ARGYLL and Bute Council was worth significantly more at the end of the last financial year than 12 months previously, a report has revealed.
The authority’s end-of-year accounts for 2019/20 have shown that the council’s net worth rose by more than £80 million during the year to reach a total of £326.371m – an increase of more than a third.
During the year, councillors voted to increase council tax by 4.5 per cent and to reduce or scrap funding for a range of services.
A report by finance chief Kirsty Flanagan also points to increases in the council’s usable and unusable reserves, and in its general fund balance, over the last financial year.
Usable reserves are those which the council can use to fund investment in services or specific projects, or to reduce council tax levels; unusable reserves are those which can’t, such as pension liabilities or gains in the value of assets.
However, Ms Flanagan also warns that the Covid-19 pandemic will place “significant financial challenges” on the council during 2020/21.
The accounts, which have yet to be audited, was considered for approval by the authority’s business continuity committee at its meeting via video link on Thursday, June 25.
Ms Flanagan said in the report: “The balance sheet shows that the net worth of the council has increased to £326.371m compared to a net worth at March 31, 2019 of £242.667m."
The new figure represents an increase of 34.5 per cent on the authority's net value 12 months previously.
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Ms Flanagan continued: “The main reason for this increase relates to the increase in asset revaluations as well as the decrease in the pension liability.
“The balance of unusable reserves has increased by £83.340m from £187.139m as at March 31, 2019 to £270.479m as at March 31, 2020.
“The general fund balance at March 31, 2020 was £49.670m; this is an increase of £0.190m from last year. There are substantial sums earmarked within the general fund, amounting to £43.375m.
“The council has agreed to hold a contingency balance equivalent to two per cent of the council budget for 2020/21 and this amounts to £4.929m.
"The remaining unallocated balance amounts to £1.366m.”
Ms Flanagan also said that the council was “faced with an unprecedented set of circumstances” due to the coronavirus pandemic.
She added: “The financial outlook is significantly exacerbated by the extent to which Covid-19 will impact on both future years’ expenditure, including loss of income and the future years funding.
“There is a lack of clarity at the current time over how the additional funds made available by the UK and Scottish Government to combat the impact of Covid-19 will meet the 2020/21 additional costs and loss of income, and whether there will be any further additional funding to support the medium to longer term implications of Covid-19.
“The council is closely monitoring the financial impact to assess the effect on the delivery of agreed savings options and the cost pressures it is creating.”
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