Item 10 - Unaudited 2025 26 West Dunbartonshire Council and Common Good and Trust Annual Accounts
West Dunbartonshire Council · 17 June 2026
Back to West Dunbartonshire Council — 17 June 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
WEST DUNBARTONSHIRE COUNCIL Report by Chief Officer - Resources Council: 17 June 2026 Subject: 2025/26 Unaudited West Dunbartonshire Council Accounts, Council Annual Governance Statement and Common Good and Trust Funds Annual Accounts 1. PURPOSE 1.1 The purpose of this report is to provide Council with: • the outcome of the annual self-evaluation undertaken of West Dunbartonshire Council’s (the Council) compliance with its Code of Good Governance • a copy of the unaudited Council 2025/26 Annual Accounts including the Annual Governance Statement (Appendix 1, pages 19-23) • a copy of the unaudited 2025/26 Common Good and Trust funds Annual Accounts 2. RECOMMENDATIONS 2.1 Members are asked to: a) note the outcome of the self-evaluation process in considering how the Council currently meets the agreed Code of Good Governance, together with the issues identified and improvement actions. b) approve the actions identified by management in the consider the Annual Governance Statement to improve internal controls c) note the unaudited 2025/26 West Dunbartonshire Council Annual Accounts which incorporates the Annual Governance Statement d) note the unaudited 2025/26 Common Good and Trust funds Annual Accounts e) agree to delegate authority to the Audit Committee to formally approve the audited accounts. 3. BACKGROUND Annual Governance Statement 3.1 Delivering Good Governance in Local Government: Framework, published by CIPFA in association with Solace in 2007, set the standard for local authority governance in the UK. CIPFA and Solace reviewed the Framework in 2015 to ensure it remained ‘fit for purpose’ and published a revised edition in spring 2016. The current Delivering Good Governance in Local Government: Framework (CIPFA/SOLACE, 2016) has applied to annual governance statements prepared for the financial year 2016/17 onwards. ITEM 10
Page 2
3.2 An addendum published by CIPFA in 2025 in association with SOLACE represents the first update of guidance since 2016 and applies to financial statements from 2025/26 onwards. The aim of the revised guidance is for councils to undertake a rigorous annual assessment of governance and consider whether it is truly fit for purpose. The review should take into account not just current demands but also anticipated challenges. 3.3 Authorities should review the effectiveness of their governance each year, against the seven principles of good governance, as set out in the Governance Framework. In conducting the annual review: • The Council should assess how effectively its arrangements meet the principles of good governance in practice. The identification of those arrangements in the local code facilitates the review. • The review should consider if and how its governance arrangements support the achievement of the Council’s purpose and objectives – its outcomes. • The review should consider whether the Council’s governance arrangements are operating effectively and should identify any areas for improvement. 3.4 In order to demonstrate a commitment to sound governance, local authorities are required to consider the points above and to publish a governance statement on an annual basis. The Governance Statement can be found in unaudited accounts included in Appendix 1 to this report (pages 19-23) 3.6 The annual governance statement is the formal statement that concludes on an annual review of the Council’s governance arrangements as defined in the CIPFA/SOLACE Framework. The statement requires to be signed off by the most senior officer (Chief Executive) and the most senior elected member (Council Leader). 3.7 The revised requirements as outlined above have been reflected in the governance statement for 2025/26. The draft Annual Governance Statement details the assessment of the effectiveness of the Council’s governance framework, where governance needs to improve, how we have improved governance arrangements in 2025/26 and considerations looking forward to 2026/27. Unaudited 2025/26 Council Accounts 3.8 The annual unaudited accounts set out the financial statements of the Council and the Common Good and Trust Funds for the year ended 31 March 2026. Their main purpose is to demonstrate the stewardship of public funds entrusted to the Council. The requirements governing the format and content of local authority annual accounts are contained in the Code of Practice on Local Authority Accounting in the United Kingdom (the Code). The 2025/26 accounts have been prepared in accordance with this Code and are included in Appendix 2 to this report. 3.7 There is a statutory requirement to prepare a set of accounts and submit them
Page 3
to the Controller of Audit. The date set by the Scottish Government for the submission of the unaudited annual accounts is 30 June each year. 3.8 The 2025/26 draft accounts will be submitted to Forvis Mazars on 30 June 2026. Unaudited 2025/26 Trust Funds Annual Accounts and Dunbarton Common Good outturn position as at 31 March 2026 3.9 Common Good Funds and Trust Funds are administered separately from the Council’s general fund and are subject to distinct governance, stewardship and reporting requirements. The purpose of presenting these accounts to Committee is to provide members with an overview of the financial position, transactions and stewardship arrangements for the funds held and administered by the Council during the financial year. 3.10 The 2025/26 draft accounts will be submitted to Forvis Mazars on 30 June 2026. 4. MAIN ISSUES Annual Governance Statement 4.1 A revised local code was developed for the Council and agreed at the Audit and Performance Review Committee on 8 March 2017. 4.2 The annual self-evaluation review for 2025/26 has been carried out and has identified that current practice is mainly compliant with the Code of Governance, whilst identifying some areas for improvement. There were no significant governance issues identified and areas for improvement are detailed within the draft Annual Governance Statement at Appendix 1. 4.3 In terms of the Council’s overall corporate governance arrangements, it is considered that, although there are some areas of work to be completed to ensure full compliance with the Local Code of Good Governance, we consider the governance arrangements operating during 2025/26 to be fit for purpose in that they are operating effectively and support the achievement of West Dunbartonshire Council’s strategic priorities. The Annual Governance Statement 2025/26 is informed by the self-assessment of compliance against the Local Code of Good Governance and related Certificates of Assurance from Chief Officers, the work of Internal Audit, External Audit and external inspection agencies. 4.4 The Council’s Annual Governance Statement will be published within the Annual Accounts for the year ended 31 March 2026. Unaudited 2025/26 Council Accounts 4.5 The unaudited accounts show that the outturn on the general fund is a surplus of £12.652m after the pension saving of £5.332m and the budgeted use of
Page 4
reserves of £1.063m represents an underspend of 4% against the 2025/26 revised budget of £313.821m. 4.6 The £12.652m underspend breaks down as: £000 Service underspend after the use of earmarked reserves (1,801) Use of earmarked reserves 3,027 In year transfer of Suspense Balances to reserves (October Finance update) (3,062) Over recovery taxation and non-specific grant income (1,815) Under recovery of central support costs due to reduced staff costs in the Central Support model due to the temporary reduction in pension costs. 752 SPFO in year pension saving transferred to pension smoothing reserve (4,702) Loan Charges - one off discount following the termination of long term loans and application of the general capital grant to absorb the principal cost of loan charges where statutory mitigation allows. (5,051) Final Budgetary Control Position (12,652) The Housing Revenue Account (HRA) is reporting an in-year surplus of £0.511m. More detail can be found in agenda items 13 and 15 to this same Council meeting which explain the outturn position of the General Fund and HRA respectively. 4.7 Since 2010/11 local authorities have been required to prepare financial statements following International Financial Reporting Standards (IFRS). Under the Local Authority Accounts (Scotland) Regulations 2014 there is a requirement to include a management commentary in the accounts. The contents of the annual accounts are summarised in the paragraphs that follow. 4.8 Management Commentary: outlines the key messages regarding the objectives and strategy of the Council and its financial performance for the year. It also looks forward, outlining the future financial plans for the organisation and the challenges and risks which are faced by the Council. 4.9 Statement of Responsibilities for the annual accounts: outlines the Council’s responsibilities and also the responsibilities of the Council’s Section 95 Officer. 4.10 Annual Governance Statement: details the view on the adequacy of its governance and internal control system. It is the Council’s view that the systems for governance and internal control are operating effectively within the Council during 2025/26 and that there are no significant weaknesses. 4.11 Remuneration Report: details the remuneration policy, remuneration and
Page 5
pension benefits of senior councillors and senior officers in addition to detail on employee exit packages. Comprehensive Income and Expenditure Statement (CIES): 4.12 This statement shows the accounting cost of providing services rather than the amount to be funded from taxation, in order to comply with the requirements of the Code. This means that the net cost of service includes statutory accounting adjustments for depreciation, loans fund principal repayment, the net change for the pension adjustment and accrued holiday leave not taken by 31 March 2026; reducing the total cost of service provision by £27.622m. This is one of the main reasons why the actual outturn shown within the Comprehensive Income and Expenditure account differs from the actual outturn shown within the management commentary (page 8 of the accounts), as these costs are not included as part of the service budgets. A reconciliation between the two outturns is shown at paragraph 4.13. 4.13 The Council ended the year with a 2025/26 deficit of £37.824m. This is the accounting deficit based on the IFRS compliant accounts rather than the movement in the General Fund Balance. It comprises of the following: £000 Deficit on Provision of Services 14,462 Deficit on the revaluation of long-term assets 33,776 Actuarial loss on the pension fund asset (10,414) Total Deficit 37,824 4.14 The table below, sets out a reconciliation of the deficit on the provision of services of £14.462m as noted in the Statement of Comprehensive Income and Expenditure under IFRS requirements and the in-year revenue underspend of £12.652m against budget (paragraph 4.6): £000 Deficit on Provision of Services per the Comprehensive Income and Expenditure Statement 14,462 Statutory adjustments required by the Code (paragraph 4.12) (27,622) Deficit on Provision of Services per Movement in Reserves – pg 34 (13,160) Adjust for movements to/from statutory reserves: Other Reserves (3) HRA Surplus 511 Movement in General Fund Balance (12,652) 4.15 Balance Sheet: The Balance Sheet shows that the net worth of the Council has decreased by £37.824m from £367.053m as at 31 March 2025 to £329.229m as at 31 March 2026. The major changes are set out in the table below.
Page 6
31 March 2025 £’000 31 March 2026 £’000 Movement £’000 Main Reason Long- term Assets 1,284,685 1,275,052 (9,633) Movement as a result of the revaluation and indexation of non-current assets and capital expenditure offset by in year depreciation. Current Assets 77,682 110,966 33,284 Increase in cash and cash equivalents due to timing of repayment of debt, an increase in assets held for sale as a result of more land assets being actively marketed and an increase in short term debtors due to timing differences. Current Liabilities (401,895) (416,921) (15,026) Increase in short-term borrowing in year to support the GS and HRA capital programme. Long- term Liabilities (593,419) (639,868) (46,449) Increase in long-term borrowing to support HRA and GS capital programme. Total 367,053 329,229 (37,824) Movement in Reserves Statement 4.16 This shows the movement on the different reserves held by the Council, analysed into usable reserves (resource backed reserves which can be used to fund expenditure) and unusable reserves (required purely for accounting purposes and are not backed by resources). 4.17 The total Council reserves have decreased from £367.053m at 31 March 2025 to £329.229m at 31 March 2026, a decrease of £37.824m, due to the reasons detailed in the table above. 4.18 The balance of unusable reserves has decreased by £50.984m from £353.928m as at 31 March 2025 to £302.944m as at 31 March 2026. This is mainly due to the revaluation of assets offset by the movement in the pension liability. 4.19 Cash Flow Statement: The Cash Flow Statement shows the changes in cash and cash equivalents of the Council during the financial year. The Cash and Cash Equivalents increased by £19.190m to £27.417m.
Page 7
4.20 Notes to the Financial Statement: The notes section provides further information and explanation on some of key figures included within the Accounts. The notes conform to the guidance issued by CIPFA/LASAAC within the Code of Practice on Local Authority Accounting. 4.21 Council Tax Income Account: This account shows the gross income raised from council tax levied and deductions made under the Local Government Finance Act 1992. The resultant net income is transferred to the CIES. Council Tax was increased by 11.5% in 2025/26 therefore the Council Tax rate for Band D was £1,559.86 for 2025/26. The income transferred to the general fund for Council Tax in 2025/26 was £45.949m. This compared to £41.701m in 2024/25. 4.22 Non-Domestic Rate Income Account: This account is an agent’s statement that reflects the statutory obligation for billing authorities to maintain a separate Non-Domestic Rate Account. Net Non-Domestic Rate Income to the Consolidated Income and Expenditure Account amounted to £84.737m for 2025/26. This compares to £87.481m in 2024/25. This is the Council’s share of the estimated NDR income which has been distributed proportionately on the basis of the Council’s 2024/25 mid-year income. It does not represent additional income to the Council, just a distribution of the national pool to reflect what is due to the Council as agreed as part of the 2025/26 settlement figure (already accounted for) and what the Council collected. 4.23 Housing Revenue Account In relation to the HRA, the draft accounts show a balance of £1.122m as at 31 March 2026. This is below the prudential reserve target of £1.160m. Steps continue to be put in place to try to build the reserves back up to the prudential target in 2025/26 and beyond. Capital Programmes 4.24 Details of the capital programmes can be found in report 14 and 16. A list of the main capital projects progressed during 2025/26 is provided on page 12 of the Annual Accounts. The year end position is summarised as follows: Budget Spend Variance Overspend Underspend Reprofiling £,000 £,000 £,000 £,000 £,000 £,000 General Services 59,582 50,216 (9,366) 1,868 (969) (10,265) HRA 55,547 48,150 (7,397) 7,548 (14,945) 0 Total 115,129 98,366 (16,763) 9,416 (15,914) (10,265)
Page 8
4.25 The main areas of reprofiling in the year were: General Services Gruggies Burn Flood Prevention Scheme Further design underway following value engineering, this budget will be utilised in 26/27 Vehicle Replacement Delay due to the vehicle build time associated with the specialist vehicles and the delivery lead time from the date of supply order placement. Exxon City Deal Project underway and progressing well, however, spend not in line with original projection due to delays to works on site and defect completion on Network Rail works 4.26 Group Accounts: The Council is required to prepare Group Accounts in addition to its own Annual Accounts. Group Accounts are prepared when a Council has a material interest in other organisations. The purpose of the accounts is to combine its financial information with other organisations within its group. For 2025/26 the Council’s group consists of: (a) West Dunbartonshire Leisure Trust (b) Dunbartonshire and Argyll and Bute Valuation Joint Board (c) Clydebank Property Company (d) West Dunbartonshire Energy Company (e) Health and Social Care Integrated Joint Board (f) Dumbarton Common Good and Trust Funds. 4.27 The group accounts on pages 91 to 98 consolidate the Council’s Financial Statements, the Common Good and Trust Funds and the four other entities listed above. The effect of combining these entities on the Group Balances Sheet is to increase reserves and net assets by £19.918m creating an overall net asset of £349.147m. Next Steps 4.28 To enable the Council to meet its legislative requirements, Members require to approve the audited Annual Accounts for signature no later than 30 September 2026. As the audit of the Council’s 2024/25 accounts is still ongoing it is clear the audit of the 2025/26 accounts will not be completed by the 30 September 2026 deadline. It is not clear at the current time when the 2024/25 audit will be completed by and therefore it is not possible to determine which future meeting of the Council will be presented with the audited accounts for approval. Depending on the timing of the completion of the 2024/25 audit it may be that a meeting of the Audit Committee will be the most suitable time for the Accounts to be approved. Council is therefore asked to agree to delegate authority to the Audit Committee to formally approve the audited accounts if required.
Page 9
Charity Accounts 4.29 Appendix 3 provides Members with the accounts of the Trust Funds which are administered by the Council. These Financial Statements are also audited by our external auditors prior to submission to the Office of the Scottish Charity Regulator (OSCR). The draft Financial Statements 2025/26 will be presented to the external auditors. These are also included within the Council’s Group position. The summary position of the Trusts are noted below – interest gained was received for all trusts, with six grant payments made, four from the Alexander Cameron Bequest and two from Dr AK Glen Fund. As the AK Glen Fund has bene fully distributed it has been wound up and removed from the Scottish Charity Register. Opening Balance 2025/26 (£) Surplus / (Deficit) 2025/26 (£) Closing Balance 2025/26 (£) Dunbartonshire Educational Trust Scheme 1962 95,762 (11,281) 84,481 McAuley Prize for Mathematics 24,466 1,002 25,468 Alexander Cameron Bequest 118,944 3,678 122,622 UIE Award 27,661 1,133 28,794 Totals 266,833 5,468 261,365 4.30 The audited Trust Fund accounts will be approved by the Council, together with the Council’s Financial Statements. 4.31 Common Good Appendix 4 provides Members with the accounts of the Dumbarton Common Good which are administered by the Council, also audited by our external auditors as part of the year end process. This is also included within the Council’s Group position. The main movements within the common good are noted below: £ Opening Balance 367,828 Income 320,412 Expenditure (411,032) Closing Balance 277,208 CONCLUSION 4.32 The Unaudited Annual Accounts have been prepared in accordance with
Page 10
4.33 4.34 professional and statutory requirements. The General Fund Balance has increased by £12.652m from an opening balance of £12.272m to £24.924m, after taking into consideration the movement during the year, the end of year outturn position and earmarked balances. The Council’s net worth, per the balance sheet, has decreased from £367.053m at 31 March 2025 to £329.229m at 31 March 2026, a decrease of £37.824m. As the audit of the 2024/25 financial statements remains ongoing, the 2024/25 prior year comparatives and the balances rolled forward into 2025/26, may be subject to change following completion of the audit. Any resulting adjustments to the 2025/26 accounts are expected to affect only the prior year balance sheet comparatives and are not expected to have an impact on the 2025/26 outturn position. It should be noted that there are outstanding changes to be made to the unaudited 2025/26 financial statements prior to submission to the Controller of Audit and External Audit on 30 June 2026. These include but are not limited to the split between earmarked and unearmarked balances pending the decision made by Council on report 13 and any further amendments following completion of the audit of the 2024/25 annual accounts. 5. PEOPLE IMPLICATIONS 5.1 There are no people implications as a consequence of this report. 6. FINANCIAL AND PROCUREMENT IMPLICATIONS 6.1 There are no direct financial or procurement implications arising from this report. 7. RISK ANALYSIS 7.1 There is a risk that a failure to maintain a local code and develop a framework to support the gathering and updating of the necessary evidence will leave the Council unable to produce a Governance Statement. The current approach to ongoing annual assessment of compliance and reporting to this Committee ensures that the Council can produce a meaningful Governance Statement. 8. EQUALITIES IMPACT ASSESSMENT (EIA) 8.1 No equalities impact was required in relation to the preparation of this report. 9. CONSULTATION 9.1 The views of Legal Services have been requested on this report and have advised there are neither any issues nor concerns with the report. 10. STRATEGIC ASSESSMENT 10.1 Sound financial practices are cornerstones of good governance and support Council and officers to pursue the Council’s strategic priorities.
Page 11
Laurence Slavin Chief Officer - Resources Date: 17 June 2026 Person to Contact: Carol Alderson, Finance Manager, 16 Church Street, Dumbarton E-mail: carol.alderson@west-dunbarton.gov.uk Appendices 1. West Dunbartonshire Council Unaudited Annual Accounts for the year ended 31 March 2026 2. Dumbarton Common Good Fund draft Position as at 31 March 2026 3. Unaudited West Dunbartonshire Council Charitable Trusts Annual Accounts for the year ended 31 March 2026 Background Papers Budget Report to Council - 5 March 2025