The Governance Standards and Audit Committee of Merton Council met on Thursday 3 September 2026 to discuss the progress of audits, corporate complaints, and HR employment matters. Key discussions included the ongoing efforts to rebuild audit assurance following previous disclaimed opinions, a review of the council's complaints handling procedures, and an update on the HR employment report, particularly concerning the reduction of agency worker expenditure.

Internal Audit Progress Report

Margaret Culleton, Head of Internal Audit, presented the Internal Audit Progress Report, detailing the work undertaken by the team up to August 2026. The report highlighted that the audit plan was progressing, with eight assurance reviews and one advisory review completed. Two of these assurance reviews resulted in a Limited Assurance opinion: Arboriculture Risk Management and Direct Payments. For Arboriculture Risk Management, the audit identified that while management was committed to improving the service, key risk management arrangements had not kept pace with the increasing complexity of the council's tree stock. Recommendations included implementing new procedures for inspections, documenting emergency response protocols, and maintaining a site profile inventory. For Direct Payments, weaknesses in governance, financial control, and monitoring were identified, with a reliance on spreadsheets noted as a significant risk. Management has accepted all recommendations for both audits, and improvement plans are being developed.

The report also detailed outstanding Priority 1 audit actions from previous years, with seven remaining. These relate to Client Financial Affairs, Deprivation of Liberty, Disabled Facility Grants, High Needs Block, and Contract Management. The committee was informed that the audit plan may be adjusted due to new high-risk areas or resource pressures, with some audits potentially being deferred to future years.

Councillor Nick Thomas inquired about the potential move of audits to 2027/28, specifically mentioning planning and parking permits. Margaret Culleton explained that planning was suggested for deferral due to an ongoing restructure within that department, and parking permits were considered for a later date as parking income had already been reviewed that year.

Corporate Complaints Report

Sharon Evans, Director of Governance and Civic Services, presented the Corporate Complaints Report for 2025/26, along with reports for Children's Services and Adult Social Care, and the Local Government and Social Care Ombudsman's (LGSCO) annual letter. The council received 1450 stage 1 corporate complaints, a 39% increase from the previous year. Of these, 638 (44%) were upheld. The report noted a significant increase in complaints related to Council Tax billing, homelessness, parking, and refuse collections. A contributing factor to the increase in complaint volumes and complexity was identified as the use of Artificial Intelligence (AI) in generating complaints.

The LGSCO's annual letter indicated that Merton Council had 11 upheld investigations out of 12 investigated cases, with an upheld rate of 92%, slightly higher than the average for similar authorities. However, the number of upheld decisions per 100,000 population was materially lower than the average. The council achieved 100% compliance with LGSCO recommendations.

Councillor Butcher asked about the expected improvements in response times and quality due to the new LGSCO Code of Guidance. Sharon Evans explained that the new code, which came into effect in April 2026, mandates shorter timescales for acknowledging and responding to complaints. The council had updated its Complaints Policy and provided training to officers in preparation for these changes.

Councillor Paul raised concerns about the increase in AI-generated complaints and suggested exploring AI solutions to manage them. Sharon Evans acknowledged this as a growing issue and mentioned that some councils were testing AI to address AI-generated complaints. She also noted that the council was exploring technological solutions for managing complaints, including FOI and SAR requests.

Councillor Holden raised concerns about parking complaints in Wimbledon, suggesting a review of procedures to reduce them. Sharon Evans acknowledged that parking is an emotive issue but confirmed that processes would be reviewed. She also addressed concerns about legal challenges, stating that while threats are made, the council is generally robust in preventing escalation.

Councillor Wilson raised concerns about the Children's Social Care report, specifically regarding the lack of progress on ensuring young people know how to complain and the absence of complaints from children and young people themselves. Elizabeth Fitzpatrick, Director for Education for Early Health, stated that efforts were being made to improve this, including engaging with the participation team and exploring a texting service for young people.

Complaints Against Members

Sharon Evans presented the annual update on complaints against members. Since September 2025, eight complaints had been processed under the Members' Code of Conduct. None were dealt with informally, one was not accepted as it fell outside the code, and four were not referred for formal investigation due to no case to answer. Two complaints were not referred for formal investigation, but training was provided to the councillor involved. One complaint remained under determination. The nature of the complaints primarily concerned councillors' use of social media, allegations of disrespectful behaviour, and the use of position for personal advantage. Seven complaints were made by members of the public, and one by a Merton Councillor. No complaints progressed to a formal investigation or public hearing.

Councillor Oldham asked how many complaints were referred back to different parties for their internal complaints procedure. Sharon Evans explained that while few complaints were received at Merton, if a complaint did not fully fall within the code of conduct, or if a councillor was not acting in their capacity as a councillor, it could be referred to their group. Councillor Mitchell asked for more detail on the nature of social media complaints, but Sharon Evans explained the need for confidentiality where no formal investigation had taken place, citing natural justice. She confirmed that where formal investigations and findings occurred, more detail could be reported.

HR Employment Report

Mildred Phillips, Director of People and Culture, presented the HR Employment Report, which included an update on agency worker expenditure. The report highlighted that contingency/agency workforce expenditure totalled £8.4m between January and June 2026, a reduction of nearly £1m compared to the same period in 2025, alongside a decrease in the average number of workers from 299 to 253. This reduction was attributed to a decrease in reliance on agency staffing across several service areas, including Admin & Clerical, Facilities & Environment Services, and Manual Labour. However, the use of interim workers, particularly those paid on a daily rate above £400, remained the largest area of contingency usage, increasing from 62 to 74 between January and June 2026. This was largely due to the need for specialist skills in IT transformation and regeneration projects.

The report also detailed ongoing HR initiatives, including new staff benefits, volunteer days, occupational health services, and employee assistance programmes. Training was provided to managers on making effective referrals to Occupational Health and on managing difficult conversations. The council continued to increase its use of the Apprenticeship Levy, with 86 live apprenticeships across the council.

Councillor Holden inquired about the trend of agency worker numbers, asking if it was expected to continue falling. Mildred Phillips confirmed that the trend was expected to continue falling, but acknowledged a continued reliance on agency workers for short-term resource needs. Councillor Mitchell raised concerns about churn within permanent employees, particularly younger cohorts, and requested that this data be included in future reports. Mildred Phillips agreed to include this information. Councillor Paul asked about the relatively high level of mental health-related absence in certain departments. Mildred Phillips explained that this was a national trend and that the council was working to increase awareness and uptake of its Employee Assistance Programme.

Work Programme

Richard Poole, Vice-Chair, presented the Work Programme. He informed the committee that an additional meeting was likely to be scheduled for 8 October 2026, to discuss the brilliant basics initiative, which includes reviewing parts of the Constitution. The November meeting might be moved to December. Councillor Thomas inquired about the driving force behind the extra meeting in October, and Richard Poole explained it was to review the Constitution to ensure governance was fit for purpose and ready for upcoming changes, including the council's role as a landlord. Councillor Paul asked if there would be an opportunity to amend constitutional changes at that meeting, and Richard Poole confirmed that while some changes could be made legally without full council approval, members' input would be taken on board.

The committee noted the report and agreed to move to the next item.

The meeting concluded with the committee noting the reports presented. The information status of the meeting was SCHEDULED_ONLY, meaning no decisions were formally made or recorded as having been held.