Agenda item

The Service Director Finance submitted a report presenting the 2020/21 Statement of Accounts, the Council’s eleventh set of accounts prepared in accordance with International Financing Reporting Standards.  Thanks were also extended to Mr P Johnson (Independent Member), who had been involved in discussions with the Service Director Finance and his Team during the preparation of the accounts, for the support, challenge and rigour he had brought to the process.

The Committee also received a presentation from Mr S Loach (Head of Finance) giving an introduction to the preparation of the accounts, the impact of Covid 19 on the Statement of Accounts, the key messages and explanations arising therefrom and outlining the next steps to be taken. 

He made specific reference to the following matters which he put in the context of and, cross referenced to, the current Statement of Accounts:

• The Statement of Accounts Structure
  • The narrative report
  • The 4 Core Statements
  • The Disclosure notes
  • The Technical annexes
• The Key Messages in relation to the Impact of Covid
  • The costs of the pandemic and the areas of spend.  Particular reference was made to the fact that over £80m had been provided to businesses across Barnsley impacted by the pandemic.  This expenditure had not, however, been included within the accounts as the Council was effectively acting as an agent on the government’s behalf
  • The income losses
  • The overall impact on the financial position.  Overall there had been a £3.1m overspend reported in line with expectations of which £2.9m related to the Collection Fund (taxation losses) leaving a General Fund overspend of £0.2m.  This overall overspend was to be addressed through taxation income compensation expected in 2021/22 and Section 31 Grants for reliefs awarded.  There was also to be a re-prioritisation of reserves earmarked for planned new investment as agreed in the Covid 19 Financial Recovery Strategy.  There had been no call on the Council’s Minimum Working Balance which was retained at the increase of £20m
  • The Balance Sheet (Net Worth) – particular reference was made in this respect to Property Plant and Equipment and to the long-term liabilities in relation to retirement benefit obligations.  Arising out of this, specific mention was made to the total movement in Property Plant and Equipment and, in relation to Pension Liability, the two bases of valuation and the total movement in Pension liability.  In this respect, specific mention was made to actuarial (Gains)/Losses and the changes in actuarial assumptions
• The Balance Sheet Reserves – with particular reference to the usable reserves in relation to the General fund and housing Revenue Account
• The next Steps – which involved a Public Inspection period running from the 28^th July to the 8^th September, 2021, the External Audit process from July to mid-October and the presentation to this Committee and to the Council of the ISA 260 report on the External Audit Findings

The report and presentation engendered a full and frank discussion during which matters of a general and detailed nature were raised and answers were given to Members questions where appropriate.  The following matters were amongst those raised:

• The implications of the current increase in inflation was touched upon, however, the Service Director Finance commented that it was anticipated that this was a short term issue and rates would return to around 2%.  Particular reference was made to the impact in terms of pensions and public sector pay
• In relation to the Key Performance against Core Outcomes, it was noted that the number of new houses built during 2020/21 was lower than the target.  This was largely due to the impact of the pandemic on the construction industry.  The target for the number of affordable homes had been exceeded.  Further information on this would be provided
• In response to specific questioning, the Service Director Finance reported on the current position with regard to the wiping out of bad debts and to collection rates.  He commented that many businesses had received business rate relief which meant that there were less debts to collect, however, he did have some concerns regarding the collection of Council Tax going forward
• Reference was made to the deficit on the SEN Budget, to the way in which this was displayed within the accounts and the reasons for this as well as the measures introduced to tackle that deficit
• There was a discussion of the total income losses which currently stood at £11.4m and the reasons for this were outlined.  It was noted that of the £3.1m deficit, £2.9 related to Collection Fund (taxation losses) for which taxation income compensation was anticipated
• An explanation was provided of the way in which grants that were distributed to local businesses throughout the Covid pandemic were addressed within the accounts.  It was noted that the Government had worked on an estimate based on the business rate and it had become apparent that a number of Councils including Barnsley had been overpaid.  These overpayments were to be repaid back to the Government
• In response to specific questioning, the Service Director Finance commented that the Pension Authority accounts were intrinsically linked to the Council’s accounts.  Until these were ‘signed off’ the Council was unable to sign off its own accounts
• Reference was made to the current position with regard to officers in receipt of an exit package being re-employed by the authority on either a full time, part time or consultancy basis.  The Executive Director Core Services commented on the legal position in this respect.  Re-employment would generally only occur if a particular individual had a set of skills that was in short supply and these skills were required for a particular piece of work.  Further information would be provided in writing
• Reference was made to the re-valuation of assets, how this was undertaken, what factors were taken into account and to the role of External Audit in this process.  Further information would be provided

RESOLVED

(i)            that the Service Director Finance and his Team be thanked for their hard work and dedication in producing the accounts in challenging circumstances;

(ii)          that Mr P Johnson (Independent Member) be thanked for his personal support, challenge and rigour he had brought to the process during the preparation of the accounts; and

(ii)       that the work that has taken place to prepare the Authority’s Draft 2020/21 Statement of Accounts on an International Financial Reporting Standards basis be noted.