Decision details

Report by Chief Financial Officer (attached)

Decision Maker: Council

Decision status: For Determination

Is Key decision?: No

Is subject to call in?: No

Decisions:

Council considered a report by the Chief Financial Officer (circulated previously) regarding the Statement of Accounts for 2022/23.

 

The Director of Resources and Deputy Chief Executive advised that:

 

·       Draft Statement of Accounts for year ended 31 March 2023 which were signed by the Chief Financial Officer on 8th June 2023.

·       The target date for published, audited accounts was 30 September.  Last year the target date was extended to 30 November 2023. 

·       Due to national resource pressures a significant number of audits have not been carried out across the sector.  The Council was one of only a small number of Local Authorities to have had their 2022/23 accounts audited.

·       External Audit of Accounts (Grant Thornton) audit of financial statements had taken place through October – December 2023 and being concluded through January 2024.

·       Audit Findings Report was presented to Governance Committee on 9 January 2024.  An Unqualified Opinion on Financial Statements was reported and there were seven recommendations (one high, three medium and three low) following the Key Findings which had been accepted by management and responses had been built into the Action Plan.

·       The Narrative Report (pages 28 to 38 of the accounts) sets out the challenges we face, how we aim to meet those challenges (Medium Term Financial Plan) and reviewed the last financial year 2022-23.

·       Review of year ended 31 March 2023.  Quarter 3 reported as at December 2022 a small net surplus of £19,000.  Favourable variances seen in last quarter since last reported position; most notably additional income from planning fees, a reduction in the Temporary Accommodation additional cost pressure that was forecast, additional interest receivable on our investments and additional Business Rates and Government Grant income. The final outturn position achieved a net budget surplus of (£693,000); this was (£604,000) in previous year.  The detailed main variances including adverse and favourable were included on the table on pages 32 and 33 of the accounts.

·       The proposals and options for balances of £693,000 to be placed into earmarked reserves were detailed on page 34 of the accounts.

·       Green Lanes Shopping Centre - Members approved in June 2021 to proceed with the acquisition of Green Lanes Shopping Centre; which the Council completed the purchase in November 2021. The financial modelling demonstrated that revenue income generated from the centre would cover both the repayment of the loan and asset management costs and would return a contribution to the Council which could be used towards mitigating future risks on income volatility, investment back into the centre and the overarching council budget.  The financial outturn for the Centre produced a net return (income less costs) for the 2021/22 year of (£243,600) due to minimal borrowing costs for last financial year as these commenced in 2022/23. The 2022/23 trading position produced a net return of (£291,000), including borrowing costs. This was a positive return for the Council and was in line with the original forecasting. 

·       The general fund reserve balance as at 31 March 2023 was £1.238m. The earmarked reserves of £11.134m were detailed on pages 62 and 63 of the accounts.  The balances left the Council in a stronger position to deal with the risks and challenges it faced moving into 2023/24.  It was positive for the Council to be able to put balances into reserves at year end especially after such a challenging financial year following the pandemic and inflationary pressures experienced in 2022/23 year.

·       The Medium Term Financial Strategy for 2023-2029 (pages 29 and 30 of the accounts) was refreshed annually and built into service planning.  The continued pressure and uncertainty on the Council’s funding sources remained as the Government’s Fair Funding Review and Business Rates Retention changes, originally planned for 2023/24 year had again been delayed by a further two years until April 2025.   The refreshed forecasted cumulative budget gap/surplus for 2023-24 to 2028-29.

·       Key performance indicators as detailed on pages 39 to 43 of the accounts.

·       Main statements of the accounts as detailed on pages 45 to 51 of the accounts which included:

·       Comprehensive Income and Expenditure Statement (page 45)

·       Movement in Reserves Statement (page 47)

·       Balance sheet (page 48) which included net assets of £106.7m (£59.5m increase from 2021-22 year). The long term assets had increased by £8m (pages 87 and 88). Net assets had increased by £2m. The Pension fund net liability had decreased by £50m due to change in financial assumptions. Fund liabilities had decreased by £53m. Fund assets decreased by (£2.5m).  Further analysis in pension note 42 on pages 109 to 115 of the accounts.  The Pension Fund History for the last 6 years were detailed on page 113 which showed net liability (£63m through to £14m).  The Pensions deficit was offset by the same balance in Unusable reserve (note 27 on pages 95 and 98).  The Pensions deficit would be made good by increased contributions over the remaining working life of employees; as assessed by the actuary every 3 years.  Capital Grants Receipts in Advance increased by £1.2m.

·       Cash Flow Statement (page 49 of the accounts).

·       Collection Fund (pages 50 and 51 of the accounts).

·       Accounting Policies (pages 52 to 71 of the accounts) detailed the rules and concepts in preparing the accounts. There had been no material changes for 2022-23.

·       Notes to the Accounts (pages 72 to 122 of the accounts). Included disclosures notes and further analysis of figures contained within the main statements.

·       Draft Auditors report (pages 123 to 128 of the accounts) – the Audit findings report was presented to the Governance Committee on 9 January 2024.  The opinion was “that the financial statements give a true and fair view of the financial position of the authority”.

 

The Chair of the Governance Committee presented the recommendations of the Governance Committee held on 13 June 2023 and 9 January 2024 (circulated previously) and thanked the Director of Resources and Deputy Chief Executive for their work.

 

It was moved by Councillor Norman and seconded by Councillor Jones that the recommendation in the report be adopted.

 

An amendment was moved by Councillor Biederman “that the recommendation in the report be adopted and that Council write to the MP requesting that she meet urgently with the Levelling Up Minister to request funding for projects in North Devon”.

 

Councillor Norman and Councillor Jones agreed to take this amendment on board.

 

In response to a question, the Director of Resources and Deputy Chief Executive advised that he would provide a breakdown of the split on spend on statutory and non-statutory services that the Council provided and circulated to all Councillors.

 

The Director of Resources and Deputy Chief Executive and his team were thanked for their remarkable work and achievements with limited budgets and real term reduction in funding received from the Government. Councillors were proud of officers and what they have managed to achieve with less funding.

 

RESOLVED:

 

(a)  that the Statement of Accounts 2022-23 be approved, and that the Chairman of the Council sign and date the Statement of Accounts as required by the Accounts and Audit Regulations 2015; and

(b)  that Council write to the MP requesting that she meet urgently with the Levelling Up Minister to request funding for projects in North Devon.

Report author: Jon Triggs

Publication date: 06/02/2024

Date of decision: 17/01/2024

Decided at meeting: 17/01/2024 - Council

Accompanying Documents: