Agenda item
Draft Statement of Accounts 2014/15
To present the draft Statement of Accounts prior to their submission for audit.
Minutes:
The committee received the draft Statement of Accounts for 2014/2015 as approved by the Chief Finance Officer prior to their submission for audit. The Chief Finance Officer, Conrad Hall, invited questions either at the meeting or subsequently via email. Members raised questions on the increase in schools’ balances to £22m and the impact on the balance sheet of current central government plans to extend Right To Buy to housing association properties.
Conrad Hall responded that discussions would be taking place with schools over their plans to spend the money for educational purposes. Regarding the Right To Buy extension the committee heard that the value of council housing stock as disclosed in the accounts was not based on market value. The detail of the legislation was still unknown, but the cost of funding housing associations RTB discounts through sale of council properties as they became vacant was likely to be significant. The costs to housing associations would have to be met by local authorities. He confirmed that the HRA balance which currently stood at £4.5m was required for investment in housing stock which might provided some short term mitigation against the impact of the legislation.
Members raised questions on the position of the council’s property assets and Conrad Hall drew attention to the balance sheet of assets held for sale and advised that most had been sold. The remaining substantial property unsold, Brent House, was due to be sold shortly. He undertook to write to members on the suggestion for Brent House to be used for temporary accommodation.
Members referred to the current level of staff changes and queried whether the redundancy provision had increased. The Chief Finance Officer drew attention to Note 10 in his report, the Movement in Reserves Statement, and the £3.725m balance as at 31 March 2015. Previously costs would have been met from the mainstream revenue budget. Phil Johnstone (KPMG) added that concern over excessive redundancy payments would be raised however there had been no cause for concern in the previous year. The question was raised as to in what circumstances the enhanced redundancy payment would be made and who would take the decision. Conrad Hall advised that the terms for compulsory and voluntary redundancy payments had been agreed by the General Purposes Committee in February 2015 and that in 2014/15 there had been no exemptions. The Chief Finance Officer also confirmed that the low interest rates were the most significant factor in the calculation of the pension liability and that a rise in interest rates would, other things being equal, tend to have the effect of decreasing the pension liability. The Actuary carried out an estimate of liability every three years which would take into account interest rates, forecast investment returns, the demographic profile of the workforce, enhanced retirement packages granted and estimates of future life span.
Members drew attention to the rent arrears and the increase in HRA debt, up by 30%, which Conrad Hall agreed was a concern. He suggested this be the subject of further discussion when the accounts were approved in September.
RESOLVED:
(i) that the report be noted;
(ii) that the Chief Finance Officer and his staff be thanked for their work on the Statement of Accounts.
Supporting documents:
- draft-statement-of-accounts-rpt, item 6. PDF 111 KB
- draft-statement-of-accounts-app, item 6. PDF 2 MB