The Audit and Performance Committee of Westminster Council met on Wednesday 2nd December 2015 to review the council's financial performance, audit findings, and corporate complaints. Key discussions included the 2014/15 annual audit letter from KPMG, an update on corporate contract management, and the finance and performance monitoring report for the second quarter. The committee also reviewed the headline results from the 'Your Voice' staff survey 2015 and received an internal audit progress report.

KPMG Annual Audit Letter 2014/15

The committee received the Annual Audit Letter from the council's external auditors, KPMG, detailing the key findings from the audit of the council's financial statements for the year ending 31 March 2015. The City Treasurer, Steve Mair, informed the committee that a comparative report on local government accounts for 2014-2015 was expected, which would rank the council's financial statement filing performance against other local authorities.

Discussions also addressed an increase in the audit fee, which was partly attributed to objections raised by an individual concerning motorcycle parking charges. While these objections highlighted minor weaknesses in procurement processes, they were not considered fundamental problems. The committee was assured that KPMG would be responsible for signing off all accounts from 2007/08 to 2014/15.

Regarding the unqualified Value for Money conclusion, concerns were raised about identified weaknesses in procurement, including non-compliance with the Procurement Code, contract extensions without contractual provision, and an outdated or incorrect contracts register. The Chief Procurement Officer, Anthony Oliver, confirmed that remedial actions were being taken to ensure full compliance. He noted that contract extensions, particularly in Adult Social Care and Children's Services, were often necessary due to the consideration of government legislation on commissioning strategies and were scrutinised by Cabinet Members. The process for extending contracts was described as rigorous, involving approval by the Westminster Tri-Borough Approval Board and relevant Cabinet members.

Decision: The committee noted the Annual Audit Letter 2014/15, including the status of objections to the authority's accounts.

Corporate Complaints 2014/15

A report summarising the council's Annual Complaints Review for 2014-15 was presented, covering complaints at Stages 1 and 2, those received by the Local Government Ombudsman (LGO), and a review of correspondence with the Leader and Cabinet Members. Siobhan Coldwell, Chief of Staff, expressed satisfaction with how services were handling complaints, noting general improvement. The council is implementing a new complaints reporting system, expected to go live on 1 April 2016, which will enable more comprehensive data analysis and trend identification.

Sue Howell, Complaints and Customer Manager, highlighted a decrease in the total number of complaints and a significant fall in the percentage of upheld complaints, particularly at Stage 2. The council has introduced a new target of 10 working days for responding to complaints at each stage, totalling 20 days for the entire process, which compares favourably with other London authorities. The LGO provided no comment on the council's performance in its annual review but may do so in the future.

The committee discussed the decision not to create a Tri-Borough Complaints Team, with the analysis indicating no robust business case for savings. It was explained that different boroughs have distinct complaints processes, and a shared service would have required increased resources for some. Complaints relating to Tri-Borough Services are investigated by the borough where the service is located. Adults and Children's Social Services, being Tri-Borough services, have their own statutory complaints procedures.

A greater volume of complaints was noted in the Finance department, largely due to the nature of services such as Housing Benefit, Council Tax, and Business Rates, where delays in processing claims or issues with payments can lead to complaints. Regarding planning, the low volume of formal complaints at Stage 1 was contrasted with a high volume of correspondence to the Cabinet Member. This was clarified by the fact that appeals against planning applications are handled by the Planning Inspectorate, an independent body.

Decision: The committee noted the information in the Annual Complaint Review 2014/15 and welcomed the improvement in performance and reduced timescales for responding to complaints.

Actions:

• Progress reports on the implementation of the new complaints reporting system and performance data once live will be provided.
• A note on the reasons for the increase in complaints concerning CityWest Homes staff behaviour will be provided.
• Details of the processes in place to ensure that homes offered to social housing tenants match their Housing Benefit allowance will be provided.

Update on Corporate Contract Management

The committee reviewed a report on compliance with contract record keeping within CapitalEsourcing, the implementation of the Contract Management Framework (CMF), and procurement training. Anthony Oliver, Chief Procurement Officer, reported an increase in compliance with contract record-keeping from 41% to 86% since July, with three departments achieving 100% compliance. The aim is to achieve full compliance across all departments by early in the New Year. Recording of contract performance had improved from 30% to 44%, with a drive planned for the New Year to ensure full compliance in this area, supported by training for contract managers.

Mandy Gado, Head of Procurement Operations, explained that the CMF, finalised since July, is designed to support a consistent approach to managing diverse contracts across Tri-Borough, focusing on risk management and opportunity exploitation. Mr Oliver emphasised that an accurate contracts register helps manage contracts effectively, including alerting managers to upcoming contract end dates and the need for re-procurement.

Officers confirmed that work was underway to map new organisational hierarchies within CapitalEsourcing to align with the Managed Services Agresso system. The system allows for the input of generic and specific contract data, enabling performance comparisons. The committee discussed staff retention of contract managers, who are based within individual directorates, and the requirement for all new staff managing contracts to receive relevant training. The council also plans to develop training on negotiation skills.

Decision: The committee noted the report.

Action: Regular progress reports on meeting compliance targets for contract record keeping within CapitalEsourcing will be provided.

Finance (Period 6) and Performance Business Plan (Quarter 2) Monitoring Report

Steve Mair, City Treasurer, presented an overview of the council's financial position at Period 6 (September 2015), projecting an overall underspend of £1.082 million against the budget and a £2.588 million underspend for capital expenditure. The Local Government Finance Settlement was due to be announced, with uncertainty regarding whether it would be a one or two-year settlement. Opportunities within the Directorate of the Executive Director of City Management and Communities were partly related to car parking income.

Damian Highwood, Evaluation and Performance Manager, introduced the performance management framework update for April–September. Concerns were raised about the 'Your Voice' Staff Survey 2015 results, particularly regarding staff feeling safe to speak up, being supported through change, and satisfaction with the work environment. Carolyn Beech, Director of HR, outlined the council's Leadership Academy programme to equip managers with leadership skills and noted that departmental managers were asked to produce action plans by 20th December in response to survey results.

The committee discussed population changes in Westminster, noting a pronounced reduction in the female population and seeking clarification on the origins and reasons for international migration. Mr Highwood suggested that affordability and the impact of benefit caps might be contributing factors to families moving out of the borough, potentially affecting school places in the long term.

Concerns were also raised about the number of empty properties and the potential for the council to charge a premium on unoccupied and unfurnished properties. The City Treasurer advised that due to the council's low Council Tax base, the revenue generated would be minimal compared to administration costs.

The increase in time taken to process planning applications was attributed to unfilled posts within the department, which were being addressed. The financial impact of the extension of 'Right to Buy' to housing associations, funded by the sale of high-value council homes, was estimated to result in a £1.5 million annual revenue loss due to a delay between sales and the acquisition of replacement properties.

Regarding the Digital programme, rated as red/off track, issues related to customer contact methods and flexible working arrangements for on-street staff were highlighted.

Decision: The committee noted the report.

Actions:

• Clarification will be provided on whether the capital project to redevelop the Marylebone library is behind schedule and its impact on the council's capital budget.
• Details on measures to address the rising numbers of Unaccompanied Asylum Seeking Children will be supplied.
• A breakdown by nationality of international migrants, including the context for their migration, will be provided.
• Details on current and future school capacity, given the decline in the female population and potential falling child numbers, will be supplied.
• Information on whether the increase in population is matched by an increase in council tax dwellings, and data on empty properties, will be provided.
• Details of rough sleepers who are not the responsibility of the council will be supplied.
• Details of where fly-tipping incidents occur in Westminster will be supplied.

Internal Audit Progress Report

The committee noted the work of the Internal Audit Service, with generally effective internal control systems in the areas audited, although one limited and one no assurance report were issued concerning Tri-Borough fostering and adoption, and Tri-Borough multi-user log-ins, respectively. Follow-up reviews confirmed the consistent effectiveness of implementing medium and high-priority recommendations.

Concern was expressed that no internal audit work had been undertaken on the council's key financial systems due to issues with the Managed Services Programme implementation. Moira Mackie, Internal Audit Manager, explained that as systems were still being changed, key controls had not yet been reviewed. The Finance team was undertaking extensive testing, and Internal Audit planned to conduct additional testing to enhance, not duplicate, existing work.

Decision: The report was noted.

Action: A note will be provided on whether the recommendations regarding Tri-Borough multi-user log-ins have been implemented.

Headline Results from 'Your Survey' 2015

The committee reviewed the headline results from the 'Your Voice' Staff Survey 2015, an annual survey designed to gather staff feedback. Key areas of improvement included IT and resources, perception of fair pay, learning and career opportunities, and a belief that action would be taken based on the survey. Areas that declined were appraisals, understanding of objectives, and communication. Staff also expressed a desire to better understand what is happening within the council. Carolyn Beech, Director of HR, attributed some of these responses to the introduction of the Managed Services Programme and a large organisational reorganisation.

Improvements were noted in areas identified for focus in 2014. Each department will develop an action plan, and corporate actions will be developed for bullying and change management. The committee expressed disappointment that the number of staff wishing to work at the council in 12 months was below the local government benchmark and that staff did not feel sufficiently informed about council matters. Miss Beech acknowledged that future reorganisations would be inevitable due to financial savings required and that these would need to be managed better, with input sought from trade unions.

While satisfaction with IT had increased, overall satisfaction levels remained low. The survey did not identify specific IT issues staff were dissatisfied with.

Decision: The report was noted.

Action: A breakdown of the 'Your Voice' Staff Survey results by Department will be provided as part of a more detailed paper.

Work Programme

The Chairman raised concerns about the potential long-term geological impacts and structural integrity of buildings resulting from the large number of basement extensions granted by the council. The City Treasurer believed the council was fully insured and undertook to raise the matter with the Council's Risk Manager.

Decisions:

• The agenda items for the next meeting on 3rd February were noted.
• The responses to actions arising from the meetings on 17th September and 3rd November were noted.

Actions:

• A note on the council's insurance arrangements in relation to legal challenges associated with basement extension consents will be provided.
• Independent Persons on the Council's Standards Committee will be invited to the next meeting on 3rd February 2016 to discuss maintaining high ethical standards.

Lessons Learned - Managed Services Programme

The committee received a report on the key findings from a lessons learned review of the Managed Services programme, conducted by an external auditor.

Decision: The report was noted.

Actions:

• The cost of the review undertaken by Mazars will be provided.
• An explanation of how the list of interviewees for the review was selected will be provided.