Agenda item

Statement of Accounts 2021/2022


The Assistant Head of Finance went through the report for the Committee.  The Governance and Audit Committee was required to approve the final audited Statement of Accounts, which was scheduled for October this year. This report provided a copy of the draft accounts, which was signed by the Section 151 Officer (Head of Finance) and passed over to Audit Wales, who would undertake their audit of the accounts during the coming months. It was anticipated that a final, audited, set of accounts would be presented at the October meeting of the Governance and Audit Committee for committee approval.


The bulk of the report came from the Appendix, there was however a cover report which the Assisted Head of Finance highlighted for the Committee, this provided the background and the process of signing off the report.  There was a table of dates which would be of interest to the Committee.  It was noted that there was a shift in one of the dates since the report was drafted.  The public inspection would therefore commence on 15 August and not 8 August. The 27 October date would not move as this was formally agreed for the next Committee meeting.


The covering report highlighted the experiences when providing the accounts, this was in relation to the Pandemic.  There was also reference to the finance service and the impact created due to the workload, this was slightly delayed which was not an unusual occurrence to happen in most authorities.


Comments from the Committee:


Councillor Jordan went through the total expenditure for 2022-23 on page 88 and asked why the amount was £11.5M, whereby previous years, the sum was quite low, by comparison.  The Assistant Head of Finance advised that there was an actual cost and budgeted cost. One of the main aspects of capital finance and capital reporting was that there was slippage, therefore a capital programme could extend across multiple years.  Finance set a budget with a five year window based on the anticipated spend each year.  Ultimately, schemes would slip, the pandemic was a factor and could also include factors such as weather and school building project if there was a delay, or underestimating the planning for the period.   Slippage was a common occurrence and what had happened on this occasion was that we had an ambitious capital programme which had seen an increase in the anticipated spend because of the delivery of a number of high profile schemes which had pushed on the spending a number of years.  This was the highest spending by the Council in 2022-23 and this was acknowledged, at the moment we’re looking at re-profiling to reduce to a more realistic deliverable figure in this financial year.  When we report our first capital monitoring position, which would go to Cabinet in September, what you would see is a product of that re-profiling exercise.  As a result that would go down and shifted into future years.  One of the high-profile schemes was Bassaleg High school scheme and this would be monitored and adjusted accordingly.


Councillor Cocks referred to page 86 regarding the staff savings during the pandemic where some services not running at the time. In light of this, was there a backlog of services and projects because of the pandemic and what was the process of looking at this and a strategy in place to address this.  The Revenue underspend would not be rolled forward as it would with capital underspend however funding would be ear marked for specific purposes, in terms of where there might be a backlog.  There was a process around this and for the 2022-23 revenue budget there was a covid risk mitigation fund.  For the previous two years, the WG had provided a hardship fund to cover those additional costs and that ended for 2022-23.  The Council therefore created its own internal fund which would be used on a priority basis to address legacy issues, one of which was backlog issues in service delivery additional funding could be applied for and funding could be allocated.  This was seen in some of the schools. There was a mixed approached but was being acknowledged and monitored.


D Reed, Co-opted Member referred to pensions on page 92 and the £72M dip for this financial year was this a one off occurrence or was it a trend.  The Assistant Head of Finance advised that some of the explanation was there and there was a reduction in liability, which was a positive move.  A lot of this was around performance and investments, going forward it was difficult to see how it would go, with the current economic situation.  Interest rates had started to incrementally increase and it was anticipated to increase further and there was a potential for funding would perform well.  There were two elements, the other element was future liability as life expectancy increased, liability increases, it was therefore reasonable to say that investment might not perform as they had.  The Head of Finance advised that this would be a long term liability looking at a 20 year horizon in terms of employer/employee contribution rates and in terms of managing the funds over that time horizon. It was important to say that we would be looking at this over the long term in dealing with the evaluation at present.  The Co-opted Member asked if that had any impact on the usable reserves.  The Chief Accountant and Project Manager advised that this was a long term commitment to liability.  This year was unusual on the back of the previous financial year, this was therefore a rebalancing of the equity portfolio based on the Stock Market crash as a result of pandemic.  This was however bouncing back into a state of normality but taking into context the previous dip from the last year.


The Chair asked given that the draft Statement of Accounts was submitted to Audit Wales, was there a notice published by Newport City Council that if anyone wanted to raise any issues about the statement of accounts they could so with Audit Wales through Newport City Council?  The Chief Accountant and Project Manager advised that Finance were in the process of putting formal notification on the notice board at main reception and through the customer contact centre and published on internet signposting people on how to access this.



That Committee noted the draft 2021/22 Statement of Accounts.

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