The Governance, Audit, Risk Management and Standards Committee (GARMS) convened to discuss a range of topics, including the council's anti-fraud strategy, risk management, internal and external audit progress, treasury management, and member development. The committee noted the progress made in various areas, raised concerns about the sustainability of the council's borrowing, and discussed strategies for mitigating risks. The committee also approved the draft member induction programme for 2026.

Treasury Management Update

The committee discussed the treasury management performance update for Quarter 2 of 2025/26. A key concern was the sustainability of the council's borrowing, with Councillor Alex Prager questioning whether the current pace was sustainable. The report indicated that the council had borrowed £25 million for the Housing Revenue Account (HRA) at just over 4% interest, and approximately £40 million for other purposes.

It was noted that the council is taking out more external borrowing due to lower reserves, which had previously allowed for internal borrowing without incurring capital financing costs. The impact of borrowing is factored into the Medium Term Financial Strategy (MTFS) for the current and future years. However, borrowing to plug a budget gap increases the budget gap, which is not a sustainable option.

Councillor Alex Prager asked about the contingency plans if interest rates do not fall as forecasted. Officers responded that the current contingency involves short-term borrowing and refinancing, based on the expectation that longer-term borrowing is currently unaffordable. This strategy carries the risk that refinancing could occur when interest rates are higher. The council is monitoring available information and working with treasury advisors to inform their plans. They have also identified the interest rate levels at which it would be beneficial to lock in long-term borrowing.

Councillor Matthew Perlberg referred to a reported 60% decrease in the council's capital expenditure forecast for 2025/26 in relation to borrowing and requested information on which specific capital schemes had been removed or deferred to achieve this reduction. Officers agreed to provide a response after the meeting.

Richard Harbord, Independent Member, raised concerns about the scarcity of short-term borrowing towards the end of the financial year and asked about contingency plans. He also enquired whether the HRA capital programme was fully compliant with building safety requirements and the regulator's standards. Officers confirmed that the council had recently achieved a C1 rating, the highest possible, in a social housing inspection, indicating strong performance in building safety.

Councillor Alex Prager asked about the council's major advisor, MUFG. There was some confusion about whether MUFG Link Treasury Advisors were part of the major Japanese bank MUFG, but it was clarified that MUFG had bought out Link Treasury Advisors, so they are now a subsidiary of the MUFG.

External Audit Progress Report

The committee received an update on the external audit progress for 2024/25. The audit commenced in July, and good progress has been made, with 50% of the fieldwork completed. The audit team has finished the planning and risk assessment work, the interim testing work, and the work on system migration to Oracle.

A challenge identified was the timely production of annual accounts. There had been delays in providing information on debtors and creditors, and the auditors were working with the council to resolve this. The auditors plan to complete their findings report by February 2026 and sign the opinion.

Councillor Nick Mearing-Smith raised concerns about risks remaining in the council's IT and financial systems, a recurring theme in previous reports. The auditors clarified that their concern related to the Oracle system and the system migration. They had not found any material issues with the data migration or the preparation of charts of accounts.

In response to a question about mitigating risks, the auditors advised focusing on what the council can control, such as producing high-quality accounts. They also emphasised the importance of ensuring that borrowing is asset-backed and not for speculative purposes.

The auditors also provided an update on the pension fund audit, which had a disclaimed opinion in 2023/24. The goal for 2024/25 is to audit all closing balances and transactions. The auditors are on track to achieve this, which would allow them to move away from a disclaimed opinion in 2025/26.

The auditors identified three areas where work would be backstopped in the current year:

• Testing the completeness and accuracy of membership data.
• Normal and deficit contributions.
• Classification of employers' contribution disclosure.

The auditors emphasised the importance of accurate membership data for the triennial valuation¹.

Councillor Kath McGuirk raised concerns about bank reconciliations and was surprised that regular monthly reconciliations were not being done automatically. Officers acknowledged that there had been significant turnover in the pensions team, which had contributed to the issue. They stated that they were working to get back on track and implement good practices, including making better use of digital data and technology.

Corporate Anti-Fraud Team Half Yearly Progress Report

The committee reviewed the Corporate Anti-Fraud Team (CAFT) Half Yearly Progress Report for Quarter 2 of 2025/26. The report highlighted the results achieved in the first six months of the year, including two criminal executions related to polygamy and forced submission of timesheets. The team also reported on prevention work, such as refusing service for social care issues.

Councillor Paul Lemon enquired about the likelihood of recovering funds via the Proceeds of Crime Act 2002 from past fraud cases. Officers explained that the government runs an incentivisation scheme that splits the recovered funds, with approximately 33% going to the council after deductions for the government and the courts.

Councillor Paul Lemon also noted that tenancy fraud recoveries of £2.37 million and corporate fraud recoveries of £1.7 million were significant and asked whether there were any thoughts around prioritising those areas. Officers responded that tenancy fraud was a significant part of what they do in terms of monetary value, and they were looking at ways to enable more proceeds of crime investigations. However, they clarified that proceeds of crime investigations only arise after an actual fraud case has been identified and assets can be recovered.

Quarterly Risks Report

The committee considered the Quarterly Risks Report, which provided an overview of risks for the latest quarter, focusing on the council's strategic and high-level service risks. The report identified 183 open risks in total, with 24 considered strategic and seven high-level strategic risks.

Councillor Paul Lemon asked about a risk related to land where the depot is located, which belongs to Narrow Rail. Narrow Rail has requested the land back, and part of the depot function is moving to North London Business Park. Councillor Paul Lemon asked whether an assessment would be done on the potential move and its impact on the service that the depot provides. Officers said they would circulate that information.

Councillor Paul Lemon also raised concerns about risks related to the North London Waste Authority (NLWA) and the late delivery of investment in the program. He noted that there was reference to a potential increase in the treatment levy and asked for more information. Officers responded that there were potential changes mooted around 2020 in relation to the current North London heat and waste plant being constructed. There are some concerns around the delivery of that, and the Chief Executives, Directors of Environment, and Director of Finance are reviewing the possible outcomes. The risk reflects the uncertainty around the delivery of the heat network. Additional costs could result from the delay to the program, which would be shared by the seven authorities involved.

Internal Audit Exception, Recommendations and Progress Report

The committee reviewed the Internal Audit Exception, Recommendations and Progress Report for Quarter 2. The report indicated that internal audit had delivered 52% of its annual program, meeting its target. Eight reviews were completed, including an assurance report for Shalom Noam Jewish Primary School.

However, there had been a decline in the rate of completed actions, with 67% of actions due confirmed as implemented, below the target of 90%. The lower rate was mainly due to management not completing agreed actions or providing evidence on time. This issue had been raised by the chief executive at a recent senior management meeting.

An officer explained that the slippage in actions was mainly due to the implementation of a new asset management system called Concerto. The system is intended to cover the entire estate function, including property management and insurance reporting. The implementation date for property services is January.

Councillor Alex Prager noted that the council's borrowings were almost spiralling out of control and that multiple service loan governance improvements remained in progress. He sought reassurance that there were plans for proper oversight to be created and set down. Officers responded that they were working on this, triangulating the internal audit recommendations with the external audit recommendations. A Capital Program Board is due to meet in the new year to assess what has been agreed and whether it is being monitored, as well as benefit realisation.

Member Development Programme Update

The committee received an update on the Member Development Programme for 2022-2026. The report provided a backward-looking overview of the training delivered over the last year, including attendance information. The council had an interim review for charter plus status and was found to be on track.

Councillor Kath McGuirk raised concerns about enabling wider members of the community to become councillors, particularly those with normal jobs . She suggested that the council needed to look at how it was trying to encourage wider members of the community to become councillors and how training could support them.

Councillor Nick Mearing-Smith agreed that training sessions during the work day were difficult and suggested recording sessions to allow councillors to review them at their convenience. He also noted that the average age of a councillor across the UK is 60 and that Barnet was trying to combat that with more younger councillors who have other priorities.

Officers stated that they would continue to record all sessions where possible and share them afterwards. They were also open to new ideas and formats for training.

Member Induction Programme

The committee discussed the draft Member Induction Programme for 2026 onwards. The plan had been developed in consultation with the member development steering group, and comments had been sought from previous induction participants and senior officers.

Feedback from members who experienced the program in 2022 was to avoid overloading new members at the start but to ensure that essential sessions, such as planning and licensing training, adult safeguarding, and children's safeguarding, were delivered early on.

Councillor Paul Lemon suggested that training on Community Infrastructure Levy (CIL) and neighbourhood CIL (NCIL) should be included, as many councillors will end up reviewing submissions and scoring them. Officers agreed to schedule training on CIL and NCIL in advance of relevant meetings.

The committee agreed to note the draft member induction program 2026 and member development program 2026-2030.

Committee Forward Work Programme

The committee noted the forward work programme for 2025-2026.