Draft Statement of Accounts
To consider the draft accounts for 2019/20.
Adele Taylor, Director of Resources, explained that the accounts included the period up until 31st March 2020. The report gave an indication of where RBWM was, while the accounts had been published on the website since early August so that the public could inspect them. Deloitte, the external auditors, had also provided an update at the end of the report.
Andrew Vallance, Head of Finance, said that RBWM had been rated to provide high quality services whilst providing one of the lowest council tax bands outside London. Overspend was mainly due to parking shortages and a decline in parking income, while revenue and benefits had overspend due to Covid and the need for additional housing benefits. There had been an increased cost of temporary accommodation and RBWM had received grants totalling £8 million, with around £1 million of this being used to cover the costs of Covid. In the general fund, money was moved from the budget into the reserves, RBWM had to take money out of the reserves last year to balance the budget.
On the expenditure statements, there had been a revaluation as there had been a change in the fair value of investment properties. Every three years, the pension fund was reviewed and this year the fund had been reviewed; there was a slight improvement as a result. Short term borrowing had increased to cover and fund the capital programme while there had been a positive increase in cash flow, which had increased to over £7 million.
Councillor L Jones raised a number of points, she said that in the report it was claimed that 74% residents were satisfied but the last survey was conducted in 2018. There was a lot of narrative about the 20/21 financial year, but she was interested to know how RBWM would have got to this point without Covid. She asked how much the grant was and how this had affected cash flow. Councillor Jones noted that RBWM was its own insurer and whether this meant that the figures detailing this in the report were a risk. Councillor Jones also queried about risk assessments; how each risk was managed, the processes and procedures, and how does a risk come about.
Adele Taylor said that she would check the date regarding the resident satisfaction survey. For Covid, it was about understanding the impact and the need to identify the significant effects it would have on future finances. The Medium Term Financial Plan was being revised and once this was complete it would form part of the accounts. There were a number of claims outstanding on the insurance but RBWM would not necessarily pay out in these areas. An item on Risk Management would be coming to the next meeting of the Audit and Governance Committee.
Andrew Vallance said that RBWM had insurance for high value losses, which did defer some risk. Ruth Watkins, Chief Accountant, said that the first Covid grant had been received in-year, with £1.8 million of that grant being spent.
Adele Taylor said that revaluations happened on a regular basis and that she would be happy to do a briefing note on how revaluations worked.
Councillor L Jones asked if it would also be possible to have a note on RBWM waste and also if Panel members were able to see the accounts before they were published.
Councillor Sharpe asked what checks were in place to ensure that improvements were happening.
He was informed that budget monitoring reports would be going to Cabinet regularly and officers would be looking at ways to improve how the accounts were presented as they wanted them to be as easy to understand and accessible as possible. Corporate Overview and Scrutiny would see the progress being made on the CIPFA action plan. Adele Taylor passed on her thanks to the team who had put together the Statement of Accounts for all their hard work. She also thanked the external auditors for their work and the robust working relationship.
Councillor Shape further asked if officers were receiving information in a timely manner and on a regular basis. Adele Taylor said that they were and that she hoped that officers would providing the information to Members in a good way.
Councillor Werner said that Covid was an issue for the last month of the accounts but formed a big part of them. He was interested to know what position the accounts would be in without the impact of Covid. The new waste contract had recently been implemented and there had been a number of issues, but Councillor Werner did not believe this had been reflected in the accounts. Savings were required as there were no reserves after last year’s budget and three blank boxes were part of the report, he asked if they would have been negative figures. Regarding the budget, he said that it was a ‘big mountain’ to sort and asked if officers felt that the levels proposed were achievable.
Adele Taylor said that the blank boxes were due to the Medium Term Financial Strategy being revised and that the updated version would be included in the final accounts. It was not going to be easy to find savings but a comprehensive spending review would be happening to see where these savings could happen. Regarding the waste contract, Adele Taylor said that she could not comment on the contract but it fell under the current financial year and the accounts that the Committee were looking at were for the previous financial year.
Councillor Bhangra joined the meeting.
Councillor Price said that she understood the RBWM Property Company was not included in the accounts as it was its own separate subsidiary. She said that she did not understand why investment income from the company was not part of the RBWM accounts.
Adele Taylor explained that the property company was separate and had its own set of accounts as a result. Regarding the question of why it was not part of the accounts, she said that it depended on the size of the company and RBWM Property Company did not have a high enough turnover to be part of the accounts.
Councillor Hilton, Lead Member for Finance and Ascot, said that Covid costs had been offset at the start of the year. Financial difficulties were mostly associated with the loss of income but he believed that without the impact of Covid, the financial positon of RBWM would have been ‘very good’.
Councillor L Jones disagreed with these comments and said that she did not think RBWM would have been in a good position, it would be in a better position but she would not regard it as good. Councillor Hilton accepted this statement.
The Committee then considered the update from the external auditors on the accounts. Jonathan Gooding, Deloitte, explained that the audit was ongoing with the deadline set for completion by the end of November. A good proportion of the work had been completed, but the pension fund side was less progressed as there had been issues receiving information due to the current situation.
Councillor L Jones said that Committee members needed to have training around the pension fund as she did not know where to go when she required some answers on this area. Adele Taylor said that training or a briefing on the pension fund could be provided.
Councillor Hilton said that a paper would be coming to the next Berkshire Pension Fund Panel. Councillor Sharpe, who chaired the Panel, said that it would be good to understand more about the pension fund, how it works and also how it was governed.
Councillor Bowden asked if the pension fund was amalgamated. Councillor Hilton explained that there were two schemes, with the Berkshire pension fund managed by LPB.
Councillor Rayner, Deputy Leader of the Council and Lead Member for Resident & Leisure Services, HR, IT, Legal, Performance Management & Windsor, said that there were 30 to 40 funds with outstanding queries and asked if this was normal.
Jonathan Gooding said that it was a combination of factors that had caused this, he had hoped that progress would be further than what it is but outstanding issues would be completed within the next few weeks.
RESOLVED UNANIMOUSLY; That the Audit and Governance Committee noted the report.