Agenda item

This report provides an update on the status of the Statement of Accounts for 2024/25. The report provides an overview of revisions to the statements which have been made following the external audit process. The report confirms that Final Accounts will be published ahead of the statutory backstop date.

Appended to the report is a copy of the draft Letter of Representation for approval.

Recommendation

The Committee is recommended to:

       i.          Note that the Director of Finance will authorise for issue the final Statement of Accounts 2024/25 by 27 February 2026.

      ii.          Approve the Letter of Representation

The Chief Accountant introduced the report.

Members suggested deferring questions until after the next agenda item, aiming for a more practical flow of the meeting, and proposed to adjust the agenda order accordingly.

The Chair agreed to adjust the agenda order and moved onto the next item – External Auditors Update.

Following the discussion on item 6. - External Auditors Update, the committee moved to item 5. – Statement of Accounts Update 2024-2025.

Members raised questions about the statement that Three Rivers experienced the highest increase in business rates, seeking clarification whether this was within Hertfordshire or nationwide. The Director of Finance explained that the valuations and rates are set nationally, and that the increase in Three Rivers, largely due to Warner Brothers’ property valuation, was the largest in the country. Despite this, the Council did not gain additional resources because the business rate system resets the base value nationally, resulting in no local financial benefit. The conversation also covered some context about a previously planned business rate pooling initiative with other Hertfordshire councils, which was intended to allow retention of a portion of growth but was ultimately cancelled by the government. The conversation also highlighted the lack of local control over business rates and the challenges faced by the Council in supporting struggling businesses despite increases in rateable values.

Members addressed the identification and classification of surplus assets, noting a new amount of £37,000 that has been reclassified as surplus, due to ongoing reviews and plans for disposal. The conversion then shifted to Councillor expenses, highlighting a notable doubling in the amount claimed from the 2023-2024 to the 2024-2025 financial years, which raises concerns. Members suggested the need for further investigation, and documentation in meeting minutes. Additionally, the discussion covered exit packages paid by the Council, specifically mentioning an £18,000 package. The mechanism for scrutiny was explained, indicating that significant exit packages require formal approval by Full Council, while smaller packages fall under the authority of the head of paid service. This ensures oversight and accountability in managing council expenses and personal matters.

Members pointed out the extensive length of the report, suggesting the inclusion of an executive summary to present key figures and findings for easier comprehension. The Director of Finance responded by explaining that the format of local authority accounts is nationally mandated by the standard setting body CIPFA, but acknowledged ongoing debates about simplifying these accounts. Additionally, the officer referenced Sir Tony Redmond’s review recommending the creation of a nationally standardised summary statement of accounts, tailored for elected Members and the public.

Members discussed the changes in the balance of Section 106 commuted sums between 31 March 2023 and the present, noting a decrease from approximately £1 million to £600,000. The Director of Finance explained that Section 106 commuted sums refer to payments made by developers who are unable to provide affordable housing on-site, allowing the local authority to use these funds to support affordable housing projects elsewhere within the district. The officer further explained that these sums are typically charged to developers rather than householders, and highlighted the use of such funds in schemes that go through the joint ventures, which aim to deliver 100% affordable housing.

Councillor Tony Humphreys moved the recommendation as set out in the report.

On being put to the Committee, the motion was declared CARRIED by the Chair, the voting being by general assent.

RESOLVED:

The Committee is recommended to:

       i.          Note that the Director of Finance will authorise for issue the final Statement of Accounts 2024/25 by 27 February 2026.

      ii.          Approve the Letter of Representation