To consider the report relating to the Statement of Accounts 2024/25 Approval of Audited Statements (DFP/14/2526).

Director of Finance and Procurement, Mike Rea, advised Members that the Authority was required to prepare a set of annual financial statements in a format that was set out under the relevant accounting code and standards which must be approved and signed off for publication by the Authority. Members were aware that the published statements of accounts must include an opinion from external auditors, Forvis Mazars on whether the statements gave a true and fair view of the financial position of the Authority and had been prepared in accordance with the relevant codes of practice.

Members’ attention was drawn to paragraphs 10 - 25 on pages 67 - 72 of the agenda which provided background to the four financial statements in the statements of accounts. It was explained that these paragraphs summarised the 2024-25 movements in the statements and explained any significant changes from the previous year’s figures.

Mike Rea advised Members that paragraph 20 outlined the Balance Sheet movements between 2023-24 and 2024-25, and the movements on the Authoritys’ assets and liabilities. Members noted that the codes and regulations required a number of notional accounting entries and adjustments that were significant in value to be included in the Statement of Accounts such as the depreciation charge. It was explained that they were notional in nature, therefore, they did not form part of the cost that must be funded by the Authorities approved general fund budget.

It was acknowledged that as per paragraph 8 of the report, the budgeted outturn position had not changed to that report of the Policy and Resources Committee in July 2025. Mike Rea added that the report recommended that Members delegated Authority to the Chair of the Audit Committee and the Director of Finance and Procurement to sign the 2024-25 Statement of Accounts and approve for publication and note that the Director of Finance and Procurement would sign the Letter of Representation.

The Chair, Councillor Jeanie Bell, directed Members’ attention to the information around the reduction in unusable reserves in paragraph 19, page 70 of the agenda and asked for clarification on what drove this reduction and whether it affected the financial resilience of the Authority going forwards. She also asked that given the volatility of pension liabilities, what actions were being taken to mitigate future functionalities in the unusable reserves.

Mike Rea referred Members to the table in paragraph 21, page 134 of the agenda which showed a further breakdown of the unusable reserves. He explained that Members could see the difference from one year to another and that the pensions reserve from one year had gone from £856m down to £775m. He added that this tended to have the greatest impact on the unusable reserves figure. These fluctuations in the pension reserve resulted from the actuarial assumptions and demographics data used when performing the annual liability calculation.

Councillor Chris Page mentioned the statement on page 193 of the agenda addressing that no significant weaknesses were identified, and that the Authority had established specific reserves to cover the risk of variation. He asked whether there was anything further that the Authority needed to think about or whether this was sufficient.

Mike Rea reminded Members that the Authority was set to approve the Medium-Term Financial Plan at the upcoming Budget Meeting.  The Medium-Term Financial Plan included several reserves, starting with the General Revenue Reserve, which represented approximately 5% of the net revenue budget and remained unallocated for future commitments. Additionally, various earmarked reserves were maintained for specific contingencies, such as an Inflation Reserve to mitigate fluctuations in pay and prices.

RESOLVED that:

a)    authority to the Chair of the Audit Committee and the Director of Finance & Procurement, as the S151 Officer, to sign the 2024/25 Statement of Accounts, attached as Appendix A to this report be delegated and for publication on the Authority’s website be approved; and

 the Director of Finance and Procurement will sign the letter of representation in relation to the 2024/25 accounts, attached as Appendix B be noted.