The Audit and Performance Committee of Westminster Council met on Tuesday 27 February 2024 to review the council's performance, financial position, ethical standards, and audit plans. Key discussions included the Q3 performance report, the Q3 finance monitor, the ethical standards report, and the internal and external audit plans for the upcoming year.

Q3 Performance Report

The committee received an overview of the Q3 performance report, covering October to December 2023. Nick Byrom, Strategic Performance Manager, informed the committee of errors in the report concerning Commercial and Housing Improvement Programme KPIs, with a correction to be issued. The committee noted that the Strategic Risks section had been enhanced since Q2, and future reports would reflect the redistribution of teams from the former Innovation and Change directorate.

A significant concern raised was the potential 30% reduction in staffing for the Integrated Care Board (ICB). While acknowledging the pressures within NHS England, the committee sought clarity on where these efficiencies would be made. They expressed concern that council grants might be redirected to replace ICB services, particularly those related to preventative care and carers. The council is actively engaged in dialogue and is exploring internal resource allocation to mitigate negative impacts on communities. Updates on this matter, including cross-London developments, were requested.

The committee also discussed the council's approach to compliance with the Building Safety Act 2022, noting the extensive work underway and the significant governance structures in place. They requested regular updates and clarification on the number of high-rise buildings on the register, as well as the number of buildings with cladding similar to that used on Grenfell. The potential risks posed by new claim periods within the Act were also discussed, with a request for a detailed response.

The new Planning Guarantee and its implementation were questioned, with the committee being informed about a new monitoring framework being developed to ensure adherence to shorter deadlines. The financial implications of this guarantee were also raised.

Regarding Children's Services KPIs, the committee was pleased to note the council's high targets and the service's strong performance, even when benchmarked against other local authorities.

The performance of the Corporate and Housing Customer Services Contact Centre was discussed, with the committee acknowledging retrospective data and robust mitigations. Despite facing challenging circumstances and a high volume of calls, improvements are being made, including shared IT systems and staff upskilling.

The Westminster Adults Employment Service's target of 500 clients was unlikely to be met, with a projected 400 jobs by year-end. Capacity challenges and the impact of the Cost-of-Living Crisis were cited. The service model will be reviewed, focusing on client outcomes, data management, employer engagement, and performance monitoring.

Concerns were raised about construction pricing and market challenges affecting programme delivery, particularly for the Church Street and Ebury Bridge schemes. The committee acknowledged the need for evidence-led decision-making given available funds and evolving viability modelling.

Finally, the ongoing trend of customer services failing to meet targets was noted, with increased demand for Stage 2 complaints and repair-related calls identified as key drivers. The committee recommended that this issue be referred to the relevant Policy and Scrutiny Committee for further investigation.

RESOLVED: The committee noted the Q3 performance updates and indicated areas where more information or clarification was required. Actions were agreed for future updates on the ICB staffing reductions, Building Safety Act compliance, cladding information, Building Safety Act risks, and the Planning Guarantee monitoring framework. The issue of customer services failing to meet targets will be referred to the relevant Policy and Scrutiny Committee.

Q3 Finance Monitor

Gerald Almeroth, Executive Director of Finance and Resources, presented the Q3 finance monitor. The committee noted a forecast General Fund revenue overspend of £2.7 million, an increase from £2.4 million at Q2, despite higher-than-average interest earnings. This was largely attributed to increased temporary accommodation (TA) costs and variations in town planning income. The Housing Revenue Account (HRA) is facing a deficit of nearly £2 million, primarily due to increased repair costs. The Capital Programme has a forecast underspend of £35 million, approximately 13% of the gross budget, largely due to slippage in various schemes and the deferral of TA acquisitions.

Contract inflationary pressures are projected to be £3 million higher than budgeted, but these have been factored into the budget due to go before Full Council on 6 March 2024. The Market Sustainability and Improvement Fund and Discharge funding are continuing.

A detailed conversation took place regarding the worst-case scenario for TA, with officers assuring the committee that the situation is monitored weekly and interventions are in place. The pressure from TA has been largely offset by favourable interest rates. The council is also working to reduce TA costs through prevention, acquisitions, and prompt void turnaround. Challenges in the acquisition programme and assumptions for family accommodation were discussed. Concerns were raised about the use of high-cost hotels and the associated expenses, with an emphasis on transparency. These issues are to be raised at the Housing and Regeneration Policy and Scrutiny Committee.

The financial risk of families with no recourse to public funds was discussed, with costs rising nationally and unpredictably. The council has spent approximately £900,000 on this and plans to incorporate this pressure into future budgets.

A reduction in planning income was noted, which has been built into the base budget. Road management income has exceeded pre-pandemic levels, and further information on this increase was requested. Commercial waste income and the cost of running the service, along with Penalty Charge Notice income, were also discussed.

Council tax and business rates collection rates are still recovering post-COVID-19, with council tax collection rates remaining behind target due to a transient population. Savings identified in the report are on track, and clarification was requested on the Prudential Indicators in Appendix 3.

RESOLVED: The committee noted the Q3 finance monitor position. Actions were agreed to share details on road management income, provide clarification on Prudential Indicators, and share details regarding the legal challenge against parking charges, CCTV camera programmes, and public conveniences renovation.

Ethical Standards Report

Joyce Golder, Principal Solicitor for Bi-Borough Legal Services, presented the Ethical Standards report. The committee noted the collaborative effort in compiling the report, which details the ethical governance in place across the council, covering members, staff, and contractors.

Three complaints against councillors were considered but not referred for a hearing to the Standards Committee. The Monitoring Officer expressed confidence that concerns had been adequately resolved through direct conversations and training.

A decreasing trend in Staff Disciplinary Cases, Whistleblowing, and Grievance issues was noted positively, with the council maintaining adequate monitoring and developing a new framework.

Changes to the Procurement Code were discussed in relation to unsubstantiated claims of unethical conduct. The committee was informed of significant ongoing changes to ensure compliance, with a new strategy to be launched imminently.

Two cases opened in 2022/23 regarding ethical conduct were raised, with a request for detailed feedback.

The council's policies on Declarations of Interest, Gifts, and Hospitality for councillors and officers were discussed, with an emphasis on transparency. The committee raised concern about whether the councillor policy includes declaring declined gift and hospitality offers over £25, requesting this be communicated to councillors if accurate. The staff register of interests, gifts, and hospitality was reviewed and is published regularly.

Inappropriate behaviour at work, bullying, and harassment remained at 13%, which was considered a high number. The committee also noted that 10% of respondents preferred not to say, potentially indicating a lack of trust. An upcoming internal campaign aims to address inappropriate behaviour in the workplace.

RESOLVED: The committee noted the 2023 Annual Report and actions taken to maintain high ethical standards. They also suggested areas for inclusion in the next annual report. Actions were agreed to provide detailed feedback on two ethical conduct cases and to communicate information on declined gifts and hospitality offers to councillors if applicable.

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 are on track for completion, with one audit receiving limited assurance. Progress is being made on recommendations, and no significant issues of concern were identified.

RESOLVED: The committee considered and commented on the results of the internal audit work.

Internal Audit Plan 2024/25

Moira Mackie presented the draft Internal Audit Plan for 2024/25. The committee noted the challenges in developing the plan due to frequently changing risks and the collaborative process involving audit teams and council staff. The plan is a result of cooperation between the audit team and staff across the council. Quarterly plans will be provided in future reports.

A detailed discussion on cyber-attacks highlighted them as a continually high risk. While not audited annually, regular conversations about necessary controls are held. The human element of cyber-security was discussed, and the committee was pleased to note mandatory cyber-security training for officers, its inclusion in councillor induction, and external consultant advice. Plans for increased awareness communications were noted, and the committee requested the issue be raised directly with councillors. Financial risks in the strategic risks noted in the audit plan were also discussed.

RESOLVED: The committee reviewed the draft Annual Audit Plan for Q1 2024/25 and identified specific audits for consideration. They also reviewed the Strategic Audit Plan to ensure it covers persistent risks and outlines business areas for a 5-year plan. Action was agreed to raise the issue of cyber-security directly with councillors.

External Audit Plan

Jo Brown, Audit Partner at Grant Thornton, provided an overview of the External Audit Plan. The committee noted that the Auditor's Annual Report combines reporting for 2021-22 and 2022-23. The report is largely backward-looking but includes forward-looking elements on sustainability and improvement actions. The overall summary was positive, with recommendations acknowledging challenges in the Housing Service and the need for prompt action.

The committee queried the duration of the Auditor's Annual Report and was informed that the 2023/24 report would be drafted concurrently with the financial statement audit in November 2024. Responses to recommendations would be reported in due course.

The council's collaboration with Grant Thornton on responding to recommendations was discussed, with management comments showing positive responses. The council acknowledged areas for improvement and learning.

The committee noted that the audited accounts and final statement of accounts, including the annual report, are due for discussion on 25 November 2024, and Grant Thornton will endeavour to meet the statutory publishing deadline of 15 November. Thanks were extended to Grant Thornton for their dedication and effort in delivering the previous audited accounts despite sector-wide challenges.

RESOLVED: The committee considered the External Audit Plan.

The meeting concluded at 20:29.