SOUTH NORTHAMPTONSHIRE COUNCIL
STATEMENT OF ACCOUNTS
2011-12
AUDITED
20/09/12
Yellow highlight to show Audit Adjustments
South Northamptonshire Council Statement of Accounts 2011-12
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CONTENTS PAGE
INTRODUCTION .................................................................................................................................. 4
EXPLANATORY FOREWORD .............................................................................................................. 5
MOVEMENT IN RESERVES STATEMENT ............................................................................................. 16
COMPREHENSIVE INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 MARCH
2012 .................................................................................................................................................. 17
BALANCE SHEET AS AT 31 MARCH 2012......................................................................................... 18
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012 ................................................. 19
NOTES TO THE FINANCIAL STATEMENTS .......................................................................................... 20
1. IMPACT OF NEW STANDARDS ..................................................................................................... 20
2. ACCOUNTING STANDARDS THAT HAVE BEEN ISSUED BUT HAVE NOT YET BEEN ADOPTED ..... 20
3. CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES................................................ 21
4. ASSUMPTIONS MADE ABOUT THE FUTURE AND OTHER MAJOR SOURCES OF ESTIMATION
UNCERTAINTY................................................................................................................................... 21
5. MATERIAL ITEMS OF INCOME AND EXPENSE .............................................................................. 23
6. EVENTS AFTER THE BALANCE SHEET DATE ................................................................................... 23
7. ADJUSTMENTS BETWEEN ACCOUNTING BASIS AND FUNDING BASIS UNDER REGULATIONS... 24
8 TRANSFERS TO AND FROM EARMARKED RESERVES .................................................................... 26
9 PROPERTY, PLANT AND EQUIPMENT ............................................................................................ 28
10 HERITAGE ASSETS ........................................................................................................................ 30
11 INTANGIBLE ASSETS ..................................................................................................................... 31
12 DEBTORS ...................................................................................................................................... 32
13 CASH AND CASH EQUIVALENTS ................................................................................................ 32
14 ASSETS HELD FOR SALE ............................................................................................................... 33
15 CREDITORS .................................................................................................................................. 33
16 PROVISIONS ................................................................................................................................ 34
17 UNUSABLE RESERVES ................................................................................................................... 35
18 NOTES TO THE CASH FLOW STATEMENT ..................................................................................... 39
19 AMOUNT REPORTED FOR RESOURCE ALLOCATION DECISIONS.............................................. 41
20 TRADING OPERATIONS – BUILDING CONTROL.......................................................................... 43
21 JOINT ENTITY – WEST NORTHAMPTONSHIRE JOINT PLANNING UNIT ......................................... 44
22 MEMBERS’ ALLOWANCES .......................................................................................................... 44
23 OFFICERS’ REMUNERATION ........................................................................................................ 45
24 EXIT PACKAGES........................................................................................................................... 47
25 EXTERNAL AUDIT COSTS.............................................................................................................. 48
26 GOVERNMENT GRANT AND GRANT INCOME .......................................................................... 48
27 RELATED PARTIES ......................................................................................................................... 49
28 CAPITAL EXPENDITURE AND CAPITAL FINANCING ................................................................... 51
29 LEASES ......................................................................................................................................... 52
South Northamptonshire Council Statement of Accounts 2011-12
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30 IMPAIRMENT LOSSES ................................................................................................................... 52
31 IAS 19 PENSION FUND NOTES - PARTICIPATION IN PENSION SCHEMES.................................... 52
32 CONTINGENT ASSETS .................................................................................................................. 60
33 CONTINGENT LIABILITIES ............................................................................................................. 60
34 FINANCIAL INSTRUMENTS............................................................................................................ 61
35 NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS - MARKET RISK....... 66
36 HERITAGE ASSETS – SUMMARY OF TRANSACTIONS................................................................... 67
37 HERITAGE ASSETS ........................................................................................................................ 69
ACCOUNTING POLICIES.................................................................................................................. 70
COLLECTION FUND.......................................................................................................................... 86
COLLECTION FUND NOTES .............................................................................................................. 87
GLOSSARY OF TERMS USED IN FINANCIAL STATEMENTS ................................................................ 89
South Northamptonshire Council Statement of Accounts 2011-12
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INTRODUCTION
Welcome to South Northamptonshire District Council’s Statement of Accounts for the
year ending 31st March 2012. The Statement of Accounts is a statutory document
providing information on the cost of services provided by South Northamptonshire District
Council to the council tax payer and detailing how those services were financed. In
addition, it provides information within the Balance Sheet on the value of our assets (what
we own), what we are owed and the value of our liabilities (what we owe). The
terminology used can often be confusing so I hope you find the glossary at the end of this
document a useful reference.
A summary of the financial position is available in the Summary Statement of Accounts
and you can find a copy on the finance pages of our website.
Should you have any comments or wish to discuss this statement in further detail then
please contact the finance team by email [email protected]
or contact me direct on
0300 003 0106.
I hope you find the financial statements of interest and I look forward to hearing your
views.
Karen Curtin
Head of Finance and Procurement
South Northamptonshire District Council
Springfields, Towcester,
Northamptonshire NN12 6AE
South Northamptonshire Council Statement of Accounts 2011-12
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EXPLANATORY FOREWORD
The purpose of this Statement of Accounts is to present the financial results of the
Council’s activities for the year ended 31 March 2012, and to summarise the overall
financial position of the Council as at this date.
1. The Accounting Statements
The Council is required by law to complete its accounts in line with the Code of Practice
on Local Authority Accounting (“the Code”). In theory, the Code ensures that all local
authorities produce their accounts on a consistent basis, enabling comparisons.
The Code represents an attempt by accounting regulators to reconcile accounting
standards in general use within the UK with the statutory local government finance
framework. This is not an easy marriage: there are material differences between what
accounting rules state should be included in the accounts and what legislation states
should be financed by a local authority and local council taxpayers.
Accordingly there are many entries, particularly within the Comprehensive Income &
Expenditure Statements, which are included as notional items for presentational
purposes, so that accounting standards are fulfilled, and then “reversed out” so that the
bottom line financial performance is consistent with statutory requirements.
The Code also requires expenditure on services to be categorised under standard
headings that don’t always align to the actual organisation and structure of the Council.
The above can lead to a confusing picture if the core financial statements are taken at
face value. Unfortunately, the Council has no discretion to depart from the prescribed
format and content of those statements.
The Annual Governance Statement is no longer an integral part of the financial
statements but is prepared as a standalone report and is available on the Council’s
website.
This Explanatory Foreword sets out the key issues and is intended to give the reader an
insight into the Council’s financial performance during 2011-12 in a way that the financial
statements themselves may not otherwise do.
This foreword has been written to provide a guide to the significant matters reported in
these accounts. It also indicates the type of expenditure incurred and the ways in which
money has been raised to pay for this.
2 The Key Messages
The period presented a number of challenges to the Council.
a) The financial challenge of maintaining services alongside the successful delivery of
a multi million approved capital programme, within agreed budget parameters in
a turbulent economic climate, demanded the highest levels of resource
management.
South Northamptonshire Council Statement of Accounts 2011-12
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b) The operational challenge of preparing financial statements whilst undergoing a
move to share senior management with Cherwell District Council and also to join
services, where practical, with Cherwell District Council.
2a) Financial Challenge
The Council has top quality budgetary control and as a result has delivered during the
year against revenue budget within acceptable tolerances. These are based on
percentage variance of revenue budget against profile (+3%/-3%). The capital
programme has been continuously reviewed in detail throughout the year and capital
schemes that have not yet started have either been deleted as they are no longer
priorities, reduced in value due to procurement savings or specification changes, or
slipped forward into future periods.
We started the year with £26.4 million of net assets (restated 10/11) and as at 31st March
2012 the net asset figure had decreased by £7.8 million primarily as a result of the impact
of the increase in pension fund deficit but also due to downward valuations of assets that
had to be recategorised under a newly applied IFRS (International Financial Reporting
Standard) on Heritage Assets. At the end of the year we had net assets of £18.6 million,
£6.9 million of earmarked reserves and £3.3 million of general fund reserves. Our
approved budget did not draw on General Fund balances, a reserve maintained to
provide a financial cushion should something unexpected happen. The final accounts
show that £0.1m was transferred to this balance during 2011-12.
We invested £2.6 million of capital funds on a variety of capital schemes during the year,
to continue providing first-class public facilities and investment in the infrastructure of the
district. Highlights include the continued support to home improvement grants directly
helping older and vulnerable people to live independently in their own homes and the
Moat Lane Project, the Towcester Town Centre regeneration project.
We have continued to reduce our costs and have kept council tax frozen at 2009-10
rates. The 2012-13 budget has reduced by a further £0.4 million, bringing our total
reduction in net expenditure in three years to £1.3m (12% of our 2009-10 budget).
2b) Operational Challenge
In 2011-12 South Northamptonshire Council agreed with Cherwell District Council to share
a Joint Senior Management Team working under one shared Chief Executive, this was set
up during 2011-12 and will save in the region of £1 million each year, shared between the
two councils.
Looking forward to 2012-13 and beyond, it is clear that the pressure to reduce spending
by Councils and other public sector organisations will continue. In response, we are in the
process of putting joint working arrangements in place for some back office functions
and front line services. Further joint working arrangements will be explored across all
service areas during 2012-13.
3 Revenue Expenditure
The Comprehensive Income and Expenditure Statement is prepared in accordance with
the Service Reporting Code of Practice (SeRCOP) issued by the Chartered Institute of
Public Finance and Accountancy (CIPFA) and as a result we have to take our services
and categorise accordingly.
South Northamptonshire Council Statement of Accounts 2011-12
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During 2011-12 the General Fund Revenue account has been subject to regular and
rigorous monitoring as part of the quarterly monitoring to members.
The 2011-12 revenue budget identified underspends in services at quarter 3 of £468k, this
subsequently moved to a Service outturn underspend position of £82k after a transfer of
£770k to ear marked reserves. The movement between quarters was primarily through
required adjustments in the treatment of leases under IFRS (International Financial
Reporting Standards). Taking these adjustments into account, the end of year position
contains no surprises; the year-end variances now being reported have been accurately
anticipated throughout the year.
The figures in the table below have been reported to members as the provisional outturn
except that internal recharges were itemised separately but to correspond to the figures
in Note 19 the internal recharges have been reallocated back to the service areas. This
has had not impact on the totals.
The table below summarises the revenue position against budget in SERCoP format:
Budget Actual Variance
£000s £000s £000s
Central Services to the Public 970 775 (195)
Cultural & Related Services 459 445 (14)
Environmental and Regulatory Services 4,008 4,362 354
Planning Services 2,026 2,338 312
Parking Services and Public Transport 141 157 16
Housing Services General Fund 848 753 (95)
Corporate & Democratic Core 1,688 461 (1,227)
Non distributed costs 773 770 (3)Net Cost of Services 10,913 10,061 (852)
Transfer to Earmarked Reserves 770
Net Cost of Services Outturn underspend (82)
The main variations to net cost of service against budget were:
South Northamptonshire Council Statement of Accounts 2011-12
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Variance
Primary Drivers £000s
Development Management Planning Fees (191)
Waste Services (finance lease accounting adjustment) (189)
ICT underspend (122)
Rent Allowances Benefit Subsidy overpayments recovered (104)
Unspent Grant income to be transferred to earmarked
reserve (83)
JMT savings in implementation and salaries (77)
Over achieved Interest Income (59)
Corporate Training underspend (50)
Council Tax Benefit Subsidy overpayments recovered (32)
Unders and overs less than £20,000 (16)
Procurement (finance lease accounting adjustment) (12)
Moat Lane Project 83
Net Cost of Services Variance (852)
Our service expenditure can be split between staffing costs and other running costs,
including capital charges. Running costs include the costs of running our buildings,
transport, payments we make to contractors, the payments we make to people receiving
benefits and the cost of administrative and professional support costs. Capital charges are
made to cover the annual depreciation cost of our assets. Note 19 splits the Council’s
income and expenditure into more detail and is in the same format of our management
accounts.
4 Sources of Finance - Where the Money Came From
The following chart provides an analysis of our main sources of income for the year:
South Northamptonshire Council Statement of Accounts 2011-12
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Government
Grants and
contributions,
£22,019,000, 66.3%
Interest and
Investment
Income, £501,000,
1.5%
Fees and Charges,
£2,579,000, 7.8%
Income from
Council Tax,
£7,841,000, 23.6%
Other income,
£248,000, 0.8%
5 Capital Expenditure and Financing
Capital Expenditure (spending on the acquisition, creation or enhancement of fixed
assets) and Capital Financing (mainly receipts from the sale of such assets in previous
years), are detailed in the Notes to the Financial Statements and summarised in the tables
below.
South Northamptonshire Council Statement of Accounts 2011-12
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Comparison of capital spending by scheme 2011-12 against budget
Capital Scheme
Total
Adjusted
Budget
Final
Spend
2011-12 Variance
£000s £000s £000s
Towcester Town Centre Regeneration 788 305 (483)
Disabled Facilities Grants (Private Sector) 600 588 (12)
Capitalisation of IT Costs 250 250 0
CRM/Improved Customer Services 201 95 (106)
Finance leases for refuse vehicles and
photocopier
201 201 0
Shared Infrastructure Services Costs 159 159 0
Capitalisation of Officer Time 149 88 (61)
Solar Panels - Towcester Centre For Leisure 145 142 (3)
Solar Panels - Tove Depot 135 135 0
Decent Homes in the Private Sector 134 134 0
Towcestrians - Club House 120 3 (117)
Community Dev Fund unallocated 104 0 (104)
Solar Panels - Brackley Leisure Centre 100 80 (20)
Agresso system upgrade 100 0 (100)
Assisted Maintenance Grants 81 57 (24)
Microsoft Licensing & Support 67 67 0
Wheeled Bins and Recycling Boxes 67 67 0
Purchased Vehicles - Direct Services 55 49 (6)
Municipal Buildings 52 0 (52)
1st Blisworth Scout Group 50 50 0
Blakesley and Woodend New Village Hall 50 50 0
Various small schemes <£50k 262 97 (165)
3,870 2,617 (1,253)
Capital expenditure (Note 27) 2,617
The capital programme has been financed using government grants, capital receipts and
revenue contribution and is analysed by category below:
2011-12
£000s
Sources of finance
Capital Receipts 2,157
Funding from Earmarked Reserves
through Revenue 163
Government Grants and Other
Contributions 297
Direct Revenue Financing 0
2,617
South Northamptonshire Council Statement of Accounts 2011-12
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6 Revaluations
Our assets are revalued on a 5 year rolling basis, the revaluations in 2011-12 are listed in
the table below:
Book Value
2010/11
Gross Valuation
2011/12
Change in Value Upward/
Downward
£ £ £
Moat Lane, Motte - Land (Prior Year Adjustment back to 1 April 2010) 1,128,142 219,240 (908,902) Down
Towcester - Pesticide Store - Building 66,028 21,000 (45,028) Down
Towcester - Pesticide Store - Land 22,650 14,000 (8,650) Down
Tove Depot (Towcester) - Building 849,929 296,311 (553,618) Down
Tove Depot (Towcester) - Land 247,500 296,311 48,811 Up
The Old Mill - Towcester - Building 585,156 634,411 49,255 Up
The Old Mill - Towcester - Land 265,980 271,891 5,911 Up
Mill House, Chantry Lane, Towcester - Building 422,694 228,258 (194,436) Down
Mill House, Chantry Lane, Towcester - Land 145,000 97,825 (47,175) Down
Masonic Hall, Towcester - land 740,000 216,000 (524,000) Down
138 Watling Street, Towcester - Building 516,693 256,175 (260,518) Down
138 Watling Street, Towcester - Land 175,000 109,789 (65,211) Down
Moat Lane, Wayside Garage - Land 1,225,396 149,310 (1,076,086) Down
Brackley - Swimming Pool - Building 876,380 1,697,045 820,665 Up
Brackley - Swimming Pool - Land 170,000 188,730 18,730 Up
Farthinghoe Recycling Centre - Building 46,925 99,538 52,613 Up
Farthinghoe Recycling Centre - Land 149,308 99,538 (49,770) Down
Brackley - The Piggeries 10,000 34,875 24,875 Up
Brackley Office/flat (Bridge Street) - Building 126,768 75,000 (51,768) Down
Brackley Office/flat (Bridge Street) - Land 55,927 200,000 144,073 Up
Water Tower at Deanshanger - Land 93,100 86,499 (6,601) Down
6,790,433 5,072,506 (1,717,927)
The primary driver for the downward revaluation of the Moat Lane ‘Mount and Wayside
Garage’ asset was the reclassification of this asset from a single community asset to partly
a heritage asset (The Mount) and partly a ‘surplus’ asset held for regeneration (Wayside
Garage). This meant the valuation basis changed from historical cost to fair value.
7 Reserves and Balances Summary
In considering the sustainability of the Council’s expenditure plans a key factor is the level
of reserves which are likely to be available to the Council and their ability to support the
underlying level of expenditure in the long term.
We have made use of a number of earmarked reserves this year, utilising specifically set
aside funds to assist in the funding of capital projects, primarily the move away from
Capita contracted Information Technology (IT) services and the joining up with Cherwell
District Council of IT (i.e. shared servers and telephony). A full list of earmarked reserves is
shown in Note 8. These reserves are reviewed in January of each year to ensure that they
are set at an appropriate level.
We maintain a general reserve to provide a financial cushion should something
unexpected happen that may lead to significant unplanned expenditure and to assist
South Northamptonshire Council Statement of Accounts 2011-12
12
with our longer term financial planning. The final accounts show that £0.1 million was
transferred to this balance during 2011-12 and the closing balance equates to £3.3
million.
8 Treasury Management Performance
The Council has significant cash reserves which it invests through a combination of
brokers, direct with Banks and the Government’s Debt Management Office (DMO). The
interest earned is credited to the Income and Expenditure Account thus helping to
maintain Council Tax increases at reasonable levels, due to the downturn in the economy
interest rates have fallen dramatically over the last three years and the reliance on
interest income has had to be significantly reduced in the budget.
Treasury Management includes the management of cash flows, banking, and capital
market transactions; the effective control of the risks associated with those activities; and
the pursuit of optimum performance consistent with those risks.
For the Council this involves managing our cash flow on a daily basis and using the banks
that comply with our policy on rating levels to make investments with approved
counterparties to ensure best value for money.
As at 31st March 2012 we had a total of £21.5 million (£20.8 million in 2010-11) invested. Of
this, £15.1 million were investments, and £6.4 million were cash and cash equivalents. In
the year higher than budgeted balances and changes in cash flow resulted in investment
income above budget by £59k despite the interest rates continuing to fall. The budget
was based on an average core investment balance of £21.3 million and an interest rate
of 2.09%. The actual average balance was £27.78m million which attracted an average
return of 1.92%. This was achieved despite the Bank of England keeping the bank base
rate at 0.5% since March 2009.
South Northamptonshire Council Statement of Accounts 2011-12
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9 Collection Fund
As a Billing Authority, the Council is required to maintain a Collection Fund, which
accounts for the transactions relating to Council Tax and Business Rates. The balance
carried forward at 31st March 2012 is £0.17 million surplus. The Council Tax element of this
surplus will be shared by the District Council and the major precepting bodies.
10 Pension
The application of International Accounting Standard (IAS) 19 has resulted in a pension
liability of £27.6 million shown in the Balance Sheet, an increase of £4.9 million in the year.
The liability represents our share of the liability to Northamptonshire County Council's
Pension Fund. This amount is matched by a Pensions Reserve also shown on the Balance
Sheet and therefore has no immediate impact on the Council's overall financial position
and its General Fund Balances but does reduce the net worth of the Council.
Further details are set out in the Accounting Policies and Pension Notes.
11 Audit
The first draft of these accounts was approved for audit by the Chief Financial Officer on
28 June 2012.
These accounts are scheduled to go to the Audit Committee for approval on 20
September 2012.
12 Explanation of the Statements
The Statement of Accounts is supported by the Statement of Responsibilities, the
Statement of Accounting Policies, the Core Statements and the associated notes. There is
a short explanation of each of the core statements and in addition there is a glossary of
financial terms to assist the reader.
Karen Curtin BA (Hons) ACCA Date:
Head of Finance & Procurement
Martin Henry BA (Hons) CPFA
Chief Financial Officer and Director of Resources Date:
South Northamptonshire Council Statement of Accounts 2011-12
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STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS
The authority is required to:
• Make arrangements for the proper administration of its financial affairs and to
secure that one of its officers has the responsibility for the administration of those
affairs. In this authority, that officer is the Director of Resources (Chief Finance
Officer).
• Manage its affairs to secure economic, efficient and effective use of resources
and safeguard its assets.
• Approve the statement of accounts.
…….……………………………………………………………… …….……………………
Chairman of the Audit Committee Date
The Director of Resource’s Responsibilities:
The Director of Resources (as Chief Finance Officer) is responsible for the preparation of
the authority's Statement of Accounts in accordance with proper practices as set out in
the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United
Kingdom (‘the Code”).
In preparing this statement of accounts, I, the Director of Resources have:
• selected suitable accounting policies and then applied them consistently;
• made appropriate judgements and estimates that were reasonable and prudent;
• complied with the Local Authority Code;
• kept proper accounting records which were up to date; and
• taken reasonable steps for the prevention and detection of fraud and other
irregularities.
I certify that this statement presents a true and fair view the financial position of the
authority at the accounting date and its income and expenditure for the year ended 31
March 2012.
Martin Henry BA (Hons) CPFA Date: 29 June 2012
Director of Resources
South Northamptonshire Council Statement of Accounts 2011-12
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1.4 Chairman of Audit Committee Certificate
I certify that the Statement of Accounts has received the full approval of Members.
Councillor Sandra Barnes MBE Date: September 2012
Chairman of Audit Committee
South Northamptonshire Council Statement of Accounts 2011-12
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Movement in Reserves Statement
This statement shows the movement in the year on the different reserves held by the
authority, analysed into ‘usable reserves’ (i.e. those that can be applied to fund
expenditure or reduce local taxation) and other reserves. The Surplus or (Deficit) on the
Provision of Services line shows the true economic cost of providing the authority’s
services, more details of which are shown in the Comprehensive Income and Expenditure
Statement. These are different from the statutory amounts required to be charged to the
General Fund Balance for council tax setting purposes. The Net Increase /Decrease
before Transfers to Earmarked Reserves line shows the statutory General Fund Balance
before any discretionary transfers to or from earmarked reserves undertaken by the
council.
2011-12Note/
Ref
Capital
Receipts
Reserve
General Fund
Balance
Earmarked
General Fund
Reserves
Capital
Grants
Unapplied
Total Usable
Reserves
Revaluation
Reserve
Financial
Instruments
Adjustment
Account
Deferred
Capital
Receipts
Reserve -
Mortgages
Capital Adjustment
Account
Pensions Reserve Collection
Fund
Adjustment
Account
Accumulated
Absences
Account
Total Unusable
Reserves
Total Authority
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Balance at 1 April 2011
(RESTATED) BS (9,102) (3,150) (6,611) - (18,863) (2,390) 7 (558) (27,342) 22,664 42 88 (7,489) (26,352)Movement in reserve during
(Surplus) or deficit on provision
of services CI&E - 4,362 4,362 - 4,362Other Comprehensive
Expenditure and Income 1 1 (928) 4,431 3,503 3,504
Correction to10-11 Valuation * 353 353 353Total Comprehensive
Expenditure and Income 1 4,362 - - 4,363 (575) - - - 4,431 - - 3,856 8,219
Adjustments between
accounting basis & funding basis
under regulations No. 7 1,807 (4,800) - - (2,993) - 20 2,567 484 (69) (9) 2,993 -
Net Increase / Decrease before
Transfers to Earmarked Reserves 1,808 (438) - - 1,370 (575) - 20 2,567 4,915 (69) (9) 6,849 8,219Transfers to / from Earmarked
Reserves No. 8 382 (382) - -
Increase / Decrease in Year 1,808 (56) (382) - 1,370 (575) - 20 2,567 4,915 (69) (9) 6,849 8,219-
Balance at 31 March 2012 (7,294) (3,206) (6,993) (17,493) (2,965) 7 (538) (24,775) 27,579 (27) 79 (640) (18,133)
2010-11 comparatives
Note/
Ref
Capital
Receipts
Reserve
General Fund
Balance
Earmarked
General Fund
Reserves
Capital
Grants
Unapplied
Total Usable
Reserves
Revaluation
Reserve
Financial
Instruments
Adjustment
Account
Deferred
Capital
Receipts
Reserve -
Mortgages
Capital Adjustment
Account
Pensions Reserve Collection
Fund
Adjustment
Account
Accumulated
Absences
Account
Total Unusable
Reserves
Total Authority
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Balance at 1 April 2010 BS (9,672) (3,352) (6,746) - (19,770) (1,526) 7 (584) (28,317) 34,685 41 86 4,392 (15,378)(22) 909 887 887
Balance at 1 April 2010
(RESTATED) BS (9,672) (3,352) (6,746) - (19,770) (1,548) 7 (584) (27,408) 34,685 41 86 5,279 (14,491)Movement in reserve during
2010-11
(Surplus) or deficit on provision
of services CI&E - (4,890) - (4,890) - - - - - - - - (4,890)Other Comprehensive
Expenditure and Income - - - - (933) - - - (6,038) - - (6,971) (6,971)Total Comprehensive
Expenditure and Income - (4,890) - (4,890) (933) - - - (6,038) - - (6,971) (11,861)Adjustments between
accounting basis & funding basis
under regulations No. 7 570 5,227 - - 5,797 91 - 26 66 (5,983) 1 2 (5,797) -
Net Increase / Decrease before
Transfers to Earmarked Reserves 570 337 - - 907 (842) - 26 66 (12,021) 1 2 (12,768) (11,861)Transfers to / from Earmarked
Reserves No. 8 - (135) 135 - - - - - - - - - -
-
Increase / Decrease in Year 570 202 135 - 907 (842) - 26 66 (12,021) 1 2 (12,768) (11,861)
-
Balance at 31 March 2011 (9,102) (3,150) (6,611) (18,863) (2,390) 7 (558) (27,342) 22,664 42 88 (7,489) (26,352)
IFRS Adjustment for Heritage Assets
South Northamptonshire Council Statement of Accounts 2011-12
17
Comprehensive Income and Expenditure Account for the year ended 31 March 2012
This statement shows the accounting cost in the year of providing services in accordance
with generally accepted accounting practices, rather than the amount to be funded
from taxation. Authorities raise taxation to cover expenditure in accordance with
regulations; this may be different from the accounting cost. The taxation position is shown
in the Movement in Reserves Statement. The Comprehensive Income and Expenditure
Account is abbreviated to CI&E in this document.
Gross Gross Net Gross Gross Net
Expenditure Income Expenditure Expenditure Income Expenditure
£000 £000 £000 £000 £000 £000
Expenditure on Services
Central services to the public 4,523 (3,571) 952 4,423 (3,648) 775Cultural and Related Services 967 (246) 721 797 (138) 659Environment and Regulatory Services 5,725 (1,801) 3,924 6,340 (1,704) 4,636Planning Services 4,860 (1,260) 3,600 3,852 (1,282) 2,570Highways and transport services 461 (102) 359 163 0 163Housing Services 12,881 (11,398) 1,483 13,750 (12,511) 1,239Corporate and democratic core 3,329 (274) 3,055 2,465 (504) 1,961
Non Distributed Costs 234 0 234 2,733 0 2,733Exceptional item 0 0 0Pensions - past service gain* (6,588) 0 (6,588) 0 0 0
Net Cost of Services 26,392 (18,652) 7,740 34,523 (19,787) 14,736
Other Operating expenditure
Loss/ (Gain) on the disposal of non current
assets 3 27
Downward revaluation of asset held for
sale 0 50Contribution to housing pooled capital
receipts 16 15Transfer of Collection Fund Deficit 4 0Surplus on trading undertakings 0 0Other income (1,544) (248)Parish Council Precept 1,891 1,924
Financing and investment income and expenditure
Interest and Investment Income (587) (501)Interest expenses 111 202 Pensions interest cost and expected return
from pension assets 1,055 811
Taxation and non-specific grant income
General Government Grant (735) (1,081)Non domestic rates (5,064) (3,496)Demand on the collection fund (7,586) (7,640)Capital grants and contributions (194) 0Non-specific Grant Income 0 (379)Transfer of Collection Fund Surplus 0 (58)
(Surplus) or Deficit on Provision of services (4,890) 4,362
(Surplus)/Deficit on Revaluation of Non
Current Assets (933) (928)
Actuarial (Gain)/Losses on Pension Fund
Assets/Liabilities (6,038) 4,431
Other Gains/Losses and Movements 0 0(Surplus)/Deficit on Other items 0 1
Other Comprehensive Income and Expenditure (6,971) 3,504
Total Comprehensive Income and Expenditure (11,861) 7,866
2010-11 2011-12
* £2,159k of the £2,733k in non distributed costs relates to downward valuations of Moat
Lane Regeneration Project Assets.
South Northamptonshire Council Statement of Accounts 2011-12
18
Balance Sheet as at 31 March 2012
The Balance Sheet shows the value of the assets and liabilities recognised by the
authority. The net assets of the authority are matched by the reserves held by the
authority. The first category of reserves are usable reserves, i.e. those reserves that the
authority may use to provide services, subject to the need to maintain a prudent level of
reserves and any statutory limitations on their use (for example the Capital Receipts
Reserve that may only be used to fund capital expenditure or repay debt). The second
category of reserves are those that the authority is not able to use to provide services. This
category of reserves includes reserves that hold unrealised gains and losses (for example
the Revaluation Reserve), where amounts would only become available to provide
services if the assets are sold; and reserves that hold timing differences shown in the
Movement in Reserves Statement line ‘Adjustments between accounting basis and
funding basis under regulations’.
Notes 01-Apr-10 31-Mar-11 31-Mar-12
£000 £000 £000
RESTATED RESTATED
Property, Plant & Equipment 9 28,391 28,643 26,918
Heritage Assets 9 241 241 241
Intangible Assets 11 189 153 161
Long Term Investments 34 10,138 5,032 5,032
Investments in Associates and Joint Ventures 0 0 0
Long Term Debtors 12 589 705 662
Long Term Assets 39,548 34,774 33,014
Short Term Investments 34 5,091 12,473 10,061
Inventories 102 85 115
Short Term Debtors 12 5,355 4,700 3,301
Cash and Cash Equivalents 13 6,322 3,340 6,385
Assets held for sale 14 0 426 608
Current Assets 16,870 21,024 20,470
Bank Overdraft 13 (740) (550) (494)
Short Term Borrowing 0 0 0
Short Term Creditors 15 (3,587) (2,865) (4,036)
Short Term Provisions 16 0 (531) (7)
Liabilities in disposal groups 0 0 0
Current Liabilities (4,327) (3,946) (4,537)
Long Term Creditors 15 (1,460) (1,456) (1,456)
Long Term Provisions 0 0 0
Deferred Liabilities - Finance Leases 29 (588) (514) (904)
Other Long Term Liabilities 31 (34,685) (22,664) (27,579)
Capital Grants receipts in advance 15 (866) (866) (875)
Long Term Liabilities (37,599) (25,500) (30,814)
Net Assets 14,491 26,352 18,133
Usable reserves page 15 (19,770) (18,863) (17,493)
Unusable Reserves 17 5,279 (7,489) (640)
Total Reserves (14,491) (26,352) (18,133)
These financial statements replace the unaudited financial statements authorised at the meeting of
the Audit Committee on 29 June 2012.
……………………………………………………….……………………………date: …………….
Martin Henry BA (Hons) CPFA
Director of Resources and S151 Officer
South Northamptonshire Council Statement of Accounts 2011-12
19
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
The Cash Flow Statement shows the changes in cash and cash equivalents of the
authority during the reporting period. The statement shows how the authority generates
and uses cash and cash equivalents by classifying cash flows as operating, investing and
financing activities. The amount of net cash flows arising from operating activities is a key
indicator of the extent to which the operations of the authority are funded by way of
taxation and grant income or from the recipients of services provided by the authority.
Investing activities represent the extent to which cash outflows have been made for
resources which are intended to contribute to the authority’s future service delivery. Cash
flows arising from financing activities are useful in predicting claims on future cash flows
by providers of capital (i.e. borrowing) to the authority.
Notes 2010-11 2011-12
£000 £000
Net surplus or (deficit) on the provision of services 4,890 (4,362)
Adjustment to surplus or deficit on the provision of services for non-
cash movements 18 A 217 6,486
Adjust for items included in the net surplus or deficit on the provision
of services that are investing and financing activities 18 A (3,613) (1,142)
Net Cash flows from Operating Activities 1,494 982
Net Cash flows from Investing Activities 18 C (4,615) 746
Net Cash flows from Financing Activities 18 D 328 1,374
Net increase or decrease in cash and cash equivalents (2,792) 3,101
Cash and cash equivalents at the beginning of the reporting period 18 E 5,582 2,790
Cash and cash equivalents at the end of the reporting period 18 E 2,790 5,891
Cash and cash equivalents movement in the year (2,792) 3,101
South Northamptonshire Council Statement of Accounts 2011-12
20
NOTES TO THE FINANCIAL STATEMENTS
1. IMPACT OF NEW STANDARDS
Heritage assets are to be recognised as a separate class of assets for the first time in the
2011-12 financial statements, in accordance with UK Standard FRS 30. The adoption of
this new standard in the Code results in a change of accounting policy that requires the
publication of a Balance Sheet as at the beginning of the earliest comparative period
(i.e. a third Balance Sheet) in the 2011-12 financial statements where the restatement and
/or re-measurement of heritage assets is material.
This affects the Moat Lane Bury Mount asset, which was held in the Community Assets
category in 2010-11. Review has determined that part of this asset is a Heritage asset (the
Mount) and that the other part of the asset (Wayside Garage) is held for the Towcester
regeneration project. Both parts of the asset are now valued at fair value rather than
historical value, which has produced a large downward revaluation of £909k (for the
Mount, applied from 1 April 2010) and £1,076k (for the Wayside part, applied at 31 March
2012).
The other impact of the change in Heritage assets is that we have recognised three
Heritage assets not previously on the Fixed Asset register. These are two works of art and
the civic regalia which together total £22k. These are recognised in the opening restated
balances from 1 April 2010.
As a result of the introduction of the Heritage Asset standard in the 2011-12 Code, the
Code also adds the option for authorities to choose to measure Community Assets at
valuation and to make disclosures as if Community Assets are Heritage Assets. This applies
to one asset, Marlow's Meadow & Waterhall, Easton Neston, Towcester which is valued at
fair value.
2. ACCOUNTING STANDARDS THAT HAVE BEEN ISSUED BUT HAVE NOT YET BEEN ADOPTED
An authority is required to disclose information relating to the impact of an accounting
change that will be required by a new standard that has been issued but not yet
adopted. This requirement applies to accounting standards that come into effect for
financial years commencing on or before 1 January of the financial year in question (i.e.
on or before 1 January 2012 for 2011-12).
The adoption of amendments to IFRS 7 Financial Instruments: Disclosures (issued October
2010) by the Code will result in a change of accounting policy
The amendments to IFRS 7-Financial Instruments: Disclosures (transfers of financial assets,
issued October 2010), are intended to assist users of the financial statements to evaluate
the risk exposures that relate to transfers of financial assets and the effect of those risks on
the authority’s financial position.
The effective date of this change of accounting policy is 1 April 2012.
However, the Council are of the view that the transfers described by the standard do not
occur frequently in local authorities. Relevant circumstances would arise where an
authority retains ownership of a financial asset but contracts to reassign or otherwise pay
over the cash flows generated by the instrument, at the same time as retaining
substantially all the risks and rewards of ownership.
The Council considers that this will not have a material impact on the financial
statements.
South Northamptonshire Council Statement of Accounts 2011-12
21
3. CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
In applying the accounting policies, the Authority has had to make certain judgements
about complex transactions or those involving uncertainty about future events. The
critical judgements made in the Statement of Accounts are:
• There is a high degree of uncertainty about future levels of funding for local
government. However, the Authority has determined that this uncertainty is not yet
sufficient to provide an indication that the assets of the Authority might be
impaired as a result of a need to close facilities and reduce levels of service
provision.
• The Authority has one Member who is a trustee of the South Northants Leisure Trust,
that member does not represent SNC when sitting on the Trust board and is not
involved in SNC decisions relating to the Trust. The Trust is a charitable organisation
that operates the leisure centres owned by SNC. It has been determined that the
Authority does not have control of the Trust and it is not a subsidiary of the
Authority.
4. ASSUMPTIONS MADE ABOUT THE FUTURE AND OTHER MAJOR SOURCES OF ESTIMATION
UNCERTAINTY
In the preparation of the consolidated Accounts, a number of estimates and assumptions
have been made relating to the reporting of results of operations and the financial
position of the Council. Results may differ significantly from those estimates under different
assumptions and conditions. It is considered that the following discussion addresses the
Council’s most critical accounting estimates and judgements, which are those that are
most important to the presentation of its consolidated financial position and results. These
particular policies require subjective and complex judgements, often as a result of the
need to make estimates about the effect of matters that are uncertain.
Depreciation of property, plant and equipment
The Council assigns useful lives and residual values to property, plant and equipment
based on periodic studies of actual asset lives and the intended use for those assets.
Changes in circumstances such as technological advances, prospective economic
utilisation and physical condition of the assets concerned could result in the actual useful
lives or residual values differing from initial estimates.
Where the Council determines that the useful life of property, plant and equipment
should be shortened or residual value reduced, it depreciates the net book value in
excess of the residual value over the revised remaining useful life, thereby increasing
depreciation expense. Any change in an asset’s life or residual value is reflected in the
Council’s Accounts when the change in estimate is determined.
Impairment of property, plant and equipment and intangible assets
The Council assess the impairment of property, plant and equipment and intangible
assets (excluding goodwill) whenever events or changes in circumstances indicate that
the carrying value may not be recoverable or otherwise as required by accounting
standards.
Factors that are considered important and which could trigger an impairment review
include the following:
• obsolescence or physical damage;
• significant changes in technology and regulatory environments;
• significant underperformance relative to expected historical or projected future
operating results;
South Northamptonshire Council Statement of Accounts 2011-12
22
• significant changes in the use of its assets or the strategy of the overall business;
• significant negative industry or economic trends; and
• significant decline in the market capitalisation relative to net book value for a sustained
period.
The identification of impairment indicators, the estimation of future cash flows and the
determination of the recoverable amount for assets or cash generating units requires
significant judgement which is determined by qualified external valuer.
Revenue recognition
Judgement is required in assessing the application of revenue recognition principles and
the specific guidance in respect of Council revenue. This includes the presentation of
revenue as principal or as agent in respect of income received from transmission of
content provided by third parties.
Impairment allowance for doubtful debt
The Impairment allowance for doubtful debt reflects the Council’s estimates of losses
arising from the failure or inability of the Council’s customers to make required payments.
The allowance is based on the ageing of customer accounts, customer credit worthiness
and the Council’s historical write-off experience. Changes to the allowance may be
required if the financial condition of the Council’s customers improves or deteriorates. An
improvement in financial condition may result in lower actual write-offs.
Provisions
A provision is recognised when there is a present (legal or constructive) obligation in
respect of a past event. Judgement is required to quantify such amounts.
Pensions
The Council provides one defined benefit pension scheme for its employees. The asset (or
liability) recognised in the statement of financial position in respect of defined benefit
pension plans represents the fair value of plan assets less the present value of the defined
benefit obligations at the reporting date. The expected cost of providing these defined
benefit pensions will depend on an assessment of such factors as:
• the life expectancy of the Officers;
• the length of service;
• the rate of salary progression;
• the rate of return earned on assets in the future;
• the rate used to discount future pension liabilities; and
• future inflation rates.
The assumptions used by the Council are set out in note 30 and are estimates chosen
from a range of possible actuarial assumptions which may not necessarily be borne out in
practice but have been comparable to the median estimates in this regard used by
other Councils. Changes to these assumptions could materially affect the size of the
defined benefit schemes’ liabilities and assets disclosed in note 31.
Fair value estimation
The nominal value of receivables (less any valuation allowance) and payables are
assumed to approximate their fair values. Judgement is required in determining the
appropriate assumptions underlying those inputs and forecasts.
The fair value of financial liabilities measured at amortised cost is estimated by
discounting the future contractual cash flows at the current market interest rate that is
available to the Council for similar financial instruments. Discounted cash flows are used
to determine the fair value for the majority of remaining financial instruments.
South Northamptonshire Council Statement of Accounts 2011-12
23
5. MATERIAL ITEMS OF INCOME AND EXPENSE
This note highlights material items of income and expenditure within the Comprehensive
Income and Expenditure Statement.
2010-11 2011-12
£'000 £'000
Expenditure
Benefits payments 14,004 14,894
REFCUS - Capital Grants 876 955
IT Contract (revenue costs) 590 684
Consultancy - Whiting Landscape Ltd 95 -
Income items
Grants - Benefits Subsidy (13,833) (14,884)
REFCUS - Government Grant (388) (297)
Investments (587) (501)
General Government Grant (735) (1,081)
Redistributed Non Domestic Rates (5,064) (3,496)
Benefits payments are made up of housing benefit and council tax benefit paid out to
claimants, the income item relates to the Central Government Grant called ‘benefit
subsidy’ which covers the majority of this expenditure.
REFCUS (revenue expenditure funded from capital under statute) relates to disabled
adaptations to people’s properties (disabled facilities grants and decent homes
improvements) and also other expenditure on properties that are not owned by the
Council, for example culture capital grants to communities in the District.
IT contract relates to the provision of IT services by CAPITA, this contract has now ended
and services are being provided by Cherwell District Council.
Investment income is the interest income on short and long term investments placed
during the year as part of the Treasury Departments cash flow management.
The General Government Grant and Redistributed Non Domestic Rates are main funding
received from Central Government.
6. EVENTS AFTER THE BALANCE SHEET DATE
The Statement of Accounts was authorised for issue by the Director of Resources on 28
June 2012. Events taking place after this date are not reflected in the financial statements
or notes. Where events taking place before this date provided information about
conditions existing at 31 March 2012, the figures in the financial statements and notes
have been adjusted in all material respects to reflect the impact of this information.
South Northamptonshire Council Statement of Accounts 2011-12
24
7. ADJUSTMENTS BETWEEN ACCOUNTING BASIS AND FUNDING BASIS UNDER REGULATIONS
This note details the adjustments that are made to the surplus or deficit on the CI&E to
give the resources specified by statutory provisions as being available to the Authority to
meet future capital and revenue expenditure.
2011-12General
fund
Capital
Receipts
Reserve
Capital
Grant
Unapplied
Movement in
unusable
reserves
£000 £000 £000 £000
Adjustment primarily involving the Capital Adjustment Account
Reversal of items debited or credited to the Comprehensive Income and Expenditure Statement
Charges for depreciation and impairment of non-current assets (942) 0 0 942
Revaluation losses on Property Plant and Equipment (2,746) 0 0 2,746
Amortisation of intangible assets (418) 0 0 418
Capital grants and contributions applied 0 0 0 0
Movement in the Donated Assets Account 0 0 0 0
Revenue expenditure funded from capital under statute (954) 0 0 954
Amounts of non-current assets written off on disposal or sale as part of the gain/ loss
on disposal to the Comprehensive Income and Expenditure Statement (124) 0 0 124
Unattached Capital Receipts 248 (248) 0 0
Insertion of items not debited or credited to the Comprehensive Income and
Expenditure Statement
Statutory provision for the financing of capital investment 0 0 0
Capital expenditure charged against the General Fund (RCCO) 163 0 0 (163)
Adjustments primarily involving the Capital Receipts Reserve:
Transfer of cash sale proceeds credited
as part of the gain/ loss on disposal to the
Comprehensive Income and Expenditure
Statement 97 (97) 0 0
Use of the Capital Receipts Reserve to finance new capital expenditure 0 2,157 0 (2,157)Contribution from the Capital Receipts Reserve towards administrative costs of non-
current asset disposals 0 0 0 0Contribution from the Capital Receipts Reserve to finance the payments to the
Government capital receipts pool. (15) 15 0 0
Transfer from Deferred Capital Receipts Reserve upon receipt of cash 0 (20) 0 20
Adjustments primarily involving the Deferred Capital Receipts Reserve Transfer of deferred sale proceeds credited as part of the gain/ loss on disposal to
the Comprehensive Income and Expenditure Statement
Adjustment primarily involving the capital grants unapplied accountCapital grants and contributions unapplied credited to the Comprehensive Income
and Expenditure Statement
Application of grants to capital financing transferred to the Capital Adjustment
Account 297 (297)
Adjustments primarily involving the Pensions Reserve
MIRS Reversal of retirement benefits Dr or Cr to CI&E (2,212) 2,212
Employer’s pensions contributions and direct payments to pensioners payable in the
year 1,728 (1,728)
Adjustments primarily involving the Collection Fund Adjustment Account
Amount by which council tax income credited to the Comprehensive Income and
Expenditure Statement is different from council tax income calculated for the year
in accordance with statutory requirements 69 (69)
Adjustments involving the closure of the Housing Revenue Account (HRA account)
Closure of the HRA transferred the remaining HRA balance into the General Fund, as
required by statute. 0 0
Adjustments primarily involving the Accumulated Absences Account
Movement in the Employee benefits Reserve in 2009-10 9 (9)
Rounding
Total Adjustments (4,800) 1,807 0 2,993
South Northamptonshire Council Statement of Accounts 2011-12
25
2010-11 comparatives
General
fund
Capital
Receipts
Reserve
Capital
Grant
Unapplied
Movement in
unusable
reserves
£000 £000 £000 £000
Adjustment primarily involving the Capital Adjustment Account
Reversal of items debited or credited to the Comprehensive Income and Expenditure Statement
Charges for depreciation and impairment of non-current assets (872) 0 0 872
Revaluation losses on Property Plant and Equipment (738) 0 0 738
Amortisation of intangible assets (370) 0 0 370
Capital grants and contributions applied 194 0 0 (194)
Movement in the Donated Assets Account 0 0 0 0
Revenue expenditure funded from capital under statute (876) 0 0 876
Amounts of non-current assets written off on disposal or sale as part of the gain/ loss
on disposal to the Comprehensive Income and Expenditure Statement (922) 0 0 922
Unattached Capital Receipts 1,543 (1,543) 0 0
Insertion of items not debited or credited to the Comprehensive Income and
Expenditure Statement
Statutory provision for the financing of capital investment 0 0 0 0
Capital expenditure charged against the General Fund (RCCO) 15 0 0 (15)
Adjustments primarily involving the Capital Receipts Reserve:Transfer of cash sale proceeds credited
as part of the gain/ loss on disposal to the
Comprehensive Income and Expenditure
Statement 900 (900) 0 0
Use of the Capital Receipts Reserve to finance new capital expenditure 0 3,025 0 (3,025)Contribution from the Capital Receipts Reserve towards administrative costs of non-
current asset disposals 0 0 0 0
Contribution from the Capital Receipts Reserve to finance the payments to the
Government capital receipts pool. (16) 16 0 0
Transfer from Deferred Capital Receipts Reserve upon receipt of cash 0 (28) 0 26
Adjustments primarily involving the Deferred Capital Receipts Reserve Transfer of deferred sale proceeds credited as part of the gain/ loss on disposal to
the Comprehensive Income and Expenditure Statement 0 0 0 0
Adjustment primarily involving the capital grants unapplied accountCapital grants and contributions unapplied credited to the Comprehensive Income
and Expenditure Statement 0 0 0 0Application of grants to capital financing transferred to the Capital Adjustment
Account 388 0 0 (388)
Adjustments primarily involving the Pensions Reserve
MIRS Reversal of retirement benefits Dr or Cr to CI&E 4,262 0 0 (4,262)
Employer’s pensions contributions and direct payments to pensioners
payable in the year 1,721 0 0 (1,721)
Adjustments primarily involving the Collection Fund Adjustment Account
Amount by which council tax income credited to the Comprehensive Income and
Expenditure Statement is different from council tax income calculated for the year
in accordance with statutory requirements (1) 0 0 1Adjustments involving the closure of the Housing Revenue Account (HRA account)Closure of the HRA transferred the remaining HRA balance into the General Fund, as
required by statute. 0 0 0 0
Adjustments primarily involving the Accumulated Absences Account
Movement in the Employee benefits Reserve in 2009-10 (2) 2
Rounding 1 1
Total Adjustments 5,227 570 0 (5,797)
South Northamptonshire Council Statement of Accounts 2011-12
26
8 TRANSFERS TO AND FROM EARMARKED RESERVES
A) This sets out the amounts set aside from the General Fund balances in earmarked
reserves to finance future expenditure plans and the amounts posted back from
earmarked reserves to meet General Fund expenditure in 2011-12. The following were
transferred between earmarked reserves and the General Fund in 2011-2
Reserve Balance
1 April
2010
Transfer in Transfer out Balance
31 March
2011
Transfer
in
Transfer
out
Balance
31 March
2012£000 £000 £000 £000 £000 £000 £000
General Fund
IT Developments 247 99 (16) 330 382 (247) 465
VAT Partial Exemption 100 0 (80) 20 0 0 20
General Fund Items 645 319 (308) 656 14 (508) 162
Licensing Contingencies 153 0 (78) 75 33 0 108
Improvement Planning Reserve Fund 199 0 (199) 0 0 0 0
Elections sinking fund 119 34 (29) 124 14 (38) 100
Pay Review contingency (Pension Reserve) 0 0 0 0 79 0 79
Homeless People 10 0 0 10 0 0 10
Legal Consultancy 25 0 0 25 50 (31) 44
Civil contingency (emergency planning) 6 0 0 6 0 (6) 0
Youth Council Grant aid 3 0 0 3 0 (3) 0
Planning Delivery Grant 29 0 (29) 0 0 0 0
Benefits Contingencies 47 28 0 75 70 0 145
Customer Contact Centre 358 13 (46) 325 0 (58) 267
Flood Alleviation 75 0 (75) 0 75 0 75
Building Maintenance Reserve (formerly 481 0 0 481 0 (38) 443
Business Continuity 117 0 (50) 67 0 0 67
Contaminated Land Investigations 5 0 0 5 0 (5) 0
Centrally Controlled Initiatives 251 0 (214) 37 0 (37) 0
Organisational Design Review 29 0 (29) 0 0 0 0
Leisure Trust Grant 16 0 0 16 0 0 16
Leisure Initiatives 71 0 (16) 55 0 (5) 50
DIP and Workflow Roll Out 100 0 0 100 0 (100) 0
Towcester Mill 40 0 0 40 0 0 40
Standards Committee Investigations 25 0 (15) 10 0 (10) 0
Local Area Business Growth Initiative 272 0 (168) 104 0 (5) 99
Street cleansing vehicle maintenance and 40 13 0 53 0 (53) 0
One-off Budget Growth Item 360 29 (197) 192 0 (56) 136
Moat Lane Development 206 57 (293) (30) 0 30 0
Moat Lane Project Management Costs 57 0 (57) 0 0 0 0
Economic Downturn Reserve 20 0 (20) 0 0 0 0
Budget Consultation 3 0 (3) 0 0 0 0
Climate Change 45 20 0 65 0 0 65
West Northants Joint Planning Unit 93 0 (93) 0 0 0 0
CDC Implementation Costs 0 554 (554) 0 0 0 0
Phase One Implementation costs 0 637 (211) 426 0 (426) 0
High Speed Rail 2 0 100 0 100 0 (59) 41
Phase Two Implementation costs 0 30 0 30 0 (30) 0
Joint Working Reserve (formerly 0 380 (30) 350 188 (1) 537
IT Review Reserve 0 150 0 150 0 (150) 0
Local Development Framework Fund 0 75 (9) 66 11 (12) 65
Temporary Accommodation 0 14 (11) 3 9 (3) 9
Local Research Fund 0 14 0 14 0 0 14
Strategic Housing 0 44 0 44 173 (27) 190
Land Charges 0 34 0 34 0 0 34
Habitat 0 51 0 51 0 0 51
Risk Reserve 0 0 0 0 100 0 100
Budget Implementation Reserve 0 0 0 0 100 0 100
Resource Review 0 0 0 0 148 (13) 135
Revenue Fund Contingency Fund 0 0 0 0 234 (13) 221
Planning Fee Reserve 0 0 0 0 185 0 185
Unallocated Revenue Grants Reserve 0 0 0 0 421 0 421
Total Revenue earmarked reserves 4,247 2,695 (2,830) 4,112 2,286 (1,904) 4,494
Towcester Town Centre Strategy 55 0 0 55 0 0 55
Capital Financing Reserve 2,247 0 0 2,247 0 0 2,247
Leisure Re-theming 12 0 0 12 0 0 12
TCFL Maintenance 84 0 0 84 0 0 84
Municipal Buildings 102 0 0 102 0 0 102
Total Capital Earmarked Reserves 2,500 0 0 2,500 0 0 2,500Total Earmarked Reserves 6,746 2,695 (2,830) 6,611 2,286 (1,904) 6,993
South Northamptonshire Council Statement of Accounts 2011-12
27
B) Purpose of significant reserves
Balances as at year ended 2012 £000 Reason for the reserve
Benefits Contingency 145
To deal with repayment of overpaid benefit subsidy if required
and to provide a small contingency for use within the benefits
section.
Budget Implementation Reserve 100To fund the costs of the implementation of the budget
proposals for 2012-13
Customer Service Centre 267To deliver the requirements of the access strategy including
the development of the customer contact centre.
Elections 100Annual contribution held in reserves for use at the time of local
elections
Revenue Fund Contingency
Reserve221
The amalgamation of small reserves less than £10k which can
be bid for if needed in the future.
IT Service Reserve (formerly IT
Developments)465
To fund changes in IT service - requirement over next 2
financial years
Maintenance of Municipal Buildings 102 To fund the cost of repairs for Council Offices
Planning Fee Reserve 185 Revenue from Planning fees c/fwd to assist service provision.
Resource Review 135 To fund the costs associated with the Resource Review
Risk Reserve 100To recognise the risk associated with market uncertainty
regarding the price achievable for recycling materials
Strategic Housing 190 To progress strategic housing projects
Joint Working Reserve (formerly
Transitional Arrangements)537
To assist in the smooth transition to a Joint Senior
Management Team, to develop partnership working and to
assist in meeting the performance aspirations set out by
Cabinet in the consideration of the Joint Senior Management
Team Business Case
Building Maintenance Reserve
(previously TCFL roofing)443
To provide funds to meet possible repair and replacement
costs for all Council owned property.
General Fund Items 162
The majority of this reserve relates to the agreed budget carry
forwards as sanctioned by the Head of Finance and
Procurement
Unallocated Revenue Grant
Reserve421
The unspent proportion of the Revenue Grants are held in this
reserve to be drawn down when spent in future years
South Northamptonshire Council Statement of Accounts 2011-12
28
9 PROPERTY, PLANT AND EQUIPMENT
Movement in property, plant and equipment.
2011/ 12 Operational Assets
Community
Assets Total
Land Land Civic & Art
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
COST OR VALUATION
At 1 April 2011 14,231 1,686 1,362 132 219 22 14,342 0 31,994 426Write off of accumulated balances on revaluation (172) (120) (292)
Additions (including enhancements) 357 659 287 0 0 0 392 0 1,695 0Donations 0 0 0 0 0 0 0 0 0 0Revaluation increases/ (decreases) recognised in the
Revaluation Reserve 841 0 0 0 0 0 87 0 928 0
Revaluation increases/ (decreases) recognised in the
Surplus/Deficit on the Provision of Services (657) 0 0 0 0 0 (2,082) 0 (2,739) (7)
Derecognition - Disposals 0 0 (2) 0 0 0 (38) 0 (40) (86)Derecognition - Other 0 0 0 0 0 0 0 0 0 0Assets reclassified (to)/ from Held for Sale and Land 0 0 0 0 0 0 (275) 0 (275) 275Other movements in cost or valuation* (353) 0 0 290 0 0 (289) 0 (352) 0
At 31 March 2012 14,247 2,345 1,647 422 219 22 12,017 0 30,919 608
DEPRECIATION AND IMPAIRMENTS
At 1 April 2011 (406) (1,287) (1,245) 0 0 0 (172) 0 (3,110) 0Write off of accumulated balances on revaluation 172 120 292
Depreciation charge (319) (327) (231) 0 0 0 (65) 0 (942) 0Impairment losses/ (reversals) recognised in the
Revaluation Reserve 0 0 0 0 0 0 0 0 0 0Other movements in depreciation and impairment 0 0 6 0 0 0 (6) 0 0 0At 1 April 2012 (553) (1,614) (1,470) 0 0 0 (123) 0 (3,760) 0
NET BOOK VALUE AT 31 MARCH 2012 13,694 731 177 422 219 22 11,894 0 27,159 608NET BOOK VALUE AT 31 MARCH 2011 13,825 399 117 132 219 22 14,170 0 28,884 426
2010/ 11 comparatives Operational Assets
Community
Assets Total
Land Land Civic & Art
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
COST OR VALUATION
At 1 April 2010 (RESTATED) 17,508 1,609 1,188 0 219 22 23,731 0 44,277 0
Write off of accumulated balances on revaluation (2,963) (10,287) (13,250)Additions (including enhancements) 514 77 187 132 0 0 1,302 0 2,212 0Donations 0 0 0 0 0 0 0 0 0 0Revaluation increases/ (decreases) recognised in the 158 0 0 0 0 0 691 0 849 0
Revaluation increases/ (decreases) recognised in the
Surplus/Deficit on the Provision of Services 0 0 0 0 0 0 (557) 0 (557) 0
Derecognition - Disposals 0 0 (12) 0 0 0 (920) 0 (932) 0
Derecognition - Other 0 0 0 0 0 0 0 0 0 0
Assets reclassified (to)/ from Held for Sale and Land (514) 0 0 0 0 0 0 0 (514) 0
Assets reclassified (to) Heritage Assets 0 0 0 0 0 0 0 0 0 0
Other movements in cost or valuation (472) 0 0 0 0 0 382 0 (90) 426At 31 March 2011 14,231 1,686 1,362 132 219 22 14,342 0 31,994 426
DEPRECIATION AND IMPAIRMENTS
At 1 April 2010 (3,170) (1,047) (1,049) 0 0 0 (10,379) 0 (15,645) 0Write off of accumulated balances on revaluation 2,963 10,287 13,250
Depreciation charge (359) (240) (196) 0 0 0 (10) 0 (805) 0Impairment losses/ (reversals) recognised in the
Revaluation Reserve 0 0 0 0 0 0 0 0 0 0
Other movements in depreciation and impairment 160 0 0 0 0 0 (70) 0 90 0
At 1 April 2011 (406) (1,287) (1,245) 0 0 0 (172) 0 (3,110) 0
NET BOOK VALUE AT 31 MARCH 2011 13,825 399 117 132 219 22 14,170 0 28,884 426NET BOOK VALUE AT 31 MARCH 2010 14,338 562 139 0 219 22 13,352 0 29,519 0
Heritage Assets
Other Land &
Buildings
Leased Vehicle,
Plant &
Equipment
Vehicle,
Plant &
Equipment
Heritage Assets
Surplus
Assets
Other Land &
Buildings
Leased Vehicle,
Plant &
Equipment
Vehicle,
Plant &
Equipment
Assets Held
for Sale
Assets Held
for Sale
Assets under
Construction
Non-Operational Assets
Non-Operational Assets
Assets under
Construction
Surplus
Assets
South Northamptonshire Council Statement of Accounts 2011-12
29
Valuation
The table below distinguishes between assets held at ‘historical cost’ and at ‘fair value’ in
the balance sheet.
Council
Dwellings
Other Land &
Buildings
Vehicles,
Plant &
Equipment
Community
Assets
Heritage
Assets
Surplus
Assets Total
£000 £000 £000 £000 £000 £000 £000
Carried at historical cost 0 0 908 0 0 117 1,025
Valued at Fair Value @:
31-Mar-12 0 2,199 0 422 241 2,032 4,894
31-Mar-11 0 4,290 0 0 0 4,600 8,890
31-Mar-10 0 4,484 0 0 0 830 5,314
31-Mar-09 0 2,721 0 0 0 4,315 7,036
Total Value at 31 March 2012 0 13,694 908 422 241 11,894 27,159
A valuation of 20% of other land and buildings and non-operational assets for the 2011-12
financial year have been valued as at 1 April 2011 by Simon Layfield FRICS IRRV, Partner,
Wilks Head and Eve LLP, Newlands House, 40 Berne’s Street, London, W1T 3NA.
All of the Council’s non-current assets (long term assets) were reviewed at 31 March 2012
and no further impairments were noted.
Revaluations
The Authority carries out a rolling programme that ensures that all Property, Plant and
Equipment required to be measured at fair value is revalued at least every five years.
Valuations of land and buildings were carried out in accordance with the methodologies
and bases for estimation set out in the professional standards of the Royal Institution of
Chartered Surveyors. Vehicles, plant and equipment are carried at depreciated historic
cost.
Surplus Assets
Within Surplus Assets a total of £5.4m are assets associated with the Moat Lane
redevelopment - they are all considered as "assets held for development" and it is
anticipated that all these assets will have a transfer of ownership in the next (2012-13)
financial year. The balance in surplus assets of £6.5m mostly relates to areas of land in
Brackley which are not used for the provision of any council services. There are no plans in
place to sell this land in the near future.
South Northamptonshire Council Statement of Accounts 2011-12
30
10 HERITAGE ASSETS
Art Collection Moat Lane Civic Regalia Total Assets
£000 £000 £000 £000
On a Valuation Basis (not Cost)
01-Apr-10 6 219 16 241
Additions 0 0 0 0
Disposals 0 0 0 0
Revaluations 0 0 0 0
Impairment Losses/(reversals) recognised
in the Revaluation Reserve 0 0 0 0
Impairment Losses/(reversals) recognised
in Surplus or Deficit on the Provision of
Services 0 0 0 0
Depreciation* 0 0 0 0
31-Mar-11 6 219 16 241
Additions 0 0 0 0
Disposals 0 0 0 0
Revaluations 0 0 0 0
Impairment Losses/(reversals) recognised
in the Revaluation Reserve 0 0 0 0
Impairment Losses/(reversals) recognised
in Surplus or Deficit on the Provision of
Services 0 0 0 0
Depreciation* 0 0 0 0
31-Mar-12 6 219 16 241
* The Heritage Assets held by the Council do not require depreciation as they are land,
works of art or civic regalia and are therefore considered to hold their value, this
category is shown in the note for completeness.
South Northamptonshire Council Statement of Accounts 2011-12
31
11 INTANGIBLE ASSETS
The Authority accounts for its software as intangible assets, to the extent that the software
is not an integral part of a particular IT system and accounted for as part of the hardware
item of Property, Plant and Equipment.
All software is given a finite useful life, based on assessments of the period that the
software is expected to be of use to the Authority. Intangible assets are looked at
individually and are amortised on a straight line basis over 1 to 3 years, there is a
particular awareness that intangible ICT assets can quickly become obsolete.
Software Other Total
£000 £000 £000
0 0 0
Additions 361 0 361
Disposals 0 0 0
Revaluations 0 0 0
0 0 0
361 0 361
Additions 334 0 334
Disposals 0 0 0
Revaluations 0 0 0
Transfer 0 0 0
695 0 695
Additions 426 0 426
Disposals 0 0 0
Revaluations 0 0 0
Transfer 0 0 0
1,121 0 1,121
Software Other Total
£000 £000 £000
0
(172) 0 (172)
0 0 0
0 0 0
Disposal 0 0 0
(172) 0 (172)
(370) 0 (370)
0 0 0
0 0 0
0 0 0
(542) 0 (542)
(418) 0 (418)
0 0 0
0 0 0
0 0 0
(960) 0 (960)
Software Other Total
£000 £000 0
Balance at 31-Mar-10 189 0 189
Balance at 31-Mar-11 153 0 153
Balance at 31-Mar-12 161 0 161
Balance at 31-Mar-11
Amortisation for the Year
Impairment Charge
Impairment Losses
Impairment Charge
Impairment Losses
Balance at 31-Mar-10
Net Book Value
Impairment Charge
Impairment Losses
Disposal
Balance at 31-Mar-12
Amortisation for the Year
Disposal
Balance at 31-Mar-11
Balance at 31-Mar-12
Depreciation and Impairment
Balance at 01-Apr-09
Amortisation for the Year
Cost
Balance at 01-Apr-09
Transfer
Balance at 31-Mar-10
South Northamptonshire Council Statement of Accounts 2011-12
32
12 DEBTORS
An analysis of the debtors balance is shown below.
1-Apr-10 31-Mar-11 31-Mar-12
£000 £000 £000
HMRC VAT 234 219 140
Government Departments 1,462 832 1,072
NNDR Due from Central Government 2,121 1,604 362
Other Local Authorities 250 253 186
Sundry Persons 495 1,000 819
Assisted Car Purchase Scheme 68 58 42
Cycle Scheme - 1 1
Housing Rents (former tenants) 142 1 0
Council Taxpayers 117 106 108
Housing Benefits Overpayments 435 443 480
Total Debtors 5,324 4,517 3,210
Council Tax payers ( 66) ( 59) ( 65)
General Fund ( 190) ( 132) ( 168)
Housing Revenue Account ( 134) 0 0
Total Impairment Allowance for Doubtful Debts ( 390) ( 191) ( 233)
Other Local Authorities 1 0 0
Sundry Persons 420 374 324
Total for Payments in Advance 421 374 324
TOTAL NET CURRENT DEBTORS 5,355 4,700 3,301
Housing 583 556 535
General Fund 3 146 124
Housing Act 3 3 3
TOTAL LONG TERM DEBTORS 589 705 662
13 CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash at bank, short-term bank deposits and money
market investments of three months or less from the start of the investment.
The balance of Cash and Cash Equivalents is made up of the following elements
01-Apr-10 31-Mar-11 31-Mar-12
£000 £000 £000
Cash equivalent 0 0 6,100
Cash
Current Accounts 66 0 2
Petty Cash 1 1 1
Call Accounts 6,255 3,339 282
Total cash and Cash Equivalent 6,322 3,340 6,385
Overdraft (740) (550) (494)
Total 5,582 2,790 5,891
South Northamptonshire Council Statement of Accounts 2011-12
33
Short-term bank deposits consist primarily of liquidity account deposits, which can be
readily converted to cash at short notice. The effective interest rate on short-term bank
deposits at 31 March 2012 was 0.61% (31 March 2011 - 0.68%).
14 ASSETS HELD FOR SALE
The table below details those assets held for sale at the Balance Sheet date.
2011 2012 2011 2012
£000 £000 £000 £000
Balance at start of year 0 0 0 426
Assets newly classified as held for sale:
Property, Plant and Equipment 0 0 426 275
Intangible Assets 0 0 0 0
Disposals 0 0 0 -93
Balance at end of year 0 0 426 608
Non-CurrentCurrent
15 CREDITORS
The table below provides details on the level of creditor balances set out in the Balance
Sheet.
1-Apr-10 31-Mar-11 31-Mar-12
£000 £000 £000
Government Departments 751 388 163
Other Local Authorities 755 469 1149
Council Tax Due to Preceptors 240 262 595
Sundry Persons 972 843 733
Council Taxpayers 137 137 129
Housing Rents 17 17 17
Finance Lease Liability 208 148 216
CREDITORS 3,080 2,264 3,002
Government Departments 168 258 157
Other Local Authorities 111 143 98
Sundry Persons 107 114 25
Section 106 Deposits 121 86 504
Escrow Agreement 0 0 250
RECEIPTS IN ADVANCE (current - within 1 year) 507 601 1,034
TOTAL SHORT TERM CREDITORS 3,587 2,865 4,036
Section 106 Deposits 1,460 1,456 1,456
RECEIPTS IN ADVANCE (long term - after 1 year) 1,460 1,456 1,456
Capital Receipts in Advance (S106 deposits) 866 866 875CAPITAL RECEIPTS IN ADVANCE (long term - after 1
year) 866 866 875
South Northamptonshire Council Statement of Accounts 2011-12
34
16 PROVISIONS
During 2011-12 the Council undertook to find budget savings and increase efficiencies
through joint working with Cherwell District Council. A provision has been made to cover
the estimated costs of implementation of this initiative.
Joint
Working
Set up
Costs
Total
£000 £000
At 1 April 2011 531 531
Arising during the year 0 0
Used during the year (483) (483)
Reversed unused (41) (41)
Unwinding of discount 0 0
At 31 March 2012 7 7
Current Provision 7 7
Non - current Provision 0 0
7 7
At 1 April 2010 0 0
Arising during the year 554 554
Used during the year (23) (23)
Reversed unused 0 0
Unwinding of discount 0 0
At 31 March 2011 531 531
Current Provision 531 531
Non - current Provision 0 0
531 531
2011 2012
£000 £000
Expected timing of cash flows:
Within one year 531 7
Between one and five years 0 0
After five years 0 0
Total 531 7
South Northamptonshire Council Statement of Accounts 2011-12
35
17 UNUSABLE RESERVES
Detail of the Unusable Reserves as shown on the balance sheet. Movements in the
Authority’s usable reserves are detailed in the Movement in Reserves Statement.
UNUSABLE RESERVES 31-Mar-10 31-Mar-11 31-Mar-12
£000 £000 £000
Revaluation Reserve (1,548) (2,390) (2,965)
Capital Adjustment Account (27,408) (27,342) (24,775)
Financial Instruments Adjustment Account 7 7 7
Deferred Capital Receipts Reserve (584) (558) (538)
Pensions Reserve 34,685 22,664 27,579
Collection Fund Adjustment Account 41 42 (27)
Accumulated Absences Account 86 88 79
Total Unusable Reserves 5,279 (7,489) (640)
RESTATED
The Revaluation Reserve contains the gains made by the Authority arising from increases
in the value of its Property, Plant and Equipment (and Intangible Assets). The balance is
reduced when assets with accumulated gains are:
• revalued downwards or impaired and the gains are lost
• used in the provision of services and the gains are consumed through
depreciation, or
• disposed of and the gains are realised.
The Reserve contains only revaluation gains accumulated since 1 April 2007, the date
that the Reserve was created. Accumulated gains arising before that date are
consolidated into the balance on the Capital Adjustment Account.
Movement in Revaluation Reserve 2010-11 2011-12
£000 £000
Balance brought forward 1 April ( 1,526) ( 2,390)
IFRS Adjustment for Heritage Assets ( 22) 0
Balance brought forward 1 April ( 1,548) ( 2,390)
Upward revaluation of assets (unrealised) ( 964) ( 1,065)
Downward revaluation of assets and impairment losses not
charged to the Surplus/Deficit on the Provision of Services31 137
Difference between fair value depreciation and historical cost
depreciation91 0
Accumulated gains on assets sold or scrapped, written off to the
Capital Adjustment Account0 0
Adjustment for prior year valuation error* 0 353
Total movement of realised capital resources in year ( 842) ( 575)
Balance carried forward 31 March ( 2,390) ( 2,965)
Capital Adjustment Account
The Capital Adjustment Account absorbs the timing differences arising from the different
arrangements for accounting for the consumption of non-current assets and for financing
the acquisition, construction or enhancement of those assets under statutory provisions.
The Account is debited with the cost of acquisition, construction or enhancement as
depreciation, impairment losses and amortisations are charged to the Comprehensive
Income and Expenditure Statement (with reconciling postings from the Revaluation
Reserve to convert fair value figures to a historical cost basis). The Account is credited
with the amounts set aside by the Authority as finance for the costs of acquisition,
construction and enhancement. The Account contains accumulated gains and losses on
South Northamptonshire Council Statement of Accounts 2011-12
36
Investment Properties and gains recognised on donated assets that have yet to be
consumed by the Authority. The Account also contains revaluation gains accumulated
on Property, Plant and Equipment before 1 April 2007, the date that the Revaluation
Reserve was created to hold such gains.
Note 7 provides details of the source of all the transactions posted to the Account, apart
from those involving the Revaluation Reserve.
2010-11 2011-12
Capital
Adjustment
Account
Capital
Adjustment
Account£000 £000
Balance brought forward at 1 April (28,317) (27,342)IFRS ADJUSTMENT 909 0Balance brought forward at 1 April (27,408) (27,342)
Reversal of items relating to capital expenditure debited or credited to the Comprehensive
Income and Expenditure Statement:Charges for impairment of non-current assets 67Charges for depreciation of non-current assets 805 942Revaluation losses on Property, Plant and Equipment 738 2,746Amortisation of intangible assets 370 418Revenue expenditure funded from capital under statute 876 954Revenue grant received for expenditure funded from capital under statute (388) (297)Amounts of non-current assets written off on disposal or sale as part of the gain/loss on disposal to the
Comprehensive Income and Expenditure Statement922 124
Adjusting amounts written out of the Revaluation Reserve (90) 0Net written out amount of the cost of non-current assets consumed in the year 3,300 4,887
Capital financing applied in the year:
Use of the Capital Receipts Reserve to finance new capital expenditure (3,025) (2,157)Use of the Major Repairs Reserve to finance new capital expenditure 0 0Capital grants and contributions credited to the Comprehensive Income and Expenditure Statement that
have been applied to capital financing(194) 0
Application of grants to capital financing from the Capital Grants Unapplied Account 0 0Statutory provision for the financing of capital investment charged against the General Fund 0 0Capital expenditure charged against the General Fund (RCCO) (15) (163)Net financing applied (3,234) (2,320)
Total Movement in the year 66 2,567
Balance carried forward at 31 March (27,342) (24,775)
Movements in Amounts Set Aside to Finance Capital Investment
South Northamptonshire Council Statement of Accounts 2011-12
37
Pensions Reserve
The Pensions Reserve absorbs the timing differences arising from the different
arrangements for accounting for post employment benefits and for funding benefits in
accordance with statutory provisions. The Authority accounts for post employment
benefits in the Comprehensive Income and Expenditure Statement as the benefits are
earned by employees accruing years of service, updating the liabilities recognised to
reflect inflation, changing assumptions and investment returns on any resources set aside
to meet the costs. However, statutory arrangements require benefits earned to be
financed as the Authority makes employer’s contributions to pension funds or eventually
pays any pensions for which it is directly responsible. The debit balance on the Pensions
Reserve therefore shows a substantial shortfall in the benefits earned by past and current
employees and the resources the Authority has set aside to meet them. The statutory
arrangements will ensure that funding will have been set aside by the time the benefits
come to be paid.
2010-11 2011-12
£000 £000
Balance at 1 April 34,685 22,664
Actuarial gains or losses on pensions assets and liabilities ( 6,038) 4,431
Employer’s pensions contributions and direct payments to pensioners ( 1,721) ( 1,728)
Balance at 31 March 22,664 27,579
2,212Reversal of items relating to retirement benefits debited or credited to the
Surplus or Deficit on the Provision of Services in the Comprehensive Income
and Expenditure Statement
Pensions Reserve
( 4,262)
South Northamptonshire Council Statement of Accounts 2011-12
38
Deferred Capital Receipts Reserve
The Deferred Capital Receipts Reserve holds the gains recognised on the disposal of non-
current assets but for which cash settlement has yet to take place. Under statutory
arrangements, the Authority does not treat these gains as usable for financing new
capital expenditure until they are backed by cash receipts. When the deferred cash
settlement eventually takes place, amounts are transferred to the Capital Receipts
Reserve.
2010-11 2011-12
£000 £000
Balance at 1 April ( 584) ( 558)
Transfer to the Capital Receipts Reserve upon receipt of cash 26 20
Balance at 31 March ( 558) ( 538)
Transfer of deferred sale proceeds credited as part of the gain/loss on
disposal to the Comprehensive Income and Expenditure Statement
Collection Fund Adjustment Account
The Collection Fund Adjustment Account manages the differences arising from the
recognition of council tax income in the Comprehensive Income and Expenditure
Statement as it falls due from council tax payers compared with the statutory
arrangements for paying across amounts to the General Fund from the Collection Fund.
2010-11 2011-12
£000 £000
Balance at 1 April 41 42
Amount by which council tax income credited to the
Comprehensive Income and Expenditure Statement is 1 (69)
different from council tax income calculated for the year in
accordance with statutory requirements
Balance at 31 March 42 (27)
Collection Fund Adjustment Account
Accumulated Absences Account
The Accumulated Absences Account absorbs the differences that would otherwise arise
on the General Fund Balance from accruing for compensated absences earned but not
taken in the year, e.g. annual leave entitlement carried forward at 31 March. Statutory
arrangements require that the impact on the General Fund Balance is neutralised by
transfers to or from the Account.
South Northamptonshire Council Statement of Accounts 2011-12
39
Accumulated Absences Account 2010-11 2011-12
£000 £000
Balance at 1 April 86 88
Settlement or cancellation of accrual made at the end of the preceding year (86) (88)
Amounts accrued at the end of the current year. 88 79
Amount by which officer remuneration charged to the
Comprehensive Income and Expenditure Statement on an accruals
basis is different from remuneration chargeable in the year in
accordance with statutory requirements
0 0
Balance at 31 March 88 79
18 NOTES TO THE CASH FLOW STATEMENT
2011 2012
Note A to the Cash flow Statement £000 £000
Net Surplus or (Deficit) on the Provision of Services 4,890 (4,362)
Adjust net surplus or deficit on the provision of services for non cash movements
Depreciation, Amortisation, Impairment and downward valuations 1,980 4,106
Increase/Decrease in Creditors (587) 595
Increase/Decrease in Interest 24 110
Increase/Decrease in Debtors 613 (679)
Increase/Decrease in Inventories 17 (30)
Pension Liability (5,983) 484
Contributions to/ (from) Provisions 531 (524)
Carrying amount of non-current assets sold [property plant and equipment, investment property
and intangible assets] 922 124
Carrying amount of short and long term investments sold 2,700 2,300
Total non cash movements 217 6,486
Adjust for items included in the net surplus or deficit on the provision of services that are
investing or financing activities
Capital Grants credited to surplus or deficit on the provision of services (582) (297)
Proceeds from the sale of short and long term investments (587) (501)
Proceeds from the sale of property plant and equipment, investment property and intangible
assets (2,444) (344)
Total investing or financing activities (3,613) (1,142)Net Cash Flows from Operating Activities 1,494 982
South Northamptonshire Council Statement of Accounts 2011-12
40
Note B to the Cash Flow Statement - Operating Activities (Interest) 2011 2012
£000 £000
Operating activities within the cash flow statement include the following cash flows relating to
interest
Interest Received 611 611
Interest Paid (111) (202)Dividends Received 0 0
Note C to the Cash Flow Statement - Cash Flows from Investing Activities 2011 2012
£000 £000
Purchase of Property, Plant and Equipment, investment property and intangible assets (2,601) (1,287)
Purchase of short and long term investments (5,000) 0
Other payments for Investing Activities (172) (34)
Proceeds from the sale of property plant and equipment, investment property and intangible
assets 927 116Proceeds from short-term and long-term investments 587 501
Other Receipts from Investing Activities 1,644 1,450
Total Cash Flows from Investing Activities (4,615) 746
Note D to the Cash Flow Statement - Cash Flows from Financing Activities 2011 2012
£000 £000
Billing Authorities - Council Tax and NNDR adjustments 539 1,575Cash payments for the reduction of the outstanding liabilities relating to finance leases and on-
balance sheet PFI contracts (211) (201)
Total Cash Flows from Financing Activities 328 1,374
Note E - Makeup of Cash and Cash Equivalents 2010 2011 2012
£000 £000 £000
Cash and Bank Balances 67 1 285
Cash Investments - regarded as cash 6,255 3,339 6,100
Bank Overdraft (740) (550) (494)
5,582 2,790 5,891
South Northamptonshire Council Statement of Accounts 2011-12
41
19 AMOUNT REPORTED FOR RESOURCE ALLOCATION DECISIONS
This note ties the income and expenditure recorded in the budget reports for the year in
to the Statement of Accounts. The reasons for the differences between the reported
figure in the budget reports and the amounts disclosed in the accounts include notional
costs that are accounting adjustments rather than real monetary exchange transactions.
Reported Income and
Expenditure 2011-12
Central Services
to the Public
Cultural,
Environmental
and Planning
Services
Highway, Roads
and Transport
Services
Housing
Services
Corporate
and
Democratic
Core
Non
Distributed
Costs
Total
£000 £000 £000 £000 £000 £000 £000
Fees, Charges and other
service income (290) (2,163) 0 (50) (577) 0 (3,080)
Government Grants and
Other Contributions (3,358) (960) 0 (12,166) (426) 0 (16,910)
Total Income (3,648) (3,123) 0 (12,216) (1,003) 0 (19,990)
Employee Expenses 878 4,262 43 876 2,923 770 9,752
Other Service Expenses 3,523 3,338 87 11,642 1,830 0 20,420
Support Service Recharge 22 2,668 27 451 (3,289) 0 (121)
Total Expenditure 4,423 10,268 157 12,969 1,464 770 30,051
Net Expenditure 775 7,145 157 753 461 770 10,061
Reported Income and
Expenditure 2010-11
Comparatives
Central Services
to the Public
Cultural,
Environmental
and Planning
Services
Highway, Roads
and Transport
Services
Housing
Services
Corporate
and
Democratic
Core
Non
Distributed
Costs
Total
£000 £000 £000 £000 £000 £000 £000
Fees, Charges and other
service income (215) (2,077) (1) (19) (669) 0 (2,981)
Government Grants and
Other Contributions (3,356) (1,203) (102) (11,018) (181) 0 (15,860)
Total Income (3,571) (3,280) (103) (11,037) (850) 0 (18,841)
Employee Expenses1,085 4,955 42 930 2,676 149 9,837
Other Service Expenses 3,479 3,607 339 10,708 2,431 0 20,564
Support Service Recharge 5 2,028 80 601 (2,894) 0 (180)
Total Expenditure4,569 10,590 461 12,239 2,213 149 30,221
Net Expenditure 998 7,310 358 1,202 1,363 149 11,380
Reconciliation of Reported Income and Expenditure to Cost of Services in the
Comprehensive Income and Expenditure Statement 2010-11 2011-12
£000 £000
Net expenditure in the reported analysis 11,380 10,061
Net expenditure of services and support services not included in the analysis 452 0
Amounts in the CI&E statement not reported to members in the analysis ( 4,568) 4,377 *
Amounts included in the analysis not included in the CI&E statement 476 298 **
Costs of Services in Comprehensive Income and Expenditure Statement 7,740 14,736 * See third column on table below in ‘reconciliation to subjective analysis’
** See fourth column on table below in ‘reconciliation to subjective analysis’
South Northamptonshire Council Statement of Accounts 2011-12
42
Reconciliation to Subjective Analysis
This reconciliation shows how the figures in the analysis of reported income and
expenditure relates to a subjective analysis of the Surplus or Deficit on the Provision of
services included in the Comprehensive Income and Expenditure Statement.
2011-12
Reported
Analysis
Services &
Support
Services not in
Analysis
Amounts not
reported to
Management
for decision
making *
Amounts not
included in
CI&E **
Allocation
of
Recharges
Cost of
Services
Corporate
Amounts
Total
£000 £000 £000 £000 £000 £000 £000 £000
Fees, Charges and Other service income (2,579) (2,579) (2,579)
Interest and Investment Income (501) 501 0 (501) (501)
Income from Council Tax 0 (7,698) (7,698)
Other income 0 (248) (248)
Government Grants and contributions (16,910) (297) (17,207) (4,956) (22,163)
Rounding (1) (1) (2) (2)
Total Income (19,990) 0 (298) 500 0 (19,788) (13,403) (33,191)
Employee Expenses 9,752 0 (772) 8,980 8,980
Other services expenses 20,218 20,218 20,218
Support Service recharges (121) (121) (121)
Depreciation, amortisation and
impairment
5,447 5,447 50 5,497
Interest Payments 202 (202) 0 202 202
Precepts & Levies 0 1,924 1,924
Payments to Housing Capital Receipts
Pool
0 15 15
Gain or Loss on Disposal of Fixed Assets 0 27 27
Pensions interest cost and expected
return from pension assets
0 811 811
Collection Fund Deficit 0 0 0
Rounding 0 0
Total Expenditure 30,051 0 4,675 (202) 0 34,524 3,029 37,553
Surplus or deficit on the provision of
services 10,061 0 4,377 298 0 14,736 (10,374) 4,362
2010-11
Reported
Analysis
Services &
Support
Services not in
Analysis
Amounts not
reported to
Management
for decision
making
Amounts not
included in
CI&E
Allocation
of
Recharges
Cost of
Services
Corporate
Amounts
Total
£000 £000 £000 £000 £000 £000 £000 £000
Fees, Charges and Other service income
(2,394) (7) (2,401) (2,401)
Interest and Investment Income (587) 587 0 (587) (587)
Income from Council Tax 0 (7,586) (7,586)
Other income 0 (1,544) (1,544)
Government Grants and contributions
(15,860) (3) (388) (16,251) (5,993) (22,244)
Total Income (18,841) (10) (388) 587 0 (18,652) (15,710) (34,362)
Employee Expenses 9,837 291 (7,036) 3,092 3,092
Other services expenses 20,453 170 20,623 20,623
Support Service recharges (180) 1 (179) (179)
Depreciation, amortisation and
impairment 2,857 2,857 2,857
Interest Payments 111 (111) 0 111 111
Precepts & Levies 0 1,891 1,891
Payments to Housing Capital Receipts
Pool 0 16 16
Gain or Loss on Disposal of Fixed Assets
0 2 2
Pensions interest cost and expected
return from pension assets 0 1,055 1,055
Collection Fund Deficit 0 4 4
Rounding (1) (1) 1 0
Total Expenditure 30,221 462 (4,180) (111) 0 26,392 3,080 29,472
Surplus or deficit on the provision of
services 11,380 452 (4,568) 476 0 7,740 (12,630) (4,890)
South Northamptonshire Council Statement of Accounts 2011-12
43
Reconciliation of General Fund Balances reported to Members
This reconciliation shows how the reported balance in the General Fund relates to the
Balance Sheet Statement for General Fund Reserves.
2011-12
£000
Estimated Balance of General Fund Balances in the report to Members 3,283
Entries posted after the provisional report was reported to members (75)
- Entries impacting on Net cost of Services
- Entries impacting on Other operating expenditure in the C I&E (2)
General Fund Balance stated in the Balance Sheet Statement 3,206
20 TRADING OPERATIONS – BUILDING CONTROL
The Local Authority Building Control Regulations require the Council to keep a record of
information regarding the setting of charges for the administration of the Building Control
function. However, certain activities performed by the Building Control Unit cannot be
charged for, such as providing general advice and liaising with other statutory authorities.
The statement below shows the total cost of operating the Building Control service
divided between chargeable and non-chargeable activities.
There is a regulatory requirement for the Building Control account to break even over a
three year period for chargeable services. The three year period to 31st March 2012 made
an operating deficit of £246,000. The Council has put in place measures to rectify the
deficit position through the creation of a joint Building Control service with Cherwell
District Council. The larger unit is better able to make efficiencies whilst keeping the
service levels to a high standard.
The figures in the table below only reflect the income and expenditure that relate to
South Northamptonshire Council.
Chargeable Non Total Chargeable Non Total
Chargeable Chargeable
2010-11 2010-11 2010-11 2011-12 2011-12 2011-12
£000 £000 £000 £000 £000 £000
Expenditure
Employees 133 77 210 67 55 122
Premises 0 35 35 0 0 0
Transport 11 4 15 5 3 8
Supplies and Services 8 1 10 3 25 28
Central and Departmental Recharges 154 33 187 48 12 60
Total Expenditure 306 150 456 123 95 218
Income
Building Regulations Charges ( 203) 0 ( 203) ( 141) 0 ( 141)
Miscellaneous Income ( 2) ( 35) ( 37) ( 2) 0 ( 2)
Total Income ( 205) ( 35) ( 241) ( 143) 0 ( 143)
Surplus (Cr)/ Deficit for Year 100 115 216 ( 20) 95 75
Surplus (Cr)/Deficit for Year 2010-11 100
Surplus (Cr)/Deficit for Year 2009-10 166
Three year Surplus of Deficit 246
Building Control Charging
Account
South Northamptonshire Council Statement of Accounts 2011-12
44
21 JOINT ENTITY – WEST NORTHAMPTONSHIRE JOINT PLANNING UNIT
South Northamptonshire Council (SNC) is in partnership with Northamptonshire County
Council, Northampton Borough Council and Daventry District Council to fund a Joint
Planning Unit (JPU) for West Northamptonshire.
SNC is the accountable body for the JPU and, as such, all accounting entries come
through the ledgers of SNC. Only the proportion of the costs associated with SNC are
shown in the primary statements. This memorandum account shows the full expenditure
for the JPU in 2011-12 and how it was funded by the partner Authorities.
EXPENDITURE 2010-11 2011-12
£000 £000
Employees 643 573
Premises 12 12
Transport 12 10
Supplies and Services 228 109
Central and Departmental Recharges 0 0
895 704
INCOME - Funding from Partners 2010-11 2011-12
No of votes £000 £000
Northampton County Council 2 149 0
Northampton Borough Council 4 298 282
Daventry District Council 3 224 211
South Northamptonshire Council 3 224 211
12 895 704
Funding from Partners is based on the number of votes within the Joint Strategic Planning
Committee.
Northampton County Council (NCC), as part of their budget reductions for setting the
2011-12 budget, deleted the budget for the contribution to the WNJPU from 2011-12
onwards, however NCC does still have seats on the Joint Strategic Planning Committee.
22 MEMBERS’ ALLOWANCES
The Authority paid the following amounts to members of the council during the year.
Nature of Expenditure 2010-11 2011-12£000 £000
Chairman's allowance 5 5
Basic Allowance 190 196
Special Responsibility 109 95
Travel & Subsistence/Others 12 12
Total 316 308
South Northamptonshire Council Statement of Accounts 2011-12
45
23 OFFICERS’ REMUNERATION
a) The number of employees whose remuneration (excluding employer pension
contributions) was £50,000 or more is set out below in bands of £5,000.
Remuneration band 2010/2011 Number of Employees 2011/2012 Number of Employees
£50,000 - £54,999 1 1
£55,000 - £59,999 1 1
£60,000 - £64,999 2 0
£65,000 - £69,999 1 1
£70,000 - £74,999 2 1
£75,000 - £79,999 1 3
£80,000 - £84,999 2 2
£85,000 - £89,999 2 1
£90,000 - £94,999 0 0
£95,000 - £99,999 0 0
£100,000 - £104,999 0 0
£105,000 - £109,999 0 0
£110,000 - £114,999 1 0
£115,000 - £119,999 0 0
£120,000 - £124,999 0 0
£125,000 - £129,999 0 0
South Northamptonshire Council Statement of Accounts 2011-12
46
b Disclosure of remuneration for senior employees.
The financial year 2011-12 saw a significant restructure of the council resulting in a shared
management team arrangement with Cherwell District Council with some shared services.
Existing South Northants employees that form part of this new structure are still formally
employed by the Council and 50% is charged to Cherwell District Council, this charge
equated to £135,016 in 2011-12. The full costs of their employment are shown in the note
below. The same arrangement is in place for existing Cherwell District Council, employees
that form part of the new structure are still formally employed by Cherwell District Council
and 50% is recharged to this Council, this recharge equated to £192,312 in 2011-12. 2010/11
Basic
Sala
ry
Bonuses
Expenses
Allow
ances
Com
pensation for
loss o
f off
ice
Pensio
n
Contr
ibutions
Tota
l re
munera
tion
inclu
din
g p
ensio
n
conts
Post title Year £s £s £s £s £s £s
Chief Executive 2010/11 108,830 0 3,162 0 25,483 137,475
Director of Policy 2010/11 82,403 0 2,401 0 19,487 104,291
Director of Service Delivery 2010/11 87,466 0 1,186 0 20,690 109,342
Director of Community Engagement & Corporate Delivery2010/11 84,936 0 103 0 20,096 105,135
Head of Finance 2010/11 88,925 0 588 0 17,866 107,379
Head of Corporate Services 2010/11 76,384 0 1,876 0 17,866 96,126
Head of Environment and Implementation 2010/11 70,053 0 893 0 16,655 87,601
Head of Strategic Policy 2010/11 64,866 0 0 0 0 64,866
2011/12
Key
Basic
Sala
ry
Bonuses
Expenses A
llow
ances
Com
pensation for
loss
of offic
e
Pensio
n C
ontr
ibutions
Tota
l re
munera
tion
inclu
din
g p
ensio
n c
onts
Post title Year £s £s £s £s £s £s
4 Chief Executive Post Holder 1 2011/12 32,678 0 575 56,529 3,243 93,025
1 Chief Executive Post Holder 2 2011/12 110,955 0 0 0 15,423 126,378
1 Director of Community & Environment 2011/12 84,699 0 3,296 0 12,199 100,194
3 Director of Development 2011/12 43,250 0 330 0 5,536 49,116
3 Director of Resources 2011/12 43,250 0 132 0 5,536 48,918
2 Director of Policy 2011/12 42,779 0 826 0 5,410 49,015
1 Head of Finance and Procurement 2011/12 71,152 0 10,694 0 0 81,847
1 Head of Environmental Services 2011/12 62,500 0 0 0 8,688 71,188
1 Head of Transformation 2011/12 53,549 0 1,045 0 0 54,594
1 Head of Community Services 2011/12 62,500 0 236 0 8,688 71,424
2 Director of Service Delivery 2011/12 67,578 0 1,574 7,510 8,354 85,017
2
Director of Community Engagement & Corporate Delivery2011/12 56,996 0 309 21,025 5,671 84,001
2 Head of Finance 2011/12 38,089 0 435 0 4,809 43,333
2 Head of Corporate Services 2011/12 42,557 0 1,907 0 5,290 49,754
2 Head of Environment and Implementation 2011/12 36,324 0 641 0 4,649 41,614
2 Head of Strategic Policy 2011/12 32,259 0 0 0 0 32,259
3 Head of Law and Governance 2011/12 37,750 0 810 0 4,832 43,392
3Head of Public Protection and Development Management 2011/12 36,500 0 32 0 4,672 41,204
3 Head of Strategic Planning and the Economy 2011/12 36,000 0 0 0 0 36,000
The above table details the Senior Management Team of South Northamptonshire Council in 2010/11. 100% of this cost was
borne by South Northamptonshire Council.
1 Joint Management Team Post employed by CDC. (SNC bore 50% of costs from 1st October 2011)
2 Post deleted as part of Joint Management Team Implementation with SNC
4 Employed by SNC and only worked for SNC (SNC bore 100% of costs ended May 2011)
The above table details the Senior Management Team of South Northamptonshire Council in 2011/12. Part way through the
year the Senior Management Team became a shared team with Cherwell District Council with the costs being shared with
50% being borne by South Northamptonshire Council.
3 Joint Management Team posts employed by SNC . (CDC bore 50% of costs from October 2011)
South Northamptonshire Council Statement of Accounts 2011-12
47
24 EXIT PACKAGES
The numbers of exit packages with total cost per band and total cost of the compulsory
and other redundancies are set out in the tables below:
SNC entirely responsible for these costs.
(a) (b) © (d) (e)
Exit package cost
band (including
special payments)
2010/11 2011/12 2010/11 2011/12 2010/11 2011/12 2010/11 2011/12
£0-£20,000 4 1 1 0 5 1 £40,658 £8,521
£20,001-£40,000 1 0 3 0 4 0 £118,949 £0
£40,001-£60,000 0 0 0 0 0 0 £0 £0
£60,001-£80,000 0 0 0 0 0 0 £0 £0
£80,001-£100,000 1 0 0 0 1 0 £103,717 £0
£100,001-£200,000 0 0 0 0 0 0 £0 £0
Total 6 1 4 0 10 1 £263,324 £8,521
CDC/SNC 60/ 40 responsible for these costs.
(a) (b) © (d) (e)
Exit package cost
band (including
special payments)
2010/11 2011/12 2010/11 2011/12 2010/11 2011/12 2010/11 2011/12
£0-£80,000 0 5 0 3 0 8 £0 £267,181
£80,001-£120,000 0 0 0 0 0 0 £0 £0
£1200,001-£200,000 0 0 1 3 1 3 £175,836 £432,255
Total 0 5 1 6 1 11 £175,836 £699,436
Number of
compulsory
redundancies
Number of other
departures agreed
total number of exit
packages by cost
band [(b) + ©]
Total cost of exit
packages in each
band
Number of
compulsory
redundancies
Number of other
departures agreed
total number of exit
packages by cost
band [(b) + ©]
Total cost of exit
packages in each
band
South Northamptonshire Council Statement of Accounts 2011-12
48
25 EXTERNAL AUDIT COSTS
The Authority has incurred the following costs in relation to the audit of the Statement of
Accounts, certification of grant claims and statutory inspections and to non-audit services
provided by the Authority’s external auditors. 2010-11 2011-12
£000 £000
Base Audit 97 86
Statutory Inspection 0 0
Grant Claims 19 18
Other 0 0
Total 116 104
26 GOVERNMENT GRANT AND GRANT INCOME
The Authority credited the following grants, contributions and donations to the
Comprehensive Income and Expenditure Statement
Grant Income 2010-11 2011-12
£000 £000
Credited to Taxation and Non Specific Grant Income
General Government Grant ( 735) ( 1,081)
Redistributed Non domestic rates ( 5,064) ( 3,496)
Capital grants and contributions ( 194) 0
Other contributions 0 ( 379)
Other contributions Collection Fund Surplus (SNC proportion) ( 58)
Total ( 5,993) ( 5,014)
Credited to Services
CLG New Burdens Grants ( 93) ( 3)
CLG Area Based Grant - specific to services ( 36) 0
DWP Housing Benefit Administration ( 322) ( 378)
DWP Rent Allowances ( 10,625) ( 11,655)
DWP Council Tax Benefits ( 3,208) ( 3,230)
CLG Homelessness Grant ( 47) ( 66)
DoT Special Travel Concession Grant ( 67) 0
Waste & Resources Action Programme ( 36) 0
Future Jobs Fund ( 18) 0
CLG Neighbourhood Planning 0 ( 8)
CLG Mortgage Repossession 0 ( 30)
DWP - ATLAS 0 ( 28)
Other grants ( 5) 0
CLG Disabled Facilities Grant ( 143) ( 163)
CLG Regional Housing Pot for Decent Homes ( 219) ( 134)
Other contributions ( 48) ( 43)
Contributions from Other Local Authorities ( 1,165) ( 1,252)
Big Lottery ( 57) ( 59)
Environment Agency ( 55) ( 37)
NDR cost of Collection ( 106) ( 105)
Feed in Tarrif for solar panels 0 ( 15)
Rounding 0 ( 1)
Total grants and Contributions Credited to the services ( 16,251) ( 17,207)
South Northamptonshire Council Statement of Accounts 2011-12
49
Grant Income continued 2010-11 2011-12
£000 £000
Revenue Grants Receipts in Advance
Big Lottery ( 33) 0
Environment Agency - Flood Defence ( 101) ( 98)
s106 Deposits ( 86) ( 504)
CLG Neighbourhood Plans 0 ( 52)
DEFRA - Air Quality 0 ( 50)
Other grants and contributions ( 124) ( 37)
Escrow Agreement (Moat Lane) 0 ( 250)
Capital Grants Receipts in Advance
Regional Housing Pot ( 176) ( 42)
Total ( 520) ( 1,033)
Acronyms: CLG (Department for Local Government and Communities), DWP
(Department for Work and Pensions), DoT (Department of Transport), ATLAS (Automated
Transfers to Local Authority Systems), NDR (National Non-Domestic Rates), DEFRA
(Department for Environment, Food and Rural Affairs).
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 be spent only in
accordance with the agreement concluded with the developer.
27 RELATED PARTIES
South Northamptonshire Council is required to disclose material transactions with related
parties, bodies or individuals that could potentially control or influence the Council (or
conversely be controlled or influenced by the Council). Disclosure of these transactions
allows readers to assess the extent to which the Council might have been constrained in
its ability to operate independently or might have secured the ability to limit another
party's ability to bargain freely with the Council.
Central Government has effective control over the general operations of the Council - it
is responsible for providing the statutory framework within which the Council operates,
providing just over half of its funding in the form of grants and also prescribing the terms of
many of the transactions that the Council has with other parties (e.g. Council tax bills &
Housing Benefits). The details of the grants received from government departments have
been set out in the previous note on the subjective analysis.
Members of the Council have direct control over the Council's financial and operating
policies. The total of Members' allowances paid in 2011-12 is shown in Note 22.
During 2011-12, works and services to the value of £4,463 (£49,365 for 2010-11) were
commissioned from one company in which one Member had an interest. Contracts were
entered into in full compliance with the Council's Standing Orders.
South Northamptonshire Council Grants Panel paid grants totalling £494 to voluntary
organisations where one Member had a position on the governing body. The relevant
Member did not take part in any discussion or decision relating to the grant.
South Northamptonshire Council Statement of Accounts 2011-12
50
Details of all these transactions are recorded in the Register of Members' Interests which is
open to public inspection at the Council Office, Springfields, Towcester, NN12 6AE during
office hours.
The precept payments made to Northamptonshire County Council and
Northamptonshire Police Authority amounted to £34,442,242 for 2011-12 (£34,350,286 for
2010-11) and £6,472,329 for 2011-12 (£6,455,020 for 2010-11) respectively.
Other Public Bodies - Precepts to Parish and Town Councils amounted to £1,924,298 for
2011-12 (£1,891,463 for 2010-11).
Officers of the Council declared interests of £10,566 in 2011-12 (£15,488 in 2010-11).
In 2011-12 a joint senior management team was implemented with Chief Executive,
Directors and senior management being shared between the South Northamptonshire
Council (SNC) and Cherwell District Council (CDC). Where existing members of staff were
re-employed in the new structure, the staff remained employed by their existing Council
and their costs were shared and appropriately charged to the other Council. In addition
other services have become shared for example Information Technology, Democratic
Process and Building Control. The charge from CDC to SNC was £832,031 and the charge
from SNC to CDC was £509,880 for 2011-12.
Other related parties include:
• The Joint Planning Unit (JPU) consisting of Daventry District Council, Northampton
Borough Council and Northampton County Council (expenditure of £211,000).
• The Community Safety Partnership Unit (CSPU) with Daventry District Council and
Northamptonshire Police Authority (expenditure of £49,244).
• Moat Lane Partnership with Morgan Sindall (income of £250,000).
• Moat Lane Partnership with Northamptonshire County Council (a partner but nil
transactions in 2011-12).
• Northamptonshire Waste Partnership which is a formal partnership consisting of all
eight Northamptonshire local authorities and is dedicated to reducing the amount
of waste going to landfill (expenditure of £25,000).
• South Northants Homes (income of £329,094 and expenditure of £41,953).
• SEMLEP (South East Midlands Local Enterprise Partnership) (expenditure of £7,000).
• South Northants Leisure Trust (expenditure of £176,246).
South Northamptonshire Council Statement of Accounts 2011-12
51
28 CAPITAL EXPENDITURE AND CAPITAL FINANCING
The total amount of capital expenditure incurred in the year is shown in the table below
(including the value of assets acquired under finance leases), together with the resources
that have been used to finance it. Where capital expenditure is to be financed in future
years by charges to revenue as assets are used by the Authority, the expenditure results in
an increase in the Capital Financing Requirement (CFR). The CFR is analysed in the
second part of this note.
2010-11 2011-12
£000 £000
Opening Capital Financing Requirement 797 662
Capital expenditure
Property, plant and equipment (non-leased) 2,135 954
Property, plant and equipment (leased) 77 659
Inventories (stock) 66 82
Intangible Assets 334 426
REFCUS* 876 954
TOTAL 3,488 3,075
Sources of capital finance
Capital Receipts Reserve
- new assets purchased 2,326 1,299
- Assets leased on finance (reduction of balance
sheet liability)
211 201
- REFCUS 488 657
Capital Grants 194 0
Capital Grants - REFCUS* 388 297
RCCO and other reserves 15 163
External Borrowing 0 0
Future Borrowing 0 0
Total 3,622 2,617
Closing Capital Financing Requirement 662 1,120
2010-11 2011-12
Explanation of movements in year £000 £000
Increase in underlying borrowing 0 0
Assets acquired under finance leases 77 659
Finance lease liability repayment (211) (201)
Increase/ (decrease) in Capital Financing
Requirement
(134) 458
*REFCUS stands for Revenue Expenditure Funded From Capital Under Statute. This is
expenditure on assets that do not belong to the Council and so do not appear on the
Council’s asset register. For example disabled adaptations through disabled facilities
grants.
South Northamptonshire Council Statement of Accounts 2011-12
52
29 LEASES
The council leases its waste vehicles and multifunctional devices (photocopiers) under
leases that are classed as finance leases and therefore the assets are shown on the
balance sheet as belonging to the Council. This is one of the significant changes to the
accounts under the IFRS standards as previously these were considered operating leases
and the assets were not shown on the balance sheet. Details of the leases are shown
below:
Finance Lease Net Present Value 31-Mar-11 31-Mar-12
£'000 £'000
Finance lease liabilities (net present value of minimum lease payments)
Current 141 216
Non-Current 397 872
Finance costs payable in future years 634 845
Minimum lease payments 1,172 1,933
Minimum lease payments Finance lease liabilities
31-Mar-11 31-Mar-12 31-Mar-11 31-Mar-12
£000 £000 £000 £000No later than one year 383 423 141 216Later than one year but not later than five years 789 1,329 397 751Later than five years 0 181 0 121Total 1,172 1,933 538 1,088
30 IMPAIRMENT LOSSES
Paragraph 4.7.4.2(1) of the Code requires disclosure by class of assets of the amounts for
impairment losses and impairment reversals charged to the Surplus or Deficit on the
Provision of Services and to Other Comprehensive Income and Expenditure. These
disclosures are consolidated in Notes 9 and 11 reconciling the movement over the year in
the Property, Plant and Equipment and Intangible Asset balances.
During 2011-12 the Council has recognised downward valuations in 11 assets, totalling
£2.7m as part of the five year rolling programme of external valuation. These asset
movements are noted in the Explanatory Foreword.
In addition there has been a retrospective downward valuation due to the application of
the Heritage Asset standard from 1st April 2010 (as outlined in note 1). Here a single asset
previously held at historical cost (£1.128m) in the community asset category, was
separated into two assets. One re-categorised as a heritage asset and valued at fair
value (£219k) and the other moved into the Moat Lane Regeneration category called
‘surplus assets’ and valued at fair value (£149k).
31 IAS 19 PENSION FUND NOTES - PARTICIPATION IN PENSION SCHEMES
As part of the terms and conditions of employment of its officers and other employees,
the authority offers retirement benefits through membership of the Local Government
Pension Scheme administered by Northamptonshire County Council. Although these
benefits will not actually become payable until after the employees retire, the council is
required to disclose the cost of these at the time that the employees earn their future
entitlement.
The arrangement is a funded defined benefit final salary scheme. This means that the
council and employees pay contributions into a fund, calculated at a level intended to
balance the pension liabilities with investment assets. The retirement benefits are
South Northamptonshire Council Statement of Accounts 2011-12
53
determined independently of the investments of the scheme and employers have an
obligation to make contributions where assets are insufficient to meet employee benefits.
South Northamptonshire Council recognises the cost of retirement benefits in the
Comprehensive Income and Expenditure Statement under 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 contributions payable in the year, so the future cost of retirement benefits is
reversed out in the Movement in Reserves Statement so that it does not impact the
charge to council tax.
The date of the last actuarial valuation was 31st March 2010.
Valuation method
1. As required under the Accounting Standard IAS19 the Actuary has used the
projected unit credit method of valuation.
2. No allowance has been made for administration expenses in the present value of
the defined benefit obligation, or the balance sheet. Expenses are allowed for by way of
increase in the current service cost.
3. The last formal valuation of the Fund was carried out as at 31 March 2010. The
Actuary has projected the results of this valuation forward to 31 March 2012 using
approximate methods. The roll-forward allows for:
• changes in financial assumptions;
• additional benefit accrual;
• estimated cash flows over the period; and
• membership information.
4. In order to assess the value of the Council’s liabilities in the Fund as at 31 March
2012, the Actuary has rolled forward the value of the Council’s liabilities calculated at the
latest formal valuation for the Employer, allowing for the different financial assumptions
required under the Accounting Standard at the accounting date. In calculating the
current service cost the Actuary allowed for changes in the Council’s pensionable payroll
as estimated from contribution information provided. In calculating the asset share, the
Actuary rolled forward the Council’s share of the assets allocated as at the latest
valuation for the Council allowing for investment returns (estimated where necessary), the
effect of contributions paid into, and estimated benefits paid from, the Fund by the
Council and its employees.
5. In preparing the balance sheet at 31 March 2012 and the revenue account to 31
March 2012, no
allowance is made for the effect of and changes in the membership profile since 31
March 2011. The principal reason for this is that insufficient information was available to
the Actuary to allow them to make any such adjustment. However, for most employers,
the effect is likely to be immaterial in actuarial terms.
6. Whilst the liabilities calculated under the Accounting Standard include an
allowance for some premature retirements on grounds of ill-health, there is no allowance
for early retirements on grounds of redundancy or efficiency.
7. It is not possible to assess the accuracy of the estimated liability shown in the results
schedule without conducting a full valuation. Such a valuation is generally not practical
in the time available to meet the Council’s reporting requirements. The estimated liability
will not reflect differences in demographic experience from that assumed (e.g. early
South Northamptonshire Council Statement of Accounts 2011-12
54
retirements) or the impact of differences between aggregate changes in salary and
pension and changes for specific individuals.
South Northamptonshire Council Statement of Accounts 2011-12
55
i) The table below summaries the membership data
Total Salaries/Pensions Average
Number Age
31 January 2012 31 March 2010 31 January 2012 31 March 2010 31 March 2010Actives 193 208 5,079 5,401 50Deferred Pensioners 265 264 * 610 50Pensioners 281 274 * 1,606 66
*The actuary did not have current figures for the amount of pensions in payment and deferred pensions.Calculations are based on estimates from the latest formal valuation.
Deferred pensioners include undecided leavers and frozen refunds.
Salaries are actual, not full-time equivalent
ii) The assumed total pensionable payroll is:
Period Assumed Total Pensionable Payroll1 April 2011 to 31 March 2012 £5,164,0001 April 2012 to 31 March 2013 £5,079,000
iii) Early Retirements
There were a total of 3 new early retirements during the year 2011-12.
1 April 2011 to 31 March 2012 Number Total Pension Accrued Total Pension ActualRedundancy 2 £99,149 £99,149Efficiency 1 £6,421 £6,421
Assets and Liabilities in Relation to Retirement Benefits
a) Reconciliation of the opening and closing balances of the present value of the
scheme liabilities:
31 March 2011 31 March 2012
£000 £000Opening Balance 34,685 22,664Cash Payments to Pension Fund during the year (1,721) (1,728)Actuarial gain/ (loss) for the year (6,038) 4,431Appropriations to Pension Reserve during the year (4,262) 2,212Balance carried forward 22,664 27,579
South Northamptonshire Council Statement of Accounts 2011-12
56
Actuarial gains and losses are changes in the net pensions liability that arise because
events have not coincided with assumptions made at the last actuarial valuation or
because the actuaries have updated their assumptions. These are debited or credited to
the Pension Reserve.
2010-11 2011-12
£000 £000
Opening Balance 67,766 55,586
Current Service Cost 1,214 965
Interest Cost 3,431 3,043
Contribution by Scheme Participants 368 343
Actuarial Gains/ (Losses) ( 8,457) 2,795
Benefits Paid - Funded ( 2,055) ( 2,108)
Benefits Paid - Unfunded ( 150) ( 148)
Past Service (Costs) ( 6,588) 10
Curtailments 57 426
Closing Balance 55,586 60,912
Liabilities
b) Reconciliation of the opening and closing balances of the fair value of the scheme
assets:
Assets 2010-11 2011-12
£000 £000
Opening Balance 33,081 32,922
Expected Return on Scheme Assets 2,376 2,232
Actuarial Gains/ (Losses) ( 2,419) ( 1,636)
Contributions by the Employer 1,571 1,580
Contributions in respect of Unfunded Benefits* 150 148
Contribution by Scheme Participants 368 343
Benefits Paid - Funded ( 2,055) ( 2,108)
Benefits Paid – Unfunded* ( 150) ( 148)
Closing Balance 32,922 33,333
*This relates to the old pension gratuities scheme.
The expected return on assets is based on a consideration of 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 experienced
in the respective markets.
South Northamptonshire Council Statement of Accounts 2011-12
57
Reconciliation of transactions relating to Post-employment Benefits
Local Government Pension Scheme 2011 2012
£000 £000
Comprehensive Income and Expenditure Statement
Cost of Services
- current service cost 1,214 965
- past service costs / (gain) -6,588 10
- settlements and curtailments 57 426
Financing and Investment Income and Expenditure
-interest cost 3,431 3,043
- expected return on scheme assets -2,376 -2,232
Total Post Employment Benefit Charged to the Surplus or
Deficit on the Provision of Services -4,262 2,212
Other Post Employment Benefit Charged to the
Comprehensive Income and Expenditure Statement
- actuarial (gains) and losses -6,038 4,431
Total Post Employment Benefit Charged to the
Comprehensive Income and Expenditure Statement -10,300 6,643
Movement in Reserves Statement
- reversal of net charges made to the Surplus or Deficit for
the Provision of Services for post employment benefits in
accordance with the Code 4,262 -2,212
Actual amount charged against the General Fund Balance
for pensions in the year:
- employers’ contributions payable to scheme 1,721 1,728
The cumulative amount of actuarial gains and losses recognised in the Comprehensive
Income and Expenditure Statement to 31 March 2012 is a loss of £18,062,000.
Major categories of Plan Assets as a Percentage of Total Plan Assets
The Local Government Pension Schemes assets consist of the following categories, by
proportion of the total assets held
2011 2012
Equities 72.0% 71.0%
Bonds 20.0% 21.0%
Property 6.0% 6.0%
Cash 2.0% 2.0%
100.00% 100.00%
Investment Returns
South Northamptonshire Council Statement of Accounts 2011-12
58
The return on the Fund in market value terms for the year to 31 March 2012 is estimated
based on actual Fund returns (provided by Northamptonshire County Council to the
Actuaries Hymans Robertson LLP) and index returns where necessary.
Actual Rate of Return 1st April 2011 to 31st December 2011 (2.9%)
Estimated Rate of Return 1st April 2011 to 31st March 2012 1.8%
The bid value of the Fund’s Assets as at 31 March 2012 is £1,315m (31 March 2011 was
£1,281m) based on information provided by the County Council and Actuaries Hymans
Robertson LLP and adjusting for the difference between the mid-market (as supplied) and
bid value of the assets.
Principal Actuarial Assumptions as at 31st March 2012
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 and so on. The scheme liabilities have been assessed
by Hymans Robertson LLP, an independent firm of actuaries, estimates being based on
the latest full valuation of the scheme as at 31 March 2007.
The principal assumptions used by the actuary have been
2010-11 2011-12
£000 £000
Discount Rate 5.50% 4.80%
Expected Return on Assets 6.80% 5.50%
Salary Increase Rate 5.10% 4.80%
Inflation/Pension Increase Rate 2.80% 2.50%
Mortality Assumptions
Longevity at 65 for Current Pensioners:
- Men 21.4 years 21.4
- Women 23.3 years 23.3
Longevity at 65 for Future Pensioners:
- Men 23.4 years 23.4
- Women 25.5 years 25.5
Equity Investments 7.50% 6.20%
Bonds 4.90% 3.50%
Property 5.50% 4.40%
Cash 4.60% 3.50%
Commutation
Take-up of Option to Convert Annual Pension into
Retirement Lump Sum pre April 2008 50% 50%
Take-up of Option to Convert Annual Pension into
Retirement Lump Sum post April 200875% 75%
South Northamptonshire Council Statement of Accounts 2011-12
59
Scheme History:
a) Present Value of Scheme Liabilities, Fair Value of Assets and Surplus Deficit in the
Scheme:
31 March 2008 2009 2010 2011 2012
£000 £000 £000 £000 £000
Fair Value of Employer Assets 30,592 23,972 33,081 32,922 33,333
Present Value of Scheme Liabilities (50,938) (43,527) ( 67,766) ( 55,586) ( 60,912)Surplus / (Deficit) in the Scheme (20,346) (19,555) (34,685) (22,664) (27,579)
Statutory arrangements for funding the deficit mean that the financial position of the
authority remains healthy. The deficit on the scheme will be made good by increased
contributions over the remaining working life of employee, as assessed by the scheme
actuary.
The projected pension expense for the year to 31 March 2012 is £1.81m. The total
contributions expected to be made to the scheme by the council in the year to 31 March
2012 is £1.31m.
History of Experienced Gains and Losses:
b) The actuarial gains identified as movements on the Pensions Reserve in 2011-12 can be
analysed into the following categories, measured as a percentage of assets or liabilities
at 31 March 2012:
31st March 2008 2009 2010 2011 2012
£000 £000 £000 £000 £000
Fair Value of Employer Assets 30,592 23,972 33,081 32,922 33,333
Experienced Gain/ (Loss) on
Assets (3,635) (8,893) 7,295 (2,419) (1,636)
Gain/ (Loss) as % of Asset Fair
Value -12% -37% 22% -7% -5%
Present Value of Liabilities (50,938) (43,527) (67,766) (55,586) (60,912)
Experienced Gain/ (Loss) on
Liabilities (2,398) (24) (131) 4,930 (838)Gain/ (Loss) as % of Total
Liabilities 5% 0% 0% -9% 1%
Projected pension expense:
c) The projected pension expense for the year to 31 March 2013.
Analysis of projected amount to be charged to operating profit for the year to 31 March
2013 is provided in the table below:
South Northamptonshire Council Statement of Accounts 2011-12
60
Year Ended: 31 March 2013 £000 % of pay
Projected Current Service Cost* 972 19.1%
Interest on Obligation 2,907 57.2%
Gain/(Loss) as % of Asset Fair Value (1,819) (35.8%)
Gain/(Loss) as % of Total Liabilities 2,060 40.5%
The information included for all of the pension disclosures is provided by Hymans
Robertson LLP, the Actuary for the Pension Fund. Further information can be found in the
County Council’s Pension Fund’s Annual Report which is available on request from the
Pensions Section [Resources Directorate PO Box 136, County Hall, Guildhall Road,
Northampton, NN1 1AT].
32 CONTINGENT ASSETS
Contingent Assets
VAT Repayment - Fleming Case
In 2009-10 the Council won a legal case to have a refund of VAT paid on Leisure Services.
The refunded payment included the initial VAT and simple interest. The Council has a
second claim lodged to have compound interest repaid. The value of this if successful is
estimated to be £130,000.
33 CONTINGENT LIABILITIES
(b) Contingent Liabilities
Land Charges - Property Search Information
Potential liability arising from the fact that under the Environmental Information
Regulations 2004 there is the possibility that search fees have been incorrectly charged
historically. An accurate estimate of financial effects is not possible given the uncertain
number of potential claimants and the extent to which any of the commercial search
agents actually made a financial loss. In 2010-11 the Council received a grant of £34,000
to help to offset this potential liability and this has been transferred to an ear-marked
reserve.
South Northamptonshire Council Statement of Accounts 2011-12
61
34 FINANCIAL INSTRUMENTS
Categories of Financial Instruments
i) Types of Financial Instruments
Accounting regulations require the ‘“financial instruments’ (investment, lending and
borrowing of the Council) shown on the balance sheet to be further analysed into various
defined categories. The investments, lending & borrowing disclosed in the balance sheet
are made up of the following categories of ‘financial instruments’:
a) Financial Instrument Balances for year ended 31 March 2012
Financial Instrument March 31st
2011
March 31st
2012
March 31st
2011
March 31st
2012
£000 £000 £000 £000
Investments (Assets)
Investments 5,032 5,032 12,473 10,061
Cash and Cash Equivalents 0 0 3,340 6,385
Debtors (Assets)
Loans and Receivables 0 0 0 0
Financial Assets carried at contract
amount (Trade Debtors)
0 0 1,167 1,244
Total Investments 5,032 5,032 16,980 17,690
Borrowings (Liabilities)
Financial liabilities at amortised cost
(bank overdraft)
0 0 550 494
Creditors (Liabilities)
Financial Liabilities carried at contract
amount (Trade Creditors)
1,273 0 1,414 2,079
Total Borrowings 1,273 0 1,964 2,573
Long Term Current
South Northamptonshire Council Statement of Accounts 2011-12
62
b) Gains and Losses on Financial Instruments
The gains and losses recognised in the Comprehensive Income and Expenditure Account
and in relation to financial instruments are made up as follows:
Liabilities at
amortised
cost
Loans &
Receivables
Available
for sale
assets
£000 £000 £000 £000
Interest & Investment Income 0 501 0 501
Net Gain/ (Loss) for the year 0 501 0 501
Liabilities at
amortised
cost
Loans &
Receivables
Available for
sale assets
£000 £000 £000 £000
Interest & Investment Income 0 587 0 587
Net Gain/ (Loss) for the year 0 587 0 587
Total
Total2010-11 Financial Year Financial
Liabilities
Financial Assets
2011-12 Financial Year Financial
Liabilities
Financial Assets
c) Fair Value of Assets and Liabilities Carried at Amortised Cost
The fair value of each class of financial assets and liabilities, which are carried in the
balance sheet at amortised cost, is disclosed below.
d) Methods and Assumptions in Valuation Technique
Loans and receivables are carried on the balance sheet at amortised cost, whereas
‘available for sale’ and ‘fair value through profit and loss’ investments are carried on the
balance sheet at fair value. The amortised cost consists of the nominal value of the
principal plus accrued interest as at year end.
The 2011-12 Code of Practice requires the fair values of the council’s investments to be
disclosed for comparison purposes. Fair value is the amount for which an asset could be
exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s-
length transaction. The fair value of a financial instrument on initial recognition is generally
the transaction price. The Council’s investment portfolio at year-end consisted entirely of
loans and receivable investments.
The fair value of an instrument is determined by calculating the Net Present Value (NPV)
of future cash flows, which provides an estimate of the value of payments in the future in
today’s terms.
South Northamptonshire Council Statement of Accounts 2011-12
63
e) Assets and Liabilities
The fair values are calculated as follows:
f) Fair Value of Liabilities Carried at Amortised Cost
Financial Liability Carrying
Amount
Fair Value Carrying
Amount
Fair Value
£000 £000 £000 £000
Temporary Borrowing (Short Term) 0 0 0 0
Trade Creditors 1,414 1,414 2,079 2,079
Total Liabilities 1,414 1,414 2,079 2,079
31-Mar-11 31-Mar-12
g) Fair Value of Assets Carried at Amortised Cost
Financial Asset Carrying
Amount
Fair Value Carrying
Amount
Fair Value
£000 £000 £000 £000
Deposits with banks/building societies:
Cash Equivalents 3,339 3,339 6,385 6,385
Short Term (<1 Year) 12,473 12,473 10,061 10,061
Long Term (>1 Year) 5,032 5,593 5,032 5,236
Trade Debtors 1,167 1,167 1,244 1,244
Total Assets 22,011 22,572 22,722 22,926
31-Mar-11 31-Mar-12
The fair value for investments at the Balance Sheet date is higher than the carrying
amount because the interest rate on similar investments is now lower than that obtained
when the investment was originally made.
The Council’s management of treasury risks actively works to minimise the Council’s
exposure to the unpredictability of financial markets and to protect the financial
resources available to fund services. The Council has fully adopted CIPFA’s Code of
Treasury Management Practices and has written principles for risk management.
ii) Risk Management
a) Credit Risk
Credit risk arises from the short-term lending of surplus funds to banks, building societies
and other local authorities as well as credit exposures to the Council’s customers. This risk
is minimised through the Annual Treasury Management Strategy, which sets the policy of
the Council to place deposits only with a limited number of high quality banks and
building societies and to restrict lending to a prudent maximum amount for each
institution.
South Northamptonshire Council Statement of Accounts 2011-12
64
The Council has set counterparty limits, restricting the total amount of deposits with any
single institution/banking group to a maximum of £7.5 million.
The following analysis summarises the Council’s potential maximum exposure to credit risk,
based on the authorities experience over the past five years, and adjusted to reflect
current market conditions.
a) Credit Risk - Quantitative Notes
Amount
(Principal or
Outstanding
Balance)
Historical experience
of default (adjusted
to reflect market
conditions)
Estimated
maximum
exposure
to default
31-Mar-12 31-Mar-12
£000 % £000
Deposits with Banks and Building
Societies
Long-
Term
Short-
Term
Principal
Amount
Between one and two years:
Royal Bank of Scotland A F1 5,000,000 0 0
Less than 1 year:
Bank Of Scotland A F1 5,000,000 0 0
Barclays Bank A F1 3,000,000 0 0
Nationwide A+ F1 3,000,000 0 0
HSBC AA F1+ 2,000,000 0 0
Debt Management Office N/A N/A 3,100,000 0 0
Natwest Bank Call Account (plus
cash in hand plus petty cash)
A F1 285,419 0 0
Sub-Total: Deposits with banks
and building societies
21,385,419 0 0
Trade Debtors Outstanding
Balance
Sub-Total: Trade Debtors 1,244 1.69 21
Total 21,386,663 21
FITCH credit rating
Whilst the current economic climate has raised the overall possibility of investment
defaults, the Council maintains a strict credit criteria review for investment counterparties.
The Council expects full repayment on the due date of deposits placed with its existing
counterparties.
South Northamptonshire Council Statement of Accounts 2011-12
65
b) Debtor Risk
The Council does not generally allow credit for its trade debtors. Outstanding debt
overdue for payment can be analysed by age as follows
Duration outstanding 31-Mar-11 31-Mar-12
£000 £000
Total Debtors:
Debtors * 1,167 1,244
Outstanding Debt Overdue:
Between 1 and 13 days 72 102
Between 14 and 27 days 31 16
Between 28 and 41 days 4 1
42 days and older 85 92
Total Outstanding Debt 192 211
* Debtors figures exclude statutory obligations
c) Liquidity Risk
The Council manages its liquidity position through the risk management processes set out
above (setting and approval of Prudential Indicators, and approval of the Annual
Treasury Management Strategy), as well as through the active management of the cash
flow position. This seeks to ensure that cash is available when it is needed.
In the event of an unexpected cash requirement, the Council has access to borrowings
from the money markets to cover any short term cash flow need. The Council is also
required to provide a balanced budget through the Local Government Finance Act
1992, which ensures sufficient funds are raised to cover annual expenditure. There is
therefore no significant risk that it will be unable to raise finance to meet its commitments
under financial instruments.
The maturity structure of financial liabilities is as follows
Duration outstanding 31-Mar-11 31-Mar-12
£000 £000
Loans Outstanding:
Temporary Borrowing 0 0
Creditors * 1,414 2,079
Total 1,414 2,079
Outstanding Liabilities Overdue
Less than one year 1,414 2,079
Between one and two years 0 0
Between two and five years 0 0
More than five years 0 0
Total 1,414 2,079
* Creditors figures exclude statutory obligations.
All trade and other payables are due to be paid in less than one year.
South Northamptonshire Council Statement of Accounts 2011-12
66
d) Interest Rate Risk
The Council maintains a significant investment portfolio, and has no long term borrowing.
Whilst the cash flow procedures above are considered against prevailing market
conditions, a longer term risk to the Council relates to managing the exposure to
replacing financial instruments, such as longer term financial assets, as they mature.
An assessment of interest rate exposure is fed into the setting of the annual budget (and
ongoing monitoring), as well as the Medium Term Financial Strategy.
The maturity structure of investments held by the Council is as follows
Period remaining to maturity
at Balance Sheet date 31-Mar-11 31-Mar-12
£000 £000
Less than one year 15,638 16,385
Between one year and two years 5,000 5,000
More than two years 0 0
Total 20,638 21,385
Principal Invested
35 NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS - MARKET RISK
e) Interest Rate Risk
The Authority is exposed to risk in terms of its exposure to interest rate movements on its
investments. Movements in interest rates have an impact on the authority as Investments
at Fixed Rates will result in the Fair Value of the assets will fall.
Also, at times of low interest rates, the Authority will only be able to obtain low
percentages of return on its investments at fixed rates in any new investments placed.
The Authority currently does not have any investments at Variable Rates.
The Authority currently does not have any borrowings, including variable rate loans and
the Authority has a number of strategies for managing interest rate risk.
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 forecasted out-turn during the year. This allows for any adverse changes to be
accommodated.
f) Price Risk
The Authority has no financial investments in equity shares and thus has no exposure to a
loss arising from movement in the prices of shares. Also, although the authority does have
a number of joint ventures, these organisations do not have any shares
g) 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.
South Northamptonshire Council Statement of Accounts 2011-12
67
36 HERITAGE ASSETS – SUMMARY OF TRANSACTIONS
This note shows Heritage Assets and Community Assets (as they are being given the same
accounting treatment as Heritage Assets) over a two year period that will be added to
each year until a five year overview is gained. They were identified in 2011-12 as part of
the change in accounting policies under IFRS and have been retrospectively applied to
1st April 2010.
The Heritage Asset Moat Lane – Bury Mount shown in the table below was purchased at
£1.128m and had been held on the balance sheet at this historical cost. Now it is
revalued at fair value at £219k (a downward valuation of £909k).
The Community Asset Marlow’s Meadow and Waterhall was purchased in two phases
and was partly held in ‘surplus assets’ (£291k) until prepared and available for use by the
general public.
2010-11 2011-12
£'000 £'000
Community Assets - Marlow's Meadow &
Waterhall, Easton Neston, Towcester
Balance Brought Forward 132 132
Additions - purchased 0 0
Additions - value donated 0 0
recategorisation 0 290
Impairments 0 0
Depreciation 0 0
Disposals 0 0
Balance Carried Forward 132 422
Heritage Assets: Art Collection
Balance Brought Forward 6 6
Additions - purchased 0 0
Additions - value donated 0 0
Impairments 0 0
Depreciation 0 0
Disposals 0 0
Balance Carried Forward 6 6
Heritage Assets: Civic Regalia
Balance Brought Forward 16 16
Additions - purchased 0 0
Additions - value donated 0 0
Impairments 0 0
Depreciation 0 0
Disposals 0 0
Balance Carried Forward 16 16
Heritage Assets: Bury Mount
Balance Brought Forward 219 219
Additions - purchased 0 0
Additions - value donated 0 0
Impairments 0 0
Depreciation 0 0
Disposals 0 0
Balance Carried Forward 219 219
South Northamptonshire Council Statement of Accounts 2011-12
68
South Northamptonshire Council Statement of Accounts 2011-12
69
37 HERITAGE ASSETS
Art Collection
The Collection consists of one painting and one statue.
This collection is held at Towcester Springfields in the lobby of the Council Chamber.
The art collection consists of:
- One painting of the landscape at Blisworth, Northamptonshire by the artist of Peter
Newcombe.
This has been valued at current market value.
- One bronze statue of a bell-tower (c. 0.5 m).
This has been valued at its current market value.
Depreciation has been considered for these assets and as they hold their value or
increase in value as they age, depreciation is not considered appropriate.
These assets are intended to be preserved in trust for future generations because of its
historical association.
Four Chains of Office – Councillor Regalia
This consists of four chains of office.
These chains are securely held at Towcester Springfields.
- This has been valued at current market value and insurance value.
Depreciation has been considered and is not appropriate for Civic Chains as they
are more likely to hold or increase in value with time.
This asset is intended to be preserved in trust for future generations because of its
historical and cultural association.
Moat Lane – Bury Mount
Bury Mount has been at the centre of Towcester since medieval times. Bury Mount Motte
is the remains of an earthwork motte and bailey fortification or ancient castle, and has
been designated a Scheduled Ancient Monument. The Motte probably dates back to
the 11th Century when it was a Norman fortification. The remains were restored in 2008
with an access ramp, landscaping around the River Tove and mill stream and
explanatory plaques. Following restoration, it has become a key attraction which
provided a new venue for the town and serves as the centrepiece of the wider Moat
Lane development.
It would have been strategically placed to control primary transport routes and river
crossings. The Towcester Motte controlled the junction of Watling Street and long distance
route from Southampton to Stamford which went through Winchester, Oxford, Brackley
and Northampton, now the A34 and A43 trunk roads.
- This has been valued by external valuation on April 1st 2012.
Depreciation has been considered and it is not appropriate as this asset is land.
This asset is intended to be preserved in trust for future generations because of its
historical association.
South Northamptonshire Council Statement of Accounts 2011-12
70
ACCOUNTING POLICIES
i. General Principles
The Statement of Accounts summarises the Authority’s transactions for the 2011-12
financial year and its position at the year-end of 31 March 2012. The Authority is required
to prepare an annual Statement of Accounts by the Accounts and Audit (England)
Regulations 2011, which those Regulations require to be prepared in accordance with
proper accounting practices.
These practices primarily comprise the Code of Practice on Local Authority Accounting in
the United Kingdom 2011-12 and the Service Reporting Code of Practice 2010-11,
supported by International Financial Reporting Standards (IFRS) and statutory guidance
issued under section 12 of the 2003 Act.
The accounting convention adopted in the Statement of Accounts is principally historical
cost, modified by the revaluation of certain categories of non-current assets and financial
instruments.
Main Changes to Accounting Policies since 2010-2011
For 2011-12 the amendments to accounting policies are:
The 2011-12 Code requires additional disclosures in respect of remuneration and exit
packages. Disclosure of remuneration and pension contributions in respect of senior
employees is required; this requirement was introduced in amendments to the Accounts
and Audit Regulations. In addition, the Code has introduced a requirement to disclose
the number and cost of exit packages agreed.
The 2011-12 Code adopts the requirements of FRS 30 Heritage Asset. Heritage assets are
carried at valuation, where possible, and additional disclosures are required. The Code
also permits, but does not require, authorities to adopt the measurement and disclosure
requirements within FRS 30 for community assets, SNC has adopted these changes.
ii. Accruals of Income and Expenditure
Activity is accounted for in the year that it takes place, not simply when cash payments
are made or received. In particular:
• Revenue from the sale of goods is recognised when the Authority transfers the
significant risks and rewards of ownership to the purchaser and it is probable that
economic benefits or service potential associated with the transaction will flow to the
Authority.
• Revenue from the provision of services is recognised when the Authority can measure
reliably the percentage of completion of the transaction and it is probable that
economic benefits or service potential associated with the transaction will flow to the
Authority.
• Supplies are recorded as expenditure when they are consumed – where there is a
gap between the date supplies are received and their consumption; they are carried
as inventories on the Balance Sheet.
• Expenses in relation to services received (including services provided by employees)
are recorded as expenditure when the services are received rather than when
payments are made.
• Interest receivable on investments and payable on borrowings is accounted for
respectively as income and expenditure on the basis of the effective interest rate for
the relevant financial instrument rather than the cash flows fixed or determined by the
contract.
• Where revenue and expenditure have been recognised but cash has not been
received or paid, a debtor or creditor for the relevant amount is recorded in the
South Northamptonshire Council Statement of Accounts 2011-12
71
Balance Sheet. Where debts may not be settled, the balance of debtors is written
down and a charge made to revenue for the income that might not be collected.
iii. Cash and Cash Equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable
without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid
investments that mature in three months or less from the date of acquisition and that are
readily convertible to known amounts of cash with insignificant risk of change in value.
In the Cash Flow Statement, cash and cash equivalents are shown net of bank overdrafts
that are repayable on demand and form an integral part of the Authority’s cash
management.
iv. Exceptional Items
When items of income and expense are material, their nature and amount is disclosed
separately, either on the face of the Comprehensive Income and Expenditure Statement
or in the notes to the accounts, depending on how significant the items are to an
understanding of the Authority’s financial performance.
v. Prior Period Adjustments, Changes in Accounting Policies and Estimates and Errors
Prior period adjustments may arise as a result of a change in accounting policies or to
correct a material error. Changes in accounting estimates are accounted for
prospectively, i.e. in the current and future years affected by the change and do not
give rise to a prior period adjustment.
Changes in accounting policies are only made when required by proper accounting
practices or the change provides more reliable or relevant information about the effect
of transactions, other events and conditions on the Authority’s financial position or
financial performance.
Where a change is made, it is applied retrospectively (unless stated otherwise) by
adjusting opening balances and comparative amounts for the prior period as if the new
policy had always been applied.
Material errors discovered in prior period figures are corrected retrospectively by
amending opening balances and comparative amounts for the prior period.
vi. Charges to Revenue for Non-current Assets
Services, support services and trading accounts are debited with the following amounts
to record the cost of holding non-current assets during the year:
• depreciation attributable to the assets used by the relevant service
• revaluation and impairment losses on assets used by the service where there are no
accumulated gains in the Revaluation Reserve against which the losses can be
written off
• amortisation of intangible assets attributable to the service.
The Authority is not required to raise council tax to fund depreciation, revaluation and
impairment losses or amortisation. However, it is required to make an annual contribution
from revenue towards the reduction in its overall borrowing requirement but as SNC does
not hold any debt this requirement is not applicable.
Depreciation, revaluation and impairment losses and amortisation are therefore replaced
by the contribution in the General Fund Balance by way of an adjusting transaction with
the Capital Adjustment Account in the Movement in Reserves Statement for the
difference between the two.
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vii. Employee Benefits
Benefits Payable During Employment
Short-term employee benefits are those due to be settled within 12 months of the year-
end.
They include such benefits as wages and salaries, paid annual leave and paid sick leave,
bonuses and non-monetary benefits (e.g. cars) for current employees and are
recognised as an expense for services in the year in which employees render service to
the Authority. An accrual is made for the cost of holiday entitlements (or any form of
leave, e.g. time off in lieu) earned by employees but not taken before the year-end
which employees can carry forward into the next financial year. The accrual is made at
the wage and salary rates applicable in the following accounting year, being the period
in which the employee takes the benefit. The accrual is charged to Surplus or Deficit on
the Provision of Services, but then reversed out through the Movement in Reserves
Statement so that holiday benefits are charged to revenue in the financial year in which
the holiday absence occurs.
Termination Benefits
Termination benefits are amounts payable as a result of a decision by the Authority to
terminate an officer’s employment before the normal retirement date or an officer’s
decision to accept voluntary redundancy and are charged on an accruals basis to the
appropriate service in the Comprehensive Income and Expenditure Statement when the
Authority is demonstrably committed to the termination of the employment of an officer
or group of officers or making an offer to encourage voluntary redundancy.
SNC does not pay enhanced termination benefits.
Post-employment Benefits
Employees of the Authority are members of The Local Government Pensions Scheme,
administered by Northamptonshire County Council in conjunction with a firm of Actuaries
(Hymans Robertson LLP).
The schemes provides defined benefits to members (retirement lump sums and pensions)
earned as employees worked for the Authority.
The Local Government Scheme is accounted for as a defined benefits scheme:
The liabilities of the Northamptonshire pension fund attributable to the Authority are
included in the Balance Sheet on an actuarial basis using the projected unit method – i.e.
an assessment of the future payments that will be made in relation to retirement benefits
earned to date by employees, based on assumptions about mortality rates, employee
turnover rates, etc, and projections of projected earnings for current employees.
Liabilities are discounted to their value at current prices, using a discount rate of 5.5%
(based on the indicative rate of return on high quality corporate bond iBoxx Sterling
Corporates AA 15 years Index, with the removal of recently re-rated bonds from the
index).
The assets of the Northamptonshire pension fund attributable to the Authority are
included in the Balance Sheet at their fair value:
• quoted securities – current bid price
• property – market value.
The change in the net pensions liability is analysed into seven components:
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• current service cost – the increase in liabilities as a result of years of service earned this
year – allocated in the Comprehensive Income and Expenditure Statement to the
services for which the employees worked.
• past service cost – the increase in liabilities arising from current year decisions whose
effect relates to years of service earned in earlier years – debited to the Surplus or
Deficit on the Provision of Services in the Comprehensive Income and Expenditure
Statement as part of Non Distributed Costs.
• interest cost – the expected increase in the present value of liabilities during the year
as they move one year closer to being paid – debited to the Financing and
Investment
Income and Expenditure line in the Comprehensive Income and Expenditure
Statement.
• expected return on assets – the annual investment return on the fund assets
attributable to the Authority, based on an average of the expected long-term return
– credited to the Financing and Investment Income and Expenditure line in the
Comprehensive Income and Expenditure Statement.
• gains or losses on settlements and curtailments – the result of actions to relieve the
Authority of liabilities or events that reduce the expected future service or accrual of
benefits of employees – debited or credited to the Surplus or Deficit on the Provision of
Services in the Comprehensive Income and Expenditure Statement as part of Non
Distributed Costs
• actuarial gains and losses – changes in the net pensions liability that arise because
events have not coincided with assumptions made at the last actuarial valuation or
because the actuaries have updated their assumptions – charged to the Pensions
Reserve
• contributions paid to the Northamptonshire pension fund – cash paid as employer’s
contributions to the pension fund in settlement of liabilities; not accounted for as an
expense.
In relation to retirement benefits, statutory provisions require the General Fund Balance to
be charged with the amount payable by the Authority to the pension fund or directly to
pensioners in the year, not the amount calculated according to the relevant accounting
standards. In the Movement in Reserves Statement, this means that there are
appropriations to and from the Pensions Reserve to remove the notional debits and
credits for retirement benefits and replace them with debits for the cash paid to the
pension fund and pensioners and any such amounts payable but unpaid at the year-
end. The negative balance that arises on the Pensions Reserve thereby measures the
beneficial impact to the General Fund of being required to account for retirement
benefits on the basis of cash flows rather than as benefits are earned by employees.
Discretionary Benefits
The Authority also has restricted powers to make discretionary awards of retirement
benefits in the event of early retirements. Any liabilities estimated to arise as a result of an
award to any member of staff are accrued in the year of the decision to make the award
and accounted for using the same policies as are applied to the Local Government
Pension Scheme.
SNC does not award discretionary benefits.
viii. Events After the Reporting Period
Events after the Balance Sheet date are those events, both favourable and
unfavourable, that occur between the end of the reporting period and the date when
the Statement of Accounts is authorised for issue. Two types of events can be identified:
• those that provide evidence of conditions that existed at the end of the reporting
period – the Statement of Accounts is adjusted to reflect such events
• those that are indicative of conditions that arose after the reporting period – the
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Statement of Accounts is not adjusted to reflect such events, but where a category of
events would have a material effect, disclosure is made in the notes of the nature of
the events and their estimated financial effect.
Events taking place after the date of authorisation for issue are not reflected in the
Statement of Accounts.
ix. Financial Instruments
Financial Liabilities
Financial liabilities are recognised on the Balance Sheet when the Authority becomes a
party to the contractual provisions of a financial instrument and are initially measured at
fair value and are carried at their amortised cost. As a debt free authority SNC does not
have significant Financial Liabilities
Financial Assets
Financial assets are classified into two types:
• loans and receivables – assets that have fixed or determinable payments but are not
quoted in an active market
• available-for-sale assets – assets that have a quoted market price and/or do not have
fixed or determinable payments.
Loans and Receivables
Loans and receivables are recognised on the Balance Sheet when the Authority
becomes a party to the contractual provisions of a financial instrument and are initially
measured at fair value. They are subsequently measured at their amortised cost. Annual
credits to the Financing and Investment Income and Expenditure line in the
Comprehensive Income and Expenditure Statement for interest receivable are based on
the carrying amount of the asset multiplied by the effective rate of interest for the
instrument. For most of the loans that the Authority has made, this means that the amount
presented in the Balance Sheet is the outstanding principal receivable (plus accrued
interest) and interest credited to the
Comprehensive Income and Expenditure Statement is the amount receivable for the
year in the loan agreement.
However, the Authority has made a number of loans to voluntary organisations at less
than market rates (soft loans). When soft loans are made, a loss is recorded in the
Comprehensive
Income and Expenditure Statement (debited to the appropriate service) for the present
value of the interest that will be foregone over the life of the instrument, resulting in a
lower amortised cost than the outstanding principal. Interest is credited to the Financing
and
Investment Income and Expenditure line in the Comprehensive Income and Expenditure
Statement at a marginally higher effective rate of interest than the rate receivable from
the voluntary organisations, with the difference serving to increase the amortised cost of
the loan in the Balance Sheet. Statutory provisions require that the impact of soft loans
on the
General Fund Balance is the interest receivable for the financial year – the reconciliation
of amounts debited and credited to the Comprehensive Income and Expenditure
Statement to the net gain required against the General Fund Balance is managed by a
transfer to or from the Financial Instruments Adjustment Account in the Movement in
Reserves Statement.
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Where assets are identified as impaired because of a likelihood arising from a past event
that payments due under the contract will not be made, the asset is written down and a
charge made to the relevant service (for receivables specific to that service) or the
Financing and Investment Income and Expenditure line in the Comprehensive Income
and Expenditure Statement. The impairment loss is measured as the difference between
the carrying amount and the present value of the revised future cash flows discounted at
the asset’s original effective interest rate.
Any gains and losses that arise on the derecognition of an asset are credited or debited
to the Financing and Investment Income and Expenditure line in the Comprehensive
Income and Expenditure Statement.
Available-for-Sale Assets
Available-for-sale assets are recognised on the Balance Sheet when the Authority
becomes a party to the contractual provisions of a financial instrument and are initially
measured and carried at fair value. Where the asset has fixed or determinable payments,
annual credits to the Financing and Investment Income and Expenditure line in the
Comprehensive Income and Expenditure Statement for interest receivable are based on
the amortised cost of the asset multiplied by the effective rate of interest for the
instrument. Where there are no fixed or determinable payments, income (e.g. dividends)
is credited to the Comprehensive Income and Expenditure Statement when it becomes
receivable by the Authority.
Assets are maintained in the Balance Sheet at fair value. Values are based on the
following principles:
• instruments with quoted market prices – the market price
• other instruments with fixed and determinable payments – discounted cash flow
analysis
• equity shares with no quoted market prices – independent appraisal of company
valuations.
Changes in fair value are balanced by an entry in the Available-for-Sale Reserve and the
gain/loss is recognised in the Surplus or Deficit on Revaluation of Available-for-Sale
Financial Assets. The exception is where impairment losses have been incurred – these are
debited to the Financing and Investment Income and Expenditure line in the
Comprehensive Income and Expenditure Statement, along with any net gain or loss for
the asset accumulated in the Available-for-Sale Reserve.
Where assets are identified as impaired because of a likelihood arising from a past event
that payments due under the contract will not be made (fixed or determinable
payments) or fair value falls below cost, the asset is written down and a charge made to
the Financing and Investment Income and Expenditure line in the Comprehensive
Income and Expenditure Statement. If the asset has fixed or determinable payments, the
impairment loss is measured as the difference between the carrying amount and the
present value of the revised future cash flows discounted at the asset’s original effective
interest rate. Otherwise, the impairment loss is measured as any shortfall of fair value
against the acquisition cost of the instrument (net of any principal repayment and
amortisation).
Any gains and losses that arise on the derecognition of the asset are credited or debited
to the Financing and Investment Income and Expenditure line in the Comprehensive
Income and Expenditure Statement, along with any accumulated gains or losses
previously recognised in the Available-for-Sale Reserve.
Where fair value cannot be measured reliably, the instrument is carried at cost (less any
impairment losses). Additional policy detail required where an authority has financial
assets at fair value through profit or loss (such as derivatives).
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Instruments Entered Into Before 1 April 2006
The Authority has not entered into financial guarantees prior to 1 April 2006 that are not
required to be accounted for as financial instruments.
x. Government Grants and Contributions
Whether paid on account, by instalments or in arrears, government grants and third party
contributions and donations are recognised as due to the Authority when there is
reasonable assurance that:
• the Authority will comply with the conditions attached to the payments, and
• the grants or contributions will be received.
Amounts recognised as due to the Council are not credited to the Comprehensive
Income and Expenditure Statement until conditions attached to the grant or contribution
have been satisfied. Conditions are stipulations that specify that the future economic
benefits or service potential embodied in the asset in the form of the grant or contribution
are required to be consumed by the recipient as specified, or future economic benefits
or service potential must be returned to the transferor.
Monies advanced as grants and contributions for which conditions have not been
satisfied are carried in the Balance Sheet as creditors. When conditions are satisfied, the
grant or contribution is credited to the relevant service line (attributable revenue grants
and contributions) or Taxation and Non-specific Grant Income (non-ring-fenced revenue
grants and all capital grants) in the Comprehensive Income and Expenditure Statement.
Where capital grants are credited to the Comprehensive Income and Expenditure
Statement, they are reversed out of the General Fund Balance in the Movement in
Reserves Statement. Where the grant has yet to be used to finance capital expenditure, it
is posted to the Capital Grants Unapplied reserve. Where it has been applied, it is posted
to the Capital Adjustment Account. Amounts in the Capital Grants Unapplied reserve are
transferred to the Capital Adjustment Account once they have been applied to fund
capital expenditure.
xi. Heritage Assets
Heritage Assets are recognised and measured (including the treatment of revaluation
gains and losses) in accordance with the Authority’s accounting policies on property,
plant and equipment. However, some of the measurement rules are relaxed in relation to
heritage assets. These items are reported in the Balance Sheet at insurance valuation
which is based on market values. These insurance valuations are updated on an annual
basis. There is a five year rolling programme of valuation of land and buildings by an
external valuer.
The assets within the art collection and civic regalia are deemed to have indeterminate
lives and a high residual value; hence the Authority does not consider it appropriate to
charge depreciation.
Acquisitions are made by purchase or donation. Acquisitions are initially recognised at
cost and donations are recognised at valuation with valuations provided by the external
valuers and with reference to appropriate insurance values and commercial markets
using the most relevant and recent information from sales at auctions.
xii. Intangible Assets
Expenditure on non-monetary assets that do not have physical substance but are
controlled by the Authority as a result of past events (e.g. software licences) is capitalised
when it is expected that future economic benefits or service potential will flow from the
intangible asset to the Authority.
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Internally generated assets are capitalised where it is demonstrable that the project is
technically feasible and is intended to be completed (with adequate resources being
available) and the Authority will be able to generate future economic benefits or deliver
service potential by being able to sell or use the asset. Expenditure is capitalised where it
can be measured reliably as attributable to the asset and is restricted to that incurred
during the development phase (research expenditure cannot be capitalised).
Expenditure on the development of websites is not capitalised if the website is solely or
primarily intended to promote or advertise the Authority’s goods or services.
Intangible assets are measured initially at cost. Amounts are only revalued where the fair
value of the assets held by the Authority can be determined by reference to an active
market. In practice, no intangible asset held by the Authority meets this criterion, and
they are therefore carried at amortised cost. The depreciable amount of an intangible
asset is amortised over its useful life to the relevant service line(s) in the Comprehensive
Income and Expenditure Statement. An asset is tested for impairment whenever there is
an indication that the asset might be impaired – any losses recognised are posted to the
relevant service line(s) in the Comprehensive Income and Expenditure Statement. Any
gain or loss arising on the disposal or abandonment of an intangible asset is posted to the
Other Operating Expenditure line in the Comprehensive Income and Expenditure
Statement.
Where expenditure on intangible assets qualifies as capital expenditure for statutory
purposes, amortisation, impairment losses and disposal gains and losses are not permitted
to have an impact on the General Fund Balance. The gains and losses are therefore
reversed out of the General Fund Balance in the Movement in Reserves Statement and
posted to the
Capital Adjustment Account and (for any sale proceeds greater than £10,000) the
Capital Receipts Reserve.
xiii. Interests in Companies and Other Entities
The Authority has material interests in companies and other entities that have the nature
of subsidiaries, associates and jointly controlled entities and require it to prepare group
accounts. In the Authority’s own single-entity accounts, the interests in companies and
other entities are recorded as financial assets at cost, less any provision for losses.
Currently SNC has one interest in an entity. This is the West Northamptonshire Joint
Planning Unit (JPU) and is an associate. The JPU does not hold any assets.
xiv. Inventories and Long-term Contracts
Inventories are included in the Balance Sheet at the lower of cost and net realisable
value.
The cost of inventories is assigned using the weighted average costing formula.
Long-term contracts are accounted for on the basis of charging the Surplus or Deficit on
the
Provision of Services with the value of works and services received under the contract
during the financial year.
There are no material balances of inventories that have been acquired for less than their
fair value.
There are no material balances of inventories that are held for distribution at no charge or
for a nominal charge; or consumption in the production process of goods to be
distributed at no charge or for a nominal fee.
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xv. Investment Property
Investment properties are those that are used solely to earn rentals and/or for capital
appreciation. The definition is not met if the property is used in any way to facilitate the
delivery of services or production of goods or is held for sale.
Investment properties are measured initially at cost and subsequently at fair value, based
on the amount at which the asset could be exchanged between knowledgeable parties
at arm’s-length. Properties are not depreciated but are revalued annually according to
market conditions at the year-end. Gains and losses on revaluation are posted to the
Financing and
Investment Income and Expenditure line in the Comprehensive Income and Expenditure
Statement. The same treatment is applied to gains and losses on disposal.
Rentals received in relation to investment properties are credited to the Financing and
Investment Income line and result in a gain for the General Fund Balance. However,
revaluation and disposal gains and losses are not permitted by statutory arrangements to
have an impact on the General Fund Balance. The gains and losses are therefore
reversed out of the General Fund Balance in the Movement in Reserves Statement and
posted to the
Capital Adjustment Account and (for any sale proceeds greater than £10,000) the
Capital Receipts Reserve.
Although SNC receives rent on a small number of assets, these assets are not held solely
for those rentals.
xvi. Jointly Controlled Operations and Jointly Controlled Assets
Jointly controlled operations are activities undertaken by the Authority in conjunction with
other venturers that involve the use of the assets and resources of the venturers rather
than the establishment of a separate entity. The Authority recognises on its Balance Sheet
the assets that it controls and the liabilities that it incurs and debits and credits the
Comprehensive Income and Expenditure Statement with the expenditure its incurs and
the share of income it earns from the activity of the operation.
Jointly controlled assets are items of property, plant or equipment that are jointly
controlled by the Authority and other venturers, with the assets being used to obtain
benefits for the
venturers. The joint venture does not involve the establishment of a separate entity. The
Authority accounts for only its share of the jointly controlled assets, the liabilities and
expenses that it incurs on its own behalf or jointly with others in respect of its interest in the
joint venture and income that it earns from the venture.
xvii. Leases
Leases are classified as finance leases where the terms of the lease transfer substantially
all the risks and rewards incidental to ownership of the property, plant or equipment from
the
lessor to the lessee. All other leases are classified as operating leases.
Where a lease covers both land and buildings, the land and buildings elements are
considered separately for classification. Arrangements that do not have the legal status
of a lease but convey a right to use an asset in return for payment are accounted for
under this policy where fulfilment of the arrangement is dependent on the use of specific
assets.
The Authority as Lessee
Finance Leases
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Property, plant and equipment held under finance leases is recognised on the Balance
Sheet at the commencement of the lease at its fair value measured at the lease’s
inception (or the present value of the minimum lease payments, if lower). The asset
recognised is matched by a liability for the obligation to pay the lessor. Initial direct costs
of the Authority are added to the carrying amount of the asset. Premiums paid on entry
into a lease are applied to writing down the lease liability. Contingent rents are charged
as expenses in the periods in which they are incurred.
Lease payments are apportioned between:
• a charge for the acquisition of the interest in the property, plant or equipment –
applied to write down the lease liability, and
• a finance charge (debited to the Financing and Investment Income and Expenditure
line in the Comprehensive Income and Expenditure Statement).
Property, Plant and Equipment recognised under finance leases is accounted for using
the policies applied generally to such assets, subject to depreciation being charged over
the lease term if this is shorter than the asset’s estimated useful life (where ownership of
the asset does not transfer to the authority at the end of the lease period).
The Authority is not required to raise council tax to cover depreciation or revaluation and
impairment losses arising on leased assets. Instead, a prudent annual contribution is made
from revenue funds towards the deemed capital investment in accordance with
statutory requirements. Depreciation and revaluation and impairment losses are therefore
substituted by a revenue contribution in the General Fund Balance, by way of an
adjusting transaction with the Capital Adjustment Account in the Movement in Reserves
Statement for the difference between the two.
Operating Leases
Rentals paid under operating leases are charged to the Comprehensive Income and
Expenditure Statement as an expense of the services benefiting from use of the leased
property, plant or equipment. Charges are made on a straight-line basis over the life of
the lease, even if this does not match the pattern of payments (e.g. there is a rent-free
period at
the commencement of the lease).
The Authority as Lessor
Finance Leases – SNC does not lease assets as a lessor on a finance lease basis, in that it
retains substantially the risks and rewards of the assets that it leases.
Operating Leases
Where the Authority grants an operating lease over a property or an item of plant or
equipment, the asset is retained in the Balance Sheet. Rental income is credited to the
Other Operating Expenditure line in the Comprehensive Income and Expenditure
Statement. Credits are made on a straight-line basis over the life of the lease, even if this
does not match the pattern of payments (e.g. there is a premium paid at the
commencement of the lease). Initial direct costs incurred in negotiating and arranging
the lease are added to the carrying amount of the relevant asset and charged as an
expense over the lease term on the same basis as rental income.
SNC has no material sale and leaseback assets.
xviii. Overheads and Support Services
The costs of overheads and support services are charged to those that benefit from the
supply or service in accordance with the costing principles of the CIPFA Service Reporting
Code of Practice 2011-12 (SeRCOP). The total absorption costing principle is used – the
full cost of overheads and support services are shared between users in proportion to the
benefits received.
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The bases of allocation are continually being refined and developed to reflect more
accurately where the costs are borne. Many of the charges are made on actual time
spent, other services are allocated on the following bases: -
Accountancy: Number of budget holders
Payroll: Estimated number of payslips
Creditors: Estimated number of invoices
Internal Audit: Annual audit plan
Computer Services: Estimated usage by number of officers
Sundry Debtors: Estimated number of invoices raised
Human Resources: Staff Time Apportionment by number of officers
Office Management: Estimated usage
Public Offices: Floor area estimated by number of windows per office
Other: Staff Time apportionment
The costs of service management are apportioned to the activities managed, based on
staff time apportionment.
The exceptions to the absorption costing principle are:
• Corporate and Democratic Core – costs relating to the Authority’s status as a
multifunctional, democratic organisation.
• Non Distributed Costs – the cost of discretionary benefits awarded to employees
retiring early and impairment losses chargeable on Assets Held for Sale.
These two cost categories are defined in SeRCOP and accounted for as separate
headings in the Comprehensive Income and Expenditure Statement, as part of Net
Expenditure on Continuing Services.
xix. Property, Plant and Equipment
Assets that have physical substance and are held for use in the production or supply of
goods or services, for rental to others, or for administrative purposes and that are
expected to be used during more than one financial year are classified as Property, Plant
and Equipment.
Recognition
Expenditure on the acquisition, creation or enhancement of Property, Plant and
Equipment is capitalised on an accruals basis, provided that it is probable that the future
economic benefits or service potential associated with the item will flow to the Authority
and the cost of the item can be measured reliably. Expenditure that maintains but does
not add to an asset’s potential to deliver future economic benefits or service potential
(i.e. repairs and maintenance) is charged as an expense when it is incurred.
Purchase of property, plant and equipment is recognised as capital expenditure when it
reaches £1,000 or more (i.e. the capital de minimis). If the expenditure is below £1,000 the
expenditure is treated as a revenue expense and the asset is not placed on the asset
register.
Measurement
Assets are initially measured at cost, comprising:
• the purchase price
• any costs attributable to bringing the asset to the location and condition necessary for
it to be capable of operating in the manner intended by management
• the initial estimate of the costs of dismantling and removing the item and restoring the
site on which it is located.
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The Authority does not capitalise borrowing costs incurred whilst assets are under
construction.
The cost of assets acquired other than by purchase is deemed to be its fair value, unless
the acquisition does not have commercial substance (i.e. it will not lead to a variation in
the cash flows of the Authority). In the latter case, where an asset is acquired via an
exchange, the cost of the acquisition is the carrying amount of the asset given up by the
Authority.
Donated assets are measured initially at fair value. The difference between fair value and
any consideration paid is credited to the Taxation and Non-specific Grant Income line of
the Comprehensive Income and Expenditure Statement, unless the donation has been
made conditionally. Until conditions are satisfied, the gain is held in the Donated Assets
Account.
Where gains are credited to the Comprehensive Income and Expenditure Statement,
they are reversed out of the General Fund Balance to the Capital Adjustment Account in
the Movement in Reserves Statement.
Assets are then carried in the Balance Sheet using the following measurement bases:
• infrastructure, community assets and assets under construction – depreciated
historical cost
• dwellings – fair value, determined using the basis of existing use value for social
housing
(EUV–SH)
• all other assets – fair value, determined as the amount that would be paid for the
asset in its existing use (existing use value – EUV).
Where there is no market-based evidence of fair value because of the specialist nature
of an asset, depreciated replacement cost (DRC) is used as an estimate of fair value.
Where non-property assets that have short useful lives or low values (or both),
depreciated historical cost basis is used as a proxy for fair value.
Assets included in the Balance Sheet at fair value are revalued sufficiently regularly to
ensure that their carrying amount is not materially different from their fair value at the
year-end, but as a minimum every five years. The external valuation programme is run on
a five year rolling basis with an internal valuation on an annual basis for all assets not
included in the rolling programme. Increases in valuations are matched by credits to the
Revaluation Reserve to recognise unrealised gains. [Exceptionally, gains might be
credited to the Surplus or Deficit on the Provision of Services where they arise from the
reversal of a loss previously charged to a service.]
Where decreases in value are identified, they are accounted for by:
• where there is a balance of revaluation gains for the asset in the Revaluation Reserve,
the carrying amount of the asset is written down against that balance (up to the
amount of the accumulated gains)
• where there is no balance in the Revaluation Reserve or an insufficient balance, the
carrying amount of the asset is written down against the relevant service line(s) in the
Comprehensive Income and Expenditure Statement.
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
Assets are assessed at each year-end as to whether there is any indication that an asset
may be impaired. Where indications exist and any possible differences are estimated to
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be material, the recoverable amount of the asset is estimated and, where this is less than
the carrying amount of the asset, an impairment loss is recognised for the shortfall.
Where impairment losses are identified, they are accounted for by:
• where there is a balance of revaluation gains for the asset in the Revaluation Reserve,
the carrying amount of the asset is written down against that balance (up to the
amount of the accumulated gains)
• where there is no balance in the Revaluation Reserve or an insufficient balance, the
carrying amount of the asset is written down against the relevant service line(s) in the
Comprehensive Income and Expenditure Statement.
Where an impairment loss is reversed subsequently, the reversal is credited to the relevant
service line(s) in the Comprehensive Income and Expenditure Statement, up to the
amount of the original loss, adjusted for depreciation that would have been charged if
the loss had not been recognised.
Depreciation
Depreciation is provided for on all Property, Plant and Equipment assets by the systematic
allocation of their depreciable amounts over their useful lives. An exception is made for
assets without a determinable finite useful life (i.e. freehold land and certain Community
Assets) and assets that are not yet available for use (i.e. assets under construction).
Deprecation is calculated on the following bases:
• dwellings and other buildings – straight-line allocation over the useful life of the
property as estimated by the valuer
• vehicles – 30% of the value of each class of assets in the Balance Sheet, as advised by
a suitably qualified officer
• infrastructure – straight-line allocation over 25 years.
• the depreciable amount of an intangible asset is amortised over its useful life on a
straight line allocation where useful life is estimable and 30% reducing balance where
not.
• Plant, furniture and equipment – straight line basis over useful life.
Where an item of Property, Plant and Equipment asset has major components whose cost
is significant in relation to the total cost of the item, the components are depreciated
separately. The interpretation of the meanings of ‘major’ and significant cost’ for South
Northamptonshire Council’s policy requires components to be depreciated separately to
their host asset when:
• The host assets value is £500,000 (was £1,000,000) or more and
• Components of the host asset are of 20% (was 30%) or more of the value of the total
asset and
• Components whose estimated useful life is 80% or less than the estimated useful life of
the host asset.
Revaluation gains are also depreciated, with an amount equal to the difference
between current value depreciation charged on assets and the depreciation that would
have been chargeable based on their historical cost being transferred each year from
the Revaluation
Reserve to the Capital Adjustment Account.
Disposals and Non-current Assets Held for Sale
When it becomes probable that the carrying amount of an asset will be recovered
principally through a sale transaction rather than through its continuing use, it is
reclassified as an Asset Held for Sale. The asset is revalued immediately before
reclassification and then carried at the lower of this amount and fair value less costs to
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sell. Where there is a subsequent decrease to fair value less costs to sell, the loss is posted
to the Other Operating Expenditure line in the Comprehensive Income and Expenditure
Statement. Gains in fair value are recognised only up to the amount of any previously
losses recognised in the Surplus or Deficit on Provision of Services.
Depreciation is not charged on Assets Held for Sale.
If assets no longer meet the criteria to be classified as Assets Held for Sale, they are
reclassified back to non-current assets and valued at the lower of their carrying amount
before they were classified as held for sale; adjusted for depreciation, amortisation or
revaluations that would have been recognised had they not been classified as Held for
Sale, and their recoverable amount at the date of the decision not to sell.
SNC is not carrying a disposal group as an Asset Held for Sale.
Assets that are to be abandoned or scrapped are not reclassified as Assets Held for Sale.
When an asset is disposed of or decommissioned, the carrying amount of the asset in the
Balance Sheet (whether Property, Plant and Equipment or Assets Held for Sale) is written
off to the Other Operating Expenditure line in the Comprehensive Income and
Expenditure Statement as part of the gain or loss on disposal. Receipts from disposals (if
any) are credited to the same line in the Comprehensive Income and Expenditure
Statement also as part of the gain or loss on disposal (i.e. netted off against the carrying
value of the asset at the time of disposal). Any revaluation gains accumulated for the
asset in the Revaluation Reserve are transferred to the Capital Adjustment Account.
Amounts received for a disposal in excess of £10,000 are categorised as capital receipts.
The balance of receipts is required to be credited to the Capital Receipts Reserve, and
can then only be used for new capital investment. Receipts are appropriated to the
Reserve from the General Fund Balance in the Movement in Reserves Statement.
The written-off value of disposals is not a charge against council tax, as the cost of non
current assets is fully provided for under separate arrangements for capital financing.
Amounts are appropriated to the Capital Adjustment Account from the General Fund
Balance in the Movement in Reserves Statement.
xx. Provisions, Contingent Liabilities and Contingent Assets
Provisions
Provisions are made where an event has taken place that gives the Authority a legal or
constructive obligation that probably requires settlement by a transfer of economic
benefits or service potential, and a reliable estimate can be made of the amount of the
obligation.
For instance, the Authority may be involved in a court case that could eventually result in
the making of a settlement or the payment of compensation. Provisions are charged as
an expense to the appropriate service line in the Comprehensive Income and
Expenditure Statement in the year that the authority becomes aware of the obligation,
and are measured at the best estimate at the balance sheet date of the expenditure
required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the
Balance Sheet. Estimated settlements are reviewed at the end of each financial year –
where it becomes less than probable that a transfer of economic benefits will now be
required (or a lower settlement than anticipated is made), the provision is reversed and
credited back to the relevant service.
Where some or all of the payment required to settle a provision is expected to be
recovered from another party (e.g. from an insurance claim), this is only recognised as
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income for the relevant service if it is virtually certain that reimbursement will be received
if the authority settles the obligation.
Provision for Back Pay Arising from Unequal Pay Claims
The Authority has no claims for back pay arising from discriminatory payments incurred
before the Authority implemented its equal pay strategy.
Landfill Allowance Schemes
Not relevant for SNC as a Waste Collection Authority. Scheme applies to Waste Disposal
Authorities only.
Contingent Liabilities
A contingent liability arises where an event has taken place that gives the authority a
possible obligation whose existence will only be confirmed by the occurrence or
otherwise of uncertain future events not wholly within the control of the authority.
Contingent liabilities also arise in circumstances where a provision would otherwise be
made but either it is not probable that an outflow of resources will be required or the
amount of the obligation cannot be measured reliably. Contingent liabilities are not
recognised in the Balance Sheet but disclosed in a note to the accounts.
Contingent Assets
A contingent asset arises where an event has taken place that gives the authority a
possible asset whose existence will only be confirmed by the occurrence or otherwise of
uncertain future events not wholly within the control of the authority. Contingent assets
are not recognised in the Balance Sheet but disclosed in a note to the accounts where it
is probable that there will be an inflow of economic benefits or service potential.
xxi. Reserves
The Authority sets aside specific amounts as reserves for future policy purposes or to cover
contingencies. Reserves are created by appropriating amounts out of the General Fund
Balance in the Movement in Reserves Statement. When expenditure to be financed from
a reserve is incurred, it is charged to the appropriate service in that year to score against
the Surplus or Deficit on the Provision of Services in the Comprehensive Income and
Expenditure Statement. The reserve is then appropriated back into the General Fund
Balance in the Movement in Reserves Statement so that there is no net charge against
council tax for the expenditure. Certain reserves are kept to manage the accounting
processes for non-current assets, financial instruments, retirement and employee benefits
and do not represent usable resources for the Authority – these reserves are explained in
the relevant policies.
xxii. Revenue Expenditure Funded from Capital under Statute
Expenditure incurred during the year that may be capitalised under statutory provisions
but that does not result in the creation of a non-current asset has been charged as
expenditure to the relevant service in the Comprehensive Income and Expenditure
Statement in the year. Where the Authority has determined to meet the cost of this
expenditure from existing capital resources or by borrowing, a transfer in the Movement in
Reserves Statement from the General Fund Balance to the Capital Adjustment Account
then reverses out the amounts charged so that there is no impact on the level of council
tax.
xxiii. VAT
VAT payable is included as an expense only to the extent that it is not recoverable from
Her Majesty’s Revenue and Customs. VAT receivable is excluded from income. The
amount of VAT irrecoverable is negligible.
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COLLECTION FUND
The Collection Fund is an agent’s statement that reflects the statutory obligation for billing
authorities to maintain a separate Collection Fund. The statement shows the transactions
of the billing authority in relation to the collection from taxpayers and distribution to local
authorities and the Government of council tax and non-domestic rates.
Note
£000 £000 £000 £000INCOMEIncome from Council Tax 45,171 45,811Transfers from General Fund - Council Tax Benefits 3,223 3,233 - Transitional Relief 2 1
3,225 3,234Income from Non-Domestic Ratepayers 1 18,335 19,090Net Adjustments for Previous Years' Community Charges 0 0
66,731 68,135EXPENDITUREPrecepts and Demands - Northamptonshire County Council - Precept 34,366 34,491 - Northamptonshire Police Authority - Precept 6,458 6,481 - South Northamptonshire Council (incl. Parishes) - Precept 7,586 7,640
48,410 48,612Non-Domestic Rates - Payment to National Pool 18,229 18,985 - Costs of Collection 106 105
1 18,335 19,090Bad and Doubtful Debts - Council Tax write offs 57 33 - Change in provision for Council Tax bad debts ( 44) 13 31 64
Previous Year's Estimated Surplus/ (Deficit) - Northamptonshire County Council ( 16) ( 49) - Northamptonshire Police Authority ( 3) ( 9) - South Northamptonshire Council ( 4) ( 11)
( 23) ( 69)
66,735 67,697
Increase (Cr) / Decrease in Fund in Year 4 ( 438)
Balance brought forward 263 267
Balance carried forward 3 267 ( 171)
2010-11 2011-12
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COLLECTION FUND NOTES
1. Non-Domestic Rates (NDR)
The gross yield for the year was £22,410,436.10
Income from Non-Domestic Ratepayers can be calculated as follows:-
2010-11 2011-12£000 £000
Gross Yield for 2011-12 21,405 22,410
Adjustments for Previous Years ( 1,221) ( 398)
Allowances and Other Adjustments ( 1,860) ( 2,990)
(Increase)/ Decrease in Provision for Non-Collection 39 74
Interest on Overpayments ( 28) ( 6)
Income from Non-Domestic Ratepayers 18,335 19,090
The total non-domestic rateable value at 31st March 2012 was £52,800,934 and the
National Non-Domestic Rate multiplier for the year was 43.3p with a reduction to 42.6p for
small businesses. (In 2010-11, the multiplier was 41.4p for all properties with a reduction to
40.7p for small businesses. The reduction in multiplier followed the national revaluation
which came into effect on 1 April 2010.)
2. Council Taxbase
No. of Exemptions/ Effective No. Band D
Band Properties at Discounts/ of Properties Ratio Equivalents
1 April 2011 New properties
A* 0 (33) 33 5/9 18
A 1,951 390 1,561 6/9 1,041B 8,245 934 7,311 7/9 5,686C 8,968 772 8,196 8/9 7,286
D 5,706 458 5,248 9/9 5,248
E 5,298 320 4,978 11/9 6,084F 3,549 175 3,374 13/9 4,874
G 2,095 103 1,992 15/9 3,320
H 175 10 165 18/9 330TOTAL 35,987 3,129 32,858 33,887
Provision for Non-collection (1%) * 339
TAX BASE 33,548 * Non-collection includes allowance for successful appeals, bad debts and movements.
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3. Analysis of Balance Carried Forward
2010-11 2010-11 2011-12 2011-12
£000 £000 £000 £000
Collection Fund Surplus 267 ( 171)Deficit Estimated at 15.01.12 to be collected in 2012-13:
Northamptonshire County Council (shown under Debtors) ( 49) 1
Northamptonshire Police Authority (shown under Debtors) ( 9) 0
South Northamptonshire Council ( 11) ( 68) 0 1
Estimated Deficit (Surplus) 199 ( 170)
To be shared between:-
Northamptonshire County Council (shown under Debtors) ( 140) 120
Northamptonshire Police Authority (shown under Debtors) ( 26) 23South Northamptonshire Council ( 31) 27
( 198) 170
Balance on Collection Fund relating to
South Northamptonshire Council: 42 ( 27)SNC Proportion - (Shown in Collection Fund Adjustment
Account) 42 ( 27)
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GLOSSARY OF TERMS USED IN FINANCIAL STATEMENTS
Accrual
An amount included in the final accounts to cover income or spending during an
accounting period for goods or work done, but for which we have not received or made
a payment by the end of that accounting period.
Accumulated Absences Account
The Accumulated Absences Account absorbs the difference that would otherwise arise
on the General Fund Balance from accruing for compensated absences earned but not
taken in the year e.g. annual leave entitlement carried forward at 31 March. Statutory
arrangements require that the impact on the General Fund Balance is neutralised by
transfers to or from the Account.
Actuarial Gains and Losses
Actuarial gains and losses, in respect of the pension fund, arise where actual events have
not coincided with the actuarial assumptions made for the last valuation (known as
experience gains/losses) or the actuarial assumptions have changed. For example an
unexpectedly high pay award may have been made during the year or employee
turnover may have been greater than expected. Scheme assets will need to be revalued
on the basis of the revised information.
Actuarial valuation
This is when an actuary checks what the pension scheme’s assets are worth and
compares them with what the scheme owes. They then work out how much the
contributions from employers must be so that there will be enough money in the scheme
when people get their pensions.
Audit
An independent examination of the Council's accounts to ensure that they comply with
the necessary legislation and follow best accounting practice. The Council's accounts
are audited by the Audit Commission.
Audit Commission
The Audit Commission was established by the Local Government Finance Act 1982. It has
responsibility for the external audit of all local Council’s. It can either use district auditors
who are employed by the Audit Commission or firms of accountants.
Balances
The revenue reserves of the Council, made up of the accumulated surplus of income
over expenditure. Balances from part of our reserves.
Balance Sheet
The Balance Sheet is a snapshot of the accounts as at the 31st March. It includes the
assets and liabilities of all activities of the Council.
Business Rates or National Non-Domestic Rates (NNDR)
The rates paid by businesses. The money is collected by the Council and paid into a
central pool administered by the Government. The total collected is then redistributed to
Council’s on the basis of population.
Capital Adjustment Account
Reflects the timing difference between the cost of fixed assets consumed and the capital
financing set aside to pay for them.
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Capital Charge
A charge to reflect the cost of fixed assets used to provide services.
Capital Expenditure
Spending to buy significant fixed assets that we will use or benefit from for more than a
year (for example, land and buildings).
Capital Receipts
Proceeds of £10,000 or more from the sale of assets which have a long term value.
Cash and Cash Equivalents
Cash and Cash Equivalents comprises of cash on hand and demand deposits which are
short-term, highly liquid investments that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of change in value. They must be held
for the purpose of meeting short-term cash commitments rather than for investment or
other purposes.
Cash Flow Statement
This consolidated statement summarises the inflows and outflows of cash arising from
transactions with third parties for revenue and capital purposes.
Chartered Institute of Public Finance and Accountancy (CIPFA)
The leading professional accountancy body for the public services. They set and monitor
professional standards and provide education and training in accountancy and financial
management. This is the main professional organisation for accountants working in the
public service.
CLG Communities and Local Government.
Code of Practice on Local Council Accounting
A guidance publication which interprets the requirements of International Financial
Reporting Standards in the United Kingdom.
Collection Fund
This account reflects the statutory requirement to maintain a separate Fund, which shows
the transactions of the billing Council in relation to National Non-Domestic Rates and
Council Tax, and illustrates the way in which these have been distributed to preceptors
and the Council’s General Fund. The Collection Fund is consolidated with the other
accounts of the Council.
Collection Fund Adjustment Account
The practical effect of the changes in the 2009 SORP is that the Collection Fund balance
in the Balance Sheet will disappear. The surplus/deficit will be shared out in its entirety
between the Council and its preceptors. The preceptors' share will be carried as
creditors/debtors, but the Council's share will be credited to it’s I+E Account. The
Collection Fund Adjustment Account is then needed to reconcile the net credit made to
the I+E Account for council tax to the statutory amount in the Statement of Movement -
i.e., the demand on the Collection Fund for the year, plus the statutory amount
payable/receivable for the year in relation to past deficits/surpluses.
Communities & Local Government (CLG)
CLG works to create a thriving, sustainable, vibrant community that improves everyone's
life.
Community Assets
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Assets that we plan to hold onto indefinitely, that have no set useful life and that may
have restrictions on being sold.
Commuted Sums
Commuted Sums are negotiated contributions from developers, usually under section 106
Planning Agreements. The amenities provided by this funding are generally on-site play
facilities; off-site sports facilities or 15 years open space grounds maintenance.
Comprehensive Income and Expenditure Account
The Income and Expenditure Account reports the net cost of the functions for which the
Council is responsible. It shows how the net cost has been financed from general
government grants and income from taxpayers.
Contingency
The money we set aside to pay for unexpected spending.
Contingent liabilities
An amount we could owe when we send the accounts for approval. We will include the
liability in the balance sheet if we can estimate it reasonably accurately. Otherwise we
would add the liability as a note to the accounts.
Contingent Assets and Liabilities
A condition which exists at the balance sheet date, where the outcome will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future
events.
Corporate and Democratic Core
Corporate Management: concerns those activities and costs that provide the
“infrastructure” that allows services to be provided. Charges to this heading are strictly
regulated. If costs can be identified within individual service areas, they cannot be
charged here.
Council Tax
The local tax that pays for a proportion of council services. It replaced the poll tax in April
1993.
Creditors
Amounts we owe for work done, goods received or services provided which have not
been paid for by the end of the financial year.
Current Assets
An asset which will be used up during the next accounting period e.g. inventories
(stocks).
Current Liabilities
Amounts which will become due or could be called upon during the next accounting
period.
Current Service Cost
Current service (pension) cost is an estimate of the true economic cost of employing staff
in a financial year, earning years of service that will eventually entitle them to a lump sum
and a pension. It measures the full liability estimated to have been generated in the year
(at today’s prices) and is unaffected by whether the fund is in surplus or deficit.
Debtors
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Amounts we owe for work done, goods received or services provided which have not
been paid for by the end of the financial year.
Depreciation
The measure of the wearing out, consumption or other reduction in the useful economic
life of a fixed asset, whether arising from use, passage of time, or of obsolescence through
technological or other changes.
Earmarked Reserves
Reserves set aside for specific purposes.
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Exceptional Items
Items of income and expense that are deemed to be exceptional based on their
significance (material), their nature and amount is disclosed separately, either on the
face of the Comprehensive Income and Expenditure Statement or in the notes to the
accounts, depending on how significant the items are to an understanding of the
Council’s financial performance.
Expected Return on Assets
Under the provisions of IAS19 the expected return on assets is a measure of the return
(income from dividends, interest etc.) on the assets held by the scheme for the year. It is
not intended to reflect the actual returns, but a longer term measure, based on assets at
the start of the year, any movements during the year and an expected return factor.
Fair Value
The fair value of an asset is the price at which it could be exchanged in an "arms length"
transaction less, where applicable, any grants receivable towards the purchase or use of
that asset.
Finance Lease
A lease that transfers substantially 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 payments, including any initial payment, amounts to
substantially all of the fair value of the leased asset.
Financial Instrument Adjustment Account
The SORP introduced the requirement to account for Financial Instruments based on a
new set of Financial Reporting Standards, IAS 32, IAS 39 and IFRS 7. This technical
guidance requires certain Financial Instruments such as loans and deposits to be valued
on the Balance Sheet in accordance with the financial reporting requirements rather
than being shown at their "nominal" value. This results in an impact on Service Cost and
Interest in the Income and Expenditure Account. However, Accounting Regulations have
been put in place to allow the impact of these new accounting requirements to be
adjusted in the Statement of Movement in the General Fund Balance. This adjustment has
resulted in creation of a Financial Instrument Adjustment Account on the Balance Sheet.
Fixed Asset
A tangible asset that yields benefit to the Council and the services it provides for a period
of time in excess of one year.
General Fund
This account shows the expenditure and income relating to all the services provided by
the Council and how the net cost of these services has been financed by the local
taxpayers and government grants.
Government Grants
Assistance by government and inter-government agencies and similar bodies, whether
local or national, or international, in the form of cash or transfers of assets to the Council in
return for past or future compliance with certain conditions.
Heritage Assets
A heritage asset is an asset with historical, artistic, scientific, technological, geophysical or
environmental qualities that is held and maintained principally for its contribution to
knowledge and culture. These are accounted for in accordance with FRS 30 Heritage
Assets as adopted in the Code of Practice on Local Council Accounting, as there is no
IFRS that deals with heritage assets. Heritage assets can be both tangible and intangible
in nature.
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Housing Benefit
Payments to people on low incomes to assist them in meeting their housing costs.
Impairment
Impairment occurs where the recoverable amount of the fixed asset is lower than the
carrying value amount.
Infrastructure Assets
Fixed assets that are immovable or not transferable, expenditure on which is recoverable
only by the continued use of the asset created. Examples of infrastructure assets would
be assets within the Town Centre Regeneration Scheme.
Intangible Assets
Expenditure which has been capitalised but which does not always produce a fixed
asset, e.g. grants, software licences.
Interest Cost
Under the provisions of IAS 19 interest cost is the amount needed to unwind the discount
applied in calculating the current service cost. Provisions made at present value in
previous years will need to be uplifted by a year’s discount in order to keep pace with
current values.
IFRS
International financial reporting standards (IFRS) represent a set of generally accepted
accounting principles (GAAP) used by companies to prepare financial statements.
International Financial Reporting Standards that have been developed by the
International Accounting Standards Board (IASB). These are a set of accounting rules
followed by, or being adopted by, more than 100 countries. All member states of the EU
are required to use IFRS as adopted by the EU for listed companies since 2005. This year is
the second year that Councils have been required to complete their Financial
Statements in accordance with IFRS.
International Accounting Standard 19 (Retirement Benefits)
The objectives of IAS19 are to ensure that financial statements contain adequate
disclosure of the cost of providing retirement benefits and the related gains, losses, assets
and liabilities. The financial statement should also reflect the assets and liabilities arising
from an employer’s retirement benefit obligations and any related funding at fair values.
In addition the operating costs of providing retirement benefits should be recognised in
the accounting period(s) in which the benefits are earned by the employees, and the
related finance costs and any other changes in value of the assets and liabilities should
be recognised in the accounting periods in which they arise.
Inventories
These comprise the following:-
a) goods or other assets purchased for resale;
b) consumable stores;
c) products and services in intermediate stages of completion; and
d) finished goods for resale.
Investments
A long-term investment is an investment for longer than twelve months. Investments which
do not meet these criteria are classed as short term investments and shown in current
assets.
Investment Properties
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Interest in land and / or buildings which is held for its investment potential, rather than its
use in the provision of the Council’s services to the public, any rental income being
negotiated at arms length.
Leasing
A way of paying for capital spending where we pay a rental charge for a certain period
of time. There are two main types of leasing arrangements.
a) Finance leases, which transfer all the risks and rewards of owning a fixed asset to the
person taking out the lease. These assets are included in the fixed assets in the balance
sheet.
b) Operating leases, where the leasing company owns the asset and the yearly rental is
charged direct to the income and expenditure account.
Local Government Pension Scheme (LGPS)
Northamptonshire District Council participates in the LGPS, which is a defined benefit
pension scheme based on final pensionable salary. The fund is administered by
Northamptonshire County Council.
Minimum Revenue Provision
The minimum amount of the Council’s external debt that must be repaid in accordance
with Government regulations, by the revenue account in the year of account.
Movement in Reserves Statement
This statement brings together all the recognised gains and losses of the Council during
the period and identifies those that have and have not been recognised in the Income
and Expenditure account. The statement separates the movements between revenue
and capital reserves
Net Book Value
The amount at which fixed assets are included in the balance sheet, i.e. their historical
cost or current value less the cumulative amounts provided for depreciation.
Non Distributed Costs
These tend to be costs which, because of their nature, cannot be allocated or
apportioned to services. They may include the costs associated with the unused shares of
IT facilities or other long-term unused but unrealisable assets. They may also include the
costs of past service, settlement and curtailment pension contributions.
Non-Operational Assets
Fixed assets held by the Council but not directly occupied, used or consumed in the
delivery of its services. Examples of non-operational assets include investment properties
and those assets which are surplus to requirements and which are being held pending
sale or redevelopment.
Operational Assets
Fixed assets held and occupied, used or consumed by the Council in the direct delivery
of those services for which it has a statutory or discretionary responsibility.
Past Service Costs
Under the provisions of IAS19 past service costs are non-periodic costs arising from
decisions in the current year but whose financial effect is derived from years of service
earned in earlier years. Most costs are likely to be discretionary benefits, including added
year liabilities. Any new added years liabilities/past service costs will need to be
recognised in non distributed costs.
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Pensions Reserve
The Pensions Reserve absorbs the timing differences arising from the different
arrangements for accounting for post employment benefits and for funding benefits in
accordance with statutory provisions.
Post Balance Sheet Events
Those events, both favourable and unfavourable, which occur between the balance
sheet date and the date on which the Statement of Accounts is signed by the
responsible officer and authorised for issue.
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Precepts
The amount that the Council is required to collect from council tax payers to fund
another, non tax collecting Council's expenditure. Precepts are issued by County, Parish
and Town Councils and the local police Council.
Prior Year Adjustments
Those material adjustments which apply to previous years, which have arisen from
changes in accounting policies or from the correction of fundamental errors. They do not
include adjustments of accounting estimates made in prior years.
Provision
An amount we set aside to provide for something we will need to pay, but where we do
not know the exact amount and the date on which it will arise.
PRP
Performance related pay.
Related Party Transactions
The Council is required to disclose any material transactions with related parties to ensure
that stakeholders are aware when these transactions take place and the amount and
implications of such transactions.
Reserves
Amounts of money put aside to meet certain categories of expenditure in order to avoid
fluctuations in the charge to the General Fund.
Revaluation Reserve
Records the unrealised net gains from revaluations made after 1st April 2007.
Revenue Expenditure
The Council’s day-to-day expenditure on items which include wages, stationery and
interest charges. Expenditure that is not capital expenditure.
Revenue Expenditure Funded from Capital under Statute (REFCUS)
Capital expenditure which does not result in, or remain matched with, tangible assets.
Examples of this include expenditure on items such as private sector housing grants or
expenses included in the promotion of a Private Act of Parliament.
Revenue Support Grant
The main non-service specific grant from Central Government to fund the Council’s
expenditure.
Service Reporting Code of Practice (SeRCOP)
This Code of Practice provides guidance on the reporting structure, to enable
consistency and comparison of costs with other Council’s. The highest structure level
shown in the statements are mandatory.
Useable Capital Receipts
The amount of capital receipts which the Council is able to use to finance capital
spending.
Useful Life The period over which the Council will derive benefits from the use of a fixed
asset.
Usable Reserves Reserves that can be applied to fund expenditure or to reduce council
tax.
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Unusable Reserves Reserves that are kept to manage the accounting processes for non-
current assets, financial instruments, and retirement and do not represent usable
resources for the Council.