The report of the Executive Director of Resources (Section 151 Officer) is attached.  The draft Statement of Accounts (Appendix 2) is attached.

Contact: James Walton (01743) 258915

15.1  Members received the report of the Executive Director of Resources (Section 151 Officer) (copy attached to the signed minutes) which provided an overview of the Accounts for the year 2020/21 and details of the reasons for the most significant changes between the 2019/20 Accounts and the 2020/21 Accounts.

15.2  The Executive Director of Resources (Section 151 Officer) informed Members of the reason for the revised covering report and analytical review which had been issued the previous day.  He explained that the closure of accounts had taken longer this year due to Covid-19 and the delay around the valuation of Property, Plant and Equipment (PPE) which had only been received the previous week.  Also, the final valuation of the Shropshire County Pension Fund had changed significantly leading to adjustments having to be made in the accounts otherwise it would have been a material misstatement.

15.3  The Executive Director of Resources (Section 151 Officer) apologised to Members and understood that it was unacceptable that they had only received the draft Statement of Accounts the day before the meeting and hence the revised report and analytical review being sent by way of mitigation.  As Members were not able to form an opinion on the accounts, the Executive Director of Resources (Section 151 Officer) suggested that Members submit any questions and/or comments to himself and the Interim Director of Strategic Finance in the next couple of weeks who would consider and respond as necessary.

15.4  In response to a query the Executive Director of Resources (Section 151 Officer) replied that pages 17-224 were entirely new and that the analytical review pages 7-16 included changes made in the last week.  He invited members to look at pages 7-16 to identify any concerns and questions not dealt with in the explanation.  He confirmed that the Pension Fund accounts had been reviewed by the Pensions Committee.

15.5  In response to a query about why the Auditor’s Statement was blank  (note section 3) the Executive Director of Resources (Section 151 Officer) explained that once the draft Statement of Accounts had been signed off, they were passed to Grant Thornton who had from 1 August to 30 September to produce their audit opinion and certificate.  It was hoped to take this to Council on the 23 September but the Audit Committee would have the opportunity to look at it either in their training session on 10 September or the next Committee meeting on 16 September.

15.6  The Interim Director of Strategic Finance took Members through the analytical review and highlighted the most significant areas where there had been material changes (variances) over £8m or over 10%, and explained why these changes had occurred (see Appendix 1).

15.7  In response to a query relating to the revised dedicated school grant deficit, the Strategic Financial Accountant referred to note 29 in the accounts and explained that the new regulations allowed for any deficit to be transferred to unusable reserves then ringfenced for future years.

15.8  In response to a query about the decrease in assets, the Strategic Financial Accountant explained that this was due to the movement of the net equity position on the balance sheet due to the result of the fall in investment valuation.

15.9  In response to a query the Executive Director of Resources (Section 151 Officer) explained that the £3.4m Shopping centre purchase price covered some of the capital works when it was held in Trust.  From 1 February 2021 this became part of the Capital Expenditure (note 17) and the £8.5m was the value of the PPE element plus movements.  The Executive Director of Resources (Section 151 Officer) explained that the value of the Unit Trust had to be separated out into income/expenditure/cash plus valuation.  He agreed to provide more detail if required.

15.10In response to a query about the collection fund (section 8) it was explained that NDR income was down 50% and was prevalent on how businesses were affected during the pandemic when a lot of businesses were given rate relief.  The Council usually collected approximately £80m but this was split 50/50 with the Government, however as the Council’s £40m was still needed the Government took a reduction and gave the Council a grant.

15.11RESOLVED:

          That the contents of the draft 2020/21 statement of accounts be noted.