Agenda item

The Committee considered a report of the Director of Corporate Resources which presented the 2008/09 statement of accounts for approval and informed the Committee of the key issues within the accounts.  A copy of the report marked ‘B’ is filed with these minutes.

Revised versions of pages 12, 35 and 39 were tabled at the meeting.  A copy of these pages is also filed with the minutes.

Arising from discussion the following points were raised:-

(i) Pension Assets and Liabilities

Concern was expressed that the County Council’s pension liabilities exceeded the pension fund assets.  The position of the pension fund was regularly monitored by the Pension Fund Management Board, although the next actuarial valuation was not due until March 2010.  Even if the financial situation improved, there would still be a significant deficit.  However, the Government had recently put proposed changes out to consultation which might reduce the impact of the valuation.  It was also anticipated that there would be consultation on more radical changes to the pension scheme in the near future.

(ii) Income and Expenditure Account

Concern was expressed that the Income and Expenditure Account had a £41m deficit for the year.  However, members were assured that the County Council had actually underspent during 2008/09.  The deficit was recorded because of adjustments that had to be made to the overall figure, such as the inclusion of the pension fund.

(iii) Officer Remuneration

It was noted that the number of employees earning of £50,000 had increased from 2007/08.  The majority of these employees were teachers, who had had an incremental increase in their salaries.  There had been no significant increase in the number of middle managers employed by the Council.

(iv) Borrowing

Long term borrowing had fallen significantly, whereas there had been an increase in borrowing repayable on demand or within 12 months.  The reduction in long term borrowing was a result of beneficial interest rates; it had been advantageous to repay a lot of debt with cash.  Equally, low interest rates meant that there were advantages to short term borrowing.

(v) Land

It was noted that the amount of land held by the County Council had decreased.  The Council sold land every year; however the current financial situation meant that it would be less beneficial to do so over the next couple of years.  A Scrutiny Review Panel had been established to consider the future of County Farms and Industrial Properties, but the occasion of the election meant that it was not clear how work on this would continue.

(vi) Investment Strategy

The County Council’s Treasury Management Strategy, which included the Investment Strategy, was considered by the Corporate Governance Committee and the full Council.  The protocol for lending and borrowing had been reviewed and tightened following the recent collapse of the Icelandic banks.

RESOLVED:-

That the Statement of Accounts for 2008/09 be approved, subject to the Director of Corporate Resources being authorised to make such amendments which are not of a material nature as he considers appropriate following further discussions with the External Auditor.