Agenda item

The Monitoring Officer advised the meeting that three questions had been received under the Public Question Time Scheme from Mr Peter Morley, who was in attendance to put his questions direct to the meeting.

The Chairman welcomed Mr Morley to the meeting, and invited him to put his three questions to the meeting.

Mr Morley’s questions were as follows: -

“Question 1

On the 19^th June the Finance Officer presented the Financial Statement to the Governance and Audit Committee for approval prior to external audit. He said “The first 23 pages are a narrative report, I ask you to read it and tell us if it works what we are trying to say with the narrative report is, this is all you need to read because we are conscious of the fact that not everybody wants to go through all the numbers and statements etc. and so we are trying to get to a succinct document that says this is what West Lindsey is all about.  He then goes on to say “Over the year we have made a small surplus on service of £150.000 and along with additional Business rates we ended with a surplus of £432.000. This surplus was in fact against a projected Budget set at the beginning of the year for part of the annual outgoings and is in actuality nothing more than a paper exercise.

In actual fact, overall for the year, income was £44.113m and expenditure was £45.701m which means there was a deficit of £1.588m, yet again in the Narrative report, the Finance Officer proudly proclaims “We have once again shown good financial stewardship and delivered a small profit”

At best this is misrepresentation of the facts and I ask that this Council provide a suitable explanation.

Question 2

Councillor Summers, in his introduction to the Financial Statement explained about the changes at senior level and how cost savings had been made but I will now ask him in light of these assumed savings why has the overall figure on the ‘Employee, Benefits, Expenses bill risen by £1.1M when equivalent full time staff numbers have reduced by 16 from the previous year.

Question 3

Again this is a question for Councillor Summers to answer, can you please explain the following; published figures in the narrative report state that in 2016/17 the Council had £18.88m of investments but at the end of 2017/18 this figure is now £15.316m and as almost £2.5m was spent on the Keighley Hotel this year it appears that almost £6m has disappeared from the Investment portfolio. I have further questions that require answers but will hold these over to the next meeting.”

The Chairman thanked Mr Morley for his questions and asked the Leader of the Council to respond.

As the first question made reference to the Executive Director of Resources, at the request of the Leader, he responded to Mr Morley’s first question as follows: -

“The table on page 15 shows the net position that is funded by tax payers and government grant. The table on page 26 ‘The Comprehensive Income and Expenditure Account shows the position when generally accepted accounting practice is applied to the accounts of the Local Authority. However, the accounting adjustments are reversed under a statutory override which ensures the taxpayer does not pay for the accounting adjustments which are of a non cash nature. Therefore it is appropriate to declare a surplus has been achieved for the benefit of the tax payer.

With regards my comments on the narrative report, it is my aspiration that the narrative report becomes a clear and reliable representation of the performance of the local authority both in financial and non-financial terms. Thus providing tax payers and other stakeholders with an overview of this Authority’s activities within a given financial year.

As the nature of Mr Morley’s questions indicates the Financial Statements are not easy to understand and can be interpreted in different ways.

I thank Mr Morley for working through the financial statements in such detail and raising his concerns with regards to the variation in interpretation.”

The Leader of the Council thanked Mr Knowles for his response before proceeding to answer Mr Morley’s further two questions as follows

“With regard to question 2, Employee Benefits includes recognition of the implications of the reporting standard known as IAS 19 which requires that the Authority’s pension liability is calculated on an annual basis using assumptions agreed by actuaries.

This standard requires that the employee benefits includes an amount for ‘post employment benefits’ which for this year amounts to £933k. This is not a cash transaction and as mentioned above is not expected to be funded by the tax payer on a year on year basis but provides an indication for comparison purposes.

This amount will vary from year to year and is outside the control of the local authority. The remainder of this variance is made up of exit packages, establishment changes, employer turnover and the impact of employee increments, pay award and national insurance and pension contribution changes.

The change in budgeted full time equivalent staff can be seen on page 18 of the Narrative Report and shows a reduction year on year of 17 employees.

“With regard to question 3, the figures Mr Morley refers to (page 17 of the Narrative Report) relate to the level of investments that were with banks and other institutions at the year end. I accept this could have been better explained and we will consider that in next year’s report. The Balance Sheet on page 27 of the report shows the total assets of the Authority have increased from £43m in March 2017 to £51m in March 2018 reflecting the good financial stewardship I referred to when presenting the accounts to Council.

I would like to thank Mr Morley for his questions and we will use this feedback to make further improvements to the financial statements in future.”

The Chairman thanked Mr Morley for his attendance and indicated he would receive a copy of the responses to his questions, provided verbally at the meeting, in writing, in due course.