Agenda and minutes

Apologies had been received from Councillors De Cruz, Hawkins and Tavener.

Copy attached

These were agreed as a true record and signed by the Chair.

There were none.

There were none.

There were none.

Joint report of the Chief Executive, the Director of Finance and the Borough Solicitor

(copy herewith)

B Lewis, Assistant Head of Finance, presented the 2007/08 Annual Governance Statement, which replaced the Statement of Internal Control and had a wider remit to include oversight of governance and partnership arrangements. The Committee noted the processes involved in the production of the Statement and that it would be reviewed again by the Annual Governance Group before its final sign-off in September.

The Chair referred to page 17 of the Statement and the need to be aware of the significant governance issues raised when looking at the financial statement.

Recommended:

That Council adopt the Annual Governance Statement 2007/08.

Report of the Director of Finance

(copy herewith)

B Lewis presented the 2007/08 Statement of Accounts to the Committee explaining in detail some of the more significant transactions.  It was noted that, although there were budgetary pressures for the future, the Council’s current position was relatively healthy.

Referring to the loss of revenue from non-dwelling premises, Councillor Meredith requested that the matter of un-let garages and industrial units be considered by the relevant service area and that a report be presented to a future Audit Committee meeting.

The Chair highlighted the increase in deficit from £5 to £9 million in the Income and Expenditure account and explained that changes in accounting policies skewed like for like figures. The Committee was referred to the Statement of Movement showing a reduction in the General Fund balance of £142,000, although there had also been additions to earmarked reserves.

It was pointed out that some of the significant differences between the figures for 2006/07 and 2007/08 were as a result of changes in analysis and accounting practices and that direct comparisons were not possible in some cases. 

There was now a more pro-active treasury team leading to an improvement in interest rates and a better managed portfolio. The biggest change was in the capitalisation of additional redundancy and pension costs with additional strains for early retirement.  The Statement identified where capital expenditure was necessary to retain the value of existing assets.

Premia (i.e. penalty charge) incurred in 2002/03 and 2003/04, when certain loans were restructured, was split between HRA and the General Fund.  Auditors had advised that this split was incorrect and that more should have been charged to the HRA.  The HRA charge can be spread over the remaining life of the restructured loans.  The consequence of this to the General Fund is that there is a significant credit to the General Fund in thee accounts.

The Chair then commented on the income deficit in the Building Control Trading Account.  It was noted that the aim was to break even over a period of three years.  Charges could be raised but no profit could be made and there remained an element of competition with the private sector in future contracts. 

The Committee was guided to the table in the Statement relating to debtors and it was reported that officers were investigating the two key areas of rent arrears and the recovery of overpayments in benefits.  The policy in place to ensure that tenants with existing rent arrears were not re-housed was subject to lenience in cases of particular need, although it was noted that old debts were known to be more difficult to recover. There had to be clear evidence that debts were not recoverable before they could be written off.  Work was being undertaken to improve performance relating to these long-standing bad debts. It was requested that the Housing Department present a report addressing the issue of rent arrears and collection with specific reference to trends and the previously reported improved collection of rent.

There was further concern about the  ...  view the full minutes text for item 7.