To note the draft, unaudited Statement of Accounts for 2025/26.

The Head of Strategic Finance introduced the draft Statement of Accounts for 2025–26, highlighting the significant work completed by the finance team. The following principal were noted;

1.     The accounts were published early (29 May), ahead of the statutory deadline (30 June), and the audit had already begun.

2.     The aim was to complete the audit and approve final accounts by 29 September, earlier than the statutory deadline (31 January 2027).

3.     The Comprehensive Income and Expenditure Statement showed a £0.9m deficit, due to technical accounting adjustments (e.g. asset revaluations, pension liabilities), despite a balanced outturn in management accounts.

4.     The Balance Sheet showed net assets of £614.9m, general fund reserves of £10.1m (unchanged) and earmarked reserves of £70.9m.

5.     A two-page summary had been included to make the accounts more accessible to non-specialists.

On behalf of the committee, the chair offered his congratulations to the Director of Finance and her wider team for their achievements.

In response to committee questions, it was noted:

1. Comments about government funding pressures were acknowledged, but it was confirmed the document should remain non-political, focusing on factual reporting rather than attributing causes.
2. Regarding the Dedicated Schools Grant (DSG), a SEND reform plan was being submitted to government and if approved, the council could receive funding to cover 90% of the DSG deficit, significantly improving finances. The remaining 10% would be managed over time, with a clear repayment strategy in place.
3. A lack of detailed information regarding the £5.7m Central Treasury Management variance was noted, particularly in relation to investment and contractual income. It was explained that the accounts are required to follow a prescribed format, which does not permit the inclusion of this level of detail which and could be found in separate reports (e.g. cabinet outturn reports).
4. Concerns about external consultants for transformation were met with assurance that there will be strong internal governance and challenge. External input will be used selectively to provide additional ideas and expertise, not dictate solutions.
5. Changes in reserves were clarified as classification/interpretation issues (e.g. school reserves) rather than unexplained losses.
6. Officers would review and clarify the wording to better explain how reserves relate to insurance risks. (Page 83 – Narrative Report)  Action 2026/27-6
7. Capital expenditure and grants figures are explained through technical accounting treatments, with full detail in supporting notes and subject to audit.
8. Questions on treasury management and borrowing confirmed, decisions were actively managed, supported by advisors, and aligned with the approved strategy.
9. The transition from Balfour Beatty to M Group did not offer a direct cost saving, but a move to better value for money and improved service delivery.
10. Reserves are used to manage specific financial risks (e.g. insurance excesses) and are clearly tracked and reviewed.
11. It was explained that loss on disposal of non-current assets mainly arose from, academy school transfers (no proceeds) or asset disposals (e.g. vehicles, property).
12. REFCUS was explained as revenue expenditure funded from capital, e.g. grants spent on residents’ homes where no asset is retained by the council.
13. PFI arrangements  ...  view the full minutes text for item 146