Agenda item

To present the report of the Director of Function (Resources)/Section 151 Officer.

The report of the Director of Function (Resources)/Section 151 Officer incorporating the draft Statement of the Accounts for the 2024/25 financial year was presented for the committee’s consideration. It was noted that the figures were unaudited and may therefore be subject to change. A final report will be presented to the Full Council upon completion of the external audit.

The Director of Function (Resources)/Section 151 Officer reported that Audit Wales had issued a revised audit timetable but as these revised deadlines have not been written into the regulations, each council must publish a notice highlighting the delay in publication and the reasons for it. The draft Statement of the Accounts for 2024/25 was signed by the Council’s Responsible Financial Officer – the Director of Function (Resources)/Section 151 Officer on 30 June 2025 and the external audit commenced on 1 July with the aim of securing approval of the final accounts by 31 October 2025. The Section 151 Officer thanked the Council’s Accountancy Services team for its hard work in completing the draft accounts by 30 June.

The Section 151 Officer advised the committee of a change in the treatment of leased assets  following a review of the Code of Practice on Local Authority Accounting. Leases are now required to be accounted for as if they were funded through borrowing, which has   implications for the presentation of the Balance Sheet and for the Council’s reported borrowing figures. He provided a summary of the main financial statements included in the accounts. The Comprehensive Income and Expenditure Statement (CIES) shows the total income and expenditure for the year across all services, based on accounting standards and includes technical items such as depreciation and the current and past service pension costs which are not funded by grants or local taxation. The CIES shows a net accounting surplus of £45m for the year. After adjustments have been applied as detailed in Table 1 of the report and Note 6 of the accounts, the surplus, which is credited to the Council’s reserves and balances,  reduces to £3.741m. The CIES and adjustments in Note 6 are brought together in the Movement in Reserves Statement to show the Council balances as at 31 March 2025. The Section 151 Officer also provided an overview of the notes to the financial statements and highlighted those which the committee might find most helpful in reviewing the accounts including earmarked reserves, capital expenditure and financing, provisions, expenditure and income analysed by nature, grants income, pensions, contingent liabilities and assets, and related party transactions.

In response to questions raised by the committee, the Director of Function (Resources)/ Section 151 Officer provided further clarification as follows –

·         The provision for the Penhesgyn Waste Site relates to the aftercare of the areas of the site formerly used for landfill and maintenance of the culvert beneath the site. It includes potential costs that may arise from the failure of the culvert. An annual expert inspection assesses the risks, potential costs and the adequacy of the provision.

·         The £5.7m payment to Cyngor Gwynedd under Related Parties includes payment for services under joint agreements, notably for Additional Learning Needs.

·         The £67.607m for Council Tax income (Note 12) includes the North Wales Police and town and community council precepts and reflects the debit raised rather than the budgeted amount. The budget is based on the tax base which is lower to account for in year changes and non-collection of debt. The increase from £59m in 2023/24 to £67m in 2024/25 also reflects changes in the number of properties subject to payment of the Council Tax premium. Additional income was received late in 2024/25 following the reclassification of approximately 200 - 250 self-catering properties from business rates to standard council tax due to changes in the qualifying thresholds and they became liable also for the premium payment. The transfer of some properties was backdated to April 2023.This contributed to the 13% increase in Council Tax income in 2024/25.

·         In respect of Note 39 (Council Tax) and the ratio of people to properties, the total number of properties on Anglesey is in the region of 35,000 of which over 2,500 are second homes with no permanent residents. Discounting these gives a total of 32,500. Additionally 11,000 -12,500 households claim a single person discount reflecting an increase in single person households. In terms of learning from this data or benchmarking it with other councils of a similar profile to Anglesey, the proportion of Band D equivalents is used to compare council tax rates across authorities. However, some councils particularly in South Wales have higher Band D council tax rates than Anglesey due to a greater number of Band A and B properties. The prevalence of second homes can also distort comparison.

·         With regard to the Local Government Pension scheme although the pensions fund shows a net asset position of £139m (excluding unfunded benefits), accounting rules prevent recognition of this surplus on the balance sheet because it cannot be used or spent by the Council. An asset ceiling of £139m has therefore been applied reducing the asset to nil on the balance sheet. Additionally, unfunded pension obligations cannot be offset against the net pension asset resulting in a reported net pension liability of £9m despite a positive performance by the pensions fund in 2024/25.

The committee questioned the value of the Statement of Accounts in informing the wider public about Council spending. As an example, reference was made to the cashflow statement which shows a net surplus of £38m on the provision of services – up from £12m in 2023/24 which was noted as difficult to reconcile with ongoing service pressures and the cost of living crisis. It was suggested that key information from the accounts be presented in a more digestible summary format for the public benefit.

The Director of Function (Resources)/Section 151 Officer acknowledged that the Statement is a complex and technical document which is prepared in accordance with accounting regulations and is difficult for the public to interpret. In contrast, the regular budget oversight  reports to the Executive are more accessible and effective in helping the public monitor the Council’s financial performance and service delivery.

In closing the discussion, the Chair expressed his and the committee’s appreciation of the efforts of the Accountancy service’s staff in ensuring the timely completion of the draft accounts.

It was resolved to note the draft unaudited main financial statements for 2024/25.