Transcript

I'm Councillor Rebecca Spencer, Chair of the Committee. This meeting has been recorded and is being broadcast live. The recording of tonight's meeting may also be used for quality and training purposes. While we hope everything runs smoothly, please be patient if we hit some challenges in the virtual environment. In the event that technical issues require the meeting to be adjourned and it can't be restarted within a few minutes, further updates will be posted on the Council's Democracy Twitter account, which is LBL Democracy. Can I just remind those joining us physically in the room that the microphones are fitted into the ceiling? They're always on and can pick up everything you say, even if you whisper. Public speakers, once called, asked to take a seat at the public speakers' table and, once your three minutes are up, should return to the gallery. Helton's safety and housekeeping. The fire exits. Please exit the room from either door and go upstairs to street level. And there's an accessible toilet just outside the right-hand side of the room. We've received no apologies for tonight's meeting, so I'll move on to any pecuniary interests. Do any of the members have any declarations of pecuniary interest? Thank you. I'd also like to say I don't have any disclosable pecuniary interest in any matters to be considered this evening. So we'll move on to the agenda items and I'll ask officers to introduce themselves as and when they are asked to speak at the meeting. So agenda item two is the minutes of the previous meeting. The members agree. Well, I'm about to ask, do members agree that the meeting represents their accurate record of decision? I was there, so I'm, so it's a bit of an off-request, but I understood that we'd be talking about that point. I keep raising the empty homes. Was it, was it, was it discussed then or not? Because nothing in the minutes to say it was, but I thought it was. I was there to believe it wasn't. It's on the action log. Oh, it's on the action log, yeah. And we will cover that in the next, um. Do members agree that the minutes for the meeting on Thursday the 30th of January represent their accurate discussion? Thank you, um, I note that the minutes from the meeting from Thursday the 30th of January are approved, so we'll move on to agenda item three, which is the work programme and action monitoring log. Um, I'll invite Leoko Mabika from Democratic Services to introduce the item. Hi, and good evening, everyone. Um, this is standard report that usually comes to corporate community. Um, appendix A is the work programme for 2020, 25 to 2026. And appendix B is the actions log. Um, update, um, at this time we have important actions that need to be completed and this has been actively followed up by the officers. I don't have any questions. On that. That's a motion when we're having our development of emergency planning. Like, we keep asking for it. Um, yeah, sorry, um, just to say, um, Councilman, I think we, um, undertook to provide all of the outstanding actions, um, outside of the committee meeting, um, so you should have received emails, um, committee members for each of the actions, and I think that's what Leoko had updated in the action log. So we're hoping to point. We were asking for, there's an annual report because this committee is primarily about risk. So ask the emergency planning team, I do need to do it with risks. We just want to ask for a report. We've got a lot of people sitting around this table here. We've been asking for it a long time and it should be on the committee timetable. We have had that in the last year as an item, emergency planning. Have we? We have had that, yeah. We've got that, a massive Excel document that was too big to fit on the page, if you remember. But we have had that this year. It's the item here about the empty homes. This is about when we build a new, a new, not we, uh, somebody builds a new home, when do they get on a council tax bill? Not, I think, they've been empty for a year. We can then charge them more. That's, I've been asking about this time last year because that was part of the council tax, so it's not on here, is it? We had spoken about the process, and I've spoken to Zina about the process for identifying empty homes, I think, read to you from the A. I can identify the email that was sent out, that set out the response, both from the service and from finance, both in terms of what, what the current arrangements are and what is planned in relation to empty homes. So I think it was noted on the action log as being completed, but certainly very happy to afford that for you. Yeah, I've got one development that when people moved in in May 24 and they're still not paying any council tax because they've been billed. So, I don't remember, we have got the voids, the council processes in regards to stealing the voids, but I don't think there was any information about what the council is asking about, where, from how it's been billed, the council clocks in, so they can charge the council tax that they're provided in the rooms of use for the house. We can take that away. We can take that away. We can take that away. We can take that away. Yeah, just. That's about it. Just to check. It was, there was an email from Zina, which was sent to all of us with information on the MTA. Did it actually come at the door? It was two things. It was basically a, there was the action plan for reducing them and there was also a briefing. Yeah, I think that was about council empty homes. I don't think it was about what I'm talking about. New build MCOs. I'm talking about all those flats that get built in the north of Borough and nobody ever lives in them. I think we can take this offline because I don't know if it's a corporate committee or if this sits with housing. I've been raising it since we set the council tax this time last year. We still haven't got an answer, clear answer, but I'll look at it again. Now we've got Zina, maybe we could start with it. Any other questions on the work programme and action monitoring log? In that case, if there are no further questions from committee members, can we conclude item three by agreeing with the questions made? So we'll now move on to the next item on business, which is agenda item four, and that's the 2023 to 24 draft statement of accounts. So I'm going to invite Robert Brown and the assistant director of corporate finance to introduce the report. And then I understand we will also hear from our external auditors who will introduce themselves. Thank you. Good evening, everyone. Firstly, I'd just like to apologise for the lateness of some of the reports that you've received. Obviously, at the normal reports of events, that wouldn't happen. But obviously, we're in unusual circumstances in terms of the statutory deadlines that we're working to. And obviously, the client's activity. I'm going to assume, hopefully, that you've at least had a chance to review the cover report. So I just wanted to move straight on to what's different to the version of the accounts that we're bringing to you tonight. The final accounts and draft accounts, which we've put back in January, I think it was. So I wanted to bring your attention to page 20 of the first supplementary pack. which on the lead you should have received. And that's usually also an annual report. The completion report. The completion report. The account's sorted. And on page 20 of that report. It sets out the three main changes, which we've made to the accounts. And following the contractions and draft requirements. So. They may need narrative changes, but they relate to the headline items and exhibit accounts. The first is around the disclosure around the judgment we've made about HFL and the parents to the ones in advance to them. So the members will obviously be aware that there's an issue for the competition to just three accounts. We've had to add narrative to our accounts about the judgment we've made for that in 23-24. We've added additional narrative to justify how a wide-going concern basis is appropriate for the HFL companies given that we've had accounts prepared on an ongoing concern basis. That's obviously our judgment is on the basis that those companies are due to come back into the council at some point in the future. So this narrative I need to explain that. Third adjustment there is around the capitalization direction that we've had for government around the UHS expenditure. I think. As it appears in the report, it has been updated because the narrative there refers to the facts that the direction hadn't been formally approved yet. In the last couple of days, it has been approved. So I expect that will be updated on version of this report. But yes, the narrative will also change in the accounts that we've had to happen. Same with the main substantial changes that we've had to make. But obviously that's the cavity in the fact that this audit has been much reduced than a normal audit would be because of the bounce updates. What I propose to do now is hand you over to our auditors. They're going to walk you through some work that they've done or haven't done. And in particular, they'll focus on the pension fund report recognising that that one was only published today. So you may not have even had a chance to look at that one in detail here. But I know we saw. Yeah, thanks, Rob. Good evening, everybody. So I'm Suresh Patel. I'm the partner in charge from Forgus Mazar. I've got Paddy Sadhu, the senior manager of the staff of the audit. And I've got Charlie Carl, who's a member of the team. Pretty unusual circumstances that we're kind of reporting to you tonight. Over the course of the last year, we shared with you the government's intentions to introduce what they call the kind of backstop arrangements to address the build up of delayed accounts and audit across local governments. The first of those backstop dates was the 13th of December. We were able to actually deliver your March 23 year accounts before that deadline. So you've got a clean opinion. But we made a call earlier than that to say, actually, there's insufficient time to full audit by the next backstop date, which is the 28th of October. So that's the reason why we are issuing an opinion by that date, because that's a requirement on us to issue that opinion to enable you, the council, to publish audited accounts. And audited obviously is caveated to the extent that under those arrangements to issue a disclaimed opinion. There are some procedures we carry out, and Rob's alluded to the fact that we have done some work around those big ticket areas, which we looked at the accounts for, you know, they need to be challenged given the issues of the prior year. So we've commented on those, but ultimately on the council's accounts, the opinion that we give is for the disclaimed opinion that essentially says that we are given no assurance on the numbers in the accounts. And that's in line with the guidance that's been issued. It's fair to say the majority of councils up and down the country and in London will receive a similar disclaimed opinion. Government's intentions and government's communications when they set the backstop arrangements was that no council would be adversely affected by these arrangements. So the receipt of a disclaimed opinion will not count against you in any form of PWLB borrowing or any other engagement that you have in terms of you as a council. As I say, you are in the majority of councils receiving a disclaimed opinion. We can talk you through a bit more detail on the on the completion report for the councils in a second, but that's the kind of headline message in terms of the council. Pension fund, we appreciate you might not have had a chance to look at any great detail, so we'll talk you through that in a second, but that the headline on that is slightly different. So on that one, we took a view that we could complete the audit within the limited time that we have. And thank you to the council for helping us to move towards that. However, there are two items of accounts or two items within the accounts of the pension fund where the council has been unable to provide sufficient information to enable us to gain assurance that those balances are materially correct. And those are the current assets and liabilities. I think they're on the net assets statement as a result and as a result of the backstop date. So we found an issue in an ordinary course of events. You might have a few more weeks, a few more months to try and find to try and resolve the matter. I suspect you will in a few months, but because of the need to issue an opinion by the 28th of February, we have taken the decision that we will qualify your accounts. What that means in practice and the wording of the qualification is such that we are saying everything else is fine, except for the specific items that we have flagged in our report where we haven't been able to obtain the sufficient appropriate audit evidence that we would do to issue an unqualified audit opinion. So that's the kind of headline on the accounts for the council on the pension fund. We're happy to talk you through a bit more detail on the council reports and then a bit more detail on the pension fund if Paddy can do that. So I first want to draw committee members attention to page 17 on the council audit completion report. So that reports one ongoing matter in relation to the council's minimum revenue provision. As Suresh alluded to, there's bits of work that we've deemed to be so fundamentally important that we need to complete despite the backstop arrangements. I can verbally confirm that we have now completed that ongoing work and we have identified no issues or errors in relation to the 23-24 accounts. What we have included in our auditors annual report is additional reporting emphasising the impacts that changes in regulations in 24-25 will have on the council. But we can deal with that separately when we walk through the value for money reporting. Moving on to the next page, we've reported significant matters and difficulties we encountered during the audit. Without repeating what Rob has already said too much, that echoes the three headline items we viewed to be in the accounts that we have had discussions with management during the audit. First is in relation to the redress capitalisation. Essentially, we viewed that to be a considerable judgement that management exercised in the way that it had been accounted for. As Rob explained, that capitalisation was granted yesterday and we will, as a result of that, be reporting a £1.1 million unadjusted error as a result of costs in 21-22 being capitalised that did not fit into that direction. That is well below our materiality threshold, which is why we'll be reporting that as unadjusted. The second item we've got in there is around homes for Lambeth. During 23-24, those subsidiaries drew down a further £20 million in borrowings from the council. The council, in preparing the accounts, has judged that those loan balances are not credit impaired and has made no allowance for not receiving repayment of those loans. Again, we consider that to be a judgement the council has made and that narrative has been included in the accounts. But to emphasise, because this is a disclaimed audit opinion, we've not performed any further work. The third item that Rob again alluded to was the going concern matter in relation to the three subsidiaries for homes for Lambeth that are not prepared on a going concern basis. Again, the council has made the judgment that that has no impact on either the group going concern basis for the accounts to be prepared on and also that no consolidation adjustments will be required in preparing the group accounts. Again, the audit is disclaimed so we've performed no detailed work, but we have asked that narrative is included in the accounts to emphasise that judgment that has been made. Moving on to the pension fund audit completion report. Again, I appreciate that that was only made public yesterday, so I'll take a bit more time to talk through the real detail. The first page I want to draw to the committee's attention in there is page five, which outlines our draft conclusions for the audit. In relation to the audit opinion, we communicated that there were two significant issues that if not resolved would prevent us from issuing an unqualified audit opinion. As Suresh alluded to, we have not been able to resolve those matters satisfactorily and will be qualifying. Moving on to page 14, that then outlines the significant issues that we have identified during the audit, one of which is the issue that we have qualified based on. Sundry creditors and sundry debtors are the two items in the accounts that we have been unable to obtain sufficient appropriate evidence to audit. The page numbers, is that what you're asking? I can't follow which page we're on, sorry. This is page. We've got the council pack numbering system, then we've got two audit reports which all have separate numbering. Could you just, when you talk about something, put connection with all the right pages first. Yeah. This is page 14. I'm not talking about impairment. Perhaps you could explain these technical terms. Yeah. If you're going concerned, it's, remember, none of us have a lot of accounts to fit around this table. Page numbers. So at the moment we're on page 14 of the second supplementary pack, the pension fund board completion score. The actual annual account. The second supplementary agenda pack. But if it turns into today. I haven't got anything for today. It's the pension fund that we don't have got sent out today. The email today. I've got it on. See, when I've done it once. Why am I not sent out to all of it? It was, we have, they have mentioned that the reason for why it was sent out so late and that was two hours later. Yeah, I appreciate that. But are we talking about the pension fund now? Page 14 is about the pension fund. Yes. Yes. On the report I haven't got. Yeah. I'm looking online then. Okay. Okay. Let's see what we're supposed to make of that. Sorry? Transit ledger code. How else will have questions? For example, I'm just, no, I'm not going to ask, I'm just saying, could you explain? So that's the first significant issue I'm just getting on straight now. That's the first issue I'm trying to explain now. So the first issue we encountered was in relation to two account codes that form part of the cash balance reported in the pension fund accounts. These are called cash in transit accounts and essentially what they do is one records payable items that the pension fund will be required to pay and one tracks the actual payment of that cash from the bank account. In practice, the two should net 2-0 and the pension fund should be reconciling the two to each other to make sure the payments it is making matches the payments it was required to make. That has led to the first control recommendation that we have reported on page 17 where the pension fund essentially isn't doing this reconciliation process. And there's also a net balance on those two accounts of 0.7 million, which we have been treated again as an unadjusted error because they should net to nil. Second significant matter. Yeah, do you want to stop? Everybody following where we are just conscious that. Page 17. That's where the control recommendation in relation to that issue is reported. Are you saying the sums are 0.7 million out? We can ask questions at the end, we'll go through the report. I'm happy to do it as we go if that's easier. No, let's go through the report and we can make notes. Or, yeah, I mean, if you want to address that, well, Sean. Sorry. Yeah, that's fine. Yeah, yeah, yeah. Otherwise, we're just looking at it and thinking. So, yes, the answer is yes. So, there's a 0.7 difference between two codes which should net off to zero. Yeah, I can understand that. Yeah. But we're treating it as an error. Yeah. And the fund isn't adjusting for it because it's quite soon. So, going back to page 14, where we talk about the significant issues that we encountered during the audit. The second on there is titled current assets and current liabilities. And that is the issue that we are qualifying the audit opinion on. So, essentially, in order to do our testing of those current asset and current liabilities balances, we would ask for a transactional listing that reconciles back to the figure in the accounts. The pension fund has been unable to provide transactional listings that are sufficient for us to test. They include balances that the pension fund cannot explain for their existence, essentially. We have been unable to test those balances, so we cannot provide an opinion on those balances specifically. So, moving through again, we come on to the internal control recommendations, which are on page 17. The reconciliation of cash and transit ledger codes. I've already explained that one. That was linked to the first significant issue. The second, we have a reconciliation of investment asset valuations to the general ledger. We identify that as a key control where the pension fund looks to reconcile its investment asset values to fund manager reports that provide those valuations. That reconciliation was not taking place and it wasn't being done with sufficient frequency. There is his work being followed up. That has resulted in an unadjusted misstatement, which is reported on page 20. And that's that 2.5 million in there. Moving through again. The only thing I've now not spoken through is the adjusted misstatements on page 21. So, the main one in there is the 14.4 million. And that was in relation to the pension fund netting off current asset and current liability positions. They should be reported gross to each other, but they were being netted off. That's been adjusted for in the final pension fund accounts. That's all the key issues in that report that I wanted to draw to the committee's attention. There is detail in there around how we carried out the audit, stuff that's probably not as headline as those issues. But we're open to any questions on the account, so that's where we want to start. Do we have anything else to add before we move on to member questions? One other thing on the accounts and the issuing of the audit opinion. So local electors have the right to inspect your accounts and then ask a question or even object to the accounts if they think there's something unlawful in the accounts. That period of inspection starts when you publish your accounts and then ends up to a 30 day work 30 working day period. Because you only published your accounts on the 16th of January, I think, top of my head, that inspection period only ends on the 27th of February. That has two issues potentially. One, there's a risk that an objection is lodged. 27th of February, and I don't have sufficient time to consider that appropriately. In that case, I can't issue the audit opinion. The second issue it has is in terms of just you to be able to then publish your accounts. If we've got a number of questions or objections, it just creates a risk that we can't sufficiently address those matters before we issue this. The committee needs to be aware of that. Thank you. We will obviously come back to you with questions, but we do have now we've had the report. We will now hear Councillor Ainsley's representation on item four. So you'll have three minutes to speak, Councillor Ainsley, if you'd like to introduce yourself and then we will start the three minutes. Hi Councillor Scott Ainsley, I'm a Green Party councillor, leader of the Greens, and I sat on this committee for a few years, a few years ago. In a way, it's a bit of a shame that I go first because actually I'd like to hear what the current members of the committee would have to question. Before I offer my opinion, but I think what's clear from the auditor's report is that this council doesn't know how to budget properly. And that it's not known how to budget properly or accurately year on year on year because they keep repeating the same messages year on year. And sometimes the budget forecasting is revised three months later and doubled in terms of a couple of examples that are in the auditor's findings. This is grave concern. This is the only committee, I think, when I'm serving on it, flagging the extremely poor business case for Holmes for Lambeth. And we're still paying the price of that mistake because of the black hole, 40 million in the finances. We're paying 8 million every year in extra interest for the money that we borrowed for Holmes for Lambeth. And I'm I'm seeing finance teams struggling to try and help out what is a defensive administration, I have to say. And it's not helping the people of Lambeth and we're not helping each other. I've been doing our budget proposals at the moment and we're coming across a lot of obstacles that shouldn't be there because ultimately we're all working as one group to kind of like help the people of Lambeth. So, look, there's lots of questions I have about this report. One is on page 18 of the auditor's report. What is an IFRS 16? It sounds to me like it's a bit of accountancy jiggery pokery to try and save an embarrassing situation and hiding debt. So that's one thing I'd like to flag. And I've already alluded to it, but some of the recommendations identified at page 24. Three months later, what was a 10 million pound? And so I've got the wrong specs on this helpful. You know, the budget setting is completely out. And that's repeated. It's an area of ongoing weakness. I flagged this to Councillor David Amos, who's responsible for for finance. And my questions were kind of unskillfully swerved. Really, we just have to face up to the fact that something really needs to change. And I hope that with a new, you know, with Sena in place that that things really start that the team all start to pull together. And I think that's incumbent upon us as members to support them as much as we possibly can cross party to ensure that we can sort of just once and for all, just put this mess behind us and start budgeting accurately and be honest about what our what our position is. Otherwise, we're just going to. Your three minutes is up, but I'm happy for you to end the sentence. Thanks, Chair. Yeah, just these guys must be tired of saying the same thing year after year after year. Someone has to get a grip. It has to be this committee because I can't see anyone else doing it. Thanks. Thank you, Councillor Ainsley. Before we go to members questions, I would like to give the auditors a reference to IFRS 16. Does someone want to provide explanation as to what that is? Yeah, so IFRS 16 is International Financial Reporting Standard 16 and it relates to leases. And it's an accounting standard that will apply to local government from the 1st of April 25. So it's something that the council needs to be essentially getting ready to implement for next year's accounts. Doesn't it? Borrowing essentially impacts how you've disclosed an account for the leases that you hold on being agreements or building. Thank you. Sorry, accounts, Adam, do you have a follow up on that in particular? It might have an issue. Is it going to be an impairment or is it going to be good or bad news for us? Are we going to have more losses or gains? Or is it in English? It's a new accounting standard. But what's impact when it has on us? It's how you recognise your lease liabilities. So there's two types of leases, a finance lease and an operating lease. The main impact will be on operating leases. So under the old standard, the future liabilities for those leases are not recognised on a council's balance sheet. They're deemed revenue in nature and you just recognise the expense in the year that it happens. Under the new standard, you will be required to recognise all of those payments as a liability on your balance sheet. But it is a purely technical accounting adjustment. What is an operating lease? What do you might have here? It's a lease where the risks and rewards of ownership do not substantially sit with the council. So you lease a building for five years because you do not lease that building over the substantial term of that entire useful life. It's deemed an operating lease. So it's a substance over form thing, essentially. Do you take, in substance, ownership of the asset or are you borrowing it? For the finance one? Thank you. Questions, please. It's just a problem about the language. It's not really a question. It's just an explanation. Finance lease is the opposite. Where essentially you are leasing something from someone else, but it's for the majority of that thing's life. So in substance, you are taking ownership of that item. Sina, do you have something to add? If you were to take, through you chair, but if you were to take the same building. So in, I think in plain English, you'd think operating leases or I operate this and a finance lease is I'm financing something. But actually, that isn't the case. These are two technical terms that basically mean. So in Paddy's first example, let's say it's the same building, but we are, we are leasing that building five years because we're going to run something in it like a nursery or something, but it's only really for five years. That's a relatively short period of time. If the same building, we took the lease out and it was for 99 years, let's say, in essence, we may as well own it. So that in accounting terms, the government are not the government, I should say, we are being required to recognise based on the nature of the lease. So the substance of that lease as opposed to is it a building lease or is it a building lease? Does that does that help? Council Cole, did you have a question on this before we move on? So it's a sort of question. It would have been useful to define what the internet, what that stood for, the IFRS, etc. But we were offered training on it and it is a lot of on the new international standards and it's obviously a lot of information. So that's kind of is a very fair point, but they don't apply. My understanding is they don't apply to these accounts, but they will in the future. It doesn't care we'll be enough to find out in the future. Just, just. Thank you for that, Councillor Bryant. Yeah, I think the first question would be going back to the potential of other accounts. Obviously, it's more concerning there, there's actually a qualified opinion. Yeah. That's actually in NorCal, so it's quite a serious situation to find yourself in. So obviously, obviously, it's part of what one of the issues you've had was this issue of netting off current assets and current liabilities. Now, is that something that just happened this year or had it been going on in previous years? I think it was happening last year, but the actual amount wasn't material that was being netted up. So I think it was a couple of million last year, as opposed to now it's 14 million. So I think last year we probably kind of just let it go. Well, honestly, in hindsight, we probably should have made a more of an issue of it last year. I thought we didn't. This year, on immediately looking at the accounts, it's obvious that it was something, again, which is what triggered then further work we're carrying out. That's all right. Then there's obviously, if you picked it up last year, did you actually flag it up to management last year that this was an issue? I don't think we did because it wasn't material, because I think we just... Yeah, another question. Is it on the pension fund? Not the pension fund, it was on the main accounts, but you'd want to... I'll just ask a question on the pension fund. So obviously you're not able to qualify them because there's insufficient information to do that. My understanding is obviously we're in a position where we're looking to sign off these accounts. Is that information that is currently being prepared? Will this be qualified at some point? I know it won't before the deadline, but... I think the qualification is a decision made by the auditors on the basis that there is insufficient time for us to provide the necessary information for the auditors to then check that and confirm that they are satisfied that the information we have given them means that they can remove that qualification. I think for the committee's assurance, we see this work as a continuation of what we need to do ready for the next set of accounts that will be audited for 24-25 at the end of March, we will start preparing that. So we have in Rob's team somebody who is focused specifically on this, so that information will be made available well in time for when auditor colleagues come along to do the pension fund audit. for 24-25 and because of the time period being so constrained, that is only a matter of months away. So I'd like to give you that commitment that we will continue with that work so that all of that information is available to them. And then obviously they will take a view on and do their sample testing, etc. in order to be satisfied that we've given them what they need. Yeah, okay. Any questions from members councillor Brian, do you want to ask the notes questions? So this is certainly on the main account, or several different areas, but the first one was, Suresh did actually flag up, this is obviously the public inspection period which is still ongoing. Um, and it's just supposed to be more questions as Zena and Rob there. I think the report mentions there's been H requests submitted by one person, and it's just can you update us on progress in, um, dealing with, in answer. Yeah, so we, we, in terms of that first request, um, we've now finished, finalised, finalised a set of responses that are just ready for me to send up to Zena to clear. Um, we've had another request coming in on Monday. Again, another, I think, nine questions there. So we'll, we're preparing the answers to those now. That's all we had. Any councillor Brian? So the second question was that it's probably someone more from Zena, I think. Um, just looking, particularly the main accounts that we've sent, and it's page seven. So it's in the first bit, the, um, the narrative report from the Chief Financial Officer. I'm just, I'm slightly confused by the, but this is a bit where it says summary of financial performance of the year. So it's page seven of the accounts. I don't know what it is in the pack. But obviously it says that the Council's services reports are net overspent of £49.5 million. But then the breakdown is, that's confusing there because actually the table on the following page actually seems to come back for zero. It seems to show there's no variance, as I read it. And I, I know some of this is because there, there are overspents on directorates that I think are then handled by corporate items. Um, but I'm just wondering if somebody could a talk us through it and whether that might be made more clear before the final version is published. If. Who would like to. To take that. Apologies, I'm just checking my version. It's okay. Um, now it's the mail from, is your question related to that? I want to say that. Page eight. Can I make more general point? No, it's not. I was, but Councillor Ainslie is right. We, this is the committee. The only committee that actually looks at the council. Look, lots of people look at the budget in the future. We're the only ones in the future. So we have got a lot of responsibilities here. And it's very, very unfortunate. And it's not in any, nobody's responsible for this, is it? The government had a good idea about this stock gap. Good idea because I understand that councils across the country, maybe other organisations, but all got behind with their audits. And you really, if you're starting a year in April, you want your audit for your last year to be clear so that you start your new financial year on a solid ground. That makes eminent sense to me. I can understand that. I don't need any accounting language to tell me that. And that's a good idea. The problem is getting there, isn't it? And we've got, I think we've got to this bit of a mess because of Covid and all the terrible things have been happening in recent years. So we are where we are. But my, so my question really is, how are we going to start off the budget for 25-6? We haven't got a firm basis and the auditors have not looked at the, 40% of the audit hasn't been done. That's quite a lot of audit not to be done. So when you can't, you're doing it saying you haven't qualified the numbers. That sounds, well, if you were qualifying the numbers, how much tweaking do you think you would do? I mean, you must do something otherwise you're going to spend all that time on it. So it's, I'm just, what I'm really asking is how wobbly, and it's not just us because you said lots of other councils in the same position. How wobbly is the whole public, let's say the local authority sector going to be if we were starting off from a rather sort of soggy base for the due year coming ahead? Or will we, will we through the year, Robert and his team actually unravel some of these problems and put them out, some kind of adjustments so that this time next year we know exactly where we are and we've got much firmer ground. That's the assurance I want, that we're not just going to be building on sand or swamps, keep building on swamps at some point. And I think the government wants to create a solid rock forward, but if our rocks a bit, I'm trying to use some metaphors here. When is it going to be solid rock? That's what I want to know. When are we going to really know? That's a general point. I've got lots of other questions, but they're not appropriate, really, because I think if we'd had more time, I could have digested this. I haven't even seen this pension fund thing. I have some questions. It's just been such short notice and because it's accounting language, we do need a little bit of time. I'm sure if we'd had time to have sessions with the people around the table, we'd know much more about it. But we are where we are and we've got to make this decision. So, but I just want this assurance that we won't be in this sort of position. Us or any other council would be in this sort of position this time next year, because it's, it just seems very uncertain. Foundations for what is going to be a very difficult year. We all know that or know it's going to be not just for us. It's going to be for the whole sector is very difficult year. And the country on not just that is it's not just us. It's all kinds of things will be very difficult in this year ahead. You know, would you like to comment on Councillor Bryant's question? I would almost put it into two parts and obviously. I think the first point is in relation to what we're currently considering. And that is about assurances around signing off accounts, because that is the look back. That is the decision in terms of our accounts in relation to year 23, 24. And I think changes that Rob has referred to that were made since you considered the draft accounts in January. They are those three key key areas. The rest of the accounts from our perspective are as they were when we considered those last month. And what I would say is from my perspective, from our perspective, we want to move as quickly back to a normal reporting cycle for the accounts as quickly as possible. I can't give you a cast iron guarantee that 2425 will be that year, but we will be working to having a full audit back in place with the team working on producing the accounts. By the deadline in order for audit to be able to do the external order to do the job they need to do both on the main accounts and the pension fund so that that commitment will certainly give you. We know that there are some colleagues in other parts of London where they've already made clear that their accounts will be disclaimed for at least another year, possibly too. Yes, absolutely, because they've got balances that they need to, you know, in order for the auditors to be able to, they've got to unravel quite a lot. So this, the government have already, I think they've already enabled disclaimed opinions to be up to 27, 27, 28. So, you know, I can't guarantee you 2425, but that's our planning intention and we're already talking to our audit colleagues that once we've got this out of the way, we will be planning for 2425. So that, that sort of foundation around assurance on the accounts and then presenting a true and fair view, I think is, is one thing. You know, you know, us presenting them to you today is, is on that basis. The second point, which I think we'll come on to, which is the value of the money judgment that our audit colleagues have made around our future financial sustainability, the risks that we face in relation to our reserves, etc. I think we're going to come on to that next, but again, I absolutely completely agree with you. One of the recent projects you will see the increase in growth requirements from December to this final budget is because colleagues have worked very closely with service colleagues to identify what the four year effect of this year's pressures are in terms of next year. I think in order that we are as robust as we can be in those estimates for accommodation, children and adults so that we don't start the year with a. An unrealistic or optimistic view of what is achievable in relation to those expenses. And yes, Council Member. That sounds somewhat reassured, but it's, it's, they're all promises, aren't they? It's good that they've got the intention. I'm glad to hear that we're likely to be that. Well, not that. Being in the worst position. Not they're willing to follow the most possible. But come on, is there any way you can quantify the level of risks? This is the favourite word of this committee, isn't it? Risk. What is the risk of not having financial audit of our accounts for 20 before? What is it? Because how much could it go up and down by? We talked about 4.5%. You know, ask me it's fairly spoken. But you know, if it's 40% of the audit effort, it must be quite a lot. You say somewhere in the report that you're, that you're not in a bill is quite as much as normal because you haven't been able to do all the work. Oh, that's good. That's a little saving there. Yeah. But not doing that because audit is a very important function. I think we all appreciate it. We need it. And if we're not doing it, what is the consequences? Just generally, level of risk. I have a limited view, having not been here very long. But what I can say is you as a committee very recently approved the accounts in relation to 2223 and that was a full audit. That was literally two months ago. We are in a situation, unfortunately, where the backstop date, which was previously May, has been brought forward. So to all intents and purposes, both the council team and the external audit team were working to a May deadline and felt that it was entirely possible to do another full audit, which unfortunately, because the government changed the date quite late. I think on top of that, and again, you know, my view, we will be starting the 2425 audit process relatively soon. And so this period of disclaimed opinion is relatively short. Now, I can't give you that doesn't mean that I can say to you hands on heart that that means there are things in there that the audit might have uncovered should the auditors have done more work. But what I can say is relatively recently that they gave an unqualified opinion on 2223. They will be doing work on 2425 imminently. Sorry, yes, yes. Add to that one one other consequence. I'm sure the auditors will say that is that because the council accounts have been disclaimed because the pension fund accounts qualified, it will lead to greater scrutiny as part of that 2425 audit. So they'll be doing more work to gain insurance where they could get that. They'll catch it. They'll catch it. And the pension accounts will obviously be under great scrutiny because of the qualification. They'll drop 20. They'll drop 20. They'll drop 20. I'm just thinking that's a saving we could make the same. You want it, Bill? Pay for a few places out of that or maybe one. I have a question around homes, but I don't know if we want to wait and have this second part of your report, the value for money. You want to move on to value for money? I think that's where we'll have a lot of questions and I'm conscious of the time. And I think I think we should move on to that. Yeah. So if you remember, as your auditors, we have a responsibility to form an opinion on your accounts in terms of the numbers. But then also I have a separate responsibility around commenting on your arrangements and I'll use the language that we're required to use. But commenting on essentially how you kind of manage yourself. Governance. Sustainability. Demonstrate your money effectively, essentially. Last year, we reported on two areas of weakness. One was around financial sustainability, essentially the low level of reserves. And then we also reported on the HFL and the first state report and the recommendations associated with that. This year, we've, I suppose, ramped up the reporting on financial sustainability. So there's another risk that we've identified around that in terms of the budget, budgeting for growth and achieving savings. And the same recommendation we had last year also remains in terms of low level of reserves and the need to replenish those. Similarly with HFL, the two recommendations that we raised last year remained in place for this year. So there's a lot of detail in the auditor's annual report, which is part of the first supplementary pack, which I'm not going to point them to. But the details there if you want to refer to it. These are clearly quite serious matters, which will then lead on to the statute of recommendation, which I'll talk about in a second. But essentially, the key areas that we've identified weaknesses around financial sustainability and then the HFL recommendations from Kerslow. I will ask the first question on homes for the Lambeth then if anyone has any other questions related to homes for Lambeth. So obviously the judgment on the HFL 2023-24 loan balances for these to be impaired. Will this be something that will need to be revisited for the 24 to 25 accounts? Yeah. Yeah. I mean, essentially, again, depending on what you actually do, bringing it back in house, there will be a judgment made on the loans that are still outstanding and sitting in HFL and whether or not you're actually going to get those back. Does anyone have any questions related to the HFL piece or any questions in general? I've got sheets of questions. I'm not asking everyone, but I'm trying to consolidate them. What's the general thing? Can we talk a bit about reserves? They're a bit alarming, aren't they? There's a line somewhere. I don't know whether it's in the budget or in the courts because we've got so many pages here, but there's a very alarming line. There's a lot of zeros in there. Do you want me to move to the statute of recommendations thinking? Yeah, yeah, let's... We haven't got them in our... No, no, I'll explain why. Yeah, let's move on to that. So I mentioned about that members of the public being able to object to the accounts and that's one of the powers that we have in that to be able to respond to those. That's part of what's called the Local Audit and Accountability Act. So by statute, we have these responsibilities. The other powers that we have are to essentially escalate issues where we think either the council hasn't done enough yet because we've been flagging it for a while and it needs to do more or it's not in a public domain yet, but we think it should be. So in one case, we can issue what's called a report in the public interest. Like I say, it's put something in the public that maybe wasn't and needs to be in the public interest. The other one is this is making what's called a written recommendation or a statute recommendation. And that's what what we are doing as we speak. And it's on the basis of the fact that we have been reporting on the financial sustainability risk for the last two years. We have been reporting on the implementation of the codes like recommendations also two years. So we're essentially escalating our reporting to say, and this this is addressed to the full council, which is why it's not come here yet. And also we're just finessing the wording. We've given officers an opportunity to just have a view on some of the wording that we've used. But that will come out tomorrow. The council then has 30 days to respond in public to those recommendations. And I think one is to take it to the 5th of March council meeting. We will also attend. That recommendation that it's essentially a letter, one page letter, which summarises the things that you've you've seen here in your report and essentially says. You know, you're setting a budget for twenty five, twenty six zero unallocated general fund balance. So unallocated general fund balance essentially is your buffer. Anything that you haven't thought about, you haven't planned happens at the moment, you haven't got a buffer. You have got some reserves that you've allocated for certain things that I imagine you could then repurpose if need be. But essentially you have set in a budget with no general unallocated general fund reserve, similarly with the HRA. I understand you have now received some financial support from government. The 40 million for the HRA has come through today. So that will but that's still that's still still leaves you with no unallocated HRA reserve. You clearly got savings targets within the 2526 budget and the medium term financial strategy moving forward. I think over the next three years that totals over 100 million. Given that the savings targets in the last two years have been, I think, 17 million and 26 million. The 17 million wasn't achieved. The 26 million. I don't think I've seen what the forecast is, but you say you're going from 1726 to 46. I think it is for 2526 with not a record of achieving the previous savings. And I think that savings have been added on each year. So essentially we're saying that the situation is severe. So it's quite rare for an auditor to issue a statutory recommendation. The fact that it requires you to report in the public your actions against those recommendations clearly demonstrates as a variety of the matter. So if we're not satisfied that either the actions that you say you will do aren't being implemented or if the actions don't start delivering the outcomes that you planned, we then could escalate to the next level of our reporting in terms of doing a report in the public interest. So actually putting it out into the public domain, the detail of why the council is where it's at. Now, I appreciate that this is in the context nationally of, you know, severe challenges across local governments. So you'll be aware most councils have got financial challenges. The reason why we're issuing the statutory recommendation here is because we've been we've been flagging it for the last two years. And we think we need to to discharge our responsibilities. We need to do that reporting. Thank you. So to be clear in terms of the statutory recommendation, that is something that will be dealt with by the full council. That's not something that kind of is coming here for the corporate community to to deal with. But it's obviously the forum for us to ask any questions and concerns that we have are moved to Council Adam. But first of all, I'm going to ask what are the immediate and longer term impacts of receiving a statutory recommendation? So we do have to share it with the Secretary of State, so it will be on government's radar. As I said, you have 30 days to respond to the council. And then, as I said, we will be then clearly following up in terms of have you done the 50% you're going to do? Are they leading to the outcomes that you want? And if they're not, then, like I say, we have got a further reporting hour that we could exercise. Councillor Adam, how long do we get? So you get 30, the council has got 30 days to respond. To respond, yes. To essentially say what you're going to do and respond. Yes. Then how long from then do you take until you can take it further? It's down to you what you determine the actions to be in response to the recommendations. We will then obviously, if you put in a real, if whatever date you put in, we will, you know, hold you against those dates. I just want to ask Zena, what is 40 million going to do to the budget that we didn't have to? That sounds good news. What difference is it going to make? And is it 40 million, another 40 million for the HRA? And is there any more money we're trying to get? So capitalisation direction was confirmed today, this afternoon, 40 million from the HRA, I think it's on the government's website. That's basically in simple terms, the government giving us permission to borrow 40 million pounds to balance our HRA. So if you look at the budget report that's gone to that's gone to cabinet that will be considered on one day that will then read be recommended to full council. It makes clear in there that the HRA is balanced on the basis that the government would approve that 40 million. So without that 40 million, the HRA currently would be projecting a 25 million pound overspent. So the 40 million will cover that off. There is a desire and intention to use more part of the remainder to put some money into reserves. So 23 million just to bolster that reserves position. And then the remainder of the 40 million is intended to be used to address, start to address more rapidly the legal disrepair costs that we are incurring. So that 40 million that government are giving us permission to borrow, in essence, will cover those three things. I thought the 40 million was the redress scheme. So something else. So the redress scheme. I'm also unhelpfully in two separate capitalisation directions. So one was in relation to one is in relation to the redress scheme. And in that case has a direct bearing on the accounts because the way in which that direction was worded. In essence, in very simple terms, we were using the money over a number of years, but the way it was worded didn't really extend sufficiently the permission to do that. So on redress, we haven't asked for more money. We just asked for government to confirm that we could use it for the period for which we needed it. They have confirmed that we can do that. There is a minor adjustment that hasn't been recognition of a difference just around about a million, which because of the way the new direction is worded, we had allocated roughly a million more of that capitalisation than we had authority to. But because it relates to 2223 and it's a very small amount, we've agreed with the auditors. They're satisfied that that that's not something we need to adjust the accounts for. But that is not more money. That is simply how we are using the money that government had already agreed we could have for redress. This 40 million is a new request in the year that they have confirmed today. This redress one will affect. Twenty. Three, four, your comments in the audit report, yeah? Yeah. So essentially what we were saying is that the accounts for 2324 were based on a presumption that you would get the government to approve it, which at the time they hadn't. So we were saying that's a bit of a judgment you're making, but now you've got it. We've worked it through. So that's a tick? Yeah. Well, tick bar a million. Yeah, we were in there. Right. Okay. There's not any other 40 million. No, there's not. I thought there was three not, but anyway. Councillor Adam, did you have a question? Councillor Brian? Yeah, first just going to this 40 million of capitalisation for the HR Act. I think it's important to mention, it's not actually the government giving us money, it's giving permission to borrow it. Yeah, yeah. And I think the key bit for my reading of the budget paper for Canada next week, which I hope he's in it for comment, is actually that money has to be repaid from the HRA. And the proposal is actually, that's going to be done by selling off some council houses, which actually is an issue of concern to people, I suppose. But obviously, but it's a debt that has to be repaid. Is that correct? Sorry, Chair. Yeah, no, no, that's fine. You're absolutely right. The HRA has to balance and we are being given permission to borrow. That borrowing will have to be paid for and it will have to be paid for out of the HRA. And we will have to organisationally look at a number of things by reducing costs wherever we can in relation to the HRA, looking at the borrowing costs that we've already incurred versus the ability to repay that. Because this capitalisation direction, as you slightly say in the budget report, that is for one year only. So it is only going to balance our HRA for next year. The government will expect us to have a credible plan about how we get to a sustainable HRA in the short to medium term. And equally, our auditors have highlighted very clearly that they are concerned about the level of reserves that we have in the HRA and will also want to know what our plan is. And yes, you are right. One of the options will have to be a consideration of disposals where they meet the criteria for disposal in order to generate a receipt that would allow us to pay the debt costs. It also, Paddy mentioned something called the minimum revenue provision. So that is in effect, essentially a charge that you have to pay your borrowing essentially. So the more you borrow, the more you need. And that's an actual proper charge to your general fund. Even though you're borrowing 40 million for the HRA, there will be an impact on this provision charge that you need to make. Yep. Councillor Adam. How much is the charge for that? Sorry again? How much would the charge be? It's very complicated to work out and I think you can apply us. At the moment, based on a 50 year life, it's two cents. But that's on top of. Yeah. Yeah. It's unfortunately local. It's one of the areas of local government accounting that is particularly complicated for us in that we have we have a legal obligation to set aside the money. So when people think of sort of repaying interest, they think that's straightforward. But for us in local government, we have to go above and beyond that in very simple terms. It isn't just the debt cost itself. It's it relates to the principle as well and that we are legally required to do that. So it's absolutely right. The more we borrow, the more we have to set aside and it is real money that we set aside. It's not just an accounting entry and, you know, on a desktop basis. It's real money that we have to set aside. It's like a whole question. Yeah, I've got the question on page 24. I think it's the third paragraph. The council has failed to budget for the for demand pressure in relation to temporary accommodation despite prior year overspends. Obviously, that's based on that we all have the same demands for temporary accommodation. But would it be fair to take into account that the law is going to change and that tenants will have some rights and landlords will less easily a bit. It's something that the reality might be. I can see that we have to budget for it to continue. The reality is. For the purposes of our reporting, we focus on quite a high level. So the detail of how things move forward. Yes, it might change things. But what we're commenting on is what's currently happened. And that's our view at the moment. So clearly that we factored into your future budgeting on temporary accommodation. Just a further question on that budgeting for temporary accommodation. So the I mean, as we know, the demand for temporary accommodation is phenomenal. And it's, you know, one of the biggest challenges we face as a council. How could we have budgeted that differently? I don't think we we have to have the money or the budget. So what would what what should we have done? Well, I think that's the point we're trying to make that you significantly overspending on a budget area. When you set the next budget, you have to reflect the fact that you've got all this demand coming through the door. Otherwise you end up in what you've said you've ended up is just another overspend. But I think from a 100% recognising that there is a national issue with accommodation. This is not unique to Lambeth. It's not unique to London. Obviously, London feels it most acutely. So this is a combination of things. But I think from the auditor's perspective, what they're saying is. We have a finite budget. If we know that one particular area is requiring. A certain proportion of that, then we have to budget accordingly. If we don't have enough for the rest of it, then we have to take whatever decisions there are. There are choices. So if you choose to fund the growth of the year. And I use the word excuse very loosely. Then other decisions have to be taken in order to that. In order for that to happen and still have a balanced budget. Alternatively, if we estimate a lower figure, then what plans are we putting in place to manage that demand? We don't then own spend a little bit. So I think the auditors think it would be fair to say is those are choices we have to make as an organisation. What they want to see is sound budget estimates and then sound budget monitoring. That reflects the plans we've made, how we choose to do that, whether it's policy choices, whether it's, you know, being less generous than others or whatever those things are, or agreeing to reduce other services in order to pay for TA. So I think they would say that that is for us to determine that sort of. Very difficult. Very difficult. I don't take take questions from the floor. Can you break? I'm happy to take a question. Yes. Thank you, Chair. Just on the fact that when you borrow from the government, when you get capitalized the 40 million. Are we at a risk of having to sell our assets, which effectively robs us of future homes in order to meet this payment? So is it is it getting out of us? It's getting us out of a tricky bind, but ultimately in the short term, but in the long term, we're losing assets. We're losing land. We risk losing houses. Thank you, Chair. No, that's fine. And I mean, I think we we covered that. I mean, it's again difficult decisions. We don't want to lose houses, but it's the situation that we're in. I don't know if you want to expand on that. I think one of the things that I would say is clearly in the general fund, one of the savings proposals is talking about asset review generally. And I think it's fair to say that it's not unique to this organization that looking at your assets is increasingly an option that has to be explored. What I would also say, however, is absolutely from a finance perspective and from a value for money perspective. It is not sensible to dispose of assets that either have future income generation possibilities or are an asset that you would want to keep. However, there are also those assets that are extremely expensive to maintain or repair or economic to keep. So I think as long as organizationally we're clear about our criteria as to when we think disposal is an appropriate option, it is a perfectly legitimate one. But I agree with you that a sort of blanket approach is not one that certainly from a finance perspective, we would be recommending. And I would imagine that the administration also would want very clear criteria in relation to when they choose to dispose as one of the solutions to be sustainable financially. That's the Meldrum. Coming back to this capitalization, which year, which accounts is it going to be in? 25-26. So it's for next year in order to balance next year's budget. How are we doing this year we're currently in? So we have in our forecasting for this year, we have predicted the overspend position and the year end position on reserves is I think we're projecting 5 million will be will have used reserves and we will then be only at 5 million at the end of 24-25. So that's all taken into account in terms of government because it's on this year's figures that we based our projected overspend of 25 million for next year. That makes sense. So that's why of that 40 million, 25 of it is simply going to ensure that we don't overspend to the degree we would do if we didn't have that 40 million. This is the HMA one? HMA. So how many savings, how much millions of savings? Bear in mind we have to pay all that over quite a long period of time, hopefully. Is it 30 years? Not 10 year loan, is it? Anything like that? I don't like the point in terms of decentralization, but it will depend on the borrowing that we take out, which I presume for a three to determine. How long have we got to balance books? So this is the point earlier. So the 40 million that we have had confirmation today relates to balancing next year's budget. So what else have we got to save from next year in order to balance the budget okay for the 6th or 7th? So that's the piece of work that didn't have to be done in year, which is why I think the point is being made about all the different options around how to get the HRA balance. It is likely that we may have to have a conversation with government about 26, 27 in order to give ourselves enough time to get to a sustainable HRA. Because clearly, you know, there are obligations in maintaining our stock and all those other things that we have to do, which means that we won't necessarily be able to get to a sustainable HRA position by the end of next financial year. Can I ask the question of the auditors? Yes, you can ask a question. Talking about millions of savings here, millions there, which you say a bit unrealistic sometimes, but some of them will include staffing costs, will they not? Where, what are we supposed to do about a redundancy budget? It's a question for us, you know, rather than us. So what do auditors say? I mean, hopefully we're not going to government to borrow some money to play with that. So, no, that's not a position. However, when you do large scale redundancies, it is quite common and normal for that to be capitalised. In fact, you know, when you do them large scale, I'm aware of a number of councils that have done that in the past, long before these capitalisation directions. In terms of redundancy costs per se, when we are calculating savings, there is an expectation that costs are identified. So the saving is net or cost? Oh, it's netted. Okay. So it's not additional. Okay, that's fine. That would be the expectation. Just to be clear on this point around staff, you're speculating as to something that an organisation could do to save costs. This isn't based on any, to be very clear, this isn't based on any informational decisions that we have. This is purely a speculation about an organisation. There's no particular pot called that, but yeah. Okay. Council Brian, did you have a question? Yeah, I was to go back to the VFM report. So we didn't really get a chance to put a quiz on that. Obviously, I'm particularly concerned, obviously, your recommendation you meant about Homes for Lambeth. And I'm not quite sure it's not fair, I think, to put a finance colleague here on the spot on it. But the key bit is obviously, what is really disappointing is you basically say you made recommendations last year and they haven't seen it infinitely. And given that one of the key things that we've been saying for a long time about Homes for Lambeth, was a complete failure of governance arrangements on it. And that was what the CURSE report came up with. And we know they had this oversight and scrutiny quality that seems to be completely useless. But who is it in the organisation who should have been taking forward this value for money recommendation? And I think we need to get them for this committee to explain themselves, because it's quite dammit that that hasn't been implemented. Question? If you can put them on part one, I'll be certain. Yeah, I think I would say that you would be looking to me to respond to that and to give you an analysis of why the decisions to date have been the decisions to date and why that has resulted in the efficient progress that the auditors are citing as a concern. Because that does lie squarely with me and my role, because it is about, in essence, the financial implications of bringing Homes for Lambeth back in house that the auditors want to ensure we have got a plan for. But are there individuals within the organisation specifically tasked with that detailed plan of bringing Homes for Lambeth back in house? I think that's the assessment that I would need to bring back so that you can be satisfied that what we're taking forward picks up what's been done to date, what hasn't been done to date and what will they do with that? Because I think for me, quite frankly, we don't have very long because these days in a few months time and that statutory recommendation is not going to recognise the fact that the 23-24 accounts were delayed and 24-25 is hot on its heels. They are going to want to see the progress that they will expect to see by the time they do their next value for money judgment. And I want to make sure that what we bring back to you, ultimately, 24 Council, which perhaps will delegate that to you as corporate committee, we will want to make sure that that detailed plan is there and that you can monitor that on a very forensic basis, really. And it would be useful to know, you know, it's under your, obviously, you said your responsibility, but there must be, you know, there's a hierarchy within Homes for Lambeth itself, there's senior roles within that, who exactly, you know, operationally. We can, we can, we need more information. I know that someone who reviewed scrutiny in September, so I think what I would just need to take away and sort of with the monitoring officer's advice would be sort of which bits are, committee related in relation to this because it's the statutory recommendation and its relation to the VFM judgment, which is clearly within your remit and then the broader kind of perhaps arrangements that are more about being scrutinised by scrutiny. So very happy to take that away and make sure that the bits related to the VFM judgment and the work being taken forward is brought back here. I suppose my only caveat to that is, at this point, it's part of a statutory recommendation that will go to full council, but once full council has considered it, there will then be, no doubt, somewhere that it is, you know, transferred to, to have more rigorous oversight on a day-to-day basis. And so Adam, just because we would like to see if there are separate entities, ongoing councils that now has not been added to the general account would have implications for the next year's accounts as well. Yeah, I don't, I think we're lacking clarity on exactly where within the organisation that, that tasks it to bring, bring this back. From my perspective, from my perspective, it would be squarely me from a finance perspective and then the corporate director for, got Nabil's title, I do apologise, but it would be him from an operational point of view in relation to HFL's kind of governance, etc. So between the two of us, I think that is referenced in the corporate peer communication plan as well. Yeah. Does anyone else have any further questions they want to ask? I've got to make minor ones after this. Would you like to ask them? No, no, I don't know. You might absolutely need to answer, Adam, sorry. If you tell the action plan to, to meet the actions required of the Cursed Lake report, when can we expect it to be coming to us? I think that will be determined by the, um, the work that full council require us to do, so I think once we get the statutory recommendation tomorrow, it will set out very clearly what the auditors are expecting, uh, full council to respond to. That will then be considered as part of the full council meeting, and as a result of that, um, this is me speculating now because obviously those, those things have to be decided, but my, my assumption would be that full council won't be the body that kind of oversees the action plan on a, on a more kind of granular basis. It will refer that, I would imagine here in terms of the BFM judgment and any areas that are more scrutiny, um, committees sphere would go there. So I would imagine that that action plan would come back here relatively quickly because we've got to respond. We've got to respond to the auditors within 30 days. So, you know, in terms of the corporate committee and, um, you know, officer committee and, and I know that we're looking at some work to undertake, you know, a review of how we manage this committee and make us as effective as possible. But the, you know, there's lots from here that we will want to see. So things like the action plan of, you know, homes for land, but that's just one element of this recommendation. So there'll be other parts of this recommendation that we as a corporate committee will want oversight of and we, and we want to see, and we want to make sure that it's being, you know, addressed. Like this is serious. There is a time straight on this, but then there's the other side of the committee where we're looking at risk reports and we're pulling up reports. And, and I'm, I'm kind of seeing, um, you know, our, our responsibilities. We're stretched, we're stretched thin, you know, we will, do we focus on this, but then we also have, you know, the risk, risk items within the council and, you know, reports of assurance. And, you know, we want to see the detail around that. Um, so I don't, I don't quite know the answer to that in terms of our accountability. Um, so, and again, for further discussion, but I would, I would suggest, um, that responding to the statutory recommendation will almost form part of your core activity. So, you know, the risks related to it, for example, will need to be covered off through the risk items. The audit, uh, plan. I'm sure we'll cover off, you know, looking at management controls in relation to how are we progressing some of those actions. Some of them will be for cabinet. So, you know, improve budget monitoring, um, those reports being enhanced. So I think there will be a range of things that will respond to the statutory recommendation. And it won't necessarily be that you have to do those things, but you'll have oversight of making sure that when, where it is happening, you are satisfied. For example, the budget monitoring report, if, if that is one of the recommendations that we will have a, a more comprehensive budget monitoring report that lists progress on savings more specifically, then you will just need to know that that is happening. So that's quite binary. Whereas perhaps something like, you know, updates on what's happening in relation to the financial plan on HFL, you may want to have a bit more detail on that on a more basis. So I think it's probably going to be a mixture of things that we will need to work through. And as, uh, sorry, as part of this recommendation that, and apologies if this has been covered, um, in terms of the auditors and the responsibilities of the auditors, do we, um, do you have kind of, is, will there be increased audit activity throughout the period? And will we get insight into that? I think it will depend on what the response is in terms of the actions. Like I said, if you've got some sort of staged action plan or milestones, it might well be that each of those milestones, we, by the way, the progress that's been made. But until we see the actions, you know, not to say. Yeah. Um, I will take, I'll have to take final question from the floor. Um, it's just, it's, it's not a question. It's just, uh, helpful to the committee ideally. Um, when I sat on the committee and we were monitoring. Who was ultimate responsible for homes for Lambeth and monitoring the risk. Um, cause I was on corporate committee at the time. I, we commissioned a piece of work. To do a Venn diagram on where the overlaps are with, um, overview and scrutiny corporate committee and where responsibility lay. I can share that with you chair if you, if you like, which might make things a little bit clearer. And I think it sets out a path. Okay. Um, did you have a final question? On a sort of separate, maybe a separate. I mean, they're to do with this, but they're not, they're not terribly significant. Would you like to mention them? My first point for me is relevant to this is the pensions. Which is not going to be on the statutory recommendation. So I'm just, can we make sure that the pensions committee see it? I don't know whether that's not part of the governance, but I think they need to see that they've got the qualification. Yeah. I'm on it. Yeah. Right. Okay. Then the other thing on here, I've just. We haven't had time to go through all this. We haven't had very much time at all, but. One of my. Things about this committee. Is. Fets. Fets. We are trustees of FET charity. I think those budgets should be in the annual report. And I was very alarmed to find out a while ago that we didn't have any of it. It wasn't even interest bearing. And it should be. That's the least we could do as trustees. So you may not know about this thing. It's a minor thing, but it's one of our. Yeah. Yeah. It's like. It's common and all these others. Yeah. Odds and sods. It's just one of those things that we just. I'd like to see it is mentioned. I'm not sure it is mentioned, but there's nothing about the actual balance. The other thing I just wanted to mention was. Maybe this is a bit. It's not. What's the interest? But in my ward, we have the West North Health and Leisure Centre, which is a PFI building. And it's been mentioned, but we haven't got the actual amount of money to pay back for that particular thing. Well, I'd like to see that referred to. Maybe it's not going to be in this set annual council because they're only finished. Please put it in the next. Next year. Because it's. A lot of money and like a lot of PFI schemes issues. But we need to keep on top of. And. I know it's a rush. I did give his apologies earlier to go to another. Another audit committee. I'm happy to, unless there's no. I'm so grateful that ours is the one that started earlier and not hurt me. He's only going to one that's only just starting at eight, I think. And as we've got no further questions, I'm just going to kind of move on. Obviously the recommendation is that we've got a lot of questions. I'm just going to kind of move on. Obviously, the recommendation is that we've got a lot of questions. We've got a lot of money and a lot of PFI schemes and issues. But we need to keep on top of that. I'm just going to kind of move on. Obviously the recommendation this evening is for. To approve the statement of accounts. I think there's been some things that we. As a concern. There's obviously the bit around the pensions where there is. Is missing information, which is quite serious and. You know. To kind of sign off accounts. Without that, obviously there's. We rightly. Or, you know, I definitely have has some hesitation. I have had conversations and do. Feel assured that that information is in. The process of being provided and that scrutiny will. Will be. Provided around that for the next accounts. And I and I know that there's individuals working really. Hard in the finance team to get that. And I think we mentioned that the previous committee that. You know, these. Compressed dates that, you know. There's kind of the overlying messages, but we sometimes. Forget that there's some people all behind the scenes. Who work really hard on. On a lot of this stuff. So I have been assured that that is. Something that is being. Taken very seriously. And then with the overall. Accounts, I think kind of factually. I don't. I personally don't see the issue with. Signing these off where our concern. Lies, I think is the. Going forward and the what's next. So the statutory recommendation. I think is where all the concerns lie. But with regards to the backward looking. Statement of accounts itself. With those points noted, I would. Would sign them off. But happy to say. I want to sign. I'm not happy to sign off unless we say. They have not been. Financially audited. That seems to me quite significant. I know you've said it's only one year, but. As long as it's. Note that. Is it something. This is some big problem and we've signed it off. I think. It wasn't already something. But you know. It's. We're doing our best. It's a difficult circumstance. But there's all these caveats. As long as we have that as a caveat. I would. Be happy for. To prove it in light of. All these difficulties. Yes. The fact we've had no financial audit. It's. It's 40% of the audit work has not been done. You know. I suppose. And again. Perhaps taking advice from. Democratic service colleagues and legal colleagues. But. We have a. Disclaimer. So. I think if we know the disclaimer. Which. Which basically confirms. Yeah. Yeah. It's got. There has been no audit opinion. Yeah. Then absolutely. That is factually correct. And you are. You are basically. Improving the accounts. On the basis that. The auditors have. Issued a disclaimer. Which I think covers what. Yeah. Yeah. Yeah. Is what the government. Nothing reckoning on do. Is it? I agree. But we just need to. To make that. Noted very clearly. That we haven't had a. Auditor opinion. And we're signing off on that basis. This. In that case. If there aren't. Further questions. I'm going to conclude. The item for. By agreeing. With the recommendations. With those points. Very clearly. Very clearly noted. So we now close the meeting. Of the corporate committee. So thank you to. To our members. And for officers attending. And to our auditors. And. And everyone who made. The reason possible. I particularly. Like to talk to Adina. Because. Your first. You've only been here. What? I don't know many weeks. A bit like. Mr. Trump's been.