comprehensive income and expenditure statement and... · the comprehensive income and expenditure...

COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT

FOR THE YEAR ENDED 31 MARCH 2014

2012/13 2012/13 2012/13

Restated Restated Restated 2013/14 2013/14 2013/14

Expenditure Income NET Expenditure Income NET

£'000 £'000 £'000 £'000 £'000 £'000

Service Costs

11,645 (8,923) 2,722 Central Services to the Public 3,713 (1,285) 2,428

10,102 (496) 9,606 Cultural and Related Services 16,978 (1,543) 15,435

9,963 (1,751) 8,212 9,784 (1,771) 8,013

6,360 (1,246) 5,114 Planning Services 6,169 (1,554) 4,615

3,196 (2,578) 618 Highways and Transport Services 3,995 (2,631) 1,364

53,486 (49,210) 4,276 Housing Services 52,709 (48,615) 4,094

3,492 (80) 3,412 Corporate and Democratic Core 3,322 (85) 3,237

726 0 726 Non-Distributed Costs 75 (295) (220)

98,970 (64,284) 34,686 COST OF SERVICES 96,745 (57,779) 38,966

Other Operating Income and Expenditure

1,080 Payment of Precepts (collected on behalf of Parish Councils) 1,068

(16) 0

Financing and Investment Income and Expenditure

(11,995) Net Gain on Investment Property (Note 6) (24,183)

(3,124) Interest and Investment Income (Note 9) (3,464)

3,540 Net Interest on the Pension Liability (Note 16) 3,570

Taxation and Non-Specific Grant Income and Expenditure

(8,025) Council Tax Income (including parish precepts) (7,473)

0 Net Business Rates Income and Expenditure (Note 14) (2,513)

(10,092) Other Non-Ringfenced Government Grants Income (Note 15) (8,841)

(931) Capital Grants and Contributions Income (Note 15) (953)

5,123 (SURPLUS)/ DEFICIT ON PROVISION OF SERVICES (3,823)

Other Comprehensive Income and Expenditure

(188) 1,597

2,660 (18,790)

(280) - Loss/(Gain) on Revaluation of Investments 2,697

7,315 TOTAL COMPREHENSIVE (INCOME) / EXPENDITURE (18,319)

Other Operating Income and Expenditure

The statement includes some costs and incomes that are not allowed to be charged as income and

expenditure to the General Fund (the account used to set the level of council tax). This means that in

order to give a comparable presentation of the performance of the council during the year, it is necessary

to adjust the surplus or deficit on the Comprehensive Income and Expenditure Statement to obtain the

movement on the General Fund. These adjustments are called "Adjustments between the accounting

basis and the funding basis under regulations" and are shown in the Movement in Reserves Statement on

page 9.

Environmental and Regulatory

Services

Items that will not be reclassified to the (Surplus) / Deficit on

Provision of Services

- Loss/(Gain) on Revaluation of Long Term Assets

- Remeasurement of Pension Liability

This statement shows the accounting cost to the council in the year on the provision of services and other

operating activities in accordance with International Financial Reporting Standards (IFRS) adapted by the

Local Authority Accounting Code of Practice (the Code).

Items that may be reclassified to the (Surplus) / Deficit on

Provision of Services

It includes everything that affects the council's net asset position and therefore includes all of the council's

operating activities, along with any gains or losses on the council's investing and financing activities and

movements in the value (i.e. revaluations and impairments) of long term assets and liabilities. The total

comprehensive income and expenditure represents the total movement on net assets within the Balance

Sheet.

Basingstoke and Deane Borough Council 7 Statement of Accounts

BALANCE SHEET


31-Mar-13 31-Mar-14

£'000 £'000 Notes

79,052 Property, Plant and Equipment 68,287 5

227,284 Investment Property 237,146 6

102,673 Long Term Investments 84,508 9

903 Other Long Term Assets 915

409,912 LONG TERM ASSETS 390,856

10,556 Short Term Investments 24,516 9

3,700 Short Term Debtors 6,515 10

33,769 Cash and Cash Equivalents 44,950 11

48,025 CURRENT ASSETS 75,981

(11,169) Short Term Creditors (15,022) 12

(512) Provisions (1,457) 13

(11,681) CURRENT LIABILITIES (16,479)

(6,985) Grants and Contributions Receipts In Advance (7,988) 15

(83,250) Pension Scheme Liability (68,030) 16

(90,235) LONG TERM LIABILITIES (76,018)

356,021 NET ASSETS 374,340

(118,278) Usable Reserves (126,668) 17

(237,743) Unusable Reserves (247,672) 18

(356,021) TOTAL RESERVES (374,340)

There are two types of reserve shown in the Balance Sheet. The first category of reserves are usable

reserves, i.e. those reserves that the council may use to provide services, subject to the need to maintain

a prudent level of reserves and any statutory limitations on their use. The second category of reserves is

those that the council is not able to use to provide services. This category includes reserves that contain

unrealised gains and losses (for example the Asset Revaluation Reserve), where amounts would only

become available to provide services if the assets were to be realised. They also include reserves that

hold timing differences and any adjustments made between the accounting basis and funding basis under

regulations within the Movement in Reserves Statement on page 9.

The Balance Sheet shows the value, as at the Balance Sheet date, of the assets and liabilities recognised

by the council. The net assets of the council (assets less liabilities) are matched by reserves held by the

council.


MOVEMENT IN RESERVES STATEMENT


General

Fund

Balance

Earmarked

Revenue

Reserves

Capital

Receipts,

Grants &

Contrib-

utions

Reserves

Total

Usable

Reserves

(Note 17)

Total

Unusable

Reserves

(Note 18)

Total

Reserves

£'000 £'000 £'000 £'000 £'000 £'000

(1,500) (27,086) (89,130) (117,716) (245,620) (363,336)

5,123 0 0 5,123 0 5,123

0 0 0 0 2,192 2,192

5,123 0 0 5,123 2,192 7,315

(7,148) 0 1,463 (5,685) 5,685 0

(2,025) 0 1,463 (562) 7,877 7,315

2,025 (2,025) 0 0 0 0

0 (2,025) 1,463 (562) 7,877 7,315

(1,500) (29,111) (87,667) (118,278) (237,743) (356,021)

(3,823) 0 0 (3,823) 0 (3,823)

0 0 0 0 (14,496) (14,496)

(3,823) 0 0 (3,823) (14,496) (18,319)

(3,532) 0 (1,035) (4,567) 4,567 0

(7,355) 0 (1,035) (8,390) (9,929) (18,319)

7,355 (7,355) 0 0 0 0

0 (7,355) (1,035) (8,390) (9,929) (18,319)

(1,500) (36,466) (88,702) (126,668) (247,672) (374,340)

Net transfer to/(from) earmarked

reserves

Adjustments between accounting

basis and funding basis under

regulations

Other comprehensive income and

expenditure

Balance as at 31 March 2014

Net (increase)/decrease in 2013/14

This statement shows the movement in the year on the different reserves held by the council, analysed

into "usable reserves" and "unusable reserves" (see Notes 17 and 18 for more details).

The Comprehensive Income and Expenditure Statement shows a surplus of £3.823 million for 2013/14

(deficit of £5.123 million in 2012/13). However, after adjusting for the items that are not allowed to be

charged to the General Fund, the council had a General Fund surplus of £7.355 million for 2013/14

(£2.025 million surplus in 2012/13) before any discretionary transfers to or from earmarked reserves.

Movements during 2012/13

(Restated)

Total comprehensive income and

expenditure


expenditure





regulations


Movements during 2013/14

Movements during the year come from the Comprehensive Income and Expenditure Statement. These

are then adjusted for the difference between the accounting basis and the funding basis by transfers

between the General Fund Balance and the other reserves.

Surplus on provision of services

Net (increase)/decrease before

transfers to earmarked reserves

Deficit on provision of services


expenditure

Net transfer to/(from) earmarked

reserves

Net (increase)/decrease before

transfers to earmarked reserves


CASH FLOW STATEMENT


2012/13

Restated 2013/14

£'000 £'000

OPERATING ACTIVITIES

5,123 (Surplus) / Deficit on the Provision of Services (3,823)

Adjustments for Non-Cash Movements:

(3,150) Pension Fund adjustments (3,570)

(2,015) Depreciation and amortisation of long term assets (2,206)

(1,585) Revaluation impairments of property, plant and equipment (7,741)

(1,690) Revaluation of investment property 10,647

(490) Amortisation of premiums and gain on disposal of investments (205)

(366) Write out of long term assets on disposal (3,737)

0 Recognition of a Donated Asset 175

(280) Decrease/(increase) in allowances for doubtful debts 7

Adjustments for Items included in Investing Activities:

382 Proceeds from disposal of long term assets 3,737

Adjustments for Items on an Accruals Basis:

(1,858) Increase/(decrease) in operating activity debtors 2,514

1,277 Decrease/(increase) in operating activity creditors (3,248)

(340) Decrease/(increase) in provisions (945)

(4,992) Net Cash (In Flow) / Out Flow from Operating Activities (8,395)

INVESTING ACTIVITIES

3,004 Payments for additions to long term assets 3,932

401,548 Payments for purchase of investments 117,657

(382) Proceeds from disposal of long term assets (3,737)

(418,850) Proceeds from disposal of investments (118,906)

(14,680) Net Cash Out Flow / (In Flow) from Investing Activities (1,054)

FINANCING ACTIVITIES

60 Repayment of temporary borrowing 23

860 Net (in flow)/out flow for business rates payable to government & preceptors (957)

(17) New temporary borrowing raised (34)

348 Net (in flow)/out flow for council tax payable to preceptors (764)

1,251 Net Cash (In Flow) / Out Flow from Financing Activities (1,732)

(18,421) NET (INCREASE) / DECREASE IN CASH AND CASH EQUIVALENTS (11,181)

The Cash Flow Statement is different to the other statements because it is on a cash basis, and some of

the figures may not agree with other figures in the financial statements which are all on an accruals basis

(i.e. based on amounts payable and receivable rather than actually paid or received).

Cash and Cash Equivalent includes cash in hand, the council's main bank account, deposit accounts with

other banks and money market funds with financial institutions that are held for meeting short term cash

commitments rather than for investment purposes. They are repayable, without penalty, on notice of not

more than 30 days and are convertible to known amounts of cash with insignificant risk of change in value.

The purpose of the Cash Flow Statement is to show how the Cash and Cash Equivalents shown in the

Balance Sheet has changed. It therefore includes all cash amounts received and paid out irrespective of

the type of transaction. A reconciliation of the net movement in cash and cash equivalents to the Balance

Sheet can be seen in Note 11.


NOTES TO THE FINANCIAL STATEMENTS

1. PRIOR PERIOD ADJUSTMENTS

Published Restated Change

2012/13 2012/13 2012/13

£'000 £'000 £'000

Comprehensive Income and Expenditure Statement

Central Services to the Public 2,710 2,722 12

Cultural and Related Services 9,587 9,606 19

Environmental and Regulatory Services 8,185 8,212 27

Planning Services 5,084 5,114 30

Highways and Transport Services 613 618 5

Housing Services 4,259 4,276 17

Corporate and Democratic Core 3,402 3,412 10

Non-Distributed Costs 726 726 0

Net Interest on Pension Liability 2,130 3,540 1,410

Remeasurement of Pension Liability 4,190 2,660 (1,530)

Cash Flow Statement

(Surplus)/Deficit on the Provision of Services 3,593 5,123 1,530

Pension Fund Adjustments (1,620) (3,150) (1,530)

Movement in Reserves Statement

Deficit on the Provision of Services (General Fund) 3,593 5,123 1,530

3,722 2,192 (1,530)

(5,618) (7,148) (1,530)

4,155 5,685 1,530

The council is required to apply the new accounting requirements retrospectively (as if they had always

been applied) and this means that some of the prior period comparators need to be restated.

None of these adjustments have an impact on the Pension Liability shown in the Balance Sheet. They

also do not impact on the General Fund and therefore there is no impact on council tax.

Adjustments between accounting basis and funding basis

under regulations (General Fund)

Adjustments between accounting basis and funding basis

under regulations (Unusable Reserves)

Impact on Individual Lines in Primary Statements

During 2013/14 the Local Authority Accounting Code of Practice adopted the June 2011 changes to IAS19

- Post Employment Benefits. The changes related to the classification, recognition, measurement and

disclosure of pension liabilities.

Impact on Notes to the Accounts

Other Comprehensive Income and Expenditure (Unusable

Reserves)

The main impact is in the Pensions note to the accounts (Note 16) where comparative figures for 2012/13

have been restated and some elements of the note have been replaced with new disclosure requirements.



2. JUDGEMENTS MADE IN APPLYING ACCOUNTING POLICIES

Lease classifications – the council has made judgements on whether its lease arrangements are

operating leases or finance leases. These judgements are based on a series of tests designed to assess

whether the risks and rewards of ownership have been transferred from the lessor to the lessee. The

results of the tests are taken “in the round” and together with a judgement on materiality the decisions

have been made. The accounting treatment for operating and finance leases is different and could have a

significant effect on the financial statements.

Contractual arrangements – the council has made judgements on whether its contractual arrangements

contain embedded leases (i.e. arrangements that are not legally leases but take the form of payments in

return for the use of specific assets).

Production of group accounts – the council has decided that it does not need to produce group

accounts even though it had a subsidiary company called 3en up until the end of April 2013. The

judgement was based on the fact that grouping the accounts would not materially change the reported

figures in the financial statements and it would not aid understanding of the Statement of Accounts.

Allowances for doubtful debts - the council has made judgements about the level of allowances for

doubtful debts that it needs to provide for. These judgements are based on historical experience of debtor

defaults adjusted for the current economic climate.

All of these judgements are the responsibility of the Head of Resources as set out in the Statement of

Responsibilities for the Statement of Accounts on page 50.

Conditions on Developers' Contributions - the council has made a judgement about whether developer

contributions agreements have conditions based on a "substance over form" concept and has assumed

that all agreements have a constructive obligation to repay contributions if not used, even if this is not

explicit in the legal agreement.

Post balance sheet events - the council has made judgements about whether there have been any

material post balance sheet events that it would need to be adjusted in the financial statements or

disclosed as a note.

Providing for potential liabilities – the council has made judgements about the likelihood of pending

liabilities and whether a provision should be made or whether there is a contingent liability. The

judgements are based on the degree of certainty around the results of pending issues.

Asset classifications – the council has made judgements on whether assets are classified as Investment

Property or Property, Plant and Equipment. These judgements are based on the main reason that the

council is holding the asset. If the asset is used in the delivery of services or is occupied by third parties

who are subsidised by the council they are deemed to be Property, Plant and Equipment assets. If there

is no subsidy and/or full market rent is being charged this would indicate that the asset is an Investment

Property. The classification determines the valuation method to be used.

The critical judgements that have the most significant effect on the amounts in the financial statements

are:

In applying the accounting policies which are set out on pages 41 to 47, the council has had to make

certain judgements about complex transactions or those involving uncertainty about future events.



3. UNCERTAINTIES RELATING TO ASSUMPTIONS AND ESTIMATES USED

Pensions Liability

The financial statements contain some estimated figures that are based on assumptions made by the

council about the future, or that are otherwise uncertain.

The council has made provision for its

share of appeals on business rates of

£1.24 million in 2013/14 based on

what it believes to be a prudent but

realistic level. The allowance is based

on appeals that have been lodged with

the Valuation Office Agency, a range

of historical success rates (from 40%

to 100%) for previous appeals for

different types of businesses and, an

average 10% reduction in the rateable

value for successful appeals.

Effect if Actual Results Differ from

Assumptions/Estimates

The council has made allowances for

doubtful debts of £2.673 million in

2013/14 (£2.680 million in 2012/13)

based on what it believes to be a

prudent but realistic level. The

allowances are based on:

Business Rates Debtors - analysis of

write offs over the last 5 years.

Council Tax Debtors – 100% for debts

over 4 years old and a sliding scale

from 85% to 95% for debts between 1

and 3 years old and 60% for up to 1

year old.

Housing and Council Tax Benefit

Overpayments Debtors- 100% for all

overpayments.

Property Rents and Sundry Debtors -

100% for all debts that are more than

3 months beyond their due dates.

If debt collection rates were to

deteriorate or improve, a 5% change

in the recoverability would require an

adjustment to the financial statements

of £133,700 in 2013/14 (£134,000 in

2012/13).

Allowances for Doubtful Debts

Business Rates Appeals Provision If success rates were to deteriorate or

improve, a 5% change in the rate

would require an adjustment to the

financial statements of £127,000 in

2013/14.

Uncertainties

Estimation of the net liability to pay

pensions depends on a number of

complex judgements relating to the

discount rate used, the rate at which

salaries are projected to increase,

changes in retirement ages, mortality

rates and expected returns on pension

fund assets. A firm of consulting

actuaries is engaged to provide the

council with expert advice about the

assumptions to be applied.

The effects on the net pensions liability

of changes in individual assumptions

can be measured. For instance, a

0.5% increase in the discount rate

assumption would result in a decrease

in the pension liability of approximately

£20 million.

The sensitivity of each of the

assumptions used by the actuaries

can be seen on page 30 within the

pensions note to the accounts.

Estimates are made taking into account historical experience, current trends and other relevant factors.

However, because balances cannot be determined with certainty, actual results could be materially

different from the assumptions and estimates made.

Item

The items in the council’s Balance Sheet at 31 March 2014 for which there is a significant risk of material

adjustment in the forthcoming financial year (excluding investments, investment property and land and

buildings that are carried at fair value based on recently observed market values) are as follows:



Internally

Reported

Net

Cost

Pension

Adjust-

ments

Capital

Account-

ing

Support

Service

Recharges

Other

Statutory

Adjust-

ments

Actual

Net

Cost

2013/14 2013/14 2013/14 2013/14 2013/14 2013/14

£'000 £'000 £'000 £'000 £'000 £'000

Portfolios

106 0 75 315 0 496

625 (1,232) 0 1,474 0 867

(1,066) 0 246 5,042 0 4,222

302 0 1,122 1,520 0 2,944

4,158 0 1 6,058 0 10,217

48 0 2 1 0 51

453 0 0 3,869 0 4,322

590 0 22 1,801 0 2,413

2,297 0 9,196 1,941 0 13,434

Portfolio Total 7,513 (1,232) 10,664 22,021 0 38,966

20,559 1,232 0 (21,845) 54 0

764 0 650 (1,414) 0 0

Cost of Services 28,836 0 11,314 (1,238) 54 38,966

Corporate Items

0 0 0 0 1,068 1,068

(14,774) 0 (10,647) 1,238 0 (24,183)

(3,092) 0 (372) 0 0 (3,464)

Pension Interest Costs 0 3,570 0 0 0 3,570

Council Tax Income (6,343) 0 0 0 (1,130) (7,473)

Business Rates Income (4,263) 0 0 0 1,750 (2,513)

General Government Grants (8,841) 0 0 0 0 (8,841)

Capital Grants and Contributions 0 0 (953) 0 0 (953)

Provision of Services (8,477) 3,570 (658) 0 1,742 (3,823)

4. RECONCILIATION WITH AMOUNTS REPORTED INTERNALLY

The analysis of income and expenditure on the face of the Comprehensive Income and Expenditure

Statement (on page 7) is that specified by the Service Reporting Code of Practice. However, decisions

about resource allocation are taken by the council on the basis of budget reports analysed by Service

Portfolios. The internal reporting does not include charges relating to capital expenditure (e.g.

depreciation etc.) or notional pension costs (current service cost etc.) and expenditure on support services

is budgeted for centrally within business units and is only charged to services at the end of the year.

These items form part of the reconciliation between the internally reported net cost and the actual net cost

shown in the Comprehensive Income and Expenditure Statement.

Leader

Environment and Climate Change

There is a general requirement in the accounting code to provide comparable figures for the previous year.

However it is not possible to show directly comparable figures for 2012/13 because each year the

portfolios change and there were prior period adjustments relating to pension costs.

Payments to Parishes

Community Services

Business Units

Agency and Holding Accounts

Strategy

Housing and Regeneration

Partnerships

Economic Strategy and

Development

Planning

The purpose of this note is to reconcile the financial information reported internally to that reported in the

Comprehensive Income and Expenditure Statement. The reconciliation for 2013/14 is as follows:

Investment Property

Property and Finance

Interest and Investment Income



Internally

Reported

Pension

Adjust-

ments

Capital

Account-

ing

Other

Statutory

Adjust-

ments

Recharge

Adjust-

ments Total

2013/14 2013/14 2013/14 2013/14 2013/14 2013/14

£'000 £'000 £'000 £'000 £'000 £'000

Expenditure

Employees 21,748 3,570 0 54 0 25,372

Premises 5,657 0 0 0 0 5,657

Transport 734 0 0 0 0 734

Supplies and Services 10,088 0 0 0 0 10,088

Contracted Services 4,620 0 0 0 (2,271) 2,349

Housing Benefit Payments 48,048 0 0 0 0 48,048

Business Rates Expenditure 27,774 0 0 1,796 0 29,570

0 0 1,814 0 0 1,814

Parish Precepts 0 0 0 1,068 0 1,068

118,669 3,570 1,814 2,918 (2,271) 124,700

Income

Housing Benefit Subsidy (48,262) 0 0 0 0 (48,262)

Grants and Contributions (services) (1,518) 0 (1,147) 0 0 (2,665)

Fees and Charges (5,928) 0 0 0 158 (5,770)

Property Rents (15,662) 0 0 0 0 (15,662)

Reimbursements and Other Income (5,463) 0 0 0 2,113 (3,350)

Interest and Investment Income (3,092) 0 (372) 0 0 (3,464)

Income from Business Rates (32,037) 0 0 (46) 0 (32,083)

Income from Council Tax (6,343) 0 0 (1,130) 0 (7,473)

General Government Grants (8,841) 0 0 0 0 (8,841)

Capital Grants and Contributions 0 0 (953) 0 0 (953)

(127,146) 0 (2,472) (1,176) 2,271 (128,523)

(8,477) 3,570 (658) 1,742 0 (3,823)

There is a general requirement in the accounting code to provide comparable figures for the previous year.

However it is not possible to show directly comparable figures for 2012/13 because there were prior period

adjustments relating to pension costs.

(Surplus)/Deficit on Provision of

Services

Capital Charges

The Code also requires a breakdown of the reporting segments by type of expenditure (e.g. cost of

employees, cost of premises etc.). It is only possible to show this in total because the internal reporting did

not provide a breakdown for each segment (portfolio). For 2013/14 the analysis is as follows:



5. PROPERTY, PLANT AND EQUIPMENT (PPE)

Vehicles Total

Land and Plant and Community PPE

Buildings Equipment Assets Assets

£'000 £'000 £'000 £'000

Net Book Value at 31 March 2012 71,541 2,803 7,503 81,847

Cost or Valuation

As at 31 March 2012 74,108 5,484 7,503 87,095

Movements in 2012/13

Additions 163 360 62 585

Disposals 0 (283) 0 (283)

Reclassifications (9) 0 (4) (13)

(1,585) 0 0 (1,585)

(169) 0 0 (169)

As at 31 March 2013 72,508 5,561 7,561 85,630

As at 31 March 2012 (2,567) (2,681) 0 (5,248)


Depreciation (1,238) (723) 0 (1,961)

Disposals 0 283 0 283

Depreciation written out (to revaluation reserve) 348 0 0 348

As at 31 March 2013 (3,457) (3,121) 0 (6,578)


Cost or Valuation

As at 31 March 2013 72,508 5,561 7,561 85,630


Additions 273 528 25 826

Recognitions 175 0 0 175

Disposals/Derecognitions (19) (464) 0 (483)

Reclassifications (199) 0 0 (199)

(7,741) 0 0 (7,741)

(6,579) 0 0 (6,579)

As at 31 March 2014 58,418 5,625 7,586 71,629

As at 31 March 2013 (3,457) (3,121) 0 (6,578)


Depreciation (1,504) (685) 0 (2,189)

Disposals/Derecognitions 19 464 0 483

Depreciation written out (to revaluation reserve) 4,942 0 0 4,942

As at 31 March 2014 0 (3,342) 0 (3,342)


The net book value and movements for the different categories of Property, Plant and Equipment assets

are shown below:

Revaluations (charged to services)

Accumulated Depreciation

Revaluations (charged to services)

Revaluations (to revaluation reserve)

Accumulated Depreciation

Revaluations (to revaluation reserve)



Depreciation and Estimated Useful Lives

Buildings from 10 to 100 years

Vehicles, Plant and Equipment from 3 to 10 years

Revaluations and Impairments

Significant Revaluations

31/03/13

Carrying

Value Asset

2013/14

Additions /

Reclassifica

tions /

Disposals

2013/14 Net

Deprec-

iation

Adjustment

2013/14

Revaluation

Change -

Revaluation

Reserve

2013/14

Revaluation

Change - To

Services

31/03/14

Carrying

Value

£'000 £'000 £'000 £'000 £'000 £'000

14,951 The Anvil* 0 149 (422) (9) 14,669

14,620 The Aquadrome* 0 1,158 (2,771) (2,595) 10,412

4,892 Tadley Swimming Pool* 0 538 (2,098) 0 3,332

6,381 Haymarket Theatre* 0 194 (429) (3,671) 2,475

8,618 Public Car Parks 0 0 (1,090) (858) 6,670

19,589 Other PPE Land and Buildings 230 1,418 231 (608) 20,860

69,051 230 3,457 (6,579) (7,741) 58,418

Revaluations charged to services

* Valued externally by DTZ Debenham Tie Leung Limited.

All of the non-specialised properties were valued by Mike Bovis, the council's internal Property Manager,

who is a member of the Royal Institute of Chartered Surveyors (RICS).

The significant specialised properties were valued externally by DTZ Debenham Tie Leung Limited using a

depreciated replacement cost (DRC) methodology. These properties were previously valued by the

council's internal Property Manager and this change has lead to a number of significant changes to the

valuations.

All of the council's land and buildings assets have been revalued during 2013/14. Where assets are not

revalued because they are carried at cost (e.g. community assets) or depreciated cost (e.g. vehicles, plant

and equipment) they are reviewed for impairments at the end of the year.

The basis for the valuations is in accordance with the council's Accounting Policies (see page 41).

The following useful lives have been used in the calculation of depreciation which is based on a straight-

line allocation over the expected life of the asset.

Downward revaluations of PPE assets are charged to the Asset Revaluation Reserve in the first instance,

however if there is an insufficient balance in the revaluation reserve then the balance is charged to the

relevant service area. This means that of the total reduction of £10.633 million in the carrying value

£7.741 million was charged to services.

During 2013/14 there were some significant revaluations on operational land and buildings as follows:



6. INVESTMENT PROPERTY

2012/13 2013/14

£'000 £'000

226,759 Balance at the Start of the Year 227,284

Movements in Year

2,568 Additions - Subsequent Expenditure 2,781

(366) Disposals - Carrying Value Written Out (3,737)

13 Reclassifications - from Property, Plant and Equipment 171

(1,690) Net Gain/(Loss) on Revaluations 10,647

227,284 Balance at the End of the Year 237,146

Revaluations

Significant Revaluations

31/03/13

Carrying

Value Asset

2013/14

Additions /

Reclassifica

tions /

Disposals

2013/14

Revaluation

Change

31/03/14

Carrying

Value

£'000 £'000 £'000 £'000

42,485 Houndmills Industrial Estate 0 1,767 44,252

38,748 Daneshill Industrial Estate (25) 2,299 41,022

30,625 Basing View 1,629 740 32,994

26,930 Viables 0 1,260 28,190

25,250 The Malls 393 7 25,650

15,000 Festival Place 0 (650) 14,350

7,400 Land at Manydown* 0 2,000 9,400

2,735 West Ham Leisure Park 749 1,056 4,540

3,450 Land at Gresley Road (disposal) (3,450) 0 0

34,661 Other Investment Property (81) 2,168 36,748

227,284 (785) 10,647 237,146

Investment Property held under leases and restrictions on disposals

In addition to the capital expenditure for the year (shown as additions to the assets), the council is

contractually committed to £0.642 million of future expenditure on Basing View Regeneration works.

Significant valuation gains at Houndmills and Daneshill Industrial Estates were due to rent reviews and

recent refurbishment works resulting in additional lettings. The Land at Manydown has increased by

£2.000 million due to more certainty over the future development of the site and subsequent increased

hope value.

The movement in the fair value (estimated market value) of Investment Property Assets is shown below:

All Investment Property valuations have been updated in 2013/14 in accordance with the requirements of

the Code. The valuations were carried out by Mike Bovis, the council's internal Property Manager, who is

a Member of the Royal Institute of Chartered Surveyors (RICS) with the exception of the Land at

Manydown* that was valued by Deloitte LLP.

During 2013/14 there were some significant revaluations on investment property as follows:

The council leases land at Manydown, valued at £9.400 million as at 31 March 2014 (£7.400 million as at

31 March 2013), that it has classified as an Investment Property. There are restrictions on the disposal of

the council's interest in the lease in so far as the landlord has an option to buy back the lease and

Hampshire County Council have an option to purchase 50% of the council's interest in the asset.



Investment Property Income and Expenditure Account

2012/13 2013/14

£'000 £'000

1,690 Net (Gain)/Loss on Revaluation of Investment Property (10,647)

(17,964) Income from Investment Property (rents and service charges) (18,043)

4,279 Maintenance and Running Costs of Investment Property 4,507

(11,995) Net (Gain)/Loss on Investment Property (24,183)

7. STATUTORY CAPITAL EXPENDITURE AND FINANCING

2012/13 2013/14

£'000 £'000

0 Opening Capital Financing Requirement 0

Statutory Capital Expenditure

585 Property Plant and Equipment Assets (see Note 5) 826

2,568 Investment Property Assets (see Note 6) 2,781

0 Intangible Assets 1

1,497 Revenue Expenditure Funded from Capital Under Statute 2,530

4,650 Total Capital Expenditure 6,138

Source of Finance (see Note 17)

(1,778) Capital Receipts Reserve (2,196)

(441) Capital Grants and Contributions Reserve (1,189)

(2,431) Direct Revenue Financing from the General Fund (2,753)

0 Closing Capital Financing Requirement 0

8. LEASES

The Council as Lessor

2012/13 2013/14

£'000 £'000

13,801 Due within one year 14,307

48,461 Due later than one year and not later than five years 51,317

763,687 Due after five years 778,828

825,949 Total Future Minimum Lease Rentals Receivable 844,452

The Investment Property Income and Expenditure Account is used to record the operating activity relating

to investment properties. It does not include expenditure on the acquisition or enhancement of Investment

Property as these are shown as investing activities and form part of the cost/value of the assets. The net

gain of £24.183 million in 2013/14 (£11.995 million in 2012/13) is shown in the Comprehensive Income

and Expenditure Statement.

Movements in the Capital Financing Requirement (the council's need to borrow to finance capital

expenditure) are shown below:

The estimated future minimum lease rentals receivable do not include rents that are contingent on events

taking place in the future such as rent reviews. In 2013/14 the contingent rents receivable by the council

were £3.592 million (£3.729 million in 2012/13).

The council leases out 95% of its Investment Property under operating leases for the purpose of

generating income. It also leases out land and buildings for the purpose of the provision of community

services such as sports and leisure facilities and community centres.

Total capital expenditure for 2013/14 amounted to £6.138 million (£4.650 million in 2012/13).

The estimated future aggregate minimum lease rentals receivable from these leases are:

A breakdown of the expenditure and income is shown below:



9. FINANCIAL INSTRUMENTS (INCLUDING INVESTMENTS)

Financial Instruments - Investment Balances and Movements

Available- Long

Long Term Investments Loans and for-Sale Term

Receiv- Financial Investment

ables Assets Total

£'000 £'000 £'000

Cost at 31 March 2012 16,000 84,994 100,994

Cumulative Amortisation of Premiums at 31 March 2012 0 (1,307) (1,307)

Cumulative Revaluations at 31 March 2012 0 5,998 5,998

Carrying Value at 31 March 2012 16,000 89,685 105,685


Acquisitions 1,000 0 1,000

Disposals (cost written out) 0 (4,021) (4,021)

Disposals (amortised premiums written out) 0 221 221

Amortisation of Premiums 0 (492) (492)

Revaluations 0 280 280

Cost at 31 March 2013 17,000 80,973 97,973





Acquisitions 0 4,954 4,954

Disposals (cost written out) 0 (19,820) (19,820)

Disposals (amortised premiums written out) 0 (179) (179)


Revaluations 0 (2,697) (2,697)

Cost at 31 March 2014 17,000 66,107 83,107




Financial instruments are contractual arrangements that give rise to a financial asset in one entity and a

financial liability in another. For the council, this primarily relates to financial assets in the form of

investments and debtors where deferred payment terms have been agreed and financial liabilities in the

form of short term borrowing and creditors where deferred payment terms have been agreed.

The council's debtors are classed as receivables and details of these are shown in Note 10.

The council is required to classify its financial assets (investments and debtors) into two categories; Loans

and Receivables and Available for Sale Financial Assets.

The council's investments are shown in three different places in the Balance Sheet; Long Term

Investments, Short Term Investments and Cash and Cash Equivalents.



Financial Instruments - Investment Balances and Movements

Available- Short

Short Term Investments Loans and for-Sale Term

Receiv- Financial Investment

ables Assets Total

£'000 £'000 £'000

Cost at 31 March 2012 24,500 0 24,500

Accrued Interest at 31 March 2012 156 411 567

Carrying Value at 31 March 2012 24,656 411 25,067


Acquisitions 392,550 7,998 400,548

Disposals (407,050) (7,998) (415,048)

Accrued Interest 0 (11) (11)

Cost at 31 March 2013 10,000 0 10,000


Carrying Value at 31 March 2013 10,156 400 10,556


Acquisitions 92,700 20,003 112,703

Disposals (cost written out) (88,700) (10,002) (98,702)

Disposals (amortised premiums written out) 0 2 2


Accrued Interest (14) (26) (40)

Cost at 31 March 2014 14,000 10,001 24,001

Cumulative Amortisation of Premiums at 31 March 2014 0 (1) (1)



Financial Instruments - Fair Values

Loans and Available- Total Loans and Available- Total

Receiv- for-Sale Financial Receiv- for-Sale Financial

ables Financial Instru- ables Financial Instru-

Assets ments Assets ments

2012/13 2012/13 2012/13 2013/14 2013/14 2013/14

£'000 £'000 £'000 £'000 £'000 £'000

(549) (2,575) (3,124) Interest and Investment Income (609) (2,855) (3,464)

0 (280) (280) 0 2,697 2,697

(549) (2,855) (3,404) (609) (158) (767)

Net (Gain)/Loss on Revaluation of

Investments

The Code requires the fair value of all investments to be disclosed. Available for Sale financial

instruments are shown at fair value (i.e. quoted market value) and Loans and Receivables are shown at

cost because this is not materially different from the fair value.

Total Income, Expense, Gains and

Losses

The income, expense, gains and losses recognised in the Comprehensive Income and Expenditure

Statement for the different categories of financial instruments were as follows:

Financial Instruments - Amounts included within the Comprehensive Income and Expenditure

Statement



Financial Instruments - Amounts included within the Cash Flow Statement

2012/13 2013/14

£'000 £'000

5 Interest Paid 4

(3,661) Interest Received (3,727)

Financial Instruments - Nature and Extent of Risk

Credit Risk - Investments

Investment Instrument

Indicative

Credit

Rating

% of

Portfolio

31-Mar-13

% of

Portfolio

31-Mar-14 Change

Government Bonds (Gilts) AA+ 43% 39% -4%

Supranational Bonds AAA 9% 0% -9%

Local Authority Bonds AA 3% 3% 0%

Money Market Funds AAA-mf 13% 20% 7%

Local Authority Deposits AA 15% 11% -4%

Bank Deposits A 14% 24% 10%

Corporate Bonds BBB- 3% 3% 0%

The council's activities expose it to a variety of financial risks. These include credit risk (the possibility that

other parties might fail to pay amounts due to the council), liquidity risk (the possibility that the council

might not have funds available to meet its commitments) and market risk (the possibility that losses may

arise due to changes in interest rates and market prices).

Risk management in this area is carried out by a central treasury management team under policies

approved by the council in the annual Treasury Management Strategy. The council has a policy for risk

management, has adopted the CIPFA Treasury Management Code of Practice and has set treasury

management indicators to control financial instrument risks in accordance with the CIPFA Prudential Code

of Practice.

Credit risk arises from all of the council's investments and some of the council's customers. These include

service related debtors but exclude council tax and business rate debtors.

The code requires the council to disclose the amount that best represents its maximum exposure to credit

risk. The council has not had nor expects any default losses in relation to investments. Many of the

council's investments are in financial instruments where the amount of credit risk is reflected in the market

price of those investments.

The council's risk management on financial instruments (mainly investments) focuses on the credit risk

and the unpredictability of financial markets and seeks to minimise the potential adverse effects on the

resources available to fund services.

The table below compares the percentage of the council's investment portfolio that was invested in each

type of investment at the beginning and at the end of the year and illustrates that, as at 31 March 2014,

39% of investments were in government issued or government backed instruments (52% as at 31 March

2013). The average credit rating for the investment portfolio as a whole is AA, which is an indication of the

level of risk in the investment portfolio.

The interest income and expenditure figures in the table above include accruals. However, the Code

requires the council to disclose the actual cash amounts of interest received and paid. These were as

follows:



Credit Risk - Service Related Debtors

Liquidity Risk

Invest- Invest-

ments ments

31-Mar-13 Maturity Profile of Investments 31-Mar-14

£'000 £'000

42,450 Less than 1 year (short term) 63,951

20,216 Less than 1 year (long term) 9,169

9,409 1 year to 2 years 10,803

10,591 2 years to 3 years 19,450

19,744 3 years to 4 years 10,072

10,661 4 years to 5 years 10,898

32,052 5 years to 10 years (combined) 24,115

145,123 Total Investments 148,458

Market Risk (interest rates/prices/exchange rates)

The council does not normally allow credit for service related debtors. However, as at 31 March 2014

some service related debtors were past their due date for payment. The past due amount has been

analysed by age and is shown in Debtors (see Note 10).

As the council has net investments of £148.5 million as at 31 March 2014 (£145.1 million as at 31 March

2013) and access to borrowing from the Public Works Loan Board (PWLB), there is no significant risk that

it will be unable to raise funds to meet its commitments. Instead, the risk is that the council will have to

reinvest a significant proportion of its investments at a time of unfavourable interest rates. The council's

strategy, in order to reduce the risk, is to ensure that no more than £40 million of its long term investments

mature in any one year through careful planning of new investments. The maturity profile of investments

is as follows:

All trade and other payables (creditors) are due to be paid in less than one year and therefore have a low

liquidity risk.

In order to give some indication of the level of risk, if interest rates had been 0.5% higher or lower this

would have resulted in £197,000 increased or decreased interest income on the council's variable rate

investments.

In order to reduce credit risk, deposits were not made with banks and financial institutions unless they

were rated independently by all three major rating agencies with a minimum rating score of A- or

equivalent. The council also has a policy of not investing more than £10 million with any one institution or

group unless the instruments used are government backed. Diversification of counterparties is also

obtained via the use of money market funds, which invest in a wide range of instruments from numerous

different institutions.

The council has maintained a cautious credit risk policy for all new long term investments by investing only

in government issued instruments or with other local authorities.

The council has no financial instruments denominated in foreign currencies and thus has no exposure to

losses arising from movements in exchange rates.

The council is exposed to changes in market prices for its bond investments. However, as the council has

a policy of purchasing bonds with the intention of holding them to maturity, any variations in market prices

do not have a financial impact on the council unless they are sold.

The council aims to minimise risk in terms of its exposure to interest rate movements by having a

significant proportion of its investments in fixed rate instruments. As at 31 March 2014 the council had

73% (77% as at 31 March 2013) of its investments in fixed rate instruments. The council also has an

interest rate risk reserve of £1.000 million as at 31 March 2014 (£1.000 million as at 31 March 2013) to

accommodate any adverse changes in the year.



10. SHORT TERM DEBTORS

31-Mar-13 31-Mar-14

£'000 £'000

171 Central Government (includes business rates safety net) 2,708

470 Other Local Authorities 569

3,059 3,238

3,700 Total Short Term Debtors 6,515

Service Related Debtors - Age Debt Analysis

Overdue Overdue

Debtors Debtors

31-Mar-13 Age of Debt (beyond due date) 31-Mar-14

£'000 £'000

1,257 Less than 3 months 419

60 3 months to 6 months 93

574 6 months to 1 year 83

450 More than 1 year 438

2,341 Total Overdue Service Related Debtors 1,033

11. CASH AND CASH EQUIVALENTS

31-Mar-13 31-Mar-14

£'000 £'000

171 Cash In Hand 189

1,148 Bank Current Account 4,811

14,600 Bank Deposit Accounts (Investments) 10,100

17,850 Money Market Funds (Investments) 29,850

33,769 Total Cash and Cash Equivalents 44,950

The significant decrease in debts beyond their due date from £2.341 million to £1.033 million is due to

three developers' contributions totalling £1.482 million that were overdue on 31 March 13 and were paid

during 2013/14.

Other Entities and Individuals (includes Property Rents and

Housing Benefits Overpayments)

As at 31 March 2014 some service related debtors were past their due date for payment. The past due

amount has been analysed by age and is shown below:

Debtors are shown net of allowances for doubtful debts and the council is required to categorise debtors

as at 31 March as follows:

The main items included within Cash and Cash Equivalents were as follows:

The movement in cash and cash equivalents during the year was £11.181 millon (£18.421 million in

2012/13). More details of the movement is shown in the Cash Flow Statement on page 10.

The significant increase in the central government debtor is due to the new funding arrangements for

business rates that was introduced from 1 April 2013.

Cash equivalents include deposit accounts and money market funds with financial institutions that are

repayable, without penalty, on notice of not more than 30 days and are convertible to known amounts of

cash with insignificant risk of change in value.



12. SHORT TERM CREDITORS

31-Mar-13 31-Mar-14

£'000 £'000

(1,136) (2,803)

(2,834) (3,576)

(7,144) (8,643)

(11,114) Total Short Term Creditors (15,022)

13. PROVISIONS

14. NET BUSINESS RATES INCOME AND EXPENDITURE

2013/14

£'000

Business Rate Income and Expenditure

Business Rate Income (28,317)

Renewable Energy Income (46)

Provision Made for Business Rates Appeals 1,240

Allowances for impairment 255

Interest on overpayments 6

Business Rates Income and Expenditure (26,862)

Business Rate Grant Income and Expenditure

Safety Net Income from Government (1,274)

Business Rate Relief Grants from Government (307)

Tariff Payment to Government 25,930

24,349

Total Retained Business Rates (2,513)

New funding arrangements from 1 April 2013 allow the council to retain a proportion of business rates and

this replaces the previous arrangements whereby all business rates were paid to the government and then

the council received a distribution from a national pool (see note 15) as part of the government's formula

grant funding.

Central Government (includes business rates tariff)

Total provisons of £1.457 million consist of £1.240 million for the council's share of the newly created

provision for appeals on business rates as part of the new funding arrangements for business rates and

£0.217 million for other service based provisions (£0.512 million in 2012/13).

Other Entities and Individuals (includes contractors deposits,

capital works and receipts in advance)

Other Local Authorities (includes council tax and business

rates payable to precepting authorities)

The council is required to categorise creditors as at 31 March as follows:

Business Rates Grant Income and Expenditure

The significant increases in the central government and local authority creditors are due to the new

funding arrangements for business rates that was introduced from 1 April 2013.



15. GRANTS AND CONTRIBUTIONS

Government Grants and Capital Contributions Income

2012/13 2013/14

£'000 £'000

0 Support for Emergency Flooding (Council Tax) 16

0 New Burdens Grant (Community Right to Challenge)* 8

0 Support for Emergency Flooding (Bellwin claim) 481

29 Housing Benefits System Improvements 0

57,040 Housing and Council Tax Benefit Subsidy** 48,196

40 Rent Rebates Subsidy 66

57,109 48,767

Business Rates Safety Net Grant 1,274

Business Rate Relief Grants 307

1,581

118 Revenue Support Grant 4,052

6,097 Distribution from Business Rate Pool*** 0

170 Council Tax Freeze Grant 69

0 Council Tax Support Transitional Grant 17

2,385 New Homes Bonus Grant 3,539

120 Local Services Support Grant 0

84 New Burdens Grant (Council Tax) 71

8 New Burdens Grant (Community Right to Challenge)* 0

5 New Burdens Grant (Community Right to Bid) 8

3 New Burdens Grant (Business Rates) 0

0 New Burdens Grant (Transparency Agenda) 2

0 Business Support Grant (Flooding) 65

100 High Street Innovation Grant 0

20 Neighbourhood Planning Grant 25

982 Housing and Council Tax Benefit Administration 897

0 New Burdens Grant (Welfare Reforms) 72

0 New Burdens Grant (Electoral Registration) 24

10,092 8,841

559 Disabled Facilities Grant 484

50 Developers Contributions (Section 106) (conditions met) 214

25 Other Contributions (conditions met) 0

297 Other Contributions (no conditions) 80

0 Other Contributions (donated asset) 175

931 953

68,132 60,142

Total Non-Ringfenced Government Grants

* Shown in Non-ringfenced grants in 2012/13 and within services in 2013/14.

Capital Grants and Contributions

*** New funding arrangements from 1 April 2013 (see note 14) that replaces distributions from a national pool.

Total All Government Grants and Capital Contributions

Total Service Specific Revenue Grants and Contributions

Other Non-Ringfenced Government Grants

The council credited £60.142 million in 2013/14 (£68.132 million in 2012/13) in government grants and

capital contributions to the Comprehensive Income and Expenditure Statement during the year. Details of

these credits are shown below:

Service Specific Government Grants (included in cost of

services)

Business Rates Grant Income (included in Note 14)

Total Business Rate Grant Income

** From 1 April 2013 Council Tax Benefits (£6.0 million) have been replaced by Council Tax Support and are now treated as a discount in the

Collection Fund.

Total Capital Grants and Contributions



Grants and Contributions Receipts in Advance

2012/13 2013/14

£'000 £'000

(7,334) Balance at the Start of the Year (6,985)

Movements in Year

2 Amounts Receivable (with conditions) (2,211)

Amounts recognised as income (conditions subsequently met)

272 994

75 214

(6,985) Balance at the End of the Year (7,988)

16. PENSION SCHEME

The council participates in the Local Government Pension Scheme (LGPS) administered by Hampshire

County Council. The scheme is a defined benefit plan with benefits earned up to 31 March 2014 linked to

final salary and benefits earned after this date based on a career average earnings. The pension

payments are also index linked. This is a funded scheme, meaning that the council and employees pay

contributions into a fund, calculated at a level intended to balance the future pension obligations with

pension assets (mainly investments).

The council has in the past made discretionary unfunded awards for early retirements which were

termination benefits that impact on the council's future pension liability. These are unfunded defined

benefit arrangements, under which liabilities are recognised when the awards are made. However, there

are no investments assets built up to meet these pension liabilities, and cash has to be generated to meet

actual pension payments as they eventually fall due.

The council has a number of grants and contributions receivable that have yet to be recognised as income

as they have conditions attached to them that will, if not met, require the monies to be returned to the

contributor. These mainly relate to section 106 developer contributions that have conditions in the form of

time limits on them. The balances and movements on these were as follows:

Participation in the pension scheme is also made available to elected members. In 2013/14 there were 10

members in the scheme at a cost to the council of £13,532 (11 members in 2012/13 at a cost of £13,038).

Pension Scheme - Participation

- Within Cost of Services

The principal risks to the council of the scheme are the longevity assumptions, statutory changes to the

scheme, structural changes to the scheme, changes in inflation, bond yields and the performance of the

equity investments held by the scheme. These are mitigated to a certain extent by the statutory

requirements to charge to the council's General Fund the amounts required by statute as described in the

accounting policies note.

Pension Scheme - Operation and Risks

As part of the terms and conditions of employment of its employees, the council offers retirement benefits.

Although these benefits will not actually be payable until the employees retire, the council has a

commitment to make the payments, and this needs to be disclosed at the time that employees earn their

future entitlement.

- Within Taxation and Non-Specific Grant Income

The pension scheme is operated under the LGPS (Benefits, Membership and Contributions) Regulations

2007 and the governance of the scheme is the responsibilty of the pension committee of Hampshire

County Council. Policy is determined in accordance with the Pension Fund Regulations. The investment

managers of the fund are appointed by the committee.

The council has a number of grants and contributions receivable that have yet to be recognised as income

as they have conditions attached to them that will, if not met, require the monies to be returned to the

contributor. These mainly relate to section 106 developer contributions that have conditions in the form of

time limits on them. The balances and movements on these were as follows:



2012/13

Restated 2013/14

£'000 £'000

Included in Cost of Services

2,680 Current Service Costs 3,050

210 Past Service Costs / (Credits) 80

Included in Financing and Investment Income & Expenditure

3,540 Net Interest on Pension Liability 3,570

6,430 Sub Total Included in Provision of Services 6,700

Included in Remeasurement of the Pension Liability

Actuarial (gains)/losses

12,440 - due to change in financial assumptions (9,030)

0 - due to change in demographic assumptions (3,220)

(360) - due to liability experience (4,720)

(9,420) Return on assets in excess of that recognised in net interest (1,820)

2,660 Sub Total Included in Remeasurement of Liability (18,790)

9,090 (12,090)

Movement in Reserves Statement (General Fund)

(6,430) Reversal of charges made for retirement benefits (6,700)

3,280 Inclusion of employer's contributions payable (see below) 3,130

(3,150) Total Included in Movement in Reserves Statement (3,570)

The analysis of actual employers contributions payable is as follows:

2012/13

Restated 2013/14

£'000 £'000

Employer's Contributions Paid to Pension Fund

2,680 Normal Funded Contributions 2,660

210 Lump Sums for Early Retirements 70

Employer's Contributions Paid to Pensioners

390 Discretionary / Unfunded Added Years 400

3,280 Total Employer's Contributions Paid for Pensions 3,130

2012/13

Restated 2013/14

£'000 £'000

(186,830) Present value of the pension obligation* (175,490)

103,580 Fair value of pension fund assets 107,460

(83,250) Net Liability arising from Pension Obligation (68,030)

*Includes a liability of £6.540 million as at 31 March 2014 for discretionary and unfunded added years

(£6.600 million as at 31 March 2013).

Pension Scheme - Assets and Liabilities Recognised in the Balance Sheet

Total Included in Comprehensive Income and Expenditure

Statement

Pension Scheme - Transactions Relating to Retirement Benefits and Termination Benefits

As at the last valuation date the split of the pension obligation by category of members was 31% active

members, 50% pensioners and 19% deferred pensioners.

The following transactions have been made in the financial statements during the year:



2012/13

Restated 2013/14

£'000 £'000

(169,560) Opening pension obligation (186,830)

(2,680) Current service cost (3,050)

(7,820) Interest on pension obligation (8,080)

(910) Contributions by scheme participants (890)

Actuarial (losses)/gains:

(12,440) - due to changes in financial assumptions 9,030

0 - due to changes in demographic assumptions 3,220

360 - due to liability experience 4,720

6,430 Benefits paid 6,470

(210) Past service costs (80)

(186,830) Closing present value of pension obligation (175,490)

2012/13

Restated 2013/14

£'000 £'000

92,120 Opening fair value of assets 103,580

4,280 Interest Income on assets* 4,510

9,420 Remeasurement gains on assets* 1,820

3,280 Contributions by the employer 3,130

910 Contributions by scheme participants 890

(6,430) Benefits paid (6,470)

103,580 Closing fair value of assets 107,460

The net liability will be made good by increased contributions over the remaining working life of employees

as assessed by the scheme actuary and the recent changes to the scheme introduced on 1 April 2014

which will increase the amount paid into the scheme by employees and employers. The total contributions

expected to be made by the council to the scheme in 2014/15 for funded benefits is £2.810 million and for

un-funded benefits is £420,000.

The actual return on scheme assets in the year was a gain of £6.330 million (gain of £13.700 million in

2012/13).

Pension Scheme - Movement in the Present Value of the Pension Obligation

Pension Scheme - Movement in the Fair Value of Pension Fund Assets

Pension fund liabilities have been assessed on an actuarial basis using the projected unit method, an

estimate of the pensions that will be payable in future years, dependent on assumptions about mortality

rates, salary levels, etc. The funded scheme liabilities have been assessed by Aon Hewitt Limited, an

independent firm of actuaries, being based on the latest full valuation of the funded scheme as at 31

March 2013. Valuations for unfunded elements were assessed by the actuaries at 31 March 2014.

The movement in the pension obligation for the year was as follows:

Pension Scheme - Impact on the Council's Cash Flow

The movement in the fair value of assets for the year was as follows:

Pension Scheme - Basis for Estimating Assets and Liabilities

*Actual Return on Scheme Assets



31-Mar-13 31-Mar-13 31-Mar-14 31-Mar-14

Funded Un-funded Funded Un-funded

General assumptions (per annum):4.4% 4.1% Rate for discounting scheme liabilities 4.3% 4.2%3.6% 3.5% RPI Inflation Rate 3.4% 3.2%2.7% 2.6% CPI Inflation Rate 2.4% 2.2%4.6% n/a Rate of Increase in Salaries 3.9% n/a 2.7% 2.6% Rate of Increase to pensions in payment 2.4% 2.2%2.7% n/a Rate of Increase to deferred pensions 2.4% n/a

31-Mar-13 Assumed Split of Pension Fund Assets 31-Mar-14 31-Mar-14Quoted Un-quoted

58% Equities 58% 3%26% Bonds 25% 0%8% Property 8% 0%8% Cash and Other Assets 3% 3%

31-Mar-13 Mortality Assumptions (measured in years): 31-Mar-14Future lifetime at 65 for current pensioners

24.0 Male 24.425.0 Female 26.2

Future lifetime at 65 for future pensioners (currently 45)25.7 Male 26.526.9 Female 28.5

Impact on Impact on

Net Projected

Change Liability Service

+/- +/- Costs +/-

Discount rate assumption 0.1% £4.0 m £0.1 m

Rate of Increase in Salaries 0.1% £0.5 m £0.0 m

0.1% £2.5 m £0.1 m

Mortality Assumptions 0.1% £4.1 m £0.1 m

Rate of Increase to pensions in payment and

deferred pensions

The table below shows the sensitivity of the actuarial assumptions and what impact a 0.1% change would

have for each of the assumptions.

The main assumptions used in the actuary's calculations were:

Pension Scheme - Assumptions

As well as the financial assumptions above, actuaries have made the following assumptions based on

recent experience and allowing for expected future mortality improvements:

The main assumptions relating to the split of pension fund assets were:

The basis for the overall expected return is a weighted average of the individual expected returns on each

class of assets.

The assumption for the take up of commutation (converting pension to a lump sum) is based on 70% of

the maximum for 2013/14 (based on 25% for past service and 75% for future service in 2012/13).

Pension Scheme - Sensitivity of Actuarial Assumptions



17. USABLE RESERVES

General

Fund

Balance

Earmarked

Revenue

Reserves

Capital

Receipts

Reserve

Capital

Grants &

Contrib -

utions

Reserve

Total

Usable

Reserves

£'000 £'000 £'000 £'000 £'000

(1,500) (27,086) (85,423) (3,707) (117,716)

5,123 0 0 0 5,123

5,123 0 0 0 5,123

(2,015) 0 0 0 (2,015)

(1,585) 0 0 0 (1,585)

(1,690) 0 0 0 (1,690)

(1,497) 0 0 0 (1,497)

372 0 0 (372) 0

(3,150) 0 0 0 (3,150)

2,431 0 0 0 2,431

0 0 0 441 441

0 0 1,778 0 1,778

(14) 0 (384) 0 (398)

(7,148) 0 1,394 69 (5,685)

(2,025) 0 1,394 69 (562)

2,025 (2,025) 0 0 0

0 (2,025) 1,394 69 (562)

(1,500) (29,111) (84,029) (3,638) (118,278)

Total comprehensive income and expenditure

Net (increase)/decrease before transfers to

earmarked reserves


Other statutory adjustments

Adjustments between accounting basis and

funding basis under regulations:

Total adjustments between accounting basis

and funding basis under regulations (Restated)

Capital receipts applied (financing)

Capital grants and contributions unapplied

The balances and movements on usable reserves are shown below:

Pension costs adjustment (Restated)

Deficit on provision of services (Restated)

Depreciation and amortisation of long term assets

Net Transfers to or from earmarked reserves

Revenue expenditure funded from capital under

statute

Revaluation losses on property, plant and

equipment (charged to services)

Capital grants and contributions applied (financing)

Revaluation of investment property

Capital expenditure charged to the general fund

(financing)

Usable reserves are reserves that the council may use to provide services, subject to the need to maintain

a prudent level of reserves and any statutory limitations (for example the Capital Receipts Reserve can

only be used to fund capital expenditure).





General

Fund

Balance

Earmarked

Revenue

Reserves

Capital

Receipts

Reserve

Capital

Grants &

Contrib -

utions

Reserve

Total

Usable

Reserves

£'000 £'000 £'000 £'000 £'000

(1,500) (29,111) (84,029) (3,638) (118,278)

(3,823) 0 0 0 (3,823)

(3,823) 0 0 0 (3,823)

(2,206) 0 0 0 (2,206)

(7,741) 0 0 0 (7,741)

10,647 0 0 0 10,647

(3,737) 0 0 0 (3,737)

3,737 0 (3,737) 0 0

175 0 0 0 175

386 0 (386) 0 0

(2,530) 0 0 0 (2,530)

295 0 0 (295) 0

(3,570) 0 0 0 (3,570)

2,753 0 0 0 2,753

0 0 0 1,189 1,189

0 0 2,196 0 2,196

(1,741) 0 (2) 0 (1,743)

(3,532) 0 (1,929) 894 (4,567)

(7,355) 0 (1,929) 894 (8,390)

7,355 (7,355) 0 0 0

0 (7,355) (1,929) 894 (8,390)

(1,500) (36,466) (85,958) (2,744) (126,668)

Available Resources

Total adjustments between accounting basis

and funding basis under regulations

The table above shows the reserves that the Code defines as "usable". However, the council has already

decided to invest most of these reserves in order to earn interest income to support the annual revenue

budget rather than make them available to spend. The estimated amount of usable reserves that are

available to spend is £64.610 million as at 31 March 2014. In addition to these available funds the council

also has £7.988 million as at 31 March 2014 of developers' contributions (shown as long term liabilities)

that are also available, resulting in £72.598 million of reserves that are available to fund future spending

plans.




Investment property proceeds (disposals)

Gain on sale of capital investment

Capital grants and contributions unapplied

Revaluation losses on property, plant and

equipment (charged to services)

Net (increase)/decrease before transfers to

earmarked reserves

Revenue expenditure funded from capital under

statute

Net Transfers to or from earmarked reserves

Depreciation and amortisation of long term assets



Surplus on provision of services

Total comprehensive income and expenditure

Adjustments between accounting basis and

funding basis under regulations:

Capital expenditure charged to the general fund

(financing)

Gain from donated asset


Capital grants and contributions applied (financing)

Investment property written out (disposals)

Pension costs adjustment



Usable Reserves - Descriptions and Purpose

To/(From) To/(From)

General General

Fund Balance Fund Balance

2012/13 31-Mar-13 Earmarked Revenue Reserves 2013/14 31-Mar-14

£'000 £'000 £'000 £'000

Reserves for Future Capital Expenditure

408 (11,233) Revenue Reserve for Capital Purposes (General) (540) (11,773)

(1,000) (1,000) Revenue Reserve for Capital Purposes (Green Investment) 0 (1,000)

(2,135) (3,420) Community Infrastructure Reserve 3,420 0

0 0 Strategic Infrastrucutre Reserve (3,125) (3,125)

0 0 Local Infrastructure Fund (LIF) Reserve (3,126) (3,126)

0 (884) Affordable Housing Reserve 250 (634)

161 (11) Basing View Reserve 11 0

Risk Reserves

(500) (1,000) Rent Risk Reserve (358) (1,358)

249 (1,000) Interest Rate Risk Reserve 0 (1,000)

0 (665) Corporate Bonds Reserve 0 (665)

262 (100) Insurance Reserve (295) (395)

(250) (500) Stability and Resilience Reserve (2,533) (3,033)

Reserves for Future Revenue Expenditure

0 0 Operational Asset Maintenance Reserve (550) (550)

0 0 Neighbourhood Planning Reserve (45) (45)

0 0 Economic Development Reserve (43) (43)

0 0 Manydown Reserve (619) (619)

22 (785) Invest to Grow Reserve 0 (785)

0 (350) Invest to Save Reserve 6 (344)

75 (301) Local Plan Inquiry Reserve 179 (122)

360 (1,189) Efficiency and Transformation Reserve 689 (500)

50 (20) Climate Change Reserve 0 (20)

12 (101) Transport Reserve 0 (101)

28 (918) Budget Carry Forwards Reserve (522) (1,440)

Reserves Invested to Earn Interest

233 (5,634) Commuted Sums Reserve (154) (5,788)

(2,025) (29,111) Total Earmarked Revenue Reserves (7,355) (36,466)

General Fund Balance - This represents the council's working balance and is effectively a general

reserve that is available for unforeseen events.

Earmarked Revenue Reserves - These are reserves set aside from the General Fund that are

earmarked to fund specific items in the future. There are four types of earmarked revenue reserves; those

set aside to fund future capital expenditure, risk reserves, those set aside to fund specific future revenue

expenditure and those invested to earn interest to support specific future revenue expenditure.

The movement on each of these reserves was as follows:

Capital Receipts Reserve - This represents the accumulated capital receipts (proceeds from the disposal

of long term assets) that are available to finance any future capital expenditure.

Capital Grants and Contributions Reserve - This represents the accumulated capital grants and

contributions that are available to finance any future capital expenditure.



Revenue Reserve for Capital Purposes (Green Investment) - To provide resources to finance the

council's current and future capital expenditure plans for green investment.

Local Infrastructure Fund (LIF) Reserve - To provide resources for community infrastructure utilising

New Homes Bonus grant.

Revenue Reserve for Capital Purposes (General) - To provide resources to finance the council's current

and future capital priorities expenditure programmes.

Stability and Resilience Reserve - To cover the increased risk and volatility from the impact of the

localisation of business rates and council tax benefits.

Manydown Reserve - To provide resources for the promotion of the Land at Manydown for development.

Budget Carry Forward Reserve - To provide funds for items that were budgeted for in the year but have

not been spent and need to be carried forward until the following year.

Corporate Bonds Reserve - To provide funds to cover the risk of losses in the capital value of corporate

bond investments.

Economic Development Reserve - To provide resources to meet revenue costs associated with

economic development.

Commuted Sums Reserve - To provide funds for the future maintenance of specific areas of land

(adopted by the council) and play areas arising from developer's planning obligations.

Insurance Reserve - To provide funds to cover the risk of future payments to Municipal Mutual Insurance

Company resulting from future claims.

Local Plan Inquiry Reserve - To provide funds for the provision of the Local Plan.

Invest to Save Reserve - To provide one-off pump-priming for the council's revenue efficiency saving

initiatives.

Rent Risk Reserve - To provide funds to cover the risk of not achieving the required amount of rent

income from the council's investment property assets.

The purpose of each of the earmarked reserves held at 31 March 2014 is shown below:

Invest to Grow Reserve - To provide resources to finance the revenue implications of the time delay

between capital spend on the council's invest to grow capital schemes and the eventual receipt of financial

returns.

Strategic Infrastructure Reserve - To provide resources for strategic infrastructure utilising New Homes

Bonus grant.

Interest Risk Reserve - To provide funds to cover the risk of not achieving the required amount of interest

income from the council's investments.

Transport Reserve - To provide support to mobility and transport services for groups most impacted by

the transfer of concessionary fares to Hampshire County Council.

Affordable Housing Reserve - To provide resources for direct grant funding by the council to assist in the

delivery of affordable housing on key sites.

Climate Change Reserve - To provide funds for the council's climate change initiatives.

Efficiency and Transformation Reserve - To provide resources for efficiency initiatives including meeting

redundancy and retirement costs resulting from the efficiency and savings strategy.

Operational Asset Maintenance Reserve - To provide resources to meet revenue costs associated with

the IT, Property and vehicle maintenance programmes that cannot be met from within existing budgets.

Neighbourhood Planning Reserve - To provide resources to meet revenue costs associated with

neighbourhood planning, utilising the government's neighbourhood planning grants.



18. UNUSABLE RESERVES

Pension

Scheme

Reserve

Asset

Revaluation

Reserve

Financial

Instrument

Revaluation

Reserve

Capital

Adjustment

Account

Statutory

Adjustment

Accounts

Total

Unusable

Reserves

£'000 £'000 £'000 £'000 £'000 £'000

77,440 (16,859) (5,998) (300,236) 33 (245,620)

0 (188) 0 0 0 (188)

0 0 (280) 0 0 (280)

2,660 0 0 0 0 2,660

2,660 (188) (280) 0 0 2,192

0 0 0 2,015 0 2,015

0 0 0 1,585 0 1,585

0 0 0 1,690 0 1,690

0 0 0 1,497 0 1,497

3,150 0 0 0 0 3,150

0 0 0 (2,431) 0 (2,431)

0 0 0 (441) 0 (441)

0 0 0 (1,778) 0 (1,778)

0 350 0 32 16 398

3,150 350 0 2,169 16 5,685

5,810 162 (280) 2,169 16 7,877

83,250 (16,697) (6,278) (298,067) 49 (237,743)

Capital grants and contributions


Total adjustments between

accounting basis and funding basis

under regulations

Revenue expenditure funded from

capital under statute



Net decrease/(increase) in 2012/13

Depreciation and amortisation of long

term assets

Revaluation losses on property, plant

and equipment (charged to services)


Unusable reserves are reserves that are not available to the council to provide services because they

generally relate to unrealised gains or losses on assets and liabilities.

The balances and movements on unusable reserves in 2012/13 are shown below:


expenditure

Surplus on revaluation of available for

sale investments

Actuarial loss on pension fund assets

and liabilities (Restated)

Capital expenditure charged to the

general fund (financing)


expenditure (Restated)



regulations:

Pension costs adjustment (Restated)


Surplus on revaluation of long term

assets



Pension

Scheme

Reserve

Asset

Revaluation

Reserve

Financial

Instrument

Revaluation

Reserve

Capital

Adjustment

Account

Statutory

Adjustment

Accounts

Total

Unusable

Reserves

£'000 £'000 £'000 £'000 £'000 £'000

83,250 (16,697) (6,278) (298,067) 49 (237,743)

0 1,597 0 0 0 1,597

0 0 2,697 0 0 2,697

(18,790) 0 0 0 0 (18,790)

(18,790) 1,597 2,697 0 0 (14,496)

0 0 0 2,206 0 2,206

0 0 0 7,741 0 7,741

0 0 0 (10,647) 0 (10,647)

0 0 0 3,737 0 3,737

0 0 0 (175) 0 (175)

0 0 0 2,530 0 2,530

3,570 0 0 0 0 3,570

0 0 0 (2,753) 0 (2,753)

0 0 0 (1,189) 0 (1,189)

0 0 0 (2,196) 0 (2,196)

0 362 0 (360) 1,741 1,743

3,570 362 0 (1,106) 1,741 4,567

(15,220) 1,959 2,697 (1,106) 1,741 (9,929)

68,030 (14,738) (3,581) (299,173) 1,790 (247,672)

Depreciation and amortisation of long

term assets

Deficit on revaluation of available for

sale investments



Deficit on revaluation of long term

assets

Actuarial gain on pension fund assets

and liabilities

Donated asset adjustment


Net decrease/(increase) in 2013/14

Revenue expenditure funded from

capital under statute

Pension costs adjustment

Capital expenditure charged to the

general fund (financing)



Revaluation losses on property, plant

and equipment (charged to services)

Capital grants and contributions

applied (financing)

Total adjustments between

accounting basis and funding basis

under regulations

Investment property written out

(disposals)

The balances and movements on unusable reserves in 2013/14 are shown below:


expenditure



regulations:


expenditure



Unusable Reserves - Descriptions and Purpose

Pension Scheme Reserve

Asset Revaluation Reserve

Financial Instruments Revaluation Reserve

Capital Adjustment Account

Statutory Adjustment Accounts

w Collection Fund Adjustment Account

w Paid Absences Adjustment Account

19. RELATED PARTY TRANSACTIONS

These consist of two adjustment accounts:

The purpose of this account is to record capital amounts used to finance capital expenditure, the write

down of assets on disposal and adjustments made to the Comprehensive Income and Expenditure

Statement relating to capital items.

The purpose of this reserve is to reflect movements in the council's Property, Plant and Equipment assets

resulting from revaluations. The reserve contains only revaluation gains accumulated since 1 April 2007,

the date the reserve was created. Accumulated gains arising before that date are consolidated in the

Capital Adjustment Account.

The debit balance on the Pension Scheme Reserve shows a substantial shortfall in the benefits earned by

past and current employees and the resources the council 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.

This represents the council's share of Council Tax and Business Rates within the Collection

Fund Balance.

The council is required to disclose material transactions with related parties. Related parties are bodies or

individuals that have the potential to control or influence the council or to be controlled or influenced by the

council.

The purpose of this reserve is to reflect movements in the market value of the council's available-for-sale

financial instruments (i.e. investments that have a quoted market price).

Members of the council have direct control over the council's financial and operating policies. During

2013/14 and 2012/13, other than the Members' Allowances shown in Note 22, there were no related party

transactions between the council and Council Members. Any declarations of interest are recorded in the

Register of Members' Interests which is open to public inspection.

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, provides a significant amount of its

funding in the form of grants and it prescribes the terms of many of the transactions the council has with

other parties (e.g. housing benefits). Details of funding transactions with UK government departments in

the form of grants and contributions are set out in Notes 14 and 15.

This represents the reversal of the accrual for paid absences (annual leave not taken at the

year end). The accrual is required under the Code but under regulations is not allowed to

count as expenditure against the General Fund and subsequent level of council tax.

The Code requires the net liability of the council's share in its employees' pension fund to be recognised in

the financial statements and this gives rise to a Pension Scheme Reserve.



20. AGENCY EXPENDITURE

21. EXTERNAL AUDIT COSTS

Restated Estimated

2012/13 2013/14

£'000 £'000

PricewaterhouseCoopers LLP

73 External Audit Services 73

25 Certification of Grant Claims and Returns 22

13 Other Services 0

Audit Commission

(7) External Audit Services Rebate (10)

2 Other Services 0

106 Total External Audit Costs 85

22. COUNCIL MEMBERS' ALLOWANCES

Chief Officers have the ability to influence the council. During 2012/13 and 2011/12, other than the Senior

Employees' Remuneration shown in Note 23, there were no related party transactions between the

council and Chief Officers.

The council provided material financial assistance to a number of organisations (mainly arts and leisure

related bodies) although it does not exercise any form of control over those organisations. It did however

have a controlling influence over a subsidiary partnership called "3en" up until the end of April 2013 (see

Note 1).

The council incurred the following fees relating to the appointed external auditors:

The total sum paid directly to Council Members for allowances and travelling in 2013/14 was £572,350

(£569,717 in 2012/13).

The council holds funds on behalf of parish councils in the form of temporary loans but does not have a

controlling influence over them.

The council also undertakes work on an agency basis for Hart District Council. The work includes legal

services, grounds maintenance and street cleansing. The total reimburseable expenditure for 2013/14

was £1,209,900 (£1,151,000 in 2012/13).

A detailed breakdown of allowances paid to individual Councillors can be found on the council's website

www.basingstoke.gov.uk.

The council undertakes work on an agency basis for Hampshire County Council. The work includes grass

cutting, traffic management and highways planning. The total reimburseable expenditure for 2013/14 was

£684,000 (£645,000 in 2012/13).



23. EMPLOYEES' REMUNERATION

Continuing Employees Total Continuing Employees Total

Employees Left in Year Employees Employees Left in Year Employees

2012/13 2012/13 2012/13 Remuneration Band 2013/14 2013/14 2013/14

13 0 13 £50,001 - £55,000 13 0 13

7 0 7 £55,001 - £60,000 11 0 11

7 1 8 £60,001 - £65,000 3 1 4

2 1 3 £65,001 - £70,000 3 0 3

3 0 3 £70,001 - £75,000 5 0 5

2 1 3 £75,001 - £80,000 0 0 0

0 0 0 £80,001 - £85,000 1 0 1

0 0 0 £85,001 - £90,000 0 0 0

0 1 1 £90,001 - £95,000 0 0 0

0 0 0 £95,001 - £100,000 1 0 1

1 1 2 £100,001 - £105,000 0 0 0

0 1 1 £105,001 - £110,000 0 0 0

0 0 0 £110,001 - £115,000 1 0 1

0 0 0 £115,001 - £120,000 0 0 0

0 0 0 £120,001 - £125,000 0 0 0

1 0 1 £125,001 - £130,000 0 0 0

0 0 0 £130,001 - £135,000 1 0 1

0 0 0 £135,001 - £140,000 0 0 0

0 0 0 £140,001 - £145,000 0 0 0

0 0 0 £145,001 - £150,000 0 0 0

36 6 42 39 1 40

24. REDUNDANCY AND EXIT PACKAGES

Number of Number of Total Cost Number of Number of Total Cost

Compulsory Other £'000 Compulsory Other £'000

2012/13 2012/13 2012/13 Total Cost Band 2013/14 2013/14 2013/14

4 5 101 0 - £40,000 1 3 49

3 2 336 £40,001 - £150,000 0 0 0

7 7 437 1 3 49

In addition to the amounts payable to employees, the council may incur additional pension costs payable

to the pension fund in lump sums for early retirements as a result of redundancy. There were no

additional payments made in 2013/14 (£138,800 in 2012/13).

The Code requires information relating to redundancies and exit packages to be disclosed. This note gives

the number of redundancies and packages. For this purpose, exit packages include compulsory and

voluntary redundancy costs, pension contributions in respect of added years, ex-gratia payments and

other departure costs.

The council terminated the contracts of 4 employees in 2013/14 incurring liabilities of £48,900 (£297,900 in

2012/13 for 14 employees) payable to the employees.

Information relating to employees' remuneration is required to be published in accordance with the

Accounts and Audit (England) Regulations 2011. This note gives the number of employees whose

remuneration exceeded £50,000. For this purpose remuneration includes gross pay, all taxable benefits

and termination benefits but excludes employer pension contributions.



25. SENIOR EMPLOYEES' REMUNERATION

Salary & Benefits Sub Pension

Allowances In Kind Total Payments Total

£ £ £ £ £

2013/14

Chief Executive 126,069 4,263 130,332 16,140 146,472

Corporate Director (notes a and b.) 110,446 130 110,576 13,742 124,317

Corporate Director (notes c and d.) 93,785 6,176 99,961 12,209 112,170

Head of Resources (note e.) 75,179 5,408 80,587 9,818 90,405

Head of Residents Services 71,304 5,945 77,249 8,792 86,041

73,757 130 73,887 9,099 82,986

61,143 74 61,217 3,951 65,169

Head of Human Resources 70,899 4,864 75,763 7,898 83,660

Head of Commissioning 70,836 130 70,966 8,721 79,687

Strategic Project Manager 74,539 130 74,669 9,294 83,963

Strategic Project Manager (Manydown) 69,615 130 69,745 8,649 78,394

Policy Manager (Economic & Community Strategy) 59,694 130 59,824 7,357 67,181

2012/13

Chief Executive 120,486 7,642 128,128 15,801 143,929

Corporate Director (note a. and h.) 100,801 570 101,371 12,481 113,852

Corporate Director (notes i, j and k.) 21,453 1,005 22,458 2,813 25,271

Corporate Director (notes l and m.) 51,120 3,716 54,836 6,707 61,543

Head of Resources (note e.) 74,819 4,969 79,788 9,818 89,606

Head of Residents Services 67,864 7,059 74,923 9,626 84,549

70,564 1,602 72,166 8,907 81,073

Head of Commissioning (note n.) 25,022 43 25,065 3,115 28,180

Head of Commissioning (note o.) 65,099 325 65,424 8,075 73,499

Head of Governance & Monitoring Officer (note g.) 76,439 130 76,569 9,431 86,000

Head of Human Resources 65,041 4,688 69,729 8,537 78,266

Strategic Project Manager 74,559 130 74,689 9,294 83,983

Strategic Project Manager (Manydown) (note p.) 7,163 15 7,178 888 8,066

Policy Manager (Economic & Community Strategy) 59,229 130 59,359 7,357 66,716

Notes:

p. Started on 22/02/13

a. Includes allowance for being deputy chief executive of £6,543 in 2013/14 (£6,543 in 2012/13)

k. Left on 27/05/12

b. Includes allowance for being the returning officer of £12,453 in 2013/14

h. Includes allowance for being the returning officer of £2,876 in 2012/13

g. Includes allowance for being the monitoring officer of £2,333 in 2013/14 (£4,000 in 2012/13)

e. Includes allowance for being the chief finance officer of £4,000 in 2013/14 (£4,000 in 2012/13)

n. Left on 05/08/12

Head of Community Services

l. Started on 20/08/12

j. Includes allowance for being the returning officer of £7,059 in 2012/13

o. Started on 03/02/13 and includes amounts in previous capacity as Public Law Manager and Interim Head of

Commissioning.

Information relating to individual senior employees' remuneration is required to be published under the

Accounts and Audit (England) Regulations 2011. This note gives the details of salary, allowances,

benefits in kind and pension payments for senior employees (as defined in the regulations) whose salary

exceeded £50,000.

Head of Community Services

f. Left on 31/10/13

i. Includes allowance for being deputy chief executive of £1,020 in 2012/13

m. Includes allowance for being deputy chief executive of £519 in 2012/13.

c. Includes allowance for being deputy chief executive of £6,543 in 2013/14

d. Includes allowance for being the monitoring officer of £750 in 2013/14

Head of Governance & Monitoring Officer (notes f

and g.)



26. SIGNIFICANT ACCOUNTING POLICIES

25.1 Basis of Preparation

The Service Reporting Code of Practice 2013/14 (SeRCOP)

Fair values based on the following:

Pensions Assets Fair values based on the following:

quoted securities – current bid price

unquoted securities – professional estimate

unitised securities - current bid price

property - market value

assets quoted on a market – the market price

assets without an active market - valuation techniques (e.g.recent

market transactions or similar transactions or discounted cash flow)

Financial Instruments - Available

for Sale Assets

The Statement of Accounts is adjusted to reflect events after 31 March 2014 and before the date the

Statement was authorised for issue only where the events provide evidence of conditions that existed at

31 March 2014.

All accounting policies are applied consistently and in applying the accounting policies the council has to

make judgements and these are set out in a separate note to the accounts.

The Accounts and Audit (England) Regulations 2011 require the council to prepare a Statement of

Accounts for each financial year in accordance with proper accounting practices. For 2013/14, these

proper accounting practices principally comprise:

The Statement of Accounts is prepared using the going concern and accruals bases. The historical cost

convention has been applied, modified by the fair valuation of the following material categories of non-

current assets and financial instruments:

Class of Assets Fair Value - Valuation Basis

Property, Plant and Equipment:

Specialised Buildings

Property, Plant and Equipment:

Other Land and Buildings

Depreciated replacement cost (DRC)

Existing use value (EUV)

The Code of Practice on Local Authority Accounting in the United Kingdom 2013/14 (the

Code)

The Local Authorities (Capital Finance and Accounting)(England) Regulations 2003 (SI 2003

No 3146, as amended) (the 2003 Regs)

Fair value based on the amount for which the property could be

exchanged between knowledgeable parties at arm’s length

Investment Properties



26.2 Adjustments between Accounting Basis and Funding Basis

Expense

Holiday Pay Projected cost of untaken

leave entitlements at 31

March.

No charge

Collection Fund Adjustment Account

Collection Fund Adjustment Account

Paid Absences Adjustment Account

Council Tax Accrued income from bills Demand on the Collection

Fund/precept for year

plus recovery of

estimated deficit/share of

estimated surplus for

previous year

Business Rates Accrued income from bills

in year

Budgeted income

receivable from the

Collection Fund for the

year

Long Term Asset

Disposals

Gain or loss based on

proceeds less carrying

amount of asset

No charge or credit Capital Adjustment Account

Pensions Costs Movements in pensions

assets and liabilities

Employer’s pensions

contributions payable and

direct payments made by

the Council to pensioners

in year

Pension Reserve

Capital Grants and

Contributions

Grants that became

unconditional in year or

were received in year

without conditions

No credit Capital Grants Unapplied Reserve

(amounts unapplied at year end) Capital

Adjustment Account (other amounts)

Long Term Asset

Disposals

Gain or loss based on

sale proceeds less

carrying amount of asset

(net of costs of disposal)

No charge or credit Capital Adjustment Account (carrying

amount) Capital Receipts Reserve (sale

proceeds and costs of disposal)

Investment Properties Movements in fair value Revenue provision to

cover historical cost in

accordance with the 2003

Regs


Revenue Expenditure

Funded from Capital

under Statute

Expenditure incurred in

year

Revenue provision to



Regs


Unusable reserves are used to manage the differences between the accounting and statutory funding

bases. The material adjustments are:

Proper Accounting

Basis in CIES

Statutory Funding Basis

in MiRS

Unusable Reserve (used for

differences)

Property, Plant and

Equipment

Depreciation and

revaluation/impairment

losses

Revenue provision to



Regs


The amounts shown in Comprehensive Income and Expenditure Statement (CIES) are on the basis of

proper accounting practice. However, the resources available to the council in any financial year and the

expenses that are charged against those resources are specified by statute (the 2003 Regs). Where the

statutory provisions differ from the accounting basis used in the CIES, adjustments to the accounting

treatment are made in the Movement in Reserves Statement (MiRS) so that usable reserves reflect the

statutory funding available at the year-end.



26.3 Financial Instruments

Financial Liabilities (Borrowing and deferred payment terms Creditors)

Financial Assets (Investments and deferred payment terms Debtors)

Financial assets are classified into two types:

Loans and Receivables (excluding debtors)

Available-for-Sale Financial Assets

Financial instruments are recognised on the Balance Sheet when the council becomes a party to their

contractual provisions and are initially measured at fair value.

The council’s financial liabilities consist of borrowing in the form of parish loans (where parishes have

deposited cash balances with the council and the council pays them interest on the loans) and trade

creditors if the council has been given deferred payment terms.

Loans and receivables – these are investment assets that have fixed or determinable

payments but are not quoted in an active market (e.g. fixed deposits) and trade debtors if they

have been given deferred payment terms.

Available-for-sale financial assets – these are investment assets that have a quoted market

price (e.g. gilts) and/or do not have fixed or determinable payments (e.g. shares).

Loans and receivables are carried at cost in the Balance Sheet representing the outstanding principal

receivable and the interest receivable is credited to the CIES.

Any gains and losses that arise on sale or maturity of loans and receivables are credited or charged to the

CIES as Interest and Investment Income.

Available-for-sale assets are initially measured at fair value (estimated market value) which is deemed to

be the purchase price. Where the asset has fixed or determinable payments, annual credits to the CIES

for interest receivable are based on the amortised cost of the asset, multiplied by the effective rate of

interest for the instrument.

Some investments can be purchased above or below face value. This would lead to paying premiums, or

receiving discounts, on the face value of these investments in return for being paid a higher or lower

interest rate over the life of the investment. Premiums or discounts are amortised to the CIES over the life

of the investment. This has the effect of recording the interest income using the effective interest rate.

Available-for-sale assets are subsequently carried in the Balance Sheet at fair value (estimated market

value). Values are based on the quoted market prices. Any changes in fair value (market price) are

balanced by an entry in the Financial Instruments Revaluation Reserve and the gain/loss is recognised as

Other Comprehensive Income and Expenditure. Any gains or losses that arise on sale or maturity are

credited or charged to the Interest and Investment Income line within the CIES.

The historic purchase of some investments have been capitalised and financed in accordance with local

authority investment regulations. This means that any gains or losses relating to capitalised investments

that have been charged to the CIES are not allowed to be charged to the General Fund and are therefore

reversed out of the General Fund to the Capital Adjustment Account in the MiRS.

The council’s policy is to continue to show long term investments that are due to mature within one year as

long term investments until maturity, at which point they become cash equivalents.



26.4 Government Grants and Contributions

26.5 Investment Properties

26.6 Leases

26.7 Overheads and Support Services

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.

Where the council 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

CIES. Credits are made on a straight-line basis over the life of the lease, even if this does not match the

pattern of payments.

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 SerCOP. The total absorption costing principle is used – the

full cost of overheads and support services is shared between users in proportion to the benefits received,

with the exception of:

Corporate and Democratic Core – costs relating to the council’s status as a multifunctional,

democratic organisation.

Non Distributed Costs – the residual cost of pensions for past employees and the cost of

discretionary benefits awarded to employees retiring early.

Investment properties are those that are used solely to earn rentals and/or for capital appreciation.

Investment properties are measured initially at cost and subsequently at fair value. Properties are not

depreciated, with gains and losses on revaluation being posted to the Financing and Investment Income

and Expenditure line in the CIES. The line is also credited/debited with gains/losses on the disposal of

properties, measured as the difference between the carrying amount and sale proceeds.

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.

Leases of land are normally classified as operating leases, however extremely long leases of land (say

over 250 years) could be treated as finance leases.

Whether paid on account, by instalments or in arrears, government grants and third party contributions

and donations are recognised as due to the council when there is reasonable assurance that the council

will comply with any conditions attached to the payments, and the grants or contributions are expected to

be received.

Amounts recognised as due to the council are not credited to the CIES until the council has satisfied any

conditions attached to the grant or contribution that would require repayment if not met.

The grant or contribution is credited to the relevant service line (ring-fenced/service specific revenue

grants and contributions) or Taxation and Non-specific Grant Income and Expenditure (non-ring-fenced

revenue grants and all capital grants) in the CIES.



26.8 Post-Employment Benefits

The Local Government Pension Scheme is accounted for as a defined benefits scheme:

The change in the net pension liability is analysed into the following components:

Service cost comprising:

Re-measurements comprising:

26.9 Property, Plant and Equipment (PPE)

The return on plan assets – excluding amounts included in net interest on the net defined

benefit liability (asset) – charged to the Pensions Reserve as Other Comprehensive Income

and Expenditure within the CIES

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 as Other

Comprehensive Income and Expenditure within the CIES

Contributions paid to the Hampshire County Council Pension Fund – accounted for as

part of the cost of services within the CIES

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 council 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 a revenue expense when it is incurred.

Measurement: Assets are initially measured at cost and include the purchase price and any costs

attributable to bringing the asset to the location and condition necessary for it to be capable of operating in

the manner intended.

The liabilities of the Hampshire County Council Pension Fund attributable to the council 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

and projections of earnings for current employees).

Liabilities are discounted to their value at current prices, using a calculated discount rate

based on a series of calculations for high quality corporate bonds over a range of periods.

The assets of the pension fund attributable to the council are included in the Balance Sheet at

their fair value (see 26.1).

Current service cost – allocated in the CIES to the services for which the employees worked

Past service cost – debited to the Surplus or Deficit on the Provision of Services in the CIES

as part of Non Distributed Costs

Net interest on the net defined benefit liability – charged to the Financing and Investment

Income and Expenditure line of the CIES

Most employees of the council are members of the Local Government Pension Scheme, administered by

Hampshire County Council.



Where decreases in value are identified, they are accounted for by:

26.10 Reserves

26.11 VAT

Disposals: When an asset is disposed of or decommissioned, the carrying amount of the asset in the

Balance Sheet is written off to the Other Operating Income and Expenditure line in the CIES against any

receipts arising from the disposal as a gain or loss on disposal.

The council sets aside specific amounts as reserves for future policy purposes or for risks to the revenue

budget. Reserves are created by appropriating amounts out of the General Fund Balance in the MiRS

When expenditure to be financed from a reserve is incurred, it is charged to the appropriate heading within

the CIES in that year and is included in the Surplus or Deficit on the CIES. The reserve is then

appropriated back into the General Fund Balance in the MiRS so that there is no net charge against

council tax for the expenditure.

Certain reserves and accounts are kept to manage the accounting processes for PPE assets, investments

and retirement benefits and do not represent usable resources for the council – see 26.2 for unusable

reserves.

Income and expenditure excludes any amounts related to VAT, as all VAT collected is payable to HM

Revenue and Customs, and all VAT paid is recoverable from it.

Certain categories of Property, Plant and Equipment are measured subsequently at fair value – see 26.1

for details. Assets included in the Balance Sheet at fair value are re-valued 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. Increases in valuations are matched by credits to the Revaluation Reserve to recognise

unrealised gains.

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 CIES.

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.

Impairments: Assets are assessed at each year-end as to whether there is any indication that items may

be impaired. Where indications exist and any possible differences are estimated to 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 in the same way as revaluation losses.

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 Community Assets) and assets that are not yet

available for use (i.e. assets under construction).



26.12 Provisions

Provisions are charged as an expense to the appropriate service line in the CIES when:

Signed:___________________________________________ Date: 19 June 2014

Provisions are charged as the best estimate at the balance sheet date of the expenditure required to settle

the obligation, taking into account relevant risks and uncertainties.

The council has a present obligation (i.e. an event has taken place that gives the council a

legal or constructive obligation), and

It is probable that an outflow of resources will be required to settle the obligation, and

A reliable estimate can be made of the amount of the obligation.

27. NEW ACCOUNTING STANDARDS YET TO BE ADOPTED

28. DATES THE ACCOUNTS CERTIFIED AND AUTHORISED FOR ISSUE

The Statement of Accounts have been prepared as at 31 March 2014 and were certified and authorised

for issue on 19 June 2014 by the Chief Finance Officer (Head of Resources).

There are no new accounting standards yet to be adopted that would have a material impact on the

financial statements.

Kevin Jaquest CPFA - Head of Resources


COLLECTION FUND


2012/13 2012/13 2013/14 2013/14

Council Business 2012/13 Council Business 2013/14

Tax Rates Total Tax Rates Total

£'000 £'000 £'000 £'000 £'000 £'000

INCOME

(82,722) (69,378) (152,100) Amounts Receivable (84,221) (71,044) (155,265)

Transfers from General Fund

(8,005) 0 (8,005) Council Tax Benefits 0 0 0

(90,727) (69,378) (160,105) TOTAL INCOME (84,221) (71,044) (155,265)

EXPENDITURE

Precepts and Shares

0 69,166 69,166 Central Government 0 35,765 35,765

67,536 0 67,536 Hampshire County Council 62,535 6,438 68,973

7,876 0 7,876 General Fund (BDBC) 7,361 28,612 35,973

3,994 0 3,994 Fire and Rescue Authority 3,698 715 4,413

9,517 0 9,517 Police Authority 9,113 0 9,113

Distribution of

Previous Year Surplus

0 0 0 Central Government 0 0 0

1,501 0 1,501 Hampshire County Council 429 0 429

175 0 175 General Fund (BDBC) 50 0 50

89 0 89 Fire and Rescue Authority 25 0 25

211 0 211 Police Authority 61 0 61

Charges to Collection Fund

0 6 6 Interest Paid on Overpayments 0 16 16

0 206 206 Costs of Collection 0 206 206

0 0 0 Renewable Energy Disregards 0 46 46

129 0 129 Allowance for Impairment 245 637 882

0 0 0 Appeals provision 0 3,100 3,100

91,028 69,378 160,406 TOTAL EXPENDITURE 83,517 75,535 159,052

301 0 301 MOVEMENT IN FUND BALANCE (704) 4,491 3,787

(2,488) 0 (2,488) OPENING FUND BALANCE (2,187) 0 (2,187)

(2,187) 0 (2,187) CLOSING FUND BALANCE (2,891) 4,491 1,600

The council is required to maintain a separate Collection Fund Account which is used to record the

collection and distribution of council tax and business rates on behalf of the Borough, County, Police and

Fire Authorities, Parishes and Central Government.


NOTES TO THE COLLECTION FUND

1. Calculation of the Council Tax Base

Discounted Band D Discounted Band D

Equivalent Equivalent Equivalent Equivalent

Ratio to Properties Properties Properties Properties

Band Band D 2012/13 2012/13 2013/14 2013/14

*A 5/9 6.00 3.3 4.75 2.6

A 6/9 1,768.60 1,179.1 1,826.13 1,217.4

B 7/9 9,553.00 7,430.1 9,693.50 7,539.4

C 8/9 22,476.30 19,978.9 22,819.50 20,284.0

D 1 12,020.55 12,020.6 12,223.25 12,223.3

E 11/9 9,652.25 11,797.2 9,729.50 11,891.6

F 13/9 5,608.20 8,100.7 5,697.00 8,229.0

G 15/9 2,922.30 4,870.5 2,979.13 4,965.2

H 18/9 344.25 688.5 371.38 742.8

64,351.45 66,068.9 65,344.14 67,095.3

330.1 373.9

0.0 (5,986.9)

(1,328.0) (1,229.6)

65,071.0 60,252.7

*A - Entitled to disabled relief reduction

2. Non-Domestic Rateable Value

3. Distribution of the Collection Fund Balance

2012/13 2013/14 2013/14

Council Council Business 2013/14

Tax Tax Rates Total

£'000 £'000 £'000 £'000

(194) Borough Share - Collection Fund Adjustment Account (257) 1,796 1,539

(1,993) Preceptors' Share - Included in Debtors and Creditors (2,634) 2,695 61

(2,187) Closing Fund Balance (2,891) 4,491 1,600

The distribution of the Collection Fund Balance and where it is shown in the accounts is as follows:

Allowance for doubtful debts (2%)

Council Tax Base ( Band D

Growth in tax base

The Council Tax Base was calculated as follows:

** Council Tax Support is a new scheme for 2013/14 that replaces the

previous Council Tax Benefits credited directly to the collection fund.

For 2013/14 the Uniform Business Rate was 47.1p (45.8p in 2012/13) and the total non-domestic rateable

value at 31 March 2014 was £177.4 million (£176.8 million as at 31 March 2013). The total potential

business rates collectable in 2013/14 were £80.96 million (£78.6 million in 2012/13) but this was reduced

to £71 million in 2013/14 (£69.4 million in 2012/13) due to adjustments, including reassessments of

rateable values and business rate reliefs.

Allowance for council tax support**


comprehensive income and expenditure statement and... · the comprehensive income and expenditure...

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