The Finance Manager – Financial Control and Closing presented the unaudited Statement of Accounts for 2018-19 for noting and the Harbour Authority Annual Return for 2018-19 for approval.

He explained that the Council’s draft Statement of Accounts for the financial year ended 31 March 2019 was attached as Appendix A to the report and comprised a number of different statements relating to the financial performance and reserves as well as a statement on corporate governance arrangements.  The Annual Return for the Harbour Authority was also attached to the report for approval.

The Finance Manager – Financial Control and Closing explained that the Statement of Accounts 2018/19 was signed by the Section 151 Officer and passed to the Wales Audit Office on 28 May 2019, two weeks in advance of the date it was required. This demonstrated the Council’s commitment to earlier closing of accounts, as achieved in the last two years. He outlined the Core Financial Statements included in the Accounts, produced in accordance with International Financial Reporting Standards (IFRS) and other headlines of interest.

A Member referred to the high number of schools with a deficit budget and queried if the funding formula was correct. The Interim Head of Finance and Section 151 Officer replied that that was an interesting question and that a new document had recently been submitted to Council which set out what was being done to manage the deficit. Some Councils had changed the formula but the total sum remained the same so in these cases there would be some schools that gained and some that lost. The Schools Budget Forum was the body that would consider the advantages/disadvantages of any changes to the funding formula.       

The Member commented that given the MTFS, those schools already in deficit would struggle to balance their budget. The Interim Head of Finance and Section 151 Officer explained that they were already working closely with schools to help reduce the deficits and that in general, schools were in this position for all sorts of reasons. The level of support had been increased to give schools the opportunity to produce a plan stating how they would reduce the deficit and she was positive they had halted the slide.  The Member asked how a deficit budget aligned with Estyn inspection results and how these schools could make progress. The Interim Deputy Head of Finance explained that the trend was the same across Wales. The position had improved slightly this year but only because of a last minute WG grant. It was difficult for schools to manage when grant information was available at the last minute. A major grant from WG had still not been agreed for the current year and this made it very difficult for schools to manage their budgets.  She explained that when an inspection took place, the inspectors looked at the financial management arrangements in place to support schools. The recent Estyn inspection was complimentary and they could see good support was being provided. They would also look at the balances over a number of years and pupil numbers. It was hard to plan but they were supporting the schools as much as they could.

A Member referred to the reduction to the cost of services by approximately £10 million over the course of the year and asked if that was in line with expectations given the savings plan for the year. She added that the biggest reduction appeared to be in Education and Family Support and asked if the savings met expectations.     

The Finance Manager – Financial Control and Closing explained that the reduction in Education and Family Support was partly due to a technical adjustment following the revaluation of schools resulting in a reduction in expenditure year-on-year. The Member asked if other savings had been achieved and the figures reflected this. The Interim Deputy Head of Finance explained that the figure partly reflected the technical adjustments just referred to and partly reflected MTFS savings and transfers into the settlement from Welsh Government. The actual total BCBC budget had not fallen over recent years, it had possibly increased due to transfers of grants into the settlement, but technical adjustments make it look lower this year.

The Chairperson queried why the table on directorate under and over spends included in the presentation, was  included in the accounts last year but not this year and asked if the over spend on the communities directorate was a result of savings not achieved or unexpected costs. The Interim Deputy Head of Finance explained that she did not have the details to hand but a report on financial performance for 2018/19 was due to be submitted to Cabinet the following week. Part of the over spend was in respect of budget savings not realised in full and part was due to an over spend on services. The Interim Head of Finance and Section 151 Officer explained that 2 particular schemes had not been taken forward, subsidised bus routes and public conveniences, and these would show as an over spend. They had both been delayed due to a consultation exercise but would eventually be delivered.

RESOLVED:                That the Committee noted the unaudited Statement of Accounts for 2018-19 and approved the Harbour Authority Annual Return 2018-19.