The Audit and Performance Committee of Westminster Council met on Tuesday 27 February 2024 to review the council's financial performance, operational progress, and ethical standards. Key discussions included a significant projected overspend in the General Fund, primarily driven by increased Temporary Accommodation costs, and a detailed examination of the council's Q3 financial position. The committee also reviewed the Q3 performance report, noting progress against Key Performance Indicators (KPIs) and identifying areas of concern, particularly within Children's Services and customer service delivery. Furthermore, the committee received updates on the council's ethical standards, internal audit progress, and the proposed internal audit plan for the upcoming year.

Q3 Performance Report

The committee received an overview of the Quarter 3 Performance Report, covering October to December 2023. Nick Byrom, Strategic Performance Manager, presented the report, highlighting that while many KPIs were on track, some areas required attention. The committee raised concerns about the potential impact of a 30% staffing reduction within the Integrated Care Board (ICB) and sought assurances on how the council would mitigate this, particularly regarding preventative care and carer support. Updates were also requested on the council's approach to complying with the Building Safety Act 2022, including the number of buildings with cladding similar to Grenfell Tower. The committee noted the new Planning Guarantee and its potential financial implications, requesting further information on the monitoring framework. While acknowledging that some KPIs in Children's Services were at risk of not meeting targets, the committee was reassured that the service generally outperformed other local authorities. The performance of customer contact centres was discussed, with a commitment to improve resilience and upskill staff. The committee also queried the Westminster Adults Employment Service's target achievement and the challenges faced due to the Cost-of-Living Crisis, requesting a review of the service model. Concerns were raised about construction market volatility impacting the viability of schemes like Church Street and Ebury Bridge. The committee also noted the ongoing trend of customer services failing to meet targets, particularly in relation to Stage 2 complaints and increased call volumes due to repair demands, suggesting this issue be referred to the relevant Policy and Scrutiny Committee for further investigation.

Q3 Finance Monitor

Gerald Almeroth, Executive Director of Finance and Resources, presented the Q3 financial monitoring report. The committee noted a projected overspend of £2.7 million in the General Fund revenue, a shift from the previous quarter's projected underspend, largely attributed to increased Temporary Accommodation (TA) costs and reduced town planning income. The Housing Revenue Account (HRA) was forecast to have a deficit of nearly £2 million, primarily due to rising repair costs, which would be offset by earmarked reserves. The Capital Programme showed a projected underspend of £35 million, mainly due to delays in TA acquisitions, with these projects expected to be carried forward and expanded. The committee discussed the £3 million increase in contract inflationary pressures, which had been factored into the budget for Full Council. They also engaged in a detailed discussion about the worst-case scenario for TA costs, with officers assuring the committee that the situation was being monitored weekly and interventions were in place. The use of high-cost hotels and associated expenses were highlighted as an area requiring transparency, with these issues to be raised at the Housing and Regeneration Policy and Scrutiny Committee. The financial risk associated with families having no recourse to public funds was acknowledged, with plans to incorporate this pressure into future budgets. The committee noted the continued reduction in planning income, which had been built into the budget, and discussed the increase in road management income and Penalty Charge Notice income. They also noted that business rates and council tax collection rates were still recovering post-COVID-19, with council tax collection remaining behind target due to a transient population. The committee requested further information on road management income and clarification on the Prudential Indicators.

Ethical Standards Report

Joyce Golder, Principal Solicitor for Bi-Borough Legal Services, presented the Ethical Standards Report. The committee noted that three complaints against councillors were not referred for a hearing, with the Monitoring Officer confident that training and direct engagement with the councillors involved had resolved concerns. The committee was pleased to see a decreasing trend in staff disciplinary cases, whistleblowing, and grievance issues, attributing this to ongoing monitoring and a new framework. Significant changes to the Procurement Code were discussed, aimed at ensuring compliance and improving modern slavery statements, with an annual refresh of the code anticipated due to the evolving procurement landscape. The committee requested detailed feedback on two ethical conduct cases from 2022/23. Concerns were raised regarding the council's Declarations of Interest, Gifts, and Hospitality policies for both councillors and officers, with an emphasis on transparency. The committee noted that inappropriate behaviour, bullying, and harassment at work remained at 13%, and while this was recognised as inadequate, an internal campaign was planned to address the issue.

Internal Audit Progress Report

Moira Mackie, Head of Internal Audit, provided an overview of the Internal Audit Progress Report. The committee was pleased to note that most audits were on track for completion by the end of the reporting period. The report highlighted one audit with limited assurance regarding Section 106 and Community Infrastructure Levy (CIL) funds, with significant improvements already made following the recommendations. The committee welcomed the update that there were no other major issues of concern.

Internal Audit Plan 2024/25

Moira Mackie also presented the draft Internal Audit Plan for 2024/25. The committee acknowledged the challenges in developing an audit plan due to frequently changing risks and noted that the plan was a collaborative effort. A detailed discussion ensued regarding cyber-attacks, identified as a continually high risk. The committee queried the tests undertaken for officers and councillors, and was reassured by the mandatory cyber-security training for staff and the inclusion of cyber-security in the councillor induction course. The committee requested that the issue of cyber-security awareness be raised directly with councillors. The inclusion of financial risks in the strategic risks noted in the audit plan was also discussed.

External Audit Plan

Jo Brown, Audit Partner from Grant Thornton, provided an overview of the External Audit Plan. The committee noted that the Auditor's Annual Report would combine reporting for the 2021-22 and 2022-23 financial years. While the report was largely backward-looking, it contained forward-looking elements regarding sustainability and improvement actions. The committee expressed appreciation for Grant Thornton's dedication in delivering the previous audited accounts despite sector-wide challenges. They were pleased to note that Westminster was a priority for Grant Thornton's resourcing plan for the upcoming audit. The committee also discussed how the council would work with Grant Thornton to address the recommendations made in the Auditor's Annual Report, acknowledging areas for improvement and welcoming the council's proactive approach, particularly within the Housing Service.