Agenda item

The Financial Compliance Report was presented which detailed the position regarding legislative reporting requirements and the position on submission of the Council’s Statements of Accounts.

In reference to key legislative reporting requirements to central Government, it was noted that the Council continued to provide the majority of key legislative deliverables within timeframes. The key outstanding returns remained the VAT returns and Whole of Government Accounts (WOGA).

As reported at previous meetings, although from December 2024 the Council returned to monthly VAT returns, work had continued to provide assurance to HMRC regarding VAT return that had been submitted in December 2024, which covered the previous three years. Additional resources had been added to strengthen the finance team in relation to VAT including a VAT Accountant and mandatory VAT training for all finance staff.

The WOGA had not been produced by the Council for a number of years and required a substantial mapping exercise in order to be undertaken. It was unlikely that the Council would be able to achieve this before the Cycle 2 deadline of 3 October 2026. However, the Council was working to achieve a submission for the 2026/27 financial year.

In relation to the Council’s Statements of Accounts, Members were reminded that the Council’s External Auditor, Ernst & Young, had started its audit work on the 2023/24 Accounts and it was expected this set of accounts would be disclaimed. The 2024/25 Accounts had been completed by the Government’s deadline of 30 June 2025 and the public consultation period for inspection of draft accounts finished on 11 August 2025. These Accounts were expected to be audited close to the Government backstop date of 27 February 2026.

The key recent deliverables achieved since the last meeting were set out which included upgrading the Council’s finance system, TechOne to the latest version and setting up a project team to reinstall the cash receipting functionality within the system. A question was raised by a Member whether this was the most appropriate option given the issues experienced by the Council with the TechOne cash receipting module following implementation of the TechOne system.

The Assistant Director Finance and Customer Services responded that the Council had three options to consider which were: to fix its current system which was tried and did not work successfully, to purchase a new and different system altogether which would involve a substantial cost, or to reinstall the functionality that is already available as part of the TechOne package. It was highlighted that more local authorities in the UK were now using the TechOne cash receipting module than when the Council first tried to implement it, including Worcestershire County Council. In addition, Officers were in discussion with TechOne around specific resource requirements and exact mechanism which would be in place to operate the cash receipting module.

A further question was raised by a Member with regard to the effect of Local Government Reorganisation (LGR) on the situation around the local government audit backlog and how that would be taken into account by the Government. It was noted in response that from a financial perspective any unitary authority would be a completely new organisation. An officer group was being set up across the six district councils and the county council in Worcestershire to assess how the assets and contracts of each authority would be transferred to the new unitary authority, whether a one-unitary model or a north-south model is adopted in Worcestershire. It was highlighted that if the Government approved a north-south unitarisation model in Worcestershire, there would be complexities around splitting current Worcestershire County Council assets.

Members discussed the impact of LGR on Redditch Borough Council. The Portfolio Holder for Finance commented that the Council was in a reasonably strong financial position and possessed clarity on its asset base. It was highlighted that it was important to invest in the Borough’s assets before the unitarisation to ensure strong position for Redditch in the new unitary authority structure.

RESOLVED that

1)    The Committee note the position in relation to the delivery of the 2024/25 Accounts and the auditing of the 2023/24 Accounts.

2)    The Committee note the position in regard to other financial indicators set out in this report.

3)    Note the position on the Financial Stability Plan following the successful delivery of the Financial Improvement Plan.