Agenda item

The Committee received an update from the Assistant Director of Finance and Customer Services on progress made in response to the Section 24 Statement and the Council’s financial recovery and stabilisation efforts.

It was reported that the Council had made good progress overall, with key deliverables such as the Quarter 1 Finance Performance and Treasury Management reports completed. However, 2 national returns remained outstanding which included VAT returns and Whole of Government Accounts (WGA).

Significant work had been undertaken with HMRC and tax advisors (PS Tax) with monthly VAT returns being submitted. A VAT accountant had been appointed and mandatory VAT training was being rolled out across the finance team, with introductory training planned for the wider organisation.

The WGA had not been produced for several years, in line with many other authorities. A substantial mapping exercise was planned to bring the Council back on track.

The 2023/24 and 2024/25 accounts were expected to be disclaimed due to audit timelines.  Public consultation on the 2024/25 accounts had closed on 11th August 2025 and discussions with EY were ongoing.

The Council had transitioned to clearing routine accounts on a monthly basis, marking a significant step forward from previous backlog clearance efforts.

Following the presentation, Members and Officers discussed the following:

• Adequacy of the Tech One finance system. -  Officers confirmed that a detailed health check was underway to assess whether the systems configuration could be improved or required partial reinstallation.  Lessons had been learned from the initial implementation and the Council aimed to have a fully functioning system in place, ahead of Local Government Reorganisation (LGR). 

• Concerns were raised about past issues with the Tech One system and the importance of rigorous testing before adopting systems in the future were emphasised. Members urged Officers to “test to break” and avoid pioneering unproven software.

• Members noted that Worcestershire County Council (WCC) had adopted the Tech One system.  However, any future unitary authority would likely implement a new system rather than inherit existing installations.

A verbal update on the financial stabilisation plan was provided by the Deputy Chief Executive and Chief Finance Officer. The recovery phase had placed significant strain on the finance team and stabilisation was the priority. Several interim appointments had been made to strengthen the team including Chief Accountant (interim), Finance Services Manager, 2 Senior Finance Business Partners (permanent), 2 Finance Business Partners (interim), VAT Specialist, Tech One Systems Manager and Tech One Technical Support Officer.

A Project Manager was still to be recruited who would oversee major workstreams. The Council would utilise its finance stabilisation reserve to fund these temporary arrangements. A report outlining the structure and associated budget pressures was being prepared.

Following the financial stabilisation update, Members made the following comments:

• A request for an organisational chart of the finance team, showing filled and vacant posts. - Officers confirmed that this would be shared once it was reviewed by Senior Management and Leadership.
• The Chair and Members expressed appreciation for the finance team’s efforts, acknowledging the pressure they had endured.
• The Portfolio Holder for Finance confirmed her support for the stabilisation approach, recognising the need to separate project work from day-to-day operations and the importance of investing in short-term capacity to secure long-term resilience.