Agenda Document Pack - Audit and Scrutiny Panel - 24/09/2026
North Lanarkshire Council · 24 September 2026
Back to Audit and Scrutiny Panel — 24 September 2026 and its agenda
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15 September 2026 Members of the Audit and Scrutiny Panel Chief Executive’s Office Rachel Blair Chief Officer (Legal, Democratic and Strategy) Civic Centre, Windmillhill Street, Motherwell ML1 1AB www.northlanarkshire.gov.uk Notice is given that a Special Meeting of the Audit and Scrutiny Panel is to be held in the Council Chamber, Civic Centre, Windmillhill Street, Motherwell, ML1 1AB on Thursday, 24 September 2026 at 14:00 PM which you are requested to attend. The agenda of business is attached. Rachel Blair Chief Officer (Legal, Democratic and Strategy) Members : Clerk Name: Karen Swan Clerk Telephone: 07919 730272 Clerk Email: committee@northlan.gov.uk S Watson, P Kelly, C Costello, M Hughes, J Hume, D Johnston, J Leckie, M McCulloch, J McLaren, P Patton, G Robinson. Page 1 of 64
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Agenda 1 Declarations of Interest In Terms of the Ethical Standards In Public Life Etc. (Scotland) Act 2000 2 Audit Scotland 2025-2026 Annual Audit report Submit report by the Chief Officer (Audit and Risk) presenting the 2025-26 Annual Audit Report to elected members. Appendix 1 Copy to follow 5 - 8 3 Annual Accounts 2025-26 (Audited) Submit report to Chief Officer (Finance and Technology) (Copy to follow) 4 Annual Accounts 2025-26 - Letters of Representation Submit report by the Chief Officer (Finance and Technology) providing the letter of representation submitted to Audit Scotland. 9 - 16 5 Annual Accounts 2025-26 - External Auditors report to those charged with Governance on the 2025-26 Audit Submit report by the Chief Officer (Finance and Technology) providing the external auditors comments on matters arising from their audit of the financial statements for the Council. 17 - 32 6 Best Value Thematic Audit: Asset Management Submit report by Chief Officer (Legal, Democratic and Strategy) presenting the outcome of the thematic Best Value audit on asset management. 33 - 64 Page 3 of 64
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref FS/ASP/ExtAudARR Date 24/09/26 Audit Scotland 2025-26 Annual Audit Report From Francis Scott, Chief Officer (Audit and Risk) E-mail scottfr@northlan.gov.uk Executive Summary The purpose of this report is to present the 2025-26 Annual Audit Report to elected members. The report is produced by the Council’s appointed external auditors, Audit Scotland, in respect of the audit of the Council for the year-ending 31 March 2026. A copy of the 2025-26 Annual Audit Report is attached at Appendix 1. The report summarises the work undertaken by Audit Scotland and presents the main findings arising from the audit. The report also contains audit recommendations and responses, including planned actions, which have been agreed by management. Audit Scotland will present the report to Panel and highlight any issues arising from their work that they wish to bring to the Panel’s attention. Recommendations The Panel is invited to: (a) invite the external auditor to speak to the report and to highlight key messages arising from the audit; and (b) through Internal Audit reporting, agree to monitor the implementation of management actions agreed in response to external audit’s recommendations. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Item 2 Page 5 of 64
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1. Background 1.1 The Accounts Commission have appointed Audit Scotland as the Council’s external auditor. Expected outputs to be produced by the Council’s external auditors are outlined each year in their annual planning document. 1.2 The external auditor is required to prepare an annual report for elected members and the Controller of Audit summarising the findings from the annual audit of the Council. The annual report for 2025-26 has been discussed and agreed with senior management. 2. Report 2.1 The 2025-26 Annual Audit Report presents the key matters identified from the external audit of the Council’s annual accounts and the wider scope areas of financial management, financial sustainability, vision, leadership and governance, best value arrangements and the use of resources to improve outcomes. 2.2 The report also details the external auditor’s audit opinion on the 2025-26 financial statements. 2.3 Audit recommendations arising from the audit are included in the Action Plan, with appropriate management responses, agreed timescales and responsible officers. Progress implementing agreed actions will be monitored by Internal Audit and reported to future meetings of the Panel. 3. Measures of success 3.1 The Council is committed to delivering effective and efficient financial reporting and high standards of financial management and corporate governance which underpin the delivery of Council services and the achievement of planned outcomes and corporate priorities and ambitions. 3.2 Both Internal and External Audit report to the Audit and Scrutiny Panel on their assessment of the adequacy and effectiveness of the Council’s financial management and corporate governance arrangements. 4. Supporting documentation Appendix 1 North Lanarkshire Council – 2025-26 Annual Audit Report Francis Scott Chief Officer (Audit and Risk) Page 6 of 64
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ Page 7 of 64
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If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Effective responses by management to the control issues and/or areas of improvement identified by External Audit will increase the likelihood of the Council achieving its ambitions by improving control frameworks and more effectively mitigating potential risks and threats to the achievement of planned outcomes. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 8 of 64
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref GT/VR/FC Date 24/09/26 Annual Accounts 2025/26 – Letter of Representation From Greg Telfer, Chief Officer (Finance and Technology) E-mail TelferG@northlan.gov.uk 1. Background 1.1 The Local Government (Scotland) Act 1973 requires all local authorities to appoint an officer who has responsibility for the administration of their financial affairs (known as the Section 95 Officer). 1.2 International Standards on Auditing (ISA580 Written Representations) require external audit to request a written representation from the accountable officer providing written assurance on aspects of the Council’s financial statements and Charitable Trust and Educational Trust Accounts including the judgements and estimates made in their preparation. 2. Report 2.1 The letter of representation has been signed in my capacity as Section 95 Officer for the Council. A copy of the letter is attached. Executive Summary The purpose of this report is to provide Members with information on the Letter of Representation required to be submitted to Audit Scotland in respect of the Council’s Annual Accounts for 2025/26. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Note the Letter of Representation provided to Audit Scotland The Plan for North Lanarkshire Priority All priorities Ambition statement (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning Programme of Work Statutory / corporate / service requirement Item 4 Page 9 of 64
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2.2 As in previous years, the letter set out the representations of management and confirms that the accounts are free from material misstatement. 2.3 During the course of the audit, a number of misstatements within the Council’s financial statements were identified, with those deemed material corrected, these are summarised in Exhibit 4 of the Annual Audit report. There are three misstatements which have not been adjusted for and summary information in respect of these is provided at Appendix 2 in the Annual Audit Report. The value, nature, and circumstances of the uncorrected misstatements were considered, individually and in aggregate, by the audit team, and it was concluded these were not material to the financial statements. As a result, these did not have any impact on the audit opinions given in the Independent Auditor’s Report. 2.4 A list of items that have arisen relating to the Council’s accounts are contained within the External Audit Annual Audit Report which forms part of this meeting’s agenda. 3. Measures of success 3.1 N/A 4. Supporting documentation Appendix 1 North Lanarkshire Council Letter of Representation Greg Telfer Chief Officer (Finance and Technology) Page 10 of 64
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 11 of 64
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Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 12 of 64
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Our Ref: Your Ref: Contact: E-mail: Date: GT/VR/FC Greg Telfer TelferG@northlan.gov.uk John Boyd, Audit Director Audit Scotland 4th Floor 8 Nelson Mandela Place Glasgow G2 1BT Chief Executive’s Office Greg Telfer Chief Officer (Finance and Technology) Civic Centre Windmillhill Street Motherwell ML1 1AB www.northlanarkshire.gov.uk Dear John, North Lanarkshire Council Annual accounts 2025/26 This representation letter is provided in connection with your audit of the annual accounts of North Lanarkshire Council and its group, (hereafter referred to as North Lanarkshire Council) for the year ended 31 March 2026 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view and have been properly prepared, and for expressing other opinions on the Remuneration Report, Management Commentary, and Annual Governance Statement. I confirm to the best of my knowledge and belief, and having made such enquiries as I considered necessary, the following representations given to you in connection with your audit of North Lanarkshire Council’s annual accounts for the year ended 31 March 2026. General I have fulfilled my responsibilities for the preparation of the 2025/26 annual accounts as set out in your 2025/26 Annual Audit Plan. All the accounting records, documentation, and other matters which I am aware are relevant to the preparation of the annual accounts have been made available to you for the purposes of your audit. All transactions undertaken by North Lanarkshire Council been recorded in the accounting records and are properly reflected in the financial statements. I confirm that the effects of uncorrected misstatements are immaterial, individually and in aggregate, to the financial statements as a whole. I am not aware of any uncorrected misstatements other than those reported by you. Financial Reporting Framework The annual accounts have been prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2025/26 (2025/26 Code) and the requirements of the Local Government (Scotland) Act 1973, the Local Government in Scotland Act 2003, and the Local Authority Accounts (Scotland) Regulations 2014. Appendix 1 Page 13 of 64
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In accordance with the Local Authority Accounts (Scotland) Regulations 2014, I have ensured that the financial statements give a true and fair view of the financial position of North Lanarkshire Council at 31 March 2026 and the transactions for 2025/26. Accounting Policies and Estimates All material accounting policies applied are as shown in the note included in the financial statements. The accounting policies are determined by the 2025/26 Code, where applicable. Where the 2025/26 Code does not specifically apply, I have used judgement in developing and applying an accounting policy that results in information that is relevant and reliable. All accounting policies applied are appropriate to North Lanarkshire Council’s circumstances and have been consistently applied. The methodology, significant assumptions, and data used in making accounting estimates are reasonable, and have been properly reflected and disclosed in the financial statements in accordance with the 2025/26 Code. Judgements made in making estimates have been based on the latest available and reliable information. Estimates have been revised where there are changes in the circumstances on which the original estimate was based or as a result of new information or experience. Going Concern Basis of Accounting I have assessed North Lanarkshire Council’s ability to continue to use the going concern basis of accounting and have concluded that it is appropriate. I am not aware of any material uncertainties that may cast significant doubt on North Lanarkshire Council’s ability to continue to adopt the going concern basis of accounting. Assets All assets at 31 March 2026 of which I am aware have been reported in the financial statements. All assets as at 31 March 2026 have been valued and / or indexed in line with the accounting polices around asset valuations. I carried out an assessment at 31 March 2026 as to whether there is any indication that an asset may be impaired and have recognised any impairment losses identified in the financial statements. I have provided you with all information of which I am aware regarding any valuation exercises carried out after 31 March 2026. There are no plans or intentions that are likely to affect the carrying value or classification of the assets recognised in the financial statements. Owned assets are free from any lien, encumbrance, or charge, except as disclosed in the financial statements. Liabilities All liabilities at 31 March 2026 of which I am aware have been reported in the financial statements. Provisions have been recognised in the financial statements for all liabilities of uncertain timing or amount at 31 March 2026 of which I am aware where the conditions specified in IAS 37, as adapted by the 2025/26 Code, have been met. The amount recognised as a provision is the best estimate of the expenditure likely to be required to settle the obligation at 31 March 2026. Where the effect of the time value of money is material, the amount of the provision has been discounted to the present value of the expected payments. Page 14 of 64
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Provisions recognised in previous years have been reviewed and adjusted, where appropriate, to reflect the best estimate at 31 March 2026, or to reflect material changes in the assumptions underlying the calculations of the provisions. The accrual recognised in the financial statements for annual leave untaken by 31 March 2026 has been estimated on a reasonable basis. There are no plans or intentions that are likely to affect the carrying value or classification of the liabilities recognised in the financial statements. Contingent Liabilities There are no significant contingent liabilities, other than those disclosed in Note 24 to the financial statements, arising either under formal agreement or through formal undertakings requiring disclosure in the financial statements. All known contingent liabilities have been fully and properly disclosed in accordance with IAS 37, as adopted by the 2025/26 Code. Litigation and Claims All known actual or possible legal claims have been disclosed to you and have been accounted for and disclosed in the financial statements in accordance with the 2025/26 Code. Fraud I understand my responsibilities for the design, implementation, and maintenance of internal control to prevent fraud and I believe I have appropriately fulfilled those responsibilities. I have provided you with all information in relation to: • my assessment of the risk that the financial statements may be materially misstated as a result of fraud, • any allegations of fraud or suspected fraud affecting the financial statements, and • fraud or suspected fraud that I am aware of involving management, employees who have a significant role in internal control, or others that could have a material effect on the financial statements. Laws and Regulations I have disclosed to you all known instances of non-compliance or suspected non-compliance with laws and regulations whose effects should be considered when preparing financial statements. Related Party Transactions All material transactions with related parties have been appropriately accounted for and disclosed in the financial statements in accordance with IAS 24, as adopted by the 2025/26 Code. I have made available to you the identity of all of North Lanarkshire Council’s related parties and all the related party transactions of which I am aware. Remuneration Report The Remuneration Report has been prepared in accordance with the Local Authority Accounts (Scotland) Regulations 2014, and all required information of which I am aware has been provided to you. Management Commentary I confirm that the Management Commentary has been prepared in accordance with statutory guidance, and the information is consistent with the financial statements. Page 15 of 64
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Corporate Governance I confirm North Lanarkshire Council has undertaken a review of the system of internal control during 2025/26 to establish the extent to which it complies with proper practices set out in Delivering Good Governance in Local Government: Framework 2016. I have disclosed to you all deficiencies in internal control identified from this review or of which I am otherwise aware. I confirm that the Annual Governance Statement has been prepared in accordance with the Delivering Good Governance in Local Government: Framework 2016 and the information is consistent with the financial statements. There have been no changes in the corporate governance arrangements, or issues identified, since 31 March 2026 which require to be reflected in the Annual Governance Statement or annual accounts. Group Accounts I have identified all the other entities in which North Lanarkshire Council has an interest and have classified and accounted for them in accordance with the 2025/26 Code. Any significant issues, including those related to fraud and any qualified audit opinions, in relation to the financial statements of group entities, have been provided to you. Any significant issues identified by you as group auditor have been communicated to management of group components, where relevant to those components. Events Subsequent to the Date of the Balance Sheet All events subsequent to 31 March 2026 for which IAS 10, as adopted by the 2025/26 Code, requires adjustment or disclosure have been adjusted or disclosed. Yours sincerely Greg Telfer Chief Officer (Finance and Technology) Page 16 of 64
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref GT/VR/FC Date 24/09/26 Annual Accounts 2025/26 – External Auditor’s report to those charged with Governance on the 2025/26 Audit From Greg Telfer, Chief Officer (Finance and Technology) E-mail TelferG@northlan.gov.uk 1. Background 1.1 The Audit Commission appoint external auditors to local authorities in order to carry out the audit of financial statements in accordance with International Standards on Auditing. 1.2 Recognising the importance of effective two-way communication in an audit of financial statements, the International Standards on Auditing (ISA260 Communication with those charged with governance) requires external auditors to communicate relevant matters relating to their audit of financial statements to those charged with governance. Such communications are required to be on a sufficiently prompt basis to enable those charged with governance to take appropriate action. Executive Summary This report is presented to members to allow them to consider the external auditor’s comments on specific matters arising from their audit of the financial statements for the Council. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Acknowledge the External Auditor’s report to those charged with Governance on the 2025/26 Audit and consider, as appropriate, the issues highlighted. The Plan for North Lanarkshire Priority All priorities Ambition statement (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning Programme of Work Statutory / corporate / service requirement Item 5 Page 17 of 64
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1.3 The objectives of the auditors are to: • Communicate clearly with those charged with governance the responsibilities of the auditor in relation to the financial statement audit and an overview of the planned scope and timing of the audit; • Obtain from those charged with governance, information relevant to the audit; • Provide those charged with governance with timely observations arising from the audit that are significant relevant to their responsibility to oversee the financial reporting process. This may include: a) Their views on the qualitative aspects of the Council’s accounting and financial reporting practices; b) Significant difficulties, if any, encountered during the audit; b) Material weaknesses, if any, in the design, implementation or operating effectiveness of financial systems relating to the accounts; c) Any unadjusted misstatements; e) Any unexpected modifications to the auditor’s report on the accounts; f) Any other relevant matters relating to the audit. • Promote effective two-way communication between the auditor and those charged with governance. 2. Report 2.1 The review of the 2025/26 accounts by Audit Scotland is now complete with the final version of the accounts forming part of this meeting’s agenda. 2.2 Following completion of their audit, Audit Scotland have produced a report to those charged with governance on the 2025/26 Audit for North Lanarkshire Council, a copy of which is attached to this report. 2.3 A full Annual Report has been prepared by Audit Scotland and forms part of this meeting’s agenda. 3. Measures of success 3.1 N/A 4. Supporting documentation Appendix 1 Audit Scotland Report to Those Charged With Governance on the 2025/26 Audit – North Lanarkshire Council Greg Telfer Chief Officer (Finance and Technology) Page 18 of 64
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☐ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 19 of 64
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Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 20 of 64
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8 Nelson Mandela Place, Glasgow, G2 1BT Phone: 0131 625 1500 Email: info@audit.scot www.audit.scot Audit and Scrutiny Panel 24 September 2026 North Lanarkshire Council Audit of the 2025/26 annual accounts Independent Auditor’s Report 1. My audit work on the 2025/26 annual accounts is now substantially complete. Subject to receipt of a revised set of annual accounts for review and final internal quality review, I anticipate being able to issue unmodified audit opinions in the Independent Auditor's Report on 24 September 2026. The proposed Independent Auditor’s Report is attached at Appendix A. Annual Audit Report 2. Under International Standards on Auditing in the UK (ISA (UK)), I am required to report specific matters identified from the audit of the annual accounts to those charged with governance of North Lanarkshire Council in sufficient time to enable appropriate action. For North Lanarkshire Council, those charged with governance is the Audit and Scrutiny Panel. I present for the committee's consideration my draft Annual Audit Report on the 2025/26 audit. The section headed "Significant findings and key audit matters" sets out the issues identified in respect of the annual accounts, including those that I am required to report to you. 3. The Annual Audit Report also sets out conclusions on the wider scope areas that frame public audit as set out in the Code of Audit Practice. 4. The Annual Audit Report will be issued in final form after the audit of the annual accounts has been completed. Uncorrected misstatements 5. I also report to those charged with governance all uncorrected misstatements in the annual accounts which I have identified during the course of my audit, other than those of a trivial nature, and request that these misstatements be corrected. 6. There are three misstatements which I request be corrected. If corrected, this would increase net expenditure by £6.458 million and decrease the net assets in the Balance Sheet by the same amount. Full details of the uncorrected errors are included in Appendix 2 of the Annual Audit Report. Page 21 of 64
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Other ISA (UK) matters 7. In presenting this letter and the Annual Audit Report to the Audit and Scrutiny Panel, I seek confirmation from those charged with governance on the following matters: if they are aware of any instances of actual, suspected, or alleged fraud, if they are aware of any subsequent events that have occurred since the date of the financial statements, if they are content that the methods, assumptions, and data used in making accounting estimates in the annual accounts are appropriate, if all related party relationships and transactions they are aware of are reflected in the annual accounts, and if they are aware of any non-compliance with laws and regulations. 8. Any issues that I have identified from my audit in relation to other ISA (UK) matters that I am required to report to those charged with governance have been reported in the section headed “Other matters to report” in the Annual Audit Report. Representations from the Section 95 Officer 9. As part of the completion of the audit, I am seeking written representations from the Chief Officer (Finance and Technology), who is the Section 95 Officer, on aspects of the annual accounts, including the judgements and estimates made. 10. A draft letter of representations is attached at Appendix B. This should be signed and returned to me by the Section 95 Officer with the signed annual accounts prior to the Independent Auditor’s Report being signed. Outstanding matters 11. There is one area where I still require additional information to conclude on audit work, and this is identified below: We have requested audit assurances from Strathclyde Pension Fund’s auditors in respect of the information provided to the actuary relating to North Lanarkshire Council. Page 22 of 64
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Independent auditor’s report to the members of North Lanarkshire Council and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements I certify that I have audited the financial statements in the annual accounts of North Lanarkshire Council and its group for the year ended 31 March 2026 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the group and council only Comprehensive Income and Expenditure Statements, the group and council only Balance Sheets, the group Movements in Group Reserves Statement and council Movements in Reserves Statement, the group and council only Cash Flow Statements, the council only Housing Revenue Account, the Council Tax Income Statement, the Non Domestic Rates Income Statement, the Sundry Accounts Statement and notes to the group and council only financial statements, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2025/26 (the 2025/26 Code). In my opinion the accompanying financial statements: give a true and fair view of the state of affairs of the council and its group as at 31 March 2026 and of the income and expenditure of the council and its group for the year then ended; have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2025/26 Code; and have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion I conducted my audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. My responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of my report. I was appointed by the Accounts Commission on 2 December 2022. My period of appointment is five years, covering 2022/23 to 2026/27. I am independent of the council and its group in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and I have fulfilled my other ethical responsibilities in Page 23 of 64
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accordance with these requirements. Non-audit services prohibited by the Ethical Standard was not provided to the council. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Conclusions relating to going concern basis of accounting I have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the ability of the council and its group to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the current or future financial sustainability of the council and its group. However, I report on the council’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Risks of material misstatement I report in my Annual Audit Report the most significant assessed risks of material misstatement that I identified and my judgements thereon. Responsibilities of the Chief Officer (Finance and Technology) and Audit and Scrutiny Panel for the financial statements As explained more fully in the Statement of Responsibilities, the Chief Officer (Finance and Technology) is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Chief Officer (Finance and Technology) determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Chief Officer (Finance and Technology) is responsible for assessing the ability of the council and its group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the operations of the council and its group. The Audit and Scrutiny Panel is responsible for overseeing the financial reporting process. Page 24 of 64
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Auditor’s responsibilities for the audit of the financial statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. I design procedures in line with my responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: using my understanding of the local government sector to identify that the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003 are significant in the context of the council and its group; inquiring of the Chief Officer (Finance and Technology) as to other laws or regulations that may be expected to have a fundamental effect on the operations of the council and its group; inquiring of the Chief Officer (Finance and Technology) and the Chief Officer (Legal and Democratic) concerning the policies and procedures of the councils and its group regarding compliance with the applicable legal and regulatory framework; discussions among my audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which my procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the council’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the Page 25 of 64
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relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of my auditor’s report. Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited parts of the Remuneration Report I have audited the parts of the Remuneration Report described as audited. In my opinion, the audited parts of the Remuneration Report have been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Chief Officer (Finance and Technology) is responsible for the other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities and the unaudited parts of the Remuneration Report. My responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In my opinion, based on the work undertaken in the course of the audit: the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and Page 26 of 64
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the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Matters on which I am required to report by exception I am required by the Accounts Commission to report to you if, in my opinion: adequate accounting records have not been kept; or the financial statements and the audited parts of the Remuneration Report are not in agreement with the accounting records; or I have not received all the information and explanations I require for my audit. I have nothing to report in respect of these matters. Conclusions on wider scope responsibilities In addition to my responsibilities for the annual accounts, my conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in my Annual Audit Report. Use of my report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, I do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. John Boyd FCPFA Audit Director Audit Scotland 4th Floor 8 Nelson Mandela Place Glasgow G2 1BT Page 27 of 64
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Appendix B: Letter of Representations (ISA (UK) 580) John Boyd, Audit Director Audit Scotland 4th Floor 8 Nelson Mandela Place Glasgow G2 1BT North Lanarkshire Council Annual accounts 2025/26 Dear John, This representation letter is provided in connection with your audit of the annual accounts of North Lanarkshire Council and its group, (hereafter referred to as North Lanarkshire Council) for the year ended 31 March 2026 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view and have been properly prepared, and for expressing other opinions on the Remuneration Report, Management Commentary, and Annual Governance Statement. I confirm to the best of my knowledge and belief, and having made such enquiries as I considered necessary, the following representations given to you in connection with your audit of North Lanarkshire Council’s annual accounts for the year ended 31 March 2026. General I have fulfilled my responsibilities for the preparation of the 2025/26 annual accounts as set out in your 2025/26 Annual Audit Plan. All the accounting records, documentation, and other matters which I am aware are relevant to the preparation of the annual accounts have been made available to you for the purposes of your audit. All transactions undertaken by North Lanarkshire Council been recorded in the accounting records and are properly reflected in the financial statements. I confirm that the effects of uncorrected misstatements are immaterial, individually and in aggregate, to the financial statements as a whole. I am not aware of any uncorrected misstatements other than those reported by you. Financial Reporting Framework The annual accounts have been prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2025/26 (2025/26 Code) and the requirements of the Local Government (Scotland) Act 1973, the Local Government in Scotland Act 2003, and the Local Authority Accounts (Scotland) Regulations 2014. Page 28 of 64
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In accordance with the Local Authority Accounts (Scotland) Regulations 2014, I have ensured that the financial statements give a true and fair view of the financial position of North Lanarkshire Council at 31 March 2026 and the transactions for 2025/26. Accounting Policies and Estimates All material accounting policies applied are as shown in the note included in the financial statements. The accounting policies are determined by the 2025/26 Code, where applicable. Where the 2025/26 Code does not specifically apply, I have used judgement in developing and applying an accounting policy that results in information that is relevant and reliable. All accounting policies applied are appropriate to North Lanarkshire Council’s circumstances and have been consistently applied. The methodology, significant assumptions, and data used in making accounting estimates are reasonable, and have been properly reflected and disclosed in the financial statements in accordance with the 2025/26 Code. Judgements made in making estimates have been based on the latest available and reliable information. Estimates have been revised where there are changes in the circumstances on which the original estimate was based or as a result of new information or experience. Going Concern Basis of Accounting I have assessed North Lanarkshire Council’s ability to continue to use the going concern basis of accounting and have concluded that it is appropriate. I am not aware of any material uncertainties that may cast significant doubt on North Lanarkshire Council’s ability to continue to adopt the going concern basis of accounting. Assets All assets at 31 March 2026 of which I am aware have been reported in the financial statements. All assets as at 31 March 2026 have been valued and / or indexed in line with the accounting polices around asset valuations. I carried out an assessment at 31 March 2026 as to whether there is any indication that an asset may be impaired and have recognised any impairment losses identified in the financial statements. I have provided you with all information of which I am aware regarding any valuation exercises carried out after 31 March 2026. There are no plans or intentions that are likely to affect the carrying value or classification of the assets recognised in the financial statements. Owned assets are free from any lien, encumbrance, or charge, except as disclosed in the financial statements. Page 29 of 64
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Liabilities All liabilities at 31 March 2026 of which I am aware have been reported in the financial statements. Provisions have been recognised in the financial statements for all liabilities of uncertain timing or amount at 31 March 2026 of which I am aware where the conditions specified in IAS 37, as adapted by the 2025/26 Code, have been met. The amount recognised as a provision is the best estimate of the expenditure likely to be required to settle the obligation at 31 March 2026. Where the effect of the time value of money is material, the amount of the provision has been discounted to the present value of the expected payments. Provisions recognised in previous years have been reviewed and adjusted, where appropriate, to reflect the best estimate at 31 March 2026, or to reflect material changes in the assumptions underlying the calculations of the provisions. The accrual recognised in the financial statements for annual leave untaken by 31 March 2026 has been estimated on a reasonable basis. There are no plans or intentions that are likely to affect the carrying value or classification of the liabilities recognised in the financial statements. Contingent Liabilities There are no significant contingent liabilities, other than those disclosed in Note 24 to the financial statements, arising either under formal agreement or through formal undertakings requiring disclosure in the financial statements. All known contingent liabilities have been fully and properly disclosed in accordance with IAS 37, as adopted by the 2025/26 Code. Litigation and Claims All known actual or possible legal claims have been disclosed to you and have been accounted for and disclosed in the financial statements in accordance with the 2025/26 Code. Fraud I understand my responsibilities for the design, implementation, and maintenance of internal control to prevent fraud and I believe I have appropriately fulfilled those responsibilities. I have provided you with all information in relation to: my assessment of the risk that the financial statements may be materially misstated as a result of fraud, any allegations of fraud or suspected fraud affecting the financial statements, and Page 30 of 64
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fraud or suspected fraud that I am aware of involving management, employees who have a significant role in internal control, or others that could have a material effect on the financial statements. Laws and Regulations I have disclosed to you all known instances of non-compliance or suspected non-compliance with laws and regulations whose effects should be considered when preparing financial statements. Related Party Transactions All material transactions with related parties have been appropriately accounted for and disclosed in the financial statements in accordance with IAS 24, as adopted by the 2025/26 Code. I have made available to you the identity of all of North Lanarkshire Council’s related parties and all the related party transactions of which I am aware. Remuneration Report The Remuneration Report has been prepared in accordance with the Local Authority Accounts (Scotland) Regulations 2014, and all required information of which I am aware has been provided to you. Management Commentary I confirm that the Management Commentary has been prepared in accordance with statutory guidance, and the information is consistent with the financial statements. Corporate Governance I confirm North Lanarkshire Council has undertaken a review of the system of internal control during 2025/26 to establish the extent to which it complies with proper practices set out in Delivering Good Governance in Local Government: Framework 2016. I have disclosed to you all deficiencies in internal control identified from this review or of which I am otherwise aware. I confirm that the Annual Governance Statement has been prepared in accordance with the Delivering Good Governance in Local Government: Framework 2016 and the information is consistent with the financial statements. There have been no changes in the corporate governance arrangements, or issues identified, since 31 March 2026 which require to be reflected in the Annual Governance Statement or annual accounts. Group Accounts I have identified all the other entities in which North Lanarkshire Council has an interest and have classified and accounted for them in accordance with the 2025/26 Code. Any significant issues, including those related to fraud and any qualified audit opinions, in relation to the financial statements of group entities, have been provided to you. Any significant Page 31 of 64
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issues identified by you as group auditor have been communicated to management of group components, where relevant to those components. Events Subsequent to the Date of the Balance Sheet All events subsequent to 31 March 2026 for which IAS 10, as adopted by the 2025/26 Code, requires adjustment or disclosure have been adjusted or disclosed. Yours sincerely Section 95 Officer Page 32 of 64
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref RB/SL Date 24/09/26 Best Value thematic audit: Asset Management From Rachel Blair, Chief Officer (Legal, Democratic and Strategy) E-mail blairr@northlan.gov.uk Executive Summary This report presents the outcome of the thematic Best Value audit on Asset Management, specifically “How well councils are managing assets to achieve their corporate objectives and respond to challenges around financial sustainability and climate change”. This audit has been undertaken as part of a national approach to auditing thematic aspects of the statutory Best Value duty. This national approach was initially implemented during 2022/23, with the first thematic audit focussing on the leadership of the development of the council’s strategic priorities. This was followed in year two by a thematic audit on workforce innovation and in year three by a thematic audit on transformation. The thematic audit on asset management is year four of the programme set by the Accounts Commission. Overall, the key messages in the outcome report following North Lanarkshire Council’s thematic Best Value audit on Asset Management are extremely positive. The report recognises the clear strategic framework provided by the Corporate Asset Management Plan (CAMP) for managing and developing the council’s assets, and that the CAMP reflects post pandemic working arrangements, changing population needs, future demand for services, and net zero commitments. It also acknowledges the council’s consideration of the affordability of its capital programme and asset management plans. In addition, the report recognises the proactive place-based approach the council has through initiatives such as the community hub and housing investment programmes, and the community asset transfer process, which bring together council services, partners, and third sector organisations to strengthen referral pathways, make better use of community assets, and co-ordinate investment in housing and regeneration to support more accessible, joined up services, and improvements in health, wellbeing, and social inclusion. The Best Value outcome report also contains three audit recommendations for improvement, for which management responses have been provided outlining the planned next steps and actions. Recommendations It is recommended the Audit and Scrutiny Panel: 1) Review the outcome report following the thematic Best Value audit in line with the Panel’s role to ensure oversight of the adequacy and effectiveness of the council’s governance, risk management, and internal control frameworks and external audit Item 6 Page 33 of 64
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1. Background 1.1 A report to the Audit and Scrutiny Panel in February 2023 provided an outline of the new national approach to auditing Best Value which came into effect as part of the external auditor’s appointment for the five-year term from 2022/23. 1.2 Under this approach: • Auditing Best Value is fully integrated within the wider annual audit, with findings reported through the external auditor’s Annual Audit Report (AAR). • Thematic Best Value audit work is undertaken each year by the external auditor, in line with Accounts Commission requirements, to provide assurance on areas of risk or interest across Scotland at a defined point in time. • Each council’s Annual Audit Report (AAR) and thematic Best Value reports are considered by the Accounts Commission once during the five-year external audit appointment, informing a statutory report produced by the Controller of Audit under Section 102(1) of the amended Local Government (Scotland) Act 1973. 1.3 To date, outcome reports produced for the council as part of the national thematic Best Value audit programme have covered: 1.3.1 Leadership of the development of new strategic priorities - reported to the Audit and Scrutiny Panel in October 2023 and the Policy and Strategy Committee in December 2023. Nationally the outcome report (Delivering for the future, why leadership matters), following the audit of all 32 councils, was published by Audit Scotland in July 2024: https://audit.scot/uploads/2024-07/nr_240711_best_value_thematic_leadership.pdf 1.3.2 Workforce innovation (how the council is responding to current workforce challenges through building capacity, increasing productivity, and innovation) - reported to the Audit and Scrutiny Panel in August 2024 and the Policy and Strategy Committee in September 2024. Nationally the outcome report (Delivering for the future, responding to the workforce challenge) following the audit of all 32 councils, was published by Audit Scotland in August 2025: https://audit.scot/uploads/2025-07/bv_250807_workforce_thematic.pdf 1.3.3 Transformation (how councils are redesigning and delivering more efficient services to achieve planned outcomes) - reported to the Audit and Scrutiny Panel and the Policy and Strategy Committee in September 2025. arrangements, and 2) Note that, as the Audit and Scrutiny Panel is accountable to the Policy and Strategy Committee as the parent committee, this report (and appendix) will be remitted to the next Policy and Strategy Committee meeting for Elected Members’ oversight. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Page 34 of 64
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Nationally the outcome report (Delivering for the future, how councils are redesigning and delivering more efficient services) following the audit of all 32 councils, was published by Audit Scotland in May 2026: https://audit.scot/uploads/2026-05/ac_260521_bv_thematic_transformation.pdf 1.4 Following the conclusion of the year four thematic Best Value audit on Asset Management in North Lanarkshire, which was carried out by the external auditors (Audit Scotland), this report herewith (and attached in Appendix A) presents the outcome of the audit along with key findings and recommendations. 2. Thematic Best value audit on Asset Management Scope of the audit 2.1 The scope provided by the external auditors outlined that the 2026 thematic audit would focus on assessing the council’s ability to demonstrate Best Value in Asset management in three key areas: 1. The extent to which the council has a clear asset management strategy and plans that are affordable, and that align with its corporate objectives, new ways of working, the changing needs of its population, and net zero commitments. 2. The extent to which the council’s governance and accountability arrangements support effective asset management. 3. The extent to which the council has a robust approach to working with partners and communities in managing its assets. 2.2 The scope also outlined that the audit would focus on the council’s strategic approach to asset management and capital investment and would not seek to examine all aspects of asset management. The assets considered within scope were informed by the council’s own asset management strategy and priorities. As a result, auditors focused on those assets central to the delivery of the council’s strategic objectives. Approach to the audit 2.3 In conducting the audit, a team of auditors from Audit Scotland carried out the following: • A review of relevant information already available in the public domain. • A review of information gained from additional requests which were fulfilled by the council. • Meetings with relevant officers from across the council, including Chief Officers responsible for asset management. Key messages 2.4 Overall, the key messages from Audit Scotland are extremely positive - these are set out in the outcome report in Appendix A and also noted in the extract below: 1. North Lanarkshire Council’s Corporate Asset Management Plan provides a clear strategic framework for managing and developing its assets. The plan is aligned with the Strategic Capital Investment Programme and supports delivery of the council’s corporate priorities. 2. The Corporate Asset Management Plan reflects post-Covid hybrid working arrangements, changing population needs and future demand for services, and links to the council’s ambition to meet net zero commitments. Page 35 of 64
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3. The council has sufficiently considered the affordability of its capital programme and asset management plans whilst navigating substantial financial pressures. 4. The council has strong reporting and monitoring of its capital programme, but asset management plan reporting needs improvement. The council recognises this and is taking steps to address it. Its latest performance has improved against all relevant Local Government Benchmarking Framework indicators compared to 2013/14. 5. The council’s approach to community asset transfers (CAT) is clear and transparent. Ongoing improvements to simplify procedures and enhance support help encourage more CAT proposals. There are examples of engaging with communities in developing asset management plans. However, the impact of this feedback on decision-making is not always clear. 6. The council takes a proactive place-based approach through initiatives such as the community hub programme and housing investment programmes. It brings together council services, partners and third-sector organisations to strengthen referral pathways, make better use of community assets, and co-ordinate investment in housing and regeneration. This supports positive outcomes, including accessible, joined-up services and improved health, wellbeing and social inclusion. Source: Thematic Best Value report, Audit Scotland, September 2026 Improvement action plan 2.5 The report contains three recommendations for improvement which are noted below. This includes management responses, including planned actions, responsible officers, and timescales which are also detailed in the appendix to the external audit report attached. Issue / risk Recommendation Agreed management action / timing 1. Governance arrangements in the Corporate Asset Management Plan The council’s Corporate Asset Management Plan (CAMP) could be strengthened by setting out additional detail on the corporate governance arrangements, including key roles and responsibilities. Risk: A lack of clarity regarding review and reporting arrangements may lead to unclear accountability for delivery of the CAMP, reducing assurance that priorities remain aligned with corporate objectives. The council should set out further detail on the governance arrangements for corporate asset management in its CAMP to improve transparency and accountability. This should include key roles and responsibilities, reporting arrangements, and how progress and priorities will be reviewed and aligned with corporate objectives. This will be reflected in the next update to the CAMP which is expected after the introduction of the next Strategic Capital Investment Plan (due at Policy and Strategy Committee in December 2026). This will include consideration of consolidated CAMP and associated asset management plans (AMPs) reporting and supporting governance and monitoring arrangements to strengthen oversight, accountability, and assurance of asset management delivery across the council. Chief Officer (Assets and Procurement) September 2027 2. Performance reporting The current performance reporting arrangements do not provide a comprehensive view of performance across the council’s asset portfolio. As a result, it is difficult to assess overall performance across different asset classes or to understand how delivery of the CAMP contributes to the council's wider strategic objectives and decision- making. The council should enhance the annual CAMP update by bringing together key performance information, achievements, risks and improvement actions across asset classes to demonstrate progress against the plan's objectives and enhance strategic oversight. The council’s approach to reporting of the CAMP and associated AMPs will be reviewed with a view to developing standardised reporting arrangements, including common themes, together with a template and reporting schedule. Consideration will also be given to the benefits to be gained from introducing a consolidated annual asset management report for the council to provide a comprehensive overview of performance, progress, Page 36 of 64
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2.6 As part of the council’s Internal Audit monitoring arrangements, regular reports to the Audit and Scrutiny Panel provide updates on progress in implementing recommendations arising from the external auditors’ Annual Audit Reports (AARs). This approach includes recommendations from thematic Best Value audits and, as such, progress in implementing the agreed Asset Management improvement actions will be monitored by Internal Audit and reported to future meetings of the Audit and Scrutiny Panel through the existing process. 3. Measures of success 3.1 Key measures of success are: • That the council is able to demonstrate Best Value in line with the requirements of the Local Government in Scotland Act 2003 and the supporting statutory guidance. • That the Audit and Scrutiny Panel fulfil their role in relation to commenting on the scope and depth of external auditor work and ensuring it gives value for money. 4. Supporting documentation 4.1 Appendix A - Audit Scotland thematic Best Value audit report - Asset Management: “How well councils are managing assets to achieve their corporate objectives and respond to challenges around financial sustainability and climate change”. Rachel Blair Chief Officer (Legal, Democratic and Strategy) 5. Impacts Risk: Limited performance reporting may reduce strategic oversight and accountability for delivery of the CAMP. risks and priorities across the council’s asset portfolio. Chief Officer (Assets and Procurement) September 2027 3. Reporting on community feedback The council’s consultation summary reports do not always clearly show how the council has used the outcomes of engagement with communities to inform decision-making. Risk: Communities may have limited assurance that their views have been appropriately considered, reducing transparency and accountability. The council could further strengthen its reporting on community engagement in asset management by clearly demonstrating how it has considered and used feedback from communities to inform decision-making. This could include showing the extent to which community views have influenced asset management plans and related decisions. Discussions will be undertaken across all relevant services to develop a consistent approach to recording and reporting the information derived from consultation activity. This will support the development of a standard process for demonstrating how community feedback has been considered and how it has influenced asset management plans and related decision-making, strengthening transparency and accountability. Chief Officer (Assets and Procurement) September 2027 Page 37 of 64
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5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? The legal impact in this report is only in relation to supporting demonstration of the council’s compliance with the relevant legislation listed below. It does not introduce new legal duties or changes to the council’s statutory duty in this respect. • The Local Government in Scotland Act 2003 introduced the statutory duty of Best Value which requires the council to “make arrangements which secure Best Value” and ensure “continuous improvement in the performance of the authority’s functions”. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ Page 38 of 64
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If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Demonstrating Best Value in line with statutory requirements supports the mitigation of the risk on the Corporate Risk Register for governance, leadership, and decision making. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 39 of 64
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Best Value thematic work – Asset management North Lanarkshire Council How well councils are managing assets to achieve their corporate objectives and respond to challenges around financial sustainability and climate change Prepared by Audit Scotland September 2026 Appendix A Page 40 of 64
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Key messages | 2 Page 41 of 64
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Best Value thematic work: North Lanarkshire Council | 3 Contents Key messages 4 Introduction 5 1. Asset management planning 7 2. Governance and performance 12 3. Partnership working and community engagement 16 Appendix 21 Accessibility You can find out more and read this report using assistive technology on our website www.audit.scot/accessibility. Page 42 of 64
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Key messages | 4 Key messages 1 North Lanarkshire Council’s Corporate Asset Management Plan provides a clear strategic framework for managing and developing its assets. The plan is aligned with the Strategic Capital Investment Programme and supports delivery of the council’s corporate priorities. 2 The Corporate Asset Management Plan reflects post-Covid hybrid working arrangements, changing population needs and future demand for services, and links to the council’s ambition to meet net zero commitments. 3 The council has sufficiently considered the affordability of its capital programme and asset management plans whilst navigating substantial financial pressures. 4 The council has strong reporting and monitoring of its capital programme, but asset management plan reporting needs improvement. The council recognises this and is taking steps to address it. Its latest performance has improved against all relevant Local Government Benchmarking Framework indicators compared to 2013/14. 5 The council’s approach to community asset transfers (CAT) is clear and transparent. Ongoing improvements to simplify procedures and enhance support help encourage more CAT proposals. There are examples of engaging with communities in developing asset management plans. However, the impact of this feedback on decision-making is not always clear. 6 The council takes a proactive place-based approach through initiatives such as the community hub programme and housing investment programmes. It brings together council services, partners and third-sector organisations to strengthen referral pathways, make better use of community assets and co- ordinate investment in housing and regeneration. This supports positive outcomes, including accessible, joined-up services and improved health, wellbeing and social inclusion. Page 43 of 64
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Introduction | 5 Introduction 1. Asset management directly impacts how councils provide services and achieve their own corporate priorities and longer-term financial sustainability. Limited capital budgets make it challenging for councils to maintain their existing assets and estates, invest in new assets and achieve net zero targets. Exhibit 1 sets out some principles for effective asset management, informed by CIPFA guidance and the Infrastructure Investment Plan for Scotland. Exhibit 1 Principles for effective asset management Principle What this looks like in practice Strategic alignment Councils’ asset management strategies align with their corporate objectives, financial plans, new ways of working, population needs and net zero commitments. Investment hierarchy To support sustainability and cost-effectiveness, asset management strategies prioritise: 1. maintaining and optimising existing assets 2. repurposing or upgrading existing assets to meet the needs of the community 3. new investment only when necessary Monitoring condition and performance Councils regularly assess the condition, suitability and performance of their assets, to help inform investment priorities and support continuous improvement. Governance and accountability Councils have clear roles and responsibilities for asset management, with regular, transparent reporting and senior oversight. Community asset transfers Councils have transparent and robust processes in place to assess and support requests for community asset transfers. Place-based approaches Councils collaborate across services and other public and third sector organisations to manage assets as a collective resource across their local area. This has the potential to achieve savings, better align service provision and create opportunities for joint working. Source: Audit Scotland Page 44 of 64
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Introduction | 6 2. The Code of Audit Practice sets out the requirements for Best Value audit work. This report covers the thematic aspect of the Best Value audit requirements. The Accounts Commission has directed auditors to report on how well councils are managing their assets. In carrying out the work, auditors have considered the following questions: • Part 1 – To what extent does the council have a clear asset management strategy and plans that are affordable, align with its corporate objectives, the changing needs of its population, and net zero commitments? • Part 2 – To what extent do the council’s governance and accountability arrangements support effective asset management? • Part 3 – To what extent does the council have a robust approach to working with partners and communities in managing its assets? 3. An improvement action plan is included at Appendix 1 of this report. This sets out audit recommendations in key areas, and the council’s planned response including responsible officers and dates for implementation. 4. The coverage of the work is in line with the expectations for council’s arrangements for the seven Best Value themes in the Local Government in Scotland Act 2003, Best Value Statutory Guidance 2020. Page 45 of 64
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1. Asset management planning | 7 1. Asset management planning 5. Councils’ capital programmes are a necessary component of modernising services to improve outcomes for local communities. Doing this successfully requires good strategic medium- to long-term asset management and planning. The Accounts Commission’s Local government budgets 2025/26 briefing reported that capital funding for 2025/26 had increased but remained lower than in 2023/24 and that investing in new buildings and assets is increasingly expensive. Councils are relying on borrowing as the main source of funding for capital projects. In 2025/26, councils intend to borrow £3.13 billion, an increase from £2.67 billion in 2024/25. Findings and evidence relating to the council’s asset management strategic planning arrangements Judgements Evidence 1. The council’s Corporate Asset Management Plan provides a clear strategic framework for managing and developing its assets. It covers a sufficient period enabling strategic planning. 2. The council’s Corporate Asset Management Plan could be strengthened by setting out additional detail on the corporate governance arrangements, including key roles and responsibilities. 1. In May 2026, the council agreed a refreshed Corporate Asset Management Plan (CAMP), covering the period of 2026-2031. This overarching strategic document refers to the relevant CIPFA guidance and sets out the council’s approach to and priorities for managing and developing its assets. It supports the council’s ambition to bring together all asset types ‘into a single, integrated estate which operates as a cohesive base’. Progress is being made towards this objective with community hubs demonstrating how traditional boundaries between asset types (schools, community, partner assets) can be removed to support more integrated service delivery. 2. The CAMP covers the management of around 1,000 operational assets, including community hubs, schools, care homes and office accommodation and outlines how the approach taken supports service delivery. The CAMP also provides a strategic overview of other major asset classes such as housing, which is supported by a dedicated Housing Asset Management Plan (HAMP) 2026-31. 3. The CAMP briefly mentions that the council is planning to ‘review the plan annually and provide regular updates on key areas to the relevant committees’. However, there is an opportunity to provide further clarity on how progress Page 46 of 64
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1. Asset management planning | 8 Judgements Evidence and priorities will be reviewed and aligned to achieve the corporate objectives. The CAMP could be strengthened by setting out additional detail on the corporate governance arrangements. This includes key roles and responsibilities as well as monitoring and reporting processes. 3. The council’s Corporate Asset Management Plan aligns with its corporate objectives. It reflects post- Covid hybrid working arrangements, changing population needs and future demand for services, while supporting the council’s ambition to meet its net zero commitments. 1. There is clear alignment between the CAMP and the council’s strategic priorities. The CAMP establishes the strategic approach to asset management, with a stated objective of supporting the vision and ambitions set out in The Plan for North Lanarkshire. 2. There is evidence that the council has considered the changing population needs and future demand for services. The CAMP includes the following initiatives: • development of community hub-based service delivery • investment in schools, housing and community infrastructure • support for integrated and place-based services • digital transformation initiatives to make service delivery more collaborative and responsive 3. There is evidence that the council has considered how its assets can be optimised to reflect new ways of working and providing services. For example, since 2017, the council has been undertaking a programme of office rationalisation and has delivered over £2 million in efficiency savings to date. As co-location within community hubs expands and more agile ways of working are adopted, the council continues to reduce and consolidate its office estate, improving asset utilisation and supporting more efficient service delivery. 4. The CAMP clearly links to the council’s plan to meet its net zero commitment. North Lanarkshire’s Path to Net Zero (2045) prioritises actions that increase its buildings' energy efficiency and reduce carbon emissions and energy demand and identifies targets and timescales to achieve those. 5. Given the CAMP is a high-level strategic plan, detailed information such as property condition, occupancy rates, demographic and trend analysis is contained within individual asset plans. 4. There is a clear link between the Corporate Asset Management Plan, the council’s capital 1. The CAMP covers the same five-year period as the council’s Strategic Capital Investment Programme and both support the Programme of Work, its delivery framework for achieving the ambitions of The Plan for Page 47 of 64
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1. Asset management planning | 9 Judgements Evidence programme and asset management plans. North Lanarkshire. The CAMP supports capital investment decisions and funding applications. One of the criteria for submitting a capital funding bid is demonstrating that the proposed expenditure aligns with the Corporate or Service Asset Management Plan priority or supports the Programme for Work (if it is a new investment proposal). 2. Based on our review of the council’s HAMP and the Town and Community Hub programme, there is a clear link between the CAMP and those individual asset management plans. They include specific actions and timescales and are also linked to the capital programme. 5. The council demonstrates a commitment to affordability in its capital programme and has regularly reviewed its key financial strategies to keep its borrowing at an affordable level. This requires careful ongoing monitoring. 1. Across Scotland, councils continue to operate in a challenging financial landscape with ongoing cost pressures, high interest rates, and economic uncertainty. These conditions have a direct influence on borrowing costs and the affordability of the capital programme. 2. The CAMP recognises that the council's assets represent the second largest areas of expenditure and states that assets should be ‘well managed, maintained and fit for current and future needs’. 3. There is evidence that the council has sufficiently considered affordability in capital investment and asset management planning. • When developing community hubs, the council prioritises refurbishing and adapting existing buildings where possible. Decisions are based on factors such as building conditions, community need, location and delivery timescales, while it will also build new hubs where required. • The council actively considers how efficiently assets are used, taking account of whole-life costs. Examples include initiatives to improve asset utilisation rates and reduce surplus capacity across the estate. The council uses a Strategic Assessment Tool to evaluate property- related proposals and options appraisals, supporting informed decision-making. • The Strategic Capital Investment Programme 2024/25 to 2028/29 provides details on the projected capital resources available from various funding sources, including capital grants and capital receipts, as well as borrowing and undertakes risk assessments at a strategic level. The council also has the Community Investment Fund, a locally controlled source of capital financing, as the main source of funding. It comes from ringfencing elements of future council tax income Page 48 of 64
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1. Asset management planning | 10 Judgements Evidence associated with housing growth and top slicing an element of future council tax increases. The Fund aims to create additional resources of £500 million over a ten- year period to support capital programmes, reducing reliance on external funding and borrowing. The Programme has built in a corporate contingency of £8.7 million to help manage unforeseen costs and other risks associated with programme delivery. • As the Medium-Term Financial Plan 2027/28 to 2031/32 demonstrates, the council regularly carries out scenario planning, considering ongoing service pressures and other external and internal financial challenges (including increased inflation and loan charges costs). Under the envisaged scenario, it highlights a significant funding gap of £75.545 million for the three-year budget period from 2027/28 to 2029/30. It continues to monitor affordability acknowledging that risks will require ongoing careful management. • As reported in the council’s annual accounts, long-term borrowing increased from £590.6 million in 2023/24 to £774.9 million in 2025/26, a rise of 31 per cent over the period. This was accompanied by an increase in annual interest costs from £44.6 million to £58.2 million. • The council’s 2026/27 Treasury Management Strategy, which sets out its annual borrowing approach, indicates that borrowing levels are expected to increase over the next five years. For example, the proportion of financing costs to net revenue is projected to rise from 5.4 per cent in 2026/27 to 8.3 per cent in 2030/31. However, the strategy sufficiently considers financing risks, including economic conditions and fluctuating interest rates, and the associated prudential indicators suggest that borrowing levels will remain affordable and sustainable. 6. The council has taken a proactive approach to identify, monitor and manage significant building safety risks. 1. The council has a two-pronged approach to identify, monitor and manage significant building safety risks across its estate. First, it identifies risks through annual condition surveys. Second, it manages and mitigates risks through its corporate risk management framework. The framework categorises risks at corporate, service and project levels. For example, the council has identified a medium corporate risk associated with reinforced autoclaved aerated concrete (RAAC) and a moderate risk relating to faster stock deterioration within its HAMP. These risks are kept under regular review and the updates are reported to the relevant committees. Page 49 of 64
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1. Asset management planning | 11 Recommendations The council should set out further detail on the governance arrangements for corporate asset management in its Corporate Asset Management Plan to improve transparency and accountability. This should include key roles and responsibilities, reporting arrangements, and how progress and priorities will be reviewed and aligned with corporate objectives. Judgements Evidence 2. The council has identified properties with significant risks, such as flammable cladding and RAAC, and maintains up- to-date information about their condition. As reported on its website, the council has assessed more than 400 corporate properties for RAAC, confirming its presence in five. It also surveyed 13,785 sites and identified RAAC in 140 properties across 22 blocks. The council is taking action to ensure safety through remedial works, demolition where necessary, and continued monitoring. It also reports specifically on RAAC to the relevant committees. For example, it presented a report to the Housing Committee in February 2025. 3. The council developed a Tower Strategy in 2017, re- provisioning its tower estate over the next 25 years. This included condition surveys, such as external cladding assessments, demolitions/refurbishments and a fire safety programme. The May 2026 Housing Committee report noted good progress on demolitions, the fire safety programme and major refurbishments. In addition, the council has received funding for three Scottish Government Cladding Remediation Programme Single Building Assessments. This programme is not directly related to the Grenfell Tower incident. Page 50 of 64
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2. Governance and performance | 12 2. Governance and performance 6. It is essential that the council has effective governance arrangements in place to enable transparency, oversight and scrutiny of progress with implementing its capital programme and asset management strategy. This enables better-informed decision making and corrective action where needed. Findings and evidence relating to the council’s governance arrangements and performance Judgements Evidence 7. The council has strong reporting and monitoring of its capital programme but asset management plan reporting needs improvement. 1. The council has integrated leadership arrangements in place for its capital programme and asset management plan. • Responsibility of overseeing asset management plans is distributed across five committees in line with each committee’s remit. The Audit and Scrutiny Panel oversees performance across the council. • At senior officer level, senior management teams, which meet monthly, provide strategic oversight of asset management and the capital programme. The Strategic Capital Delivery Group, which meets quarterly, oversees the council’s capital programmes. 2. The council monitors progress against its capital budgets for the General Fund and the Housing Revenue Account and regularly reports to the Policy and Strategy Committee, the Finance and Resource Committee and the Housing Committee. There is evidence of sufficient scrutiny and oversight in implementing the capital programme at elected member and senior officer levels. 3. Reporting of performance against internal asset management indicators is undertaken at service level through a range of separate Performance Review reports to relevant committees. Each performance report tracks trends in KPIs and highlights progress and areas for improvement and the Audit and Scrutiny Panel, which oversees performance across the council, receives the Performance Assurance Review report on a quarterly basis. However, neither individual Performance Review Page 51 of 64
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2. Governance and performance | 13 Judgements Evidence reports nor Performance Assurance Review reports provide a comprehensive view of performance across the council’s asset portfolio. As a result, it is difficult to assess overall performance across different asset classes or to understand how delivery of the CAMP contributes to the council's wider strategic objectives and decision-making. There is an opportunity for the annual CAMP update to provide additional strategic insight through bringing together key performance information, achievements, risks and improvement actions across asset classes. The council’s 2026 self-evaluation recognised this as an area for improvement and the council is taking steps to demonstrate progress against the plan's objectives and enhance strategic oversight. 8. The council regularly reports progress with its capital programme while it continues to face delivery challenges. 9. The council is shifting its focus from reactive maintenance to planned and prioritised maintenance. 10. The council’s most recent performance shows improvement across all relevant Local Government Benchmarking Framework indicators compared to 2013/14. 1. We highlighted in our 2024/25 Annual Audit Report that the council’s capital programme continued to face delivery challenges with capital spend being re-profiled. 2. In September 2025, the council reported that the final General Services capital outturn for 2024/25 was £119.439 million, representing 99 per cent of the original budget. While this is an improvement on 2023/24, when expenditure reached only 63 per cent of the original budget, performance against the revised budget showed no improvement, with the outturn accounting for 87 per cent of the revised budget. The council continued to note a number of significant reprofiling exercises conducted during the year. It highlighted ongoing challenges in delivering the capital programme such as staffing shortages, contractor and supply chain issues, rising costs and the need to prioritise externally funded projects. Lessons learnt identified included stronger risk management, improved stakeholder collaboration, and more realistic planning and coordination arrangements. 3. For 2025/26, the council approved a capital programme of £310 million, which was subsequently revised to £318 million. The latest monitoring report (as at 27 February 2026) shows slippage in programme delivery. The council has delivered: • 80 per cent of the General Services capital programme (£180.276 million revised budget), compared with a target of 98 per cent of the projected outturn being committed. • 75 per cent of the Housing Revenue Account capital programme (£137.646 million revised budget), Page 52 of 64
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2. Governance and performance | 14 Judgements Evidence compared with a target of nearly 100 per cent of the projected outturn being committed. 4. The council is actively working to reduce reactive maintenance by taking an integrated approach for repairs, maintenance and investment across its assets. Maintenance contracts are now in place for property and roads, helping to support planned maintenance and service continuity. The council is also improving digital connectivity through its housing programme, which is expected to reduce reactive maintenance requirements in the medium term. 5. For 2024/25, the council demonstrated improvement against the relevant Local Government Benchmarking Framework (LGBF) indicators compared to the baseline year of 2013/14 (Exhibit 2). • The strongest improvement was in the percentage of internal floor area of operational buildings in satisfactory condition, which increased by 23 percentage points to 95 per cent. This performance was substantially stronger than the family group average, which increased by 13 percentage points to 92.5 per cent, and the national average, which rose by ten percentage points to 91 per cent. • While overall performance against the 2013/14 baseline has improved, improvement in relation to the suitability and condition of operational buildings has been modest, increasing by only 0.4 percentage points. This compares with increases of seven percentage points for the family group average and eight percentage points for the national average. Page 53 of 64
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2. Governance and performance | 15 Exhibit 2 Trend in performance against Local Government Benchmarking Framework indicators North Lanarkshire Council has demonstrated improvement in 2024/25 compared to the baseline year of 2013/14. Note: The latest available LGBF data for the proportion of council dwellings that are energy efficient relates to 2021/22 across all councils. Consequently, it is not possible to assess the council's performance against this indicator for subsequent years. Source: Audit Scotland using Local Government Benchmarking Framework Recommendations The council should enhance the annual Corporate Asset Management Plan update by bringing together key performance information, achievements, risks and improvement actions across asset classes to demonstrate progress against the plan's objectives and enhance strategic oversight. Page 54 of 64
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3. Partnership working and community engagement | 16 3. Partnership working and community engagement 7. It is essential that councils consider how they can collaborate across services and with other public and third sector organisations to manage assets. This has the potential to achieve savings, better align service provision and create opportunities for joint working. Councils should also have transparent and robust processes in place for supporting and assessing community asset transfer requests and engaging with their communities on asset management plans and priorities. Findings and evidence relating to the council’s partnership working and community engagement arrangements Judgements Evidence 11. The council has a clear and ambitious plan for service delivery, supported by initiatives such as the community hub programme and Housing Investment Programmes. It brings council services, partners and third-sector organisations together to provide more accessible and joined-up services for local communities. 1. The CAMP and The Plan for North Lanarkshire both recognise the importance of working with communities, public sector partners, third sector organisations and other stakeholders to maximise the use of assets and improve service delivery. Examples of partnership working in the CAMP include: • Town and Community Hubs – the biggest long-term project to replace or modernise older schools and create community-focused buildings that bring services together in one place. • Office Rationalisation – changing how the council uses its buildings with investment in a number of community facilities used by council staff, partners and the community. • Housing and Regeneration - working with private developers, housing associations and other partners to increase affordable housing, improve the quality and energy efficiency of existing homes and support community regeneration. • Learning Estate – 23 learning campuses are owned and managed through a private public partnership. Page 55 of 64
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3. Partnership working and community engagement | 17 Judgements Evidence • Commercial Estate – The Centre Cumbernauld is owned by the council and is currently occupied by retailers and third sector organisations. 2. To strengthen partnership working, the council adopted its Leadership and Operating Model in 2021. The model sets out a ten-year plan to move from traditional office-based working to a more flexible, community-focused approach. Through this model, the council has been working collaboratively with a wide range of partners, including NHS Lanarkshire, education providers, third-sector organisations, community groups, sports clubs and other local partners. 3. The council reports progress every six months to the Policy and Strategy Committee. The latest update, published in June 2026, highlighted several benefits of the community hubs. For example, the hubs in Chryston, Riverbank and Newmains and St Brigid have helped partner organisations improve referral pathways, reduce duplication and make better use of community assets. They have also supported early intervention, increased community participation and enhanced health, wellbeing, employability, family support and digital inclusion services. As a result, local residents have benefited from more accessible and joined-up services, leading to stronger community connections and improved health, wellbeing and social inclusion outcomes. Since the start of the programme in March 2020, the council has developed four community hubs and plans to open a further four hubs in 2026. 12. The council has a framework that sets out its approach to involving communities in decisions that affect them. There are examples of community engagement in the development of asset management plans. However, it is not always clear how feedback from these engagements has influenced decision- making. 1. The council approved its overarching framework for community engagement, the Working with Communities Framework, in 2019. It sets out how it works with communities and involves them in decisions that affect them. This includes asset management. The framework is based on the council’s Trust Model, which aims to ensure that engagement happens at the right time, involves the right people, has a clear purpose, encourages shared responsibility and is tailored to local community needs. The council is currently reviewing the framework. It is expected to be updated by the end of 2026. The revised framework is intended to be more flexible, responsive to local communities and inclusive of all communities. 2. The council regularly engages with communities through public consultations published on its website. Recent examples we reviewed include those on the Bellshill, Page 56 of 64
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3. Partnership working and community engagement | 18 Judgements Evidence Kilsyth and Shotts Town Action Plans, the HAMP and the Cumbernauld Town Centre Regeneration project. The council has published detailed consultation reports. However, those reports do not always clearly show how the council has used the outcomes of engagement to inform decision-making. 13. The council has a clear and transparent approach to supporting and assessing community asset transfer requests. Additional resourcing has contributed to an increase in community asset transfer applications. 1. The council has clear governance arrangements on community asset transfer (CAT). The Communities Committee oversees CAT, including approving CAT requests, as well as reviewing any refusals. An officer-led Corporate Community Ownership and Management of Assets Group, made up of senior officers from relevant council services, assesses applications and a Community Asset Leadership Group, made up of Chief Officers, makes recommendations to support the Committee’s decision-making. The Communities Committee receives annual updates in line with Scottish Government guidance for local authorities. These updates also form part of the Performance Assurance Review submitted to the Audit and Scrutiny Panel, which oversees performance and are published on the council’s website. The 2025/2026 annual report is expected in August 2026. 2. The council’s website provides helpful information for communities. It helps increase transparency of the CAT assessment and scoring process. For example, it includes: • a short explanatory video outlining how the CAT process works in practice, such as how applications are assessed and decisions are made • a dedicated council contact and links to external support organisations, such as Development Trusts Association Scotland (DTAS), Community Ownership Support Service and the Scottish Government • the Equality Impact Assessments completed for all CAT requests • decision notices and committee reports. 3. The CAMP actively encourages CAT requests and sets out an intention to increase the number of applications. In June 2024, the council updated its Community Ownership and Management of Council-Owned Assets Policy (available on the council’s website) and approved additional resourcing to further support community groups to make better use of local assets through the formal CAT process or through alternative arrangements. Page 57 of 64
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3. Partnership working and community engagement | 19 Case study Continuous improvements to the Community Asset Transfers approach The council secured funding through the UK Shared Prosperity Fund and established a support fund to help community groups develop robust, evidence-based Community Asset Transfer (CAT) proposals. Between 2023/24 and 2025/26, the fund supported 24 community groups, distributing £95,240 to enable essential development work, including feasibility studies, condition surveys and business planning. The council is using end-of-project reports to capture outcomes, identify lessons learned and inform ongoing improvements to the CAT process. It indicated that groups accessing the fund were better equipped to progress CAT applications, secure external funding and develop sustainable community-led projects. Judgements Evidence 4. The updated policy helps clarify the CAT processes. It defines the roles of community and voluntary organisations, elected members, council staff and senior officers to support the effective implementation. It also includes a structured assessment framework and scoring matrix to ensure consistency and transparency in decision-making. 5. The council has also temporarily increased resources for CAT. It has created two Community Capacity Officer posts to provide dedicated support to community groups interested in the CAT process. In addition, it has introduced a £2.3 million Community Asset Transfer Fund to enable community groups to bid for funding to undertake essential preparatory work such as business planning, valuations, surveys and feasibility studies for assets to be transferred (Case study). 6. Since 2017 when the updated national guidance became available, there have been six full CATs completed through the CAT process, alongside 16 leases and ten transfers through other mechanisms. Since updating the policy in June 2024, the council has received twelve new CAT requests – double the number received during the previous four years (2020-2024). The council is currently reviewing the CAT process with the completion expected in August 2026. Through the review, it aims to streamline the process and strengthen consistency and alignment with council priorities. Page 58 of 64
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3. Partnership working and community engagement | 20 Building on the success of the fund, the council has included a £2.3 million Community Asset Fund within its Strategic Capital Investment Programme 2024/25 to 2028/29. This investment demonstrates the council’s commitment to continuous improvement by reducing barriers to participation, strengthening community capacity and supporting long-term sustainability of the community-owned assets. Source: Audit Scotland Recommendations The council should further strengthen its reporting on community engagement in asset management by clearly demonstrating how it has considered and used feedback from communities to inform decision- making. This could include showing the extent to which community views have influenced asset management plans and related decisions. Page 59 of 64
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Appendix | 21 Appendix Improvement action plan Issue/risk Recommendation Agreed management action/timing 1. Governance arrangements in the Corporate Asset Management Plan The council’s Corporate Asset Management Plan (CAMP) could be strengthened by setting out additional detail on the corporate governance arrangements, including key roles and responsibilities. Risk – A lack of clarity regarding review and reporting arrangements may lead to unclear accountability for delivery of the CAMP, reducing assurance that priorities remain aligned with corporate objectives. The council should set out further detail on the governance arrangements for corporate asset management in its CAMP to improve transparency and accountability. This should include key roles and responsibilities, reporting arrangements, and how progress and priorities will be reviewed and aligned with corporate objectives. This will be reflected in the next update to the CAMP which is expected after the introduction of the next Strategic Capital Investment Plan (due at Policy and Strategy Committee in December 2026). This will include consideration of consolidated CAMP and associated asset management plans (AMPs) reporting and supporting governance and monitoring arrangements to strengthen oversight, accountability, and assurance of asset management delivery across the council. Chief Officer (Assets and Procurement) September 2027 Page 60 of 64
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Appendix | 22 Issue/risk Recommendation Agreed management action/timing 2. Performance reporting The current performance reporting arrangements do not provide a comprehensive view of performance across the council’s asset portfolio. As a result, it is difficult to assess overall performance across different asset classes or to understand how delivery of the CAMP contributes to the council's wider strategic objectives and decision- making. Risk – Limited performance reporting may reduce strategic oversight and accountability for delivery of the CAMP. The council should enhance the annual CAMP update by bringing together key performance information, achievements, risks and improvement actions across asset classes to demonstrate progress against the plan's objectives and enhance strategic oversight. The council’s approach to reporting of the CAMP and associated AMPs will be reviewed with a view to developing standardised reporting arrangements, including common themes, together with a template and reporting schedule. Consideration will also be given to the benefits to be gained from introducing a consolidated annual asset management report for the council to provide a comprehensive overview of performance, progress, risks and priorities across the council’s asset portfolio. Chief Officer (Assets and Procurement) September 2027 Page 61 of 64
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Appendix | 23 Issue/risk Recommendation Agreed management action/timing 3. Reporting on community feedback The council’s consultation summary reports do not always clearly show how the council has used the outcomes of engagement with communities to inform decision-making. Risk – Communities may have limited assurance that their views have been appropriately considered, reducing transparency and accountability. The council could further strengthen its reporting on community engagement in asset management by clearly demonstrating how it has considered and used feedback from communities to inform decision-making. This could include showing the extent to which community views have influenced asset management plans and related decisions. Discussions will be undertaken across all relevant services to develop a consistent approach to recording and reporting the information derived from consultation activity. This will support the development of a standard process for demonstrating how community feedback has been considered and how it has influenced asset management plans and related decision- making, strengthening transparency and accountability. Chief Officer (Assets and Procurement) September 2027 Page 62 of 64
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Best Value thematic work – Asset management North Lanarkshire Council How well councils are managing assets to achieve their corporate objectives and respond to challenges around financial sustainability and climate change Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 Email: info@audit.scot www.audit.scot AS.5.0 Page 63 of 64
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