Agenda item

Briefing report attached

The Draft Statement of Accounts are attached.

Sam Evans, Joint Chief Finance Officer presented a briefing note setting out the unaudited Statement of Accounts for the 2020/21 financial year.  The report highlights the overall financial position for the year.

Whilst there is no longer a requirement to present the unaudited accounts to Members before the external audit process commences, the Council has continued this practice as it gives Members early notification of the financial outcome of the previous financial year and is considered to be good practice.

There is a requirement to obtain certification of the accounts by the responsible financial officer, for the Council this is the Executive Director of Finance and S151 Officer.

The accounts will be available for public scrutiny from 2 August to 13 September.  This will be advertised on the Council’s website.  The unaudited accounts will be placed on the Council’s website on 31 July in line with the Government’s policy of increased transparency in the public sector.  And the accounts will be subject to external audit.

The style and format of the accounts is largely prescribed by the CIPFA Code of Practice (The Code). Audit Committee should assure themselves that the Narrative Report is consistent with the core financial statements.

The Statementof Accounts for Bury Councilcomprises of:

•               A narrative statementby the Executive Director of Finance and S151 Officer

·                         The statement ofresponsibilities forthe accounts

·                         The core financialstatements, comprising:

·                         The movement inreserves statement

·                         The comprehensive incomeand expenditurestatement

·                         The balance sheetas at31 March 2021

·                         The cash flowstatement

·                         The notes to thecore financialstatements

·                         The Housing Revenue Account

·                         The Collection Fund

·                         The Group Accounts

It was explained that Elected members arenot expectedto befinancial experts,but theyare responsible for approving and issuing the Council’s financial statements. Indoing this they are playing a key role in ensuring accountability and value formoney aredemonstrated tothe public.However, localauthority financialstatements arecomplex andcan bedifficult tounderstand: theymust comply with CIPFA’s Local Authority Code of Practice, which is based on InternationalFinancial ReportingStandards andalso theaccounting andfinancing regulationsof central government

This covering report explains the key features of the primary statements andnotesthatmakeupthe2020/21Statement ofAccounts. Thenarrative statementprovides further information on the key issues for the benefit of readers of thestatements.

Sam explained that the narrative statement provided information onthe financialstatements and gave an explanation of keyevents andtheir effecton thefinancial statements. It was reported that theinformation inthe narrativestatement isconsistent withbudget informationprovided duringthe yearand reconcilesto theyear-end  financialposition reported to Cabinet on 21^st July 2021.

Those present were given the opportunity to ask questions and make comments and the following points were raised:-

·        Councillor Butler referred to the Government grants that had been received in relation to COVID and asked whether this was making the accounts look better than had they not been received.

Sam confirmed that this was the case and that the Council would be working to build back the reserves that they would be using to support loss of income particularly in relation to the airport dividend.

·                   Councillor Butler referred to the Local Government Pension Scheme and the fact that this was a big liability and asked  whether the scheme was still taking new members.

It was reported that this was the case.

·                 Councillor Rydeheard referred to the £12m use of reserves and asked whether this was sustainable.

Sam explained that this was not sustainable and that a 3 year programme was in place to get the Council back into financial balance.

·                A question was asked with regard to the school reserves being down £21.5m through the DSG.

Sam reported that the Council was fortunate to secure funding through the Safety Valve Project with the Department for Education.  This is a 4 year programme of work that would look at getting back into financial surplus by 2024/25 year end.

·                  Councillor Gartside explained that before consolidated reserves there were the minimum level of reserves. Councillor Gartside asked whether a minimum figure of reserves would be set in relation to risk management and the risks set out within the Risk Register.

Sam explained that this would be part of the Medium Term Financial Strategy which was one of the documents that was currently undergoing a refresh. This was due to Sam being very new to post.

·                Councillor Rydeheard asked when the COVID grants would be expected to be used by.

Sam reported that the Council had up to the end of the 2021/22 financial year. Some of the grants already had commitments against them but not all were committed at the current time.

·                  Councillor Hayes referred to the Business Retention Pilot which allowed GM authorities to retain 100% of the business grants it collected. Councillor Hayes referred to the statement that this would change to 75% and asked if it was known when this would happen.

Sam explained that the 75% retention was initially planned to commence in 2021/2022, but this was delayed so that GM Authorities continued the 100% retention in 2021/2022. It was also explained that this was under constant review to ensure that it meets with the needs of localities.

·                   Councillor Gartside explained that the Council used to have Star Chambers where the heads of departments attended and were asked to account in relation to overspends.

Sam explained that this was a monthly item on the agenda at the Executive Team Meeting. There was also a Finance specific Overview and Scrutiny Committee being established.

·         Councillor Rydeheard referred to the receipts from sales and assets and asked why the value was significantly higher than the forecast in this area.

Sam explained there were capital programme receipts that would be built into the reports in future but hadn’t been included as yet.

·               Councillor Whitby asked whether the cost of Covid would be met through government grants.

Sam stated that not all costs would be funded via grants and there would be a shortfall.

Delegated decision:

That the Draft Statement of Accounts be noted.