Agenda item

Notedthe 2022/23 Annual Audit Letter.

Noted and endorsed the comments of the Audit and Risk Management panel as published

Councillor Denise Hyland, Cabinet Member for Finance, Resources and Social Value, formally moved the report. She thanked Grant Thornton for the report and their service over the last few years.  The report related to financial year 2022-23 and things had moved on significantly since last year and in excess of £33m worth of savings had been agreed.  The Audit and Risk Management Panel had suggested a Tracker report be submitted to the Panel on progress taken on the implementation of the External Auditor’s recommendations from 2021-22 & 2022-23 and also recommended that the Council considered appointing a second non-voting independent member with the necessary financial expertise to the Panel.  After discussion with the Leader, Chief Executive and Director of Finance they would be happy to accept these suggestions.

Paul Jacklin from Grant Thornton addressed the Council.  Grant Thornton had completed the handover work to Forvis Mazars and this had gone well.  The Council was in a good position.  For the 2022-23 financial year they had identified two significant weaknesses, one in financial sustainability and one in the ‘3 E’s’ area of improving economy, efficiency and effectiveness.  They had not identified any weakness in governance but had made some recommendations for further improvements in this area.  It was worth noting that many more significant weaknesses were being identified across the local government sector where increased demands were stretching financial conditions further. 

They had raised key recommendations in two areas. Firstly, like other councils, Greenwich was facing significant increased demands and complex service provision needs.  This had been exacerbated by higher inflation costs and the cost of living crisis alongside uncertainty over future funding levels.  Significant savings programmes had been needed to deliver a balanced budget position.  Recommendations in this area would centre around strengthening the processes of identification, challenge, implementation and monitoring of savings programmes going forward, to avoid the need for one off measures and the use of reserves to balance positions.

The second significant weaknesses was the Council, had self-referred to the regulator of social housing regarding delays to site inspections to dwellings which meant the Council was not able to meet the required standards.  Action plans had been put in place to return to full compliance but where statutory notices were in place, they were required to report a significant weakness in this area.

It should be emphasised that the report was quite old and so things had moved on.  The incoming auditors would comment on the arrangements put in place since this time.

Councillor David Gardner, Chair of the Audit and Risk Management Panel rose to comment on the report.  He said he was pleased the recommendations for a second independent member with the necessary experience had been endorsed along with the recommendation of a tracker.  Additionally they would seek to track the implementation of internal audit review recommendations or reasons for delay or non-implementation.  There was concern arising from the 2022-23 Audit letter in terms of sustainability and the measures to be taken but the Panel had been reassured by the Cabinet Member and Director that there had been significant improvements in the approach taken for 2023-24, which the Tracker should highlight.

Councillor Matt Hartley, Leader of the Opposition asked Mr Jacklin if he felt that the situation he had described at the end of 2022-23, and how they had urged Members and Senior Officers to acknowledge the gravity of the situation and to take effective and far-reaching action to restore a sustainable financial position, was now being acknowledged and taken seriously and actions put in place accordingly.  Mr Jacklin replied that they were satisfied it was now being taken seriously although he could not comment on actions taken for the 2023-24 period. 

Councillor Hartley thanked the Auditors and the Finance Team for their work on the report which he felt was strongly worded and highlighted the weaknesses.  He believed the report to be quietly damning of the Council’s Re-thinking Services policy especially regarding digital services, the reform of which had not been delivered.  Given the Council's plans were reliant on the success of rethinking services, which at this point it had been suggested they had not been, it was crucial that the Council addressed the weaknesses that had been identified.  He had been disappointed by the Council’s Management response to this in the report and asked for the Cabinet Member for Finance to offer some reassurance on the strength of the Council’s response to the rethinking services findings in the Audit Letter.  He added that the Opposition were pleased to see the two recommendations from the Audit and Risk Management Panel had been accepted.

Councillor Denise Hyland, Cabinet Member for Finances, Resources and Social Value formally closed the debate.  She commented that it should be noted the period the report referred to was 2021-22 & 2022-23 so during and just after Covid.  Savings had been delayed due to putting together the team and the recovery from Covid, but they had not been negated.  They were confident the initial savings would be made and hopefully exceeded.  She was absolutely confident in the abilities of Officers, and they would be keeping a watchful eye also.

Resolved -

That the 2022/23 Annual Audit Letter be noted.

That the commentsof the Audit and Risk Management panel as published, were noted and endorsed.