In accordance with the Accounts and Audit Regulations 2003, the Council’s accounts were required to be approved by the Council, or its delegated Committee, each year. The report of the Executive Directors discussed the main issues affecting the Council’s draft Statement of Accounts and provided a full commentary on the core financial statements. The full statement would be circulated to Members when available. 

At the time of writing the report, the Council’s external auditors, Grant Thornton, were in the early stages of their work on the accounts for 2019/20.  Grant Thornton would report on the outcome of their work later in the year in line with the revised national timescales. The draft accounts included a Narrative Report and the Annual Governance Statement approved by the Committee at its meeting on 18 May 2020 (Minute AS19/51 refers), which in accordance with the Committee resolution had been updated for the impact of COVID-19 on the Council’s finances.  The Code of Practice had required no major changes in the presentation of the accounts.

The Assistant Director Resources led Members through the draft Statement of Accounts and drew out the salient points. 

It was noted that overall, the balance sheet showed that the financial position of the Council remained sound with an adequate amount of reserves in place to meet short term needs. The Pensions Fund liability of £17.85m was a long term financial assessment of a possible shortfall based on its current performance and therefore no immediate action was required.  The net worth of the Council had increased by £15.2m and the useable cash resources of the Council had increased by £0.6m.

The Collection Fund balance was in surplus for the year by £1.9m; this balance was made up of both Council Tax and Business Rates. For Council Tax, the Fund was in surplus by £0.471m as at 31 March 2020, with East Sussex County Council entitled to the majority of this amount.  For business rates, the Fund was in surplus by £1.452m, with the Government receiving the highest amount followed by this Council.

The Movement in Reserves statement showed the movement in the year on the different reserves held by the Council (analysed into ‘useable’ and ‘unusable’). The deficit of £2.428m on the provision of services line showed the true economic cost of providing the Council’s services.

The Balance Sheet showed that overall the financial position of the Council remained sound, however the COVID-19 pandemic looked likely to exacerbate the financial pressure on the Council in the current financial year. It was therefore essential that in the medium term, the Council continued to deliver the target savings set out in the Medium Term Financial Strategy in order for the Council to continue to balance its budget. 

Members had the opportunity to ask questions and the following points were noted during the discussion:

•           £1m fund for art-based projects in a development planned for Beeching Road, Bexhill was to be funded by money from the South East Local Enterprise Partnership during 2020/21 and therefore did not feature in these financial accounts;

•           if the Council agreed to the establishment of a Town Council for Bexhill-on-Sea, the Council would incur set-up costs, but would seek to recover these from the Town Council’s first year precept including election costs;

•           the Section 31 grants referred to on page 47 of the report was a compensatory grant paid by the Government to local authorities for loss of income in relation to extended reliefs and exemptions on business rates; and

•           implementation of the Human Resources module of the ERP system had been delayed due to issues with managing the multiple schemes for annual leave within the Council.  Alternatives were being considered and it was confirmed that the financial and payroll modules had been delivered on time.

On behalf of the Committee, the Chairman thanked the Assistant Director Resources and his team for their hard work in producing the Statement of Accounts and for their management of the Council’s finances.

RESOLVED: That the Council’s draft 2019/20 Statement of Accounts be noted.

(Councillor Harmer declared a personal interest in this matter in so far as she was in receipt of a Business Grant and in accordance with the Members’ Code of Conduct remained in the meeting during the consideration thereof).