Agenda item

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

The report of the Director of Function (Resources)/Section 151 Officer incorporating the draft Comprehensive Income and Expenditure Statement (CIES) for 2023/24 and the draft Balance Sheet as at 31 March 2024 was presented for the Executive’s consideration. The report provided a summary of the Council’s general balances, earmarked reserves, school balances and HRA reserve.

The report was introduced by Councillor Robin Williams, Deputy Leader and Portfolio Member for Finance who reported that the Council’s draft accounts had been forwarded to Audit Wales for audit within the prescribed deadline and had been reviewed by the Governance and Audit Committee on 18 July 2024.

The Director of Function (Resources)/Section 151 Officer referred to the CIES which shows the Council’s income and expenditure position for 2023/24 including the cost of services based on accounting practices rather than the amount to be funded from taxation. He reported on the movements in the Council’s reserves and balances at 31 March 2024 as summarised in paragraph 3.4 of the report and advised that the figures presented are subject to audit and may change. The balance on the General Fund as at 31 March 2024 is £15.604m (including the underspend from 2023/24) or 8.95% of the 2023/24 net expenditure budget. The Council utilised £4.425m of this reserve as funding for the 2024/25 budget which reduces the net available balance to £11.179m or 6.08% of the 2024/25 net expenditure budget. The Section 151 Officer’s recommendation approved by the Council is that 5% of the net revenue expenditure budget should be maintained as a minimum balance of the reserve for the forthcoming financial year. Based on this recommendation the minimum balance should be £9.2m which gives the Councill £2m of balances above this minimum figure. Based on the available information, the funding position for 2025/26 appears challenging. The surplus in general balances strengthens the Council’s position and provides it with the opportunity to use its general balances in 2025/26 to supplement its Welsh Government settlement and Council Tax funding. Staying on budget in 2024/25 will also help the Council’s position as any overspend will have to be met from the general balances. Planning for the 2025/26 budget has already commenced.

The Section 151 Officer also referred to school balances which although they have reduced remain in a comparatively healthy state overall, and to earmarked reserves which are held for specific purposes. Table 4 of the report sets out the new reserves created in 2023/24 and the reasons for their creation for which the Executive’s approval is sought.

The Executive thanked the Finance Service’s staff for their work in completing the draft accounts on time and their subsequent submission for audit.

It was resolved –

• To note the draft unaudited financial statements for the financial year 2023/24. (The full Draft Statement of Accounts 2023/24 is published on IOACC-Draft-SOA-Redacted.pdf (gov.wales)).
• To note the position of the Council’s general balances of £15.604m.
• To note the balance of Earmarked Reserves of £16.778m and approve the creation of £1.553m of new earmarked reserves.
• To formally approve the transfer of £2.002m of earmarked reserves back to the Council’s General Balances.
• To note the balance of the school reserves of £5.577m.
• To note the balance of the HRA reserve of £8.189m.