Agenda item

The Select Committee received details of the Council’s financial outturn position for the financial year 2019/20 as included in the draft Statement of Accounts, the Council being required to prepare a Statement of Accounts for each financial year in accordance with statutory timelines and accounting practices set out by the Chartered Institute of Public Finance and Accountancy (CIPFA).  While the government had agreed revised timescales for the preparation and audit of the accounts due to the Covid-19 pandemic, Oldham was still on course to have the accounts audited in line with the original statutory position.  The Statement of Accounts were submitted for audit on 31^st May 2020 and published on the Council’s website on 1^st June 2020.

A submitted report summarised the Council’s financial outturn position for 2019/20 and the following matters were highlighted to the Select Committee –

·         the overall revenue outturn position for 2019/20 was a surplus of £0.270m, an increase on the favourable variance of £0.065m projected at month 9 that was reported to Cabinet on 23^rd March 2020.  It was noted that the months 6 and 8 projections reported to the Select Committee in January and February 2020 had both shown projected overspends which had been caveated with anticipated movements on the budget;

·         the year-end variances that are attributable to each Portfolio, with commentary being given as to the principle adverse variances in the People and Place, Community Health and Adult Care, and Children’s Services Directorates;

·         Schools balances at 31^st March 2020 were £5.487m but were offset by the deficit on the Dedicated Schools Grant (DSG) of £4.916m leaving a net balance of £0.571m held within Other Earmarked Reserves;

·         the final Housing Revenue Account (HRA) balance was £21.796m;

·         the balance on the Collection Fund was a surplus of £3.295m;

·         the small reduction in revenue account Earmarked Reserves of £1.263m to a level of £79.360m, a decrease in other Earmarked Reserves of £4.431m to a level of £8.504m, and an increase in the General Fund balance of £0.270m to £15.110m which was reflective of the revenue outturn position;

·         expenditure on the Council’s Capital Programme for 2019/20 was £54.383m which was an increase on the month 9 forecast expenditure of £52.497m. The increase in expenditure required funding allocated to future years to be re-profiled to fully finance the Capital Programme in 2019/20;

·         Capital Receipts in year totalled £9.914m, all of which were used to finance the Capital Programme in year;

·         the significant items in each of the primary financial statements, the Comprehensive Income and Expenditure Statement, the Movement in Reserves Statement, the Balance Sheet and the Cash Flow Statement;

·         the preparation of Group Accounts incorporating the Council’s two wholly owned companies – the Unity Partnership Ltd. and MioCare Community Interest Company; and

·         the performance of the Finance Team in closing the accounts.

The budgetary implications of Covid-19 were considered and it was noted that the government had made some resources available to the Council.  However, if further funding was not forthcoming and in light of reports of other Councils highlighting potential bankruptcy, the implications for Oldham were queried.  The Director of Finance noted the level of reserves held and advised that additional revenue support from government could be anticipated, along with a further package of support to enable Councils to address the funding challenge in different ways. Notwithstanding, the Council needed to keep its position under control and a clearer view could be taken following further central government announcements.  While it was too early for talk of Section 114 Notices, it was acknowledged that there would be implications if the government did not provide further resources.  The Deputy Leader of the Council stressed that unless additional resources were provided to address the loss of income and additional expenditure incurred as a result of Covid-19, there was a serious possibility of Section 114 Notices.  While the Council may have healthy reserves, these would disappear very quickly if additional resource was not provided.

The Chair and Committee Members expressed thanks to the Director of Finance and staff for their work in production of the outturn data for 2019/20 budget.  In noting the financial position of the Council going forward, the Chair suggested that the Committee needed more regular updating on the Council’s budgetary position.  The Director of Finance undertook to report further to the Committee and to review the availability of budget updates against the Committee’s work programme and meeting dates.

RESOLVED that the Council’s financial outturn position for the financial year 2019/20 be noted.