Agenda item

(To receive a report from Sue Maycock, Head of Finance – Corporate, which invites the Committee to scrutinise and comment on the draft Statement of Accounts 2022/23)

Councillor Mrs S Rawlins (Chairman) declared that she was member of the ESPO Management Committee for openness and transparency.

Consideration was given to the 2022/23 draft statement of accounts, presented by the Strategic Finance Lead – Technical. The following matters were highlighted:

·   The 2021/22 accounts were subject to a national issue concerning local authorities’ management of infrastructure assets. The Council had successfully managed these assets over the years and had disposed of them as necessary. However, this did not necessarily prove compliance, and as such the Council was pursuing the statutory override to confirm compliance despite maintaining well catalogued assets.

·   Another national issue emerged relating to the valuations of Local Government Pension Scheme (LGPS) liabilities, which had delayed reporting as previously calculated values did not tally with necessary changes to reporting periods. 250 other councils were in a similar situation and the matter had been raised with central government.

·   It had been a challenging year due to national economic pressures and the rollout of the Council’s new Business World system. However, the Council was in a financially stable position and had received positive feedback from CIPFA and Grant Thornton and had achieved an outstanding report from Ofsted.

·   Despite inflationary pressures, the Council held an underspend on the revenue and financial budget.

·   There had been significant movement in the Councils balance sheets, largely due to recalculations in relation to pension liabilities.

The Committee considered the report, and the following comments were raised:

·   Regarding the Council’s management of infrastructure assets, pursuing the statutory override in order to satisfy the audit would not have any impact on taxpayers or service delivery as the assets in question were not saleable. However, the need to pursue the statutory override for a well-maintained group of assets in order to meet audit criteria had caused delays to signing off the Council’s financial position.

·   There was nothing concerning in the audit’s findings, and it showed that the Council was in a comfortable position.

·   There were no major changes anticipated from external audit.

·   The National Audit Office had advised auditors to be more accommodating and sense check their recommendations to ensure audits were fit for the purposes of local authorities, as audits had historically treated local authorities like businesses and measured their financial management against metrics that did not necessarily apply to the public sector.

·   Capital overspends were largely due to inflation. Technical issues and delays had contributed to cost escalation of large projects, which had been compounded by rising inflation over time. Over delivery, in some instances, had also contributed to rising costs, as more work was able to be undertaken within a set time than had been anticipated.

·   Funding had become more reliant on revenue collection over the years. However, an increase in council tax collection had been reported as more houses were built and occupied. Revenue streams were reliable and presented little risk to the Council’s financial management.

·   The Council was currently making its highest use ever of the apprenticeships levy, with approximately 80% of all apprentices retained. The Committee felt that the use of the levy should be maximised.

·   CallConnect was the only private company owned by the Council as a non-profit service.

·   Pension liabilities had changed largely due to a fall in the nation’s life expectancy and fluctuations in the property market, which had impacted the difference between useable and non-useable reserves.

·   Future funding from central government remained uncertain while increases to council tax presented a challenge to already squeezed households.

·   The Committee were informed that the Council’s financial position was as follows:

o   £48million was held in reserves, which should last up to four years based on current assumptions.

o   323 cash backed assets were held.

o   More internal borrowing was being pursued to meet inflationary demands.

o   A certainty of income had been demonstrated and cashflow was in a good position.

o   Salary banding had remined similar, but inflation had pushed up pay.

RESOLVED

That the draft Statement of Accounts 2022/23 and comments made be noted.