Lambeth Council's Corporate Committee recently reviewed an internal audit that revealed weaknesses in the council's governance, raising concerns about financial stability and risk management. The Internal Audit Annual Report and Opinion 2024-2025 stated that Internal Audit had provided 'limited assurance' that the council had adequate systems of governance, risk management and internal control.
The council is also facing challenges in addressing statutory recommendations from external auditors, including the need to:
- Identify additional savings and efficiencies to mitigate forecast overspends for 2024/25;
- Ensure planned savings and efficiencies for 2025/26 are achievable and put in place cost control measures to avoid overspends;
- Replenish the level of unallocated general fund and HRA reserves to those levels deemed prudent by the Section 151 officer;
- Reduce the unfunded budget gap within the Council's MTFS; and
- Implement the key recommendation of the Kerslake report of bringing the provision of housing services through Homes for Lambeth back 'in-house' and determine the associated financial consequences and the impact on the level of reserves and the MTFS.
The Internal Audit Annual Report and Opinion for 2024-25, presented at the July 24, 2025, meeting, offered 'limited assurance' regarding the adequacy of the council's systems for governance, risk management, and internal control. The report highlighted challenges in engaging with management and slower-than-anticipated progress in implementing the 2025-26 internal audit plan.
Paul Rock, Assistant Director Internal Audit and Counter Fraud, presented the report, noting that while there were positives, the number of 'limited assurance' opinions was too high. He also noted the need for improved management implementation of actions. Senior management and the management board are committing to delivering actions, engaging with internal audit, introducing changes including regular reporting at senior management levels, and ensuring director ownership of actions. I have discussed and raised this at senior management, the management board as well as assurance board,
Rock stated, received firm commitment from both that they will be focused on delivering actions and engaging with internal audit.
Several members of the committee voiced their concerns about the limited assurance opinion. Paula Mills, an independent member of the committee, expressed her disappointment with the level of detail in the report, stating that it did not provide enough information to assure her that the council was appropriately addressing the recommendations. She requested more qualitative and quantitative information to support the implementation of recommendations.
Councillor Matthew Bryant echoed these concerns, noting that just two months into the financial year, the council was already forecasting a significant deficit, suggesting flaws in the budget-setting process. He requested more evidence that actions taken were having the desired effect.
In response to the concerns, officers committed to providing more detailed updates and evidence at future meetings. Glenn, whose full name and title were not provided in the meeting transcript, stated that he would welcome dialogue with the committee to shape the September meeting and provide the necessary evidence. Jacqueline Moylan, Interim Director of Finance, added that the council was procuring external support to manage demand-led services and would have more information available by the September meeting.
Key findings related to counter fraud progress in 2024-2025 include:
- Tenancy fraud continues to be a key focus, with 81 tenancies recovered after investigations.
- Right to Buy investigations resulted in almost £1m in discounts being withheld.
- Staff investigations led to fourteen officers resigning under investigation or being dismissed.
Tenancy recoveries and internal fraud outcomes to date were lower than in the previous year, but the service expected to achieve similar outcomes by the end of the year.
In addition to the internal audit report, the committee also discussed the council's response to statutory recommendations from external auditors, and counter-fraud progress. The meeting highlighted the ongoing challenges faced by Lambeth Council in maintaining financial stability and ensuring effective governance.
