The next Brent Council administration will inherit a perilous financial situation

 

 Cllr Jumbo Chan at Brent Full Council on September 15th 2025

 Cllr Jumbo Chan, who has quietly and assiduously been doing a very competent job as vice chair of the Audit and Standards Advisory Committee, took just 2 and a half minutes at Full Council to inform his fellow councillors of the upcoming serious financial issues facing Brent Council. There was no reaction or questions from his colleagues. Cllr Chan is one of the recently deselected councillors.

His Committee meets again on Thursday and will consider the Interim Auditor's Annual Report LINK , a report on Council's work on actions following the Social Housing Regulator's finding of serious failings in Brent Housing Management LINK, and the Council's Risk Register.

It is clear that whoever forms the next adminstration after the May 2026 local elections will face a very rocky, if not perilous ride.

 

 The biggest impact and most likely risks include the number of people needing homeless accommodation, the High Needs SEND grant deficit, financial resilience (including the Housing Revenue Account following the repairs needed in the light of the Social Housing Regulator's findings) and a decline in Council reserves. 

The Auditor's report, despite the bland language, suggests that without further cuts and revenue raising the Council might have to  apply for additional emergency government funding (Exceptiona Financial Support) at high interest rates.

AUDITOR'S REPORT 

Here are some of the key points (my highlighting in bold):

Background 

The Council faced continued financial pressures in 2024-25, with a £15.5 million overspend driven largely by rising temporary accommodation costs. While reserves were used to balance the General Fund, the situation remains challenging. Saving plans delivered targeted £8 million in savings. A balanced budget of £431.4 million is set for 2025-26, including an additional £15 million for homelessness, which will cover current demand based upon 2024-25 numbers. However, homelessness pressures are expected to grow, adding further strain. The Dedicated Schools Grant (DSG) and Housing Revenue Account (HRA) also face financial pressure, with deficits and housing regulatory concerns highlighting the need for a robust, long-term financial recovery plan.

 

Key Recommendation 1

The Council must urgently take additional difficult decisions to ensure that a realistic budget can be set for next year and in the medium-term, so this can be delivered without the need to further draw on reserves nor Exceptional Financial Support (EFS) from central government 

 

 

The funding gap 

 

The difference between any council’s annual income and expenditure is the ‘funding gap’. The budget process aims to close this gap by identifying expenditure savings, additional income or using reserves to provide a balanced position. Any increase at the Council in demand or costs, higher than the growth forecast in the Medium Term Financial Strategy (MTFS), will require more savings or additional income to offset.

 

The MTFS, dated February 2025, anticipates a cumulative budget gap of £28 million by 31 March 2029, highlighting increasing financial pressures. Chart 1 sets out the savings and growth delivered to date and projected over a six- year period.

 

• Forecast growth for 2026-27 to 2028-29 in the MTFS is reduced to approximately £26 million per year, which is around 50% lower than the £53.3m million growth budgeted for in 2025-26.

• Forecast savings for 2026-27 to 2028-29 are only marginally higher than those required in 2024-25 and 2025-26.

 

This indicates considerable pressure in the current MTFS with limited scope to absorb unforeseen cost pressures.

 

Current spending levels across the Council are deemed unsustainable and pose a risk to the Council's financial sustainability. Without additional income, additional savings (which links to Key Recommendation 2), or service cuts, the Council is at risk of delivering overspends which cannot be supported by remaining reserves.

 

Impact: If the Council fails to manage demand for services and deliver against budgets the reserves levels will threaten its financial sustainability. Exceptional Financial Support (EFS) may be necessary for 2027-28, which would entail borrowing at a premium to cover revenue costs.

 

Key Recommendation 2: It is critical that savings through the Embrace Change Transformation Programme are quantified and integrated into the Medium-Term Financial Strategy (MTFS) providing a pipeline of sufficient recurrent savings and income generation schemes supported by robust business cases through collaboration and business transformation.

 

 

Areas for Improvement - disposal of property assets

 

Using the property strategy to identify assets that are not operational and not required for service delivery could provide the Council with a pipeline of potential capital receipts which could support the financing of the capital programme. This could reduce long-term borrowing and mitigate additional financing costs. Any plans for asset disposal should be built into the Medium-Term Financial Strategy with realistic timescales, to mitigate potential Exceptional Financial Support needs in 2027-28

 

Improvement Recommendation 1

 

Area for improvement: Using the property strategy to make best use of assets, including the identification of non-operational assets.

 

 

Area for improvement: Strengthening the medium-term financial strategy to reflect and mitigate risks from the Direct Schools grant (DSG) and Housing Revenue Accout) HRA balances.

 

The statutory override on Dedicated Schools Grant (DSG) deficits is extended to 2027-28, but the Council’s £13.6 million cumulative deficit remains unresolved, posing a material risk to the MTFS beyond the override period. Alongside pressures in the Housing Revenue Account (HRA), where compliance risks and rising costs threaten long-term sustainability, these issues require urgent financial planning and reserve management.

 

Evidence: Many councils are reporting significant deficits in their DSG accounts due to rising demand for SEND services, especially Education, Health, and Care Plans (EHCPs).

 

Management has actively managed the cumulative deficit DSG position from a high of £15.9 million in 2021-22 to £13.6 million at 31 March 2025. It is a strong achievement to have reduced the cumulative deficit and curtailed significant increases, with £1 million received from the Department for Education to mitigate in- year overspends, helping to maintain the deficit and prevent further growth. The Council's DSG Deficit Management Plan has been updated to cover up to and including 2027-28, in line with the extension to the statutory override, by which time the forecast DSG cumulative deficit could be £20.3 million mitigated or £31.3m unmitigated. Uncertainty remains around how the DSG deficit will be managed if the statutory override is not extended beyond 31 March 2028, and this is not built into the MTFS.

 

Meanwhile, the HRA shows a provisional £2.1 million surplus for 2024-25, but long-term sustainability is threatened by housing stock refurbishment costs and debt.

 

The HRA faces significant risk, indicated by the Council's self-referral to the Regulator of Social Housing which resulted in a “C3 – significant improvement needed” grading for failing to meet the Safety and Quality Standard in relation to accuracy and completion of fire safety data and housing repairs, highlighting compliance risks and potential cost increases.

Continuous monitoring and assessment are necessary as the Council develops a recovery plan which needs to be funded by the HRA reserve.

 

BRENT HOUSING MANAGEMENT 

The Brent Housing Revenue Account (HRA) had an underspend of £2m in financial year 2023-24 but will be under strain as a result of the works needed to satisfy the Social Housing Regulator and to ensure tenants and leaseholders safety, which is the main consideration.

 

The Action Plan on the issues raised by the Regulator was due early this summer and delayed until September the but still not published. The report before the Audit Committee threfore does not contained a costed programme to ensure compliance and we don't yet know its impact on repairs and rents.

 

Extracts from the report:  [My coments in square brackets]

 

The Health and Safety Specialist have been contracted to support ongoing improvement work, providing additional objective and independent oversight, as well building safety expertise.

 

Caldiston Ltd have carried out an independent forensic audit across all key compliance workstreams (including fire, gas, electrical, water, asbestos and decent homes requirements) which was completed in August 2025. The audit involved desktop reviews, staff interviews and validation of data from multiple systems in use by the service, including True Compliance, NEC, and LifeSpan. [Will audit and recommendations be made public?]

 

The audit aligned with officers' concerns, validating the referral to the regulator confirming that there were significant systemic issues, particularly in data management, governance, and policy implementation. The overall outcome of the audit was that the housing management service has inadequate assurance in relation to managing building safety and compliance.

 

Key recommendations from the audit include developing a comprehensivecompliance framework, resolving data integrity issues, closing overdue fire risk assessment actions, establishing central registers for smoke and CO detectors,and providing staff training on compliance processes. It is also recommended to implement dashboards for real-time KPI monitoring and align the Strategic Risk Register with actual risks.

 

The findings from the audit have highlighted and clarified several areas that the service had already identified as needing focus as well as some additional key learning. These findings will now feed into the development of a robust action plan for improvement. [Publication  when?] This action plan will also include root cause analysis (as recommended by The Regulator), to ensure permanent solutions are in place to prevent similar issues arising in the future and will form a key part of the agenda and monitoring for the relevant project board under the newly established Housing and Tenant Improvement Programme. 

 

Ongoing improvement work

 

Whilst the reflective audit work is vital for lesson learning and effectively mapping robust and long-term improvements to our management of building safety, it has been important to us as a service to ensure we are driving forward rapid improvements on the ground to strengthen oversight quickly and provide re-assurance for our residents
 

The Compliance Team have been onboarding additional contractors to expedite the completion of works as a consequence of Fire Risk Assessments, and as of 1 September it is confirmed that all outstanding high-risk fire actions in high-rise blocks have been satisfactorily addressed; either closed with evidence, completed and closed with evidence or work booked. [Figures for each category?]

The rebuild of True Compliance and the NEC asset register is underway [Expected completion date?], and additional governance has also been implemented around the management of data, in particular restricting property creation access which provides a more controlled approach to new properties being added to the system and feeding into compliance workstreams accurately.

 

The compliance team has been progressing with recruitment. A Compliance and Contract Manager, a dedicated electrical manager, a Quality and Delivery Manager and an interim Contract Officer all started in September. Two permanent Contract Officers are being shortlisted currently, all with a focus on compliance and safety.

 

Furthermore, the Housing & Tenant Satisfaction Improvement Board met for its initial meeting in September. [Please publish Minutes for transparency and accountability]

This Board, chaired by the Chief Executive, will oversee and drive initiatives aimed at improving the quality of housing services and increasing tenant satisfaction.

 

The Board will provide governance and oversight by monitoring the progress of improvement initiatives and ensuring compliance with housing standards. [Will results be pubished?]

 

Significant progress has been made in addressing the data issues highlighted in the audit report. Our priority has been to validate the ownership and the council’s compliance responsibilities of all properties on our Housing Database, NEC. This work is essential to build confidence in our data and provide a reliable foundation for reporting.

 

We are currently in the process of systematically reviewing each compliance stream, starting with Gas. This will confirm the properties that fall in or out of scope, and importantly, for what reason. Whilst the audit highlighted that confidence in the reporting number is low, we are using these figures as a baseline so that improvements can be clearly appreciated as our validation work progresses. This will result in the reported asset numbers changing as properties are validated and confirmed in work streams, and percentages fluctuating because of this.

 

This data correction work is not limited only to the properties we report on to the Regulator (i.e. council owned homes) but has been expanded to all residents in our properties e.g. leaseholders, i4B and FWH tenants etc. This ensures a consistent, council-wide approach that strengthens both safety andassurance moving forward.

 

A section of the report deals with financial considerations but not in detail:

 

Financial Considerations

 

 Like other local authorities, Brent is facing significant financial pressures and is continuously needing to look for efficiencies to address budget challenges. Some of the main challenges that could affect the long-term viability of the HRA Business Plan along with rent levels are major works and repairs.[How, increased rents and reduced works and repairs as in Kensington and Chelsea?]

 

As the Council adds more stock to its portfolio and complexities of new additional requirements to building standards are increasing, such as fire safety works and decarbonisation, the cost of major works are rising. At the moment, there is insufficient government subsidy available to address these changes.

 
 

The Asset Management Strategy and investment plans must be approached cautiously and allow for flexibility to scale back on schemes where required. Careful budget monitoring and financial planning are crucial. With a current 5.75% loan rate for the HRA, £1m in borrowing costs the HRA circa £28k per annum in interest costs.

 

The specialists that have been appointed to assist with the recovery of the compliance breaches, are currently undertaking an initial assessment of the situation with the intention of developing a recovery programme. [Cost of specialists?[

 

Upon completion of the initial assessment, a paper will be presented setting out the anticipated costs and financial implications. For comparative purposes, a registered provider with 21,000 homes that were in a similar situation, spent £2.3m on their recovery programme. [Brent Housing Management manages approximately 8,000 council homes, 4,000 leaseholds, and 31 Gypsy and Traveller pitches]

  

It should be noted that whilst operating under a regulatory notice, access to grant funding for housing developments may be reduced or ceased, until the council can evidence a position of compliance.

 

 

 

 

 

No response from Brent Council to Audit's concerns over potential conflict of interest in First Wave Housing and i4B Holdings

Wembley Matters recently drew attention to the Brent Council Internal Audit that found a possible conflict of interest in the directorships of Brent's housing companies First Wave Housing and i4B Holdings. See LINK. Wembley Matters drew attention to the role of the councillor director Saqib Butt, who is the brother of the Leader of Brent Council as well as Brent Council officers.  

Brent Council responded to the Audit:  Management Response: We will review job descriptions to identify and mitigate conflicts of interest.

The Internal Audit found 5 medium risks the first of which said:

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.

Proposed changes to the Board membership and governance arrangements for both companies are tabled for Cabinet on September 12th. The officer's report makes no mention of resolving the potential conflict of interest and merely substitutes one Brent Council officer,  Phil Porter, Corporate Director for Adult Social Care, for another, Gail Tolley, who steps down from the boards following her retirement as Strategic Director for Children and Young People.

The Independent Chair, Martin Smith's and Independent Non-executive Director. Akimntoye's terms of office are recommended to be extended for another 3 years. 

As Peter Gadson, Corporate Director, Residents Srrvices stays on the board, it means that three of the five directors are either Brent employees or a Brent councillor. 

No mention is made of the Council's promise to review job descriptions and mitigate conflicts of interest. Instead the Cabinet's overall control of both companies is emphasised:  

As sole Shareholder for i4B and the sole Guarantor for FWH, the Council has an important role in providing strategic direction for the companies and retains control of key decisions. Cabinet is the strategic supervisory body with ultimate responsibility for ensuring governance of the companies and the power to appoint and dismiss Directors and the Company Secretary are reserved to Cabinet. Cabinet therefore has the power to agree the Recommendations contained in this report

Auditor: Brent better placed than most London councils to survive the financial challenges of the Covid-19 pandemic

The Audit Findings for the London Borough of Brent, to be considered by the Audit and Standards Committee on Tuesday September 8th are rather better than might be expected. LINK

The report by Grant Thornton  states:

 

.....To put this in further context, Brent Council could receive no RSG, council tax or business rates in 2020/21 and still balance the books using reserves. This is a much stronger position than virtually all other councils, however it must be noted that the reserves are earmarked to support strategic projects outlined in the Council’s capital programme and many of these reserves cannot be used to support revenue costs.

 

The report looks forward to 2020/21 and the impact of the Covid19 measures taken by the Council during lockdown and the impact on income.  Having had shaky reserves in the past the Council has been reluctant to eat into reserves but may have to as a consquence of a £29m funding gap, as well as reducing demand for services and 'efficiency'  cuts:

If there is a shortfall the Council has contingency plans to keep it on a sound financial footing. The Council will use the full range of options available, including (but not limited to) taking steps to reduce demand for services, implementing further efficiency savings, streamlining processes, and as a last resort re-diverting earmarked cash reserves as a one-off measure. The Council holds general reserves of £15.1m and £146m in earmarked reserves (excluding Community Infrastructure Levy funds and other ring-fenced reserves) which are held to meet specific identified purposes or future expenditure commitments, a large proportion of which are for financing the capital programme.

A review of the capital expenditure plan seems inevitable. Budget planning and consultation will take place soon.  One of the key issues will be what happens to Council Taxat a time when many residents will be strapped for cash as a result of unemployment resulting from the economic downturn.

 

EXTRACT FROM THE AUDITOR'S REPORT

2019/20 Financial Return

 

In a year where March saw the outbreak of the Covid-19 pandemic, the Council has performed well to achieve a breakeven position for its service area budgets. The Council responded to the pandemic situation quickly, making critical decisions in response to constantly moving government guidance. With only 2 weeks remaining of the 2019/20 financial year with the outbreak of the pandemic, impact on the financial outturn was minimised for 2019/20 but will be a larger impact on 2020/21.

 

The outturn for 2019/20 highlights the effective management action taken to address the pressures throughout the year. The £1.5m overspend in Children and Young Persons (CYP) (in part offset by contingency funds within CYP reserves) and £0.6m overspend in Community Well Being were offset by underspends within Regeneration and Environment.

 

The use of CYP earmarked reserves illustrates that the Council does have ongoing financial pressures which need to be addressed. However, this needs to be put in the context of income growth opportunities the Council’s reserves position. Brent has over £134.8m of usable reserves, excluding capital reserves, which can ultimately be deployed to address in-year shortfall. To put this in further context, Brent Council could receive no RSG, council tax or business rates in 2020/21 and still balance the books using reserves. This is a much stronger position than virtually all other councils, however it must be noted that the reserves are earmarked to support strategic projects outlined in the Council’s capital programme and many of these reserves cannot be used to support revenue costs. It is also worth noting that the Council is very clear about finding solutions in CYP going forwards.

 

The Council’s MTFS set in 2019/20 identified £11.4m savings required for 2020/21 and a best estimate budget gap of £20m for 2021/22-2022/23. In the November 2019 MTFS update a comprehensive review of technical budget assumptions took place, including a review of the 2020/21 savings plans and estimated savings of £4.28m to be delivered in 2021/22 and £1.77m to be delivered in 2022/23.

 

As a result of the pandemic it is expected that service departments will experience income and expenditure pressures in 2020/21. The magnitude of the pressures will depend on the severity and length of the pandemic. The Council has modelled the financial impact based on lockdown periods of 3 and 6 months and has a cost tracker to estimate and record the additional pressures relating to additional expenditure, loss of income, impact on savings and capital programmes, and treasury management issues. The Council estimates the 2019/20 impact to be £0.4m while for 2020/21, a 3-month lockdown period has an estimated lost income impact of £19.8m, with another £14.9m on top of that for a 6-month lockdown. The Council reports these figures to MHCLG fortnightly.

 

The net cost of Covid-19 to the Council is expected to be £47.6m (£42.7m of additional income and expenditure pressures and £4.9m of slippage in savings plans), which is far in excess of the £21.2m funding to be received from central government. The cost estimates are considerable, and the Council has been working to the assumption that costs will be fully reimbursed. Central government recently announced a new package of support which includes provision for some income losses to be reimbursed where losses are more than 5% of a council’s planned income from sales, fees and charges, with central government covering up to 75% of the remainder. Also, any deficits on council tax and business rates income will be allowed to be spread over 3 years rather than 1 year. Detailed workings of the scheme will be confirmed as central government drafts the statutory instrument that will effect the changes. This leaves the Council with an estimated gap of £26.4m before support for income losses is taken into account. If there is a shortfall the Council has contingency plans to keep it on a sound financial footing. The Council will use the full range of options available, including (but not limited to) taking steps to reduce demand for services, implementing further efficiency savings, streamlining processes, and as a last resort re-diverting earmarked cash reserves as a one-off measure. The Council holds general reserves of £15.1m and £146m in earmarked reserves (excluding Community Infrastructure Levy funds and other ring-fenced reserves) which are held to meet specific identified purposes or future expenditure commitments, a large proportion of which are for financing the capital programme.

 

The Council has modelled indicative forecasts of the council tax base and business rates income going forward. Modelling is challenging for the Council given that the Council receives c£50m (approx. 40% of net rates payable) of additional relief from central government to further discount the bills of businesses in retail, leisure and hospitality sectors, as well as small businesses:

• the Council received c£64m from central government to provide grants (between £10k-£25k) to support the above businesses; and

• all other business rate payers having difficulty in paying were offered payment deferrals in line with central government guidance.

Due to the above, the amount of NDR income collected to date compared to budget has changed significantly, and forecasting future collection is dependent on how long different business sectors take to recover, if at all. The Council has modelled business rates collection forecast for 2020/21 for the amounts collected and to be collected over a revised collection profile, against a reduced collectible debit, to support future business rates income projections. However, the amount of business rates the Council is allowed to retain is largely dependent on the future business rates regime and the amount of section 31 grant for certain business sectors. Also, the Council is part of the London business rates pool in 2020/21. London Councils will be modelling the potential impact of a deficit on the pool and individual boroughs and the results are expected later in the year. This exercise along with other intelligence and data gathering exercises on collection rates will be critical to better understand the potential impact on the 2020/21 budget and future budget assumptions for business rates income.

 

Over the past 2 years, the Council has been addressing historic overspends and undertook a comprehensive review of demographic pressures and other expenditure pressures, ensuring the Council could move to a more sustainable financial position. Following the Covid-19 outbreak the Council’s financial position has changed significantly. The impact of the loss of fees and charges, and emergency costs have had an immediate effect on all local authorities. In the longer term there is likely to be further squeeze on public spending, which could impact future funding settlement allocations.

 

The 2020/21 budget agreed in February 2020 included savings of £7.4m to deliver a balanced budget. Analysis shows that £0.3m of the planned savings are at risk of not being delivered at all, £2.5m of the planned savings have already been delivered, and £4.6m of the planned savings will not be delivered in 2020/21 (the Council will look to make these savings in 2021/22 instead). The 2020/21 budget also agreed business plans which included savings of £4.3m. Along with review and tracking of Covid-19 cost pressures, the savings position is being monitored daily and monthly monitoring reports and forecasts are reported to the Departmental Management Team. At this stage, all indications are that the 2021/22 savings (including the £4.6m of planned savings for 2019/20) will be achieved. Looking ahead, the savings forecasts will be reported quarterly and challenged and CMT and Cabinet, as well as the Resources and Public Realm Scrutiny Committee. As well as reporting progress of savings delivery the update reports will include mitigating actions or other interventions if there are delays in implementation or risk of delivery.

 

Proposed budget setting for 2021/22

 

Based on information available to date, the Council estimates that ongoing and recurring pressures will be in the region of £11m to £29m from 2021/22 across all service areas and council tax collection. At this stage, the estimates excludes future losses on business rates whilst further modelling is undertaken. Therefore, without additional funding or relives from central government the budget gap is likely to increase further. The Council’s estimates will be refined over the summer and are a major factor in the construction of the 2021/22 budget. Robust and credible plans will need to be developed and agreed in February 2021 to deliver a legally required balanced budget. At this stage, it is not clear when the Spending Review will be announced, or what the LG Finance Settlement for Brent in 2021/22 will be. The lack of clarity means that the Council will need to continue to plan with little or no funding certainty over the medium term. The Council expects to need to take difficult decisions about which services to prioritise and protect, and which to reduce in order to continue to deliver affordable and sustainable budgets.

 

To close a gap of this magnitude and in a relatively short space of time there are 3 main options:

 

• Further savings – options are limited given the current savings programme already includes a significant number of efficiencies and new income generation options are likely to be limited.

• Reduce growth assumptions – the current MTFS includes £13m of annual growth but there is a risk that reducing growth assumptions will store up pressures in future years.

• Scale back the capital programme – pausing or stopping specific capital schemes funded by borrowing would free up corporate revenue budgets set aside to provide capital financing.

 

A further consideration is if central government introduces new interventions specifically for long term Covid-19 related pressures, such as a multi-year minimum funding guarantee to compensate local authorities for income losses beyond their control. Another option may be to allow the capitalisation of losses, which would ultimately be funded by increased borrowing. The options will be further examined to ensure their consequences are properly understood and set out for members and the outcome of the review will be presented to Cabinet as part of the draft 2021/22 budget in October 2020.

 

The Council continues to maintain reserve levels much above those of its peers, but it is recognised that of the £398.4m total usable reserves and capital receipts reserve, £249.3m relates to reserves built up to help to finance the Council’s £1bn capital expenditure plans. 

 

Excluding the capital reserves, HRA and schools’ reserves leaves general fund reserves of £134.8m, which is close to the average level of reserves for London boroughs. However, the Council must carefully consider the use of its reserves to support revenue shortfalls as it is a non-recurrent source of funding, and use of reserves on a large-scale risks creating structural overspends if the Council’s finances do not recover quickly and income is reduced long term. 

 

From an audit point of view, the Council has managed its revenue reserves in a way that makes it better placed than most London councils to survive the challenges of the Covid-19 pandemic from a financial perspective. This prudent approach to reserves must be continued to address the risk of future pandemics, recessions and other issues or events that may impact on the Council’s financial sustainability.

 

 

Brent Council to approve 'biggest financial transaction for a generation'

The Brent Audit and Standards Committee LINK will tonight consider a paper going to Cabinet in September LINK which would give the go ahead for the Council to borrow c£230,000,000 to fully meet its commitments on its already approved£800m capital investment programme.

The paper sets out detailed  borrowing options that balance risk and cost of borrowing. The amount required in 2019-20 is £62.4m and 2020/21 £166.6m.

As indicated in the diagram above the Council can only meet day to day costs from its Revenue account so the investment programme is aimed at 'invest to save' by for example buying housing and using revenue from rents to meet day to day costs of providing services.

Cemetery asbestos exposure being dealt with 'seriously and properly' by Brent Council

Carolyn Downs, Brent Council Chief Executive, has responded to Clrr Duffy's call for an independent investigation into the asbestos waste exposure at Paddington Cemetery. LINK

Ms Downs wrote:

The letter to you from Chris Whyte intended to make clear that we will ask internal audit to undertake an initial investigation and that dependent upon their findings we will consider whether to pass the matter to an independent investigator, the police or any other relevant body or whether there is no evidence to support a claim of wrong doing. Pre-judging the outcome of this initial investigation, or any speculation at this stage about who is to blame, is not appropriate or helpful in my view. Internal audit will be able to pull together the relevant documentation, take a view on the matter and make recommendations. If we do proceed to an external review or some other action then this work will be very helpful to the third party involved at that point.

It is unfortunate that you believe residents will take the view that our colleagues in internal audit, who bring to bear their experience and specialist skills to investigate serious internal and external allegations all the time, which in appropriate cases have resulted in many successful prosecutions, would engage themselves in a “cover up”. I disagree. I am very clear that they will investigate this matter properly and thoroughly and this is entirely the right way for the Council to proceed. Even though any proposed follow [up] action which is an executive function will need to be formally reported to Cabinet, reports from internal audit are within the remit of the Audit Advisory Committee which reports to the Council and not the Cabinet. I do hope that you will feel reassured and able to make clear to any residents that the matter is being dealt with seriously and properly by the Council.

Please also note that the attached report is in the public domain already which covers the health risks related to this serious matter. LINK

Rest assured that the council already has been and will continue to be open and transparent about this matter and is mindful of the need to ensure appropriate scrutiny and accountability.

Public excluded from yet another key Brent Council discussion

The KPMG auditor is still investigating  objections to Brent Council's 2015-16 accounts by six local residents over the payment to former Director of HR Cara Davani LINK  and PcW has issued a 'limited assurance' verdict on Brent's Planning procedures LINK and drawn attention to potential for fraud.

Given that context there is  surely public interest in Brent's interal audit and investigation arrangements but the public have been  excluded from hearing consideration of these matters at the next meeting of the General Purposes Committee on January 30th.

The General Purposes Committee has hithertoo been made up of members of the Brent Cabinet, plus one opposition member, an arrangement that has itself drawn criticism.  The agenda item on the Council's website today still includes Cllr Mashari rather than her successor Cllr Tom Miller. Cllr Reg Colwill is the opposition member. Any change of membership will  have to be approved by Full Council at the January 23rd Meeting.

Fraud & error risk in Brent Planning Application process found by auditors

An internal audit report into Brent Council's planning application process by PriceWaterhouseCooper (PcW) has given only a 'Limited Assurance' rating and identified  high and medium risks of error or fraud. The report LINK which was submitted in November 2016 will be discussed at the Audit Committee on Wednesday January 11th 7pm at Brent Civic Centre.

In the last year there have been major staff changes in the Planning Department. Both planning and regeneration come under the Strategic Director for Regeneration and Environment.  Recently the lead member for Regeneration, Growth, Employment and Skills, which also covers planning policy,  Cllr Roxanne Mashari, resigned from the Cabinet earlier this month to be replaced by Cllr Shama Tatler.

The summary states: (my emphasis highlighted in yellow)

A new management team has been in place since May 2016 and there was evidence of some improvement being made to the system of controls within the planning application assessment process. However, our review did identify significant weaknesses in the planning application review and assessment process due to issues in the design of automated and user access controls with the system used to process planning applications, Acolaid. Issues identified around the system audit trail, user access rights and system enforced controls in place mean that the system is highly susceptible to manipulation and abuse through inappropriate or fraudulent activity and action should be taken immediately by management to strengthen the controls embedded within the system. We have included on page 4 a summary process map identifying the key weaknesses within the overall control system. 

Based on the findings identified by this review we are only able to give Limited Assurance over how the risks covered by this review are being mitigated. Key findings

•       The audit trail supporting the completion of key planning tasks is driven by the user selection from a drop down field that any user can amend rather than being automatically recorded based on the username within the system who has actually processed the task. The audit trail, including evidence of key approvals in the planning application process, may not accurately reflect who has actually performed the task and could be susceptible to manipulation to hide inappropriate activity. 


•       The system does not enforce segregation of duties between key parts of the planning process such as the initial assessment of the application by a Planning Officer and the subsequent approval by a Planning Manager. 


•       Roles and responsibilities are not fully aligned to access rights within the system. There are 9 levels of user access rights in the Acolaid system. Those responsible for granting/amending access rights were not able to define what access rights these user profiles permitted. 


•       Acolaid system user access rights have not been regularly reviewed by management. There are 739 user IDs listed on the Acolaid system. 429 (58%) users had not used the system since 30/3/2016 at the time of audit (01/08/2016) consisting of staff that have left the Council or who no longer require access to Acolaid. There is no effective mechanism in place to identify users who have left the Council or no longer require access to the system and withdraw access rights accordingly. 


•       There is no evidence an anti-bribery risk assessment has been completed for the Planning Department and anti-bribery awareness training has not been provided to planning staff. The Council may not be able to demonstrate that it has taken steps to prevent bribery resulting in non-compliance with the Bribery Act 2010 which could result in reputational damage and prosecution under this legislation. 


•       The Council officers a pre-application advice service in relation to prospective planning applicants. Advice issued should be subject to review in advance of being issued. 7/101 (7%) of pre-applications had been processed and reviewed by the same person. 


Given the  multi-million value of planning applications in Brent and the fact that for several years now, as pointed out on this blog, major decisions are delegated to the head of planning, this is an area of obvious concern.   As with any Audit Report an action plan has been devised for each area of concern but councillors will need  to step up their scrutiny of the internal working of their own department to ensure it is fit for purpose.

An immediate question that springs to mind is whether, historically, any fraud may have taken place or major errors made?  Are any investigations planned into past planning application decisions in the light of this report? 

The report states:

Planning Officers are bound by the Royal Town Planning Institute's Code of Conduct, which includes competence, honesty and integrity as key principles. However, this does not include any specific requirements regarding anti- bribery. We reviewed the Council's Anti-Fraud and Bribery Policy and found:

•   The Council has committed to maintain adequate and proportionate procedures to prevent bribery, undertake anti-bribery risk assessments and make all employees aware of their responsibilities to adhere strictly to this policy at all times; 


•   An anti-bribery risk assessment for the planning applications process and anti-bribery awareness training has not been provided to staff; 


•   A planning code of conduct is in place for members, however this does not include provisions relating to officers. We note that the code of conduct is currently being redrafted to include officers; and 
Planning Officers are required to flag any potential conflicts of interest in processing planning applications on an ad-hoc basis, but there is no requirement to make formal written declarations and a register of interests is not maintained.

These are the risk assessment findings:

HIGH RISK Approval of planning applications: System-audit trail and workflow

The Acolaid system does not accurately record the allocation and completion of work and the audit trail is susceptible to manipulation. In addition the system does not enforce segregation of duties for key parts of the process and system access rights do not reflect roles and responsibilities. As a result planning applications may be approved without the prerequisite review and approval in line with roles and responsibilities in place. This could result in planning applications being approved inappropriately due to fraud or error. 


HIGH RISK Acolaid System use access

System access rights do not reflect current roles and responsibilities. Individuals who do not require access to the system or have left the Council have access to the system and are able to make inappropriate changes to records and standing data due to fraud or error. 

MEDIUM RISK Anti-bribery arrangements

The Council is not able to demonstrate that it has taken steps to prevent bribery resulting in non-compliance with the Bribery Act 2010 which could result in reputational damage and prosecution. 
Inappropriate decisions are made regarding proposed planning applications due to bribery and undue influence. 


MEDIUM RISK Pre-application advice

Insufficient segregation of duties and independent review of pre-application advice may result in poor quality advice not being identified and resolved or inappropriate advice being issued based on the scope of services that can be provided at the pre-application stage. 


MEDIUM RISK Management Information Control design

There is insufficient performance information available to management to facilitate effective oversight of operational performance. Operational issues are not identified and resolved in a timely manner.