Agenda item

The Committee received a report of the Corporate Director of Resources thatpresented the draft (unaudited) statement of accounts for the year ended 31 March 2024 and raise (where applicable) any significant points arising from the accounts.  The unaudited statement of accounts for Durham County Council for the financial year ended 31 March 2024 was authorised by the Responsible Finance Officer (the Corporate Director of Resources) on 31 May 2024 in accordance with statutory deadlines. The statement of accounts was published on the council’s website the same day (for copy see file of Minutes).

Councillor A Watson thanked Officers for providing an excellent report that showed the council in a stable position.

R Davisworth stated that the Council had a large and significant asset-base for land and buildings, which was in part due to the fact many County Durham schools had continued to be under the control of the local education authority rather than convert to academies.    Reserves were held to provide a level of financial sustainability for the Council, but the level of reserves had dropped in recent years.    Arrangements were in place to benchmark the Council’s financial balance sheet strength compared to other local authorities.  There was a lot of work incorporated to produce the accounts, working to challenging deadlines to produce draft accounts by 31 May 2024. 

Mr I Rudd was interested in the different community developments that the council had entered that was noted under contingency liabilities within the report.  He gave Milburngate development as an example and wanted to know what the liabilities were for the council.  He also mentioned the similar site at Aykley Heads and whether Council Hall would be raised to the ground in 3-4 years time and a new building built and what material risks or liabilities there could be for the council’s pot.

R Davisworth outlined the legal issues, completion challenges and timescales for the Milburngate development. A contingent liability had been reflected as an event before the end of financial year.  A report had gone to Cabinet that was confidential to agree the next steps to potentially delegate to officers to work with stakeholders for a solution which would need to be value for money and legally sound.   A report was due back to Cabinet in the autumn with a liability update to reflect the position.  

Mr I Rudd asked about if practical completion was made would there be any liability on the council.

R Davisworth responded that it was necessary for structural deficiencies with the building to be rectified by the developer.    The council could take legal action to force through practical completion but they were not at that position. 

Re. Aykley Heads:  The report presented in September 2023 sought to work as a joint venture with partners to procure a suitable developed masterplan, infrastructure and vision for the site in various plots.  This was to be part of the Durham Innovation district. The procurement process was still ongoing.  Dialogue would take place with bidders this year to take this forward and would be presented to Cabinet in Quarter 4 2024/25.    Approval had been provided from Cabinet to identify a partner for a joint venture to share the risks and the rewards equally – this process was part of the ongoing procurement process. 

Councillor A Watson asked if Milburngate would create a financial liability to the council.

R Davisworth replied that there would be no financial liability relating to the building costs for the Council until practical completion was agreed.  There was a need for a significant amount of money to be spent by the developer to get the building back to an acceptable standard.  It was unclear how this would be taken forward and funded as the Council was not obligated to contribute towards these costs.

Councillor A Watson asked if there were any time limits for the practical completion to be concluded.

R Davisworth replied that there were no time limits for this to be agreed which was a risk in itself.

In response to a comment from Mr I Rudd, R Davisworth agreed that a presentation could be added as a future agenda item on assurances on the government structure that was in place and how the group committees were managed that included the Share Holders Working Group that comprised of the portfolio holders, Leader and Deputy Leader that looked at investment and assets. It would also give a review of the Directors, Strategic Officers and the 151 Officer who met three times per year to discuss issues as part the structure.

T Henderson confirmed that she attended Company Governance meetings which considered the effectiveness of the governance arrangements in place. She confirmed that during 2023/24 improvements continued to be made and that this was referenced within the annual assurance opinion report which was presented to the Committee earlier in the meeting. 

R Davisworth noted that key risks provided assurance to the Audit Committee to make sure officers had legal advice from independent advisors as to what could be taken on as there may be potential for a conflict of interest.  Advise was given to Officers of the Council when decision making if objectives became blurred.

Resolved:

That the statement of accounts of the council for the financial year ended 31 March 2024 which have been published on the council’s website in line with statutory guidance and deadlines be considered.