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The Committee received report ES/1238 of Councillor Maurice Cook, the Cabinet Member with responsibility for Resources, which related to the Draft Statement of Accounts for the 2021/22 financial year.
Councillor Cook introduced the report and highlighted notes 16 and 17 of the Draft Statement, which related to Heritage Assets and Intangible Assets. Councillor Cook explained that these amounts had previously been immaterial and outlined the reason for their inclusion in the Draft Statement of Accounts.
Councillor Cook noted the significant level of detail in the Draft Statement of Accounts, thanking officers for their hard work, and invited the Chief Finance Officer to comment on the report.
The Chief Finance Officer advised that EY, the Council's external auditors, were close to completing the audit of the 2020/21 accounts. The completion of the audit had been delayed due to the identified issue with housing rent and services charges and how this as a compliance issue feeds into the audit report. The Chief Finance Officer stated that it was unlikely that provision in the accounts would be needed for the rectification of this issue as the figures would fall below materiality values and it was more likely to be noted as an adjustment item. The Chief Finance Officer expected that the final 2020/21 accounts would be presented at the Committee's next meeting.
The Committee was informed that the Council's designated audit manager at EY would be leaving at the end of July 2022 and was being replaced by a senior manager at the company. EY's audit of the 2021/22 accounts was scheduled to begin in December 2022 and the Chief Finance Officer confirmed that preliminary work had already begun to prepare for this audit.
The Chairman invited questions and comments.
Councillor Cooper noted the state of rent arrears on 31 March 2022 and asked what was being done to reduce this amount, bearing in mind the current cost of living crisis. The Chief Finance Officer said that he had attempted to obtain further information on rent arrears earlier that day but due to officer leave had been unable to do so; he advised that he was aware that the Council's Housing team was looking to improve the rent arrears situation and he would be able to circulate detailed information on this subject to the Committee outside of this meeting. The Chief Finance Officer confirmed that the figure in the Draft Statement of Accounts was an accumulated year-end position, as opposed to an in-year figure.
Councillor Byatt raised a query on the net loss of eight properties from the Council's housing stock and asked what this represented in terms of asset value. The Chief Finance Officer said he would be able to supply the values outside of the meeting and highlighted that the capital receipts in the Housing Revenue Account (HRA) section of the Draft Statement detailed the amount the properties had been sold for. The Chief Finance Officer added that the current housing regime allows local authorities to reinvest these capital receipts in the acquisition of new housing stock.
The Chief Finance Officer said he was not aware of any specific funding to the Council as a result of Lowestoft being one of only six locations in England that had been designated as a Centre of Offshore Renewable Engineering (CORE) status by the Government but could follow up on this, noting that the Council retained 100% of the business rates from the related onshore facilities.
The Chief Finance Officer confirmed that a list of surplus assets was published on the Council's website and said he would circulate this link to members of the Committee.
The Finance Compliance Manager advised that she would circulate detailed information on ICT income generation to members of the Committee.
In response to a question from Councillor Coulam, the Chief Finance Officer confirmed that an initial provision of £1,240,000 had been made in the 2021/22 accounts to address the identified issue with housing rent and services charges and this was covered in more detail in the Draft Annual Governance Statement for the 2021/22 financial year, which was to be considered by the Committee later in the meeting.
The Chief Finance Officer, responding to a question on the reserve for private sector housing condition survey and improvements, advised that he would seek further information from the Private Sector Housing team on funding this working in the future.
The Chief Finance Officer confirmed that there had been no transfers out from the hardship reserve fund as no applications had been received; he undertook to provide more information on this and for officers to consider alternative uses for this reserve should there be less requirement in respect of its original purpose.
The Chief Finance Officer explained that the discrepancy between council tax and business rate write-offs was related to the significant support for business rates received during the COVID-19 pandemic, which had reduced the amount of business rates that had needed to be collected from businesses during the previous two years.
The Chairman noted the substantially increased amount of money received by the Council in the form of COVID-19 support and asked how the Finance team had coped with this. The Chief Finance Officer considered that the Council had coped well and highlighted that the work of receiving and distributing COVID-19 grants had been shared by multiple departments across the authority, particularly the work of Internal Audit in completing pre and post checks. The Chief Finance Officer was of the view that his own team had fared well and complimented the work of the Financial Compliance team, noting that the extra funding had made drafting the Statement of Accounts more complex.
There being no further questions or comments the Chairman sought a proposer and seconder for the recommendation set out in the report. On the proposition of Councillor Cooper, seconded by Councillor Cloke it was by a unanimous vote
RESOLVED
That the Draft Statement of Accounts for 2021/22 be noted.