service reporting code of practice - cipfa · this schedule details the changes that have been made...

service reportingcode of practice

For Local Authorities 2015/16

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service reportingcode of practice

For Local Authorities 2015/16

SERVICE REPORTING CODE OF PRACTICE \ FOR LOCAL AUTHORITIES 2015/16

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Published by:

CIPFA \ THE CHARTERED INSTITUTE OF PUBLIC FINANCE AND ACCOUNTANCY

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From 1 January 2015, CIPFA will be moving to 77 Mansell Street, London E1 8AN

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© December 2014 CIPFA

ISBN 978 1 84508 427 1

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Schedule of Changes

This schedule details the changes that have been made to the 2015/16 Service Reporting Code of Practice.

THE DEFINITION OF TOTAL COSTThe definition of total cost in Section 2 of SeRCOP has been updated to include the requirements of the five new or amended standards introduced by the IASB in May 2011, ie IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Ventures, IFRS 12 Disclosure of Interests in Other Entities, IAS 27 Separate Financial Statements (as amended in 2011) and IAS 28 Investments in Associates and Joint Ventures (as amended in 2011), as introduced by the 2014/15 Code.

SERVICE EXPENDITURE ANALYSIS – ENGLAND AND WALES

Adult Social Care (England)A new mandatory line has been added: Social Support – Social Isolation.

There have also been various updates to the guidance notes, as necessary.

Central ServicesThe guidance on Local Welfare Assistance Schemes has been updated.

Cultural Services and Related ServicesAdditional guidance is provided on the discretionary line Heritage.

Highways and Transport ServicesA new discretionary line has been added: Traffic management – bus lane enforcement.


Housing ServicesTwo discretionary lines have been altered: Social Homebuy includes shared ownership and affordable rents and Public Houses is renamed Commercial Properties.


Public Health (England)Two new discretionary lines have been added under the mandatory line Miscellaneous Public Health Services to cover children’s 0–5 public health duties that will transfer to local


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authorities from October 2015: Mandated 0–5 children’s services and All 0–5 children’s services.


Police ServicesThere have been some minor changes to the headings for the divisions and subdivisions of services.

SERVICE EXPENDITURE ANALYSIS – SCOTLANDThere are no structural changes to the Scotland Service Expenditure Analysis. Reference to the Scottish Government’s Guidance on the Operation of Local Authority Housing Revenue Accounts (HRAs) in Scotland has been added to the Housing SEA guidance.

SERVICE EXPENDITURE ANALYSIS – NORTHERN IRELANDLocal government reform in Northern Ireland will result in the transfer of powers for certain functions from central to local government, and the creation of a new Community Planning function within local government. These have necessitated structural changes to the Northern Ireland Service Expenditure Analysis. There have also been various other updates to subdivisions of service and the guidance notes to reflect current practice.

Leisure and Recreation Services There have been updates to subdivisions within Culture and Heritage, Recreation and Sport and Tourism to reflect the transfer of powers from central government to local government in these areas. A subdivision within Community Services has been moved to the new service Planning and Development.

Environmental ServicesThere has been an update to a subdivision within Environment Health to reflect the new powers transferred to district councils in housing standards.

Planning and Development ServicesThis service has been created to reflect local authorities’ new powers in Community Planning and Economic Development, including the promotion of entrepreneurship, the delivery of elements of EU Rural Development Programme, Urban Regeneration and Community Development, local development planning, Development Control and Environmental Initiatives. New mandatory divisions have been created to reflect the functions transferred from central government.

Previous Service Expenditure Analysis divisions and subdivisions relating to Community Services, Building Control and Economic Development have been moved to Planning and Development Services to align expenditure analysis.

SCHEDULE OF CHANGES

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Highways and Transport Services The Highways and Transport services has been created to reflect the transfer of powers to local government regarding off-street parking.

Corporate and Democratic CoreThere has been an update to the service to reflect Assembly Ombudsman for NI and NI Commissioner of complaints expenditure. Descriptions of previous costs have been amended to reflect the new legislation on local government reform.

Other Services There has been an update to the Central Services to the Public division to reflect the power of competence and local government reform legislation.

RECOMMENDED STANDARD SUBJECTIVE ANALYSISGroup 1 – Employee Costs includes a new line for employee expenses in relation to voluntary aided and foundation schools. This reflects the consolidation requirements specified in Appendix E of the 2014/15 Code.


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Contents

BACKGROUND TO THE DEVELOPMENT OF THE SERVICE REPORTING CODE OF PRACTICE FOR LOCAL AUTHORITIES (SeRCOP) ...........................................................................................................................................xv

SECTION 1: INTRODUCTION ..................................................................................................................................... 1STATUS ..........................................................................................................................................................1STRUCTURE OF THE SERVICE REPORTING CODE OF PRACTICE FOR LOCAL AUTHORITIES ...........2CIPFA STATEMENT ......................................................................................................................................3APPLICABLE DATE ......................................................................................................................................3RELATIONSHIP WITH THE STATEMENT OF ACCOUNTS .........................................................................3ACCOUNTING PRACTICES ..........................................................................................................................4

SECTION 2: THE DEFINITION OF TOTAL COST ....................................................................................................... 5THE PURPOSE OF TOTAL COST ..................................................................................................................5GROSS AND NET TOTAL COST ...................................................................................................................6GROSS TOTAL COST ....................................................................................................................................6NET TOTAL COST .......................................................................................................................................34NET TOTAL COST EXCLUDING SPECIFIC GRANTS ................................................................................35RELATIONSHIP TO THE COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT ...................35 JOINT ARRANGEMENTS ..........................................................................................................................35TRADING ACCOUNTS AND TRADING OPERATIONS .............................................................................36RELATIONSHIP WITH THE TREATMENT IN THE COMPREHENSIVE INCOME AND

EXPENDITURE STATEMENT IN THE ANNUAL STATEMENT OF ACCOUNTS ...........................43COSTS EXCLUDED FROM GROSS AND NET TOTAL COST .....................................................................47DEFINITION OF TOTAL COST FOR GROUP ACCOUNTS ........................................................................57

SECTION 3: SERVICE EXPENDITURE ANALYSIS FOR ENGLAND AND WALES ..................................................59INTRODUCTION .........................................................................................................................................59THE SUBJECTIVE ANALYSIS ....................................................................................................................59FORMAT OF THE SERVICE EXPENDITURE ANALYSIS...........................................................................59THE PRINCIPLE OF TOTAL COST .............................................................................................................61STATUS OF THE SERVICE EXPENDITURE ANALYSIS ............................................................................61THE SERVICE EXPENDITURE ANALYSIS ................................................................................................61

ADULT SOCIAL CARE (ENGLAND) ...............................................................................................................63PART ONE: SERVICE EXPENDITURE ANALYSIS FOR ADULT SOCIAL CARE ............................................65

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR ADULT SOCIAL CARE .............................................................................................................................................69INTRODUCTION .........................................................................................................................................69WHAT TO INCLUDE IN THE SERVICE EXPENDITURE ANALYSIS ........................................................69OVERHEAD APPORTIONMENT .................................................................................................................70JOINT ARRANGEMENTS AND POOLED BUDGETS .................................................................................70SUPPORTING PEOPLE – ANCILLARY EXPENDITURE ...........................................................................70STATUS AND IMPLEMENTATION .............................................................................................................71


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UPDATING THE GUIDANCE ......................................................................................................................71

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE .........................72

ADULT SOCIAL CARE (WALES) .....................................................................................................................83PART ONE: SERVICE EXPENDITURE ANALYSIS FOR ADULT SOCIAL CARE ............................................85

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR ADULT SOCIAL CARE .............................................................................................................................................87INTRODUCTION .........................................................................................................................................87WHAT TO INCLUDE IN THE SERVICE EXPENDITURE ANALYSIS ........................................................87OVERHEAD APPORTIONMENT .................................................................................................................88JOINT ARRANGEMENTS AND POOLED BUDGETS .................................................................................88SUPPORTING PEOPLE – ANCILLARY EXPENDITURE ...........................................................................89STATUS AND IMPLEMENTATION .............................................................................................................89UPDATING THE GUIDANCE ......................................................................................................................89

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE.........................90

CENTRAL SERVICES .....................................................................................................................................101PART ONE: SERVICE EXPENDITURE ANALYSIS FOR CENTRAL SERVICES ........................................... 103

INTRODUCTION ...................................................................................................................................... 103STATUS AND IMPLEMENTATION .......................................................................................................... 103UPDATING THE GUIDANCE ................................................................................................................... 103

PART TWO: THE CORPORATE AND DEMOCRATIC CORE (CDC) .............................................................. 104INTRODUCTION ...................................................................................................................................... 104GUIDANCE ON WHAT TO INCLUDE IN CDC COSTS ........................................................................... 106CONTRIBUTIONS TO CORPORATE AND DEMOCRATIC CORE COSTS .............................................. 107

PART THREE: NON DISTRIBUTED COSTS (NDC) ...................................................................................... 109INTRODUCTION ...................................................................................................................................... 109GUIDANCE ON WHAT TO INCLUDE IN NON DISTRIBUTED COSTS ................................................. 109CONTRIBUTIONS TO NON DISTRIBUTED COSTS ............................................................................... 110

PART FOUR: CENTRAL SERVICES TO THE PUBLIC .................................................................................. 111INTRODUCTION ...................................................................................................................................... 111GUIDANCE ON WHAT TO INCLUDE IN CENTRAL SERVICES ............................................................ 112

CHILDREN’S AND EDUCATION SERVICES .................................................................................................115PART ONE: SERVICE EXPENDITURE ANALYSIS FOR CHILDREN’S AND EDUCATION

SERVICES – EDUCATION SERVICES .................................................................................................... 116

PART TWO: SERVICE EXPENDITURE ANALYSIS FOR CHILDREN’S AND EDUCATION SERVICES – CHILDREN’S SOCIAL CARE ............................................................................................. 117

PART THREE: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR CHILDREN’S AND EDUCATION SERVICES .......................................................................................... 119INTRODUCTION ...................................................................................................................................... 119STRUCTURE OF THE SERVICE EXPENDITURE ANALYSIS FOR CHILDREN’S AND

EDUCATION SERVICES ............................................................................................................... 119SUPPORT SERVICE AND MANAGEMENT COSTS ................................................................................ 120CLASSIFYING DIFFERENT TYPES OF SCHOOL ................................................................................... 120JOINT ARRANGEMENTS AND POOLED BUDGETS .............................................................................. 120SUPPORTING PEOPLE – ANCILLARY EXPENDITURE ........................................................................ 121STATUS AND IMPLEMENTATION .......................................................................................................... 121UPDATING THE GUIDANCE ................................................................................................................... 121

CONTENTS

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PART FOUR: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE – EDUCATION SERVICES .......................................................................................................................... 122INTRODUCTION ...................................................................................................................................... 122SCHOOLS .................................................................................................................................................. 126EDUCATION MANAGEMENT AND SUPPORT SERVICES .................................................................... 127

PART FIVE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE – CHILDREN’S SOCIAL CARE ................................................................................................................... 128

CULTURAL AND RELATED SERVICES .........................................................................................................137PART ONE: SERVICE EXPENDITURE ANALYSIS FOR CULTURAL AND RELATED SERVICES .............. 139

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR CULTURAL AND RELATED SERVICES ................................................................................................... 140INTRODUCTION ...................................................................................................................................... 140STATUS AND IMPLEMENTATION .......................................................................................................... 140UPDATING THE GUIDANCE ................................................................................................................... 140

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN CULTURAL AND RELATED SERVICES ........ 141INTRODUCTION ...................................................................................................................................... 141

ENVIRONMENTAL AND REGULATORY SERVICES .....................................................................................147PART ONE: SERVICE EXPENDITURE ANALYSIS FOR ENVIRONMENTAL AND REGULATORY

SERVICES ................................................................................................................................................. 149

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR ENVIRONMENTAL AND REGULATORY SERVICES .............................................................................. 151INTRODUCTION ...................................................................................................................................... 151STATUS AND IMPLEMENTATION .......................................................................................................... 151UPDATING THE GUIDANCE ................................................................................................................... 151

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN ENVIRONMENTAL AND REGULATORY SERVICES ................................................................................................................................................. 152

FIRE AND RESCUE SERVICES .....................................................................................................................161PART ONE: SERVICE EXPENDITURE ANALYSIS FOR FIRE AND RESCUE SERVICES ........................... 163

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR FIRE AND RESCUE SERVICES ............................................................................................................... 164INTRODUCTION ...................................................................................................................................... 164APPLICABILITY OF THE CORPORATE AND DEMOCRATIC CORE ..................................................... 164CHANGES TO THE TREATMENT OF PENSIONS COST ......................................................................... 164STATUS AND IMPLEMENTATION .......................................................................................................... 165UPDATING THE GUIDANCE ................................................................................................................... 165

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE ...................... 166

HIGHWAYS AND TRANSPORT SERVICES ..................................................................................................169PART ONE: SERVICE EXPENDITURE ANALYSIS FOR HIGHWAYS AND TRANSPORT SERVICES ........ 171

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR HIGHWAYS AND TRANSPORT SERVICES ............................................................................................ 173INTRODUCTION ...................................................................................................................................... 173STATUS AND IMPLEMENTATION .......................................................................................................... 173UPDATING THE GUIDANCE ................................................................................................................... 173NOTE ON HIGHWAYS DIVISIONS OF SERVICE ................................................................................... 173HOW TO TREAT ‘OTHER’ WORKS .......................................................................................................... 174

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE...................... 175


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HOUSING SERVICES ....................................................................................................................................187PART ONE: HOUSING GENERAL FUND (ENGLAND)/HOUSING COUNCIL FUND (WALES)

SERVICE EXPENDITURE ANALYSIS ..................................................................................................... 189

PART TWO: HRA FORMAT (ENGLAND) ...................................................................................................... 191

PART THREE: HRA FORMAT (WALES) ........................................................................................................ 195

PART FOUR: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR HOUSING SERVICES ............................................................................................................................... 198INTRODUCTION ...................................................................................................................................... 198HOUSING REVENUE ACCOUNT GUIDANCE ......................................................................................... 198GUIDANCE ON WHAT TO INCLUDE IN THE GENERAL FUND/COUNCIL FUND ............................... 202ADVICE ON INCONSISTENT ACCOUNTING PRACTICES ................................................................... 209STATUS, IMPLEMENTATION AND UPDATING THE GUIDANCE ........................................................ 210

NATIONAL PARKS ........................................................................................................................................211PART ONE: SERVICE EXPENDITURE ANALYSIS FOR NATIONAL PARKS .............................................. 213

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR NATIONAL PARKS ................................................................................................................................... 215INTRODUCTION ...................................................................................................................................... 215STATUS AND IMPLEMENTATION .......................................................................................................... 215UPDATING THE GUIDANCE ................................................................................................................... 215

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN THE NET COST OF NATIONAL PARKS ........ 216

PLANNING SERVICES ..................................................................................................................................223PART ONE: SERVICE EXPENDITURE ANALYSIS FOR PLANNING SERVICES ........................................ 225

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR PLANNING SERVICES ............................................................................................................................ 226INTRODUCTION ...................................................................................................................................... 226STATUS AND IMPLEMENTATION .......................................................................................................... 226UPDATING THE GUIDANCE ................................................................................................................... 226

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN PLANNING SERVICES .................................. 227

POLICE SERVICES ........................................................................................................................................235PART ONE: SERVICE EXPENDITURE ANALYSIS FOR POLICE SERVICES .............................................. 237

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR POLICE SERVICES .................................................................................................................................. 238INTRODUCTION AND BACKGROUND .................................................................................................. 238THE REVISED POLICE SERVICE EXPENDITURE ANALYSIS .............................................................. 238APPLICABILITY OF THE CORPORATE AND DEMOCRATIC CORE ..................................................... 239APPLICABILITY OF NON DISTRIBUTED COSTS ................................................................................. 239ITEMS BELOW THE COST OF SERVICE LINE ....................................................................................... 239STATUS AND IMPLEMENTATION .......................................................................................................... 239THE RECOMMENDED STANDARD SUBJECTIVE ANALYSIS ............................................................... 239UPDATING THE GUIDANCE ................................................................................................................... 239

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN THE NET COST OF POLICE SERVICES ........ 240

PART FOUR: GUIDANCE NOTE: ITEMS INCLUDED IN THE NET COST OF SERVICE DIVISIONS BELOW THE NET COST OF SERVICES LINE ......................................................................................... 243

CONTENTS

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PUBLIC HEALTH (ENGLAND) .......................................................................................................................245PART ONE: SERVICE EXPENDITURE ANALYSIS FOR PUBLIC HEALTH ................................................. 247

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR PUBLIC HEALTH ...................................................................................................................................... 249INTRODUCTION ...................................................................................................................................... 249WHAT TO INCLUDE IN THE SERVICE EXPENDITURE ANALYSIS ..................................................... 249OVERHEAD APPORTIONMENT .............................................................................................................. 249JOINT ARRANGEMENTS AND POOLED BUDGETS .............................................................................. 250STATUS AND IMPLEMENTATION .......................................................................................................... 250UPDATING THE GUIDANCE ................................................................................................................... 250

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE...................... 251

SECTION 3: SERVICE EXPENDITURE ANALYSIS FOR SCOTLAND ....................................................................257INTRODUCTION ...................................................................................................................................... 257FORMAT OF THE SERVICE EXPENDITURE ANALYSIS........................................................................ 257THE PRINCIPLE OF TOTAL COST .......................................................................................................... 258STATUS OF THE SERVICE EXPENDITURE ANALYSIS ......................................................................... 258THE SERVICE EXPENDITURE ANALYSIS ............................................................................................. 259UPDATING THE SERVICE REPORTING CODE OF PRACTICE FOR LOCAL AUTHORITIES .............. 259

EDUCATION SERVICES ................................................................................................................................261PART ONE: SERVICE EXPENDITURE ANALYSIS FOR EDUCATION SERVICES ...................................... 263

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR EDUCATION SERVICES .......................................................................................................................... 265INTRODUCTION ...................................................................................................................................... 265STRUCTURE OF THE SERVICE EXPENDITURE ANALYSIS FOR EDUCATION SERVICES ................ 265EDUCATION MANAGEMENT AND SUPPORT SERVICES .................................................................... 265CLASSIFYING DIFFERENT TYPES OF SCHOOL ................................................................................... 266UPDATING THE GUIDANCE ................................................................................................................... 266

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE...................... 267INDIVIDUAL SCHOOL BUDGETS .......................................................................................................... 267EA CENTRALLY HELD SCHOOL BUDGETS ............................................................................................ 267NON-SCHOOL FUNDING ........................................................................................................................ 271OPTIONAL HOLDING ACCOUNTS ......................................................................................................... 273

HOUSING SERVICES ....................................................................................................................................275PART ONE: SERVICE EXPENDITURE ANALYSIS FOR HOUSING SERVICES (GENERAL FUND) ........... 277

PART TWO: SERVICE EXPENDITURE ANALYSIS FOR THE HOUSING REVENUE ACCOUNT (HRA) ..................................................................................................................................... 278

PART THREE: GUIDANCE NOTE: COMPLETING THE HOUSING SERVICE EXPENDITURE ANALYSIS ...................................................................................................................... 280WHAT TO INCLUDE IN HOUSING SERVICES (GENERAL FUND) ....................................................... 280WHAT TO INCLUDE IN THE HOUSING REVENUE ACCOUNT ............................................................. 286

CULTURAL AND RELATED SERVICES .........................................................................................................291PART ONE: SERVICE EXPENDITURE ANALYSIS FOR CULTURAL AND RELATED SERVICES .............. 292

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR CULTURAL AND RELATED SERVICES ................................................................................................... 293INTRODUCTION ...................................................................................................................................... 293UPDATING THE GUIDANCE ................................................................................................................... 293


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PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE ...................... 294

ENVIRONMENTAL SERVICES ......................................................................................................................299PART ONE: SERVICE EXPENDITURE ANALYSIS FOR ENVIRONMENTAL SERVICES ............................ 301

PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE ......................... 303

ROADS AND TRANSPORT SERVICES .........................................................................................................309PART ONE: SERVICE EXPENDITURE ANALYSIS FOR ROADS AND TRANSPORT SERVICES ............... 311

PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE ......................... 312ROADS ...................................................................................................................................................... 312NETWORK AND TRAFFIC MANAGEMENT ........................................................................................... 315PARKING SERVICES ............................................................................................................................... 316PUBLIC TRANSPORT .............................................................................................................................. 317MANAGEMENT AND SUPPORT SERVICES .......................................................................................... 318

TRADING SERVICES ....................................................................................................................................321PART ONE: SERVICE EXPENDITURE ANALYSIS FOR TRADING SERVICES .......................................... 323

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR TRADING SERVICES ............................................................................................................................... 324INTRODUCTION ...................................................................................................................................... 324UPDATING THE GUIDANCE ................................................................................................................... 324

PLANNING AND DEVELOPMENT SERVICES ..............................................................................................325PART ONE: SERVICE EXPENDITURE ANALYSIS FOR PLANNING AND

DEVELOPMENT SERVICES ..................................................................................................................... 327

PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE ......................... 328

SOCIAL WORK ..............................................................................................................................................339PART ONE: SERVICE EXPENDITURE ANALYSIS FOR SOCIAL WORK .................................................... 341

PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE ......................... 344INTRODUCTION ...................................................................................................................................... 344SERVICE STRATEGY ............................................................................................................................... 346REPORTER TO THE CHILDREN’S PANEL .............................................................................................. 348CHILDREN AND FAMILIES .................................................................................................................... 348OLDER PEOPLE ....................................................................................................................................... 353PEOPLE WITH PHYSICAL OR SENSORY DISABILITIES ..................................................................... 356PEOPLE WITH LEARNING DISABILITIES ............................................................................................ 357PEOPLE WITH MENTAL HEALTH NEEDS .............................................................................................. 358PEOPLE WITH ADDICTIONS/SUBSTANCE MISUSE ............................................................................ 358PEOPLE WITH AIDS/HIV ........................................................................................................................ 359VULNERABLE HOMELESS PEOPLE ....................................................................................................... 359SERVICES TO ASYLUM SEEKERS AND REFUGEES ............................................................................. 359CRIMINAL JUSTICE SOCIAL WORK SERVICES .................................................................................. 360SUPPORT SERVICE AND MANAGEMENT COSTS (OPTIONAL HOLDING ACCOUNTS) ................... 361

CENTRAL SERVICES .....................................................................................................................................363PART ONE: SERVICE EXPENDITURE ANALYSIS FOR CENTRAL SERVICES ........................................... 365

INTRODUCTION ...................................................................................................................................... 365STATUS OF THE SERVICE EXPENDITURE ANALYSIS ......................................................................... 365UPDATING THE GUIDANCE ................................................................................................................... 365

PART TWO: THE CORPORATE AND DEMOCRATIC CORE ......................................................................... 366INTRODUCTION ...................................................................................................................................... 366

CONTENTS

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GUIDANCE ON WHAT TO INCLUDE IN CDC COSTS ........................................................................... 368CONTRIBUTIONS TO CORPORATE AND DEMOCRATIC CORE ........................................................... 370

PART THREE: NON DISTRIBUTED COSTS ................................................................................................. 371INTRODUCTION ...................................................................................................................................... 371GUIDANCE ON WHAT TO INCLUDE IN NON DISTRIBUTED COSTS ................................................. 371CONTRIBUTIONS TO NON DISTRIBUTED COSTS ............................................................................... 372

PART FOUR: CENTRAL SERVICES TO THE PUBLIC .................................................................................. 373INTRODUCTION ...................................................................................................................................... 373GUIDANCE ON WHAT TO INCLUDE IN CENTRAL SERVICES TO THE PUBLIC ................................ 374

PART FIVE: ITEMS EXCLUDED FROM THE COST OF SERVICES ............................................................. 377INTRODUCTION ...................................................................................................................................... 377GUIDANCE ON WHAT TO INCLUDE ...................................................................................................... 377

SECTION 3: SERVICE EXPENDITURE ANALYSIS FOR NORTHERN IRELAND ..................................................379INTRODUCTION ...................................................................................................................................... 379FORMAT OF THE REVISED SERVICE EXPENDITURE ANALYSIS ....................................................... 379THE PRINCIPLE OF TOTAL COST .......................................................................................................... 380STATUS OF THE SERVICE EXPENDITURE ANALYSIS ......................................................................... 381UPDATING THE SERVICE REPORTING CODE OF PRACTICE FOR LOCAL AUTHORITIES .............. 382

LEISURE AND RECREATION SERVICES .....................................................................................................383PART ONE: SERVICE EXPENDITURE ANALYSIS FOR LEISURE AND RECREATION SERVICES ........... 385

PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN LEISURE AND RECREATION SERVICES ........ 386INTRODUCTION ...................................................................................................................................... 386UPDATING THE GUIDANCE ................................................................................................................... 386LEISURE AND RECREATION SERVICES ............................................................................................... 386

ENVIRONMENTAL SERVICES ......................................................................................................................391PART ONE: SERVICE EXPENDITURE ANALYSIS FOR ENVIRONMENTAL SERVICES ............................ 393

PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN ENVIRONMENTAL SERVICES ......................... 395INTRODUCTION ...................................................................................................................................... 395UPDATING THE GUIDANCE ................................................................................................................... 395ENVIRONMENTAL SERVICES ................................................................................................................ 395

PLANNING AND DEVELOPMENT SERVICES ..............................................................................................401PART ONE: SERVICE EXPENDITURE ANALYSIS FOR PLANNING AND DEVELOPMENT

SERVICES ................................................................................................................................................. 403

PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN PLANNING AND DEVELOPMENT SERVICES ................................................................................................................................................. 404

HIGHWAYS AND TRANSPORT SERVICES ..................................................................................................409PART ONE: SERVICE EXPENDITURE ANALYSIS FOR HIGHWAYS AND

TRANSPORT SERVICES .......................................................................................................................... 411

PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN HIGHWAYS AND TRANSPORT SERVICES .......................................................................................................................... 412INTRODUCTION ...................................................................................................................................... 412UPDATING THE GUIDANCE ................................................................................................................... 412HIGHWAYS AND TRANSPORT SERVICES ............................................................................................ 412

CORPORATE AND DEMOCRATIC CORE ......................................................................................................413PART ONE: SERVICE EXPENDITURE ANALYSIS FOR THE CORPORATE AND

DEMOCRATIC CORE ............................................................................................................................... 415


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PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN THE CORPORATE AND DEMOCRATIC CORE ............................................................................................................................... 416INTRODUCTION ...................................................................................................................................... 416UPDATING THE GUIDANCE ................................................................................................................... 416CORPORATE AND DEMOCRATIC CORE COSTS ................................................................................... 417

OTHER SERVICES .........................................................................................................................................419PART ONE: SERVICE EXPENDITURE ANALYSIS FOR OTHER SERVICES ............................................... 421

INTRODUCTION ...................................................................................................................................... 421UPDATING THE GUIDANCE ................................................................................................................... 421

PART TWO: TRADING SERVICES ................................................................................................................ 422GUIDANCE NOTE: WHAT TO INCLUDE IN TRADING SERVICES ....................................................... 422

PART THREE: NON DISTRIBUTED COSTS ................................................................................................. 423INTRODUCTION ...................................................................................................................................... 423GUIDANCE NOTE: WHAT TO INCLUDE IN NON DISTRIBUTED COSTS ............................................ 423CONTRIBUTIONS TO NON DISTRIBUTED COSTS ............................................................................... 424

PART FOUR: CENTRAL SERVICES TO THE PUBLIC .................................................................................. 425INTRODUCTION ...................................................................................................................................... 425GUIDANCE NOTE: WHAT TO INCLUDE IN CENTRAL SERVICES ....................................................... 425

PART FIVE: GUIDANCE ON OTHER OPERATING INCOME AND EXPENDITURE AND SERVICE MANAGEMENT AND SUPPORT SERVICES .......................................................................................... 427INTRODUCTION ...................................................................................................................................... 427GUIDANCE NOTE: WHAT TO INCLUDE IN OTHER OPERATING INCOME AND

EXPENDITURE ............................................................................................................................. 427GUIDANCE NOTE: WHAT TO INCLUDE IN SERVICE MANAGEMENT AND

SUPPORT SERVICES ................................................................................................................... 429

SECTION 4: RECOMMENDED STANDARD SUBJECTIVE ANALYSIS ..................................................................431INTRODUCTION ...................................................................................................................................... 431STRUCTURE OF THE SUBJECTIVE ANALYSIS ..................................................................................... 431STATUS AND IMPLEMENTATION .......................................................................................................... 432UPDATING THE GUIDANCE ................................................................................................................... 432GROUP 1 – EMPLOYEES ......................................................................................................................... 432GROUP 2 – PREMISES-RELATED EXPENDITURE ............................................................................... 433GROUP 3 – TRANSPORT-RELATED EXPENDITURE ............................................................................ 434GROUP 4 – SUPPLIES AND SERVICES................................................................................................. 434GROUP 5 – THIRD PARTY PAYMENTS ................................................................................................. 435GROUP 6 – TRANSFER PAYMENTS ...................................................................................................... 436GROUP 7 – SUPPORT SERVICES .......................................................................................................... 437GROUP 8 – DEPRECIATION AND IMPAIRMENT LOSSES .................................................................. 438GROUP 9 – INCOME ............................................................................................................................... 439GROUP 10 – CAPITAL FINANCING COSTS (NOT INCLUDED IN THE NET COST

OF SERVICES) .............................................................................................................................. 440

SECTION 5: OTHER RELEVANT GUIDANCE .........................................................................................................441ANALYSING COSTS ON AN INTERNAL CROSS-CUTTING BASIS ...................................................... 441

GLOSSARY OF TERMS ............................................................................................................................................453

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Background to the Development of the Service

Reporting Code of Practice for Local Authorities (SeRCOP)

i In February 1998, CIPFA’s Local Government Committee asked its Local Authority Accounting Panel to review:

� the standard CIPFA objective classification

� the CIPFA statement on accounting for overheads

� the need for advice on methods of apportionment.

ii In March 1998, the DETR published the Green Paper Modernising Local Government – Improving Local Services through Best Value, followed in July 1998 by the White Paper Modernising Local Government – In Touch with the People. The Welsh Office published parallel papers in Wales. The papers expressed the need to develop and recommend finance and accounting arrangements that represent best practice when accounting for Best Value.

iii In June 1998, the DETR wrote to the Local Government Association (LGA) stating that:

Ministers hope that it would be possible to put in place finance and accounting arrangements in local authorities; perhaps by way of statutory guidance issued by the Secretary of State, that:

(a) Represent best practice

(b) Would facilitate accurate comparison between both services and authorities

(c) Would strengthen the current arrangements for recharging all support service costs which may reasonably be charged to front-line services so that efficiency pressures on support services are comparable, and complementary to the pressures on front-line services.

iv The LGA established a steering group, including representatives from CIPFA, the DETR and the Audit Commission, to review existing local authority practice. The steering group invited CIPFA, through its Local Authority Accounting Panel, to conduct the review and to recommend to the group a best practice approach. There was extensive consultation during the development of the Best Value Accounting Code of Practice (BVACOP) with a wide range of local authority practitioners, in addition to the formal members of the Steering Group. The development of subsequent editions of BVACOP continued on the basis of extensive research and consultation with relevant stakeholder groups and practitioners.


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v The Best Value framework, as it applies to England and Wales, is included in the Local Government Act 1999. In Scotland, the requirement to ensure Best Value is contained within the Local Government in Scotland Act 2003. In Northern Ireland, the requirement is contained within the Local Government Act (Northern Ireland) 1972 and the Department of the Environment’s Accounts Direction.

vi The development of the local authority accounting framework for Best Value has been undertaken in consultation with all relevant parties either through the steering groups and/or review and the advisory groups, so that regional differences have been and continue to be accommodated.

vii In Scotland, LASAAC approved BVACOP from 1 April 2000. However, it was agreed that further work was required on the Scottish Service Expenditure Analysis which had a staggered application from 1 April 2001 for the majority of services (with the exception of Education and Social Work) and from 1 April 2002 applies to all services.

viii In Northern Ireland, the duty of Best Value applies to local authorities from 1 April 2002. The Technical Accounting Support Service (TASS) Steering Group for Northern Ireland, which includes representatives from CIPFA Northern Ireland, the Department of the Environment, the Local Government Audit Office and the Association of Local Government Finance Officers, approved BVACOP for application to local authorities in Northern Ireland.

ix Government ministers in England and Wales formally endorsed the 2000 edition of BVACOP.

x On publication of 2001 BVACOP in March of that year, Local Government Minister Beverly Hughes endorsed BVACOP for the second year and said:

I congratulate CIPFA and all contributing partners for their work on updating the Best Value Accounting Code of Practice. As the recognised standard for all local authorities, it is instrumental in encouraging the transparency, comparability and financial discipline that underpins the success of Best Value. With commitment to the Code, shared by central government, local councils and CIPFA alike, I am convinced that it will continue as a source of best practice and keep up the drive for Best Value.

xi For 2002 BVACOP, Local Government Minister Dr Alan Whitehead said:

CIPFA is to be congratulated on its continued commitment to review the Code which continues to play an essential role in promoting financial accountability and transparency critical to delivering best value.

xii In 2003, regulations were issued under the Local Government Act 2003 that formally defined BVACOP as representing statutory proper accounting practices to be followed by authorities in England and Wales.

xiii To take account of its extended coverage and to meet the needs for more transparent service reporting, BVACOP was renamed Service Reporting Code of Practice for Local Authorities (SeRCOP) in 2011/12.

SECTION 1

Introduction

1.1 The Best Value Accounting Code of Practice (BVACOP), which was renamed the Service Reporting Code of Practice (SeRCOP) in 2011/12, was established to modernise the system of local authority accounting and reporting and ensure that it met the changed and changing needs of modern local government; particularly the duty to secure and demonstrate Best Value in the provision of services to the community. In 2015/16, SeRCOP has been revised and updated to keep pace with the new IFRS-based Code of Practice on Local Authority Accounting in the United Kingdom (the Code) and to reflect the requirements of the differential legislative frameworks in each UK administration.

1.2 SeRCOP provides guidance on financial reporting to stakeholders but does not provide guidance on the Statement of Accounts. The Code provides the definitive guidance on the production and content of the Statement of Accounts. The relationship of SeRCOP with the Statement of Accounts is discussed below.

1.3 The overall framework adopted by SeRCOP will support the objective to establish the widest range of financial reporting requirements, in order that data consistency and comparability are achieved. SeRCOP particularly aims to meet the demands of both the Best Value and the Transparency initiatives and its various stakeholders.

1.4 It is recognised that the overall framework will need to be responsive to change and that the guidance provided will need to be dynamic in nature. CIPFA is therefore committed to reviewing SeRCOP on at least an annual basis.

1.5 SeRCOP continues to be developed from the key principles established in the statement of principles published in September 1999 (see the LAAP pages on the CIPFA website – click on Policy & Guidance > Technical Panels and Boards > Local Authority Accounting Panel). The principles are based on the issues identified in the consultation paper A Modernised Framework for Local Authority Accounting – Accounting for Best Value (published in January 1999) and the responses received to it.

1.6 This edition of SeRCOP is the sixth to be prepared under International Financial Reporting Standards (IFRS). The revisions to SeRCOP in this edition have emanated from the consultation issued on the CIPFA website in 2014. These related to updates arising from the IFRS-based Code for 2014/15 and a review of the subjective analysis and the Service Expenditure Analyses (SEAs) of all services in SeRCOP.

STATUS 1.7 SeRCOP (BVACOP) established ‘proper practice’ with regard to consistent financial reporting

below the Statement of Accounts level. This was given statutory force in England and Wales by regulations made under the Local Government Act 2003: SI 2003 No 3146 and SI 2003 No 3239 (W319) respectively.


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1.8 Sections 2 and 3 of SeRCOP present the mandatory requirements for all local authorities. Section 2 requires all local authorities to adopt the definition of total cost when presenting cost-based performance indicators (PIs) in any published format, unless a different specific definition for a national PI is provided. For example, a number of PI definitions have excluded specific grants from the net cost calculation. Section 2 also contains best practice guidance as a commentary to the mandatory requirements. This guidance is in purple type in Section 2. Section 3, the Service Expenditure Analysis, requires all local authorities to calculate total cost at division of service level or at a lower level if required by a published PI.

1.9 In England and Wales, statutory guidance previously made specific reference to BVACOP in relation to the preparation of performance plans and improvement plans. As the requirements for summary financial information in plans have been relaxed, the specific references have been removed from the guidance material. However, as there remains an overarching requirement for performance information to be consistent and comparable, the guidance implicitly supports the application of SeRCOP.

1.10 In Scotland, BVACOP received its status from the approval by the Local Authority (Scotland) Accounts Advisory Committee – LASAAC – the accounting standard setting body for Scottish local authorities. The Local Government in Scotland Act 2003 introduced the statutory duty of Best Value to Scottish local authorities from 1 April 2003. Specifically, this Act has repealed the sections of the 1980 and 1988 Acts relating to CCT and removed the requirement to keep an account in relation to all work which falls within the defined activities outlined in the respective Acts.

1.11 In Northern Ireland, primary legislation has given statutory effect to a Best Value framework.

STRUCTURE OF THE SERVICE REPORTING CODE OF PRACTICE FOR LOCAL AUTHORITIES1.12 The structure of SeRCOP is as follows.

Section 1 – Introduction 1.13 Section 1 does not have formal status. It gives an overview of SeRCOP’s framework, status

and its application dates. It sets SeRCOP’s development in the context of Best Value developments and legislation.

Section 2 – The Definition of Total Cost1.14 Section 2 is the first of the sections specifying the mandatory requirements of SeRCOP. It

defines total cost. Total cost should apply to all Best Value reporting requirements indicated in SeRCOP and in previous editions of BVACOP.

1.15 Best practice guidance is included within Section 2, providing a commentary on the mandatory requirements of SeRCOP.

Section 3 – Service Expenditure Analysis1.16 Since the 2002 BVACOP, there have been three separate SEAs: one for English and Welsh

authorities, one for Scottish authorities, and one for Northern Irish authorities. Section

SECTION 1 \ INTRODUCTION

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3 provides the service classification, listed in paragraphs 3.9 (England and Wales), 3.10 (Scotland) and 3.9 (Northern Ireland). It also defines the mandatory divisions of service at which total cost must be aggregated.

Section 4 – Recommended Standard Subjective Analysis1.17 Section 4 provides a recommended standard subjective analysis. This analysis is consistent

with the subjective analysis required by government returns such as the Whole of Government Accounts.

1.18 This analysis is consistent with the subjective analysis required by Whole of Government Accounts.

CIPFA STATEMENT1.19 The Institute Council has determined that the principles and detailed proposals set out

in the Service Reporting Code of Practice for Local Authorities be adopted by all local authorities in the United Kingdom. It is expected that members of CIPFA will comply with all the requirements of SeRCOP as it defines best professional practice in terms of financial reporting.

APPLICABLE DATE1.20 The requirements set out in this 2015/16 edition of SeRCOP apply to all Best Value reporting

requirements in the UK. 2015/16 SeRCOP applies to all accounting periods beginning on or after 1 April 2015.

1.21 This means that the requirements of the 2015/16 Service Reporting Code of Practice for Local Authorities apply to:

� 2015/16 Budget Information

� 2015/16 Statements of Accounts

� 2015/16 Performance Indicators.

RELATIONSHIP WITH THE STATEMENT OF ACCOUNTS1.22 As noted in paragraph 1.2, SeRCOP does not prescribe guidance on the Statement of

Accounts. This is provided by the Code. However, the Code notes the importance of using the SEA defined by the individual services in Section 3 of SeRCOP to provide the service analysis on the costs of local authorities’ services.

1.23 The Central Services SEA also provides an objective format for the ‘cost of services’ of the authority that complies with the format of the Comprehensive Income and Expenditure Statement specified by the Code.

1.24 Whilst SeRCOP does not prescribe guidance for the production of the Statement of Accounts, it does seek to clarify where the recommendations of the two codes interact.


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ACCOUNTING PRACTICES1.25 SeRCOP aims to provide a consistent basis for all statutory financial disclosures in relation to

Best Value. These include:

� the Statement of Accounts

� all formally reported local PIs and nationally based performance indicators: BVPIs, Audit Commission PIs and Welsh Government PIs.

1.26 One of the principles that underpin the development of SeRCOP referred to in paragraph 1.5 above is that ‘the definition of total cost will be consistent with the financial accounting framework established by the Code’. In order to ensure this consistency, it is important that authorities generally follow the requirements of the Code when compiling information for these statutory disclosures.

1.27 However, a substantial potential point of departure was introduced in 2006 BVACOP following the abolition of capital financing charges in the 2006 Statement of Recommended Practice. Although the charges were removed from the definition of total cost applicable to service outturns in the then I+E Account, there will still be circumstances where they are either required or desirable as part of the costing framework. These circumstances are discussed in Section 2 (paragraphs 2.4 and 2.5).

1.28 The overall aim of SeRCOP is to assist practitioners in the preparation of financial reports for Best Value and Transparency purposes and the preparation of the financial statements. It does not form part of the Code, nor has it been reviewed by the Financial Reporting Advisory Board. It attempts to explain and illustrate what is required by the Code, but does not carry the authority of the Code.

SECTION 2

The Definition of Total Cost

THE PURPOSE OF TOTAL COST2.1 The definition of total cost will provide the consistent basis for all formal external financial

reporting and statutory financial disclosures.

2.2 Specifically, financial information requirements for formal financial reports of performance, for performance indicators and for statistical returns will be harmonised around the definition of total cost. Total cost must also be used for reporting the cost of services in the Comprehensive Income and Expenditure Statement.

2.3 The use of total cost for less formal purposes, such as unpublished local performance indicators and cost benchmarking at lower levels of detail than required by Section 3, will also enhance the reliability and comparability of such information.

2.4 However, total cost may not be appropriate for management accounting and decision-making purposes. Costing for decision-making purposes will often require the use of different techniques; it will also require that all relevant costs, and only relevant costs, are taken into account, whether they form part of total cost or not. For example, there are strong arguments for reflecting the costs of early retirement in management accounts so that service managers can see the cost as well as the benefit of such decisions, and as a way of ensuring management discipline. Such costs are not within the total cost of individual services for consistency reasons, and so parallel accounting systems may be required, using total cost for external reporting and comparisons and other accounts for internal management purposes. Authorities will also need to decide whether a cost of capital element (to reflect the full cost of using fixed assets in the provision of a service) should be included in any costing for decision-making purposes.

2.4.1 Notional interest is a fundamental part of the full cost of service provision and is a concept widely applied across the public services. However, notional interest does not form part of total cost, and is not reported in the Comprehensive Income and Expenditure Statement.

2.4.2 There remain a number of circumstances where it may be appropriate to include notional interest in the definition of ‘cost’:

� statutory reporting where the basis on which the calculation is to be performed is specified to include notional interest

� fees and charges

� recharges to the Housing Revenue Account and Pension Fund

� pricing for competitive tender

� cost comparisons and efficiency assessments


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� trading accounts

� asset management.

2.4.3 In considering whether it is appropriate to include notional interest in the definition of ‘cost’, local authorities will need to ensure that they are using costing techniques that are appropriate to the circumstances. This may require the use of different techniques rather than simply incorporating notional interest into the SeRCOP definition of total cost.

2.5 In particular, local authorities will need to ensure when putting any service(s) out to competition that all their own relevant costs are taken into account, whether these are defined as being within total cost or not.

2.6 It is important also to distinguish between costs that are within total cost to support the aim for as much consistency as possible between authorities and those costs over which service managers exercise control. The latter depend on local management and delegation arrangements and there is no intention to restrict local authorities’ discretion over such matters.

2.7 The total cost of a service or activity includes all costs, as defined below, which relate to the provision of the service (directly or bought in) or to the undertaking of the activity.

2.8 The total cost of a service or activity must reflect all the costs associated with that service/activity, wherever in the management structure they arise. It is acknowledged that the accounting structure, as defined by the service expenditure headings, is unlikely to match the management structure in any authority.

2.9 The accounting structure has been and will be further developed to allow flexibility in combining the elements within the Service Expenditure Analysis (SEA) to match management structures and review requirements.

GROSS AND NET TOTAL COST2.10 Total cost exists in both gross and net terms. No categories of income are considered to be

abatements of expenditure, and movements to and from reserves must be excluded from total cost definitions. Relevant movements can easily be taken into account in local comparisons, if required.

GROSS TOTAL COST2.11 Gross total cost includes all expenditure attributable to the service/activity, including

employee costs, expenditure relating to premises and transport, supplies and services, third party payments, transfer payments, support services and depreciation.

Expenditure in Total Cost2.11.1 The definition of total cost includes:

� exceptional or ‘lumpy’ costs, ie those costs exceptional by their size or incidence, such as the costs of internal audit investigations, legal expenses or charges for the impairment of fixed assets

SECTION 2 \ THE DEFINITION OF TOTAL COST

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� expenditure that is dependent on matching income that is expected to net to zero, such as the cost of projects that would not take place without 100% grant funding and services provided on the basis of full reimbursement of costs

� any contributions, either cash or in kind, towards the work of others (joint arrangements) – see paragraphs 2.24 and 2.26 of Section 2 of SeRCOP.

2.11.2 Exceptional expenditure is included within the definition of gross total cost. It is a real cost to the authority.

2.11.3 The Code of Practice on Local Authority Accounting in the United Kingdom (the Code) requires exceptional items to be included in the total cost of services to which they relate or on the face of the Comprehensive Income and Expenditure Statement if that degree of prominence is necessary to give a fair representation of the accounts. Although exceptional service expenditure might be disclosed separately from the service outturn in the Comprehensive Income and Expenditure Statement, it should not be excluded from the total cost of the service for other external reporting requirements such as performance indicators.

2.11.4 An adequate description of each exceptional item should be disclosed for all external reporting requirements, the Statement of Accounts, formal financial reports of performances or in any external report that includes the publication of related performance indicators. It would seem reasonable for the financial statement in a formal financial report of performance to note this exceptional spend as a part of comparative outturn information provided.

2.11.5 Expenditure that is dependent on matching income is also included in the calculation of total cost. Although such expenditure will not normally impact on the tax payer, and may vary considerably between otherwise comparable authorities, it is considered that leaving it unreported would give rise to a number of potential problems, including:

� If funding ceases for work done through the employment of a member of staff, it will usually not be possible to cease the expenditure at the same time. It is more informative for this to be shown as under-recovered income than as over-expenditure.

� This expenditure may vary between authorities for management reasons and, in any event, the associated costs may not be distinguishable. For example, where meals are offered to staff in a client facility, the cost should properly include a share of the fixed costs as well as the variable costs involved. It is not practicable to identify and thus exclude this element of expenditure, which would mean that the contribution made would be the only indication of what expenditure should be excluded.

2.11.6 Expenditure on work carried out by the authority under formal agency agreements, where the authority is not in substance accountable for the partnership arrangement (or any aspect of it), should not be included within the definition of total cost. Such expenditure is clearly definable and is excluded from the Comprehensive Income and Expenditure Statement, except by way of disclosure, in the notes to the accounts, within the terms of the Code. Agency agreements are also subject to notice clauses that minimise the risk which, in other third party funding arrangements, might fall on the authority.


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2.11.7 The move to the IFRS-based Code means that employee costs included in total cost will need to comply with IAS 19 Employee Benefits. For example, any accruals of holiday pay should be included in total cost.

2.12 Specifically, it includes depreciation calculated in accordance with the Code and with existing capital accounting guidance.

2.12.1 The consistent treatment of depreciation within the reported total costs of services involves:

� Following the definition of capital expenditure as laid down in the Code.

� Following the requirements and principles laid down in the Code for the valuation and revaluation of assets.

� Using the principles and requirements prescribed by the Code for the depreciation of assets. The detail of local asset management policies will determine local policies on depreciation and asset lives.

� Allowing the impact of any resulting differences in depreciation to reflect the effectiveness of such policies.

2.12.2 Applying the above principles will assist depreciation, and thus total cost, in being consistent and comparable between authorities by specifying a basis of calculation that is consistent enough to eliminate technical differences, such as whether otherwise identical accommodation occupied is rented or was bought on the open market, but which leaves real differences as requiring explanation and/or investigation.

2.12.3 The Code provides the requirements for the recognition and measurement of tangible assets. The incorporation of IAS 16 Property, Plant and Equipment into the Code ensures that assets are accounted for on a consistent basis and where revaluations are required that these are kept up to date. Additional guidance on the accounting treatment of tangible fixed assets and the calculation of depreciation is contained in the CIPFA publication Code of Practice on Local Authority Accounting in the United Kingdom – Guidance Notes for Practitioners.

2.12.4 There are, however, management issues arising from the specification of depreciation as the charging basis for the use of assets; for example, using asset rents within budget holders’ controllable budgets as an incentive to make the most effective use of property. Such arrangements are an acknowledged exercise of management discretion. They cannot, and should not, be standardised or otherwise constrained by financial accounting regulations and it is possible, therefore, that authorities may adopt an internal management treatment that differs from the external accounting treatment.

2.12.5 It is considered that comparability is best served by adhering to the principles and requirements contained in the Code when calculating asset lives and choosing depreciation policies, rather than by having standardised asset lives and depreciation policies. This gives an opportunity for authorities to be rewarded or penalised for their asset management policies. Since such policies can affect the real costs incurred, it is sensible for their impact on total cost to be shown through, for example, an extended (or shortened) useful life. In other words, consistency requires clear principles to be


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set out. Detailed policies should be determined locally, to allow real differences to be manifest, but in accordance with the principles and requirements laid down in the Code.

2.12.6 The Code explicitly recognises that local authorities may have intangible assets, particularly in relation to computer software. Balances of intangible assets will be subject to a comparable treatment to tangible assets as regards charges to service revenue accounts based on impairment (if any) and amortisation.

2.13 Total cost also includes any related impairment loss or revaluation loss that is charged to Surplus or Deficit on the Provision of Services. Impairment losses or revaluation losses should be recognised in Other Comprehensive Income and Expenditure and therefore not in the total cost of a service, unless there is no accumulated gain attributable to the relevant asset in the Revaluation Reserve to absorb the losses. A revaluation gain should be credited to a service revenue account where it represents the reversal of a loss previously recognised. An impairment loss that has previously been charged to a service revenue account may only be reversed where there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. Impairment of an asset under construction and impairment or revaluation losses in relation to surplus assets (not classified as held for sale) should be charged to Non Distributed Costs. Where the asset under construction is an investment property, the impairment (or any movement in fair value in relation to an investment property under construction that is carried at fair value) will be shown in the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement, and will therefore not form part of total cost.

2.13.1 Assets held at fair value are revalued periodically. In addition, assets are assessed for impairment when there are indications that impairment may have occurred.

2.13.2 The Code provides the following examples of events and changes in circumstances that indicate that impairment may have occurred:

� a significant decline (ie more than expected as a result of the passage of time or normal use) in an asset’s market value during the period (a smaller decline will be a revaluation loss)

� evidence of obsolescence or physical damage of an asset

� a commitment by the authority to undertake a significant reorganisation

� a significant adverse change in the statutory or other regulatory environment in which the authority operates.

2.13.3 All impairments and revaluation losses should be recognised in the Revaluation Reserve and not in total cost, unless there are insufficient accumulated gains in the reserve for the relevant assets to absorb the losses. In the latter case, the excess of the impairment or revaluation loss over the accumulated gains will also be chargeable as part of total cost, either in the service revenue account or, for assets under construction and surplus assets (not classified as held for sale), in Non Distributed Costs. The process for reversing losses previously charged to a service revenue account depends on whether the loss was an impairment or a revaluation loss. Where a gain reverses a previous impairment loss that was recognised as part of total cost in a prior period, this gain may exceptionally be taken to the service revenue account (Non Distributed Costs for assets under construction and surplus assets (not classified as held for sale))


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if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. However, any revaluation gain that reverses a revaluation loss previously recognised as part of total cost in a prior period may be taken to the service revenue account (Non Distributed Costs for assets under construction and surplus assets (not classified as held for sale)).

2.13.4 Costs associated with abortive capital schemes are not classed as impairment of assets under construction; these costs are a proper charge to the Surplus or Deficit on the Provision of Services and should be charged to the relevant service revenue account(s). Where a decision as to which service would have used the asset had not been taken (for example, where additional office accommodation was being provided but no decision as to the occupying service(s) had been taken), the costs should be apportioned between the possible users of the asset. Exceptionally, if the asset was to have been an investment property and therefore not related to the delivery of any service, the costs should be charged to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. Costs should be included in the relevant subjective group. For example, staff costs relating to architectural plans would be included in Group 1 – Employees, but payments to external consultants for those plans would be included in Group 4 – Supplies and Services. Where an abortive scheme was to be funded by a capital grant or contribution, and the terms of the grant or contribution permit its use to fund the expenditure even if the scheme does not proceed, that part of the grant or contribution that relates to the abortive scheme should be recognised as a revenue grant or contribution. Where the terms of the grant or contribution do not permit its use to fund the expenditure if the scheme does not proceed, the costs of the abortive scheme will need to be met out of revenue resources (unless a direction allowing the expenditure to be capitalised has been given under section 16 of the Local Government Act 2003 (England and Wales) or permission to borrow has been given by the Scottish Government).

2.13.5 Additional guidance on the accounting treatment of impairment and revaluation losses can also be found in CIPFA’s publication Code of Practice on Local Authority Accounting in the United Kingdom – Guidance Notes for Practitioners.

2.14 Where legislation allows expenditure that does not result in an asset being carried on the Balance Sheet to be counted as capital for funding purposes, the Code requires such expenditure to be charged to Surplus or Deficit on the Provision of Services in accordance with the general provisions of the Code. Funding the expenditure from capital resources is achieved by adjusting the General Fund Balance and the Capital Adjustment Account. Except in exceptional circumstances, revenue expenditure funded from capital under statute will be included in the total cost calculation for individual (or a combination of) services in the year that they are incurred. An example of an exceptional circumstance would be where a direction has been given to capitalise redundancy cost for reorganisation and the services to which the redundancy cost relates no longer exist.

2.14.1 The Code defines revenue expenditure funded from capital under statute as expenditure that legislation allows to be ‘classified as capital for funding purposes when it does not result in the expenditure being carried on the Balance Sheet as a fixed asset’. The Code requires revenue expenditure funded from capital under statute to be charged to the


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Comprehensive Income and Expenditure Statement. Such items will generally be those that qualify as capital expenditure under the statutory controls framework but do not result in an asset for the authority. Section 4.6 of the Code explains the treatment in more detail.

2.14.2 In order to achieve a degree of consistency in the treatment of accounting for both tangible assets and assets that are not in a tangible form, the following approach should be adopted:

� Amounts included in the Balance Sheet should be based on the continuing value of expenditure to an authority at the Balance Sheet dates, not on its need to finance that expenditure. Revenue expenditure funded from capital under statute will therefore not be included in the Balance Sheet.

� Revenue expenditure funded from capital under statute should be charged to service revenue accounts as defined by the service expenditure headings in Section 3 of SeRCOP. Only in very exceptional circumstances will it be likely that the expenditure is not for the benefit of any particular service or combination of services. In such exceptional cases, it should be charged corporately after Net Cost of Services. Paragraph 2.14 of SeRCOP provides an example of an exceptional circumstance, ie where a direction has been given to capitalise redundancy costs for reorganisation and the services to which the redundancy costs relate no longer exist.

2.14.3 If revenue expenditure funded from capital under statute materially distorts the total cost of a division of service or a published performance indicator, then this should be clearly disclosed.

Accounts to be Charged for Capital Items2.14.4 The general principle is that depreciation and impairment loss should be made to the

service making use of the asset concerned (or charged to Non Distributed Costs if the assets are non-operational).

2.14.5 The level of detail to which depreciation, impairment loss, revenue expenditure funded from capital under statute and the amortisation of intangible assets should be made is determined by the level of detail at which total cost is to be reported, as specified in Section 3.

2.14.6 Where assets are shared between services, an apportionment question will arise, especially if one (or more) service is occupying property of greater value than it requires, simply to prevent the space remaining unused. The full value and associated depreciation charges do, however, need to be apportioned to the services using the accommodation on the basis of the SEA in Section 3 of SeRCOP. The ‘actual’ cost of the accommodation should be charged to the service. The management decision to allocate services to ‘prestige’ accommodation is a separate consideration to how the costs should be accounted for.

2.14.7 If an external contractor is making use of an asset at no charge to them, then the amount the authority is paying for their services will be less than would otherwise have been the case. There is, therefore, no justification for not charging depreciation to the client service to which the contractor’s work is charged.


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2.15 Total cost also includes an appropriate share of all support services and other overheads. These should be charged, allocated or apportioned across users and other beneficiaries in accordance with the following seven general principles.

1. Complete Recharging of Overheads

All overheads not defined as Non Distributed Costs or Corporate and Democratic Core should be fully recharged to the service expenditure headings as defined by Section 3 of SeRCOP. Note that Corporate and Democratic Core costs should receive an appropriate allocation of overheads.

2. Correct Recipients The system used must correctly identify who should receive overhead charges.

3. Transparency Recipients must be clear what each recharge covers and be provided with sufficient information to enable them to challenge the approach being followed.

4. Flexibility The recharging arrangements must be sufficiently flexible to allow recharges to be made regularly enough and to the level of detail appropriate to meeting both users’ and providers’ needs.

5. Reality Recharging arrangements should result in the distribution of actual costs which has the basis of fact. Even if the link cannot be direct, reality should be the main aim.

6. Predictability/Stability

Recharges should be as predictable as possible, although there will be practical limitations to this.

7. Materiality It is unlikely that a simple system will be adequate to meet all other requirements noted above. However, due regard should be made to materiality to minimise the costs involved in running the system.

Accounting for Overheads2.15.1 The guidance on accounting for overheads is intended to consolidate and supersede a

range of previous CIPFA guidance, including aspects of The Management of Overheads in Local Authorities and Accounting for Central Services. Further guidance on detailed overhead apportionment techniques entitled Fair Shares? was published by CIPFA in August 2003.

2.15.2 Users of support services expect to know what overheads they carry, how they are calculated and whether they can have any control over the amount charged.

2.15.3 While it is important that total cost includes an appropriate share of all overheads, there are other circumstances where the inclusion of the full range of overheads may not be appropriate. For example, management accounts may exclude from budget holders’ reports any overheads for which they are not responsible. There may even be situations where an authority wishes to perform some cost benchmarking exercises, for management purposes, using a definition of cost which excludes specified overheads. Authorities clearly have discretion to do this, but care should be taken that, whatever alternative definition of cost is chosen, it can be consistently applied.

2.15.4 Guidance on Non Distributed Costs (NDC) can be found in paragraph 2.42 of SeRCOP. Costs which fall within the Corporate and Democratic Core (CDC), including both Corporate Management (CM) and Democratic Representation and Management (DRM),


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are not overheads for this purpose; rather they are represented by their own SEA heading in Section 3.

Principles

2.15.5 Administrative overheads arise in service departments as well as in central departments. Service management costs also arise in all departments and these, like all overheads, require apportionment across the range of divisions of service affected. Both the general principles and this guidance apply equally to such service department overheads. The definition of total cost must follow the requirements of the conceptual framework set out in section 2.1 of the Code, particularly the two fundamental characteristics of relevance and faithful representation. The usefulness of financial information that is relevant and faithfully represented is enhanced if it is comparable, verifiable, timely and understandable. The two fundamental qualitative characteristics of relevance and faithful representation must therefore underpin the seven principles for allocating support services and other overheads set out in paragraph 2.15 above. The enhancing characteristics will inform the application of the seven general principles.

2.15.6 This guidance does not cover direct services, such as local tax collection, which in some authorities are managed centrally. Section 3 of SeRCOP identifies all such direct services. A defining feature of overheads is that, for total cost purposes, they end up charged, allocated or apportioned to direct services, as defined in Section 3, rather than having a final service expenditure heading of their own. Accounting for them therefore requires the use of holding accounts.

2.15.7 There may be other holding accounts in use; for example, within Adult Social Care, a holding account may record the total costs of the home care service before they are apportioned across client groups. These are not overhead costs and are not covered by this guidance.

2.15.8 Nor does this guidance cover depreciation and impairment losses (see the guidance in paragraphs 2.12 and 2.13 of SeRCOP) or direct costs such as for utilities, which are often paid for centrally and then recharged to users.

2.15.9 This guidance concentrates on the apportionment of overheads. Allocation, which is a matter of fact, does not give rise to the types of issue addressed in this section. For example, the allocation to operational units of the total costs of outgoing telephone calls can be based on the cost of calls made on the handsets used by each such unit, information on which will be available from the telephone bill.

2.15.10 Charging, the third method of recharging available, is based on an agreement between the user and the provider but is otherwise similar, in the bases that can be used and the issues that arise, to apportionment. The general principles that should apply to a charging regime and to the apportionment of overheads are the same.

Complete recharging of overheads

2.15.11 The general principle is that all overheads, support service and service management costs should be fully recharged to the service expenditure headings defined in Section


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3 of SeRCOP. Also, the costs of CDC and NDC should be allocated to separate objective heads and not allocated to any other head.

2.15.12 In this context, CDC costs are not overheads; rather, CM and DRM are service expenditure headings in their own right, to which many overheads will need to be apportioned.

2.15.13 Various types of cost may extend across more than one service expenditure heading and require apportionment; not all such costs are overheads. For example, the cost of meals on wheels is a direct service cost but it may require apportioning across different client groups, and thus different service expenditure headings.

2.15.14 Two features define apportionable overheads. One is that they end up charged, allocated or apportioned to direct services, as defined in Section 3, rather than having a final service expenditure heading of their own. The second is that they are ‘overhead’ in nature. In other words, they include service management, support services and certain other costs, such as insurance premiums, but they do not include costs such as grounds maintenance or other direct costs which, for convenience, are initially accounted for within a holding or trading account.

2.15.15 Some overhead costs are service specific, eg force command within the Police Service; others are of a more general, administrative nature, eg finance or legal. These latter can arise either in service departments or in central departments.

2.15.16 In some authorities, there may be a support activity which relates only to one SEA. For example, committee administration may support only DRM. However, this is still an overhead, albeit 100% allocated to DRM. In other authorities, the committee administration section may support officer-only groups and a more complex apportionment process may be required.

Correct recipients

2.15.17 The general principle is that apportionments should be made to each of the services benefiting from the support (or overhead). In Section 3, SeRCOP has deemed that the level of detail for final apportionments must be at division of service level, or lower if required by specific performance indicators. However, because authorities may wish to calculate total cost at lower levels of detail for their own purposes, it may be that apportionments to subdivisions of service, or even to individual cost centres, are required.

2.15.18 It is likely to be the case that, as more detailed calculations of total cost are required, more issues will arise concerning precisely who is benefiting from a support service or other overhead. However, even at service level, there may be some areas where apportionments are particularly difficult, for example between General Fund housing and the Housing Revenue Account (HRA). Here, it is important to balance fairly the interests of council tax payers and tenants.

2.15.19 Getting the recipients correct can also have a significant impact on trading accounts. For example, if personnel are working for a transport section, they need to be aware of the significance of distinguishing carefully between work involving minibus drivers (whose costs are met from the General Fund, eg Children’s and Education Services


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or Adult Social Care) and work involving mechanics, whose costs and overheads are charged to a trading operation.

2.15.20 Another issue arises as a result of the increasing mismatch between the accounting structure as represented by the SEA and individual authorities’ management structures. Support service providers will immediately be clear which part of the management structure is commissioning work, but it may not be so apparent which SEA the cost should be charged to. In this situation, the onus must be on the person commissioning to make it clear to the provider which SEA is to pay. Where work is provider led, the extent of any problem will depend on the apportionment basis used but, in any event, care should be taken to identify the correct division of service to receive the recharge.

2.15.21 A specific issue may arise when an external contractor is using a support service at no charge. On the basis that the amount the authority is paying for their services should be less than would otherwise have been the case, the apportionment should be made to the clients of the contractor’s service, because it is they who are indirectly benefiting.

Transparency

2.15.22 Recipients must be clear what each recharge covers and be provided with sufficient information to enable them to challenge the approach being followed. This requires a number of features to be present in the apportionment system.

2.15.23 The first is that information about the bases of apportionments is given in a sufficient level of detail. A lump-sum recharge covering the whole range of financial services is unlikely to be acceptable to users and, from a provider’s perspective, more detail than this will be required to calculate apportionments in any event. However, there are levels of detail below which it may not be sensible to go. For example, there are some extremely complex calculation bases for IT services, using a dozen or more sub-headings, including, for example, a specific charge for relocating a computer terminal. It is not good practice to spend undue time or other resources in getting unnecessarily precise figures.

2.15.24 Also, although this level of detail may be considered necessary for the initial calculation of apportionments and for the monitoring of costs thereafter, it may be counter-productive to make the actual recharge to users at that same level of detail. On the other hand, any specific recharges where users can influence the amount by their actions will need to be identified separately so that they can see this occur. It is important not only that users are aware of the extent to which they can influence the level of the recharge, but also that they can see this responsiveness in action.

2.15.25 The actual level of detail used for the calculation of recharges should be agreed between the user and the provider in each case. However, as a minimum, all elements of the recharge that respond to specific user action should be identified. It will probably also be necessary to identify separately the elements that relate to different outputs (eg training separate from industrial relations work).

2.15.26 Users will also need to receive regular information on recharges, since even where they do not control these elements of cost, they will still feature within their total cost and therefore be of concern. Where users have no control over the level of recharges they


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receive, ie when they are all done by apportionments, they should receive information at least twice a year – once at the year-end as part of the formal total cost reporting and once at an earlier stage to enable the approach, if not actually the figures, to be challenged.

2.15.27 For some authorities, who fix apportionments at budget time and then revisit them only in exceptional cases, this earlier reporting would be part of the budget; for others it may be later in the year, most likely at the revised estimate stage.

Flexibility

2.15.28 The recharging arrangements must be sufficiently flexible to allow recharges to be made regularly enough and to a level of detail appropriate to meeting both users’ and providers’ needs. In other words, as well as routine, regular apportionments, it should be possible to meet the ad hoc requirements of either party.

2.15.29 In terms of timing, the main requirement of the apportionment system will be to support the calculation of total costs at least at the end of each financial year for the production of the annual accounts, statistical returns, etc since full apportionments will be required at this time. Calculations will also be required of budgeted and estimated outturn figures to fit in with the timetable for the production of performance indicators and reports.

2.15.30 For other purposes, for example a cost benchmarking or activity-based costing exercise, separate total cost calculations will be required. This would entail making apportionments as and when such an exercise requires them to be made. The system should be flexible enough to deliver such apportionments whenever needed.

2.15.31 There may also be cases where more detailed apportionments than to division of service level may be required on a regular basis for management reasons, even though they are not required by SeRCOP. For example, where there is any sort of client/contractor or purchaser/provider split in place within a division of service, however informal, it may be that the total costs of each activity is required. A specific example might be within the Adult Social Care client group divisions of service, where the total cost of assessment and care management, on the one hand, and service provision, on the other, may be required. To provide service managers with flexibility, the apportionment system should be capable of meeting this requirement, even if it is identified after the system is established.

2.15.32 Clearly, once overheads have been apportioned to any cost centre at or below division of service level, the accounting system will aggregate them automatically to the required level. When regular detailed apportionments are required, therefore, they should be calculated on the same rigorous, top-down basis as is required for the Statement of Accounts, performance indicators, etc and implemented using the main accounting system.

2.15.33 However, a distinction should be acknowledged between formal, regular apportionments of this sort and the calculation of total costs for ad hoc management reasons. The former need to be as accurate as possible to comply with SeRCOP, and the comprehensive, top-down, ledger-based approach will help to deliver that accuracy.


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2.15.34 For the more ad hoc calculations of total cost for management purposes, such as benchmarking or activity-based costing, which are likely to relate to smaller elements of service, a different approach may be considered acceptable. The intention should still be to bring in the total cost of whatever activity or element of service is being considered, but this could be done on a bottom-up basis, identifying and costing the appropriate overheads only so far as they relate to that activity or element of service. A less than comprehensive approach, which does not apportion overhead costs down across the full range of services, runs the risk of being less accurate, but management discretion should be applied to the balance between the accuracy achieved and the effort required to achieve it.

2.15.35 This judgement also needs to take account of the risk of disagreements between figures calculated top-down (eg by Finance) and those calculated bottom-up (eg by service managers). If both calculations are done, they are almost inevitably going to reach different answers and a time-consuming reconciliation exercise may be required. To avoid this, the general guidance is therefore that total cost calculations should be based on a top-down approach wherever possible. This ensures that all costs are included once and only once, since there is a control total to work to. It should also improve the reliability of the results since all users can challenge their own, and other people’s, apportionments.

Reality

2.15.36 Recharging arrangements should result in a distribution of actual costs that has a basis in fact. For apportionments, such a link clearly cannot be direct, or the apportionment would actually be an allocation. However, since the purpose of total cost is to reflect real cost levels, a main aim of the apportionment process must be to support that.

2.15.37 This has a number of consequences. The first is that there should be a link between the cost to a user and the benefit they receive. This link is clearest in an apportionment system that is based on the outputs of the support service and, for that reason, output-based approaches are generally to be preferred. It is acknowledged, however, that this may not be practical in all areas, at least in the short term.

2.15.38 A second consequence relates to cross-subsidisation between users. In the past, this has been viewed as unsatisfactory, largely for equity reasons. The concept of total cost precludes any cross-subsidisation between users. This means that, as a matter of principle, the same apportionment basis should be applied for all users (including trading accounts). Where a charging regime is in place, there may be some scope for differential charging, but differential apportionment is not good practice and should be avoided.

2.15.39 A particular issue arises if some users are charged for a particular service using a service level agreement (SLA) and others receive their recharge by way of apportionment. In this case, the key requirement is that the two arrangements generally equate; in other words, that there is no advantage to users as a consequence of their being in one regime rather than the other.


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2.15.40 This common approach to apportionments should apply at least down to division of service level. If apportionments are made below that level, then the same principles should apply, especially that all users should receive a ‘fair share’ of the apportionment. However, it may be considered appropriate to leave the detail of how such lower-level apportionments are made to the appropriate service manager.

2.15.41 A related issue concerns what could be regarded as cross-subsidy over time and the extent to which the concept of total cost allows the ‘lumpiness’ of certain costs, ie costs which, for an individual user, can vary a lot from year to year, to be ‘smoothed out’. It is clear that such variability in the costs of, for example, internal audit, is not a reason for regarding such costs as ‘corporate’.

2.15.42 Other areas of support service cost which are potentially ‘lumpy’ from the perspective of individual users are supporting service departments in reviews, IT developments and the costs of industrial tribunals or legal cases. To a lesser extent, costs such as staff development can vary from year to year in any one department, even if overall, across the authority, they are similar. Variations such as these can arise because of users’ demands, eg for systems development, because of corporate or providers’ requirements, eg audit investigations or reviews, or as a result of external events, eg insurable risks or legal cases.

2.15.43 The principle of ‘reality’ does not allow for the ‘smoothing’ of variations such as these. Overhead apportionments should be based on actual costs and reflect actual support levels to each user in the year in question. This means that not only should all overhead costs be written off in the year in which they are incurred, leading to potential fluctuations in the total apportioned, but also that each user’s share of the total could, in some circumstances, vary significantly between years.

2.15.44 It is acknowledged that any such variations in total costs from year to year may be reflected in performance indicators. However, such variations will be explicable as part of the investigation of differences, whether between years or between authorities. To allow variations to be masked would undermine the credibility of the figures more than would be the case if fluctuations were evident.

2.15.45 Also relevant to this issue is the guidance in paragraph 2.11 of SeRCOP as regards exceptional expenditure. This is clear that such expenditure should form part of the relevant total cost even though, by definition, it is ‘lumpy’.

2.15.46 A related issue concerns the pooling of costs across users. This has most frequently been done in the context of office accommodation where, often for historical reasons, some services are located in offices that cost more than others, even though the quality of the accommodation is similar, and they have no choice about this. Often, property allocation is treated as a corporate issue.

2.15.47 It is argued that, in this situation, services occupying more expensive property should not be penalised for this and that costs should be pooled and then apportioned on an equal basis (usually £n per square metre). It is clear that, where users do have choice as to which property they occupy, pooling should not apply, since pooling would obscure the consequences of them exercising this choice. However, it is also the case under the total costing regime that no pooling of property costs should be allowed.


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2.15.48 Where property differs in quality or where different maintenance standards apply, then under the principle of ‘reality’, the apportionment system should reflect this. For example, a charge for property maintenance per square metre could be set at three levels: high for rooms that are required to be expensively decorated (eg members’ and public rooms), medium for most normal space and low for ‘scruffy’ accommodation, such as depots.

2.15.49 There are other examples of where an apportionment system should reflect differences in the quality of the support service received. For example, although it will be normal practice to charge all accountants of a similar grade at the same rate, there may be a situation where a user wishes to pay extra for the services of a specified accountant with particularly relevant experience.

Predictability/stability

2.15.50 Recharges should be as predictable as possible, although there will be practical limitations to this, not least users’ requirement for some flexibility in the amount of a support service they use and therefore pay for. This can have knock-on effects on other users and the apportionment system needs to strike an appropriate balance between providing each user with the flexibility they want to vary their cost by varying their demand, and the requirement of other users not to suffer unpredictable adverse effects as a consequence. Predictability is of particular importance to users who themselves aim to recover their costs.

2.15.51 Minimising these adverse consequences is an issue that support service providers need to address by managing their volume of activity because, although there is scope within the definition of Non Distributed Costs for spare IT capacity to be held centrally if no one is using it and it cannot be disposed of, this is not the case for support services.

2.15.52 Central support staff will not be left sitting idle. Either support staff numbers will be reduced or they will spend the time freed up by reduced demands from one user working on behalf of other users. This latter course will increase the apportionments made to these other users, without them necessarily being aware of this in advance, to compensate for the reduction in apportionment achieved by the user whose demands reduced.

2.15.53 Even without a formal SLA, the solution to issues such as this lies in communication between providers and users. The provider needs to establish whether the other users actually require more service, in which case they should not object to the apportionment increasing. If they do not, then the solution is to manage down the total volume of service provided as soon as is achievable, with all users, including the one (or more) who initiated the decline, carrying a higher cost than they would wish in the interim.

2.15.54 In addition to the predictability of the actual recharge, there should also be stability in the method of calculation and apportionment of overheads. Therefore, it is desirable that there is stability in the method of accounting for recharges, with any change in apportionment methods being justified and undertaken in consultation with users.


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Materiality

2.15.55 It is unlikely that a simple system will be adequate to meet all the other requirements noted in this chapter. However, due regard should be given to materiality to minimise the effort involved in running the system so that the quest for ‘accurate’ apportionments does not turn the process into a bureaucracy whose costs outweigh the benefits achieved.

2.15.56 There are many areas where the issue of materiality is important. For example, in the context of apportionments based on time recording systems, it is often tempting to offer people a large number of different activity codes to collect quite detailed information in case it is required at a later date for some reason. A long list of codes may be important to catch the occasional quarter of an hour spent on a particular activity, but it can also be very daunting and put people off accurate completion of their time record, thus defeating the object, as well as causing resentment about the time it takes to complete.

2.15.57 Another would be where support services provide services to each other. If the extent of this is not material, in order to prevent complicated tail-chasing, the recharges between them can be left out of apportionment calculations.

2.15.58 Other examples might be where a service manager spends a very small amount of time on corporate or democratic management but, for reasons of materiality, this is not taken into account and they are deemed to be 100% service management. A similar situation may arise if a staff member moves temporarily to another area of work, for example to cover for someone off sick. If this is for a very short period then it may not be considered material enough for any adjustments to be made.

2.15.59 There are also materiality issues about how often it is necessary to recalculate the base data used to calculate apportionments, for example proportions of time spent on various activities or floor space occupied. These should be recalculated whenever there is reason to suppose that they may have changed by a material amount, and at least annually.

Impact on Charging Systems2.15.60 Charging systems are a way of spreading the costs of support services between users

which, whilst they may use the same bases as equivalent apportionment systems, are founded on an agreement, often called a service level agreement, between the provider and the various users. In principle, charging systems could also apply to other overheads such as office accommodation.

2.15.61 A fundamental requirement of a charging system is that all parties are clear that such a system is in operation. There are situations in which an apportionment system may be preferred, and there are situations in which charging may be preferred; but hybrid systems, typified by above-the-line apportionments, are not good practice and should be avoided.

2.15.62 It should be noted that the accounting arrangements for charging regimes are not fundamentally different to those required under apportionment arrangements. Charging regimes will be associated with providers’ trading accounts, which may have


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a balance at the end of the year (subject to the requirements of SeRCOP), whereas apportionments will be associated with holding accounts, which will always be cleared out at the end of each year.

2.15.63 Charging systems should follow the same general principles as apportionment systems but the application of those principles raises particular issues, covered below.


2.15.64 Application of this principle implies that the charges set for any service should be such that the provider recovers their costs over the course of the year. The total cost concept takes this further by requiring that the provider’s trading account does not have a material balance on it at all at the end of the year, whether deficit or surplus.

2.15.65 Paragraph 2.33 of SeRCOP includes the requirement for the reapportionment of any balance on a provider’s trading account, for total cost reporting purposes, if failure to do so would materially misstate one or more of the published total costs. For this requirement not to undermine the SLAs and charging processes, it is important to try to ensure that such significant balances only arise in occasional, specific and therefore readily explicable circumstances. For example, the support service provider may, with users’ agreement, be accumulating ‘reserves’ over a specified period to spend on a particular piece of equipment.

Correct recipients

2.15.66 The particular issue that may arise here is the need to ensure that all affected budget holders are properly involved in the negotiation of the SLA in circumstances where the agreement is primarily between two departments, as defined in structural terms. For example, if the school library service is managed by another department, eg Cultural Services on behalf of Children’s and Education Services, and there is an agreement between Finance and Cultural Services, this is likely to cover financial services provided to the whole Cultural Services department. However, some of the resulting charge will be borne by the Children’s and Education Services SEA, and so the budget holder for this aspect of education should also be a party to the SLA.

2.15.67 There may also be issues about how the charge that results from the application of the SLA is distributed between the various divisions of service covered. This may be immediately apparent because of the basis used for the charge but, if not, there would be merit in covering it explicitly within the SLA to prevent subsequent disagreements.

Transparency

2.15.68 This is not usually an issue within charging regimes since the requirements for clarity about what is covered by each aspect of the agreement, the basis of the charge and at what level of detail it is calculated, as well as the various associated information requirements, should be covered within the SLA.


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Flexibility

2.15.69 Similarly, issues about the extent to which users can request more detailed information about their charges, to enable them to carry out more detailed costings, either regularly or on an ad hoc basis, should be spelled out in the SLA.

Reality

2.15.70 The concept of total cost and the reality principle do not allow for anything other than the cost of support services to be included within total cost. This would not allow for any of the sort of cross-subsidisation between users, or between users and providers, that can result if a charging mechanism is used. However, because of the nature of support services, there is no way of reflecting their cost accurately in this way in any event, and the issue, therefore, is to ensure that the negotiated charges are in no sense less accurate than the alternative of apportionments.

2.15.71 There are certain constraints on the parties’ freedom to negotiate charges, not least the statutory requirement for the main revenue and capital accounts to reflect expenditure. This means that the charges made to each user must at least cover the costs that result directly from their use of the support service. Fixed costs must be recovered too, so charges must be pitched with a view to avoiding a loss on any support service overall. The scope for negotiations about charges is therefore effectively about how much each user contributes to fixed costs.

2.15.72 Even this is constrained, however, by the need, under the total cost concept, for cross-subsidisation between users to be minimised. So, for reasons that parallel those detailed above in respect of apportionments, the same basic charging structure should be applied for all users (including trading accounts). Users’ freedom to negotiate the cost to themselves would thus depend on things such as the level, quality or speed of service they require of the support service, and not, for example, on the basic unit cost charged.

2.15.73 Charging systems are often designed to influence behaviour; for example, in some cases a user would be required to pay more for a printing job that was required particularly quickly or at short notice. This also means that the cost to users is not a reflection of the ‘true’ cost of the service they have received. However, provided the same basis applies to, and has been agreed by, all users, there is no reason to argue that it is not accurate enough for total cost purposes. Indeed, similar charging structures are applied by external printers.

2.15.74 Where charging systems are designed to influence users’ behaviour, it is particularly important that information on charges is fed back to users promptly or they will not realise that they have triggered the surcharge, or equivalent, to which they are expected to respond.

2.15.75 Similarly, if there are penalty clauses within the SLA which give users a reduced charge for performance that falls short of specified quality standards on the part of providers, then the provider will need to respond quickly to address these shortcomings. If they respond too slowly and receive less income than expected, this may lead to a year-end deficit which may be material enough to require reapportionment back out to the users.


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This would clearly undermine the original ‘rebate’ intention, although the real aim of maintaining or at least restoring agreed quality standards would have been achieved.

2.15.76 The other ‘reality’ issues identified within 2.15.36–2.15.49 above will also affect charging regimes but it is acknowledged that changing SLAs to use more output measures, to eliminate smoothing and pooling and to ensure a consistent charging basis for all users, at least to division of service level, will require negotiation with users. As part of this, users are likely to require quantification of the impact of the changes so that they can assess any consequential impact on their performance indicators and other total costs.


2.15.77 The requirement for predictability is often a major reason why users and providers participate in a charging regime. One specific consequence of such a regime is the way in which redundant support services are dealt with. Under their SLA, users will have agreed to a particular level of service for a fixed period. This gives providers (and other users) some stability over that period. As the end of that period approaches, the SLA will require renegotiation and, if there is a desire on the user’s part to adjust their volume (up or down), the provider will need to respond by altering the total volume of service provided so that there is no adverse effect on the costs borne by any other user. The notice period should be set to enable this to happen.

Materiality

2.15.78 One important materiality issue that arises under charging regimes is the level of detail which needs to be built into SLAs. Indeed, the bureaucratic nature of some early examples put others off charging regimes altogether. As with apportionment systems, there is a need to have regard to the balance between the efforts involved in an ‘accurate’ system and the benefits which result.

2.15.79 The materiality issues identified in 2.15.55–2.15.59 are also relevant to charging regimes but they may need consideration earlier, at the time when the SLA is negotiated. For example, in an apportionment system materiality is an issue in determining how often the base data used to calculate the amount of the apportionment should be reviewed. Where a charging system is in operation, the SLA should specify how often such reviews take place. At the time when this agreement is reached it will be necessary to take account of how quickly such data may change and the effort involved in recalculating charges. Users should then receive updated information whenever such reviews take place to ensure that they are receiving the most accurate information possible as the year progresses.

2.15.80 There is also one additional materiality issue that arises when a charging regime is in place, and that concerns when it is necessary to apportion back to users the surpluses or deficits on providers’ trading accounts. This has already been referred to in paragraph 2.15.65, as have the difficulties which would result from such a reapportionment. The most important aim is therefore to ensure that no material balances arise, at least unintentionally, but each authority, with its auditor, will need to determine materiality in this context as in all others.


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Impact on Specific Services2.15.81 The seven general principles identified apply equally to all services and to all users,

including trading accounts and non-General Fund services such as the HRA and pension funds, as far as the calculation of total cost is concerned. However, there are some particular issues which arise in some services, as a result of either legislative or other reporting requirements, and these are considered below.

Housing Revenue Account

2.15.82 Although the direct costs which may be charged to the HRA are defined, there is no statutory definition about how overheads can or cannot be apportioned to it. Authorities should therefore apply the same bases when recharging overheads to the HRA as they do for other services, in accordance with the ‘reality’ principle.

2.15.83 CDC and NDC are not overheads and are therefore not allocated or apportioned to services. However, the HRA will benefit from the overall democratic process and corporate management reflected in CDC. In addition, some of the costs in NDC may have arisen from previous HRA activities.

2.15.84 For these reasons, the HRA is permitted to make contributions to CDC and NDC provided these comply with the statutory framework for the HRA (see the Central Services SEA for England and Wales and for Scotland, paragraphs 7 and 8 of Part Two and paragraphs 8 and 9 of Part Three).

2.15.85 This contribution by the HRA, which is outside its total cost, should be determined by each authority according to principles that it can explain and justify. For example, one possibility would be to consider the extent to which CDC and NDC would reduce if the authority transferred all its housing stock and closed its HRA. If this was the amount of the HRA contribution it would lead to comparable costs being carried by the General Fund by authorities with and without HRAs. Alternatively, it could be done on an average rather than on a marginal basis, assessing a reasonable HRA contribution towards each CDC/NDC heading.

Pension funds

2.15.86 As for the HRA, there is no statutory definition about how administration costs and other overheads can or cannot be apportioned to pension funds, provided they can be justified. Authorities should therefore apply the same bases when apportioning or charging overheads to the pension fund as they do for other services. If changing the apportionment bases gives rise to liquidity issues, these should be addressed at the next revaluation.

2.15.87 Where, however, admitted bodies are required to contribute towards such administration costs, there should be a clear link between the charge made and the actual costs incurred. There should also be consultation with admitted bodies about the basis of the charge and they should be provided with appropriate supporting information.


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Schools

2.15.88 The main issue here arises as a result of the differences between the accounting framework for education as defined by SeRCOP and the reporting requirements, which relate to funding, imposed by the DCSF on education authorities in England and Wales. These place pressure on such authorities to include on their section 251/52 returns as high a proportion of delegated expenditure as possible.

2.15.89 Another potential issue in the context of schools is that it may be difficult to reapportion back to them any share of a trading account surplus or deficit (see paragraph 2.15.65), making it particularly important to try to avoid the need for such a reapportionment.

Other services

2.15.90 There may be other services or activities in individual authorities that give rise to particular issues in the context of recharging overheads, especially where a change to the bases used gives rise to a significant change in total cost. For example, all trading or ringfenced accounts, such as building control, which recover their costs through charging, may find their overall trading position altered.

2.15.91 Arrangements involving partnerships and work for external bodies may also be affected if total cost is used as a feature within the funding arrangement and if total costs change as a consequence of reviewing overhead recharge systems.

2.15.92 In all these cases, authorities will need to have regard both to the need to apply the general principles laid out here and to the impact that their detailed recharging arrangements, within these principles, may have on the services concerned.

2.16 The physical nature of property, plant and equipment means that depreciation and impairment can usually be identified as a direct cost for services. However, where there is shared use of the assets and depreciation and impairment need to be apportioned to the service headings defined in Section 3 of SeRCOP, the seven principles listed in 2.15 above will apply.

2.16.1 It will usually be clear which division of service is occupying a particular property or using a particular vehicle. Examples of where this may not be the case, and costs would need to be apportioned, include:

� sports centres in schools might provide education services by day and leisure services in the evening

� an authority might have pooled arrangements for its vehicle fleet

� civic centres are often multi-functional buildings accommodating both direct services to the public and support services.

2.16.2 Where an apportionment of depreciation and impairment losses to divisions of service is necessary, then the seven principles of apportionment defined in paragraph 2.15 of SeRCOP should be applied. It is important to note that there may be occasions where total cost, including attributable depreciation and impairment losses, will need to be reported at a subdivision of service level. In such cases, the seven principles of apportionment will also apply.


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2.16.3 Depreciation and impairment losses should be fully recharged to service expenditure headings as defined in Section 3 of SeRCOP (including CDC) except where the depreciation and impairment losses fully satisfy the definition of Non Distributed Costs (see paragraph 2.42).

2.16.4 Authorities will have to consider carefully why assets might be unused before withholding depreciation and impairment losses from apportionment:

� It will not always be the case that assets can be used to their full capacity. It will often be unavoidable, if assets are to be made available to services as required, that there will be surplus capacity. The costs of this surplus capacity should normally be recharged to users. For instance, Children’s and Education Services would not expect to be able to avoid depreciation and impairment losses on schools premises whilst they stood empty during holidays. Users of a vehicle from pooled transport provision should expect to be charged with a share of the costs of ‘idle time’ for cars, rather than just the direct costs incurred in ‘drive time’.

� Where parts of an asset are not used at all (eg a floor of an office building), then the costs of this type of surplus capacity might exceptionally be withheld on the specific conditions that:

– The assets are long-term unused but unrealisable assets (ie are NDC) – this requires that there is no possibility of the surplus capacity being disposed of by sale, lease or rental or being applied for an alternative use by the authority. These circumstances will be rare – a floor in an office building would have to be incapable of disposal (eg being held under a non-cancellable lease) and unusable for an authority’s remaining functions (perhaps because the assets are specialised).

– The assets are surplus to requirements (ie are non-operational) – this requires that a separate asset can be identified that is recognised as surplus to the requirements of any particular service and therefore any charge is within the definition of NDC. It is not necessary for the property to be formally declared surplus, but there must not be any sense in which a service is seeking to achieve a policy objective through the continued ownership of the asset. For example, if a floor of an office building is vacant and no service has a current or future policy objective that is in any way dependent upon occupation of the space, then it might be determined that this is non-operational. However, if an Adult Social Care department is short of resources and ‘mothballs’ a wing of a residential home in the hope that it can be reopened when resources become available again, then the asset is being held for a policy objective and remains operational.

Correct recipients

2.16.5 Depreciation and impairment losses should be apportioned to each of the services defined in Section 3 of SeRCOP benefiting from the use of the relevant fixed asset. Again, it is recognised that the services defined by SeRCOP are not likely to match the organisational structure of the authority. Property and transport managers (and other


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asset managers) will need to ensure that they have the appropriate systems necessary to identify recipients for both the organisational structure of the authority and the SeRCOP divisions of service. Their basic format will, however, be no different than for overhead apportionment systems.

2.16.6 The requirement to charge client services for the use of support services by external contractors at no charge will be particularly important in relation to fixed asset costs. See paragraph 2.14.7.

Transparency

2.16.7 The principle of transparency is more difficult to apply for depreciation and impairment losses because of the greater difficulties for service managers in understanding the implications of receiving depreciation and impairment charges. This makes it more important that recipients are clear what each recharge covers and are provided with sufficient information to enable them to challenge the approach being followed.

2.16.8 Where service users have depreciation and impairment losses apportioned to them, then they should be provided with information about the assets on which the charge is based. This would include, as a minimum, the value of the assets, the basis on which depreciation and impairment losses are calculated, and the basis on which their apportionment of the total charge has been determined.

2.16.9 Any recharges made should show separately the element comprising depreciation and impairment losses if users are able to influence this specific amount of the recharge. However, this will not be necessary in all cases. For example, property recharges might include an apportionment of running costs as well as depreciation and impairment losses. If all of these costs are variable, depending on the extent to which a building might be occupied or a vehicle used, then the service manager might not need to know what element specifically comprises depreciation and impairment losses.

Flexibility

2.16.10 It is good practice for authorities to prepare budgeted and estimated outturn figures for depreciation and impairment losses, rather than just total cost for the production of the annual accounts. This enables budgeted performance indicators to be compared with the outturn figures.

2.16.11 Depreciation and impairment losses might change significantly between budget and outturn as fixed assets are acquired, disposed of, revalued, changed in use or impaired during the year. For example, if a school was destroyed by fire, this could result in a significant impairment charge for Children’s and Education Services. The flexibility of recharging arrangements will depend on the extent to which an authority has decided that depreciation and impairment losses should be an absolute charge against budgets or benchmark figures, such that a change in the depreciation and impairment losses charge might result in a change in operations. This would entail making apportionments as and when significant changes take place.

2.16.12 The relationship between the basis of apportionment of depreciation and impairment losses and usage of the asset is important for one-off costing exercises for reviews. Any


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attempts at estimating an activity or outcome will also need to estimate the cost of depreciation and impairment losses – the accuracy of such estimates will be reliant on the ability to relate usage to depreciation and impairment losses.

Reality

2.16.13 Most depreciation and impairment losses can be directly identified to specific cost centres because of exclusive use of the relevant asset. Where apportionment is necessary, recharges should reflect real cost levels.

2.16.14 In terms of making a link between the cost to a user and the benefit they receive, the main issue will be the charging basis for fixed assets. For example, it will usually be reasonable to charge for use of buildings based on the time of occupation for multi-functional use of the building or office; if the building is simply shared with other users then a ‘traditional’ apportionment basis of floor space is likely to be appropriate. Vehicles might more fairly be recharged on the basis of the intensity of use (eg mileage).

2.16.15 Depreciation and impairment losses have a potential to be lumpy, but the principle of reality does not allow for smoothing. The main causes of significant variations between years will be:

� Acquisition or disposal of assets – resultant changes in depreciation and impairment losses should clearly be reflected in total cost.

� Impairments of assets – where this has resulted in the exceptional consumption of the economic benefits inherent in assets, this should be recorded in the year the impairment has occurred, even where the charge would be very substantial (eg school arson). The significance should be marked by explanations of the charge, rather than attempts to avoid it.

� Effect of revaluations – where assets are revalued every five years, this might result in a significant jump in depreciation between year 5 and year 6. Where this occurs, this could be an indication that the five-yearly revaluation is not appropriate and that assets may need to be revalued more regularly. CIPFA guidance on capital accounting recommends that each year-end the chief finance officer should consider with the valuer whether or not trends in property values have changed or varied materially and reassess the planned valuation programme.

2.16.16 The prohibition of pooling costs of property across users is discussed in paragraphs 2.15.46 and 2.15.47.


2.16.17 Recharges should be as predictable as possible, although this does not mean that they should be fixed. Service managers need to be assisted in understanding how apportionments of depreciation and impairment losses might change if their use of fixed assets changes.

2.16.18 The basis of apportionment should be the same for all users of the assets and there should also be stability in the method of apportionment of depreciation and impairment losses. The application of this principle is less likely to be a problem,


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depending on the accuracy and the sophistication of the systems used. There may, however, be a real need to reflect the reality of a change in the valuation of the assets as described in paragraph 2.16.15.

Materiality

2.16.19 The principle of materiality applies equally to depreciation and impairment losses as to overhead apportionment.

Conclusions

2.16.20 The inclusion of depreciation and impairment losses in the definition of total cost means that performance information will reflect the consumption of economic benefit of the fixed assets used by a service. Service managers and external stakeholders are therefore likely to be more interested in and challenge any ‘non-controllable costs’ to the service and will be encouraged to use assets more effectively. This, and the implications of the need for depreciation and impairment charges apportionment, will mean that it is increasingly necessary that asset registers have accurate, up-to-date and timely information that is continuously reviewed and reflects asset usage by the services of the authority.

2.17 The reported total cost of a service and service division should reflect material adjustments applicable to prior periods arising from changes in accounting policies or the correction of material errors. This should be accounted for by restating the comparative figures for the preceding period in the statement of accounts (where the adjustment relates to the preceding period).

2.18 The restating of comparative figures also applies to comparative financial information reported in formal reports of performance and in cost-based performance indicators, whether local or national (this may require the adjustment of opening balances for cumulative effect).

2.18.1 The majority of prior period items arise from corrections and adjustments that are the natural result of estimates inherent in the accounting process. Such adjustments constitute normal transactions for the year in which they are identified, and should be accounted for accordingly.

2.18.2 The definition of total cost requires that the reported total cost of a service and service divisions reflect such material adjustments for prior periods for changes in accounting policies or the correction of material errors. All formal reports of total cost should reflect and disclose such prior period adjustments where relevant. Where formal reporting requires that reports of total cost be made at subdivisions of service, then the treatment of prior period adjustments should also be reflected in these subdivisions.

2.18.3 Prior period adjustments are effected by excluding the income and/or expenditure representing the adjustment from the total cost of a service (division) for the current year and accounting for it in the year that the relevant transaction took place, as if it had been accounted for properly at that time. Consequently, if the adjustment relates to the immediately preceding period, then it should be made to the comparative figures for that period.


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2.18.4 This treatment should be reflected in the reported total cost of a service in formal financial statements of performance. The main impact on reporting requirements of prior period adjustments will be on reports of total cost in the Statement of Accounts, in formal financial statements of performance and in cost-based performance indicators (whether local or national).

2.18.5 The amount of the adjustment and the reason for the error or the change in accounting policy should be disclosed in a note in the financial report on performance or in a note to cost-based performance indicator disclosures.

2.18.6 The cumulative effect of any material error or change in accounting policy should be reported in formal financial reports of performance. This should indicate the timescales and the dates of the material error or change in accounting policy. The material error may, for example, not have just taken place over one financial year.

2.19 The total cost of a service includes (for defined benefits schemes) its attributable current service (pensions) costs, defined in the Code as the increase in the present value of a defined benefit obligation resulting from employee service in the current period. As with all costs, current service (pensions) costs should be reported at the mandatory service division level defined in Section 3 of SeRCOP.

2.19.1 IAS 19 Employee Benefits is a complex accounting standard, but it is based on a simple principle – that an organisation should account for employee benefits (including retirement benefits) when it becomes committed to give them, even if the actual payment of benefits will be many years in the future. IAS 19 therefore requires that pensions costs be accounted for as employees work the years of service that give them a right to a pension when they retire and that this entitlement should be as much a part of the cost of employment as the salary that they are paid.

2.19.2 This principle of reflecting the full costs of employing people during the period that they are employed is wholly consistent with the concept of total cost. Authorities should be reporting on the full cost consequences of the decisions they take in providing services to the public, and IAS 19 ensures that this is done on a fair and consistent basis for retirement benefits, irrespective of the method of funding.

Current Service Costs 2.19.3 One of the objectives of IAS 19 is that the operating cost of providing retirement

benefits to employees is recognised in the accounting period(s) in which the benefits are earned by the employees. The June 2011 amendments to IAS 19 introduced a new definition of service cost which now includes the following three components:

a) current service cost

b) past service cost

c) gains and losses on settlements.

However, the definition of current service cost remains unchanged and is still recognised in the definition of total cost. The remaining two components, past service cost and gains and losses on settlements, are dealt with in the guidance on Non Distributed Costs in paragraphs 2.42a) and b).


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2.19.4 The IAS 19 definition of current service (pensions) cost represents the benefits earned by and awarded to employees during the year to reflect the true costs of service. IAS 19 defined pension costs are actually no different to any other cost of employment. These costs are attributable to the individually defined services of local authorities (these services gain benefit and make decisions about the employment of each individual) and therefore the current service (pensions) cost as defined by IAS 19 is included in the definition of total cost.

2.19.5 Paragraph 2.19 includes within the total cost of a service the current service (pensions) cost as defined by the Code. The Code defines current service (pensions) costs as ‘the increase in the present value of a defined benefit obligation resulting from employee service in the current period’.

2.19.6 Current service (pensions) cost should be reported at service division level. Cost-based performance indicators should be reported on the same cost base as provided in the Statement of Accounts. Therefore any cost-based performance indicators should be based on the total cost definition in SeRCOP.

2.19.7 Current service (pensions) cost applies to all defined benefits schemes. Any contributions receivable by an authority from employees should be offset against the current service cost.

2.19.8 Current service (pensions) cost applies equally to police and fire fighters’ defined benefit schemes.

2.19.9 The current service (pensions) cost represents the actuarially calculated present value of the pensions benefits earned by current employees and is an estimate of the true economic cost of employing people in a financial year, earning years of service that will eventually entitle them to the receipt of a lump sum and pension when they retire. It measures the full liability estimated to have been generated in the year (at today’s prices) and is thus unaffected by whether any fund established to meet liabilities is in surplus or deficit.

2.19.10 The Code assumes that the current service (pensions) cost will be based on an actuarial valuation, even where there is no statutory requirement for one (ie for unfunded schemes).

2.19.11 CIPFA recognises that there would be practical difficulties for actuaries in estimating the current service costs for each service division in the SEA. Local authorities will need to allocate current service (pensions) costs to services on the basis of reasonable, justifiable and consistent estimates of this cost to comply with the requirements of SeRCOP.

2.19.12 The most reasonable, justifiable and consistent basis of allocation or apportionment of current service cost will normally be pro rata to the pensionable pay per service division. However, authorities should use a different basis where there is evidence to suggest that pro rating would lead to material misstatements of the pensions costs attributable to individual services.

2.19.13 It is important to note that such pro rating should be based on the same cost base used to calculate retirement benefits; for example, pro rating to employee cost is not likely to


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be an appropriate base if a significant percentage of staff within a service are not in the pension scheme.

2.19.14 The apportionment methodology used by authorities should comply with the seven principles of apportionment specified in paragraph 2.15 (and related guidance) of SeRCOP in its application to the cost of retirement benefits. The methodologies used to attribute or apportion costs to service divisions specified in Section 3 of SeRCOP will need to be considered by each local authority and be appropriate to its local circumstances. In applying the seven principles of apportionment in paragraph 2.15 of SeRCOP, the following factors apply to current service (pensions) costs:


2.19.15 Current service (pensions) costs should be fully recharged to service expenditure headings as defined in Section 3 of SeRCOP (including Corporate and Democratic Core).

Correct recipients

2.19.16 Current service (pensions) costs should be apportioned to each of the services service divisions defined in Section 3 of SeRCOP that benefit from an employee’s service or portion thereof. It is recognised that the services defined by SeRCOP are not likely to match the organisational structure of the authority. Their basic treatment will, however, be no different than for overhead apportionment systems.

Transparency

2.19.17 It is important that service managers are clear what elements of cost are included in the definition of total cost and are provided with sufficient information to enable them to challenge the approach being followed.

2.19.18 Service managers should be able to understand the basis on which current service (pensions) costs are attributed to their service and be provided with information about how the costs are attributed to services.

Flexibility

2.19.19 Performance reporting requirements mean that authorities should be preparing budgeted and estimated outturn figures for current service (pensions) costs, rather than just total costs for the production of the annual accounts.

2.19.20 Although some elements of the pensions costs borne by an authority in any year may be volatile (eg those reflecting investment performance), current service costs should be relatively stable, provided that the workforce is stable. Flexibility will normally be achieved by linking any apportionment of current service costs to pensionable pay, so that pensions recharges flex with salaries.

Reality

2.19.21 Attribution or allocation methodologies should reflect the reality of the current service (pensions) costs.


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2.19.22 In terms of making a link between the cost to a user and the benefit they receive, the main issue will be whether particular groups of employees cause the authority to have a higher or a lower liability for retirement benefits. For instance, in a final salary scheme, one year of service is likely to be of higher value to a professional worker who expects his or her salary to increase substantially over their remaining working life than to a casual worker with little prospect of promotion before retirement.

2.19.23 However, even though the potential might exist for years of service to be worth more to some individuals than to others, this should not be reflected in an apportionment methodology unless it is actually given effect in the actuary’s valuations. In assessing the contributions that different authorities should be making to pensions funds, some attention will be paid by actuaries to the characteristics of the contributing authorities’ workforces, and contribution rates will be set to reflect differences. However, these assessments will probably be set at a fairly high level of aggregation and not take into account all the factors that would need to be considered to match the differentiation to particular services. This means generally that contribution rates will be set commonly for employees, even though there was a potential for them to generate pensions liabilities at different levels.

2.19.24 The implication of this is that most authorities will be able adequately to reflect the reality principle by pro rating the current service cost evenly against pensionable pay. Only where the actuary has advised that an authority’s contribution rate has been particularly affected by characteristics of its workforce, and these peculiar characteristics are concentrated in particular services, would an authority be expected to depart from pro rating.


2.19.25 Managers will be able to appreciate that their attributable pensions costs will rise if they employ more people, pay higher salaries, etc or that their costs will fall in reverse circumstances. Predictability will therefore depend on managers being provided with good estimates of the likely percentage of pensionable pay by which current service costs will be apportioned.

Materiality

2.19.26 The principle of materiality applies equally to pensions costs as to overhead apportionment.

2.19.27 The method adopted should be explained as an estimation technique in relevant disclosures.

2.19.28 Past service costs, and gains and losses on settlements should be charged to Non Distributed Costs (see paragraph 2.42).

2.20 The Code states that provisions should be charged to Surplus or Deficit on the Provision of Services. In most cases, therefore, provisions will be included within the total cost calculation for individual services. However, if a provision is required for the items defined as Non Distributed Costs (see paragraph 2.42), then such provisions should be charged to this service division.


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NET TOTAL COST2.21 Net total cost is defined as gross total cost (as above) less income, with income defined to

include income from fees and charges and specific, special and supplementary grants which can be attributed to services (ie all grants except for general grants such as redistributed non-domestic rates, Revenue Support Grant and other general grants, including all non-ringfenced grants; and capital grants and contributions).

Income in Total Cost2.21.1 The consequences of the definition of expenditure for the purposes of calculating gross

total cost are that the following are also defined as income, as opposed to ‘abatements of expenditure’:

(a) income in respect of incidentals, such as staff meals and private telephone calls

(b) revenue income from the sale of equipment, for scrap or otherwise

(c) reimbursements for non-agency work undertaken for, and fully funded by, third parties

(d) reimbursements for work done under partnership arrangements so that the net total cost of the service(s) concerned includes the appropriate proportion of partnership costs attributable to the authority

(e) receipts that arise as the result of successful insurance claims or similar process (eg fraud recovery).

2.21.2 Some contracts with third party providers of services are net contracts, in that the authority will pay the provider a sum for the service that is net of income that the provider may collect from service users. For instance, a contract for leisure centre management may be tendered at a reduced fee if the provider is given the right to retain the takings that it generates from the operation of the catering facilities at the centres. If the authority has given up rights to the income, then the expected accounting practice would be to account for the fees that it will pay to the provider and not to seek to gross up the cost to recognise the value of the income foregone. In contrast, grossing up would be expected where the authority retains the right to income, engages the service provider to collect it, and nets the cash collected off any fees payable to the provider for services when payment falls due. In these circumstances the authority would account for the gross fee payable to the provider as expenditure and the income collected as income when preparing total cost.

2.21.3 Under the Code, capital grants and contributions are credited to the Comprehensive Income and Expenditure Statement when they are received. These grants and contributions are included with non-specific grants, and do not form part of the Net Cost of Services.

Consolidation2.21.4 The definitions of gross expenditure and income given above apply at all levels at which

total cost is calculated. However, there may be occasions when two or more total costs at a detailed level require consolidation into a summarised total cost and, in these


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circumstances, care must be taken to avoid double counting. For example, it may be that a total cost is calculated for each individual secondary school and also for a secondary school support unit at education HQ, from which secondary schools buy services. Simple addition of gross expenditure, income and net expenditure (each as defined above) to form the total cost of the secondary school service would result in double counting in both gross expenditure and income of the amounts involved in such transactions. In this situation, the double counting should be removed by extracting the internal transactions from both gross expenditure and income so that the gross total cost is not distorted.

NET TOTAL COST EXCLUDING SPECIFIC GRANTS2.22 Net total cost excluding specific grants is defined as gross total cost (as above) less income

other than specific grants.

2.22.1 Where a national indicator provides the definition of net cost to exclude specific grants, the definition must be adhered to. Paragraph 2.22, therefore, defines the concept of ‘net total cost excluding specific grants’ as gross total cost less income, but income excludes all specific grants. In this context, the distinction between specific grants and other forms of government support for a service is relevant and authorities will need to consider the specific circumstances if there are situations where doubt arises. In Scotland, Scottish Government Finance Settlement Circulars may provide an indication of what can be classified as a specific grant.

2.22.2 The Net Cost of Services should be net of all grants that can be attributed to services, whether they are called specific, supplementary or special, and whether they are within aggregated external finance (AEF) or not.

2.22.3 Government treatment of various specific grants differs across the UK and it is not consistent with IFRS. It may also differ from year to year as new grants are introduced or have their status altered. Authorities should therefore be aware that the definitions used in government returns may differ from those in SeRCOP.

2.22.4 The grants which should not be netted off to reach the Net Cost of Services are redistributed non-domestic rates, Revenue Support Grant and other general grants, including all non-ringfenced grants such as Area Based Grant, and capital grants and contributions. With the move away from ringfencing, more grants will not be applicable to services and therefore will fall within this category.

RELATIONSHIP TO THE COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT2.23 The sum of the net total cost of all services, the costs included within the definition of Non

Distributed Costs and Corporate and Democratic Core (see paragraphs 2.38 to 2.45) and exceptional items disclosed on the face of the Comprehensive Income and Expenditure Statement will equate to net expenditure of continuing operations.

JOINT ARRANGEMENTS2.24 Chapter nine of the Code recognises two types of joint arrangement – joint operations and

joint ventures. Joint ventures are consolidated into the Group Accounts, with the investment


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in the entity accounted for in the single entity accounts at cost or valuation. Where the arrangement is classified as a joint venture, consolidation should be accounted for using the equity method described by IAS 28 (as amended in 2011). Joint ventures are therefore excluded from the total cost of local authority services and are not considered for the purposes of SeRCOP. Authorities will need to account for their share of joint operations in their single entity accounts, in accordance with chapter nine of the Code. Further detailed guidance on accounting for joint arrangements (ie joint operations and joint ventures) is provided in Accounting for Collaboration in Local Government (CIPFA, 2014).

2.25 Revenue and expenditure attributable to joint operations is recognised for total cost purposes within the Net Cost of Services of the authority and allocated to service headings to the same extent that expenditure, income or other contributions are recognised as relating to services’ expenditure in those same accounts within the Code. Where the activities of joint operations cannot be identified to service headings, a separate line or lines describing the activity should be included alongside the SEA services.

2.26 Where an authority is incurring expenditure as part of an arrangement with other entities or local authorities (which may not be classified as a joint operation, an associate or a subsidiary), the gross total cost of the service(s) concerned includes all the authority’s expenditure, whether by way of contribution or otherwise, which relates to that arrangement. Contributions received from other parties will be included as income.

2.27 The requirements for preparing total cost figures for group accounting are set out in paragraph 2.46 below.

TRADING ACCOUNTS AND TRADING OPERATIONS2.28 A trading account is a method of matching income and expenditure for a particular activity

or group of activities. Trading accounts should be maintained where services are provided on a basis other than a straightforward recharge of cost or on a cash-limited vote basis. The configuration of service delivery will determine the scope of a trading account. In Scotland, section 10 of the Local Government in Scotland Act 2003 requires that trading accounts be maintained and disclosed for significant trading operations.

2.28.1 The Local Government in Scotland Act 2003 requires trading accounts to at least break even in every three-year period.

2.29 Trading operations are services provided to users on a basis other than a straightforward recharge of cost, such as a quoted price or a schedule of rates. Formal financial reports of performance may need to include summarised details of performance for significant trading operations providing services in a competitive environment.

2.29.1 Trading accounts for trading operations are kept for a variety of purposes for different stakeholders, including:

� showing managers, auditors and the public the trading results

� enabling managers, auditors and unsuccessful tenderers to see whether external trading organisations and internal trading organisation tenders have covered costs in total


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� ensuring that any overspendings revealed by budget-cost comparisons are attributed to the budget holders responsible, eg so that overspendings on highways payroll as a direct result of inefficiency in the payroll provider are attributed to payroll, not highways

� ensuring that budget holders are not charged more than they agreed when they chose to have the support service

� relieving budget holders from having to accept arbitrary apportionments

� enabling budget holders to predict the cost to themselves of the support services they order.

2.29.2 SeRCOP does not dictate the services for which trading accounts should be maintained and disclosures made. It is up to authorities to determine which services are to be provided on a trading basis. In coming to such decisions, authorities will be aware of the need to demonstrate competitiveness and make comparisons. Authorities therefore need to consider the arrangements for financial administration conducive to these objectives. They will probably need to consider prevailing industry norms and standards. Authorities will also need to make decisions on the grouping of trading operations.

2.30 A competitive environment is one in which the user has discretion over whether to procure the service from the in-house provider either as part of a periodic tendering procedure or on a continuous basis. A service where the user may negotiate only over volume or quality, but has never had the opportunity to exercise choice on where to procure, is not provided in a competitive environment for performance reporting purposes. Trading operations in categories (a) to (d) below are deemed to provide services in a competitive environment. Such operations should be considered for disclosure in formal financial reports of performance. In Scotland, trading accounts are required to be maintained and disclosed for significant trading operations. Specific guidance on the identification of competitive services in Scottish local government can be found in Significant Trading Operations – Consolidated Guidance (June 2013) from LASAAC and the CIPFA Directors of Finance Section. The guidance was updated in 2013 to reflect the findings of the Trading Operations Review Group. There are five main types of trading operation that may be run by authorities:

(a) Trading services or undertakings with the public or with other third parties. These include, inter alia, catering undertakings, markets, trade refuse collection and industrial units.

(b) External trading organisations (ExTOs) which have won contracts from other public bodies, for example under the Local Authorities (Goods & Services) Act 1970.

(c) Work carried out by internal trading organisations (InTOs) arising from voluntary competitive tendering (VCT) exercises.

(d) Support services provided in a free internal market, ie to schools or to other budget holders who have been given freedom to buy externally if they wish.

(e) Support services provided in a limited internal market, eg where budget holders are free to decide the quantity and type of the work to be done on the basis of the prices quoted to them, but not to buy externally.


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2.31 Some authorities may have established legally separate trading companies to carry out some trading activities. Charges made by (parent) authorities for providing such trading companies with services, supplies, work and facilities (eg accommodation) have to cover all the costs of doing so. Authorities should establish a robust methodology for determining the charges, and are free to decide which methodology to adopt. However, they may find it helpful to use the definition of total cost as defined elsewhere in SeRCOP, and may also consider it appropriate to include a contribution to Corporate and Democratic Core costs and Non Distributed Costs in the charge. Trading companies are liable to income and corporation taxes on their profits. Full charges to trading companies by parent authorities for services, supplies, work and facilities will however tend to minimise taxable profits, while giving in-house users the benefits of any economies of scale.

2.32 Where one part of a service is provided in a competitive environment and another part in a non-competitive environment, only that part provided in a competitive environment should be considered for disclosure. The decision to divide a trading account in this manner should be subject to consideration of the significance and materiality of the part that is provided in a competitive environment.

2.32.1 Authorities are likely to need to know this information for internal decision-making purposes, ie to ascertain whether the competitive element is subsidising the non-competitive element, or vice versa.

2.33 Significant balances on trading accounts for support services or for other services provided internally on a trading basis may distort materially the total cost of recipient services, regardless of whether the results of the trading operation are disclosed in formal financial reports of performance. Where a trading account balance leads to the material misstatement of total cost at the division of service level or of a published performance indicator, regardless of whether the indicator is local or national, a reapportionment should be made. The amount of any such reapportionment should be disclosed in the summary disclosure note.

2.33.1 SeRCOP does not advocate the routine reapportionment of surpluses and deficits generated/sustained by trading operations unless a failure to action a reapportionment is likely to lead to a material distortion. This is because:

� Routine reapportionment undermines the ethos for maintaining trading accounts in the first place.

� Reapportionment potentially undermines budget monitoring disciplines for both the suppliers and the recipients of services because both know that reported figures will be modified at year-end.

� Depending on the charging mechanism, accurate reapportionments are likely to be technically complex and time consuming. This particularly applies to activities with multiple users and differential profit margins for different items of work, ie work carried out on a schedule-of-rates basis. This means that crude reapportionments with little relation to reality are likely to be made.

2.33.2 Trading activity will necessarily result from capital works and should not be reflected in revenue accounts. In this instance, therefore, particular care will require to be taken when reapportioning surpluses.


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2.34 In determining materiality, authorities should consider the significance of the surplus or deficit in terms of the overall income and expenditure of the trading operation, and the relevant assets and liabilities.

2.34.1 Disclosures only apply to significant trading operations. There is no precise measure of materiality in relation to trading operations. Information is likely to be useful to the readers of formal financial reports of performance if it enhances their understanding of the way in which services have been provided and the way in which resources have been deployed in the provision of those services.

2.35 The summary disclosure should include:

(a) The nature of the trading operation, ie the service that is provided and the main customers.

(b) Turnover.

(c) Surplus/deficit.

(d) Any reapportionment of surplus/deficit.

(e) Any details putting financial performance in a context useful to the reader of a formal financial report of performance. In Scotland the requirement is for disclosure of significant trading operations. The identification of a trading operation in itself does not necessarily indicate that formal disclosure should be made.

The summary disclosure note should be compiled on the basis of proper accounting practice using the total cost approach in SeRCOP.

2.35.1 Disclosures should not be so limited that they fail to give readers insights into the financial performance of major trading operations. Conversely, immaterial information impairs understandability. Disclosures should not therefore be so voluminous that they divert attention from key areas. In Scotland, Part 3 of Significant Trading Operations – Consolidated Guidance (June 2013) provides guidance on the content of disclosures. In particular, performance against the three-year prescribed financial objective should be demonstrable to the reader.

2.35.2 Where a trading operation has sustained a deficit disclosed in a formal financial report of performance, details should be included of remedial action and the results of such action.

2.35.3 Authorities have to make two main decisions when planning what trading information to disclose:

� what operations should be reported on

� how their performance information can best be presented.

2.35.4 A practical methodology for determining what operations should be reported would have the following steps:

1 Identify the trading operations that are provided in a ‘competitive environment’ (see paragraph 2.30 of SeRCOP).

2 Set parameters (in terms of percentage) for ‘significance’ based on two performance criteria measured against the authority’s overall net operating expenditure:


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– turnover of trading operation

– size of surplus/deficit on trading account

– consider adding non-financial criteria, such as the levels of interest in particular activities expressed in consultation with the public, the prominence of promises about the trading activity in policy statements, particularly those considering performance issues or a corporate assessment of the authority, and the risk of loss that the authority is exposed to in carrying out the activity

– other non-financial criteria may also guide decisions on disclosure – eg trading services used to deliver targets included in local public service agreements in England or improvement agreement outcomes in Wales; as a result of reviews; or those services that may be provided or are supporting functions that are provided under the well-being powers.

3 Review the criteria chosen to ensure that they properly balance comprehensiveness and understandability.

4 Where the methodology results in draft disclosures that are too voluminous or too sparse, review the parameters used for each criterion and raise or lower thresholds.

2.35.5 A list of possible trading operations which could be disclosed in performance reports and the Statement of Accounts is provided in the list below to assist authorities in their consideration of which services to disclose. This list is not intended to be prescriptive and is by no means exhaustive.


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Possible external trading activity Possible internal trading activity

� Industrial estates

� Market undertakings

� Investment properties

� Building control

� Fishery harbours

� Trade waste

� Crematoria

� Ports

� Piers

� Airports

� Toll bridges/roads

� Car parks

� Civic halls

� Theatres

� Museums

� Building cleaning

� Building maintenance

� Construction and property services

� Finance services

� Legal services

� Personnel services

� Office services (printing, security, etc)

� Highways maintenance

� Housing management

� On-street parking

� Environmental cleaning and sweeping

� Refuse collection

� Leisure management

� Grounds maintenance

� Vehicle management/transport

� Vehicle maintenance

� Catering services (staff, welfare, education, etc)

� Administrative education support services

� Specialist education support services

� Social services residential homes

� Social services home care services

2.35.6 Significance needs to be carefully judged. Limited, aggregated disclosures will not give readers any insights into the financial performance of trading operations. However, too much information may prevent an appreciation of the substantial issues with which the authority is confronted. Disclosure should be considered if making the information public would result in:

� better informed consultation with stakeholders, likely to result in tangible improvements in trading operations

� effective comparison of trading performance year on year and between authorities and the private sector, where provision of information about trends, peers and competitors would enhance stakeholder involvement

� promotion of challenge to what the authority does and how it does it in substantial areas of policy

� demonstration that the authority has a competitive approach to key areas of service delivery.

2.35.7 Having determined the operations to be reported on, authorities will then determine the information to be disclosed:

� The nature of the trading operation – readers should be able to understand what the authority is doing and what it is seeking to achieve, rather than just be presented


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with a simple heading such as ‘building cleansing’ or ‘county trading’. Relevant information will depend on precisely what the authority is doing but might include:

– a description of the activities carried out – this could also include the volume of activity, key outputs, the value of these outputs to the community and any relevant performance indicators (either local or national)

– the main customers

– the basis on which work is won or commissioned

– the policy objectives the authority is seeking to achieve through the activity

– the extent to which the activity is carried out on a commercial basis and the risks involved.

� Turnover – where there are substantial amounts of external and internal income, these might usefully be separated; an indication of the outputs represented by the turnover might also provide useful context.

� Surplus/deficit – disclosure of the surplus/deficit for the year should be regarded as the minimum requirement for information on financial performance. Where the trading is external, then surplus/deficit might equate to profit/loss, as the income will be real income for the authority. Where income is from internal recharges to the budgets of the authority’s services, then the theory of surpluses and deficits being strictly linked to the performance of the trading operation relationship does not necessarily hold, ie all surpluses demonstrate good performance and all deficits do not. Surpluses and deficits may arise from an error in a pricing decision in a contract or a change of accounting policy, or may be a policy decision of the authority (see paragraph 2.37.11 for guidance on budgetary and management accounting implications). Therefore, surpluses and deficits will need to be put in the context of the trading operation’s targets: for instance, a local authority may have decided to generate a surplus to support other spending priorities (eg investment and replacement decisions), to break even, or to run a subsidised activity at a loss, and the consequences of missing a target in either direction may need to be explained.

� Any reapportionment of surplus/deficit – this information is required as it would otherwise be unclear how surpluses/deficits had been taken into account when aggregating the authority’s overall position.

� Any details putting financial performance in a context useful to the reader – especially important is the performance framework under which the activity is being carried out (see surplus/deficit above). Other useful contextual information might be:

– the basis of disclosure – ie whether figures are actuals or projected outturns (NB: increasingly, performance reports will require that final outturn information is required)

– information about previous year forecasts and actuals and projected performance for next year

– explanation where previous year actual outturn is significantly different from the disclosed forecast


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– performance measures

– information on future prospects

– any remedial action that has been taken or is planned to recover a deficit.

2.35.8 There is some (limited) scope for authorities to group trading operations into a consolidated disclosure. Other groupings may be relevant to the way in which the service is organised in a local authority, eg refuse collection and street cleansing. However, care should be taken if grouping is to be used. If it is decided that the results of particular activities are significant, then this significance could be lost if results are consolidated. Also, grouping activities together may confuse readers, particularly in relation to the demonstration of the performance of an activity. Grouping is not likely to be appropriate in the following instances:

� the activities are not similar

� the activities have different exposures to commercial risk

� the activities are accountable to different senior officers

� the trading results are a mixture of surpluses and deficits

� the operations are working to different financial targets, for example break-even and/or surplus.

2.36 Where a significant balance on a trading account relates to both internal and external bodies, only the element relating to internal bodies should be reapportioned. The element relating to external bodies should remain as a balance on the trading account.

RELATIONSHIP WITH THE TREATMENT IN THE COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT IN THE ANNUAL STATEMENT OF ACCOUNTS2.37 In the Comprehensive Income and Expenditure Statement, the aggregate performance of

all category (a) operations in paragraph 2.30 of SeRCOP for which there is no division or subdivision of expenditure and the surplus/deficit on category (b), (c), (d) and (e) operations (subject to the requirements of paragraphs 2.33 and 2.34 above) should be reported in the Financing and Investment Income and Expenditure line. For category (a) operations where there is a division or subdivision of service, that division or subdivision should be used to accumulate income and expenditure.

2.37.1 Where trading operations are significant, an authority should consider whether separate disclosure on the face of the Comprehensive Income and Expenditure Statement is appropriate. Guidance on determining whether a trading operation is significant is provided in paragraphs 2.35.3–2.35.6.

2.37.2 The Code also requires the following note to be prepared:

(2) The nature, turnover, and profits/losses of any significant trading operation and for Scottish local authorities the cumulative surplus or deficit for the current year and two preceding financial years in accordance with the requirements of the Local Government in Scotland Act 2003.


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Guidance on the information to be disclosed is provided in paragraphs 2.35.7 and 2.35.8 above.

2.37.3 Previous editions of this publication have also required disclosures in relation to The Local Authority Building Control Charge Regulations (England and Wales only) and the Local Authorities (Goods and Services) Act 1970. The Code does not require these disclosures, and they have therefore been removed from SeRCOP. However, authorities should note that the removal of the requirement to report these amounts in the Statement of Accounts does not remove the requirement on local authorities to comply with the legislation.

2.37.4 Although significant trading operations may have their results disclosed separately in the Statement of Accounts (see paragraph 2.37.2), these results still have to be consolidated fully into the authority’s overall financial outturn, represented by the Comprehensive Income and Expenditure Statement.

2.37.5 SeRCOP has reaffirmed the importance that the real costs of services are reported comprehensively in all material respects; the concept of total cost. The costs of trading operations therefore need to be properly consolidated and the effect of internal recharges neutralised in determining what it really cost to provide a particular service. The treatment for income and expenditure on trading accounts should be as follows:

� Some trading accounts will be an integral part of the total cost of particular services and should be consolidated fully into the total cost of that service (eg industrial estates, theatres and leisure management, trade waste, and car parks). The SEA in Section 3 of SeRCOP notes the income and expenditure of these trading activities should be recorded gross within the appropriate service division(s). However, it should be noted that even though the income and expenditure of this service has been fully consolidated into the whole authority Income and Expenditure Account, if authorities view any of these services as significant trading operations then these should be disclosed in the Statement of Accounts.

� Where a support service/internal trading account has a year-end balance attributable to under- or over-recovery of internal recharges, then the balance should be reapportioned to services, if doing so would have a material effect on total cost figures – the cost of the activity will then be absorbed fully by all its client services.

� Where trading activity is with other parties and does not relate to the provision of the authority’s own services, all transactions should be kept out of the total cost figures of individual services and the authority’s net expenditure of continuing operations.

2.37.6 Authorities will need to be able to trace these various treatments through the accounts and provide a clear audit trail, to ensure that no income or expenditure has gone missing or been double counted in translating the ledger into the Statement of Accounts. However, there is no need for the reconciliation to be published. The results of trading operations can be disclosed as self-contained statements of performance, perhaps with a note setting out briefly how they have been reflected in the Statement of Accounts, but without a detailed proof that the aggregate surplus/deficit of all operations is reflected in the bottom line of the whole authority Comprehensive Income and Expenditure Statement.


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2.37.7 For example, an authority might operate a building maintenance operation providing building maintenance services to the whole authority, to its council tenants’ properties and to the neighbouring police and crime commissioner. At the end of the financial year, the trading unit has the following financial results:

Element of the trading operation Expenditure £000

Turnover (income)

£000

Surplus/ (deficit)

£000

Building maintenance HRA 3,045 2,980 (65)

Building maintenance (general) 1,567 1,921 354

Building maintenance – police and crime commissioner

1,232 1,308 76

TOTAL 5,844 6,209 365

2.37.8 The trading account for building maintenance would be disclosed as indicated below, bringing together all aspects of its performance. (Note: the example below considers only the minimum financial information for disclosure. Full disclosure requirements for any activity should comply with paragraphs 2.35.7 and 2.35.8 above.)

Example disclosure note

The authority operates a building maintenance trading unit that carried out routine and programmed/planned maintenance on the authority’s property portfolio, including council housing, as well as for the police and crime commissioner. The projected financial outturn for the current year is:

20yy/zz

£000

Turnover 6,209

Expenditure 5,844

Surplus 365

Local authorities in Scotland should refer to section 12 of A Best Value Approach to Trading Accounts – A Guidance Note for Local Authority Practitioners, which provides guidance on disclosure.

2.37.9 However, each element of the operation will require separate treatment when incorporating the activity into the whole authority Comprehensive Income and Expenditure Statement. Ignoring implications of materiality for this example, the treatment would be:


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Element of the trading operation

Treatment in the Comprehensive Income and Expenditure Statement

Building maintenance for the Housing Revenue Account (HRA)

The maintenance of dwellings is a function of the HRA and the activity should be reflected in the HRA. Subject to the guidance in the Housing Revenue Account Manual and the Housing SEA, the actual cost of maintenance should be incorporated into the net cost of the HRA. If the HRA has already been debited with trading recharges of £2,980,000, then debiting it with the attributable deficit of £65,000 would bring the total cost to the actual cost of £3,045,000.

Building maintenance (general)

The surplus on the trading account shows that non-HRA services have been overcharged for the maintenance services provided (when comparing agreed recharges to actual cost). To avoid overstating the total cost of the service (divisions) or cost-based performance indicators, the surplus should be repatriated to services – an additional credit of £354,000 apportioned fairly across all client services would reduce the reported cost of maintenance work in service outturn to £1,567,000.

Building maintenance services to the police and crime commissioner

By definition, support services provided to other parties should not be regarded as part of an authority’s Net Cost of Services. Neither the expenditure nor the income for this activity should be allocated or apportioned to services. Instead, the balance of £76,000 surplus will be consolidated into the Comprehensive Income and Expenditure Statement by adding it to the items in the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement.

2.37.10 This disaggregation of the building maintenance trading account is solely for the purposes of presenting the whole authority Income and Expenditure Account. It does not challenge the integrity of trading accounts when these are presented in isolation or used for management purposes.

Budgetary and Management Accounting Implications2.37.11 The issue raised in the preceding paragraph highlights a general concern raised by

practitioners: that of the relationship of SeRCOP’s requirements for reporting total cost and local authorities’ budgeting or management accounting practices. SeRCOP’s provisions for trading accounts are dedicated to the consistent external reporting of performance. They are not intended to force authorities to adopt particular management practices or budgetary arrangements that strictly follow the total cost principle. For instance:

� Authorities are not required to take all financial decisions on the basis of the accounting treatments prescribed by SeRCOP. The treatments might be a factor in any decision, as the performance of the activity will eventually be reported in the SeRCOP trading account format. But other accounting treatments can be judged as more appropriate when it comes to comparing internal and external tenders, setting targets and measuring performance for management purposes, determining budgets for trading managers or assessing the operational future of the trading operation.


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� Some of the requirements of SeRCOP require the exclusion of costs from trading accounts for fairer presentation, particularly those relating to the Corporate and Democratic Core and Non Distributed Costs. Where elements of these costs were taken into account when setting tender prices, then excluding them from trading accounts may result in a ‘windfall’ surplus for the operation. It is for authorities to decide for themselves whether to recover these costs. However, it is also a matter for policy whether trading managers are able to retain (in budgetary terms) the windfall surpluses that would then arise in trading accounts – the accounting requirements of SeRCOP would require these surpluses or deficits to be apportioned if they are material. Budgetary arrangements, rather than SeRCOP provisions, will always determine the ownership of reserves arising on SeRCOP-compliant trading accounts.

� Reapportionment of surplus and deficits does not mean that accountability for the balance is taken away from trading managers – authorities can decide within their budgetary framework that trading operations can retain surpluses to meet future investment plans or be required to recover deficits from future trading. This is provided for in the Movement on Reserves Statement and in the general treatment of reserves as defined by the Code. Surpluses and deficits that have been consolidated can be appropriated to or from trading operation reserves. For instance, the authority might decide that the building maintenance operation described above can carry its surplus forward into the next year. £365,000 could be appropriated out of the General Fund Balance within the Movement on Reserves Statement and credited to the building maintenance operation’s balances.

COSTS EXCLUDED FROM GROSS AND NET TOTAL COST2.38 An apportionment of all support service costs and some overheads are to be included within

total cost. The exceptions are:

(a) Corporate and Democratic Core

(b) Non Distributed Costs.

Each of these is defined below.

2.39 The Corporate and Democratic Core (CDC) is defined as comprising two divisions of service: Democratic Representation and Management (DRM) and Corporate Management (CM). If anything does not fall within the definitions given for either DRM or CM, then it cannot be within CDC.

2.40 DRM concerns corporate policy making and all other member-based activities. CM concerns those activities and costs that relate to the general running of the authority. These provide the infrastructure that allows services to be provided, whether by the authority or not, and the information required for public accountability. Activities relating to the provision of services, even indirectly, are overheads on those services, not CM.

2.40.1 DRM is defined to accommodate the wide range of governance structures adopted by local authorities.

2.40.2 It is anticipated that many authorities will continue to use the phrase ‘corporate management’ to cover a range of activities which suits their own culture and method of


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operating. It must not be assumed that any such definition of corporate management equates to the accounting definition. The accounting definition must be consistently applied for total cost calculations or, through the consequential effect on support services, the comparability of all total costs will be undermined.

2.40.3 It should also be noted that there may be situations in which statutory requirements have to take precedence over the accounting guidance given below. For example, national parks authorities have a definition of ‘corporate management and administration’ laid down in their financial grant memorandum. This includes DRM but it also includes activities that are service management and administration and which, in the absence of such overriding guidance, would be treated as an overhead across the service.

2.40.4 It is important to note that activities are not within CDC because:

� They are provided centrally. This may be cost effective, but that in itself does not affect the nature of the activity.

� They are provided on the insistence of someone other than the manager of the service to which the costs of the activity will be charged. Managerial responsibility for decisions regarding the nature and scale of such activities, and therefore their costs, is a separate consideration to how the costs should be accounted for.

2.41 The composition of the CDC is given in Section 3.

2.41.1 The following table summarises the composition of CDC. Subsequent paragraphs provide guidance on individual elements of CDC.

Service Division of service What does it include?

Corporate and Democratic Core

Democratic Representation and Management

(a) All members’ allowances and expenses, including telephone calls, postage, equipment costs, hospitality, accommodation costs, training, conference fees etc, incurred when undertaking activities on behalf of the authority, as local representatives or to represent local interests.

(b) The costs associated with local government reorganisation.

(c) The costs associated with officer time spent on appropriate advice and support activities.

(d) Subscriptions to local authority associations and provincial councils.


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Service Division of service What does it include?

Corporate and Democratic Core (continued)

Corporate Management

(a) The functions of the individual designated the head of the paid service (frequently the chief executive), except those concerned with the direct management of services or the provision of advice and support to members.

(b) Maintaining statutory registers, eg of politically sensitive posts, unused land, payments to members and members’ interests. (This excludes the costs of maintaining statutory service-specific registers.)

(c) Providing information required by members of the public in exercise of statutory rights (other than about specific services).

(d) Completing, submitting and/or publishing all service staffing returns, Statements of Accounts, annual reports, public performance reports and formal financial reports of performance.

(e) Estimating, negotiating, accounting for and allocating corporate-level resources such as capital grants; supported borrowing and other sources of capital finance; precepts; Revenue Support Grant; redistributed non-domestic rates and taxes.

(f) The costs of statutory external audit.

(g) The costs of external inspections.

(h) The costs of treasury management. In Scotland treasury management charges are appropriately charged to the Loans Fund.

(i) Bank charges, other than those that relate to accounts operated on a decentralised basis. In Scotland bank charges are appropriately charged to the Loans Fund.

(j) The costs associated with supporting a local strategic partnership.

2.41.2 Where overheads are not charged or apportioned, this fact should be disclosed. Authorities will need to recognise that CDC has not been charged to services in a note to the Statement of Accounts. Where material, it would seem reasonable to disclose CDC on the face of the Comprehensive Income and Expenditure Statement. CDC is included in the Central Services SEA.

Democratic Representation and Management2.41.3 This includes all aspects of members’ activities in that capacity, including corporate,

programme and service policy making and more general activities relating to governance and the representation of local interests. To give authorities maximum flexibility in reflecting their own constitutional arrangements, there are no recommended subdivisions of service.


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2.41.4 Activities covered include all meetings that involve members acting on behalf of the authority. This includes meetings of the council, of all policy and service committees, of joint officer/member working groups and of cabinets or similar executive groups. DRM also covers activities that members undertake as local representatives or to represent local interests. This includes:

� preparing, making, defending and opposing proposals for local government reorganisation, changes of function, boundary changes, local legislation and attending government committees on behalf of the authority or the local area

� making appointments to other public bodies and responding to their requests for information and advice

� advising voluntary bodies

� following up particular issues raised by their constituents

� attending conferences and meetings organised by local authority associations and similar organisations

� civic ceremonials, including mayor making, the granting of freedom, town twinning, civic regalia and jubilee celebrations.

2.41.5 DRM costs also include the costs associated with officer advice and support to members. This covers a range of activities, including:

� Office support services, including typing, mail handling, library and IT support.

� Professional advice and support, for example in challenging proposals that would adversely affect the council.

� The functions of monitoring officers designated under section 114 of the Local Government Finance Act 1988 and section 5 of the Local Government and Housing Act 1989, when acting in that capacity (ie the duty to consider whether proposals, actions or omissions would give rise to breaches of the law or maladministration and to report on them).

� Other procedural and legal advice relating to the conduct of meetings.

� The preparation of agendas and minutes.

� Attendance at meetings involving members, as defined in paragraph 2.41.4.

� The production of specific papers for members and/or for meetings involving members. Papers produced for management reasons which then go to members as background or for information are not DRM. The level of member involvement in the management of services will therefore affect DRM costs but not the costs borne by the service.

� Following up queries or answering questions raised by members.

2.41.6 Costs properly chargeable to DRM therefore include:

� all members’ allowances and expenses, including telephone calls, postage, equipment costs, hospitality, accommodation costs, training and conference fees

� the costs associated with officer time spent on appropriate advice and support activities, as described in 2.41.4


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� subscriptions to local authority associations and provincial councils.

2.41.7 SeRCOP states that the level of member involvement should affect the cost of DRM at an authority and not affect the cost of services. This should be interpreted as follows:

� All officer time preparing papers and attending meetings as a specific consequence of the existence of members at a local authority should be charged to DRM.

� All officer time that would have been incurred in the management of the service, if it were assumed that there were no members at the local authority, should not be included in DRM, regardless of whether members are or are not actually involved. The cost of such time is a management cost and should therefore be charged to the appropriate service.

2.41.8 For example, for the cost of processing a planning application, all routine site visits and other associated costs are to be defined as service management costs, as they have been incurred as a result of the function of the local authority as part of their responsibility for local planning services. The cost of obtaining member approval for planning applications is an additional cost of the local democratic process and should, therefore, be included in DRM. As such, DRM may include the preparation of reports specifically written for members, additional site visits undertaken for the benefit of members and officer attendance at member meetings.

2.41.9 In summary, therefore, officer support of members can be included in DRM if, and only if, the cost incurred was specifically due to the existence of elected members, and is over and above the cost incurred in the management of the service or function. Any cost that would have been incurred if members did not exist should be charged to the relevant service.

Corporate Management2.41.10 Corporate management concerns those activities and costs that provide the

infrastructure that allows services to be provided, whether by the authority or not, and the information that is required for public accountability. Activities that relate to the provision of services, even indirectly, are overheads on those services. There are no subdivisions recommended for CM.

2.41.11 Specifically, the following activities and functions are defined as within CM:

� the functions of the individual designated the head of the paid service (frequently the chief executive), except those concerned with the direct management of services or the provision of advice and support to members

� maintaining statutory registers, eg of politically sensitive posts, unused land, payments to members and members’ interests – except when those statutory registers are defined specifically as a function of the services included in the SEA

� providing information required by members of the public in exercise of statutory rights (other than about specific services)

� completing, submitting and/or publishing all service staffing returns, Statements of Accounts, annual reports, public performance reports and local performance plans


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� estimating, negotiating, accounting for and allocating corporate-level resources such as capital grants; supported borrowing and other sources of capital finance; precepts; Revenue Support Grant; redistributed non-domestic rates and taxes

� the costs associated with supporting a local strategic partnership.

2.41.12 CM also includes the following cost items:

� treasury management and bank charges

� external audit

� external inspections.

Treasury Management and Bank Charges2.41.13 The definition of CM includes the costs of treasury management and bank charges

other than those relating to accounts operated on a decentralised basis.

2.41.14 Treasury management and bank charges fit within the context of the definition of CM, which says that it concerns those activities and costs that provide the infrastructure that allows services to be provided. The nature of treasury management is also inherently corporate, since one of its functions is to manage the net cash flow needs of services across the whole authority. As one of the outcomes of the treasury management activity, those bank charges which relate to main council accounts should also be accounted for as CM. Charges for any accounts operated on a decentralised basis, eg those held by schools, should be a charge against the account holder.

2.41.15 As the Code has adopted IAS 39 Financial Instruments: Recognition and Measurement, service revenue accounts should feature two potential transactions:

� Debits reflecting the effective loss incurred when an authority makes soft loans (ie loans at less than a market rate and which therefore contain an element of financial assistance granted by the authority).

� Credits for the effective gain made when an authority is advanced a loan at less than the market rate (and which therefore contains an element of financial assistance granted to the authority) – this will be a credit at the time the loan is advanced to the service or services benefiting from the financial assistance. If very rarely the service(s) benefiting from the element of financial assistance contained in the loan cannot be identified, the gain should be included within Taxation and Non-specific Grant Income.

Debits and credits relating to the recognition and subsequent measurement of financial guarantees should also be included in the total cost of the service(s) whose objectives are furthered by the giving of the guarantee.

2.41.16 The CIPFA publication Treasury Management in the Public Services: Code of Practice and Cross-Sectoral Guidance Notes (the TM Code), which was fully revised in 2011, contains a definition of treasury management. The adoption of the recommendations of the TM Code by an individual local authority in England and Wales gives it the status of ‘proper practice’ under the 1989 Act within that authority. For Scottish authorities, Finance Circular 5/2010 (The Investment of Money by Scottish Local Authorities)


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requires that authorities comply with both the Treasury Management Code and the Prudential Code issued by CIPFA, or explain the reasons for non-compliance.

2.41.17 The definition of treasury management in the TM Code is:

The management of the organisation’s investments and cash flows, its banking, money market and capital transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.

2.41.18 For consistency with the TM Code, SeRCOP adopts the definition of treasury management used within the TM Code. This definition will be updated for any revisions to the approved TM Code in future years.

2.41.19 With reference to the definition of treasury management given above, these costs are generally at a higher level than the costs of bank reconciliation. This normally includes the routine checking that the authority’s internal records agree with transactions recorded by the bank and are outside the definition of ‘treasury management’. However, activities such as checking that the timings of in-payments to the bank are optimal should be included as CM.

2.41.20 In Scotland, bank charges and treasury management costs should be charged to the consolidated loans fund, where appropriate.

External Audit2.41.21 The costs of statutory external audit including value for money (VFM) work are included

in the definition of CM. This is on the basis that, as a large amount of the external audit fee relates to the annual audit of the financial statements and reviews of corporate governance arrangements, the costs involved should be viewed as corporate.

2.41.22 This includes VFM work, where it is recognised that while VFM reviews could very reasonably be associated with specific services, to avoid year-on-year distortions these costs are included as a part of CM. This does not include work done by external auditors which would otherwise be done within the authority or by separate contractors, eg consultancy work. Also excluded is work done by the external auditor in relation to the auditing of grant claims. Such costs must be charged to services, including CDC, if the grant claim is of a corporate nature. Where such work includes a reimbursement, it should be treated as income. Other activities that may or may not be done by the external auditor should be accounted for according to the nature of the activity concerned.

2.41.23 The advantage of including external audit within CM is that it reflects the above argument and relieves authorities of what is inevitably an artificial allocation exercise. It also accounts for a key aspect of public accountability alongside related activities, such as the preparation of the accounts and the annual report. The disadvantage could be that it excludes from total cost something which is a legitimate charge both on single-purpose authorities and on much of the private sector. Private companies, however, would not necessarily allocate annual audit costs to operational units.


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External Inspections2.41.24 Local authorities and other authorities in England and Wales are subject to external

inspections. Authorities are required to bear the costs associated with these where they are undertaken by the Audit Commission Directorate of Inspection, rather than by the specialist inspectorates. Inspections are likely to concentrate on particular functions or groups of functions and the associated costs will vary significantly from year to year. The inclusion of such costs within service total costs could have a significant distorting effect and should, therefore, be accounted for as a corporate management cost.

Costs Excluded from the Definition of Corporate Management2.41.25 CIPFA receives regular enquiries about whether or not the following activities should be

included in the costs of CM.

Cross-service/Community Initiatives2.41.26 Most local authorities are currently participating in initiatives that cross services, such

as economic regeneration, sustainability and youth training or other initiatives that are being developed as a part of an authority’s community strategy under the Local Government Act 2000. Many authorities have questioned whether or not some or all of these costs, including start-up costs, should be included as CM. Such corporate initiatives are usually for the benefit of one or more of the services of an authority and therefore should be allocated to the relevant service divisions. The Community Development service division has been included in the Environmental Services SEA to accommodate the costs of many types of community initiative.

Cost of Chief Officers2.41.27 Chief officers other than the chief executive are appointed primarily to be responsible

for particular services provided by an authority. Whilst they may engage in activity which has cross-authority significance, SeRCOP takes the line that, given the increasing nature of such activity, centralisation of such costs would increasingly distort the costs of service delivery. Therefore, costs of chief officers are to be charged to services. Where a chief executive also acts as a chief officer for part of his or her time, eg chief executive and director of finance (excluding those functions of the director of finance that may be classified as DRM), costs should be allocated between CM and the service. It should be noted that where chief officers or other officers are specifically responsibly for the activities defined as CM, then such costs should be allocated to that service division.

The Costs of Producing the Budget2.41.28 Most of the work entailed in producing the budget is a management requirement,

chargeable to services, not CDC. (The preparation of budget strategy options or covering papers to the budget setting out options and requiring decisions would, however, be DRM and, thus, CDC.) In this case, the detailed service budgets can be seen as background information against which members are being asked to make decisions. The reference under CM to estimating, negotiating, etc, corporate resources specifically


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concerns the allocation of capital grants, precepts, etc, which fund the budget of the authority.

2.42 Other central costs not included within the total cost of individual services are those that are defined as Non Distributed Costs (NDC). In summary, they comprise:

(a) Past service costs relating to retirement benefits (if any) – for a defined benefit scheme these costs are defined by the Code as the change in the present value of the defined benefit obligation for employee service in prior periods, resulting from a plan amendment (the introduction or withdrawal of, or changes to, a defined benefit plan) or a curtailment (a significant reduction by the authority in the number of employees covered by a plan).

2.42.1 IAS 19 definitions of past service costs, and gains and losses on settlements, relate to decisions in the current year whose effects are influenced by employees’ service earned in preceding financial years. Thus IAS 19 defined past service costs (and gains and losses on settlements) are not costs which relate to the current service provision or the current service of the employee and therefore should not be included in the definition of total cost.

2.42.2 Past service costs (for a defined benefit scheme) are defined by the Code as the change in the present value of the defined benefit obligation for employee service in prior periods, resulting from a plan amendment (the introduction or withdrawal of, or changes to, a defined benefit plan) or a curtailment (a significant reduction by the authority in the number of employees covered by a plan). Note that the definition of past service costs now includes curtailments

2.42.3 A plan amendment occurs when an authority introduces, or withdraws, a defined benefit plan or changes the benefits payable under an existing defined benefit plan.

2.42.4 A curtailment occurs when an authority significantly reduces the number of employees covered by a plan. A curtailment may arise from an isolated event, such as the closing of a part of an authority, the discontinuance of an operation or the termination or suspension of a plan.

2.42.5 Past service cost may be either positive (when benefits are introduced or changed so that the present value of the defined benefit obligation increases) or negative (when benefits are withdrawn or changed so that the present value of the defined benefit obligation decreases).

2.42.6 Where a defined benefit plan’s benefits payable are reduced at the same time as the benefits payable are increased under the plan for the same employees, the authority shall treat the change as a single net change.

2.42.7 Past service costs are a non-periodic cost – they arise from decisions taken in the current year, but whose financial effect is derived from years of service earned in earlier years. For instance, if scheme regulations were amended to increase the multiplier derived from years of service applied to final salaries in calculating pensions, total liabilities would rise but the majority of this rise would not relate to employee activity in the current year. It is therefore presented separately from the current service cost.


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2.42.8 The Code requires that unfunded discretionary benefits should be accounted for on a defined benefit basis. Discretionary benefits include added years liabilities. These should be treated in accordance with other past service costs and be recognised when the benefits vest. All added years liabilities should be excluded from the definition of the total cost of the service. However, local authorities may wish to ensure service accountability for these decisions by including added years liabilities within service budgets.

2.42.9 Unfunded discretionary benefits arrangements – unfunded defined benefit schemes for teachers and local authority employees where the costs fall directly on the employer – should be accounted for on a defined benefit basis and included in Non Distributed Costs.

2.42.10 Recognition of past service costs refers to the process of an entitlement to benefits becoming unconditional, not to when payment falls due. In most cases recognition will be immediate, but there might be instances where increased benefits are phased in over more than one year, whereupon a straight-line allocation across the years will be necessary.

(b) Gains and losses on settlements relating to retirement benefits (if any) – these are defined by the Code.

2.42.11 The Code defines settlements as follows:

A settlement is a transaction that eliminates all further legal or constructive obligations for part or all of the benefits provided under a defined benefit plan, other than a payment of benefits to, or on behalf of, employees that is set out in the terms of the plan and included in the actuarial assumptions.

2.42.12 Settlements have the effect of extinguishing a portion of the plan liabilities, usually by transferring plan assets to or on behalf of plan members to their new employer or an insurance company in settlement of the obligation and include:

� a lump-sum cash payment to scheme members in exchange for their rights to receive specified pension benefits

� the purchase of an irrevocable annuity contract sufficient to cover vested benefits

� the transfer of scheme assets and liabilities relating to a group of employees leaving the scheme.

(c) The costs associated with unused shares of IT facilities.

(d) The costs of shares of other long-term unused but unrealisable assets.

2.42.13 These headings cover the cost of portions of computer mainframes and integrated systems that are unused as a result of loss of work caused by outsourcing or the loss of a function or area, and an appropriate share of the cost of other long-term unused but unrealisable assets.

2.42.14 Their inclusion within Non Distributed Costs reflects the reality that there is no service to charge costs on to because those costs relate to unused capacity (IT or otherwise). Where services are using the capacity, whether by choice or otherwise, they should be bearing their fair share of the cost. Similarly, if previous decisions about, for example,


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the choice of IT system have resulted in a cost which might be higher than the services concerned would wish, they still have to bear the full cost.

2.42.15 These two subdivisions should only be used in the narrowly defined way described; they are not a general mechanism to insulate services from the cost impact of past decisions. Whilst some may consider that their identification in this way may reduce the incentive to plan for their demise, an alternative view is that their separate identification makes the additional costs more conspicuous than if they were obscured within an overhead allocation.

(e) impairment losses relating to assets under construction and impairment and revaluation losses of surplus assets held for disposal (but which do not satisfy the criteria in the Code to be classified as held for sale) and depreciation on the latter category of assets

2.42.16 Impairment and/or revaluation losses relating to any non-operational assets – ie assets under construction and other surplus assets not classified as held for sale (other than investment properties) form part of Non Distributed Costs. Costs associated with abortive capital projects are not impairments, and should be charged to the relevant service revenue account (see paragraph 2.13.4 of SeRCOP).

2.42.17 Surplus assets are those assets which are not being used (or developed for future use) by a service, but which do not meet the criteria to be classified as either investment property or assets held for sale.

(f) the revenue expenditure involved in holding surplus assets (eg security costs)

2.42.18 Where overheads are not charged or apportioned, this fact should be disclosed. Authorities will need to recognise this in a note to the Statement of Accounts. Where material, Non Distributed Costs should be disclosed on the face of the Comprehensive Income and Expenditure Statement. Non Distributed Costs are included in the Central Services SEA.

2.43 Although none of these costs (ie DRM, CM or NDC) is within the total cost of any service, there are arguments that accounts such as the HRA and, for administering authorities, the pension fund should be required to contribute towards their funding.

2.44 It should be noted that such contributions should only take place in order to comply with statutory requirements.

2.45 The basis on which such contributions are made must follow relevant legislation and should reflect the same principles as those governing the apportionment of overheads. Any contribution or change in the methodology used to derive such contributions must be clearly disclosed.

DEFINITION OF TOTAL COST FOR GROUP ACCOUNTS2.46 Many authorities have interests in companies and other entities that will need to be

encompassed in arrangements for financial reporting, particularly group accounts in the Statement of Accounts. In order to bring financial information from different entities together effectively, variations are required from the accounting policies that would normally be applied by local authorities. The principle of total cost remains applicable to group reporting, so that authorities should follow the principles set out in paragraphs 2.10 to 2.23


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for the purposes of establishing total cost for the financial reporting of group activity, but with the following differences:

� Where the activities of a subsidiary can be identified to service headings, gross total cost for services should include any impairment of goodwill that arose on the acquisition of an interest in a subsidiary. Where this is not possible, impairment of goodwill should be presented as a separate line in net expenditure of continuing operations.

� Where the activities of a subsidiary can be identified to service headings, the operating results of subsidiaries should be allocated or apportioned as income and expenditure to the group total cost of the services. Where this is not possible, a separate line or lines describing the activity should be included alongside the SEA services.

� Transactions between the authority and its subsidiaries should be eliminated from the group income and expenditure included in total cost.

� Where transactions between the authority and its subsidiaries, associates and joint ventures have resulted in unrealised profits on the disposal of non-current assets, the unrealised profits should be eliminated from group total cost.

� Apart from any unrealised profits covered by the previous item, no adjustment should be made to total cost figures for services for associates and joint ventures consolidated using the equity method. The authority’s share of the operating profits of associates and joint ventures is shown as a separate line in the Surplus or Deficit on the Provision of Services (ie below the net cost of services line).

SECTION 3

Service Expenditure Analysis for England and Wales

INTRODUCTION3.1 This section sets out a Service Expenditure Analysis (SEA) of local authority (LA) expenditure.

The duty of Best Value has applied to English and Welsh local authorities from 1 April 2000 and has increased expectations about:

� the level of detail that will be available from local authority accounts

� the degree to which the accounts of Best Value authorities can be compared

� the extent to which a single set of financial records should be compatible with the diverse reporting requirements placed upon local authorities.

To reflect the Transparency agenda, BVACOP was renamed the Service Reporting Code of Practice for Local Authorities (SeRCOP).

3.2 The SEA:

� complements existing subjective frameworks for analysing local authority activity

� supersedes the existing SEA issued in December 2013.

THE SUBJECTIVE ANALYSIS3.3 Every item of expenditure or income can be analysed in terms of both the new SEA and on a

subjective basis. This is required to enable local authorities to meet government reporting requirements; specifically, for completing the DCLG subjective analysis return. The subjective analysis is also a key management control and information tool. The revised standard subjective analysis is included in Section 4.

FORMAT OF THE SERVICE EXPENDITURE ANALYSIS3.4 Figure 1 shows how the format of the revised SEA for each service (eg Adult Social Care,

Children’s and Education, Housing) has been analysed across a number of mandatory service divisions. In turn, most service divisions are split into several discretionary subdivisions. Finally, a guidance note supports each SEA that:

� indicates or defines those activity areas and expenditure items that should be included in each subdivision

� states the date when the new analysis comes into force.


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Figure 1: An Illustration of the SEA Hierarchy

Children Looked After service

division

Family centres subdivision

Services for the under 8s

subdivision

Direct payments subdivision

Home care subdivision

Equipment and adaptations subdivision

Children Looked After service

division

Service: Social Services (England and Wales)

Guidance note on content and definitions of each subdivision of service

Youth Justiceservice division

3.5 The aim of the hierarchy within the new SEA is to promote consistency between local authorities in terms of the format and comparability of financial performance reporting. To achieve this, a common format of service divisions and subdivisions is recommended:

� Service divisions represent the mandatory level to which all local authorities are expected to be able to aggregate their costs. This is also the minimum level at which total cost is expected to be applied. Occasionally, where a particular performance indicator relates to an item shown at the subdivision level, total costs will need to be accounted for at the lower level.

� Subdivisions represent a recommended but discretionary sub-aggregation of costs. Authorities are encouraged to follow these as closely as possible, given their local circumstances. The basis for this recommendation is that benchmarking, which is central to the comparison element of Best Value, will be much easier if financial information is broadly similar at this lower level of detail.

� The guidance note items may or may not apply to individual local authorities. The purpose of the guidance notes is to promote consistency between local authorities’ accounting records. So it is important that, where the items in the guidance notes do apply to a local authority, it must account for them in the service division identified on the guidance note regardless of local management arrangements.

3.6 It should be emphasised that local authorities have total organisational freedom. Indeed, Best Value encourages innovative organisational arrangements. Lower-level detail will, in practice, reflect this freedom and will normally follow local organisational and managerial arrangements. The important issue is that, regardless of organisational arrangements in place, the aggregation of costs at service division level is consistent between local authorities so that comparisons can be made.

SECTION 3 \ SERVICE EXPENDITURE ANALYSIS FOR ENGLAND AND WALES

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THE PRINCIPLE OF TOTAL COST3.7 The third principle of Best Value accounting requires that total cost is the basis of financial

reporting. Total cost is defined in Section 2. The total cost principle applies to each item at the mandatory service division level in the SEA. Specifically, this means that, in addition to direct costs, each division of service must include an appropriate share of:

� depreciation

� impairment loss identified on assets used to provide the services of an authority

� revenue expenditure funded from capital under statute

� amortisation of intangible assets

� support service overheads

� current service (pensions) costs per IAS 19 Employee Benefits.

Key to the comparability of costs between different authorities is the consistent apportionment of these costs across the service divisions. SeRCOP provides good practice guidance, including a set of general principles to apply in accounting for these costs.

STATUS OF THE SERVICE EXPENDITURE ANALYSIS3.8 The new SEA that follows supersedes all previous versions that apply to England and Wales.

The date of application of each part of the SEA is clearly stated in the guidance notes relating to each individual service.

THE SERVICE EXPENDITURE ANALYSIS3.9 The following individual services are presented, demonstrating the breakdown of the

hierarchy of service divisions and subdivisions, followed by guidance notes to further explain the definitions of those service divisions and subdivisions:

� Adult Social Care (England)

� Adult Social Care (Wales)

� Central Services

� Children’s and Education Services

� Cultural and Related Services

� Environmental and Regulatory Services

� Fire and Rescue Services

� Highways and Transport Services

� Housing Services

� National Parks

� Planning Services

� Police Services

� Public Heath (England only).


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Adult Social Care (England)

In 2014/15 a new Service Expenditure Analysis (SEA) for Adult Social Care (ENGLAND ONLY) was introduced.

The revision was as a result of the work carried out with the Health & Social Care Information Centre (HSCIC), local authorities and the Department of Health on the new joint CIPFA/HSCIC Adult Social Care Finance Return (ASC-FR), which will replace the PSSEX1 return for 2014/15. Further details of the ASC-FR are available at www.hscic.gov.uk/socialcarecollections2015

The Adult Social Care SEA was introduced as part of the Best Value Accounting Code of Practice 2007, replacing the Social Services SEA. At the same time, Children’s Social Care was transferred to the new Children’s and Education Services SEA.

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR ADULT SOCIAL CARE

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR ADULT SOCIAL CARE

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE

www.hscic.gov.uk/socialcarecollections


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Divisions of Service (Mandatory)

Subdivisions of Service (Discretionary)

Physical Support

� adults (18–64)

(Attributable data)

� Long Term support – nursing

� Long Term support – residential

� Long Term support – supported accommodation

� Long Term support – community: direct payments

� Long Term support – community: homecare

� Long Term support – community: supported living

� Long Term support – community: other Long Term care

� Short Term support to maximise independence

� Other Short Term support.

� older people (65+) � Long Term support – nursing









Sensory Support

� adults (18–64)

(Attributable data)




















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Support with Memory and Cognition

� adults (18–64)

(Attributable data)



















Learning Disability Support

� adults (18–64)

(Attributable data)




















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Mental Health Support

� adults (18– 64)

(Attributable data)



















Social Support – Substance Misuse Support

(Attributable data)

Social Support – Asylum Seeker Support

(Attributable data)

Social Support – Support for Carer

(Attributable data)

� Community: direct payments

� Community: other support for carer.

Social Support – Social Isolation

(Attributable data)

Assistive Equipment and Technology

(Attributable data)

Social Care Activities (Non-attributable data)

Information and Early Intervention

(Non-attributable data)

Commissioning and Service Delivery

(Non-attributable data)

Note 1: The transfer of children’s social care to the new Children’s and Education Services SEA in 2007 reflected the requirement for local authorities to have a director of children’s services in place from 1 April 2008. It is acknowledged that the level of integration of services under a children’s services directorate will vary between authorities and between England and Wales. However, by retaining the mandatory divisions for Education Services and Children’s Social Services set out in the 2006 BVACOP, authorities should be able


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to account for these services on a basis that is consistent with previous years. This should also provide sufficient flexibility for authorities to continue to complete CIPFA and government statistical returns and to preserve trends.

Note 2: SeRCOP makes it clear that Corporate and Democratic Core costs and Non Distributed Costs should be kept separate from the SEA above.

Note 3: This guidance should be read in conjunction with the introduction to the SEA for all local government services and CIPFA’s principles for Best Value accounting (see the LAAP pages on the CIPFA website – click on Policy & Guidance > Technical Panels and Boards > Local Authority Accounting Panel).

Note 4: The subjective analysis will need to be capable of splitting all the services above between in-house and bought-in provision.

Note 5: Apportionment bases should be determined in accordance with CIPFA’s best practice guidance, which is in line with the seven principles of apportionment specified in Section 2 of SeRCOP.


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INTRODUCTION1 The aim of this guidance is to ensure different local authorities’ adult social care financial

records are on as consistent a basis as possible and to allow local authorities to meet the majority of their financial reporting commitments from a single set of base financial records.

2 The guidance is not intended to influence how different authorities are organised on the ground. This is not CIPFA’s role and is contrary to the spirit of Best Value, which encourages innovation. The guidance merely seeks to provide a means for a comparable aggregation of the costs of social services, regardless of how they are organised. The ability to compare services is one of the four key strands of Best Value, namely to:

� make comparisons

� challenge how things are done and what is done

� consult widely on service provision

� demonstrate competitiveness.

WHAT TO INCLUDE IN THE SERVICE EXPENDITURE ANALYSIS3 SeRCOP states that Corporate and Democratic Core costs and Non Distributed Costs should

not be allocated or apportioned to other divisions of service.

4 Guidance on what to include in each division of service follows in Part Three. It is important for consistent reporting purposes to attribute each client to one long-term client group only and according to that client’s primary support reason. It is possible that clients will have additional short-term episodes of care which might be recorded against a different primary support reason.

5 This means that, as far as it is practical, costs should be recorded on a client basis rather than an establishment basis. In practice, this means, for example, that if a residential care home that is used mainly by older people with learning disabilities is also attended by several adults aged 18–64 with physical disabilities, the costs of the residential care home should be apportioned between the two primary support reasons.

6 A few other basic rules are that:

� Expenditure should include payments funded by grants.

� Income and expenditure should each be shown gross. Do not net one off against the other, eg show contributions by clients towards the cost of their care as income.

� Social care management and support service costs should be separated for children’s and adult social care and apportioned to the division of service that benefits from them.

7 Under section 256 of the National Health Service Act 2006 (formerly section 28a of the NHS Act 1977), health authorities can reimburse local authority expenditure. This should be


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recorded in the appropriate service division(s) or subdivision(s). Contributions from the health authority should be recorded as income.

OVERHEAD APPORTIONMENT 8 Whenever there is a need to apportion costs over more than one division of service, reference

should be made to CIPFA’s current guidance on the principles of cost apportionment specified in Section 2.

JOINT ARRANGEMENTS AND POOLED BUDGETS9 Detailed guidance on accounting for pooled budget arrangements are included in the CIPFA

publication Pooled Budgets: A Practical Guide for Local and Health Authorities. As the following extract from the 2001 edition of that document explains, the basic rule is that each partner accounts for its own contribution to the joint arrangement or pooled budget:

Given the nature of the pooled budget arrangement, each partner should account for their contribution to the budget. The host should send monitoring reports on a quarterly basis and at the year end prepare a memorandum of accounts within their statement of accounts that shows what has been received, and spent, and what remains. This memorandum of accounts will be sent to each of the partners at the year end for inclusion in their statement of accounts. Records will need to be retained for at least six years.

10 Ideally, the contribution will be accounted for across the SEA according to actual spending as recorded in the quarterly monitoring reports mentioned above, which should be based upon the pooled budgets management accounts.

11 Contributions by the NHS or other third parties towards the costs of services provided and managed by local authority social care should be included as income in the authority’s accounts. The gross costs of the services provided should be included as expenditure.

12 An authority’s contribution to a care trust should also be recorded in the appropriate service division(s) according to actual spending.

SUPPORTING PEOPLE – ANCILLARY EXPENDITURE13 If authorities identify expenditure in occasional or ancillary services within Adult Social Care

service divisions as Supporting People expenditure, then the expenditure should be included in the appropriate primary support reason in the Adult Social Care division of service. For core Supporting People expenditure, see Housing General Fund.


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STATUS AND IMPLEMENTATION14 This SEA for Adult Social Care replaces all previous versions issued by CIPFA and is mandatory

for English authorities from 1 April 2015. SeRCOP 2015/16 applies to the following statutory disclosures:

� 2015/16 Budgets

� 2015/16 Performance Indicators

� 2015/16 Statement of Accounts.

UPDATING THE GUIDANCE15 CIPFA is dedicated to keeping the guidance up to date and it will be reviewed on an annual

basis as a minimum.


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Service Divisions and Subdivisions

Includes

Physical Support Services attributable to adults where the primary support reason for their care is related to physical support. Include support with access and mobility and the more intensive support described as personal care support (as defined in the Health and Social Care Act 2008).

Costs should be analysed according to the following age groups:

� Adults (18–64)

� Older people (65+).

Long Term support – nursing

Long Term support encompasses any service or support which is provided with the intention of maintaining quality of life for an individual on an ongoing basis, which has been allocated on the basis of eligibility criteria/policies (ie an assessment of need has taken place), and which is subject to regular review.

Exclude any Short Term episodes intended for a time-limited period.

Costs should be analysed according to age:

� Adults (18–64)


Include Long Term placements in:

� Care homes with nursing care registered by health authorities and by definition requiring trained nursing staff to be present

� Nursing care beds in dual registered homes.

Local authorities should record their contributions to nursing care placements in this subdivision of service, even if this contribution is residential placement for this care.

Long Term support – residential


Include residential care direct payments.



� Adults (18–64)



� Homes registered under Registered Care Homes Act 1984

� Residential care beds in dual registered homes.


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Includes

Long Term support – supported accommodation




� Adults (18–64)



� Adult placement schemes (Shared Lives)

� Hostels

� Unstaffed homes

� Partially staffed homes

� Group homes.

Long Term support – community: direct payments




� Adults (18–64)


Direct payment describes a payment process where support is given via the issue of monetary payments directly to adult clients who have been assessed as needing certain services (eg the issue of a personal budget solely via direct payment of funds to the recipient).

Exclude the cost of administering the payments to clients; this should be included under Commissioning and Service Delivery.

Exclude grants to voluntary organisations that support direct payments users; these should be included under Information and Early Intervention.

Exclude direct payments to support carers of adults with physical support needs, which should be included under Social Support: Support for Carer.


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Includes

Long Term support – community: homecare




� Adults (18–64)


Homecare or domiciliary care provided in an individual’s own home, normally of a personal nature, to enable an individual to continue with their daily life (eg help with eating or drinking, toileting, washing or bathing, dressing, oral care or the care of skin, hair and nails). It may also include prompting and supervision of an individual’s self-care.

Long Term support – community: supported living




� Adults (18–64)


Supported living covers a range of services that support people to live as independently as possible in the community. Service users are responsible for their own tenancies, own their home or are living with family or friends. They receive an agreed level of care and support tailored to their individual needs. Service users’ support needs may vary, from those who are very able and receive support for a few hours a week to those who require support 24 hours a day.

Long Term support – community: other Long Term care




� Adults (18–64)



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Includes

Short Term support to maximise independence

All episodes of support provided that are intended to be time-limited and to maximise the independence of the individual and reduce/eliminate their need for ongoing support. At the end of the support, a review or assessment for ongoing care will take place to determine what will follow.

Such an assessment or review will need to have taken place several weeks after the start of the episode. This does not mean that the actual service has ceased, but that a review has been held, the support need has been assessed or reviewed, a decision to continue or not has been made, and a sequel can be clearly identified.


� Adults (18–64)


Short Term support to maximise independence includes reablement services.

Exclude any episodes of respite care that may also be time-limited. This support is usually provided as part of a longer-term support package for a client, is commissioned only because of the existence of a carer who needs support, and is considered a carers’ service.

Exclude emergency support (ie not to maximise independence but a crisis support service), which should be included in ‘Other Short Term support’.

Exclude assistive equipment and technology.

Other Short Term support All episodes of support provided that are intended to be time-limited but are not intended to maximise the independence of the individual (eg emergency support following a spell in hospital). At the end of the support, a review or assessment will take place to determine what will follow.

Please note that it is possible for a client to have concurrent short and Long Term support ; for example, an existing (ongoing) Long Term support client who could benefit from Short Term support because of a change in their situation or circumstances (eg a spell in hospital as an emergency). The costs of support for such clients should be allocated separately to the underlying intentions behind each form of support, ie the costs of the client’s Short Term support included in the Short Term measure, with the costs of their ongoing Long Term support included in the Long Term measure.


� Adults (18–64)


Exclude assistive equipment and technology.

Sensory Support Services attributable to adults where the primary support reason for their care is related to sensory support. Include visual impairment, hearing impairment or dual impairment.


� Adults (18–64)



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Includes


See the definition above for Physical Support and relate it to Sensory Support.















Other Short Term support See the definition above for Physical Support and relate it to Sensory Support.


Services attributable to adults where the primary support reason for their care is related to Support with Memory and Cognition. Include support and services for clients with conditions affecting their thinking, knowing, awareness and remembering processes.


� Adults (18–64)



See the definition above for Physical Support and relate it to Support with Memory and Cognition.












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Includes





Other Short Term support See the definition above for Physical Support and relate it to Support with Memory and Cognition.

Learning Disability Support

Services attributable to adults where the primary support reason for their care is related to learning disability support. Include services provided to assist individuals with understanding new or complex information and learning and applying new skills.


� Adults (18–64)



See the definition above for Physical Support and relate it to Learning Disability Support.















Other Short Term support See the definition above for Physical Support and relate it to Learning Disability Support.


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Includes

Mental Health Support Services attributable to adults where the primary support reason for their care is related to mental health support. Include conditions or disorders of the mind involving thoughts, behaviours, and emotions that cause significant distress to either the person him/herself or others. Significant distress can mean the person is unable to function, meet personal needs on their own, or are a danger to themselves or others.


� Adults (18–64)



See the definition above for Physical Support and relate it to Mental Health Support.















Other Short Term support See the definition above for Physical Support and relate it to Mental Health Support.

Social Support – Substance Misuse Support

Services attributable to all adults where the primary support reason for their care is related to social support: substance misuse support.

These are services or interventions for clients who have regular and problematic intoxication through excessive consumption of and/or dependence on psychoactive substances. It includes the use of both legal and illegal drugs and includes alcohol.

Examples of the types of services offered for substance misuse include:

� Community drug & alcohol services

� Rehabilitation

� Harm reduction interventions


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Includes

Social Support – Asylum Seeker Support

Services or interventions for registered asylum seekers. Includes:

� Supported access to health, housing or education services

� Language/interpreter support

� Providing advice and information

� Access to legal advice.

Social Support – Support for Carer

Services attributable to adults and younger carers of adults where the primary support reason for their care is related to social support – support for carer. Include services or interventions undertaken in order to support an individual in their role of caring for another person.

Community: direct payments

Direct payment describes a payment process where support is given via the issue of monetary payments directly to clients who have been assessed as needing certain services (eg the issue of a grant payment to support a carer). Include the value of direct payments made to support all carers regardless of the primary support reason of the adult they are caring for.

Community: other support for carer

Include any other services attributable to supporting carers.

Social Support – Social Isolation

This includes support provided with the intention of reducing the social isolation of individuals, such as sitting and befriending services.

Assistive Equipment and Technology

Include costs attributable to all adults regardless of their primary support reason.

Include:

� All items of equipment or minor adaptations funded by the authority with the intention of helping an individual in their daily living, including to have a greater sense of reassurance

� The cost of telecare service contracts

� The cost of maintenance contracts and safety inspections.

Exclude equipment grant-aided by central government or funded by the authority’s housing service.


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Includes

Social Care Activities (non-attributable costs)

Includes any staff or other revenue expenditure associated with social work practice in relation to supporting individuals through a care or risk management process.

Include:

� Assessment. Front-line assessment of clients, including through initial allocation or intake functions.

� Review. Front-line reviews of clients.

� Care management. Providing other care management activities with clients, such as detailed planning of support to meet their eligible needs, brokerage and navigation following a statutory assessment or review; and ongoing professional support.

� Safeguarding. Supporting all aspects of front-line safeguarding activity, from raising initial concerns to investigations and developing safeguarding plans to minimise risk.

� Costs associated with undertaking carers’ assessments and reviews or providing professional support to carers.

Exclude expenditure associated with commissioning or infrastructure.

Exclude expenditure associated with the care, support and daily living solutions resulting from this care management process (with the exception of professional support), whether low-level preventative, Short Term or Long Term.

Information and Early Intervention (non-attributable costs)

Includes expenditure on any service or support for which there is no test of eligibility and no requirement for review.

Include:

� Information and advice. Expenditure on advice and publication teams, leaflets and advertising, websites and other information channels.

� Screening and signposting. Investment in contact centres, one-stop shops, advice services, etc.

� Prevention/low-level support. Non-attributable costs for drop in centres, supported luncheon clubs, falls prevention and low-level brokerage services (eg supporting access to full costed services such as gardening or shopping).

� Independent advocacy. Costs of supporting advocacy and associated functions.

Exclude expenditure associated with front-line access of clients to assessment or care management processes, including safeguarding.

Exclude expenditure associated with the resulting care, support and daily living solutions themselves, whether Short Term or Long Term.

Exclude expenditure associated with assistive equipment and technology.

Exclude expenditure associated with commissioning or infrastructure.


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Includes

Commissioning and Service Delivery (non-attributable costs)

Includes expenditure on commissioning or commissioning-related functions and infrastructure costs.

Include:

� Strategic business direction (eg needs analysis, policy or strategic development)

� Business planning (including business development, performance and budget planning and monitoring)

� Commissioning and de-commissioning functions

� Commissioning, procurement and management (including market management, contract procurement and provider monitoring)

� Communications and personal protective equipment

� Governance and support (eg admin, finance, IT and information management, legal, non-front-line quality assurance, audit and risk management)

� Responding to complaints and complaint management

� Infrastructure: building and premises management, IT.

Exclude front-line facilitation of clients’ access to assessment or care management, including safeguarding.

Exclude expenditure associated with the resulting care, support and daily living solutions themselves, whether low-level preventative, Short Term or Long Term.

Note 1: The Health & Social Care Information Centre (HSCIC) will not require an analysis of Social Care Activities, Information and Early Intervention or Commissioning and Service Delivery.

Note 2: The HSCIC intends to request additional financial data for each primary support reason relating to older people (65+) analysed on a voluntary basis for 2015/16. The additional voluntary analysis will be for older people aged 65–74, older people aged 75–84 and older people aged 85+

Note 3: The HSCIC intends to collect some data comparable to that collected in previous years in order to maintain a minimum time series. The proposed data items would be collected for two age groups only – ‘18–64’ and ‘65+’ – and would include the apportionment of overheads. The required analysis will be as follows:

� Total gross and net expenditure on assessment and care management

� Total gross and net expenditure on residential and nursing care

� Total gross expenditure on home care services

� Total gross expenditure on community-based services excluding home care

� Total fairer charging income in relation to home care and day care services

� Total gross and net expenditure on direct payments

� Other gross and net expenditure (including supported accommodation and supporting people)

� Net total expenditure (for 18–64 and 65+).

� This reflects the changes requested to the bridging year data in the new finance proforma.

Note 4: HIV/AIDS is now considered a health condition and is not a primary support reason.


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Adult Social Care (Wales)

The Adult Social Care SEA was introduced as part of the Best Value Accounting Code of Practice 2007, replacing the Social Services SEA. At the same time, Children’s Social Care was transferred to the new Children’s and Education Services SEA.





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Service Strategy � Strategic management

� Complaints procedures.

Older People (Aged 65 or Over) including Older Mentally Ill

� Assessment and care management

� Nursing care placements

� Residential care placements

� Supported and other accommodation

� Direct payments

� Home care

� Day care/day services

� Equipment and adaptations

� Meals

� Other services to older people.

Adults Aged Under 65 with a Physical Disability or Sensory Impairment





� Direct payments

� Home care



� Meals (if significant)

� Other services to adults with a physical disability or sensory impairment.

Adults Aged Under 65 with Learning Disabilities





� Direct payments

� Home care




� Other services to adults with learning disabilities.

Adults Aged Under 65 with Mental Health Needs





� Direct payments

� Home care


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Adults Aged Under 65 with Mental Health Needs (continued)




� Other services to adults with mental health needs.

Other Adult Services � Assessment and care management

� HIV/AIDS

� Substance abuse (addictions)

� Asylum seekers

� Other adult services.

Support Service and Management Costs (optional holding accounts)

Note: all costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed. Apportionment bases should be determined in accordance with SeRCOP.

� Management and administration

� Central advisory, policy and development units (including BV)

� Information and communication technology

� Training

� Transport (other than for clients)

� Catering (other than for clients)

� Personnel/HRM

� Finance (including internal audit)

� Legal services

� Property services

� Quality assurance

� Contract negotiation

� Welfare rights service

� Generic advocacy services

� Others not specified above.

Note 1: The transfer of children’s social care to the new Children’s and Education Services SEA in 2007 reflected the requirement for local authorities to have a director of children’s services in place from 1 April 2008. It is acknowledged that the level of integration of services under a children’s services directorate will vary between authorities. However, by retaining the mandatory divisions for Education Services and Children’s Social Services set out in the 2006 BVACOP, authorities should be able to account for these services on a basis that is consistent with previous years. This should also provide sufficient flexibility for authorities to continue to complete CIPFA and government statistical returns and to preserve trends.



Note 4: The subjective analysis will need to be capable of splitting all the above services between in-house and bought-in provision.

Note 5: Apportionment bases should be determined in accordance with CIPFA’s best practice guidance which is in line with the seven principles of apportionment specified in Section 2 of SeRCOP.


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INTRODUCTION1 The aim of this guidance is to ensure different local authorities’ social services financial

records are on as consistent a basis as possible and to allow local authorities to meet the majority of their financial reporting commitments from a single set of base financial records.

2 The guidance is not intended to influence how different authorities are organised on the ground. This is not CIPFA’s role and is contrary to the spirit of Best Value, which encourages innovation. The guidance merely seeks to provide a means for a comparable aggregation of the costs of social services, regardless of how they are organised. The ability to compare services is one of the four key strands of Best Value, namely to:







4 Guidance on what to include in each division of service follows in Part Three. It is important for consistent reporting purposes to attribute each client to one client group only on the following basis:

� The term ‘older people’ refers to all people aged 65 or over even if the primary need for support is not related to age. In particular, older mentally ill, learning disabled, physically disabled, etc should be included as older people.

� The adult HIV/AIDS and the substance abuse headings are only to be used where the primary need for support stems from the HIV/AIDS condition or the abuse/addiction. For example, if an adult who has needs that mainly stem from mental illness also suffers from HIV/AIDS, include all the costs of support as Adults Aged Under 65 with Mental Health Needs.

� Expenditure specifically to support carers should be recorded under the appropriate client group for the person they care for. Normally, the support will fit into the existing framework, ie often it will be home care, respite care or day care/day services. Where an appropriate subdivision of service does not exist, this support should be recorded as ‘Other’ services.

5 This means that, in so far as it is practical, costs should be recorded on a client basis rather than establishment basis. In practice, this means, for example, that if a day centre that


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is used mainly by older people is also attended by several adults with physical or sensory impairment, the costs of the day centre should be apportioned between the two client groups.


� Expenditure should include payments funded by grants.


� Social Care management and support service costs should be separated for children’s and adult social care and apportioned to the division of service that benefits from them.

7 Under s256 of the National Health Service Act 2006 (formerly s28a of the NHS Act 1977), health authorities can reimburse local authority expenditure. This should be recorded in the appropriate service division(s) or subdivision(s). Contributions from the health authority should be recorded as income.



JOINT ARRANGEMENTS AND POOLED BUDGETS9 Detailed guidance on accounting for pooled budget arrangements is included in the CIPFA

publication Pooled Budgets: A Practical Guide for Local Authorities and the National Health Service (Fully Revised Second Edition 2009). As the following extract from the first edition of that publication explains, the basic rule is that each partner accounts for its own contribution to the joint arrangement or pooled budget:

Given the nature of the pooled budget arrangement, each partner should account for their contribution to the budget. The host should send monitoring reports on a quarterly basis and at the year end prepare a memorandum of accounts within their statement of accounts that shows what has been received, and spent, and what remains. This memorandum of accounts will be sent to each of the partners at the year end for inclusion in their statement of accounts. Records will need to be retained for at least six years.


11 Contributions by the NHS or other third parties towards the costs of services provided and managed by local authority social care should be included as income in the authority’s accounts. The gross costs of the services provided should be included as expenditure.



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SUPPORTING PEOPLE – ANCILLARY EXPENDITURE13 If authorities identify expenditure in occasional or ancillary services within Adult Social

Care service divisions as Supporting People expenditure, then the expenditure should remain in the Adult Social Care division of service and be identified separately – preferably as a discretionary subdivision of service within each division of service. Care will need to be taken to distinguish such expenditure from other grant-aided expenditure such as grants for community care. Supporting People expenditure should be included here; for core Supporting People expenditure, see Housing General Fund.

STATUS AND IMPLEMENTATION14 This SEA for Adult Social Care replaces all previous versions issued by CIPFA and is mandatory

for Welsh authorities from 1 April 2015. 2015/16 SeRCOP applies to the following statutory disclosures:

� 2015/16 Budgets




basis as a minimum.


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Includes

Service Strategy This category has been very narrowly defined for Adult Social Care to ensure that amounts recorded by each authority are comparable. It is important, therefore, to follow the narrow definition below.

Strategic management This includes the costs of the management team. The relevant director and his or her team are expected to contribute the majority of the strategic input to liaison and joint arrangements with outside and partnership bodies.

It is recognised that other staff will also contribute to strategic activity, but making consistent and accurate estimates of their input is difficult and time consuming and the likely impact on comparisons is minor. Therefore, the costs of other staff time involved in strategic planning and partnership arrangements are not included in this definition. Similarly, some operational input by the relevant director and his or her personal staff is inevitable, but it is ignored as its impact is unlikely to be material and accurate quantification is difficult.

Complaints procedures Include the relevant costs of the complaints procedure required by the National Health Service and Community Care Act 1990.

Older People (Aged 65 or Over) including Older Mentally Ill

Include services to all people aged 65 or over in this category, even where the reason for care is a mental health, physical, sensory, learning or other need or disability.

Assessment and care management

The process of receiving referrals, assessing need, defining eligibility and arranging for packages of care to be provided and reviewing the quality and continued relevance of that care for older people. It includes field social work costs (including hospital social worker), other social care staff based in primary healthcare settings, occupational therapy services to older people and relevant support staff costs.

Nursing care placements Include all placements (include respite and rehabilitation) in:

� Care homes with nursing care registered by the health authorities and by definition requiring trained nursing staff to be present


Local authorities should record their contribution to nursing care placements in this subdivision of service, even if this contribution is residential placement for this care.

Residential care placements Include all placements (including respite and rehabilitation) in:




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Includes

Supported and other accommodation

Include:

� Adult placement schemes

� Group homes

� Unstaffed homes


� Sheltered housing costs not applicable to the Housing Revenue Account

� Extra care housing schemes

� Supported living and community support services.

Exclude highly sheltered housing where the warden care amounts to personal care to clients. This should be included as ‘Home care’, below.

Direct payments Include the value of direct payments made to older people for the purchase of care services. Also include the costs of administering the payments to clients and grants to voluntary organisations that support direct payments users.

Exclude direct payments to carers of older people, which should be included under ‘Other services to older people’.

Home care Include the following services:

� Home helps

� Night sitters

� Domiciliary care assistants

� Home care assistants

� Others providing non-therapeutic support

� Personal care in sheltered housing and extra care housing schemes

� Care attendant schemes

� Support or payments to voluntary workers/organisations providing home care services

� The costs of supervising and administering the above services, including fees to the Post Office for collecting income

� Rehabilitation, enablement and intermediate care.

Day care/day services Include activities involving regular attendance at a location (other than the client’s own home) for personal, social, therapeutic, training or leisure purposes including any meals at the centre and transport to and from the location. This can also include day care/day services provided within resource centres.

Exclude luncheon clubs, included in ‘Meals’, below.

Equipment and adaptations Include Social Care’s contribution to:

� Adaptations to homes

� Disability equipment

� Telephones, alarm and other communication equipment

� Stores, delivery and other associated costs.

Exclude contributions by the Housing Service.


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Includes

Meals

Note: in rare instances where the cost of meals to client groups other than older people is significant, they should be separately charged to the other client group(s).

Include:

� Meals on wheels

� Cook-chill meals

� Meals at luncheon clubs.

Exclude meals provided at day centres, included in ‘Day care/day services’, above.

Other services to older people

Include:

� Peripatetic support staff who supervise people living in the community and liaise with other agencies, CPNs, etc, and whose duties do not fit the home care definition

� Expenditure, including direct payments, on support for carers rather than clients that is not included in any of the other divisions of service

� Grants to voluntary organisations that cannot be more specifically placed under another heading.

Adults Aged Under 65 with a Physical Disability or Sensory Impairment

Include services to adults aged up to 64 where the primary reason for their care is related to a physical disability or sensory impairment.


See the definition for Older People above and relate it to adults with a physical disability or sensory impairment.

Nursing care placements Include all placements (including respite and rehabilitation) in:








Include:

� Hostels


� Unstaffed homes


� Group homes

� Supported living and community support services

� Sheltered housing costs not applicable to the Housing Revenue Account.

Exclude highly sheltered housing where the warden care amounts to personal care to clients. This should be included as ‘Home care’, below.


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Includes

Direct payments Include the value of direct payments made to clients with a physical disability or sensory impairment for the purchase of care services.

Also include the costs of administering the payments to clients and grants to voluntary organisations that support direct payments users.

Exclude direct payments to carers of adults with a physical disability or sensory impairment, which should be included under ‘Other services to adults with a physical disability or sensory impairment’.

Home care Include:

� Home helps

� Night sitters




� Personal care in sheltered housing



� The costs of supervising and administering the above services, including Post Office fees for collecting income


Day care/day services Include:

� Activities involving regular attendance at a location (other than the client’s own home) for personal, social, therapeutic, training or leisure purposes

� Meals at the centre and transport to the location

� Supported employment.

This can also include day care/day services provided within resource centres.





� Telephones, alarm equipment and other communications equipment


Exclude tools and equipment grant-aided by central government or funded by the authority’s Housing Service.

Meals

Note: where the cost of meals to client groups other than older people is not significant, include all the costs as Older People.

In rare instances where the cost of providing meals to adults with a physical disability or sensory impairment is material, include them separately here. Include:

� Meals on wheels


� Meals at luncheon clubs

Exclude meals provided at day centres, included in ‘Day care/day services’.


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Includes

Other services to adults with a physical disability or sensory impairment

Include:

� Sensory impairment services

� Talking books service


� Peripatetic support staff who supervise people living in the community and liaise with other agencies, CPNs, etc, and whose duties do not fit the home care definition, eg community support workers and outreach workers

� Grants to voluntary organisations related to people with a physical disability or sensory impairment not obviously classified under one of the more specific headings above.

Adults Aged Under 65 with Learning Disabilities

Include services to adults aged up to 64 where the primary reason for their care is related to learning disabilities.


See the definition for Older People above and relate it to adults with learning disabilities.


� Care homes with nursing care registered by the health authorities and by definition requiring trained nursing staff to be present







Include:

� Hostels


� Unstaffed homes


� Group homes



Exclude highly sheltered housing where the warden care amounts to personal care. This should be included as ‘Home care’, below.

Direct payments Include the value of direct payments made to clients with learning disabilities for the purchase of care services. Also include the costs of administering the payments to clients and grants to voluntary organisations that support direct payments users.

Exclude direct payments to carers of adults with a learning disability, which should be included under ‘Other services to adults with a learning disability’.


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Includes

Home care Include:

� Home helps

� Night sitters







� The costs of supervising and administering the above services, including Post Office fees for collecting income






This care also includes day care/day services provided in resource centres.





� Telephones, alarm and other communications equipment



Meals


In rare instances where the cost of providing meals to adults with learning disabilities is material, include them separately here. Include:

� Meals on wheels



Exclude meals provided at day centres. Include in ‘Day care/day services’.


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Includes

Other services to adults with learning disabilities

Include:

� Peripatetic support staff who supervise people living in the community and liaise with other agencies, CPNs, etc and whose duties do not fit the home care definition, eg community support workers and outreach workers


� Grants to voluntary organisations that cannot be more specifically placed under another heading.

Adults Aged Under 65 with Mental Health Needs

Include services to adults aged up to 64 where the primary reason for their care is related to mental health needs.


See the definition for Older People above and relate it to adults with mental health needs.









Include:

� Hostels


� Unstaffed and partially staffed homes

� Group homes



Exclude highly sheltered housing where the warden care amounts to personal care. This should be included as ‘Home care’, below.

Direct payments Include the value of direct payments made to clients with mental health needs for the purchase of care services. Also include the costs of administering the payments to clients and grants to voluntary organisations that support direct payments users.

Exclude direct payments to carers of adults with mental health needs, which should be included under ‘Other services to adults with mental health needs’.


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Includes

Home care Include:

� Home helps

� Night sitters







� The costs of supervising and administering the above services including Post Office fees for collecting income






This care also includes day care/day services provided in resource centres.


Equipment and adaptations Include Social Care’s contributions towards:



� Telephones, alarm and other communications equipment



Meals


In rare instances where the cost of providing meals to adults with mental health needs is material, include them separately here. Include:

� Meals on wheels



Exclude meals provided at day centres (see ‘Day care/day services’, above).


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Includes

Other services to adults with mental health needs

Include:

� Peripatetic support staff who supervise people living in the community and liaise with other agencies, CPNs, etc, and whose duties do not fit the home care definition, eg community support workers and outreach workers


� Grants to voluntary organisations related to people with mental health needs that cannot be easily categorised in a more specific heading.

Other Adult Services Include the following services to adults not included in the other client groups above.


See the definition for Older People above and relate it to Other Adult Services.

HIV/AIDS Include services to adults where their need for support arises primarily from their having contracted HIV/AIDS. Note: all services to children with HIV/AIDS are included in Children’s Services.

Substance abuse (addictions)

Include services to adults where their need for support arises primarily as a result of:

� Alcohol abuse

� Drug abuse

� Other substance abuse, eg solvents.

Note: all services to children who abuse substances are included in Children’s Services.

Asylum seekers Since April 2006 no local authority in England and Wales has a statutory duty to provide asylum support. This duty has been transferred to the National Asylum Support Service (NASS). This subdivision should include any residual costs arising from, for example, local authority support for former interim provisions cases while NASS considers their application for transfer to NASS support.

This subdivision should also include the costs to the local authority of dealing with and supporting those asylum seekers classed as NRPF (No Recourse to Public Funds). These are asylum seekers with no entitlement to benefits and other support such as housing.

Other adult services In the unlikely event that an adult does not fit into one of the above client groups (for example, a carer who is not a client in his or her own right, but attends a day centre, receives supported employment, receives home care or is accommodated), the costs of their services should be included here. Also include here any grants to voluntary organisations that are not specific to any of the client groups above.


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Includes


Include here all support costs related to social care whether it is provided centrally by another department of the council, externally by a contractor or by staff employed within the social care directorate or department. Support and management costs are likely to include:

� Management and administration costs that cannot be directly allocated 100% to a particular division of service

� Central advisory, policy and development units (including Best Value)

� Information and communications technology

� Training for social care staff



� Personnel and human resources management


� Legal services


� Quality assurance (including contracts compliance)


� Welfare rights service to advise clients

� Generic advocacy services to represent clients

� Interpretation and translation

� Any other item not clearly related to a specific client group.

Note: all costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed. Apportionment bases should be determined in accordance with the guidance in Section 2 of SeRCOP.


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Central Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR CENTRAL SERVICES

PART TWO: THE CORPORATE AND DEMOCRATIC CORE (CDC)

PART THREE: NON DISTRIBUTED COSTS (NDC)

PART FOUR: CENTRAL SERVICES TO THE PUBLIC


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INTRODUCTION1 The first purpose of the Central Services SEA is to clearly define:

� the Corporate and Democratic Core costs

� the Non Distributed Costs.

2 The second purpose of this revised SEA for Central Services is to provide a standard SEA for those services to the public that are often provided from an authority’s centre.

3 The third and final purpose of this SEA for Central Services is to provide a framework for accounting for those items of income and expenditure that do not fit into the definition of total cost for any single given service.

4 The SEA for Central Services is presented in the following four parts:

� Part Two: Corporate and Democratic Core costs (CDC)

� Part Three: Non Distributed Costs (NDC)

� Part Four: Central Services to the Public.

STATUS AND IMPLEMENTATION5 This SEA for Central Services replaces all previous versions issued by CIPFA and is mandatory

for English and Welsh authorities from 1 April 2015. 2015/16 SeRCOP applies to the following statutory disclosures:

� 2015/16 Budgets




basis as a minimum.


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PART TWO: THE CORPORATE AND DEMOCRATIC CORE (CDC)

INTRODUCTION1 The definition of Corporate and Democratic Core (CDC) outlined in Section 2 of SeRCOP sets

out CDC costs as comprising two categories of expenditure:

� Democratic Representation and Management costs (DRM)

� Corporate Management costs (CM).

2 Each category of CDC costs is defined in Section 2 as follows.


This includes all aspects of members’ activities in that capacity, including corporate, programme and service policy making and more general activities relating to governance and the representation of local interests. To give authorities maximum flexibility in reflecting their own constitutional arrangements, there are no recommended subdivisions of service.

(Paragraph 2.41.3, Section 2, SeRCOP)


...concerns those activities and costs that provide the infrastructure that allows services to be provided, whether by the authority or not, and the information that is required for public accountability. Activities that relate to the provision of services, even indirectly, are overheads on those services. There are no subdivisions recommended for CM.


3 Table 1 summarises what is included in each category of CDC costs.


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Table 1: Corporate and Democratic Core Costs

Service Divisions of Service (Mandatory)

What does it include?



(a) All members’ allowances and expenses, including telephone calls, postage, equipment costs, hospitality, accommodation costs, training, conference fees, etc incurred when undertaking activities on behalf of the authority, as local representatives or to represent local interests (see paragraph 4 below).

(b) The costs associated with local government reorganisation (see paragraph 4 below).

(c) The costs associated with officer time spent on appropriate advice and support activities (see paragraph 5 below).

(d) Subscriptions to local authority associations and provincial councils.


(a) The functions of the individual who is designated to be the head of the paid service (frequently the chief executive), except those concerned with the direct management of services or the provision of advice and support to members.

(b) Maintaining statutory registers, eg of politically sensitive posts, unused land, payments to members and members’ interests.

(c) Providing information required by members of the public in the exercise of statutory rights (other than about specific services).

(d) Completing and submitting and/or publishing all service staffing returns, Statements of Accounts, annual reports, public performance reports and Best Value performance plans.

(e) Estimating, negotiating, accounting for and allocating corporate-level resources such as capital grants; supported borrowing and other sources of capital finance, precepts, block grants and taxes.



(h) The costs of treasury management.

(i) Bank charges, other than those that relate to accounts operated on a decentralised basis.

(j) The costs associated with supporting a local strategic partnership.

(Section 2, SeRCOP)


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GUIDANCE ON WHAT TO INCLUDE IN CDC COSTS

Democratic Representation and Management4 Section 2 of SeRCOP explains what to include in CDC costs. In brief, members’ allowances and

expenses include:

� preparing, making, defending and opposing proposals for local government reorganisation including local polls or referendums, changes of functions, boundary changes, local legislation and attending government committees on behalf of the authority or the local area

� making appointments to other public bodies and responding to their requests for information and advice

� advising voluntary bodies

� following up particular issues raised by constituents

� attending conferences and meetings organised by local authority associations and similar organisations

� civic ceremonials, including mayor making, the granting of freedom, town twinning, civic regalia and jubilee celebrations.

5 Again in brief, officer advice and support to members includes:


� Professional advice and support, for example in challenging proposals that would adversely affect the council.

� The functions of monitoring officers designated under s114 of the Local Government Finance Act 1988 and s5 of the Local Government and Housing Act 1989, when acting in that capacity (ie the duty to consider whether proposals, actions or omissions would give rise to breaches of the law or maladministration and to report on them).



� Attendance at meetings involving members.



Corporate Management Costs6 Section 2 of SeRCOP explains what to include in Corporate Management costs. In brief, it

includes the costs of:

� Chief executive or other designated head of the paid service – the functions of the individual designated the head of the paid service (frequently the chief executive), except those concerned with the direct management of services or the provision of advice and support to members.


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� Maintaining statutory registers, eg of politically sensitive posts, unused land, payments to members and members’ interests, but specifically excluding the electoral register, which is included in the Elections Service incorporated in Central Services to the Public, below.

� Providing information required by members of the public in the exercise of statutory rights, except if it is about a specific service, in which case the cost is quite reasonably charged to that service.

� Completing, submitting and/or publishing corporate information such as corporate service staffing returns, Statements of Accounts, annual reports, public performance reports and Best Value performance plans.

� Estimating, negotiating, accounting for and allocating corporate-level resources such as capital grants; supported borrowing and other sources of capital finance, precepts, block grants and taxes.

� The costs of statutory external audit including value for money work, but excluding work done by external auditors that would otherwise be done within the authority or by separate contractors, eg consultancy work. Also excluded is work done to audit grant claims. These costs should be charged to services, including the Corporate and Democratic Core if the grant claim is of a corporate nature. Where such work includes a reimbursement, it should be treated as income.

� The costs of external inspections. Local authorities and other authorities in England and Wales will be subject to external inspections. As inspections largely concentrate on particular functions or groups of functions, the associated costs will vary significantly from year to year. The inclusion of such costs within the total costs of individual services could have a significant distorting effect and should, therefore, be accounted for as a Corporate Management cost.

� The costs of treasury management and bank charges are included because treasury management fits within the definition of Corporate Management as including ‘those activities and costs that provide the infrastructure that allows services to be provided’. One outcome from treasury management activity is the level of bank charges relating to main council bank accounts. Therefore, these charges should also be included in Corporate Management. Charges for any accounts operated on a decentralised basis, eg those held by schools, should be a charge against the service of the account holder.

CONTRIBUTIONS TO CORPORATE AND DEMOCRATIC CORE COSTS7 Section 2 of SeRCOP recognises that:

...there are arguments that accounts such as the HRA, and for administering authorities, the pension fund should be required to contribute towards their funding.

It should be noted that such contributions should only take place in order to comply with statutory requirements.

(Paragraphs 2.43 and 2.44, Section 2, SeRCOP)

8 The Housing Revenue Account (HRA) is a statutory account. Authorities should ensure that they satisfy the appropriate legislative requirements and statutory provisions when accounting for the HRA. Authorities wishing to make a contribution to the General Fund for


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CDC would calculate such contributions depending on local and organisational circumstance. Local discretion will need to be exercised to make an appropriate and realistic estimate of the relevant contribution. Authorities will need to adhere to the seven principles of apportionment outlined in Section 2 of SeRCOP to provide such estimates. The Housing Services SEA gives some guidance on this issue.

To do this, an authority will need to calculate the resources used by officers and members and other corporate management costs to estimate accurately the proportion of its CDC costs that relate to its own housing stock.

9 A similar estimation process will need to take place for the time of members and officers and other corporate management costs which relate to the pension fund.


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PART THREE: NON DISTRIBUTED COSTS (NDC)

INTRODUCTION1 The definition of total cost in Section 2 SeRCOP states that:

Gross total cost includes all expenditure relating to the service or division of service, including:

� Employee costs.

� Expenditure relating to premises and transport.

� Supplies and services.

� Third party payments.

� Transfer payments.

� Support services, including an appropriate share of overheads and central support services that need to be apportioned or allocated.

� Depreciation, impairment loss and revenue expenditure funded from capital under the statute and the amortisation of intangible assets.

� Current service (pensions) cost per IAS 19.

� Provisions, if related to the service.(Paragraphs 2.11–2.17, Section 2, SeRCOP)

2 The majority of central support services such as finance, internal audit, personnel, IT, legal services, procurement, etc should be charged, allocated or apportioned to the service divisions defined in the Service Expenditure Analysis. SeRCOP, however, specifically excludes certain costs and overheads it defines as Non Distributed Costs. It defines these as follows:

(a) past service costs (if any)

(b) gains and losses on settlements (if any)

(c) the costs associated with unused shares of IT facilities

(d) the cost of shares of other long-term unused but unrealisable assets

(e) impairment losses relating to assets under construction and other surplus assets held for disposal (but which do not satisfy the criteria in the Code to be classified as held for sale) and depreciation on the latter category of assets

(f) the revenue expenditure involved in holding surplus assets (eg security costs)(Paragraph 2.42, Section 2, SeRCOP)

GUIDANCE ON WHAT TO INCLUDE IN NON DISTRIBUTED COSTS3 The two main areas within the definition of Non Distributed Costs are costs relating to

retirement benefits (items (a) and (b) above) and unused and unusable shares of assets (items (c) and (d)). Further guidance on each of these elements of cost can be found in Section 2 of SeRCOP. This guidance is summarised below.


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Retirement Benefits4 For funded and unfunded defined benefit pension schemes (this will include police and

fire service uniformed staff schemes), the cost of retirement benefits to be included in the definition of total cost of a service will be current service pension costs. All other elements of retirement benefits costs (past service costs, and gains and losses on settlements) will be excluded from the definition of total costs of services and are defined as Non Distributed Costs (NDC).

The Costs of Unused Shares of IT Facilities and Other Assets5 These headings cover the cost of portions of computer mainframes and integrated systems

and other long-term unused assets that are unused as a result of reduced activity or loss of work caused by either voluntary competitive tendering (VCT) or the loss of a function or area of work.

6 These costs are included within NDC to reflect the reality that there is no service to charge costs on to because those costs relate to unused capacity (IT or otherwise). It is important to note that where services are using the capacity, whether by choice or otherwise, they should be bearing a fair share of the cost. Similarly, if previous decisions about, for example, the choice of IT system have resulted in a cost which might be higher than the services concerned would wish, they will still have to bear the full cost.

7 It is important to note that these two subdivisions should be used in the narrowly defined way described above. They are not a general mechanism to insulate services from the cost impact of past decisions.

CONTRIBUTIONS TO NON DISTRIBUTED COSTS8 The argument given in Section 2 of SeRCOP that accounts such as the HRA should make a

contribution to CDC costs is also extended to NDC (see paragraph 7 in part two above).

9 Again, each authority will wish to satisfy itself that it complies with the statutory definition of the HRA ringfence. Exactly how this contribution is calculated will depend on local factors:

� For retirement benefits, authorities will need to consider in detail the past service costs (and gains and losses on settlements) attributable to the HRA. It may be possible that some past service costs are directly attributable to HRA employees or that there may need to be some pro rating of past service costs on the most appropriate, reasonable and justifiable basis identified by the authority. Each authority would need to consider the nature of the improvement in benefits.

� For unused asset costs that arise because of a loss of work or function related to non-General Fund activities, eg the loss of a housing management contract, there may be excess computer capacity previously borne by the HRA.

10 Such contributions will need to comply with the definition of NDC at Section 2 of SeRCOP.


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INTRODUCTION1 The fourth Best Value accounting principle, ‘There will be segmental reporting of total costs’,

means that all local authority services, including those provided by central departments, should be accounted for separately in the SEA. Table 2 below shows the main services to the public that are often provided by central departments and the new standard classification as it applies to them. Additional guidance on each item follows Table 2.

Table 2: Central Services to the Public



Local Tax Collection � Council tax collection

� Council tax support administration

� Council tax discounts

� Local council tax support scheme

� Non-domestic rates collection

� BID ballot costs

� Cost of collection and distribution of BID levy.

Registration of Births, Deaths and Marriages

Elections � Registration of electors

� Conducting elections.

Emergency Planning

Local Land Charges

Local Welfare Assistance Schemes

General Grants, Bequests and Donations

Coroners’ Court Services

Other Court Services

2 Since these services have little in common, and many could quite feasibly be provided in a service department or by an external contractor, each is classified as a service division in its own right. This should not affect their accounting treatment. As separate divisions of service, each should be accounted for separately. It may also be the case in some authorities that other services to the public are provided from a central department. Such services should be identified and in accounting terms included in the service identified by CIPFA in this SEA.


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GUIDANCE ON WHAT TO INCLUDE IN CENTRAL SERVICES

Local Tax Collection3 The Local Government and Finance Act 1988 required each billing authority in England to

maintain a separate collection fund to show its transactions for non-domestic rates and the council tax, and how these have been distributed to precepting authorities and the General Fund. The collection fund includes all income from council tax and non-domestic rates. It also includes payments of precepts, transactions with the national business rate pool, provisions for bad debts and adjustments for previous years’ collection fund deficits and surpluses.

4 Welsh authorities no longer have to keep a separate collection fund.

5 In all cases, the costs of local tax collection should be accounted for as a separate service.

6 Some authorities give discounts for prompt payment of council tax. Such discounts are not a charge on the collection fund, so they should also be accounted for under the Local Tax Collection division of service.

7 The following service subdivisions are recommended:

� Council tax collection

� Council tax support administration


� Local council tax support scheme (see Note, below)

� Non-domestic rates collection costs (less an allowance from the national non-domestic rates pool)

� BID ballot costs

� Cost of collection and distribution of BID levy.

Note: Before 2013/14, council tax benefit provided support for groups with low incomes towards the payment of their council tax bills. From April 2013, council tax benefit is to be replaced by localised support for council tax. Local authorities will set up new schemes to support people in their own areas. This will only affect people of working age who currently receive council tax benefit.

Local authorities are responsible for the design and administration of a local scheme for supporting council tax for those on low incomes. The Welfare Reform Bill 2012 contains the provisions for the abolition of council tax benefit, paving the way for new local schemes, and the Local Government Finance Act 2012 contains the legislation enabling local authorities to design and develop such local support schemes.

The new local arrangements for providing support for council tax will be integrated within the collection fund and the council tax system as a whole, and will provide support to households as a reduction in the amount of council tax as part of the discount arrangements. The new schemes will result in a reduction in the council tax base for an area once all discounts are taken into account.


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As council tax is calculated by dividing an authority’s budget requirement, after deducting formula grant and business rates, by the council tax base, this would increase the level of council tax. To avoid an increase in council tax the government will pay a new grant to local authorities to reduce their budget requirement.

Registration of Births, Deaths and Marriages8 The costs of these services normally exceed the fees earned from the Registrar General and

from members of the public for registrations, certificates and copies. The important issue under SeRCOP is that the gross costs and gross income should each be shown. They should not be netted off against each other.

Elections9 It is possible to argue that the cost of local elections and of maintaining the register of

electors should be included in the Democratic Representation and Management element of CDC costs. However, election costs relate to many types of elections, not just local ones – eg local authorities act as agents to administer parish council, national, National Assembly for Wales and European elections.

10 The costs of administering these elections as agents are not a part of the CDC, because they are not connected with the management of the authority. They arise because a service is given to other bodies. For many authorities, these costs are not significant and accounting for them separately from local elections may not be justified. Where the costs are significant, they will vary from year to year with the electoral cycle. Their inclusion in the CDC could, therefore, distort Best Value year-on-year comparisons. Costs associated with local polls or referendums relating to reorganisation should still be included in CDC under Democratic Representation and Management.

11 Similarly, the same electoral register is used for all elections and any division of the costs of its preparation and maintenance would be arbitrary. It is, therefore, logical and within the spirit of Best Value that the costs of administering all elections are recorded together with the cost of maintaining the register of electors under a service division heading Elections.

12 Within the Elections service division, there are two subdivisions:

� Registration of electors


Emergency Planning13 This heading is for recording the cost, and any grant income, of arrangements to provide

integrated emergency planning under the Civil Contingencies Act 2004. These arrangements include civil emergency and disaster planning and support as well as the maintenance of emergency networks and the conducting of exercises. Note: Fire and Rescue Services civil defence and emergency planning expenditure and grant income should be recorded separately under the Fire and Rescue Services SEA.


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Local Land Charges14 The costs of maintaining the register of local land charges and dealing with requests for

certificates of search and other enquiries should be recorded here, along with income from charges made. Income and expenditure should each be recorded on a gross basis.

Local Welfare Assistance Schemes15 The Discretionary Social Fund (ie current Community Care Grant and Crisis Loan schemes)

that supported vulnerable people was abolished in April 2013 as a result of Welfare Reform Act and replaced with local schemes administered by local authorities. Include gross expenditure on administration of the local schemes and Local Welfare Provision Grant.

General Grants, Bequests and Donations16 Most of the grants given by local authorities are related to specific services and should be

recorded under the appropriate service heading. There may, however, be examples of grants which are not related to any of the other functions of the authority and which are given under powers that are not service-specific, eg grants to support Citizens Advice Bureaux. These should be recorded under this heading, which would also cover any grants, bequests or donations received by the authority where no specific purpose has been determined. Authorities will need to ensure that such grants, bequests or donations received do not meet the requirements of paragraphs 2.3.2.10 and 3.4.2.44 e) of the Code.

Coroners’ Court Services17 Include all the costs associated with the Coroners’ Court Service including costs of:

� The coroner and his/her deputies

� The coroner’s office

� Premises

� Inquests

� Juries where required

� Post-mortems.

Mortuary costs are included in the Environmental Services SEA. It may charge the coroner for the use of its services, in which case part of the costs of the mortuary will transfer to Coroners.

Other Court Services18 Include court-related expenditure that does not fit into the Coroners categories above. For

example:

� Some authorities retain and maintain judges’ residences for use, in return for a rent, by judges when they hold courts in their area.

� The Corporation of London maintains the Mayor’s and City Crown Court and Central Criminal Court premises and employs certain Central Criminal Court employees.

� Include income and expenditure separately on a gross basis. Do not net off.

Children’s and Education Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR CHILDREN’S AND EDUCATION SERVICES – EDUCATION SERVICES

PART TWO: SERVICE EXPENDITURE ANALYSIS FOR CHILDREN’S AND EDUCATION SERVICES – CHILDREN’S SOCIAL CARE

PART THREE: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR CHILDREN’S AND EDUCATION SERVICES

PART FOUR: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE – EDUCATION SERVICES

PART FIVE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE – CHILDREN’S SOCIAL CARE


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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR CHILDREN’S AND EDUCATION SERVICES – EDUCATION SERVICES



Early Years � Delegated nursery school budgets

� Early years free entitlement

� High needs budget for early years

� Grants devolved to nursery schools

� LA/corporate expenditure attributable to early years provision.

Primary Schools � Delegated primary school budgets

� Dedelegated items (England)

� High needs budget for primary education

� Grants devolved to primary schools

� LA/corporate expenditure attributable to primary schools.

Secondary Schools � Delegated secondary school budgets

� Dedelegated items (England)

� High needs budget for secondary education

� Grants devolved to secondary schools

� LA/corporate expenditure attributable to secondary schools.

Special Schools and Alternative Provision

� Delegated special school and alternative provision budgets

� Pupil referral units

� Other alternative provision

� High needs budget for special schools and alternative provision

� Grants devolved to special schools

� LA/corporate expenditure attributable to special schools.

Post-16 Provision � High needs budget for post-16 provision

� LA/corporate expenditure attributable to post-16 provision

� Grants devolved to post-16 provision.

Other Education and Community Budget

� Young people’s learning and development

� Adult and community learning

� Service strategy and other educational functions.

Management and Support Services

� Specific (optional) holding accounts as required by each authority.


Note 2: This guidance should be read in conjunction with the introduction to the SEA for all local government services and CIPFA’s statement of principles for Best Value accounting (see the LAAP pages on the CIPFA website – click on Policy & Guidance > Technical Panels and Boards > Local Authority Accounting Panel).


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PART TWO: SERVICE EXPENDITURE ANALYSIS FOR CHILDREN’S AND EDUCATION SERVICES – CHILDREN’S SOCIAL CARE



Sure Start Children's Centres/Flying Start and Early Years

Children Looked After � Residential care

� Fostering services

� Adoption services

� Special guardianship support

� Short breaks (respite) for disabled children looked after

� Children placed with family and friends

� Education of children looked after

� Leaving care support services

� Asylum seekers

� Other children looked after services.

Other Children and Family Services

Family Support Services � Direct payments

� Short breaks (respite) for disabled children

� Other support for disabled children.

� Targeted family support

� Universal family support.

Youth Justice

Safeguarding Children and Young People’s Services

� Social work (including LA functions in relation to child protection)

� Commissioning and children's services strategy

� Local safeguarding children board.

Asylum Seekers � Assessment and case management

� Other children and families (includes children who are not looked after).

Services for Young People � Targeted services for young people

� Universal services for young people.


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Note: all costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed. Apportionment bases should be determined in accordance with the guidance in Chapter 2, Section 4 of SeRCOP.


� Central advisory, policy and development units (including BV)


� Training



� Personnel/HRM


� Legal services


� Quality assurance


� Welfare rights service

� Generic advocacy services

� Others not specified above.

Note 1: It is the intention of the Children’s and Education Services SEA (introduced in the 2007 BVACOP SEA) to reflect the requirement for local authorities to have a director of children’s services in place from 1 April 2008. It is acknowledged that the level of integration of services under a children’s services directorate will vary between authorities and also between England and Wales. However, by retaining the mandatory divisions for Education Services and Children’s Social Care set out in the 2006 BVACOP, authorities should be able to account for these services on a basis consistent with previous years. This should also provide sufficient flexibility for authorities to continue to complete CIPFA and government statistical returns and to preserve trends.




Note 5: Apportionment bases should be determined in accordance with the guidance in Section 2 of SeRCOP.


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PART THREE: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR CHILDREN’S AND EDUCATION SERVICES

INTRODUCTION1 The SEA for Education Services within the Children’s and Education Services provides a

high-level summary of expenditure on education. The inclusion of an Education SEA within the framework also allows for the placement of elements of non-school funding that involve adult and community education. The service and divisions of service headings are mandatory for English and Welsh local authorities (LAs) from 1 April 2004 and LAs will need to ensure that they have the information necessary to calculate total cost, as defined in Section 2 of SeRCOP, at this level. Any more detailed total cost calculations are at the discretion of each LA.

2 The aim of this guidance is to ensure different local authorities’ Children’s Services financial records are on as consistent a basis as possible and to allow local authorities to meet the majority of their financial reporting commitments from a single set of base financial records.

3 Local authorities have the discretion to establish a more detailed supporting analysis if they require it, including those issued under s251 of the Apprenticeships, Skills, Children and Learning Act 2009 and in Wales s52 of the Schools Standards and Framework Act 1998.

4 This guidance note should be read in conjunction with the general introduction to the complete series of SEAs. This emphasises that the aim of the SEA is to define consistent groups of activities to which, at the mandatory division of service level, the definition of total cost should apply. It is through the definition of total cost that the scope of income and expenditure to be included in the SEA is defined. Because the focus is on the type of activity, and what it is intended to achieve, the SEA cuts across other issues such as how a service is organised, in managerial terms, and how it is funded.

STRUCTURE OF THE SERVICE EXPENDITURE ANALYSIS FOR CHILDREN’S AND EDUCATION SERVICES5 There are seven main divisions of service plus the facility, within Education Management and

Support Services, for each local authority to maintain such holding accounts as it wishes for support services and other overheads.

6 SeRCOP states that Corporate and Democratic Core costs and Non Distributed Costs should not be allocated or apportioned to other divisions of service.

7 The term ‘children’ should cover all children regardless of the type of need.


� Expenditure should include payments funded by grants and income.



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� Social care management and support service costs should be apportioned to the division of service that benefits from them.

9 Under section 256 of the National Health Service Act 2006 (formerly section 28a of the NHS Act 1977), health authorities can reimburse local authority expenditure. This should be recorded in the appropriate service division(s) or subdivision(s). Contributions from the health authority should be recorded as income.

SUPPORT SERVICE AND MANAGEMENT COSTS10 This service division may be helpful to authorities that find it useful to maintain holding

accounts for support services and other overheads where the costs:

� are not directly charged to users of the services

� cannot be directly allocated to users of the services.

11 It is important to stress that these holding accounts are optional. They need not be used at all and, if they are used, authorities have complete discretion over what each covers. However, if any holding accounts are used, they should not contain a balance at the year-end and they will not feature in end-of-year accounts. This is because, to meet the definition of total cost, all costs, including management and support costs, must be allocated, apportioned or charged to one of the other service divisions at the year-end.

12 Whenever there is a need to apportion costs over more than one division of service, reference should be made to CIPFA’s current guidance on the principles of cost apportionment specified in Section 2 of SeRCOP.

CLASSIFYING DIFFERENT TYPES OF SCHOOL13 Where different types of school exist, LAs are free to analyse locally in greater detail than the

minimum required here. For example, they may wish to separate first schools from middle schools, boarding schools from non-boarding schools, secondary schools with sixth forms from those without.

14 First and middle schools should be classified as either Primary or Secondary in the first instance, on the basis of the relevant deeming order.

15 Early Years should include free-standing nursery schools. Nursery classes in primary schools should continue to be included in Primary Schools.


publication Pooled Budgets: A Practical Guide for Local Authorities and the National Health Service (Fully Revised Second Edition 2009). As the following extract from the first edition explains, the basic rule is that each partner accounts for its own contribution to the joint arrangement or pooled budget:

Given the nature of the pooled budget arrangement, each partner should account for their contribution to the budget. The host should send monitoring reports on a quarterly basis


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and at the year end prepare a memorandum of accounts within their statement of accounts that shows what has been received, and spent, and what remains. This memorandum of accounts will be sent to each of the partners at the year end for inclusion in their statement of accounts. Records will need to be retained for at least six years.


18 Contributions by the NHS or other third parties towards the costs of services provided and managed by the local authority should be included as income in the authority’s accounts. The gross costs of the services provided should be included as expenditure.


SUPPORTING PEOPLE – ANCILLARY EXPENDITURE20 If authorities identify expenditure in occasional or ancillary services within the Children’s

Social Care service divisions as Supporting People expenditure, then the expenditure should remain in the Children’s Social Care division of service and be identified separately – preferably as a discretionary subdivision of service within each division of service. Care will need to be taken to distinguish such expenditure from other grant-aided expenditure such as the leaving care grant and grants for community care. For core Supporting People expenditure, see Housing General Fund.

STATUS AND IMPLEMENTATION21 This SEA for Education Services replaces all previous versions issued by CIPFA and is

mandatory for English and Welsh local authorities from 1 April 2015. 2015/16 SeRCOP applies to the following statutory disclosures:

� 2015/16 Budgets



UPDATING THE GUIDANCE22 CIPFA is dedicated to keeping the guidance up to date and it will be reviewed annually as a

minimum.


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PART FOUR: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE – EDUCATION SERVICES

INTRODUCTION1 The scope of each division of service is defined in terms of the subdivisions listed in Part

One above. These subdivisions are optional but, if they not are used, authorities will need to ensure that the totality of their scope, described below, equates to the totality of their own subdivisions of each division of service.


Includes

Early Years

Delegated nursery school budgets

The ‘Delegated budgets’ subdivision equates to the ISB. So, for example, ‘Delegated nursery school budgets’ are the total of the amounts delegated to the authority’s nursery schools under its Fair Funding formula.

Early years free entitlement Funding within the schools budget allows for a free entitlement (including eligible two-year-olds). Include:

� Academies

� Children’s centres

� Private, voluntary and independent (PVI) providers (including funded child-minders).

High needs budget for early years

Include:

� Top-up funding for maintained providers

� Top-up funding for academies and free schools

� Top-up funding for independent providers.


� SEN support services

� Support for inclusion

� Direct payment (SEN and disability).

Grants devolved to nursery schools

LA/corporate expenditure attributable to early years provision

LA/corporate expenditure attributable to nursery schools would be a combination of elements of three distinct types of expenditure:

� Retained nursery schools and early years budget

� LA budget attributable to nursery schools and early years

� Other central and corporate overheads.

Primary Schools

Delegated primary school budgets

The ‘Delegated budgets’ subdivision equates to the ISB. So, for example, ‘Delegated primary school budgets’ are the total of the amounts delegated to the authority’s primary schools under its Fair Funding formula.


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Includes

Dedelegated primary school budgets

Include:

� Contingencies – include here expenditure as defined in Part 1 of The School and Early Years Finance (England) Regulations 2012

� Behaviour support services

� Support to UPEG and bilingual learners (includes expenditure for the purposes of improving the performance of under-performing pupils from ethnic minority groups; and meeting the specific needs of bilingual pupils)

� Free school meals – eligibility

� Insurance

� Museum and library services

� Licences/subscriptions

� Staff costs – supply cover (including long-term sickness).

High needs budget for primary education

Include:


� Top up funding for academies and free schools

� Top-up funding for independent providers





Grants devolved to primary schools

LA/corporate expenditure attributable to primary schools

LA/corporate expenditure attributable to primary schools would be a combination of elements of three distinct types of expenditure:

� Retained primary schools budget

� LA budget attributable to primary schools


Secondary Schools

Delegated secondary school budgets

The ‘Delegated budgets’ subdivision equates to the ISB. So, for example, ‘Delegated secondary school budgets’ are the total of the amounts delegated to the authority’s secondary schools under its Fair Funding formula.

http://www.legislation.gov.uk/uksi/2012/335/contents/made



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Includes

Dedelegated secondary school budgets

Include:

� Contingencies – include here expenditure as defined in Part 1 of The School and Early Years Finance (England) Regulations 2012

� Behaviour support services

� Support to UPEG and bilingual learners

� Free school meals – eligibility

� Insurance

� Museum and library services

� Licences/subscriptions

� Staff costs – supply cover (including long-term sickness).

High needs budget for secondary education

Include:








Grants devolved to secondary schools

LA/corporate expenditure attributable to secondary schools

LA/corporate expenditure attributable to primary schools would be a combination of elements of three distinct types of expenditure:

� Retained secondary schools budget

� LA budget attributable to secondary schools


Special Schools and Alternative Provision

Delegated special school and alternative provision budgets

The ‘Delegated budgets’ subdivision equates to the ISB. So, for example, Delegated special school and alternative provision budgets are the total of the amounts delegated to the authority’s special schools.

Pupil referral units

Other alternative provision




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Includes

High needs budget for special schools and alternative provision

Include:







� Special schools and pupil referral units in financial difficulty

� PFI and BSF costs at special schools

� Direct payments (SEN and disability).

Grants devolved to special schools

LA/corporate expenditure attributable to special schools

LA/corporate expenditure attributable to special schools would be a combination of elements of three distinct types of expenditure:

� Retained special schools budget

� LA budget attributable to special schools


Post-16 Provision

High needs budget for post-16 provision

Include:








LA/corporate expenditure attributable to post-16 provision

Grants devolved to post-16 provision

Other Education and Community Budget

Young people’s learning and development

Includes provision for 16–18-year-olds other than schools and further education and covers non-advanced direct provision on apprenticeships and entry to employment for 16–18-year-olds. This line also includes 14–19 reform, education business links, learning agreement pilots, NEETs, increasing flexibility for 14–16-year-olds, young apprenticeships – key stage 4 for 14- and 15-year-olds, 14–19 fighting funds, ie support for learning and development initiatives, and structural support for 16–18-year-olds which has not been included within the lines above.


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Includes

Adult and community learning

Combines adult education, community education, family learning and other community services (but not the youth service).

Service strategy and other educational functions

Include:

� Therapies and other health-related services

� Central support services (including music services)

� Education welfare service

� School improvement

� Asset management – education

� Statutory/regulatory duties

� Premature retirement costs/redundancy costs (new provisions)

� Monitoring national curriculum assessment

� Educational psychology service

� SEN administration, assessment, co-ordination and monitoring

� Monitoring of SEN provision

� Parent partnership, guidance and information

� Home to school or other provider transport: SEN transport expenditure (age 0–25)

� Home to school or other provider transport: other home to school transport expenditure

� Supply of school places

� Pension costs – includes existing early retirement costs

� Joint use arrangements

� Insurance

� Complaints

� Strategic management.


� Specific (optional) holding accounts as required by each authority.

SCHOOLS2 The headings are defined in detail by s251/s52 requirements and by regulations1 that define

the LA budget, schools budget and individual schools budget (ISB).

3 The introduction of consistent financial reporting (CFR) in England from 2002/03, which captures school-level income and expenditure, and the associated standardised headings for school-level financial information, may also influence LAs’ choice of further subdivisions for their financial records. CFR is not an accounting system but a report that schools’ end-of-year accounts feed into.

1. These are The School and Early Years Finance (England) Regulations 2012 or, in Wales, The School Funding (Wales) Regulations 2010.


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4 To fulfil their requirements under s251, LAs will need to keep information on those elements of the Schools Budget which have been retained, rather than delegated to schools, and on items defined as being within the LA Budget, such as schools strategic management. The detailed information each authority will require to keep about retained items will depend on their delegation schemes as well as the extant definitions of the Schools Budget and the Individual Schools Budget. Detailed definitions and related information requirements within the LA Budget will similarly be defined by current regulations and by the scope of, for example, RO forms.

5 It should be noted that these detailed requirements differ between England and Wales and that they may change at regular intervals. It is important, therefore, that LAs refer to current regulations, as well as their own information requirements, when they are defining their financial coding systems.

6 It should also be noted that, for each of the schools divisions of service to be SeRCOP compliant, expenditure which falls within either Retained Schools Budget or LA Budget will need to be apportioned across types of school, ie early years, primary, secondary and special. There is no requirement to apportion them to individual school level, although LAs may choose to do so if they wish, and they do not need to be split between the different types of school during the year. Some, but not all, of this apportionment is also required for s251 purposes.

7 Similarly, for each of the schools divisions of service to be reported on a total cost basis, they must include an appropriate share of all overheads, whether these arise within the education department or centrally. They must also include appropriate capital charges. These may be charged directly to the Attributable LA/corporate expenditure subdivision of service or they may be channelled to it through Education Management and Support Services, as the authority sees fit.

8 LAs may also find it useful to differentiate, for example by having separate sub-subdivisions within the Strategic Management part of the LA Budget, between those elements of the s251 definition which are overheads on the service, in SeRCOP terms, and those which should be transferred (back) to the Corporate and Democratic Core for total cost reporting purposes

EDUCATION MANAGEMENT AND SUPPORT SERVICES9 The subdivisions of this division of service are entirely at the discretion of each authority.

Each will be locally defined to include specific types of cost relating to education management and support service costs which are not charged directly to one of the above service divisions. Any costs included in these accounts should ultimately be allocated or apportioned to an appropriate service division. This may be done periodically during the year or at the year-end. So, these optional holding accounts will not show in the year-end accounts as they will be cleared to nil.


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PART FIVE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE – CHILDREN’S SOCIAL CARE


Includes

Sure Start Children's Centres/Flying Start and Early Years

Includes the cost of children’s centres, costs devolved to individual children’s centres, the cost of local authority provided or commissioned services, and management costs relating to children’s centres.

Include salary costs of any qualified teachers and/or early years professional staff employed by children’s centres.

Exclude other early education funding (including funding through the free entitlement, as that is covered elsewhere).

Exclude the cost of services provided in kind by other statutory providers (for example health services or Jobcentre Plus).

Children Looked After Include the costs of looking after children for continuous periods of more than 24 hours.

Residential care Include expenditure on residential care in voluntary children’s and registered children’s homes as defined in the Children Act 1989. It includes:

� Community homes

� Respite care in children’s homes

� Associated independent visitor costs and relevant contact payments under sections 20 to 34 of the Children Act 1989

� Homes where education is provided, but does not attract schools budget funds

� Boarding schools. Include the social care share of the costs of community homes with education provision and the social care element of accommodating children with special education needs in schools where the education element is chargeable against schools budget.

Exclude mother and baby homes (included in ‘Other children looked after services’), short breaks for looked after disabled children (included in ‘Short breaks (respite) for disabled children looked after’) and youth detention accommodation homes (included in ‘Other children looked after services’).

Exclude also respite care for those children not meeting the definition of children looked after.


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Includes

Fostering services Include all fees and allowances paid to foster carers and the costs of social worker and other support staff who support foster carers. Include:

� Mainstay placements

� Link placements

� Permanence placements

� Temporary/respite fostering

� Associated independent visitor costs and relevant contact payments under sections 20 to 34 of the Children Act 1989.

Exclude remand fostering (Youth Justice); foster care placements with a relative or a friend (‘Children placed with family and friends’); social work costs related directly to the fostered children (Social Work); and short breaks (respite) for looked after disabled children (‘Short breaks (respite) for disabled children looked after’).

Adoption services Include adoption allowances paid and other staff and overhead costs associated with adoption including the costs of social workers seeking new and supporting existing adoptive parents. Also include costs related to adoption support, such as the cost of therapeutic services.

Special guardianship support Include financial support paid to special guardianship families under The Special Guardianship Regulations 2005 and other staff and overhead costs associated with special guardianship orders.

Short breaks (respite) for disabled children looked after

Include all provision for short breaks (respite) services for disabled children who are deemed looked after. Include:

� Short breaks utilising a residential setting

� Family-based overnight and day care short-break services – including those provided through contract and family link carers

� Sitting or sessional short-break services in the child’s home, or supporting the child to access activities in the community.

Exclude any break exceeding 28 days’ continuous care and costs associated with providing disabled children’s access to residential universal services.

Children placed with family and friends

Includes costs on the authority’s children placed with family and friends functions under the Children Act 1989.

Education of children looked after

Include costs on the services provided to promote the education of children looked after by the authority (eg looked after children education service teams and training for designated teachers). Individual support for children looked after should not be included here – include within Secure Accommodation (Welfare). Exclude any funding delegated to schools for looked after children.

Leaving care support services Include here the authority’s leaving care support services functions under the Children (Leaving Care) Act 2000.

Asylum seekers Include planned expenditure of those asylum seeking children who are looked after.

http://www.opsi.gov.uk/SI/si2005/20051109.htm


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Includes

Other children looked after services

Include support to looked after children and young people:

� In NHS/other establishments providing nursing/medical care

� Residential, respite and emergency nights in residential beds at family centres

� In lodgings or hostels

� In mother and baby homes

� Living independently in flats or bed and breakfast establishments or with friends

� In residential employment

� Independent visitor costs and relevant contact payments under sections 20/34 of the Children Act 1989 not included under Residential Care or ‘Fostering services’

� In secure accommodation welfare (as set out in the Legal Aid, Sentencing and Punishment of Offenders Act)

� Advocacy services for children looked after.

Other Children and Family Services

Include other budgeted spend that cannot be placed under another specific heading but contributes to overall spending on children’s and young people’s services.

Also include budgeted spend here:

� Grants to voluntary organisations that cannot be specifically placed under another children’s heading

� Counselling services

� Generic services in support of children that abuse substances not included elsewhere.

Family Support Services Include statutory services provided to children in need and voluntary aid to other children.

Direct payments Include the value of direct payments made to 16- and 17-year-olds who are disabled under s17(10) of the Children Act 1989, payments made to the carers (eg parents) of disabled children aged under 18 and payments made to 16- and 17-year-olds who act as carers for the purchase of care services. Also include the costs of administering the payments.

Short breaks (respite) for disabled children

Include all provision for short-breaks (respite) services for disabled children in need but not looked after. Include the costs of:

� Short breaks utilising a residential setting – including overnight stays, day care and sessional visits to the setting

� Family-based overnight and day care short-break services – including those provided through contract and family link carers

� Sitting or sessional short break services in the child’s home, or supporting the child to access activities in the community.

http://www.legislation.gov.uk/ukpga/2012/10/contents/enacted

http://www.legislation.gov.uk/ukpga/2012/10/contents/enacted


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Includes

Other support for disabled children

Include Children’s Services’ contribution to equipment and adaptations such as:

� Adaptations to homes to help children remain at home

� Disability equipment for children, including wheelchairs

� Special telephones for the use of children

� Other communications and community equipment


Exclude contributions by the Housing service, the Adult Social Care service and local NHS services

Targeted family support Targeted family support services are those focused on particular vulnerable families, including but not limited to families receiving support through the Troubled Families programme.

Include budgeted spending in the following areas that were previously captured under separate lines in this data collection:

� Contribution to the health care of individual children. This is expenditure where there is a need to support a child. This includes non-statutory innovative initiatives or pilot programmes, eg family nurse partnerships. These could be funded privately, by the local authority, or jointly by the local authority and the primary care trust.

� Home care services. This is home care provided to help look after a child at home; for example, home helps, domiciliary care assistants, and support or payments to voluntary workers or organisations providing home care services. Also include the costs of administration of home care for children.

� Intensive family interventions. Include expenditure for providing intensive family interventions which support the programme led by the Troubled Families Unit to turn around the lives of troubled families. Common characteristics include each family having access to a dedicated practitioner who delivers support and co-ordinates the work of other agencies, ensuring that a support/care plan is in place which outlines actions and timescales. These interventions commonly include pre- and post-measurements of how circumstances for the family have changed.


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Includes

Targeted family support (continued)

Other areas of spend that could be included in this line are:

� Payments or gifts in kind to safeguard and promote the welfare of children in need

� Community support workers (peripatetic support staff who supervise children at risk, children in need, and learning in the community, and liaise with other agencies, CPNs, etc), outreach workers, family support or aid workers, and others working with those families but whose duties do not fit the home care definition

� Expenditure on support for carers rather than clients (including young carers) that is not included in any of the other divisions of service

� Family contact supervision

� Residence orders paid for.

Exclude home care services provided for short breaks for disabled children.

Universal family support Universal family support is open to all, regardless of their family circumstances or perceptions of vulnerability.

This includes support provided in the community for children who do not have a particular need that has been already identified (but who may be in a disadvantaged group), such as home–school liaison services funded by the local authority, peer-to-peer support services, such as Homestart, and relationship support.

Youth Justice Include the costs of services related to young offenders including youth offending teams:

� Costs of providing or purchasing secure accommodation for children who pose a risk to themselves or to others, or who have a security requirement placed on them for youth justice reasons under s53 of the Children and Young Persons Act 1933. Include all other remand facilities for a young offender, eg under s97 of the Crime and Disorder Act 1998

� Costs of social services staff and support facilities for youth offender teams under the Crime and Disorder Act 1998

� Community services costs

� Remand fostering costs, ie payments to carers and supervision costs where a court has made an order that an alleged young offender should be held securely in the community rather than being placed in an institution

� Bail support schemes

� Other youth justice costs.


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Includes

Safeguarding Children and Young People's Services

Social work (including LA functions in relation to child protection)

Social workers are directly involved with the care of children and with the commissioning of services for children.

Include most of the direct social work costs (except those detailed below). Also include the processes for assessing need, determining and defining the service to be provided and reviewing the quality of and continued relevance of that care for children. Also include:

� Field social work costs (include hospital social workers)

� Occupational therapy services to children

� Relevant support staff costs

� Child protection social work costs.

Exclude social work costs in support of foster carers and adoptive families as these are captured elsewhere.

Commissioning and children's services strategy

Include budgeted spending on overall commissioning within Children’s and Young People’s Services, such as the cost of a central commissioning function.

Also include any additional expenditure on services that are bought in from outside the local authority to support the central commissioning function. Where joint commissioning units have been set up, eg between the local authority and the primary care trust, include the overall costs of maintaining the joint unit.

Exclude the costs of the actual services commissioned as well as any social worker costs related to commissioning as these are captured elsewhere. Also exclude costs of commissioning services specifically for Sure Start children’s centres.

For the children’s services strategy element, include partnership costs for multi-agency working, ie contributions from the authority to partnership manager and other costs. Do not include pooled budget contributions for specific front-line services. Include spending on statutory regulatory duties related to children’s services that are not included in ‘Service strategy and other educational functions’.

Local safeguarding children board

Includes costs of the authority’s local safeguarding children board functions under the Children Act 2004 and The Local Safeguarding Children Boards Regulations 2006.

Asylum Seekers Include services to children and families.

Assessment and case management

The process of receiving referrals, assessing need, defining eligibility and arranging for packages of care to be provided and reviewing the quality and continued relevance of that care for children and families. It includes field social work costs (including hospital social worker), other social care staff based in primary healthcare settings, occupational therapy services to children and families and relevant support staff costs.

http://www.opsi.gov.uk/acts/acts2004/ukpga_20040031_en_3#pt2-pb1-l1g11


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Includes

Children Include the costs of finding accommodation, ensuring education, etc, including the costs of peripatetic support workers and grants to voluntary organisations that support children. (NB this excludes asylum-seeking children who meet the definition of Children Looked After.)

Families Include giving advice and assisting with accommodation, including the costs of peripatetic support workers and grants to voluntary organisations that support asylum-seeking families.

Services for Young People Services for young people (aged 13 to 19) encompasses all local authority expenditure on the provision of educational and recreational leisure-time activities, including youth work and delivery of their duties to support young people to participate in education or training. The scope of the activities covered by this is defined in Statutory Guidance for Local Authorities on Careers Guidance Provision for Young People in Schools issued in March 2013 by the Secretary of State for Education and targeted support services for young people.*

Targeted services for young people

Targeted services are those focused on supporting early intervention for vulnerable young people, including but not limited to those at risk of teenage pregnancy, substance misuse, youth crime and not being in education, employment or training.

Include those services that are targeted towards supporting individual young people on a one-to-one basis (eg counselling), groups of young people (for example young people at risk of gang involvement) or specific localities (for example detached youth work in areas that have high instances of anti-social behaviour). Include:

� Youth work

� Activities for young people

� Services to support young people’s participation in education or training

� Substance misuse services

� Teenage pregnancy services

� Discretionary awards

� Student support.

Universal services for young people

Universal and open access services are open to all young people, regardless of their circumstances or perception of vulnerability. Include:

� Youth work

� Activities for young people

� Services to support young people’s participation in education or training

� Substance misuse services

� Teenage pregnancy services

� Discretionary awards; and student support.

* www.gov.uk/government/publications/careers-guidance-for-young-people-in-schools

www.education.gov.uk/16to19/careersguidance/a0064052/the


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Includes

Support Service and Management Costs

(optional holding account)

Include here all support costs related to children’s social care, whether it is provided centrally by another department of the council, externally by a contractor or by staff employed within the social care directorate or department. Support and management costs are likely to include:

� Management and administration costs that cannot be directly allocated 100% to a particular division of service

� Central advisory, policy and development units (including Best Value)

� Information and communications technology

� Training for social care staff



� Personnel and human resources management


� Legal services


� Quality assurance (including contracts compliance)


� Welfare rights service to advise clients

� Generic advocacy services to represent clients

� Interpretation and translation

� Any other item not clearly related to a specific client group.

Note: all costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed. Apportionment bases should be determined in accordance with the guidance in Section 2 of SeRCOP.


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Cultural and Related Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR CULTURAL AND RELATED SERVICES

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR CULTURAL AND RELATED SERVICES

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN CULTURAL AND RELATED SERVICES


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Culture and Heritage � Archives

� Arts development and support

� Heritage

� Museums and galleries

� Theatres and public entertainment.

Recreation and Sport � Community centres and public halls

� Foreshore

� Sports development and community recreation

� Indoor sports and recreation facilities

� Outdoor sports and recreation facilities

� Golf courses.

Open Spaces � Community parks and open spaces

� Countryside recreation and management

� Allotments.

Tourism � Tourism policy, marketing and development

� Visitor information

� Visitor centres.

Library Service � Library buildings

� Mobile and housebound library services.

Service Management and Support Services

Optional holding accounts. All costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed.




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INTRODUCTION1 Central to the notion of Best Value is the ability to reliably Compare the performance of

different local authorities. Comparison is central because it can inform Consultation, stimulate Challenge and enable Competitiveness to be considered and assessed.

2 The Comparison process is much more far-reaching than a simple cost comparison. However, in so far as some elements of any comparison will be financially based, it is important that the financial inputs are accurate, compiled on the same basis and aligned with the non-financial aspects being measured.

3 The guidance notes have been compiled from the following sources. The aim has been to promote consistency between CIPFA’s definitions and those provided by other organisations, and to make them as comprehensive and user-friendly as possible:

� CIPFA statistics definitions (www.cipfastats.net) and Technical Information Service (TIS) information streams (www.tisonline.net)

� CLG RO/RA form definitions.

STATUS AND IMPLEMENTATION4 This SEA for Cultural and Related Services replaces all previous versions issued by CIPFA and

is mandatory for English and Welsh authorities from 1 April 2015. 2015/16 SeRCOP applies to the following statutory disclosures:

� 2015/16 Budgets




basis as a minimum.

www.cipfastats.net

www.tisonline.net


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PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN CULTURAL AND RELATED SERVICES

INTRODUCTION1 This guidance note covers expenditure on Cultural and Related Services. The Department for

Culture Media and Sport (DCMS) defines culture as:

Culture has both a material and a value dimension and includes a wide range of activities including arts, media, sports, parks, museums, libraries, the built heritage, the countryside, playgrounds and tourism.

(Source: Local Cultural Strategies, DCMS, June 1999)


Includes

Culture and Heritage

Include here expenditure related to the arts and local history.

Archives Include here the cultural elements of local authority expenditure on the records in their custody under s224 of the Local Government Act 1972 and on promotion of the use of records of local interest under the Local Government (Records) Act 1962. The Act enables local authorities to promote the use of records held under the 1962 Act. Include all costs of the archive services provided under the 1962 Act here.

Note: similar services provided under the Public Libraries and Museums Act 1964 should be included in the Library Service division, below.

Arts development and support

Include direct expenditure on the arts and grants or other contributions to individuals or voluntary organisations.

Include expenditure on arts and crafts fairs and other events, arts development and support expenditure that takes place in community centres and halls (for libraries this cost derives from space in shared community facilities; the costs should be apportioned between the services as appropriate).

Heritage Include expenditure on initiatives or services designed to develop/maintain an awareness of local history. Some grants to voluntary groups will be included here.

Special events to celebrate historical events should also be included. Also include historic environments such as listed buildings, and monuments and heritage interpretation centres.

Museums and galleries

S12 of the Public Libraries and Museums Act 1964 empowers authorities to provide museums. Include the gross costs of running the museums and galleries here. This should include the costs of both museums directly provided by the authority and those independent museums which are in receipt of a regular revenue subsidy from the authority.

Income earned from visitors should be shown as gross income, not netted off against expenditure.


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Includes

Theatres and public entertainment

Local authority entertainment powers are contained in s132 of the Local Government Act 1948 and s145 of the Local Government Act 1972. Include here expenditure on and income from:

� Theatres

� Concert halls

� Dance halls

� Other entertainment premises

� Holding dances

� Maintaining a band/orchestra

� Arranging events, eg concerts, pantomimes, etc

� Promoting events

� Providing refreshments at events

� Making grants to others who provide entertainment.

Recreation and Sport

S19 of the Local Government (Miscellaneous Provisions) Act 1976 empowers councils to provide or support recreation facilities. Include these expenses in this division of service.

Community centres and public halls

Include expenditure on premises provided for residents of an area to use, normally, in return for a hire charge. For example, include general purpose public halls that offer the following types of services: wedding receptions, local drama group plays, badminton, etc.

Exclude premises used mainly for arts events, eg exhibitions, concerts etc, and those mainly for the use of council housing tenants that relate to the HRA.

Exclude premises for hire which are integral with libraries, as this expenditure should be included under the Library Service.

Foreshore Expenditure on the foreshore (land between the high water limit and the coastline proper) and associated promenade and piers. Include all expenditure on this area that cannot be placed in another division of service. For example, toilets will be recorded as ‘Public conveniences’, and cleaning as ‘Street cleansing’, not ‘Foreshore’.

Sports development and community recreation

Include development and outreach teams. Also include holiday play schemes for children.

Specific grants to voluntary or other groups should also be recorded here.

Indoor sports and recreation facilities

Include indoor pools, sports halls and leisure centres, and any attached slipper baths, laundry services, hydrotherapy pools, etc.

Note: where an indoor facility has some outdoor provision, eg a five-a-side football area, include all costs as Indoor.


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Includes

Outdoor sports and recreation facilities

Include outdoor pools or lidos, running tracks, football pitches, pitch and putt courses, etc unless they are within the boundary of a larger community park (see below) or attached to an indoor facility. In such cases, code the full cost to the main facility, ie to the park or sports facility. Only grounds for which the only or primary use is as a sports ground should be costed here. Public parks that have common sporting facilities (football pitches, tennis courts, etc) but are otherwise used just as public parks should be fully costed to ‘Community parks and open spaces’ (below). Apportionments of cost in such cases are not necessary (unless there is a large and discrete sporting element in the park).

Golf courses Golf courses are potentially large and material operations in their own right. They could easily distort comparisons, so they need to be shown separately. Include gross expenditure and gross income from players, refreshments sales, etc here.

Open Spaces Include here expenditure on open spaces, parks, etc.

Community parks and open spaces

Include all public open spaces within the boundaries of a city, town or village, including the costs associated with play areas, nature corners and sports facilities that are an integral part of the park. Public parks that have common sporting facilities (football pitches, tennis courts, etc) but are otherwise used just as public parks should normally be fully costed here rather than under ‘Outdoor sports and recreation facilities’ (above). Apportionments of cost in such cases are not necessary (unless there is a large and discrete sporting element in the park).

Countryside recreation and management

Include facilities in country areas that are aimed at visitors but provide recreation facilities for residents as well, including:

� Country parks

� Camping/caravan parks (exclude travellers’ sites – they are included in Housing General Fund expenses)

� Picnic areas

� Nature reserves

� Canal work

� Footpaths, bridleways and towpaths (including maintaining a map of, and enforcing, public rights of way).

Allotments Include expenditure on allotments and rents collected from tenants here. S14 of the Agricultural Land Act 1931 empowers councils to provide allotments. Where they do this, separate accounts showing the expenditure incurred and the rents collected are to be maintained under s14(6) of the Act.

Tourism Include expenditure to encourage people to visit the area as allowed by s14(4) of the Development of Tourism Act 1969.


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Includes

Tourism policy, marketing and development

Include the costs of:

� Drawing up policies and strategies to develop and promote tourism in the area

� Undertaking qualitative and quantitative tourism research

� Promoting and advertising the area to potential visitors

� Developing and managing public/private tourism partnership

� Managing conference facilities and conference promotion

� Contributions to regional tourist boards, area tourism partnerships and destination management organisations

� Grants and loans given to support organisations offering attractions or other tourist-related facilities.

Visitor information Include the costs of information provided for visitors, eg maps, tourist guides, what’s on leaflets, etc.

Visitor centres Local authorities normally provide information offices, bureaux, etc for the provision of information to visitors. Include the costs of these offices here.

Library Service Libraries are a statutory service under the Public Libraries and Museums Act 1964. Include expenditure on this statutory service here.

When local authorities are fulfilling their statutory duties through a third party, be it through a contractual or a commissioned relationship, and be it with a private contractor or a community-owned facility, this needs to be reflected within the costs of the service.

Library buildings Include here the premises, staff and other costs associated with the provision of permanent libraries. Include any fees for overdue books or other services for which a fee is allowed here as gross income.

Most permanent libraries provide a wealth of reference materials to assist users with all manner of needs, including research by local students, contact points for local clubs, etc. The costs of archives and records not kept under the Local Government (Records) Act 1962 should also be charged here.

Building on the theme of cross-cutting issues, libraries are increasingly seen as local, multi-purpose resource centres. They can contribute to the local community in its widest sense. Hence, libraries hire out rooms for local clubs and meetings, offer drop-in centres, host community events like exhibitions and bring-and-buy fetes, etc. Expenditure on such community services and any income earned (eg room hire fees) should be recorded here.

Where libraries occupy space in shared community facilities, the costs should to be apportioned between the services.

Mobile and housebound library services

Include expenditure on libraries that operate from vans, buses, trailers or any other mobile base. Also include here services to housebound library service users. Include any fees for overdue books or other services here as gross income.


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Includes

Service Management and Support Services (SMSS)

An optional holding account for management and support service costs. All costs must be recharged to the other divisions of service. Where possible, costs should be allocated directly to the most appropriate service division, eg officers’ time on the preparation of updates to and monitoring of:

� Local cultural plans should be charged to Culture and Heritage

� Sports and recreation strategies should be charged to Recreation and Sport.

Other support services such as finance, IT, personnel, procurement, etc may need in part to be apportioned. Apportionment bases should be determined in accordance with the guidance in Section 2 of SeRCOP.


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Environmental and Regulatory Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR ENVIRONMENTAL AND REGULATORY SERVICES

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR ENVIRONMENTAL AND REGULATORY SERVICES

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN ENVIRONMENTAL AND REGULATORY SERVICES


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Page 149




Cemetery, Cremation and Mortuary Services � Cemeteries

� Crematoria

� Mortuaries

� Closed churchyards.

Coast Protection

Community Safety (Crime Reduction)

Community Safety (CCTV)

Community Safety (Safety Services)

Flood Defence and Land Drainage � Defences against flooding

� Land drainage and related work.

Agricultural and Fisheries Services

Regulatory Services Environmental Health subdivisions include:

� Alcohol and entertainment licensing

� Animal and public health

� Environmental protection

� Food safety

� Health and safety

� Housing standards

� Infectious disease

� Noise and nuisance

� Pest control

� Port health

� Public conveniences

� Taxi licensing

� Water safety.

Trading Standards subdivisions include:

� Consumer pricing

� Fair trading

� Food standards

� Metrology

� Product safety.

Street Cleansing (not chargeable to Highways)

Waste Collection � Household waste collection

� Waste strategy.


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Waste Disposal � Disposal of waste

� Transfer stations

� Civic amenity sites

� Waste strategy

� Closed landfill sites

� Trading of landfill allowances.

Trade Waste � Collection

� Disposal.

Recycling � Collection

� Disposal/recovery.

Waste Minimisation

Climate Change Costs

Service Management and Support Services Optional holding accounts. All costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed.


Note 2: This guidance should be read in conjunction with the introduction to the Service Expenditure Analysis for all local government services and CIPFA’s statement of principles for Best Value accounting (see the LAAP pages on the CIPFA website – click on Policy & Guidance > Technical Panels and Boards > Local Authority Accounting Panel).


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PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR ENVIRONMENTAL AND REGULATORY SERVICES




3 This guidance note has been compiled from the following sources. The aim has been to promote consistency between CIPFA’s definitions and those provided by other organisations, and to make them as comprehensive and user-friendly as possible:



STATUS AND IMPLEMENTATION4 This SEA for Environmental and Regulatory Services replaces all previous versions issued

by CIPFA and is mandatory for English and Welsh authorities from 1 April 2015. 2015/16 SeRCOP applies to the following statutory disclosures:

� 2015/16 Budgets




basis as a minimum.

www.cipfastats.net

www.tisonline.net


Page 152

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN ENVIRONMENTAL AND REGULATORY SERVICES


Includes

Cemetery, Cremation and Mortuary Services

Include the costs and income related to cemeteries, crematoria and mortuary services.

Cemeteries Include all costs associated with the provision of cemeteries including contributions and administrative support to joint cemetery boards established under the Local Government Act 1972.

Crematoria Include all costs associated with the provision of crematoria including contributions and administrative support to joint crematoria boards established under the Local Government Act 1972.

Mortuaries Include the cost of mortuary and post-mortem services here. The Public Health Act 1936 requires some authorities to maintain mortuary services. The authority may charge another body, such as a police force, for its use of the mortuary and post-mortem services offered. Similarly, the authority may choose to buy in such services from, for example, a local hospital.

Closed churchyards Under the Local Government Act 1972, a parochial church council may decide to close a churchyard and request that a local authority maintain it. The costs of maintaining transferred churchyards should be accounted for here.

Coast Protection The costs of coast protection are significant for some authorities and should include relevant revenue expenditure such as expenditure incurred to protect coastal areas against erosion and sea encroachment.

Community Safety (Crime Reduction)

The Community Safety division of service has been split to assist authorities in separately identifying community safety expenditure in accordance with the requirements of the CLG RO forms. Include Community Safety (Crime Reduction) expenditure that cannot be clearly or properly allocated to a specific service. Examples of types of expenditure to include here are:

� Fees paid to police forces to secure extra police officers for a particular area

� Providing crime prevention advice.

Exclude any items that can be coded to a specific service or the HRA.

Community Safety (CCTV) Exclude any items that can be coded to a specific service or the HRA. For example, CCTV cameras in car parks should be coded to Parking Services. Cameras providing security to schools should be accounted for in Education.


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Includes

Community Safety (Safety Services)

The Community Safety division of service has been split to assist authorities in separately identifying community safety expenditure in accordance with the requirements of the CLG RO forms.

Include Community Safety (Safety Services) expenditure that cannot be clearly or properly allocated to a specific service. Examples of types of expenditure to include here are:

� Lighting in non-highway areas (except HRA items)

� Provision of safety railings

� Providing home safety advice.

Flood Defence and Land Drainage

Any activity related to the prevention of flooding should be included in this service division.

Defences against flooding Include:

� Revenue expenditure (including capital charges) on the construction, alteration, improvement, repair, maintenance, demolition and removal of defences

� Costs related to the maintenance and testing of flood warning systems

� The provision of advice and information to the public.

Land drainage and related work Include the routine maintenance of watercourses. County councils have the power to remove obstructions in the watercourse and to undertake drainage works. District councils and London boroughs also have similar powers to drainage boards. Also include liaison costs involving the Environment Agency and relevant bodies.

Agricultural and Fisheries Services

Include the costs of supporting agriculture, notably those associated with the provision and maintenance of farms and smallholdings for rent including rent collection costs. Also include costs related to fishery harbours as defined by s21 and Schedule 4 of the Sea Fishery Industry Act 1951 and fisheries expenditure at all other ports.

Record the rents and other income earned here. Show income and expenditure gross.

Exclude the costs of enforcing animal welfare and other regulatory standards. These are accounted for under the Environmental Health and Trading Standards divisions of Environmental Services.

Regulatory Services Include all services to promote and protect public health.

Includes all services which promote and ensure fair, honest and safe trading practices in relation to fair trading, food standards, pricing, product safety, and weights and measures.


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Includes

Alcohol and entertainment licensing

All licensing activity, not classed as DRM, by a council should be accounted for here. This rationalises the accounts, which previously showed different licensing work in different places. This new simpler method of accounting:

� Reflects an increasing trend by local authorities to have a single multi-skilled team to deal with all licensing work

� Opens up the possibility for Best Value reviews of licensing activity.

Examples of licensing activity to include here are:

� Theatres

� Cinemas

� Animal licensing

� Responsibilities under the Gambling Act 2005

� Responsibilities under the Licensing Act 2003.

Income from licence fees should be accounted for here.

Animal and public health This category includes expenditure on a number of small activities as follows. Local records are likely to identify each service separately:

� Animal welfare

� Dog control

� Cesspool emptying

� Contributions to sewerage schemes

� Temporary caravan sites

� Checking conditions at travellers’ sites

� Health education activity, eg leaflets, exhibitions, etc.


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Includes

Environmental protection Include work performed to reduce:

� Air pollution:

– Responsibilities under the Environment Protection Act 1990, the Clean Air Act 1993 and Part IV of the Environment Act 1995. Include work on the air quality management plan here

– Other statutory nuisance work investigating complaints of dust, odour and smoke

– Light pollution powers under the Environmental Protection Act 1990 (as amended by the Clean Neighbourhoods and Environment Act 2005).

� Pollution prevention and control: includes permitting business under The Environmental Permitting (England and Wales) Regulation 2007.

� Contaminated land: the Environment Act 1995 requires local authorities to have a formal strategy to identify and deal with contaminated land. Include the costs of preparing and implementing this strategy including the costs of:

– Identifying contaminated land

– Assessing the degree of contamination

– Maintaining a register of contaminated land

– Monitoring levels of contamination

– Assessing the health risks associated with contaminated land.

� Anti-fly-tipping work: include publicity costs, telephone hotlines and the costs of court actions. Note: exclude the removal of fly-tipped waste. It is included in Waste Collection, below.

� Environmental crime: includes littering, dog fouling, fly-tipping, enforcement of trade waste contract and graffiti.

Food safety Include all activity that aims to reduce the incidence of food poisoning as required by:

� The Food and Environment Protection Act 1985

� The Food Safety Act 1990

� The Food Hygiene (England) Regulations 2006

� EC 852 – 2004

� EC 853 – 2004

� EC 854 – 2004.

Likely activity to be accounted for here includes:

� Regular inspections of food premises

� Routine inspection and testing of food samples

� Running food hygiene courses for people who handle food at work

� The operation of a ‘good hygiene’ certificate scheme

� Investigations into food poisoning outbreaks.


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Includes

Health and safety Include expenditure on health and safety at work inspections, investigations of notified incidents and enforcement work. The work will mostly be undertaken under the Health and Safety at Work Act 1974. The precise areas covered are detailed in The Enforcing Authority Regulations (SI 746/1977) and include shops, offices, some warehouses and some other commercial premises, eg launderettes.

Housing standards Include all costs associated with work to ensure that the residents of private sector accommodation live in safe and sanitary conditions. Includes private sector accommodation; caravans and mobile structures; public sector properties; and owner-occupied houses. Likely activities to include here are:

� Inspections in response to complaints from residents

� Checks on the quality of houses in multiple occupation

� Licensing of houses in multiple occupation

� Checks on conditions at traveller sites

� Inspections of hotels, guest and boarding houses

� Validation certification.

Infectious disease This category includes expenditure on the control of infectious diseases under the Public Health (Control of Diseases) Act 1984 and associated 1988 regulations, except for port health provisions, which are included in the ‘Port health’ subdivision below.

Noise and nuisance Include work performed to reduce noise pollution:

� Action under the Environmental Protection Act 1990 dealing with noise as a statutory nuisance

� Noisy party patrols, investigating complaints and where necessary the costs of seizing noisy equipment

� The silencing of alarms under the Clean Neighbourhoods and Environmental Act 2005 (costs of work in default which cannot be recovered cannot be set as a charge against the property under this legislation)

� Any action under the Noise and Statutory Nuisance Act 1993 or the Noise Act 1996

� Dealing with noise from construction sites and noise in the street under the Control of Pollution Act 1974.

Pest control Include the costs of rodent and other pest control activity including mice, wasps, etc. Any income earned from this activity should be shown gross.

Port health Checks on the fitness of food and animals in transit at ports and airports.

The issuing of de-ratting certificates.

Include income from the certificates shown gross. Do not net off income against costs.

Public conveniences Include the costs of running, cleaning and maintaining public toilets. Income should also be accounted for on a gross basis.


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Includes

Taxi licensing Licensing activity, not classed as DRM, by a council should be accounted for here. This rationalises the accounts, which previously showed different licensing work in different places. This new simpler method of accounting:


� Opens up the possibility for Best Value reviews of licensing activity.

Examples of licensing activity to include here are:

� Hackney carriages

� Private hire vehicles.


Water safety Includes all activity that aims to reduce the incidence of water-based poisoning as required by the Water Industry Act 1991.

Activity likely to be accounted for here includes monitoring drinking water.

Consumer pricing Includes inspection, advice and enforcement activity to ensure prices are accurately displayed where required and that consumers are not misled as to the price of goods, services or accommodation.

Fair trading Includes activity under a wide range of legislation aimed at protecting consumers and legitimate businesses and preventing unfair commercial practices. Activities include:

� Investigation and enforcement based on complaints or intelligence

� Good trader schemes and controls on door-to-door selling activity

� Provision of legal advice to businesses and to individual members of the public.

Food standards Includes inspection, advice to businesses, sampling and other activities aimed at ensuring that food sold is correctly labelled and meets compositional standards where applicable.

Metrology Includes inspection and enforcement activity aimed at ensuring that weighing and measuring equipment used for trade is accurate and that goods sold by quantity are correct.

Product safety Includes inspection, advice to businesses, sampling and other activities aimed at ensuring that products placed on the market are safe.


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Includes

Street Cleansing (not chargeable to Highways)

Include here the sweeping and removal of litter from land, litter bins, etc that are required to comply with s89 of the Environmental Protection Act 1990. It sets standards of cleanliness that councils must maintain for 11 different categories of land. The categories range from shopping centres to towpaths that the public have rights of access to. Also include the:

� Collection of illegally fly-tipped rubbish

� Removal of dead animals

� Cleansing of foreshores

� Graffiti removal

� Removal of abandoned vehicles which do not constitute a traffic hazard.

Any sweeping that relates to keeping carriageways free of litter for road safety purposes should be charged to the Environmental maintenance subdivision of Highways and Transport Services.

Waste Collection Include all expenditure on the collection of household waste. Do not include expenditure on the collection of trade waste (included under Trade Waste, below) or expenditure on the separate collection of recyclable, re-useable or compostable waste (to be included under Recycling, below).

Household waste collection Include the collection of refuse from private dwellings and community skips. Include all types of waste including garden waste, bulky items and clinical or hazardous waste. Income earned from these collections should also be shown here. Under s75 of the Environmental Protection Act 1990, the following types of premises are classed as households:

� Residential care home premises

� Nursing care home premises

� Schools or other educational establishments.

Expenditure on collecting waste from the above premises should be included in Household waste collection expenditure and the income receivable. The full costs of refuse collection will only be ascertained from the refuse collection trading account. For further guidance on accounting for internal trading accounts see paragraphs 2.28–2.36 of SeRCOP.

Waste strategy Include the costs of preparing, monitoring and reviewing the joint waste strategy.

Waste Disposal Include the costs of household waste disposal including landfill, incineration, centralised composting, re-using/recycling and new technologies, etc in this service division. Do not include expenditure on the treatment of recyclable, re-useable or compostable waste – these are to be included under Recycling below.

Disposal of waste Include the costs of waste disposal, including landfill, incineration and new treatment technologies.

Transfer stations Include the costs of operating transfer stations, including transport to disposal sites.


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Includes

Civic amenity sites Include the costs of operating civic amenity sites (household recycling centres), including transport costs.

Waste strategy Include the cost of preparing, monitoring and reviewing the waste strategy.

Closed landfill sites Include the cost of restoration and monitoring.

Trading of landfill allowances Include costs and income.

Trade Waste

Collection Include the costs of collecting refuse from commercial properties. Income earned from this activity should also be included here and shown gross.

Disposal Include payments to waste disposal authorities for the disposal of trade waste.

Recycling

Collection Include all of the costs of collecting items separately (eg doorstep collections or banks), for recycling. Exclude the costs of processing recycled waste except for those which are borne solely by the waste collection authority (WCA) and cannot be attributed to the waste disposal authority (WDA).

Disposal/recovery Include the costs of processing recyclable or compostable waste and the costs of material sorting (material recovery facilities – MRFs). Include the costs of re-processing, where recyclables are used as secondary raw materials, and composting/organic reprocessing such as windrow composting, in-vessel composting or anaerobic digestion. Include the cost of new recycling technologies. Include the payment of re-use and recycling credits and income from disposal credits or the sale of recyclables. Costs shown here may be direct costs or payments to contractors.

Waste Minimisation Include the costs of initiatives and actions to encourage the minimisation of waste through the re-use, exchange and shared use of goods.

Include the costs of initiatives and actions to prevent/reduce waste through consumer purchasing.

Exclude costs of recycling (above).

Exclude any process that takes raw waste and following treatment reduces its volume, minimising the quantity of waste going to landfill. These costs are to be included under Waste Disposal (above).

Climate Change Costs Optional division of service for costs associated with the Climate Change Act 2008.


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Includes


An optional holding account for management and support service costs. All costs must be recharged to the other divisions of service. Where possible, costs should be allocated directly to the most appropriate service division, eg management time on the preparation of the air quality management plan would be charged to the Pollution reduction subdivision.

Inevitably, some support services costs such as finance, IT, personnel, procurement, etc will need in part to be apportioned. Apportionment bases should be determined in accordance with the guidance in Section 2 of SeRCOP.

Fire and Rescue Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR FIRE AND RESCUE SERVICES

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR FIRE AND RESCUE SERVICES



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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR FIRE AND RESCUE SERVICES



Community Safety � Statutory inspection, certification and enforcement

� Prevention and education (see note 4).

Fire Fighting and Rescue Operations � Operational responses

� Communications and mobilising

� Securing water supplies.

Fire Service Emergency Planning and Civil Defence

Management and Support Services (optional holding accounts)

All costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed.

� Finance

� Personnel

� Information technology

� Training

� Transport maintenance

� Property

� Legal services

� Central procurement/stores

� Others as required.

Note 1: The Central Services SEA has guidance on local authorities’ emergency planning role.



Note 4: Increasingly, fire authorities are using operational fire fighters for prevention and education work, rather than using dedicated staff such as school liaison officers, fire safety officers, etc. Fire fighters are normally charged to the ‘Operational responses’ subdivision (see below). Therefore, a financial adjustment is necessary to accurately show the costs of prevention and education work. Where this is the case, an estimate of the time involved should be made and an appropriate amount of expenditure transferred from the ‘Operational Responses’ subdivision to the ‘Prevention and education’ subdivision.

Note 5: The costs associated with partnership working should be included in the division to which they apply. For the most part this will be in Community Safety work on prevention and education. Partnership working may also apply in establishing arrangements for call handling, mobilisation and other operational activity.


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PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR FIRE AND RESCUE SERVICES

INTRODUCTION1 The aim of this guidance is to get different fire and rescue authorities’ financial records

on as consistent a basis as possible. It is not intended to influence how different services are organised on the ground. This is not CIPFA’s role and is contrary to the spirit of Best Value, which encourages innovation. The guidance merely seeks to provide a means for the aggregation of the costs of Fire and Rescue Services, regardless of how they are organised, on a comparable basis. The ability to compare services is one of the four key strands of Best Value, namely to:

� make comparisons between services




APPLICABILITY OF THE CORPORATE AND DEMOCRATIC CORE2 Section 2 of SeRCOP states clearly that the costs of the Corporate and Democratic Core apply

to Fire and Rescue Services. These costs should not be allocated or apportioned to other divisions of service. The definition applies equally to Fire and Rescue Services, except that:

� The statutory roles of the clerk and treasurer will be under DRM point (b) as officer time supporting democratic representation and management.

� Corporate Management point (a) is less likely to apply as the chief fire officer will either be involved in direct management of services (charged to services) or with the provision of advice and support to members (charged to DRM).

� Corporate Management point (e) will not apply.

CHANGES TO THE TREATMENT OF PENSIONS COST3 The Local Authority Accounting Panel (LAAP) established the Fire Services Consultative Group

as part of the development programme for the 2003 BVACOP. This group reviewed the Fire Services section of the Service Expenditure Analysis for 2003 BVACOP.

4 Since the introduction of BVACOP in February 2000 the treatment for fire fighters’ pension costs has been to account for all pensions costs as a separate service division of the SEA. This was primarily to ensure that the impact of the fluctuation of year-on-year costs of uniformed staff was kept out of cost comparisons.

5 The LAAP Fire Services Consultative Group decided that the costs of fire fighters’ pensions should be included in the cost of each service division in the SEA, as this would accurately represent the ‘full’ cost of each service division.


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6 Therefore, since the 2003 BVACOP, the division of service Fire Fighters’ Pensions has been removed from the Fire Services SEA.

7 The costs and the pensions contributions of fire fighters’ pensions should instead be attributed (or allocated) to the total cost of the other service divisions within the SEA as appropriate and in line with the recommendations provided in the good practice guidance set out in Section 2 of SeRCOP. Pension costs will need to be attributed in a way which will comply with the new pension funding arrangements which took effect from 1 April 2006. More details on these arrangements can be found on Fire and Rescue Service Circular 8-2006.

8 Any costs meeting the definition of Non Distributed Costs as defined in Section 2 of SeRCOP should be attributed to this new service division.

STATUS AND IMPLEMENTATION9 This SEA for Fire Services replaces all previous versions issued by CIPFA and is mandatory for

English and Welsh authorities from 1 April 2015. 2015/16 SeRCOP applies to the following statutory disclosures:

� 2015/16 Budgets




basis as a minimum.


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Includes

Community Safety

Statutory inspection, certification and enforcement


� Fire safety inspections and issuing certificates under the Fire Precautions Act 1971 (1971 Act) as amended under The Fire Precautions (Workplace) Regulations 1997, or The Regulatory Reform (Fire Safety) Order 2005

� Inspecting and issuing licences to premises where petroleum or explosives are stored under the Petroleum (Regulation) Acts 1928 and 1936, the Explosives Act 1875 and the Public Health Act 1961, which concerns derelict petrol tanks

� Enforcement work associated with the above licensing/inspection activities

� Giving advice to planning and licensing authorities on matters of fire safety. (See CIPFA’s Technical Information Service’s ‘Police and Fire’ information stream at www.tisonline.net for a comprehensive list of relevant legislation.)

Any income earned from licence fees or for giving advice should be included here and shown gross.

Prevention and education


� Carrying out fire investigations

� The giving of free fire prevention advice when requested under s7(2)(d) of the Fire and Rescue Services Act 2004

� Community fire safety officers or advisors

� Partnership working relating to Community Safety work

� Schools liaison

� Liaison and co-operation with the National Community Fire Safety Centre

� Production and distribution of fire safety leaflets, posters, videos, etc

� Chip pan fire simulators and other similar fire safety demonstration equipment

� Joint fire safety initiatives with voluntary bodies such as Age Concern, Association of British Insurers, Fire Protection Association, Industrial Fire Protection Association and the British Fire Services Association

� Provision of free smoke alarms

� Any other fire prevention and education activity.

Note: increasingly, fire authorities are using operational fire fighters for prevention and education work, rather than using dedicated staff such as school liaison officers, fire safety officers, etc.

Fire fighters are normally charged to the ‘Operational responses’ subdivision, below. Therefore, a financial adjustment is necessary to accurately show the costs of prevention and education work. Where this is the case, an estimate of the time involved should be made and an appropriate amount of expenditure transferred from the ‘Operational responses’ subdivision to the ‘Prevention and education’ subdivision.

www.tisonline.net


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Includes

Fire Fighting and Rescue Operations

Operational responses

This will include a significant proportion of total expenditure. It will include the costs of whole-time fire fighters and retained fire fighters (separately identified in the subjective analysis). It will also include charges made to revenue in respect of capital investment in appliances.

Include here the costs of attending all types of incident:

� Primary/secondary/chimney fires/road traffic collisions

� Special services incidents such as road accidents, spills, flood pumping out, animal rescues, lift releases, etc

� False alarms and malicious calls.

Income from special services should be included here gross. Do not net special services costs off against income earned.

Communications and mobilising

This includes the handling of emergency calls, the despatch of resources, ongoing incident management and the provision of information about incidents.

Include control room operators and other staff that work directly in the control room. Also include the costs of:

� Secondary or standby systems

� Hardware/software-related costs, eg maintenance agreements, capital charges

� Charges from operators, eg BT

� Primary and secondary station links

� Personnel links, eg pagers, mobile phones

� Radio communications including data links

� Telephony, eg 999 calls

� Mobile control/incident rooms.

Exclude the following items which should be classed as management and support services:

� The general switchboard

� Database management

� Systems support.

Securing water supplies

S38 of the 2004 Act requires fire authorities to take steps to ensure adequate water supplies in case of fires. The Water Industry Act 1991 requires water undertakers to fit fire hydrants in water mains at the request of fire and rescue authorities, and such authorities are required to pay for their fitting and maintenance.

Include the costs associated with securing water supplies and of fitting and maintaining fire hydrants in this subdivision.


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Includes

Fire Service Emergency Planning and Civil Defence

Fire and rescue authorities are required to assess, plan and advise in respect of a wide range of emergencies under the Civil Contingencies Act 2004 and are expected to do this through participation in their local resilience forum.

Therefore, this service division includes the costs of:

� Fire and Rescue Services emergency planning staff and their training

� Premises and other assets used by emergency planning staff

� The costs of any exercises to test plans

� Emergency planning literature and publicity.


(optional holding accounts)

The aim is to allocate and apportion all support costs to appropriate service divisions. This may be done periodically during the year or at the year-end. Hence these optional holding accounts will not show in the year-end accounts as they will have been cleared to nil.

Include:


� Personnel


� Training

� Transport maintenance

� Property

� Central procurement and stores

� Legal services

� Others as required.

Note: some support services such as finance, IT, personnel, procurement, etc may not be easily allocated to service divisions and will need to be apportioned to all service divisions on an equitable basis. Apportionment bases should be determined in accordance with the guidance in Section 2 of SeRCOP.

Highways and Transport Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR HIGHWAYS AND TRANSPORT SERVICES

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR HIGHWAYS AND TRANSPORT SERVICES



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Transport Planning, Policy and Strategy

Structural Maintenance � Structural maintenance (principal roads)

� Structural maintenance (other roads)

� Bridges.

Capital Charges relating to Construction Projects

� Capital charges relating to construction projects (principal roads)

� Capital charges relating to construction projects (other roads)

� Capital charges relating to construction projects (bridges)

� Capitalised scheme design and/or site supervision costs.

Environmental, Safety and Routine Maintenance

Street Lighting (including energy costs)

Winter Service

Traffic Management and Road Safety

� Traffic management

� Traffic management – bus lane enforcement

� Road safety education and safe routes (including school crossing patrols)

� Congestion charging.

Parking Services � On-street parking

� Off-street parking.

Public Transport � Statutory concessionary fares

� Discretionary concessionary fares

� Support to operators

� Co-ordination.

Airports, Harbours and Toll Facilities

� Airports

� Harbours/ports/docks

� Piers and jetties

� Toll roads/tunnels.



� Professional and engineering services

� Highways properties.

Note: all costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed.


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PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR HIGHWAYS AND TRANSPORT SERVICES

INTRODUCTION1 The aim of this guidance is to ensure different local authorities’ Highways and Transport

Services financial records are on as consistent a basis as possible and to allow local authorities to meet the majority of their financial reporting commitments from a single set of base financial records.

2 The guidance is not intended to influence how different authorities are organised on the ground. This is not CIPFA’s role and is contrary to the spirit of Best Value, which encourages innovation. The guidance merely seeks to provide a means for a comparable aggregation of the costs of Highways and Transport Services, regardless of how they are organised. The ability to compare services is one of the four key strands of Best Value, namely to:





STATUS AND IMPLEMENTATION3 This SEA for Highways and Transport Services replaces all previous versions issued by CIPFA

and is mandatory for English and Welsh authorities from 1 April 2015. 2015/16 SeRCOP applies to the following statutory disclosures:

� 2015/16 Budgets




basis as a minimum.

NOTE ON HIGHWAYS DIVISIONS OF SERVICE5 The Highways divisions of service (the second to the sixth divisions of service, Structural

Maintenance to Winter Service) include the construction, structural maintenance and routine maintenance of public highways, and streetlights. It also includes footpaths, cycle ways, towpaths and bridleways not already included in the Open Spaces division of service (within the Cultural and Related Services SEA). It includes both the management and commissioning costs involved in determining the work required and the costs of monitoring its completion


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and the amounts paid to the in-house teams or outside contractors for carrying out the work. Capital charges associated with capital works should be included here.

6 A particular feature of the Highways divisions of service is the extent to which expenditure may be rechargeable to third parties, to utilities and individuals for private street works, to the Housing Revenue Account for some estate roads and to other local authorities or the government for agency work. In most of these cases, the expenditure and the associated income should be included under the same service expenditure heading and appropriate subjective headings. Section 2 explains that the exception to this is when expenditure is by an authority working as a formal agent of government or another local authority. In this case, only show net income or expenditure in the authority’s accounts. To assist the completion of government returns, the Highways divisions of service includes the separate divisions:

� Structural Maintenance

� Environmental, Safety and Routine Maintenance.

HOW TO TREAT ‘OTHER’ WORKS7 There may be other highways expenditure that is difficult to classify, eg some county

councils have village maintenance teams that do many types of small maintenance tasks in one village, classified as one job. Urban councils may do the same in individual estates or electoral wards. Authorities should try to classify such work as accurately as possible over the above categories. The level of sophistication required to make this split will vary according to the materiality of the amounts involved.


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Includes


This division of service includes those costs associated with:

� Formulating transport, highways plans and policy including the associated research

� Working with developers to assess the impacts of developments on highways

� Highway/road issues relating to planning applications

� Highway adoptions

� Monitoring street works.

Include network-related issues such as:

� Maintenance of a road network plan

� Information published to promote the road network.

Include the preparation of annual plans such as:

� The local transport plan

� The road safety plan

� Contributing to unitary development plans

� Contributing to the regional transport strategy

� Contributing to structure plans.

Include the following planning-related work:

� Giving a transport view of planning applications

� Assisting with searches

� The formal adoption of roads

� Temporary notices and orders, including road closures made under s14 of the Road Traffic Act 1994 as amended by The Road Traffic Temporary Restrictions Procedure Regulations 1992.

Include monitoring street works under the New Roads and Street Works Act 1991, whereby the local authority monitors all road works by private parties, utilities, etc.

Note: consistency between local authorities. To assess the costs of transport planning, policy and strategy accurately and consistently will require good estimates of how staff split their time between the tasks described above and the more operational tasks detailed in the guidance notes that follow.


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Includes

Structural Maintenance This includes expenditure on the maintenance of public highways of all classes, footways, cycle tracks and other rights of way. However, in order to complete government returns and to report on national performance indicators, it is important that authorities also separate expenditure on principal roads from expenditure on other roads.

The ‘Structural maintenance (principal roads and other roads)’ subdivisions of service do not include the structural maintenance and strengthening of bridges, for which there is a separate subdivision.

The following subdivisions of service are included:

� Structural maintenance (principal roads)

� Structural maintenance (other roads)

� Bridges.

Structural maintenance (principal roads)

Structural maintenance includes:

� Reconstruction

� Overlay

� Resurfacing (including integral patching and minor repairs)

� Surface dressing (including integral patching and minor repairs)

� Remedial earthworks

� Drainage structures

� Fencing, walls and barriers

� Costs of third party liability claims related to structural defects on roads, footpaths, etc.

Taking each element of structural maintenance in turn:

� Reconstruction includes the removal of two or more of the structural layers of a carriageway, footway or footpath and their replacement with new material, including new surfacing, including the reinstatement of coastal highways. Any consequent works in connection with footways, cycle tracks, drainage, road markings and kerbs should be included. Small areas of reconstruction carried out prior to larger overlaying or resurfacing works should be included with the larger operation.

� Overlay of the existing wearing course to increase or restore the strength of the carriageway should be included. As with reconstruction, above, any necessary prior or consequent works should be included. Overlays in thicknesses of up to and including 50mm should be classified as Resurfacing.

� Resurfacing refers to the replacement of the existing wearing course to restore the running surface. Again, any necessary prior or consequent works should be included here as a part of the larger project, not as minor works.


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Includes

Structural maintenance (principal roads) (continued)

� Surface dressing, including the renewal of anti-skid treatment, to enhance the surface texture and seal the carriageway should be included, together with any necessary prior or consequent works, such as the need to fill in potholes or to make minor repairs or patching to prepare the road for resurfacing.

� Remedial earthworks refers to the repair of earth slips and the provision of any necessary drainage and new retaining systems.

� Drainage structures includes the replacement and structural maintenance of existing carriageway drainage systems, the replacement of kerbs for drainage purposes and the maintenance and replacement of culverts under 2m in span or diameter.

� Fences, walls and barriers includes the replacement and repair of all fences, walls, etc except snow fences, hedges and noise barriers on bridges, and additionally safety crash barriers which are located particularly in central reservations and at railway bridges in addition to other bridges. Note the cleaning of fences, etc is included as a Routine Maintenance item, below.

� Third party liability claims that are made as a result of structural defects should be accounted for here. This will account for the majority of claims made. Material claims not related to structural defects (eg slipping on ice) can be allocated appropriately to the most relevant division of service (ie Winter Service in the example given).

If more detailed analysis is required, eg by scheme or by agent authority, this can be done using either the subjective analysis or the SEA. It is recommended that a lower level of SEA is used to differentiate between schemes and that the detailed analysis provided for in the third party payments subjective grouping is used to differentiate between agent authorities.

Structural maintenance (other roads)

See ‘Structural maintenance (principal roads)’ above.

Bridges This should include all structural maintenance and strengthening of bridges and structures charged to revenue account, including bridges, tunnels, and culverts over 2m in span, pedestrian subways and noise barriers on bridges. It should also include assessment work. Include related capital charges here.


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Includes


The largest element here will be the capital charges and impairment loss made to revenue as the result of past capital expenditure on the road network on the construction of roads and bridges. These charges should be made in accordance with the capital accounting guidance on infrastructure assets.

If analysis by scheme is required, this can be achieved at the next level down in the SEA. In order to complete government returns and to report on national performance indicators, it is important that authorities also separate expenditure on principal roads from expenditure on other roads. This service division has been separately identified to align with the DCLG’s RO2 form and to avoid the ‘distorting’ impact of capital charges on the maintenance of roads.

Capital charges relating to construction projects (principal roads)

Capital charges relating to construction projects (other roads)

Capital charges relating to construction projects (bridges)

Capitalised scheme design and/or site supervision costs

Environmental, Safety and Routine Maintenance

Environmental maintenance includes the following only to the extent that they are necessary for the preservation of the carriageway and for traffic safety, including the preservation of sight lines. The majority of street sweeping or cleansing is accounted for as an environmental rather than a highways service. This will include charges for:

� Tree maintenance

� Verge maintenance

� Carriageway sweeping, including litter and other hazard removal.

Exclude similar operations for amenity reasons.

Safety maintenance includes the maintenance and replacement of existing road markings and studs. It also includes the cleaning, repair, replacement and energy costs associated with existing:

� Traffic signals

� Signs

� Crossings

� Overhead signs or signal gantries

� Communications equipment for principal motorways.

Exclude the provision of new equipment and facilities. These should be classified under ‘Traffic management’ (see below).


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Includes

Environmental, Safety and Routine Maintenance (continued)

Routine maintenance includes:

� Ad hoc, unplanned patching and minor repairs

� Drainage cleaning

� Cleaning of fencing, walls, barriers, etc

� Culverts and subways cleaning

� Routine inspections.

Defining each item in turn:

� Ad hoc patching and minor repairs includes haunching, repairing potholes, etc carried out in a responsive and unplanned way. These should not be included if they are an essential element of an associated reconstruction, overlay, resurfacing or surface dressing project. In such cases, include these costs as a part of the bigger project, not as minor works.

� Drainage cleaning includes the testing, rodding and cleaning of drains, gullies, ditches and carriageway drainage systems.

� Cleaning fencing, walls and barriers that require minor maintenance or cleaning will be covered by this heading, except for snow fences (Winter Service), hedges (‘Verge maintenance’) and noise barriers on bridges (‘Bridges’). It also covers the cleaning, repair and replacement of other street furniture, eg roadside seats and street name plates.

� Culverts and subways cleaning includes culverts with spans greater than 2m, pedestrian subways and highways tunnels. This heading covers cleaning only, not structural maintenance.

� Routine inspections includes regular checks of highways, footpaths, etc to identify maintenance needs, safety risks, etc. Structural surveys are a part of the Structural Maintenance division.

Street Lighting (including energy costs)

This division of service includes all the costs of street lights, including their maintenance, inspection and energy costs. Include the costs of extra seasonal lighting (such as Christmas lights) and the costs of lighting pedestrian subways and highway tunnels. Although it may be hard to separate lighting costs from other electrical costs, eg for illuminated signs/bollards, traffic signals, etc, separate identification is necessary so that local authorities are able to provide reliable information for the DCLG RO2 return.

Where practical, lighting directly associated with construction or maintenance of highways should be charged to these headings.

Winter Service This should include the cost of keeping roads free from snow and ice, including salting, urea treatment, snow ploughing, snow fencing and standby arrangements. It should also include weather forecasting costs, the maintenance and energy costs for under-road heating and the maintenance and operation of ice detecting equipment, but not its supply or installation. This should be included in the costs of the larger construction project that the installation of the new equipment was associated with. This has previously been a subdivision of service but has now been separately identified so local authorities can provide reliable information for the DCLG RO2 form.


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Includes


The following subdivisions of service are included. Each is described further below:


� Road safety education and safe routes (including school crossing patrols)

� Congestion charging.

Traffic management This includes:

� Planning, and scheme design (for example, urban safety management schemes, home zones, new pedestrian crossings and new traffic calming measures)

� Street naming

� The monitoring of traffic, including CCTV monitoring cameras

� Area traffic control centres

� Contributions towards the administration and enforcement of lorry ban schemes, such as the one operated collectively by the London borough councils to keep lorries out of London during night hours

� Research undertaken to inform policy making such as traffic surveys, accident data collection and accident investigations

� Traffic regulation orders.

Only include specific traffic management schemes and the associated capital charges here. Traffic management aspects of larger construction or structural maintenance projects should be included in the larger schemes and need not be separately identified, unless they are material and not separating them would distort comparisons.

Exclude expenditure and income for bus lane enforcement; these fall in line below.

Traffic management – bus lane enforcement

Include bus lane enforcement expenditure and income.


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Includes

Road safety education and safe routes (including school crossing patrols)

This includes publicity, training and other initiatives to improve road safety including:

� Contributions to the Royal Society for the Prevention of Accidents (RoSPA)

� Cycling training/motorcycle proficiency

� Schools liaison

� Road safety literature

� Rehabilitation courses for motor offenders.

Historically, school crossing patrols have sometimes been included within authorities’ Highways budgets and sometimes within Education budgets. For ease of comparison, reported spending should now be consistently recorded in Highways not Education.

Expenditure on safe route schemes (such as to school, to work, etc) should also be coded here, including capital charges that relate to capital works. This consolidates all road safety issues in one SEA and should facilitate a more joined-up approach to road safety, and in particular, safety related to travelling to school.

Congestion charging This includes the cost of surveys for proposed congestion charging schemes as well as costs associated with the schemes themselves. Toll charges which are not part of a congestion charging zone should not be included and should be shown under Airports, Harbours and Toll Facilities.

Parking Services Parking Services includes all costs associated with the provision of the parking facilities, including facilities for lorries and those provided under statutes other than the Highways Acts. It should also include all expenditure and income from the operation of parking regimes.

The following subdivisions of service are included. Each is described further below:



On-street parking This should include the costs and income from:

� Parking meters

� Parking attendants

� Residents’ parking permit schemes

� Business parking permit schemes.


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Includes

Off-street parking Authorities that provide off-street parking should include here the costs of operating and maintaining car parks, as well as the income received. They should include:

� Staffing costs

� Barrier equipment

� Security equipment

� The enforcement of excess charges, etc.

This category also includes the costs associated with operating car parks that support park and ride schemes.

Some authorities may like to further analyse off-street parking between surface car parks and multi-storey car parks. This would be good practice wholly consistent with Best Value as the likelihood is that peripatetic staff will service the surface car parks. Multi-storey sites are more likely to have permanent staff. Hence, trading accounts can more easily be prepared for individual multi-storey car parks. There are also ready private sector comparisons for multi-storey car parks, making their separation desirable.

Public Transport The following subdivisions of service are included. Each is described further below:

� Statutory concessionary fares

� Discretionary concessionary fares

� Support to operators and voluntary groups

� Co-ordination.

Statutory concessionary fares

Costs (including administration) of providing the statutory National Concessionary Travel Scheme for Older People and for eligible disabled people.

Discretionary concessionary fares

Costs (including administration) of all discretionary elements of any local concessionary travel schemes. This includes concessions during peak hours; for non-educational travel for young people; for companion travel; for disabilities not covered by the English National Concessionary Travel Scheme and on transport other than registered buses.

Please note that education travel should be included under the Children’s and Education Services SEA.


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Includes

Support to operators This should include the third party payments made to:

� Public transport operators

� Park and ride operators

� Passenger transport executives as levies

� Voluntary groups providing quasi-public transport, eg dial a ride schemes.

Any costs incurred in administration or monitoring of the above should be included here. For further guidance on accounting for trading account surpluses and deficits, see paragraph 2.28–2.36 of SeRCOP.

It is probable that authorities will wish to analyse each type of support further, for example by type of transport (bus, rail, ferry, etc) or by operator. The former should be achieved by using a lower level of SEA, the latter by using the detailed analysis provided for within the third party payments category in the standard subjective analysis of local authority expenditure.

Co-ordination This should include costs associated with the co-ordination of public transport services, including the:

� Provision of general information to the travelling public

� Revenue costs of investing in the public transport infrastructure, eg bus stations and bus shelters

� Costs of liaison with transport providers and the travelling public.


This division of service includes expenditure and income related to directly owned facilities in the following categories:

� Airports

� Harbours, ports and docks

� Piers and jetties

� Toll roads/tunnels.

Include expenditure and income from directly owned facilities here.

Many of the items under this section will be trading units reported annually to the DCLG on its form TSR (Trading Services). In each case, include gross costs on the total cost basis defined in Section 2 of SeRCOP, eg include capital charges and overheads and ensure that all income (such as toll payments) is recorded in full.

Although only one line is mandatory (ie Airports, Harbours and Toll Facilities), it is good practice to retain a separate trading account (where appropriate) or cost centre for each separate airport, dock, pier or other facility.

Airports Note that where an authority owns or part-owns an airport company, its share of the airport company’s receipts and any revenue support given should also be recorded here.

Harbours/ports/docks Exclude fishery harbours, as defined by s21 and schedule 4 of the Sea Fishery Industry Act 1951, and the costs of fishery responsibilities at more generic harbours. All fisheries-related costs are accounted for in the Agricultural and Fisheries Services division of Environmental Services.

Piers and jetties


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Includes

Toll roads/tunnels



Service management costs are distinct from support services:

� Support services are those that support the provision of services to the public. They are supplied to assist direct providers of services to the public in carrying out their main functions. They may be supplied in a variety of ways. For example, by staff of the highways and transportation service itself, by other departments of the local authority or by outside bodies.

� Service management, by contrast, almost always originates within the same department as the direct service costs.

In accordance with the principle of full allocation, both management and support service costs should ultimately be recharged fully to front-line services. Hence, management and support services (MSS) are voluntary holding accounts. The costs must be fully allocated to front-line services for financial reporting purposes.

Recharging to users: given that highways/roads works are often capital, some recharges will include capital accounts as well as revenue divisions or subdivisions of service. It may, in some cases, be necessary to attribute these recharges at a more detailed level to achieve proper accountability; for example, where there is a need to reflect properly the full costs of trading undertakings or where costs are recovered from third parties.

The following subdivisions of service are suggested and a brief description of their coverage is given below:


� Professional and engineering

� Highways properties.

Neither management and administration nor professional and engineering services are likely to be comparable between different authorities, since:

� The deployment of professional and engineering staff will be determined very much by the organisation of the service within each authority and affect the extent to which direct charging is possible and desirable.

� Management and administration will be distorted by different levels of devolvement within authorities.

As noted above, the use of these holding accounts is optional and authorities may wish to charge any of the above items of expenditure to the appropriate ‘final’ division or subdivision of service in line with the seven principles of apportionment specified in Section 2 of SeRCOP.


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Includes

Management and administration

This subdivision of service will include staff engaged in management and administration. To minimise cross-charging between MSS subdivisions, it should exclude administrative staff that are clearly directly attributable to other MSS divisions or subdivisions of service (for example, the secretaries of engineering staff).

Authorities may wish further to subdivide the costs of management and administration to reflect separately accountable units within the highways and transportation department. This will depend on the organisational arrangements and management accountabilities adopted in each authority, but might include separate geographical areas/divisions or separate support service functions, eg finance, personnel, information technology and training. These units may simply be separate budget cost centres or may constitute separate business units providing support services (eg via an SLA) to clients.

Premises used exclusively for administration should be accounted for under the ‘Administration’ subdivision, but where shared premises are involved, ‘Administration’ should only bear a proportion of the total cost calculated on an appropriate basis. This same principle applies to other subjective heads of expenditure covered by the ‘Administration’ subdivision of service. This also applies to ‘Professional and engineering services’, below.

Professional and engineering services

This may include the costs of professional and engineering staff, other than those covered by the management and administration subdivision. It may also include the costs of quarries, laboratories and technical surveys where these are not charged directly to other divisions of service. Again, some authorities may wish to account for such services at a more detailed level.

The previous standard form of accounts included a division of service called ‘Professional and engineering services’. It contained a range of different activities. Some were support services (eg management and administration), and others were direct services (eg traffic management). It did not require further analysis. This meant that the total cost of outcomes – for example, the cost of highways repair and maintenance – was not readily identifiable.

Highways properties All income and expenditure associated with highways properties should be accounted for under this heading before being allocated to the most appropriate service division.


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Housing Services

PART ONE: HOUSING GENERAL FUND (ENGLAND)/HOUSING COUNCIL FUND (WALES) SERVICE EXPENDITURE ANALYSIS

PART TWO: HRA FORMAT (ENGLAND)

PART THREE: HRA FORMAT (WALES)

PART FOUR: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR HOUSING SERVICES


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PART ONE: HOUSING GENERAL FUND (ENGLAND)/HOUSING COUNCIL FUND (WALES) SERVICE EXPENDITURE ANALYSIS



General Fund/ Council Fund (GF/CF) Housing

Housing Strategy

Enabling

Housing Advice

Housing Advances

Private Sector Housing Renewal � Administration of grants

� Renewal activity

� Management orders

� Prohibition orders and improvement notices

� Empty homes and dwellings

� Slum clearance

� Other neighbourhood regeneration

� Home improvement agencies – revenue costs.

Licensing of Private Sector Landlords

� Licensing of houses in multiple occupation (HMOs)

� Selective licensing of other private rented properties.

Homelessness � Hostels (non-HRA support)

� Bed and breakfast accommodation

� Other nightly paid, privately managed accommodation

� Private managed accommodation leased by the authority

� Private managed accommodation leased by RSLs

� Directly with a private sector landlord

� Accommodation within the authority’s own stock (non-HRA)

� Accommodation within RSL stock

� Other temporary accommodation

� Prevention

� Administration

� Support.

Housing Benefits Payments (Note 3)

� Rent allowances

� Non-HRA rent rebates

� Rent rebates to HRA tenants

� Subsidy limitation transfer from HRA

� Discretionary housing payments.

Housing Benefits Administration


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General Fund/ Council Fund (GF/CF) Housing (continued)

Contribution to the HRA re Items Shared by the Whole Community

Other Council Property � Travellers’ sites

� Non-HRA council property.

Supporting People (Note 4) � Strategy

� Administration

� Commissioning payments to providers.

Other Welfare Services

Housing Management and Support Services (All costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed.)

� Housing department support staff and costs

� Support from other council departments eg finance, HRM

� Other housing support costs.



Note 3: The division of service Housing Benefits Payments will include both benefits expenditure and related income. Income will include direct subsidy receivable and recovery of benefit overpayments and it will also include relevant transfers to or from the Housing Revenue Account (HRA) (see the table in Part Four, paragraph 17 for more details). Since 2006/07, the DWP no longer notifies authorities of individual separate amounts of housing and council tax benefits administration subsidy. Instead, an overall total cost is notified. The recommended method is to calculate and split housing benefit and council tax benefit administration subsidy pro rata to expenditure on housing benefit and council tax benefit administration. This will provide an approximate apportionment which can then be used to calculate a net cost. This method has the advantage of not affecting the SEA. See DWP Housing Benefit and Council Tax Benefit Circulars HB/CTB/S3/2006 and S4/2007 for details of subsidy allocations.

Note 4: Local authorities have discretion to continue to charge to the HRA Supporting People (SP) services that were funded from the HRA prior to 1 April 2003. However, these services may instead be charged to the General Fund (GF)/Council Fund (CF) along with other SP services and, where this is done, this division of service should include only those services eligible for SP grant. Other welfare services should be shown separately under the heading that follows.


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PART TWO: HRA FORMAT (ENGLAND)



Housing Revenue Account Income and Expenditure Statement (England)

HRA Income Dwelling Rents (Gross) � General needs housing

� Sheltered accommodation

� Temporary accommodation

� Social Homebuy, shared ownership and affordable rents.

Non-dwelling Rents (Gross) � Garages

� Shops

� Land

� Other (eg pubs, telephone masts, wayleaves).

Tenants’ Charges for Services and Facilities

� Service charges (Note 1)

� Heating and utility charges

� Charges to tenants for Supporting People services

� Charges for other welfare services (Note 2) (excluding essential care)

� Other charges to tenants (Note 3).

Leaseholders’ Charges for Services and Facilities

Other Charges for Services and Facilities

� Community centres

� Commercial properties.

Contributions Towards Expenditure � From social services authorities

� In respect of transferred dwellings

� Rechargeable repairs

� Grants for Supporting People initiative

� Compensation payments from contractors and settlement of insurance claims

� Financial assistance from the government for repair of HRA property damaged as a result of an emergency or disaster.

Reimbursement of Costs � Court costs, insurance and other income.

Sums directed by the Secretary of State that are income in accordance with IFRS (if any)


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HRA Expenditure

Repairs and Maintenance � Responsive

� Planned

� Associated costs (Note 4).

Supervision and Management � Policy and management

� Managing tenancies

� Right-to-buy administration

� Rent collection, recovery and accounting.

Special Services � Communal heating

� Communal lighting

� Lifts

� Laundry services

� Caretaking

� Concierge schemes

� Cleaning

� Ground maintenance

� Welfare services (excluding essential care)

� Other special services (eg CCTV).

Rents, Rates, Taxes and Other Charges

� Lease rentals on property

� Properties where LA landlord is responsible for the council tax

� Rates and water charges payable in non-dwellings

� Insurance costs paid by the landlord.

Subsidy Limitation Transfer to the GF (Note 5)

Transfer of HRA Surplus to the General Fund

Increase/(decrease) in Impairment of Debtors

Depreciation and Impairments of Fixed Assets (Note 6)

� Depreciation and impairment – dwellings

� Depreciation and impairment – all other HRA assets.

Amortisation of Intangible Assets (Note 7)

Debt Management Costs

Sums directed by the Secretary of State that are expenditure in accordance with IFRS (if any)

Net cost of HRA services as included in the whole-authority Comprehensive Income and Expenditure Statement


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HRA services’ share of Corporate and Democratic Core

HRA share of other amounts included in the whole-authority Net Cost of Services but not allocated to specific services

Net cost of HRA services including HRA share of costs not allocated to specific services

Gain or loss on sale of HRA non-current assets

HRA share of interest payable and similar charges including amortisation of premiums and discounts

HRA share of net interest on the net defined benefit liability (asset) (Note 8)

HRA Investment Income (Note 9) � Mortgage interest on HRA properties sold under RTB

� Interest on capital cash balances

� Interest on revenue cash balances.

HRA share of capital grants and contributions receivable

Surplus or deficit for the year on HRA Income and Expenditure Statement2

Note 1: Since 2002/03 authorities have been able to unpool service charges as part of rent restructuring and, where this has been done, service charges should be included here, along with those which have always been levied as a separate service charge. Service charges that remain pooled should be included within Dwelling Rents (Gross).2

Note 2: This denotes activities that at present could be charged to either the HRA or the GF.

Note 3: Other charges to tenants will include items such as laundry and cleaning not identified above.

Note 4: As detailed in the table in Part Four, paragraph 19, it is recommended that the planning and clerical processing of repairs be classified as a management item, not repairs. However, it is acknowledged that there may be other types of cost associated with repairs, such as professional fees for specifying and inspecting work, which may be included under repairs.

Note 5: Where deductions from rent rebate subsidy payable (to the GF) have been made due to the operation of the policy on rent rebate subsidy limitation (and as a result of expenditure on modular improvements), a transfer from the HRA to the GF must be made, as directed by the Secretary of State under item 10.

2. Detailed guidance in relation to the Movement on the HRA Statement is provided in Module 3, Section J of the 2014/15 Code of Practice on Local Authority Accounting in the United Kingdom: Guidance Notes for Practitioners.


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Note 6: These denote the total charges for depreciation, and the value of any impairment charges for the financial year, in respect of dwellings and other assets within the authority’s HRA, calculated in accordance with proper practices. Details should be disclosed in notes to the account.

Note 7: This denotes the value of any charge calculated in accordance with proper practices in respect of amortisation of intangible assets attributable to the HRA. This should be disclosed in notes to the account.

Note 8: These are lines to accommodate pensions accounting within the HRA in accordance with IAS 19.

Note 9: Calculated in accordance with the item 8 determination.


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PART THREE: HRA FORMAT (WALES)



HRA Income Dwelling Rents (Gross) � General needs housing

� Sheltered accommodation

� Temporary accommodation.


� Shops

� Land

� Other (eg pubs, telephone masts, wayleaves).

Tenants’ Charges for Services and Facilities

� Service charges (Note 1)

� Heating and utility charges

� Charges to tenants for Supporting People services

� Charges for other welfare services (Note 2) (excluding essential care)

� Other charges to tenants (Note 3).

Leaseholders’ Charges for Services and Facilities

Other Charges for Services and Facilities


� Commercial properties.

Contributions Towards Expenditure � From social services budgets

� In respect of transferred dwellings

� Rechargeable repairs.

Reimbursement of Costs Court costs, insurance and other income

HRA Subsidy Receivable (Note 4)

Sums directed by Welsh Ministers that are income in accordance with IFRS

HRA Expenditure

Repairs and Maintenance � Responsive

� Planned

� Associated costs (Note 5).



� Rent collection and accounting

� HRA CDC and NDC contribution.

Special Services � Communal heating


� Lifts


� Caretaking

� Concierge schemes


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HRA Expenditure (continued)

Special Services (continued) � Cleaning

� Ground maintenance

� Welfare services (excluding essential care)

� Other special services (eg CCTV).

Rents, Rates, Taxes and Other Charges

� Lease rentals on property

� Properties where LA landlord is responsible for the council tax

� Rates and water charges payable in non-dwellings

� Insurance costs paid by the landlord.

Subsidy Limitation Transfer to Council Fund (Note 6)

Transfer of Assumed Surplus to Exchequer (Note 4)

Increase/(decrease) in Impairment of Debtors

Depreciation and Impairments of Fixed Assets (Note 7)



Amortisation of Intangible Assets (Note 8)

Debt Management Costs

Sums directed by Welsh Ministers that are expenditure in accordance with IFRS

Net cost of HRA services as included in the whole-authority Comprehensive Income and Expenditure Statement

HRA services share of Corporate and Democratic Core

HRA share of other amounts included in the whole authority Net Cost of Services but not allocated to specific services

Net cost of HRA services including HRA share of costs not allocated to specific services

Gain or loss on sale of non-current assets

HRA share of interest payable and similar charges including amortisation of premiums and discounts

HRA share of net interest on the net defined benefit liability (asset) (Note 9)


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Transfers from the Council Fund as directed by Welsh Ministers (Note 10)

HRA Investment Income (Note 11) � Mortgage interest on HRA properties sold under RTB

� Interest on capital cash balances

� Interest on revenue cash balances

HRA share of capital grants and contributions received

Surplus or deficit for the year on HRA Income and Expenditure Statement3

Note 1: Where service charges have been unpooled from rent, they should be included here. Service charges which remain pooled should be included as part of Dwelling Rents (Gross).3

Note 2: This denotes activities that at present could be charged to either the HRA or the Council Fund.

Note 3: Other charges to tenants will include items such as laundry and cleaning.

Note 4: This denotes those items within the HRA service that are mutually exclusive, ie if it is an income item there will be no expenditure and vice versa.

Note 5: As detailed in the table in Part Four, paragraph 19, it is recommended that the planning and clerical processing of repairs be classified as a management item, not repairs. However, it is acknowledged that there may be other types of cost associated with repairs, such as professional fees for specifying and inspecting work, which may be included under repairs.

Note 6: Where deductions from rent rebate subsidy payable (to the County Fund) have been made due to the operation of the policy on rent rebate subsidy limitation (and as a result of expenditure on modular improvements) a transfer from the HRA to the CF must be made, as directed by Welsh Ministers under item 10.

Note 7: These denote the total charges for depreciation, and the value of any impairment charges for the financial year, in respect of dwellings and other assets within the authority’s HRA, calculated in accordance with proper practices. Details should be disclosed in notes to the account.

Note 8: This denotes the value of any charge calculated in accordance with proper practices in respect of intangible assets attributable to the HRA. This should be disclosed in notes to the account.

Note 9: These are lines within the Code to accommodate pensions accounting within the HRA in accordance with IAS 19.

Note 10: Special direction required from Welsh Ministers under item 9, Part I of Schedule 4 of the Local Government and Housing Act 1989.

Note 11: Calculated in accordance with the item 8 determination.

3. Detailed guidance in relation to the Movement on the HRA Statement is provided in Module 3, Section K of the 2014/15 Code of Practice on Local Authority Accounting in the United Kingdom: Guidance Notes for Practitioners.


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PART FOUR: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR HOUSING SERVICES

INTRODUCTION1 This guidance note is presented in five sections:

� Introduction

� Housing Revenue Account (HRA) Guidance

� What to Include in the General Fund/Council Fund

� Advice on Inconsistent Accounting Practices

� Status, Implementation and Updating the Guidance.

HOUSING REVENUE ACCOUNT GUIDANCE

Resource Accounting in the Housing Revenue Account2 The government introduced in England a form of resource accounting in the HRA from 1

April 2001. In Wales, resource accounting operated for the first time from 1 April 2005. The objectives of this include encouraging a more efficient use of housing assets and increasing the transparency of the HRA.

3 Authorities are required to charge depreciation and, where applicable, impairments on all HRA properties in accordance with proper practices.

What to Include in the Housing Revenue Account – England and Wales 4 Section 74 in Part VI of the Local Government and Housing Act 1989 (LGHA 1989) requires

local authorities to keep a ringfenced HRA. It specifies the major items to be included within the HRA as dwellings and other property, eg garages, shops, etc provided under Part II of the Housing Act 1985 (HA 1985). Section 75 refers to Schedule 4 of LGHA 1989, which specifies the items to be debited (Part II) and credited (Part I) to the HRA.

5 It is not intended that this guidance will interpret or repeat the statutory guidance, but it is appropriate to make reference to existing guidance that will help authorities to interpret the requirements of the LGHA 1989. Section 3 of this guidance also gives advice on the inconsistent housing accounting practices that CIPFA and DCLG research have shown exist between different local authorities.

6 The main sources of advice on the interpretation of the LGHA 1989 are:

� DOE Circular 8/95 (The Ring Fence Circular) advises what to include in and exclude from the HRA.

� Chapter 5 of the DCLG Housing Revenue Account Manual advises what to credit to the HRA in England (latest revision 2007).


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� Chapter 6 of the DCLG Housing Revenue Account Manual advises what to debit to the HRA in England (latest revision 2007. The manual can be found at www.gov.uk/government/publications/housing-revenue-account-manual-2006-2007-edition).

� The Local Authority Housing information stream provided by the CIPFA Technical Information Service (www.tisonline.net).

� Sections 126 and 127 of the Leasehold Reform, Housing and Urban Development Act 1993 specify what welfare services housing authorities may charge to the HRA.

Expenditure on Repairs, Maintenance and Management7 Item 1 under Part II of Schedule 4 of the LGHA 1989 specifies that expenditure on the repair,

maintenance and management of HRA property should be included. CIPFA has traditionally, and continues to in this guidance, split this broadly three ways, as follows:

� Repairs and Maintenance refers to the upkeep of HRA property.

� Special Services refers to those services that some rather than all tenants benefit from.

� Supervision and Management refers to management functions relating to all properties.

8 Repairs and Maintenance is further split as follows:

Repairs and Maintenance Subdivisions

Includes

Responsive repairs

As the name implies, these repairs are in response to, for example, tenant requests to maintain the accommodation, eg repair a broken window, fix handles on doors, unblock a drain, fix a broken boiler in an individual dwelling. (Note: responsive maintenance of lifts/boilers/entry systems is included in the Special Services divisions of service described in more detail below.)

Planned repairs

As the name implies, these are planned and cyclical repairs to maintain the accommodation, eg repainting, patching roofs, replacing windows. Include here all repairs and maintenance costs which do not relate to enhancement. Enhancement works, being capital in nature, will be either funded from capital resources or accounted for in Revenue Contributions to Capital Expenditure.

Associated costs

This subdivision is not for the planning and clerical processing of repairs, which are classified as a management item, not repair. Other types of cost associated with repairs, such as professional fees for specifying and inspecting work, may be included here.

9 Special Services are the running costs (including maintenance contracts and cyclical safety checks, etc) of those services that benefit specific groups of tenants, eg lifts, shared boilers, stair lighting, caretaking, etc. These can represent significant costs for some authorities, whereas others may provide few shared services. Under the Comparison element of Best Value it is, therefore, important to separate these costs out from the general management of all property common to all housing authorities.

10 The subdivisions of service represent an indication of the services that could be included as special services. Authorities should separately identify any services they provide that are not included in the suggested subdivisions of service. Included within special services are costs which are recovered from tenants and leaseholders as service or heating charges. It is

www.tisonline.net


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important that these costs are accurately assessed so that they can be fully recovered from the users of the services.

11 Supervision and Management is further split as follows. The list of items to be included in each definition has been drawn from paragraph 11 of the DOE Circular 10/94 Reports To Tenants and from the Arthur Andersen 1999 research for the DOE into The Cost of Local Authority Housing Management. Research by the Building Research Establishment (BRE), published in 2003, provided a detailed breakdown of elements that, in their view, could constitute subdivisions of housing management and maintenance activities.

Supervision and Management Subdivisions

Includes

HRA policy and management


� HRA share of strategic management costs

� ALMO liaison

� PFI management

� Keeping registers and records of:

– dwellings and property

– tenants

– repairs work undertaken

� Voids management and reduction

� Receipt and transmission of requests for repairs

� Management of improvement and modernisation

� Management of planned/programme maintenance

� The administration of council house sales (please note the guidance about inconsistent accounting treatment regarding the extraordinary credit allowed here, by regulations issued under the LGA 2003, as an appropriation from the usable capital receipts reserve)

� Option appraisals

� Consultation with tenants under s105 of HA 1985

� Reviewing and setting rent levels, service charges and Supporting People charges.


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Supervision and Management Subdivisions

Includes

Managing tenancies

Include the cost of:

� Giving information and advice on tenancy matters

� Statutory consultation with tenants about large-scale voluntary transfers of council housing stock (LSVT)

� Receiving tenancy applications/accessing eligibility

� Waiting list management relating to HRA properties only (dwellings and other property) (include HRA share only in situations where a common housing register is maintained)

� Transfers and exchanges

� Tenancy regulations and agreements

� Advising tenants groups

� Facilitation of tenant participation

� Support to tenant management organisations formed under right to manage provisions of the Leasehold Reform, Housing and Urban Development Act 1993

� Producing/distributing tenants’ reports

� Anti-social behaviour

� Community wardens.

Rent collection, recovery and accounting


� Preparation of the rent roll

� Rent collection

� Recovery of arrears, court action and evictions

� Advising tenants on benefit entitlement to minimise risk of arrears

� Rent accounting including internal audit activity.

HRA contribution towards Corporate and Democratic Core (CDC) and Non Distributed Costs (NDC)

Authorities should ensure that they satisfy the appropriate legislative requirements and statutory provisions when accounting for the HRA. Authorities wishing to make a contribution to the GF/CF for CDC would calculate such contributions depending on local and organisational circumstances. To do this, an authority will need to calculate the resources used by officers and members and other corporate management costs to estimate accurately the proportion of its CDC costs that relate to its own housing stock. Similarly, authorities may consider it necessary to make a contribution to NDC from the Housing Revenue Account. (See Section 2 of SeRCOP for CDC and NDC definitions.)

12 Local authorities have discretion to establish their own more detailed financial arrangements and may wish to take the BRE research, referred to above, into account, as well as their own needs for costing and management information, when doing this.

Trading Operations Providing Services to the Housing Revenue Account13 The HRA is a statutory account. Authorities should ensure that they satisfy the appropriate

legislative requirements and statutory provisions when accounting for the HRA. It is the view of DCLG, the National Assembly for Wales and the Audit Commission that material balances of internal trading operations providing services to the HRA should be repatriated to or from


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the HRA, in line with the general requirements of Section 2 of SeRCOP. Adherence to these requirements will achieve consistency and comparability for HRA accounting. For additional guidance on the repatriation of significant surpluses or deficits, see paragraphs 2.28–2.36 of SeRCOP.

14 The preceding paragraph is intended to assist local authorities with the treatment of the repatriation of material surpluses and deficits of trading operations providing services to the HRA. Local authorities may also wish to refer to the DCLG Housing Revenue Account Manual. It is important to note that each authority will need to satisfy itself that it has met the statutory requirements of the HRA.

15 Where authorities have established arm’s-length management organisations (ALMOs) or tenant/resident management organisations (TMOs/RMOs), they need to ensure that these organisations supply financial information in the format authorities need, in order to comply with preparing the HRA in accordance with the Code and the Service Reporting Code of Practice for Local Authorities.

Leasehold Services16 The large number of flats and maisonettes sold under Right to Buy now means that many

local authorities have a sizeable proportion of leasehold property within their HRAs. The costs of services provided to leaseholders under Supervision and Management, Repairs and Maintenance and Special Services need to be recovered from leaseholders. Authorities must ensure that they accurately identify such costs and that they have procedures in place to ensure their recovery. Particular care needs to be taken in assessing the costs of management and administration to be recharged to leaseholders. Organisations providing leaseholder services must provide cost information sufficient to enable enforceable service charges to be raised.

GUIDANCE ON WHAT TO INCLUDE IN THE GENERAL FUND/COUNCIL FUND17 Guidance on what to include in each division and subdivision follows:


Includes

Housing Strategy � Review of housing needs, eg housing conditions survey

� Preparation of strategic plans eg home energy conservation plan

� Government initiative bids, eg Housing Market Renewal

� Preparing joint ventures

� Liaison with external bodies

� DOE circular 8/95 makes it clear that Housing Strategy should include costs incurred as a consequence of a LSVT, except the costs of the statutory duty to consult (s106A of Schedule 3A to HA 1985).

Note: each authority should charge a share of housing strategy costs, based upon an assessment of costs relevant to its own stock, to the HRA.


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Includes

Enabling Include all costs associated with the enabling function of the authority including RSLs. Specifically show:

� Day-to-day liaison cost

� Nomination fees paid, except where related to homelessness

� Waiting list management.

Housing Advice Since the Housing Act 1996, each council has to provide a housing advice service to people housed privately. Where staff are employed solely or substantially to fulfil this duty, their costs and appropriate overhead costs should be included here in the GF.

It is inevitable that some advice will be given to non-council tenants by staff in area council housing offices which, thus, will be charged to the HRA. Where this is the case, the council should consider whether any of the costs of the area office should in fact be borne here in the GF/CF rather than by the HRA. Do not include advice covering homelessness which should be shown under the separate Homelessness division.

Housing Advances Include:

� Costs of administering advances to individuals to purchase their property under s435 of the HA 1985

� Mortgage interest payments by the mortgagors should be shown here as income.

Private Sector Housing Renewal

Local authorities’ involvement with private sector housing is increasingly linked to wider cross-cutting initiatives such as community health, community safety and social inclusion. Housing’s contribution to such initiatives will often be accounted for in the subdivisions that follow below. As a division of service, Private Sector Housing Renewal should have all appropriate overheads and capital charges apportioned to it, including any amortisation of intangible assets.

Administration of grants

Include the administration of all financial support for repairs and improvements including:

� Where deferred action notices are issued under Part I of the Housing Grants, Construction and Regeneration Act 1996, include the costs here

� Grants agency arrangements

� The general power to provide assistance (eg grants, loans, other assistance) under The Regulatory Reform (Housing Assistance) (England and Wales) Order 2002

� Adherence to the proper accounting treatment of soft loans.

Renewal activity Include revenue expenditure on:

� Renewal areas (Part VII of LGHA 1989)

� Group repair schemes (Part I of the Housing Grants, Construction and Regeneration Act 1996 and Part VIII of the LGHA 1989)

� Compulsory purchase orders issued following the issue of a control order (see below).


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Includes

Management orders The HA 1985 (s346) and subsequently the Housing Act 2004 enable councils to keep a register of HMOs. The inspection of HMOs is normally undertaken by Environmental Health staff and accounted for as such. However, if, as a result of inspections, the authority believes that further action is necessary to protect the safety, health or welfare of occupants and the landlord will not take appropriate action, the authority can issue a management order. In effect, the council takes over the management of the property for up to five years. The costs of these orders and subsequent management costs should be accounted for here.

Authorities may make a management order under the provisions of Part 4 of the Housing Act 2004, in relation to licensable properties as defined by Parts 2 and 3 (licensing of HMOs and selective licensing of other residential accommodation). An authority may apply to the Residential Property Tribunal for an interim management order in other prescribed circumstances (empty dwelling management orders). The costs of these orders and subsequent management costs should be accounted for here.

Prohibition orders and improvement notices

The HA 1985 (s346) and subsequently the Housing Act 2004 enable councils to keep an HMO register. The inspection of HMOs is normally undertaken by Environmental Health staff and accounted for as such. However, if, as a result of inspections, the authority believes an HMO is unfit for human habitation, it can issue a prohibition order or improvement notice on all or part of the house. The costs of these orders and enforcement are accounted for here.

Empty homes and dwellings

Slum clearance Include the costs of making the demolition order, declaring and consulting on clearance areas and any compulsory purchase activity necessary.

Other neighbourhood regeneration

Include any other costs associated with neighbourhood regeneration and other initiatives not accounted for under slum clearance.

Home improvement agencies – revenue costs

Include revenue costs associated with home improvement agencies.

Licensing of Private Sector Landlords

Include all costs associated with the licensing of HMOs and selective licensing of private sector landlords.

Homelessness Parts II and III of the HA 1985 allow expenditure on housing homeless people.

Expenditure under Part II relates to the HRA. Part III expenditure should be in the GF/CF subdivisions below. Note: include housing benefit paid to homeless people in the appropriate subdivisions below.

Hostels (non-HRA support)

Only include hostels used mainly to house the homeless, including women’s refuges. Exclude any other hostel, although the cost of housing a homeless person in other types of hostel should, if significant, be identified and included as ‘Other temporary accommodation’, below.

Bed and breakfast accommodation

Include privately owned/managed hotels or guest houses with some shared facilities. Exclude hotel annexes with self-contained units and where meals are not provided.


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Includes

Other nightly paid, privately managed accommodation

Shared facilities ‘annexes’ also typically involve the use of units and annexes associated with privately managed hotels, or such establishments, where households share at least some basic facilities. Meals may or may not be provided. Do not include supported lodgings as shared facilities annexes.

Private managed accommodation leased by the authority

Covers dwellings leased on short-term arrangements from the private sector by your authority. Include accommodation leased and managed by local authorities or leased by the authority but managed by another organisation such as an RSL.

Private managed accommodation leased by RSLs

Covers dwellings leased on short-term arrangements from the private sector by an RSL. Include accommodation leased by an RSL under a housing association leasing scheme (HALS).

Directly with a private sector landlord

Covers those households which are referred to, and enter into an agreement with, a private landlord, but only where this accommodation is provided as temporary accommodation to discharge a homelessness duty. This section should not be used to record cases where the accommodation is not provided as temporary accommodation to discharge a homelessness duty (eg where people have been assisted to obtain accommodation for themselves, perhaps through rent deposit, rent in advance, or rent direct schemes).

Accommodation within the authority’s own stock (non-HRA)

Covers households placed in your own authority’s stock.

Accommodation within RSL stock

Covers households placed in RSL stock (as RSL tenants) as temporary accommodation.

Other temporary accommodation

Include any other expenditure on housing for homeless people including payments to/for:

� Caravans

� Demountables

� Portacabins

� Transportables

� Supported lodgings placements.

Prevention Homelessness prevention is where a local authority takes positive action to provide housing assistance to someone who considers him or herself to be at risk of homelessness in the near future, and as a result the person is able to either remain in his or her existing accommodation or obtain alternative accommodation providing a solution for at least the next six months.

Administration The costs of administering the homeless function, ie receipt of requests for help and allocation of spaces.

Administration cost should include legal costs, direct employee costs plus proportion of office expenses, ie office costs, IT, finance, central recharges and administration support services, pro rata to the number of employees.

Support Support costs should include floating support of people in temporary accommodation.


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Includes

Housing Benefits Payments

Local authorities pay housing benefits to people of limited means to subsidise some or all of their rents and eligible service charges. Council tenants receive rent rebates; other people receive rent allowances.

Both rebates and allowances are accounted for in the GF/CF.

Rent allowances Rent allowances are paid to the tenants of private landlords and RSLs. Account for these payments here.

Non-HRA rent rebates

Include any rent rebate paid to a council tenant of a non-HRA dwelling.

Rent rebates to HRA tenants

Include all rent rebates paid to HRA tenants here, including any discretionary enhancements to statutory rent rebates paid, for example to war widows.

Subsidy limitation transfer from HRA

Include any transfer from the HRA as a result of the operation of the policy of rent rebate subsidy limitation.

Discretionary housing payments

Housing Benefits Administration

Administration costs of assessing and paying housing benefits, both rent rebates and rent allowances, but not council tax benefit, fall within the GF/CF.

Contribution to the HRA re Items Shared by the Whole Community

Paragraph 3, Part III, Schedule 4 of the LGHA 1989 requires the GF/CF to make contributions to the HRA where amenities in the HRA actually benefit the wider community. Calculation of the contribution due is a local matter and is dependent ‘upon local circumstances ... including the purpose of the provision and the use made of the facilities by tenants and other people’ (DOE Circular 8/95). All authorities should, therefore, consider if any of the following items, highlighted in the DOE Circular 8/95, warrant a GF/CF contribution:

� Play and other recreational areas

� Grassed areas

� Gardens


� Play schemes.

Other Council Property

In rare instances where property is held under powers other than s74 of the LGHA 1989, but is used for council housing purposes, include the costs here.

Exclude property held as non-housing secure tenancies, eg school and leisure centre caretakers’ residences.

Travellers’ sites Some councils provide sites for travellers to be accommodated. These sites may be static or move-on sites.

Include associated costs here plus income and rent paid including by housing benefit.

Non-HRA council property

Include the costs of any other non-HRA property used for housing purposes.


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Includes

Supporting People Welfare services in England and Wales provided under the Supporting People programme defined under the Local Government Act 2000.

1 DCLG (then the DTLR) provided guidance in Supporting People: Identifying Support Service Cost and the Amount of Pooled Rent Income Financing Support Services. This document provides guidance to local authorities on the identification of support costs from the HRA. In December 2002, DCLG (then the ODPM) indicated that this support may be provided from within the HRA ringfence. DCLG has issued a direction by the Secretary of State in exercise of the powers conferred on him by s87 of, and item 9 of Part I of Schedule 4 to, the Local Government and Housing Act 1989, allowing Supporting People grant to be credited to the HRA. The Supporting People programme began on 1 April 2003, bringing together seven housing-related funding streams from across central government. From 2011/12, all Supporting People funding has been rolled into Formula Grant and allocated via the Local Government Finance Report for the relevant financial year.

2 Most Supporting People costs are charged to the General or County Fund at division of service level. For local authorities with a housing function, this is within the Housing General Fund/Council Fund. For those authorities which do not provide a housing function and would not normally use the Housing service classification, it is the view of the Best Value Steering Group and the Local Authority Accounting Panel that they need not refer to this as a Housing service but would still need to aggregate the costs at the Supporting People service division level. This cost, however, should not be included in the Social Services elements of the SEA.

3 If these services are provided as occasional or ancillary services as a part of a non-Housing service, eg Social Services, then the expenditure should remain a Social Services cost and any grant attributable to this service should be recorded in the appropriate Social Services service division and identified separately. See also comments on the relationship with grants for community care and registered care in the Adult Social Care SEA (Part Two, paragraph 13) and the Children’s and Education Services SEA (Part Three, paragraph 20).

Strategy

Administration

Commissioning payments to providers


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Includes

Other Welfare Services

Certain welfare services provided by wardens in sheltered housing are classed as essential care services (ECS). These should be accounted for in the GF/CF. DOE Circular 8/95 indicated the following ECS are GF/CF items:

� Assistance with mobility

� Assistance at meal times

� Assistance with personal appearance

� Assistance with personal hygiene

� Administration of medication

� Nursing care.

This service division is for situations where Best Value is achieved if welfare services are provided by Housing staff and the council wishes to include the cost here rather than in Social Services.

Note 1: it is hard to envisage a situation where nursing care would be provided by Housing staff and for comparative purposes meals on wheels (and similar) and home helps are always accounted for as Social Services work.

Note 2: as the Supporting People proposals become clearer, it is possible that this division of service will warrant new subdivisions.

HRA-related Pensions Costs (possible new line for Welsh LAs only)

This line may be required by Welsh local authorities if they are of the view that they cannot, under current regulations, charge current service (pensions) costs to the HRA. Authorities should, however, ensure that they charge the HRA with the appropriate charges for pensions in accordance with the relevant regulations.

Housing Management and Support Services


Support services support the direct provision of housing services to the public.

They may support in-house teams or external contractors. The basic principle is that through direct allocation, where possible, and apportionment, where necessary, the support costs should all be charged to front-line service divisions before or at the year-end.

Housing department support staff and costs

The housing department may have staff in supporting roles such as:

� Finance officers

� Administrative staff

� Training staff.

Support from other council departments

Include Housing’s share of central support costs such as central departments for the following, if they are applicable:

� Finance (payroll, internal audit, etc)

� Human resource management

� Training


� Procurement

� Facilities management

� Legal services.


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Includes

Other housing support costs

Includes support services not included in the above two categories, eg management consultants, external training firms. They can be accounted for here before allocation to the appropriate front-line service. Also include support, advice to and liaison with tenant and resident groups. This activity may relate to more than one service division and require an apportionment exercise to be undertaken.

ADVICE ON INCONSISTENT ACCOUNTING PRACTICES18 CIPFA is aware that the accounting treatment of certain items in the HRA and the housing

GF/CF can be inconsistent between different local authorities. The cumulative effect of such inconsistency potentially reduces the usefulness of comparisons under Best Value or for other purposes such as benchmarking.

19 In each case, existing guidance, included below, has been identified. This should be followed in order to greatly improve the comparability of local authority housing accounts. CIPFA’s Housing Panel will continue to review each practice identified and may issue its own guidance on each issue at some future date.

Inconsistent Accounting Treatment

CIPFA Recommended Practice

There is an inconsistent HRA interpretation of general management and of repairs. Some authorities include the management of repairs as Supervision and Management; others include it as Repairs and Maintenance.

DOE Circular 10/94 Tenants’ Reports included the planning and clerical processing of repairs as a management item, not repairs. Alternatively, the Housing Revenue Account Manual paragraph 12.1.5 specifies that repairs include all revenue expenditure on repairs. To reconcile the apparent conflict in the advice, it is recommended that overall planning and clerical processes be treated as Supervision and Management. Revenue costs associated with the actual repair, eg professional fees to specify the work or inspect it, are classed as Repairs and Maintenance.

Housing Strategy (GF/CF) and ‘Policy and management’ within Supervision and Management (HRA) are still widely interpreted by some authorities, while others hardly identify any costs here.

Housing strategy and policy-related costs must be split between the GF/CF and the HRA. The guidance in Section 2 above, if followed, represents a narrow definition of these costs and leaves little scope for interpretation.


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Inconsistent Accounting Treatment

CIPFA Recommended Practice

Services to the wider community requiring a GF/CF contribution to the HRA differ between authorities.

DOE Circular 8/95 (Ring Fence) lists the following services that may warrant a contribution from the GF/CF:

� Play and other recreational areas

� Grassed areas

� Gardens


� Play schemes.

Each local authority should have regard to the purpose of the provision and the use made of the facility when considering if a contribution (and its value) is appropriate. Reasons should be documented so that external audit enquiries can be satisfied.

Contrary to CIPFA advice, some authorities class special services received by some tenants as opposed to all tenants as general Supervision and Management. Others follow the guidance and class as Special Services.

Consistency is a prerequisite for useful comparison under the Best Value regime. To achieve this consistency, it is important that the definitions for general Supervision and Management and Special Services in Sections 2 and 3 of this guidance note are followed.

STATUS, IMPLEMENTATION AND UPDATING THE GUIDANCE20 This SEA for Housing Services replaces all previous version issued by CIPFA and is mandatory

for English and Welsh authorities from 1 April 2015. 2015/16 SeRCOP applies to the following statutory disclosures:

� 2015/16 Budgets



21 CIPFA is dedicated to keeping the guidance up to date and it will be reviewed on an annual basis as a minimum.

National Parks

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR NATIONAL PARKS

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR NATIONAL PARKS

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN THE NET COST OF NATIONAL PARKS


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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR NATIONAL PARKS



Conservation of the Natural Environment

� Farmed land

� Moorland

� Wetlands and water

� Coast

� Woodland, trees and forestry teams

� Biodiversity and wildlife conservation.

Conservation of Cultural Heritage � Buildings

� Archaeology

� Enhancement schemes

� Conservation areas

� Local culture and traditions.

Recreation Management and Transport � Public rights of way

� National trails

� Access to open land

� Visitor management and facilities

� Specialist recreation

� Car parks

� Public transport

� Traffic management.

Promoting Understanding � Visitor centres

� Education and study centres

� Information and interpretation services

� Public relations.

Rangers, Estates and Volunteers � Ranger service

� Estate teams

� Volunteers.

Development Control � Advice

� Dealing with applications

� Enforcement

� Regulation of other special topics, eg minerals/waste control

� Other development control work.


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Forward Planning and Communities � National park management plan

� Statutory development plans

� Local studies and plans

� Minerals policy

� Sustainable development fund

� Other environmental initiatives

� Community development.

Specialist Ringfenced Accounts � Windermere Registration Scheme

� Broads Navigation Account

� Other specialist ringfenced accounts.


Optional holding accounts. All costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed and before budgets are set.

Note 1: SeRCOP makes it clear that Corporate and Democratic Core Costs should be kept separate from the SEA above.



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PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR NATIONAL PARKS



2 The Comparison process is much more far-reaching than a simple cost comparison. However, insofar as some elements of any comparison will be financially based, it is important that the financial inputs are accurate, compiled on the same basis and aligned with the non-financial aspects being measured.

3 The Service Expenditure Analysis for National Parks was included for the first time in this publication in 2007. It was developed by practitioners in national parks authorities across England and Wales and agreed by the CIPFA Local Authority Accounting Panel (LAAP) and Best Value Steering Group (BVSG).

STATUS AND IMPLEMENTATION4 This SEA for National Parks is mandatory for English and Welsh national parks authorities

from 1 April 2015. 2015/16 SeRCOP applies to the following statutory disclosures:



5 2015/16 SeRCOP may also be applied to 2015/16 budgets, which national parks authorities are not statutorily required to disclose.


basis as a minimum.


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PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN THE NET COST OF NATIONAL PARKS


Includes

Conservation of the Natural Environment

Expenditure and income related to conservation activities on land, water and coastal areas.

Farmed land Conservation and maintenance of farmed land (including sited properties) irrespective of ownership. Conservation-related support of and liaison with farmers in their capacity as local business entities (and not recreational land owners). Provision of related advice. Includes Environmental Land Management Scheme.

Moorland Conservation and maintenance of moorland (including sited properties) irrespective of ownership. Conservation-related support of and liaison with farmers in their capacity as local business entities (and not recreational land owners). Provision of related advice.

Wetlands and water Conservation and maintenance of lakes, rivers, waterways and wetlands excluding biodiversity and wildlife issues.

Coast Conservation, maintenance and stewardship activity on dunes, beaches and other coastal areas.

Woodland, trees and forestry teams

Conservation and maintenance of wooded areas. Forest design plans and new planting. Include specialist forestry teams and workers but not more general estate/field teams. Excludes tree preservation orders (see Development Control).

Biodiversity and wildlife conservation

All conservation issues relating to biodiversity, habitats and species. Include species-related projects, eg ospreys and red squirrels. Support to biodiversity and wildlife-related partners.

Conservation of Cultural Heritage

Expenditure and income related to conservation activities regarding culturally significant buildings and sites, along with local culture and traditions generally.

Buildings Conservation and maintenance of historic buildings owned either by the NPA or privately. Provision of conservation related advice.

Archaeology All aspects of archaeologically based work.

Enhancement schemes All costs associated with schemes designed to enhance the conservation of cultural heritage.

Conservation areas Costs relating to the designation of conservation areas and their management, excluding direct development control issues.

Local culture and traditions Costs associated with the recognition, celebration and promotion of local goods, culture and traditions.

Recreation Management and Transport

Public rights of way All costs associated with maintaining and enforcing the definitive map of rights of way (excluding maintenance costs of national trails below). Also includes provision of related advice.


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Includes

National trails All costs associated with maintenance and upkeep of national trails.

Access to open land Managing access to open access land, dealing with temporary closures and the local access forums.

Visitor management and facilities

Visitor policy development and visitor facilities other than tourist information/visitor centres.

Specialist recreation Specialist recreational activity management, eg trails management and recreational green road driving.

Car parks All activity associated with car parking.

Public transport Schemes run directly by the NPA or subsidies to other local schemes in support of transport-enabling initiatives including integrated transport and ticketing schemes.

Traffic management Traffic regulation orders and other traffic management activities.

Promoting Understanding Expenditure and income related to promoting public understanding of the special qualities of national parks.

Visitor centres All activity associated with general tourist information centres and visitor centres including any retail activity.

Education and study centres Educational services and centres focusing on academic or vocational study or the delivery of specific information about the NPA. Include any subcontracted service delivery via, for example, the Field Studies Council or other similar bodies.

Information and Interpretation services

Costs associated with providing or maintaining local information points. Include the production of interpretation boards and signage and general information.

Public relations All centrally controlled and produced bulletins, press releases and other public relations work in support of the NPA’s public profile.

Rangers, Estates and Volunteers

Expenditure and income related to the public face of service provision.

Ranger service All costs associated with the work of the ranger teams unless specifically costed to another subdivision.

Estate teams All costs associated with the work of the estate/field teams unless specifically costed to another subdivision. Exclude forestry workers (see ‘Woodland, trees and forestry teams’).

Volunteers All costs associated with volunteers.

Development Control Expenditure and income related to the development control process and its enforcement.

Advice Handling enquiries from developers, consultants and local residents on development control matters, especially those made in advance of the submission of an application.


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Includes

Dealing with applications Advertisements: handling applications for consent to display advertisements under The Town and Country Planning (Control of Advertisements) Regulations 1992 (as amended).

Applications: handling applications made to the authority under town and country planning legislation – whether or not the applications are determined by the authority. To avoid doubt, this category includes all those applications (and notifications) listed below:

� Applications for planning permission for development under Article 3 of the Town and Country Planning (Applications) Regulations 1988 and Articles 3 and 4 of The Town and Country (General Development) Order 1995, including:

– applications for outline planning applications

– applications for full planning permission

– applications for approval of reserved matters

� Applications for limited period permissions, for the renewal of permissions, for the variation of conditions and the removal of onerous conditions (including applications made under s73 of the Town and Country Planning Act 1990)

� Applications under Regulations 3 and 4 of The Town and Country Planning General Regulations 1992

� Applications for certificates of lawfulness of existing or proposed use or development

� Applications for certificates of appropriate development

� Notifications under Circular 18/84 (Development by Government Department); Circular 14/90 (Overhead Electric Cables); applications by the British Coal Corporation under Class A, Part 21 of The Town and Country Planning (General Development) Order 1995

� Revisions and modifications to existing or approval schemes where a new application is not needed

� Applications for consent, agreement or approval required by a condition or limitation attached to the grant of planning permission, as defined by Article 21 of The Town and Country Planning (General Development Procedure) Order 1995

� Applications, determinations and approvals for the erection or significant alteration, etc of agricultural and forestry buildings in national parks

� Applications, determinations and approvals under Parts VI and VII of Schedule 2 to The Town and Country Planning (General Development) Order 1995 (Agricultural and Forestry Buildings Operators) and amended in 1999


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Includes

Dealing with applications (continued)

� Hedgerow removal notices under the 1997 Hedgerow Regulations

� Applications, determinations and approvals relating to the installation of telecommunications apparatus under Part 24 of Schedule 2 to The Town and Country Planning (General Permitted Development) Order 1995 (Development by Telecommunications Code System Operators)

� Applications, determinations and approvals under Part 31 of Schedule 2 to The Town and Country Planning (General Permitted Development) Order 1995 (Demolition of Buildings)

� Applications for hazardous substances consents under The Planning (Hazardous Substances) Regulations 1992

� Applications to stop up or divert footpaths under s257 of the Town and Country Planning Act 1990

� Applications for minerals and waste under The Town and Country Planning (Minerals) Regulations 1995 and The Town and Country Planning (Prescription of County Matters) Regulations 1980.

Also include:

� Collection of statistics relating to applications

� The discharge of planning conditions

� The preparation and supervision of s106 agreements

� Commenting on applications or other development proposals on which the authority is consulted by another council

� Handling purchase notices

� Handling claims for compensation of any kind

� Ombudsman cases related to the core planning function and court actions and any costs associated with those activities including costs awarded for or against the council in respect of planning appeals.

Appeals: handling planning appeals, ie s78, advertisement and listed building appeals and the collection of statistics in relation to appeals.

Environmental assessments: the environmental assessment of planning applications is required for certain types of development under The Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999.

Conservation and listed buildings: handling of the following applications made to the authority under town and country planning legislation:

� Applications for listed buildings consent under s8 of the Planning (Listed Buildings and Conservation Areas) Act 1990

� Applications for conservation area consent under s74 of the Planning (Listed Buildings and Conservation Areas) Act 1990.


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Includes


Also include:

� Buildings preservation orders, urgent works notices, repairs notices and spot listings

� Listed building and conservation appeals

� Tree and forestry regulations

� Preparation and administration of tree preservation orders

� Handling applications for felling licences

� Handling applications to fell trees under tree preservation orders and in conservation areas.

Enforcement Monitoring and ensuring compliance with planning regulations and decisions, handling complaints about development; investigating alleged breaches of planning control and taking enforcement action; monitoring and enforcing compliance with planning conditions, prosecutions and associated legal proceedings:

� Enforcement appeals

� Collection of statistics in relation to enforcement and enforcement appeals

� Section 215 notices to compel landowners to tidy up land.

Regulation of other special topics, eg minerals/waste control

Regulation of special activities not referred to above.

Other development control work

All other development control activity not defined above.

Forward Planning and Communities

Expenditure and income related to strategic planning and community development activities.

National park management plan

All costs associated with the development and production of the plan.

Statutory development plans

All costs associated with the development and production of relevant plans.

Local studies and plans All costs associated with the development and production of relevant plans.

Minerals policy Any costs associated with the development and production of a specific minerals policy.

Sustainable development fund

Include all expenditure funded by sustainable development grant and its associated grant income.

Other environmental initiatives

Include all costs relating to environmental initiatives other than the sustainable development fund.


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Includes

Community development Include the costs of initiatives to build community structures rather than the more physical structures above. The indications are this is still a maturing activity. The area of expenditure is likely to develop as authorities increase their capacity to perform the new duty to promote economic and social well-being under the Local Government Act 2000. It is important to note that not all community expenditure should be recorded here; instead it should be allocated to the appropriate division of service. Costs will include:

� Specific community development initiatives

� Social inclusion

� Projects with community groups

� Projects with voluntary groups and associations

� Promoting e-functionality in the community

� Neighbourhood resources.

Specialist Ringfenced Accounts

Expenditure and income related to ringfenced accounts for specialised purposes.

Windermere Registration Scheme

Costs incurred by the Lake District National Park in relation to regulation and enforcement of local byelaws regarding Lake Windermere, along with fee income.

Broads Navigation Account Costs incurred by the Broads Authority in relation to waterway maintenance and patrolling activities, along with toll income.

Other specialist ringfenced accounts

Costs of other specialist ringfenced schemes as dictated locally.


An optional holding account for management and support service costs. All costs must be recharged to the other divisions of service. Where possible, costs should be allocated directly to the most appropriate service division.

Inevitably some support services costs such as finance, IT (including maintenance of websites), personnel, procurement, etc will need in part to be apportioned. Apportionment bases should be determined in accordance with the guidance in Section 2 of SeRCOP.


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Planning Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR PLANNING SERVICES

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR PLANNING SERVICES

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN PLANNING SERVICES


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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR PLANNING SERVICES



Building Control � Building regulations

� Enforcement

� Other building control work.



� Enforcement

� Regulation of other special topics, eg minerals/waste control.

Planning Policy � Regional and sub-regional planning

� Local development framework (including development plan documents and supplementary planning documents)

� Planning projects and implementation

� Conservation and listed buildings policy (including nature conservation strategy)

� Trees and forestry policy

� Other special topics

� Sustainable development strategies.

Environmental Initiatives

� Environmental education

� Grants

� Individual environmental projects.

Economic Research

Business Support � Premises development

� Grants/loans and guarantees

� Support to business and enterprise.

Economic Development � Market undertakings

� Training and employment

� Government initiatives

� Promotion and marketing of the area.

Community Development




Note 2: This guidance should be read in conjunction with the introduction to the Service Expenditure Analysis for all local government services and CIPFA’s statement of principles for Best Value accounting (see the LAAP pages on the CIPFA website – click on Policy & Guidance > Technical Panels and Boards > Local Authority Accounting Panel).


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PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR PLANNING SERVICES




3 This guidance note has been compiled from the following sources. The aim has been to promote consistency between CIPFA’s definitions and those provided by other organisations, and to make them as comprehensive and user-friendly as possible:


� Planning Officers’ Society definitions from its consultation paper Costs of the Planning Service (1999)


STATUS AND IMPLEMENTATION4 This SEA for Planning Services replaces all previous versions issued by CIPFA and is

mandatory for English and Welsh authorities from 1 April 2015. 2015/16 SeRCOP applies to the following statutory disclosures:

� 2015/16 Budgets




basis as a minimum.

www.cipfastats.net

www.tisonline.net


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PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN PLANNING SERVICES


Includes

Building Control Include all expenditure related to a local authority’s role in the monitoring and enforcement of building regulations.

Building regulations Include costs associated with local authorities’ responsibilities under the Building Act 1984 to vet plans for new buildings and to make site visits to monitor compliance with health and safety and building regulations. These relate to:

� Section 18 building over a sewer

� Section 21 provision of drainage

� Section 24 provision of exits

� Section 25 provision of water supplies.

Show gross costs here with fees charged shown as gross income.

Enforcement Include the costs of enforcing building regulations in the interests of public health and safety. Include the costs of serving notices and of any subsequent court action and cost recovery action.

Other building control work

Include here the giving of pre-submission advice and the administration of legislation related to:

� Dangerous structures

� Access for disabled people

� Street naming and numbering.

Also include here services that may be offered such as:

� Structural design

� Fire safety auditing

� Energy auditing

� Planning conditions checks and enforcement.

Councils are allowed to charge fees for many of these services. Where income is earned, gross costs and gross income should each be shown. Netting off is not an acceptable practice.

Include activities which earn no fees, such as register of building works which would include approved inspectors and other works such as FENSA window fittings.

Development Control Include all activities and costs related to the local authority’s role in development control under town and country planning legislation.

Advice Handling enquiries from developers, consultants and local residents on development control matters, especially those made in advance of the submission of an application.


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Includes

Dealing with applications

Advertisements: handling applications for consent to display advertisements under The Town and Country Planning (Control of Advertisements) Regulations 1992 (as amended).

Applications: handling applications made to the authority under town and country planning legislation – whether or not the applications are determined by the authority. To avoid doubt, this category includes all those applications (and notifications) listed below:

� Applications for planning permission for development under Article 3 of The Town and Country Planning (Applications) Regulations 1988 and Articles 3 and 4 of The Town and Country (General Development) Order 1995, including:

– applications for outline planning applications

– applications for full planning permission

– applications for approval of reserved matters

� Applications for limited period permissions, for the renewal of permissions, for the variation of conditions and the removal of onerous conditions (including applications made under s73 of the Town and Country Planning Act 1990)

� Applications under Regulations 3 and 4 of The Town and Country Planning General Regulations 1992


� Applications for certificates of appropriate development

� Notifications under Circular 18/84 (Development by Government Department); Circular 14/90 (Overhead Electric Cables); applications by the British Coal Corporation under Class A, Part 21 of The Town and Country Planning (General Development) Order 1995

� Revisions and modifications to existing or approval schemes where a new application is not needed

� Applications for consent, agreement or approval required by a condition or limitation attached to the grant of planning permission, as defined by Article 21 of The Town and Country Planning (General Development Procedure) Order 1995

� Applications, determinations and approvals for the erection or significant alteration, etc of agricultural and forestry buildings in national parks

� Applications, determinations and approvals under Parts VI and VII of Schedule 2 to The Town and Country Planning (General Development) Order 1995 (Agricultural and Forestry Buildings Operators) and amended in 1999


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Includes


� Applications, determinations and approvals relating to the installation of telecommunications apparatus under Part 24 of Schedule 2 to The Town and Country Planning (General Permitted Development) Order 1995 (Development by Telecommunications Code System Operators)

� Applications, determinations and approvals under Part 31 of Schedule 2 to The Town and Country Planning (General Permitted Development) Order 1995 (Demolition of Buildings)

� Applications for hazardous substances consents under The Planning (Hazardous Substances) Regulations 1992

� Applications to stop up or divert footpaths under s257 of the Town and Country Planning Act 1990

� Applications for minerals and waste under The Town and Country Planning (Minerals) Regulations 1995 and The Town and Country Planning (Prescription of County Matters) Regulations 1980.

Also include:

� Collection of statistics relating to applications

� The discharge of planning conditions

� The preparation and supervision of s106 agreements

� Commenting on applications or other development proposals on which the authority is consulted by another council

� Handling purchase notices

� Handling claims for compensation of any kind

� Ombudsman cases related to the core planning function and court actions and any costs associated with those activities including costs awarded for or against the council in respect of planning appeals.

Appeals: handling planning appeals, ie s78, advertisement and listed building appeals, and the collection of statistics in relation to appeals.

Environmental assessments: the environmental assessment of planning applications is required for certain types of development under The Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999.

Conservation and listed buildings: handling of the following applications made to the authority under town and country planning legislation:

� Applications for listed buildings consent under s8 of the Planning (Listed Buildings and Conservation Areas) Act 1990

� Applications for conservation area consent under s74 of the Planning (Listed Buildings and Conservation Areas) Act 1990.

Also include:

� Buildings preservation orders, urgent works notices, repairs notices and spot listings

� Listed building and conservation appeals.


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Includes


Tree and forestry regulations:

� Preparation and administration of tree preservation orders

� Handling applications for felling licences

� Handling applications to fell trees under tree preservation orders and in conservation areas

� Hedgerow removal notices under 1997 Hedgerow Regulations

� It is recognised that planning departments consult the public jointly with other departments. Include any associated costs here.

Enforcement � Handling complaints about development; investigating alleged breaches of planning control and taking enforcement action; monitoring and enforcing compliance with planning conditions, prosecutions and associated legal proceedings

� Enforcement appeals

� Collection of statistics in relation to enforcement and enforcement appeals

� S215 notices to compel landowners to tidy up land.

Regulation of other special topics

Regulation of special activities not referred to above.

Planning Policy Include statutory and non-statutory planning policy work including the preparation of guidelines and public consultation and involvement.

Regional and sub-regional planning

Responding to consultations and involvement in planning policy matters from other authorities and bodies, including any regional planning organisation.

Preparing or contributing to the preparation of sub-regional planning policy.

Local development framework

Preparation, approval and adoption, or the review, amendment or repeal and replacement, of any part of the statutory development plan. This includes any work required for those purposes such as:

� Surveys

� Costs of examinations in public

� Research

� Monitoring and analysis

� Community involvement.

This section includes the collection, analysis, presentation and maintenance of databases in relation to these matters, including mapping costs and census data costs that relate to planning and the costs of the sites and monuments database.

Include supplementary planning documents such as the preparation, approval, adoption, or review of any non-statutory plan, policy statement or any other kind of general supplementary planning document or guidance including development or design briefs and urban design framework statements that set out the planning policy for the whole or part of the authority’s area. The plan, guidance, etc above is likely to be regarded as a guide for the purposes of development, promotion and control work.


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Includes

Local development framework (continued)

Also include here work required for the above purposes such as surveys, research, monitoring, analysis, community involvement (including the collection, analysis, presentation and maintenance of databases in relation to these matters).

Include work on local development schemes, statements of community involvement and annual monitoring reports as well as work on development plan documents.

Exclude maintenance of the network plan. It is accounted for in Highways and Transport Services.

Planning projects and implementation

Implementation of projects requiring a high degree of co-ordination, where the purpose is to secure the authority’s planning aims.

Conservation policy and listed buildings

Include costs associated with:

� The determination of policy or policy guidelines for conservation (outside the development plan process)

� The designation of conservation areas and the preparation and implementation of any schemes for their enhancement, including conservation area appraisals

� Building risk assessment and general advice on historic buildings and conservation areas.

Trees and forestry policy Include the costs related to statutory policies and non-statutory guidance related to trees and forestry.

Other special topics Include costs associated with statutory policies and non-statutory guidance related to special areas of activity not covered above, and costs associated with article 4 directions and areas of special advertisement control.

Sustainable development strategies

Include the collection of statistics relating to environmental audits and the preparation and carrying out of:

� Local authority agenda 21 strategy

� Biodiversity action plan

� Environmental audits

� State of the environment reports

� Environmental management strategies under the label of agenda 21 activities.

Environmental Initiatives

Include costs related to protecting or improving the natural environment.

Environmental education

Environmental education includes:

� Projects with schools and colleges

� Production of education packs and leaflets

� Promotion of planning policies.

Grants Include any grants relating to environmental initiatives.


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Includes

Individual environmental projects

Include:

� The carrying out of any surveys and the preparation and implementation of any schemes for the purposes of environmental improvement

� Surveys of derelict and/or contaminated sites and the preparation and implementation of schemes for their reclamation and other similar projects

� Work in connection with (and including management of) buildings of architectural or historic interest, ancient monuments and sites of archaeological interest and the preparation of schemes for their conservation and enhancement. Include the costs of the archaeology service here

� Work in connection with (and including management of) sites of special scientific interest or sites of nature conservation interest; and the preparation of schemes for their conservation enhancement

� Woodland grant schemes

� Flower baskets and flower beds in town centres and shrubs and flowerbed maintenance in the middle of roundabouts. This excludes any activity undertaken by the highways authority which should be shown in Highways and Transport Services.

Exclude countryside recreation and management. It is shown separately under Cultural and Related Services.

Economic Research Economic research includes:

� Need surveys

� Collation of information on economic analysis, including census data

� Specific investigations into areas where new policy is being developed.

Business Support

Premises development Include:

� The building and letting of subsidised small individual or commercial units for start-up businesses or other purposes

� Conference centre costs

� Shopping centre costs

� Other non-service-based premises held for future development. Exclude surplus properties awaiting disposal or being held as investment properties

� The implementation of development on particular sites in pursuit of a proposal in the development plan or a departure from it.

Include gross costs and gross income, eg rents received, separately.

Grants/loans and guarantees

The handling of financial incentives to persuade firms to set up or expand business in the area, including:

� Giving grants

� Making loans

� Providing guarantees.

Support to business and enterprise

Include:

� Grants to voluntary organisations that provide support and advice

� Careers advice to adults

� In-house costs of advisory services provided.


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Includes

Economic Development Include costs related to understanding, promoting and supporting the economic well-being of the area.

Market undertakings Include the costs associated with the:

� Provision of facilities for markets

� Erection and taking down of stalls

� Collection of rents from the market traders.

Exclude the costs of enforcing food hygiene and trading standards. These are accounted for under Environmental Health and Trading Standards in Environmental and Regulatory Services. Also record rents and other income earned here. Show income and expenditure gross.

Training and employment

Include:

� Training initiatives provided for local people directly by the local authority

� Grants to voluntary organisations that provide training.

Government initiatives Include:

� Work associated with regeneration activities including bids for and implementation of SRB or similar initiatives

� Input into and advice on European policy matters

� Attracting European funding

� Attracting lottery funding.

Promotion and marketing of the area

The promotion of development in the authority’s area by means of:

� General publicity including the preparation of exhibitions, promotional literature, audio-visual aids and area guides

� Supplying information about the area

� Advertising development opportunities

� Organising promotional events such as seminars and workshops, particularly to maintain or attract employment.

Exclude tourism publicity, which is shown separately in Cultural and Related Services.


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Includes

Community Development

Include the costs of initiatives to build community structures rather than the more physical structures above. The indications are that this is still a maturing activity. The area of expenditure is likely to develop as authorities increase their capacity to perform the new duty to promote economic and social well-being under the Local Government Act 2000. It is important to note that not all community expenditure should be recorded here, eg if the expenditure incurred is Economic Development, Community Education, Library Service or any other area of the SEA, then it should be allocated to the appropriate division of service.

As this is an area that is still in its early stages of development, no subdivisions of service are proposed. Costs will include:

� Community strategy formulation and development

� Specific community development initiatives

� Social inclusion

� Projects with community groups

� Projects with voluntary groups and associations

� Promoting e-functionality in the community

� Neighbourhood resources.


An optional holding account for management and support service costs. All costs must be recharged to the other divisions of service. Where possible costs should be allocated directly to the most appropriate service division, eg officers’ time on agenda 21 strategy formulation should be charged to the Sustainable development strategies subdivision.

Inevitably some support services costs such as finance, IT, personnel, procurement, etc will need in part to be apportioned. Apportionment bases should be determined in accordance with the guidance in Section 2 of SeRCOP.

Police Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR POLICE SERVICES

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR POLICE SERVICES

PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN THE NET COST OF POLICE SERVICES

PART FOUR: GUIDANCE NOTE: ITEMS INCLUDED IN THE NET COST OF SERVICE DIVISIONS BELOW THE COST OF SERVICE LINE


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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR POLICE SERVICES

Service Divisions (Mandatory)

Local Policing

Dealing with the Public

Criminal Justice Arrangements

Road Policing

Operational Support

Intelligence

Investigation

Investigative Support

National Policing

Non Distributed Costs


Net Cost of Police Services

Gains/Losses on Disposal of Fixed Assets

Levies

External Interest Payable

Interest and Investment Income

Trading Account Surpluses or Deficits

Net Interest on the Net Defined Benefit Liability (Asset)

Minimum Revenue Provision

Reversal of Depreciation and Impairment of Fixed Assets


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PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR POLICE SERVICES

INTRODUCTION AND BACKGROUND1 The aim of this guidance is to ensure that different police and crime commissioners (PCCs)

and police forces’ financial statements and group accounts are produced on the most accurate and consistent basis possible. It is not intended to influence how different forces are organised on the ground. This is not CIPFA’s role and is contrary to the spirit of Best Value and the requirements of the Service Reporting Code of Practice for Local Authorities (SeRCOP), which encourages innovative approaches to service delivery and autonomy for services. The guidance merely seeks to provide a means for the aggregation of the costs of policing, regardless of how forces are organised, on, where possible, a comparable total cost basis. Section 2 of SeRCOP requires that total cost includes appropriate shares of capital charges, overheads and support services.

2 The aim of this guidance is still to ensure that the activities of operational policing are recorded in a consistent, accurate way whilst complying with the requirements of SeRCOP and the Code of Practice on Local Authority Accounting in the United Kingdom, which PCCs and forces must still adhere to.

3 This guidance often refers to officers. Officers is used as a generic term. It does not imply work by uniformed police officers as opposed to civilian staff. The choice of personnel to do any particular activity is a local management matter.

THE REVISED POLICE SERVICE EXPENDITURE ANALYSIS4 This guidance seeks to provide a means of comparable aggregation of the costs of police

activities at service division level in line with the general requirements of SeRCOP specified in the introduction to Section 3 of SeRCOP.

5 Three optional holding accounts are also identified (Support Functions, Police and Crime Commissioner and Income). These accounts should be allocated to the divisions of service identified in the Police Services SEA or the two service divisions that Section 2 of SeRCOP requires to be excluded from the definition of total cost, ie Corporate and Democratic Core and Non Distributed Costs.

6 Capital charges can also be directly attributed to the divisions of service. Capital charges are defined in Section 2 of SeRCOP.

Additional Guidance7 The remainder of the guidance for Police Services is set out as follows:

� Part Three details the costs that should be included in the Net Cost of Police Services.

� Part Four details those expenditure items accounted for below the cost of service line (see paragraph 10 below).


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APPLICABILITY OF THE CORPORATE AND DEMOCRATIC CORE8 Section 2 of SeRCOP states clearly that the concept of the Corporate and Democratic Core

applies to Police Services. These costs should not be allocated or apportioned to other divisions of service. The definitions in Section 2 of SeRCOP apply equally to Police Services, except that:

� The statutory roles of the chief executive and the chief finance officer to the PCC will be under DRM point (b) as officer time spent supporting democratic representation and management.

� Corporate Management point (a) is less likely to apply, as the chief constable will be involved in direct management of services (charged to divisions of service). Corporate Management point (e) will not apply.

APPLICABILITY OF NON DISTRIBUTED COSTS 9 Non Distributed Costs as defined by Section 2 (eg past service costs) apply to police forces for

non-uniformed police force staff.

ITEMS BELOW THE COST OF SERVICE LINE10 The revised SEA includes an analysis of the net operating section of the Income and

Expenditure Account for PCCs. For additional guidance on this section see the Code of Practice on Local Authority Accounting in the United Kingdom and associated Guidance Notes.

STATUS AND IMPLEMENTATION11 This SEA for Police Services replaces all previous versions issued by CIPFA and is mandatory

for English and Welsh forces from 1 April 2015. 2015/16 SeRCOP applies to the following statutory disclosures:

� 2015/16 Budgets



THE RECOMMENDED STANDARD SUBJECTIVE ANALYSIS12 For budgetary and management accounting purposes, PCCs and police forces may also wish

to analyse expenditure using the subjective analysis (already a requirement of government statistical returns). CIPFA’s Recommended Standard Subjective Analysis is included in Section 4 of SeRCOP.


basis as a minimum.


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PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN THE NET COST OF POLICE SERVICES

Service Division Includes

Local Policing � Neighbourhood policing

� Incident (response) management

� Specialist community liaison

� Local command team and support overheads.

Dealing with the Public � Local call centres/front desk

� Central communications unit (including contact management units)

� Dealing with the public command team and support overheads.

Criminal Justice Arrangements

� Custody

� Police doctors, nurses and surgeons

� Other custody costs

� Criminal justice arrangements

� Police National Computer (PNC)

� Civil disclosure/Criminal Records Bureau (CRB)

� Coroner assistance

� Fixed penalty scheme (central ticket office)

� Property officer/stores

� Criminal justice arrangements command team and support overheads.

Road Policing � Traffic units

� Traffic wardens/police community support officer traffic

� Vehicle recovery

� Casualty reduction partnership

� Road policing command team and support overheads

Operational Support � Air operations

� Mounted police

� Specialist terrain

� Dogs section

� Advanced public order

� Airport and ports policing unit

� Firearms unit

� Civil contingencies

� Events

� Operational support team and support overheads.

Intelligence � Intelligence analysis /threat assessments

� Intelligence gathering

� Intelligence command team and support overheads.


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Investigation � Major investigation unit

� Economic crime (including regional asset recovery team)

� Specialist investigation units

� Serious and organised crime unit

� Public protection

� Local investigation/prisoner processing

� Investigations command team and support overheads.

Investigative Support � Scenes of crime officers

� External forensic costs

� Fingerprint/internal forensic costs

� Photographic image recovery

� Other forensic services

� Investigative support command team and support overheads.

National Policing � Secondments (out of force)

� Counter-terrorism/Special Branch

� ACPO projects/initiatives

� Hosting national services

� Other national policing requirements.

Non Distributed Costs See Section 2 of SeRCOP.


� See Section 2 of SeRCOP

� Democratic Representation and Management

� Corporate Management.

Support Functions (optional holding account) Note: in accordance with the requirements of SeRCOP, these costs must be allocated directly or apportioned to service divisions

Support functions need to be charged to appropriate service divisions so that the cost of each service division represents the total cost of each service as defined by Section 2 of SeRCOP. For further guidance on overhead apportionment and recharging please see paragraph 2.15 of SeRCOP and the accompanying guidance.

� Human resources

� Finance

� Legal

� Fleet services

� Estates/central building costs

� Information and communications technology (ICT)

� Professional standards

� Press and media

� Performance review/corporate development

� Procurement

� Training


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Support Functions (optional holding account) (continued)

� Administration support

� Force command

� Support to associations and trade unions

� Force band

� Social club support

� Insurance and risk management

� Catering.

Police and Crime Commissioner (optional holding account) Note: in accordance with the requirements of SeRCOP, these costs must be allocated directly or apportioned to service divisions or the relevant section in the Service Expenditure Analysis (eg Corporate and Democratic Core)

Police and Crime Commissioner costs need to be charged to appropriate service divisions so that the cost of each service division represents the total cost of each service as defined by Section 2 of SeRCOP. For further guidance on overhead apportionment and recharging please see paragraph 2.15 of SeRCOP and the accompanying guidance.

� Police and crime commissioners’ expenses

� Forces admin and support

� Consultation

� Statutory expenses

� Treasury management

� Internal audit.

Income (optional holding account) Note: in accordance with the requirements of SeRCOP, income must be allocated directly or apportioned to service divisions

Income needs to be credited to appropriate service divisions so that the net cost of each service division represents the total cost of each service as defined by Section 2 of SeRCOP. For further guidance on overhead apportionment and recharging please see paragraph 2.15 of SeRCOP and the accompanying guidance.

� Specific grants

� Secondment income

� Trading account income

� Income from officer services

� Proceeds of crime income

� Other income.

Net Cost of Police Services

Some teams may deliver functions that relate to more than one division of service. Where the effect will not be material, it is acceptable to allocate the team to the dominant function that it delivers. Where the effect would be material, the costs of the team should be apportioned between the functions delivered.

Some police forces may have a national policing role that covers functions that are covered in other divisions of service (for example specialist operations). Such forces/authorities should apportion the costs of these functions between the relevant division of service (where the function is carried out on behalf of its local responsibilities) and the National Policing division (where the function is carried out in fulfilment of its national policing role).


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PART FOUR: GUIDANCE NOTE: ITEMS INCLUDED IN THE NET COST OF SERVICE DIVISIONS BELOW THE NET COST OF SERVICES LINE

Item

Gains/Losses on Disposal of Fixed Assets

Levies

External Interest Payable

Interest and Investment Income

Trading Account Surpluses or Deficits

Net Interest on the Net Defined Benefit Liability (Asset)

Minimum Revenue Provision

Reversal of Depreciation and Impairment of Fixed Assets

For further guidance on these costs and income items, please refer to the relevant Code of Practice on Local Authority Accounting in the United Kingdom and associated Guidance Notes.


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Public Health (England)

The Public Health SEA was a new chapter for the 2013/14 SeRCOP SEA, following the responsibility for public health being transferred from the NHS to local government in England for the financial year 2013/14.

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR PUBLIC HEALTH

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR PUBLIC HEALTH



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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR PUBLIC HEALTH



Sexual Health � Contraception

� STI testing and treatment

� Advice, prevention and promotion.

NHS Health Check Programme

Health Protection

National Child Measurement Programme

Public Health Advice

Obesity � Adult obesity

� Child obesity.

Physical Activity � Physical activity for adults

� Physical activity for children.

Substance Misuse � Drug misuse in adults

� Alcohol misuse in adults

� Youth services.

Smoking and Tobacco � Stop smoking services and interventions

� Wider tobacco control.

Children 5–19 Public Health Programmes

Miscellaneous Public Health Services

� Nutrition initiatives

� Health at work

� Accident prevention

� Public mental health

� General prevention

� Community safety, violence prevention and social exclusion

� Dental public health

� Fluoridation

� Infectious disease surveillance and control

� Environmental hazards protection

� Seasonal death reduction initiatives

� Birth defect prevention

� Mandated 0–5 children’s services

� All 0–5 children’s services

� Other public health services.


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Note 3: Apportionment bases should be determined in accordance with CIPFA’s best practice guidance which is in line with the seven principles of apportionment specified in Section 2 of SeRCOP.

Note 4: Mandatory public health spend, for the purposes of completion of RA/RO returns, covers the following categories: Sexual Health: Contraception/STI testing and treatment (please note: this does not include Sexual Health: Advice, prevention and promotion, which is a non-mandatory service); NHS Health Check Programme; Health Protection; National Child Measurement Programme; and Public Health Advice.


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PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR PUBLIC HEALTH

INTRODUCTION1 The aim of this guidance is to ensure different local authorities’ Public Health service

financial records are on as consistent a basis as possible and to allow local authorities to meet the majority of their financial reporting commitments from a single set of base financial records.

2 The guidance is not intended to influence how different authorities are organised on the ground. This is not CIPFA’s role and is contrary to the spirit of Best Value, which encourages innovation. The guidance merely seeks to provide a means for a comparable aggregation of the costs of Public Health services, regardless of how they are organised. The ability to compare services is one of the four key strands of Best Value, namely to:







4 Guidance on what to include in each division of service follows in Part Three.


� Expenditure should include all expenditure including payments funded by grants.


6 Apportionment bases should be determined in accordance with CIPFA’s best practice guidance which is in line with the seven principles of apportionment specified in Section 2 of SeRCOP.

7 All divisions/subdivisions should include all provision commissioned by local authorities from all providers, including GPs and community pharmacies.




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publication Pooled Budgets: A Practical Guide for Local Authorities and the National Health Service (2009).


11 Contributions by the NHS or other third parties towards the costs of services provided and managed by the local authority public health division should be included as income in the authority’s accounts. The gross costs of the services provided should be included as expenditure.


STATUS AND IMPLEMENTATION13 This SEA for Public Health, issued by CIPFA, is mandatory for English authorities from 1 April

2015. 2015/16 SeRCOP applies to the following statutory disclosures:

� 2015/16 Budgets




basis as a minimum.


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Includes

Sexual Health

Contraception Provision of contraceptive advice and the provision of all methods of contraception and emergency contraception for people of all ages. For example, include contraceptive provision in genitourinary medicine (GUM) clinics, sexual health clinics and/or the community, any local arrangements made with GPs for the provision of advice and supplies of contraception which are not covered by the GP contract (eg in relation to the fitting and removal of implants, intrauterine systems and devices) and any local contracts with pharmacies.

STI testing and treatment STI testing and treatment, including prophylaxis after sexual exposure, chlamydia screening as part of the National Chlamydia Screening Programme, and HIV testing. For example, costs should include STI testing and treatment in GUM clinics, community programmes (including pharmacies), any local contracts with GPs (eg as part of the National Chlamydia Screening Programme), any testing service (eg postal testing for chlamydia), and any laboratory costs associated with STI/HIV testing.

Advice, prevention and promotion

Provision of sexual health advice, promotional activities or interventions; outreach work; locally developed information or campaigns and/or materials for promoting good sexual health; HIV prevention and sexual health promotion work, preventative intervention services in schools, colleges, pharmacies and help lines; sexual health elements of teenage pregnancy prevention.

Other elements of sexual health and reproductive healthcare, eg pregnancy testing, assessment and referral for abortion as part of LA-commissioned sexual health services, and sexual health aspects of psycho-sexual counselling.

NHS Health Check Programme

Risk assessment for NHS Health Check Programme.

Cohort identification and management.

Exclude smoking cessation lifestyle intervention following NHS Health Check risk assessment (include in the ‘Stop smoking services and interventions’ subdivision).

Exclude weight management lifestyle intervention following NHS Health Check risk assessment (include in the 'Adult obesity’ subdivision).

Exclude physical activity lifestyle intervention following NHS Health Check risk assessment (include in the 'Physical activity for adults' subdivision).

Exclude intensive lifestyle management for non-diabetic hyperglycaemia, impaired fasting glucose or impaired glucose tolerance (include in ‘Other public health services’ subdivision).


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Includes

Health Protection Steps carried out to protect the health of the population; for example, advising on health protection planning..

Exclude any costs related to duties under the Public Health (Control of Disease) Act 1984.

National Child Measurement Programme

Delivery of the mandatory elements of the National Child Measurement Programme – weighing and measuring of eligible children and the central return of the data.

Exclude the cost of any services that the child or family may be referred to (spend recorded elsewhere).

Public Health Advice The provision of healthcare public health advice to NHS commissioners on the commissioning of NHS services.

Any general data collection, collation, management, analysis and interpretation, or data presentation and reporting towards the provision of this duty to NHS commissioners.

Exclude any general information and intelligence not related to the provision of population-based public health advice to NHS commissioners on the commissioning of NHS services (the mandatory function) which should be recorded under Miscellaneous Public Health Services.

Obesity Exclude BMI assessment undertaken specifically as part of an NHS Health Check (record under NHS Health Check Programme).

Exclude any interventions which are covered in the Physical Activity service division or in the ‘Nutrition initiatives’ subdivision of Miscellaneous Public Health Services or as part of the Healthy Schools Programme (include in the Children 5–19 Public Health Programmes division of service).

Exclude breastfeeding support and the baby-friendly initiative (spend should be recorded under the ‘Nutrition initiatives’ subdivision of Miscellaneous Public Health Services.

Adult obesity BMI assessment/identification of the overweight and obese.

Commissioned brief/community lifestyle weight management interventions for adults.

Specialised weight management interventions for adults (eg dietetics and community dietetics, obesity clinics, etc).

Workplace weight management programmes.

Obesity prevention programmes, which may include programmes focusing on healthy eating/cooking, physical activity or healthy lifestyles.

Social marketing in relation to obesity, including Change4Life initiatives and work with local Change4Life supporters.


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Includes

Child obesity Follow-up to the National Child Measurement Programme (non-mandatory element) – providing result letters to parents and/or proactive follow-up.

Commissioned brief/community lifestyle weight management interventions for children up to age 19.

Specialised weight management interventions for children up to age 19 (eg dietetics and community dietetics, obesity clinics, etc).

Obesity prevention programmes, which may include activities in early years settings such as children’s centres.

Obesity prevention programmes in schools or in partnership with schools (including healthy meals initiatives).

Physical Activity

Physical activity for adults Let's Get Moving/commissioned physical activity brief interventions.

Active travel (ie travelling actively for everyday journeys) initiatives.

Community-based recreational walking and cycling schemes.

Sports-based interventions.

Investment in county sport partnerships.

Other physical activity interventions.

Local information campaigns to promote physical activity and sport.

Physical activity for children As above (‘Physical activity for adults’), but for anything solely aimed at children aged up to 18 years.

Substance Misuse Exclude the costs of implementing local young people’s substance misuse strategies; the cost of specialist substance misuse treatment services and placements for under 18s; and targeted prevention initiatives, which should be accounted for under the relevant subdivisions within Children’s and Education Services.

Exclude any spend on reintegration or homeless outreach services funded through other means.

Exclude residential rehabilitation funded through other means, eg from the community care budget.

Exclude any social-service-funded interventions such as case management and day treatment programmes.

Exclude any general universal or targeted prevention activity funded through the Early Intervention Grant.

Drug misuse in adults All structured drug treatment, eg care-planned psycho-social and pharmacological intervention including in-patient treatment.

Harm reduction and open access services, eg harm reduction strategy activities; needle and syringe programmes and equipment; and any programmes to prevent drug misuse through targeted health improvement activity.

Residential rehabilitation (include any public health spend that is pooled alongside adult community care budgets for this purpose).


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Includes

Alcohol misuse in adults Tier 1 interventions, eg alcohol-related information, any locally commissioned identification and brief advice.

Tier 2 interventions, eg open-access non-care-planned alcohol-specific advice and counselling.

Tier 3 interventions, eg community-based, structured, care-planned alcohol treatment, such as counselling services and day treatment programmes; and community detoxification.

Tier 4 interventions, eg alcohol specialist inpatient treatment such as detoxification.

Reducing alcohol harm in the population through targeted health improvement activity.

Youth services Include spend on any specialist substance misuse (drug and alcohol) intervention activities that are solely aimed at children and young people aged up to 18.

Smoking and Tobacco

Stop smoking services and interventions

Local stop smoking services.

Local incentive schemes to encourage brief interventions and referrals to local stop smoking services.

Wider tobacco control Preventing uptake (including schools-based activity).

Smoke-free places initiatives.

Regulatory and enforcement activity.

Tackling illicit tobacco in the community including contributions to multi-local-authority (eg regional) activities.

Communications and marketing campaigns including contributions to multi-local-authority (eg regional) activities.

Exclude normal regulatory and enforcement activity carried out by local authority regulatory services eg trading standards.

Children 5–19 Public Health Programmes

School health promotion, eg Healthy Schools Programme.

Health promotion and prevention interventions.

School nursing services.

Healthy Child Programme 5–19.

Exclude drug or sexual health intervention services to children and young people, which are accounted for under the relevant headings in Children’s Services.

Miscellaneous Public Health Services

Nutrition initiatives Promoting a balanced diet.

Five a Day (all activity, including grants to other organisations).

Breastfeeding support.

School fruit and veg scheme.

Baby-friendly initiative.


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Includes

Health at work External workplace health (eg advice to employers on commissioning occupational health support, but excluding internal workplace interventions and occupational health).

Initiatives aimed at getting workers or the unemployed back to work more quickly following a period of ill health.

Staff education around workplace health.

Workplace award schemes.

Accident prevention For example, identification of people at risk from falling.

Exclude any activity that contributes to accident prevention quantified in other categories (eg Obesity and Physical Activity divisions).

Public mental health Mental wellbeing promotion.

Mental illness prevention.

Anti-stigma and discrimination.

Suicide and self-harm prevention.

General prevention General behavioural/lifestyle campaigns/services to prevent cancer (including skin cancer) and long-term conditions.

Cardiovascular disease prevention additional to the NHS Health Check Programme.

General initiatives targeted at particular groups vulnerable to poor health outcomes.

General health promotion activities.

Exclude specific activity quantified in other categories, eg NHS Health Check spend.

Community safety, violence prevention and social exclusion

Outreach workers, targeted preventative activities, and victim support for activities tackling crime and disorder, community safety and new entrants to the youth justice system.

Specialist services for victims of domestic violence.

Specific support for families with multiple problems (note: only include contribution from public health grant, ie exclude spend from other sources),

Specific public health initiatives to tackle social isolation.

Dental public health Supervised tooth-brushing schemes.

Milk fluoridation scheme.

Fluoride varnish programmes.

Brushing for life.

Intra-regional co-ordination of dental epidemiology programme.

Any data collection, collation, co-ordination and staff calibration for any national or local surveys of public dental health.

Fluoridation Water fluoridation costs (revenue).

Infectious disease surveillance and control

Include awareness raising or behaviour change initiatives and public health support for communicable disease control programmes; and any training in the community (eg about healthcare associated infections).


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Includes

Environmental hazards protection

Note: this subdivision should only include spend from the public health grant.

Seasonal death reduction initiatives

Note: this subdivision should only include spend from the public health grant. Some social care services may contribute to this area, but are accounted for elsewhere.

Birth defect prevention Any population-level interventions to reduce and prevent birth defects.

Mandated 0–5 children’s services

Include antenatal health promoting visits; new baby review; 6–8-week assessment; 1-year assessment; 2–2½-year review.

All 0–5 children’s services Include all universal elements of the healthy child programme. Also include targeted services and the family nurse partnership (FNP).

Other public health services Any spend from the public health grant used to tackle the wider and social determinants of health and health inequalities not already recorded in any other category.

NHS Health Check Programme – intensive lifestyle management for non-diabetic hyperglycaemia, impaired fasting glucose or impaired glucose tolerance.

Exclude the mandatory elements of the NHS Health Check programme, which should be recorded under the NHS Health Check Programme division of service.

SECTION 3

Service Expenditure Analysis for Scotland

INTRODUCTION3.1 LASAAC approved the Service Expenditure Analysis (SEA) to be applicable to Scottish local

authorities from 1 April 2000. The first full Scottish SEA was implemented from 1 April 2002. Revisions have been made since the initial implementation to ensure that the Scottish SEA remains relevant. For 2015/16 the publication has been revised and updated to keep pace with the IFRS-based Code of Practice on Local Authority Accounting in the United Kingdom (the Code).

FORMAT OF THE SERVICE EXPENDITURE ANALYSIS3.2 Each service has been analysed across a number of mandatory service divisions. These

service divisions are then split into several discretionary subdivisions. Guidance notes have also been included to support the Service Expenditure Analyses (SEA).

3.3 The aim of the hierarchy within the SEA is to promote consistency between local authorities in terms of both format and comparability of financial reporting. To achieve this, a common format of service divisions and subdivisions is recommended:

� Service divisions represent the mandatory level to which all local authorities are expected to be able to aggregate their costs. This is also the minimum level at which total cost is expected to be applied.

� Subdivisions represent a recommended but discretionary sub-aggregation of costs. Authorities are encouraged to follow these as closely as possible as this will assist with benchmarking, which is central to the comparison element of Best Value.

The guidance notes may or may not be applied. Their purpose is to promote consistency between local authorities.


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reporting. Total cost is defined in Section 2 of SeRCOP. The total cost principle applies to each item at the mandatory service division level in the SEA. Specifically, this means that, in addition to direct costs, each division of service must include adjustments to ensure that total cost includes items such as:

� depreciation

� impairment loss identified on assets used to provide the services of an authority

� revenue expenditure funded from capital under statute


� current service pensions costs per IAS 19 Employee Benefits

� soft loan and financial guarantee charges and credits arising from compliance with accounting standards relating to financial instruments.

STATUS OF THE SERVICE EXPENDITURE ANALYSIS3.5 The new SEA that follows supersedes all previous versions that apply to Scotland.

3.6 There are no substantive changes to the Scottish Service Expenditure Analysis for 2015/16 at the date of publication of SeRCOP.

3.7 The Scottish Service Expenditure Analysis (SEA) is intended to be consistent with the analyses required in the Local Financial Returns (LFRs) by the Scottish Government. The intention is to ensure that authorities are not required to substantially restate their financial reporting figures in order to comply with Scottish Government data collation requirements. Practitioners should note, however, that:

� In conjunction with a review of Scottish Government Local Financial Returns, LASAAC is considering the classification of Community Safety expenditure. This may lead to an amendment to the requirements for 2015/16 classification.

� The proposals in the Welfare Funds (Scotland) Bill being considered by the Scottish Parliament at the date of SeRCOP publication may also affect the formal classification of expenditure required for 2015/16 financial statements.

� No change has been proposed by the Scottish Government on information requirements relating to the integration of adult health and social care during 2015/16.

3.8 Authorities should also note that, for financial reporting purposes, all support expenditure should be absorbed into the total cost of services. The SEA does not specifically define what constitutes ‘support’ expenditure, as this will be dependent on authority-specific decisions about management structures and budget-holding responsibilities. The guidance on LFR completion, however, seeks to ensure some consistency in the LFR data by specifying the following:

� For LFR purposes ‘support costs’ include finance, information technology, human resources, property management/office accommodation, legal services, procurement services, corporate services and corporate and democratic core. Detailed lists of the

SECTION 3 \ SERVICE EXPENDITURE ANALYSIS FOR SCOTLAND

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functions considered to constitute these items are provided in the LFR guidance. For LFR purposes, all relevant costs should be categorised as ‘support costs’ regardless of which department in the authority manages the budget.

� For LFR purposes ‘support costs’ exclude expenditure such as property repairs, transport maintenance and any other items not specified as support costs. These costs will be included within departmental expenditure on LFR returns, regardless of which department in the authority manages the budget.

3.9 The Code specifies that the Comprehensive Income and Expenditure Statement should use an analysis of service income and expenditure based on the SeRCOP SEA. While local authorities may provide the full range of services outlined in the SEA, the Code also applies to other Scottish organisations including regional transport partnerships and valuation joint boards. The Scottish SEA applies to these bodies to the extent that they provide services included within the SEA. The Code does allow, as appropriate, the combination of minor classes of service expenditure.

THE SERVICE EXPENDITURE ANALYSIS3.10 The Service Expenditure Analysis is presented in a manner that demonstrates the breakdown

of the hierarchy of service divisions and subdivisions, followed by guidance notes to give further definitions of those service divisions and subdivisions. This SEA applies to all the following services with effect from 1 April 2015:

� Education Services



� Environmental Services

� Roads and Transport Services

� Trading Services

� Planning and Development Services

� Social Work

� Central Services.

UPDATING THE SERVICE REPORTING CODE OF PRACTICE FOR LOCAL AUTHORITIES3.11 It is planned that the Service Reporting Code of Practice for Local Authorities, including the

Service Expenditure Analysis, will be reviewed and updated as appropriate in response to the developing requirements in Scotland.

3.12 CIPFA would welcome any comments or suggestions that could contribute to this updating exercise. If you have any comments on the Scottish Service Expenditure Analysis, please contact the CIPFA Technical Enquiry Service at [email protected]



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Education Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR EDUCATION SERVICES

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR EDUCATION SERVICES



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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR EDUCATION SERVICES



Individual School Budgets

Budgets Devolved to the Pre-primary School Head Teacher

Budgets Devolved to the Primary School Head Teacher

Budgets Devolved to the Secondary School Head Teacher

Budgets Devolved to the Special School Head Teacher

Schools Without Devolved Budgets

Education Authority Centrally Held School Budgets

Schools Strategic Management � Statutory and regulatory duties

� Redundancy costs met centrally

� School contingencies centrally held

� Non-devolved strategic central services.

Non-devolved School Grants

Pre-primary Education � Nursery schools

� Other under 5s provision not located in primary or special schools (including purchased from the private/voluntary sector)

� Childcare services

� Registration services.

Facilitating School Improvement

Supporting Special Education needs (SEN), irrespective of whether delivered in mainstream or SEN schools

� Education psychology services

� Support for SEN pupils

� Promoting improved SEN support

� SEN functions under the Education (Scotland) Act 1980 and the Children (Scotland) Act 1995

� Education outside school settings.

School and Pupil Support � Admissions and planning school provision

� School exclusions

� Home to school transport

� Ensuring attendance at school

� Pupil support

� School meals and milk (where not devolved)

� Independent school fees (not for SEN reasons)

� Support for cultural and related education.


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Non-school Funding

Strategic Management of Non-school Services

Support for Students � Awards made

� Student support.

Home to College Transport (16–18 years)

Community Learning � Delivering

� Facilitating.

Optional Holding Accounts

Education Management and Support Services. All costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed.

� To be determined locally.

Note 1: Section 2 of the Service Reporting Code of Practice for Local Authorities makes it clear that Corporate and Democratic Core costs and Non Distributed Costs should be kept separate from the Service Expenditure Analysis above.

Note 2: This guidance should be read in conjunction with the introduction to the Service Expenditure Analysis for all local government services and CIPFA’s Principles for Best Value Accounting.

Note 3: In this analysis, centrally held funds do not need to be split between the different types of school during the year, to avoid overly complicated record keeping.


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PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR EDUCATION SERVICES

INTRODUCTION1 This Service Expenditure Analysis for Education Services is mandatory for Scottish local

authorities (LAs) from 1 April 2002. This guidance note should be read in conjunction with the general introduction to the complete series of SEAs.

STRUCTURE OF THE SERVICE EXPENDITURE ANALYSIS FOR EDUCATION SERVICES2 Education Services expenditure is split broadly into three categories:

� Individual School Budgets (devolved to schools)

� Education Authority (EA) Centrally Held School Budgets

� Non-school Funding.

3 Each of these broad categories is split into a series of service divisions that, in turn, are divided into subdivisions of service. These are detailed in the guidance that follows in Part Three.

4 Key points to note when completing the analysis of education expenditure are:

� In Scotland, EAs are required under The Schools Board (Financial Information) (Scotland) Regulations 1990 to show school budgets analysed over subjective headings. This will help individual schools and local authorities to compare schools on a like-by-like basis or by type, particularly as community and cluster schools become established.

� Some EAs offer a useful benchmarking service to their schools. They collect data, collate it and provide all schools with an analysis of comparative spending data. This requires that schools use a common format.

� All schools budgets controlled centrally must be analysed during the year over expenditure headings related to the purpose of the expenditure, eg strategic planning, school improvement, special needs, promoting access.

� It is important to ensure that the detailed guidance that follows is adhered to. This will greatly improve the comparability of different EA accounts. This, in turn, will assist the benchmarking activity that is inevitable under Best Value. Effective benchmarking will assist LAs to Compare and Challenge more effectively and present those involved in Consultation with better base data.

EDUCATION MANAGEMENT AND SUPPORT SERVICES5 To be consistent with the other SEAs included in SeRCOP, this guidance has an optional

service division called Education Management and Support Services. This is not compulsory,


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but may be helpful to authorities that find it useful to maintain holding accounts for support services where the costs:

� are not directly charged to users of the services

� cannot be directly allocated to users of the services.

6 The key point to bear in mind is that, to meet CIPFA’s definition of total cost, all costs, including management and support costs, must be allocated, apportioned or charged to a service division at the year-end. Any holding accounts used must not contain a balance at the year-end and will not feature in end-of-year accounts.

7 This guidance makes reference to the allocation of overheads. CIPFA recommends that the general principles as laid out in paragraph 2.15 of Section 2 of SeRCOP are followed.

CLASSIFYING DIFFERENT TYPES OF SCHOOL8 Classification of schools is predetermined by the focus of the education, ie primary,

secondary or SEN. However, EAs will need to consider the impact and the subsequent allocation processes that will be required with the introduction of cluster and community schools, which may, indeed, cover more than one functional educational grouping.

UPDATING THE GUIDANCE9 CIPFA is dedicated to keeping its guidance up to date. This guidance will be reviewed and

updated as appropriate in response to developing requirements in Scotland.


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INDIVIDUAL SCHOOL BUDGETS1 Divisions of service:

� Budgets Devolved to the Head Teacher of Pre-primary Schools

� Budgets Devolved to the Primary School Head Teacher

� Budgets Devolved to the Secondary School Head Teacher

� Budgets Devolved to the Special School Head Teacher

� Schools Without Devolved Budgets.

Budgets Devolved to the Head Teacher of Pre-primary Schools2 All traditional education activity should be included here, ie including nursery schools but

not including childcare services. This traditional activity should be included here, regardless of which department operates the service. If the costs do not fall within this category, they should be included within Children and Families in Social Work.

3 Expenditure included within each Individual School Budgets division of service includes budgets devolved to individual schools. A subjective breakdown is needed in line with CIPFA’s standard subjective classification outlined in the introduction to Section 3 of SeRCOP.

4 EAs should also include an allocation of costs associated with both community and cluster schools.

5 Gross expenditure should be shown separately within individual school budgets and grants received shown as income.

Schools Without Devolved Budgets6 Schools that do not operate devolved school management should include individual school

expenditure under this heading.

EA CENTRALLY HELD SCHOOL BUDGETS7 Divisions of service:

� Schools Strategic Management

� Non-devolved School Grants

� Pre-primary Education

� Facilitating School Improvements

� Supporting Special Education Needs

� School and Pupil Support.


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Schools Strategic Management8 Expenditure within Schools Strategic Management includes costs associated with the EA’s:

9 Statutory and regulatory duties, including:

� Chief education officer and his or her personal staff (schools-related activity)

� Central financial management, eg administering grants, dealing with superannuation, budget monitoring in respect of non-devolved funds

� Internal audit and other tasks related to s95 responsibilities

� Human resource management (HRM) of staff not devolved to schools

� The EA’s HRM functions relating to the appointment, grading, conditions of service and dismissal of employees

� Consultation with governing bodies, school boards, school employees, etc

� Health and safety work under the 1974 Health and Safety at Work Act

� Dealing with complaints

� Legal services related to statutory functions of the EA

� Collaboration and joint planning with other EAs, voluntary bodies or the public

� Standing Advisory Council on Religious Education

� Information technology related to linking or facilitating links between the EA and its schools, between schools and between schools and other institutions

� School board members

� School board members’ expenses not paid by schools

� Consulting with and providing information to school boards, school staff and staff representatives

� Management of capital programmes/asset management plans

� Providing education specific information to the Scottish Government

� Curriculum development.

10 Redundancy costs met centrally.

11 School contingencies centrally held, including those contingency budgets held centrally to help schools pay for unexpected events and temporary staff costs to compensate schools for staff absence arising from, for example:

� Long-term sickness

� Full-time secondments, except if secondment is to an EA or to a school governing body

� Ante-natal care or maternity leave

� Trade union duties under the Trade Union and Labour Relations Act 1992

� Public duties under s50 of the Employment Rights Act 1996

� Jury service

� Acting in the capacity of a safety representative or employee representative

� Reserve forces duties under s1(2)of the Reserve Forces Act 1996


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� Suspension from working at a school

� Any other costs as determined by the EA.

12 Non-devolved strategic central services are those costs that the EA incurs but which are not devolved, including insurance expenditure, the cost of education library and museum services, relevant licences and subscriptions, costs arising from the operation of a joint use facility, of operating the school board and secondary school exam fees paid to the Scottish Qualifications Agency (SQA).

Non-devolved School Grants13 Expenditure within Non-devolved School Grants includes expenditure supported by both the

Excellence Fund and other government grants. For consistency it is recommended that grants other than the Excellence Fund should be identified separately. In all cases the expenditure should be shown as the gross expenditure, and the grant received as income. This will allow the total cost to be demonstrated.

14 Excellence Fund grant which relates to non-school services should be accounted for under the appropriate heading, and grants developed to schools should be accounted for as devolved school expenditure.

Pre-primary Education15 Other under 5s provision should include the costs associated with under 5s advisors, support

to playgroups, support to voluntary groups, etc.

Facilitating School Improvements16 Expenditure within this subdivision includes expenditure incurred in the preparation and

review of the education development plan, and implementing and monitoring the school improvement plan, including:

� Challenging schools

� Support to schools causing concern

� Support to turn failing schools around

� Payments to universities, etc for educational research under s24 of the Education (Scotland) Act 1980

� The costs of inspectors who carry out a quality assurance role.

Supporting Special Education Needs17 Expenditure within Supporting SEN relates mainly but not exclusively to supporting children

with records of special education need. It includes:

18 Education psychology services, including the costs of administrating and arranging the record of needs process and monitoring its provision under the Education (Scotland) Act 1980.

19 Support for SEN pupils, which includes expenditure on the provision of specialist SEN support, irrespective of whether a pupil has a record of need or not, and any fees incurred


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for SEN pupils at independent special schools. If any element of these fees relates to non-educational costs, then that should be charged to social work.

20 Promoting improved SEN support, which includes:

� Monitoring SEN provision in school

� Disseminating good practice between schools

� Facilitating collaboration between schools

� Promoting the integration of SEN pupils into primary and secondary schools

� Giving information to parents about SEN.

21 SEN functions under the Education (Scotland) Act, which includes expenditure incurred as a result of investigations into possible child abuse cases and/or child protection orders under the Children (Scotland) Act 1995 or s48 of the Social Work (Scotland) Act 1968.

22 Education outside school settings, which includes:

� Home tuition

� Hospital units

� Social work establishments (including secure accommodation)

� Other settings (specify each).

School and Pupil Support23 Expenditure within the School and Pupil Support division of service is incurred in the following

subdivisions.

24 Admissions and planning school provision, which includes:

� Planning the school provision needed

� Preparation of the school organisation plan

� School admissions administration

� Handling admission appeals

� Services to school organisation committees

� Services to admissions forums.

25 School exclusions: costs arising from both the administration of the exclusion and advice to parents of excluded pupils. Includes:

� Home tuition

� Hospital units

� Social work establishments (including secure accommodation)

� Other settings (specify each).

26 Home to school transport (s51 of the Education (Scotland) Act 1980): expenditure arising from taxi costs, bus costs (which should be split between those costs arising from in-house and contracted-out provision) and any other transport costs arising in the transport of children from home to school. Other transport costs should be identified, eg train, ferry, etc.


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27 Ensuring attendance at school includes expenditure relating to:

� School attendance work – sections 35 to 44 of the Education (Scotland) Act 1980

� Education welfare service (except SEN/behaviour support and other duties under the Children (Scotland) Act 1995, covered above).

28 Pupil support includes expenditure arising as a result of:

� Assistance to enable people to take advantage of educational opportunities

� Clothing grants

� Lodging grants

� Education maintenance allowances

� Scholarships

� Bursaries

� Administration of eligibility for free meals.

29 School meals and milk expenditure (non-devolved) includes the provision of school meals and milk, and the repairs and maintenance of school kitchens in schools that do not have devolved funding.

30 Independent school fees, ie fees paid to private schools for pupils without SENs.

31 Support for cultural and related education includes expenditure relating to:

� Music tuition (not covered by SF/EF)

� Other music-related activity (not covered by SF/EF)

� Visual/performing arts activity

� Operational units (not for organised sport or games), eg activity centres, computer centres, technology centres, field centres, outdoor centres, residential centres, rural schools development units, sailing centres, school camps, school farms, science workshops, urban studies centres and language centres.

NON-SCHOOL FUNDING 32 Divisions of service:

� Strategic Management of Non-school Services

� Support for Students

� Home to College Transport (16–18 years)

� Community Learning.

Strategic Management of Non-school Services33 A share of the EA’s strategic management costs relate to non-school expenditure. This

includes and should be identified as:

� Chief education officer (CEO) (non-schools activity)

� CEO’s personal staff (non-schools activity)


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� Planning for whole non-schools service, notably preparing and monitoring the lifelong learning strategy, and preparing and monitoring the early years development plan

� Administration of grants related to non-school activity, eg for adult education courses funded by the FEFC, nursery and early years grants, etc

� Providing information to the Scottish Government relating to non-schools education activity.

Support for Students34 The Support for Students division is split between two subdivisions:

35 Awards made relates to mandatory student awards made and the associated administration.

36 Student support includes:

� Discretionary awards made and associated administration

� Other support for students, including the assessment of entitlement for loans.

Home to College Transport37 The Home to College Transport division of service should include all expenditure incurred

under s509 of the Education Act 1996. An EA can pay transport costs for 16–18-year-olds, including:

� EA transport costs

� Public transport costs

� Contract hire costs.

Community Learning38 Community Learning is defined as the expenditure incurred by the main provider, ie service

department within the local authority, in delivering and facilitating that council’s community learning strategy.

39 Delivering community learning includes:

� Individual personal development work with children and young people

� Community-based adult learning and adult literacy and numeracy

� The development of community capacity through the provision of training, eg in core skills/ICT skills developments and consultancy support for voluntary and community groups/individuals.

40 The range of activities covered will include, for example:

� Initiatives to promote volunteering and community action, particularly in social inclusion areas

� Strategic, operational and educational support to the voluntary sector

� Measures to provide education for citizenship (through youth forums, etc)

� Youth information services


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� Direct provision of youth activities and facilities

� Educational support for individuals and groups.

41 It also includes vocational and non-vocational education.

42 Vocational education includes expenditure relating to:

� Vocational training

� Adult education advisers

� Exam fees (non-school pupils) to the Scottish Qualifications Agency

� Lifelong learning programme (vocational elements).

43 Non-vocational education expenditure relates to:

� Non-vocational education

� Non-statutory careers services

� Adult education advisers

� Lifelong learning programme (non-vocational elements).

44 Facilitating community learning includes:

� The development and implementation of community learning strategies and community learning plans

� Contributing to local regeneration partnerships

� Supporting local learning partnerships and guidance networks.

OPTIONAL HOLDING ACCOUNTS45 No recommended subdivisions. The optional holding accounts contain only one division of

service, namely Education Management and Support Services. All costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts of each financial year are closed. This will ensure that the total cost of each service is shown. Any subdivisions of service should be determined to meet local needs.


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Housing Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR HOUSING SERVICES (GENERAL FUND)

PART TWO: SERVICE EXPENDITURE ANALYSIS FOR THE HOUSING REVENUE ACCOUNT (HRA)

PART THREE: GUIDANCE NOTE: COMPLETING THE HOUSING SERVICE EXPENDITURE ANALYSIS


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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR HOUSING SERVICES (GENERAL FUND)



General Fund Housing

Housing Strategy

Registered Social Landlords

Housing Advice

Housing Advances

Private Sector Housing Renewal � Administration of renovation and improvement grants


� Control orders

� Closing orders

� Slum clearance (unsubsidised)

� Slum clearance (subsidised).

Homelessness � Hostels (non-HRA support)

� Bed/breakfast accommodation

� Leasehold dwellings


� Homelessness administration.

Housing Benefits Payments � Rent allowances paid


� Discretionary additions in respect of HRA rebates.

Rent Rebates � Rent rebates.

Housing Benefits Administration � Rent allowances

� Rent rebates.

Contribution to the HRA

Other Council Property � Travellers’ sites


Welfare Services

Housing Support Services (Supporting People)

� Administration and commissioning costs

� Payments to providers.

Housing Management and Support Services

All costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed.


� Support from other council departments, eg finance, HRM


Note 1: Section 2 of SeRCOP makes it clear that Corporate and Democratic Core costs and Non Distributed Costs should be kept separate from the Service Expenditure Analysis above.



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PART TWO: SERVICE EXPENDITURE ANALYSIS FOR THE HOUSING REVENUE ACCOUNT (HRA)


Subdivisions of Services (Discretionary)

HRA (Income) Dwelling Rents (Gross)


� Shops

� Rental from land.

Housing Support Grants � Housing support

� Hostel support.

Leasehold Service Charges

Charges for Welfare Services

Hostels

Other Income

Sums directed by the Minister that are income in accordance with IFRS

HRA (Expenditure) Repairs and Maintenance � Planned

� Responsive

� Void repairs

� Special services

� Hostels.



� Rent collection and accounting

� Special services

� Hostels.

Depreciation and Impairment of Non-current Assets


� Depreciation and impairment – hostels


Impairment of Debtors � Increase/reduction in impairment.

Rent, Rates, Taxes and Other Charges � Lease rentals

� Vacant properties: council tax

� Vacant properties: rent

� Irrecoverables

� Rates and water charges payable on non-dwellings.

Sums directed by the Minister that are Expenditure in Accordance with IFRS


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Subdivisions of Services (Discretionary)

Sub-total: HRA Income and Expenditure as defined above should equal the HRA Cost of HRA Services as included in the whole authority Comprehensive Income and Expenditure Statement.

Items below this point are a reconciliation to the movement on the HRA balance.

HRA Share of Other Service Items in the Whole Authority Net Cost of Services

HRA Share of Corporate and Democratic Core

� HRA share of Corporate and Democratic Core.

HRA Share of Other Amounts included in the Whole Authority Net Cost of Services

� HRA share of Non Distributed Costs

� Other amounts.

Sub-total: Cost of HRA Services including HRA share of costs not allocated to specific services

HRA Share of Other Whole Authority Corporate Items in the Surplus or Deficit on the Provision of Services

Gain or Loss on Sale of HRA Non-current Assets

HRA Share of Interest Payable and Similar Charges (including amortisation of premiums and discounts)

� Interest on capital cash balances (where figure is payable)

� Interest on revenue cash balances (where figure is payable)

� Other interest payable and similar charges.

HRA Share of Interest and Investment Income

� Interest on capital cash balances (where figure is receivable)

� Interest on revenue cash balances (where figure is receivable)

� Mortgage interest on HRA properties sold under RTB.

HRA Share of net interest on the net defined benefit liability/asset

HRA Share of Capital Grants and Contributions Receivable

HRA Total Income and Expenditure Statement surplus or deficit for the year


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PART THREE: GUIDANCE NOTE: COMPLETING THE HOUSING SERVICE EXPENDITURE ANALYSIS

WHAT TO INCLUDE IN HOUSING SERVICES (GENERAL FUND)1 Divisions of service:

� Housing Strategy

� Registered Social Landlords

� Housing Advice

� Housing Advances

� Private Sector Housing Renewal

� Homelessness

� Housing Benefits Payments

� Rent Rebates

� Housing Benefits Administration

� Contribution to the HRA

� Other Council Property

� Welfare Services

� Housing Support Services (Supporting People)

� Housing Management and Support Services.

2 This section is intended to assist with the move towards consistency at subdivision level and to offer guidance on what should be included within both division and subdivision.

Housing Strategy3 This division includes expenditure incurred in the:

� Review of housing needs

� Preparation of strategic plans

� Government initiative bids

� Preparing joint ventures

� Liaison with external bodies

� Costs incurred as a consequence of an LSVT, except the costs of the statutory duty to consult.

4 Each authority should charge a share of Housing Strategy costs, based upon an assessment of costs relevant to its own stock, to the HRA.

Registered Social Landlords 5 This division includes expenditure incurred in day-to-day liaison and nomination fees paid.


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Housing Advice6 This division relates to activities incurred under the Housing Act 1996 (no Scottish

equivalent), where each council has to provide a housing advice service to people housed privately. Where staff are employed solely or substantially to do this duty, their costs and appropriate overhead costs should be included here.

7 It is inevitable that some advice will be given to non-council tenants by staff in area council housing offices and, thus, charged to the HRA. Where this is the case, the council should consider whether any of the costs of the area office should in fact be borne here in the GF rather than by the HRA.

8 The principle to be used is that staff primarily employed to advise HRA tenants who would be employed even if no private tenants asked for advice should be charged to the HRA. Any extra resources provided specifically to serve private tenants are a correct charge to the GF.

Housing Advances9 This division includes:

� The cost of administering advances to individuals to purchase their property under Part X11 of the Housing (Scotland) Act 1987

� Deferred charges written off to revenue

� Mortgage interest payments by the mortgagors, which should be shown here as income.

Private Sector Housing Renewal10 This division of service has a number of subdivisions, including:

� Administration of renovation and improvement grants


� Control orders

� Closing orders

� Slum clearance (subsidised and unsubsidised).

11 This reflects local authorities’ increasing involvement with the private sector, and the increasing links with wider cross-cutting initiatives such as community health, community safety and social inclusion. Housing’s contribution to such initiatives will often be included in the above subdivisions. In more detail, these subdivisions will include expenditure as detailed below.

12 Administration of renovation and improvement grants: include the administration of:

� Home improvement grants under Part XIII of the Housing Scotland Act 1987

� Housing renovation grants

� Houses in multiple occupancy (HMO) grant

� Home insulation grants under Part XIII of the Housing Scotland Act 1987

� Where deferred action notices are issued, include the costs here.


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13 Renewal activity: include revenue expenditure on:

� Renewal areas

� Housing action areas (Schedule 8 of the Housing Scotland Act 1987)

� General improvement areas

� Group repair schemes

� Compulsory purchase orders issued following the issue of a control order (see below).

14 Control orders: the Housing Scotland Act 1987 (s152) enables councils to keep an HMO register. The inspection of HMOs is normally undertaken by Environmental Health staff and accounted for as such. However, if, as a result of inspections, the authority believes that further action is necessary to protect the safety, health or welfare of occupants and the landlord will not take appropriate action, the authority can issue a control order. In effect, the council takes over the management of the property for up to five years. The costs of these orders and subsequent management costs should be accounted for here.

15 Closing orders: the Housing Scotland Act 1987 (s152) enables councils to keep an HMO register. The inspection of HMOs is normally undertaken by Environmental Health staff and accounted for as such. However, if, as a result of inspections, the authority believes an HMO is unfit for human habitation, it can issue a closing order on all or part of the house. The costs of these orders and enforcement are accounted for here.

16 Slum clearance: include expenditure on slum clearance under Part X of the Housing Scotland Act 1987, split between:

� Subsidised

� Unsubsidised.

17 Include the costs of making the demolition order, declaring and consulting on clearance areas and any compulsory purchase activity necessary.

Homelessness 18 Part II of the Housing Scotland Act 1987 allows expenditure on housing homeless people.

Expenditure under Part III should be in the GF subdivisions below. Note: include housing benefit paid to homeless people in the Homelessness subdivisions below.

19 Homelessness has the following subdivisions:

� Hostels (non-HRA) support

� Bed and breakfast accommodation

� Leasehold dwellings


� Homelessness administration.


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20 Hostels: only include hostels and lodging houses used mainly to house the homeless. Exclude any other hostel although the cost of housing a homeless person in other types of hostel should, if significant, be identified and included as ‘Other temporary accommodation’, below.

21 Bed and breakfast accommodation: include privately owned/managed hotels or guesthouses with some shared facilities. Exclude hotel annexes with self-contained units and where meals are not provided.

22 Leasehold dwellings: only include dwellings leased to house homeless people where the LA holds the lease.

23 Other temporary accommodation: include any other expenditure on housing for homeless people including payments to/for:

� Hotels with self-contained annexes

� Leased premises where the council is not the leaseholder

� Acting as management agents for an RSL.

24 Homelessness administration: the costs of administering the homeless function, ie receipt of requests for help and allocation of spaces.

Housing Benefits Payments25 Local authorities pay housing benefits to people of limited means to subsidise their rents.

Council tenants receive rent rebates and other people receive rent allowances. In Scotland, each type of benefit is accounted for in the General Fund. The Housing Benefits Payments division of service has the following subdivisions:

� Rent allowances paid


� Discretionary additions in respect of HRA rebates.

26 Rent allowances: rent allowances are paid to the tenants of private landlords and RSLs. Account for these payments here. A separate Rent Allowances Account should be maintained.

27 Non-HRA rent rebates: include any rent rebate paid to a council tenant of a non-HRA dwelling.

28 Discretionary additions in respect of HRA rebates: include discretionary enhancements to statutory rent rebates paid, for example to war widows, here.

Rent Rebates29 Under s205/6 of the Housing (Scotland) Act 1987, Scottish councils must maintain a Rent

Allowances Account (see above) and a Rent Rebate Account. Hence, Scottish local authorities must account for each benefit separately within the GF in a division of service known as Rent Rebates.


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Housing Benefits Administration30 Administration costs of assessing and paying housing benefits all fall within the GF,

regardless of where the actual payment is accounted for. This division of service has two subdivisions:

� Rent allowances

� Rent rebates.

31 Rent allowances: include the costs of administering the payment of housing benefits to the tenants of private landlords and RSLs.

32 Rent rebates: include the costs of administering the payment of housing benefits to tenants of council properties.

Contribution to the HRA33 In the past, the Secretary of State has given consent to exclude some items from the HRA on

equity grounds. All authorities should therefore consider if any of the following items warrant a General Fund contribution:

� Play and recreational areas

� Grassed areas

� Gardens


� Play schemes.

Other Council Property34 In rare instances where property is held under powers other than the Housing Acts, but is

used for council housing purposes, include the costs here. Property held as non-housing secure tenancies, eg school and leisure centre caretakers’ residences, should be excluded.

35 Other council property is therefore split between two subdivisions, namely:

� Travellers’ sites


36 Travellers’ sites: some councils provide sites for travellers to be accommodated. Include associated costs here.

37 Non-HRA council property: include the costs of any other non-HRA property used for housing purposes.

Welfare Services 38 Certain welfare services provided by wardens in sheltered housing are classed as essential

care services. These should be accounted for in the General Fund.

39 If the welfare services provided are delivered by housing personnel, then the costs should be included within General Fund Housing. If the welfare services are of a social services nature and are delivered by social workers, then such costs should be included within Social Work.


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Housing Support Services (Supporting People)40 Supporting People Grant was previously a separate grant which, from 1 April 2008, was

discontinued, with government funding for these services being amalgamated into Revenue Support Grant. Expenditure on Housing Support Services (previously Supporting People Grant eligible expenditure) should be included here wherever, in organisational terms, the team(s) commissioning, managing or providing the service is located. Housing Support Services are defined in The Housing (Scotland) Act 2001 (Housing Support Services) Regulations 2002. They do not include services which may be defined as personal care or personal support (as defined in section 28(2) of the Regulation of Care (Scotland) Act 2001) and these should continue to be accounted for within Social Work. Although the grant referred to by the regulations no longer exists, it is considered that the regulations provide a framework for identification of services provided for Housing purposes. No Housing Support Services net expenditure should be borne by the HRA. Income to this division of service will include income from charges made to service recipients.

Housing Management and Support Services41 This division of service has three subdivisions, which are optional holding accounts. Support

services support the direct provision of housing services to the public. They may support in-house teams or external contractors. The basic principle is that, through direct allocation where possible and apportionment where necessary, the support costs should all be charged to front-line service divisions before or at the year-end.

42 The subdivisions are:


� Support from other council departments


43 Housing department support staff and costs: the housing department may have staff in supporting roles such as finance officers, administrative and training staff.

44 Support from other council departments: include the housing department’s share of central support costs such as central departments for the following, where applicable:

� Finance (payroll, internal audit, etc)

� Human resource management

� Training


� Procurement

� Facilities management

� Legal services.

45 Other housing support costs includes support services not included in the above two categories, eg management consultants, external training firms. They can be accounted for here before allocation to the appropriate front-line service. Also include support, advice to and liaison with tenant and resident groups. This activity may relate to more than one service division and may therefore require apportionment.


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WHAT TO INCLUDE IN THE HOUSING REVENUE ACCOUNT 46 The Housing Scotland Act 1987 introduced the provision of keeping by law records of

expenditure and income associated with properties acquired under the general power to provide housing, and homes acquired under other specified housing legislation. There have been a number of amendments to this legislation since then, including the introduction of a ringfenced account.

47 Part X of the Housing Scotland Act 1987 requires local authorities to keep a ringfenced HRA. It specifies the major items to be included within the HRA as dwellings and other property, eg garages, shops, etc provided under Part One of the Housing Scotland Act 1987.

48 Following representation from HRA tenant groups, in February 2014 the Scottish Government issued Guidance on the Operation of Local Authority Housing Revenue Accounts (HRAs) in Scotland. This guidance was intended to promote consistency and transparency in respect of the operation of the HRA. It summarises the legislation extant at the time it was published and may be referred to by auditors in undertaking their duties. Practitioners are advised to review the new guidance when classifying HRA expenditure and income. In implementing the guidance, practitioners may particularly wish to review:

� the basis for, and methodology used to calculate, charges to the HRA for costs incurred by other General Fund services (for example, from significant trading operations, central support services, Corporate and Democratic Core, Non Distributed Costs, etc)

� the treatment of significant surpluses/deficits relating to such charges (for example, where the charges made are significantly different to the costs actually incurred)

� the basis for, and methodology used, to charge shares of corporate costs to the HRA

49 It is not intended that this guidance will interpret or repeat statutory legislation and guidance, but it is appropriate to make reference to existing guidance that will help authorities to interpret the requirements of the statute.

Expenditure on Repairs, Maintenance, Supervision and Management50 CIPFA has traditionally split this broadly in two, as follows:

� Repairs and Maintenance refers to the upkeep of HRA property

� Supervision and Management refers to management functions relating to all properties.

Repairs and Maintenance51 This division of service is split as follows:

52 Planned: these are planned and cyclical repairs and improvements to maintain the current standard and value of the accommodation, eg repainting, patching roofs and replacing windows. (Note: the cyclical maintenance of lifts/boilers/entry systems, etc is included in ‘Special services’ below.) Only include revenue costs here, not capital expenditure.

53 Responsive: these repairs are in response to tenant requests for help to maintain the standard of the accommodation, eg to repair a broken window, unblock a drain, fix a broken boiler in an individual dwelling, etc.


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54 Void: these repairs arise as a direct result of a property becoming void and are necessary prior to a house being re-let.

55 Special services: these are the running costs (including maintenance contracts and cyclical safety checks, etc) of those services that benefit specific groups of tenants, eg lifts, shared boilers, stair lighting, caretaking, etc. These can represent significant costs for some authorities, whereas others may provide few shared services. It includes expenditure relating to:

� Heating


� Lifts


� Concierge schemes.

56 The subdivisions represent an indication of the services that could be included as ‘Special services’. Authorities should separately identify any services they provide which are not included in the subdivisions of service.

57 Hostels: a separate category has been established to allow local authorities to record separately the repairs and maintenance expenditure incurred on hostels.

Supervision and Management58 Supervision and Management is split into the following subdivisions.

59 Policy and management, which includes expenditure relating to:

� HRA share of strategic housing management costs

� Keeping registers and records of dwellings and property, tenants, and repairs work undertaken

� Voids management and reduction

� Receipt and transmission of requests for repairs

� Management of improvements and modernisations

� Management of planned/programmed maintenance

� The administration of council house sales (where not capitalised)

� Consultation with tenants.

60 Managing tenancies, which includes expenditure relating to:

� Giving information and advice on tenancy matters

� Statutory consultation with tenants about a large-scale voluntary transfer (LSVT)

� Receiving tenancy applications/assessing eligibility

� Waiting list management

� Allocation/letting of dwellings and other property

� Transfers and exchanges

� Tenancy regulations and agreements


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� Advising tenant groups

� Facilitation of tenant participation

� Support to tenant management organisations formed under Right to Manage provisions of LRHUDA 1993

� Producing/distributing the tenants’ reports required under s153 of LRHUDA 1993.

61 Rent collection and accounting includes expenditure relating to:

� Reviewing and setting rent levels

� Preparation of the rent roll

� Rent collection

� Recovery of arrears

� Advising tenants on benefit entitlement to minimise risk of arrears

� Rent accounting, including internal audit activity.

62 Special services are the running costs of those services that benefit specific groups of tenants. It includes expenditure relating to:

� Caretaking

� Cleaning

� Ground maintenance.

63 The subdivisions of ‘Special services’ represent an indication of the services that could be included as ‘Special services’. Authorities should separately identify any services they provide which are not included in the subdivisions of service.

64 Hostels: a separate category has been established to allow local authorities to record separately the supervision and management expenditure incurred on hostels. Authorities should refer to the Housing (Scotland) Act 1987 Schedule 151(1)(e) for a definition of what constitutes a ‘hostel’ for HRA purposes. Any related income, such as Housing Support Grant in relation to hostel provision, should be included within HRA Income.

65 Sums directed by the minister: the Housing (Scotland) 1987 Act Schedule 15, especially paragraphs 7 and 8, allow ministers to specify any other items that should be included within the Housing Revenue Account. Where any such direction is made they should, if they fall within IFRS be shown as income or expenditure as appropriate. Any such sums that are not IFRS compliant should be included within the Statement of Movement on the HRA Balance.

66 HRA share of other service items in the whole authority Net Cost of Services: authorities may consider it proper to charge the HRA Balance with an appropriate proportion of items in the whole authority Net Cost of Services, such as Corporate and Democratic Core and Non Distributed Costs. Authorities should ensure that they satisfy the appropriate legislative requirements and statutory provisions when accounting for the HRA. Reference to the Scottish Government’s Guidance on the Operation of Local Authority Housing Revenue Accounts (HRAs) in Scotland is advisable. Authorities satisfied as to the appropriateness of such charges to the HRA Balance would calculate these depending on local and organisational circumstances. For example, in relation to Corporate and Democratic Core (CDC) an authority will need to calculate the resources used by officers and members and


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other corporate management costs to estimate accurately the proportion of CDC costs that relate to its HRA stock. Similarly, authorities may consider it necessary to make a charge to the HRA for Non Distributed Costs. (See Section 2 of SeRCOP for CDC and NDC definitions.)

Key to the main abbreviations used above:LRHUDA 1993 = Leasehold Reform, Housing and Urban Development Act 1993

LSVT = large-scale voluntary transfer of council house stock


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Cultural and Related Services





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� Heritage



Library Service � Permanent lending libraries

� Mobile lending libraries

� Reference and information services

� Specific community library services.

Recreation and Sport � Allotments



� Foreshore




� Golf courses

� Community parks and open spaces.


� Promotional events

� Camping and caravanning.

Service Management and

Support Services


Note 1: Section 2 of the Service Reporting Code of Practice for Local Authorities makes it clear that Corporate and Democratic Core costs and Non Distributed Costs should be kept separate from the Service Expenditure Analysis above.



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3 These guidance notes have been compiled from the following sources. The aim has been to promote consistency between CIPFA’s definitions and those provided by other organisations and to make them as comprehensive and user friendly as possible:

� CIPFA statistics definitions and CIPFA’s Technical Information Service (www.tisonline.net)

� LFR form definitions.



www.tisonline.net


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PART THREE: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE1 S14 of the Local Government and Planning (Scotland) Act 1982 gives local authorities a duty

to ensure adequate provision of facilities for cultural activities.

Culture and Heritage2 The Culture and Heritage division is supported by a number of subdivisions, namely:

� Archives


� Heritage



3 This division will capture expenditure related to the arts and local history.

4 Archives: capture all costs of the archive services provided under the Local Government and Planning Act (Scotland) Act 1982. The 1982 Act empowers a local authority to make bye-laws for the regulation and preservation of facilities for leisure and recreation, sporting, cultural or social activities provided for or in conjunction with the council in the area of the council. Legislation may require in the future that this subdivision becomes mandatory, and therefore would have to become a division of service.

5 Archives can be distinguished from records, which are defined as including charters, minutes, accounts and other documents and any other records, of whatever form and in whatever medium, which convey information relating to the composition and operation of the council. This subdivision does not include records, which are the property of the Registrar of Scotland.

6 Arts development and support: include direct expenditure on the arts and grants or other contributions to individuals or voluntary organisations.

7 Heritage: include expenditure on initiatives or services designed to develop/maintain an awareness of local history. Some grants to voluntary groups will be included here. Special events to celebrate historical events should also be included.

8 Museums and galleries: the Public Libraries Consolidation (Scotland) 1887 Act empowers authorities to provide museums. Include the gross costs of running the museums and galleries here and show gross income separately. Income earned from visitors should be shown as gross income not netted off against expenditure.

9 Theatres and public entertainment: include here expenditure on facilities operated primarily for the provision of public entertainment and social activities, including:

� Theatres

� Concert halls

� Dance halls

� Other entertainment premises

� Holding dances


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� Maintaining a band/orchestra

� Arts and crafts fairs and other events

� Arranging events, eg concerts, pantomimes, etc

� Promoting events

� Providing refreshments at events

� Making grants to others who provide entertainment

� Public halls

� Village halls.

Library Service 10 Libraries are a statutory service under the Public Libraries Consolidation (Scotland) Act

1887, which empowers local authorities to establish public libraries; and s163 of the Local Government (Scotland) Act 1973. Include expenditure on this statutory service here. Subdivisions include:

� Permanent lending libraries

� Mobile lending libraries

� Reference and information services

� Specific community library services.

11 Permanent lending libraries: include here the premises, staff and other costs associated with the provision of permanent libraries. Include any fees for overdue books or other services for which a fee is allowed here as gross income.

12 Mobile lending libraries: include expenditure on libraries that operate from vans, buses, trailers or any other mobile base. Also include here services to housebound library service users. Include any fees for overdue books or other services here as gross income.

13 Reference and information services: most permanent libraries provide a wealth of reference materials for users to assist all manner of needs including research by local students, contact points for local clubs, etc. The costs of archives and records not kept under the Local Government and Planning Act 1982 should also be charged here. These services may warrant separate identification from, for example, permanent lending libraries because they will have a significant role to play in cross-cutting initiatives. For example, libraries reference services may be a key part of the following initiatives:

� Promoting lifelong learning

� Supporting social inclusion

� Building stronger communities.

14 Specific community library services: building on the theme of cross-cutting issues, libraries are increasingly seen as local, multi-purpose resource centres. They can contribute to the local community in its widest sense. Hence, libraries hire out rooms for local clubs and meetings, offer drop in centres, host community events like exhibitions, bring-and-buy fetes, etc.


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15 School libraries should go in Education.

16 Expenditure on such community services and any income earned (eg room hire fees) should be separately recorded here.

Recreation and Sport17 The Local Government and Planning (Scotland) Act 1982 makes provision for adequate

provision of recreational facilities. The Recreation and Sport division of service captures this information. The following subdivisions are included to assist with consistency of information:

� Allotments



� Foreshore




� Golf courses

� Community parks and open spaces.

18 Allotments: include expenditure on allotments and rents collected from tenants here where allotments are provided under the relevant legislation.

19 Community centres: include expenditure on premises provided for residents of an area to use, normally, in return for a hire charge. Exclude premises used mainly for arts events, eg exhibitions, concerts, etc and those mainly for the use of council housing tenants that relate to the Housing Revenue Account.

20 Countryside recreation and management: include facilities in country areas that are aimed at visitors, but provide recreation facilities for residents as well, including:

� Country parks

� Picnic areas

� Nature reserves

� Footpaths, bridleways and towpaths (include the costs of footpath officers here)

� Canal work

� Countryside access national parks.

21 Foreshore (land between the high water limit and the coastline proper and associated promenade): exclude cleansing, which should be included within the Other Cleaning (not chargeable to Roads) division of service.


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22 Sports development and community recreation: include development and outreach teams. Specific grants to voluntary or other groups should also be recorded here.

23 Indoor sports and recreation facilities: include indoor pools, sports halls and leisure centres and any attached slipper baths, laundry services, hydrotherapy pools, etc.

24 Where an indoor facility has some outdoor provision, eg a five-a-side football area, include all costs as indoor.

25 Performance indicators separate the costs of swimming provision. Therefore, local records must show pools separately.

26 Outdoor sports and recreation facilities: include outdoor pools or lidos, running tracks, football pitches, pitch and putt courses, etc unless they are within the boundary of a larger community park (see below) or attached to an indoor facility. In such cases, code the full cost to the main facility, ie to the park or sports facility.

27 Golf courses: potentially large and material operations in their own right. They could easily distort comparisons; therefore, they need to be shown separately. Include gross expenditure and gross income from players, refreshments sales, etc here.

28 Community parks and open spaces: include all public open spaces within the boundaries of a city, town or village, including the costs associated with play areas, nature corners and sports facilities that are an integral part of the park.

Tourism29 Tourism delivery is a function of the Scottish Tourist Board and the respective local tourist

boards. The Tourism division of service has three subdivisions, which are used to capture the costs that local authorities incur in contributing to tourism within their area:

� Tourism policy, marketing and development

� Promotional events


30 Tourism policy, marketing and development: expenditure included here is as follows:

� Developing policies to promote tourism in the area

� Promoting and advertising the area to potential visitors. Exclude expenditure explicitly on particular arts activities and programmes

� Contributions to regional tourist boards

� Grants/loans given to support organisations offering attractions or other tourist related facilities, eg what’s on leaflets, etc.

31 Promotional events: business-related area promotion should be included under the Economic Development division of Planning and Development Services.

32 Camping and caravanning: exclude travellers’ sites and principal type accommodation. They are included in Housing General Fund expenses.


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Service Management and Support Services33 An optional holding account for service management and support service costs. All costs

must be recharged to the other divisions of service. Where possible, costs should be allocated directly to the most appropriate service division, eg officers’ time on the preparation of updates to and monitoring of:

� Local cultural plan should be charged to Culture and Heritage

� Sports and recreation strategies should be charged to Recreation and Sport.

34 Other support services such as finance, IT, personnel, procurement, etc may need to be apportioned. In these cases, reference should be made to paragraph 2.15 of Section 2 of SeRCOP. It gives guidance on the apportionment of costs.

Environmental Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR ENVIRONMENTAL SERVICES

PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE


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� Cemeteries

� Crematoria

� Mortuaries


Coast Protection

Environmental Health � Food safety

� Pollution reduction


� Port health

� Pest control

� Public health


� Laboratories/fish/shellfish hygiene

� Health and safety at work.


Trading Standards � Inspection and enforcement

� Citizens Advice Bureaux (CAB)/money advice

� Animal health

� Advice and education.

Other Cleaning (not chargeable to Roads)

Waste Collection � Household waste collection

� Trade waste

� Recycling

� Waste strategy.


� Recycling

� Trade waste



� Waste strategy

� Trading of landfill allowances

� Closed landfill sites.




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Cemetery, Cremation and Mortuary Services1 Subdivisions include:

� Cemeteries

� Crematoria

� Mortuaries


2 Cemeteries: include all costs associated with the provision of cemeteries, including contributions and administrative support to joint cemetery boards established under the Local Government Act 1972. Include costs (burials/funerals) incurred as a result of the National Assistance Act 1948.

3 Crematoria: include all costs associated with the provision of crematoria including contributions to and administrative support to joint crematoria boards established under the Local Government Act 1972.

4 Mortuaries: include the cost of mortuary and post-mortem services here. The 1936 Public Health Act requires some authorities to maintain mortuary services. The authority may charge another body, eg a police force, for its use of the mortuary and post-mortem services offered. Similarly, the authority may choose to buy in such services from, for example, a local hospital.

5 Closed churchyards: the costs of maintaining transferred churchyards should be accounted for here.

Coast Protection6 The costs of coast protection are significant for some authorities and should include relevant

revenue expenditure, such as expenditure incurred to protect coastal areas against erosion and sea encroachment. No subdivisions.

Environmental Health7 Include all services to promote and protect public health. Subdivisions include:

� Food safety

� Pollution reduction


� Port health

� Pest control

� Public health



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� Health and safety at work.

8 Food safety (excluding fish): include all activity that aims to reduce the incidence of food and water-based poisoning as required by the Water (Scotland) Act 1980, the Food and Environment Protection Act 1985, the Food Safety Act 1990 and the Water Industry Act 1991.

9 Likely activity to be accounted for here includes:

� Regular inspections of food premises

� Routine inspection and testing of food samples

� Monitoring private and public drinking water supplies

� Running food hygiene courses for people who handle food at work

� The operation of a good hygiene certificate scheme

� Investigating food or waterborne disease notifications and outbreaks.

10 Pollution reduction: include work performed to reduce:

� Noise pollution: including noisy party patrols and investigating complaints. Any action under the Noise and Statutory Nuisance Act 1993.

� Air pollution: including responsibilities under the Environmental Protection Act 1990, the Clean Air Act 1993 and Part IV of the Environment Act 1995. Include work on the air quality management plan here.

� Contaminated land: the Environment Act 1995 requires local authorities to have a formal strategy to identify and deal with contaminated land. Include the costs of preparing and implementing this strategy including the costs of:

– identifying contaminated land

– assessing the degree of contamination

– maintaining a register of contaminated land

– monitoring levels of contamination

– assessing the health risks associated with contaminated land.

� Water pollution: include regular monitoring of water quality (not drinking water, which is in the Food Safety subdivision, above).

� Anti-fly-tipping work: include publicity costs, telephone hotlines and the costs of court actions. Note: exclude the removal of fly-tipped waste. It is included in the Waste Collection division of service, below.

11 Housing standards: include all costs associated with work to ensure that the residents of private sector accommodation live in safe and sanitary conditions. Likely activities to include here:

� Inspections and enforcements in response to complaints from residents

� Checks on the quality of houses of multiple occupation

� Checks on conditions at travellers’ sites

� Inspections of hotels, guest and boarding houses.


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12 Port health includes checks on the fitness of food and animals in transit at ports and airports and the issuing of de-ratting certificates. Include income from the certificates.

13 Pest control: include the costs and income of rodent and other pest control activity, including mice, wasps, etc.

14 Public health: this category includes expenditure on a number of small activities, as follows. Local records are likely to identify each service separately:

� Animal welfare

� Dog control including enforcement

� Contributions to sewerage schemes

� Temporary caravan sites

� Checking conditions at travellers’ sites

� Health education activity, eg leaflets, exhibitions, etc

� Caravan site licensing/inspections

� Property disrepair

� Civic Government (Scotland) Act 1982 notices

� Miscellaneous Nuisance Actions Under Environmental Protection Act 1990

� Abandoned vehicles.

15 Public conveniences: include the costs of running, cleaning and maintaining public toilets.

16 Laboratories/fish/shellfish hygiene: expenditure incurred by fulfilling their requirements and carrying out enforcement of The Food Safety (Fishery Products & Live Shellfish) (Hygiene) Regulations 1998.

17 Health and safety at work: include the activities of local authorities in enforcing the Health and Safety at Work Etc Act 1974 in shops, offices and a wide range of other premises. The activities include enforcement inspections and visits, including investigations of notified accidents.

Flood Defence and Land Drainage18 Any activity under the Flood Prevention (Scotland) Act 1961 and the Flood Prevention and

Land Drainage (Scotland) Act 1997 relating to the prevention of flooding should be included in this service division. Include:

� Revenue expenditure (including capital charges) on the construction, alteration, improvement, repair, maintenance, demolition and removal of defences

� Costs related to the maintenance and testing of flood warning system.

Trading Standards19 Include expenditure on all activities related to the administration and enforcement of trading

standards legislation. Subdivisions:

� Inspection and enforcement

� CAB/money advice


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� Animal health

� Advice and education.

20 Inspection and enforcement: include the costs of all work related to the functions of:

� Metrology (weights and measures)

� Fair trading (trade descriptions, consumer credit, trademarks, etc)

� Safety (product safety, petroleum, explosives and poisons, etc)

� Quality standards (fertilisers, feeding stuffs, pesticides, plant protection products, etc).

21 Likely activities to include here:

� Enforcement visits to trade premises

� Inspection, test and calibration of weighing and measuring equipment

� Investigations

� Sampling, test purchasing and analysis

� Business advice and support (including home authority relationships, local business partnerships and the issue of information leaflets for traders)

� Licensing and registration duties, independent of which department issues the licence, etc.

22 All income should be accounted for here.

23 CAB/money advice: include all costs associated with money advice and debt counselling.

24 Animal health: include all costs associated with animal health and welfare issues.

25 Advice and education: include costs associated with:

� Providing consumer advice

� Conciliation

� Consumer education (including promotional and publicity costs)

� Small claims support.

Other Cleaning (Not Chargeable to Roads)26 Include here the sweeping and removal of litter from land, litter bins, etc required to comply

with the Environmental Protection Act 1990. It sets standards of cleanliness that councils must maintain for 11 different categories of land. The categories range from shopping centres to tow paths to which the public has rights of access. Also include the:

� Collection of illegally fly-tipped rubbish



� Major clean-ups.

27 Any sweeping that relates to keeping carriageways free of litter for road safety purposes should be charged to Roads and Transport Services.


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Waste Collection28 Include all expenditure on the collection of waste. Subdivisions:

� Household waste collection

� Trade waste

� Recycling

� Waste strategy.

29 Household waste collection: using the definition in s75 of the Environmental Protection Act 1990, include expenditure on the collection of refuse from private dwellings.

30 Trade waste: include the costs and income of collecting refuse from commercial properties.

31 Recycling is a major activity now and warrants separate identification. Include all the costs of collecting items for recycling separately (eg doorstep collections or bottle/paper banks). Exclude the costs of processing recycled waste, which is included in Waste Disposal, below.

32 Also include the costs of preparing, implementing and monitoring the authority’s recycling plan. This may include, for example, the provision of home composting bins to householders.

33 Waste strategy: include the costs of developing a waste strategy (where not included in other Waste Collection subdivisions). Costs should be included whether development was done under the National Waste Strategy framework or determined locally. Waste strategy will normally encompass both waste collection and waste disposal. As such a pragmatic approach to apportioning waste strategy costs will normally be required (refer to Chapter 2, Section 4). Materiality of costs and the impact on reported spend for waste collection and waste disposal will need to be considered.

Waste Disposal34 Include the costs of waste disposal, including landfill, incineration, centralised composting

and salvage/recycling, etc in this service division. Subdivisions:

� Disposal of waste

� Recycling

� Trade waste



� Waste strategy

� Trading of landfill allowances

� Closed landfill sites.

35 Disposal of waste: include the costs of waste disposal, including the costs of transport to disposal sites.

36 Recycling: include the costs of processing recyclable waste. These may be direct costs or payments to contractors.

37 Trade waste: include payments to waste disposal authorities for the disposal of trade waste.


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38 Transfer stations: include the costs of operating transfer stations.

39 Civic amenity sites: the costs of civic amenity sites, provided for individuals to transport their waste to, for the local authority to dispose of, should be included here.

40 Waste strategy: include the costs of developing a waste strategy (where not included in other Waste Disposal subdivisions). Costs should be included whether development was done under the National Waste Strategy framework or determined locally. Waste strategy will normally encompass both waste collection and waste disposal. As such, a pragmatic approach to apportioning waste strategy costs will normally be required (refer to Chapter 2, Section 4). Materiality of costs and the impact on reported spend for waste collection and waste disposal will need to be considered.

41 Trading of landfill allowances: include the costs and income of trading landfill allowances.

42 Closed landfill sites: include the costs of restoration and monitoring of council-owned closed landfill sites. Treatment of privately owned land or council land not previously used for landfill should be included under ‘Contaminated land’ as part of Planning and Development Services (Environmental Initiatives).

Service Management and Support Services (SMSS)43 An optional holding account for management and support service costs. All costs must be

recharged to the other divisions of service. Where possible, costs should be allocated directly to the most appropriate service division, eg management time on the preparation of the air quality management plan would be charged to the ‘Pollution reduction’ subdivision.

44 Inevitably, some support services costs such as finance, IT, personnel, procurement, etc will need in part to be apportioned. In these cases, reference should be made to paragraph 2.15 of Section 2 of SeRCOP. It gives guidance on the apportionment of costs.

Roads and Transport Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR ROADS AND TRANSPORT SERVICES



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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR ROADS AND TRANSPORT SERVICES



Roads � Construction

� Structural maintenance

� Environmental maintenance

� Winter maintenance

� Lighting

� Safety maintenance

� Routine repairs.

Network and Traffic Management � Traffic management

� Network management

� Road safety education

� School crossing patrols

� Data collection

� Accident investigations

� Network, planning, policy and strategy.

Parking Services � On-street parking


Public Transport � Concessionary fares


� Co-ordination.




� Highways properties

� Transport planning, policy and strategy.

Note: all costs accounted for in these accounts should be allocated directly or apportioned to the service divisions above before the accounts are closed.




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ROADS 1 The Roads division includes the construction, structural maintenance, environmental

maintenance, winter maintenance, lighting, safety maintenance and routine repairs of public roads (including footpaths and cycleways), including street lighting and bridges. It includes both the management and commissioning costs involved in determining the work required and monitoring its completion and the amounts paid to in-house teams or outside contractors for carrying out the work. Capital charges associated with capital works should be included here.

2 A particular feature of Roads is the extent to which expenditure may be rechargeable to third parties, to utilities and individuals for private street works, to the Housing Revenue Account for some estate roads and to other local authorities or the government for agency work. In these cases, the expenditure and the associated income should be included under the same service expenditure heading and appropriate subjective headings.

Construction3 The largest element here will probably be capital charges (depreciation and impairment

charged to revenue) as the result of past capital expenditure on the construction of roads and bridges.

4 It may also include any non-capitalised scheme design and/or site supervision costs.

5 If analysis by scheme is required, this can be achieved at the next level down in the Service Expenditure Analysis.

Structural Maintenance6 This includes expenditure on the maintenance of public roads of all classes, footways,

cycleways and other rights of way. It includes:

� Reconstruction

� Overlay

� Resurfacing (including integral patching and minor repairs)

� Surface dressing (including integral patching and minor repairs)

� Remedial earthworks

� Drainage structures

� Bridges and other structures

� Patching and minor repairs

� Fencing, walls and barriers.

7 If more detailed analysis is required, eg by scheme or by agent authority, this can be done using either the subjective or the Service Expenditure Analysis. It is recommended that a


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lower level of Service Expenditure Analysis is used to differentiate between schemes and that the detailed analysis provided for in the third-party payments subjective grouping is used to differentiate between agent authorities.

8 Taking each element of structural maintenance in turn:

� Reconstruction includes the removal of some or all of the structural layers of a road or pavement and their replacement with new material, including new surfacing and the reinstatement of coastal highways. Any consequent works in connection with footways, cycleways, drainage, road markings and kerbs should be included. Small areas of reconstruction carried out prior to larger overlaying or resurfacing works should be included with the larger operation.

� Overlay of the existing wearing course to increase or restore the strength of the carriageway should be included. As with ‘Reconstruction’ above, any necessary prior works and any consequential works should be included. Overlays in thicknesses of up to and including 50mm should be classified as ‘Resurfacing’.

� Resurfacing refers to the replacement of the existing wearing course to restore the running surface. Again, any necessary prior works and any consequent works should be included here as a part of the larger project, not as minor works.

� Surface dressing, including the renewal of anti-skid treatment, to enhance the surface texture and seal the carriageway should be included, together with any necessary prior or consequent works such as the need to fill in potholes, or to make minor repairs or patching to prepare the road for resurfacing.

� Remedial earthworks refers to the repair of earth slips and the provision of any necessary drainage and new retaining systems.

� Drainage structures includes the replacement and structural maintenance of existing carriageway drainage systems, the replacement of kerbs for drainage purposes and the maintenance and replacement of culverts under 2m in span or diameter. Culverts greater than 2m should be included under ‘Bridges’.

� Bridges and other structures should include all structural maintenance and strengthening of bridges and structures charged to the revenue account, including toll bridges and tunnels. It should also include assessment work. Include related capital charges here.

� Patching and minor repairs includes haunching, repairing potholes, etc. These should be included unless they are an essential element of an associated reconstruction, overlay, resurfacing or surface-dressing project. In such cases include these costs as a part of the bigger project, not as minor works.

� Fencing, walls and barriers that require maintenance or replacement will be covered by this heading except for snow fences (‘Winter maintenance’), hedges (‘Verge maintenance’) and noise barriers on bridges (‘Bridges’). It also covers the cleaning, repair and replacement of other street furniture.

Environmental Maintenance9 This should cover the following, only to the extent that they are necessary for the

preservation of the carriageway and for traffic safety, including the preservation of sight lines.


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The majority of street sweeping or cleansing is accounted for as an environmental rather than a highways/roads service. This category will include charges for:

� Tree and hedge maintenance (including weed-spraying)

� Verge maintenance

� Carriageway sweeping, including litter and other hazard removal where it is considered a safety hazard.

10 Similar operations for amenity reasons should not be included.

Winter Maintenance11 This should include the cost of keeping roads and footways free from snow and ice, including

salting, area treatment, snow ploughing, snow fencing and standby arrangements. It should also include weather forecasting costs, the maintenance and energy costs for under-road heating and the maintenance and operation of ice detecting equipment, but not its supply or installation.

Lighting12 This subdivision includes the maintenance, inspection and energy costs associated with road

lighting only.

Safety Maintenance13 This includes the maintenance and replacement of existing road marking and studs. It also

includes the cleaning, repair, replacement and energy costs associated with existing:

� Traffic signals

� Signs

� Crossings

� Illuminated bollards

� Overhead signs or signal gantries

� Road markings.

14 It should not include the provision of new equipment and facilities. These should be classified under ‘Traffic management’ (see below).

Routine Repairs15 This division includes the following subdivisions of service, defined in more detail below:

� Drainage

� Gully emptying.

16 Drainage maintenance includes the testing, rodding and cleaning of drains, gullies, ditches and carriageway drainage systems.

17 Gully emptying includes the regular cleaning out of gullies to ensure road drainage system remains clear and effective of debris.


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How to Treat ‘Other’ Works18 There may be other highways expenditure which is difficult to classify. Authorities should

try to classify such work as accurately as possible over the above categories. The level of sophistication required to make this split will vary according to the materiality of the amounts involved.

NETWORK AND TRAFFIC MANAGEMENT19 The subdivisions of service are:


� Network management

� Road safety education

� School crossing patrols

� Data collection

� Accident investigations

� Network, planning, policy and strategy.

Traffic Management20 Only include specific traffic management schemes and the associated capital charges here.

Traffic management aspects of larger construction or structural maintenance projects should be included in the larger schemes and need not be separately identified unless they are material and not separating them would distort comparisons.

21 Expenditure on safe routes to school schemes should also be coded here, including capital charges that relate to capital works. This consolidates all road safety issues in one Service Expenditure Analysis and should facilitate a more joined-up approach to road safety, in particular, safety related to travelling to school.

Network Management22 This subdivision includes:

� Planning and scheme design (for example, urban safety management schemes, home zones, new pedestrian crossings and new traffic calming measures)

� The monitoring of traffic, including CCTV monitoring cameras

� Area traffic control centres

� Information published to promote the network

� The local transport plan

� The road safety plan

� Contributing to structure plans

� Research undertaken to inform policy making, such as traffic surveys.


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Road Safety Education23 This should include publicity, training and other initiatives to improve road safety, including:

� Contributions to the Royal Society for the Prevention of Accidents (RoSPA)

� Cycling/motorcycle proficiency

� Schools liaison

� Road safety literature

� Rehabilitation courses for motor offenders.

School Crossing Patrols24 Historically, school crossing patrols have sometimes been included within authorities’ roads

budgets and sometimes within education budgets. For ease of comparison reported spending should now be consistently recorded in Roads not Education.

Network, Planning, Policy and Strategy25 This division of service includes those costs associated with:

� Formulating transport, highways and roads plans and policy including the associated research

� Working with developers to assess the impacts of developments on highways/roads

� Highways/roads issues relating to planning applications

� Highways/roads adoptions

� Monitoring street works.

26 Specific items to include:

� Network-related issues such as managing and maintaining a road register.

� The preparation of annual plans such as contributing to the long-term strategy.

� Planning-related work, including:

– dealing with s106 developers’ contributions to improving the network as a condition of planning consent

– giving a transport view of planning applications

– assisting searches

– the formal adoption of roads.

� Monitoring street works under the New Roads and Street Works Act, whereby the local authority monitors all road works by private parties, utilities, etc.

PARKING SERVICES27 Parking services includes all costs associated with the provision of parking facilities, including

facilities for lorries and those provided under statutes other than the Highways Acts. It should also include all expenditure and income from the operation of decriminalised parking regimes.


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28 This division includes the following subdivisions of service, described further below:



On-street Parking29 This should include the costs and income from:

� Parking meters and ticket machines

� Traffic wardens employed on parking duties, ie not on policing duties

� Residents parking permit schemes

� Business parking permit schemes

� Vehicle uplifts (decriminalised parking).

Off-street Parking30 Authorities that provide off-street parking should include here the costs of operating and

maintaining car parks, as well as the income received. They should include:

� Staffing costs

� Barrier equipment and ticket issuing equipment

� Security equipment

� The enforcement of excess charges, etc.

31 Some authorities may like to further analyse off-street parking between surface car parks and multi-storey car parks. This would be good practice, wholly consistent with Best Value, as the likelihood is that peripatetic staff will service the surface car parks. Multi-storey sites are more likely to have permanent staff. Hence, trading accounts can more easily be prepared for individual multi-storey car parks. There are also ready private sector comparisons for multi-storey car parks, making their separation desirable.

32 This category also includes the costs associated with operating car parks that support park and ride schemes.

PUBLIC TRANSPORT33 Public Transport includes all costs incurred in support of the public transport network, either

directly or by subsidies to operators or individuals. The subdivisions include the following, described further below:

� Concessionary fares


� Co-ordination.

Concessionary Fares34 This should include the costs of all concessionary fares for elderly people, for those with

visual or other disabilities and for children. It should not include any element of school transport costs. Associated administration costs should be included.


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Support to Operators and Voluntary Groups35 This should include the third-party payments made to:

� Public transport operators

� Park and ride operators

� Passenger transport executives as levies

� Voluntary groups (under the Transport Act 1985) providing quasi-public transport, eg dial a ride schemes.

36 Any costs incurred in administration or monitoring of the above should be included here. See Section 2 of SeRCOP for the treatment of trading account surpluses and deficits.

37 Authorities will probably wish to analyse such support further, by type of transport (bus, rail, ferry, etc) or by operator. The former should be achieved by using a lower level of Service Expenditure Analysis, the latter by using the detailed analysis provided for within the third-party payments category in CIPFA’s standard subjective analysis of local authority expenditure.

38 Where an authority has an airport company, its share receipts earned and revenue support given should also be included here.

39 The existence of the rural bus services grant at present makes it good practice for shire authorities to separately identify urban and rural support. Further, rural support needs to identify those new routes that attract rural bus services grant and older routes that do not.

Co-ordination40 This should include costs associated with the co-ordination of public transport services,

including the:

� Provision of general information to the travelling public

� Revenue costs of investing in the public transport infrastructure, eg bus stations and bus shelters

� Costs of liaison with transport providers and the travelling public.

MANAGEMENT AND SUPPORT SERVICES41 Service management costs are distinct from support services:

� Support services are those which support the provision of services to the public. They are supplied to assist direct providers of services to the public in carrying out their main functions. They may be supplied in a variety of ways. For example, by staff of the highways and transportation service itself, by other departments of the local authority or by outside bodies.

� Service management, by contrast, almost always originates within the same department as the direct service costs.


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42 In accordance with the principle of full allocation, both management and support service costs should ultimately be recharged fully to front-line services. Hence, Management and Support Services (MSS) are voluntary holding accounts. The costs must be fully allocated to front-line services for financial reporting purposes.

43 The bases adopted should be used consistently for all the heads to which recharges are made. These simple practices will greatly assist any local authority that undertakes a benchmarking exercise under Best Value.

44 There is potential for cross-charging between support services, and any such cross-allocation needs to take place before any costs are recharged to non-support service divisions.

45 Where an SLA is in operation, support service providers will need to anticipate such cross-charging in determining the charges for their own services.

Subdivisions of Service46 The following subdivisions of service are included and a brief description of their coverage is

given below:



� Highways properties

� Transport planning, policy and strategy.

47 Neither ‘Management and administration’ nor ‘Professional and engineering’ services are likely to be comparable between different authorities, since:

� The deployment of professional and engineering staff will be determined very much by the organisation of the service within each authority and affect the extent to which direct charging is possible and desirable

� ‘Management and administration’ will be distorted by different levels of devolvement within authorities.

Management and Administration 48 This subdivision of service will include staff engaged in management and administration. To

minimise cross-charging between MSS subdivisions, it should exclude administrative staff that are clearly directly attributable to other MSS divisions or subdivisions of service (for example, the secretaries of engineering staff).

49 Authorities may wish further to subdivide the costs of management and administration to reflect separately accountable units within the highways and transportation department. This will depend on the organisational arrangements and management accountabilities adopted in each authority, but might include separate geographical areas/divisions or separate support service functions, eg finance, personnel, information technology, training, etc. These units may simply be separate budget cost centres or may constitute separate business units providing support services (eg via an SLA) to clients.


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50 Premises used exclusively for administration should be accounted for under the ‘Management and administration’ subdivision, but where shared premises are involved, administration should only bear a proportion of the total cost calculated on an appropriate basis. This same principle applies to other subjective heads of expenditure covered by the ‘Management and administration’ subdivision of service. This also applies to ‘Professional and engineering services’.

Professional and Engineering Services51 This may include the costs of professional and engineering staff, other than those covered

by the ‘Management and administration’ subdivision. It may also include the costs of quarries, laboratories and technical surveys where these are not charged directly to other divisions of service. Again, some authorities may wish to account for such services at a more detailed level.

52 The previous standard form of accounts included a division of service called Professional and Engineering Services. It contained a range of different activities. Some were support services (eg management and administration), and others were direct services (eg traffic management). It did not require further analysis. This meant that the total cost of outcomes, for example, the cost of highways repair and maintenance, was not readily identifiable.

Highways Properties53 All income and expenditure associated with highways properties should be accounted for

under this heading before being allocated to the most appropriate service division above.

Use of Holding Accounts54 As noted above, the use of these holding accounts is optional and authorities may wish to

charge any of the above items of expenditure to the appropriate final division or subdivision of service.

Trading Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR TRADING SERVICES

PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR TRADING SERVICES


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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR TRADING SERVICES



Local Authority Transport Undertakings � Buses

� Ferries

� Other.

Slaughterhouses

Fishery Harbours and Markets

Other Trading Services:

Airports

Other Harbours

Toll Bridges

Note: This section refers to trading with the public, not internal trading accounts. The services in the Trading Services SEA are defined as type (a) services in paragraph 2.30 of Section 2 of the Service Reporting Code of Practice for Local Authorities. For further guidance on the disclosure and reporting requirements of these operations, please refer to paragraphs 2.28 to 2.36 of Section 2 of SeRCOP and the Code of Practice on Local Authority Accounting in the United Kingdom.


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PART TWO: GUIDANCE NOTE: COMPLETING THE SERVICE EXPENDITURE ANALYSIS FOR TRADING SERVICES




3 These guidance notes have been compiled from the following sources. The aim has been to promote consistency between CIPFA’s definitions and those provided by other organisations and to make them as comprehensive and user friendly as possible:

� CIPFA statistics definitions and CIPFA’s Technical Information Service (www.tisonline.net)

� LFR form definitions.



www.tisonline.net

Planning and Development Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR PLANNING AND DEVELOPMENT SERVICES



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Building Control � Building warrants

� Enforcement

� Other building control work

� Advice.


� Dealing with fee-earning applications

� Dealing with non-fee-earning applications

� Enforcement

� Appeals


Planning Policy � Development planning

� Other statutory activities

� Supplementary planning guidance


� Other special topics.

Environmental Initiatives � Sustainable development strategies

� Derelict land

� Contaminated land

� Other environmental initiatives.

Economic Development � Business competitiveness

� Physical business infrastructure

� Training and human resource development

� Economic inclusion

� Area promotion

� Economic research and policy development.


Optional holding accounts. All costs accounted for in these accounts should be charged, allocated or apportioned to the service divisions above before the accounts are closed.

Note 1: Section 2 of SeRCOP makes it clear that Corporate and Democratic Core costs and Non Distributed Costs should be kept separate from the Service Expenditure Analysis above. Further guidance on the scope of CDC in respect of determining planning applications is given in the section on Development Control.

Note 2: This guidance should be read in conjunction with the introduction to the Service Expenditure Analysis for all local government services.


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PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN EACH DIVISION OF SERVICE1 Planning and Development Services are analysed into seven mandatory divisions of service:

� Building Control

� Development Control

� Planning Policy

� Environmental Initiatives

� Economic Development

� Service Management and Support Services.

Building Control2 This division of service should include all expenditure relating to the building control role

under the Building (Scotland) Acts 1959 and 1970, including:

� The Building (Procedure) (Scotland) Regulations 1981 as amended

� The Building Operations (Scotland) Regulations 1975

� The Building (Relaxation by Local Authorities) (Scotland) Regulations 1991.

3 There are four subdivisions:

� Building warrants

� Enforcement


� Advice.

4 These subdivisions are not mandatory, but whether they are or are not adopted, the following notes about what each comprises serve to define what should be included in the Building Control division.

5 Dealing with building warrants and certificates of completion includes the costs involved in the entire process of handling applications for building warrants from the receipt of a valid application to the granting of a warrant. It includes any work related to applications for relaxation of standards, including providing information to the Scottish Government should an appeal against refusal of relaxation be made.

6 Where elected members are responsible for the final decision on an application, then some costs will be chargeable to Democratic Representation and Management. However, this should only be the additional cost, including officer attendance at committees concerned and the preparation of any additional briefing material or presentations. The costs of work that would have been required even had the decision been delegated should be charged to this subdivision.

7 The work associated with applications for certificates of completion should be included, as should the costs of site visits related to both building warrants and certificates of completion.


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8 Liaison with the fire authorities, SEPA, roads authorities, HSE, etc as necessary in connection with applications should be included.

9 The costs of any consultants, for example fire or structural engineers, used to assess applications should be included.

10 The costs of keeping the register of applications, including attached plans and documents, should be included here.

11 Show gross costs here with fees charged as gross income.

12 Enforcement includes the costs of monitoring and enforcing compliance with building control legislation governing warrants, dangerous buildings and building operations. It will also include handling complaints about building control, investigating alleged breaches of building control and taking associated enforcement action where expedient. Include the costs of serving notices and of any subsequent court action and cost recovery action. Also include the costs of any consultants, eg structural engineers, used to aid the enforcement role.

13 Other building control work includes the costs of general advice (such as the production of explanatory leaflets) and other activities not related to specific applications in the activities above. This subdivision should include:

� Building control aspects of property enquiries, including letters of comfort or similar

� Actions under the Civic Government (Scotland) Act 1982, such as repairs to property, safety of platforms for public entertainment, street naming and numbering, public entertainment licensing, licensing of indoor sports premises

� Actions under other licensing legislation such as advice or certification for licensed premises

� Actions under the Safety at Sportsgrounds Act

� Actions under the Housing (Scotland) Acts such as those related to improvement/repair grants, closing/demolition orders and houses in multiple occupation

� Actions under other legislation such as the Cinematograph Acts, Theatres Act, Betting, Gaming and Licensing Act, Fire Precautions Act

� Collection of general statistics relating to applications, warrants, certificates and house building (eg for the Scottish Government and Audit Scotland)

� Any advisory work related to access for people with disabilities (eg access officer role)

� Ombudsman cases related to the building control function but not related to any specific application

� Consultation by the Scottish Government on draft legislation, technical standards, building regulation notes, etc

� Building control service development activities, such as charter mark, liaison on best practice, benchmarking, performance indicators, etc.

14 Also include any services offered in relation to activities such as:

� Structural design

� Lists of approved contractors, etc


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� Fire safety auditing

� Energy auditing

� Dealing with contaminated land.

15 Should authorities charge fees for any such activities, gross costs and gross income should each be shown.

16 Advice includes handling enquiries from developers, consultants and local residents on building control matters made in advance of the submission of an application.

Development Control17 This division of service should include all activities and costs related to the local authority’s

role in development control under town and country planning legislation. There are six subdivisions:

� Advice

� Dealing with fee-earning applications

� Dealing with non-fee-earning applications

� Enforcement

� Appeals


18 These subdivisions are not mandatory, but whether they are or are not adopted, the following notes about what each comprises serve to define what should be included in the Development Control division.

19 Advice includes handling enquiries from developers, consultants and local residents on development control matters, especially those made in advance of the submission of an application.

20 Dealing with fee-earning applications includes the costs involved in the entire process of handling fee-earning applications (see below), from the receipt of a valid application to its determination and resolution of any outstanding matters. Where elected members are responsible for the final decision on an application then some determination costs will be chargeable to Democratic Representation and Management. However, this should only be the additional cost, including officer attendance at the committee or subcommittee concerned and the preparation of any additional briefing material or presentations. The costs of work that would have been required even had the decision been delegated should be charged here. This stage of the process may also include one or more special activity, for example environmental impact assessment, retail impact assessment or transport impact assessment. It may also include the negotiation of a s75 agreement. In some cases, public inquiries may be required and their costs would also fall here. Authorities may wish to keep a separate record of such special costs.


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21 This subdivision therefore includes the determination costs that relate to:

� Applications for planning permission for development under Articles 3, 4,5 and 6 of The Town and Country Planning (General Development Procedure) (Scotland) Order 1992 including:

(a) applications for outline planning applications

(b) applications for full planning permission

(c) applications for approval of reserved matters

� Applications for limited period permissions, for the renewal of permissions, for the variation of conditions and the removal of onerous conditions (including applications under s42 of the Town and Country Planning (Scotland) Act 1997)

� Applications for consent to display advertisements under Regulation 5 of The Town and Country Planning (Control of Advertisements) (Scotland) Regulations 1984 (as amended)

� Applications in respect of minerals and waste control under the Town and Country Planning (Scotland) Act 1997


� Revisions and modifications to existing or approved schemes where a new application is not needed.

22 Dealing with non-fee-earning applications includes the same range of costs as those listed above for earning applications but as applied to applications, consents, notifications, etc submitted under planning legislation but for which no fee is payable. This will include:

� Consultations with neighbouring authorities

� Applications under The Development by Planning Authorities (Scotland) Regulations 1981

� Applications for listed buildings consent or to modify listed buildings consent under sections 6 and 17 of the Planning (Listed Buildings and Conservation Areas) (Scotland) Act 1997

� Applications for conservation area consent under sections 66 and 67 of the Planning (Listed Buildings and Conservation Areas) (Scotland) Act 1997

� Applications for certificates of appropriate alternative development

� Notifications of proposed developments by government departments and other Crown bodies

� Notifications of overhead electric lines

� Applications by the British Coal Corporation under Classes 60 and 62 of The Town and Country Planning (General Permitted Development) (Scotland) Order 1992

� Notifications/determinations under Classes 18 and 22 of The Town and Country Planning (General Permitted Development) (Scotland) Order 1992 (agricultural and forestry buildings and operations)

� Applications, determinations and approvals under Part 33 of The Town and Country Planning (General Permitted Development) (Scotland) Order 1992 (demolition of buildings)

� Applications for consent under Regulation 5 of The Town and Country Planning (Hazardous Substances) (Scotland) Regulations 1993


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� Applications, determinations and approvals relating to the installation of telecommunications apparatus under Part 20 of The Town and Country Planning (General Permitted Development) (Scotland) Order 1992 (development by telecommunications code system operators)

� Other activities such as Licensing Act s23 certificates, licensing consultations from SEPA and consultations on construction consents

� Applications for felling licences, tree preservation orders (TPOs), issues of TPOs, applications to fell under TPOs, applications to fell in conservation areas under Part VII of the Town and Country Planning (Scotland) Act 1997.

23 Enforcement includes the costs of monitoring and enforcing compliance with planning conditions, the discharge of planning conditions, prosecutions and associated legal proceedings, including enforcement appeals. It will also include handling complaints about development, investigating alleged breaches of planning control and taking associated enforcement action where expedient. Costs involved in the collection of statistics in relation to enforcement and enforcement appeals would also be recorded here.

24 Appeals includes the costs of handling appeals in respect of refusals of planning permission and/or conditions attached to the granting of a permission, including any collection of statistics in relation to appeals. Any court costs concerned with these appeals, including costs awarded for or against the council, would also be shown here. Examples:

� Enquiries caused by applications called in by the Scottish Government

� Appeals against advertisement consent, listed building consent, tree preservation order, conservation area and hazardous substances consent decisions.

25 Other development control work includes the costs of general advice and other activities which concern development control but which are not related to any actual or potential application(s). This would include:

� Planning aspects of property enquiries

� Collection of general statistics relating to various categories of application and consents (eg for the Scottish Government and the Accounts Commission)

� Ombudsman cases related to the development control function but not related to any specific application(s)

� Consultation by the Scottish Government on draft legislation, PANs, etc

� Work in connection with Scottish Government audits and similar reviews

� Development control service development activities, such as charter mark or liaison with colleagues about best practice, benchmarking, etc or participation in working groups intended to help the general development of the development control service or particular aspects of it.

26 There are types of general development control cost that are clearly development control, but where it is less clear whether they fall into this subdivision or whether they should be treated as overheads on the more specific headings given above. Examples include the costs of running development control management systems, the OS licence fee (which should be accounted for in full as a development control cost, even though others receive an incidental


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benefit, since the licence is maintained in order to fulfil statutory development control requirements) and development control use of a GIS.

27 Whilst development control costs are being considered only as a total, this is not an issue. However, as soon as costs are taken to the next level of detail, a judgement about such costs will be required. The general guidance should be that anything that has a direct impact on the process of handling applications should be treated as an overhead. Anything that has no impact (eg collecting general statistics) or where the link is more tenuous (eg benchmarking exercises) should be treated as ‘Other development control work’.

28 It is also important to distinguish between the types of advice that should be classified under ‘Advice’ and those that fall within ‘Other development control work’. Again, while guidance can be offered, it is ultimately a matter for professional judgement. Advice should relate to specific sites or specific applications, or potential applications, where off-the-shelf guidance is not adequate. This would include the sort of discussions where notes are likely to be taken because a link may be possible between the discussion and a subsequent application. Whilst it may not be possible to say that there is no link between the more general advice which would fall within ‘Other development control work’ and a subsequent application, any such link would be more tenuous because of the more general nature of the discussion.

Planning Policy29 This division of service should include statutory and non-statutory planning policy work

including the preparation of guidelines and public consultation and involvement. There are five subdivisions:

� Development planning

� Other statutory activities

� Supplementary planning guidance


� Other special topics.

30 These subdivisions are not mandatory but, whether they are or are not adopted, the following notes about what each comprises serve to define what should be included in Planning Policy.

31 Development planning: includes all costs relating to the preparation, approval and adoption, or the review, amendment or repeal and replacement, of any part of the statutory development plan. This includes any work required for those purposes such as:

� Surveys

� Costs of public inquiries

� Research

� Monitoring and analysis

� Public participation or objection.

32 Also include here the collection, analysis, presentation and maintenance of databases in relation to these matters.


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33 Other statutory activities includes the costs involved in meeting other statutory planning policy requirements not incorporated in the council’s development plans, including conservation area designations, subject plans, national park plans, trees and forestry policies and minerals policies.

34 Supplementary planning guidance includes the preparation and approval for adoption, or the review of any non-statutory plan, policy statement or any other kind of general supplementary planning guidance that sets out the planning policy for the whole or a significant part of the authority’s area. Such planning guidance is likely to be regarded as a guide for the purposes of development, promotion and control work. Also include here work required for the above purposes such as surveys, research, monitoring, analysis, public participation (including the collection, analysis, presentation and maintenance of databases in relation to these matters). Design briefs and site briefs should be included here.

35 Planning projects and implementation covers costs involved in the implementation of projects, requiring a high degree of co-ordination, where the purpose is to secure the authority’s planning aims. The costs of handling purchase notices and dealing with claims for compensation should be included under this heading.

Environmental Initiatives36 This division of service should include costs related to protecting or improving the natural

environment. There are four subdivisions:

� Sustainable development strategies

� Derelict land

� Contaminated land

� Other environmental initiatives.

37 These subdivisions are not mandatory but, whether they are or are not adopted, the following notes about what each comprises serve to define what should be included in the Environmental Initiatives division.

38 Sustainable development strategies includes the collection of statistics relating to environmental audits and the preparation and carrying out of:

� Local authority agenda 21 strategy

� Biodiversity action plan

� Environmental audits

� State of the environment reports

� Environmental management strategies under the label of agenda 21 activities.

39 Derelict land includes the costs involved in:

� Clearing derelict sites or in working with others to secure their redevelopment

� Preparation of derelict land strategies in partnership with LECs

� Surveys of derelict sites and the preparation and implementation of schemes for their reclamation and other similar projects

� Feasibility studies.


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40 Works of a capital nature are chargeable to capital and fall outside this guidance.

41 Contaminated land includes the costs involved in identifying contaminated land and working to clear it for redevelopment or other purpose. Costs relating to the restoration and monitoring of council-owned closed landfill sites should be reported in Environmental Services (Waste Disposal).

42 Other environmental initiatives might include carrying out any surveys and preparation and implementation of any schemes for the purposes of environmental improvement.

Economic Development43 This division of service should include the costs of economic development activities

undertaken by local authorities throughout Scotland, with the exception of tourism (see ‘Area promotion’, below). There are six subdivisions:

� Business competitiveness

� Physical business infrastructure

� Training and human resource development

� Economic inclusion

� Area promotion

� Economic research and policy development.

44 These subdivisions are not mandatory but whether they are or are not adopted, the following notes about what each comprises serve to define what should be included in the Economic Development division. The structure suggested is based on a survey of economic activity of Scottish councils undertaken during 1999 which considered outputs and finance and which has been accepted by COSLA and local authorities as a workable and comprehensive framework.

45 Business competitiveness refers to work that is undertaken to help clients/individuals overcome barriers (such as transport and childcare) to help them access training and employment opportunities both within and outside the council. It includes:

� Grants/loans

� Signposting

� Advice/counselling

� Trade development

� Operational improvements

� Management and employee development

� Strategy/planning

� Product development

� Equity finance

� Inward investment support

� Business development in target areas


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� Assistance to self-employment/business start-up

� Employment and training access projects.

46 Activities could be defined individually or in combination according to industrial sector, eg primary, manufacturing, services, etc.

47 Both business development in target areas and assistance to self-employment/business start-up refer to the provision of information, business advice and financial and other support to encourage business and employment growth within the private sector. This may involve the facilitation/organisation of some training, particularly in the area of business skills for start-up businesses and some financial support for individual business to invest in workforce training/skills development.

48 Employment and training access projects could be further divided to outside Scotland and within Scotland, covering investment grants/loans; recruitment/training grants.

49 Physical business infrastructure includes land acquisition, which could be subdivided into acquisition, servicing and premises-related costs. These could be subdivided into basic industrial premises, bespoken industrial premises, business centres, incubators for new business start-up, science/technology parks, specialist property (eg software, food), class 4 industrial, office, retail.

50 Training and human resource development refers to direct training delivered through the council to unemployed clients requiring support to acquire skills which will prepare them for sustainable employment. It could be subdivided into unemployed adults, young unemployed, school leavers, others, people with disabilities, women returners.

51 Economic inclusion includes:

� Grants for community-based projects, including groups

� Grants to assist individuals

� Assistance to third sector/social economy organisations

� Counselling/support for disadvantaged groups

� Capacity building

� Intermediate labour market projects

� Upgrading of the built environment.

52 Area promotion could include the promotion of development in the authority’s area by means of:

� General publicity including the preparation of exhibitions, promotional literature, audio visual aids and area guides

� Supplying information about the area

� Advertising development opportunities

� Organising promotional events such as seminars and workshops, particularly to maintain or attract employment.


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53 However, although it acknowledged that tourism is often promoted for economic development reasons, promotional expenditure related to tourism should not be included here but should be included with other tourism expenditure under that heading in Cultural and Related Services.

54 Economic research and policy development includes:

� Data collection, including survey analysis

� Dissemination of economic information

� Development of policy including for particular economic sectors

� Monitoring and evaluation activity

� Input into and advice on European policy matters

� Attracting and monitoring external funding including Lottery and EU funding.

Service Management and Support Services (SMSS)55 These are a series of optional holding accounts for management and support service costs.

All costs must be recharged to the other divisions of service. Where possible, costs should be allocated directly to the most appropriate service division, eg officers’ time on trying to secure Lottery funding should be charged directly to the ‘Economic research and policy development’ subdivision wherever possible.

56 Inevitably, some support services costs, such as finance, IT, personnel, procurement, etc will need in part to be apportioned. In these cases, reference should be made to paragraph 2.15 of Section 2 of SeRCOP. It gives guidance on the apportionment of costs.


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Social Work

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR SOCIAL WORK



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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR SOCIAL WORK



Service Strategy � Policy development and strategic commissioning

� Registration and inspection

� Complaints.

Reporter to the Children’s Panel

Children and Families � Assessment and casework

� Home care

� Fostering/family placement


� Residential care (non-respite)

� Day care for younger children

� Youth work services

� Children with a disability

� Support for carers

� Support to formerly looked after children

� Other children’s services

� Youth crime

� Children’s rights/advocacy.

Older People See matrix below for the subdivisions for these community care client groups.People with Physical or Sensory

Disabilities

People with Learning Disabilities

People with Mental Health Needs

People with Addictions/Substance Misuse

People with AIDS/HIV

Services to Asylum Seekers and Refugees

� Unaccompanied children

� Families

� Lone adults.

Criminal Justice Social Work Services

� Court services

� Criminal justice fieldwork

� Community service

� Prison social work

� Supported accommodation and hostels

� Other.


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Support Service and Management Costs (optional holding accounts).

Note: all costs accounted for here should be charged, allocated or apportioned to the service divisions above before the accounts are closed.

� Management

� Central advisory, policy and development units

� Training

� Personnel

� Finance

� Research and management information

� Publicity/communications


� Administration


� Contracting

� Quality assurance (including the complaints system not related to the statutory complaints procedure)

� Welfare rights.

Divisions for Community Care Client Groups: Matrix of Subdivisions

Discretionary Subdivisions (Services) Mandatory Divisions (Client Groups)

Olde

r Peo

ple

Peop

le w

ith P

hysi

cal o

r Se

nsor

y Di

sabi

litie

s

Peop

le w

ith L

earn

ing

Disa

bilit

ies

Peop

le w

ith M

enta

l He

alth

Nee

ds

Peop

le w

ith A

ddic

tions

/Su

bsta

nce

Mis

use

Peop

le w

ith A

IDS/

HIV


Occupational therapy

Equipment and adaptations

Home care

Self-directed support (direct payments)

Meals

Day care

Supported employment

Nursing homes

Residential care (registered)

Other residential care

Support for carers

Advocacy

Other services


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Note 2: This guidance should be read in conjunction with the introduction to the service expenditure analysis for all local government services and CIPFA’s Principles for Best Value Accounting.



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INTRODUCTION1 The aim of this guidance is to ensure that the financial records held by different local

authorities in Scotland on social work and social care services comply with Best Value principles and are held on as consistent a basis as possible to support robust and comparable reporting. This guidance note should be read in conjunction with the general introduction to the complete series of Service Expenditure Analyses. Throughout this section, the term ‘Social Work’ is used as a generic title for the range of services covered, although it is acknowledged that other terms, such as social care and social services, are also used by councils. These services may be delivered by more than one council department, increasingly in conjunction with the NHS and other partners.

2 This guidance is not intended to influence how different authorities are organised on the ground. This is not CIPFA’s role and is contrary to the spirit of Best Value, which encourages innovation. The guidance merely seeks to provide a means for a comparable aggregation of the costs of Social Work services, regardless of how they are organised. The ability to compare services is a key tool in achieving Best Value.

3 Social Work expenditure is divided between 12 mandatory divisions of service:

� Service Strategy

� Reporter to the Children’s Panel

� Children and Families

� Older People

� People with Physical or Sensory Disabilities

� People with Learning Disabilities

� People with Mental Health Needs

� People with Addictions/Substance Misuse

� People with AIDS/HIV

� Services to Asylum Seekers and Refugees

� Criminal Justice Social Work Services

� Support Service and Management Costs (SSMC) (optional holding accounts).

4 The model adopted is broadly defined as a matrix of services (subdivisions) within client groups (divisions).

5 The divisions correspond to the main Social Work client groups, with additional categories for Service Strategy, Support and Management Costs. Within each division of service, recommendations are made about subdivisions of service that authorities are encouraged to adopt. The subdivisions correspond mainly to services, although in some cases the subdivisions are client groups.


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6 While the subdivisions are discretionary, authorities are likely to wish to adopt them in order to meet requirements for financial information at service level, particularly for services that apply across several client groups. The LFR3 return also requires information at broadly this level of detail. Paragraph 3.7 of the SEA provides commentary regarding potential changes to the LFR requirements. Best Value cost benchmarking will be easier if authorities use consistent definitions at the subdivisional level. In practice, cost centres are unlikely to aggregate in a consistent way to the mandatory divisions of service if they cannot first be aggregated to the discretionary subdivisions or to categories very similar to them.

Apportionment of Costs7 For all local authorities, some of the subdivisions will require some apportionment of costs.

For further guidance on apportioning administrative overheads, see paragraph 2.1 of Section 2 of SeRCOP.

8 In 2002, joint guidance (Guidance on Implementing the Best Value Accounting Code of Practice Service Expenditure Analysis for Social Work Services) was issued by CIPFA Scotland, ADSW, and the government’s Social Care Data Standards Project. This included Appendix 1: ‘Detailed Guidance on Apportioning Generic Service Expenditure to Client Groups’, which may further assist with this requirement. If a copy is required please contact CIPFA Scotland.

Free Personal and Nursing Care9 The free personal and nursing care policy was implemented in July 2002 under the terms of

the Community Care and Health (Scotland) Act 2002. The policy has had a high media profile with significant public and political interest.

10 A specific heading for free personal and nursing care is not included in the Service Expenditure Analysis. The client group structure of the Social Work SEA is regarded as being an appropriate classification method for service delivery, irrespective of the funding arrangements. Furthermore, continuing with the existing mandatory SEA headings is desirable to maintain comparability and trend analysis.

11 As part of the LFR3 return, however, the Scottish Government does require memorandum notes analysing expenditure under the free personal and nursing care policy. There is therefore a clear requirement that robust information on free personal and nursing care expenditure is available. Councils should be able to identify expenditure on free personal and nursing care, both in care homes and in home-based services, in such a way as to fully meet Scottish Government reporting requirements, including the appropriate addition of overheads.

Housing Support Services (Supporting People)12 Housing Support Services (previously Supporting People Grant eligible expenditure) are

defined in The Housing (Scotland) Act 2001 (Housing Support Services) Regulations 2002. Although Supporting People Grant no longer exists, it is considered that the regulations provide a framework for identification of services provided for Housing purposes. The definition however does not include services which may be defined as personal care or personal support (as defined in section 28(2) of the Regulation of Care (Scotland) Act 2001) and these should continue to be accounted for within Social Work. Therefore where a


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potential overlap exists it would normally be expected that the expenditure would be included within the Social Work SEA.

Joint Arrangements and Pooled Budgets13 A pooled budget is a mechanism by which different parties contribute to a discrete fund.

Within this fund or ‘pool’, contributions lose their original identity and are committed and accounted for against the joint aims of the partners. For accountability and legal reasons a pooled budget is hosted by one of the partner agencies, in accordance with its standards of financial governance and the requirements of the agencies for monitoring and review. A pooled budget arrangement is distinct from, and different to, an ‘aligned budget’ arrangement whereby decisions are taken collectively about the aligned budget but the individual accounts are still technically held within separate agency budgets to allow them to identify and account for their own contribution.

14 Detailed guidance on accounting for pooled budget arrangements is included in the CIPFA publication Pooled Budgets: A Practical Guide for Local Authorities and the National Health Service (Fully Revised Second Edition 2009). As the following extract from the first edition explains, the basic rule is that each partner accounts for its own contribution to the joint arrangement or pooled budget:

Given the nature of the pooled budget arrangement, each partner should account for their contribution to the budget. The host should send monitoring reports on a quarterly basis, and at the year end prepare a memorandum of accounts within their statement of accounts that shows what has been received, and spent, and what remains. This memorandum of accounts will be sent to each of the partners at the year end for inclusion in their statement of accounts. Records will need to be retained for at least six years.


16 Contributions by the NHS or other third parties towards the costs of services provided and managed by local authority Social Work services should be included as income in the authority’s accounts. The gross costs of the services provided should be included as expenditure.

17 An authority’s contribution to an NHS board should also be recorded in the appropriate service division(s) according to actual spending.

SERVICE STRATEGY18 This category has been narrowly defined to ensure that amounts recorded by each authority

are comparable. Although in some ways it is a replacement for the previous category of Service Strategy and Regulation (SSR), its scope is more restricted. In particular:

� Meetings of the Social Work committee are now within the expenditure category of Democratic Representation and Management (DRM) (see Section 2 of SeRCOP for further guidance)


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� Preparation of the Social Work budget at a strategic level should now be included, with other budget preparation costs, within Support Service and Management Costs for allocation across divisions of service.

There are three subdivisions:

� Policy development and strategic commissioning

� Registration and inspection

� Complaints.

19 Whether or not these subdivisions are used, the guidance that follows defines the scope of the Service Strategy division.

20 Policy development and strategic commissioning includes the costs associated with all social work policy making and related strategic activities except to the extent that such activities are properly chargeable to DRM.

21 Include strategic service planning, including the preparation of:

� Departmental service plans*

� Community care plan

� Children’s service plan

� Criminal justice social work services strategic plan

� Social work input to NHS plans, eg health improvement plans.

*The costs of policy development and strategic commissioning will usually include much of the time of the director of social work in a single service department, and a proportion of the time of directors responsible for a department or directorate which combines some or all of the Social Work function with other services. The remaining time of these senior officers is likely to be DRM and/or service management. To the extent that a proportion of senior officer time is chargeable to Service Strategy, so too will be a share of the costs of their personal and administrative support.

22 Also include liaison with outside bodies for strategic planning purposes.

23 It is recognised that other staff contribute to strategic activity; their costs are held in SSMC and can be allocated across the other service divisions according to best local estimates of time spent or role.

24 This subdivision excludes research and management information to inform policy formulation, previously charged to SSR, but now included under Support Service and Management Costs for subsequent reapportionment, eg to the client group which is the subject of the research.

25 It is acknowledged that there are practical difficulties in drawing a firm boundary around policy development and strategic commissioning. For example, departmental service planning is in the Service Strategy division, but at a more detailed, client group level, service planning should be recorded against that client group, possibly having first been recorded under SSMC. Also, as service and budget planning are better integrated, it will become more sensible to record their costs together in the accounting framework. The policy development and strategic commissioning subdivision will be kept under review.


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26 Registration and inspection: includes all of the costs of the arm’s-length registration and inspection service for all client groups (under the Children Act 1989 and the NHS and Community Care Act 1990) or payments for this service.

27 Complaints: includes costs associated with the complaints officer or procedure, required under the NHS and Community Care Act 1990.

REPORTER TO THE CHILDREN’S PANEL28 Local authority costs associated with children’s panel hearings should be accounted for here.

These will include:

� Panel member training

� Panel member expenses

� Advisory committee training and expenses

� Travel expenses for families attending hearings

� Fees for safeguarders.

CHILDREN AND FAMILIES29 This division includes all expenditure on all social work services for children and families,

including child protection, looked after children, children with or affected by disability, and other children in need, and their families. There are 13 subdivisions:

� Assessment and casework

� Home care

� Fostering/family placement


� Residential care (non-respite)

� Day care for younger children

� Youth work services

� Children with a disability


� Support to formerly looked after children

� Other children’s services

� Youth crime

� Children’s rights/advocacy.

30 Whether or not these subdivisions are used, the guidance that follows defines the scope of the Children and Families division.

31 Assessment and casework includes the process of receiving referrals, assessing need, liaising with the children’s hearing system, schools or other agencies, providing family casework, arranging for service and undertaking reviews. It includes field social work costs for children and families (including hospital social workers), support staff costs and financial


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assessment costs (where appropriate). It also includes a proportion of costs associated with mental health officers.

Prevention and support services is an optional sub-category of this subdivision, and includes:

� Assistance in cash or kind, ie payments under section 12 of the Social Work (Scotland) Act 1968 and assistance to children in need, or their families, under section 22 of the Children (Scotland) Act 1995 (excluding the purchase of packages of care included under other subdivisions)

� Child protection, ie staffing and other expenditure associated with the child protection register.

Exclude foster carer recruitment, training and support (included under ‘Fostering/family placement’ – see below).

32 Home care includes purchased domiciliary care as well as that provided by the authority (they are distinguished through the subjective level). Where apportionment of costs across client groups is necessary, this should be based on hours of service, purchased or provided, by client group, as defined in the Scottish Government H1 statistical return.

Exclude home care to support the care of children with disability (charged to the ‘Children with a disability’ subdivision).

33 Fostering/family placement includes:

� All fees, expenses and allowances paid to foster carers except those which relate to temporary/respite placements (included under Support for Carers)

� Staff and other costs for foster carer recruitment, training and support (if necessary, apportion these staff costs from the ‘Assessment and casework’ subdivision).

Note: these categories should be distinguished at subjective level.

Exclude family placement services concerned with adoption (see below).

34 Adoption services includes:

� All fees and allowances paid to adoptive parents under The Adoption Allowance (Scotland) Regulations 1996

� Staff and other costs for assessing prospective adoptive parents and for support. (If necessary apportion these staff costs from ‘Assessment and casework’, or from ‘Family placement services’.)

Note: these categories should be distinguished at subjective level.

Exclude family placement services concerned with fostering (see above).

35 Residential care (non-respite) includes three types of accommodation and authorities may wish to establish separate subdivisions of service for each:

� Secure accommodation

� Residential schools

� Other residential care.

Secure accommodation: include all provision and placement costs in accommodation approved by the Secretary of State for the purpose of restricting the liberty of children.


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Costs recorded under secure accommodation and residential schools should exclude any education-related costs. These should be charged to the Education Service. Provision and placement costs in residential schools and in other residential care should exclude expenditure on children who have been placed temporarily to provide respite for their carers. This should be included under the ‘Support for carers’ subdivision.

Other residential care includes:

� Children’s homes

� Young people’s units

� Assessment units

� Close support units

� Supported accommodation

� Residential elements of resource centres for children

� Residential nurseries

� Mother and baby homes.

Exclude residential care for children with disabilities (included in the ‘Children with a disability’ subdivision, below).

36 Day care for younger children includes three types of service and authorities may wish to establish separate subdivisions for each:

� Day centres

� Other day care

� Family centres.

In all cases, only social work related expenditure should be incurred, however the services are organised within an authority.

Day centres comprises all provision and purchase costs for centre-based day care for younger children in need (aged under 8). Include expenditure on centre-based outreach staff working with families with children in need under 8. Exclude expenditure on family centres unless solely or mainly for families with younger children in need.

Other day care includes all Social Work expenditure on childminding, playgroups, and other services for children under 8.

Family centres provide guidance and assistance to families with respect to childcare, budgeting, etc and are not confined to services for pre-school-age children in need. There may therefore be merit in recording their costs separately.

Exclude day care for children with a disability (see below).

37 Youth work services: include intermediate treatment centres and activities, the Social Work element of expenditure on joint youth work between Social Work and Education Services (eg youth strategy initiatives), group work with young people, etc. Exclude aftercare for formerly looked after children (see below).


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38 Children with a disability includes expenditure on:

� Equipment and adaptations for children with a disability

� Residential homes for children with a disability

� Home care for children with a disability

� Day care centres for children with a disability.

It is recommended that each of these categories is held as a separate subdivision where this is necessary to support the availability of information on total expenditure for each of these services across all client groups.

It is acknowledged that such costs may not be separately identifiable, for example where a day care centre provides a service for children both with and without a disability. In these cases an apportionment of service costs between ‘Children with a disability’ and other Children and Families subdivisions will be necessary.

The ‘Children with a disability’ subdivision is defined as: children and young people aged 0–17 with learning disabilities, physical disabilities or sensory impairments. (Some definitions also include children with mental health problems; services for such children are excluded here for practical reasons. For example, social, emotional, and behavioural disorders are commonly included in classifications of children’s mental health problems but their inclusion in an expenditure category for children with disabilities would require the reassignment of all or most costs for residential schools – we prefer to classify residential school expenditure with other forms of residential care for children.)

Some expenditure on children with a disability may not be easy to separate from support to carers and further guidance is given below.

39 Support for carers includes the cost of respite care services and other support to the parents, guardians or other carers of children, including carers who themselves may be under the ages of 16–17. The need for support may arise in relation to the health or disability of either a child or a parent or guardian. This subdivision comprises:

� Respite foster placements

� Respite care placements in residential schools

� Respite care placements in other residential care

� Projects to support young carers

� Other support to carers, including the costs of any special projects, grants to voluntary organisations, etc concerned mainly with support to carers, eg of children with disabilities.

Authorities may wish to maintain separate subdivisions for some or all of these categories, for example as a way of identifying the total amount spent on residential schools.

The Accounts Commission definition of respite care is recommended:

Respite care means any form of care which is intended, solely or mainly, to provide temporary or short-term relief for the carer(s) of a dependent person. The care may be on a planned or an emergency basis. Service episodes which provide an element of respite to


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carers but which would be (or have been) provided to the dependent person mainly for non-respite reasons should be excluded. The forms of respite care which are relevant … are: (a) care in a residential or nursing home, (b) care in the person’s home, (c) care at another place (eg day centre, in someone’s home).

Accounts Commission Performance Information Guidance (2000)

The following services may also be provided to support carers but are excluded because of the practical difficulty in deciding whether they are mainly intended to benefit the carer or the child:

� Assessment and casework will include some carer support

� Home care for children and families will include some carer support

� Assistance in cash or kind will include some carer support

� Day care for children will include some carer support

� Some equipment and adaptations, eg for children with disabilities, will be primarily to support carers.

40 Support to formerly looked after children includes payments, grants and assistance to formerly looked after children under sections 29 and 30 of the Children (Scotland) Act 1995. It also includes staff costs for any specialist aftercare posts.

41 Other children’s services includes expenditure on other services for children and families, eg grants and payments to voluntary organisations that cannot be specifically placed under another heading. Inappropriate use of this residual category will invalidate comparisons across the other Children and Families subdivisions. It should only be used when no other heading or headings are appropriate and, in particular, it should not be used to avoid the need for allocation across services or client groups.

42 Youth crime includes initiatives supported by the children services development fund or other finance to implement the recommendations in the Report of the Advisory Group on Youth Crime (Scottish Executive, June 2000):

� Community-based interventions and programmes for persistent young offenders

� Multi-agency teams to consider all youth crime issues, covering preventive measures as well as rehabilitative programmes or interventions, and to oversee implementation of the strategic local plan.

Exclude bail information and supervision schemes, pilot diversion schemes for 16- and 17-year-olds, and community based disposals for children and young people under 18 coming before the courts – these are charged to the Criminal Justice Social Work service division.

43 Children’s rights/advocacy: include the costs of children’s rights officer, and any costs concerned with advocacy, for example, grants to Who Cares? or other organisations concerned with children’s rights/advocacy.


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OLDER PEOPLE44 This division includes the costs of services to all people aged over 65, even where the reason

for their care relates to dementia, mental health or a physical or other disability. There are 13 subdivisions:


� Occupational therapy


� Home care*

� Self-directed support (direct payments)

� Meals

� Day care*

� Nursing homes*

� Residential care (registered)*

� Other residential care*


� Advocacy

� Other services.

45 Whether or not these subdivisions are used, the guidance that follows defines the scope of the services for the Older People division.

46 The categories above marked with an asterisk (*) should exclude respite care placements or service: these are accounted for under ‘Support for carers’.

47 Assessment and care management includes the process of receiving referrals, assessing need, defining eligibility and arranging for packages of care to be provided and reviewing the quality of and continued relevance of that care to current needs. It includes field social work costs (including hospital social workers), support staff costs and costs related to assessing each client’s financial eligibility. Include an appropriate proportion of training and staff costs associated with mental health officers. Exclude costs associated with occupational therapy (see below).

48 Occupational therapy (OT) includes assessment and care management work undertaken by occupational therapists and therapeutic services provided to older people. Client data should be used to apportion OT staff costs across client groups.

49 Equipment and adaptations includes:


� Disability equipment and aids to daily living

� Telephones

� Alarm equipment (purchase and running costs)

� Other communications equipment

� Equipment stores, delivery and other associated costs.


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50 Further subdivisions may be required in some authorities.

51 Home care includes the costs of practical services, delivered in a client’s own home, which assist people to function as independently as possible in that setting, whether this is mainstream housing (rented or owned), amenity housing, sheltered or supported accommodation.

The practical services provided include routine household tasks, within or outside the home, personal care, overnight, live-in and 24-hour services. A wide range of people might provide such services, including:

� Home helps and home care assistants

� Night sitters



� Laundry services for older people living at home

� Outreach services provided by day centre staff to clients at home


� Care attendant schemes.

52 The costs of supervising and administering the above services, including fees to the Post Office for collecting income, should also be included.

53 The costs of such services should be included whether they are provided by your own local authority, purchased from another local authority or purchased from private or voluntary sector providers. Where services are provided for clients in another local authority area, the costs should also be included here, and the associated payment made by the other local authority will show as income.

54 The costs of any services provided totally by the private or voluntary sector and paid for in full by the recipient of that service to the provider should not be included.

55 Costs should be apportioned to older people compared with other client groups on the basis of information on hours of service (defined in the Scottish Government H1 statistical return).

56 Self-directed support (direct payments) is support that is purchased directly by clients using funds from a variety of public sources, including health and social care, which is sometimes brought together into a single pot. The approach has developed over time and encompasses primary legislation as supported by statutory guidance issued in 2007 and entitled National Guidance on Self-directed Support (issued as Circular CCD 7/2007 under section 5(1) of the Social Work (Scotland) Act 1968). Direct Payments have been available to people aged 18 to 64 with community care needs since April 1997, and to people aged 65 and over since July 2000. Since December 2001 they have also been available to disabled 16- and 17-year-olds and disabled parents for children’s services. From 1 June 2003 it has been a duty for local authorities to offer direct payments, as an alternative to providing services, to all eligible disabled people aged 16 and over and to parents (or those with parental responsibility) for disabled children aged 15 and under.


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57 Meals includes the costs of:

� Meals on wheels



58 Meals provided at day centres should be excluded; they should be included with the other costs of the day centre concerned.

59 Day care includes activities involving regular attendance at a location (other than the client’s own home) for personal, social, therapeutic, training or leisure purposes, including any meals at the centre and transport to and from the location. Luncheon clubs should be included in the ‘Meals’ subdivision.

60 Nursing homes includes expenditure on people over 65 in nursing homes registered by health authorities (and in future by the Scottish Council for the Regulation of Care) and, by definition, requiring trained nursing staff to be present at all times. This will include the costs of people requiring nursing care who are placed in single-status homes (ie dually or jointly registered).

61 Residential care (registered) includes expenditure on people over 65 in residential care homes registered by social work authorities (and in future by the Scottish Council for the Regulation of Care). This will include the costs of people not requiring nursing care who are placed in single-status homes (ie dually or jointly registered). The gross and net costs of purchasing registered residential places should be included, together with the costs of providing LA residential homes. For LA residential homes that also provide day care or other non-residential services, all operating and staff costs should be apportioned between the various functions on the best basis available.

Note: both nursing homes and residential care providers now have a single registration status. At present the distinction between the two types of provision, as noted above, is maintained in the Service Expenditure Analysis.

62 Other residential care includes all other residential care for people over 65, including adult placement schemes, extra care housing and unregistered supported accommodation or sheltered housing to the extent that costs are not applicable to the Housing Revenue Account. Personal care and other domiciliary care provided to residents in such accommodation should be accounted for as ‘Home care’.

63 Support for carers includes the cost of respite care services and other support to the carers of older people. Carers are people who look after, or provide some regular unpaid service for, an older person, or someone with disabilities, or illness, living in the carer’s own or in another private household, who cannot manage at home without this help. Most carers are looking after relatives – spouses or partners, parents or parents-in-law, adult children, siblings.

64 The Accounts Commission definition of respite care is recommended:

Respite care means any form of care which is intended, solely or mainly, to provide temporary or short-term relief for the carer(s) of a dependent person. The care may be on a planned or an emergency basis. Service episodes which provide an element of respite to carers but which would be (or have been) provided to the dependent person mainly for


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non-respite reasons should be excluded. The forms of respite care which are relevant … are: (a) care in a residential or nursing home, (b) care in the person’s home, (c) care at another place (eg day centre, in someone’s home).

Accounts Commission Performance Information Guidance (2000)

65 This subdivision includes the costs of:

� Respite care placements in nursing homes

� Respite care placements in residential care homes

� Other residential respite care

� Respite care placements in day care facilities

� Home care provided on a respite care basis

� Other services to support carers.

66 Other services to support carers may include grants to voluntary organisations, special projects, and welfare benefits advice. The costs of services which benefit carers indirectly by assisting the person being cared for, such as meals on wheels, equipment or adaptations to the home, should be included under the service concerned, not under other services to support carers.

67 Authorities may need to maintain separate subdivisions for some or all of the services listed above so that they can identify the total amount spent on each type of service, for example home care.

68 Advocacy includes the costs of any designated posts and grants to voluntary organisations providing advocacy services, translation/transcription and interpretation services (possibly on an apportioned basis).

69 Other services includes grants to voluntary organisations that cannot be more specifically placed under another heading. Inappropriate use of this residual category will invalidate comparisons across the other Older People subdivisions. It should only be used when no other heading or headings are appropriate and, in particular; it should not be used to avoid the need for allocation across services or client groups.

PEOPLE WITH PHYSICAL OR SENSORY DISABILITIES70 This division includes the costs of services to people aged 18 to 64 where the primary reason

for their care is related to a physical or sensory disability. There are 14 subdivisions:




� Home care


� Meals

� Day care

� Supported employment


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� Nursing homes

� Residential care (registered)

� Other residential care


� Advocacy

� Other services.

71 Whether or not these subdivisions are used, this guidance defines the scope of services in the People with Physical or Sensory Disabilities division.

72 With the exception of Supported Employment, these subdivisions have been described above for Older People. The guidance notes in that section apply here.

73 Supported employment includes:

� Supported workshops

� Meals provided at workshops

� Transport to the workshop

� Other supported employment, such as the blind home workers’ scheme

� Tools and equipment for supported employment grant aided by the government.

74 Include services formerly known as sheltered employment.

PEOPLE WITH LEARNING DISABILITIES75 This division includes the costs of services to people aged 18 to 64 where the primary reason

for their care is related to a learning disability. There are 14 subdivisions:




� Home care


� Meals

� Day care


� Nursing homes




� Advocacy

� Other services.

76 Whether or not these subdivisions are used, this guidance defines the scope of services in the People with Learning Disabilities division.


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77 Guidance on supported employment in the section on People with Physical or Sensory Disabilities division should be applied to People with Learning Disabilities. All other subdivisions have been defined in the section on Older People.

PEOPLE WITH MENTAL HEALTH NEEDS78 This division includes the costs of services to people aged 18 to 64 where the primary reason

for their care is related to mental health needs, including but not restricted to diagnosed mental illness. People under 65 diagnosed with dementia are also included. At present people with head injuries would normally also be included within this division.

79 There are 12 subdivisions:


� Home care


� Meals

� Day care


� Nursing homes




� Advocacy

� Other services.

80 Whether or not these subdivisions are used, this guidance defines the scope of services in the People with Mental Health Needs division.

81 Guidance on supported employment in the section on People with Physical or Sensory Disabilities should be applied to People with Mental Health Needs. All other subdivisions have been defined in the section on Older People.

PEOPLE WITH ADDICTIONS/SUBSTANCE MISUSE82 This division includes the costs of services to people aged 18 to 64 where the primary reason

for their care is related to drug and alcohol addictions or substance misuse.



� Home care


� Meals

� Day care



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� Nursing homes




� Other services.

84 The definitions of these subdivisions in the section on Older People should be applied to people with addictions/substance misuse.

PEOPLE WITH AIDS/HIV85 This division includes the costs of services to people with AIDS/HIV where the primary reason

for their care is related to this condition.



� Home care


� Meals

� Day care

� Nursing homes




� Advocacy

� Other services.

87 The definitions of these subdivisions in the section on Older People should be applied to people with AIDS/HIV.

VULNERABLE HOMELESS PEOPLE 88 The costs of services to homeless people aged 16 or over with social work needs should be

recorded in the client group division of service which best reflects those needs.

SERVICES TO ASYLUM SEEKERS AND REFUGEES89 This division includes the costs of all services to asylum seekers and refugees of all ages.

There are three subdivisions:

� Unaccompanied children

� Families

� Lone adults.


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90 Whether or not these subdivisions are used, this guidance defines the scope of services in the Asylum Seekers and Refugees division.

91 It is likely in many authorities that some of these costs will be incurred in departments other than social work. All assessment, advisory, welfare rights and assistance costs should, however, be recorded here regardless of which local authority department incurs them. The costs of other direct service provided to asylum seekers, such as housing and education, should be included as part of those services, not here.

92 Unaccompanied children includes the costs of finding accommodation, ensuring access to education services, etc.

93 Families includes giving advice and assisting with accommodation.

94 Lone adults includes giving advice and assisting with accommodation.

CRIMINAL JUSTICE SOCIAL WORK SERVICES95 This division comprises all social work involvement in the criminal justice system in Scotland,

including services to the courts, to offenders, and to victims of crime. Some of these services are 100% government funded up to an approved limit, others are funded from councils’ own funds. Where approved limits are exceeded for grant-funded services, the excess is similarly funded from councils’ own funds. The cost of all services should be shown gross with grant shown as income: this subjective analysis will identify the grant-funded aspects.

96 Subdivisions for this service reflect service planning requirements. There are six subdivisions:

� Court services

� Criminal justice fieldwork

� Community service

� Prison social work

� Supported accommodation and hostels

� Other.

97 Whether or not these subdivisions are used, the guidance that follows define the scope of the Criminal Justice Social Work service division.

98 Court services are court-based social work services, but exclude the costs of social enquiry reports (SERs) prepared by criminal justice fieldwork teams. Diversion from prosecution services and bail schemes are also included here.

99 Criminal justice fieldwork covers community-based criminal justice practice teams, and includes the costs of SERs (excluding those prepared by court-based staff), probation services, supervised attendance, throughcare, home circumstances reports, fine supervision, services for victims of crime, services to families in relation to the release of prisoners, and other services discharged by criminal justice fieldwork teams.

100 Community service covers expenditure on community service teams. Where these staff are integrated with criminal justice fieldwork, an apportionment of costs between the two subdivisions will be necessary.


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101 Prison social work covers expenditure on social work staff based in prisons and young offender institutions.

102 Supported accommodation and hostels includes all registered and unregistered accommodation for offenders and ex-offenders, whether provided by the council or funded through voluntary organisations.

103 Other includes all other services, including grants to voluntary organisations, which do not fall within the definitions provided for other subdivisions.

104 In addition to the above subdivisions, authorities may wish to subdivide further to reflect the categories of service covered by the criminal justice specific grant. The table below shows the current split between 100%-funded services and those that remain funded by Revenue Support Grant, council tax and other income; these categories should be used as the basis for further subdivisions:

Services funded by specific grant Council-funded services

� Diversion from prosecution (some LAs only) � Diversion from prosecution (some LAs only)

� Social enquiry reports � Deferred sentence reports and supervision

� Other court services � Bail services

� Probation orders � Fine supervision, mean enquiry reports, etc

� Community service orders � Crime prevention and public safety

� Supervised attendance orders � Services for victims of crime

� Throughcare licences/orders (parole, non-parole licences, supervised release orders, extended supervision sentences)

� Services to families in relation to release of prisoners

� Home circumstances reports

� Voluntary assistance following release from custody

� Support programmes

� Supported accommodation

� Bail schemes (some LAs only)

� Drug treatment and testing orders (some LAs only)

SUPPORT SERVICE AND MANAGEMENT COSTS (OPTIONAL HOLDING ACCOUNTS)105 This division of service is provided as a heading for whatever (optional) holding accounts an

authority might wish to use for support and management costs related to Social Work. These may be provided centrally by another department of the council, externally by a contractor or by staff employed within the Social Work directorate or department. It will generally be preferable to charge such costs directly to front-line cost headings wherever possible. For example, externally provided policy development support may be directly chargeable to the Service Strategy division of service. In many cases, however, particularly as regards staff, this will not be feasible and apportionments (eg based on staff time) will be required.


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106 Support and management holding accounts may be useful for:

� Management

� Central advisory, policy and development units

� Training

� Personnel

� Finance

� Research and management information

� Publicity/communications


� Administration


� Contracting

� Quality assurance (including the complaints system not related to the statutory complaints procedure)

� Welfare rights.

107 Others may be added as required.

108 There are also some areas, eg transport and catering, where some costs are incurred as an integral part of a service to a client but others relate to staff or more general activities. These can, if required, be charged initially to a holding account, but the client-related aspects should be transferred to the service (eg day care) to which they relate.

109 All costs accounted for in these accounts should be charged, allocated or apportioned to the other service divisions described above before the accounts are closed.

Central Services


PART TWO: THE CORPORATE AND DEMOCRATIC CORE

PART THREE: NON DISTRIBUTED COSTS


PART FIVE: ITEMS EXCLUDED FROM THE COST OF SERVICES


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INTRODUCTION1 Following a consultation exercise in 1999 a Statement of Principles for Best Value Accounting

was developed. The third of these principles states:

The definition of Total Cost will be consistent with the financial accounting framework established by the SORP.

The definition of Total Cost will include all support service costs and capital charges. The non-allocable costs will include a redefined Corporate and Democratic Core and clearly defined unapportionable overheads.

2 The first purpose of this Service Expenditure Analysis for Central Services is, therefore, to clearly define:

� Corporate and Democratic Core costs

� Non Distributed Costs.

3 The fourth Best Value accounting principle derived from the consultation was that ‘There will be segmental reporting of total costs’, meaning that expenditure will need to be analysed over the services provided by local authorities. The Service Reporting Code of Practice for Local Authorities contains a series of Service Expenditure Analyses for services commonly devolved from a local authority’s centre to semi-autonomous directorates, divisions or departments.

4 The series of Service Expenditure Analyses does not, however, cover a number of services often provided from each local authority’s centre. Therefore, the second purpose of this Service Expenditure Analysis for Central Services is to provide a standard Service Expenditure Analysis for those services to the public that are often provided from an authority’s centre.

5 The Service Expenditure Analysis for Central Services is therefore presented in the following parts:

� Part Two: The Corporate and Democratic Core costs

� Part Three: Non Distributed Costs


STATUS OF THE SERVICE EXPENDITURE ANALYSIS6 The Service Expenditure Analysis for Central Services that follows this introduction supersedes

all previous versions that apply to Scotland.




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PART TWO: THE CORPORATE AND DEMOCRATIC CORE

INTRODUCTION1 The definition of CDC used prior to the implementation of the Service Expenditure Analysis for

local authorities was that it comprised all activities that local authorities engaged in because they are elected and multi-purpose organisations. This definition was increasingly difficult to apply, as:

� The range of democratic and governance models became wider as a result of Best Value and the modernising agenda.

� It is now recognised that single-purpose authorities, such as police authorities and fire brigades, carry some equivalent costs. For example, the costs associated with their democratic structure.

2 The Service Reporting Code of Practice for Local Authorities definition of CDC costs is, therefore, wider than that previously adopted, and to promote consistency, which is so important under Best Value, it is also more prescriptive. This leaves less room for interpretation, as this inevitably leads to inconsistent practices. It defines CDC costs as comprising two categories of expenditure:



3 Each category of CDC costs is defined in Section 2 of the SeRCOP, as follows.


This includes all aspects of members’ activities in that capacity, including corporate, programme and service policy making and more general activities relating to governance and the representation of local interests.


� Corporate Management

... concerns those activities and costs that provide the infrastructure that allows services to be provided, whether by the authority or not, and the information that is required for public accountability. Activities that relate to the provision of services, even indirectly, are overheads on those services. There are no subdivisions recommended for CM.’


4 Table 1 summarises what is included in each category of CDC costs.


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Table 1: Corporate and Democratic Core Costs


What does it include?



(a) All members’ allowances and expenses, including telephone calls, postage, equipment costs, hospitality, accommodation costs, training, conference fees etc, incurred when undertaking activities on behalf of the authority, as local representatives or to represent local interests (see paragraph 5 below).

(b) The costs associated with officer time spent on appropriate advice and support activities (see paragraph 6 below).

(c) Subscriptions to local authority associations and provincial councils.


(a) The functions of the individual who is designated to be the head of the paid service (frequently the chief executive), except those concerned with the direct management of services or the provision of advice and support to members.

(b) Maintaining statutory registers, eg of politically sensitive posts, unused land, payments to members and members’ interests.


(d) Completing and submitting and/or publishing all service staffing returns, Statements of Accounts, annual reports, public performance reports and Best Value performance plans.

(e) Estimating, negotiating, accounting for and allocating corporate-level resources such as credit approvals and other sources of capital finance, precepts, block grants and taxes.



(h) The costs of treasury management. In Scotland treasury management charges are appropriately charged to the Loans Fund.

(i) Bank charges, other than those which relate to accounts operated on a decentralised basis. In Scotland bank charges are appropriately charged to the Loans Fund.

(Section 2, SeRCOP)


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GUIDANCE ON WHAT TO INCLUDE IN CDC COSTS

Democratic Representation and Management5 Section 2 of SeRCOP explains exactly what to include in CDC costs. In brief, members’

allowances and expenses include:

� Preparing, making, defending and opposing proposals for local government reorganisation, changes of functions, boundary changes, local legislation and attending government committees on behalf of the authority or the local area

� Making appointments to other public bodies and responding to their requests for information and advice

� Advising voluntary bodies

� Following up particular issues raised by constituents

� Attending conferences and meetings organised by local authority associations and similar organisations

� Civic ceremonials, including mayor making, the granting of freedom, town twinning, civic regalia and jubilee/millennium celebrations.

6 Again in brief, officer advice and support to members includes:


� Professional advice and support, for example in challenging proposals which would adversely affect the council.

� The functions of monitoring officers designated under section 114 of the Local Government Finance Act 1988 and section 5 of the Local Government and Housing Act 1989 (or equivalent legislation in Scotland), when acting in that capacity (ie the duty to consider whether proposals, actions or omissions would give rise to breaches of the law or maladministration and to report on them).







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Corporate Management Costs7 Section 2 of SeRCOP explains exactly what to include in Corporate Management costs. In

brief, it includes the costs of:

� Chief executive or other designated head of the paid service – the functions of the individual designated the head of the paid service (frequently the chief executive), except those concerned with the direct management of services or the provision of advice and support to members.

� Maintaining statutory registers, eg of politically sensitive posts, unused land, payments to members and members’ interests, but specifically excluding the electoral register, which is included in the Elections service incorporated in Central Services to the Public, below.

� Providing information required by members of the public in the exercise of statutory rights, except if it is about a specific service, in which case the cost is quite reasonably charged to that service.

� Completing, submitting and/or publishing corporate information such as corporate service staffing returns, Statements of Accounts, annual reports, public performance reports and Best Value performance plans.

� Estimating, negotiating, accounting for and allocating corporate-level resources such as credit approvals and other sources of capital finance, precepts, block grants and taxes.

� The costs of statutory external audit including value for money work, but excluding work done by external auditors that would otherwise be done within the authority or by separate contractors, eg consultancy work. Also excluded is work done to audit grant claims. These costs should be charged to services, including the CDC if the grant claim is of a corporate nature. Where such work includes a reimbursement, it should be treated as income.

� The costs of external inspections. Under Best Value, local authorities will be subject to external inspections. Authorities will have to bear the costs associated with these where they are undertaken by the Best Value Inspectorate, rather than other specialist inspectorates such as Ofsted and HMFSI. As Best Value inspections are likely to concentrate on particular functions or groups of functions, the associated costs will vary significantly from year to year. The inclusion of such costs within the total costs of individual services could have a significant distorting effect and should, therefore, be accounted for as a Corporate Management cost.

� The costs of treasury management and bank charges are included because treasury management fits within the definition of Corporate Management as including those activities and costs which provide the infrastructure which allows services to be provided. One outcome from treasury management activity is the level of bank charges relating to main council bank accounts. Therefore, these charges should also be included in Corporate Management. Charges for any accounts operated on a decentralised basis, eg those held by schools, should be a charge against the service of the account holder. Note: in Scotland, bank charges and treasury management costs should be charged to the consolidated loans fund, where appropriate.


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CONTRIBUTIONS TO CORPORATE AND DEMOCRATIC CORE8 The following extract from the Statement of Principles for Best Value Accounting considers

whether the Housing Revenue Account and other non-General-Fund activities should contribute to the costs of the Corporate and Democratic Core:

Corporate and Democratic Core will be split into Corporate Management and Democratic Management and Representation with clear and explicit guidance on the scope of these activities. The latter should include all councillor-based activities. Consideration needs to be given to determining a contribution from the HRA and other principal non-general fund activities (eg pension funds) to these costs.

9 The CIPFA Advisory Group on Best Value Accounting discussed this issue in detail and concluded that a contribution should be made. As a consequence of this conclusion, the CDC may have income as well as expenditure, the income being the contribution from non-General Fund activities. Exactly how this contribution is calculated will depend on local organisational and political structures, so local discretion will need to be exercised to make a realistic estimate of the relevant contribution. The guidance note to the Service Expenditure Analysis for Housing Services gives some advice about this. It states the contribution should be calculated:

With regard to how officers and members have spent their time, each authority needs to calculate the proportion of its CDC costs that relate to its own housing stock.

10 A similar estimate of the time that members and officers have spent on CDC activities that relate to the pension fund, etc will need to be made.


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INTRODUCTION1 Section 2 of SeRCOP states that all expenditure attributable to the service/activity is included

in the gross total cost of that service/activity. This is specifically stated to include employee costs, expenditure relating to premises and transport, supplies and services, third party payments, transfer payments, support services and depreciation. Impairment losses are also included here where these are charged to revenue.

2 The majority of central support services such as finance, internal audit, personnel, IT, legal services, procurement etc should be charged, allocated or apportioned to the service divisions defined in the Service Expenditure Analysis. SeRCOP, however, specifically excludes certain costs and overheads it defines as Non Distributed Costs. It defines these as follows:


(b) gains and losses on settlements (if any)



(e) impairment losses relating to assets under construction and other surplus assets held for disposal (but which do not satisfy the criteria in the Code to be classified as held for sale) and depreciation on the latter category of assets

(f) the revenue expenditure involved in holding surplus assets (eg security costs).(Paragraph 2.42, Section 2, SeRCOP)

GUIDANCE ON WHAT TO INCLUDE IN NON DISTRIBUTED COSTS3 The two main areas within the definition of Non Distributed Costs are costs relating to

retirement benefits (items (a) and (b) above) and unused and unusable shares of assets (items (c) and (d)). Further guidance on each of these elements of cost can be found in Section 2 of SeRCOP. This guidance is summarised below.

Retirement Benefits4 For funded and unfunded defined benefit pension schemes (this will include police and

fire service uniformed staff schemes), the cost of retirement benefits to be included in the definition of total cost of a service will be current service pension costs. All other elements of retirement benefits costs (past service costs, and gains and losses on settlements) will be excluded from the definition of total costs of services and are defined as Non Distributed Costs (NDC).


and other long-term unused assets that are unused as a result of reduced activity or loss of


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work caused by either voluntary competitive tendering (VCT) or the loss of a function or area of work.

6 These costs are included within NDC to reflect the reality that there is no service to charge costs on to because those costs relate to unused capacity (IT or otherwise). It is important to note that where services are using the capacity, whether by choice or otherwise, they should be bearing a fair share of the cost. Similarly, if previous decisions about, for example, the choice of IT system have resulted in a cost which might be higher than the services concerned would wish, they will still have to bear the full cost.

7 It is important to note that these two subdivisions should be used in the narrowly defined way described above. They are not a general mechanism to insulate services from the cost impact of past decisions.

CONTRIBUTIONS TO NON DISTRIBUTED COSTS8 The argument given in Section 2 of SeRCOP that accounts such as the HRA should make a

contribution to CDC costs is also extended to NDC (see paragraph 8 in Part Two above).

9 Again, each authority will wish to satisfy itself that it complies with the statutory definition of the HRA ringfence. Exactly how this contribution is calculated will depend on local factors:

� For retirement benefits, authorities will need to consider in detail the past service costs (and gains and losses on settlements) attributable to the HRA. It may be possible that some past service costs are directly attributable to HRA employees or that there may need to be some pro rating of past service costs on the most appropriate, reasonable and justifiable basis identified by the authority. Each authority would need to consider the nature of the improvement in benefits.

� For unused asset costs that arise because of a loss of work or function related to non-General Fund activities, eg the loss of a housing management contract, there may be excess computer capacity previously borne by the HRA.

10 Such contributions will need to comply with the definition of NDC at Section 2 of SeRCOP.


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INTRODUCTION1 The fourth Best Value accounting principle, ‘There will be segmental reporting of total costs’,

means that all local authority services, including those provided by central departments, should be accounted for separately in the Service Expenditure Analysis. Table 2 below shows the main services to the public that are often provided by central departments and the new standard classification as it applies to them. Additional guidance on each item follows after Table 2.

Table 2: Central Services to the Public



Local Tax Collection � Council tax collection

� Council tax benefits administration


� Non-domestic rates collection.




Emergency Planning

Local Land Charges

General Grants, Bequests and

Donations

District Courts

Licensing

2 Since these services have little in common, and many could quite feasibly be provided in a service department or by an external contractor, each is classified as a division of service in its own right. This should not affect their accounting treatment. As separate divisions of service, each should be accounted for separately. It may also be the case in some authorities that other services to the public are provided from a central department. Such services should be identified and in accounting terms included in the service identified by CIPFA in this Service Expenditure Analysis.


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GUIDANCE ON WHAT TO INCLUDE IN CENTRAL SERVICES TO THE PUBLIC

Local Tax Collection3 The Local Government Act 1988 required each billing authority in England and Wales to

maintain a separate collection fund to show its transactions for non-domestic rates and the council tax, and how these have been distributed to precepting authorities and the General Fund. The collection fund includes all income from council tax, council tax benefits (if applicable) and non-domestic rates. It also includes payments of precepts, transactions with the national business rate pool, provisions for bad debts and adjustments for previous years’ collection fund deficits and surpluses.

4 The Abolition of Domestic Rates etc (Scotland) Act 1987 and the Local Government Finance Act 1992 make similar arrangements for Scotland, except that there is no statutory collection fund.

5 In all cases, the costs of local tax collection should be accounted for as a separate service.

6 Some authorities give discounts for prompt payment of council tax. Such discounts are not a charge on the collection fund, so they should also be accounted for under the Local Tax Collection division of service.

7 This division contains the following subdivisions:

� Council tax collection

� Council tax benefits/council tax support administration


� Non-domestic rates collection costs (less an allowance from the national non-domestic rates pool).


from members of the public for registrations, certificates and copies. The important issue under the Service Reporting Code of Practice for Local Authorities is that the gross costs and gross income should each be shown. They should not be netted off against each other.

Elections9 It is possible to argue that the cost of local elections and of maintaining the register of

electors should be included in the Democratic Representation and Management element of CDC costs. However, election costs relate to many types of elections, not just local ones – eg local authorities act as agents to administer parish council, national and Scottish Parliamentary, Welsh Assembly and European elections.


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10 The costs of administering these elections as agents are not a part of the CDC, because they are not connected with the management of the authority. They arise because a service is given to other bodies. For many authorities, these costs are not significant and accounting for them separately from local elections may not be justified. Where the costs are significant, they will vary from year to year with the electoral cycle. Their inclusion in the CDC could, therefore, distort Best Value year-on-year comparisons.

11 Similarly, the same electoral register is used for all elections and any division of the costs of its preparation and maintenance would be arbitrary. It is, therefore, logical and within the spirit of Best Value that the costs of administering all elections are recorded together with the cost of maintaining the register of electors under a service heading Elections.

12 Within the Elections service, there are two subdivisions:



Emergency Planning13 This heading is for recording the cost, and any grant income, of arrangements to provide

integrated emergency planning under the Civil Contingencies Act 2004. These arrangements include civil emergency and disaster planning and support as well as the maintenance of emergency networks and the conducting of exercises. Note: fire service civil defence and emergency planning expenditure and grant income should be recorded under the Fire Service Expenditure Analysis.

Local Land Charges14 The costs of maintaining the register of local land charges and dealing with requests for

certificates of search and other enquiries should be recorded here, along with income from charges made. Income and expenditure should each be recorded on a gross basis.

General Grants, Bequests and Donations15 Most of the grants given by local authorities are related to specific services and should be

recorded under the appropriate service heading. There may, however, be examples of grants which are not related to any of the other functions of the authority and which are given under powers that are not service-specific. These should be recorded under this heading, which would also cover any grants, bequests or donations received by the authority where no specific purpose has been determined.

District Courts16 This covers district courts that were set up under the District Courts (Scotland) Act 1975 under

the administrative responsibility of the local authority to hear certain criminal offences. For this service, no divisions of service are specified. Similarly, no subdivisions of service are recommended, although authorities may wish to subdivide cost to reflect local organisational arrangements.


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Licensing17 All licensing activity not classified as Democratic Representation and Management by a

council should be accounted for here. This rationalises the accounts, which previously showed different licensing work in different places. This new simpler method of accounting:


� Opens up the possibility for Best Value review of licensing activity.

18 Examples of licensing activity to include here are:

� Public entertainment licensing

� Hackney carriages

� Private hire vehicles

� Theatres

� Cinemas

� Scaffold licensing

� Hoarding licensing

� Handling applications for felling licences.

� Income from licence fees should be accounted for here.


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PART FIVE: ITEMS EXCLUDED FROM THE COST OF SERVICES

INTRODUCTION 1 This section covers all those cost and income items that arise as a result of running a local

authority service that do not form part of the costs of any one service. They are costs that fall within the determination of ‘Surplus or Deficit on the Provision of Services’, but not within the Cost of Services as defined by Section 2 of SeRCOP. Table 3 below illustrates the standard classification for this heading.

Table 3: Items Excluded from the Cost of Services



Other Operating Expenditure � Precepts and levies

� Gains/losses on disposal of non-current assets

Financing and Investment Income � Interest payable and similar charges

� Net interest on the net defined benefit liability (asset)

� Interest income

� Income, expenditure and changes in the fair value of investment properties

� Trading account surpluses and deficits not allocated back to services

� Other investment income.

Surplus or Deficit on Discontinued Operations

Taxation and Non-specific Grant Income � Council tax

� Non-domestic rate income

� Unringfenced government grants

� Capital grants and contributions.

GUIDANCE ON WHAT TO INCLUDE

Overview 2 A detailed explanation of the above items is available in the Code of Practice for Local

Authorities in the United Kingdom: Guidance Notes for Practitioners. The paragraphs below provide a brief description of some elements that are excluded from the Cost of Services.

Other Operating Expenditure3 At present in Scotland there are no precepting bodies affecting Scottish local authorities. In

England and Wales this division of service includes precepts of local precepting authorities, such as parish councils, and levies by bodies such as the National Rivers Authority, which


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are not a charge on the collection fund. It is good practice to have a separate subdivision of service for each precepting authority or levying body.

Trading Account Surpluses and Deficits4 Profits, such as dividends from subsidiary and associated companies, may be passed on

to parent authorities. Relevant losses may have to be borne by them if not met from the company’s reserves. All such income and expenditure should be included within other operating costs, alongside any surpluses and deficits that relate to expenditure that cannot be allocated to any of the other divisions or subdivisions of service in the SEA in Section 3.

5 For further guidance on accounting for trading account surpluses and deficits, see paragraph 2.28 to 2.36 of Section 2 of SeRCOP.

Interest Payable and Similar Charges 6 This includes all external interest payable and similar charges whether on loan debt or other

long-term liabilities such as finance leases and includes the write-off and amortisation of premiums and discounts.

Interest Income7 General Fund and County Fund balances often contribute significantly to interest receivable

and payable. It would, however, be laborious to apportion this interest to each service, and it would in any case be found to be attributable to many causes which are not related to the provision of services, such as council tax collection and uncleared cheques.

8 In addition to interest on fund balances, organisations may also hold investment properties. Income and expenditure, including changes in fair value, on investment properties should be treated as Financing and Investment Income since these do not arise directly from the provision of the organisation’s services.

Net Interest on the net Defined Benefit Liability (Asset) 9 Net Interest on the Net Defined Benefit Liability (Asset) should be recognised in the Financing

and Investment Income section of the Comprehensive Income and Expenditure Statement. For further detail, see the Code of Practice on Local Authority Accounting in the United Kingdom.

SECTION 3

Service Expenditure Analysis for Northern Ireland

INTRODUCTION3.1 In December 2000, CIPFA approved Sections 1 and 2 of the Best Value Accounting Code

of Practice (BVACOP), to be applicable to district councils in Northern Ireland with effect from 1 April 2001. However, it was agreed that further work would be required to review the appropriateness of the Service Expenditure Analysis (SEA) for Northern Ireland. This work was undertaken and culminated in the issue of this guidance. This SEA has been applicable to district councils in Northern Ireland with effect from 1 April 2003. For 2015/16, the publication previously entitled the Best Value Accounting Code of Practice has been revised and updated to keep pace with the IFRS-based Code of Practice on Local Authority Accounting in the United Kingdom (the Code). To reflect the differential legislative frameworks in each UK administration, BVACOP was renamed the Service Reporting Code of Practice for Local Authorities (SeRCOP).

The duty of Best Value that applies to district councils in Northern Ireland from 1 April 2002 will increase expectations about:

� the level of detail that will be available from district council accounts

� the comparability of different district council accounts

� the extent to which a single set of financial records should be compatible with the diverse reporting requirements placed upon district councils.

3.2 Every item of expenditure or income can be analysed both in terms of the new SEA and in accordance with the definition of income and expenditure set out in the Code of Practice on Local Authority Accounting in the United Kingdom. The divisions and subdivisions set out in SeRCOP have been reflected in revised service revenue accounts since 1 April 2002.

FORMAT OF THE REVISED SERVICE EXPENDITURE ANALYSIS3.3 Each service has been analysed across a number of mandatory service divisions. These

service divisions are then split into several subdivisions. A guidance note has also been included to support the SEA.


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3.4 The aim of the hierarchy within the SEA is to promote consistency between district councils in terms of both format and comparability of financial reporting. To achieve this, a common format of service divisions and subdivisions is recommended:

� Service divisions represent a mandatory level to which all district councils are expected to be able to aggregate their costs. Total costs will also need to be accounted for at a lower level.

� Subdivisions represent a mandatory sub-aggregation of costs in the majority of cases as required by the General Fund – Service Income and Expenditure Analysis provided to the Department of the Environment (DOE). District councils are required to follow these as closely as possible, given their local circumstances. The basis for this recommendation is that benchmarking, which is central to the comparison element of Best Value, will be much easier if financial information is broadly similar at this lower level of detail.

Not all district councils will have the full range of services set out in this SEA, and, in these circumstances, the entry for that particular service division or subdivision should be left blank.

The guidance notes may or may not apply to individual district councils. The purpose of the guidance notes is to promote consistency between district councils’ accounting records. It is therefore important that, where the items on the guidance notes do apply to a district council, it accounts for them in the service division identified in the guidance note, regardless of local management arrangements.

3.5 It should be emphasised that district councils have total organisational freedom. Indeed, Best Value encourages innovative organisational arrangements. Lower-level detail will, in practice, reflect this freedom and will normally follow local organisational and managerial arrangements. The important issue is that, regardless of the organisational arrangements in place, the aggregation of costs at service division level is consistent between district councils so that comparisons can be made.

3.6 The guidance contained in the SEA layout replicates in content and structure the General Fund – Service Income and Expenditure Analysis return made to the DOE.


reporting. Total cost is defined in Section 2 of SeRCOP. The total cost principle applies to each item at the mandatory service division level in the SEA. Specifically, this means that, in addition to direct costs, each service division must include an appropriate share of:

� depreciation


� impairment loss identified on assets used to provide the services of a council

� amortised deferred charges and intangible assets

� current service pension costs per IAS 19 Employee Benefits.

SECTION 3 \ SERVICE EXPENDITURE ANALYSIS FOR NORTHERN IRELAND

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STATUS OF THE SERVICE EXPENDITURE ANALYSIS3.8 The SEA that follows supersedes all previous versions that apply to Northern Ireland and its

layout is designed to replicate the requirements of the General Fund – Service Income and Expenditure Analysis return to the DOE.

3.9 The following individual services are presented, demonstrating the breakdown of the hierarchy of service divisions and subdivisions, followed by guidance notes to further explain the definitions of those service divisions and subdivisions:

Leisure and Recreation Services

� Culture and Heritage

� Recreation and Sport

� Tourism

� Community Services.


� Cemetery, Cremation and Mortuary Services

� Environmental Health

� Flood Defence and Land Drainage

� Public Conveniences

� Licensing

� Other Cleaning

� Waste Collection

� Waste Disposal

� Other Community Assets

� Minor Works.


� Community Planning


� EU Rural Development

� Urban Regeneration and Community Development

� Planning Policy



� Environmental Initiatives.


� Off-street parking Services.


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� Corporate Management.

Other Services

� Trading Services

� Non Distributed Costs

� Central Services to the Public.

UPDATING THE SERVICE REPORTING CODE OF PRACTICE FOR LOCAL AUTHORITIES3.10 CIPFA would welcome any comments or suggestions that could contribute to the process of

updating SeRCOP. Please contact the CIPFA Northern Ireland Office on 02890 266770 if you have any comments on the SEA.

Leisure and Recreation Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR LEISURE AND RECREATION SERVICES

PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN LEISURE AND RECREATION SERVICES


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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR LEISURE AND RECREATION SERVICES


Subdivisions of Service (Mandatory)



� Heritage

� Theatres and public entertainment

� Museums and art galleries.

Recreation and Sport � Allotments


� Foreshore




� Golf courses

� Recreation parks and open spaces.


� Tourist facilities

� Promotional events and festivals


Community Services � Community centres

� Community relations

� Community-run festivals.



Note 1: Section 2 of SeRCOP makes it clear that Corporate and Democratic Core costs and Non Distributed Costs should be kept separate from the SEA above.

Note 2: This guidance should be read in conjunction with the introduction to the SEA for all local government services and CIPFA’s statement of principles for Best Value accounting.


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PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN LEISURE AND RECREATION SERVICES

INTRODUCTION1 Central to the notion of Best Value is the ability to reliably compare the performance of

different district councils. Comparison is central because it can inform consultation, stimulate challenge and enable competitiveness to be considered and assessed.

2 The comparison process is much more far-reaching than a simple cost comparison. However, in so far as some elements of any comparison will be financially based, it is important that the financial inputs are accurate, compiled on the same basis and aligned with the non-financial aspects being measured.

3 The guidance notes have been compiled from the following sources:

� Department of the Environment’s Local Government Division

� CIPFAstats and CIPFA TISonline

� Consultation with various local government officers’ professional associations.

The aim has been to promote consistency between CIPFA’s definitions and those provided by other organisations and to make them as comprehensive and user friendly as possible.

UPDATING THE GUIDANCE4 CIPFA is dedicated to keeping its guidance up to date. This guidance will be reviewed on an

annual basis.

LEISURE AND RECREATION SERVICES5 This guidance note covers expenditure on Leisure and Recreation Services.

6 The Recreation and Youth Service (Northern Ireland) Order 1986 imposes a duty on district councils to ensure that there is an adequate provision of facilities for leisure and recreation activities.

Culture and Heritage7 The Culture and Heritage division will capture expenditure related to the arts and local

history. It is supported by a number of mandatory subdivisions, described below.

8 Archives: capture all costs of the archive services provided under The Recreation and Youth Service (Northern Ireland) Order 1986. The Order empowers a district council to make byelaws for the regulation and preservation of facilities for leisure and recreation, sporting, cultural or social activities provided for, or in conjunction with, the district council in the area of the district council. Legislation may require in the future that this subdivision becomes mandatory and it would therefore have to become a division of service.


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Archives are distinguished from records, which are defined as including charters, minutes, accounts and other documents and any other records, of whatever form and in whatever medium, which convey information relating to the composition and operation of the district council.

9 Arts development and support: include direct expenditure on the arts and grants or other contributions to individuals or voluntary organisations.

10 Heritage: include expenditure on initiatives or services designed to develop and maintain an awareness of local history including genealogy. Some cultural grants to voluntary groups will be included here. Special events to celebrate historical events should also be included.

11 Theatres and public entertainment: include here expenditure and income on facilities operated primarily for the provision of public entertainment and social activities, including:

� theatres

� concert halls

� dance halls

� other entertainment premises

� holding dances

� maintaining a band/orchestra

� arts and crafts fairs and other events

� arranging events, eg concerts, pantomimes, etc

� promoting events

� providing refreshments at events

� public halls

� village halls.

12 Museums and art galleries: The Museums and Galleries (Northern Ireland) Order 1998 empowers councils to provide museums including Armagh County Museum. Include the gross costs of running the museums and galleries here and show gross income separately. Income earned from visitors should be shown as gross income and not netted off against expenditure.

Recreation and Sport13 The Recreation and Youth Service (Northern Ireland) Order 1986 makes provision for adequate

provision of recreational facilities. This division of service captures this information. The following mandatory subdivisions are recommended to assist with consistency of information.

14 Allotments: include expenditure on allotments and rents collected from tenants here where allotments are provided under the relevant legislation.


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15 Countryside recreation and management: include facilities in country areas that are aimed at visitors, but provide recreation facilities for residents as well, including:

� country parks

� picnic areas

� nature reserves

� bridleways and towpaths

� maintenance of rights of way

� canal work

� countryside access.

16 Foreshore: expenditure on the foreshore (land between the high water limit and the coastline proper) and associated promenade and piers. Exclude cleansing, which should be included within the Other Cleaning division of Environmental Services.

17 Sports development and community recreation: include development, outreach teams and local sports. Specific grants to voluntary or other groups should also be recorded here.

18 Indoor sports and recreation facilities: include indoor pools, sports halls and leisure centres and any attached slipper baths, laundry services, hydrotherapy pools, etc. Where an indoor facility has some outdoor provision, eg a five-a-side football area, include all costs as part of the indoor facility.

19 Outdoor sports and recreation facilities: include outdoor pools or lidos, running tracks, football pitches, pitch and putt courses, local water recreational facilities, Donaghdee Harbour, etc unless they are within the boundary of a larger recreational park (see below) or attached to an indoor facility. In such cases, code the full cost to the main facility, ie to the park or sports facility.

20 Golf courses: golf courses are potentially large and material operations in their own right. They could easily distort comparisons and, therefore, need to be shown separately. Include gross expenditure and gross income from players, refreshments sales, etc here.

21 Recreation parks and open spaces: include all public open spaces within the boundaries of a city, town or village. Costs associated with play areas, nature corners, public conveniences and sports facilities that are an integral part of the park must be included. Include also amenity planting on facilities not owned by the district council.

Tourism22 This division of service has four mandatory subdivisions, which are used to capture the costs

that district councils incur in contributing to tourism within their area.

23 Tourism policy, marketing and development: it is recommended that expenditure here should include:

� developing policies to promote tourism in the area

� promoting and advertising the area to potential visitors – exclude expenditure explicitly on particular arts activities and programmes

� contributions to regional tourist bodies


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� grants and loans given to support organisations offering attractions or other tourist-related facilities, eg what’s on leaflets, etc

� small-scale tourism accommodation development

� provision of business support including business start-up advice, training and delivery of customer care schemes to tourist-related facilities

� provision of advice to developers on tourism polices and related issues.

24 Tourist facilities: include gross expenditure and income incurred on facilities for tourists to use while visiting an area. Examples could include historic centres, aquariums and visitor centres.

25 Promotional events and festivals: include all promotional events except for business-related area promotion, which should be included under Economic Development. All festivals should be included here except for smaller community-based festivals. This is intended to include larger festivals which have the objective of bringing tourists to an area and for the promotion of an area. Costs incurred in respect of picking up litter after festivals should also be included here.

26 Camping and caravanning: include all camping and caravan sites but exclude travellers, who should be included under Environmental Services.

Community Services27 This service division has three mandatory subdivisions, which are used to capture the costs

that district councils incur in supporting individual communities within their area:

28 Community centres: include expenditure on premises provided for local residents, normally in return for a hire charge. Exclude premises used mainly for arts events, eg exhibitions, concerts, etc. Where facilities are shared between recreational and sports activities and community activities, costs should be apportioned between the various users of the facility. In the majority of cases it would be expected that this would be recreation and sport services.

29 Community relations: include all expenditure on community relations activities.

30 Community-run festivals: include expenditure incurred in supporting community festivals and in providing such festivals for local communities. Larger festivals, which are intended to promote the area and bring in tourists, should be coded to Tourism.

Service Management and Support Services31 Within direct services it is recognised that there will be a number of support services that are

provided directly to a particular division or subdivision of service and are held centrally.

32 Examples of support service costs that could apply include finance, advertising, accommodation costs and vehicle maintenance.

33 It is recognised that the majority of support costs will be collected centrally under Central Services and that most district councils will only have a small value of support service costs at direct service level.


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34 Where there are support service costs that are held at direct service level, these should be allocated to divisions and subdivisions of service in the first instance. After this allocation, all central support services should be allocated or apportioned to divisions and subdivisions of service as appropriate.



PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN ENVIRONMENTAL AND REGULATORY SERVICES


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� Cemeteries

� Crematoria

� Mortuaries


Environmental Health � Food safety


� Pollution control/clean air


� Provision of services to travellers’ sites

� Port health

� Pest control

� Public health

� Health and safety at work

� Dog control (including enforcement)

� Welfare of animals

� High hedges

� Consumer protection

� General environmental health.


� Defences against flooding

� Internal drainage levy work.

Public Conveniences � Public conveniences.

Licensing � Licensing.

Other Cleaning � Collection of fly-tipped rubbish



� Major clean-ups

� Street cleaning

� Other.

Waste Collection � Household waste

� Trade waste

� Skip service


� Abandoned vehicles

� Recycling (collection)

� Transfer stations.


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� Recycling (disposal)

� Trade waste.

Other Community Assets � Other community assets.

Minor Works � Minor works.






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PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN ENVIRONMENTAL SERVICES










annual basis.

ENVIRONMENTAL SERVICES5 This guidance note covers expenditure on Environmental Services.

Cemetery, Cremation and Mortuary Services6 Mandatory subdivisions:

7 Cemeteries: include all costs associated with the provision of cemeteries.

8 Crematoria: include all costs associated with the provision of crematoria.

9 Mortuaries: include the cost of mortuary and post-mortem services here. The Public Health (Ireland) Act 1878 requires some district councils to maintain mortuary services. The district council may choose to buy in such services from, for example, a local hospital. Costs associated with the burial of those found dead with no relatives should also be included here.

10 Closed churchyards: the costs of maintaining transferred churchyards should be accounted for here. Expenditure incurred on the maintenance of very old cemeteries should be included here.


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Environmental Health11 Include all services to promote and protect public health. Mandatory subdivisions:

12 Food safety (excluding fish): include all activity that aims to reduce the incidence of food and water-based poisoning as required by the Food Safety (Northern Ireland) Order 1991. Activities likely to be accounted for here include:

� providing advice

� regular inspections of food premises

� routine inspection and testing of food samples

� investigating complaints

� running food hygiene courses for people who handle food at work

� the operation of a good hygiene certificate scheme

� investigation into food or waterborne disease notifications and outbreaks

� maintaining food standards through the composition and labelling of foods.

13 Laboratories/fish/shellfish hygiene: expenditure incurred by fulfilling their requirements and carrying out enforcement of The Food Safety (Fishery Products and Live Shellfish Hygiene) Regulations (Northern Ireland) 1998.

14 Pollution control/clean air: include all activity that aims to reduce the incidence of pollution as required by The Pollution Control and Local Government (Northern Ireland) Order 1978. Include work performed to reduce:

� Noise pollution, including noisy party patrols and investigating complaints. Where a district council has adopted the Noise Act 1996, the costs of seizing noisy equipment can also be included here.

� Air pollution, including responsibilities under The Clean Air (Northern Ireland) Order 1991.

� Contaminated land as designated by The Waste and Contaminated Land (Northern Ireland) Order 1996.

� Anti-fly-tipping work including publicity costs, telephone hotlines and the costs of court actions. Exclude the removal of fly-tipped waste. It is included in Other Cleaning, below.

� Licensing of processes.

� Activities designated under industrial pollution control legislation.

15 Housing standards: include all costs associated with work to ensure that the residents of private sector accommodation live in safe and sanitary conditions. Likely activities to be included here are:

� inspections and enforcements in response to complaints from residents

� regulation of Houses in Multiple Occupation (HMOs)

� enforcements of the Statutory Housing Fitness Standard

� inspections of hotels, guest and boarding houses.


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16 Provision of services to travellers’ sites: include the costs of:

� providing travellers’ sites

� checking conditions at travellers’ sites.

17 Port health: include the cost of checks on:

� the fitness of food and animals in transit at ports and airports

� imported food

� standards on board vessels including pest control

� the food safety of inflight catering on aeroplanes

� aircraft with regard to hygiene

� the issuing of de-ratting certificates. Include income from the certificates.

18 Pest control: include the costs and income related to rodent and other pest control activity including mice, wasps, etc.

19 Public health: this category includes expenditure on a number of small activities. Local records are likely to identify each service separately. These include:

� infectious diseases under the Public Health Act (Northern Ireland) 1967

� temporary caravan sites

� promoting health education activity, eg leaflets, exhibitions, etc

� drain testing service

� drinking water quality

� quality of water in swimming pools

� quality of water from private drinking water supplies

� spillage of oil from domestic heating systems

� caravan site licensing/inspections

� property disrepair.

20 Health and safety at work: include the activities of district councils in enforcing The Health and Safety at Work (Northern Ireland) Order 1978 in shops, offices and a wide range of other premises including sporting events. The activities include enforcement inspections and visits, including investigations of notified accidents.

21 Dog control (including enforcement): include the activities of district councils in all aspects of dog control including the costs of dog wardens and running dog pounds as required by The Dogs (Northern Ireland) Order 1983, The Dangerous Dogs (Northern Ireland) Order 1991 and the relevant sections of The Litter (Northern Ireland) Order 1994.

22 Welfare of animals: include expenditure on activities of inspectors and prosecutions proceedings for any offence under the Welfare of Animals Act 2011.

23 High hedges: include expenditure incurred in dealing with a high hedge complaint, including assessing the application, gathering evidence and issuing a remedial notice, if required.

24 Consumer protection: include expenditure on activities to protect customers against illegal pricing, poor quality and unfair trading. Include non-food product safety, eg dangerous toys


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and the construction of motor cars. Include also expenditure on providing money advice and debt counselling, including district council funded advice centres. Include those regulatory services covered by the following:

� the Street Trading Regulation Act 1929

� alcohol byelaws

� sale of tobacco to under 16s

� the Shop (Sunday Trading etc) (Northern Ireland) Order 1997.

25 General environmental health: within some district councils, the range of services described above is provided by a small team. If the costs incurred by such teams were to be split over the subdivisions described above, the costs would be immaterial. In such circumstances, costs should be included within this subdivision.

Flood Defence and Land Drainage26 Subject to statutory authority, any activity relating to the prevention of flooding should be

included in this service division, such as:

� revenue expenditure (including capital charges) on the construction, alteration, improvement, repair, maintenance, demolition and removal of defences

� costs related to the maintenance and testing of flood warning systems.

Public Conveniences27 Include the costs of running, cleaning and maintaining public toilets where they are a

stand-alone facility. Public conveniences provided within parks must be included in the ‘Recreation parks and open spaces’ subdivision of Recreation and Sport. Income should also be accounted for on a gross basis.

Licensing28 All licensing activity not classed as DRM by a district council should be accounted for here.

This approach brings together all aspects of licensing work. It reflects an increasing trend by district councils to have a single multi-skilled team to deal with licensing work and opens up the possibility for Best Value reviews of licensing activity. Include those regulatory services covered by the following:

� public entertainment licensing

� petroleum

� amusements

� hackney carriages

� private hire vehicles

� theatres

� cinemas

� skip licensing

� scaffold licensing


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� hoarding licensing

� handling applications for felling licences

� animal licensing

� skin piercing and ear piercing as designated under the Local Government (Miscellaneous Provisions) (Northern Ireland) Order 1985

� street trading.


Other Cleaning 29 Include here the sweeping and removal of litter from land, litter bins, etc that is required to

comply with The Litter (Northern Ireland) Order 1994. It sets standards of cleanliness that district councils must maintain for four different categories of land. The categories range from shopping centres to tow paths to which the public has rights of access. Mandatory subdivisions:

� Collection of fly-tipped rubbish



� Major clean-ups

� Street cleaning and litter picking in rural areas

� Other cleaning, including road signs, beach cleaning.

Waste Collection30 Include all expenditure on the collection of waste. Mandatory subdivisions:

31 Household waste: include expenditure on the collection of refuse from private dwellings. Include all types of waste, including garden waste and bulky items. Income earned from these collections should also be shown here.

32 Trade waste: include the costs and income of collecting refuse from commercial properties. Income earned from this activity should also be included here and shown gross.

33 Skip service: include the cost of providing a skip service. Income earned from this activity should also be included here and shown gross.

34 Civic amenity sites: the costs of civic amenity sites provided for individuals to deposit their waste for the district council to dispose of should be included here. If a civic amenity site is attached to an active waste disposal site it should be treated as Waste Disposal.

35 Abandoned vehicles: include the costs for the collection of abandoned vehicles and transport to disposal site.

36 Recycling (collection): include all the costs of collecting items separately (eg doorstep collections or bottle/paper banks), for recycling. Exclude the costs of processing recycled waste, as it is included in Waste Disposal below.


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Also include the costs of preparing, implementing and monitoring the district council’s recycling plan. This may include, for example, the provision of home composting bins to householders.

37 Transfer stations: include the costs of operating transfer stations.

Waste Disposal38 Waste Disposal is defined for the purposes of SeRCOP as starting at the point of leaving a

transfer station and where there is no transfer station at the point of entering the disposal site.

39 Include the costs of waste disposal including landfill, incineration, centralised composting and salvage/recycling, etc in this service division. Mandatory subdivisions:

40 Disposal of waste: include the costs of waste disposal including the costs of transport to disposal sites.

41 Recycling (disposal): include the costs of processing recyclable waste. This may take the form of direct costs or payments to contractors.

42 Trade waste: include payments to waste disposal organisations for the disposal of trade waste. Income earned from this activity should also be included here and shown gross.

Other Community Assets43 Include the costs associated with the upkeep and maintenance of community assets such

as war memorials and town hall clocks and include all costs and income associated with the provision of parking facilities.

Minor Works44 Include expenditure on environmental improvement schemes, activities related to, for

example, painting and cleaning of bus shelters, provision of festive lighting and removal of graffiti. Other similar types of activity can be included here.

Service Management and Support Services45 Within direct services, it is recognised that there will be a number of support services that are

provided directly to a particular division or subdivision of service and are held centrally.

46 Examples of such support service costs which may apply include finance, advertising, accommodation costs and vehicle maintenance.

47 It is recognised that the majority of support costs will be collected centrally under Central Services and that most district councils will only have a small value of support service costs at direct service level.

48 Where there are support service costs that are held at direct service level, these should be allocated to divisions and subdivisions of service in the first instance. After this allocation, all central support services should be allocated or apportioned to divisions and subdivisions of service as appropriate.



PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN PLANNING AND DEVELOPMENT SERVICES


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Division of Service (Mandatory)

Subdivision of Service (Mandatory)

Community Planning

Economic Development � Economic development general

� Economic development facilities

� Promotion of entrepreneurship and encouraging business start-up

� Provision of support to under-represented groups in entrepreneurship

� Promotion of social enterprise

� Neighbourhood renewal funding relating to enterprise initiatives.

EU Rural Development

Urban Regeneration and Community Development

� Functions associated with physical development

� Area-based regeneration

� Community development programmes for voluntary and community sectors.

Planning Policy

Development Control � Enforcement

� Advice


� Regulation of other special topics.

Building Control � Building regulations

� Enforcement


� Advice.

Environmental Initiatives � Sustainable development strategies


� Other environmental initiatives and projects.




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PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN PLANNING AND DEVELOPMENT SERVICES1 Planning and Development Services are analysed into eight mandatory divisions of service:

� Community Planning


� EU Rural Development

� Urban Regeneration and Community Development

� Planning Policy



� Environmental Initiatives.

Community Planning2 This division of service captures all expenditure involved in the development and

implementation of a shared vision for promoting the economic, social and environmental well-being of the district based on effective engagement with the community. It includes all costs associated with initiating, maintaining, facilitating and participating in community planning for the district.

Economic Development3 This division of service includes all costs relating to the economic development activities

undertaken by district councils.

4 There are six subdivisions:

� Economic development general

� Economic development facilities

� Promotion of entrepreneurship and encouraging business start-up

� Provision of support for under-represented groups in entrepreneurship

� Promotion of social enterprise

� Neighbourhood renewal funding relating to enterprise initiatives.

5 Economic development general: include the cost of undertaking economic development activities including employment costs, services procured, delivery of business programmes, economic research and development, area promotion, marketing and attracting funding.

6 Economic development facilities: include conference centre costs, costs of building or letting units for start-up or assisted businesses and any business services provided.

7 Promotion of entrepreneurship and encouraging business start-up: include all costs associated with offering guidance and support to start a business. Also include the costs of hosting enterprise shows.


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8 Provision of support for under-represented groups in entrepreneurship: include the costs associated with youth entrepreneurship (the Prince’s Trust and Shell Livewire) and investing for women.

9 Promotion of social enterprise: include all costs associated with the Social Entrepreneurship Programme, which offers support and guidance on business plans and market research and; financial assistance towards start-up costs.

10 Neighbourhood renewal funding: include all costs associated with enterprise initiatives for those living in areas of greatest need or young people currently not in employment, education or training who wish to set up a business.

EU Rural Development11 The EU Rural Development Programme aims to protect and enhance Northern Ireland’s

rural environment and contribute to the development of competitive and sustainable rural businesses and thriving rural communities. Part of this programme will be delivered by a central government department, with local councils including all costs associated with improving quality of life in rural areas and diversification of the rural economy within this division of service.

Urban Regeneration and Community Development12 This division includes all services that relate to programmes targeting the social, economic

and physical regeneration of cities, towns and villages in Northern Ireland.

13 There are three subdivisions:

� Functions associated with physical development

� Area-based regeneration

� Community development programmes for voluntary and community sectors.

14 Functions associated with physical development: include all costs associated with updating the appearance of town and city centres, including the provision of grants to encourage the private sector to develop properties and areas.

15 Area-based regeneration: include all costs associated with supporting projects to address the specific needs of the most deprived areas, groups and individuals; improve the quality of life and expand the opportunities for whole communities through tackling education, employment, health and other social problems; and transform the environment and facilities, which may involve creating or modernising community assets.

16 Community development programmes for voluntary and community sectors: include the costs associated with supporting community centres and advice services; building relationships within and between communities; and community development activities.

Planning Policy17 This division of service includes all costs associated with local development planning which

covers smaller areas such as town centres.


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Development Control18 This division of service includes all activities and costs relating to the district council’s role in

development control under legislation.

19 There are four subdivisions:

� Enforcement

� Advice


� Regulation of other special topics.

20 Enforcement: include the costs of enforcing building control legislation in the interests of public health and safety; enforcement appeals; handling complaints about development; investigating alleged breaches of planning control and taking enforcement action; monitoring and enforcing compliance with planning conditions; prosecutions; and associated legal proceedings. This subdivision also includes the costs of any consultants used to aid the enforcement role.

21 Advice: include the costs associated with handling enquiries from developers, consultants and local residents on development control matters, in particular those made in advance of the submission of an application.

22 Dealing with applications: include the costs associated with applications, consents, notifications, etc, relating to applications submitted under planning legislation. Also include the costs of spot-listing buildings to the statutory list and drawing up lists of buildings of architectural and/or historic interest.

23 Regulation of other special activities: include all costs not referred to above.

Building Control24 This division of service should include all expenditure related to a district council’s role in the

monitoring and enforcement of building regulations. The mandatory subdivisions are:

� Building regulations

� Enforcement


� Advice.

25 Building regulations: include the costs associated with district councils’ responsibilities under The Planning and Building Control (Northern Ireland) Order 1998 to vet plans for new buildings and to make site visits to monitor compliance with health and safety and building regulations. These relate to:

� full plans and inspections

� building notices and applications

� regularisation.


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The work associated with applications for certificates of completion should be included, as should the costs of site visits relating to both building regulations and certificates of completion.

Liaison with the Fire Service as necessary in connection with applications should be included.

The costs of any consultants used to assess applications, for example fire or structural engineers, should be included.

The costs of keeping the register of applications, including attached plans and documents, should be included here.

Show gross costs here with fees charged shown as gross income.

26 Enforcement: include the costs of enforcing building regulations in the interests of public health and safety. Include handling complaints about building control, investigating alleged breaches of building control and taking associated enforcement action where expedient. Include the cost of serving notices and of any subsequent court action and cost recovery action. Also include the costs of any consultants used to aid the enforcement role, for example structural engineers.

27 Other building control work: include the costs of general advice (such as the production of explanatory leaflets) and other activities not related to specific applications included in the Building regulations and Enforcement subdivisions. Include here the giving of pre-submission advice and the administration of legislation related to:

� dangerous structures

� access for disabled people

� street naming and numbering

� income from property certificates.

District councils may be allowed to charge fees for many of these services. Where income is earned, gross expenditure and gross income should each be shown.

28 Advice: include the costs of handling enquiries from developers, consultants and local residents on building control matters made in advance of the submission of an application.

Environmental Initiatives29 This division of service includes costs related to protecting or improving the natural

environment. There are three subdivisions:

� Sustainable development strategies


� Other environmental initiatives and projects.

30 Sustainable development strategies: include all costs associated with the collection of statistics relating to environmental audits and the preparation and carrying out of:

� local authority agenda 21 strategy

� biodiversity action plans

� environmental audits.


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31 Environmental education: includes all costs relating to:

� projects with schools

� production of education packs and leaflets

� promotion of planning policies.

32 Other environmental initiatives and projects: include all costs associated with:

� carrying out any environmental surveys and preparing and implementing any schemes for the purposes of environmental improvement

� surveys of derelict and/or contaminated sites and preparing and implementing schemes for their reclamation and other similar projects

� work in connection with (and including management of) buildings of architectural or historic interest.



PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN HIGHWAYS AND TRANSPORT SERVICES


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Division of Service (Mandatory)

Off-street Parking Services




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PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN HIGHWAYS AND TRANSPORT SERVICES










annual basis.

HIGHWAYS AND TRANSPORT SERVICES5 This guidance note covers expenditure on Highways and Transport Services, which contains

one division of service – Off-street Parking Services.

6 Off-street parking services: include all costs associated with operating and maintaining off-street parking facilities (with the exception of park and ride), as well as the income received. Costs may include staffing, barrier equipment, security equipment and the enforcement of excess charges.


PART ONE: SERVICE EXPENDITURE ANALYSIS FOR THE CORPORATE AND DEMOCRATIC CORE

PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN THE CORPORATE AND DEMOCRATIC CORE


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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR THE CORPORATE AND DEMOCRATIC CORE

Divisions of Service (Mandatory) What is included?


(a) All members’ allowances and expenses, including telephone calls, postage, equipment costs, hospitality, accommodation costs, training, conference fees, etc incurred when undertaking activities on behalf of the council, as local representatives or to represent local interests.

(b) The costs associated with members carrying out official and courtesy visits as defined by local government legislation.

(c) Expenditure on flights, fees and subsistence in relation to attendance at conferences and meetings.

(d) The costs associated with members’ civic ceremonials including mayor making, the granting of freedom, town twinning, civic regalia and jubilee celebrations and corporate hospitality.

(e) Expenditure such as recharges for office and meeting space and indirect support costs.

(f) Subscriptions to district council associations.

(g) The costs associated with officer time spent on appropriate advice and support activities.

(h) The costs associated with local government reorganisation.

(i) The costs associated with the duties undertaken in respect of NI Local Government Code of Conduct for Councillors.

Corporate Management (a) The functions of the individual who is designated to be the head of the paid service (frequently the chief executive), except those concerned with the direct management of services or the provision of advice and support to members.

(b) Maintaining statutory registers, eg of politically sensitive posts, payments to members and members’ interests.


(d) Completing and submitting and/or publishing all service staffing returns, Statements of Accounts, annual reports, public performance reports, performance indicators and Best Value performance plans. Public relations work carried out for corporate intentions.

(e) Estimating, negotiating, accounting for and allocating corporate-level resources such as capital finance, block grants and rates.


(g) The costs of treasury management and bank charges, other than those that relate to accounts operated on a decentralised basis.


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PART TWO: GUIDANCE NOTE: WHAT TO INCLUDE IN THE CORPORATE AND DEMOCRATIC CORE

INTRODUCTION1 The previous definition of the Corporate and Democratic Core (CDC) for district councils was

that it comprised all activities that district councils engaged in because they are elected and multi-purpose organisations. This definition was increasingly difficult to apply as the range of democratic and governance models became wider due to Best Value and the modernising agenda.

2 The definition of CDC outlined in Section 2 of SeRCOP sets out CDC costs as comprising the following items of expenditure:



Each category of CDC costs is defined in Section 2 of SeRCOP, as follows:


This includes all aspects of members’ activities in that capacity, including corporate, programme and service policy making and more general activities relating to governance and the representation of local interests. To give authorities maximum flexibility in reflecting their own constitutional arrangements, there are no recommended subdivisions of service.


� Corporate Management

… concerns those activities and costs that provide the infrastructure that allows services to be provided, whether by the authority or not, and the information that is required for public accountability. Activities that relate to the provision of services, even indirectly, are overheads on those services. There are no subdivisions recommended for CM.



annual basis.


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CORPORATE AND DEMOCRATIC CORE COSTS4 This guidance note covers expenditure on the Corporate and Democratic Core.

Democratic Representation and Management5 Section 2 of SeRCOP explains exactly what to include in CDC costs. In Northern Ireland this is

interpreted as:

6 Chair and mayor’s allowances and expenses: all chair and mayor’s allowances and expenses incurred when undertaking activities on behalf of the district council, in the capacity of civic leader.

7 Members’ allowances and expenses: all members’ allowances and expenses when undertaking activities on behalf of the district council, as local representatives or to represent local interests. Members’ allowances and expenses are covered in section 31 of the Local Government Finance Act (Northern Ireland) 2011. Regulations made using powers under section 36 of the Local Government Act (Northern Ireland) 1972 and contained in The Local Government (Payments to Councillors) Regulations 1999 provide further detail of what can be included in members’ allowances and expenses. The 1999 regulations have also been further amended and supplemented by The Local Government (Payments to Councillors) (Amendment) Regulations (Northern Ireland) 2007, The Local Government (Payments to Councillors) Regulations (Northern Ireland) 2012 and The Local Government (Severance Payments to Councillors) Regulations (Northern Ireland) 2013. Additional guidance is also provided in Guidance on Councillors’ Allowances, Tax and Social Security Benefits issued by the Department of the Environment.

8 Official and courtesy visits: all expenditure incurred as a result of members carrying out official and courtesy visits as defined by local government legislation.

9 Civic functions: expenditure incurred as result of members’ civic ceremonials, including mayor making, the granting of freedom, town twinning, civic regalia and jubilee celebrations and corporate hospitality.

10 Member and committee services support: expenditure such as

� Recharges for office and meeting space.

� Indirect support costs.


� Procedural and legal advice relating to the conduct of meetings.



� The production of specific papers for members and/or for meetings involving members. Papers produced for management reasons, which then go to members as background or for information, are not DRM. The level of member involvement in the management of services will therefore affect DRM costs but not the costs borne by the service.



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11 Other members’ costs: expenditure incurred on flights, fees and subsistence related to attending conferences and meetings and subscriptions to district council associations (member-related only). Costs relating to the Assembly Ombudsman for NI and the NI Commissioner of Complaints.

Corporate Management12 Section 2 of SeRCOP explains exactly what to include in Corporate Management costs. In

brief, it includes those costs listed below:

13 Chief executives or other designated head of the paid service. The functions of the individual who is designated to be the head of the paid service (frequently the chief executive), except those concerned with the direct management of services or the provision of advice and support to members.

14 Maintaining statutory registers, for example, of politically sensitive posts, payments to members and members’ interests.

15 Providing information required by members of the public in the exercise of statutory rights, except if this is about a specific service, in which case the cost is quite reasonably charged to that service.

16 Completing, submitting and/or publishing corporate information such as corporate service staffing returns, Statements of Accounts, annual reports, public performance reports and Best Value performance plans. Public relations work that has a corporate purpose can be included here.

17 Estimating, negotiating, accounting for and allocating corporate-level resources such as credit approvals and other sources of capital finance, precepts, block grants and rates.

18 The costs of statutory external audit including value for money work, but excluding work done by external auditors, for example, consultancy work, that would otherwise be done within the district council or by separate contractors. Work done to audit grant claims is also excluded. These costs should be charged to services, including CDC if the grant claim is of a corporate nature. Where such work includes a reimbursement, it should be treated as income.

19 The costs of treasury management and bank charges are included because treasury management fits within the definition of Corporate Management as including those activities that provide the infrastructure that allows services to be provided. One outcome of treasury management activity is the level of bank charges that relate to the main bank accounts of a district council. Therefore, these charges should also be included in Corporate Management. Charges for any accounts operated on a decentralised basis should be charged against the service of the account holder.

Contributions to the Corporate and Democratic Core20 Contributions in the context of Northern Ireland may include, for example, the recharge to the

Housing Executive for managing a portfolio of loans on its behalf.

Other Services

PART ONE: SERVICE EXPENDITURE ANALYSIS FOR OTHER SERVICES

PART TWO: TRADING SERVICES



PART FIVE: GUIDANCE ON OTHER OPERATING INCOME AND EXPENDITURE AND SERVICE MANAGEMENT AND SUPPORT SERVICES


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PART ONE: SERVICE EXPENDITURE ANALYSIS FOR OTHER SERVICES

INTRODUCTION1 The first purpose of this SEA for Other Services is to clearly define Non Distributed Costs.

2 The second purpose of this SEA for Other Services is to include those services that, while required to be reported separately, are not large enough to warrant an individual service expenditure analysis. Trading Services is included within Other Services on that basis.

3 The fourth Best Value accounting principle derived from the consultation was that ‘there will be segmental reporting of total costs’, meaning that expenditure will need to be analysed over the services provided by district councils. SeRCOP contains a series of SEAs for services commonly devolved from a district council’s centre to semi-autonomous directorates, divisions or departments.

4 The series of SEAs does not, however, cover a number of services often provided from each district council’s centre. Therefore, the third purpose of this SEA for Other Services is to provide a standard SEA for those services to the public that are often provided from a district council’s centre.

5 The fourth and final purpose of this SEA for Other Services is to provide a framework for accounting for those items of income and expenditure that do not fit into the definition of total cost for any single given service.

6 The SEA for Other Services is therefore presented in the following parts:

� Part Two: Trading Services

� Part Three: Non Distributed Costs


Some guidance is also given on expenditure to be included in Other Operating Income and Expenditure that falls within overall net operating expenditure, but not within the Net Cost of Services as defined by Section 2 of SeRCOP, and Service Management and Support Services that need to be charged to appropriate service divisions so that the costs shown represent total cost as defined in Section 2.


annual basis.


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PART TWO: TRADING SERVICES


Livestock Markets

Fishery Harbours and Markets

Airports

Other Trading Services and Other Harbours

Note: This section refers to trading with the public and not internal trading accounts.

GUIDANCE NOTE: WHAT TO INCLUDE IN TRADING SERVICES1 This division of service should include the costs of trading services undertaken by district

councils throughout Northern Ireland. This will include all expenditure incurred by the district council on internal activities that support trading services.

2 Costs should include those associated with the provision of facilities for livestock markets, fishery harbours, markets and airports. Costs associated with other trading services (such as harbours other than fishery harbours) should also be included.

3 Record income earned. Show income and expenditure gross.


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INTRODUCTION1 The definition of total cost in Section 2 of SeRCOP states that:

Gross total cost includes all expenditure relating to the service/activity, including:

� Employee costs.

� Expenditure relating to premises and transport.

� Supplies and services.

� Third party payments.

� Transfer payments.

� Support services, including an appropriate share of overheads and central support services that need to be apportioned or allocated (see Section 4, Chapter 2 for good practice guidance on overhead apportionment).

� Depreciation, impairment loss, the amortisation of intangible assets and revenue expenditure funded from capital under statute. For further discussion of the revenue impact of capital accounting requirements, see to Section 2 of SeRCOP.

� Current service (pensions) cost per IAS 19.

� Provisions, if related to the service.(Paragraphs 2.11 to 2.17, Section 2, SeRCOP)

2 Most central support services such as finance, internal audit, personnel, IT, legal services, procurement, etc should be charged, allocated or apportioned to the service divisions defined in the Service Expenditure Analysis. SeRCOP, however, specifically excludes certain costs and overheads that it defines as Non Distributed Costs. It defines these as follows:


(b) gains or losses on settlements (if any)



(e) impairment losses relating to assets under construction and, other surplus assets held for disposal (but which do not satisfy the criteria in the Code to be classified as held for sale) and depreciation on the latter category of assets

(f) the revenue expenditure involved in holding surplus assets (eg security costs).(Paragraph 2.42, Section 2, SeRCOP)

GUIDANCE NOTE: WHAT TO INCLUDE IN NON DISTRIBUTED COSTS3 For defined benefit pension schemes, the cost of retirement benefits to be included in the

definition of total cost of a service will be current service pension costs. All other elements of retirement benefits costs (past service costs, settlements and curtailments) will be excluded from the definition of total costs of services and are defined as Non Distributed Costs (NDC).


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and other long-term unused assets that are unused as a result of the loss of work caused by either competitive tendering or the loss of a function or area of work.

5 These costs are included within NDC to reflect the reality that there is no service to charge costs on to because those costs relate to unused capacity (IT or otherwise). It is important to note that where services are using the capacity, whether by choice or otherwise, they should be bearing a fair share of the cost. Similarly, if previous decisions about, for example, the choice of IT system have resulted in a cost which might be higher than the services concerned would wish, they still have to bear the full cost.

6 It is important to note that these two subdivisions should only be used in the narrowly defined way described. They are not a general mechanism to insulate services from the cost impact of past decisions.

CONTRIBUTIONS TO NON DISTRIBUTED COSTS7 It is possible that other services may contribute to Non Distributed Costs. Exactly how this

contribution is calculated will depend on local factors. Hence, local discretion will need to be exercised to make a realistic estimate of the relevant contribution.


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INTRODUCTION1 The fourth Best Value accounting principle ‘there will be segmental reporting of total costs’

means that all district council services, including those provided by central departments, should be accounted for separately in the SEA. The table below shows the main services to the public that are often provided by central departments and the new standard classification as it applies to them.

Divisions of Service (Mandatory) What is included?



� Conducting local government elections.

Emergency Planning

Grants, Donations and Contributions

Section 79 (Local Government Act (NI) 2014) Expenditure (General Power of Competence)

Policing and Community Safety Partnerships � Co-ordination and administration of policing and community safety partnership boards.

Community Safety – CCTV � Provision of CCTV cameras.

Small Dwelling Acquisition Acts

2 Since these services have little in common, and many could quite feasibly be provided in a service department or by an external contractor, each is classified as a service in its own right. This should not affect their accounting treatment. As separate services, each should be accounted for separately. It may also be the case in some district councils that other services to the public are provided from a central department. These should be identified and, in accounting terms, included in the service identified by CIPFA in this SEA.

GUIDANCE NOTE: WHAT TO INCLUDE IN CENTRAL SERVICES


from members of the public for registrations, certificates and copies. The important issue under SeRCOP is that the gross costs and gross income should each be shown. They should not be netted off against each other.

Elections4 The cost of administering local elections and maintaining the register of electors is recorded

under a service division heading Elections. There are two subdivisions:


� Conducting local government elections.


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Emergency Planning5 This heading is for recording the cost of arrangements to provide integrated emergency

planning and any related grant income. These arrangements include civil emergency and disaster planning and support as well as maintenance of emergency networks and the conducting of exercises.

Grants, Donations and Contributions6 Most of the grants given by district councils are related to specific services and should be

recorded under the appropriate service heading. There may, however, be examples of grants which are not related to any of the other functions of the district council and which are given under powers that are not service-specific – for example, district council contributions to voluntary bodies or grants to specific bodies deducted from the General Grant. These should be recorded under this heading, as should private housing building grants. This heading would also cover any grants, donations and contributions received by the council where no specific purpose has been determined.

Section 79 (Local Government Act (NI) 2014) Expenditure (General Power of Competence)

7 Section 79 of the Local Government Act (NI) 2014 allows a council to make payments for any purpose which in its opinion are in the interests of, and will bring direct benefit to:

� the council

� its district or any part of its district

� the inhabitants of its district or any part of its district.

Policing and Community Safety Partnerships8 This heading records the costs of co-ordinating and administering policing and community

safety partnership boards.

Community Safety – CCTV9 This heading records the costs of installation and running of CCTV cameras in public

places.

Small Dwelling Acquisition Acts10 In the past councils were empowered to make available loans to ratepayers resident in the

district to purchase a property located in the district. As the council repaid the loan from the Consolidated Loans Fund, the SDAA account in the General Fund was debited with both the principal repaid and the interest. As the borrower made their regular repayments to the council, the sums repaid were credited to the SDAA account. At the end of the financial year the net of the SDAA account which may have been either a credit or a debit (depending on the difference between payments out by the council and monies received from borrowers) was made as an entry to the General Fund Account. As no new SDAAs have been granted for at least 20 years, it is envisaged that this heading may already be, or will soon become, obsolete.


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PART FIVE: GUIDANCE ON OTHER OPERATING INCOME AND EXPENDITURE AND SERVICE MANAGEMENT AND SUPPORT SERVICES

INTRODUCTION1 Other Operating Income and Expenditure covers all those costs that arise as a result of

providing services that do not form part of the costs of any one service. They are costs that fall within overall net operating expenditure, but not within the Net Cost of Services as defined by Section 2 of SeRCOP. Costs falling within these categories are reported on the Comprehensive Income and Expenditure Statement and not in the General Fund – Service Income and Expenditure Analysis return to the Department of the Environment. The headings for these costs are:

� Exceptional Items

� Gain or Loss on Disposal of Fixed Assets

� Trading Account Surpluses and Deficits

� Interest Payable and Similar Charges Including Gains or Losses on the Repurchase or Early Settlement of Borrowings

� Interest and Investment Income

� Pensions Interest Cost and Expected Returns on Assets

� Extraordinary Items.

2 All district councils operate a number of service management and support services that facilitate the provision of direct services. The range and structure of these support services is unique to each district council so their precise configuration will vary from council to council.

3 Support services need to be charged to appropriate service divisions so that the costs shown represent total cost as defined in Section 2. This may be achieved in many ways, for example, direct charging. Another option is to use holding accounts to collect support service costs. They can then be allocated or apportioned to service divisions periodically or at the year-end.

4 In order to compare support services across district councils it is useful to collect cost information on these support services prior to their allocation or apportionment to direct services.

GUIDANCE NOTE: WHAT TO INCLUDE IN OTHER OPERATING INCOME AND EXPENDITURE

Exceptional Items5 In any situation where there are exceptional items to be made, these would also be included

under Other Operating Income and Expenditure.


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Gain or Loss on Disposal of Fixed Assets6 In any situation where fixed assets have been sold or disposed of, the gains or losses are

treated as Other Operating Income and Expenditure.

Surpluses and Deficits of Trading or Other Operations 7 Profits, such as dividends from subsidiary and associated companies, may be passed on to

parent authorities. Losses may have to be borne by them if not met from reserves. All such income and expenditure should be included within Other Operating Income and Expenditure, alongside any surpluses and deficits from other service-related trading accounts that are not carried forward.

For further guidance on accounting for trading account surpluses and deficits, see Section 2 of SeRCOP.

Interest Payable and Similar Charges Including Gains or Losses on the Repurchase or Early Resettlement of Borrowings

8 This includes all external interest payable and similar charges whether on loan debt or other long-term liabilities such as finance leases and includes the write-off and amortisation of premiums and discounts.

Interest and Investment Income9 General Fund balances often contribute significantly to interest receivable and payable.

It would, however, be laborious to apportion this interest to each service, and it would in any case be found to be attributable to many causes that are not related to the provision of services, for example, rates income, car loan interest and uncleared cheques. Along with investment income, this interest is, therefore, treated as Other Operating Income and Expenditure.

Pensions Interest Costs and Expected Return on Pension Assets10 Pensions interest costs and expected return on assets should be recognised in the financing

and investment income and expenditure section of the Income and Expenditure Analysis. For further detail, see the current Code of Practice on Local Authority Accounting in the United Kingdom.

Extraordinary Items11 In any situation where there are extraordinary items to be made, these would also be

included under Other Operating Income and Expenditure.


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GUIDANCE NOTE: WHAT TO INCLUDE IN SERVICE MANAGEMENT AND SUPPORT SERVICES12 The Northern Ireland Technical Accounting Support Service (TASS) Steering Group has

identified the following subdivisions for support services that may be used for the collection of cost information:

� Finance

� Personnel and training


� Legal services

� Central procurement and stores

� Other administration

� Insurance

� Accommodation costs in respect of central support staff

� Other services as required.

13 As stated above, each district council will have its own unique range of central support services and can adapt the above subdivisions to reflect their own circumstances.

14 District council systems, however, should be capable of producing total cost information in respect of their central support services. Such information will enable support services such as those highlighted above, which are provided in a centralised manner, to be examined from a Best Value perspective in the future.


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SECTION 4

Recommended Standard Subjective Analysis

INTRODUCTION4.1 This section provides CIPFA’s recommendations for a standard subjective analysis. The

subjective analysis has been drawn from CIPFA’s earlier guidance in this area. It aims to meet the minimum reporting requirements for government statistical returns and build on current practice adopted by authorities to provide financial information in multi-dimensional formats.

4.2 In 2001, CIPFA consulted with chief finance officers in England, Scotland and Wales. The consultation process concluded that it would be advantageous to introduce a recommended subjective analysis to this publication. It also concluded that a common subjective analysis would improve consistency and therefore help authorities to make effective comparisons for financial reporting requirements. In addition, a subjective analysis would provide further information that would be useful for benchmarking analyses and for analysing costs in reviews. This subjective analysis forms the basis for a number of reporting needs. Authorities must ensure that they adapt the analysis to meet the various reporting requirements.

STRUCTURE OF THE SUBJECTIVE ANALYSIS4.3 There are 10 standard subjective groupings:

� employees

� premises-related expenditure

� transport-related expenditure

� supplies and services

� third party payments

� transfer payments

� support services

� depreciation and impairment losses

� income

� capital financing costs (not included in the Net Cost of Services).

4.4 Each category is defined in the following pages. The sub-group recommendations are also listed, although not all groups will be relevant for each local authority or service.


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STATUS AND IMPLEMENTATION4.5 This subjective analysis is applicable to all formal reporting requirements for accounting

periods from 1 April 2015.

4.6 This guidance is recommended to all authorities. It is non-mandatory guidance.

UPDATING THE GUIDANCE4.7 CIPFA is dedicated to keeping this guidance up to date. This guidance will be reviewed on an

annual basis as a minimum.

GROUP 1 – EMPLOYEES4.8 This group includes the cost of employee expenses, both direct and indirect, to the authority.

Sub-group What it includes

Direct employee expenses and benefits

� Salaries

� Employer’s National Insurance contributions

� Employer’s retirement benefit costs:

– current service costs

– past service costs

– settlements

� Agency staff

� Employee allowances (not including travel and subsistence)

Indirect employee expenses � Relocation

� Interview

� Training

� Advertising

� Severance payments

� Employee-related schemes (eg welfare schemes, discount schemes)

Contributions to employee-related provisions

Debits resulting from soft loans Debits resulting from issuing soft loans to employees. Note that where soft loans are issued to, eg voluntary groups or clients, the debits will appear in the relevant subjective group. Similar lines are shown in third party payments and transfer payments groups, but the debit should be included in the subjective group that is most appropriate given the specific circumstances of the soft loan.

Employee expenses and benefits – schools

Employee costs for voluntary aided and foundation schools.

SECTION 4 \ RECOMMENDED STANDARD SUBJECTIVE ANALYSIS

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GROUP 2 – PREMISES-RELATED EXPENDITURE4.9 This group includes expenses directly related to the running of premises and land.


Repairs, alterations and maintenance of buildings

Includes relevant materials and consumables, payments to contractors and internal trading operations.

Energy costs

CRC allowances

Rents

Rates

Water services All payments to water undertakings/authorities.

Fixtures and fittings Only those physically attached to buildings. Equipment, loose furniture and materials used in the operation of a service should be included under the Supplies and Services standard grouping.

This could include the write-off in the year of any assets not deemed material by the authority’s capital accounting policies (ie below de minimis thresholds set).

Apportionment of expenses of operational buildings

A distinction should be drawn between shared operational buildings and administrative buildings. This should be charged to the Support Services standard grouping. This sub-group will receive any charge for the use of shared operational buildings.

Cleaning and domestic supplies Includes expenditure on contract cleaning. Cleaning equipment is to be charged to ‘equipment, furniture and materials’ as part of the Supplies and Services standard grouping. The management of the cleaning contract is normally defined as a support service cost (see Group 7).

Grounds maintenance costs Includes expenditure on external contracts for grounds maintenance.

Premises insurance Includes premium payments or contributions for insurance provisions.

Contributions to premises-related provisions


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GROUP 3 – TRANSPORT-RELATED EXPENDITURE4.10 This group includes all costs associated with the provision, hire or use of transport, including

travelling allowances and home to school transport.


Direct transport costs Repairs and maintenance, running costs and contributions to provisions in respect of vehicles, for example. Repairs and maintenance of (for example) roads are not included in this heading, but should be included in the relevant subjective headings (such as staff costs, supplies and services, etc).


Recharges For vehicles hired from a central pool.

Contract hire and operating leases Payments to outside firms.

Public transport Staff travelling expenses.

Transport insurance Includes premium payments or contributions to insurance provisions.

Car allowances Payments made in relation to travel expenses (not payments made for staff retention unrelated to travel on the authority’s business).

Contributions to transport-related provisions

GROUP 4 – SUPPLIES AND SERVICES4.11 This group includes all direct supplies and service expenses to the authority.


Equipment, furniture and materials All items used in the operation or administration of the service, unless specifically contained in another sub-group (eg communications and computing).


Catering Includes food and expenditure on contract catering.

Clothes, uniform and laundry

Printing, stationery and general office expenses

Services Expenditure on services not otherwise distinguished in the standard classification. Includes services on behalf of pupils and professional fees where there is no similar contract of employment.


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Communications and computing Includes postage, telephones, radio and computer costs. Operational leases and charges for central computing facilities.


Members’ allowances All members’ allowances (and salaries where paid), including attendance allowances and special responsibility allowances. These are likely to be charged to Corporate and Democratic Core.

Expenses Includes subsistence and conference expenses (NB cost not already included as employee costs). Members’ expenses are likely to be charged to Corporate and Democratic Core.

Grants and subscriptions Includes payments to individuals where goods are received in return.

Private finance initiative and public–private partnership schemes4

Include payments for supplies and services under these schemes.

Where a PFI/PPP scheme is on Balance Sheet, this line will include the service element of payments under these schemes only. The service element should not be broken into further elements (eg grounds maintenance, janitorial services) but accounted for in full here.

Authorities may however need to take account of an apportionment of the payments where these will form the basis of charges (eg services charges in relation to leased accommodation for a HRA PFI arrangement).

The interest and liability repayment elements (along with entries for depreciation, etc) will be accounted for in the same way as for finance leases.

Where a PFI scheme is off Balance Sheet, the unitary payments should be recognised in full in this group.

Contributions to provisions Includes contributions to provisions that are of a revenue nature provided they are not related to employees, premises or transport.

Miscellaneous expenses

4

GROUP 5 – THIRD PARTY PAYMENTS4.12 A third party payment is a payment to an external provider or an internal service delivery unit

defined as a trading operation – categories (a) to (d) in paragraph 2.30 of SeRCOP – which is operating independently, in return for the provision of a service or a subdivision of service as defined by Section 3 of SeRCOP.

4.13 Where a service being paid relates to the type of expenditure, for example building repairs, cleaning or catering for clients, then the payment should be recorded under the appropriate

4. Note that these are referred to in the Code of Practice on Local Authority Accounting in the United Kingdom as service concession arrangements but are commonly known as private finance initiative (PFI)/public–private partnership (PPP) schemes.


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standard grouping for that type of expenditure. For example, Premises-related Expenditure (repairs or cleaning) or Supplies and Services (catering).


Independent units within the council; include services defined as category (a) to (d) in paragraph 2.30 of SeRCOP

Joint authorities

Other local authorities

Health authorities

Government departments

Voluntary associations

Other establishments

Private contractors

Other agencies

Transport operators (in respect of concessionary fares)

Debits resulting from soft loans Debits resulting from issuing soft loans to third parties, eg voluntary associations. Note that where soft loans are issued to, for example, employees or clients, the debits will appear in the relevant subjective group. Similar lines are shown in employees and transfer payments groups, but the debit should be included in the subjective group that is most appropriate given the specific circumstances of the soft loan.

GROUP 6 – TRANSFER PAYMENTS4.14 This includes the cost of payments to individuals for which no goods or services are received

in return by the local authority.

4.15 Four sub-groups are suggested; however, this list is not exhaustive.


Schoolchildren and students Mandatory awards.

Discretionary awards.

Other.

Adult Social Services clients (Social Work clients in Scotland)

Direct payments – note there is already a subdivision of service within each division of service in the Adult Social Services SEA (Social Work SEA in Scotland).

Other.

Housing benefits Rent allowances.

Rent rebates.

Rate rebates.

Other.


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Debits resulting from soft loans Debits resulting from issuing soft loans to individuals, eg clients. Note that where soft loans are issued to, for example, employees or voluntary associations, the debits will appear in the relevant subjective group. Similar lines are shown in employees and third party payments groups, but the debit should be included in the subjective group that is most appropriate given the specific circumstances of the soft loan.

GROUP 7 – SUPPORT SERVICES4.16 Charges for services that support the provision of services to the public. The charges should

be apportioned or allocated to the service divisions which they support on the basis of the seven principles of apportionment specified in Section 2 of SeRCOP.

4.17 Such charges are traditionally defined on the basis of service. The following table provides a list of functions to demonstrate what could be defined as support services. This list is not meant to be prescriptive or exhaustive.

4.18 Support services should be distinguished from those independent trading operations (ITOs) defined as third party payments and categorised as trading operations (a) to (d) in paragraph 2.30 of SeRCOP. (It should be noted that the ITOs providing services via third part payments may be providing some of the services outlined in the table below.) The support services in this group are likely to be defined as category (e) trading operations in paragraph 2.30 of SeRCOP.

Function Including

Finance The costs of accountancy, payroll, pensions, insurance and risk management, internal audit, financial management systems (provision and development), financial consultancy and advice, financial contractor appraisal and the management of financial services provided by external contractors.

IT ICT strategy, policy and service development, hardware support, network management, systems procurement, development and operations, the management of IT services provided by external contractors.

Human Resources Employee relations, equal opportunities, health and safety, industrial relations, occupational health, recruitment, redundancy and retirements, staff resource planning, terms and conditions and welfare, the management of these services provided by external contractors.

Property Management/Office Accommodation

Acquisitions and disposals, property asset management policies and plans, energy management, property register maintenance, surveying, ensuring property cleaning, valuation and review, the management of these services provided by external contractors.

Legal Services (not included in the definition of Corporate and Democratic Core)

Advocacy and litigation, commercial work, contract negotiation, conveyancing and management of any legal services provided by external contractors.


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Function Including

Procurement Services Preparation of procurement strategy, operation of central stores, negotiation and arrangement for contracts.

Purchasing, EU procurement procedures.

Corporate Services (not included in the definition of Corporate and Democratic Core)

Review teams, press, publicity and public relations, internal mail, internal print facilities and post rooms, the management of any of these services provided by external contractors and any general administrative services.

Transport Functions Fleet management, ensuring adequate fleet maintenance and the cost and management of any of these services provided by external contractors.

4.19 Alternatively, authorities may wish to group similar activities together under general headings, eg professional services, office services.

Sub-groups4.20 There is no sub-group recommendation as such since the important principle is that users

are charged for the support services provided and that these charges are separately identified under the subjective heading of Support Services. The support service used will vary between local authority service departments and a rigid sub-group categorisation, which applies across the board, is not appropriate.

GROUP 8 – DEPRECIATION AND IMPAIRMENT LOSSES 4.21 This provides the subjective analysis that will record the revenue impact of capital items in

the service revenue accounts of the authority.


Depreciation Includes depreciation on assets held under on Balance Sheet PFI/PPP schemes.

Revaluation losses Revaluation losses charged to the service revenue account (ie the excess of the revaluation loss over the accumulated gains for the asset).

Loss on impairment of assets Impairment losses charged to the service revenue account (ie the excess of the impairment loss over the accumulated gains for the asset. The Code treats impairment loses in a similar way to revaluation losses, and any impairment or revaluation loss is taken to the Revaluation Reserve until the balance for the asset is exhausted.

Amortisation of intangible fixed assets

Movement in fair value of investment property

Investment properties are held at fair value, with any changes recognised in the Surplus or Deficit on the Provision of Services. Included here for completeness; movements should be recorded in the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement rather than in service revenue accounts.


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4.22 Revenue expenditure funded from capital under statute should be accounted for in the relevant subjective group. For example, enhancement of property owned by a third party that is used by the authority to deliver services (eg a voluntary controlled school) would be included in Group 2 – Premises-related Expenditure. Enhancement of property owned by a third party that is not used by the authority to deliver services (eg enhancing property owned and operated by a charity) would be included in Group 4 – Supplies and Services as grant expenditure.

GROUP 9 – INCOME4.23 This group includes all income received by the service from external users or by way of

charges. This group also includes recharges to internal users (see Note 1 below).


Government grants Specific and special government grants.

Other grants reimbursements and contributions

Revenue income received to finance a function/project jointly or severally undertaken with other bodies.

Contributions from other local authorities.

Value of costs recharged to outside bodies including other committees.

Customer and client receipts Sales of products or materials, data technology or surplus products.

Fees and charges for services, use of facilities, admissions and lettings.

Rents, tithes, acknowledgements, way leaves and other land and property-based charges of a non-casual user.

Interest

Recharges Value of costs recharged to internal users.

Credits resulting from soft loans All credits resulting from soft loans should be included in this subjective group (as a corporate entry).

Note 1: Internal recharges may be used for the purposes of internal management reporting or for providing disclosures in respect of significant trading operations.*5 However, such internal recharges would not meet the Code’s definition of income.6

* Comprehensive guidance on the inclusion of trading accounts in the authority’s Comprehensive Income and Expenditure Statement is provided in Module 3, paragraphs I59 to I62 of the 2014/15 Code Guidance Notes.

4.24 Specific government grants received in a year in relation to on Balance Sheet PFI/PPP schemes should be apportioned in line with the elements charged in the year (repayment of the liability and interest; where exceptionally the grant also provides funding for service charges, this should be taken into account in the apportionment). That proportion of the grant that relates to the interest element should be credited corporately outside the Net Cost

5. Required by paragraph 3.4.4.1 (2) of the 2014/15 Code.

6. Paragraph 2.1.2.26 of the 2014/15 Code.


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of Services (to match the related charge). The remainder of the grant should be credited to the service revenue account(s), which is related to the repayment of the liability element (and with the service charges element, which may exceptionally be partially funded from the grant). Specific government grants in relation to off Balance Sheet PFI/PPP schemes should be allocated in full to the service revenue account(s). This treatment is consistent with the specific grant principles in paragraph 2.22 of SeRCOP. Where the grant is not ringfenced but is paid as part of Revenue Support Grant/General Revenue Grant (as is the case with Level Playing Field Support in Scotland), the accounting treatment in this paragraph will not apply, as the grant will be included in general grants, not netted off the Net Cost of Services.

4.25 Capital grants and contributions credited to the Comprehensive Income and Expenditure Statement are included with non-specific grants, and should not be included in the Net Cost of Services.

4.26 Business Rates Supplements (England and Wales) (BRS) is a specific levy to be applied to specific projects expected to promote economic development. BRS income should not be included in Net Cost of Services but should be recognised as general income and included in the Taxation and Non-specific Grant Income line in the Comprehensive Income and Expenditure Statement.

4.27 Community Infrastructure Levy (England and Wales) is a general levy to be spent on infrastructure to support development in the area. It is not project specific and should be recognised as general income and not included in the Net Cost of Services.

GROUP 10 – CAPITAL FINANCING COSTS (NOT INCLUDED IN THE NET COST OF SERVICES)4.28 This group includes the corporate capital financing costs of the authority.

Sub-group

Interest payments

Debt management expenses

4.29 Interest payments will include the interest element of payments made under on Balance Sheet PFI/PPP schemes.

SECTION 5

Other Relevant Guidance

ANALYSING COSTS ON AN INTERNAL CROSS-CUTTING BASIS5.1 The modernisation agenda for local government is increasingly stimulating authorities to

analyse their costs in the context of objectives and outcomes that require co-operation across the organisation on particular issues. CIPFA refers to such initiatives as internal cross-cutting issues. It defines them as follows:

An Internal Cross Cutting Issue is an outcome or output that benefits the local population as a whole or in part and relies upon the performance of an activity or a series of activities aimed at securing that outcome or output. Examples would include improving community safety, improving educational attainment or reducing poverty. To be Cross Cutting the activity or activities must be undertaken by two or more different parts within an authority, as defined in CIPFA’s Standard Service Expenditure Analysis, working in co-operation.

5.2 Where an authority has established internal cross-cutting initiatives, CIPFA provides guidance to calculate and report its costs in its formal financial reports of performance on an internal cross-cutting basis.

5.2.1 Where an authority has set internal cross-cutting outcomes for itself, CIPFA recommends that an authority use this guidance to calculate and report its costs on an internal cross-cutting basis. The CIPFA Building Blocks Methodology (described below) should be used for all regular reports of costs on an internal cross-cutting basis.

5.2.2 CIPFA has not set a national framework for internal cross-cutting outcomes, nor has it set standard definitions for some common cross-cutting outcomes. CIPFA feels that to set mandatory cross-cutting outcomes would limit the freedom to set priorities based on local consultation and local assessment of needs. Although there clearly is a comparability case for a national framework of standard internal cross-cutting outcomes and definitions, the case for local consultation and challenge based on local circumstances is considered to be stronger. This means that the internal cross-cutting cost analysis will be a vehicle for local consultation and challenge rather than inter-authority comparison.

The Benefits of Calculating and Reporting Internal Cross-cutting Costs5.2.3 Each multi-service authority is encouraged to follow this guidance where it judges that

the benefits of the exercise exceed the costs. CIPFA believes that such an analysis of costs will be beneficial for the following reasons:

� The analysis of costs on an internal cross-cutting basis will make the financial information available about the authority more relevant to its stakeholders and improve the process of consultation with stakeholders.


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� An internal cross-cutting analysis of costs will allow an authority to demonstrate to stakeholders how its spending supports its priorities.

� Calculating the analysis of costs on an internal cross-cutting basis will provide useful information to managers and members about the links between the authority’s activities/functions and the desired outcomes. This will contribute to the process of challenging what and how things are done.

� The analysis of costs on an internal cross-cutting basis will inform comparisons, as the context of what are higher and lower priority areas, which may justify higher or lower spending levels, will be much clearer.

� Calculating the analysis of costs on an internal cross-cutting basis will require finance staff and service managers to work together closely. This could help to better integrate financial and service planning and to improve the relevance of financial management information for service managers.

� The production of an analysis of costs on an internal cross-cutting basis is highly consistent with developing areas such as public service agreements and community strategies.

The CIPFA Building Blocks Methodology5.2.4 To help authorities to achieve the above benefits cost effectively, CIPFA has developed

a highly practical methodology for the calculation of the internal cross-cutting costs analysis. A detailed worked example of the method is provided after 5.2.11. The methodology is summarised below.

5.2.5 The internal cross-cutting costs analysis will be built up, initially, from the existing mandatory divisions of service as detailed in CIPFA’s standard SEA in Section 3 of SeRCOP. This will ensure that:

� all authorities build up their analysis of internal cross-cutting costs from a relatively consistent source of base data

� the base financial data of authorities will remain harmonised with the existing DCLG, Scottish Government and Welsh Government returns that are based on traditional services and functions

� the internal cross-cutting costs calculated will be based on the total cost principle detailed in SeRCOP

� there will be a clear audit trail between the SEA and the new internal cross-cutting costs analysis; this will make the calculations transparent.

5.2.6 Where the costs built up from the mandatory divisions of service are not considered to be materially accurate, authorities can use subdivisions of service instead; this approach will also need to be followed by single-purpose authorities. The box below provides some useful questions that will help to determine whether an inaccuracy is material or not.

SECTION 5 \ OTHER RELEVANT GUIDANCE

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� Would the inaccuracy alter the impression given to a consultee about how the authority allocates its resources between the different internal cross-cutting outcomes that it is pursuing?

� Would the inaccuracy result in a cost effectiveness indicator being so significantly over- or understated that independent judgements about the cost effectiveness of the authority would alter?

� Would the inaccuracy prevent challenges to an activity that is not making a contribution to the achievement of any internal cross-cutting outcome?

� Would the inaccuracy mislead managers, auditors or inspectors who were investigating the efficiency/effectiveness of organisational arrangements?

5.2.7 Where subdivisions of service are used to improve the accuracy of the analysis, overhead costs and depreciation and impairment losses need to be charged to the relevant subdivisions so that the internal cross-cutting costs calculated represent total cost.

5.2.8 The subdivisions of service used to achieve greater accuracy may be those mentioned in the SEA or may be locally derived where this will achieve a better fit with the authority’s internal cross-cutting outcomes or with local management arrangements.

5.2.9 The internal cross-cutting costs analysis should be comprehensive. It should include all service costs, but not Corporate and Democratic Core costs or Non Distributed Costs. This means that:

� An ‘other’ category may need to be shown in the internal cross-cutting costs analysis with an explanatory note.

� CDC and NDC will need to be disclosed alongside the internal cross-cutting costs analysis and explained in a supporting note.

5.2.10 Each authority should prepare and retain a working paper that demonstrates the audit trail between the SEA and its internal cross-cutting costs analysis. The worked example shows what the working paper could look like.

5.2.11 Although authorities may feel that the costs of some activities relate equally to more than one internal cross-cutting outcome, the cross-cutting analysis will normally include any particular cost once only. Double counting is not recommended as it:

� Makes comparison between the SEA and the cross-cutting cost analysis difficult. This could confuse stakeholders.

� May leave authorities at risk of being accused of inflating spending pledges.

� Departs from IFRS. This may be important if, in the long run, an outcome-based analysis of costs replaces the current service analysis in the annual Statement of Accounts.


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WORKED EXAMPLE: CALCULATION OF THE ANALYSIS OF EXPENDITURE ON AN INTERNAL CROSS-CUTTING BASISThe setting1 This worked example is based on information gleaned at the authorities visited during the

research that CIPFA carried out in order to prepare its consultation paper on accounting for cross-cutting issues. The hypothetical local authority has seven cross-cutting priority areas. It provides the full range of local authority services and could be a London borough council or a unitary council.

The council’s cross-cutting priorities2 The authority is pursuing seven cross-cutting outcomes.

How the council built up the internal cross-cutting cost analysis3 The council has followed CIPFA-recommended methodology based upon the standard CIPFA

SEA, which provides the necessary building blocks. This means that the Corporate and Democratic Core costs and Non Distributed Costs do not feature in the internal cross-cutting costs analysis. They are, of course, still shown in the total spending analysis, which will reconcile to the SEA included in the annual accounts.

4 This particular council has presented its analysis on the basis of net costs. This was built up from the gross costs and gross income recorded against each cost centre as required by the total cost principle outlined in SeRCOP. It would be equally acceptable to show income and expenditure separately in the analysis. Indeed this would be a very open way of demonstrating how charging policies relate to internal cross-cutting priority outcomes.

5 The council decided to split the following divisions of service between more than one internal cross-cutting area because it judged that coding the whole of each service division to separate internal cross-cutting outcomes was not accurate enough:

– Non-school Funding was split between Economic/Community Regeneration and Lifelong Learning

– Youth Justice was split between Community Safety and Health Improvement

– Regulatory Services was split between Community Safety, Health Improvement and Environmental Sustainability

– Highways Environmental, Safety and Routine Maintenance was split between Community Safety, Environmental Sustainability and Transport

– Private Sector Housing Renewal was split between Community Safety and Economic/Community Regeneration.

6 In each case, the reason for splitting the costs of one division of service to more than one internal cross-cutting area was arrived at after asking the questions contained in 5.2.6 above from the chapter about the calculation of an internal cross-cutting costs analysis.

7 In this case, the reason for splitting the costs of one division of service to more than one cross-cutting outcome was because either:

– a local performance indicator would be distorted, or

– a user (manager or inspector) of the analysis could be misled by the information presented about spending as it relates to cross-cutting issues.

8 When the council decided to split the costs of a division of service to more than one cross-cutting outcome, it took care to allocate or apportion depreciation and impairment and overheads down to the level of the subdivisions used as the basis for the split of the costs. All cost apportionment followed the principles laid down by CIPFA in SeRCOP.


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DETAILED WORKINGS OF THE TRANSITION FROM THE SERVICE EXPENDITURE ANALYSIS TO THE INTERNAL CROSS-CUTTING COSTS ANALYSIS INDEX BY SERVICE EXPENDITURE HEADING

Service Expenditure Analysis covers:

� Adult Social Care

� Central Services

� Children’s and Education Services


� Environmental and Regulatory Services

� Planning Services

� Highways and Transport Services


Key to columns used in the calculation:

1 Community Safety (CS)

2 Economic and Community Regeneration (ECR)

3 Lifelong Learning (LLL)

4 Environmental Sustainability (ES)

5 Health Improvement (HI)

6 Other Services to the Public (OS)

7 Transport (TRANS)


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Building up the Cross-cutting Analysis of Expenditure

Net costs in £m allocated to which cross-cutting priority

Adult Social Care (England)

1 (CS)

2 (ECR)

3 (LLL)

4 (ES)

5 (HI)

6 (OS)

7 (TRANS) Total

Physical Support 15.00 15.00

Sensory Support 10.00 10.00


10.00 10.00

Learning Disability Support 56.95 56.95

Mental Health Support 19.05 19.05

Social Support – Substance Misuse/Asylum Seeker Support/ Support for Carer

2.50 2.50

Other Adult Services (including Assistive Equipment and Technology, Social Care Activities, Information and Early Intervention and Commissioning and Service Delivery)

0.85 0.85

Page Total - - - - 114.35 - - 114.35

Cumulative Total - - - - 114.35 - - 114.35


Central Services1

(CS)2

(ECR)3

(LLL)4

(ES)5

(HI)6

(OS)7

(TRANS) Total

Local Tax Collection 1.75 1.75

Registration of Births, Deaths and Marriages 1.50 1.50

Elections 1.30 1.30

Emergency Planning 0.10 0.10

Local Land Charges 0.50 0.50

Local Welfare Assistance Schemes 0.10 0.10

General Grants, Bequests and Donations 0.90 0.90

Coroners’ Court Services 0.75 0.75

Other Court Services 0.05 0.05

Page Total 1.80 - - - - 5.15 - 6.95

Cumulative Total 1.80 - - - 114.35 5.15 - 121.30


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1 (CS)

2 (ECR)

3 (LLL)

4 (ES)

5 (HI)

6 (OS)

7 (TRANS) Total

Education Services:

Early Years 6.00 6.00

Primary Schools 132.70 132.70

Secondary Schools 101.60 101.60

Special Schools and alternative provision

28.40 28.40

Post 16 7.40 7.40

Other Education and Community Budget:

Management and Support Services 2.20 2.20

Page Total - 7.40 270.90 - - - - 278.30

Cumulative Total 1.80 7.40 270.90 - 114.35 5.15 - 399.60



1 (CS)

2 (ECR)

3 (LLL)

4 (ES)

5 (HI)

6 (OS)

7 (TRANS) Total

Children’s Social Care:

Sure Start Children's Centres/Flying Start and Early Years 8.00 8.00

Children Looked After 17.00 17.00

Other Children and Family Services 3.00 3.00

Safeguarding Children and Young People’s Services 2.15 2.15

Family Support Services 6.25 6.25

Youth Justice 2.75 2.75

Services for young people 2.00 2.00

Asylum Seekers 3.10 3.10

Page Total 2.15 - - - 42.10 - - 44.25

Cumulative Total 3.95 7.40 270.90 - 156.45 5.15 - 443.85


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Environmental and Regulatory Services

1 (CS)

2 (ECR)

3 (LLL)

4 (ES)

5 (HI)

6 (OS)

7 (TRANS) Total

Cemetery, Cremation and Mortuary Services 1.05 1.05

Coast Protection 0.75 0.75

Community Safety (Crime Reduction) 0.40 0.40

Community Safety (CCTV) 0.35 0.35

Community Safety (Safety Services) 0.60 0.60

Flood Defence and Land Drainage 1.00 1.00

Agricultural and Fisheries Services 0.55 0.55

Regulatory Services:

Environmental Protection, etc 2.30 2.30

Food Safety, etc 1.00 1.00

Public Health and Safety, etc 2.75 2.75

Street Cleansing (not chargeable to Highways) 12.50 12.50

Waste Collection 11.10 11.10

Waste Disposal 6.30 6.30

Trade Waste (0.20) (0.20)

Recycling 1.40 1.40

Waste Minimisation 0.70 0.70

Climate Change Costs 0.20 0.20

Page Total 4.10 - - 36.60 2.05 - - 42.75

Cumulative Total 20.25 8.60 282.00 52.35 158.50 5.15 - 526.85


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Planning Services1

(CS)2

(ECR)3

(LLL)4

(ES)5

(HI)6

(OS)7

(TRANS) Total

Building Control 1.10 1.10

Development Control 0.30 0.30

Planning Policy 1.00 1.00

Environmental Initiatives 1.50 1.50

Economic Research 0.10 0.10

Business Support 0.25 0.25

Economic Development 3.55 3.55

Community Development 1.45 1.45

Page Total 1.45 3.90 - 3.90 - - - 9.25

Cumulative Total 21.70 12.50 282.00 56.25 158.50 5.15 - 536.10


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1 (CS)

2 (ECR)

3 (LLL)

4 (ES)

5 (HI)

6 (OS)

7 (TRANS) Total


2.80 2.80

Structural Maintenance 16.20 16.20


1.00 1.00

Environmental, Safety and Routine Maintenance:

Maintenance: Environmental 3.25 3.25

Maintenance: Safety 3.50 3.50

Maintenance: Routine 3.60 3.60

Street Lighting (including Energy Costs)

3.55 3.55

Winter Service 2.00 2.00


0.75 0.75

Parking Services 3.00 3.00

Public Transport 3.75 3.75


0.75 0.75

Page Total 7.80 - - 6.25 - - 30.10 44.15

Cumulative Total 29.50 12.50 282.00 62.50 158.50 5.15 30.10 580.25


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Housing Services (General Fund)

1 (CS)

2 (ECR)

3 (LLL)

4 (ES)

5 (HI)

6 (OS)

7 (TRANS) Total

Housing Strategy 0.65 0.65

Enabling 0.75 0.75

Housing Advice 0.55 0.55

Housing Advances 1.50 1.50

Private Sector Housing Renewal:

Administration of Grants, etc 15.50 15.50

Management Orders, etc 1.30 1.30

Licensing of Private Sector Landlords 1.00 1.00

Homelessness 5.90 5.90

Housing Benefits Payments 10.60 10.60

Housing Benefits Administration 0.30 0.30

Other Council Property 0.20 0.20

Supporting People 0.80 0.80

Other Welfare Services 0.90 0.90

Page Total 1.30 38.65 - - - - - 39.95

Cumulative Total Spending by Cross-cutting Area 29.55 50.80 282.00 62.85 159.75 5.15 30.10 620.20

Democratic Representation and Management 0.75

Corporate Management 1.00

Non Distributed Costs 0.25

Total Spending by the Council 29.55 50.80 282.00 62.85 159.75 5.15 30.10 622.20


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Glossary of Terms

ABC or activity based costing a system of expenditure analysis that separately identifies cost drivers (the activities and other factors which make the biggest differences to unit costs; for example, set-up costs and, separately, running costs) and apportions the cost of each cost driver separately to objective heads (usually referred to as cost objects). ABC thus states the total cost of cost objects more realistically than if cost drivers are merely apportioned as part of pro-rata distributions of large blocks of disparate costs.

Allocations the debits made when the expenditure to be borne by each head is a question of fact, so that no apportionments need to be made. The cost of telephones, for example, may be allocated to the users of the various lines.

Apportionments the expenditure debits made when any single item of expenditure is for the benefit of two or more service heads, so that its cost has to be apportioned to them in proportion to the apparent extent to which they benefit from the expenditure or contribute to its cost.

Benchmarking the analysis of selected activities and processes, and their comparison with similar analyses for other organisations.

Best Value authorities the authorities of types listed in the Local Government Act 1999 for England and Wales, which will be subject to the statutory duty of Best Value.

Charges the sums debited to users under contracts and service level agreements; for example, a fixed charge per week per employee for payroll services, and the debits required by systems of standard costing or accruals accounting.

Code the Code of Practice on Local Authority Accounting in the United Kingdom.

Corporate and democratic core comprising corporate management and democratic representation and management.

Cost drivers the activities or other factors in any process that make the biggest differences to the relative unit costs of the various outputs.

Debits the collective term for accounting entries representing expenditure, and therefore comprising charges, apportionments and allocations.

Depreciation charges reflecting the decline in the value (not cost) of assets as a result of their usage or ageing.


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ExTOs external trading organisations – in-house organisations which provide services, supplies or work to other bodies.

General health indicators indicators reflecting the general health or competence of authorities.

I&PSs industrial and provident societies – non-profit-making corporate bodies, registered under the Industrial and Provident Societies Acts as either organisations run for the benefit of the community, or workers’ co-operatives.

InTOs internal trading organisations – in-house organisations awarded work by and for their authorities following market testing or VCT.

Joint working arrangements between different bodies to share work needed by each, eg the joint working programme between the Contributions Agency, HM Revenue & Customs and DWP, for data sharing and cross-checking. (Note that the Code’s requirements for IFRS 11 Joint Working must be followed.)

Local authority company a company in which a local authority has shares, rights to appoint some or all of the directors, or other legal interests. It may be a company limited by shares, a company limited by guarantee or an I&PS.

Local performance indicators PIs selected by single authorities, usually to measure progress over time.

Materiality the level (usually expressed in financial terms but not usually expressly stated) below which accountants, auditors, or their clients or employers, consider risks or problems not to be significant.

Performance reviews the reviews of their own functions to be made by Best Value authorities.

Performance standards the standards to be met by Best Value authorities in England and Wales, measured against statutory PIs.

PFI or private finance initiative. Instead of providing and owning the assets needed for their services, public authorities arrange for private sector bodies (usually formed from consortia) to provide and own them. These other bodies then make the assets available under operating leases to enable public authorities to deliver the services required.

PIs performance indicators – any numerical data or ratios collected and used for the purpose of making initial comparisons (ie preferably subject to further research before firm conclusions are drawn) of the performance of groups of similar bodies.

Proper accounting practices the statutory and quasi-statutory accounting practices which local authorities are required to follow.

GLOSSARY OF TERMS

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Recharges the collective term for accounting entries representing transfers of (or to cover) costs initially debited elsewhere. They therefore comprise apportionments and charges.

Regional performance PIs selected by groups of authorities, such as benchmarking indicators clubs.

Service expenditure analysis the analysis of income or expenditure by reference to its different purposes, usually different services.

Service reviews periodic formal reviews by Scottish local authorities of selected services, comprising challenge, compare, consult and compete.

SLAs service level agreements – depending on the sector:

– in local government, agreements between operational units, which state the price and specifications of the support service by one to another.

– in government departments and the NHS, the forms of contract ‘awarded’ to in-house organisations following market testing.

SPVs special purpose vehicles – bodies set up specifically to perform PFI contracts.

Statutory performance PIs selected by government departments, the Audit or Accounts Indicators Commissions. PIs, local PIs, regional PIs and general health indicators.

Subjective analysis the analysis of income or expenditure by reference to its different sources, eg employees’ pay.

TAGs trading agreements – the term (now little used) for simple forms of SLA, which usually presuppose continuation of present levels of service, which are not therefore specified, or not in great detail.

Trusts the basis on which trustees, operating in accordance with the law of trusts, perform the activities (usually non-profit-making) specified in trust deeds.

VCT voluntary competitive tendering – for the purpose of securing competition between InTOs and other possible service providers. The term is mostly used in local government.


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