The Corporate Committee of Lambeth Council met on Wednesday 04 February 2026 to discuss the external auditors' annual report and the council's statement of accounts for 2024/25. The committee approved the statement of accounts, delegated authority for final adjustments to the Corporate Director of Resources, and considered the closedown and accounts improvement plan.

External Auditors' Annual Report

The committee received an update on the external audit completion reports for the council and the pension fund for 2024/25. Suresh Patel, representing the external auditors, explained that the council's accounts would receive a disclaimed audit opinion due to time constraints and quality issues in the draft accounts. He highlighted ongoing work on short-term debtors and the council's dialogue with the government regarding exceptional financial support, which is expected to be agreed in principle within weeks and will likely apply to the 2024/25 accounts.

Mr. Patel also detailed the objections received regarding the accounts. Two objections to the 2024/25 accounts were deemed eligible, and provisional views have been provided to the elector and the council. A further objection to the end-of-November accounts is currently being assessed for eligibility. Two objections from the 2023/24 accounts remain outstanding: one concerning leaseholder service charges, which involves complex issues being discussed with the council, and another concerning various items, for which provisional views are due to be issued shortly.

Glen Hammonds, the Director of Finance, explained that the council would be granted delegated authority to make any necessary presentational or technical adjustments to the final accounts before publication, in consultation with the Chair of the Corporate Committee and the Cabinet Member for Finance.

Councillor Jackie Meldrum raised concerns about the leaseholder service charges objection, asking for more information on its status and an approximate timeline for its resolution. Mr. Patel could not provide extensive detail to avoid prejudicing the final determination but indicated that the objection related to overheads charged to leaseholders.

Councillor Timothy Windle inquired about the process for exceptional financial support (EFS) and the closure of accounts, asking if there would be a retrospective publication. Glen Hammonds clarified that if EFS is allocated for 2024/25, adjustments would need to be made to the accounts by the 28 February deadline. He noted that such support is typically confirmed by mid-February.

Councillor Matthew Bryant questioned the backstop situation, which has led to disclaimed audit opinions since COVID-19. Suresh Patel explained that the disclaimed opinion for Lambeth began with the 2023/24 accounts, and moving from a disclaimed to an unqualified opinion is a complex and lengthy process, potentially taking three to four years, especially when there are underlying issues with the quality of the accounts.

Councillor Ibtisam Adem asked about the sale of assets to support EFS, expressing concern about the current property market. Glen Hammonds stated that a pipeline of disposals is being developed, drawing parallels with the Housing Revenue Account (HRA) where similar exercises have achieved market value or above. He emphasised the importance of establishing the right criteria for disposals to avoid a rushed sale.

The committee also discussed the pension fund accounts, where a qualified opinion is likely for 2024/25 due to ongoing issues with sundry debtors and creditors. However, the auditors are working with the council to identify an approach for the following year that would allow for an unqualified opinion. Zena Cooke, the Corporate Director of Resources and Section 151 Officer, acknowledged these as historic issues and expressed confidence in the team's efforts to resolve them, noting that the backstop date has impacted the timeline.

James Haddock, a public speaker and resident of Gypsy Hill, presented an objection regarding leaseholder service charges and commented on the draft accounts. He qualified as a Chartered Accountant in 1990 and, drawing on his experience, offered advice on culture change and improving bookkeeping practices. He stressed that materiality is for auditors, not accounts preparers. Councillor Rebecca Spencer, Chair of the Corporate Committee, responded by stating her personal commitment to value for the public and confidence in the finance team's efforts to change the culture within the finance department.

Statement of Accounts 2024/25

Glen Hammonds introduced the report on the final statement of accounts for 2024/25, seeking approval ahead of the 27 February backstop date. He noted that the accounts had been republished on several occasions due to significant updates, primarily related to group accounts. A technical reclassification had been made within the Movement in Reserves statement, which did not affect the overall level of reserves. He also highlighted the potential for further changes related to the ongoing audit and exceptional financial support.

The committee discussed the quality of the accounts, with Councillor Spencer seeking assurance that the current set was of the required quality. Glen Hammonds detailed the extensive quality assurance and review processes undertaken, including input from external experts, the former Section 151 Officer, and senior managers.

Councillor Matthew Bryant questioned the reliance on external input, asking if the council now possessed sufficient experience at the right level of seniority. Glen Hammonds acknowledged the need for permanent employees with the necessary skills and knowledge, stating that this is a key element of the improvement plan. He confirmed that recruitment for a permanent Chief Accountant and other team members is underway.

Councillor Timothy Windle raised questions about the right of use changes and IFRS 16 rules, asking if the council had been blindsided by these. Officers explained that while preparatory work had been done, it competed with other priorities due to delays in previous accounts. The improvement plan aims to start earlier on the 2025/26 accounts and ensure good housekeeping.

Councillor Jackie Meldrum inquired about the HRA accounts and the assumption of a 1% rent conversion, which was not happening. Jackie confirmed that the budget for the next year would reflect rent increases agreed by Cabinet, with rent convergence due from April 2027.

The committee also discussed the group accounts and the reflection of loans from the council to Homes for Lambeth (HFL). Peter Hesketh, Deputy Director of Finance, explained the complexity of accounting for these loans, which had been impaired. He stated that the impaired loans amounted to approximately £56 million of the total £102 million lent. The council is required to make provision for repayment through its Minimum Revenue Provision (MRP) policy, which is reviewed annually. An options appraisal for HFL is expected to be presented in the summer, taking two to three months to complete.

Councillor Meldrum also raised concerns about falling school rolls, school deficits, and reserves, noting that this was not clearly reflected in the accounts. Officers explained that the Dedicated Schools Grant (DSG) figures presented were a cumulative position and that the budget report would highlight risks to surplus positions. They also noted that academisation and school closures can incur costs for the local authority's general fund.

Councillor Spencer sought assurance from Zena Cooke, the Section 151 Officer, on signing off the accounts as a true and fair representation. Ms. Cooke expressed confidence in the progress made since the first draft of the accounts, highlighting the level of scrutiny and engagement from the finance team.

The committee agreed to the recommendations for both the external auditors' annual report and the statement of accounts, including approving the final statement of accounts, delegating authority for presentational and technical adjustments, approving the management representation letters, and commenting on the closedown and accounts improvement plan.