Agenda item

Cllr L Shires – Portfolio Holder for Finance and Assets introduced the report and stated that the budget position could fluctuate significantly, but the projected full year overspend of £25k was expected to come from IT costs and returns from the cancelled Mammoth Marathon. She added that she welcomed comments on the format of the report to ensure Members fully understood the financial information provided.

Questions and Discussion

       i.          Cllr C Cushing noted that there had been a number of additions to the budget since February, and asked whether there was a systemic reason for this, and whether the Finance Team were able to cope with the significant changes. Cllr L Shires replied that on issues such as the Marram’s footpath expenditure, it was a matter of health and safety, though it was right to ask why the Council had not been more proactive in maintaining the footpath to avoid unexpected costs. It was noted that public conveniences in Holt had been hit by a car, and additional funding was required to repair and improve the facility. Cllr L Shires stated that many other budget additions were the result of external funding received, and would not negatively impact the Council’s finances.

      ii.          Cllr C Cushing stated that external audit sign-offs were known to be two years behind schedule, and in addition to EY’s limited resources there had also been resource limitations in the Finance Team, and sought assurance that the Team would be given adequate resource to meet requirements. He added that the report contained much more information than was required for a quarterly update, and suggested that it may help to make reports more concise going forward. Cllr L Shires replied that a fine balance had to be found on the level of information provided as it was sometimes helpful to include all information to be able to drill down into issues. She added that she did aim to make the reports as accessible as possible, and additional training could be arranged if required.

     iii.          The Chairman referred to the backlog in annual accounts sign-off and asked whether the financial starting position of each year could be considered sound, and not subject to change. He added that this represented a risk which had not been recognised in section nine of the report, and asked whether there was a reason for this. Cllr J Toye stated that this issue was discussed at GRAC where it had been acknowledged as a risk, but remained hopeful that the 20/21 accounts would be signed-off by the end of the week, with an expectation for the 21/22 accounts to be signed-off by March 2024. He added that despite the concerns, the Council was clear of many financial issues faced by other authorities. It was noted that several accounting disagreements on the annual accounts which had delayed sign-off related to recording practices rather than financial discrepancies, with a pension fund allocation the final issue that had to be agreed for sign-off. The Chairman acknowledged the comments but suggested that he would expect to see recognition of the risk under section nine of the report. Cllr L Shires stated that she accepted that the risk was real, and whilst she had faith in officer’s abilities to mitigate these risks, she would seek a written response on why it had not been included.

    iv.          Cllr L Vickers noted the uncertainty of unaudited accounts and asked whether NNDC had done everything possible to achieve sign-off of the annual accounts. The CE replied that there had been a delay in sign-off of the 19/20 accounts due to a Public Interest Disclosure Act deferral, and whilst this had been completed in March, it had caused a delay with subsequent annual audits. He added that this had also come at a time when their had been national shortages in the external audit sector and updates to statutory guidance which had further delayed the audit process including the treatment of fixed infrastructure assets, which had applied to NNDC’s fixed coastal defences. It was noted that 21/22 accounts had to be completed by March 2024, and the Council would endeavour to achieve this. The CE stated that the Finance Team was not adequately resourced at present, but was actively recruiting for a Chief Technical Accountancy to increase capacity. The Chairman asked whether EY could proceed with the 21/22 audit, if they had the necessary capacity to do, to which the CE confirmed the draft accounts were complete, which would allow EY to proceed if the external resource was available.

      v.          Cllr V Holliday referred to borrowing on p52, and noted that the Council appeared to be borrowing £10m to pay back £6.2m, and asked if there was any reason for this. Cllr L Shires stated that she was already looking to ask this question, and would seek to provide a written reply. The CE stated that this was the result of a cashflow issue, as the Council had to repay Covid grants based on a business rates assessment, and whilst this money had been invested, its repayment required short-term borrowing to maintain cashflow.

    vi.          Cllr N Housden referred to point 4.5 and asked why the Council was seeking an insurance claim of £120k rather than the full £370k required to rebuild the public convenience. Cllr L Shires stated that this would allow the Council to improve the building with changing places funding, whilst also reducing its carbon footprint, so the building was not being repaired like for like, and required additional funding.

   vii.          The recommendations were proposed by Cllr S Penfold and seconded by Cllr G Bull.

RESOLVED

1.     To note the contents of the report and current budget monitoring position.

To recommend the following to Full Council:

2.     That a new capital budget of £0.050m is added to the capital programme to fund repair works to the Marrams Footpath, with funding coming from the Council’s Capital Receipts.

3.     That a new capital budget of £0.370m is added to the capital programme to demolish and rebuild the Public Conveniences at Albert Street, Holt with £0.120m to be funded from an insurance claim and £0.250m to be funded from the Council’s Capital Receipts.

4.     That a new capital budget of £1.040m is added to the capital programme in respect of the Local Authority Housing Fund.

5.     That the current Provision of Temporary Accommodation Budget is increased by £0.178m to £0.983m for 2023/24 following receipt of the Local Authority Housing Fund grant.

6.     That a capital budget of £1.458m be added to the capital programme for the Rural England Prosperity Fund expenditure and £0.266m be added to the capital programme for the UK Shared Prosperity Fund expenditure as shown in paragraph 4.7 and note that this will be funded by external funding.

7.     That a capital budget of £14.610m be added to the capital programme as shown in paragraph 4.8 and note that the project will be funded by external funding.

ACTIONS

1.     Written response to be provided to Committee on questions raised by Cllr N Dixon on recognition of risks relating to delays with external audit of accounts, and Cllr V Holliday on need for £10m borrowing to repay £6.2m