This report presents the London Borough of Hammersmith & Fulham’s 2023/24 Statement of Accounts, including the Pension Fund Accounts and Annual Governance Statement for approval.
Minutes:
Sukvinder Kalsi (Executive Director of Finance & Corporate Services) presented the London Borough of Hammersmith & Fulham’s 2023/24 Statement of Accounts (SoA), including the Pension Fund Accounts and Annual Governance Statement for approval.
Paul Dossett (Key Audit Partner, Grant Thornton LLP) said Grant Thornton was on target of delivering 3 audits within a calendar year against the context of backstop legislation and Select Committee’s concern on local audits. He attributed the achievement to the arduous work of responsive finance officers and their excellent engagement with his colleagues. He added that LBHF was nowhere near the backstop deadline of February 2025 for 2023/24 as that year’s SoA would be signed off shortly.
Nick Halliwell (Senior Manager, Grant Thornton LLP) summarised the auditing work of the Statement of Accounts 2023/24 which took place between June and September 2024 as follows:
Councillor Rowan Ree (Cabinet Member for Finance and Reform) expressed appreciation for the contribution of both sides in getting through three sets of annual figures within a calendar year. The impressive work also helped to show how well-run was this Council while some local governments were struggling in balancing the books. The audit findings spoke highly of the organisation and reflected the hard work of the professional officers. Going forward, the Council would continue to rely on the advice of the external auditors on ways to conduct its business better.
Echoing his view, Councillor Florian Chevoppe-Verdier quoted from the report that an auditor was “not aware of any issues or matters that would lead to a modified opinion” (p. 16) and that “the Council had continued to face some of the most difficult financial circumstances it had ever faced. Funding from central government had reduced by 55% in real terms and 23% in cash terms, from £164m in 2010/11 to £126m in 2024/25. The economic impact of the last few years had put further pressure on Council finances.” (p. 142) which in his opinion was a piece of underrated news. He also noted from the narrative report of the Executive Director of Finance and Corporate Services had pointed out that the Council, “like most local authorities, continued to face significant financial challenges. For over a decade, national and local public finances had been under significant pressure whilst demand for our services had increased.” (p. 25) Councillor Chevoppe-Verdier found the local finances being safe and sound was a relief in this turbulent world.
The Chair also applauded at this substantial achievement and appreciated the hard work, dedication and collaboration of both sides. He asked about any London councils among those audited by Grant Thornton, had also completed multiple audits in a year. Paul Dossett confirmed that this had been done for a number of councils. It was expected that by the end of this calendar year, 80% of the 2022/23 or earlier audits and 25 – 30 % of 2023/24 audits nationally would have been signed. The latter would include Westminster City Council and Royal Borough of Kensington and Chelsea which had their 2023/24 accounts signed off already. The figures for 2023/24 would go up at the end of next February, the backstop deadline. Paul highlighted the difficulties for councils to re-establish the audit process which usually took a long time and were aggravated by the challenges related to public interest reports and the lack of resources in the audit market.
On the Chair’s question about the difference between audits with assurances and audits done by the backstop, Paul Dossett explained that the former was the highest standard for an audit whereby members and officers could have full assurance in setting the next year’s budget with an accurate base of figures prepared by the finance team and audited with a true and fair opinion. Audits in backstop territory meant that a council had produced a set of accounts but the auditor had stopped its work due to various reasons and gave a disclaimed opinion which meant the opening balances were disclaimed while in-year expenditures and closing balances could be signed off. Paul pointed out that the gap between the two was huge and re-establishing the assurance audits was a lengthy process of recovery.
Councillor Lisa Homan appreciated the assurance audits of SoA which helped boost her confidence in the Council’s finance. Referring to the “follow up to prior year recommendations” on p.199, she asked whether the recommendations were reviewed throughout the year or just annually. Paul Dossett noted that for every audit, there would have some form of recommendations agreed with the management and to be dealt with in different ways. Those recommendations related to the production of financial statement might not need to be followed up instantly. Otherwise, there might be programme to address those recommendations as part of the audit planning for next year. He pointed out that a lot of these recommendations were meant for improvement. Nick Halliwell added that there were seven outstanding prior year recommendations, four of them had been cleared and two downgraded. The remaining one was raised in March 2023 and therefore had not been addressed in year.
Addressing Councillor Adrain Pascu-Tulbure’s concerns
Noting that the Department for Transport (DfT)) and Transport for London (TfL) would fund two-thirds of the total project costs for the Hammersmith Bridge, Councillor David Morton sought information on the actual figures involved. Sukvinder Kalsi highlighted the background of the Grade II Listed 134-year-old Hammersmith Bridge and noted that since the transferral of the Bridge to its custody some years back, LBHF had been working with DfT and TfL on a package of measures to actually finance and complete the renovation and restoration of the Bridge. The Government had re-established the task force to, among others, arrange financing for the Bridge.
Councillor Morton noted the Mayor’s concern about the Council’s plan to fund its one-third contribution from a new road user charging scheme or a toll. Councillor Ree noted that the Council had submitted a business case to the DfT about 18 to 24 months ago and it was keen to receive the feedback with a view to re-opening the Bridge early.
RESOLVED
That the Committee agreed
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