This evening's Audit and Standards Advisory Committee will consider an update on the Council's Internal Audit arrangements. It includes a section on the Council's companies that although not named I presume are Brent's housing companies, First Wave Housing and I4B Holdings Limited (previously Investing4Brent).
Five areas are raised as representing a 'Medium Risk' including a potential conflict of risk when directors are council employees. This is the releveant section from the Appendix and the management response LINK.
Five Medium risk issues were raised within the following areas:
1) Responsibilities for Council employees working for the companies: The management and two of the five directors of the companies are employed by the Council and line managed within the Council. This may create a conflict of interest as management may feel they need to represent the interests of the Council rather than the companies. These responsibilities need to be clarified to ensure that these conflicts are effectively managed, and the companies are robustly represented in disputes with the Council.
Management Response: We will review job descriptions to identify and mitigate conflicts of interest.
2) Absence of Shareholder Panel Risk Register: The Companies share their risk register with the Council and the Shareholder Panel. However, while the Shareholder Panel reviews this risk register biannually, it does not hold its own risk register on behalf of the Council. This means that the Council is not formally considering the risks to itself from the companies, for instance, the risk that the Council may need to provide additional financial support to the companies.
Management Response: The need for a risk register will be reviewed at the next panel meeting.
3) Formalisation of Stress Testing: Whilst stress testing is undertaken for the preparation of the business plans and used to inform the setting of performance indicators, there is limited documentation of this process including how the outcome impacts the Business Plans.
Management Response: Stress testing will be included in the revised business.
Although the report mentions council employees it does not mention councillor directors and possible conflicts of interest. Cllr Saqib Butt is recorded as a director of both First Wave Housing and I4B. He is also a member of the Audit and Standards Advisory Committee considering the report tonight. In addition he is vice chair of the Brent Planning Committee and a member of the Resources and Public Realm Scrutiny Committee.
Cllr Saqib Butt is the brother of Cllr Muhammed Butt, leader of Brent Council.
Wembley Matters has previosuly raised potential conflicts of interest in the article 'Probity and Planning in Brent.'