a lot of work and effort has been made over the last year

with corporate director and his team to ensure we've got the directorate register

which is what you see in front of you in a strong position.

And that's all about really making sure that the director is comfortable,

that the correct risks have been identified

and those supporting control measures, which you'll also see on the report,

are the appropriate ones and they've been properly articulated, documented

and officers have indicated where they are implemented

or not implemented or partially and so on and so forth.

So it's also about being really clear about what the state of those mitigating arrangements are.

As stated in the report, the work we're doing within the Directorate now will focus on identifying and recording

what are in fact the risks at the lower level, so the risks that effectively are held at, I suppose, service and team level.

And by doing so this will mean effectively we've got a base of risks that are ready if necessary for analysis and possible escalation to the directorate level.

So if we don't have risks at that lower level this effectively becomes a situation where there's nothing to escalate but risks can fall down.

So there is an exercise we're doing

Below the directorate level working with the teams and the director just to ensure we've got those risks properly identified

Articulated and including on the various risk registers

I'm happy to take questions on the report as I'm sure is some Steve. Thank you

Well, I do think that we useful to go for Steven to outline particularly those risks that you've got

Listed here from page

103 onwards I think

because the the corporate risks

Registers that's there and the summary of them is that is a

relisting what we agreed a recent strategy, so

Whereas we didn't have the detail and say the children's risks

And I think the purpose of this is so that we can get our head around the way in which

the risks are being managed and the issues about that.

I wonder if I could start by asking the question which is, which children?

Is it the children who live here?

Is it the children who visit here?

Is it the children who go to school here?

Is it all of those?

Because I think it's really important given the flow of children in London.

They don't just come, you know, they, I think 20 % study in one school and live in another borough, for example.

So it would be useful if I could understand the, that approach, but also the way in which your safeguarding arrangements are made.

I've got I have to say I was really pleased in the

The governance of safeguarding internally, but it'd be helpful Steven if you could sort of set out

the director approach to this

Yeah, thank you chair and thank you for inviting me to the committee and your initial question about which children it's all children

So you're quite right. We do have obviously children in our

Accessing services and part of school and other children services in the borough and health services and others

So we're all those children, we care about all of them,

and the risk, our approach to risk management addresses all of those.

You mentioned safeguarding, all councils have worked in and have worked in a few,

all corporate risk registers have on them the risk of serious harm or death of a child

as part of a corporate risk, which is also on our children's director of risk register.

and you can see in the mitigation actions in the report in terms of how we

manage that risk. I guess one of the big tests for a committee like this and

elected members and safeguarding boards is what's the quality of service of

safeguarding services. We had an inspection by Ofsted that was reported

last January where we're outstanding according to Ofsted. That doesn't mean

everything's right all the time. It's a good measure that we know what we're

doing. We also have Children's Safeguarding Board, we have a rotational

chair so currently I'm the chair of Children's Safeguarding Board and then our

colleagues in the Metropolitan Police and then the ICB will be one of the chairs

on an alternative year. Obviously ICB going through their restructure at the

moment so I'm maintaining the chair of that. We have an independent

scrutiny who sits on that board and as part of the annual report on the quality

of safeguarding practise they have comment truly than an annual report

which goes to the cabinet health and well -being board children's scrutiny

committee and other places so there is that oversight we also have which is

quite innovative and some young scrutiny age we have young people as well who we

who we pay to work as scrutiny is and look at the quality of service and hold

us to account. So there is a whole governance structure and I think the external assessment

of whether we're doing that properly is pretty strong. We also had a SEND inspection in June

which showed improvement and again that touched the focus on SEND services obviously, but

does touch on our approach to safeguarding as well which I think was positive as well.

So I think, you know, modern world, there's lots of risks

that affect children crossing the street.

At home, outside the home, there's a range of risks.

You know, we're in East London,

but there's lots of risk online at the moment as well.

So we're working incredibly hard as a council

and with partner agencies to manage those risks

and work with children and their parents

and partner agencies.

Thank you very much for that introduction.

Are there questions from members on this, members of the committee?

Councillor Bessley.

Thank you, Chair.

I have a few questions, well, comments I suppose and a couple of questions.

I think firstly, like, this is a really good risk report.

Like, it's really improved from, I would say, in the last 12 months.

So thank you and well done.

I think it's really thorough and I really like the quarterly tracker as well.

I think that's really helpful.

The,

that children's safeguarding risk was read

for like a long time.

It was ranked number, the risk rating was 25 for years.

So it's good to see that that's come down.

I think that needs to be sort of recognised.

I am sort of concerned about the,

So this is on page sorry, one of three.

Don't know what it is in the pack,

but the risk to the council's financial standing

from overspending and its revenue budget,

because that's been high for the course of 2025

and now into 2026.

And it'd be helpful to, I think,

get some information about what's being done

to mitigate that further and how that's going to come down.

My specific question is for Steve, so well done on reducing that risk. There's two risks in here

related to SEND. One is SEND budgets and the overspending of SEND budgets and then the other

one relates to the number of young people with the HCPs and the ability to

meet that demand. But the worry for me is that we're focusing too much on

the budget and not enough on actually the children and the provision and my

question is should that risk score on the EHCPs actually be higher because of the compounding

effect of not having enough budget to meet the EHCPs, if that makes sense. So how do

you get to that risk score? Do you look at metrics around how many EHCPs are being met

or not, how's that sort of taken into account?

Thank you, Councillor.

Yeah, really important question.

I think we've reduced our risk score

on how we're dealing with the level of demand,

really by how we're meeting that demand.

So there's two elements to that.

One is additional resource and investment

that we're putting to the Senn team.

It's called the Sennar team.

and this is the team that obviously takes the requests in for an EHC being does an assessment

on whether a plan should be produced and as you may be aware sometimes there's a bit of a debate

between organisations, councils, schools and parents about whether a plan is really needed

to ensure you can meet a child's needs but when we do have that plan that's saying our team then

pulls together assessment inputs from a range of professionals and produces a plan

They were under significant pressure until about 12 months ago when we put additional resourcing in,

both into the Sennar team itself but also a couple of quality assurance officers.

We do, and as elected members I'm sure all of you deal with some parents who are frustrated with the Senn system,

and it could be the council, the school, it could be health, it could be all of us.

So we put additional resource in how we actually manage that relationship with parents and manage those complaints.

So we've basically put additional resources to deal with demand.

The other strand of it, though, is sort of a preventative offer.

And you'll be aware that the government is about to, we're imminently

going to see some send reforms and you'll see one of the key principles

of that is early intervention.

And I visited a couple of primary schools and one this morning, actually.

And you can see how the impact of investment in early intervention

in early years can keep a child in mainstream education,

can potentially avoid them having the need for an actual plan.

But I think what you will see without second -guessing what government's going to do,

I think they're going to invest more in schools to ensure they have early help and prevention,

so schools can then say and councils and health services can then say to a parent,

no, we should be able to meet the needs of your child without a plan.

And I do think that's why there's some of that debate sometimes about whether a plan is required,

because in some cases we feel the council feels school health could be

doing more to avoid the need for a plan and all the work that goes around that

both for the child the parents and and and the local authority so it's that's I

think how we're managing demanding as you know we we've been tracking

educational and care plan performance rigorously for months and I I am held to

account significantly after a sack will attest to that when the mayor

challenges me and the Mayor's Advisory Board on my performance.

I've got two performance measures that are off target at the minute.

One is first -time entrance to criminal justice

and one is educational and care plans.

In the last six months though, it's turned around.

Our performance in December was nearly over 80%,

which still isn't perfect, is it, but it's better than 50 % where we were.

So I think we can demonstrate we're meeting that.

The budget risk is one that all councils are dealing with.

Again, you'll read in the local government press, you're talking about some county councils with hundreds of millions of pounds worth of debt in their high needs budget.

And the government has agreed something called the statutory override, which essentially, I'll just say it parks that debt at the side of the council's accounts.

Relatively speaking, and I know absolutely Razak and I will be focused on this though, relatively speaking, the level of our debt.

If the government withdrew the statutory override tomorrow, it wouldn't bankrupt our council.

It would bankrupt a lot of councils in this country significantly.

We've had a few programmes around this, both ourselves and with something called the, there's

been a government -sponsored programme to reduce the spend on high needs.

But in reality, I think the government reforms which are about to be introduced, part of

main reason for that is because of this massive overspend on the high needs

block. It's got a huge risk to national government finances so we are

managing that and we have been working hard on it. The solution to that will be

again investment in early prevention, the other solution will be a lot more

mainstream schools with a specialist provision on site and I've visited a few

examples of that in our board or that is that is the solution really to avoid

very expensive special school places and particularly very expensive places in

the independent special school sector as well just to follow just that point

around the statutory override I think it's quite important for us as a

committee to just be aware of it might be helpful to get at some point a

I think it was a few weeks ago there was an announcement that around 150 million pounds

a year are spent by local authorities when they're challenged at court by parents regarding

and EHCP plans, of which 99 % are successful by parents against local authorities.

And I don't need the information now, but I think it would be good to understand the quality assurance on how many cases we do have that go to court, or we're legally challenged,

and how much we spend and what's the success rate of parents in relation to the council.

I'm trying to word it positively because for me that goes down to quality assurance in

terms of if we get that decision right correctly, then one, the child gets the support that

they need most importantly, and second, in terms of financial terms, that money isn't

on court fees and barristers and solicitors,

but goes directly to the children that need it.

Just really briefly, yes, we have something called

the SEND Improvement Board that I chair,

which has a suite of data, and sort of when I first arrived,

we weren't looking at complaints data or tribunal data

and how many cases go, but we do do that now.

And part of what I mentioned before about investing in

Officers who help the relationship and manage complaints and tribunals part of that is making sure we're only doing that way

We really need to in my experience

in other councils

That the success rates of councils is is undermined because the tribunals can find that we haven't followed process

So in some cases it might even be the right decision not to have a plan or sometimes it's a tribunal about the specific provision

was actually the tribunal says, did you follow process?

Have you followed your own processes?

And a lot of the time, we found wanting

and that's where we fail at the tribunal.

So with that in mind, that brings me to my actual question

around sort of how comfortable are you

that the directors that oversee the risks

you know, have identified robust actions that will mitigate and sort of deliver against

the plans that have been put in place.

I think the evidence from the SEND inspection we had in June, it's a bit different to

the social care inspection when it's very clear, you know, you're either in an adequate

it requires improvement good or outstanding. So the SEND inspection you're basically failing,

you're doing okay but you're inconsistent or you're doing okay. We were found to be

doing okay but of inconsistency. I think that feedback and the way we managed the SEND services,

both council, health and education did give us some assurance that we're managing things

effectively. And I think the improvement plan that's now followed from the SEND inspection,

Plus, you know, we launched our sending inclusion strategy in October 24

We've got a delivery plan and we monitor that closely and then we've just started meeting with the DFE

It's interesting because the reforms aren't out with the DFE have started meeting with us about our plan to address the reforms

But again, they'll be overseeing our delivery of the reforms that I've said to them

We'll just have one plan our delivery plan for our strategy the inspection response and the reforms

So that will all be brought together and again oversight from Children's Grooming Committee cabinet health and well -being board and yourselves

Thank you chair

On the housing policy strategy and regulatory compliance

risk

HRP

SRC

triple zero one it talks about risks to private risk to residents in private

tower blocks just just wondering is that council responsibility and why I think

it is in relation to the council's corporate responsible is under the

Contingencies Act should they be because it's not tenure specific

But I think there may be the officers

This is a question about the council's responsibilities in relation to private developed private housing

I think it actually refers to cladding in private housing

I think anyway you answer I

I think we can speak to one of our experts and come to formulate a response outside of

the meeting.

Thank you.

And Councillor Chaucer is online once you ask a question.

Hi, thank you, Chair.

My question is related to the SEND.

So, I've seen many parents came to my surgery and I've seen the plan itself. So, what I've

noticed or observed, most of the report, you know, it's a six months time that we have

to produce a report. And most, all the report I've seen, the council couldn't finalise the

the plan within six months.

That's the procedure.

And also when I checked the plan in details,

so most of them were vague,

meaning there's no quantified or specified or quantified.

So that's the issues.

I think that's because of these many parents

going to the tri -vulan.

On the other hand, we are struggling with the budget.

So my question is, if in one hand we don't have enough money or adequate money, and the other hand, we don't have seems, you know, those who write the plan,

I feel like sometimes the largest part is because it's a vague plan, the writing. So this leading to the, you know, the tribunal challenge in the tribunal, and obviously if a vague plan we lose.

So how we kind of, you know, based on these two,

how we minimising the risk or what is our plan,

how you assure that, you know, we have a plan

that is correct plan and we following

the six months time period.

Thank you.

Thank you, Councillor.

Certainly some of the findings from the send inspection

shows that we're not consistently producing plans within time. You have 20 weeks to produce

the plan and yet some of the plans, they're not always the highest quality and we have.

When I talked about the investment earlier, we've appointed quality assurance officers

so with additional staff in SEND to bring the caseload down with that quality assurance

activity we should see an improvement in plans. What I will say is though

sometimes it is about the quality of the plan but sometimes it's

also about fundamentally there's a difference between the views of the

school, educational psychologists, social workers, the SCN team and the parents in

terms of what provision would meet the needs of the child and without

going into great detail sometimes it can be opposite ends of the spectrum so a

parent will be fiercely fiercely fighting on behalf of their child to

keep them mainstream where the professionals will say the child

definitely needs specialist provision and then the alternative is true where

parents are arguing for specialist provision where where really a

mainstream provision with additional support would meet the needs of that

But those are the sorts of sort of debates we get into

Well, you know, I will I will certainly say our team are working incredibly hard

I'm trying to ensure they maintain really good relationships with parents and children

But we don't always get that that plan correct and and we have to deal with that

Thank you

Councillor May I? Thank you, thank you chair.

I just want to, if you could just highlight in terms of student online safety,

I read in the press that the government is thinking of banning under 16.

Do you have a position on that? Do you have any update on that?

Are they consulting us?

I think my personal view is that yeah I would want to invent the internet tomorrow.

No, I think the schools that have demonstrated the evidence from, you know, they have those

sort of wallets that they lock the phones in at the start of the day and children can

have access to them at the end of the day or break times.

They've demonstrated the impact on education is significantly positive.

I think the other thing I've seen here and is across the country is you will speak to

parents who are upset because their children have been targeted and I'll be

speaking to the head teacher and the head teacher saying all that bullying is

happening after school and is happening online. So I do think you know we talk in

this council a lot about being child -led and listening to children. My

heartfelt wish is that this generation of children turn round and say actually

This is not good enough for us and actually they proactively challenge the system and stop using phones for the way

But I do think big big business and big tech firms have got to take more responsibility as well

But my personal view on

Banning schools in phones. I think that's really difficult to say no phones completely and

There's ways you can use phones and for safety as well

Lots of parents want to know where their kids are but certainly control of it and then more control of big tech

think is definitely cool for

Councillor Francis thanks so I just wanted to focus on the children services

one so it's really good to see the information here and I've been a

counsellor for a long time and I recall the in the case of baby Peter in her and

gay and the impact that that had within local government including within our

authority it's good to see that measure that risk measure on a downward

trajectory so the target from what I've seen here says 10 that it should be

moving towards 10 and I just wondered what your view are you content that

that's still a realistic target for us to be working towards I think the view

20 years ago was what had happened in Haringey could have happened almost

anywhere in London and that's why such significant structural reform and

change was required and extra money but is it realistic? So in one,

just on that point as well, so it talks about the triggers for this which

I'm assuming that they're kind of the ways of measuring the risk but it

It didn't seem to be complete on the version on page 63,

so I didn't really understand why that wasn't,

sorry, not page 63, page 65.

The bullet point seems to just fade out,

failure in planning for something.

And then it later also talks about

corporate scrutiny and oversight,

but that was specifically in relation to

or it talks about inspection readiness and reporting that to, sorry this is on page 68

of the supplementary, going to Children's Services and Education Scrutiny Committee

in October 24. So I just wondered is that relevant to this kind of grading of the risk?

I had one other question on youth justice.

Thank you, Councillor.

I think in terms of our aspirations around the target, I do feel that is fair.

We do have case reviews in this borough.

As chair of the Children's Safeguarding Board, we have a subgroup where cases potentially

for case review either a local learning review or an independent person

appointed to do a case review that's then reported to the national panel and

we do have to consult the national panel. I did have one the other day where we

felt that we could do a learning review we referred it to the national panel they

gave it back to us and said no we think you need to do a full case review so we

do do that and I guess that is a barometer of whether you're quite right

some of those very high profile cases all talk about the sort of information

sharing between agencies and all those things so every time we have one of

those rapid learning reviews or case reviews it allows us to test our

systems so that that's why a healthy situation to be in I guess without going

to write to the details some of the one of the case reviews latterly was about

children outside of education and missing education and making sure our

Processes are working around that and having sights on children who are out of education

So I do feel our controls are right in terms of risks children are exposed to I still think they are significant

And you know developing risk around technology and other things are significant, but I do think that's doable

I think the format of the report and the way it's been produced

Means that when we've copied and pasted the triggers work probably from the system Victoria

it's not dropped into the full document.

So there is a fuller expansion of that.

I should also quickly say my team are huge fans of Victoria.

She's been very helpful to our team

to get this right as well.

So just to put that on record, thank you.

That's great, thank you.

I really think that's a helpful response.

So my question around youth justice.

So I guess like in the decade or so following or maybe less than the following Baby Peter

like there was such a focus on children's social care and looked after children but I guess in the

decade since then there's one of the principal focuses has been around the deaths of teenagers

at the hands of other teenagers and youth violence which thankfully time this is not as doesn't

seem to suffer quite as much as some other London boroughs,

but nevertheless, we do still suffer quite a bit,

including in my own ward,

and maybe on the Isle of Dogs as well, for whatever reason.

I just wondered, are we, if you can say a little bit

about what informs your judgement around the estimate

of the risk at the moment to young people

that you've got within, either within here

or that is within a lower level

within the direct to its own documents.

Thank you, Chair, and thank you, Councillor.

Yeah, really, really important issue,

and I think as we've seen across the country

and also in the capital, the knife crime

and young people's access to knives

and such like it is incredibly worrying.

We are working really closely

with our community safety colleagues.

I chaired the Youth Justice Exec Management Board today

and our new head of community safety, Kieran, attended.

We're working really close with community safety.

We've got a well -resourced youth justice team.

In terms of our first -time entrance,

just for the last couple of months,

we start to see a bit of an uptick,

but it's still right down the bottom

of the sort of bar chart of London and Comparator.

We're doing really well in terms of first time entrants and all that sort of intervention

and work with our young people does seem to be having an impact.

And we're also seeing a significant reduction in repeat offending which is really positive.

But I do think the investment in youth, in our youth work, is going to be even more impactive.

And again, talking to some of our headteachers around some of the conflicts between different groups of young people,

we've been able to deploy our youth service outreach team to get involved in that and try and work with some of those young people's groups.

So that sort of, the work with Community Safety, looking at our performance and data, and obviously working with our police colleagues,

but also that investment in youth does make me feel more optimistic that we can avoid what we're seeing in some of our other boroughs in London.

Thank you, Chair.

As some may know, I work in the drugs and alcohol field, so again that's another poignant area, particularly around our youth.

with sort of vapes with various different illegal substances added onto it which pose

severe risks, particularly spice in vapes.

And also around knocks, the use of knocks, that's the gas people put into balloons and

used for those who are not used to it.

And in addition to that you've got the class A drugs of heroin and crack.

How geared up are we and how focused are we both within the Youth Justice but also educating

children around the risks of those drugs and what kind of service provisions do we have.

I go through NDTMS data for my day job and naturally I do have a glimpse at Tower Hamlets as well.

At the moment we've got about 88 individuals who we are addressing for drugs and alcohol treatment.

My question essentially is how geared up are we with that and what kind of audits have we taken place around that

and does more investment need to go in with the particular rise of VAPES and SPICE being added to that?

Thank you, Councillor. Certainly increasingly getting that feedback from headteachers and we had governing bodies of schools,

we had their sort of termly catch up this week, we had about 60 governing body members on a call

and when I asked them at the end of the call what would be useful to talk about next time,

definitely vapes came up and knocks as well. I know this borough has through community safety

run through some really good pieces of work particularly around knocks. I guess from a

public health perspective I have to admit it's not a profile issue as much as it should be.

So when we talk to public health colleagues about risks to children and where it's hamlet is sort of an outlier in terms of drug abuse and the impact of that.

It doesn't have the profile it should. So I'll certainly take that away and talk to our public health colleagues and community safety about what more we can be doing with schools because it's increasingly getting raised with us.

What any advice given your day job obviously would be really helpful as well

Look thank you very much. I'm very pleased as an audit committee. We looked at both the financial

service outcomes, but also the human aspects of

the risks that your department director is

Managing like thank you very much for for being here and outlining that it's been very useful that the real difficulties I

I was actually the founder of the London Child Protection Committee in 2001.

And the issues there persist and persist throughout London.

And really it's about we tend to look at the risks that have crystallised in the past

and miss the risks that are hidden in plain sight in the streets, in the schools, in families.

And I'm really pleased with both the quality of practise that you've explained

But also the way in which risks are in this area are governed and overseen

So thank you very much that Steven

Could we next go to the

Report which is on the mobilisation action plan

And it's on the agenda item 4 .1 the supplementary agenda

There's essentially 14 pages which explain this and then the officers have

Understandably said well what we need to do is to demonstrate to the committee both the

Accountabilities about who's counting to who and also to give some full disclosure about how we manage this

And so there there are these appendices which go into about 50 pages, but which could have gone on for another 250 pages

And it was that that I said to office. I don't think if one wants to see all of this surely. Maybe you do so

This is a report about how you're getting on with both

Setting up the arrangements but also then implementing them and this was following the discussions that we had in December

And it will be useful at some stage if Stephen could comment really about also what he considers in terms of this

The likely efficacy of this mobilisation plan, but if first off after a sec you could go through that be grateful

Thank you chair. I take the report as read but it will be helpful just to introduce in the interest of time.

But before I do that I just wanted to bring one point to the attention of the committee.

You recall on the 12th of December EY issued our fourth statutory recommendation and upon seeking legal advice

that had to go to full council which it did go to full council last week on the 21st to be considered.

However, people in the committee will recall the last three statutory recommendations,

the advice that we received, this is before my time, was that the audit committee should consider

instead of full council. We are working with EY at the moment and getting clarity on the next

steps from legal and I will update the committee on that next time we meet. Just a summary of the

report, you will recall on the 3rd of December, we brought a paper on the mobilisation plan

for the audit committee to consider and we discussed two phases. Phase one was basically

scoping out the work and having a granular detail on the action plan, which was completed.

We've worked with Stephen Hughes, who's our external advisor, and we worked with the chair

Burry in terms of making sure those action plans are robust. We did have a meeting to

go through those line by line last Friday with the chair and Stephen Hughes as well.

And today we are presenting that for your consideration and approval.

Phase two, we've got a target date of 30th of June and for us to make sure those actions

are implemented. However, just to manage expectations and as EY commented on before, you know, embedding

those will take time and our auditors would like to see those embedded at least for two

and get that substantial assurance that they're happy

and I welcome Steven's view on that.

So today's report is basically looking

at those four work streams.

Some have progressed, so between December and now,

the team worked really hard to make sure

not only designing this using 18 workshops,

but also making sure we are progressing at the same time.

Some areas like procurement have really progressed well

and we are in the stage of embedding

those actions at the moment.

And as part of our MTFS, we made sure we had enough resources to enable us to deliver this at pace.

So we've invested about 4 .5 million over the next three years.

And part of that was also getting the letter from the ministers in terms of us coming up with disclaimer process as quickly as possible

to enable us to get back to a routine of where we get clean audits.

So I'll leave it there.

Welcome John Jonathan Lloyd to make some comments and it'll be helpful to get your views as our audit committee and also

Steven reads views as well. Thank you, Jonathan

Just a couple of points of clarity as well

You'll see in the report that we do put the kind of complete percentages next to the 300 or so lines of activity

That's just gives us a sense of scale. We know that

Some of those actions are bigger than others and and actually the embedding is the most important element

But it just shows that for example and workstream to audit investigations

There's there's a kind of significant amount of actions to pick up and we can recognise that but gives us an element of oversight

over that just to give a sense of some of the

Kind of risks and challenges that were aware of and the mitigations in place. So we've since December we've recognised

Resources an increasing challenge and risk and that two million just for next year

for example, was begged into the MTFS

and we were starting to recruit for kind of doers

and people that can also, experts that can help us

kind of add another layer of scrutiny alongside colleagues

and EY on some of that work as well.

And recognising the balance between patient assurance.

So there's a lot of activity underway

and a lot of tasks that need to be completed,

but increasingly to do more sophisticated work

around kind of measuring impact and ensuring the cultural aspect of that is

is done and we'd expect to anticipate a more rigorous update on that for the

for the next report and then finally more work around interdependencies so

there's a huge amount of work obviously captured in the appendix and we've we've

mapped how some of those actions are kind of potentially there's elements of

conflicts but also complementary and we've got some more work to do and

update you on the next meeting as well, but and all relevant colleagues that you can see

that are working on the additional work streams here as well if there's any kind of more granular

questions.

Okay, I noticed the Microsoft hegemony means that the monthly dates are the other way around.

It's confused me for a little while, but I sort of sorted it out in the end.

Stephen first, do you want to make any observations about this?

I probably will reserve my observations if I may, Chair, because I don't want to fetter my ability to comment on it formally as the auditor.

Clearly it's a very detailed programme.

But I suppose probably a couple of questions perhaps for the Audit Committee to reflect on.

Firstly, does this give the Audit Committee what it needs?

and secondly, in terms of the monitoring of status,

then clearly there is the percentage complete column.

As I always say, I'm the third line of defence,

so I shouldn't be the one that's identifying

when things go wrong or have not been completed.

So I suppose a question for this committee

is what arrangements would it like to see

to obtain independent assurance

that we're in management of saying certain tasks

are 100 % complete, that you have the assurance

that those have been independently assessed and 100 % and comfortable that they are 100 %

complete before my team come along and do an assessment in due course as part of the

audit process.

I was very helpful and I was appraised of those first two points straight away which

is what is it that precisely we need and I think it's slightly different than this because

otherwise we're looking into the absolute details, in the case of the forest and the

We're being asked to stare at the bark in some instances. I think it's really important

We have the reporting that's relevant and that we can make judgments about and guide and steer

Council France, thank you chair. So I actually wanted to ask the question around this as well

I wasn't quite sure was the right point in the meeting was now or an earlier stage

but so obviously since our last meeting the government has

has received additional information and it's referenced in the Minister's statement and

the Minister's letter to the Chief Executive that he took note of EY's report as an external

auditor as well in deciding to extend the scope of the intervention here in Town Hamlets

but also to, I guess, to kind of tighten it. There's not really a better way of describing

Does that change EY's view of the council's likelihood to address these significant weaknesses

that you've kind of said initially at the start of last year and then added to in the

report that came to us in November and December?

I think if I could ask Kim, Kim Bromley -Darry, I know you may be observing this, but this

is a particular point about whether, because you're having to interpret whether this is

an actionable letter or whether it's a minded to letter.

I thought it might be the latter, but I'm not sure.

Yes.

I mean the status of the ministerial statement was the Secretary of State minded to and so therefore hasn't made any decisions

to date although I understand the premise of

the question

but I mean

The reality of it is is that until the Secretary of State makes a decision?

it is still just has a status of minded to and

The nature of what he might decide might be different to what he's he said in the ministerial statement

Because he needs to take into account our report which goes in for the second for next Monday as he does the council's

Report that goes in for next Monday as well

So so I think I think the status is an important issue

But I think the premise of the question is you know to to a wise is relevant if he went down that road

What would that how would that reflect on on?

a judgement of risk or compliance or

confidence of completion

Sorry to

Ask you that Kim, but I thought it was important that you said before Steve was asked to respond to what?

council Francis asked

So, thank you. Thank you councillor and I suppose our

ultimate as I've said at this meeting before the basis on which we assess the

risk and the risk of compliance or non -compliance and the overall risk of

the audit is when we see the control framework improving and the actual

evidence that the improvements have been embedded within the organisation so just

irrespective of the mechanism and whatever the Minister may decide and

then what may flow from that and what will drive our risk assessment will be

the evidence of improvements being made through whatever route those are made.

So it will be the end result rather than the means to the end which we'll take

into account in our overall assessment. But as I think I said at one of the

previous committees, clearly we're in January now of 26, so 25 -26 financial

year is well advanced. There's a question about whether even for the 26 -27

financial year and the activities in here or indeed the issues that are being highlighted

through your internal audit service can be sufficiently remediated. So it may be even

27, 28 before we start to see firm evidence of sustained progress and embedded progress

across a number of areas. Undoubtedly before then I would like to think that there will

the evidence of progress in defined areas, but it's a demonstration of that being embedded

and then that interdependency that Jonathan talked about.

I think it's good that there's activities planned and there are activities underway

and that we as the committee oversee the progress of those, but I think Stephen's point is completely

understandable.

Are there any questions on the formatting of this report or on the substance of the

report because really it's about what's appropriate to come here, like all these charts and organograms

for example about who's accountable to who and when.

Do you need, anyway, Councillor Busting.

Thank you, Chair. That's a good point because I was a bit flummoxed by these charts. I've

to be honest with you and it would help to have an explanation. I think it would be in reflecting on

Mr Reid's comments at the beginning about us as a committee and what assurance we need.

There's clearly a lot of information in here but I'm not sure that I've got as an audit committee

member assurance that things are in order and the right action is going to be being taken and I want

I want to point to a couple of things that I think sort of demonstrate that, if I may.

The first is on the summary of the Council's response to statutory recommendations, so

in the narrative report, where we've got a summary of the issues and we have 3 .17, accounts

were not signed off between 2017 and 2003.

3 .21 issue weaknesses in internal controls and risk management date back to 2018.

3 .25 governance gaps and procurement issue. Governance gaps and procurement and contract

management have persisted since 2017. Again and again this isn't the issue that was reported by

EY. This is an issue that has been PR'd in some way to reflect some kind of messaging that these

are historic issues and not the responsibility of this council and I

think this is an issue that keeps on cropping up through the reporting and

the response to the best value inspection report and now we're seeing

it in audit committee papers and what worries me is that this is a reflection

on the culture of the council and its ability to take these recommendations

seriously and implement them and actually as an audit committee we need

to be challenging that because we and as a member we need to be doing that for

our residents because four and a half million pounds of taxpayers money is

being spent on these and resolving these actions and we need to turn around to

our residents and say that that money is being well spent and I'm not sure that

I'm in a position to be able to do that that's point number one on the trucker

on the number of

actions

Being completed. So this is on page 7 works room 112 percent complete

based on the audit cycle, so basically we're being told that

Every year that trucker is going to go back to zero

That I don't think gives us sufficient assurance as a committee.

We need to know that year on year things are improving and every year if it goes back to zero,

I don't think that's a good enough reflection on the hard work that we know your team has put in,

but it doesn't give us that visibility of how much progress has been made either.

So it'd be useful to kind of get to that.

And then my third point is around the action plan relating to work stream for and the BVI and

I think the the actions in here to me don't necessarily respond to the concerns that were

raised by EY specifically and I think there needs to be work done to make sure that the

why concerns are reflected in here rather than the council's response

reflected in here and then I have one final point which is around work stream

two which is internal audit and I think because it's been merged with some of

the other audit actions related we're losing the perspective of the

responsibility of management to to be dealing with some of these things I think

the focus has now shifted to internal audit,

but actually the focus should be on management's responsibility

to be implementing audit actions,

to be improving their risks and so on.

And I think we've lost the focus of that.

So I think if there's a way that those

can be separated in some way, I'd appreciate it.

It's a workstream and there's interrelations.

But if there's a way as we as a committee

can have that difference presented to us I think that'd be really helpful.

Thank you chair if I just take on the point of workstream one the 12 % so that was just to

indicate councillor that some of those actions annual actions and they need to be completed

before the audit starts. It's not as regressing and I think you will get your

assurance from EY when they do their audit at the back of our actions so just

to clarify on that point.

Councillor Chaudry, you're online.

Thank you, Chair. So the first paragraph of the Executive Summary says that the report

was presented to the full Council on 21st January 2026 for consideration. But I can't

all the full council is spending any meaningful time considering

the structural recommendation.

And many a times, you know, repeatedly we've been told many

of these issues date back as far as 2017. So can the committee

be provided with a clear breakdown of which specific

weaknesses originate from which years because we're going more often to meet in residence

because of this campaign time and people actually raising dishes with us on a daily basis. So I

think it is essential that we have a full transparency about how long each issue has

been known and what progress has been made. Thank you.

And then we'll address that question.

Yeah, yeah, certainly.

Thank you, Councillor.

We will get to your note on terms of going back

all those years and I think the main issue has been,

honestly speaking, is because the accounts

were not published and now that they've been published,

some of these were historic recommendations

and Deloitte raised them previously

and you know, EY picked them up as well as part of the historic accounts, but what we can do is provide you a note on those specific issues, but majority relate to the publication of accounts.

Thank you, Chair. I think in terms of the reporting, and I totally respect EY have their role and they have their standards that they will operate by,

But I think it's important how the backstop also played a role in

How we set our baseline which transferred over to you why to audit I think

In terms of the council and its design and structure. I think on numerous occasions

we have sat in the audit committee and there was a huge gap in terms of

Information that was stored that

The council had access to and also in terms of the staff that operated and they took that

there was a lack of organisational memory and as a result of that that created huge

holes in how those accounts could be put together and added together.

So those reference points I feel are important.

However, we also have to move on and we have to look at the direction we're heading in.

And so I'm going to try to focus on some of the areas.

My first thing is around the Audit Committee and its effectiveness.

I think year on year the Audit Committee changes and that in itself produces challenges.

So we just had treasury management training today, for example, and that relates partly

to MTFS and how you look at it.

I think with the cycle of councillors changing and potentially we've got May elections coming

up and thereafter you're going to get possibly a fresh cycle of councillors who will come

in.

And I suppose my question is to Stephen in relation to that.

It's how do you tackle with a new pool of councillors?

And I think as a council, we had a large turnover of councillors from 2022.

A number of previous councillors stood down, experienced councillors stood down, new councillors came in.

So that development had to start and we kind of saw the same thing around scrutiny and how they pick up the reins and how they operate.

So I suppose that's one of the areas that I would seek advice around.

And if there are particular training packages or more intense ways, how we can get new councillors up to scratch.

and then reverberate that year on year because the committee members shuffle and change.

I suppose one of the questions, so for me one is the political element of it,

and that will also have a direct implication on the sort of weaknesses of the best value inspection,

particularly around areas of scrutiny and the shuffle of councillors within that.

I also wanted to pick up on areas around recommendation free, which was procurement and contract management.

I think over the last few years while I have sat on there, there has been changes done.

And I would be quite interested in Andy Grant speaking about what changes have been made

and how that's impacted particularly around the RFQ processes.

And in terms of the direction and the seeding of those processes from where they were and

where you're moving to and what you want to see as the outcome at the end of that and

how that would align with sort of external auditors looking at these processes and how

tight it is.

And the last area I want to pick up on is around the preparation for accounts for the

year 25 -26.

And what I would be interested in is to find out where we are with the audit plan, when

the audit committee will have sight of that audit plan and how and when these actions

will be implemented in relation to the start of the audit itself.

I hope that was clear.

Councillor Francis, you asked some questions there.

I think some – sorry, I'm turning myself off.

Some of the earlier points was about the provenance of a problem, and it could be the provenance

problem

established here worsened or got better whatever

and I can see the

need from both sides of the council's politically to

try to apportion

Allocate

Responsibility for the provenance ever where it started where it got worse and so on. I think it would be

Best best for the Audit Committee if we try to look impartially at that but establish

Where we can that where the province is but do so in an impartial way

If they you asked a particular question to

The contract manager, I think is that right?

Yes

Sorry to call you the contract manager. I

I'm nearly here today gone tomorrow person. So

That's quite right chair counsellor and so I think in summary the four main areas of improvement

as a result of the EY reports

around the RFQ

Streamlining controls and governance the RCDA or otherwise known as the procurement waiver

contract management

Generally across the pace and the procurement

declaration of interest

Very briefly since

November December we put a new declaration of interest process in place which now

Tests the declaration of interest of all stages of the procurement just anecdotally we've had

350 of those posted they were electronic and they are governed by the procurement team

They come in we audit then we cheque them

We make sure that if there are any declarations and there have been nine that have said yes, we have a conflict

We've investigated further three of them

Six of them were fine. There's no problem. We've checked. There's no problem there three of them were

Escalated further and then subsequently agreed. So there is a an escalation process to take cheque. Someone says something we cheque

That's no the RFQ process and quite significantly

In June last year. We put more safeguards in to make sure that

There were greater number of fields so we could identify who was

Listing the RFQ is not just the person raising the person but asking them to raise them the budget holder the call centre

and

Also if we were using repeat suppliers time and time again for the same thing

That resulted in a sharp drop in the RFQ being used

I mean literally in one quarter the last quarter previous year

We were at 500 the same quarter this year at 250

The next quarter at 350 we're down to 150

And what that has done is meant that we're going back to the businesses and we're taking more strategic approach procurements

Rather than little pieces and pieces. We're going back to the more strategic pieces of procurement

The waiver is now an electronic form

So it goes through rather than a form that's sent around on people's sign that frequently used to get lost

Is now an electronic auditable form

And again, those processes are checked much more thoroughly and we get to the point where we say well

Actually, you just can't keep doing this. You need to do a proper procurement. You need to talk to another department

Let's link up and do some procurements. So much more approach for engagement with the

Departments much more cooperation and lastly contract management. We've been rolling out the contract management training modules

There are nine or ten of them seem to be eleven

We've rolled out six of them those so far and we've had

500 people attend those they've now become mandatory and

Along with that there's a whole suite of documents that have also become mandatory to measure and monitor contract management across the organisation

I think they're the highlights of what we've been doing

Thank you. Thank you very much

after Zach before

And then yourself council Francis. Thanks. She'll just I was just gonna add to Andy's

about the declaration of interest. So we have this thing called the National

Fraud Initiative which is led by the cabinet office and one of the work

streams of that data matching is looking at companies house data in terms of who's

the director and if there's anyone you know working for the council and going

through procurement we're also checking those to make sure there's no conflict

as well. There was a particular question specific question for yourself Stephen

I'm not sure whether it was appropriate but it's a few times. Yeah, very happy

I think there was I think there was three points which the councillor made and

that I'll come back on first one was and I think something around and taking into account the

impact of the backstop

legislation

I mean

I think there is a school of thought that says if the backstop legislation hadn't come in the council would not have published the outstanding

financial statements pretty similar to

a number of councils in England because the focus by finance teams and auditors, not just

here, was on resolving issues and trying to get to a resolution. So I think the backstop

legislation has been very powerful in supporting the reset of the local government audit market

in England. On the issue of change in membership of council

and also of this committee. I think there's three points that I would know. One, what's

important is the induction arrangements for new members and that's not just in relation

to the induction for members who join this committee but generally join the council and

the workings of the council. I think it's also important that there is a continuous

improvement programme or a rolling programme of training for this and other committees.

It's specifically focused on the remit and responsibilities.

So Treasury management might be an example

of one that's relevant for this committee.

And then I think the third element in relation to that

is the self -assessment by members and by the committee,

at least on an annual basis, to allow the committee

to drive their own development needs as well,

both individually and collectively.

And then clearly in my report from last year,

I highlighted a whole range of matters in relation to the performance of the audit committee.

So I'm not going to repeat them here.

The third area was in relation to the audit plan for the 25 -26 audit.

So in line with the standard practise that will come back in the spring of 2026,

once we have made advances in completing our planning arrangements.

and we'll set out the risks as we see them for the audit then together with

materiality and I've given an indication already of where I suspect materiality

will remain and then you know at that point committee will be able to see our

approach and focus areas. And then finally, Chair, if I may, again I've

noted that and similar to comments from some councillors and you know there

continues to be a tendency to try and look back my view is that this council

is not going to affect the change that it needs until it starts to look forward

and not look back and I think that's fundamental and I've said it before but

I'll say it again

who you've run over if you look just for the rearview mirror you've got to look

forward as well and sideways councillor Francis and you got no how to drive and

So, the reason that I mentioned the minutes at the start of the meeting was because I

did say that when we had those presentations on the 3rd and 10th of December that I did

find some of the action plan, the mobilisation that was being put forward really persuasive.

I think it did face up to the scale of the challenge that was identified by the auditors

and was good.

And I think that was particularly in relation to the finance aspects of it finance and resources aspects

But I did also say that I thought there were some areas where I think that the council hadn't wasn't properly

facing up to the scale of the challenge in other parts as well and

and I think I said in that meeting that I disbed and you admonished me and encouraged me to always have hope and

and so I did and

Then I kind of see this report and I just don't really understand how these

how this how this happens because this report

tells us like it's essentially it's rewriting the

auditors

Recommendations here. I mean council of Austin's picked out a couple of them

I could pick out others of them as well that

this is the council's corporate view or interpretation of what EY is saying

instead of what EY is actually saying and I just don't think that's

appropriate for the council to try to reframe what the criticisms that it is

that are being made against it so just to give two examples so in relation to

Annual Governance Statement.

It states here on this report, page 13,

that the issue was that the AGS was missing

to seven years prior to 22, 23,

which is clearly an attempt to portray this

as a problem that was created, or at least began,

in the previous administration.

So that is not what EY said.

And I can read you a quote from what EY said.

Stephen can say himself.

In relation to the annual governance statement, which we have prolonged discussions about the over -optimism within it,

it says the Council should ensure that the tone, content and substance of the AGS accurately reflect the scale and nature of the issues faced during the year.

This includes reviewing the AGS, how the AGS is prepared, challenged and finalised prior to its publication,

alongside the financial statements to ensure it provides a balanced and transparent account of governance performance.

By all means, reference the fact that it might not have been great in past years,

if that's what you think is the most important thing.

But to describe this as only being the fact that it was missing for seven years is not correct,

And it shouldn't be published in documents of this council the second one that I want to pick up on is the

Around social housing so so you'd have to forgive me

I just need to go back to what he why actually told us and so that we can compare it with what we're being

Told is the problem now

So ey said that this was that the issue was about a delay in the in the report

or in reporting the referral, the self -referral

to the regulator and about the kind of process went through

in order to reach a decision for that to happen.

There was a long period when the mayor said he wanted to do something

before it actually happened and then there was the referral.

So, but instead of that, this is now represented as,

the issue was failures inherited from the former ALMO, Tower Hamlets Homes,

were addressed late after insourcing in November 23.

That is not what EY said.

They said something completely different again.

This attempt to rewrite history is a massive part of the problem

and you're right, chair, to always encourage me to have hope.

But the reality is that this action plan,

while it contains lots of really, really good things,

continues to peddle misrepresentation of what the auditor said and also what the

best value inspection said as the council is also peddling a

misrepresentation of what the government's Minister the Secretary of

State said it does it repeatedly online the mayor does it in cabinet meetings

like it's hopeless for us to rely on this we absolutely need to have somebody

saying this is unacceptable to present a wise report in this way and in this

kind of thing needs to be stopped.

I understand that and I think that the best way of putting the issue is to actually use

the wise words rather than to try and paraphrase them. Because in so doing you will be influenced

by what you think people want to hear. I think the important thing is that we, whether the

plan itself, this is, I take the point entirely, I think the issue is whether the plan itself

itself meets the objectives and my concern about this is that the

We are sort of

You can tell from the from the detail

What we've got is real

Fine -grain detail from officers about what they're doing on a on each of these areas

Actually, it's on some of the areas because I said don't put it all out there with hundreds of pages

There's a very big difference between the proper...

Look, I've got a... There's a... There's water here, OK?

You don't understand wetness by looking at hydrogen and oxygen molecules.

And that's the issue.

We're looking at the properties of a system at another level.

We don't want to be drawn down into the detail of what's being done.

We want to be assured of that and we want reliable indicators at our level that that that progress is being made

implementing this plan

And so I think we're we're getting you know, what we've got is a proposal. This is how they're managing it

Operationally and we're being shown the detail of that. I think that's different for what we need. I think you made this point

Well, what we need is much more information about you know, the timeliness

What's being achieved is it not being achieved is it improving? What are the impediments at the moment?

And all you know we don't really need

All the information about every indicator because otherwise we'll be essentially having dogs and bark ourselves

And I sort of think we need to come to some process whereby the reports to the committee

Give that assurance. It has very bluntly. This is what the y position is. This is how we're addressing it

This is the timeliness and progress that we're making because Stephen said actually none of this is going to result in

You know good news in terms of reports and a wife for a good 18 months to two years

So we've got to get the activities

implemented and we've got to do them rather than try to

Understand entirely the point you're making about the rephrasing of this. It's not appropriate

But it has been done for a deliberate purpose. It's been done to

Underpin an argument that's being made elsewhere. Well

You know the written rhetorical redescriptions an aspect of politics that is pervasive I'm afraid

No, no

Yeah, yeah exactly exactly exactly so outdoor is that

Thank You chair, I'll make sure we take down board and that's not gonna happen again

I've got a question about the one of the issues which is the investigations and I know

In is on online here, but it may be that's not really for her

I didn't really know what the investigations function was

I've never heard of this before I've heard of complaints functions, but I'm not heard of investigation

This is investigations within your team

Is it David because seems to me that there's complaints about services and about projects and about?

council policy

There's also issues of alleged

Integrity violations. Let's call it that on the part of officers and members. There may well be complaints about that

And it's also whistleblowing

Is this not combined in one thing as you do investigations in another and whistleblowing over here and

Because actually all of those things are within the ambit of the audit committee

Thank you, Chair.

I mean, there's a team called the Fraud Investigations Team, and their remit is to deal with, in

a professional manner, investigation to whatever standard deemed necessary and all aspects

of internal fraud.

That will be any fraud committed by somebody internal to the Council, be it an officer,

a member, an agency worker, a contractor or somebody who is one of the council's clients

or customers housing tenant, a resident in the borough and so on and so forth.

So they're remittes to carry out those investigations into alleged fraud.

As part of that they would receive referrals from the whistleblowing channel when they

pertain to fraud if they don't pertain to forward it's a conduct issue suggested

or there's a bullying issue that it's rerouted to HR or to somewhere else in

the organisation so there's a properly structured process that's set up which

means that whatever query you have be conduct fraud problems with the

neighbours parking a complaint about something else it's rooted to the

correct area within the council be human resources being complaints be it the

Fraud Investigations team, which Lindsay's the team lead and she reports to me, Gemma.

So there is this coordination between whistleblowing complaints, alleged integrity violations,

as well as serious incident complaints, such that you can make a judgement that this is

fraud, this is not fraud, this is something else, and so someone else does this.

This is a regular process that's conducted within the organisation.

It is, Chair, but it can sometimes be complex.

We discussed the case this week that involved an individual that was subject to an HR process.

They were put through the disciplinary process through HR.

They resigned.

They were also as part of that process subject to an investigation for fraud and at the same time the individual in question

Raised a fairly extensive whistleblowing complaint. So sometimes these things are in related and becomes very complicated

Councillor charges reminded me about

the point that he raised about the

what was presented to the full council meeting on the 21st of January.

So it was like for clarity, it was a paper was published and tabled,

but it was noted because we ran out of time and there was no discussion.

There wasn't allowed to be any discussion on that.

And I think that's relevant because this implies that we had a prolonged debate about it.

I'm on cited on that issue, but obviously the officers were there

Will address that at some stage presumably I mean after was actually already commented on the chair apologies

I wasn't there, but I can confirm that for you

Yeah, those reports were

Agreed under guillotine procedures at the end of the meeting

Anything further on this report because I do think that the key point to be taken from it and I know there are

really important

extraneous points of generally about

the documents but the the key thing is

whether the Audit Committee is confident in the reporting to it about the

mobilisation plan because we're spending a lot of results on this. I will work

further with officers to try to make sure that the report properly informs

the committee and really I think this is here for disclosure really the back of

this because it's almost impossible to work out isn't it really. Do you have a

I do have a point to make and I'd be grateful for your work on the report as well, making

sure that we get the level of information we require.

I was reflecting on the owner of this report actually, given the comments that were made

on it, and given the broad remit of the recommendations and the broad remit of the actions that sit

within this, I wonder whether it would be more appropriate for this report to be owned

By the chief executive you should be reporting to audit committee, but i'll leave that for you to

Consider and have that discussion with the chief exec i

Think, we should have the statutory officer the section 1 5 1 officer on that rather than

The chief executive i don't i mean i think that we can

We've got the rigour the discipline of the audit and accountancy process from a counsellor

We won't have that from chief executive, generally speaking.

Jeremy, can you come down with you?

Yeah, because I think that it would just inevitably broaden

rather than narrow the focus.

Okay.

Thank you.

Just before we conclude, it'd be helpful,

thank you for your feedback.

They're all noted.

They'll be reflected in the next update.

But just from what we discussed today,

it would be helpful to get your views as a committee if having external assurance would help,

especially what Stephen spoke about in terms of the action plan,

and what kind of evidence would you like to see?

Because for us, we could say, you know, this technical line has been implemented,

but what would help the audit committee to give them that assurance?

So it would be helpful if external assurance would be helpful for you,

but also what evidence would you like to see?

Yeah, I think independent professional

Independent of yourself that is

professional and all the advice would be

Extremely well received by the committee. I

Think that's what we need

Otherwise, we're we're actually reliant on the backstop of the backstop of as

What is that? I can't remember now in cricket where that is. But anyway the

That that's you can't play that role if you're also

Internally advising the cat that's not appropriate really so I think we respect to a wise position

It's important that we also get strong independent advice

Because otherwise we're spending money unsighted

Okay, thank you very much for that let us now

and

So approve note that report or notes the report

Can I now take us to the Treasury management review we're all much better informed given our

Training half an hour's training of earlier

It's just I often say to after a sack it's more

Shallow snorkel than a deep dive

when it's half an hour, but

Let's I've got lots of comments about this, but let's

Introduce this is it Paul? Oh

Thank You chair in the interest of time

Happy for the report to be taking as read but just to make a few quick points

The report together with the appendices can be found on pages

3 to 58 of the supplementary agenda.

And the report and the appendices together

clarify how Ta -am -Nets Council planned

to maintain a consistent approach to treasury

management in 2026 -27.

And the report broadly comprises treasury management strategy

statement TMSS and the annual investment statement which covers in a nutshell how spare cash is

invested in line with priorities namely security liquidity and yield and finally the capital

strategy report which incorporates the MRP policy, the minimum revenue provision policy

that ensures that responsible repayment of borrowing are aligned with the asset lives.

So together, chair, these strategies ensure that the council manages public funds securely,

sustainably and in full compliance with statutory and professional codes. So all three components

the report is asking this audit committee to recommend to council to approve and adopt

the policy and strategies appended to this report. So there are a series of appendices,

so appendix A for example is the Treasury Management Strategy statement itself and the

The recommended investment counterparties and limits is in Appendix A, page 7.

The investment strategy report is contained in Appendix B.

And the capital strategy, which includes the MRP policy statement, is in Appendix C.

And the prudential and treasury management indicators are contained in Appendix D.

and then finally the Treasury Management Policy Statement is set out in Appendix A.

And then importantly there's also a recommendation to delegate authority to the Corporate Director

of Resources Section 151 to make any necessary updates for Council. I'll leave it there now.

I'm happy to take any questions. Chair, thank you.

Well, I've got a rather fundamental question, I'm afraid, which I don't want to disrupt

the progress of this to the council.

It's important that the council agrees this at its meeting.

And I think this is a problem for Section 151 officers in that the borrowing strategy,

the investment strategy, is predicated entirely on an agreed capital strategy.

If you were the funder, the bank, you'd ask many, many more questions of the capital strategy,

but you're actually part of the organisation that's composing it.

So you're in meetings composing a capital strategy.

The capital strategy proposes 1 .2 billion of expenditure over the next four years.

There's no indication of capital strategy about why.

Nor is there anything in the report about the past.

In other words, you've got a programme of 320 million for this year,

I think it's $319 million, $320 million for this year,

doesn't say what was the achievement last year or the last four years,

so how much slippage is there, how much over -programming is required and so on.

When you've got this scale of capital programme,

the fundamental question is, OK, we can do this, should we do it?

Is it prudent?

And, you know, of course it's prudent because you can do it, because financially you can

do it.

But you know, there is no – the treasury management approach is really about finding

ways to finance a capital strategy.

And so really you have to go to the capital strategy and say, well, OK, why is this all

needed?

And it's not there.

what's there is a description of what it's going to be spent on, but only in large blocks.

The largest block obviously being housing capital. So I understand that.

But, you know, what it means is that you have to be part of meetings to construct the capital strategy,

and then you have to come here and say, well, this is how we're going to finance it.

And it's sort of a bit odd.

I don't know whether...

And asset management strategies which are sort of broader

aren't actually a requirement set for are they?

I've been really surprised.

I've been studying asset management strategies recently

and been surprised that some authorities just put in them about their housing,

some put about their corporate estate,

some put about, you know, leisure centres and so on.

But there is no sort of sit for greed position on what an asset management strategy is, but there is on the capital strategy.

So I think it's sort of brought home to me this problem that Section 151 officers have,

and the key officers that are working on this,

because the capital programme board, as described in...

I thought this was very good, the capital programme governance was very good,

but what I can't see is what's the trend, the history of achievements,

physical, financial, what's this achievability, what's this deliverability.

It's not there

But what is there is the total scale which is a very large scale?

And the ability to finance it is obviously

important but as the as we heard earlier this switches from

You know a very different balance sheet position as you're going through these four years now

I'm not quite sure where that you know where those questions take take you

But I do think that it would be useful if there was more information on what it is that's driving the need for this Treasury Management approach.

In other words, much more about capital strategy, much more about deliverability and achievability.

So that, because really I think you need much more information about risks, contingencies.

There's undoubtedly need, undoubtedly need to restructure the housing stock here.

That's where most of the money is.

I mean I think for every £100 you're spending on improving the stock,

you're spending £400 on building new stock.

It's really powerful that that's being done.

But it's not actually explained in the document.

I'm sorry to say that. It didn't occur to me until I saw it.

Thank you, Chair. No, I agree completely. I mean, capital strategy should not be just about financing.

It should be the strategy of where the Council is going.

And last year we did start working on the asset management plan, which really is an integral document in terms of informing the capital strategy.

and now colleagues are finalising that

and hopefully going forward that will be integrated.

Another option we're thinking about,

it's a longer term, a 10 year plan,

instead of a four year MTFS related

or a three year MTFS,

because capital strategies for a longer term,

so that would be incorporated as well.

In terms of the dilemma,

when the capital will be delivered

versus when do we finance, that is a challenge,

but SIFA does have guidance

sometimes with the prudential indicators.

And working with our treasury advisors,

we tend to kind of decide what's the best strategy

based on our deliverability.

Rest assured, we did look into slippage and rephrasing,

so when we planned this, we did make an assumption

based on historic trends.

But the council's view now is to really accelerate

the delivery of homes, but also improvement

on the current stock, hence where the key drivers,

so that those programmes are being accelerated and that's why you see the change of strategy.

It may be the optimism biases in the capital programme. I do think that the thing which

government looks most at, which everyone looks most at now is debt interest payments as a

of revenue spend and adequacy of minimum revenue provision.

And I think on both of those,

to have this in a very healthy position.

There's no question about that.

I just don't want that healthy position

to in any way worsen because we're taking

an over -optimistic view, it may be,

or perhaps a hopeful view on capital spending.

Questions or points counsellor

I thought the training earlier was really helpful

But I don't have the slides so I can't ask anything related to it because I've forgotten what I was gonna ask

another question which relates to the Treasury management media review and

and paragraphs 3 .43 and 3 .44 where it talks about Trump and in 3 .44 global trade tensions easing.

And I wondered in light of recent news whether that is optimistic, whether that needs changing,

but more seriously whether that has an impact on anything in the report.

So obviously this was probably written before recent communication.

Thank you, Chair.

I think you're right that every pronouncement from the US

currently impacts the market almost immediately.

But I think the general trend that we see is declining interest rates.

obviously the Fed for one I think proceeding very cautiously obviously a

lot of pressure being put on the chairman of the Fed to cut interest rates

pretty quickly but I think he's pushing you know back and of course looking at

rates on a continent, Europe, a lot lower than the UK.

But of course, also the Bank of England, the Monetary Policy

Committee, are also very cautious.

They see what inflation is doing.

And so they've got, I believe, a very good handle on things.

not wishing to move too fast but equally, you know, trying to sort of maintain that sort of

downward trend as far as rates are concerned. So the forecast which then falls from that is still

that downward trend. So we see the prospect of perhaps another interest

rate cut maybe over the next six months or so and then maybe take the foot off

the max elevator a little bit after that and then but over the next say 12 months

maybe another quarter of a percentage shift off as well. But just all the time

keeping the arrival on inflation because a 2 % target is a challenge obviously

giving all the global dynamics going on and of course one minute we hear about

tariffs, another minute you know it's off the table and all that. So it's like you

all the monetary authorities sort of are taking it at a time and but depending on

what you read that is like the global economy is still in in some cases good

health but we just have to wait and see what happens over the coming period

Thank you

You can yeah

No, I don't want to introduce the collapse of mag seven and

The fact that 35 % of SMPs is actually only in seven companies

We potentially facing a real problem

cancer

Thank you, Chair. So as an update from the Prime Minister's visit to China today, we get free visas.

We don't have to pay for visas for 30 days and I think there's been reduction of 10 % or 50 % on certain tariffs to China on goods.

So in light of that, I suppose China will be rivalling the US, so that may have a different

dynamic on interest rates and so on and so forth.

But putting that aside, page 16, I think, was identified on the training as the key

diagram that we need to look at.

Number one and number two the assurances in relation to the risks or the risk appetite within that

Yeah, I didn't understand what the upper line was I understood the

Liability benchmark line, but I didn't understand the upper line wasn't

It's yeah, it's that one. Yeah. Yeah, it's

We are being sent by the way, but yeah, they will be sent around and maybe it may be

revealed then.

Abdul Razaq?

I'll just briefly comment on this. There's something called authorised limit, which is the most that you can borrow.

And then the lower lines is what we might need in the next three to four years.

So as long as you don't go above the blue line, you see authorised to top.

Yeah, and then you've got your...

But I'll send the training slides.

And then, sorry, I forgot about the red line.

And then,

to the millions watching.

So we've got the blue line on the top.

That's sort of way out.

The app, oh yeah, you just watch that.

And then you've got the red line,

which is more of a triangle.

And then you have the dotted line.

And then you have this sort of black

Going across if you can just explain each of those areas and how it impacts on the position of Tower Hamlets

It might be helpful

So there's a metric there in the table effectively the dotted line is our net loans requirements

So that's the full cost pretty much the forecast position in terms of what known requirements are going to be

Once we want to maintain our minimum investment level which we've kind of put in at 60 million

Which is in line with our long term strategic pool funds

The red line is the key metric in terms of the prudential indicator and that's our liability benchmark

So that's what effectively that's the key prudential indicator one of the key prudential in case when it comes to borrowing

So we'll need to measure and report against that in terms of our actual borrowing

And the blue line is effectively our CFR.

So this is the overarching general need where we effectively haven't financed capital through

a capital finance source such as capital finance, capital receipts, capital grants.

And the sort of the black line going across, if you could explain that as well.

So that's –

Sorry.

I was going to say that's our current borrowing as it exists and effectively maturity kicking in in later years when we pay those existing

Loans back so you can see that black line is about 70 million and that's our existing borrowing

Can I start it'll be helpful if you look at that chart alongside the table table to just above it

You'll see those numbers aligned to the charts

The next question is

The trainer also specifically said that Tower Hamlets has very small borrowing and therefore it's very healthy.

How do we benchmark in terms of interest payments compared to other local authorities?

Thank you, Chair.

So, adding close, the Treasury Management Advisor has a database where they sort of

maintain the data for the population of local authorities that they track.

And so obviously they would measure the performance of each authority against roughly the average

of that population.

And then they do various sampling around that as well.

But effectively, the data set for all the authorities

participating in their monitoring programme

are sort of developed and then individual

authority performance is sort of assessed

against that broad average and then the metrics can then inform you as to how you, your performance

against the average of the local authority performance.

Just going back to your earlier question about the operational boundary and the, you know,

and the operational boundary and the authorised limit.

So the operational boundary basically gives you

that early warning sign that you're moving towards

either that red line,

that you mustn't cross the limit,

the authorised limit,

and you cannot cross the authorised limit.

So it gives you plenty of opportunity to review your approach and going back to the Chair's

point earlier, you have both this rear view mirror and of course your ambition and then

There you were able to moderate

You know your activity to ensure that you don't overshoot

Thank you for that. Look on the next item. There's actually a table which I thought was excellent which shows my credit score

This council compared to London Mets compared to authorities. I think it would be useful to do a bit more of that on

reports

Otherwise, you know we can be doing things but we want to know the extent to which we're an outlier

in both directions I'd say.

Caspar you did indicate, but I think you then, anyway.

Are you still interested?

So I think, have you moved on to 4 .5 in part?

I think we have a little bit.

I just wanted to say, having been a little bit critical

of some of the wording of the previous report,

I actually quite liked this capital strategy report

in the Appendix C.

So, and I do, but I do understand the point

that you're making about, I guess,

the kind of the fund, given the scale of the investment

that is scheduled, like that hasn't been explained

why those choices have been made.

I mean, I guess us as councillors,

from all the political parties,

will kind of have been through this

for quite a long period of time,

with constituents at our door about housing

and with housing queries.

But I did actually really appreciate

the quite granular detail about some of the other things as well which I thought

is important not to lose sight of the fact that there is investment going into

other things too including the London legacy development corporations

commitments that this council inherited when the planning powers switched over

so yeah so I actually thought this was it was was useful to me and the training

Indefinitely helped to make greater sense of it as well. Thank you

Okay, do we

Approve that report. Yes. Good. Okay the final report you're waiting for that phrase

The final report of course is the mid -year review

Which I think is before us and as I've said it's I thought

They presented things apart from well, I think it presented

Information pretty well and set out the genders sadly agenda. Well good comparisons

But is there anything particularly like to draw our attention to?

Thank you chair. I'm happy for the report to be taking us ready. I

Have a question which arises from the training and I can't see if the table was actually

here but one of the things that we were told was that as the kind of income and expenditure

fluctuates comes in and goes out that we

Reached a point just before Christmas where there was quite a small amount a relatively small amount left in the cash balances

and so I just wondered if you if there's anything that you wanted to report to the committee about that and about

whether that's an unusual situation, whether it's something that we should

understand happened, or is that just the kind of the ebb and flow of money?

Thank you, Chair. Yes, basically that's to do with the ebb and flow of money.

Having said that, we are watching and monitoring hawkishly the balances.

Obviously, we continue to maintain the strategy which is internal borrowing.

However, looking at the declining interest rates and all that, we know that at some point

it would be massively advantageous to go out and take some money, perhaps for the long

term, again depending on what the capital programme is saying.

And then we can obviously ensure that we borrow at the right time, at the right rate, for

the right duration.

And then to ensure that the profiling of that debt is absolutely spot on.

And then obviously, which is why we do very comprehensive

cash flow, you know, forecast,

ensuring that, you know, everything is fed into the forecast

that the big ticket items and then the small items as well.

So we ensure that it is that granular for us to be able to,

with some certainty, know that they can,

when we go out to take money for the long duration or whatever we can actually you know pitch it at

the right level and then to make sure that you know we can deliver on the capital programme correctly

Thank You chair which is just very brief question table 8 on page 16 of the report shows PSI and

finance leases, there's a cross next to it,

and this is for lease debt for 2526, is 75 .5 million.

Just this one here, can you just explain,

one, the cross on there, and two,

what do we do to mitigate against that

and the risks associated with it?

So this specific aspect is down to IFRS 16.

So at the time when the policy was approved back in 25 -26, we were then estimate in terms

of PFI and finance lease debt coming onto the books.

It's a technical accounting entry.

So when these operating leases effectively, as they were being treated previously, came

onto the book as finance leases, we recorded the asset as a right of use asset and a corresponding

liability went in to our books as well. So that's all come on book from 1st of

April 2024. So at the time we made an estimate in terms of how that would

materialise in terms of an asset and a liability. So based on latest assumptions

we're expecting more assets than we originally estimated for 25 -26 to

address that issue. As part of the Treasury management strategy we're

Revising the 25 26 threshold as well to take that into account in terms of the latest forecast, which is 75 million

That is why it's marked X for non -compliance because of that additional yeah, I see

Is the conclusion of our public

agenda. So, I think you need to... What do I need to do?

Sorry, just a question. I'm not sure if this is supposed to be done in public or can we

carry on in the private time but it's to do with the timing of the next meeting.

Will we discuss it in the public or can we continue within the private section?

That's fine with you.

Could we discuss that now?

Yeah, do it now. Please do it now.

So, 12th of March is pretty much ending near Ramadan.

For a lot of us it will be quite a testing time.

We also have kind of prayer obligations and so on and so forth.

So I was wondering, Chair, would it be appropriate if we were to propose to push that date back a little bit within the tax year?

So 26 would be two weeks ahead of that. The 19th would be one week ahead of that.

Or one week after, sorry. Or two weeks after.

26 would probably be better facilitated as Eid could potentially be on the 18th or thereabouts.

If I could respond. Meetings are happening during the month of Ramadan. It doesn't stop the business of the Council.

but we have made provision for meetings to start earlier and have a break for

fast opening and complete the meeting before evening prayers so we will

continue in that rain.

Sorry, with the utmost respect, Mahana, I'm putting a proposal forward to the committee and I would seek to ask the chair for permission for that and if need be

I would request a vote in order to try to move that back if there isn't a constitutional requirement for it to happen on that particular day and

The ability to move it by two weeks. I think would help a number of committee members

Practising their faith would be appreciated

It's a matter that I I'm quite

Completely flexible flexible about I have to say and I think that but

The position of the council is the important thing and I would defer not

Defer to the council's constitutional position on this and so I understand that let's take that and

Try and address that offline. I'm sent on me

Thank you

Okay, the

if so

In view of the contents the remaining items on the agenda

We recommended to adopt the following motion under the provisions of section

hundred and a of the local government x72 as

Amended the press and public be excluded from the remainder of the meeting for the consideration of section 2 business on the grounds

That it contains information that's exempt

Is that agreed? Yeah. Thank you very much indeed

I'm happy to agree that but as we've asked in previous occasions can we can

Ask that we continue to record the

Meeting for the record

Yeah exactly

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Audit Committee - Thursday 29 January 2026, 6:30pm - Tower Hamlets Council webcasts

Audit CommitteeThursday, 29th January 2026 at 6:30pm

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