Supplementary Agenda Document Pack - Moray Council - 25/06/2025
Moray Council · 25 June 2025
Back to Moray Council — 25 June 2025 and its agenda
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Moray Council Wednesday, 25 June 2025 The undernoted report(s) has been added to the agenda for the meeting of Moray Council at 09:30, in terms of Section 50B (4)(b) of the Local Government (Access to Information) Act 1985 by reason of special circumstances on the Chair accepting the report as urgent business. NOTE REFERRED TO:- 10a. Unaudited Annual Accounts for 2024-25 Report by the Depute Chief Executive (Economy, Environment and Finance) 3 - 8 Page 1
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Report to: Moray Council Meeting Date: 25 June 2025 Report by: Depute Chief Executive (Economy, Environment and Finance) Report No: FIN007/25/LP/JF Author: Lorraine Paisey Contact Email: lorraine.paisey@moray.gov.uk Subject: Unaudited Annual Accounts for 2024/25 1. PURPOSE ☒ For Decision ☐ For Information 1.1 The purpose of this report is to consider the unaudited Annual Accounts for the year to 31 March 2024 for both Moray Council and the Connected Charity Trust Funds administered by the Council. 2. SUMMARY 2.1 The unaudited Accounts for 2024/25 for the Council and for the Connected Charity Trust Funds administered by the Council are available as separate documents on the agenda under Additional Meeting Documents. These documents will be posted to the Council’s website after this meeting. 2.2 The Council’s accounts show the following headline results for the financial year: 2.3 A net surplus of £9.713 million (2023/24: £15.711 million deficit). 2.4 An increase in net value to £897.287 million (2023/24: £887.574 million) including an increase in assets to £1.319 billion (2023/24 £1.270 billion). 2.5 A decrease in usable reserves of £8.553 million (2023/24: £9.342 million increase) and increase in unusable reserves of £18.266m (2023/24 £6.369 million increase). 2.6 The Connected Charity Trust Funds consolidate the accounts of 8 Charitable Trusts, which collectively have a net worth of £1.076 million (2023/24: ££1.047 million). 3. RECOMMENDATIONS 3.1 It is recommended that Council considers and notes: Item 10a. Page 3
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i) The unaudited Annual Accounts for Moray Council for the year ended 31 March 2025; and ii) Moray Council Connected Charity Trust Funds Trustees’ Report and Financial Statements for the year ended 31 March 2025. Lorraine Paisey Chief Financial Officer 4. BACKGROUND AND CONTEXT Moray Council Annual Accounts 4.1 These accounts are prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2020/21 (the Code) which is underpinned by International Financial Reporting Standards (IFRS). They summarise the Council’s financial transactions for the year to 31 March 2025. 4.2 The regulations require the unaudited Annual Accounts to be presented to the External Auditor by 30 June and the Council to consider by 31 August. 4.3 The Code requires the Council to set out a statement not only of its own financial position but also of the financial position of all the entities or activities for which the Council is responsible or in which it has a significant financial interest. These entities are encompassed in the Group Accounts, which are included in the Annual Accounts. The Group Accounts for 2024/25 include Trust Funds and Common Good Funds as entities or activities for which the Council is responsible and the Moray Integration Joint Board, Grampian Valuation Joint Board and Moray Leisure Limited as associate bodies. 4.4 There are four core Financial Statements: the Comprehensive Income and Expenditure Statement, the Movement in Reserves Statement, the Balance Sheet and the Cash Flow Statement. Of these, the Statements most likely to be of interest to most users of the accounts are the Comprehensive Income and Expenditure Statement and the Movement in Reserves Statement. 4.5 The Comprehensive Income and Expenditure Statement expresses the income and expenditure of the Council over the past financial year in a format which complies with International Financial Reporting Standards. This includes entries relating to revaluation of assets and other entries which, by statute, cannot be charged to the Council Tax payer. 4.6 The Statement shows a surplus of £9.713 million, which includes a net increase of £25.432 million for the revaluation of the Council’s assets plus a decrease for the re- measurement of the defined benefit liability of the Council’s share of the North East of Scotland Pension Fund of £3.594 million. 4.7 Removing these items leaves a deficit on the Provision of Services of £19.313 million. After adjustment for other items not chargeable to Council Tax or Housing Rent payers (e.g. depreciation), this “book deficit” equates to a deficit of £8.853 million. This is reflected in the Movement on Reserves Statement as the decrease in Usable Reserves. Usable reserves accounting aligns with the basis on which the Council sets its budgets. They Page 4
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therefore show the direct financial impact for the Council Tax payer and Council House tenant. 4.8 The Movement on Reserves Statement shows the movement on the different reserves held by the Council, analysed into Unusable and Usable Reserves. 4.9 Unusable Reserves arise from accounting entries required to comply with International Financial Reporting Standards but which cannot impact on the level of Council Tax or Council House Rent payable. Unusable reserves increased by £18.266 million. 4.10 The net movement on the General Fund in 2024/25 was an overall decrease of £12.039 million. Note 11 to the Accounts shows an analysis of the General Fund, which consists of a general service element (the free general reserve), the Devolved School Management (DSM) balance and various ear-marked and otherwise restricted funds. 4.11 In setting the budget for 2024/25 the Council planned to use £12.023 million from ear- marked reserves. This estimate was revised during the year to £9.474 million and in the event £12.251 million was used, of which £0.212 million was transferred from the capital grants and receipts unapplied reserve into revenue. The balance carried forward into 2025/26 under DSM is £0.213 million. This figure accounts for a one-off saving of £0.200 million approved when the budget for 2025/26 was set and applied during 2024/25. The Council has also previously agreed to set aside reserves to support the Transformation of services and other Council priorities. As at 31 March 2025, the balances of these reserves stand at £5.892 million and £3.699 million respectively. In addition, the Council holds £13.480 million in other ear-marked reserves. This consists of £5.954 million income received by departments for specific purposes and not yet spent and a reserve of £7.526 million created by the application of an accounting flexibility for service concessions in 2023/24, which is not cash backed. 4.12 The Balance Sheet summarises the Council’s assets and liabilities as at 31 March 2025. This includes pension liabilities falling due in future years, which will be financed by pension contributions through the Council’s revenue expenditure. Council assets of £1.319 billion are offset by liabilities of £422.178 million, giving the Council a net worth of £897.287 million, which represents the total value of the Council’s usable and unusable reserves. 4.13 The Cash Flow Statement shows the movement in cash and cash equivalent during the financial year, an increase of £10.197 million for 2024/25. Connected Charity Trust Funds Administered by the Council 4.14 All 26 Councillors as trustees are responsible for preparing the Trustees' Annual Report and the Financial Statements in accordance with applicable law and regulations. The law applicable to charities in Scotland requires the trustees to prepare financial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources of the charity for that period. Page 5
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4.15 The financial statements for the Connected Charity Trust Funds have been prepared under the historical cost convention as modified by the inclusion of investments at fair value, in accordance with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the principles of Accounting and Reporting by Charities: Statement of Recommended Practice 2015 (FRS102) commonly referred to as the SORP. 4.16 In line with Regulation 7 of the 2006 Regulations, these financial statements have been prepared on the basis that the trust funds for which it acts as sole trustee are connected charities. As such, the accounts for these individual charities have been prepared on a collective basis for the Council. 4.17 The Council administers 8 Registered Charitable Trusts for which it is sole trustee, with a total net worth as at 31 March 2025 of £1.076 million (2023/24: £1.047 million). 4.18 Separate financial statements covering all the Council’s charitable trusts are published on the Council’s website. 5. PROPOSALS 5.1 The unaudited Annual Accounts for Moray Council for the year ended 31 March 2025 are presented for consideration and noting. 6. SUMMARY OF IMPLICATIONS 6.1 The table below shows whether risks and implications apply if the recommendations are agreed: SUBJECT YES NO Corporate Plan and 10 Year Plan (Local Outcome Improvement Plan) ✓ Policy and Legal ✓ Financial ✓ Risk ✓ Staffing ✓ Best Value and Transformation ✓ Property ✓ Information Communications Technology/Digital ✓ Equalities. Social Inclusion and Economic Impact ✓ Climate Change and Biodiversity Impact ✓ 6.2 Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) Improved Collaborative Leadership, as part of continuous improvement through Best Value, will better enable the Council to fulfil the ambitions set out in its strategic plans. a) Links to Council Corporate Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following Council Plan strategic priorities: ☐ Tackle Poverty and Inequality. ☐ Build Stronger Greener Vibrant Economy. Page 6
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☐ Build Thriving, resilient, empowered Communities. b) Links to Local Outcomes Improvement Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following Local Outcomes Improvement Plan priorities: ☐ Developing a diverse, inclusive, and sustainable economy ☐ Building a better future for our children and young people in Moray. ☐ Empowering and connecting communities. ☐ Improving wellbeing of our population 6.3 Policy and Legal The Local Authority Accounts (Scotland) Regulations 2014 require a Local Authority to submit a set of accounts to its External Auditor by 30 June. The Council’s accounts are prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2020/21 which is underpinned by International Financial Reporting Standards. The Connected Charities unaudited financial statements comply with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the provisions of the trust deed. The Audited Accounts, together with a copy of the External Auditor’s Report shall be laid before a meeting of the Council in due course. 6.4 Financial The Annual Accounts provide extensive information about the Council and its Connected Charity Trust Funds financial position at 31 March 2025. There are no financial implications arising directly from this report. One off Costs: Service Area Budget Budget Years Proposed Spend this Year Virement From Other Comments - - - - - - Annually Recurring Costs: Service Area Budget With Effect From Annual Net Impact Virement From (if applicable) Other Comments - - - - - 6.5 Risk There are no risk issues arising directly from this report. The Annual Accounts will be subjected to an audit by the Council’s External Auditors, Grant Thornton, who will provide assurance that the Accounts for 2024/25 give a true and fair view of the financial position and expenditure and income of the Council and its group for the year. Page 7
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Grant Thornton will also audit the Council’s Connected Charity Trust Funds Trustees’ Report and Financial Statements and provide a report to Members on their findings. 6.6 Staffing Many staff throughout the Council provide information for the inclusion in the Annual Accounts. The process begins before the end of March each year and is only completed once the audit of the Accounts is finalised in September. 6.7 Best Value and Transformation There are no implications for Best Value and Transformation arising from this report. 6.8 Property None. 6.9 Information Communications/Technology/Digital There are no implications for information, communications, technology or digital arising directly from this report. 6.10 Equalities, Social Inclusion and Economic Impact There are no issues for equalities, social inclusion or economic impact arising directly from this report. 6.11 Climate Change and Biodiversity Impacts There are no implications for climate change or biodiversity arising from this report. 7. CONSULTATION 7.1 Finalising the Accounts does not involve consultation, but many staff throughout the Council are involved in providing information for inclusion in the Accounts. 8. BACKGROUND PAPERS 8.1 Held by Accountancy section. Page 8