New Merseyrail stock update contained here.
Agenda item
Liverpool City Region Combined Authority Final Accounts 2014/15 (Pre-Audit)
Meeting of Liverpool City Region Combined Authority Audit Committee, Tuesday, 28th July, 2015 10.30 am (Item 7.)
To consider a report of the Treasurer concerning the Liverpool City Region Combined Authority Final Accounts for 2014/15 (Pre-Audit).
Minutes:
The Committee considered a report of the Treasurer regarding the Pre-Audit Liverpool City Region Combined Authority Final Accounts for 2014/15.
The Treasurer drew the Committees attention to the position of the reserves detailed in the Statement of Accounts. The Combined Authority reserves were inherited from the Integrated Transport Authority and remained high. The reserves were being built up for the Rolling Stock project to ensure the levy was not used and had no impact on tax payers. Reserves would also be used on transport infrastructure investment.
Councillor Killen questioned the difference between the £127 million levy and the revenue grants received by Merseytravel from the Combined Authority. It was advised that the levy was for all Combined Authority and Merseytravel activity; however not all of it was given to Merseytravel. A portion remained with the Combined Authority to pay the loan and debt charges associated with the Mersey Tunnels and Merseytravel was paid a grant to carry out the activity requested by the Combined Authority.
Councillor Moorhead enquired and received clarification that any unused money was added to the Combined Authority reserves, with the exception of the 10% contribution to the Growth Fund Scheme.
Councillor Moorhead further referred to the Rolling Stock project and enquired as to when it was likely to be reported to the Combined Authority for a decision. The Treasurer reported that the delay was due to an issue regarding infrastructure. Discussions were currently on-going with Network Rail and other relevant bodies to ensure that the network had the capacity to accommodate the rolling stock. Once a resolution was reached, which was anticipated sooner rather than later, it would be submitted to the Combined Authority.
Councillor Killen asked about the implementation timescale once a decision had been made and what changes the public could expect to see on the network. It was advised that, if agreed, the project was expected to be operational by the end of the current decade. The work undertaken to date suggested that a new fleet was needed on the network by the mid 2020s to avoid capacity and engineering issues. Improvements to the network would include better timetables, improved trains with smarter layout; including more standing room but with no reduction in the number of seats, and Wi-Fi.
Councillor Killen further asked whether the project was at risk due to budget cuts and it was explained that there were no immediate risks and the financial package being developed was striving to include all necessary costs in order to protect the levy and ultimately the tax payer. The Merseyrail network was in good health financial health, which put the project in a good position, but it was difficult to guarantee that it would not be affected by cuts in the future.
Councillor Polhill enquired whether a risk factor had been built in to the project to take in to account the increasing prices year on year to build the rolling stock using budgets that would decrease year on year. The Treasurer advised that elements of risk had been identified and would be included in the reports submitted to the Combined Authority. Contract prices was one of the risks that had been identified and when the current rail concession expired in 2028 the Combined Authority would set the terms for the new concession to make it more attractive for new bidders, which would be beneficial for the Authority. There was, however, risk in every element of the project but the risk of not replacing the rolling stock carried operational and financial risk.
Councillor Carr enquired and was advised that if the decision was made to purchase the rolling stock Merseyrail Electrics could withdraw from the contract should they not agree with the terms that were being imposed. Merseyrail Electrics were a key partner and included in discussions regarding the project, as far as was appropriate, and to date were comfortable with the proposals.
Councillor Carr also referred to the assets held for sale detailed within the Statement of Accounts and enquired as to when the assets became a liability. It was reported that there was provision for losses relating to assets in the accounts, however, the assets referred to in the accounts were purchased as part of the now-cancelled Merseytram project and had since been sold.
With regard to Global Smart Media Ltd and Accrington Technologies Ltd, which were currently dormant, Councillor Carr enquired as to when those Companies would be tidied up. It was advised that every effort was being made but as neither was incurring any costs it was not a corporate priority. There was currently an on-going issue that Merseytravels Legal Division was trying to resolve whilst ensuring financial protection for the organisation.
Resolved that:-
a) the pre-audit final accounts of the Liverpool City Region Combined Authority for 2014/15 be approved;
b) the audited final accounts be received by the Combined Authority Audit Committee following completion of the audit work by the Combined Authoritys External Auditors; and
c) the pre-audit final accounts of Merseytravel, included within the Liverpool City Region Combined Authority Group Accounts, be noted.
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