The Audit and Performance Committee of Westminster Council met on Tuesday 4 November 2025 to review the audited financial statements for the Council and the Pension Fund. Key discussions included the Annual Complaints Report, which highlighted improvements in response times despite an increase in Stage 2 complaints, and the significant financial undertaking of implementing IFRS 16, which was managed well by officers. The committee also received the External Auditor's Annual Report, which gave a positive assessment of the Council's value for money arrangements.

Annual Complaints Report

The committee received an overview of the Annual Complaints Report for 2024-25. Zoe Evans, Complaints and Customer Manager, presented the findings, noting a 15% reduction in Stage 1 complaints compared to the previous year, with an 81% response rate within the target time, a significant improvement from 57% in the prior year. Stage 2 complaints, however, saw a 37% increase to 731, with 72% responded to within the target time, up from 33% the previous year.

A key concern raised was the escalation rate from Stage 1 to Stage 2 complaints, which has risen to 30%. While there is no specific target for this escalation rate, it was noted that a large proportion of these are attributed to the Housing Service. This increase is partly due to a campaign to raise awareness and accessibility of the complaints process, alongside the introduction of a statutory complaint handling code for social housing complaints, which simplifies the process for residents. It was also noted that this trend of increased escalated complaints is reflected sector-wide across social housing landlords.

Children's Services also saw a significant increase in complaints, particularly statutory complaints, with one complainant making 15 complaints. The committee was informed that this increase is partly due to greater awareness of the complaints procedure, including work with young people and fathers/male carers, and the increased accessibility provided by Artificial Intelligence (AI) tools.

Concerns were raised about the difficulty in determining whether the volume of complaints signifies major service delivery problems or is a result of easier complaint reporting. The committee requested that future reports include more data breakdowns, such as the number of complaints from the same complainant, the impact of AI on complaint reporting, and complaints related to negative service impacts on residents. More data comparisons to previous years were also requested.

A recurring theme in the complaints data was a lack of communication, particularly in the Housing Service. Officers are working with contractors to improve communication, especially regarding appointment keeping and the level of detail provided to residents about repairs. Proactive communication is seen as a key factor in preventing complaints.

The committee also discussed the Housing Ombudsman Landlord Performance Report, finding its presentation challenging to follow. Cases of racism experienced by residents from repairs operatives were also noted, with officers investigating how to strengthen reporting and handling of such complaints.

Regarding compliments, it was noted that while the volume is similar to last year, more work is needed to capture them as they are likely underreported. Positive feedback for the Housing Service is often embedded within satisfaction surveys.

The main risk identified from the complaints data is the use of AI tools, which can impact complaint volumes and distort data. Financial risks relating to compensation levels and the impact of increasing complaint volumes on officer time were also noted.

Audited Accounts and Audit Findings Report (Council)

Rikin Tailor, Director of Finance, introduced the Council's Audited Statement of Accounts and the Audit Findings Report. He noted that while there had been some adjustments following the audit, the overall financial position remained stable. The implementation of International Financial Reporting Standard (IFRS) 16, which deals with lease accounting, was highlighted as a significant undertaking that officers had managed well.

The committee sought assurance regarding the resources available for IFRS 16 implementation, and was informed that the Council had sufficiently resourced this, with diligent record-keeping proving beneficial. Concerns were raised about increasing cost pressures for the Council alongside reducing government settlements, and the unknown outcome of the Government's Fair Funding Review. It was noted that the budget-setting process reviews the Council's Medium-Term Financial Plan and will incorporate the impact of the Fair Funding Review once the outcome is known.

Major changes in the Comprehensive Income and Expenditure Statement (CIES) throughout the year were discussed, attributed to a mix of cost and income changes, technical adjustments, increased costs and overspends in temporary accommodation, and property revaluations. Movements in Adult Social Care accounts were explained by contract inflation, increased costs, demand, and complexity pressures, necessitating the use of reserves. Reductions in net costs in Environment and Communities accounts were due to increased income from Penalty Charge Notices, parking, and waste collection, alongside technical adjustments for depreciation.

Increases in business rate provisions and risk reserves were explained by complex arrangements for smoothing income, including the release of appeals provision in 2023/24 leading to a collection fund surplus added to business rates risk reserves. The appeals provision itself had reduced, but a new provision list means the volume of appeals is building again.

The committee was pleased to note that outstanding points from the auditor had been closed, and an unmodified audit opinion was expected. Grant Thornton's thanks to the Council's finance team for their hard work and the quality of the accounts produced were welcomed, particularly in relation to the IFRS 16 implementation.

The committee noted the expected unmodified opinion on the Council's 2024/25 Statement of Account, considered the findings in Grant Thornton's Audit Findings Report, approved the adjustments outlined in the AFR, and agreed to delegate any residual matters relating to the audit of accounts to the Section 151 officer.

Audited Accounts and Audit Findings Report (Pension Fund)

Phil Triggs, Tri-Borough Director of Treasury and Pensions, presented the Pension Fund Audited Accounts and Audit Findings Report. He highlighted that the Fund's asset valuation had moved into the £2 billion range for the first time. The audit process was described as smooth, with good communication between officers and Grant Thornton.

The committee queried the meaning and impact of asset ceilings on the accounts, understanding that it is a cap on the amount of pension fund surplus assets that can be presented under ISA19 regulation. Clarification was provided that the pension fund's funding level had reduced to 140% due to a more prudent approach to actuarial assumptions, which would aid the fund in the event of future downward asset valuations.

The committee was made aware of additional financial accounts restatements in the Letter of Representation and an ongoing administration issue regarding pension records for members pre-2000.

The committee approved the 2024/25 Pension Fund Statement of Accounts and noted the Pension Fund's Audit Findings Report.

External Auditor's Annual Report

Jo Brown, Partner at Grant Thornton UK LLP, provided an overview of the External Auditor's Annual Report. The report focuses on the Council's Value for Money (VfM) arrangements, assessing financial sustainability, governance, and economy, efficiency, and effectiveness. The committee was pleased to note that there were no new recommendations and previous recommendations had been satisfactorily implemented. Assurance was given that the Council's financial arrangements provide a solid foundation for future uncertainty.

The committee queried the absence of the Geoffrey Osbourne insolvency in the report, considering the substantial costs incurred. It was noted that while there was no major liability for the Council, work is needed on processes related to large contractors to prevent similar situations. The auditors confirmed they would investigate this and report back. The insolvency of NRS Healthcare was also raised, with a suggestion for the auditors to consider this in next year's audit.

An ongoing concern regarding waivers for Purchase Orders was discussed, with an understanding that contract awards and waivers are subject to significant scrutiny, leading to a dramatic reduction in their volume. Progress on this is regularly reported to the committee.

The committee noted the Value for Money Assessment and considered the findings, concluding that no significant weaknesses were identified. Actions were agreed for the auditors to investigate the Geoffrey Osbourne insolvency and consider investigating the NRS Healthcare insolvency.

The meeting concluded at 19:29.