The Finance, Audit and Risk Committee of North Hertfordshire District Council met to discuss the Shared Anti-Fraud Service's (SAFS) annual report, a progress report on the anti-fraud plan, an internal audit progress report, and budget monitoring reports for the first quarter of the 2025/26 financial year. The committee reviewed revenue and capital budget monitoring, recommending adjustments to the capital programme for 2026/27 onwards, and approved a capital budget for the government's new energy efficiency Warm Homes Scheme¹.

First Quarter Revenue Budget Monitoring

The committee reviewed the first quarter revenue budget monitoring report for 2025/26, which provided a summary of income and expenditure forecasts. The forecast variance was a £453,000 increase in the net working budget of £24.043 million, with an ongoing impact in future years of a £314,000 increase. The report highlighted several significant variances, including:

• Staff Pay Inflation: An overspend of £36,000 due to nationally agreed pay awards for local government officers, chief officers and the chief executive, with an increase of 3.2% to all salary scale points, against a budgeted 3%.
• Treasury Investments Interest Income: An increase of £1,000,000 in estimated interest income due to higher cash balances available for investment than anticipated, resulting from the reprofiling of planned capital investments.
• Royston Leisure Centre Learner Pool: An overspend of £125,000 as the delivery of this capital project did not result in an increase to the annual management fee income.
• Leisure Centres Improvements: An overspend of £262,000. The improvement works completed in 2024/25 have delivered an ongoing annual saving of £339k.
• Leisure Centres Decarbonisation: An overspend of £230,000. Ongoing revenue savings were initially envisaged from the delivery of decarbonisation projects.
• Leisure Centre Management Contract Income: A decrease of £367,000. From 1 May 2025 the council entered into an Agency Agreement with SLM (Everyone Active) for the operation of leisure facilities.
• Leisure Centre Management Contract Income – Temporary Leisure Centre Closures: An increase of £1,200,000. The leisure centres decarbonisation project will require some closures during the works, meaning a reduction in the management fee receivable under the terms of the Leisure and Active Communities contract.
• Flex Collect Trial: An overspend of £136,000. The council was part of a Flex Collect trial (collection of soft plastics). The costs of this will be met by additional grant funding.
• Development Control - Legal and Consultants Expenditure: An overspend of £98,000. Spend relates to the two public inquiries held in respect of Wandon End Solar Farm and the Land at Rhee Spring, following the refusal of planning permission at each site by the council's Planning Control Committee.
• Planning Control Staffing Costs: An underspend of £33,000. A revenue investment proposal for additional specialist planning advice was approved by Council in February. The investment has funded the creation of the new post of Tree and Landscape Officer.
• Planning Control Software: An underspend of £20,000. A revenue investment proposal of £20k was approved at 2025/26 budget setting to install IDOX insights software.
• Extension of the Chilterns National Landscape: An underspend of £28,000. An investment bid to progress the application to extend the Chilterns National Landscape was previously approved by Council.
• Local Plan: An underspend of £179,000. Several evidence-based projects initially planned for completion in this financial year have taken slightly longer to procure and therefore complete.
• Net income from Princes Mews Car Park: An overspend of £10,000. The council previously operated the Princes Mews Car Park in Royston under a licence agreement with the landowners.
• Environmental Health Apprenticeship: An underspend of £82,000. Budget was carried forward to fund the costs of the 4-year Environmental Health Officer Apprentice post.
• Court Summons Fees Income: An overspend of £89,000. Income recovery in the first half of the year has been affected by the transition to the new financial system, with no court hearings arranged to date in this financial year.
• Property Insurance Premiums: An overspend of £44,000. Additional property insurance is required to cover the leisure centres for the period decarbonisation works are undertaken.

The committee recommended that Cabinet approve the changes to the 2025/26 General Fund budget, as identified in table 3 and paragraph 8.2 of the report, a £453k increase in net expenditure.

First Quarter Treasury Management Review

The committee reviewed the first quarter treasury management review for 2025/26, which provided an update on progress with delivering the treasury strategy. The report noted that the Council had an average investment balance of £50.0M during the first three months of 2025/26, and that it had generated £0.906M of interest from investments already made. The report also provided an update on the Council's borrowing activities, noting that no new borrowing had been undertaken during the quarter. The current forecast is that the amount of investment interest expected to be generated during the year is £1.825M, an increase of £1.0M on the original budget.

First Quarter Capital Budget Monitoring Review

The committee reviewed the first quarter capital budget monitoring review, which provided an update on progress with delivering the capital programme for 2025/26. The report noted that capital expenditure for 2025/26 is estimated to be £27.624M, an increase of £6.561M on the forecast in the Investment Strategy 2025/26 report. The report also detailed a number of changes to the capital programme, including:

• Bancroft Lighting: A reduction of £45,000, with the project now starting in 2026/27.
• Swinburne Recreation Ground Hitchin: A reduction of £30,000, with the project now starting in 2026/27.
• KGV Muga Hitchin: A reduction of £55,000, with the project now starting in 2026/27.
• Baldock Road Recreation Ground Letchworth: A reduction of £30,000, with the project now starting in 2026/27.
• Broadway Gardens Resurfacing: A reduction of £250,000, with the project now starting in 2026/27.
• Instal On Street Charging: A reduction of £50,000, with the project now starting in 2026/27.
• Solar for Business: A reduction of £563,000, with the project being discontinued.
• S106 Projects: An increase of £140,000, with a total of £140,000 of S106 funds having been released for community schemes.
• Public Sector Decarbonisation Fund Phase 2: An increase of £122,000, due to the appointment of an external Quantity Surveyor and a Principal Designer.
• Infrastructure Hardware: An increase of £20,000, for additional software needed to comply with the Department for Work and Pensions (DWP).
• Warm Homes: A new budget of £318,750 for the government's new energy efficiency Warm Homes Scheme.

The committee recommended that Cabinet approve the adjustments to the capital programme for 2026/27 onwards, and that Council approve a capital budget of £1.275M for the government's new energy efficiency Warm Homes Scheme.

Shared Anti-Fraud Service (SAFS) Annual Report 2024/25

The committee reviewed the SAFS annual report for 2024/25, which provided details of the work undertaken by the council and SAFS to protect the council against the threat of fraud. The report noted that SAFS received 113 allegations of fraud affecting council services during the year, a slight reduction from the 117 in 2023/2024. The report also highlighted a number of successful fraud investigations, including a case where a woman was sentenced for housing fraud in North Herts².

The report included several case studies, including:

• Council Tax Intervention: An anonymous allegation led to the discovery that a Hitchin resident had failed to declare their partner and their income on claims for council tax reduction and single person discount, resulting in overpayments of £4,293.
• Housing Application Fraud: A review of data provided by the National Fraud Initiative 2024/25 identified 12 applications on the council's Housing Register that were incorrect or potentially false, preventing potential fraud of £51,000.
• Working with Social Housing Providers: Investigations into the unlawful sub-letting of social properties, conducted with Settle Homes, resulted in 3 properties being returned to stock and potential savings of up to £126,000.
• Business Rates Fraud: A review into a suspected Covid Grant fraud identified a business in Hitchin operating as a restaurant that had been claiming Small Business Rate Reduction, leading to the recovery of £16,000 in avoided business rates.

SAFS Progress Report on Anti-Fraud Plan 2025/2026

The committee reviewed the SAFS progress report on the anti-fraud plan for 2025/2026. Between April and June, 26 allegations of fraud had been received. SAFS currently have 18 cases under investigation, or at referral stage (8), with estimated losses of £129,000 recorded in this caseload. One case referred to the Councils legal team earlier this year had a summons issued in Q1 and a Guilty plea at the first hearing in July.

Shared Internal Audit Service (SIAS) Progress Report 2025/26

The committee reviewed the SIAS progress report for the period to 15 August 2025. As at 15 August 2025, 23% of the 2025/26 Audit Plan days had been delivered. There have been two final internal audit report issued as part of the approved 2025/26 Audit Plan:

The report noted that there had been one audit plan amendment agreed with management: five internal audit days have been taken from contingency and added to the Homelessness audit to support an extended scope of work. The contingency budget has been reduced to zero and the estimated internal audit days for the Homelessness audit has increased to 15.