This meeting of the Audit and Risk Management Panel will include discussions on the final accounts for 2023/24, as well as the Treasury Management and Capital Strategies for 2025/26. In addition, the panel will note and comment upon the Council’s Strategic Risk Register.

Statement of Accounts 2023/24

The panel will discuss the final accounts for the 2023/24 financial year. This will include consideration of the Audit Completion Reports for both the Royal Borough of Greenwich and the Royal Borough of Greenwich Pension Fund. The Audit Completion Reports are prepared by the Council’s external auditors, Forvis Mazars, and set out any amendments to the draft accounts that they require.

Treasury Management and Capital Strategy 2025/26

The panel will discuss the Council’s Treasury Management Strategy for 2025/26. This document sets out how the Council intends to manage its borrowing, investments and cashflow and how it intends to fund its Capital Programme. The panel will also discuss the Capital Strategy, which sets out the Council’s plans for capital investment over the next ten years.

A major concern for the Council is how to manage the expected increases in its Capital Financing Requirement (CFR¹).

The Capital Programme includes a commitment to invest £25.74 million in Housing Investment (General Fund) and £61.09 million in Housing Development (General Fund). In addition, the Council is committed to providing loan facilities of approximately £55 million to the housing company Meridian Home Start, which provides affordable housing within the Borough.

The Capital Strategy acknowledges that:

The borrowing requirement arising from the Capital Strategy and Programme is inextricably linked to the Council Treasury Management Strategy and the ability for the Council to rely on the use of diminishing internal reserves and ability to fund long term debt finance costs.

It goes on to state that:

The need to continue to invest in the borough and its community competes alongside a wish to maintain and replenish internal reserves to bolster the Councils financial resilience; a more balanced approach to borrowing has therefore been adopted.

In September 2024, the Council launched the Greenwich Green Investment initiative, which enables residents, businesses and other organisations to make contributions to fund environmental sustainability projects within the borough. These “Community Bonds”, which offer a 4% annual return, are an example of the “innovative financing strategies” the Council is pursuing to help fund its capital investment.

Strategic Risk Register

The panel will discuss the Royal Borough of Greenwich Strategic Risk Register. This sets out the key strategic risks facing the Council, the controls in place to manage them and the actions that are being taken to mitigate them.

The Strategic Risk Register is owned by the Greenwich Management Team (GMT) and each risk is assigned to a designated director who is responsible for the risk.

One of the key risks facing the Council is the risk that it will be unable to balance its budget, which could require it to issue a Section 114 Notice². The Register currently assesses the likelihood of the Council failing to balance its budget as ‘Likely’.

The Register states that:

Section 25 of the Local Government Act 2003 requires the Director of Finance as the Section 151 officer to state their view in the budget report of the robustness of the estimates in the coming year, the medium-term financial strategy (MTFS) and the adequacy of reserves and balances.

Another significant risk relates to the Council’s commitment to achieving Carbon Neutrality by 2030. The Register currently assesses the likelihood of the Council failing to achieve this target as ‘Almost Certain’.

The Register records that the Sustainability Team is undertaking quarterly performance management reviews with other service areas to monitor progress in this area and that:

A full strategic review of the CNP will take place post 2025. This will include the appropriate risk assessments and whether RBG is on track to meet targets and what necessary changes are required to effectively manage the identified risks - which may include target date changes and a third action plan amongst other considerations such as external validation.