Agenda item

The Committee received the Farnham Park Sports Fields Charity Annual Report and Financial Statements for 2022/23. Ms Sophie Payne, Service Director for Culture, Sport and Leisure presented the report, along with Mr Mark Preston, Deputy Section 151 Officer and Ms Fiorella Mugari, Head of Finance.

The draft Annual Report and the Financial Statements for the year ended 31 March 2023 had been prepared in accordance with the requirements of the Charities Act 2011 and had adopted the provisions of Accounting and Reporting by Charities Statement of Recommended Practice and Financial Reporting Standards. The Farnham Park Sports Fields Charity Accounts had been audited by Azets Audited Services.

Ms S Payne summarised the operation responsibilities of the Charity and challenges faced throughout the 2022/23 financial year. The Council as sole trustee had introduced enhanced governance arrangements which included oversight on Trust activities by the Leisure Board and reports to the Corporate Management Team board meetings which covered financial management of the Trust.

The net worth of Farnham Park Sports Fields Charity had decreased by £188k from £480k in 2022 to £292k in 2023. The net operating loss for the year was £188k (after allowing for depreciation of £74k) compared to a net operating surplus of £3k in 2021/22 (£124k depreciation). The main reason for the movement was an increase in operating costs due to the impacts of high inflation (particularly prevalent in the hospitality and leisure sectors), employee costs and the application of VAT on payroll. As can be seen in the Trustees’ report, income was also affected by extreme weather, requiring 50 days of full or partial closure for the golf course. The increased operating costs were mitigated via additional income achieved across the wider Culture, Sport and Leisure service.

Points raised during discussion included:

·       The Committee heard that new expenditure costs in 2022/23 included the application of VAT on payroll and other supplies from the council which was not all recoverable. The management fee had been formalised by the council through budget provision within the MTFP and an SLA had been implemented setting out the arrangements of the Trust. Specialist advice was being sought on tax arrangements to achieve the best outcome for the charity.  The irrecoverable VAT figure showing in the accounts for 2022/23 was significantly higher than it was in 2021/22.

·       There had been a £45k increase to core staffing costs and a £38k increase to temporary staffing costs, an area where there had been difficulties recruiting bar and catering staff. Employees of the Trust were all employees of Buckinghamshire Council (BC) and had migrated to the associated contract terms and conditions. The difference in grade between BC terms and conditions and the legacy terms was circa £2-3k per annum on base salary per post. The BC terms also included other allowances such as enhanced weekend and bank holiday pay, most of which the golf club was open for. Further, there were increased employer contribution rates on pensions and operating costs charged to the Trust relating to the apprenticeship levy.

·       Inflation on supplies and services including utility bills, tree management costs and pitch treatments was significantly higher than the previous year and inflation significantly affected the interest the Trust paid to the council on the loan for the clubhouse.

·       The Committee was advised that future operating arrangements were being explored, with an options paper, which covered potential development opportunities to increase sustainability having been presented to the Leisure Board, which was chaired by the relevant cabinet member.

·       A Member noted that the site was the national sports centre for Baseball Softball UK, this made up two thirds of visitors to the site, and it was queried whether the benefit of this was being maximised with the facility attracting people from across the country. The Committee heard that discussions had been held with Baseball Softball UK and they were keen to work together with the council on master planning for the future of the site. The strategic importance of the site was recognised, and Baseball Softball UK also benefitted from investment into the pitches as they also hired these over summer whilst the other sports seasons had concluded.

·       The Chairman highlighted that over the past three years the Committee had been concerned around the decline of assets at Farnham Park. It was also recognised that the estate at Farnham Park was aging and becoming increasingly costly to maintain and repair. Were the situation not to improve there was the possibility of the charity being in a negative position in subsequent years and the Committee would like to understand proposals and plans to improve the situation. Advice was being sought from legal colleagues on the implications of the net worth becoming negative. Assurances were given, as noted above, that the Leisure Board were looking closely at options.

·       The Committee was in agreement that on its behalf, the Chairman should write to the Cabinet Member for Culture and Leisure outlining the Committee’s concerns around the ongoing sustainability of the charity, request an update report for six months’ time to understand how plans were developing and when the impact of them would be realised so that when the subsequent year’s accounts were presented there would be clear mitigating actions put forward.

ACTION: Councillor R Newcombe, on behalf of the Committee, to write to the appropriate Cabinet Member outlining the Committee’s concerns and to request an update report be presented to the Committee in approximately six months’ time.

·       A Member queried when the land was last valued and requested to view the change in value since the last valuation.

ACTION: Ms S Payne to provide details of the most recent land value valuation and the change in value since the previous valuation to Councillor R Carington.

·       It was questioned whether the Charity should be an item on the relevant risk register. The Chief Auditor would consider this and discuss it further with Ms S Payne and Mr D Skinner.

ACTION: Ms M Gibb to consider whether this risk was captured in existing risk registers or warranted a new risk.

·       A Member requested details of a substantial payment understood to be made from a Wycombe based developer when Baseball Softball UK facility was included in the Charity. There was no information available on this during the meeting so this would be established and reported back to the member.

ACTION: Ms S Payne to establish whether a payment had been made and if so, pass this information on to Councillor L Clarke OBE.

RESOLVED

        i.            That the Farnham Park Sports Fields Charity audited Annual Report and Financial Statement for the year ended 31 March 2023 (Appendix 1) be reviewed and noted.

       ii.            That the audit progress and findings report from Azets (Appendix 2) be noted.

    iii.            That the Letter of Representation (Appendix 3) in the capacity of those charged with governance be approved.

     iv.            That the Annual Report and Financial Statement for 2022/23 be approved.