Issue - meetings

To submit a report by the Director of Function (Resources)/Section 151 Officer.

It was resolved –

·        To note the draft unaudited main financial statements for 2020/21.

·        To note the position of general balances and earmarked reserves and to approve the creation of the new reserves noted in Appendix 4 of the report totalling £5,181,646.

·        To note the school balances position.

·        To approve increasing the minimum level of the General Reserve balance to £9m.This sum will be reviewed again as the 2022/23 revenue budget is set.

·        To approve the creation of Service Reserves totalling £1.376m as per Table 3, Appendix 1 of the report.

·        To authorise in principle, the use of up to £3.471m (£1.217m of the General Fund balance and £2.254m of uncommitted earmarked reserves) to fund specific projects designed to meet risks and challenges faced by the Council. The Executive will approve all new projects prior to their commencement.

The report of the Director of Function (Resources)/Section 151 Officer incorporating the draft main financial statements for the 2020/21 financial year along with details of the level of general balances and earmarked reserves held by the Council and recommendations regarding their use was presented for the Executive’s consideration.

Councillor Robin Williams, Portfolio Member for Finance reported that the report includes the draft Comprehensive Income and Expenditure Statement for 2020/21 and the draft Balance Sheet as at 31 March, 2021. More detailed information about the Council’s general balances and earmarked reserves is provides and the report details the proposed use of reserves and balances in 2021/22 and subsequent years. Also set out is the level of general balances and earmarked reserves which, in the professional opinion of the Council’s Section 151 Officer is the level required to cover any financial risks faced by the Council, to meet any existing funding commitments made and takes into account any specific restrictions in the use of the funding e.g. restrictions imposed by grant conditions. The level of risk faced by the Council can change and the level of general balances and earmarked reserves will be kept under review over the coming months. The figures as presented are unaudited and may change as a result of the audit process.

The Director of Function (Resources) and Section 151 Officers advised that the draft Comprehensive Income and Expenditure Statement (CIES) shows the cost of providing the Council’s services in accordance with statutory accounting requirements and includes costs which are not charged against Council Tax which explains the figure of £24.231m. These costs which include depreciation and pension adjustments are then reversed out before determining the final position in respect of general balances, earmarked reserves, the HRA account balance and school balances. As a result, the CIES is not directly comparable to the budget outturn reports that were presented to the Executive in June, 2021.

The Council’s General Fund Balance as at 31 March, 2021 stood at £11.593m which is equivalent to 7.86%of the net revenue budget for 2021/22. The Executive has set the minimum level of the General Fund Balance as 5% of the net revenue budget which would equate to £7.37m which mean the General Fund Balance exceeds the minimum value by £4.223m. Normally, the Section 15 Officer would recommend that their level be maintained for the coming year; however in light of the uncertainty with regard to the impact of the pandemic on the demand for Council services in 2021/22; the  continuation or otherwise of Welsh Government financial assistance and the effect of ongoing restrictions and social distancing requirements on the Council’s ability to generate income for certain services, it is considered prudent to increase the minimum level of the general fund balance during 2021/22 and possibly 2022/23 until the impacts of the pandemic are clearer. It is the professional opinion of the Section 151 Officer that a minimum value of £9m (6.1% of the net revenue budget for 2021/22) is sufficient to mitigate these  ...  view the full minutes text for item 6