Tower Hamlets Council's financial reporting continues to be hampered by pervasive assurance gaps, according to the latest audit results.
The Audit Committee of Tower Hamlets Council was due to meet on Wednesday 4 November 2026 to discuss the 2025/26 audit results for the Council. EY, the external auditor, indicated they expected to issue a disclaimer of opinion for the Council's accounts, consistent with prior years, due to pervasive gaps in assurance
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Despite progress being made in rebuilding assurance, particularly over balance sheet areas such as debtors, creditors, and provisions, significant gaps remain over reserves, capital grants received in advance, and parts of property, plant, and equipment. A significant weakness was also identified relating to the Council's budget setting, forecasting, and financial planning arrangements.
The external auditor identified significant weaknesses in the Council's governance arrangements relating specifically to budget setting, financial forecasting, and financial planning. This conclusion was based on several factors: the recurring emergence of substantial variances shortly after balanced budgets have been approved; the extent to which financial pressures have exceeded the downside risks identified through the Council's own modelling; the extent of ownership of budget responsibilities across the authority; continuing challenges in forecasting expenditure and demand; weaknesses in incorporating known risks into the annual budget; and the fact that measures introduced in response to earlier recommendations haven't yet produced sufficiently robust budgeting outcomes.
Officers acknowledged these findings and outlined their commitment to addressing them through a comprehensive financial recovery plan, a fundamental review of budget-setting arrangements, strengthened financial modelling, and a clear reserves strategy. Full assurance sufficient for an unqualified audit opinion is anticipated by 2029/30.