Transcript

Committee. Before we start the meeting, I have a few housekeeping announcements to make. The microphones are not very sensitive, so please will members speak directly into them. Members of the public are welcome to film, audio record, photograph or tweet the public proceedings of the meeting. I'd ask anyone in the room to please be considerate towards other people and take care not to disturb the proceedings. I have received any apologies for the meeting. I have received apologies from Councillor Nick Johnson, Chair. Thank you. Can all members present confirm they are voting member recognition? There are no items of business which are late and urgent tonight. Does any member wish to declare any interest of dispensation in respect of any item or issue to be considered? Can members please approve the minutes of the meeting held on 13 November 2024? Can I start with item 6, which is a government conversation with the Strategic Director of Housing? Would you like to come? Would you introduce yourselves in case there's anybody that don't know you? Thank you, Chair. My name is Hakeem Oshinaki. I'm the Strategic Director of Housing. Thank you, Chair. My name is Nati Stevens, Head of Governance for TMOs. Thank you very much. Would you like to take the presentation? Yes. Thank you, Chair. My apologies. So, I've submitted a report to the committee, which I'm assuming that committee members have read. However, just to introduce the report, I want to say a few things. My responsibilities are managing existing council homes, which includes managing the tenancy with our tenants and the leases with our leaseholders and the responsibility for repairs and maintenance of those homes. I'm also responsible for building new council homes. And finally, to deliver the council's statutory homelessness functions, which includes the provision and management of temporary accommodation. So, based on all of that, as you would have gleaned from the report, as far as our landlord responsibilities are concerned, you may be aware that we had an inspection by the Regulator for Social Housing last year. And as a result of that inspection, we've put together an action plan, which we call the Good Landlord Plan, because the idea of the plan is to make us into a good landlord, because we accept that at the moment we're not as good as we should be. So, you know, that action plan has an internal governance process to ensure that it is delivered. I have set up a housing improvement board, which looks at the delivery of the action on a monthly basis. It also goes to the council's corporate management team. And the leader has set up a housing oversight board, which he chairs, inclusive of the two cabinet members for housing, the chief executive and my colleague district director of resources, where we also ensure that the actions are delivered. And then finally, the regulator for social housing have also set up monthly meetings to ensure that we're doing the things that we've agreed with them that we would do. We are, after all, investing 180 million pounds into our existing homes for the next two years, which ensures that we deliver safe homes to people and that will fulfill the promises that we've made to ourselves, to tenants and to the Regulator for Social Housing. So, as you would have gleaned from one of the reports that we submitted, we have the highest number of tenant management organizations of any council in the country. We haven't been as good as we could have been in terms of managing them, but you will hear the steps that we've been taking to ensure that that is corrected. So, in terms of building council homes, you will be aware that we're one of the largest council home builders nationally. So far, we have delivered exactly 2,000 homes and we have a product 921 council homes currently on site. You know, that is a massive number, considering what the market is saying at the moment, where, you know, most local authorities and, in fact, housing associations have stopped building homes entirely. So, on that we're doing very well. We could be doing a lot more, of course, but the economic situation and some, you know, national policies has made this extremely difficult for us to do more on that subject. In terms of homelessness, there has been a significant increase in homeless approaches because of evictions within the private rented sector and also people who have been asked to leave by their friends or families. And that has led to an increase in the number of households we're currently providing temporary accommodation for. To be fair, we're not alone in this. This is a national issue. You may have, you know, been following this on the news. At least one in 50 residents in London are in temporary accommodation. Not great at all. We've got 17,000 households on the waiting list for council accommodation. In which, you know, 17,000 households, you multiply by the number of people within an average household. You see the number of people within be housed. And we've got just under 4,000 households currently in temporary accommodation. But there's a lot of work for us to do there. And we are, you know, working with colleagues and our partner agencies to reshape the service to make it more efficient and more effective. You know, very, very directly, and I wanted to say this because I thought you might be interested in it. You may be aware that the reception in Bournemouth hasn't been open for time. Part of our reshaping the service will mean that we would open the reception up as it used to be. There's a lot I could say about the budget, but, you know, tonight you're going to hear a lot about the budget. So I'll skip that. The main challenges, you know, to keep things narrow is one, the HRA. You know, there is an issue nationally about the HRA at the moment. You know, Clive and I were in a meeting just before this, where London councils talking about the situation of the HRA across all London councils. And we're no different. You know, trying to balance the books in the HRA is very, very difficult at the moment because of, you know, government policies over the past few years in terms of rent setting and so forth. But, you know, we, you know, we, we have an action plan. We have a, we've identified savings, things that we need to do to, to, to, to be able to balance the HRA. And we're, we're monitoring those actions. The second main challenge is homelessness. I, as I just mentioned to you earlier, you know, the, the number of people approaching us as homeless at the moment is, is unprecedented. And, and there isn't anything suggesting that that number is going to go down over the next year or two. So we expect that pressure to continue. And therefore we need to do more work to mitigate the cost of temporary accommodation, which results from the increase in the number of approaches. I'll stop there, Chair. Thank you. I want to ask members questions for members, the public. I want to ask members questions for members who will be, this item is on paper. Would you be able to just make a statement and say why this? There is nothing in this document at the moment that I am not willing to share, but I wanted to have this meeting with the committee. And if you're willing, if you would be happy for it to be shared, then I am happy for you. Okay, so. Thank you very much for your comments. You said sort of homelessness levels are unprecedented. What do you see as the kind of key causes of that or what the key pressures are that are leading to a perfect storm? So our highest demand comes from evictions from families and friends. And that has increased significantly since the pandemic. Because after the pandemic, we then had the cost of living crisis. And I think people are finding it difficult, you know, to live with each other or meet the costs associated with that. So I think that's an issue. In terms of the private rented sector, it's clearly there is a shrinkage in the private landlords are selling up, leaving the market. And where they're not, they're asking people to leave so that they can increase their rent. Private rented accommodation is becoming significantly unaffordable to most people. And therefore, they're coming to us. So even where they haven't been asked to leave, they can't afford to pay the rent. And therefore, they're coming to us. And when you look at, you know, the issues behind those reasons, there's nothing to suggest that they're going to get better in function. Thanks very much, Chair. Now that we've got lots of questions to ask you, so let me just kick off with two. So one is, in terms of the budget at the moment, we've got an extraordinary 10 million extra coming in for the actual estimate. Does that mean that the, an extra 10 million at risk? No least I would ever think it's lucky. In terms of the position of the budget, I'll be basically saying 10 million more. That's the first question. And then the second question, looking forward to KPMG's report on our agenda, they're talking about the need of council officers in the world. Is that something new? And it's an estimate. But you think opposition. Offer the contract at what you're claiming. Or if you don't agree, fine then, say you don't agree. Thank you, Councillor Simmons. So your question around the 10 million pound leasehold, I should describe the windfall. I wouldn't describe it as windfall. We only charge leaseholders for what we've done. And therefore, you know, that income is always expected. It may come earlier than planned. We may have done more works than we planned that we would do. You know, but the reality is that money is going to, if we spend 100 million pounds investing in our block and, you know, 60 million pounds of it is going to be paid by leaseholders, 60 million pounds will be paid by leaseholders. Sometimes it can come earlier than forecast or come later than forecast. So by it coming earlier, means that it can plug some of the gaps in the immediate, rather than it being the windfall. Then we will be 10 million short. Yes. Yes. Apologies. I was just clarifying. Yes. We will be 10 million worse off. Yes. Correct. Yes. Cool. Thank you. In terms of the KPMG report, officers do inspections. We have officers that we pay specifically to ensure that they do inspections. We have people with clerk of works whose jobs are to inspect works on our estates. However, we also employ people we call as employers agents who are, you know, contractors as well, but they're not the contractor delivering the works. But act on our behalf to ensure that the specifications that we've signed with the contractors is what they're delivering on site. We also ensure that when the contractors invoice us, the invoice is accurate in the sense of what they've delivered, you know, on paper and on site. You know, that is not unusual. You know, that is the practice and there's nothing wrong with that. But it's our responsibility ultimately as officers, not only to manage the employer's agents, but also to manage the contractors directly. And I, in my view, there isn't any contracts that we should be delivering without officers inspecting them. So it would be 100% as far as I'm concerned. You know, because if there's a there's a reason we employ the employer's agents because they have expertise that we wouldn't necessarily employ within our own services because we don't need them as regular as, you know, to require us to pay them a salary on a regular basis. However, you know, we are responsible for delivering those projects. And therefore, we should have sight of what's happening to them all of the time. Michael and Indora. Thank you very much for the presentation we are introducing. One of the areas which we kind of was talked upon in previous audits, which is what kind of TMO kind of finance itself and whether there's a greater risk there than perhaps not. It would be really useful to see whether we're now in a position where I know in the report itself, it states that it doesn't necessarily kind of indicate that there is a long term special issue itself. But we're really, really good to understand whether there should be concern or not in relation to that. Coming back to the question relating to kind of demand for housing or sort of council housing, special rent housing, really interesting to know whether you think there is more that can be done. In terms of managing those demands of others, but I appreciate you mentioned the reason it would still be good. I know that it just feels to me that we are kind of going from year to year and the list is increasing and I can appreciate there's lots of factors outside of our control. But are there anything that you think that you can do to be unjust by fighting and respect? Thank you for that. Thank you for that. If I start from your second question for mine, the demand for council housing is as a result of the state of the national economy and the issues which I touched on earlier. And it's not a sort of thing, it's a national issue. And even though there are 17 households on our waiting list, and that's an incredible number, I want to assure you that, you know, a lot of London authorities have far more households on their housing register than we do, because we're in the favourable position of having 55,000 votes that other landlords don't have. So we rehouse people quicker than our counterparts. So it is a terrible situation, but it's not as bad as, you know, what other colleagues across London are facing. On the second part of that question, yes, there is a lot more we could do. And that is about prevention. You know, the Homelessness Regulation Act encourages local authority to do a lot more prevention. And yes, we are doing a lot of prevention at the moment, but I believe that we can do more because we know the sources of homelessness applications. And we're doing some analysis now on the actions we can take, you know, to go up further upstream, try and stop evictions from happening at all, so that those people don't have to come to us. So hopefully we'll be able to do that. But the reality is some of the things happening are inevitable. In terms of TMOs, I deliberately didn't touch on that in my presentation because I knew there would be questions on TMO, which is why I asked my colleagues to come with me. But I did mention that we haven't been as good as we could have been in managing our TMOs, which is why we've reorganized ourselves. We've created a role, head of service for TMOs, and we've created a team around that. And the effect of all of that monitoring, we can all see, you know, because we are now identifying some financial issues in some of our TMOs because we're doing a lot more monitoring. We've strengthened our governance around them. But the idea is to support them because there isn't, in my view, you know, and these views shared across the council, there isn't, you know, there's anything better than people who live on an estate to want to manage their own. But they're not paid people like myself. They're not experts on them. So our job is to support them to be able to do a good job. However, we also have a responsibility to those tenants and as public servants to ensure that public money is appropriately spent, which is why, you know, we will ensure that where there are issues, we will support. But if the support is not going to ensure continuity, then we will take, you know, necessary action to each other. Is there anything you want to add to that? No, I'd just like to add that TMOs generally do a fantastic job. I worked for a TMO myself for 10 and a half years before joining Southern Council. And the fact that the services are locally based on the estate, they provide customized service. And the tenant structure measure service that we carry out suggests that TMOs are way ahead of us. So they do provide a good service. However, the financial oversight and the scrutiny of TMO monies have not been as good as they ought to have been. We have now kind of put in a robust monetary framework to support them to make sure they optimize the use of those resources. And one is that they are not, that we should not have been allocated to them, which we have been allocated to them in error. We have managed to recoup about 1.1 million there about now. And we are working with them collaboratively to try and make sure those monies are returned to the county. But generally, they do a good service. We now have a procurement process with them. So we support them through the procurement process. So they know exactly what the rules and regulations are around procurement and how to optimize good value. We support them in terms of how to use their credit and debit cards to make sure those risks associated with just leaving the credit card lying down carelessly are all scrutinized on those accounts, how they are spent, because they're monitored and scrutinized as well. We're supporting them through their recruitment practices as well, because they were not following, some of them were not following proper recruitment practices. So people who were typically unqualified to be doing those jobs, who are giving those jobs to do, which they had no qualifications to do, and they pose significant safety risks to the council in terms of reputation, but also in terms of the wellbeing and the welfare of our residents as well. Now we are working with them to appoint external consultants, and we are scrutinizing those consultants to make sure they meet bid regulations and accounting standards as well. We are also supporting them in terms of business planning, and we require them regularly now to submit their quarterly returns for us to unlock any allowances that we have to pay them. So there are a whole raft of nations we are putting in place to make sure governance, the financial governance, as well as the management of the TMO itself is robust and good for the residents that live there locally. It is more like a local. Sure. Go on. Sorry. Okay, I can't get in there, yes. Go on. Just to give a couple of examples of people who came to surgery two three weeks ago, and with a question about repairs, there's an and with the question about repairs. Because we spoke very well about that and you're making changes. And to be fair, I've seen changes, making it better for us counsellors. But when I saw one of my students at surgery a few weeks ago, a mum with three children, staying in one room in temporary accommodation outside of the public. And she said to me that her children couldn't use the bathroom at night. They were so scared because the ceiling was full of damp and there was water coming through the ceiling. And they wouldn't use the bathroom and she had to keep the pigments first and etc. at night. So it's been finally repaired, the ceiling, after a lot of phone calls to the agency. But surely if we leave repairs, I mean it would be like we knew at home, if we leave things undone for a long time, it's going to cost more surely when we do finally get the repair person around to fix it. So can't we do something about that to save money? And another one you mentioned about employer's agent. Basically, somebody goes around and checks the work that's been done. I presume it's what you're saying. So I'm just wondering, who checks the employer's agent? Who checks that? Because again, it's come up in my example of being a counsellor for several years, that people go and try to fix something, the employer's agent, they'll just be like, two minutes, yeah, that's fine. And they're off, that's what I'm told. Is there anything that you can do that we can do to the council to actually tighten that? It sounds good, but I think we need to tighten it and not be so trusted. On the repairs, you're absolutely right. It's teaching time, safe night and access. If you, you know, we want to do repairs as quickly as possible. We set ourselves a target around carrying out repairs and getting it right first time. Because if we do that, we save a lot of time, we save a lot of data about that. And we are doing very, very well. We're making progress in that area. But we're not where we want to be. In terms of damper mode, you know, sadly, because of the period, a lot of our homes were built. And the way they were built, you know, means that, you know, damper mode are almost inevitable. You know, so we're running on the, we're running at, you know, 100 miles per hour to stay on the same spot. Yeah, yeah, yeah. But we did, we have created a specialist team, a damper mode team, who quickly respond to, you know, dapper mode as fast as we can. And, you know, we, we used to have a backlog, which they are, you know, which, which has been reduced significantly. So, you know, I, I, I just, I want the committee to know that, yes, this is a serious issue, but it is one that I feel that we're making progress in. Definitely. Definitely. And we, we, we aim to do better. Yeah. Regarding the employer's agents, I assure you, they do a lot more, you know, than just going around and checking. The going around and checking is our job. Yeah. We have officers whose jobs are to go around and check. The, the, the job of the employer's agents is a lot more technical. And technical in the sense of work and the money. So, you know, because when we sign a contract with a contractor, say, for example, we want them to install, you know, 600 windows on private states. We would have described the specifications of those windows, quality they should have, the size and all of those. And, and that would determine the amount of money we pay. So the work of the employer's agent is to make sure that the materials are the right material. The windows have been cut and put together and installed in the right way. And the measurements are equal to what the contractor is charging. And the money they've put together is exactly as it should. So that's, you know, that's, that's a lot more than just going around to check whether they've done well. So the terms won't be saying there's, there's gaps in the windows. We should have picked that up. That's our job. I mean, the employer's agent should also pick it up, don't get me wrong. But we have people whose job basically is to make sure they put it up. Thank you, Chair. Three questions, if I could. One question on leaseholder. They often tell us as councillors that they, they find the, their leaseholder bills are difficult to penetrate. I wonder if there was, if there's going to be a move towards greater itemisation of those leaseholder bills. A couple of questions, if I may, on TMOs. I know that Cooper Close is mentioned in, in the, I think it came in, in the audit report. It's, it's a lovely estate in, in St. George's ward. And I, I just want to be, I'd like to be reassured that the actions that you're proposing, that you're happy with the actions that you're proposing to, to get their audited accounts, I think is the problem. And I wondered also, are there TMOs in Southwark, that owe Southwark council, the housing department, that owe money to the housing department? I think that's an issue that's been raised in the past. And it doesn't seem to be a direct comment on it in, in the reports that I've seen. So if I could, leaseholder itemised bill, Cooper Close, and money owed to Southwark by TMOs. Thank you. Thank you. Thank you, Chair. Thank you. I'll deal with the leaseholder bills and, and, and my colleague Nat will deal with the other two questions if you don't mind. Um, so one of the commitments we've made to leaseholders is that we're going to get better, um, at, at billing generally. Um, uh, we're, we're, we're, we're going to get better in how we manage, um, improvement works or refurbishment works. And, and we're going to consult with them at an earlier stage to make sure that we take into consideration their views about the works we want to do. Um, and. Um, and bring to their attention the likely costs by providing them with options. Um, you know, during the, before we commission contractors at all, you know, so that when the bills land, there shouldn't be any surprises. So that's the first thing. The second thing is we're committing to ensuring that there is visibility. So all of the invoices from the contractors, what I described earlier that the employer's agents would do, there's paperwork around all of that. Our intention is to make them available to any lease or who wishes to see them, so that they understand how their bills have been put together. And ultimately, we want to be able to have the information on our website, obviously secure, where people who live on a particular estate will be people who will be able to access that information, but it will be for them to access at their own convenience and then raise questions as they see it. Correct. So that's our intention. We're not there yet, but that's where we want to be. Thank you very much. That's a very good question. I will take Cooper Close first. Cooper Close finds itself in a very precarious situation. They have not submitted their statutory accounts to the Financial Conduct Committee for over three years now. We have approached them and we have spoken to them and we are working with them. The good news is you now have a tax accountant who is now the chair of the TMO. He recognises what has been going on is wrong and is willing to work with us to try and put things a lot better. He has written to the FCA, that's the financial authority. He has also written to the councillors that say, look, we owe you £181,000. We recognise that. We are happy to return what I have met in the account for £7,000 to you as a matter of priority. The other £140,000, as the case may be, what I have is it's been spent on the estate. So we are now taking advice about how we can work with them to see whether or not that £140,000 was actually spent on the estate and to see what we can work out constructively to try and because we ourselves cannot admire from the smelling of perfume because if we had done our due diligence 10, 15 years ago, they should not have found themselves in that position. On the general question of whether TMOs owe the council money, yes, it is true. I think we are looking at nearly £4 million. We have recovered about £1.3 million today or thereabouts and we are working with the other TMOs to see what plans we can work with them to try and make sure those monies are returned to the council and also to make sure, moving forward, this doesn't happen again. For this financial year, no monies were paid in external declarations to TMOs until we have finished our due diligence on all of them in terms of their financial governance, in terms of their competence to do the work we said they will do on behalf of the council, particularly in the light of Grenfell and the building safety and fire safety issues and compliance. We have tested their knowledge and their competence. None of them are able to deliver those services, so we encourage them to bring themselves back in-house and to return those monies back to the council. It's a constructive dialogue. It shouldn't take some time, but we'll get there eventually. Thank you. Thank you. I've got Michael and Andy to come back. And I'd like to try to get this item done by 7.15. Yes, sir. Very quick. Thank you for your previous answer relating to kind of what more can be done with the preventative measure. Are you willing to come back perhaps, or maybe a written report about six months' time, just providing what your thoughts are, what we can do relating to that? And secondly, as kind of your overall governance of the housing department itself, very useful to hear what you think most of the councillors' roles are and how you think that is going and where you think we can perhaps better assist you in terms of kind of improving the spectator out of the public. Reducing the number of members' inquiries, that would be a start. I mean, I have a good understanding of, you know, what elected members do, you know, representing your constituents. And what I say to my colleagues is if we do our jobs well, if we do it properly, then it will reduce the footfall into your surgeries, and therefore it will reduce the members' inquiries we get. We've identified a number of areas within the housing department that we need to get better at. You know, we know what they are. We have a plan, you know, to sort them out. It will take time. But I have no complaints about the roles of members at the moment. What I would ask is that if there are areas where members could do with more information, you know, perhaps we could have a workshop, you know, to increase understanding, you know, so that you'd be able to do more at your surgeries, or for your own personal knowledge, you know, then as a department, we'll be happy to do something around that to support you. In terms of your first question about whether or not I could bring the paper here back in six months, if you would like the paper to include, you know, not only the actions we've taken in terms of, you know, going upstream to do prevention, but the impact it's had, I would say nine months. But if you want to know what we've put in place, then I can do it in six months. Thanks very much. So two follow-up questions. So there's been a lot of focus on major works on the Canada and Devon Mansion states. Where are we up to? This may be confidential as a member, but where are we up to in terms of getting a resolution for that and an action plan going forward, the first one. And the second one is just about visibility of what the department is doing. So your point 13 says there's £180 million being invested in fire and safety related work over the next two years. That's a lot of money. It's probably ensured with the scale of the problems and challenges facing us. But if you look on the council's website, you can find no details. So residents, both leaseholders and tenants, would like to see the councillors would like to be seen. So we see these massive sums, zero visibility for the plan. How that will become more visible? I'm literally looking here and the building safety programme, there's no detail at all. Thank you for that. So in terms of Canada, Devon and Kirby, as you will be aware, we set up a task and finish team and they have been working through all of the issues raised in those three estates. The majority of those actions have been taken. Most of the issues identified in terms of the forms in the delivery of the programme have been addressed. I wouldn't say all of them are addressed satisfactorily, but they have been addressed. And where there are issues outstanding, they are still being addressed. We took a paper to overview our scrutiny, an update paper, which is a public document about where we are. And we promise that we'll continue to do so on to all of the issues are resolved. So I feel confident that we're going on the right way. In terms of visibility, you're absolutely right. One of the criticisms, you know, self-criticism and from the regulator is that we don't give enough opportunity for our residents to hold us to account because if we don't provide the information about stuff we're doing, then they can't reasonably hold us to account. So we are working, you know, some of my teams and with the comms team to start looking at the things that we can publish and how we can publish them. Because all of this information we have, if we publish them raw as we have them, they may not make good meaning to all of our residents. So we want to put them in very simple form, but, you know, where people have the technical ability and the knowledge, then we can provide, you know, fuller detail. So you are right that we're not publishing enough, but our intention is to do. We are going to do a quarterly and annual report to our tenants about our performance. We're going to start publishing our performance online from the end of March. And the program for the planned maintenance program, which is included in $180 million from April, we intend to publish as well. So before we go on to what we would, anything else we would like at this meeting, I've got just one question, basically. It has to do a stock condition survey, and I don't know how long it's been since we've had a stock survey, but the main question is, will that make a difference on where there is an emphasis moment on where expenditure and things like that, in your view? So the last time we did a stock condition survey was 2011, you know, which is why we don't have good knowledge of our stock. We've commissioned a new stock condition survey. When I say commission, we've gone through a procurement process. We're about to appoint a contractor that is going to start. The intention is that they will start on site in March, and by December of this year, we would know 20% of our stock. And the 20% wouldn't just be one area. It would be a 20% cut of all the types of property that we own. So it will start to give us good information. And by June of next year, we'd know 40%. You know, and from that moment, we can start a plan for the future, you know, what the investment program should look like from that 40% of information. But for now, we're concentrating on health and safety. So, you know, making sure that, you know, we have, you know, electrical testing in all of our properties, building safety, fire safety, all of those issues are the things that we're concentrating on this year and next year. But the information from the stock condition survey is what we would then use, you know, going forward. Thank you. Are there any actions that we want to take coming out today? Chair, could I suggest that we do? I think we can publish papers, because I've heard nothing that would imply that it shouldn't be in the public. In favour of transparency, we're aware of it. Chair, can I also ask perhaps if we have a read? Thank you very much. We're now, yes, so let me see. Hello, welcome. Would you like to introduce yourselves? Good evening, everybody. Aaron Winter, the Height-Lock and BDO, and your Chief Audit. I'm Angela Mason, I've been Manager of Airfield. Thank you very much. Thank you very much. There are two key reports that we're going to be presented to you today. So, taking the first one, it's our periodic progress report. This covers the progress of the delivery of our internal audit plan for 24-25. Please say we're making good progress with a number of audit summaries included in the pack. There's 12 there that we've since completed in the last meeting, and we've got the work for the remainder of the year either in progress, planned for the next two months, or at draft report stage. So, we're confident we can wrap up our work and report that we normally do on an annual basis for our final summer. You also see in our progress report that all the schools' audits are now completed, and the last three are just being reported and finalised at the moment. So, that is significant progress in terms of, I think I stated at the last meeting, in comparison to last year, where we had some regulars that went into the next year, where we're not going into the next year. So, a testament to the management of the council and the schools, and obviously our audit team as well, getting those done. And then, since the last meeting, we've also reviewed and done a deep dive into the recommendations that have been previously raised, and in one prior to 2223, we've reviewed and understood that they were all being completed or superseded by actions that are more recent. So, the reporting you've got in front of you is much more relevant in terms of recommendations that have been raised in the last 12 months or so. So, an implementation rate of 90%, which is a slight decrease, but we're having more that are falling due from recent work being completed. So, I think it is a better picture, a better accurate picture, where we are in the council. So, that was all I was going to say on the progress report, but what happens to take? Questions? Cool. Just very briefly, looking at kind of previous year audits and kind of the plan right up until the end of 2027, are you able to give an idea of what percentage of the areas of the council that I would have covered by that time itself? Just trying to, it would be great if it feels like we would have voted 100% of the council, but I doubt that is the case, but it would be really good to know. So, the second question is, I noted in your kind of progress part that you say, obviously, the consequences of the delay in the recommendation coming true, but also reflected in the implementation kind of period itself, but yet you started off by saying, actually, things are going well. So, it would be really good to understand whether you think there are too many delays in the recommendations that have been analysed, which is having an impact on the implementation kind of thing. So, in terms of the plan, we try and cover most years, it's a risk-based approach, so what we, what will have dropped off is the previous years and then you're seeing the more current years, so the next year's, sorry, 25, 26, 26, 26, 26 are very indicative of the areas that we've made recently, but what we always do is have a look at the CMT and CMT, tend to focus on those areas, so we can't say we look at any of the areas that we can't look at. MR-J, can I just quickly ask a follow-up question? MS CUTHERNANI- Yes. MR-J, sorry. Are we in the position to suggest if we think that they are areas? MR-J, I don't know. Just think about it. MR-J, I don't think we're in a position to say we've covered everything, and for me, taking a step back, and I think that was the next paper I was going to present was our plan. It's important to recognise that it is risk-based and risks emerge, and therefore our plan has to be flexible. So we are a finite resource in that regard, and I'm sure Clive would like us to use that wisely and not, obviously, we can do more, etc. But it's about being smart and being reflective of the kind of other assurance you get as an organisation as well. So we're only one part of that, obviously independent assurance, but there's a number of regulators, inspectors, other assurance providers in terms of counter-fraud external audit. You're getting constant reporting back on other risks, so therefore we wouldn't necessarily cover every risk if that's been covered by another provider, for example, or internal assurance that is working well. MR-J, I think you are, of course, free to ask about that. MR-J, I think it's the second part of the question, isn't it? MR-J, I think 90% is, I don't want to reflect on where other organisations are, but being in that 90% quarter is a good position to be in. I've actually got other organisations that are way lower than that in terms of, and sometimes that's to do with engagement, unrealistic targets, etc., and I think we've had that conversation previously at committee meetings. What we've done is, I think we've now, that 90% for me is a much more accurate figure because we've closed down some of those older RECs that were applicable or been completed but just hadn't been reported, and that means that that is now an accurate position. So for me, I feel much more confident and assured that the actions that are being taken and the outstanding actions are the right ones that we should be focusing on. MR-J Thank you, Chair, on page 10 of your report, climate emergency 19 in our agenda, second to last paragraph, the last line, the paragraph ends with indicating that the borough is off track to reach net zero by 2030. MR-J That's quite a bold statement. Could you confirm that that's accurate, that's according to your research? And I wondered if, given the significance of that statement, whether you've had any feedback from officers? Thank you. MR-J Thank you. MR-J The statement is based on reporting and action plans that the Council has produced and therefore they are off target. Therefore, by being off target, we've not seen any remediation plans get back on target. That comment is underpinned that if you continue with the action plans that they are and how they're defined and targets are defined, that will go past 2030. That isn't a technical sustainability expert opinion on that. It's based on what your timescales are in your internal plan. MR-J Thanks very much. I've got two quick queries. So page 45 of our papers, which I think is page four of your internal audit plan. Just for clarity, we've got three columns, 24, 25, 25, 26. And then should the next column be 26, 27, rather than 26, 28? MR-J We are, we are mainly focused on 25, 26, but also looking for, and that is good. So, I raised last year, the need to look at estate lighting. And we didn't do it last year, with the implications that we're going to be doing it this year, and it's not on the list. Given that crime and the fear of crime has gone up in the borough, I'd like to have estate lighting on there is one of the issues in terms of making people feel safe. So, I'm going to push hard for this to go in, because I raised it a year ago, and because of how strongly local residents feel about that. And I think we've got room for improvement on our housing estates. And we can build from the work that's currently being done, or being brought to a close, with lighting, I think. And we are taking a final plan back. If it is great, and we can maybe shift around. We have got some content to deal with. But, yeah, I have to say. Are there any items, matters, any matters arising from the debate, which the committee would like to see active? I've got two suggestions. One, surprisingly, is that we ask that housing estate lighting is included as part of the programme, particularly as it was flagged up a year ago. And then the second one is, there are three areas of the Council which have got a double substantial finding. And I think the committee should say, well done, and thank you for your hard work on that. And we chase, and rightly so, where we've got issues. But if we've got three double substantials, we should acknowledge the work of those teams and thank them. Can we note the update reports and agree the indicated programme, the programme for 25-26 subject to your request? Sorry. There's one thing I have to obviously formally present, which is our internal audit charter, which is at the back of our plan. And members may have seen that there are new global internal audit standards for the UK public sector that go live. And I think I did see a couple of members on a webinar on Friday for all the London borough heads of all that were there. And I participated in my role here. And there is a recording that I will share that people can see. But I just have to make a formal kind of presentation as part of our quality standards to say that you've acknowledged that we were obviously, we conform with that new standards. We've reviewed our internal processes. And actually, the UK public sector internal audit standards was at a bar previously that the global internal audit standards are bringing other countries and other sectors up to that bar. So it does mean that we have minimal change. But there are elements that we will report to you throughout the year just to make sure that you are confirmed and we are conforming with that. So I just wanted to have that formally presented as part of mine. Thank you very much. And would you think it would benefit us having a meeting about this, you know, having a meeting with the committee itself? Talk more about it, more information? If that was something the committee wanted, but the way it's presented here is all the roles and responsibilities that you need to acknowledge and we will manage that. So there's probably no ask of you at this moment in time. But if there are any questions, I'm happy to take them outside of the meeting. Thank you. Sorry. OK, so can we note the update reports and agree the Indicative Audit Programme 25-26 subject to our request at the State Lightroom? Thank you very much. Would you like to introduce yourself? Of course, yes. Good evening, everyone. I'm Claire Nibor, the partner. So, yes, great. So I have three reports to present to you this evening. I appreciate there's a lot of detail in there. So I'm going to pull out what I see as being the key messages. I'll pause at the end of each one for questions. I just wanted to open by extending the thanks of me personally and my team to the way in which the Council has supported our audit process. As you'll know, this was our first year as your external auditors, and there's a lot involved in changing auditors, both from our perspective, but more importantly from your teams. And I'd like to put on record particularly our thanks to Amaget and Humphrey, who've been fantastic at servicing all our requests. And I mean, I think you'll get a sense from the reporting as well. The points that have come up in the audit have been accepted and management agrees with the recommendations that we've raised. And I've also noted that there's a real really positive attitude to correcting audit differences that come up through the audit process. So four by one, which is a very technical point, linked to pensions accounting or not, maybe have been updated in the statements and corrected. So I think that provides you with positive assurance as well in terms of how seriously officers here take the process. So I've got three documents here. The first one is what we call our ISO 260 report, but that's really our year-end report to you as those charged with governance on the work that we've performed over the financial statements. And subject to getting the signed accounts and checking all of those, which we'll do over the next couple of days, anticipate issuing an unqualified opinion on the Council's financial statements. So you will recall through the planning process and the reports we've brought to this committee over the course of the year that we identified four areas that we considered to be significant audit risks. So where we thought we might find errors through our work, that that was most likely. The first one is linked to the valuation of your council dwellings. That's obviously a huge number on your balance sheet. It's over three billion. And there are assumptions that go into that. You had some new external valuers supporting you this year. And we used our valuation specialists as part of our team to look at that work. And on the whole, that went well. And we did identify one instance where we found some different information to support one of the valuations of a beacon. I'm sure you're familiar with this terminology, but that's around how individual estates and parts of the borough are valued. And we did find one instance where there was some other data that hadn't been brought into Clutton's assessment. Now, we don't think that's material, but we did find that we thought the value had been slightly understated. And so what we did was some additional work to make sure we were really comfortable that that wasn't more prevalent. We looked at what that would look like if we extrapolated it. And we were really comfortable with the material misstatement for the authority. And when you think about how large the council dwellings balance is and the number of properties that make up that balance, it was not significant in the end. So that was good. We then consider management override of controls, and that's anywhere where management could, in theory, override the control environment. And we look at judgments and accounting estimates that are used in preparing financial statements. We did a lot of journals testing, so they're the kind of non-cash entries that get booked into the financial statements to make sure we were really comfortable, that there wasn't any bias in those, there weren't any inappropriate entries. And we have nothing to report from that work. We also, of course, looked at the valuation of your pension liability. And this is where we came up with quite a kind of technical point linked to the arrangements that you have. They're pass-through arrangements with some of your contractors. Now, we understand why you have those, because you want to treat the employees of the contractors in a similar way to council employees. Strictly speaking, they're not your employees, so you shouldn't account for that using pensions, valuations accounting. So it shouldn't really form part of your pensions balance, but it should rather be a kind of contractual asset that you value. It's a really technical point. You didn't adjust for it. We're comfortable with that. The difference in how you would value those was not material, but we just report that for transparency. Then we also considered whether there was a risk, which we concluded there was, that you might be understating HRA expenditure because of the pressures on the HRA. So we just do that because we have to come at the audit with a sceptical mindset. And so we looked at the kind of cut off at year end to make sure that you were accounting or booking the expenditure that you should, that related to the year end of March 24th. But we also, when we were looking at journals, identified any that looked like they were moving expenditure out of the HRA into the general fund. And there were some examples of that, but they were all absolutely valid reasons. So we were comfortable that there were no issues there. Then not such a significant risk from an audit perspective, but we also wanted to understand how you'd approach the valuation of your investment properties. And we did find one that was understated by about nine and a half million, just in terms of the approach that Clutton's had taken this year. Ultimately, you agreed with us and updated that. So it's in the financial statements at a value that we're comfortable with. That's not material, by the way, but still, it was quite a large amount and you did correct for that. It was our first year as your auditors, of course, so we did a lot of work over your PFI schemes and making sure we were really comfortable with the models and how they were accounted for. That took us quite a while to get our heads around, but we got there and didn't have any errors. One to really flag, you could have put in some disclosures around your transition to the new leasing standard. That's for the IFRS 16. You opted not to do that in the end, but we have raised a recommendation. Some work is ongoing, actually, by council officers at the moment, but it's really important that you do that work sooner rather than later, because it involves looking at all your lease agreements, making sure you really understand the length of them and the terms of them. And a lot of those are going to come onto your balance sheets for next year. So it's just quite a big programme of work for an organisation of your success. So then I will just take, I'll talk through the value for money piece when I talk to our next report, because more of the detail is in there. But in this report to you, we've also included not just the significant weaknesses that we've reported, but some lower priority recommendations that have come out of our work. And they're on pages 29 onwards of my report, which I think is 118 of your pack. And that's just really because we do quite a lot of work over your value for money arrangements. They're just some of the other points that came out of our work, but they're not significant. And they won't be in the public auditor's annual report as we consist. I do have to confirm on record my independents and our independents as your auditors at this time of year. And I'm happily able to do that. On page 39 of this report, that details that uncorrected audit difference, which is to do with that pass-through arrangement and valuing it on a fair value rather than an actuarial basis. But you'll see on page 40 of my report, the items that came up through our audit that have all been corrected and are in the financial statements for you to approve today. We raised 15 recommendations. It's not uncommon in a first year audit to raise a number of recommendations. You're looking at things the first time, you know, through a few lens. So it's not uncommon in the first year to have that kind of volume. Only one of them is what we consider high priority. And I think you'll be familiar with it because your previous auditors also found this point. And it's really to do with the fact that the way in which your financial ledger is configured, your SAP system, does enable, in theory, people to go in and override the controlled environment. And that's hard to mitigate. But I don't think that's unfamiliar to you. I won't pull out all of these, but one couple that I'll just touch on. We did find some improvements could be made to capturing declarations of interest and checking for related parties. And I think that's the one from your predecessor auditors that hadn't been implemented, all their other recommendations had been. So that's good that we did find some similar findings this year. I'd also just draw out that we did have some observations about how you'd engage Cluttons as valuers and how you've worked with them. Maybe looking at your methodology, your Beacon valuation methodology. We do have really large numbers of properties within Beacon groups. That's slightly unusual compared to what we see across other councils. So there's just an opportunity. There's nothing. We're not uncomfortable that you've got the wrong value in your accounts, but there are probably some opportunities for you there to just streamline that process. And also to just make sure that you're really thinking about how you apply those assumptions and bringing them through the appropriate committee if you're making any changes to your teacher. And there are four recommendations that are low priority that I won't touch on. As I said, you've implemented the vast majority of items that were raised by the previous auditors. So in terms of the financial statements, I'm happy to pause there before I go on to our value for money work for any questions. Excellent. Lovely. I'll carry straight on. Brilliant. OK, so we then have our auditor's annual report. We'll note when we issued these just over a week or so ago for inclusion in the pack, they said they would draft for discussion purposes. We'll update these before we issue our signed opinions as final versions. But this is this is the report that gets that gets published. And as I said, we'll be issuing an unqualified opinion on the financial statements. But we are raising three weaknesses in respect to value for money arrangements that will appear in the opinion. As a reminder, we look at the arrangements that you've got in respect to financial sustainability, governance and improving economy efficiency and effectiveness. And when I came to the November committee, I talked about the areas that we'd considered to be the significant risks that we might report a weakness. And as it turns out, that that is where we are reporting some findings. So if I just take you to page 19 of this report, which I think is 162 of the pack, we've already heard a lot about the HRA recovery plan today. And obviously we met with Hakeem and members of his team as part of our work to undertake this. But you are currently in a position where your HRA reserves have been declining. You do have a recovery plan in place. And we do think you've got a reasonable recovery plan. But you are dependent on some short term measures over the next couple of years. And that presents risk to sustainability because, of course, you can't go into deficit in your HRA accounts. In order to do that, you are reliant on short term, to a certain extent, non-recurrent measures. And we think it's really important that you report that distinction. So it's really clear how much of the reserves you're replenishing on a more sustainable basis rather than taking short term actions. And, of course, because you have to do the full stock condition survey now and you are not, of course, the only local authority in that position. Many are. There will be additional costs that you'll have to build into that plan and difficult decisions to be made. So it's really we know that you're taking action. But the reserves have been depleted to such an extent, given the size of the authority now, that we do think there's a significant weakness. So we aren't reporting that. So that's the first one. Then in terms of governance, and we've detailed all of our findings from page 24 of this report. One of the things that we looked at, as you know, is the TMO governance and not just, you know, we obviously have seen the reports from last year on fair community housing. See the reports of internal audit. We know that the regulator looked at some of this. We just looked across all 17 of the TMOs to understand how those were being managed. And I don't think it's a surprise, but there are, you know, out of date management agreements. It's not always clear and well documented how those are being managed, how issues are being reported. And we just think there's an opportunity now to put in place a really robust governance structure that captures how you're updating those management agreements and getting your reporting really consistently across the whole piece. We know there's some action being taken there, but we think there's a real opportunity to bring that all together and to run that, improve the way in which you're reporting that and managing the risks associated with that going forward. And then the final one is linked to the major works. And you were talking about this earlier, but one of the things that we did find is that council officers, yes, of course, they need to use specialists sometimes in terms of those agents that we were talking about. But they must also retain overall responsibility and accountability for the schemes and their progress and, you know, they're going off track, which often they will, understanding why and being able to take action. And we did find that there was inconsistency in how that was being done and essentially too much was being sort of outsourced. Not enough accountability was being managed in house. And so we've raised a recommendation around improving the process of monitoring those schemes and being really clear about contractor performance and understanding the risks and what action you need to take when major projects like these do require more spend or aren't going to plan, which, of course, is, you know, an inherent risk for those kinds of, you know, they don't always want to take. They don't always run perfectly, but it's about being really clear about the actions you're taking as and when that arises. So before I go on to the pension fund findings, I'll just pause there. Andy. Thanks very much. This is, I was going to say, I do think this is very interesting. So I had a quick question about the monitoring of major work. Mm hmm. So these are the accounts for 23, 24. Yes. And on page 30 of yours. Yes. It turns out that half of the major work. It's an action. And you say that the council did not physically inspect the quality of works. When I asked the strategic director, he said, they do. Given that half the works were in my ward, in fact, I spent half of my year on the going round. I know that works were inspected by those out there with them multiple times doing that. So how do you sort of bridge the gap between what the strategic director said, my observation having kind of two ward counts, half of the spending during that year on major works, and then your report later. Yeah. And you said you've already met. Yeah, yeah. We met. Yeah. And so how do we square those three different options? Yeah. I mean, I think it's in part the way in which those processes are documented. When we look at it, we rely on interviewing and seeing what the kind of governance process has to be documented. And it has to be documented to be really comfortable. But it doesn't mean that people didn't go out on site. There isn't a consistent view of marketing. That's all happened. So. So as a follow up, would you consider a slight amendment to that, your report, not mine, that says we didn't find evidence or something along those lines rather than the council's record keeping was not sufficient in order to demonstrate that. Yeah. And then that would agree, that would mean you agree and I agree and Hakeem agree on what happened. And otherwise it's very helpful. Yeah. So the final report that I've got here for you today is the year-end report of the pension fund. Again, I'll be issuing the pension fund later this week. And a big thanks to Caroline who supported our work on this audit. So as a reminder, we had two significant audit risks. Again, that management override and we didn't find any issues. We did a lot of screening of the journals, of all of the journals that were posted and we actually didn't identify any high risk, which is not uncommon in the past. We also looked at the valuation of investment properties and we did find one audit there. And we also looked at the level three, which is the harder to value investments, often called investment vehicles. And we found an audit misstatement there, but that was really one of timing. So a lot of the valuations that you get for those investments are what we call a lagged basis. So you have to wait for more up-to-date information. And by the time we were out doing what it worked, there was quite a bit more information about those values. It wasn't material, but it was quite a large difference, about 11.6 million. That was about 20. So we did have a couple of findings, as with the local authority audit, the points that we raised. So the issue with one of the, it was actually a mathematical accuracy investment property. That was corrected. That was about 11.6, due to changes in evaluation. That was booked into the accounts as well. So just two audit misstatements, as well as some presentation audits. Again, we've raised some recommendations, a similar point on approval of journals and segregation duties, and a similar point on related party transactions. So that's just something to keep an eye on in terms of those processes for declarations of interest, because they are important. But overall, it was, you know, very straightforward from our perspective, and I'm happy to take that. Any questions? Any questions we have? Any questions? Any questions? Any questions? Any questions? Any questions? Do you consider matters raised in the year, any report for the Council's compliance estate setting? My question is, my question is slightly different. I'll just have a clarify about audit fees and the notice. between previous financial years yeah i don't know whether but is it a market or there's more what we're doing now yeah so um we don't point on auditors that they're set um almost nationally um and they work to a scale fee basis and as as flow outlined this was our first year with kpmg which was a new appointment i think over the course of austerity audit fees have come down to such a unsustainable level um the sector was fine didn't you know there's so many people a sample system and such like um it was inevitable but to get good quality audit work done properly that we will need to fail a bit more so at the last round of appointments everyone's fees went up it um that works on a scale through places so the fees the same for everybody obviously every organization is slightly because in some minor variations big uplift was traditionally applied um thanks very much chair so i had two suggestions coming out of this and the next report so uh kpmg have come up with a series of recommendations so i think we should ask our officers to come back with an action plan rising from those recommendations it may be that um officers led by clive completely agree with everything it may be that there's some nuance in there and uh some difference of views uh but there are good points in that and we need to have a have an action plan in response to that and then secondly um there's a very good point on waivers and i think we should just get on for them from the next committee and have those waivers brought to us on the reach the recommendation from kpmg is that all waivers should come for each meeting so we review those and there are too many waivers um and we have previously said we were going to do that and they that's dropped off the agenda get on and put it back on the agenda and then start doing the review meeting by meeting basis that kpmg uh that's the first question so yes around the action panels let's be trying to find it in the board plan we've spoken about it um i'm sure it's in there somewhere virginia but part of the board plan discussion um we can build that in if i can't that item um similarly applies to the waivers we bring that periodically um links in terms of when we'll be the right house i'm for thompson deputy chief accountant i'm sure i'm the chief accountant i'm going to hand over to humphrey to present the report to you good evening chair so we're um bringing the statement of accounts to committee um for approval um i just want to record our thanks to kpng for uh completing the audit before the backstop uh deadline on 28th february it's a challenging time for local audits to get this order completed before that obviously um as well as approving the accounts we're just asking you to note the changes in the report um which we've accepted from kpmg the accounts are not fully complete yet so sign up will happen uh in one or two days there are just a couple of outstanding issues mostly around narrative and a couple of pension funds uh issues just outstanding so we will be asking for that delegated services to proceed for to direct the resources and yourself to sign off properly in a minute any questions for humphrey smooth study accounts and and the pension fund and we approve the letters of representation and we approve the statement of accounts subject to any final changes yeah yeah okay yeah so can we do that there are any further amendments made can we agree to delegate policy to the strategic director of resources in consultation with the chairman the administration yes uh thank you for being in on time and kpmg in this process please then yes i would like to come back and council it's july with you back with the update on the next step in uh recommendation should i introduce um paul bergen manager for the corporate and the full team here present the q3 report for the corporate and the full team and especially you think you'd like to highlight um no i think we're just going along it seems to be at the same pace the same sort of uh type of reporting that we've seen um uh we're not we're not getting any less reporting which is a shame um the nature report is is quite diverse um it covers most streams of business most most services um we think we've had enough in certain areas because of our advertising getting out to speak to people which we're going to move on to in the in the next year um members have any questions for us thank you um i just had one small one which is uh page 374 para four books about concurrent working as being minor if concurrent working is fraudulently running at two jobs at the same time is that what it means yeah it's yeah basically it's um