Agenda item

Consideration was given to a report of the Finance Manager (Capital and Treasury), which presented the draft Statement of Accounts for 2020/21 for consideration.

The report highlighted:

·         The overall revenue outturn position for 2020/21 was a surplus of £2.153m;

·         The year-end variances that were attributable to each Portfolio;

·         The level of Grants received in relation to the COVID-19 Pandemic;

·         Schools balances at 31 March 2020 were £9.306m

·         The Dedicated Schools Grant (DSG) deficit was £3.560m, which was now held in an unusable reserve rather than being netted off the Schools balances (as presented in the accounts in previous years);

·         The final Housing Revenue Account (HRA) balance was £21.370m;

·         The balance on the Collection Fund was a deficit of £27.213m;

·         The revenue account earmarked reserves at £113.512m, other earmarked reserves at £29.452m (Revenue Grant Reserves of £20.145m plus School Balances as above) and an increase in the General Fund balance of £2.153m to £17.263m, reflective of the revenue outturn position;

·         Expenditure on the Council’s Capital Programme for 2020/21 was £73.227m, which was an increase on the month 9 forecast expenditure of £71.012m. The increase in expenditure required funding allocated to future years to be re-profiled to fully finance the Capital Programme in 2020/21;

·         The significant items in each of the primary financial statements;

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

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

The presentation of the draft Statement of Accounts provided the Committee with the opportunity to review the Council’s year-end financial position.

Members asked for and received clarification on the following:-

·         Severance packages – the figures showed the cumulative cost of the package including pension strain, not the amount received by the individual.

·         Increased number of write-offs – the staff who would usually undertake reviews had been moved to other tasks last year and reviews were being undertaken fully now. 

·         Investment with a term of one day – this was related to an investment in a fund that required one day’s notice to withdraw the investment.  The notice-term was therefore one day.

·         Unspent Covid grants – the final payment dates for some grants ran over the end of the financial year. Unspent discretionary grants (for which the Council acted as a Principal) were held in reserves.  Unspent mandatory grants (for which the Council acted as agent for the government) were reflected in the balance sheet. Unspent grants had been rolled forward to this year (2021/22) and many were already spent.

·         Supplementary statement for the Housing Revenue Account – one presentation of the outturn included depreciation and one did not. This was the result of a technical accounting requirement.

·         Croydon-type risk – the Council took a rigorous risk-averse approach to income and would not therefore credit income without reasonable certainty of receipt.

·         External Audit delay in agreeing accounts – this had been caused by the GMPF last year. This year was on track for agreement by the end of July.

·         Increased reserves – reserves were higher than expected largely due to the impact of the pandemic and the volatility of the financial position. The Council would still rely on reserves to balance its budget in future years. The increase in reserves improves financial resilience and would help give time for service redesign to take place and efficiencies to be delivered.  Reserves could also be used if government funding was reduced.

RESOLVED that the Council’s draft Statement of Accounts for 2020/21 be noted.