The Audit and Performance Committee of Westminster Council met on Thursday 4 September 2025 to review the council's financial performance, operational efficiency, and workforce demographics. Key discussions included a projected £7.788 million overspend in the General Fund revenue account, primarily driven by increased costs in temporary accommodation and children's social care, and a detailed examination of the council's workforce demographics and pay gap analysis. The committee also reviewed updates on procurement activities, contract performance, and the council's treasury management strategy.

Q1 Performance Report 2025/26

The committee received an update on the council's performance at the first quarter of the 2025/26 financial year. Of the 91 Key Performance Indicators (KPIs) reported, 79% were on track to meet their year-end targets, 16% were at slight risk, and 2% were off-track. Significant areas of discussion included:

• Adult Social Care & Public Health: Initiatives such as testing AI software to enhance frontline practitioners' work and training for frontline practitioners on integrating physical activity into care planning were highlighted.
• Children's Services: The launch of a £391,000 Trailblazer project to support care leavers into employment and the successful hosting of a games convention for parents and children were noted. A trial 'Young Dragons' programme using therapeutic tabletop role-play to improve learning and behaviour in children was also discussed.
• Corporate Services: The successful launch of Our Westminster Way, the organisational culture framework, and the progress of the City Plan Partial Review, which includes new policies on affordable housing and retrofitting, were presented. The launch of the Private Rented Sector (PRS) Tenants' Charter was also highlighted as a key initiative to inform tenants of their rights.
• Environment and Communities: Updates were provided on the Westminster Climate Fund, which supports local organisations in reducing carbon emissions, and Community Resilience Workshops for local leaders. The launch of the Air Quality Action Plan 2025-2030 and the installation of a new air quality monitoring station in Queen's Park Gardens were discussed. The opening of The Exchange at Ernest Harriss House, a new community hub in Paddington, and significant investments to tackle antisocial behaviour, including doubling CCTV cameras, were also reported. Maintaining a clean and safe environment was emphasised, with a Street Litter Score of 96.7% and ongoing enforcement actions against waste offences.
• Finance & Resources: The expansion of the Report It Assistant to streamline issue reporting for residents and a significant increase in digital inclusion support were noted.
• Housing and Commercial Partnerships: Progress on acquiring temporary accommodation (TA) units and the adoption of a new Tenancy Strategy and Policy phasing out fixed-term tenancies for council homes were discussed. The successful insourcing of key elements of the Housing Solutions Service and the publication of the fourth Modern Slavery Statement were also highlighted.
• Regeneration, Economy and Planning: Updates were provided on the UK Shared Prosperity Fund 2022-2025 and initiatives supporting local businesses through dedicated advisors and the Westminster Strategic Growth Initiative.

The committee also reviewed the top corporate risks, including failing to meet climate change targets, risks to financial sustainability, and risks to effective safeguarding services.

RESOLVED:

• That the Committee noted the performance updates at Quarter 1.
• That the Committee noted the update on the changes to the Planning Guarantee.

ACTIONS:

• The committee will receive the Building Safety report.
• The committee will receive the updated business model for the Building Control team.
• The committee will receive examples from across the Council of costs relating to the implementation of the Building Safety Act (BSA) requirements.
• Future Quarterly Performance reports will include an indication of the cost impact to the Council for reported achievements and issues where possible, with additional context provided offline.
• Future Quarterly Performance reports will reference the level of proficiency the Council has in certain risk areas and compared to other local authorities.

Q1 Finance Monitor 2025/26

The committee reviewed the council's financial position for the first quarter of the 2025/26 financial year.

• General Fund Revenue: A projected overspend of £7.788 million was reported, with further potential pressures of £7.980 million identified. The primary drivers for this overspend are the increased demand and cost of Temporary Accommodation (TA) and rising children's social care costs.
• Housing Revenue Account (HRA): The forecast position for the HRA is a breakeven for 2025/26, following adjustments to the approved business plan to reflect additional pressures and mitigating actions.
• Capital Programme: The General Fund capital programme showed a projected gross expenditure variance of (£65.684 million) at Quarter 1.
• HRA Capital Programme: The forecast expenditure for the HRA capital programme was £210.650 million, resulting in an underspend of £32.111 million.
• Savings: Of the £31.925 million in savings budgeted for 2025/26, 98.54% are either achieved or on track.
• Reserves: The forecast reserve balance at year-end is £276.231 million, including proposed drawdowns for Temporary Accommodation, Property, and Digital and Innovation reserves.

Key areas contributing to the General Fund overspend include a £3.3 million forecast in Children's Services due to increased placement costs and a £13.2 million overspend in Housing and Commercial Partnerships, largely driven by the rising demand and cost of Temporary Accommodation. Conversely, underspends were noted in Environment and Communities, primarily due to increased Penalty Charge Notice income and commercial waste income, and in Finance and Resources, mainly due to additional income from rent reviews and lower external audit costs.

The committee also discussed the council's collection rates for Business Rates and Council Tax, noting that Business Rates collection has exceeded pre-pandemic levels, while Council Tax collection remains below.

RESOLVED:

• That the Committee noted the current monitoring and forecast position at Quarter 1 for 2025/26.

Treasury Management Strategy Outturn 2024/25

The committee received an overview of the Treasury Management Outturn for 2024/25. The council's Aa3 global credit rating from Moody's was noted positively. Concerns were raised regarding the ability to meet future capital commitments without external borrowing due to falling investment balances, though officers are monitoring market conditions for favourable borrowing times. The council's short-term lending to other UK local authorities was assured through thorough due diligence. The committee also discussed potential concerns ahead of the Chancellor's Autumn Budget Statement and the impact of market uncertainty on borrowing rates.

RESOLVED:

• That the Committee noted the annual Treasury Management final outturn report 2024/25.

ACTION:

• The Committee will receive clarification on the Council's borrowing limits and the Capital Financing Requirement.

Review of Draft Statement of Accounts

The committee reviewed the draft 2024/25 Statement of Accounts and the draft Annual Governance Statement. These documents are awaiting audit by Grant Thornton.

RESOLVED:

• That the Committee approved the draft 2024/25 Statement of Accounts subject to the public inspection period and the audit currently underway.
• That the Committee approved the draft Annual Governance Statement included in the Statement of Accounts subject to the public inspection period and the audit.

External Auditor's Audit Plan - Pension Fund

The committee received a summary of the External Audit Plan for the Pension Fund from Grant Thornton. Key areas of focus, materiality thresholds, and audit timelines were discussed. The committee queried Grant Thornton's assessment of the actuary's competence and the scope of the IT audit strategy.

RESOLVED:

• That the Committee noted the External Audit Plan for the Pension Fund.

Internal Audit Annual Report

The committee received the Internal Audit Annual Report, noting a positive assurance opinion with a majority of audits receiving a satisfactory rating. The committee discussed how to avoid poor governance and was reminded of its role in challenging and seeking information.

RESOLVED:

• That the Committee noted the Head of Internal Audit's opinion on the adequacy and effectiveness of the Council's framework of governance, risk management and control environment.

ACTION:

• The Committee will receive a summary of some of the significant public interest reports.
• The Committee will receive a summary of the Grant Thornton 'Lessons Learnt' reports.

Counter Fraud End of Year Report

An overview of the Counter Fraud End of Year Report was presented, highlighting the council's positive activity in countering fraud. The committee discussed the return on investment in the fraud team and noted the 179 positive outcomes achieved between April 2024 and March 2025.

RESOLVED:

• That the Committee noted the contents of the Counter Fraud End of Year Report.

Annual Report of the Audit and Performance Committee

The committee noted that its Annual Report summarises its work over the last municipal year.

RESOLVED:

• That the Committee approved the report.
• That the Committee agreed the report would be forwarded to Full Council for information.

The meeting concluded at 20:01.