Chair of the Governance Committee to report the recommendations of the Governance Committee held on 12 November 2024 (to follow).

Council considered a report by the Chief Financial Officer (circulated previously) regarding the Statement of Accounts for 2023/24.

The Finance Manager advised that:

·       The target date for published audited accounts was by the first working day in June 2024. As at 3^rd June 2024 only 65/164 (40%) of District Councils had had published their draft accounts with North Devon being one of those Councils.

·       The external audit was undertaken by Bishop Fleming who were the Council’s appointed external auditors.

·       The audit of the Council’s financial statements took place from August to September 2024 and was concluded in October 2024.

·       The Audit Findings report was considered by the Governance Committee at its meeting held on 12^th November 2024.

·       The External Auditors reported an unqualified opinion on the Council’s financial statements.

·       There were four recommendations made, which were detailed within the key findings and these were accepted by management and a response had been built into the Action Plan.

·       The narrative report, which was detailed on pages 124 to 134 of the report identified the challenges that the Council was facing and how it aimed to address those challenges together with the review of the previous financial year 2023-24.

·       There were challenges facing the country, which included the cost of living pressures together with previous high inflation rates, which had risen from 2.9% at the beginning of the 2021/22 financial year to 11.1% by April 2022. Double digit inflation continued for the whole of 2022/23 peaking at 14.2% in October 2022; 2023/24 had seen a gradual easing, finishing the year at 4.3%.

·       However, inflationary impacts continued to be incurred within the Council’s current base budget and a number of those had been built into the 2024/25 budget and the Medium Term Financial Strategy and the Council would continue to capture the additional costs and ensure that they were fed into the quarterly performance reports.

·       Page 127 of the report detailed the quarter three position for 2023/24, which reported a net surplus of £73,000 with the additional income for Business Rates achieving a final outturn position with a net budget surplus of £630,000. The main variances of which were detailed on pages 128 and 129 of the report.

·       The movement of from quarter three of £557,000 was mainly attributed to the £760,000 additional Business Rates income.

·       The options for the management of the £630,000 surplus was to commit the following amounts to earmarked reserves as follows:

·       Members approved in June 2021 to proceed with the acquisition of Green Lanes Shopping Centre.

·       The purchase complimented other significant regeneration improvements, which were being delivered were being delivered within Barnstaple town centre through the Future High Streets project.

·       The financial outturn for the centre produced a net return (income less costs) of:

2021/22   (£243,600).

2022/23   (£291,000).

2023/24   (£237,000), although this figure included £150,000 from the income volatility reserve due to the financial impact of losing Wilko in August 2023.

·       This was a positive return for the Council and was in line with its original forecasting.

·       The Councils earmarked reserves as at 31^st March 2024 were as follows:

Ø  The General Fund Reserve had a balance of £1.238m.

Ø  Earmarked reserves of £10.560m were detailed in note 11 on pages 181 and 182 of the report.

Ø  The balances left the Council in a stronger position to deal with the risks and challenges it faced moving into 2024/25.

Ø  The result was positive for the Council to ensure that it could place balances into reserves at year end, especially after such a challenging financial year.

·       The figures for the Medium Term Financial Strategy (MTFS) 2024-2030, which was on pages 125 to 126 of the report were refreshed annually and would be presented to Full Council in February 2025 as part of the Council’s budget and Council Tax setting process for 2025/26.

·       There was continued pressure and uncertainty on the Council’s funding sources and as the Government’s Fair Funding Review and Business Rate Retention changes, which were originally scheduled for 2024/25 had once again been delayed by a further two years until at least 2026.

·       The MTFS 2024-2030 showed a balanced budget for 2024/25, with a £487,000 gap for 2025/26 increasing to a gap of £3.263m by 2029/30; details of which could be found in the table on page 126 of the report.

·       The Main Statements which could be found on pages 143 to 148 of the report were detailed as follows:

Ø  The Comprehensive I&E Statement on page 43 of the report included a number of “non-cash” accounting entries that were reversed out through the Movement in Reserves Statement (MiRS), which was detailed on pages 144-145 of the report with a total reversal of £18.216m. The end result of which was no movement in the General Fund balance at £1.238m, as a result there was no impact upon the Council Tax payer.

Ø  Full details could be seen in the Movement Reserves Statement on page 145 of the report.

Ø  The Balance Sheet on page 146 of the report gave an overview of the net assets total, which was £125m and an increase of £18m from the 2022/23 financial year. The main movements were detailed as follows:

o   Long term assets - £14m increase to £143m, note 15 on page 184 referred to the main movements, which included revaluation increases of £8m, additions (TA, finance lease vehicles together with asset enhancements of £9m and a depreciation of £4m).

o   Long term liabilities – A decrease of £4m, with the main movements being:

§  Finance lease liability – Increased by £1.3m.

§  Pension fund liability – Net liability decreased by £5m mainly as a result in changes to financial assumptions, including changes to the discount rate.

§  Further details could be found in pension note 42 of pages 206-211 of the report.

§  Fund history for the last six years could be found in the table on page 209 of the report, which showed the net liability moving from £62m through to £8.5m for 2023/24.

§  The pension deficit was offset by the same balance in unusable reserves, which could be found in note 27 on page 193 of the report.

§  The pension deficit would be addressed through increased contributions over the remaining working life of employees, which was assessed by the actuary every three years.

§  The cash flow statement on page 147 of the report detailed how the Council generated and used its cash and cash equivalents.

§  Collection Fund details, which were detailed on pages 148 and 149 of the report. The Council as the billing authority collected all monies, which also accounted for Council Tax together with Business Rates income and how it was distributed between major precepting authorities and central government.

§  Accounting policies, which were detailed on pages 150-169 of the report showed no material changes.

§  The draft auditor’s report was presented to Governance Committee on 12^th November 2024, with the auditor’s opinion that the accounts gave a true a fair view of the Councils financial position.

The Chair of the Governance Committee presented the recommendations of the Governance Committee held on 12^th November 2024 (circulated previously) and commended the Director of Resources and Deputy Chief Executive and his team for their work.

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

RESOLVED that the Statement of Accounts 2023-24 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.