Agenda item

Report by the Chief Financial Officer (attached).

The Committee considered a report by the Director of Resources and Deputy Chief Executive regarding the Statement of Accounts 2022/23 (circulated previously).

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

·         The target date had been brought forward from end of November 30^th September.

·         The external auditors were expected to be examining the accounts over the summer months, and coming back hopefully with an ‘Unqualified’ opinion.

·         Post-pandemic, the cost of living pressures, and the UK’s rising inflation rate, were the main challenges. At the end of March 2023 the inflation rate was at 13.5%.

·         The Council recognised the effects of world economic conditions on inflation and that this had impacted public finances which, it was recognised, would be experienced beyond 2022/23.

·         In 2022/23 a cross-party workshop was held which looked at the budget. This was valuable assistance in the setting of the 2023/24 budget.

·         A number of inflationary increases were built into the 2023/24 budget and Medium Term Financial Strategy.

·         The refreshed forecasted cumulative budget gap for 2023/24 was £0m and at 2024/25 £0.499m. From 2025/26 to 2028/29 this increased to £3.307m (2025/26) and further increased to £3.455m (2028/29) due in part to the predicted impact of the Government’s Fair Funding Review.

·         The Business case for the purchase of the Green Lanes Shopping Centre (purchased November 2021) demonstrated that revenue income would cover both the loan repayment and asset management costs, and return a contribution to the Council. The Centre had provided a net return of £243,600 for Nov 2021 to March 2022, and a net return of £291,000 for 2022/23.

·         As at December 2022 the Council forecast a net surplus of £19,000 against the budget.

·         Adverse variances to the Q3 forecast position were mainly due to:

o   £116,000 Benefit Subsidy

o   £40,000 Reduction in Pannier Market income

o   £151,000 Costs award provision for Yelland Appeal. This figure was still to be finalised. It was hoped that the negotiated figure would be less.

·         Favourable variances included:

o   £180,000 from Government Grants

o   £41,000 additional contribution from the crematorium

o   £395,000 Business rates and Pooling income

o   £136,000 Interest receivable

o   £110,000 Planning fees

o   £99,000 Temporary accommodation

·         The Council’s General Fund Balance as at 31^st March 2023 was £1.238m, with £11.134m earmarked general fund reserves; leaving the Council in a strong position for 2023/24.

·         A reduction in the employer pension liability on the balance sheet was due to change in financial assumptions of which these were outlined to members.

·         There had been no material change in the accounting policies.

In response to questions from the Committee, the Director of Resources and Deputy Chief Executive confirmed that:

·         No additional borrowing had been taken on and the same level at 31^st March 2023 compared to the previous year

·         The calculation of ‘fair value’ was included within the notes to the accounts.

·         There would be no financial benefit in ‘selling on’ any loans.

·         The Accounts would be presented to Full Council in September 2023 alongside the Annual Governance Statement (AGS)

In response to a question from the Committee, the Chief Executive confirmed that the Planning Appeal had involved Devon Highways and it was hoped that negotiations would take place regarding a contribution towards the settlement. Although there was no obligation for DCC to cover any of the costs.

In response to questions from the Committee, the Director of Resources and Deputy Chief Executive confirmed that:

·         Changes to the Senior Management structure during 2021/22 had effected the salaries figures for part of that financial year but were presented in full year for the 2022/23 period.

·         A full aged break down of short term and general debts would be presented to members in July as part of the performance report.

RECOMMEND that the Draft Statement of Accounts 2022/23 be approved and proceed to Council for consideration.