The Audit and Governance Committee of Newham Council met on Wednesday 8 February 2023, reviewing a range of financial and governance matters. Key discussions included the Treasury Management Strategy Statement, the handling of Local Government Ombudsman reports, and quarterly updates on internal audit, counter fraud, and risk management. The committee also reviewed the RIPA Policy and Procedure Document and considered the Year Ahead Forward Plan.

Treasury Management Strategy Statement (TMSS) 2023/24 and Annual Investment Strategy (AIS) 2023/24

The committee reviewed the Treasury Management Strategy Statement (TMSS) and Annual Investment Strategy (AIS) for 2023/24. This report detailed plans for the Council to borrow £447 million for its capital plan, which was due to be considered by Cabinet on 16 February 2023. Members raised concerns about the significant funds loaned to Local Authority Trading Companies (LATCOs), seeking assurance on the governance processes for these loans. It was noted that one LATCO was on the risk register with an unfinalised business plan. Officers clarified that the final version of the Populo business plan would be considered by Cabinet. The committee requested sight of the Populo briefing received at the Corporate Management Team (CMT) meeting, and it was agreed that this would be provided. Discussions also touched upon the use of Council reserves for capital loans, with officers explaining that while reserves of £7 million were not entirely cash, they were accessible for contingencies. The committee agreed to explore new processes for considering technical Treasury reports, potentially through a working group, to allow for more effective contribution.

The Handling of Reports from the Local Government Ombudsman Annual Report

The committee examined the annual report on complaints handled by the Local Government and Social Care Ombudsman (LGSCO). The report outlined reasons why Newham residents contacted the council through formal complaints, the council's responses, and how Newham performed against other London boroughs when complaints were escalated to the LGSCO. A trend analysis of housing repairs complaints was also presented, as requested by the committee at a previous meeting. Members inquired about the collection of demographic data, such as gender, in relation to the quality of complaint responses, and officers confirmed this data was captured and would be included in future reports. The committee discussed lessons learned from the annual complaints report, with officers highlighting improvements in the repairs operating model, including the integration of call centre and repair staff, and the upcoming launch of an online repairs portal. A request was made for a breakdown of the 100% of complaints by service area, as the top five complaint service areas accounted for 60% of recorded complaints. Clarity was sought on whether Stage 1 complaints referred to in the report excluded member enquiries, and officers confirmed they would check this. The committee also requested to be sighted on the action plan for culture change, which would form part of the updated Residents' Experience Programme. A significant portion of complaints related to Housing, and the committee requested that the Director of Housing appear at the next meeting to explain desired service level improvements and expected outcomes.

Quarterly Internal Audit Update

The Audit Team provided an update on work undertaken between the previous meeting and the end of December 2022, along with the level of assurance on that work. The committee was informed of an upcoming audit of recruitment practices in various service areas and a benchmarking exercise following the Grant Thornton review of public interest reports. Members raised concerns about reclaiming staff Additional Payments, with officers explaining that an outdated pay policy and managers' inability to comply with it were contributing factors. The issue of disciplinary action for officers circumventing systems was also raised with Human Resources. Discussions also covered budget controls for the Newham Mag, with officers assuring the committee that the service area operated within a budgetary framework. The committee heard about overpayments made to Care Homes due to delays in registering resident deaths, and officers explained that controls had been reinstated and overpayments were netted off from subsequent payments.

Quarterly Counter Fraud Progress Report

This report provided an update on Counter Fraud activity and results. The committee congratulated Fraud Manager, Nick Sharp, on being shortlisted for the Fraud Leadership Award. Members inquired about the recovery of monies from overpayments, and officers stated that up-to-date recovery figures would be circulated. The cost of recovery action was also discussed, with officers indicating it was minimal and that figures would be circulated.

Quarterly Update on Risk Management and Risk Register

The committee reviewed an updated corporate risk register and risk profile, including risk registers from the directorates of Environment and Sustainable Transport; Community Wealth Building; and Transformation. A new risk was highlighted concerning the stability of leadership due to a high number of senior officers in interim posts and findings from the all-staff survey. Members queried the mitigation for the People [culture] risk, suggesting the inclusion of policy changes. The committee requested to be sighted on the results of the staff survey and a copy of the Populo Report and Action Plan. A suggestion was made to re-rate the Newham Sparks programme to amber due to its dependency on the IT department, which had high levels of risk. The committee also discussed the complexity of the journey to net zero and the need for more mitigation data in the register regarding climate change. The risk of no funding for the Resident Experience programme was noted as a concern, and the budget decrease for the homeless response programme was also discussed.

RIPA Policy and Procedure Document Annual Review

The committee reviewed the annual review of the Regulation of Investigatory Powers Act 2000 (RIPA) Policy and Procedure Document. It was noted that there had been no applications for the use of RIPA powers since 2020. An amendment was agreed to change the phrase role of members to role of Audit Committee in section 3.1 of the report. Concerns were raised about a vacant Senior Responsible Officer (SRO) post, with officers explaining that the interim post holder was acting as de facto SRO. The collection of equalities data in respect of people under RIPA investigation was confirmed.

Contract Waivers and Extensions

This new standing item provided an update on contract waivers. The committee noted that under the Council's Scheme of Delegation, all contract waivers must be reported to the next meeting of the committee responsible for audit functions. Members sought clarification on the delegation limit for the Section 151 officer before consulting the relevant Cabinet Member, and requested that this information be circulated. For future meetings, the table of waivers in Appendix 1 was to be amended to include the name of the Director, Team, and date of requesting the waiver. Clarification was also requested on the meaning of Great Estates Additional Design Sprints and the term Light Touch Regime, which relates to Schedule 12 of the public contract regulations allowing for more flexible procurement in certain service areas.

Year Ahead Forward Plan

The committee considered the Forward Plan. It was resolved that the committee would continue to receive the half-yearly report on Children Services – Further Progress on the Ofsted Report with Quality Assurance. The committee also agreed to start receiving half-yearly updates on the SEND Written Statement of Action from April 2023. Discussions also took place regarding the Budget Working Commission's recommendations on financial probity, including the level and use of reserves, and the co-ordination of workplans between Scrutiny and Audit Committees to avoid duplication. The effectiveness of the Overview and Scrutiny Committee and Audit Committee was also to be reviewed in light of a recent Grant Thornton report.