The Audit Committee met to discuss the annual review of the Regulation of Investigatory Powers Act 2000 (RIPA), accounting policies, the annual report of the audit committee, and the year ahead forward plan. The committee approved the accounting policies for 2024/25 and noted the contents of the RIPA policy review, the audit committee annual report, and the year ahead forward plan. The committee also discussed the council's exceptional financial support (EFS) and its implications for the audit committee.

Exceptional Financial Support

The committee discussed the organisation's exceptional financial support (EFS) at length, and how it relates to the role of the audit committee. Councillor Terence Paul, Scrutiny Commission Chair, noted that somebody needs to watch the watcher in this organization, and that this role is divided between the audit committee and overview and scrutiny committee.

The council's Corporate Director of Resources, Conrad Hall, clarified that the government has not given the council money, but has given them accounting flexibility on how we use our own assets. This flexibility allows the council to use capital receipts, typically restricted to capital projects, to cover temporary accommodation costs.

Councillor Areeq Chowdhury asked if the council could use the EFS for other directorates where there are funding issues, such as SEND¹. Conrad Hall responded that the application was very clear that the pressure arose from housing, so the intent would be to use it to cover the gap caused by housing.

The committee agreed that when Conrad Hall receives clarification from the government as to the conditions imposed upon the EFS, he will write to the chair of overview and the chair of the audit committee for clarity.

Accounting Policies

The committee reviewed and approved the accounting policies for 2024/25, as set out in Appendix 1 of the Public reports pack. These policies are in line with the Code of Practice on Local Authority Accounting in the United Kingdom 2024/25.

There were two major changes to accounting policies in 2024/25:

• Capitalisation of debt charges: The council will capitalise borrowing costs incurred against major projects, whilst the assets are under construction.
• Leases: Under IFRS 16², leases are a contract that conveys the right to use an asset for a period of time in exchange for consideration with the right to use the asset and the associated liability being recognised on the balance sheet and accounted for as finance leases.

Councillor Areeq Chowdhury raised concerns that capitalising these charges means increasing the value of the assets, which could make the accounts look healthier in the short term but lock the council into a minute slowly over the long term. Conrad Hall responded that the policy ensures that all assets are treated the same, according to their value, rather than differently according to how they were acquired.

Councillor Terence Paul asked why this was not a capitalised like this previously. Conrad Hall said that the council has been constantly reviewing policies and treatment, and this came up as an anomaly. He added that as the council's construction and acquisition capital program has ramped up to speed, getting a policy like this right is more important.

Councillor Terence Paul also asked about accounting for heritage assets, particularly in the context of the new heritage centre. He asked how the council will account for donations of assets to the centre, and how the value of the centre will be deemed in part by the value of the assets that are going into it. Conrad Hall responded that the council will be having discussions with their auditors as to the best approach and what happens in other authorities as well. He added that the building is being used for an operational purpose, the provision of service, a heritage centre, so the council will continue to apply the same accounting policy in respect of that building as other buildings to ensure consistency.

Councillor Terence Paul suggested that officers engage with the heritage team to ensure that accounting policies are taken into consideration in the heritage centre's development.

RIPA Policy and Procedure Document Annual Review

The committee reviewed the annual update on the Regulation of Investigatory Powers Act 2000 (RIPA). Alison Sherwood, Acting Head of Community Safety Enforcement, introduced the report, noting that there were a couple of updates marked in red. She also noted that the lead officer is Sean McDermid, Director of Community Safety, along with herself, and assistance from legal services.

Alison Sherwood stated that within the service community safety enforcement, there have been no RIPA applications this year or last year. All CCTV is overt with signage, with fixed cameras and 4G movable cameras. The environmental team also uses the cameras, but they are all overt as well.

Councillor Terence Paul asked how a serious criminal offence is defined when making an application for RIPA. Alison Sherwood responded that RIPA applies to covert surveillance where it's directed, and it specifies for local authority matters that it's to do with a criminal investigation, which relates to an offence punishable by a maximum custodial sentence of six months or more for an offence relating to underage sales of alcohol or tobacco or nicotine inhaling products, and you're likely to obtain private information.

Councillor Terence Paul raised concerns about surveillance and investigative activities since October 2023, and the lack of RIPA applications. He referenced a Newham member involved in Newham 18, and questioned whether that activity falls under RIPA. Alison Sherwood responded that the policy is to do with particular surveillance that's carried out, that's triggered by RIPA. She directed Councillor Terence Paul to page 30 of the agenda, which defines what surveillance includes. She stated that if monitoring, observing, listening to persons and their movements and conversations and their activities and communications and recording anything in the course of that is part and parcel of what an investigating officer is going to do, and if it's covert so that the person doesn't, is unaware that it's taking place, then that's when the council would have to think about is RIPA engaged and what's, you know, do we need to complete an authorisation?

Councillor Rita Chadha asked about investigations of ASB³ in social housing, gang activity on estates, and fraud in relation to benefit fraud and staff fraud. She asked if those investigations meet the threshold for RIPA, and if not, what the council is doing to gather evidence. Alison Sherwood responded that the council doesn't always have to use this type of surveillance in order to gather evidence. For example, if there's antisocial behaviour, depending on what's happening, if it's in social housing, then usually officers can give their evidence of what they view in a section nine witness statement, and that's sufficient.

Councillor Kulsum Seth clarified that RIPA is one tool that the council has in its armour to undertake an investigation, but it's not always applicable. It's about the circumstances of the investigation, and whether directed surveillance is necessary to obtain the evidence that's required.

Councillor Lewis Godfrey asked if there have been applications or considerations of using this kind of surveillance to tackle fly-tipping. Alison Sherwood responded that even with overt surveillance, the council does catch people committing offences or fly-tipping. She added that cameras don't necessarily put people off from doing things, and some of the high streets are full of cameras and there is still a lot of crime on there.

Councillor Terence Paul suggested that the next report include more explanation about when RIPA is applicable, and a table setting out when and how the organisation did all the compliance issues set out in section 4.4 of the report.

Audit Committee Annual Report

The committee considered the draft annual report for submission to the council annual meeting in May 2025. Councillor Terence Paul suggested that the report note that there are discussions going on at the Constitutional Review Group about changing the title of the committee to audit and governance, which he thinks reflects the full breadth of the discussions that go on there.

Councillor Areeq Chowdhury noted that the membership next to his name should stick as May 22, not July 24. He also suggested grouping the items in section 3.1 into key thematic areas, and using a stronger word than considered, such as reviewed.

Councillor Rita Chadha suggested thinking more about celebrating the achievements in a bit more of a way, and adding a sentence at the end of each item saying what the impact was.

Councillor Terence Paul said that as the organisation has had EFS, the committee might need to look at this going forward. He asked how the organisation guards the guard, and how the council knows what's being done in its name.

Conrad Hall clarified that the government has not given the council money, but has given them accounting flexibility on how they use their own assets. He added that the local government minister has confirmed in principle support for that application, which is £16 million in 24/25 and £51.2 million in 25/26. He stated that the government may or may not choose to attach any conditions to it.

Year Ahead Forward Plan

The committee discussed the year ahead forward plan, referencing Councillor Terence Paul's comment in the previous item about including an item on EFS and how the committee looks at that.

Councillor Rita Chadha suggested adding a training update on the constitution and any changes related to that, to ensure members understand the changes.

Councillor Terence Paul stated that when the finance council brings forward a quarterly savings tracker, it should also include the savings from the transformation program, to guard against double counting.