Council accounts disclaimed by auditors

Middlesbrough Council has been told its accounts will be disclaimed

Auditors have declared their intention to disclaim a council's accounts for the 2023-24 year.

Forvis Mazars said it would disclaim Middlesbrough Council's accounts due to the "precarious financial position" and its ability to provide "affordable services".

The report acknowledged the council had made "significant improvement" by introducing a new budget-setting approach and transformation plan, but said there was still work to be done to improve "financial sustainability".

Justin Weston, head of finance and investment at the council, said the position it was in now was "much better than we've been in for the last three or four years".

Auditors should issue a clean opinion on accounts, providing full assurance as to their content and accuracy, but they can also disclaim accounts if insufficient work has been done to formulate an opinion.

This can be because the auditor has been unable to get all the information needed or appropriate evidence to state whether the financial statements are properly put together.

High spend areas

The disclaim outcome is largely due to the fast approaching "backstop" deadline for auditing 2023-24 accounts, 28 February 2025.

Forvis Mazars has taken over the role of auditing Middlesbrough Council and its duty to be satisfied refers specifically to the 2023-24 financial year.

A spokesperson told the local authority's audit committee: "What we've done in the draft report is log our audit judgements in respect of 2023-24, but also tried to reflect on the arrangements as they've developed during that year since."

A Middlesbrough Council spokesman told the Local Democracy Reporting Service the finance team had worked with directors on "high spending service areas" to "develop more comprehensive and data driven demand and cost modelling".

High spend areas included adult social care, children's social care and SEND transport.

The "backstop" deadline was introduced by the Labour government as part of the attempt to fix what it called the "broken local audit system in England".

Jim McMahon, minister of state for local government and English devolution, said last year just 1% of councils and other local bodies published audited accounts on time.