Agenda item

To receive a report of the Deputy Chief Executive this report is to present to the Committee the 2015/16 Statement of Accounts prior to them being made available for public inspection. The Statement of Accounts is included with the agenda as a separate document for Committee members and will be published on the Council’s internet site.

The Principal Finance Manager presented a report of the Deputy Chief Executive which presented the 2015/16 Statement of Accounts prior to them being made available for public inspection..

Members were informed that the Deputy Chief Executive signed the draft unaudited Statement of Accounts on the 13^th June 2016 and that after consideration by the committee the Accounts will be placed on deposit for public inspection and will be audited by KPMG over the summer period.  The final audited Accounts will be presented to the committee again in September for approval.

The Principal Finance Manager advised the committee that in respect of Business Rates the net deficit is £70m, of which 49% is attributable to the Council.  At the time when the budget was set for 2015/16 this figure was predicted to be £47m, presenting a £23m shortfall of which £11m is attributable to the Authority and which will need to be taken account of in the 2017/18 budget setting process.

The Head of Corporate Finance confirmed that Business Rates were causing the Council some difficulties at the present time, this being due to a range of factors including appeals (there being some 5000 Appeals outstanding), discounts applied due to flooding (although some grant income was also received to offset this) and granted empty property relief.  Members were informed that the Gross Rateable Value for the city is now estimated to be £912m which is less than the value prior to the Trinity shopping area opening.  This erosion being caused by the appeal process and the change in the economy and market conditions in Leeds.

The Committee requested that a further report on business rates be prepared for consideration to include;

• Background on to the Council’s current and future liabilities in respect of business rates retention;
• The roles, responsibilities and decision making processes of the Council and the Valuation Office;
• Any impact arising from the publication by the Valuation Office of the new ratings list;
• Current and future trends in respect of business rate income and liabilities arising from business rate valuation appeals;
• The risks associated with business bates retention to the Council’s budget setting process.

Members also sought confirmation on the amount of reserves that the Council holds. In total it was reported that the Council had £320m of spendable reserves, of which £268m  are ringfenced, £30m are earmarked for other specific purposes and the remaining £21.3m is the Council’s general reserve. Of the £268m ringfenced reserves, £186m relates to Capital, £38m relates to the HRA, £38m relates to Schools and £6m relates to grants received in advance of revenue spending.

The Chair questioned the procedure for the reduction of business rates and how businesses qualify for reductions in the City Centre when the retail landscape of the City Changes.

Members queried the ‘other sundry debtor’ position and noted that that this stood at £76million and had increased since last year.  Members were informed that the largest change in this figure, compared to the previous year, was an increase of £6.4m in Housing Benefit overpayment debtors.  Members asked that a detailed breakdown of sundry debtors be provided.

Members commented that total of capital receipts from the sale of assets totalled £26million but that the value of these assets were £32 million. It was noted that a large proportion of the difference in these figures is due to the sale of right to buy houses which the Council  has no control over the level on which to sell. Members requested that further information in relation to the figure stated for the sale of non-housing related assets is provided.

Members also discussed the conversion of schools into academies and how this affected the Council’s accounts. It was confirmed that the transfer of these assets totalled a £44 million loss but that the Council was no longer responsible for the maintenance of the buildings. Members requested a breakdown of the assets handed over and their value.

RESOLVED – The Committee resolved to:

(a)   note the 2015/16 unaudited Statement of Accounts as certified by the Deputy Chief Executive,;

(b)  Request a further report on business rates;

(c)  Request a breakdown  of the £76 million sundry debtor position and of the capital receipts arising from non-housing assets; and

(d)  Request a detailed breakdown of the assets transferred to create academies and their associated value.