Agenda item

The Committee considered the draft Annual Statutory Financial Statements for the year ended 31 March 2020.

Mark Sanders, the Chief Accountant introduced the report and made the following comments:

·         At this stage, the accounts were unaudited albeit with the bulk of the work completed. It was intended to bring the audited accounts to the next Committee meeting

·         He was very proud of the work of his team in reaching this advanced position, bearing in mind the changes to working practices and procedures as a result of the impact of the pandemic with new group accounting procedures as well as staff changes. The team had worked very well with the team from Grant Thornton

·         The Council would be meeting all the statutory deadlines for the publication of the accounts

·         The management accounts showed an overspend of £300k against a budget of £330m. The Council was in a good position with £76m in earmarked reserves and £12.2m in general balances. In the earmarked reserves there was a deficit reserve for the Dedicated Schools Grant of £6.3m which would be corrected over the next 2/3 years. There was no material impact on asset valuation as a result of the pandemic

·         The net assets of the Pension Fund Accounts had decreased by £160m to £2.6b with an annual surplus was £9.2m

·         Work continued on the Value for Money conclusion and dependent on circumstances he hoped to be able to report the outcome to the next meeting

·         The impact of the pandemic on the accounts in the last financial year had only been 500k due to its timing close to the end of the financial year and this had been fully funded by Government grants

·         There had been no material impact as a result of the EU exit process.

In the ensuing debate, the following points were raised:

·         The healthy state of the Council’s reserves was welcomed but it was queried how these reserves had been invested. Mark Sanders responded that the reserves were part of the cash treasury management investments and there were tight restrictions on how this money could be invested to ensure that the funds were secure. Investment risk was kept minimal and exposure to equities was not permitted

·         In response to a query about the impact of the pandemic on future financial planning, Michael Hudson commented that a going concern audit paper had been completed for the external auditor, setting out the Council’s understanding of its financial position and this document would be kept under review. The Council had also completed a monthly “Delta” return form which was submitted to the Government. As part of that process, the Council was assessing projected costs. With the aid of Government grants, it was anticipated that the Council’s cash flow should be sufficient for the remainder of the financial year. Revisions to the Medium Term Financial Plan were expected. At this stage, the finances were manageable but there would be impacts in future years. 65% of the county was covered by rate relief for this year which had helped the Council’s finances but there would be risks associated with business rates income for the following year. The Government would be undertaking a spending review in the autumn and an announcement on the business rates position was anticipated which it hoped would give some clarity going forward

·         Despite a certain negative view taken in some quarters about local government finances, this Council was in a good position and it was a credit to all concerned given the financial position three years ago and recent unexpected events

·         The Chairman commented that the transition in the Council’s finances in recent years had been significant and he expressed his gratitude to the Chief Financial Officer and his team for their work. Every year the Council had met the challenges to make savings and efficiencies. It was testament to the Council’s internal processes that the Council only had an overspend of £300k on a budget of £330m last year and had maintained a consistent level of reserves of around £12m.

RESOLVED that thedraft Final Accounts Pack, including the Statement of Accounts for the financial year ended 31 March 2020, be noted.