Agenda item

Report of the Head of Resources on the Statement of Accounts for the financial year 2020/21.

Report of the Head of Resources on the Statement of Accounts for the financial year 2020/21.

There were no material changes to the accounting policies for the 2020/21 accounts.

The contents of the accounts were largely determined by statutory requirements and mandatory professional standards as set out within The Code of Practice on Local Authority Accounting (The Code) and the Service Reporting Code of Practice (SeRCOP) published by the Chartered Institute of Public Finance and

Accountancy (CIPFA).

The 2020/21 accounts were expected to receive an unqualified audit opinion.

The following points were highlighted and noted:

·         It was noted that for the financial year 2020/21, the Council was required for the first time to produce group accounts to incorporate Now Housing Ltd. The group accounts were shown separately towards the end of the Council’s accounts.

·         It was noted that Now Housing Ltd started trading part way through the financial year so the accounts incorporated were from the first 6 months of trading for Now Housing Ltd. Now Housing Ltd is a limited company and has an 18 month accounting period which is up to 31 March 2022.

·         In the Financial Overview of 2020/21 in the Statement of accounts, it looked at non-current assets and the total value was £1.184bn and £1.026bn was for Housing Revenue Account. Members queried what made up the balance and officers stated that it included other buildings such as the Council Offices, shops and neighbourhood centres.

·         In the summary of the Council’s Financial Performance in the Statement of accounts, Members asked why the Policy and Culture expenditure was significantly higher that what was budgeted? Officers stated that it was net expenditure that was listed, including expenditure and income. The reason it was showing the variances was because of the income losses at Campus West during the year.

·         Members queried why the Council spent less on planning than budgeted;   officers stated this was due to staff vacancies. There was also a large planning application which came in during that year which increased the income.

·         Members asked about business rates as there were significant variances between what was spent and what was budgeted for.  Officers stated that it was mostly due to the Covid grants that the Council had received as the Council had not budgeted for these.  It was noted that most of the amount was transferred to reserves at the year end and would have gone into the 2021/22 financial year.

·         Members asked why Now Housing Ltd were given a low interest loan and if the Council were able to give a low interest loan to a company they own? Officers stated that the Council had provided a loan to Now Housing Ltd to enable Now Housing to purchase 12 apartments in Chequersfield and the loan was structured, giving the business a chance to grow before any repayments start. It was noted that the Council can give a low interest loan and gives the Council income.

·         Members asked where the Now Housing accounts were reported to? Officers stated that the Now Housing accounts in the audit report were for the first 6 months of trading.  In 2021/22 the next 12 months will be incorporated into the accounts.  Now Housing Ltd are a separate company so they were not audited by EY and were audited by another accounting firm. The performance of Now Housing Ltd will go to the Cabinet Housing Panel but the next 12 months of the statutory accounts will go to Audit committee.

RESOLVED:

(unanimous)

The Committee agreed to grant delegated authority to the Head of Resources in consultation with the Chairman of the Audit Committee to approve the Statement of Accounts for 2020/21 and to sign the letter of representation. An email notification will be sent to all Audit Committee members once the audit on the statement is concluded with a link to the published accounts and audit opinion.