statement of accounts 2009/10 - stratford-on-avon district of accoun… · assets, and also grants...
TRANSCRIPT
Statementof Accounts
STATEMENT OF ACCOUNTS 2009/2010
CONTENTS Page
numbers
Statement of Responsibilities for the Statement of Accounts 2
A Financial Review 3
Foreword 4-8
Statement of Accounting Policies 9-14
The Core Financial Statements:-
Income and Expenditure Account
Statement of the Movement on the General Fund Balance
Statement of Total Recognised Gains and Losses
Balance Sheet
Cash Flow Statement
15
16
16
17
18
Notes to the Core Financial Statements 19-47
Supplementary Financial Statements:-
Collection Fund
48
Notes to the Supplementary Financial Statements:-
Collection Fund
49-51
Annual Governance Statement 52-60
Audit opinion 61-63
1
A Financial Review from the Leader (2009/2010) and the Head of Resources For 2009/2010 the District Council approved a net Revenue expenditure Budget of £14.3m. The net revenue expenditure for all of the council’s services was £13,592k against a revised budget of £14,349k resulting in an underspend of £757k (5.3%). Overall there was a net contribution to the General Reserve of £273k and £583k applied to Earmarked Reserves. Major income received was £6.938m from general Government Grant and the National Non-Domestic Rate pool, plus £6.541m from Council Tax payers. The Government contribution was £34.5k higher than the previous year (0.5%) with additional specific grants received of £350k and £22.8k for Concessionary Fares and Area Based Grant respectively. The Council Tax levy at Band D was increased by 3.5% from £123.12 to £127.43 per domestic property per year. The 2009/2010 Capital Expenditure Amended Estimate (inclusive of 2008/2009 slippage) was £8.5m, comprising mainly of £1.5m for Pathlow Gypsy Site, £2.7m for World Class Stratford, £860k for E-Government, £702k for Disabled Facilities and Home Repairs Grants, £290k for Social Housing and £988k for various Section 106 schemes. Spending on some major projects was deferred until 2010/2011. This was mainly due to circumstances beyond the control of the Council, including progress by external bodies or organisations. The final 2009/2010 capital expenditure was £4.7m. At 31 March 2010 the Council held a total £3.7m in General Revenue and Earmarked balances, £15.6m in available Capital resources and had no outstanding debt.
3
Foreword Introduction 1. This foreword provides an explanation of the financial aspects of the Council's activities
and endeavours to provide an understandable guide to the significant matters reported in the accounts.
2. All local authority income and expenditure is classified as either revenue or capital. i) Revenue income and expenditure for the year is summarised within the Income
and Expenditure Account. This Account details the net operating expenditure or the running costs of the Council for the year and the extent to which this has been financed from Government grant and local taxpayers. Expenditure of a revenue nature must be financed in the year of that expenditure as the goods and services bought are deemed to have also been consumed in the year. A separate revenue account is maintained for the Collection Fund, which includes income and expenditure in respect of Council Tax, Non-domestic Rates ('Business Rates') and residual Community Charge. Transactions between the Income and Expenditure Account and this account are shown "below the line" within the Income and Expenditure Account.
ii) Capital expenditure is expenditure that results in the creation or enhancement
of fixed assets. The benefits resulting from this expenditure are deemed to last for more than one year. Capital income comes from receipts due to the sale of assets, and also grants and contributions towards specific capital projects. Capital income and expenditure are recorded within the Balance Sheet. There are implications for revenue accounts in respect of the amount of capital expenditure financed by revenue resources.
Revenue Income and Expenditure 3. The net District Expenditure for 2009/2010 was £13,592k compared to a budgeted
£14,349k. This underspend together with the £225.4k identified slippage that will be financed in 2010/2011 leads to an effective underspend of £531.6k.
4. The major variances contained within the income and expenditure account include: -
£000’s Appropriations 642 Change & Performance (159) Corporate & Democratic Core (60) Investment Income (590) National Non-Domestic Rate (177) Planning Policy (232) Refuse Collection (86) Regulatory Services (327) Other Services 232
Total (757)
4
Foreword (cont.…) 5. The Income and Expenditure Account details the gross costs of service provision
amounting to £53,741,628. This expenditure has been analysed as follows:
£000’s
Employee expenses 6,211 Service costs 3,437
Third party payments 6,401 Transfer payments 31,050
Support services 5,104 Capital charges 1,538
Total 53,741
GRAPH TO GO HERE
Direct employee expenses comprises payments to and on behalf of the Council's
employees. It includes salaries, employer's national insurance and superannuation contributions, training, professional subscriptions, recruitment, and health and safety costs.
Service costs are running expenses and include the cost of maintaining buildings,
operating vehicles and the purchase of goods. Third Party Payments are payments to others in respect of the provision of services
and include mainly contract payments to companies providing services on the Council's behalf.
Transfer payments are payments made to others for which no goods or services are
received and are principally in respect of housing and council tax benefits. Support services are provided mainly by the Monitoring Officer, Member Services,
Change and Performance, Customer Services and Resources to direct services of the Council. These costs include support service employee costs and any equipment and licences in the case of Change and Performance.
Capital charges comprise depreciation/impairments and represent the real cost of
using assets to provide services. 6. The gross income of £36,580,832, shown in the Income and Expenditure Account has
been analysed as follows:
£000’s
Government Grants 32,578 Rent income 101
Sales, Fees and Charges 2,704 Other income 1,198
Total 36,581
GRAPH TO GO HERE
5
Foreword (cont….) Government grant income of £32,578,287 is received towards the cost of Council Tax
Benefits, Housing Benefits, their administration and National Non-Domestic Rate administration.
Rent income comprises mainly rents in respect of industrial and commercial properties. Income from sales, fees and charges, building control fees, planning fees, land charges
fees and licencing fees. 7. The net cost of services within the Income and Expenditure Account is £17,160,796.
The services provided for this amount are summarised below:
£000’s
Central Services 3,205 Cultural, Environmental,
Regulatory and Planning Services
11,154
Highways and Transport Services
1,091
Housing 1,710
Total 17,160
GRAPH TO GO HERE
Precepts to town and parish councils, investment income, income from Council Tax
payers, and Government grant to finance overall Council expenditure, along with various appropriations, are shown below the net cost of services within the Income and Expenditure Account. After these items, there is a contribution to reserves for the year of £273k. This compares to a budgeted use of reserves of £430k.
8. Pensions liabilities are the estimated underlying commitments that the Council has in
the long term to pay retirement benefits. The total liability of £81,478k has a significant impact on the net worth of the Council as recorded in the Balance Sheet. However, statutory arrangements for funding the deficit mean that the financial position of the Council remains healthy. The deficit on the scheme will be made good by increased contributions over the remaining working life of employees, as assessed by the scheme’s Actuary.
Capital Expenditure 9. Capital expenditure amounted to £4.7m in 2009/2010. This compares to an original
estimate of £6.2m which was subsequently revised to £8.5m. The underspend, compared to revised estimates, of (£3.8m) is largely attributable to
delays in expenditure, notably refurbishment of Pathlow Gypsy Site (£625k), World Class Stratford (£1.3m), Housing (£354k), IT Development (£265k), Grants to Area Committees etc (£150k), Bridgetown (£176k), Sound System (£60k), Land Drainage (£44k), CCTV & Parking (£81k) and various Section 106 projects (£550k).
6
Foreword (cont.…) 10. A summary of capital expenditure in 2009/2010 is shown below:
£000’s
Home Improvement Grants 669 Affordable Housing 394
ICT – e-government 593 Waste & Cleansing 109
Area Committee Capital Grants 101 Pathlow Gypsy Site 928
Leisure Facilities 66 Empty Homes 53
World Class Stratford 1,415 Other Capital Projects 354
Total 4,682
GRAPH TO GO HERE
Capital grants include payments to village halls and other voluntary organisations within the District as contributions towards capital expenditure incurred.
11. Capital income amounted to £2.3m in 2009/2010. This figure mainly comprises: Right to Buy Receipts (£286k) and various grants (£2m).
The level of capital receipts held as at the year end was £15,714k. Assuming the
slippage of £3,644k is approved, which would be financed from accumulated capital receipts, the adjusted level of receipts would be £12,069k.
There were no valuations carried out during 2009/2010 in line with the Council’s five year rolling programme of asset valuation. For information the basis of valuations is set out in the Statement of Accounting Policies (note 6).
The Future 12. The Council has adequate revenue balances to provide financial security and a safety
mechanism for unforeseen events. The General Revenue Account balances stood at £3.665m as at 31 March 2010. However, the General Fund Balance is reduced to £2.687m after allowing for revenue slippage (£225.4k) and £751.6k is being held in Earmarked Reserves.
13. Usable capital receipts amounted to over £15.7m at 31 March 2010. The Council plans
to spend and finance £3.2m on capital schemes in 2010/2011 which will include the refurbishment of Pathlow Gypsy Site, E-Government Action Plan, Affordable Housing Investment Programme, Disabled Facilities Grants, Parking Equipment and World Class Stratford.
The level of capital income expected for 2010/2011 amounts to £1.7m being Disabled Facilities Grant (£192k), Section 106 (£274k) and sale proceeds (£1.2m) in respect of the World Class Stratford project.
7
Foreword (cont.…) The Accounting Statements 14. The Council's accounting statements for the year 2009/2010 are as follows: Page 15 The Income and Expenditure Account. This account brings together
all the functions of the authority and summarises all of the resources that the authority has generated, consumed or set aside in providing services during the year.
16 Statement of the Movement on the General Fund Balance. This
statement compares the council’s spending against the council tax that it has raised for the year, taking into account the use of reserves built up in the past and contributions to reserves for future expenditure.
16 Statement of Total Recognised Gains and Losses. This statement
brings together all the recognised gains and losses of the council for the year and shows the aggregate increase in its net worth.
17 The Balance Sheet. This statement sets out the financial position of
the Council as at the 31 March 2010. It shows the assets and liabilities of the Council as a whole including those relating to the Collection Fund.
18 The Cash Flow Statement. This statement summarises the inflows
and outflows of cash arising from transactions with third parties for revenue and capital purposes.
48 The Collection Fund. This is concerned with Council Tax, Business
Rates and residual Community Charge. Stratford-on-Avon District Council is responsible for collecting local taxes on behalf of Warwickshire County Council, Warwickshire Police Authority and the District Council itself. Town and parish council precepts are included within the District Council's demand on the Collection Fund.
Where relevant, equivalent figures for the previous year 2008/2009 are shown for comparative purposes.
Further Information
15. Further information about the functions of the Council is contained within the Annual
Report for 2009/2010. 16. Further information about the Council's finances is available from: Head of Resources Stratford-on-Avon District Council Elizabeth House Church Street Stratford-upon-Avon CV37 6HX e-mail address – [email protected]
8
Statement of Accounting Policies 1. General The accounts have been prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2009: A Statement of Recommended Practice. The Code of Practice is based on approved accounting standards, except where these conflict with specific statutory accounting requirements. The accounting convention adopted is historical cost, modified by the revaluation of specific categories of tangible fixed assets. 2. Accruals of Income and Expenditure All revenue expenditure, revenue income and capital transactions are accounted for on an accrual basis. That is, sums due to or from the Council during the year are recorded whether or not the cash has actually been received or paid during the year. 3. Estimation Techniques In some instances it has been necessary to make certain estimates in order to prepare the Statement of Accounts. Where this applies an informed decision has been made to ensure that these estimates are as accurate as could reasonably be expected. 4. Government Grants
• Capital grants and contributions are credited to capital grants/contributions unapplied when they are due. The credits are transferred into capital grants/contributions deferred when the grants or contributions are used to finance capital expenditure and as the assets to which they relate depreciate, the credits are transferred to the Income and Expenditure Account to offset depreciation charged. Where capital grants and contributions received cannot be matched against the authority’s assets these are accounted for by a transfer to the Capital Adjustment Account.
• Revenue grants are accrued and credited to the accounts in the same period in
which the expenditure to which they relate is charged. Where claims were not settled, the best estimate of the grant income is used.
5. Overheads Support services expenditure includes the following:
i) most of the salaries and operating expenses of the Monitoring Officer, Member Services, Change and Performance, Customer Services and Resources. These costs are allocated to services on the basis of agreed charges with direct departments (including Corporate Management under Corporate & Democratic Core (CDC)), reflecting the actual work of support staff and related expenses.
ii) the cost of public office buildings, mainly Elizabeth House, Stratford-upon-Avon
and the various area offices is recharged on the basis of office space occupied in relation to each service.
iii) central expenses, including bank charges, audit fees and general insurances.
Majority of the costs are charged to Corporate Management (CM). The above expenditure is fully recharged on a full absorption costing basis subject to the separate identification of Corporate and Democratic Core and Corporate Management.
9
Statement of Accounting Policies (cont.…) 6. Tangible Fixed Assets
Tangible fixed assets are assets that have physical substance and are held for use in the provision of services or for administrative purposes on a continuing basis. Recognition Expenditure over the de minimis level of £5,000 on the acquisition, creation or enhancement of tangible fixed assets is capitalised on an accruals basis, provided that it yields benefits to the Council and the services it provides for more than one financial year. Expenditure that does not fall under this remit on assets, eg repair and maintenance, is charged to revenue as it is incurred. Measurement Assets are initially measured at cost, comprising all expenditure that is directly attributable to bringing the asset into working condition for its intended use. Assets are then carried in the Balance Sheet at the lower of net current replacement cost or net realisable value in existing use. Assets included in the Balance Sheet at current value are revalued where there have been material changes in value, but at least every five years. Increases in valuations are matched by credits to the Revaluation Reserve to recognise unrealised gains. Exceptionally, gains might be credited to the Income and Expenditure Account where they arise from the reversal of an impairment loss previously charged to a service revenue account. The Revaluation Reserve contains revaluation gains recognised since 1 April 2007 only, the date of its formal implementation. Gains arising before that date have been consolidated into the Capital Adjustment Account. Impairment The value at which each category of assets is included in the balance sheet is reviewed in line with FRS11 and where impairment is identified this is accounted for by:-
• where attributable to the clear consumption of economic benefits – the loss is
charged to the relevant services revenue account; • otherwise - written off against any revaluation gains attributable to the relevant
asset in the Revaluation Reserve, with any excess charged to the relevant service revenue account.
Where an impairment loss is charged to the Income and Expenditure Account but there were accumulated revaluation gains in the Revaluation Reserve for that asset, an amount up to the value of the loss is transferred from the Revaluation Reserve to the Capital Adjustment Account. Disposals When an asset is disposed of or decommissioned, the value of the asset in the Balance Sheet is written off to the Income and Expenditure Account as part of the gain or loss on disposal. Receipts from disposals are credited to the Income and Expenditure Account as part of the gain or loss on disposal. Any revaluation gains in the Revaluation Reserve are transferred to the Capital Adjustment Account. Amounts in excess of £10,000 received from disposals are credited to the Usable Capital Receipts reserve and can then only be used for new capital
10
Statement of Accounting Policies (cont.…) investment or set aside to reduce the Authority’s underlying need to borrow. Receipts are appropriated to the Reserve from the Statement of Movement on the General Fund Balance. The written-off value of disposals is not a charge against council tax, as the cost of fixed assets is fully provided for under separate arrangements for capital financing. Amounts are appropriated to the Capital Adjustment Account from the Statement of Movement on the General Fund Balance. Depreciation Depreciation is provided for on all assets with a determinable finite life, by allocating the value of the assets in the balance sheet over the periods expected to benefit from their use. Depreciation is calculated on a straight line basis as follows:-
• freehold land and non-operational investment properties are not depreciated; • newly acquired assets are not depreciated in the year of acquisition, assets in the
course of construction are not depreciated until they are brought into use; and • buildings are depreciated over a number of years as determined by the Council’s
valuer. Machinery and equipment are depreciated over five years and other assets such as infrastructure are mainly depreciated over forty years.
7. Charges to Revenue for Fixed Assets Service revenue accounts, support services and trading accounts are debited with the following amounts to record the real cost of holding fixed assets during the year:-
• depreciation attributable to the assets used by the relevant service; • impairment losses attributable to the clear consumption of economic benefits on
tangible fixed assets used by the service and other losses where there are no accumulated gains in the Revaluation Reserve against which they can be written off; and
• amortisation of intangible fixed assets attributable to the service.
The Council is not required to raise Council Tax to cover depreciation, impairment losses or amortisations. 8. Intangible Fixed Assets Intangible assets’ costs are IT software & training and are included in the balance sheet at cost. They are then amortised on a straight line basis in the Income and Expenditure account over five/three years and one year respectively during which the Authority derives benefit from the expenditure. 9. Revenue Expenditure Funded from Capital under Statute Revenue expenditure funded from capital under statute are payments classified as capital but do not result in the creation of a fixed asset. These have been charged to the relevant service revenue account in the year. Where the council has determined to meet the cost of this expenditure from existing capital resources, a transfer to the Capital Adjustment Account then reverses out the amounts charged in the Statement of Movement on the General Fund Balance so there is no impact on the level of council tax. 10. Usable Capital Receipts Capital receipts received from sales of Council assets including Right to Buy Clawback receipts and are treated as fully usable.
11
Statement of Accounting Policies (cont.…) 11. Financial Instruments In line with the introduction of financial reporting standards 25, 26 and 29, we show financial liabilities and financial assets on our balance sheet when we become involved in the contract relating to the financial instrument. Financial Liabilities: We measure financial liabilities at their fair value (the amount that the liability could be settled for). However, we measure them on the balance sheet at their amortised cost (current value) using the method needed under accounting rules called the ‘effective interest method’. Financial Assets: We measure financial assets at their fair value (the amount that the asset could be exchanged for) and class them on the balance sheet as:- Loans and Receivables - Loans and Receivables (assets that have fixed or set payments but are not quoted on the market) are shown on the balance sheet at their amortised cost. Details of the financial instruments we hold are given in Note 20 to the financial statements on page 34. 12. Stocks and Work-in-Progress Stocks and work-in-progress are shown in the Balance Sheet at the lower of cost or net realisable value in accordance with the requirements of the Code of Practice and SSAP 9. 13. Reserves The Council maintains reserves for revenue balances, earmarked revenue functions, revaluation reserve, capital adjustment account and usable capital receipts. These are detailed in the Balance Sheet and accompanying notes. 14. Provisions and Contingencies
i) Local authorities are required to pay for all expenditure from revenue, except for those items classed as capital. Special funds to meet future extraordinary expenditure cannot be maintained.
ii) Provisions in respect of bad and doubtful debts are maintained. Potential bad
debts include amounts in respect of Council Tax and Business Rate arrears. Provisions have been estimated in accordance with recommended practice and past experience. Provisions for bad and doubtful debts reduce the value of total debtors shown on the Balance Sheet.
iii) Provisions for insurance claims outstanding and Council Tax appeals are raised
when required.
iv) Where the Council can estimate, with a degree of certainty, that a future event will confirm a contingent loss (cost) it has been included in the financial statements.
v) Where a material loss cannot be accurately estimated or an event is not
considered sufficiently certain it has not been included within the financial statements but shown in Disclosure Note 30 (page 43).
vi) Contingent gains are not accrued for within the accounting statements.
12
Statement of Accounting Policies (cont.…) 15. Pensions The Code governing Local Authority accounts requires authorities to account for their pension costs in accordance to FRS17 Retirement Benefits. The Council has accounted for its pension costs arising from the Local Government Pension Scheme, and for all unfunded discretionary benefits which it has granted, as defined benefit schemes. The Local Government Superannuation Scheme is a funded, defined benefits scheme administered by Warwickshire County Council. Within the Income and Expenditure Account, service revenue accounts and trading services have been charged with their current service cost, which represents the extent to which pensions liabilities have changed as a result of employee service during the year. Past service costs, settlements and curtailments have been charged to non-distributable costs. The interest cost and expected return on assets have been included in net operating expenditure. As required by legislation, an appropriation to the Pension Reserve has been made, which reverses out the FRS17 based pension costs in the Income and Expenditure Account and replaces them with the actual pension related payments made in the year. This ensures that the amount to be funded from Council Tax for the year is equal to the employer’s pension contributions payable and payments made directly to pensioners. 16. Exceptional items, extraordinary items and prior year adjustments Any material exceptional or extraordinary items are included within the cost of the relevant individual service or separately identified on the face of the revenue account. Details of any such items are given in the explanatory notes. Material adjustments applicable to prior years arising from changes in accounting policies or from the correction of fundamental errors are accounted for by restating the comparative figures for the preceding period in the statement of accounts and notes and by adjusting the opening balance of reserves for the cumulative effect. 17. Post balance sheet events Any material post balance sheet events, which provide additional evidence relating to conditions existing at the balance sheet date or indicate that application of the going concern concept is not appropriate, have been included in the accounts. Any material post balance sheet events that concern conditions that did not exist at the balance sheet date have been disclosed as a separate note to the accounts. 18. Value Added Tax (TAX) Value Added Tax is included within the accounts only to the extent that it is irrecoverable and therefore charged to service expenditure or capital expenditure as appropriate. 19. Operating Leases
Rentals payable under operating leases are charged to revenue on a straight-line basis over the term of the lease.
13
14
Statement of Accounting Policies (cont.…) 20. Finance Leases These are leases that transfer all the risks and rewards of ownership of a fixed asset to the lessee. Such a transfer may be presumed to occur if, at the inception of the lease, the present value of the minimum lease repayments, including any initial payment, amounts to substantially all of the fair value of the leased asset. 21. Associated and subsidiary companies, group accounts
The local authority group is defined as the local authority and its interests in entities, except where such entities are local authorities, which would be regarded as its subsidiaries or associates or joint ventures if the local authority was subject to the Companies Acts. Stratford-on-Avon DC has no financial relationships with any entity that can be considered as a subsidiary, or an associate, or a joint venture, or as a simple investment. The Authority does not have a right to share in profits, a liability to contribute to losses, or an obligation to contribute to debts or expenses in winding-up of any entity.
The Authority has an agreement with South Warwickshire Tourism, trading as Shakespeare Country (SC), relating to the carrying out of Tourism Functions. SC act as principals not agents and consequently the relevant transactions form part of their company accounts and not those of the Authority. The Authority pay for all work done and services provided in respect of the undertaking by providing 23% of the organisation core funding. Although, the Authority have influence over the organisation by providing some of its funds, this is not considered sufficient to generate a formal interest in the entity’s (SC) assets, liabilities or reserves. Shakespeare Country ceased trading on the 31 March 2010. 22. Collection Fund
Following the issue of the Local Authority Accounting Panel Bulletin 84 (LAAP 84) the Council's 2008/09 Accounts have been re-stated, as an agency account, to include accrued council tax income for the year. Under the new accounting requirements, for both the billing authority and major preceptors, the difference between the income included in the Income and Expenditure Account and the amount required by regulation to be credited to the General Fund shall be taken to a new Collection Fund Adjustment Account and included as a reconciling item in the Statement of Movement on the General Fund Balance.
15
Income and Expenditure Account 2008/2009
Net Expenditure
£000’s Restated
Services
2009/2010 Gross
Expenditure £000’s
2009/2010 Gross
Income £000’s
2009/2010 Net
Expenditure £000’s
1,702 Central Services 9,643 (8,468) 1,175
13,070 Cultural, Environmental, Regulatory and Planning Services
14,693 (3,539) 11,154
1,025 Highways and Transport Services 1,093 (2) 1,091
2,147 Housing 26,231 (24,521) 1,710
2,083 Corporate and Democratic Core 1,800 (24) 1,776
326 Non Distributed Costs 281 (27) 254
20,353 Net cost of services 53,741 (36,581) 17,160
2,538 Precepts paid to town/parish councils 2,559 2,603 (Surplus)/Deficit from trading operations not included in net cost of
services (note 2) (933)
37 Interest payable 3 12 Contribution to Housing Pooled Capital Receipts (note 10) 5
(1,409) Interest and Investment Income (706) 1,146 Pensions interest cost and expected return on pensions assets 1,789 (304) Right to Buy Clawback and other windfall capital receipts (292)
24,976 Net operating expenditure 19,585
(8,856) Precepts / demands on the Collection Fund (9,101) 12 Collection Fund balance (13)
(1,208) General Government Grants (note 36) (1,674) (6,060) Contribution from National Non-Domestic Rates Pool (5,637)
8,864 (Surplus) / Deficit for the year 3,160
16
Statement of the Movement on the General Fund Balance 2008/2009
£000’s Restated
2009/2010 £000’s
8,864 (Surplus) / Deficit for the year on the Income and Expenditure
Account 3,160
(9,462) Net additional amount required by statute and non-statutory proper practices to be debited or credited to the General Fund Balance for the year (Note 11)
(3,433)
(598) (Increase) / Decrease in General Fund Balance for the year (273)
(2,042) General Fund Balance brought forward (2,640)
(2,640) General Fund Balance only carried forward (2,913)
Statement of Total Recognised Gains and Losses 2008/2009
£000’s Restated
2009/2010 £000’s
8,864 (Surplus) / Deficit for the year on the Income and Expenditure
Account 3,160
(3,177) Surplus arising on revaluation of fixed assets 0 (2,249) Actuarial (gains) / losses on pension fund assets and liabilities 8,339
3,438 Total recognised (gains) / losses for the year 11,499
18
Cash Flow Statement 2008/2009
£000’s Restated
2009/2010 £000’s
REVENUE ACTIVITIES Cash Outflows
11,442 Cash paid to and on behalf of employees 10,981 8,087 Other operating cash payments 14,371
25,708 Housing Benefit (Rent allowances) paid out 23,284 6,522 Precepts paid 6,723
12 Payments to capital receipts pool 5
51,771 55,364 Cash Inflows
(1,167) Rents (after benefits) (953) (5,961) Council Tax receipts (6,102) (6,060) National Non-Domestic Rate receipts from National Pool (5,637) 1,458 Non-Domestic Rate receipts (1,222) (844) Revenue Support Grant (1,301)
(25,912) Government grants for benefits (note 34) (31,043) (2,297) Other Government grants (note 34) (2,046) (5,921) Cash Received for goods and services (5,862) (1,610) Other operating cash receipts (1,877)
(48,314) (56,043)
3,457 Sub-total Net Cashflow – Revenue Activities (note 32) (679) Returns on Investments and Servicing of Finance Cash Outflows
36 Interest paid 3 Cash Inflows
(1,471) Interest received (817)
2,022 Net cash outflow/( inflow) from Revenue Activities (1,493) CAPITAL ACTIVITIES Cash Outflows
6,215 Purchase of fixed assets 2,580 1,908 Other Capital Payments 2,513
8,123 5,093
Cash Inflows (864) Capital Receipts (391)
(4,595) Capital Grants (1,986)
(5,459) (2,377)
4,686 Net cash outflow/(inflow) before financing 1,223 MANAGEMENT OF LIQUID RESOURCES
504 NNDR Receipts under/over paid to the Government 5,078 (589) Council Tax Receipts under/over paid to major preceptors (487)
4,601 Decrease/(increase) in cash and equivalents (note 33) 5,814
19
Notes to the Core Financial Statements The following notes give clarity to figures used in the preceding statements. 1. Accounting for Council Tax Following the issue of the Local Authority Accounting Panel Bulletin 84 (LAAP 84) the Council's 2008/09 Accounts have been re-stated, as an agency account, to include accrued council tax income for the year. Under the new accounting requirements, for both the billing authority and major preceptors, the difference between the income included in the Income and Expenditure Account and the amount required by regulation to be credited to the General Fund shall be taken to a new Collection Fund Adjustment Account and included as a reconciling item in the Statement of Movement on the General Fund Balance. The changes are as follows:- Priors to Changes Post Changes
Amounts that would have been included prior to changes are:-
Amounts included post changes are:-
2008/09 WCC/WPA Debtor £318k Debtor £1,647k 2009/10 WCC/WPA Creditor £236k Debtor £2,160k 2. Trading Operations Trading operations are activities of the Council of a commercial nature that are financed substantially by income from tenants. Avenue Farm Depot, Mason’s Road and Timothy’s Bridge Road Industrial Estates and various commercial properties (Corporate Estates) in Stratford-upon-Avon are operated on such a basis. The financial results of each are summarised below:-
Total Trading
Ops. 08/09 £000’s
Avenue Farm Depot 09/10 £000’s
Ind. Estates
09/10 £000’s
Corporate Estates
09/10 £000’s
Rec. Grounds
09/10 £000’s
Parking
09/10 £000’s
Total Trading
Ops. 09/10
£000’s
(1,074) Income from commercial rents
(187) (70) (426) (120) (48) (851)
(3,639) Fees and
charges income
(2) (4) (61) (1) (3,688) (3,756)
(4,713) Total
income (189) (74) (487) (121) (3,736) (4,607)
3,329 Expenditure 16 10 351 14 2,738 3,129
(1,384) Surplus on
trading (173) (64) (136) (107) (998) (1,478)
3,987 Capital
Charges 2 16 99 12 416 545
2,603 (Surplus) /
Deficit after asset rental charge
(171) (48) (37) (95) (582) (933)
20
Notes to the Core Financial Statements 3. Members’ Allowances Expenditure for the 2009/2010 on members’ allowances is detailed below: -
2008/2009
£000’s
2009/2010
£000’s 349 Members’ Allowances 337
A document detailing the Members’ Allowances Scheme is available from the Head of Resources, Elizabeth House, Church Street, Stratford-upon-Avon, CV37 6HX. Details of amounts paid to individual members are also open to public inspection by prior arrangement with Resources, telephone 01789 260425. Members’ Allowances were set in line with the recommendations of the report by the Independent Remuneration Panel in February 2008. Details of members’ allowances by individual councillor can be found on the Council’s website. 4. Finance and Operating Leases During 2009/2010 no payments were made in respect of finance leases and there were no future commitments under finance leases as at 31 March 2010. Operating lease rentals are payable to the relevant service account on a straight-line basis over the term of the lease. Rentals paid under operating leases by this authority amounted to £106k in 2009/2010 and are in respect of printing equipment. Future commitments under these operating leases for printing equipment are estimated at £92k per annum until September 2011.
21
Notes to the Core Financial Statements 5. Employees’ Remuneration The Accounts and Audit Regulations 2003 (as amended) require disclosure of the number of employees whose remuneration falls in each bracket of a scale in multiples of £5,000 starting with £50,000 (excluding employer’s pension contributions) and these are as follows:- Remuneration Band Number of
Employees Number of Employees
2008/2009
2009/2010
£110,000 - £114,999 0 1 £105,000 - £109,999 0 0 £100,000 - £104,999 1 0 £95,000 - £99,999 0 0 £90,000 - £94,999 0 0 £85,000 - £89,999 0 1 £80,000 - £84,999 1 1 £75,000 - £79,999 1 0 £70,000 - £74,999 0 0 £65,000 - £69,999 0 0 £60,000 - £64,999 0 3 £55,000 - £59,999 0 5 £50,000 - £54,999 9 2 The amended regulations have also introduced a new requirement with effect from 2009/10 to disclose individual remuneration details by post title for senior employees who have the responsibility for the management of the authority and these are detailed below:- Post Title Salary
(Including fees &
Allowances)
Expenses Allowances
Total Remuneration
excluding pension
contributions 2009/10
Pension Contributions
Total Remuneration
including pension
contributions 2009/10
£ £ £ £ £
Chief Executive
2009/10 2008/09
109,768 102,037
4,931 2,145
114,699 104,182
14,921 14,523
129,620 118,705
Strategic Director A
2009/10 2008/09
80,682 74,654
5,130 3,323
85,812 77,977
11,780 10,892
97,592 88,869
Strategic Director B
2009/10 2008/09
80,682 79,167
4,176 4,152
84,858 83,319
11,780 10,892
96,638 94,211
Monitoring Officer
2009/10 2008/09
62,370 51,206
1,200 1,107
63,570 52,313
9,106 7,179
72,676 59,492
Section 151 Officer
2009/10(**) 2008/09(**) 2008/09(*)
47,721 33,867 24,686
0 0
2,279
47,721 33,867 26,965
5,987 4,098 3,365
53,708 37,965 30,330
Total 2009/10 2008/09
381,223 365,617
15,437 13,006
396,660 378,623
53,574 50,949
450,234 429,572
* Acting Section 151 Officer for period April to September 2008 ** Section 151 Officer seconded from Warwickshire County Council with effect from September 2008 to date
22
Notes to the Core Financial Statements 6. Pension Costs
As part of the terms and conditions of employment of its officers and other employees, the authority offers retirement benefits. Although these benefits will not actually be payable until employees retire, the authority has a commitment to make the payments that need to be disclosed at the time that employees earn their future entitlement. The authority participates in a defined benefit scheme, administered by Warwickshire County Council. A funded scheme means that the authority and employees pay contributions into a fund, calculated at a level intended to balance the pensions liabilities with investment assets. The Council recognises the cost of retirement benefits in the Net Cost of Services when they are earned by employees rather than when the benefits are eventually paid as pensions. However, the charge we are required to make against council tax is based on the cash payable in the year, so the real cost of retirement benefit is reversed out of the Income & Expenditure Account and replaced with actual contributions in the Statement of Movement on the General Fund Balance. These transactions for the year are as follows:- 2008/2009 2009/2010
£000’s £000’s Income & Expenditure Account Net Cost of Services:- - Current Service Cost 1,438 866 - Past Service Costs, Settlements and Curtailments 108 90 Net Operating Expenditure:- - Interest Cost 4,312 4,191 - Expected Return on Assets in the Scheme (3,166) (2,402) - Curtailments or Settlements 0 0 Net Charge to the Income & Expenditure Account 2,692 2,745 Statement of Movement on the General Fund Balance
Reversal of net charges made for retirement benefits in accordance with FRS17
(2,692) (2,745)
Actual amount charged against the General Fund Balance for pensions in the year
- Employers contributions 1,307 1,309 During 2009/2010 contributions of £1,118k (representing 14.6% of employees’ pensionable pay, when pension strain – the excess cost of early retirement – is excluded) were payable into the Warwickshire pension scheme. In addition the Council is responsible for all pension payments and related increase in respect of Pension strain. In 2009/2010 these amount to £80k representing 1.0% of pensionable pay. An estimate of the contributions expected to be paid to the scheme for 2010/2011, as per the actuarial report, are £1,306k, with £1,194k being normal contributions and £112k £ for £ recharges.
23
Notes to the Core Financial Statements In addition to the recognised gains and losses included in the Income & Expenditure Account, actuarial losses of £8,339k were included in the Statement of Total Recognised Gains and Losses (STRGL). The cumulative amount of actuarial gains/(losses) recognised in the STRGL is (£14,818k). Assets & Liabilities in relation to Retirement Benefits Reconciliation of present value of the scheme liabilities:- 2008/2009 2009/2010
£000’s £000’s Net Pensions Liability as at 1 April (70,908) (59,857) Current Service Costs (1,438) (866) Past Service Costs (108) (55) Member Contributions (544) (517) Curtailments 0 (35) Interest on Pension Liabilities (4,312) (4,191) Actuarial Gains/(Losses) 15,028 (19,002) Benefits/Transfer paid 2,425 3,045 Net Pensions Liability as at 31 March (59,857) (81,478) Reconciliation of fair value of the scheme assets:- 2008/2009 2009/2010
£000’s £000’s 1 April 48,627 38,588 Expected return on plan assets 3,166 2,402 Actuarial Gains/(Losses) (12,631) 10,663 Employer Contributions 1,307 1,309 Member Contributions 544 517 Benefits/Transfer paid (2,425) (3,045) Net Pensions Assets as at 31 March 38,588 50,434 The expected return on scheme assets is determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the Balance Sheet date. Expected returns on equity investments reflect long-term real rates of return experiences in the respective markets. The actual return on scheme assets in the year was £13,065,000 (£9,465,000 in 2008/2009).
24
Notes to the Core Financial Statements Scheme History 2005/06 2006/07 2007/08 2008/09 2009/10 *see
note *see
note As
restated As
restated Total
£000’s £000’s £’000 £000’s £000’s Present value of liabilities
(63,669) (63,726) (70,908) (59,857) (81,478)
Fair value of assets 48,445 50,487 48,627 38,588 50,434 Surplus/(Deficit) in the Scheme
(15,224)
(13,239)
(22,281)
(21,269)
(31,044)
*The Council has elected not to restate the fair value of scheme assets for 2005/2006 permitted by FRS17 (as revised). The liabilities show the estimated underlying commitments that the Council has in the long term to pay retirement benefits. The total liability of £81,478K has a significant impact on the net worth of the Council as recorded in the Balance Sheet. However, statutory arrangements for funding the deficit mean that the financial position of the Council remains healthy. The deficit on the scheme will be made good by increased contributions over the remaining working life of employees, as assessed by the scheme’s Actuary. Basis for Estimating Assets and Liabilities Liabilities have been assessed on an actuarial basis using the projected unit method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels etc. The liabilities have been assessed by Mercer Limited, an independent firm of actuaries, estimates being based on the latest full valuation of the scheme as at 31 March 2007. The principal assumptions adopted were:- ACTUARIAL ASSUMPTIONS
2008/2009
2009/2010
Rate of inflation 3.30% 3.30% Rate of increase in salaries 5.05% 5.05% Rate of increase in pensions 3.30% 3.30% Rate for discounting scheme liabilities 7.10% 5.60% Take-up of option to convert annual pension into retirement grant
50.00% 50.00%
Mortality Assumptions:- Longevity at 65 for current pensioners - Men 21.2 21.2 - Women 24.0 24.1 Longevity at 65 for future pensioners - Men 22.2 22.2 - Women 25.0 25.0 Expected rate of return on assets:- Equities 7.50% 7.50% Government Bonds 4.00% 4.50% Other Bonds 6.00% 5.20% Property 6.50% 6.50% Cash/Liquidity 0.50% 0.50% Other 7.50% 7.50%
25
Notes to the Core Financial Statements The Scheme assets consist of the following categories, by proportion of the total assets held:-
Beginning of year
End of year
Equities 63.00% 67.00% Government Bonds 10.00% 9.00% Other Bonds 15.00% 13.00% Property 5.00% 4.00% Cash/Liquidity 2.00% 2.00% Other 5.00% 5.00% History of experience Gains and Losses The actuarial loss/gain identified as movement on the Pension Reserve in 2009/2010 can be analysed into the following categories, measured as a percentage of assets or liabilities at 31 March 2010:- 2005/06 2006/07 2007/08 2008/09 2009/10 As
restated As
restated Total Total
% % % % % Difference between the expected and actual returns on assets
13.8 0.8 (9.1) (32.7) 21.1
Experience gains and losses on liabilities
1.8 0.0 (1.5) 0.0 0.0
Further information can be found in Warwickshire County Council’s Superannuation Fund Actuarial Report, which is available on request from the Strategic Director of Resources, Warwickshire County Council, P.O. Box 3, Shire Hall, Warwick, CV34 4RH.
26
Notes to the Core Financial Statements 7. Agency Income and Expenditure There are no Agency costs to disclose in the 2009/2010 (£0 in 2008/2009) Statement of Accounts. 8. Related Parties It is a requirement that the Statement of Accounts of an authority, contains disclosure of any transactions with a related party, this includes non-financial transactions. This is in order that any reader is aware of the possibility that the financial position and results of an authority may have been affected by material transactions with related parties. A related party is defined as being an organisation with which the authority has dealings, and where either officers or members of the authority have a controlling interest in that organisation. The information as relates to this Authority for 1 April 2009 to 31 March 2010 is as follows: Expenditure Transactions
Creditor Transactions
Balance 31 March
2009
Creditor
Transactions
Balance 31 March
2010 £000’s £000’s £000’s £000’s
69 0 Orbit Heart of England Housing Association – excludes Benefit Payments (note a)
0 0
1,631 0 Pension Service 1,630 0
2,214 25 Warwickshire County Council –
excludes Precepts (note c) 3,151 0
289 0 Shakespeare Country (note d) 223 0
53 0 Stratford Town Management Trust 27 0
a. There were two District Councillors who served on the service board of the Orbit Heart
of England Housing Association namely: - - George Atkinson - Ronald Cockings
The majority of the transactions were in respect of infrastructure maintenance, ie cost of works incurred and fees for supervising works.
b. There are also two District Councillors who are also Member’s of the Police Authority
namely: - Richard Hobbs - Isobel Seccombe
c. Included here is a transaction of £54k with Warwickshire County Council for the
secondment to this authority of the Head of Resources/S.151 Officer.
27
Notes to the Core Financial Statements d. There were three District Councillors who were also on the Board of Shakespeare Country
namely: -
- Jennifer Fradgley - John Horner - Sir William Lawrence (Bt)
The transaction with Shakespeare Country is in the form of a contribution towards their activities. Councillors Fradgley and Lawrence resigned during the year and South Warwickshire Tourism (Shakespeare Country) ceased trading on 31 March 2010.
e. Other Public Bodies:
The Council collects precepts on behalf of Warwickshire County Council, Warwickshire Police Authority and the Town and Parish Councils. Some Stratford-on-Avon District Council Councillors are also members of these bodies. Major transactions (£5k and over) where Stratford District Councillors are also members of Parish Councils are shown below:-
Parish Councils
Number of
Members
Creditor Payments other than Precepts
£000’s Brailes: Payment of capital grant
1 10
Shipston-on-Stour: Payment of capital grant and contributions to Parish Cleansing and Verge Trimming
1 9
Wellesbourne: Payment of capital grant and Community Safety Grant
2 5.5
Major transactions (£5k and over) where Stratford District Councillors are also members of public bodies are shown below:-
Parish Councils
Number of
Members Creditor
Payments £000’s
Citizens Advice Bureau: Stratford Branch
1 45
Non-Financial Transactions None of which the Council is aware.
28
Notes to the Core Financial Statements 9. Audit Costs In 2009/2010 the Council incurred the following fees relating to external audit and inspection:
2008/2009 2009/2010 £000’s £000’s
• Fees payable to the appointed auditor with regard to external audit services carried out by the appointed auditor
106 108
• Fees payable to the appointed auditor in respect of statutory
inspection 0 0
• Fees payable to the appointed auditor for the certification of
grant claims and returns 47 42
• Fees payable in respect of any other services provided by the
appointed auditor 3 3
Total Audit Costs 156 153
10. Housing Pooled Capital Receipts Local authorities in England have to pay a proportion of specified housing related capital receipts (75%) into a Government pool for redistribution. This is then offset by an appropriation from usable capital receipts. In the case of Stratford-on-Avon DC the receipts arise from the repayment of principal on mortgages. 2008/2009
£000’s 2009/2010
£000’s 12 Contribution to Housing Pooled Capital Receipts 5
12 5
29
Notes to the Core Financial Statements 11. Breakdown of Reconciling Items in the Statement of Movement on the General
Fund Balance The amounts in addition to the Income and Expenditure Account surplus or deficit for the year that are required by statute and non-statutory proper practices to be charged or credited to the General Fund in determining the movement on the General Fund Balance for the year are as follows:-
2008/2009
£000’s Restated
2009/2010
£000’s
2009/2010
£000’s
Amounts included in the Income and Expenditure Account but required by statute to be excluded when determining the Movement on the General Fund Balance for the year
(525) Amortisation of intangible fixed assets (589) (7,076) Depreciation and impairment of fixed assets (2,096)
246 Capital Grants and Contributions Deferred Amortisation
330
(952) Revenue Expenditure Funded from Capital under Statute
(653)
0 Net (gains) / loss on sale of fixed assets 0 304 Right to Buy Clawback and other windfall capital
receipts 292
(2,692) Net charges made for retirement benefits in accordance with FRS17
(2,745)
39 Amount by which Council Tax income adjustment included in the I&E is different from the amount taken to the General Fund in accordance with regulation
55
(10,656) (5,406)
Amounts not included in the Income and Expenditure Account but required by statute to be included when determining the Movement on the General Fund Balance for the year
(12) Transfer from Usable Capital Receipts (Housing Pooled Capital Receipts)
(5)
1,307 Employer’s contributions payable to the Warwickshire County Council Pension Fund
1,309
0 Capital expenditure charged in-year to the General Fund balance
81
1,295 1,385
Transfers to or from the General Fund Balance that are required to be taken into account when determining the Movement on the General Fund Balance for the year
(101) Net transfers (To)/From Earmarked Reserves 588 588 (101)
(9,462) Net additional amount required to be
credited to the General Fund Balance for the year
(3,433)
30
Notes to the Core Financial Statements 12. Movement of Fixed Assets Operational Assets Land and
buildings Vehicles,
plant and equipment
Infrastructure assets
Community assets
Total – Operational
Assets £000’s £000’s £000’s £000’s £000’s
Cost or Valuation at 1 April 2009
29,904*
5,877
5,247
465
41,493
Additions 964 302 718 197 2,181 Disposals 0 (844) 0 0 (844) At 31 March 2010 30,868 5,335 5,965 662 42,830 Depreciation & Impairments at 1 April 2009
(116)*
(2,468) (522) (123) (3,229)
Depreciation Charge 2009/10
(1,070)
(876) (124) (26) (2,096)
Disposals 0 844 0 0 844 At 31 March 2010 (1,186) (2,500) (646) (149) (4,481) Balance Sheet amount at 31 March 2010
29,682 2,835 5,319 513 38,349
Balance Sheet amount at 1 April 2009
29,788 3,409 4,725 342 38,264
Nature of Asset Holding:-
Owned 29,682 2,835 5,319 513 38,349 * B/Fwd figure differs by the impairment relating to 2008/2009 Non-Operational Assets Investment
Properties Total – Non-
Operational Assets
Grand Total – All Assets
£000’s £000’s £000’s Cost or Valuation at 1 April 2009 9,286 9,286 50,779 Additions 16 16 2,197 Disposals (Trf to Finance Lease) (250) (250) (1,094) At 31 March 2010 9,052 9,052 51,882 Depreciation & Impairments at 1 April 2009
0
0 (3,229)
Depreciation Charge 2009/10 0 0 (2,096) Disposals 0 0 844 At 31 March 2010 0 0 (4,481) Balance Sheet amount at 31 March 2010
9,052 9,052 47,401
Balance Sheet amount at 1 April 2009
9,286 9,286 47,550
Nature of Asset Holding:- Owned 9,052 9,052 47,401
31
Notes to the Core Financial Statements 13. Fixed Asset Valuation Valuations and impairments are carried out by external independent valuers (Gerald Eve Chartered Surveyors) in accordance with the Statement of Asset Valuation Practice and Guidance Notes of the Royal Institute of Chartered Surveyors. However, there were no valuations or impairments carried out during 2009/2010 in line with the Council’s rolling programme of asset valuation and impairment reviews. For information the basis of valuations and impairments is set out in the Statement of Accounting Policies (note 6). The programme for future valuations of the Council’s main assets is as follows:- Public Offices, Shipston Leisure Centre and various investment properties in 2011; Alcester Area Office, Studley Leisure Centre and various investment properties in 2012 and Stratford Leisure Centre, Southam Leisure Centre and various car parks in 2013. 14. Capital Expenditure and Financing Capital Expenditure is expenditure on the acquisition of a fixed asset or expenditure, which adds to and not merely maintains the value of an existing fixed asset. The Council’s de-minimis level is currently set at £5,000, which means relevant expenditure amounting to less than £5,000 will be included in the accounts as revenue expenditure rather than capital expenditure. Capital expenditure is detailed below:
2008/2009
£000’s
2009/2010
£000’s Capital expenditure adding to fixed asset valuation:
99 Leisure facilities 66 266 Car Parks 17 231 Information technology development 77 308 Crime reduction – CCTV 3 27 Improvement / refurbishment of Council offices 0
1,933 Waste & Cleansing 109 2,499 Recreation Ground/Bancroft Gardens (WCS) 967
0 Travellers Sites 928 758 Strategic Property Acquisition 0 353 Other 30
6,474 Additions to fixed assets 2,197
Capital expenditure not adding to fixed asset valuation:
474 Intangible Fixed Assets (note 17) 516 1,404 Revenue Expenditure Funded from Capital under
Statute (note 18) 1,969
1,878 2,485
8,352 Total capital expenditure 4,682
Financed by:
3,240 Grants / contributions 3,065 5,112 Capital receipts 1,536
0 Revenue contributions 81 8,352 4,682
32
Notes to the Core Financial Statements 15. Capital Commitments The Council has Capital Commitments of approximately £1,632k as at 31 March 2010 and these will be financed from 2010/2011 resources in accordance with recommended practice. An analysis of the commitments is given below:- 2008/2009
£000’s 2009/2010
£000’s 10 Waste & Cleansing 0 120 Capital Grants 49
222 World Class Stratford 964 0 Land Drainage 56 0 Pathlow Gypsy Site 389 0 CCTV 103 0 Parking Equipment 27
49 Various Miscellaneous 5 106 Area Community Committee Grants 39
507 1,632
16. Information on Assets Held An analysis of the main fixed assets owned by the Council is shown below: 2008/2009 2009/2010
Operational buildings 1 Council offices 1 3 Area offices 3 1 Depot 1
20 Car parks 20 4 Leisure centres 4
12 Public conveniences 12 1 Sports pavilions 1 1 Gypsy caravan site 1 Vehicles, plant and equipment
3 Vehicles 2 Approx.940 Information technology equipment (items) Approx.884
Community assets
102 Parks and recreation land (hectares) 102 Investment properties
24 Commercial properties 23 10 Land available for development (plots) 10
33
Notes to the Core Financial Statements 17. Intangible Fixed Assets
Gross Cost as at
1 April 2009
Accumulated Amortisation as at 1 April
2009
Expenditure in year
Accounts written off to
Income & Expenditure
Account
Net Balance at 31 March
2010 £000’s £000’s £000’s £000’s £000’s
IT Software 3,115 (1,444) 514 (589) 1,596 IT Training 141 (141) 3 0 3 3,256 (1,585) 517 (589) 1,599 Any intangible assets not yet amortised to the Income and Expenditure Account are held on the balance sheet and are for IT software & training. These costs are amortised on a straight line basis in the Income and Expenditure account over five/three years and one year respectively during which the Authority derives benefit from the expenditure. 18. Revenue Expenditure Funded from Capital under Statute
Balance at
1 April 2009
Expenditure in year
Expenditure met by grant
income
Accounts
written off to Income &
Expenditure Account
Balance at 31 March
2010 £000’s £000’s £000’s £000’s £000’s
Renovation Grants 0 669 (405) (264) 0 Area Committee Grants 0 101 0 (101) 0 Disabled Adaptations 0 13 0 (13) 0 S.106 Agreements 0 19 (19) 0 0 Affordable Housing 0 394 (394) 0 0 Empty Homes 0 53 (53) 0 0 Other Small Misc. 0 272 0 (272) 0 World Class Stratford 0 448 (445) (3) 0 0 1,969 (1,316) (653) 0 Revenue expenditure funded from capital under statute are payments classified as capital but do not result in the creation of a fixed asset. These have been charged to the relevant service revenue account in the year. Where the council has determined to meet the cost of this expenditure from existing capital resources, a transfer to the Capital Adjustment Account then reverses out the amounts charged in the Statement of Movement on the General Fund Balance so there is no impact on the level of council tax.
34
Notes to the Core Financial Statements 19. Stocks 2008/2009
£000’s 2009/2010
£000’s
12 Departmental Stationery and other consumable stocks 14 11 Sports Equipment Bank 11 7 Environmental Health Poison stock 4
30 29
20. Financial Instruments The financial instruments disclosed in the balance sheet consist of the following categories:
Long Term
31 March 2009 Current
31 March 2009
Financial Assets
Long Term
31 March 2010 Current
31 March 2010 £000’s £000’s £000’s £000’s
Loans & Receivables:-
230 10 Loan 220 10 1,409 22 Finance Lease Lessor 1,563 25
0 16,702 Money Market Funds 0 11,440 0 431 Deposits Bank/Building Societies 0 60 0 1,774 Trade Receivables 0 1,810 0 0 Cash 0 0
1,639 18,939 Total 1,783 13,345
Long Term
31 March 2009 Current
31 March 2009
Financial Liabilities
Long Term
31 March 2010 Current
31 March 2010 £000’s £000’s £000’s £000’s
Amortised Cost:-
0 1,196 Trade Payables 0 1,357 0 6 Overdraft 0 321
0 1,202 Total 0 1,678
35
Notes to the Core Financial Statements Gains and losses recognised in the Income and Expenditure Account:
Loans and Receivables
31 March 2009 At Fair Value
31 March 2009
Financial Assets
Loans and Receivables
31 March 2010 At Fair Value
31 March 2010 £000’s £000’s £000’s £000’s
1,406 1,406 Interest Received 706 706
1,406 1,406 Total 706 706
At Amortised Cost
31 March 2009 At Fair Value
31 March 2009
Financial Liabilities
At Amortised Cost
31 March 2010 At Fair Value
31 March 2010 £000’s £000’s £000’s £000’s
37 37 Interest Paid 3 3
37 37 Total 3 3 Fair Value of Assets and Liabilities carried at amortised cost Financial liabilities and financial assets represented by Borrowings and Investments are carried in the balance sheet at amortised cost. Their fair value can be assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments using the following assumptions:
• PWLB and Market debt; estimated interest rates at 31st March 2010 for new debt with the same maturity date from comparable lenders.
• Investments; long term – estimated interest rates at 31st March 2010 for equivalent loans.
• Investments; short term – carrying amounts in the balance sheet approximate to fair value.
36
Notes to the Core Financial Statements The fair values calculated are as follows:
Carrying Amount
31 March 2009
At Fair Value 31 March
2009
Financial Assets
Carrying Amount
31 March 2010
At Fair Value 31 March
2010 £000’s £000’s £000’s £000’s
Short Term:- 16,702 16,702 Money Market Funds 11,440 11,440
431 431 Deposits Bank/Building Societies
60 60
0 0 Financial Asset - Interest 24 24 1,796 1,796 Trade Receivables 1,835 1,835
10 10 Loan 10 10 Long Term:-
230 230 Loan 220 220 1,409 1,409 Finance Lease Lessor 1,563 1,563
Financial assets – where an instrument is due to mature within 12 months the carrying amount is assumed to approximate fair value. The carrying value of the long term assets are valued the same as fair value as the loan is fixed at market rate and the finance lease lessor has been valued and stated at fair value.
Carrying Amount 31 March 2009
At Fair Value 31 March 2009
Financial Liabilities
Carrying Amount 31 March 2010
At Fair Value 31 March 2010
£000’s £000’s £000’s £000’s Short Term:-
1,196 1,196 Trade Payables 1,357 1,357 6 6 Overdraft 321 321
The Council has no borrowing as at 31 March 2010 (none at 31 March 2009). Financial Liabilities - where an instrument is due to mature within 12 months the carrying amount is assumed to approximate fair value. Disclosure of nature and extent of risks arising from financial instruments The authority’s activities expose it to a variety of financial risks: (i) Credit risk – the possibility that other parties might fail to pay amounts due to the authority (ii) Liquidity – the possibility that the authority might not have funds available to meet its commitments to make payments (iii) Market risk – the possibility that financial loss might arise for the authority as a result of changes in such measures as interest rates and stock market movements The Authority’s overall risk management programme focuses on the treasury limits and treasury risk of the activities of the council. Risk management is carried out as part of the Annual Investment Strategy contained within the Treasury Management Strategy Statement. The Council provides written principles for overall risk management, as well as written policies covering specific areas, such as interest rate risk, credit risk and the investment of surplus cash.
37
Notes to the Core Financial Statements (i) Credit risk Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to the Authority’s customers. Banking institutions must have the highest possible short term credit rating as assessed by the credit-rating agency Fitch F1+ short term or AA- long (or Moody’s equivalent), or be a wholly-owned subsidiary of that bank, to qualify as counterparty for deposits. Building Societies similarly need to attain an appropriate credit rating as assessed by Fitch (or Moody’s equivalent) with a minimum of £10bn of assets (top 7) to be acceptable. Maximum limits for funds on loan and maturity dates exist for each institution and vary according to credit rating. Customers are not assessed for credit risk (other than for those entering into agreements for the rental of corporate property). The following analysis summarises the Authority’s potential maximum exposure to credit risk, based on experience of default and uncollectability over the last five financial years, adjusted to reflect current market conditions:- Amount at
31 March 2010
Historical experience of
default
Historical experience adjusted for
market conditions at
31 March 2010
Estimated maximum
exposure to default and
uncollectability
£000’s % % £000’s
Deposits with banks and financial institutions
0 0 0 0
Sales Ledger 964 0.58 0.78 10.2 The Authority does not expect any losses from non-performance by any of its counterparties in relation to deposits, with financial instructions. Credit limits are not generally imposed on customers and clients of Council services. The sales ledger debt is £964k. The sales ledger debt can be analysed by age as follows: 2009/2010 Past due but not
impaired £’000 £’000 Less than a year 824 824 More than one year 140 119 Total 964 943
38
Notes to the Core Financial Statements (ii) Liquidity risk The authority currently has a strategy to take on no long term borrowing. Short term borrowing for cash flow purposes is covered in the Treasury Management Strategy and is limited to £5m in total. All trade and other payables are due to be paid in less than one year. (iii) Market risk Interest rate risk The authority is exposed to significant risk in terms of its exposure to interest rate movements on its borrowings and investments. Movements in interest rates have a complex impact on the authority. For instance, a rise in interest rates would have the following effects:
• Investments at variable rates – the interest income credited to the Income and Expenditure Account will rise
• Investments at fixed rates – the fair value of the assets will fall Changes in interest payable and receivable on variable rate borrowings and investments will be posted to the Income and Expenditure Account and affect the General Fund Balance pound for pound. Movements in the fair value of fixed rate investments will be reflected in the Statement of Total Recognised Gains and Losses. The authority has a number of strategies for managing interest rate risk. Policy is to aim to keep a maximum of up to 100% of its borrowings in variable rate loans. The treasury management team has an active strategy for assessing interest rate exposure that feeds into the setting of the annual budget and which is used to update the budget quarterly during the year. This allows any adverse charges to be accommodated. According to this assessment strategy, at 31 March 2010, if interest rates had been 1% Higher with all other variables held constant, the financial effect would be: £’000 Increase in interest payable on variable rate borrowings 0 Increase in interest receivable on variable rate investments 213 Impact on Income and Expenditure Account 213 Decrease in fair value of fixed rate investment assets 0 Price Risk The authority does not hold any equity shares, thus there is no price risk to the authority. Foreign exchange risk The authority has no financial assets or liabilities denominated in foreign currencies and thus has no exposure to loss arising from movements in exchange rates.
39
Notes to the Core Financial Statements 21. Debtors 2008/2009
£000’s Restated
2009/2010 £000’s
2,143 Central Government 2,235
132 HM Customs and Excise 169 241 Council Taxpayers 263
1,647 Major Preceptors – WCC/WPA 1,160 4,344 Business Ratepayers 7,998
138 Housing Benefit overpayments 491 2 Mortgagors 0
911 Sundry Debtors Control 964 699 Provisional Debtors 551
0 Financial Asset - Interest 24 229 Payments in Advance 330 59 Other 67
10,545 14,252
Less Provision for bad and doubtful debts:- (104) General Revenue Account (101) (34) Housing Benefit overpayments (245)
(838) Collection Fund (503)
9,569 Total Debtors 13,403
22. Creditors 2008/2009
£000’s Restated
2009/2010 £000’s
(208) Central Government (113) (263) Inland Revenue (246) (151) Other Local Authorities (50)
(1) Mortgagors (1) (230) Creditors Control (497) (482) Receipts in Advance (485) (151) Open Spaces Commuted Sums (185) (57) Council Taxpayers (102)
(287) Business Ratepayers (84) (181) Other (139)
(2,011) (1,902)
23. Accruals 2008/2009
£000’s Restated
2009/2010
£000’s (2,309) General Revenue Account (1,509)
(2,309 ) (1,509)
40
Notes to the Core Financial Statements 24. Deferred Credits Deferred Credits represent income of a capital nature derived from the sale of assets that will be received in instalments over agreed periods of time. They arise principally from mortgages on sales of Council dwellings, which form the main part of mortgages under long term debtors. 2008/2009
£000’s 2009/2010
£000’s (20) Mortgages (13)
(20) (13)
25. Reserves The Council keeps a number of reserves in the Balance Sheet. Some are required to be held for statutory reasons, some are needed to comply with proper accounting practice, and others have been set up to earmark resources for future spending plans. Balance at 1
April 2009 Restated
Net Movement in
year
Balance at 31 March 2010
Purpose of Reserve
Further Detail of Movements
£000’s £000’s £000’s Revaluation Reserve
(6,738) 256 (6,482) Revaluation of fixed assets
Note 27
Collection Fund Adjustment Account
32 (55) (23) Council Tax income adjustment
Page 48
Capital Adjustment Account
(38,611) 1,396 (37,215) Capital resources set aside
Note 28
Usable Capital Receipts
(16,859) 1,145 (15,714) Proceeds of fixed Asset sales
Note 29
Deferred Capital Receipts
(1,278) (156) (1,434) Capital Income to be received
Finance Leases re Cox’s Yard & 4/5
Sheep Street Pensions Reserve 21,269 9,775 31,044 Pensions Liability
in the Balance Sheet
Note 6
General Fund and Earmarked Reserves
(2,803) (862) (3,665) Resources available to meet
future expenditure
Note 11 & Statement of Movement on
General Fund Balance (44,988) 11,499 (33,489)
41
Notes to the Core Financial Statements 26. Provisions
Balance at
1 April 2009
Expenditure
in year
Write-back to
Revenue Account
Additions
in year
Balance at 31 March
2010
£000’s £000’s £000’s £000’s £000’s Insurances – Outstanding claims
(6) 2 0 (2) (6)
Department of Work & Pensions
0 0 0 (100) (100)
(6) 2 0 (102) (106) Provisions are charged to the appropriate account in the year that the authority becomes aware of the obligation, based on the best estimate of the likely settlement. When payments are eventually made, they are charged to the provision set up in the Balance Sheet. Settlements are reviewed at the end of the financial year and where this is not required or a lower settlement than anticipated is made the provision is reversed and credited back to the relevant account. Insurances The insurance provision covers all insurance claims for which the Council has a potential legal liability. Department of Work & Pensions This provision covers all outstanding issues in relation to the 2008/2009 Housing and Council Tax Benefit subsidy claim. 27. Revaluation Reserve 2008/2009
£000’s 2009/2010
£000’s (3,696) Balance at 1 April (6,738)
(4,586) Increase due to revaluations 0 1,409 Decrease due to impairments 0 135 Depreciation charge 246 0 Decrease due to transfer of property to finance lease 10
(6,738) Balance at 31 March (6,482)
The above reserve was introduced by the SORP(2007) and replaces the former Fixed Asset Restatement Account. The new system from 1 April 2007 has assumed that the historic cost and current value are the same. It represents the difference between the Current Value and Historic Cost on the revaluations that have taken place as at 31 March 2010.
42
Notes to the Core Financial Statements 28. Capital Adjustment Account
£000’s
Balance at 1 April 2009 (38,611)
2009/2010 Transactions:- Capital expenditure financed from capital receipts (1,536) Capital expenditure financed from revenue (81) Revaluation Reserve applied for impairments, depreciation & finance lease
(256)
Write down of 4/5 Sheep Street transferred to finance lease 250 Depreciation in year 2,096 Revenue Expenditure Funded from Capital under Statute 1,969 Intangible Fixed Assets 589 Write down of capital grants and contributions (1,645) Write down of Long Term Debtors – Finance Leases 10 Balance at 31 March 2010 (37,215) The Capital Adjustment Account (implemented by the amalgamation of the Capital Financing Account and Fixed Asset Restatement Reserve on 1 April 2007) provides a balancing mechanism between the different rates at which assets are depreciated under the SORP and are financed through the capital controls system. It should be noted that the account is matched by fixed assets within the Balance Sheet and are not resources available to the authority. 29. Usable Capital Receipts Reserve
£000’s
Balance at 1 April 2009 (16,859)
Capital receipts received (396) Capital receipts used for financing 1,536 Appropriation to I & E – Housing Pooled Capital Receipts 5 Balance at 31 March 2010 (15,714) The usable capital receipts account represents capital receipts available to finance capital expenditure in future years. In accordance with best practice, expenditure incurred in generating capital receipts has been used to offset gross capital receipts and thereby reduce the amount required by statute to be set aside.
43
Notes to the Core Financial Statements 30. Contingent Liabilities There are possible contingent liabilities and these are as follows:-
(a) Rent Express – The Rent Express scheme operated by the council issues bonds to landlords as a means of securing the tenancy. These bonds are returned when the tenant moves out and are only called upon should damage be caused to the property during the period of the let. As at the 31 March 2010 there have been bonds issued to the value of £19,788.31.
(b) South Warwickshire Tourism – This company ceased to trade on the 31 March 2010.
When the company commenced the tourism function for Stratford staff were transferred from the Council to the company. When the company ceased to trade two members of the original staff were still employed. The Council may have an obligation to these staff in respect of their pensions. The value of this obligation to the Council is currently unknown.
(c) Orbit Heart of England Housing Association – The Council has been served with notice
of impending litigation relating to the alleged condition of properties that were transferred by the Council to the Association's predecessor in 1996. It is alleged that the Council are in breach of warranty in relation to some of those properties. The value of the prospective claim cannot at this point be ascertained.
(d) Concessionary Fares – One bus operator has issued a Judicial Review application
against the County Council to which this authority is an interested party. Another operator has an additional routes claim of £193k, not covered by the current arrangements for reimbursement, which is assumed will form the basis of any legal challenge they may proceed with. Both these challenges will be vigorously contested by the Council.
31. Section 106 2008/2009
£000’s 2009/2010
£000’s (979) Balance at 1 April (1,070) (144) S.106 monies received in year (79)
(1,123) (1,149)
Used to finance capital expenditure:- 0 Affordable Housing 394 0 Leisure Facilities 39 53 Community Halls 0
(1,070) Balance at 31 March (716)
Section 106 receipts are monies paid to the Council by developers as a result of the grant of planning permission where works are required to be carried out or new facilities provided as a result of that permission. The sums are restricted to being spent only in accordance with the agreement concluded with the developer. The balances are included within capital grants/contributions unapplied in the balance sheet (See Page 17).
44
Notes to the Core Financial Statements 32. Reconciliation of (Surplus) / Deficit to Net Cash Inflow from Revenue Activities
2008/2009
£000’s Restated
2009/2010 £000’s
(Surplus) / deficit for the year
8,864 Income and Expenditure Account 3,160 Statement of Movement on General Fund Balance – Note 11:-
(525) Amortisation of intangible fixed assets (589) (7,076) Depreciation and impairment of fixed assets (2,096)
246 Government Grants Amortisation 330 (952) Revenue Expenditure Funded from Capital under Statute (653) 304 Right to Buy clawback and other windfall receipts 292
(1,385) Pensions (1,436) (12) Housing Pooled Capital Receipts (5)
0 Capital expenditure charged in-year to the General Fund balance 81 (101) Earmarked Reserves 588
39 Collection Fund 55
(598) (273)
(40) Non cash transactions 417
(638) 144 Accruals basis items
2 Increase / (Decrease) in stocks (2) 2,612 Increase / (Decrease) in debtors (910)
144 (Increase) / Decrease in creditors 110
2,120 (658)
1,337 Items classified elsewhere in the Cash Flow Statement (21)
3,457 Net cash outflow/( inflow) from revenue activities (679)
33. Decrease/(Increase) in Cash and Cash Equivalents As at
31-Mar-09 As at
31-Mar-10 Movement
in year £000’s £000’s £000’s Cash and bank / (bank overdraft) (6) (320) 314 Temporary investments 17,000 11,500 5,500 Decrease/(increase) in cash and cash equivalents
5,814
45
Notes to the Core Financial Statements 34. Specific Government Grants
2008/2009
£000’s 2009/2010
£000’s Grants for benefits
(6,450) Council Tax benefits (6,868) (19,462) Housing benefits (24,175)
(25,912) (31,043)
Other Government Grants (379) Council Tax benefits – administration (375) (346) Housing benefits – administration (345)
(1,572) Other grants / adjustments (1,326)
(2,297) (2,046)
35. Post Balance Sheet Events The financial statements were authorised for issue by the Head of Resources to the Authority on the 27 September 2010. All events relevant to the financial year ended 31 March 2010 have been taken into consideration up to this date and where considered material recognised in the statement of accounts. There can be no reasonable expectation that events could have been taken into account by the Authority after this date. On 8 July 2010, the Minister of State for Pensions, Steve Webb MP, made a statement to Parliament, announcing the Governments intention to adopt the Consumer Price Index (CPI) as a measure of price inflation for the purposes of regulating occupational pension schemes. This followed the Chancellor’s budget announcement on 22 June 2010 that public sector pensions would adopt the CPI instead of the Retail Price Index (RPI). The change is expected to take effect from 1 April 2011. With regard to the change as far as the 2009/2010 financial statements are concerned, it is classified as a non-adjusting event and the financial effect cannot currently be estimated. It will be addressed within the 2010/2011 financial statements.
46
Notes to the Core Financial Statements 36. General Government Grants A breakdown of grants received from the Government as detailed in the Income and Expenditure Account are as follows:- 2008/2009
£000’s 2009/2010
£000’s
844 Revenue Support Grant 1,301 342 Concessionary Fares Grant 350 22 Area Based Grant 23
1,208 1,674
37. Long Term Debtors 2008/2009
£000’s 2009/2010
£000’s
20 Mortgages (a) 13 230 Stratford Football Club – Loan (b) 220 131 Grove Road Car Park – Finance Lease (c) – See note 38 131
1,278 Cox’s Yard – Finance Lease (c) – See note 38 1,267 0 4/5 Sheep Street – Finance Lease (c) – See note 38 165
1,659 Balance at 31 March 2010 1,796
(a) Mortgages relate to mortgages on the sale of council houses; (b) Loan to Stratford Football Club repayable over 25 years; and (c) These are leases that transfer all the risks and rewards of ownership of a fixed asset
to the lessee. Such a transfer may be presumed to occur if, at the inception of the lease, the present value of the minimum lease repayments, including any initial payment, amounts to substantially all of the fair value of the leased asset.
47
Notes to the Core Financial Statements 38. Leases Further information in respect of the Authority’s leases is given in the table below:-
£000’s Notes The aggregate rentals receivable in the year are as follows:-
(a) Finance Leases 106 (b) Operating Leases 870 Net investments in finance leases 1,563 See item (c) in note 37 Gross amount of assets held for use in operating leases
3,600 There are no depreciation charges as operating leases all relate to investment properties
Assets acquired by the Council for the purpose of letting under finance leases
0
39. Earmarked Reserves The following is a breakdown of the Earmarked Reserves as at 31 March 2010:-
£000’s
Risk Management 200.0 Investment Income 170.5 Beacon Award 62.5 Mortgage Rescue Programme 7.0 Local Authority Business Growth Incentive (LABGI) 161.9 Planning & Housing Delivery Grant 181.0 Total 782.9
48
Collection Fund
2008/2009
£000’s
2009/2010
£000’s Income
(66,259) Income from Council Taxpayers (note 2) (68,907)
Transfers from General Revenue Account (6,426) Council Tax benefits (7,121)
3 Transitional reduction scheme 2 (47,173) Income from Business Ratepayers (note 3) (44,569)
Contributions 0 Adjustments of previous years’ Community Charges (note 5) 0 Contributions to estimated Collection Fund Deficit (note 4)
(452) Warwickshire County Council (363) (63) Warwickshire Police Authority (55) (51) Stratford-on-Avon District Council (41)
(120,421) Total Income (121,054)
Expenditure Precepts and Demands
55,725 Warwickshire County Council 57,910 8,450 Warwickshire Police Authority 8,788 8,856 Stratford-on-Avon District Council 9,100
Contributions from estimated Collection Fund Surplus (note 4) 0 Stratford-on-Avon District Council 0 Business Rates
46,598 Payable to the national pool 44,695 207 Cost of Collection Allowance 215 (40) Movement in provision for Council Tax appeals (note 7) 0
Provisions for Bad and Doubtful Debts 111 Council Tax 348
(273) Council Tax – Write Offs (note 8) (268) 878 Business Rates 397
(511) Business Rates – Write Offs (note 8) (738)
120,001 Total Expenditure 120,447
(420) (Surplus) / Deficit for the year (607)
769 Balance at 1 April 349 (420) (Surplus) / Deficit for the year (607)
349 (Surplus) / Deficit balance at 31 March (258)
49
Notes to the Collection Fund 1. General This account reflects the statutory requirement for billing authorities to maintain a separate Collection Fund. The Collection Fund shows transactions relating to Council Tax, Business Rates and residual Community Charge. In addition, it illustrates the way in which the income is distributed. 2. Council Tax Council Tax is calculated by estimating the amount of income required from the Collection Fund by the District Council, Warwickshire County Council and Warwickshire Police Authority for the forthcoming year and dividing this by the Council Tax base. The Council Tax base for 2009/2010 was estimated as follows (figures have been rounded):- Number of
properties Adjustments
for discounts
Notional
Properties
Band ‘D’
ratio
Band ‘D’ equivale
nts Band ‘A’* 11 (1) 10 5/9 5 Band ‘A’ 3,038 (424) 2,614 6/9 1,742 Band ‘B’ 7,147 (867) 6,280 7/9 4,884 Band ‘C’ 14,679 (1,391) 13,288 8/9 11,812 Band ‘D’ 8,805 (752) 8,053 9/9 8,053 Band ‘E’ 8,328 (538) 7,790 11/9 9,521 Band ‘F’ 4,888 (261) 4,627 13/9 6,683 Band ‘G’ 4,533 (192) 4,341 15/9 7,235 Band ‘H’ 733 (38) 695 18/9 1,390 Total 52,162 (4,464) 47,698 51,325 Estimated change to band ‘D’ equivalent net of discount. (New properties) 139
Gross estimate of new tax base 2009/2010 51,464
Multiplied gross estimate by the assumed collection rate of 99.6% 51,258
Add estimated contributions in lieu of Ministry of Defence properties 72 Tax base 51,330 The basic amount of Council Tax for a Band ‘D’ property is multiplied by the relevant ratio above to calculate the amount due for each property band. Band ‘A’* - represents those taxpayers that are eligible for a disabled reduction. They are charged on the next lower band because there is not a band lower than ‘A’. They get a reduction that is calculated as five ninths of the Band D charge.
50
Notes to the Collection Fund 3. Business Rates Subject to the effects of transitional arrangements, local businesses pay an amount equivalent to the rateable value of property multiplied by the Government specified national non-domestic rate multiplier for the year. With effect from April 2009 the non-domestic rate multiplier was 48.1p for small businesses and 48.5p for larger businesses. The total non-domestic rateable value at 31 March 2010 for the District Council area was £115,729,168 (£116,986,672 at 31 March 2009). The Non-Domestic Rate Pool is maintained by Central Government. All Business Rates are paid into this Pool, with the money being re-distributed to local authorities based on population. 4. Collection Fund – Estimated Surplus and Deficits The estimated surplus or deficit on the Collection Fund at the end of each year is required to be distributed to the District Council, Warwickshire County Council and Warwickshire Police Authority. An estimated deficit in respect of Council Tax was identified in 2008/2009. The estimated deficit totalling £459,579 at 31 March 2009 was shared in 2009/2010 according to the respective amounts of precepts made on the Collection Fund in 2008/2009: £000’s Warwickshire County Council 363 Warwickshire Police Authority 55 Stratford-on-Avon District Council 41 459 5. Adjustment of Previous Years’ Community Charges All Community Charge debt has now been written off. 6. Town and Parish Councils The District Council’s demand on the Collection Fund includes an amount in respect of Town and Parish Councils which precept directly on the Council’s Income and Expenditure Account (page 15). In 2009/2010 this amount was £2,559,473 (£2,538,310 in 2008/2009).
51
Notes to the Collection Fund 7. Council Tax & Business Rates Written Off In accordance with generally accepted accounting principles, a charge for provision for bad and doubtful Council Tax and Business Rate debts is made to the Collection Fund Revenue Account. Council Tax written off against this provision amounted to £268,185 in 2009/2010 (£273,023 in 2008/2009). This amount is included within the £68,887,409 included under Income from Council Taxpayers (page 48). Business Rates written off against this provision amounted to £738,353 in 2009/2010 (£511,196 in 2008/2009). This amount is included within the £44,568,684 detailed under Income from Business Ratepayers (page 48). Summarised provisions that have been made against possible non-collection of debt relating to the Collection Fund:
Description Council Tax £000’s
NNDR £000’s
Brought forward 1 April 2009 Add Provision made in year Less Amounts written off
(386) (348)
268
(804) (397)
738
Provision 31 March 2010 (466) (463)
8. Collection Fund Balance The Collection Fund Balance represents the overall balance of the council tax due but not recovered from the precepting authorities. The deficit is to be shared amongst the precepting authorities (prorata to the amount of the total precepts). The amount attributable to Stratford-on-Avon District Council is £55k (9.1%). This amount is shown within the Equity in the Balance Sheet as the Collection Fund Balance in the Collection Fund Adjustment Account. The remainder is shown within debtors (see under Current Assets on page 17).
2008/2009
£000’s 2009/2010
£000’s
(39) Stratford-on-Avon District Council Collection Fund Balance (55) (381) Debtor – Other Precepting Bodies (552)
(420) (607)
Stratford-on-Avon District Council
Resources
Elizabeth House, Church StreetStratford-upon-Avon CV37 6HXTelephone 01789 267575Facsimile 01789 260444Minicom 01789 260747website www.stratford.gov.uk
If you find the text in this document difficult to readwe can supply it in a format better suited to your needs.
Telephone 01789 267575
SDC/0158/OCT2010