Issue - meetings

Committee considered a detailed report which informed Members of an assessment of the Council as a going concern for the purposes of producing the Statement of Accounts for 2022/23.

The concept of a going concern assumed that an authority’s functions and services would continue in operational existence for the foreseeable future. The provisions in the Code in respect of going concern reporting requirements reflected the economic and statutory environment in which local authorities operated. These provisions confirmed that as authorities cannot be created or dissolved without statutory prescription, they must prepare their financial statements on a going concern basis of accounting.

Local authorities carried out functions essential to the local community and were themselves revenue-raising bodies (with limits on their revenue-raising powers arising only at the discretion of central government). If an authority were in financial difficulty, the prospects were that alternative arrangements might be made by central government either for the continuation of the services it provided or for assistance with the recovery of a deficit over more than one financial year.

As with all principal local authorities, the Council was required to compile its Statement of Accounts in accordance with the Code which was published by the Chartered Institute of Public Finance and Accountancy (CIPFA). Accounts drawn up under the Code therefore assumed that a local authority’s services would continue to operate for the foreseeable future.

Given the significant reduction in funding for local government in recent years, and the potential threat this posed to the ongoing viability of councils, as a consequence, external auditors continued to place a greater emphasis on local authorities undertaking an assessment of the going concern basis on which they prepared their financial statements.

The Council’s current medium-term financial plan (MTFP) was revised in December 2022 and was based on assumptions that reflected what was known about the economy at that time. The Council had since seen the continued increases to general cost of living and the much-publicised issuing of, or potential issuing of, Section 114 notices by some local authorities. The Council needed to be confident that it understood and had taken into account any threats to its financial sustainability.

The report for Committee’s consideration set out the position for the Council and provided justification for the 2022/23 financial statements being prepared on a going concern basis.

Moved by Councillor Tom Munro and seconded by Councillor Duncan Haywood

RESOLVED that the outcome of the assessment of the Council’s going concern status for the purpose of preparing the Statement of Accounts for 2022/23 be accepted.