Annual Accounts Outturn
North Lanarkshire Council · 14 September 2022
Back to Finance and Resources Committee — 14 September 2022 and its agenda
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/KS/VR/SD Date 14/09/22 Annual Accounts Outturn From Elaine Kemp, Head of Financial Solutions E-mail kempe@northlan.gov.uk Telephone 07939 280601 1. Background 1.1. The Annual Accounts demonstrate the Council’s stewardship of the public funds with which it is entrusted. The Annual Accounts are prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom. The Local Authority Accounts (Scotland) Regulations, require the Council to submit a set of unaudited accounts to its external auditors, Audit Scotland, by 30 June following the end of the financial year. 1.2. In addition, the Council’s approved Financial Regulations require Council Services to remain within the approved budgetary provision, and to report all significant deviations within their budget monitoring reports. Executive Summary The purpose of this report is to inform Committee that the annual statutory accounts of the council for the year ended 31 March 2022 were submitted to the Council’s External Auditors, Audit Scotland, by the statutory date of 30 June, and subsequently reported to the Audit and Scrutiny Panel at its meeting of 8 September. This report also updates Committee on the overall position for the General Fund Account and explains any major variations against the Council’s annual budget for the year 2021/22. An overall summary on the Housing Revenue Account is also provided. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledge the contents of the report. The Plan for North Lanarkshire Priority All priorities Ambition statement (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning
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2. Report 2.1 General Fund 2.1.1 Committee should be aware that the General Fund surplus brought forward from 2020/21 has been restated from £116.751m to £162.181m to reflect the change in presentation in respect of the balances held for future contractual obligations of PPP Schools, as discussed and agreed with Audit Scotland. The overall surplus to be carried forward into 2022/23 is £239.229m recognising an in year surplus of £77.048m. 2.1.2 As outlined in table 1 below, the cumulative General Fund Surplus at 31 March 2022 is £239.229m, represented by £30.551m of COVID-19 earmarked funding and a further £138.536m of earmarked funds for specific future commitments. A balance of £8m is maintained as the approved contingency reserve level, with £29.424m contributing to the Change Management Fund to provide for the anticipated one off costs of approved savings. This leaves an unallocated balance of £32.718m. 2022/23 Earmarked Funds £m £m COVID-19 Directed Funding 6.896 COVID-19 General Funding 20.655 COVID-19 Recovery General Fund Contribution 3.000 30.551 Change Management Fund 29.424 Schools Future Contractual Obligations 54.175 Early Years & Childcare Expansion 14.249 Strategic Workforce Planning 13.000 Temporary Accommodation 9.288 Energy costs and Other Non Pay Inflation 7.220 2022/23 Budget One-off Investment 6.000 Pupil Equity Fund 5.122 Balances held by Schools under Devolved School Management 3.652 Digitisation 2.498 Active & Creative Communities 2.000 Enterprise Contract 1.687 Schools ICT Orders/Refresh & FMS Project Development 1.680 Business Gateway and Business Recovery 1.700 Youth Guarantee Funding 2.367 Winter Reserve 1.500 E&C 21/22 One Off Investment 1.146 Rapid Rehousing 1.159 Other Earmarked Funds 10.093 138.536 Contingency Reserve 8.000 Unallocated Balance 32.718 General Fund Surplus as at 31 March 2022 239.229 Table 1 2.2 Budget Outturn Position 2021/22 2.2.1 The last reported position to the Corporate Management Team indicated a General Fund forecast surplus of £27.628m, compared with a final outturn surplus of £69.092m, which is a movement of £41.464m. This is largely represented by the use of 2021/22 earmarked reserves (£36.505m), offset by approved earmarked reserves for use in
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future years (£34.544m). Further to this, the surplus increased due to additional new service requests (£39.813m) including late redeterminations from the Scottish Government, the transfer of HRA reserve for Temporary Accommodation and donation received as a result of the CLNL transfer earmarked for investment as part of the 2022/23 budget setting report. Once these are all taken into account, there is a small movement from provisional outturn position of £3.612m which is mainly in relation to an increased underspend in relation to Newly Qualified Teachers which was previously anticipated to be funded through NLC core funding, but this was not required due to managing excess covid grant funding not utilised. 2.3 Housing Revenue Account 2.3.1 The Housing Revenue Account (HRA) reported a £2.262m surplus position at provisional outturn, however this position differs from the final outturn of £7.957m deficit after recognising the transfer of the Temporary Accommodation earmarked reserve to General Fund. The deficit has reduced the balance brought forward resulting in a cumulative surplus of £19.496m. Of this surplus, some £12.871m has already been approved for specific purposes including Council Ambition (£5.054m) housing repairs (£2.500m) and HRA capital energy efficiency programme (£2.500m). Adjusting for the £1.470m contingency reserves, leaves a current unallocated balance of £5.155m. 2.4 Other Matters 2.4.1 The Council has a controlling interest in a number of bodies that have been incorporated into the Group Accounts. After consolidation, the Group balance sheet shows net assets of £2,457.608m, an increase on the single entity position of £184.528m. 2.4.2 The accounting position in relation to the Council’s pension arrangements highlights a headline net liability based on the standard IAS19 calculation of £156.156m, which is based on the latest triennial review assumptions that took place at March 2020. This position is a snapshot valuation as at 31 March 2022 and can vary from year to year. However the position will be made good by contributions over the remaining working life of employees, as assessed by the scheme actuary. 2.4.3 The 2021/22 position includes a net usable donation in relation to the insourcing of Culture Leisure North Lanarkshire of £6.486m. 3. Measures of success 3.1 The Council continues to operate within approved budgeted resources. 4. Supporting documentation 4.1 No Appendices Elaine Kemp Head of Financial Solutions
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi?
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Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed?