Issue - meetings

To consider a report of the Corporate Director for Corporate and Support Services.

The report presents the Audit Committee with the final Statement of Accounts for 2014/15. Grant Thornton LLP is the Council’s external auditor and has undertaken the audit of the Council’s Statement of Accounts.

The Audit Committee are asked to consider the issues that have arisen during the audit and approve the final Statement of Accounts.

Officer Contact: Christine Buxton on Tel: 0161-474-4124 or email: Christine.buxton@stockport.gov.uk.

A representative of the Corporate Director for Corporate and Support Services submitted a report (copies of which had been circulated) providing the Committee with the final Statement of Accounts for 2014/15.

It was reported that the Statement of Accounts for 2014/15 were ready for approval 6 weeks earlier than they had been the previous year. Changes to the Statement from its draft format were highlighted in yellow and amendments made to typographical errors were distributed to the Committee.

The following comments were made/issues raised:-

·         The Council’s balance sheet showed over £1bn of assets and asset recognition & valuation provided a key challenge in preparing the Statement of Accounts;

·         there had been a collection fund surplus of £2.643m in 2014/15 due to the Council being prudent in its assumptions of the effect on the tax base of the Local Council Tax Support Scheme in 2013/14;

·         it was confirmed that the Council had £79.342m of Lenders Option Borrowers Option (LOBO) loans which constituted a quarter of all borrowings with an annual interest payment of £3m per year;

·         concerns were raised about whether lenders intended to raise the interest rates on the £67.5m of LOBO loans that had a call-in date in the following 12 months;

·         there were no penalties incurred for exercising the Authority’s right to repay a LOBO loan early;

·         concerns were raised regarding the increased deficit for Stockport Market despite an increased investment and it was confirmed that the future operating model for the market was included in the Investing in Stockport business case which would go through the scrutiny process;

·         an increase in payment to Life Leisure had occurred as a result of advice from Price Waterhouse Cooper (PWC) who recommended that payment to Life Leisure for managing the Council’s leisure facilities should be treated as a VAT’able management fee as opposed to a grant payment, in order to allow the Council to recover the VAT from HMRC as non-business activity and for Life Leisure to retain the VAT;

·         it was difficult to anticipate the level of dividend paid from the Manchester Airport Group and how much this may vary in the future;

·         Right to Buy capital receipts had fallen by £1m compared to the previous year due to tenants’ difficulties in securing mortgages.

RESOLVED – That the 2014/15 Statement of Accounts be approved.