The Audit Committee of Havering Council met on Tuesday 25 November 2025 to discuss risk management, treasury management, and internal audit progress. Key decisions included the agreement of recommendations from the risk management and treasury management reports, and noting the progress of internal audits.

Risk Management Update

The committee received an update on the Council's Strategic Risk Register and the Significant Governance Issues Action Plan. Jeremy Welburn, Head of Assurance, presented the report, highlighting that the Strategic Risk Register currently lists 11 risks. The report detailed the current risk ratings, target risk ratings, and mitigation strategies for each.

A significant concern identified was Financial Resilience - Inability to deliver a balanced budget, which was rated as 'High' risk. Mitigation strategies include lobbying the government for fair funding, reviewing the Council's structure, developing savings proposals, and reprofiling the capital programme.

Another 'High' risk identified was Potential harm to people we owe a duty of care. Mitigation efforts include implementing a Quality Assurance Framework for the care market, developing a business case for social care staffing resilience, and ensuring appropriate safeguarding processes are in place.

The risk of External Inspection Requirements was also highlighted as 'High'. This relates to conditions attached to the Capitalisation Direction, requiring external assurance on financial management, governance, and decision-making processes, as well as additional inspection and reporting requirements following reviews by Ofsted, CQC, and the Housing Inspectorate. Mitigation includes implementing government productivity plans and undertaking peer reviews.

The committee also discussed the risk of Failure to deliver strategic corporate priorities, rated as 'Medium'. Mitigation involves reviewing the Corporate Plan, implementing an engagement strategy, and ensuring transparent communication.

Other 'Medium' risks discussed included:

• Loss of Organisational Capacity and Knowledge, with mitigation focused on a People Strategy refresh and investment in staff development.
• Organisational Culture, Governance and Capability, where efforts are underway to improve the People Strategy and embed governance and compliance through the Internal Audit Plan.
• Regeneration (Shaping the Future of the Borough), with mitigation involving reviewing affordable housing products and scheme viability.
• Severe Weather and Environmental change, with actions including the implementation of the Havering Climate Change Action Plan.
• Significant operational disruption to the Council's critical services, with mitigation involving robust Business Continuity Plans and regular testing.
• Technology: Cyber Security, where mitigation includes maintaining an Information Assurance Team and a Cyber Security Programme.

The committee also reviewed the Significant Governance Issues (SGIs) Action Plan 2025/26, which stems from the 2024/25 Annual Governance Statement. Key actions include continued lobbying for fair funding, robust procurement practices, and addressing issues identified in the 'Starting Well' social care department following an Ofsted inspection. The committee agreed to note the progress on these issues.

Internal Audit Progress

Jeremy Welburn, Head of Assurance, presented the Internal Audit Progress Report. He noted that the audit plan is aspirational and adaptable, with priorities adjusted based on emerging risks and resource availability. The report indicated that some audits had not yet started due to the need to prioritise more resource-intensive work.

Councillor John Crowder raised concerns about the number of audits not yet started, questioning the confidence in their completion by year-end. Mr. Welburn acknowledged that not all listed audits would be completed and that a review of priorities was ongoing, with some likely to be carried forward to the next year. He committed to providing a revised plan with updated timelines before the next committee meeting.

The report also detailed progress on counter-fraud work, noting a typo in the number of housing cases. The committee agreed to move into a closed session to discuss an exempt report.

Half Year Treasury Update

Tony Piggott, Treasury Manager, presented the Mid-Year Treasury Management Report for the period 1 April 2025 to 30 September 2025. The report highlighted that the investment portfolio yielded 4.70%, exceeding the budgeted return. The Authority's debt totalled £606.5 million, fixed at an average rate of 3.70%. No new debt was issued during the period as cash levels remained high.

Councillor Crowder sought assurance regarding the safety of investments made with other local authorities, asking if the Council would be a preferential creditor. Mr. Piggott confirmed that in the event of a local authority default, the Council would be first in line to be repaid.

The report also detailed the economic outlook, including interest rate forecasts and the Bank of England's Monetary Policy Committee decisions. MUFG Corporate Markets' forecast indicated a fall in interest rates over the next year or two. The committee noted that the Authority's treasury activities remained within the set limits and prudential indicators. The report also detailed the Authority's capital expenditure plans and changes to prudential indicators, including the Capital Financing Requirement (CFR) and borrowing limits. The committee agreed to note the recommendations set out in the report.