Council set to spend more money on spending assessments

A new deal will see Haringey Council’s budget ceiling on internal audits double to a maximum of £500,000 per year, reports Joe Ives, Local Democracy Reporter

Haringey Council's cabinet member for finance Johann Beckford (inset) — Haringey Council’s cabinet member for finance Johann Beckford (inset)

Financially struggling Haringey Council could be about to double its spending on some of the very processes designed to save it money.

Today (Monday 7th) Johann Beckford, the local authority’s cabinet member for finance and corporate services, approved a deal that will see the council’s budget ceiling on internal audits double to a maximum of £500,000 per year.

Nevertheless, the council maintains that although the “daily rate costs” of the services will rise they still “represent good value for money for the council compared to other options”.

Local authorities are legally required to maintain and provide internal audits. The council’s previous contract for these services, which expires at the end this month, spanned eight years with a total value of £2million, equating to £250,000 a year. But its new set up could cost double that, with the yearly limit set to half-a-million pounds.

In a report on the new contract framework the local authority argued that it is “undergoing significant financial and operational challenges” that mean it is “critical that an adequate level of dedicated internal audit work is maintained” to help address the situation.

Indeed, last week (Tuesday 1st) Luke Cawley-Harrison, leader of the Liberal Democrat group at the council, warned that the local authority was in a “debt spiral” with no clear way out.

Its arrears include a combined total of £138m in ‘exceptional financial support’ (EFS) from the government over the last two financial years alone.

Internal audits generally involve continuous assessment of the day-to-day operations of a council and its processes, including its risk management policies. External auditors, on the other hand, primarily seek to independently review and verify the council’s financial figures.

The local authority is looking to use two different contract “frameworks” for the procurement of its internal audits service from October onwards. One has been developed by Croydon Council, the other by neighbouring Barnet Council.

Both frameworks will be used through so-called ‘call off’ contracts which allow the local authority to purchase audit services using the different frameworks as needed on a case-by-case basis.

The updated framework to be provided by Croydon Council in South London is set to have a maximum cost of up to £2m and would last for three-and-a-half years, running from this October until the end of March 2030.

The framework established by Barnet Council, which will also be in use from next month, is due to run to the end of March 2028 and would have a maximum total value of £1.5m.

The Barnet deal also contains the option of a five-year contract extension, lasting until the end of March 2034. At £2.5m, this extension would give the contract with a Barnet an “aggregated total value” of £4m over an eight-year period.

Due to the flexible nature of the deals, the council will be able to maintain a new, £500,000 per-year cap on spending on its internal audit services. The local authority says the half-a-million limit also allows room for “any inflationary increases” on 2026/27 prices.

In comments published ahead of his decision on Monday, Cllr Beckford said the new frameworks will allow the local authority to maintain “independent, agile, responsive and high-quality” internal audits.

The audits, he argued, will “vigorously challenge processes”, enable “continuous improvement” and “provide the vital assurance that [the] audit committee and the community demand”.

Local news needs your support

We are proud that we were at the forefront of reporting on the recent local elections. We can’t do this without the support of our readers.

Independent news outlets like ours – reporting for the community without rich backers – are under threat of closure, turning British towns into news deserts.

If our coverage has helped you understand our community a little bit better, please consider supporting us with a monthly, yearly or one-off donation.