Can Anyone Trust the Accounts of Newham Council

In a covering letter to the report that some councillors might regard as a damning indictment of the financial management, the council’s auditors, Ernst and Young stated that the “Council were unable to provide full supporting records for the 2023/24 audit and therefore we concluded that they were not ready for an audit.” 

There will not be an audit in the published timescale.

“We were therefore unable to undertake our planned procedures on the 2023/24 financial statements and have not been able to start rebuilding assurance ahead of the planned backstop date of 28 February 2025.”

They don’t know what the actual state of the finances are.

“We are therefore unable to conclude that the 2023/24 financial statements are free from material and pervasive misstatements and anticipate issuing a disclaimed 2023/24 audit opinion.”

In plain English, the auditors do not have faith in the accounts presented to them. Or, as the introductory papers to the Audit Committee state, they are giving a ‘disclaimed opinion, i.e. they are stating that they do not have sufficient evidence (or they cannot rely upon the evidence provided) to provide an opinion.

We recall that Newham Labour councillors were whipped into voting for the budget on 27th February. They were not informed of the auditor’s findings for the previous year, nor of the lack of confidence that the auditors had in Newham’s figures. 

We understand that the s151 officer was informed of the report on or about 20th February and it would be reasonable to assume that the mayor and chief exec were informed of the report at the same time.

Perhaps Labour councillors, (and opposition members) might like to enquire as to why they were forced to vote on a budget in which the starting balances could not be relied upon.

Almost alone, Open Newham has challenged the mayor’s narrative that times are difficult, but everything is fine. It’s not. As residents of Newham we take no pleasure in seeing our council taxes climb. We live in the mess that Mayor Fiaz has created. We see no evidence that the mayor or the cabinet has any idea about how to reverse this. That’s not quite true, they can whack up taxes on residents and car owners and trot up to Whitehall with the begging bowl, but Newham continues towards the iceberg, and they are unable to turn away.

As we have noted before, Mayor Fiaz might be long gone when the SS Newham hits the iceberg, so all she has to do is last one more year and one more budget. Cleaning up her financial mess will be someone else’s problem.

Her finance cabinet member has been somewhat subdued over the matter.

Will Cllr Ali do the right thing? We suspect not. His one job is to ensure that the finances are stable. He failed. Perhaps it is time for him to fall upon his sword to protect his patron and avoid the personal embarrassment of opposition members calling for his resignation at the next full council. Of course, that would leave Fiaz with another headache, who to replace him with?