Agenda and minutes

To note any changes to the membership.

1.1     There were no changes to the membership.

To receive declarations by Members and Officers of the existence and nature of any personal or prejudicial interests in matters on this agenda.

2.1     There were no declarations made.

To approve the minutes of the meeting held on 14 September 2016.

3.1     RESOLVED:  That the minutes of the meeting held on 14 September 2016 be agreed by the Chairman as a correct record of proceedings.

Report of Grant Thornton, External Auditor

4.1       Paul Dossett, Engagement Lead, Grant Thornton, introduced the Annual Audit letter which set out the key findings from the audit of the Council’s Financial Statements (Council and Pension Fund) for the year ending 31 March 2016. 

4.2       Mr Dossett advised that the letter which had been published on the Council’s website and that of the Audit regulator by the statutory deadline of 31 October 2016 contained very little in additional information to the key findings reported to the committee at its meeting in May.  He advised that there were no outstanding objections to the 2015/16 accounts.  He further advised that since the publication of the letter Grant Thornton had certified the Council’s Housing Benefit subsidy claim on behalf of the Department for Work and Pensions as well as the Teachers Pensions Return meeting the end of November deadline.

4.3       Mr Dossett explained that the Code of Practice on Local Authority Accounting (CIPFA) requires authorities to account for Highways Network Assets (HNA) at depreciated replacement cost from 1 April 2016.  The Council’s finance team had undertaken a good deal of work in preparation for this.  CIPFA had recently decided to postpone its introduction. It will consider whether to require this to be accounted for in 2017/18.  This is expected to be known in March.

4.4       Members asked whether assets such as street furniture would be valued on their historic or replacement cost?  Mr Dossett was referred to the fact that some street furniture may incorporate Wi-Fi and therefore could be income generating.  He was asked whether such street furniture could incorporate its income generating value.  Elizabeth Jackson, Engagement Manager, Grant Thornton, suggested that this may be possible if such values can be produced.  She undertook to raise this issue with CIPFA as part of future discussions.

4.5       In response to questions relating to Value for Money risks around significant capital projects, Ms Jackson advised that as part of its audit work for 2016/17 Grant Thornton would review whether the new business case arrangements for awarding capital programme expenditure to projects are working.

4.6       RESOLVED:  That the Annual Audit Letter 2015-16 be noted.

Report of Grant Thornton, External Auditor.

5.1       Elizabeth Jackson, Engagement Manager, Grant Thornton, introduced a report which set out the auditor’s progress in delivering its responsibilities relating to the audit of the Council’s Financial Statements and the Pension Fund for the financial year 2016-17.  The report included key information on accounting changes and emerging issues for Local Government such as the outcome of the EU referendum.

5.2       The Committee was informed that a further progress report would be submitted to the next committee meeting.

5.3       RESOLVED:  That the progress report be noted.

Report of the Chief of Staff

6.1       The Committee considered a report that set out the Council’s Annual Complaints Review for 2015-16.  The report summarised the Council’s complaints performance (Complaint stages 1 and 2) and those complaints received by the Local Government Ombudsmen (LGO).  The report also contained, as an appendix, a copy of the Local Government Ombudsman Annual Letter/Review for the year ending 31 March 2016 and a copy of CityWest Homes Complaint Report for 2015-16.

6.2       Sue Howell, Complaints and Customer Manager, summarised the key headlines from the 2015-16 review.

6.3       The Committee was informed that only 18% of the stage 1 complaints were escalated to stage 2 and represents an improved performance (down 6%) compared to the previous year.  In 62% of the stage 2 complaints received the complainant did not cite specific fault with the stage 1 decision, and either requested a review without explaining why, or repeated the same complaint made at stage 1.  The analysis of stage 2 complaints revealed that there were no serious service failings in any of the complaints received. Only 6 stage 2 complaints were Upheld (6 of 163). Overall human error was the main factor in 5 of these complaints. 

6.4       The Committee was further informed that the findings of complaint decisions at stage 2 support a robust stage 1 process. Comprehensive stage 1 responses are being undertaken and any wrong doing put right at the first stage of the procedure.  There had been learning from complaints.  Measures had been implemented by Housing Benefit/Council Tax, which made up the largest volume of complaints, after analysing stage 1 complaint data.  A significant majority of housing benefit complaints were due to perceived delays in the assessment process.  In most cases additional outstanding information was required from the applicant before the application could be assessed.  Members commented that in the past the contractor was asked to prioritise speed over accuracy which resulted in assessment errors. The committee requested details of the verification process/specification for housing benefit applications.

6.5       The Committee noted the explanation in the report that the highest volume of complaints relate to finance (Housing Benefit, Council tax and business rates) but that complaint volume is not in itself a good indicator when trying to determine if a service area has been delivering good services. Whether Housing Benefit is awarded or whether a homeless application is accepted are very emotive concerns and therefore increases the likelihood of complaints being generated if customers consider the Council should be doing more whether the Council is at fault or not.  Members suggested that to more clearly reflect complaints relating to finance next year’s annual report should set out the finance related complaints by subject.

6.6       The report revealed that 28% of Council Tax stage 1 complaints upheld in 2015/16 were in relation to missing or miss-allocated Council Tax payments. The committee asked about the cause of this.  Ms Howell explained that some of the problems related to functionality issues within the Agresso system.  The particular problem had been corrected  ...  view the full minutes text for item 6.

Report of the City Treasurer and the Director of Policy, Performance and Communications

7.1       Steve Mair, City Treasurer, introduced the period 6 finance report which provided details of the forecast outturn in respect of revenue and capital and projected revenue and capital expenditure by Cabinet Member including key risks and opportunities.  The report also included details in relation to the revenue and capital expenditure for the Housing Revenue Account.

7.2       The Committee was pleased to note that at the end of period 6, the general fund was projecting an underspend of £11.667m.  This was largely attributable to higher than anticipated car parking income as a result of increased income from parking bay suspensions.  In response to questions, the City Treasurer confirmed that any net surplus at the end of the financial year would be dealt with as part of the financial year accounts for 2015/16.  The overspend of £1.051m within the portfolio of the Deputy Leader & Built Environment related to lower CIL payments.

7.3       Members noted that there was a net underspend of £60.487m within the service area capital budgets.  This was offset by £99.351m shortfall for in year capital receipts and contingencies.  Overall, the effect of the two had been to see the project borrowing requirement rise by £38.864m in 2016/17.  Members expressed ongoing concern over the capital budget where funds are not being spent as expected due to slippage on capital projects.  The City Treasurer stated that the City Council was a large and complex business with a budget of over £800 million per annum.  Therefore, it was not unusual given its complexities for slippage to occur in the capital programme.  He explained that to mitigate the challenges the Council had introduced a new business case arrangement for awarding capital programme expenditure to projects.  He also reminded the committee that there was an opportunity for Members to scrutinise next year’s capital programme as part of the Council’s budget proposals for 2017/18.

7.4       Damian Highwood, Strategic Performance Team, introduced the Quarter 2 performance report which presented detailed results for the period April to September 2016 against the 2016/17 Business Plans.  The report provided explanations and commentary in respect of outstanding, good and poor performance including achievements of targets and details of remedial action being taken where appropriate.

7.5       The report included a featured analysis on employment.  This is a key priority throughout City for All, with a commitment to reduce long-term unemployment, those out of work for a year or more, particularly prominent.  The committee was informed that data on long-term unemployment is drawn from people actively claiming workless benefits (Jobseekers Allowance, Employment Support Allowance (ESA) and Lone Parents) from local job centres.  Across all benefits in scope the long-term unemployment count had been reduced by over 5% in the single year February 2015-February 2016.  In response to questions, Mr Highwood explained that the reduction could be attributed to either claimants coming off benefits, being exempt from employment due to disability, moving out of the borough or being deceased.  The committee asked how many people that had found employment in the  ...  view the full minutes text for item 7.

Report of the City Treasurer

8.1       Moira Mackie, Interim Shared Services Director for Audit, Fraud, Risk and Insurance, introduced a report that contained details of the work carried out by the Council’s Internal Audit service in the reporting period.  It found that in the areas audited internal control systems were generally effective although one no assurance report had been issued.  One follow up review completed in the period confirmed that the implementation of recommendations had been undertaken. 

8.2       The committee noted that the one no assurance related to an audit of Children’s Disability Services - Direct Payments.  The audit identified a number of control weaknesses in the existing system.  It was further noted that since the audit was finalised the service had confirmed that actions had been taken to address the weaknesses identified.  A follow-up audit will be undertaken in January 2017 to confirm that the agreed actions have been implemented as stated by the service.

8.3       The committee further noted that in addition to the internal audit work completed in the period, a technical claims file review had been undertaken by the Council’s insurers to provide an analysis of the Tri-Borough Claims Handling Service as measured against current best practice.  The service handles Employers and Public Liability claims up to a delegated authority of £100,000 for Westminster.  The committee welcomed the news that the review concluded that the service provided was effective, which is the highest opinion given in technical reviews, with the controls considered to be appropriate and to maintaining risk within acceptable parameters.

8.4       The Committee asked for details of the sort of claims being made up to the delegated authority level and whether there were many claims to this value.  The committee also asked officers whether they believed that the value at which they were able to determine claims was set at the right level.  Neil Walker, Assistant Head of the Tri-Borough Insurance Service, informed members that the City Council self-funded claims up to a value of £100,000.  The types of claims that the service handled often included claims for tree root damage.  The delegated authority level of £100,000 for Westminster had been in place for some time. He advised that a procurement exercise was currently underway for the award of a contract for the insurances which includes as part of the evaluation delegated authority levels for claim handling.  Bidders have the option to quote for different deductible levels.  At the Royal Borough of Kensington and Chelsea the delegated authority level is £250,000, in line with their deductible.  He considered that there were benefits, dependent upon the evaluated merits of the bids, in the Council having increased authority in determining claims as it was Public funds.

8.5       RESOLVED:  That the report be noted.

8.6       ACTIONS:

1.    Provide a breakdown of the claims paid out this year by Westminster up to the delegated authority of £100,000.

2.    The committee would like a note on the outcome of the procurement for a provider to handle Employers and Public Liability claims above the  ...  view the full minutes text for item 8.

Report of Shared Services Director for Audit, Fraud, Risk and Insurance

9.1       Andy Hyatt, Tri-borough Head of Fraud, introduced a report that provided an account of fraud related activity undertaken by the Tri-Borough Corporate Antifraud Service (CAFS) from 1 April 2016 to 30 September 2016.

9.2       Since April 2016 CAFS identified 70 positive outcomes, including 12 prosecutions and ten recovered tenancies.  Fraud identified in the same period had a notional value of over £2.2 million.

9.3       The Committee noted that to date, CAFS had successfully prevented 13 Right to Buys (RTB) from completing, where suspicion was raised as to the tenant’s eligibility or financial status.  The prevention work undertaken in respect of RTB continues to protect a valuable Council stock.  In response to questions from members Mr Hyatt explained that while CAFS apply an enhanced fraud prevention process to all new RTB applications anti-fraud activity generally tended to be more reactive.  He explained that the service relies on referrals.  It did not previously want to publicise requests for referrals without having sufficient resource to investigate them.  However, since last year there has been an increase in CAFS resources which will provide additional capacity to enhance coverage and deferrals will be encouraged.  The service has previously visited each of the Council’s estate managers to raise awareness of fraud and RTB fraud and provided some guidance on issues to be aware of.  Members commented that CWH also has many street based properties and stressed the importance of similar awareness being applied to these properties.  Mr Hyatt advised that publicity around this matter will be included in newsletters that will be circulated to CWH.

9.4       In respect of disabled parking investigations, the Committee noted that the introduction of a dedicated resource, body cameras and a regular Blue Badge inspection regime had proven successful with 15 offenders apprehended who  had appropriate sanctions applied for misuse, including 12 successful prosecutions.  Members asked what they should do in the event that they suspected the fraudulent use of disabled parking badges.  Mr Hyatt advised that anyone who had concerns should contact CAFS which could undertake target monitoring.  He reported that following complaints by antique dealers in Church Street the service undertook some targeted monitoring of the use of blue badges in the area and subsequently prosecuted individuals who were witnessed to be misusing blue badges.  Mr Hyatt clarified that for a successful prosecution to take place an officer needs to witness the misuse.

9.5       The Committee also considered fraud related activity relating to resident parking investigations.  It noted that CAFS continues to investigate the misuse of resident parking permits and to date had successfully apprehended ten offenders. Positive outcomes included fraudulently obtained permits, height restricted vans and permits issued to commercial addresses.  Mr Hyatt was referred to the fact that when the committee last discussed resident parking investigations it was informed that CAFS would undertake some work to determine which addresses in the Council’s database were genuinely residential properties and subject to Council tax and which were in fact businesses.  ...  view the full minutes text for item 9.

Report of the City Treasurer.

10.1    Steve Mair, City Treasurer, introduced a briefing on the options for appointing an external auditor to the Council for the 2018-19 financial year onwards.

10.2       The Council’s current external auditors, Grant Thornton UK LLP, are currently working under a contract originally let by the Audit Commission. This was novated to Public Sector Audit Appointments (PSAA) following the closure of the Audit Commission.

10.3       Regulations made under the Local Audit and Accountability Act 2014 allow authorities options for appointing an external auditor from 2018/19 onwards.  They can opt-in for their external auditor to be appointed by an “appointing person”, as defined in the Regulations.  Alternatively, they can establish an auditor panel and conduct their own procurement exercise solely or in partnership with other authorities.

10.4       The report outlined the options in more detail, along with an analysis of the benefits and risks to the Council with the intention of opting into a procurement being run by the PSAA under the “appointing persons” regime.

10.5    The Committee noted that the function of appointing a local auditor to audit the Council’s accounts would be the responsibility of the full Council.

10.6    RESOLVED: That the report be noted.

11.1    RESOLVED: 

1.          That the work programme including the items for the next meeting on 9      February be noted.

2.          That the responses to actions be noted.

11.2    ACTION: Add an item to the work programme on DHP delegated decisions.  (Action for: Reuben Segal, Committee & Governance Services)