This meeting is expected to include discussion on a wide range of financial, governance, and strategic topics. The most significant items on the agenda are those related to the Council’s financial situation and its ongoing response to the Statutory Recommendations issued by the External Auditors.

Council finances and the External Auditor's recommendations

The meeting will include reports on several aspects of the Council’s finances, including the current Corporate Risk Register, the Risk Management Strategy and Policy Annual Review, and the Internal Audit and Counter Fraud progress for 2024/25. Notably, the Council will also be discussing its response to the Statutory Recommendations issued by the External Auditors, Forvis Mazars LLP, following their audit of the 2023/24 financial year.

The External Auditors identified a number of significant financial challenges facing the authority, including the lack of a buffer in the general fund and Housing Revenue Account (HRA)¹ reserves, ambitious savings targets, and ongoing concerns around financial sustainability.

In particular, the External Auditors have expressed concerns about the Council's efforts to identify additional savings and efficiencies to mitigate forecast overspends for 2024/25. The Auditors have recommended that the Council ensures that planned savings and efficiencies for 2025/26 are achievable and that cost control measures are in place to avoid overspends.

The report pack also contains the Council's response to these recommendations. In this, they say that they are taking a number of actions in response to the Statutory Recommendations, including:

Savings and efficiencies in the current financial year continue to be identified by service areas as part of the Council’s budget monitoring arrangements, to mitigate forecast overspends.

The Council also plans to review its reserves strategy for both the general fund and the Housing Revenue Account (HRA), with the aim of replenishing the level of unallocated reserves. The HRA reserves strategy will form part of a wider HRA financial recovery plan. The Council also intends to address the unfunded budget gap in its Medium Term Financial Strategy² as part of the budget planning for 2026-27.

Homes for Lambeth

Another point of discussion included in the meeting report pack relates to the Council’s progress on bringing housing services back in-house through Homes for Lambeth. This follows the Council's decision in December 2022 to reverse the decision it made in 2015 to set up Homes for Lambeth as an Arms Length Management Organisation.³ The External Auditors have recommended that the Council implement the key recommendation of the Kerslake report, which was commissioned by the Council in 2022 to review the strategic delivery of new affordable homes in Lambeth.

The Council's response included in the meeting documents states that the vast majority of the recommendations from the Kerslake report have been implemented and significant progress has been made. They go on to state that the financial considerations relating to bringing Homes for Lambeth back in-house are being developed. The response also says that a detailed plan setting out the financial considerations and recommended options will include confirmation of the appropriate accounting arrangements for transactions relating to Homes for Lambeth, the milestones and timetable for delivery. Progress against the plan will be incorporated into the Council’s formal finance performance reporting arrangements for 2025-26 and reflected in the 2026-27 and MTFS budget planning.

Risk Spotlight Item

The meeting report pack also includes a Risk Spotlight Item on the potential failure of suppliers, housing and waste. The documents do not contain a report on this topic and the agenda notes that it is for presentation only.

Work Programme and Action Monitoring Log

The meeting is scheduled to include a discussion of the Corporate Committee’s work programme for 2025.

The meeting documents also contain the Committee's action monitoring log, which lists a number of outstanding actions raised from previous meetings that are being actively followed up by officers. The outstanding actions include preparing a detailed report for the Committee outlining the Council's current policy and process for identifying and taxing empty homes and ensuring that the work programme includes an item on the Council’s disaster emergency planning arrangements.

Internal Audit and Counter Fraud

In addition to discussing the progress of internal audit and counter fraud work already underway, the meeting is also expected to include a discussion of the proposed Internal Audit and Counter Fraud Risk-Based Plan for 2025-26. This includes a proposal to move away from an annual planning model and adopt a six-month rolling plan that will be reviewed and prioritised quarterly. The six-month plan will identify the priority reviews for the first six months and a reserve list from which reviews will be drawn for the following six months.

The documents note that the plan has been designed around the current and planned level of internal audit and counter fraud resources likely to be available over the course of 2025/2026. The internal audit activity will be delivered by a combination of the in-house team and an external provider (BDO). This arrangement will allow the council to flexibly increase or reduce support to align with assurance requirements, the availability of resources, and expertise.

Tower Hamlets Environment Trust

The Committee is also scheduled to receive the annual report from Tower Hamlets Environment Trust which provides grants to voluntary organisations in Tower Hamlets to protect and improve the environment. It is not clear why this item is included in the work programme for Lambeth Council, and no further detail is provided in the meeting report pack.