The Audit and Risk Committee of Islington Council is scheduled to convene on Tuesday 22 September 2026. The meeting's agenda is expected to include discussions on the council's financial performance, fraud prevention activities, the use of investigatory powers, and the management of its reserves.

External Audit – Value for Money Risk Assessment

The committee is expected to review the external auditor's Value for Money Risk Assessment report for the 2025/26 financial year. This report, prepared by KPMG LLP, assesses whether the council has appropriate arrangements in place to ensure value for money across three key domains: financial sustainability, governance, and improving economy, efficiency, and effectiveness (IEEE).

The assessment indicates that while there are no significant risks identified in financial sustainability, there are two significant risks identified within governance and one significant risk identified concerning IEEE. The report highlights concerns within the Housing Directorate related to procurement and contract management, governance and assurance arrangements, and consumer regulation downgrade and housing compliance risks. KPMG's planned response involves reviewing internal and external investigations, assessing approvals for expenditure, evaluating monitoring and escalation processes, and considering the extent to which identified issues point to broader weaknesses. The report also details the council's financial sustainability, noting a formal budget-setting process and ongoing monitoring, with no significant risks identified in this area. However, it does highlight that the council's capital programme delivery was at 58% of the approved budget for 2025/26, with delays in project timelines. The report also notes that the council's efficiency savings programme for 2025/26 delivered £10.814m of the £17.632m target, with the remainder deferred.

Annual Fraud Report 2025-26

The committee is expected to consider the Annual Fraud Report for 2025-26, detailing counter-fraud activities undertaken by the Corporate Anti-Fraud Team (CAFT), Housing Investigations, and Parking Fraud Investigations. In the 2025-26 period, CAFT received 129 referrals, leading to 35 investigations. Of these, 16 involved allegations against members of the public or organisations, with 3 substantiated and 6 not substantiated. The remaining 19 investigations concerned council employees or services, with 7 substantiated and 7 not substantiated. The report outlines savings and overpayments identified by CAFT totalling £324,773.53.

The Housing Investigations Team recovered 90 properties subject to tenancy fraud, preventing fraudulent Right to Buy applications and withdrawing housing applications, with the estimated cost of these frauds to the public purse being £5.9 million. The Parking Fraud Investigation Team reported on activities including issuing Penalty Charge Notices (PCNs) and confiscating badges, with borough-wide PCNs issued increasing to 1,272 in 2025-26 from 783 the previous year. The report also touches upon the new offence of failure to prevent fraud introduced by the Economic Crime and Corporate Transparency Act 2023.

The Council's Use of Covert Investigatory Powers (RIPA Annual Report 2025-26)

The committee is scheduled to receive an update on the council's use of covert investigatory powers under the Regulation of Investigatory Powers Act 2000 (RIPA). The report indicates that for the financial year 2025/26, the council did not authorise the use of any directed surveillance or covert human intelligence sources (CHIS). The report notes that the council's use of RIPA for directed surveillance or CHIS has reduced in recent years and has not been used since 2019/20, with the Department for Work and Pensions and the police possessing their own powers for such investigations. The council's RIPA policy is currently under review, and further training will be provided as necessary.

General Fund Reserves Policy

The meeting is also expected to address the General Fund Reserves Policy. This report outlines the purpose and categorisation of reserves held by the council, emphasizing that reserves are one-off in nature and should not be used to fund recurrent expenditure or structural budget gaps. The policy highlights the importance of maintaining adequate reserves for budgetary risks, unexpected events, and emergencies, noting that reserves provide resilience against financial shocks. The report assesses that the council's General Fund budget risk reserves remain above the minimum level of 25% of Core Spending Power (CSP), with an estimated headroom of approximately £10.8 million at the end of 2025/26. However, it also points out that Islington's General Fund reserves as a percentage of CSP and gross expenditure are below the average for Inner London boroughs. The report details various types of reserves, including Budget Risk, Specific Risk, Planned Spend, and Ringfenced reserves, and provides illustrative examples of potential financial risks that could impact reserves, such as cyber-attacks, major emergencies, and surges in demand for services like temporary accommodation.

A verbal financial update is also scheduled to be provided.