Report by the Director or Resources Deputy Chief Executive (attached)

The Committee considered a report by the Director of Resources and Deputy Chief Executive regarding the Draft Statement of Accounts 2023/24 (circulated previously).

The Director of Resources and Deputy Chief Executive highlighted the following points for the Committee:

·         The Draft Statement of Accounts were signed-off on 31^st May 2024 by the Chief Financial Officer. As at 3^rd June 2024, around 65 District Councils had theirs signed (of a total 164).

·         External audit works were programmed (by Bishop Fleming) for August/September 2024, with a view to being presented to Full Council in November 2024.

·         The aim was for an ‘Unqualified opinion’.

·         The narrative report covered the external pressures and challenges to the Council in the period up to 2023-24. These included the Covid pandemic, Russia’s invasion of Ukraine, Brexit, double-digit inflation, and cost of living pressures.

·         Despite a reduction in inflation it still presented pressure to the Council’s accounts.

·         The financial pressures have been built into the Medium Term Financial Plan (MTFP).

·         As at 31 December 2023 the Council was forecasting a net surplus of £0.073m against the budget, but with favourable variances in the quarter (such as Business Rate Retention through the Devon-wide pool) the final outturn position was a budget surplus of (£0.630m) against the original budget.

·         The most notable variance to income was £0.760m Business Rates income.

·         Other income was generated through Government Grants, the Building Control partnership and a reduced spend on agency staff.

·         The only certainty in the short term was the potential impact of the Government’s Fair Funding Review and Business Rates Retention changes had now been delayed to 2026/27 at the earliest.

·         The refreshed forecasted cumulative budget gap for 2024/25 was £0m and at 2025/26 £0.487m. From 2026/27 £2.945m, to 2027/28 £3.306m.  This further increased to £3.044m in 2028/29, and £3.263m in 2029/30.

·         In June 2021 Members approved the acquisition of the Green Lanes Shopping Centre (which completed in November 2021). The financial outturn for the centre produced a net return for:

o   2021/22 (£243,600) due to minimal borrowing costs (as these commenced in 2022/23).

o   2022/23 trading position produced a net return of (£291,000), including borrowing costs.

o   2023/24 trading position produced a net return of (£237,000) this included £150,000 from the income volatility reserve due to the financial impact of losing Wilko in August 2023.

·         From the revenue budget surplus of £630,000, it was proposed to set aside the amount into the following earmarked reserves:

o   Corporate Property income volatility reserve - £150,000

o   Insurance Reserve - £280,000 – mitigate 2024/25 higher insurance costs

o   Digital Transformation Financial system reserve - £200,000.

·         The recommended level of general fund balance was 5%-10% of the Council’s net revenue budget. The combination of in year measures and robust budget management saw the Council through the financial pressures and resulted in a general fund reserve balance at 31 March 2024 of £1,238,000, which was a level of 8.4%. This was within the 5-10% levels recommended for an authority of this size.

·         Long term external  ...  view the full minutes text for item 91