Agenda item

The the current position on the Finance Recovery Plan be noted and that the report be recommended to Council on 27^th January 2022.

The Lead Member for Financial Oversight, Council Assets & Performance and the Director of Finance introduced the third in a series of reports that updated the Cabinet on the work being undertaken to improve all aspects of the Council’s financial and governance processes through the Finance Action Plan.  The report would also be presented to Council on 27^th January 2022.

The Cabinet noted the detailed progress set out including on the statement of accounts and year-end close; budget setting; companies governance and responding the recommendations of the Grant Thornton, DLUHC and CIPFA reviews.  The format of the report would be revised when work on the broader Council recovery plan began and this wider work was a point highlighted in the Commissioners comments that an Improvement and Recovery Plan was required in response to the Ministerial Directions.

Lead Members reviewed progress in a number of specific areas including financial governance arrangements; the newly identified £2.6m provision for refunds to tenants arising from the Thames Water v Southwark case; and the progress in reviewing the companies, particularly James Elliman Homes.  The Director of Finance responded that a comprehensive and systematic review was taking place of each company and some of the issues identified were complex and would take time to resolve.  Significant progress was being made and an update on each company was expected to be presented to the Audit & Corporate Governance Committee at its meeting on 1^st March 2022.  It was noted that there were some contracts within corporate related to financial systems that had been identified and were currently being worked on which it was likely would not be brought forward as early as would have been wished to renew procurement.  In relation to financial governance it was noted that a new internal Finance Board had been established, which involved Opposition councillors and Commissioners.

In response to a question, the Director of Finance stated that further historic financial issues may still be identified as work continued on the accounts from 2018/19 and subsequent years, although he confirmed that the finance team currently had sufficient resources and expertise to carry out the programme of work in the Finance Action Plan.  The Cabinet noted the progress that had been made on establishing a permanent and sustainable staffing structure for the finance department and highlighted that this was a key priority.

Councillor Smith addressed the Cabinet and asked questions about the misclassification of a number of investment properties; the Dedicated Schools Grant; and the approach to recovering bad debts.  The Director of Finance responded to the queries raised and provided assurance that the Council was stepping up its activity to recover debt but also needed to make appropriate provision for bad doubt in its accounts.

At the conclusion of the discussion the Cabinet noted the report and agreed to recommend it to Council.

Recommended –  That the current position on the Finance Recovery Plan be noted and that the report be recommended to Council on 27^th January 2022.