To approve the 2012/13 Statement of Accounts.

The Head of Corporate Finance presented the 2012/13 Statement of Accounts, which were a statutory requirement and had been produced in accordance with the CIPFA code of practice.  The Statement as presented had been approved by the Chief Officer Finance and Commercial, and would need to be published by 30 September 2013.  She drew the committee’s attention in particular to the key considerations at paragraph 8.2 of the covering report.   She gave members an overview of the full Statement of Accounts, and expanded in more detail on the following points in response to questions from members:

·         Paragraph 2.2: The most significant overspend on the revenue account was £5.9 million in relation to adult social care, which was offset by savings in other directorates,  savings on the treasury management budget, and by the sale of West Mercia Supplies. 

·         Paragraph 2.7: Of the earmarked reserves of £13.9 million, £5.5million were allocated to schools’ balances, and could be used only for this specific purpose.  A further £3.3 million related to as yet unused grants.  General reserves were £4.6 million at 31 March 2013 compared to £6.1 million in the previous year.

·         Paragraph 2.8: The increase in the deficit on the pension scheme, from £159.3 million in 2012, to £187.4 Million in 2013, would be eliminated over a period of years, starting with a review of the pension fund position later in the year.  The Chief Officer Finance and Commercial reported that the pension fund was currently cash-positive, although with the pension base likely to diminish in future years due to government cuts, it was likely that a larger employee contribution would be required.  He added that the Council had requested Herefordshire representation on the pension committee, and suggested that the Audit and Governance Committee could continue to lobby for this. 

·         The reference to property, plant and equipment on the balance sheet on page 44 of the agenda, related solely to items in the Council’s ownership, and not to those belonging to any of its contractors.

·         In response to a general question about the Council’s level of borrowing, the Head of Corporate finance confirmed that borrowing was not secured against property.  Loans used for capital spending were always matched by an increase in the revenue budget; therefore the ability to re-pay loans was always factored into the base budget. 

·         With reference to the cash flow statement on page 46 of the agenda, it was noted that a new collection system for council tax and business rates would be introduced in 2014.  Collection rates would continue to be monitored, and the impact of the new system would be assessed through the internal audit programme.  A member commented that the change in the system would lead to a proportion of business rates coming directly to the Council, which he suggested could be used to assist the start-up of new businesses. 

RESOLVED:  That

(a)       the 2012/13 Statement of Accounts be approved; and

(b)       the draft letter of representation be signed by the Chairman of the Audit and Governance Committee and by the Chief Officer Finance and Commercial.