Agenda item

To approve the Statement of Accounts 2016/17. 

23.1           The report of the Head of Finance and Asset Management, circulated at Pages No. 64-165, attached the Statement of Accounts for 2016/17 which Members were asked to approve.  

23.2           The Finance Manager explained that the Statement of Accounts for 2016/17 showed the financial position of the Council as at 31 March 2017 as well as the performance during the year. It was a statutory requirement to publish the accounts, with the audit certificate and opinion, no later than 30 September 2017. From next year those deadlines would be brought forward and the Council’s finance team had used this year as a practice run so the accounts had been ready by 31 May 2017. The audit findings report showed no material misstatements and only a few minor misclassifications and disclosure statements. The Committee was asked to review the content of the Statement of Accounts, in line with the information contained in the report, and approve them for publication in accordance with the Accounts and Audit Regulations 2011.

23.3           The Finance Manager explained that the Council had overspent against its net budget by £87,000 in the year which was broken down at Page No. 66. The employees’ full year budget was overspent largely as a result of the requirement to bring in interim staff to cover vacancies and sickness along with the provision for termination payments which had been made as part of the management restructure. In terms of supplies and services, the overspend was in relation to the expenditure associated with running elections and referendum on behalf of central government. The expenditure was unbudgeted at the start of the year but corresponding additional income had been received to finance it. Payments to third parties was significantly overspent due to disbursements incurred by One Legal which accounted for £194,000 - all amounts had been recovered from the client Councils and was shown in the income figure - planning appeal costs, and expenditure on Tewkesbury Town Centre and the new leisure centre, had been funded from other sources e.g. planning obligations. Transfer payments related to the Council’s activities in respect of the administration of housing benefit on behalf of central government but income targets had far exceeded expectations during the year with external income boosting the overall position. This had also been helped by solid income streams in a number of areas and improved recovery of housing benefit subsidy.

23.4           The total net worth of the Council had increased from £8.9 million to £9.9 million and that was summarised in the ‘Movement in Reserves Statement’, the things that had contributed to that included: an increase in long term assets which was largely due to the use of monies to fund investment property purchases; an increase in current liabilities of £20 million; an increase in total provisions due to an rise in the business rate appeals provision; other adjustments including a reduction in the Capital Receipts Reserve; and a growth in the pension deficit due to a decrease in the net discount rate over the period. The total balance for capital resources, including capital grants, was £3.279 million; however, after allowing for commitments of £5.156 million the unallocated budget available for new projects was £500,000.

23.5           In response to a query as to whether it was future proofing for growth items, the Finance Manager explained that the Council had currently borrowed £15 million at a very cheap rate. The Council had to ensure its borrowing was prudent so it would need to be careful if it borrowed for something that did not generate a return on the income like waste vehicles. The Head of Finance and Asset Management explained that the Council was not asset rich so it had to optimise its treasury strategy which meant getting its borrowing right in terms of how much, how long and when to borrow. Currently short-term borrowing was cheapest but this was reviewed on an ongoing basis. It was not unusual for Councils not to be debt-free but this was a situation that Tewkesbury Borough was not used to. Officers were always mindful of the future, and trying to protect the Council in the longer term, as well as addressing its current issues.

23.6           Members thanked the finance team for its hard work in getting the Statement of Accounts ready to meet the new deadline and, accordingly, it was

                  RESOLVED          That the Statement of Accounts 2016/17 be APPROVED.