To note the draft, unaudited Statement of Accounts for 2024/25.

The Director of Finance (DOF) expressed her personal thanks to her teams for their hard work and dedication.

The Chief Accountant (CA) introduced the draft unaudited statement of accounts for the year ended 31st of March 2025.

The following principle points were noted.

• The document included the narrative statement, the annual governance statement, the group accounts and the supplementary accounts of the collection fund statement.
• All documents had been reviewed by the internal sculpt team, who checked for accessibility and readability online.
• Herefordshire was 1 of 3% of local authorities that published on 30^th of May one month ahead of the statutory deadline determined by the Accounts and Audit Regulations 2015.
• The accounts would now be subject to external audit testing. It was noted that additional resource had been identified by the external auditors and the audit had started earlier than anticipated and would hopefully support a timely audit opinion to be brought to this committee in September, in advance of the statutory deadline of 27 February 2026.
• The net deficit on the provision of services presented in the comprehensive income and expenditure statement was £11.1 million; this represented the accounting deficit after financial accounting adjustments including pension actuarial costs and capital costs allowable under International Financial Reporting Standards (IFRS).
• The financial outturn position reported for 2024/25 was an underspend of £0.5m against a budget of £212.8m.
• Net assets measured £614.9m
• The general fund balance had increased by £0.5m to £10.1m and earmarked reserves had increased from £73.2m to £80.7m.

In response to committee questions. 

1. It was explained the amounts corresponding to council tax and business rates on pages 69 (revenue summary) included the expenditure to Herefordshire Council and page 161 (collection fund statement) included the total amounts the council collected to include tax collected on behalf of  billing authorities such as the police and fire.
2. The Council tax debt on page 119 showed a balance broadly consistent with the previous financial year. Collection rates are high and is a key performance indicator in the service level agreement with Hoople. Income and debt are monitored very closely.
3. It was explained that cash balances declined due to liquidity of cash balances around the year end because not as much council tax or business rates were collected in February and March.
4. “Trading and investment income” (Page 97)  had halved from the previous year due to valuations on the investment properties. A detailed response would be circulated to the committee.
5. There had been a significant loss on “disposal of non-current assets” (Page 97) due to Academy transfers during the year.
6. A breakdown of “other non-ring fenced grants” (page 101) would be circulated to the committee.
7. A breakdown of additions in property, plant and equipment movements (page 111) would be circulated to the committee.
8. It was highlighted that the repayment of loan debt was set out in the technical annex on page 149.
9. The council owned 100% share capital in Midlands Centre for Cyber Security in Skylon Park. Opportunities for the centre were being explored and directed through the shareholder committee. It was noted that the DOF was previously the director of Cyber Quarter Limited as the Council's representative.
10. The dedicated schools grant, a key financial risk as highlighted in the annual governance statement was discussed The council was committed to identify actions to mitigate the DSG deficit, through monitoring of the impact of actions in the DSG Deficit Management Plan, and by reviewing opportunities to increase sufficiency and reduce the use and cost of out-of-county and independent provision, through the council’s capital programme in 2025/26 and 2026/27.
11. It was explained that the budget amendment, approved in February 2024, allocated additional budget of £2.3 million to the Children & Young People Directorate to mitigate against non-delivery of savings in 2024/25. As savings had been delivered in full, the additional budget had not been used and was presented as an underspend which contributed to the overall underspend position for the year.

On behalf of the committee, the Chairperson thanked and congratulated the officers involved for the efficient preparation of the Draft Statement of Accounts.

The committee noted the draft, unaudited Statement of Accounts for 2024/25.

2023/24-056 A detailed response on “Trading and investment income” (Page 97)  having halved from the previous year to be circulated to the committee.

2023/24-057 A breakdown of “other non-ring fenced grants” (page 101) and additions in property, plant and equipment movements (page 111) would be circulated to the committee.