Auditors disclaim opinion amid procurement and governance concerns at borough council

In an audit update report considered by members on Wednesday, Ernst & Young said it was unable to conclude that the council’s financial statements for 2023/24, 2024/25 or 2025/26 were "free from material and pervasive misstatement of the financial statements".

It said this will result in a disclaimed audit opinion on all three years’ financial statements.

The report meanwhile raised seven value for money risks at the local authority, including "significant" levels of borrowing and finance lease obligations totalling circa £710 million at 31 March 2026.

Auditors said the sum gives rise to a heightened risk relating to the council’s ongoing financial sustainability.

The report also noted that the council had commissioned an external investigation to consider compliance with contract management and procurement processes and controls and the risk of corruption and collusion.

It said the council has a significant capital programme and associated asset purchases and regeneration schemes, adding: "Concerns have been identified regarding compliance with contract management and procurement processes and controls as well as the impact of high levels of borrowing related to these."

The auditor said it is yet to see the external investigator's report.

Ernst & Young also raised questions over the financial performance of the council's subsidiary company, Sempra Homes.

The report said that the council's significant loans to and investment in the company - which builds new homes in the borough - was "a potential risk of significant weakness in relation to the governance over these loans and the potential impact on the Council’s financial sustainability".

As at March 2026, Basildon had loaned the company £54.9m.

The auditor said that the company has reported a loss of £0.441 million in 2025/26, and a £13.3m loss in 2024/25.

The council has commissioned an external review of Sempra Homes' corporate governance arrangements, including risk, performance and financial management, the report said.

The report also criticised member behaviour, with auditors noting high levels of Member complaints.

The auditors' report said it awaits the findings of the Government's best value inspection into Basildon, which was launched partly due to governance concerns at the authority in July.

Adam Carey