Carolyn Haynes (Lead Accountancy Manager) presented the item and discussed:

a)    The Draft Statement of Accounts 2024/25 had been published by the statutory deadline on 30 June 2025;

b)    The audited accounts would need to be signed off by 27 February 2026;

c)    The introduction of IFS16 leases was a major implementation for the team to work on and introduced the concept of a right of use asset for all qualifying leases, including those with nominal or peppercorn rents;

                      i.        This approach eliminated the previous distinction between finance and operating leases for lessees;

                     ii.        All leases, except those with a term of less than 12 months or of a low value, were recognised on the balance sheet, regardless of the transfer of risks and rewards;

                    iii.        To complement the new standard the accounting policies within the statement of accounts had been updated;

                    iv.        In advance of the implementation date of 01 April 2024, PCC conducted a comprehensive review of all lease arrangements and, as a result, 59 land and building leases, 32 equipment leases, and eight vehicle leases were identified for recognition on the balance sheet;

                     v.        PCC’s private finance initiative (PFI’s) lease models were also reviewed in consultation with treasury management advisors to assess the impact of the introduction of IFS16 and resulted in a net reduction of £10.8985;

                    vi.        The recognition of right of use assets and corresponding lease liabilities increased the Council’s reported borrowings, which in turn raised the capital financing requirement and authorised debt limits;

                  vii.        No new money had had to be borrowed, the rents paid through the accounts were converted into an asset, recognising the minimum revenue provision through the accounts;

d)    PCC’s assets were £435 million greater than its liabilities, reflecting a downward movement of £40 million from 2023/24 due to various movements in the Council’s assets and liabilities;

e)    Property, plant and equipment assets had increased by £61 million due to a combination of asset revaluation and acquisition of new assets through the capital programme.

In response to questions, supported by Ian Trisk-Grove (Service Director for Finance), the following was discussed:

f)     PFI’s had remained fairly static and a forensic review had been undertaken due to the introduction of IFS16 and there would be no impact on the council tax payer as this was purely an accounting adjustment;

g)    Local government reorganisation (LGR) narrative did not impact this set of accounts;

h)    The autumn white paper on SEND (Special Educational Needs and Disabilities) was expected to address the Government’s position on next steps for dedicated school grants, but in the meantime finance colleagues were working closely with those in the education department on internal mitigation plans around managing costs associated.

The Committee agreed:

1.    To note the report;

2.    To note the draft (unaudited) Statement of Accounts 2024/25, which were published by 30 June 2025 in accordance with the requirements of the Accounts and Audit Regulations 2015 (as amended);

3.    To note the Statement of Accounts for 2024/25 would be subject to external audit and would be presented to the Committee for approval at their meeting planned for 20 January 2026, in advance of the backstop date of 27 February 2026.