south northamptonshire council statement of...

SOUTH NORTHAMPTONSHIRE COUNCIL

STATEMENT OF ACCOUNTS

2011-12

AUDITED

20/09/12

Yellow highlight to show Audit Adjustments

South Northamptonshire Council Statement of Accounts 2011-12

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CONTENTS PAGE

INTRODUCTION .................................................................................................................................. 4

EXPLANATORY FOREWORD .............................................................................................................. 5

MOVEMENT IN RESERVES STATEMENT ............................................................................................. 16

COMPREHENSIVE INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 MARCH

2012 .................................................................................................................................................. 17

BALANCE SHEET AS AT 31 MARCH 2012......................................................................................... 18

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012 ................................................. 19

NOTES TO THE FINANCIAL STATEMENTS .......................................................................................... 20

1. IMPACT OF NEW STANDARDS ..................................................................................................... 20

2. ACCOUNTING STANDARDS THAT HAVE BEEN ISSUED BUT HAVE NOT YET BEEN ADOPTED ..... 20

3. CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES................................................ 21

4. ASSUMPTIONS MADE ABOUT THE FUTURE AND OTHER MAJOR SOURCES OF ESTIMATION

UNCERTAINTY................................................................................................................................... 21

5. MATERIAL ITEMS OF INCOME AND EXPENSE .............................................................................. 23

6. EVENTS AFTER THE BALANCE SHEET DATE ................................................................................... 23

7. ADJUSTMENTS BETWEEN ACCOUNTING BASIS AND FUNDING BASIS UNDER REGULATIONS... 24

8 TRANSFERS TO AND FROM EARMARKED RESERVES .................................................................... 26

9 PROPERTY, PLANT AND EQUIPMENT ............................................................................................ 28

10 HERITAGE ASSETS ........................................................................................................................ 30

11 INTANGIBLE ASSETS ..................................................................................................................... 31

12 DEBTORS ...................................................................................................................................... 32

13 CASH AND CASH EQUIVALENTS ................................................................................................ 32

14 ASSETS HELD FOR SALE ............................................................................................................... 33

15 CREDITORS .................................................................................................................................. 33

16 PROVISIONS ................................................................................................................................ 34

17 UNUSABLE RESERVES ................................................................................................................... 35

18 NOTES TO THE CASH FLOW STATEMENT ..................................................................................... 39

19 AMOUNT REPORTED FOR RESOURCE ALLOCATION DECISIONS.............................................. 41

20 TRADING OPERATIONS – BUILDING CONTROL.......................................................................... 43

21 JOINT ENTITY – WEST NORTHAMPTONSHIRE JOINT PLANNING UNIT ......................................... 44

22 MEMBERS’ ALLOWANCES .......................................................................................................... 44

23 OFFICERS’ REMUNERATION ........................................................................................................ 45

24 EXIT PACKAGES........................................................................................................................... 47

25 EXTERNAL AUDIT COSTS.............................................................................................................. 48

26 GOVERNMENT GRANT AND GRANT INCOME .......................................................................... 48

27 RELATED PARTIES ......................................................................................................................... 49

28 CAPITAL EXPENDITURE AND CAPITAL FINANCING ................................................................... 51

29 LEASES ......................................................................................................................................... 52


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30 IMPAIRMENT LOSSES ................................................................................................................... 52

31 IAS 19 PENSION FUND NOTES - PARTICIPATION IN PENSION SCHEMES.................................... 52

32 CONTINGENT ASSETS .................................................................................................................. 60

33 CONTINGENT LIABILITIES ............................................................................................................. 60

34 FINANCIAL INSTRUMENTS............................................................................................................ 61

35 NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS - MARKET RISK....... 66

36 HERITAGE ASSETS – SUMMARY OF TRANSACTIONS................................................................... 67

37 HERITAGE ASSETS ........................................................................................................................ 69

ACCOUNTING POLICIES.................................................................................................................. 70

COLLECTION FUND.......................................................................................................................... 86

COLLECTION FUND NOTES .............................................................................................................. 87

GLOSSARY OF TERMS USED IN FINANCIAL STATEMENTS ................................................................ 89


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INTRODUCTION

Welcome to South Northamptonshire District Council’s Statement of Accounts for the

year ending 31st March 2012. The Statement of Accounts is a statutory document

providing information on the cost of services provided by South Northamptonshire District

Council to the council tax payer and detailing how those services were financed. In

addition, it provides information within the Balance Sheet on the value of our assets (what

we own), what we are owed and the value of our liabilities (what we owe). The

terminology used can often be confusing so I hope you find the glossary at the end of this

document a useful reference.

A summary of the financial position is available in the Summary Statement of Accounts

and you can find a copy on the finance pages of our website.

Should you have any comments or wish to discuss this statement in further detail then

please contact the finance team by email [email protected]

or contact me direct on

0300 003 0106.

I hope you find the financial statements of interest and I look forward to hearing your

views.

Karen Curtin

Head of Finance and Procurement

South Northamptonshire District Council

Springfields, Towcester,

Northamptonshire NN12 6AE


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EXPLANATORY FOREWORD

The purpose of this Statement of Accounts is to present the financial results of the

Council’s activities for the year ended 31 March 2012, and to summarise the overall

financial position of the Council as at this date.

1. The Accounting Statements

The Council is required by law to complete its accounts in line with the Code of Practice

on Local Authority Accounting (“the Code”). In theory, the Code ensures that all local

authorities produce their accounts on a consistent basis, enabling comparisons.

The Code represents an attempt by accounting regulators to reconcile accounting

standards in general use within the UK with the statutory local government finance

framework. This is not an easy marriage: there are material differences between what

accounting rules state should be included in the accounts and what legislation states

should be financed by a local authority and local council taxpayers.

Accordingly there are many entries, particularly within the Comprehensive Income &

Expenditure Statements, which are included as notional items for presentational

purposes, so that accounting standards are fulfilled, and then “reversed out” so that the

bottom line financial performance is consistent with statutory requirements.

The Code also requires expenditure on services to be categorised under standard

headings that don’t always align to the actual organisation and structure of the Council.

The above can lead to a confusing picture if the core financial statements are taken at

face value. Unfortunately, the Council has no discretion to depart from the prescribed

format and content of those statements.

The Annual Governance Statement is no longer an integral part of the financial

statements but is prepared as a standalone report and is available on the Council’s

website.

This Explanatory Foreword sets out the key issues and is intended to give the reader an

insight into the Council’s financial performance during 2011-12 in a way that the financial

statements themselves may not otherwise do.

This foreword has been written to provide a guide to the significant matters reported in

these accounts. It also indicates the type of expenditure incurred and the ways in which

money has been raised to pay for this.

2 The Key Messages

The period presented a number of challenges to the Council.

a) The financial challenge of maintaining services alongside the successful delivery of

a multi million approved capital programme, within agreed budget parameters in

a turbulent economic climate, demanded the highest levels of resource

management.


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b) The operational challenge of preparing financial statements whilst undergoing a

move to share senior management with Cherwell District Council and also to join

services, where practical, with Cherwell District Council.

2a) Financial Challenge

The Council has top quality budgetary control and as a result has delivered during the

year against revenue budget within acceptable tolerances. These are based on

percentage variance of revenue budget against profile (+3%/-3%). The capital

programme has been continuously reviewed in detail throughout the year and capital

schemes that have not yet started have either been deleted as they are no longer

priorities, reduced in value due to procurement savings or specification changes, or

slipped forward into future periods.

We started the year with £26.4 million of net assets (restated 10/11) and as at 31st March

2012 the net asset figure had decreased by £7.8 million primarily as a result of the impact

of the increase in pension fund deficit but also due to downward valuations of assets that

had to be recategorised under a newly applied IFRS (International Financial Reporting

Standard) on Heritage Assets. At the end of the year we had net assets of £18.6 million,

£6.9 million of earmarked reserves and £3.3 million of general fund reserves. Our

approved budget did not draw on General Fund balances, a reserve maintained to

provide a financial cushion should something unexpected happen. The final accounts

show that £0.1m was transferred to this balance during 2011-12.

We invested £2.6 million of capital funds on a variety of capital schemes during the year,

to continue providing first-class public facilities and investment in the infrastructure of the

district. Highlights include the continued support to home improvement grants directly

helping older and vulnerable people to live independently in their own homes and the

Moat Lane Project, the Towcester Town Centre regeneration project.

We have continued to reduce our costs and have kept council tax frozen at 2009-10

rates. The 2012-13 budget has reduced by a further £0.4 million, bringing our total

reduction in net expenditure in three years to £1.3m (12% of our 2009-10 budget).

2b) Operational Challenge

In 2011-12 South Northamptonshire Council agreed with Cherwell District Council to share

a Joint Senior Management Team working under one shared Chief Executive, this was set

up during 2011-12 and will save in the region of £1 million each year, shared between the

two councils.

Looking forward to 2012-13 and beyond, it is clear that the pressure to reduce spending

by Councils and other public sector organisations will continue. In response, we are in the

process of putting joint working arrangements in place for some back office functions

and front line services. Further joint working arrangements will be explored across all

service areas during 2012-13.

3 Revenue Expenditure

The Comprehensive Income and Expenditure Statement is prepared in accordance with

the Service Reporting Code of Practice (SeRCOP) issued by the Chartered Institute of

Public Finance and Accountancy (CIPFA) and as a result we have to take our services

and categorise accordingly.


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During 2011-12 the General Fund Revenue account has been subject to regular and

rigorous monitoring as part of the quarterly monitoring to members.

The 2011-12 revenue budget identified underspends in services at quarter 3 of £468k, this

subsequently moved to a Service outturn underspend position of £82k after a transfer of

£770k to ear marked reserves. The movement between quarters was primarily through

required adjustments in the treatment of leases under IFRS (International Financial

Reporting Standards). Taking these adjustments into account, the end of year position

contains no surprises; the year-end variances now being reported have been accurately

anticipated throughout the year.

The figures in the table below have been reported to members as the provisional outturn

except that internal recharges were itemised separately but to correspond to the figures

in Note 19 the internal recharges have been reallocated back to the service areas. This

has had not impact on the totals.

The table below summarises the revenue position against budget in SERCoP format:

Budget Actual Variance

£000s £000s £000s

Central Services to the Public 970 775 (195)

Cultural & Related Services 459 445 (14)

Environmental and Regulatory Services 4,008 4,362 354

Planning Services 2,026 2,338 312

Parking Services and Public Transport 141 157 16

Housing Services General Fund 848 753 (95)

Corporate & Democratic Core 1,688 461 (1,227)

Non distributed costs 773 770 (3)Net Cost of Services 10,913 10,061 (852)

Transfer to Earmarked Reserves 770

Net Cost of Services Outturn underspend (82)

The main variations to net cost of service against budget were:


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Variance

Primary Drivers £000s

Development Management Planning Fees (191)

Waste Services (finance lease accounting adjustment) (189)

ICT underspend (122)

Rent Allowances Benefit Subsidy overpayments recovered (104)

Unspent Grant income to be transferred to earmarked

reserve (83)

JMT savings in implementation and salaries (77)

Over achieved Interest Income (59)

Corporate Training underspend (50)

Council Tax Benefit Subsidy overpayments recovered (32)

Unders and overs less than £20,000 (16)

Procurement (finance lease accounting adjustment) (12)

Moat Lane Project 83

Net Cost of Services Variance (852)

Our service expenditure can be split between staffing costs and other running costs,

including capital charges. Running costs include the costs of running our buildings,

transport, payments we make to contractors, the payments we make to people receiving

benefits and the cost of administrative and professional support costs. Capital charges are

made to cover the annual depreciation cost of our assets. Note 19 splits the Council’s

income and expenditure into more detail and is in the same format of our management

accounts.

4 Sources of Finance - Where the Money Came From

The following chart provides an analysis of our main sources of income for the year:


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Government

Grants and

contributions,

£22,019,000, 66.3%

Interest and

Investment

Income, £501,000,

1.5%

Fees and Charges,

£2,579,000, 7.8%

Income from

Council Tax,

£7,841,000, 23.6%

Other income,

£248,000, 0.8%

5 Capital Expenditure and Financing

Capital Expenditure (spending on the acquisition, creation or enhancement of fixed

assets) and Capital Financing (mainly receipts from the sale of such assets in previous

years), are detailed in the Notes to the Financial Statements and summarised in the tables

below.


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Comparison of capital spending by scheme 2011-12 against budget

Capital Scheme

Total

Adjusted

Budget

Final

Spend

2011-12 Variance

£000s £000s £000s

Towcester Town Centre Regeneration 788 305 (483)

Disabled Facilities Grants (Private Sector) 600 588 (12)

Capitalisation of IT Costs 250 250 0

CRM/Improved Customer Services 201 95 (106)

Finance leases for refuse vehicles and

photocopier

201 201 0

Shared Infrastructure Services Costs 159 159 0

Capitalisation of Officer Time 149 88 (61)

Solar Panels - Towcester Centre For Leisure 145 142 (3)

Solar Panels - Tove Depot 135 135 0

Decent Homes in the Private Sector 134 134 0

Towcestrians - Club House 120 3 (117)

Community Dev Fund unallocated 104 0 (104)

Solar Panels - Brackley Leisure Centre 100 80 (20)

Agresso system upgrade 100 0 (100)

Assisted Maintenance Grants 81 57 (24)

Microsoft Licensing & Support 67 67 0

Wheeled Bins and Recycling Boxes 67 67 0

Purchased Vehicles - Direct Services 55 49 (6)

Municipal Buildings 52 0 (52)

1st Blisworth Scout Group 50 50 0

Blakesley and Woodend New Village Hall 50 50 0

Various small schemes <£50k 262 97 (165)

3,870 2,617 (1,253)

Capital expenditure (Note 27) 2,617

The capital programme has been financed using government grants, capital receipts and

revenue contribution and is analysed by category below:

2011-12

£000s

Sources of finance

Capital Receipts 2,157

Funding from Earmarked Reserves

through Revenue 163

Government Grants and Other

Contributions 297

Direct Revenue Financing 0

2,617


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6 Revaluations

Our assets are revalued on a 5 year rolling basis, the revaluations in 2011-12 are listed in

the table below:

Book Value

2010/11

Gross Valuation

2011/12

Change in Value Upward/

Downward

£ £ £

Moat Lane, Motte - Land (Prior Year Adjustment back to 1 April 2010) 1,128,142 219,240 (908,902) Down

Towcester - Pesticide Store - Building 66,028 21,000 (45,028) Down

Towcester - Pesticide Store - Land 22,650 14,000 (8,650) Down

Tove Depot (Towcester) - Building 849,929 296,311 (553,618) Down

Tove Depot (Towcester) - Land 247,500 296,311 48,811 Up

The Old Mill - Towcester - Building 585,156 634,411 49,255 Up

The Old Mill - Towcester - Land 265,980 271,891 5,911 Up

Mill House, Chantry Lane, Towcester - Building 422,694 228,258 (194,436) Down

Mill House, Chantry Lane, Towcester - Land 145,000 97,825 (47,175) Down

Masonic Hall, Towcester - land 740,000 216,000 (524,000) Down

138 Watling Street, Towcester - Building 516,693 256,175 (260,518) Down

138 Watling Street, Towcester - Land 175,000 109,789 (65,211) Down

Moat Lane, Wayside Garage - Land 1,225,396 149,310 (1,076,086) Down

Brackley - Swimming Pool - Building 876,380 1,697,045 820,665 Up

Brackley - Swimming Pool - Land 170,000 188,730 18,730 Up

Farthinghoe Recycling Centre - Building 46,925 99,538 52,613 Up

Farthinghoe Recycling Centre - Land 149,308 99,538 (49,770) Down

Brackley - The Piggeries 10,000 34,875 24,875 Up

Brackley Office/flat (Bridge Street) - Building 126,768 75,000 (51,768) Down

Brackley Office/flat (Bridge Street) - Land 55,927 200,000 144,073 Up

Water Tower at Deanshanger - Land 93,100 86,499 (6,601) Down

6,790,433 5,072,506 (1,717,927)

The primary driver for the downward revaluation of the Moat Lane ‘Mount and Wayside

Garage’ asset was the reclassification of this asset from a single community asset to partly

a heritage asset (The Mount) and partly a ‘surplus’ asset held for regeneration (Wayside

Garage). This meant the valuation basis changed from historical cost to fair value.

7 Reserves and Balances Summary

In considering the sustainability of the Council’s expenditure plans a key factor is the level

of reserves which are likely to be available to the Council and their ability to support the

underlying level of expenditure in the long term.

We have made use of a number of earmarked reserves this year, utilising specifically set

aside funds to assist in the funding of capital projects, primarily the move away from

Capita contracted Information Technology (IT) services and the joining up with Cherwell

District Council of IT (i.e. shared servers and telephony). A full list of earmarked reserves is

shown in Note 8. These reserves are reviewed in January of each year to ensure that they

are set at an appropriate level.

We maintain a general reserve to provide a financial cushion should something

unexpected happen that may lead to significant unplanned expenditure and to assist


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with our longer term financial planning. The final accounts show that £0.1 million was

transferred to this balance during 2011-12 and the closing balance equates to £3.3

million.

8 Treasury Management Performance

The Council has significant cash reserves which it invests through a combination of

brokers, direct with Banks and the Government’s Debt Management Office (DMO). The

interest earned is credited to the Income and Expenditure Account thus helping to

maintain Council Tax increases at reasonable levels, due to the downturn in the economy

interest rates have fallen dramatically over the last three years and the reliance on

interest income has had to be significantly reduced in the budget.

Treasury Management includes the management of cash flows, banking, and capital

market transactions; the effective control of the risks associated with those activities; and

the pursuit of optimum performance consistent with those risks.

For the Council this involves managing our cash flow on a daily basis and using the banks

that comply with our policy on rating levels to make investments with approved

counterparties to ensure best value for money.

As at 31st March 2012 we had a total of £21.5 million (£20.8 million in 2010-11) invested. Of

this, £15.1 million were investments, and £6.4 million were cash and cash equivalents. In

the year higher than budgeted balances and changes in cash flow resulted in investment

income above budget by £59k despite the interest rates continuing to fall. The budget

was based on an average core investment balance of £21.3 million and an interest rate

of 2.09%. The actual average balance was £27.78m million which attracted an average

return of 1.92%. This was achieved despite the Bank of England keeping the bank base

rate at 0.5% since March 2009.


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9 Collection Fund

As a Billing Authority, the Council is required to maintain a Collection Fund, which

accounts for the transactions relating to Council Tax and Business Rates. The balance

carried forward at 31st March 2012 is £0.17 million surplus. The Council Tax element of this

surplus will be shared by the District Council and the major precepting bodies.

10 Pension

The application of International Accounting Standard (IAS) 19 has resulted in a pension

liability of £27.6 million shown in the Balance Sheet, an increase of £4.9 million in the year.

The liability represents our share of the liability to Northamptonshire County Council's

Pension Fund. This amount is matched by a Pensions Reserve also shown on the Balance

Sheet and therefore has no immediate impact on the Council's overall financial position

and its General Fund Balances but does reduce the net worth of the Council.

Further details are set out in the Accounting Policies and Pension Notes.

11 Audit

The first draft of these accounts was approved for audit by the Chief Financial Officer on

28 June 2012.

These accounts are scheduled to go to the Audit Committee for approval on 20

September 2012.

12 Explanation of the Statements

The Statement of Accounts is supported by the Statement of Responsibilities, the

Statement of Accounting Policies, the Core Statements and the associated notes. There is

a short explanation of each of the core statements and in addition there is a glossary of

financial terms to assist the reader.

Karen Curtin BA (Hons) ACCA Date:

Head of Finance & Procurement

Martin Henry BA (Hons) CPFA

Chief Financial Officer and Director of Resources Date:


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STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS

The authority is required to:

• Make arrangements for the proper administration of its financial affairs and to

secure that one of its officers has the responsibility for the administration of those

affairs. In this authority, that officer is the Director of Resources (Chief Finance

Officer).

• Manage its affairs to secure economic, efficient and effective use of resources

and safeguard its assets.

• Approve the statement of accounts.

…….……………………………………………………………… …….……………………

Chairman of the Audit Committee Date

The Director of Resource’s Responsibilities:

The Director of Resources (as Chief Finance Officer) is responsible for the preparation of

the authority's Statement of Accounts in accordance with proper practices as set out in

the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United

Kingdom (‘the Code”).

In preparing this statement of accounts, I, the Director of Resources have:

• selected suitable accounting policies and then applied them consistently;

• made appropriate judgements and estimates that were reasonable and prudent;

• complied with the Local Authority Code;

• kept proper accounting records which were up to date; and

• taken reasonable steps for the prevention and detection of fraud and other

irregularities.

I certify that this statement presents a true and fair view the financial position of the

authority at the accounting date and its income and expenditure for the year ended 31

March 2012.

Martin Henry BA (Hons) CPFA Date: 29 June 2012

Director of Resources


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1.4 Chairman of Audit Committee Certificate

I certify that the Statement of Accounts has received the full approval of Members.

Councillor Sandra Barnes MBE Date: September 2012

Chairman of Audit Committee


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Movement in Reserves Statement

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

authority, analysed into ‘usable reserves’ (i.e. those that can be applied to fund

expenditure or reduce local taxation) and other reserves. The Surplus or (Deficit) on the

Provision of Services line shows the true economic cost of providing the authority’s

services, more details of which are shown in the Comprehensive Income and Expenditure

Statement. These are different from the statutory amounts required to be charged to the

General Fund Balance for council tax setting purposes. The Net Increase /Decrease

before Transfers to Earmarked Reserves line shows the statutory General Fund Balance

before any discretionary transfers to or from earmarked reserves undertaken by the

council.

2011-12Note/

Ref

Capital

Receipts

Reserve

General Fund

Balance

Earmarked

General Fund

Reserves

Capital

Grants

Unapplied

Total Usable

Reserves

Revaluation

Reserve

Financial

Instruments

Adjustment

Account

Deferred

Capital

Receipts

Reserve -

Mortgages

Capital Adjustment

Account

Pensions Reserve Collection

Fund

Adjustment

Account

Accumulated

Absences

Account

Total Unusable

Reserves

Total Authority

£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000

Balance at 1 April 2011

(RESTATED) BS (9,102) (3,150) (6,611) - (18,863) (2,390) 7 (558) (27,342) 22,664 42 88 (7,489) (26,352)Movement in reserve during

(Surplus) or deficit on provision

of services CI&E - 4,362 4,362 - 4,362Other Comprehensive

Expenditure and Income 1 1 (928) 4,431 3,503 3,504

Correction to10-11 Valuation * 353 353 353Total Comprehensive

Expenditure and Income 1 4,362 - - 4,363 (575) - - - 4,431 - - 3,856 8,219

Adjustments between

accounting basis & funding basis

under regulations No. 7 1,807 (4,800) - - (2,993) - 20 2,567 484 (69) (9) 2,993 -

Net Increase / Decrease before

Transfers to Earmarked Reserves 1,808 (438) - - 1,370 (575) - 20 2,567 4,915 (69) (9) 6,849 8,219Transfers to / from Earmarked

Reserves No. 8 382 (382) - -

Increase / Decrease in Year 1,808 (56) (382) - 1,370 (575) - 20 2,567 4,915 (69) (9) 6,849 8,219-

Balance at 31 March 2012 (7,294) (3,206) (6,993) (17,493) (2,965) 7 (538) (24,775) 27,579 (27) 79 (640) (18,133)

2010-11 comparatives

Note/

Ref

Capital

Receipts

Reserve

General Fund

Balance

Earmarked

General Fund

Reserves

Capital

Grants

Unapplied

Total Usable

Reserves

Revaluation

Reserve

Financial

Instruments

Adjustment

Account

Deferred

Capital

Receipts

Reserve -

Mortgages

Capital Adjustment

Account

Pensions Reserve Collection

Fund

Adjustment

Account

Accumulated

Absences

Account

Total Unusable

Reserves

Total Authority

£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000

Balance at 1 April 2010 BS (9,672) (3,352) (6,746) - (19,770) (1,526) 7 (584) (28,317) 34,685 41 86 4,392 (15,378)(22) 909 887 887

Balance at 1 April 2010

(RESTATED) BS (9,672) (3,352) (6,746) - (19,770) (1,548) 7 (584) (27,408) 34,685 41 86 5,279 (14,491)Movement in reserve during

2010-11

(Surplus) or deficit on provision

of services CI&E - (4,890) - (4,890) - - - - - - - - (4,890)Other Comprehensive

Expenditure and Income - - - - (933) - - - (6,038) - - (6,971) (6,971)Total Comprehensive

Expenditure and Income - (4,890) - (4,890) (933) - - - (6,038) - - (6,971) (11,861)Adjustments between

accounting basis & funding basis

under regulations No. 7 570 5,227 - - 5,797 91 - 26 66 (5,983) 1 2 (5,797) -

Net Increase / Decrease before

Transfers to Earmarked Reserves 570 337 - - 907 (842) - 26 66 (12,021) 1 2 (12,768) (11,861)Transfers to / from Earmarked

Reserves No. 8 - (135) 135 - - - - - - - - - -

-

Increase / Decrease in Year 570 202 135 - 907 (842) - 26 66 (12,021) 1 2 (12,768) (11,861)

-

Balance at 31 March 2011 (9,102) (3,150) (6,611) (18,863) (2,390) 7 (558) (27,342) 22,664 42 88 (7,489) (26,352)

IFRS Adjustment for Heritage Assets


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Comprehensive Income and Expenditure Account for the year ended 31 March 2012

This statement shows the accounting cost in the year of providing services in accordance

with generally accepted accounting practices, rather than the amount to be funded

from taxation. Authorities raise taxation to cover expenditure in accordance with

regulations; this may be different from the accounting cost. The taxation position is shown

in the Movement in Reserves Statement. The Comprehensive Income and Expenditure

Account is abbreviated to CI&E in this document.

Gross Gross Net Gross Gross Net

Expenditure Income Expenditure Expenditure Income Expenditure

£000 £000 £000 £000 £000 £000

Expenditure on Services

Central services to the public 4,523 (3,571) 952 4,423 (3,648) 775Cultural and Related Services 967 (246) 721 797 (138) 659Environment and Regulatory Services 5,725 (1,801) 3,924 6,340 (1,704) 4,636Planning Services 4,860 (1,260) 3,600 3,852 (1,282) 2,570Highways and transport services 461 (102) 359 163 0 163Housing Services 12,881 (11,398) 1,483 13,750 (12,511) 1,239Corporate and democratic core 3,329 (274) 3,055 2,465 (504) 1,961

Non Distributed Costs 234 0 234 2,733 0 2,733Exceptional item 0 0 0Pensions - past service gain* (6,588) 0 (6,588) 0 0 0

Net Cost of Services 26,392 (18,652) 7,740 34,523 (19,787) 14,736

Other Operating expenditure

Loss/ (Gain) on the disposal of non current

assets 3 27

Downward revaluation of asset held for

sale 0 50Contribution to housing pooled capital

receipts 16 15Transfer of Collection Fund Deficit 4 0Surplus on trading undertakings 0 0Other income (1,544) (248)Parish Council Precept 1,891 1,924

Financing and investment income and expenditure

Interest and Investment Income (587) (501)Interest expenses 111 202 Pensions interest cost and expected return

from pension assets 1,055 811

Taxation and non-specific grant income

General Government Grant (735) (1,081)Non domestic rates (5,064) (3,496)Demand on the collection fund (7,586) (7,640)Capital grants and contributions (194) 0Non-specific Grant Income 0 (379)Transfer of Collection Fund Surplus 0 (58)

(Surplus) or Deficit on Provision of services (4,890) 4,362

(Surplus)/Deficit on Revaluation of Non

Current Assets (933) (928)

Actuarial (Gain)/Losses on Pension Fund

Assets/Liabilities (6,038) 4,431

Other Gains/Losses and Movements 0 0(Surplus)/Deficit on Other items 0 1

Other Comprehensive Income and Expenditure (6,971) 3,504

Total Comprehensive Income and Expenditure (11,861) 7,866

2010-11 2011-12

* £2,159k of the £2,733k in non distributed costs relates to downward valuations of Moat

Lane Regeneration Project Assets.


18

Balance Sheet as at 31 March 2012

The Balance Sheet shows the value of the assets and liabilities recognised by the

authority. The net assets of the authority are matched by the reserves held by the

authority. The first category of reserves are usable reserves, i.e. those reserves that the

authority may use to provide services, subject to the need to maintain a prudent level of

reserves and any statutory limitations on their use (for example the Capital Receipts

Reserve that may only be used to fund capital expenditure or repay debt). The second

category of reserves are those that the authority is not able to use to provide services. This

category of reserves includes reserves that hold unrealised gains and losses (for example

the Revaluation Reserve), where amounts would only become available to provide

services if the assets are sold; and reserves that hold timing differences shown in the

Movement in Reserves Statement line ‘Adjustments between accounting basis and

funding basis under regulations’.

Notes 01-Apr-10 31-Mar-11 31-Mar-12

£000 £000 £000

RESTATED RESTATED

Property, Plant & Equipment 9 28,391 28,643 26,918

Heritage Assets 9 241 241 241

Intangible Assets 11 189 153 161

Long Term Investments 34 10,138 5,032 5,032

Investments in Associates and Joint Ventures 0 0 0

Long Term Debtors 12 589 705 662

Long Term Assets 39,548 34,774 33,014

Short Term Investments 34 5,091 12,473 10,061

Inventories 102 85 115

Short Term Debtors 12 5,355 4,700 3,301

Cash and Cash Equivalents 13 6,322 3,340 6,385

Assets held for sale 14 0 426 608

Current Assets 16,870 21,024 20,470

Bank Overdraft 13 (740) (550) (494)

Short Term Borrowing 0 0 0

Short Term Creditors 15 (3,587) (2,865) (4,036)

Short Term Provisions 16 0 (531) (7)

Liabilities in disposal groups 0 0 0

Current Liabilities (4,327) (3,946) (4,537)

Long Term Creditors 15 (1,460) (1,456) (1,456)

Long Term Provisions 0 0 0

Deferred Liabilities - Finance Leases 29 (588) (514) (904)

Other Long Term Liabilities 31 (34,685) (22,664) (27,579)

Capital Grants receipts in advance 15 (866) (866) (875)

Long Term Liabilities (37,599) (25,500) (30,814)

Net Assets 14,491 26,352 18,133

Usable reserves page 15 (19,770) (18,863) (17,493)

Unusable Reserves 17 5,279 (7,489) (640)

Total Reserves (14,491) (26,352) (18,133)

These financial statements replace the unaudited financial statements authorised at the meeting of

the Audit Committee on 29 June 2012.

……………………………………………………….……………………………date: …………….

Martin Henry BA (Hons) CPFA

Director of Resources and S151 Officer


19

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012

The Cash Flow Statement shows the changes in cash and cash equivalents of the

authority during the reporting period. The statement shows how the authority generates

and uses cash and cash equivalents by classifying cash flows as operating, investing and

financing activities. The amount of net cash flows arising from operating activities is a key

indicator of the extent to which the operations of the authority are funded by way of

taxation and grant income or from the recipients of services provided by the authority.

Investing activities represent the extent to which cash outflows have been made for

resources which are intended to contribute to the authority’s future service delivery. Cash

flows arising from financing activities are useful in predicting claims on future cash flows

by providers of capital (i.e. borrowing) to the authority.

Notes 2010-11 2011-12

£000 £000

Net surplus or (deficit) on the provision of services 4,890 (4,362)

Adjustment to surplus or deficit on the provision of services for non-

cash movements 18 A 217 6,486

Adjust for items included in the net surplus or deficit on the provision

of services that are investing and financing activities 18 A (3,613) (1,142)

Net Cash flows from Operating Activities 1,494 982

Net Cash flows from Investing Activities 18 C (4,615) 746

Net Cash flows from Financing Activities 18 D 328 1,374

Net increase or decrease in cash and cash equivalents (2,792) 3,101

Cash and cash equivalents at the beginning of the reporting period 18 E 5,582 2,790

Cash and cash equivalents at the end of the reporting period 18 E 2,790 5,891

Cash and cash equivalents movement in the year (2,792) 3,101


20

NOTES TO THE FINANCIAL STATEMENTS

1. IMPACT OF NEW STANDARDS

Heritage assets are to be recognised as a separate class of assets for the first time in the

2011-12 financial statements, in accordance with UK Standard FRS 30. The adoption of

this new standard in the Code results in a change of accounting policy that requires the

publication of a Balance Sheet as at the beginning of the earliest comparative period

(i.e. a third Balance Sheet) in the 2011-12 financial statements where the restatement and

/or re-measurement of heritage assets is material.

This affects the Moat Lane Bury Mount asset, which was held in the Community Assets

category in 2010-11. Review has determined that part of this asset is a Heritage asset (the

Mount) and that the other part of the asset (Wayside Garage) is held for the Towcester

regeneration project. Both parts of the asset are now valued at fair value rather than

historical value, which has produced a large downward revaluation of £909k (for the

Mount, applied from 1 April 2010) and £1,076k (for the Wayside part, applied at 31 March

2012).

The other impact of the change in Heritage assets is that we have recognised three

Heritage assets not previously on the Fixed Asset register. These are two works of art and

the civic regalia which together total £22k. These are recognised in the opening restated

balances from 1 April 2010.

As a result of the introduction of the Heritage Asset standard in the 2011-12 Code, the

Code also adds the option for authorities to choose to measure Community Assets at

valuation and to make disclosures as if Community Assets are Heritage Assets. This applies

to one asset, Marlow's Meadow & Waterhall, Easton Neston, Towcester which is valued at

fair value.

2. ACCOUNTING STANDARDS THAT HAVE BEEN ISSUED BUT HAVE NOT YET BEEN ADOPTED

An authority is required to disclose information relating to the impact of an accounting

change that will be required by a new standard that has been issued but not yet

adopted. This requirement applies to accounting standards that come into effect for

financial years commencing on or before 1 January of the financial year in question (i.e.

on or before 1 January 2012 for 2011-12).

The adoption of amendments to IFRS 7 Financial Instruments: Disclosures (issued October

2010) by the Code will result in a change of accounting policy

The amendments to IFRS 7-Financial Instruments: Disclosures (transfers of financial assets,

issued October 2010), are intended to assist users of the financial statements to evaluate

the risk exposures that relate to transfers of financial assets and the effect of those risks on

the authority’s financial position.

The effective date of this change of accounting policy is 1 April 2012.

However, the Council are of the view that the transfers described by the standard do not

occur frequently in local authorities. Relevant circumstances would arise where an

authority retains ownership of a financial asset but contracts to reassign or otherwise pay

over the cash flows generated by the instrument, at the same time as retaining

substantially all the risks and rewards of ownership.

The Council considers that this will not have a material impact on the financial

statements.


21

3. CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES

In applying the accounting policies, the Authority has had to make certain judgements

about complex transactions or those involving uncertainty about future events. The

critical judgements made in the Statement of Accounts are:

• There is a high degree of uncertainty about future levels of funding for local

government. However, the Authority has determined that this uncertainty is not yet

sufficient to provide an indication that the assets of the Authority might be

impaired as a result of a need to close facilities and reduce levels of service

provision.

• The Authority has one Member who is a trustee of the South Northants Leisure Trust,

that member does not represent SNC when sitting on the Trust board and is not

involved in SNC decisions relating to the Trust. The Trust is a charitable organisation

that operates the leisure centres owned by SNC. It has been determined that the

Authority does not have control of the Trust and it is not a subsidiary of the

Authority.

4. ASSUMPTIONS MADE ABOUT THE FUTURE AND OTHER MAJOR SOURCES OF ESTIMATION

UNCERTAINTY

In the preparation of the consolidated Accounts, a number of estimates and assumptions

have been made relating to the reporting of results of operations and the financial

position of the Council. Results may differ significantly from those estimates under different

assumptions and conditions. It is considered that the following discussion addresses the

Council’s most critical accounting estimates and judgements, which are those that are

most important to the presentation of its consolidated financial position and results. These

particular policies require subjective and complex judgements, often as a result of the

need to make estimates about the effect of matters that are uncertain.

Depreciation of property, plant and equipment

The Council assigns useful lives and residual values to property, plant and equipment

based on periodic studies of actual asset lives and the intended use for those assets.

Changes in circumstances such as technological advances, prospective economic

utilisation and physical condition of the assets concerned could result in the actual useful

lives or residual values differing from initial estimates.

Where the Council determines that the useful life of property, plant and equipment

should be shortened or residual value reduced, it depreciates the net book value in

excess of the residual value over the revised remaining useful life, thereby increasing

depreciation expense. Any change in an asset’s life or residual value is reflected in the

Council’s Accounts when the change in estimate is determined.

Impairment of property, plant and equipment and intangible assets

The Council assess the impairment of property, plant and equipment and intangible

assets (excluding goodwill) whenever events or changes in circumstances indicate that

the carrying value may not be recoverable or otherwise as required by accounting

standards.

Factors that are considered important and which could trigger an impairment review

include the following:

• obsolescence or physical damage;

• significant changes in technology and regulatory environments;

• significant underperformance relative to expected historical or projected future

operating results;


22

• significant changes in the use of its assets or the strategy of the overall business;

• significant negative industry or economic trends; and

• significant decline in the market capitalisation relative to net book value for a sustained

period.

The identification of impairment indicators, the estimation of future cash flows and the

determination of the recoverable amount for assets or cash generating units requires

significant judgement which is determined by qualified external valuer.

Revenue recognition

Judgement is required in assessing the application of revenue recognition principles and

the specific guidance in respect of Council revenue. This includes the presentation of

revenue as principal or as agent in respect of income received from transmission of

content provided by third parties.

Impairment allowance for doubtful debt

The Impairment allowance for doubtful debt reflects the Council’s estimates of losses

arising from the failure or inability of the Council’s customers to make required payments.

The allowance is based on the ageing of customer accounts, customer credit worthiness

and the Council’s historical write-off experience. Changes to the allowance may be

required if the financial condition of the Council’s customers improves or deteriorates. An

improvement in financial condition may result in lower actual write-offs.

Provisions

A provision is recognised when there is a present (legal or constructive) obligation in

respect of a past event. Judgement is required to quantify such amounts.

Pensions

The Council provides one defined benefit pension scheme for its employees. The asset (or

liability) recognised in the statement of financial position in respect of defined benefit

pension plans represents the fair value of plan assets less the present value of the defined

benefit obligations at the reporting date. The expected cost of providing these defined

benefit pensions will depend on an assessment of such factors as:

• the life expectancy of the Officers;

• the length of service;

• the rate of salary progression;

• the rate of return earned on assets in the future;

• the rate used to discount future pension liabilities; and

• future inflation rates.

The assumptions used by the Council are set out in note 30 and are estimates chosen

from a range of possible actuarial assumptions which may not necessarily be borne out in

practice but have been comparable to the median estimates in this regard used by

other Councils. Changes to these assumptions could materially affect the size of the

defined benefit schemes’ liabilities and assets disclosed in note 31.

Fair value estimation

The nominal value of receivables (less any valuation allowance) and payables are

assumed to approximate their fair values. Judgement is required in determining the

appropriate assumptions underlying those inputs and forecasts.

The fair value of financial liabilities measured at amortised cost is estimated by

discounting the future contractual cash flows at the current market interest rate that is

available to the Council for similar financial instruments. Discounted cash flows are used

to determine the fair value for the majority of remaining financial instruments.


23

5. MATERIAL ITEMS OF INCOME AND EXPENSE

This note highlights material items of income and expenditure within the Comprehensive

Income and Expenditure Statement.

2010-11 2011-12

£'000 £'000

Expenditure

Benefits payments 14,004 14,894

REFCUS - Capital Grants 876 955

IT Contract (revenue costs) 590 684

Consultancy - Whiting Landscape Ltd 95 -

Income items

Grants - Benefits Subsidy (13,833) (14,884)

REFCUS - Government Grant (388) (297)

Investments (587) (501)

General Government Grant (735) (1,081)

Redistributed Non Domestic Rates (5,064) (3,496)

Benefits payments are made up of housing benefit and council tax benefit paid out to

claimants, the income item relates to the Central Government Grant called ‘benefit

subsidy’ which covers the majority of this expenditure.

REFCUS (revenue expenditure funded from capital under statute) relates to disabled

adaptations to people’s properties (disabled facilities grants and decent homes

improvements) and also other expenditure on properties that are not owned by the

Council, for example culture capital grants to communities in the District.

IT contract relates to the provision of IT services by CAPITA, this contract has now ended

and services are being provided by Cherwell District Council.

Investment income is the interest income on short and long term investments placed

during the year as part of the Treasury Departments cash flow management.

The General Government Grant and Redistributed Non Domestic Rates are main funding

received from Central Government.

6. EVENTS AFTER THE BALANCE SHEET DATE

The Statement of Accounts was authorised for issue by the Director of Resources on 28

June 2012. Events taking place after this date are not reflected in the financial statements

or notes. Where events taking place before this date provided information about

conditions existing at 31 March 2012, the figures in the financial statements and notes

have been adjusted in all material respects to reflect the impact of this information.


24

7. ADJUSTMENTS BETWEEN ACCOUNTING BASIS AND FUNDING BASIS UNDER REGULATIONS

This note details the adjustments that are made to the surplus or deficit on the CI&E to

give the resources specified by statutory provisions as being available to the Authority to

meet future capital and revenue expenditure.

2011-12General

fund

Capital

Receipts

Reserve

Capital

Grant

Unapplied

Movement in

unusable

reserves

£000 £000 £000 £000

Adjustment primarily involving the Capital Adjustment Account

Reversal of items debited or credited to the Comprehensive Income and Expenditure Statement

Charges for depreciation and impairment of non-current assets (942) 0 0 942

Revaluation losses on Property Plant and Equipment (2,746) 0 0 2,746

Amortisation of intangible assets (418) 0 0 418

Capital grants and contributions applied 0 0 0 0

Movement in the Donated Assets Account 0 0 0 0

Revenue expenditure funded from capital under statute (954) 0 0 954

Amounts of non-current assets written off on disposal or sale as part of the gain/ loss

on disposal to the Comprehensive Income and Expenditure Statement (124) 0 0 124

Unattached Capital Receipts 248 (248) 0 0

Insertion of items not debited or credited to the Comprehensive Income and

Expenditure Statement

Statutory provision for the financing of capital investment 0 0 0

Capital expenditure charged against the General Fund (RCCO) 163 0 0 (163)

Adjustments primarily involving the Capital Receipts Reserve:

Transfer of cash sale proceeds credited

as part of the gain/ loss on disposal to the

Comprehensive Income and Expenditure

Statement 97 (97) 0 0

Use of the Capital Receipts Reserve to finance new capital expenditure 0 2,157 0 (2,157)Contribution from the Capital Receipts Reserve towards administrative costs of non-

current asset disposals 0 0 0 0Contribution from the Capital Receipts Reserve to finance the payments to the

Government capital receipts pool. (15) 15 0 0

Transfer from Deferred Capital Receipts Reserve upon receipt of cash 0 (20) 0 20

Adjustments primarily involving the Deferred Capital Receipts Reserve Transfer of deferred sale proceeds credited as part of the gain/ loss on disposal to

the Comprehensive Income and Expenditure Statement

Adjustment primarily involving the capital grants unapplied accountCapital grants and contributions unapplied credited to the Comprehensive Income

and Expenditure Statement

Application of grants to capital financing transferred to the Capital Adjustment

Account 297 (297)

Adjustments primarily involving the Pensions Reserve

MIRS Reversal of retirement benefits Dr or Cr to CI&E (2,212) 2,212

Employer’s pensions contributions and direct payments to pensioners payable in the

year 1,728 (1,728)

Adjustments primarily involving the Collection Fund Adjustment Account

Amount by which council tax income credited to the Comprehensive Income and

Expenditure Statement is different from council tax income calculated for the year

in accordance with statutory requirements 69 (69)

Adjustments involving the closure of the Housing Revenue Account (HRA account)

Closure of the HRA transferred the remaining HRA balance into the General Fund, as

required by statute. 0 0

Adjustments primarily involving the Accumulated Absences Account

Movement in the Employee benefits Reserve in 2009-10 9 (9)

Rounding

Total Adjustments (4,800) 1,807 0 2,993


25

2010-11 comparatives

General

fund

Capital

Receipts

Reserve

Capital

Grant

Unapplied

Movement in

unusable

reserves

£000 £000 £000 £000

Adjustment primarily involving the Capital Adjustment Account

Reversal of items debited or credited to the Comprehensive Income and Expenditure Statement

Charges for depreciation and impairment of non-current assets (872) 0 0 872

Revaluation losses on Property Plant and Equipment (738) 0 0 738

Amortisation of intangible assets (370) 0 0 370

Capital grants and contributions applied 194 0 0 (194)

Movement in the Donated Assets Account 0 0 0 0

Revenue expenditure funded from capital under statute (876) 0 0 876

Amounts of non-current assets written off on disposal or sale as part of the gain/ loss

on disposal to the Comprehensive Income and Expenditure Statement (922) 0 0 922

Unattached Capital Receipts 1,543 (1,543) 0 0

Insertion of items not debited or credited to the Comprehensive Income and

Expenditure Statement

Statutory provision for the financing of capital investment 0 0 0 0

Capital expenditure charged against the General Fund (RCCO) 15 0 0 (15)

Adjustments primarily involving the Capital Receipts Reserve:Transfer of cash sale proceeds credited

as part of the gain/ loss on disposal to the

Comprehensive Income and Expenditure

Statement 900 (900) 0 0

Use of the Capital Receipts Reserve to finance new capital expenditure 0 3,025 0 (3,025)Contribution from the Capital Receipts Reserve towards administrative costs of non-

current asset disposals 0 0 0 0

Contribution from the Capital Receipts Reserve to finance the payments to the

Government capital receipts pool. (16) 16 0 0

Transfer from Deferred Capital Receipts Reserve upon receipt of cash 0 (28) 0 26

Adjustments primarily involving the Deferred Capital Receipts Reserve Transfer of deferred sale proceeds credited as part of the gain/ loss on disposal to

the Comprehensive Income and Expenditure Statement 0 0 0 0

Adjustment primarily involving the capital grants unapplied accountCapital grants and contributions unapplied credited to the Comprehensive Income

and Expenditure Statement 0 0 0 0Application of grants to capital financing transferred to the Capital Adjustment

Account 388 0 0 (388)

Adjustments primarily involving the Pensions Reserve

MIRS Reversal of retirement benefits Dr or Cr to CI&E 4,262 0 0 (4,262)

Employer’s pensions contributions and direct payments to pensioners

payable in the year 1,721 0 0 (1,721)

Adjustments primarily involving the Collection Fund Adjustment Account

Amount by which council tax income credited to the Comprehensive Income and

Expenditure Statement is different from council tax income calculated for the year

in accordance with statutory requirements (1) 0 0 1Adjustments involving the closure of the Housing Revenue Account (HRA account)Closure of the HRA transferred the remaining HRA balance into the General Fund, as

required by statute. 0 0 0 0

Adjustments primarily involving the Accumulated Absences Account

Movement in the Employee benefits Reserve in 2009-10 (2) 2

Rounding 1 1

Total Adjustments 5,227 570 0 (5,797)


26

8 TRANSFERS TO AND FROM EARMARKED RESERVES

A) This sets out the amounts set aside from the General Fund balances in earmarked

reserves to finance future expenditure plans and the amounts posted back from

earmarked reserves to meet General Fund expenditure in 2011-12. The following were

transferred between earmarked reserves and the General Fund in 2011-2

Reserve Balance

1 April

2010

Transfer in Transfer out Balance

31 March

2011

Transfer

in

Transfer

out

Balance

31 March

2012£000 £000 £000 £000 £000 £000 £000

General Fund

IT Developments 247 99 (16) 330 382 (247) 465

VAT Partial Exemption 100 0 (80) 20 0 0 20

General Fund Items 645 319 (308) 656 14 (508) 162

Licensing Contingencies 153 0 (78) 75 33 0 108

Improvement Planning Reserve Fund 199 0 (199) 0 0 0 0

Elections sinking fund 119 34 (29) 124 14 (38) 100

Pay Review contingency (Pension Reserve) 0 0 0 0 79 0 79

Homeless People 10 0 0 10 0 0 10

Legal Consultancy 25 0 0 25 50 (31) 44

Civil contingency (emergency planning) 6 0 0 6 0 (6) 0

Youth Council Grant aid 3 0 0 3 0 (3) 0

Planning Delivery Grant 29 0 (29) 0 0 0 0

Benefits Contingencies 47 28 0 75 70 0 145

Customer Contact Centre 358 13 (46) 325 0 (58) 267

Flood Alleviation 75 0 (75) 0 75 0 75

Building Maintenance Reserve (formerly 481 0 0 481 0 (38) 443

Business Continuity 117 0 (50) 67 0 0 67

Contaminated Land Investigations 5 0 0 5 0 (5) 0

Centrally Controlled Initiatives 251 0 (214) 37 0 (37) 0

Organisational Design Review 29 0 (29) 0 0 0 0

Leisure Trust Grant 16 0 0 16 0 0 16

Leisure Initiatives 71 0 (16) 55 0 (5) 50

DIP and Workflow Roll Out 100 0 0 100 0 (100) 0

Towcester Mill 40 0 0 40 0 0 40

Standards Committee Investigations 25 0 (15) 10 0 (10) 0

Local Area Business Growth Initiative 272 0 (168) 104 0 (5) 99

Street cleansing vehicle maintenance and 40 13 0 53 0 (53) 0

One-off Budget Growth Item 360 29 (197) 192 0 (56) 136

Moat Lane Development 206 57 (293) (30) 0 30 0

Moat Lane Project Management Costs 57 0 (57) 0 0 0 0

Economic Downturn Reserve 20 0 (20) 0 0 0 0

Budget Consultation 3 0 (3) 0 0 0 0

Climate Change 45 20 0 65 0 0 65

West Northants Joint Planning Unit 93 0 (93) 0 0 0 0

CDC Implementation Costs 0 554 (554) 0 0 0 0

Phase One Implementation costs 0 637 (211) 426 0 (426) 0

High Speed Rail 2 0 100 0 100 0 (59) 41

Phase Two Implementation costs 0 30 0 30 0 (30) 0

Joint Working Reserve (formerly 0 380 (30) 350 188 (1) 537

IT Review Reserve 0 150 0 150 0 (150) 0

Local Development Framework Fund 0 75 (9) 66 11 (12) 65

Temporary Accommodation 0 14 (11) 3 9 (3) 9

Local Research Fund 0 14 0 14 0 0 14

Strategic Housing 0 44 0 44 173 (27) 190

Land Charges 0 34 0 34 0 0 34

Habitat 0 51 0 51 0 0 51

Risk Reserve 0 0 0 0 100 0 100

Budget Implementation Reserve 0 0 0 0 100 0 100

Resource Review 0 0 0 0 148 (13) 135

Revenue Fund Contingency Fund 0 0 0 0 234 (13) 221

Planning Fee Reserve 0 0 0 0 185 0 185

Unallocated Revenue Grants Reserve 0 0 0 0 421 0 421

Total Revenue earmarked reserves 4,247 2,695 (2,830) 4,112 2,286 (1,904) 4,494

Towcester Town Centre Strategy 55 0 0 55 0 0 55

Capital Financing Reserve 2,247 0 0 2,247 0 0 2,247

Leisure Re-theming 12 0 0 12 0 0 12

TCFL Maintenance 84 0 0 84 0 0 84

Municipal Buildings 102 0 0 102 0 0 102

Total Capital Earmarked Reserves 2,500 0 0 2,500 0 0 2,500Total Earmarked Reserves 6,746 2,695 (2,830) 6,611 2,286 (1,904) 6,993


27

B) Purpose of significant reserves

Balances as at year ended 2012 £000 Reason for the reserve

Benefits Contingency 145

To deal with repayment of overpaid benefit subsidy if required

and to provide a small contingency for use within the benefits

section.

Budget Implementation Reserve 100To fund the costs of the implementation of the budget

proposals for 2012-13

Customer Service Centre 267To deliver the requirements of the access strategy including

the development of the customer contact centre.

Elections 100Annual contribution held in reserves for use at the time of local

elections

Revenue Fund Contingency

Reserve221

The amalgamation of small reserves less than £10k which can

be bid for if needed in the future.

IT Service Reserve (formerly IT

Developments)465

To fund changes in IT service - requirement over next 2

financial years

Maintenance of Municipal Buildings 102 To fund the cost of repairs for Council Offices

Planning Fee Reserve 185 Revenue from Planning fees c/fwd to assist service provision.

Resource Review 135 To fund the costs associated with the Resource Review

Risk Reserve 100To recognise the risk associated with market uncertainty

regarding the price achievable for recycling materials

Strategic Housing 190 To progress strategic housing projects

Joint Working Reserve (formerly

Transitional Arrangements)537

To assist in the smooth transition to a Joint Senior

Management Team, to develop partnership working and to

assist in meeting the performance aspirations set out by

Cabinet in the consideration of the Joint Senior Management

Team Business Case

Building Maintenance Reserve

(previously TCFL roofing)443

To provide funds to meet possible repair and replacement

costs for all Council owned property.

General Fund Items 162

The majority of this reserve relates to the agreed budget carry

forwards as sanctioned by the Head of Finance and

Procurement

Unallocated Revenue Grant

Reserve421

The unspent proportion of the Revenue Grants are held in this

reserve to be drawn down when spent in future years


28

9 PROPERTY, PLANT AND EQUIPMENT

Movement in property, plant and equipment.

2011/ 12 Operational Assets

Community

Assets Total

Land Land Civic & Art

£000 £000 £000 £000 £000 £000 £000 £000 £000 £000

COST OR VALUATION

At 1 April 2011 14,231 1,686 1,362 132 219 22 14,342 0 31,994 426Write off of accumulated balances on revaluation (172) (120) (292)

Additions (including enhancements) 357 659 287 0 0 0 392 0 1,695 0Donations 0 0 0 0 0 0 0 0 0 0Revaluation increases/ (decreases) recognised in the

Revaluation Reserve 841 0 0 0 0 0 87 0 928 0

Revaluation increases/ (decreases) recognised in the

Surplus/Deficit on the Provision of Services (657) 0 0 0 0 0 (2,082) 0 (2,739) (7)

Derecognition - Disposals 0 0 (2) 0 0 0 (38) 0 (40) (86)Derecognition - Other 0 0 0 0 0 0 0 0 0 0Assets reclassified (to)/ from Held for Sale and Land 0 0 0 0 0 0 (275) 0 (275) 275Other movements in cost or valuation* (353) 0 0 290 0 0 (289) 0 (352) 0

At 31 March 2012 14,247 2,345 1,647 422 219 22 12,017 0 30,919 608

DEPRECIATION AND IMPAIRMENTS

At 1 April 2011 (406) (1,287) (1,245) 0 0 0 (172) 0 (3,110) 0Write off of accumulated balances on revaluation 172 120 292

Depreciation charge (319) (327) (231) 0 0 0 (65) 0 (942) 0Impairment losses/ (reversals) recognised in the

Revaluation Reserve 0 0 0 0 0 0 0 0 0 0Other movements in depreciation and impairment 0 0 6 0 0 0 (6) 0 0 0At 1 April 2012 (553) (1,614) (1,470) 0 0 0 (123) 0 (3,760) 0

NET BOOK VALUE AT 31 MARCH 2012 13,694 731 177 422 219 22 11,894 0 27,159 608NET BOOK VALUE AT 31 MARCH 2011 13,825 399 117 132 219 22 14,170 0 28,884 426

2010/ 11 comparatives Operational Assets

Community

Assets Total

Land Land Civic & Art

£000 £000 £000 £000 £000 £000 £000 £000 £000 £000

COST OR VALUATION

At 1 April 2010 (RESTATED) 17,508 1,609 1,188 0 219 22 23,731 0 44,277 0

Write off of accumulated balances on revaluation (2,963) (10,287) (13,250)Additions (including enhancements) 514 77 187 132 0 0 1,302 0 2,212 0Donations 0 0 0 0 0 0 0 0 0 0Revaluation increases/ (decreases) recognised in the 158 0 0 0 0 0 691 0 849 0

Revaluation increases/ (decreases) recognised in the

Surplus/Deficit on the Provision of Services 0 0 0 0 0 0 (557) 0 (557) 0

Derecognition - Disposals 0 0 (12) 0 0 0 (920) 0 (932) 0

Derecognition - Other 0 0 0 0 0 0 0 0 0 0

Assets reclassified (to)/ from Held for Sale and Land (514) 0 0 0 0 0 0 0 (514) 0

Assets reclassified (to) Heritage Assets 0 0 0 0 0 0 0 0 0 0

Other movements in cost or valuation (472) 0 0 0 0 0 382 0 (90) 426At 31 March 2011 14,231 1,686 1,362 132 219 22 14,342 0 31,994 426

DEPRECIATION AND IMPAIRMENTS

At 1 April 2010 (3,170) (1,047) (1,049) 0 0 0 (10,379) 0 (15,645) 0Write off of accumulated balances on revaluation 2,963 10,287 13,250

Depreciation charge (359) (240) (196) 0 0 0 (10) 0 (805) 0Impairment losses/ (reversals) recognised in the

Revaluation Reserve 0 0 0 0 0 0 0 0 0 0

Other movements in depreciation and impairment 160 0 0 0 0 0 (70) 0 90 0

At 1 April 2011 (406) (1,287) (1,245) 0 0 0 (172) 0 (3,110) 0

NET BOOK VALUE AT 31 MARCH 2011 13,825 399 117 132 219 22 14,170 0 28,884 426NET BOOK VALUE AT 31 MARCH 2010 14,338 562 139 0 219 22 13,352 0 29,519 0

Heritage Assets

Other Land &

Buildings

Leased Vehicle,

Plant &

Equipment

Vehicle,

Plant &

Equipment

Heritage Assets

Surplus

Assets

Other Land &

Buildings

Leased Vehicle,

Plant &

Equipment

Vehicle,

Plant &

Equipment

Assets Held

for Sale

Assets Held

for Sale

Assets under

Construction

Non-Operational Assets


Assets under

Construction

Surplus

Assets


29

Valuation

The table below distinguishes between assets held at ‘historical cost’ and at ‘fair value’ in

the balance sheet.

Council

Dwellings

Other Land &

Buildings

Vehicles,

Plant &

Equipment

Community

Assets

Heritage

Assets

Surplus

Assets Total

£000 £000 £000 £000 £000 £000 £000

Carried at historical cost 0 0 908 0 0 117 1,025

Valued at Fair Value @:

31-Mar-12 0 2,199 0 422 241 2,032 4,894

31-Mar-11 0 4,290 0 0 0 4,600 8,890

31-Mar-10 0 4,484 0 0 0 830 5,314

31-Mar-09 0 2,721 0 0 0 4,315 7,036

Total Value at 31 March 2012 0 13,694 908 422 241 11,894 27,159

A valuation of 20% of other land and buildings and non-operational assets for the 2011-12

financial year have been valued as at 1 April 2011 by Simon Layfield FRICS IRRV, Partner,

Wilks Head and Eve LLP, Newlands House, 40 Berne’s Street, London, W1T 3NA.

All of the Council’s non-current assets (long term assets) were reviewed at 31 March 2012

and no further impairments were noted.

Revaluations

The Authority carries out a rolling programme that ensures that all Property, Plant and

Equipment required to be measured at fair value is revalued at least every five years.

Valuations of land and buildings were carried out in accordance with the methodologies

and bases for estimation set out in the professional standards of the Royal Institution of

Chartered Surveyors. Vehicles, plant and equipment are carried at depreciated historic

cost.

Surplus Assets

Within Surplus Assets a total of £5.4m are assets associated with the Moat Lane

redevelopment - they are all considered as "assets held for development" and it is

anticipated that all these assets will have a transfer of ownership in the next (2012-13)

financial year. The balance in surplus assets of £6.5m mostly relates to areas of land in

Brackley which are not used for the provision of any council services. There are no plans in

place to sell this land in the near future.


30

10 HERITAGE ASSETS

Art Collection Moat Lane Civic Regalia Total Assets

£000 £000 £000 £000

On a Valuation Basis (not Cost)

01-Apr-10 6 219 16 241

Additions 0 0 0 0

Disposals 0 0 0 0

Revaluations 0 0 0 0

Impairment Losses/(reversals) recognised

in the Revaluation Reserve 0 0 0 0


in Surplus or Deficit on the Provision of

Services 0 0 0 0

Depreciation* 0 0 0 0

31-Mar-11 6 219 16 241

Additions 0 0 0 0

Disposals 0 0 0 0

Revaluations 0 0 0 0


in the Revaluation Reserve 0 0 0 0


in Surplus or Deficit on the Provision of

Services 0 0 0 0

Depreciation* 0 0 0 0

31-Mar-12 6 219 16 241

* The Heritage Assets held by the Council do not require depreciation as they are land,

works of art or civic regalia and are therefore considered to hold their value, this

category is shown in the note for completeness.


31

11 INTANGIBLE ASSETS

The Authority accounts for its software as intangible assets, to the extent that the software

is not an integral part of a particular IT system and accounted for as part of the hardware

item of Property, Plant and Equipment.

All software is given a finite useful life, based on assessments of the period that the

software is expected to be of use to the Authority. Intangible assets are looked at

individually and are amortised on a straight line basis over 1 to 3 years, there is a

particular awareness that intangible ICT assets can quickly become obsolete.

Software Other Total

£000 £000 £000

0 0 0

Additions 361 0 361

Disposals 0 0 0

Revaluations 0 0 0

0 0 0

361 0 361

Additions 334 0 334

Disposals 0 0 0

Revaluations 0 0 0

Transfer 0 0 0

695 0 695

Additions 426 0 426

Disposals 0 0 0

Revaluations 0 0 0

Transfer 0 0 0

1,121 0 1,121


£000 £000 £000

0

(172) 0 (172)

0 0 0

0 0 0

Disposal 0 0 0

(172) 0 (172)

(370) 0 (370)

0 0 0

0 0 0

0 0 0

(542) 0 (542)

(418) 0 (418)

0 0 0

0 0 0

0 0 0

(960) 0 (960)


£000 £000 0

Balance at 31-Mar-10 189 0 189



Balance at 31-Mar-11

Amortisation for the Year

Impairment Charge

Impairment Losses

Impairment Charge

Impairment Losses


Net Book Value

Impairment Charge

Impairment Losses

Disposal



Disposal



Depreciation and Impairment

Balance at 01-Apr-09


Cost

Balance at 01-Apr-09

Transfer



32

12 DEBTORS

An analysis of the debtors balance is shown below.

1-Apr-10 31-Mar-11 31-Mar-12

£000 £000 £000

HMRC VAT 234 219 140

Government Departments 1,462 832 1,072

NNDR Due from Central Government 2,121 1,604 362

Other Local Authorities 250 253 186

Sundry Persons 495 1,000 819

Assisted Car Purchase Scheme 68 58 42

Cycle Scheme - 1 1

Housing Rents (former tenants) 142 1 0

Council Taxpayers 117 106 108

Housing Benefits Overpayments 435 443 480

Total Debtors 5,324 4,517 3,210

Council Tax payers ( 66) ( 59) ( 65)

General Fund ( 190) ( 132) ( 168)

Housing Revenue Account ( 134) 0 0

Total Impairment Allowance for Doubtful Debts ( 390) ( 191) ( 233)


Sundry Persons 420 374 324

Total for Payments in Advance 421 374 324

TOTAL NET CURRENT DEBTORS 5,355 4,700 3,301

Housing 583 556 535

General Fund 3 146 124

Housing Act 3 3 3

TOTAL LONG TERM DEBTORS 589 705 662

13 CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash at bank, short-term bank deposits and money

market investments of three months or less from the start of the investment.

The balance of Cash and Cash Equivalents is made up of the following elements

01-Apr-10 31-Mar-11 31-Mar-12

£000 £000 £000

Cash equivalent 0 0 6,100

Cash

Current Accounts 66 0 2

Petty Cash 1 1 1

Call Accounts 6,255 3,339 282

Total cash and Cash Equivalent 6,322 3,340 6,385

Overdraft (740) (550) (494)

Total 5,582 2,790 5,891


33

Short-term bank deposits consist primarily of liquidity account deposits, which can be

readily converted to cash at short notice. The effective interest rate on short-term bank

deposits at 31 March 2012 was 0.61% (31 March 2011 - 0.68%).

14 ASSETS HELD FOR SALE

The table below details those assets held for sale at the Balance Sheet date.

2011 2012 2011 2012

£000 £000 £000 £000

Balance at start of year 0 0 0 426

Assets newly classified as held for sale:

Property, Plant and Equipment 0 0 426 275

Intangible Assets 0 0 0 0

Disposals 0 0 0 -93

Balance at end of year 0 0 426 608

Non-CurrentCurrent

15 CREDITORS

The table below provides details on the level of creditor balances set out in the Balance

Sheet.

1-Apr-10 31-Mar-11 31-Mar-12

£000 £000 £000

Government Departments 751 388 163


Council Tax Due to Preceptors 240 262 595


Council Taxpayers 137 137 129

Housing Rents 17 17 17

Finance Lease Liability 208 148 216

CREDITORS 3,080 2,264 3,002

Government Departments 168 258 157



Section 106 Deposits 121 86 504

Escrow Agreement 0 0 250

RECEIPTS IN ADVANCE (current - within 1 year) 507 601 1,034

TOTAL SHORT TERM CREDITORS 3,587 2,865 4,036

Section 106 Deposits 1,460 1,456 1,456

RECEIPTS IN ADVANCE (long term - after 1 year) 1,460 1,456 1,456

Capital Receipts in Advance (S106 deposits) 866 866 875CAPITAL RECEIPTS IN ADVANCE (long term - after 1

year) 866 866 875


34

16 PROVISIONS

During 2011-12 the Council undertook to find budget savings and increase efficiencies

through joint working with Cherwell District Council. A provision has been made to cover

the estimated costs of implementation of this initiative.

Joint

Working

Set up

Costs

Total

£000 £000

At 1 April 2011 531 531

Arising during the year 0 0

Used during the year (483) (483)

Reversed unused (41) (41)

Unwinding of discount 0 0

At 31 March 2012 7 7

Current Provision 7 7

Non - current Provision 0 0

7 7

At 1 April 2010 0 0

Arising during the year 554 554

Used during the year (23) (23)

Reversed unused 0 0

Unwinding of discount 0 0

At 31 March 2011 531 531

Current Provision 531 531

Non - current Provision 0 0

531 531

2011 2012

£000 £000

Expected timing of cash flows:

Within one year 531 7

Between one and five years 0 0

After five years 0 0

Total 531 7


35

17 UNUSABLE RESERVES

Detail of the Unusable Reserves as shown on the balance sheet. Movements in the

Authority’s usable reserves are detailed in the Movement in Reserves Statement.

UNUSABLE RESERVES 31-Mar-10 31-Mar-11 31-Mar-12

£000 £000 £000

Revaluation Reserve (1,548) (2,390) (2,965)

Capital Adjustment Account (27,408) (27,342) (24,775)

Financial Instruments Adjustment Account 7 7 7

Deferred Capital Receipts Reserve (584) (558) (538)

Pensions Reserve 34,685 22,664 27,579

Collection Fund Adjustment Account 41 42 (27)

Accumulated Absences Account 86 88 79

Total Unusable Reserves 5,279 (7,489) (640)

RESTATED

The Revaluation Reserve contains the gains made by the Authority arising from increases

in the value of its Property, Plant and Equipment (and Intangible Assets). The balance is

reduced when assets with accumulated gains are:

• revalued downwards or impaired and the gains are lost

• used in the provision of services and the gains are consumed through

depreciation, or

• disposed of and the gains are realised.

The Reserve contains only revaluation gains accumulated since 1 April 2007, the date

that the Reserve was created. Accumulated gains arising before that date are

consolidated into the balance on the Capital Adjustment Account.

Movement in Revaluation Reserve 2010-11 2011-12

£000 £000

Balance brought forward 1 April ( 1,526) ( 2,390)

IFRS Adjustment for Heritage Assets ( 22) 0

Balance brought forward 1 April ( 1,548) ( 2,390)

Upward revaluation of assets (unrealised) ( 964) ( 1,065)

Downward revaluation of assets and impairment losses not

charged to the Surplus/Deficit on the Provision of Services31 137

Difference between fair value depreciation and historical cost

depreciation91 0

Accumulated gains on assets sold or scrapped, written off to the

Capital Adjustment Account0 0

Adjustment for prior year valuation error* 0 353

Total movement of realised capital resources in year ( 842) ( 575)

Balance carried forward 31 March ( 2,390) ( 2,965)

Capital Adjustment Account

The Capital Adjustment Account absorbs the timing differences arising from the different

arrangements for accounting for the consumption of non-current assets and for financing

the acquisition, construction or enhancement of those assets under statutory provisions.

The Account is debited with the cost of acquisition, construction or enhancement as

depreciation, impairment losses and amortisations are charged to the Comprehensive

Income and Expenditure Statement (with reconciling postings from the Revaluation

Reserve to convert fair value figures to a historical cost basis). The Account is credited

with the amounts set aside by the Authority as finance for the costs of acquisition,

construction and enhancement. The Account contains accumulated gains and losses on


36

Investment Properties and gains recognised on donated assets that have yet to be

consumed by the Authority. The Account also contains revaluation gains accumulated

on Property, Plant and Equipment before 1 April 2007, the date that the Revaluation

Reserve was created to hold such gains.

Note 7 provides details of the source of all the transactions posted to the Account, apart

from those involving the Revaluation Reserve.

2010-11 2011-12

Capital

Adjustment

Account

Capital

Adjustment

Account£000 £000

Balance brought forward at 1 April (28,317) (27,342)IFRS ADJUSTMENT 909 0Balance brought forward at 1 April (27,408) (27,342)

Reversal of items relating to capital expenditure debited or credited to the Comprehensive

Income and Expenditure Statement:Charges for impairment of non-current assets 67Charges for depreciation of non-current assets 805 942Revaluation losses on Property, Plant and Equipment 738 2,746Amortisation of intangible assets 370 418Revenue expenditure funded from capital under statute 876 954Revenue grant received for expenditure funded from capital under statute (388) (297)Amounts of non-current assets written off on disposal or sale as part of the gain/loss on disposal to the

Comprehensive Income and Expenditure Statement922 124

Adjusting amounts written out of the Revaluation Reserve (90) 0Net written out amount of the cost of non-current assets consumed in the year 3,300 4,887

Capital financing applied in the year:

Use of the Capital Receipts Reserve to finance new capital expenditure (3,025) (2,157)Use of the Major Repairs Reserve to finance new capital expenditure 0 0Capital grants and contributions credited to the Comprehensive Income and Expenditure Statement that

have been applied to capital financing(194) 0

Application of grants to capital financing from the Capital Grants Unapplied Account 0 0Statutory provision for the financing of capital investment charged against the General Fund 0 0Capital expenditure charged against the General Fund (RCCO) (15) (163)Net financing applied (3,234) (2,320)

Total Movement in the year 66 2,567

Balance carried forward at 31 March (27,342) (24,775)

Movements in Amounts Set Aside to Finance Capital Investment


37

Pensions Reserve

The Pensions Reserve absorbs the timing differences arising from the different

arrangements for accounting for post employment benefits and for funding benefits in

accordance with statutory provisions. The Authority accounts for post employment

benefits in the Comprehensive Income and Expenditure Statement as the benefits are

earned by employees accruing years of service, updating the liabilities recognised to

reflect inflation, changing assumptions and investment returns on any resources set aside

to meet the costs. However, statutory arrangements require benefits earned to be

financed as the Authority makes employer’s contributions to pension funds or eventually

pays any pensions for which it is directly responsible. The debit balance on the Pensions

Reserve therefore shows a substantial shortfall in the benefits earned by past and current

employees and the resources the Authority has set aside to meet them. The statutory

arrangements will ensure that funding will have been set aside by the time the benefits

come to be paid.

2010-11 2011-12

£000 £000

Balance at 1 April 34,685 22,664

Actuarial gains or losses on pensions assets and liabilities ( 6,038) 4,431

Employer’s pensions contributions and direct payments to pensioners ( 1,721) ( 1,728)

Balance at 31 March 22,664 27,579

2,212Reversal of items relating to retirement benefits debited or credited to the

Surplus or Deficit on the Provision of Services in the Comprehensive Income

and Expenditure Statement

Pensions Reserve

( 4,262)


38

Deferred Capital Receipts Reserve

The Deferred Capital Receipts Reserve holds the gains recognised on the disposal of non-

current assets but for which cash settlement has yet to take place. Under statutory

arrangements, the Authority does not treat these gains as usable for financing new

capital expenditure until they are backed by cash receipts. When the deferred cash

settlement eventually takes place, amounts are transferred to the Capital Receipts

Reserve.

2010-11 2011-12

£000 £000

Balance at 1 April ( 584) ( 558)

Transfer to the Capital Receipts Reserve upon receipt of cash 26 20

Balance at 31 March ( 558) ( 538)

Transfer of deferred sale proceeds credited as part of the gain/loss on

disposal to the Comprehensive Income and Expenditure Statement

Collection Fund Adjustment Account

The Collection Fund Adjustment Account manages the differences arising from the

recognition of council tax income in the Comprehensive Income and Expenditure

Statement as it falls due from council tax payers compared with the statutory

arrangements for paying across amounts to the General Fund from the Collection Fund.

2010-11 2011-12

£000 £000

Balance at 1 April 41 42

Amount by which council tax income credited to the

Comprehensive Income and Expenditure Statement is 1 (69)

different from council tax income calculated for the year in

accordance with statutory requirements

Balance at 31 March 42 (27)


Accumulated Absences Account

The Accumulated Absences Account absorbs the differences that would otherwise arise

on the General Fund Balance from accruing for compensated absences earned but not

taken in the year, e.g. annual leave entitlement carried forward at 31 March. Statutory

arrangements require that the impact on the General Fund Balance is neutralised by

transfers to or from the Account.


39

Accumulated Absences Account 2010-11 2011-12

£000 £000

Balance at 1 April 86 88

Settlement or cancellation of accrual made at the end of the preceding year (86) (88)

Amounts accrued at the end of the current year. 88 79

Amount by which officer remuneration charged to the

Comprehensive Income and Expenditure Statement on an accruals

basis is different from remuneration chargeable in the year in

accordance with statutory requirements

0 0

Balance at 31 March 88 79

18 NOTES TO THE CASH FLOW STATEMENT

2011 2012

Note A to the Cash flow Statement £000 £000

Net Surplus or (Deficit) on the Provision of Services 4,890 (4,362)

Adjust net surplus or deficit on the provision of services for non cash movements

Depreciation, Amortisation, Impairment and downward valuations 1,980 4,106

Increase/Decrease in Creditors (587) 595

Increase/Decrease in Interest 24 110

Increase/Decrease in Debtors 613 (679)

Increase/Decrease in Inventories 17 (30)

Pension Liability (5,983) 484

Contributions to/ (from) Provisions 531 (524)

Carrying amount of non-current assets sold [property plant and equipment, investment property

and intangible assets] 922 124

Carrying amount of short and long term investments sold 2,700 2,300

Total non cash movements 217 6,486

Adjust for items included in the net surplus or deficit on the provision of services that are

investing or financing activities

Capital Grants credited to surplus or deficit on the provision of services (582) (297)

Proceeds from the sale of short and long term investments (587) (501)

Proceeds from the sale of property plant and equipment, investment property and intangible

assets (2,444) (344)

Total investing or financing activities (3,613) (1,142)Net Cash Flows from Operating Activities 1,494 982


40

Note B to the Cash Flow Statement - Operating Activities (Interest) 2011 2012

£000 £000

Operating activities within the cash flow statement include the following cash flows relating to

interest

Interest Received 611 611

Interest Paid (111) (202)Dividends Received 0 0

Note C to the Cash Flow Statement - Cash Flows from Investing Activities 2011 2012

£000 £000

Purchase of Property, Plant and Equipment, investment property and intangible assets (2,601) (1,287)

Purchase of short and long term investments (5,000) 0

Other payments for Investing Activities (172) (34)

Proceeds from the sale of property plant and equipment, investment property and intangible

assets 927 116Proceeds from short-term and long-term investments 587 501

Other Receipts from Investing Activities 1,644 1,450

Total Cash Flows from Investing Activities (4,615) 746

Note D to the Cash Flow Statement - Cash Flows from Financing Activities 2011 2012

£000 £000

Billing Authorities - Council Tax and NNDR adjustments 539 1,575Cash payments for the reduction of the outstanding liabilities relating to finance leases and on-

balance sheet PFI contracts (211) (201)

Total Cash Flows from Financing Activities 328 1,374

Note E - Makeup of Cash and Cash Equivalents 2010 2011 2012

£000 £000 £000

Cash and Bank Balances 67 1 285

Cash Investments - regarded as cash 6,255 3,339 6,100

Bank Overdraft (740) (550) (494)

5,582 2,790 5,891


41

19 AMOUNT REPORTED FOR RESOURCE ALLOCATION DECISIONS

This note ties the income and expenditure recorded in the budget reports for the year in

to the Statement of Accounts. The reasons for the differences between the reported

figure in the budget reports and the amounts disclosed in the accounts include notional

costs that are accounting adjustments rather than real monetary exchange transactions.

Reported Income and

Expenditure 2011-12

Central Services

to the Public

Cultural,

Environmental

and Planning

Services

Highway, Roads

and Transport

Services

Housing

Services

Corporate

and

Democratic

Core

Non

Distributed

Costs

Total

£000 £000 £000 £000 £000 £000 £000

Fees, Charges and other

service income (290) (2,163) 0 (50) (577) 0 (3,080)

Government Grants and

Other Contributions (3,358) (960) 0 (12,166) (426) 0 (16,910)

Total Income (3,648) (3,123) 0 (12,216) (1,003) 0 (19,990)

Employee Expenses 878 4,262 43 876 2,923 770 9,752

Other Service Expenses 3,523 3,338 87 11,642 1,830 0 20,420

Support Service Recharge 22 2,668 27 451 (3,289) 0 (121)

Total Expenditure 4,423 10,268 157 12,969 1,464 770 30,051

Net Expenditure 775 7,145 157 753 461 770 10,061

Reported Income and

Expenditure 2010-11

Comparatives

Central Services

to the Public

Cultural,

Environmental

and Planning

Services

Highway, Roads

and Transport

Services

Housing

Services

Corporate

and

Democratic

Core

Non

Distributed

Costs

Total

£000 £000 £000 £000 £000 £000 £000

Fees, Charges and other

service income (215) (2,077) (1) (19) (669) 0 (2,981)

Government Grants and

Other Contributions (3,356) (1,203) (102) (11,018) (181) 0 (15,860)

Total Income (3,571) (3,280) (103) (11,037) (850) 0 (18,841)

Employee Expenses1,085 4,955 42 930 2,676 149 9,837

Other Service Expenses 3,479 3,607 339 10,708 2,431 0 20,564

Support Service Recharge 5 2,028 80 601 (2,894) 0 (180)

Total Expenditure4,569 10,590 461 12,239 2,213 149 30,221

Net Expenditure 998 7,310 358 1,202 1,363 149 11,380

Reconciliation of Reported Income and Expenditure to Cost of Services in the

Comprehensive Income and Expenditure Statement 2010-11 2011-12

£000 £000

Net expenditure in the reported analysis 11,380 10,061

Net expenditure of services and support services not included in the analysis 452 0

Amounts in the CI&E statement not reported to members in the analysis ( 4,568) 4,377 *

Amounts included in the analysis not included in the CI&E statement 476 298 **

Costs of Services in Comprehensive Income and Expenditure Statement 7,740 14,736 * See third column on table below in ‘reconciliation to subjective analysis’

** See fourth column on table below in ‘reconciliation to subjective analysis’


42

Reconciliation to Subjective Analysis

This reconciliation shows how the figures in the analysis of reported income and

expenditure relates to a subjective analysis of the Surplus or Deficit on the Provision of

services included in the Comprehensive Income and Expenditure Statement.

2011-12

Reported

Analysis

Services &

Support

Services not in

Analysis

Amounts not

reported to

Management

for decision

making *

Amounts not

included in

CI&E **

Allocation

of

Recharges

Cost of

Services

Corporate

Amounts

Total

£000 £000 £000 £000 £000 £000 £000 £000

Fees, Charges and Other service income (2,579) (2,579) (2,579)

Interest and Investment Income (501) 501 0 (501) (501)

Income from Council Tax 0 (7,698) (7,698)

Other income 0 (248) (248)

Government Grants and contributions (16,910) (297) (17,207) (4,956) (22,163)

Rounding (1) (1) (2) (2)

Total Income (19,990) 0 (298) 500 0 (19,788) (13,403) (33,191)

Employee Expenses 9,752 0 (772) 8,980 8,980

Other services expenses 20,218 20,218 20,218

Support Service recharges (121) (121) (121)

Depreciation, amortisation and

impairment

5,447 5,447 50 5,497

Interest Payments 202 (202) 0 202 202

Precepts & Levies 0 1,924 1,924

Payments to Housing Capital Receipts

Pool

0 15 15

Gain or Loss on Disposal of Fixed Assets 0 27 27

Pensions interest cost and expected

return from pension assets

0 811 811

Collection Fund Deficit 0 0 0

Rounding 0 0

Total Expenditure 30,051 0 4,675 (202) 0 34,524 3,029 37,553

Surplus or deficit on the provision of

services 10,061 0 4,377 298 0 14,736 (10,374) 4,362

2010-11

Reported

Analysis

Services &

Support

Services not in

Analysis

Amounts not

reported to

Management

for decision

making

Amounts not

included in

CI&E

Allocation

of

Recharges

Cost of

Services

Corporate

Amounts

Total

£000 £000 £000 £000 £000 £000 £000 £000

Fees, Charges and Other service income

(2,394) (7) (2,401) (2,401)

Interest and Investment Income (587) 587 0 (587) (587)

Income from Council Tax 0 (7,586) (7,586)

Other income 0 (1,544) (1,544)

Government Grants and contributions

(15,860) (3) (388) (16,251) (5,993) (22,244)

Total Income (18,841) (10) (388) 587 0 (18,652) (15,710) (34,362)

Employee Expenses 9,837 291 (7,036) 3,092 3,092

Other services expenses 20,453 170 20,623 20,623

Support Service recharges (180) 1 (179) (179)

Depreciation, amortisation and

impairment 2,857 2,857 2,857

Interest Payments 111 (111) 0 111 111

Precepts & Levies 0 1,891 1,891

Payments to Housing Capital Receipts

Pool 0 16 16

Gain or Loss on Disposal of Fixed Assets

0 2 2

Pensions interest cost and expected

return from pension assets 0 1,055 1,055

Collection Fund Deficit 0 4 4

Rounding (1) (1) 1 0

Total Expenditure 30,221 462 (4,180) (111) 0 26,392 3,080 29,472

Surplus or deficit on the provision of

services 11,380 452 (4,568) 476 0 7,740 (12,630) (4,890)


43

Reconciliation of General Fund Balances reported to Members

This reconciliation shows how the reported balance in the General Fund relates to the

Balance Sheet Statement for General Fund Reserves.

2011-12

£000

Estimated Balance of General Fund Balances in the report to Members 3,283

Entries posted after the provisional report was reported to members (75)

- Entries impacting on Net cost of Services

- Entries impacting on Other operating expenditure in the C I&E (2)

General Fund Balance stated in the Balance Sheet Statement 3,206

20 TRADING OPERATIONS – BUILDING CONTROL

The Local Authority Building Control Regulations require the Council to keep a record of

information regarding the setting of charges for the administration of the Building Control

function. However, certain activities performed by the Building Control Unit cannot be

charged for, such as providing general advice and liaising with other statutory authorities.

The statement below shows the total cost of operating the Building Control service

divided between chargeable and non-chargeable activities.

There is a regulatory requirement for the Building Control account to break even over a

three year period for chargeable services. The three year period to 31st March 2012 made

an operating deficit of £246,000. The Council has put in place measures to rectify the

deficit position through the creation of a joint Building Control service with Cherwell

District Council. The larger unit is better able to make efficiencies whilst keeping the

service levels to a high standard.

The figures in the table below only reflect the income and expenditure that relate to

South Northamptonshire Council.

Chargeable Non Total Chargeable Non Total

Chargeable Chargeable

2010-11 2010-11 2010-11 2011-12 2011-12 2011-12

£000 £000 £000 £000 £000 £000

Expenditure

Employees 133 77 210 67 55 122

Premises 0 35 35 0 0 0

Transport 11 4 15 5 3 8

Supplies and Services 8 1 10 3 25 28

Central and Departmental Recharges 154 33 187 48 12 60

Total Expenditure 306 150 456 123 95 218

Income

Building Regulations Charges ( 203) 0 ( 203) ( 141) 0 ( 141)

Miscellaneous Income ( 2) ( 35) ( 37) ( 2) 0 ( 2)

Total Income ( 205) ( 35) ( 241) ( 143) 0 ( 143)

Surplus (Cr)/ Deficit for Year 100 115 216 ( 20) 95 75

Surplus (Cr)/Deficit for Year 2010-11 100

Surplus (Cr)/Deficit for Year 2009-10 166

Three year Surplus of Deficit 246

Building Control Charging

Account


44

21 JOINT ENTITY – WEST NORTHAMPTONSHIRE JOINT PLANNING UNIT

South Northamptonshire Council (SNC) is in partnership with Northamptonshire County

Council, Northampton Borough Council and Daventry District Council to fund a Joint

Planning Unit (JPU) for West Northamptonshire.

SNC is the accountable body for the JPU and, as such, all accounting entries come

through the ledgers of SNC. Only the proportion of the costs associated with SNC are

shown in the primary statements. This memorandum account shows the full expenditure

for the JPU in 2011-12 and how it was funded by the partner Authorities.

EXPENDITURE 2010-11 2011-12

£000 £000

Employees 643 573

Premises 12 12

Transport 12 10

Supplies and Services 228 109

Central and Departmental Recharges 0 0

895 704

INCOME - Funding from Partners 2010-11 2011-12

No of votes £000 £000

Northampton County Council 2 149 0

Northampton Borough Council 4 298 282

Daventry District Council 3 224 211

South Northamptonshire Council 3 224 211

12 895 704

Funding from Partners is based on the number of votes within the Joint Strategic Planning

Committee.

Northampton County Council (NCC), as part of their budget reductions for setting the

2011-12 budget, deleted the budget for the contribution to the WNJPU from 2011-12

onwards, however NCC does still have seats on the Joint Strategic Planning Committee.

22 MEMBERS’ ALLOWANCES

The Authority paid the following amounts to members of the council during the year.

Nature of Expenditure 2010-11 2011-12£000 £000

Chairman's allowance 5 5

Basic Allowance 190 196

Special Responsibility 109 95

Travel & Subsistence/Others 12 12

Total 316 308


45

23 OFFICERS’ REMUNERATION

a) The number of employees whose remuneration (excluding employer pension

contributions) was £50,000 or more is set out below in bands of £5,000.

Remuneration band 2010/2011 Number of Employees 2011/2012 Number of Employees

£50,000 - £54,999 1 1

£55,000 - £59,999 1 1

£60,000 - £64,999 2 0

£65,000 - £69,999 1 1

£70,000 - £74,999 2 1

£75,000 - £79,999 1 3

£80,000 - £84,999 2 2

£85,000 - £89,999 2 1

£90,000 - £94,999 0 0

£95,000 - £99,999 0 0

£100,000 - £104,999 0 0

£105,000 - £109,999 0 0

£110,000 - £114,999 1 0

£115,000 - £119,999 0 0

£120,000 - £124,999 0 0

£125,000 - £129,999 0 0


46

b Disclosure of remuneration for senior employees.

The financial year 2011-12 saw a significant restructure of the council resulting in a shared

management team arrangement with Cherwell District Council with some shared services.

Existing South Northants employees that form part of this new structure are still formally

employed by the Council and 50% is charged to Cherwell District Council, this charge

equated to £135,016 in 2011-12. The full costs of their employment are shown in the note

below. The same arrangement is in place for existing Cherwell District Council, employees

that form part of the new structure are still formally employed by Cherwell District Council

and 50% is recharged to this Council, this recharge equated to £192,312 in 2011-12. 2010/11

Basic

Sala

ry

Bonuses

Expenses

Allow

ances

Com

pensation for

loss o

f off

ice

Pensio

n

Contr

ibutions

Tota

l re

munera

tion

inclu

din

g p

ensio

n

conts

Post title Year £s £s £s £s £s £s

Chief Executive 2010/11 108,830 0 3,162 0 25,483 137,475

Director of Policy 2010/11 82,403 0 2,401 0 19,487 104,291

Director of Service Delivery 2010/11 87,466 0 1,186 0 20,690 109,342

Director of Community Engagement & Corporate Delivery2010/11 84,936 0 103 0 20,096 105,135

Head of Finance 2010/11 88,925 0 588 0 17,866 107,379

Head of Corporate Services 2010/11 76,384 0 1,876 0 17,866 96,126

Head of Environment and Implementation 2010/11 70,053 0 893 0 16,655 87,601

Head of Strategic Policy 2010/11 64,866 0 0 0 0 64,866

2011/12

Key

Basic

Sala

ry

Bonuses

Expenses A

llow

ances

Com

pensation for

loss

of offic

e

Pensio

n C

ontr

ibutions

Tota

l re

munera

tion

inclu

din

g p

ensio

n c

onts

Post title Year £s £s £s £s £s £s

4 Chief Executive Post Holder 1 2011/12 32,678 0 575 56,529 3,243 93,025

1 Chief Executive Post Holder 2 2011/12 110,955 0 0 0 15,423 126,378

1 Director of Community & Environment 2011/12 84,699 0 3,296 0 12,199 100,194

3 Director of Development 2011/12 43,250 0 330 0 5,536 49,116

3 Director of Resources 2011/12 43,250 0 132 0 5,536 48,918

2 Director of Policy 2011/12 42,779 0 826 0 5,410 49,015

1 Head of Finance and Procurement 2011/12 71,152 0 10,694 0 0 81,847

1 Head of Environmental Services 2011/12 62,500 0 0 0 8,688 71,188

1 Head of Transformation 2011/12 53,549 0 1,045 0 0 54,594

1 Head of Community Services 2011/12 62,500 0 236 0 8,688 71,424

2 Director of Service Delivery 2011/12 67,578 0 1,574 7,510 8,354 85,017

2

Director of Community Engagement & Corporate Delivery2011/12 56,996 0 309 21,025 5,671 84,001

2 Head of Finance 2011/12 38,089 0 435 0 4,809 43,333

2 Head of Corporate Services 2011/12 42,557 0 1,907 0 5,290 49,754

2 Head of Environment and Implementation 2011/12 36,324 0 641 0 4,649 41,614

2 Head of Strategic Policy 2011/12 32,259 0 0 0 0 32,259

3 Head of Law and Governance 2011/12 37,750 0 810 0 4,832 43,392

3Head of Public Protection and Development Management 2011/12 36,500 0 32 0 4,672 41,204

3 Head of Strategic Planning and the Economy 2011/12 36,000 0 0 0 0 36,000

The above table details the Senior Management Team of South Northamptonshire Council in 2010/11. 100% of this cost was

borne by South Northamptonshire Council.

1 Joint Management Team Post employed by CDC. (SNC bore 50% of costs from 1st October 2011)

2 Post deleted as part of Joint Management Team Implementation with SNC

4 Employed by SNC and only worked for SNC (SNC bore 100% of costs ended May 2011)

The above table details the Senior Management Team of South Northamptonshire Council in 2011/12. Part way through the

year the Senior Management Team became a shared team with Cherwell District Council with the costs being shared with

50% being borne by South Northamptonshire Council.

3 Joint Management Team posts employed by SNC . (CDC bore 50% of costs from October 2011)


47

24 EXIT PACKAGES

The numbers of exit packages with total cost per band and total cost of the compulsory

and other redundancies are set out in the tables below:

SNC entirely responsible for these costs.

(a) (b) © (d) (e)

Exit package cost

band (including

special payments)

2010/11 2011/12 2010/11 2011/12 2010/11 2011/12 2010/11 2011/12

£0-£20,000 4 1 1 0 5 1 £40,658 £8,521

£20,001-£40,000 1 0 3 0 4 0 £118,949 £0

£40,001-£60,000 0 0 0 0 0 0 £0 £0

£60,001-£80,000 0 0 0 0 0 0 £0 £0

£80,001-£100,000 1 0 0 0 1 0 £103,717 £0

£100,001-£200,000 0 0 0 0 0 0 £0 £0

Total 6 1 4 0 10 1 £263,324 £8,521

CDC/SNC 60/ 40 responsible for these costs.

(a) (b) © (d) (e)

Exit package cost

band (including

special payments)

2010/11 2011/12 2010/11 2011/12 2010/11 2011/12 2010/11 2011/12

£0-£80,000 0 5 0 3 0 8 £0 £267,181

£80,001-£120,000 0 0 0 0 0 0 £0 £0

£1200,001-£200,000 0 0 1 3 1 3 £175,836 £432,255

Total 0 5 1 6 1 11 £175,836 £699,436

Number of

compulsory

redundancies

Number of other

departures agreed

total number of exit

packages by cost

band [(b) + ©]

Total cost of exit

packages in each

band

Number of

compulsory

redundancies

Number of other

departures agreed

total number of exit

packages by cost

band [(b) + ©]

Total cost of exit

packages in each

band


48

25 EXTERNAL AUDIT COSTS

The Authority has incurred the following costs in relation to the audit of the Statement of

Accounts, certification of grant claims and statutory inspections and to non-audit services

provided by the Authority’s external auditors. 2010-11 2011-12

£000 £000

Base Audit 97 86

Statutory Inspection 0 0

Grant Claims 19 18

Other 0 0

Total 116 104

26 GOVERNMENT GRANT AND GRANT INCOME

The Authority credited the following grants, contributions and donations to the

Comprehensive Income and Expenditure Statement

Grant Income 2010-11 2011-12

£000 £000

Credited to Taxation and Non Specific Grant Income

General Government Grant ( 735) ( 1,081)

Redistributed Non domestic rates ( 5,064) ( 3,496)

Capital grants and contributions ( 194) 0

Other contributions 0 ( 379)

Other contributions Collection Fund Surplus (SNC proportion) ( 58)

Total ( 5,993) ( 5,014)

Credited to Services

CLG New Burdens Grants ( 93) ( 3)

CLG Area Based Grant - specific to services ( 36) 0

DWP Housing Benefit Administration ( 322) ( 378)

DWP Rent Allowances ( 10,625) ( 11,655)

DWP Council Tax Benefits ( 3,208) ( 3,230)

CLG Homelessness Grant ( 47) ( 66)

DoT Special Travel Concession Grant ( 67) 0

Waste & Resources Action Programme ( 36) 0

Future Jobs Fund ( 18) 0

CLG Neighbourhood Planning 0 ( 8)

CLG Mortgage Repossession 0 ( 30)

DWP - ATLAS 0 ( 28)

Other grants ( 5) 0

CLG Disabled Facilities Grant ( 143) ( 163)

CLG Regional Housing Pot for Decent Homes ( 219) ( 134)

Other contributions ( 48) ( 43)

Contributions from Other Local Authorities ( 1,165) ( 1,252)

Big Lottery ( 57) ( 59)

Environment Agency ( 55) ( 37)

NDR cost of Collection ( 106) ( 105)

Feed in Tarrif for solar panels 0 ( 15)

Rounding 0 ( 1)

Total grants and Contributions Credited to the services ( 16,251) ( 17,207)


49

Grant Income continued 2010-11 2011-12

£000 £000

Revenue Grants Receipts in Advance

Big Lottery ( 33) 0

Environment Agency - Flood Defence ( 101) ( 98)

s106 Deposits ( 86) ( 504)

CLG Neighbourhood Plans 0 ( 52)

DEFRA - Air Quality 0 ( 50)

Other grants and contributions ( 124) ( 37)

Escrow Agreement (Moat Lane) 0 ( 250)

Capital Grants Receipts in Advance

Regional Housing Pot ( 176) ( 42)

Total ( 520) ( 1,033)

Acronyms: CLG (Department for Local Government and Communities), DWP

(Department for Work and Pensions), DoT (Department of Transport), ATLAS (Automated

Transfers to Local Authority Systems), NDR (National Non-Domestic Rates), DEFRA

(Department for Environment, Food and Rural Affairs).

Section 106 receipts are monies paid to the Council by developers as a result of the grant

of planning permission where works are required to be carried out or new facilities

provided as a result of that permission. The sums are restricted to be spent only in

accordance with the agreement concluded with the developer.

27 RELATED PARTIES

South Northamptonshire Council is required to disclose material transactions with related

parties, bodies or individuals that could potentially control or influence the Council (or

conversely be controlled or influenced by the Council). Disclosure of these transactions

allows readers to assess the extent to which the Council might have been constrained in

its ability to operate independently or might have secured the ability to limit another

party's ability to bargain freely with the Council.

Central Government has effective control over the general operations of the Council - it

is responsible for providing the statutory framework within which the Council operates,

providing just over half of its funding in the form of grants and also prescribing the terms of

many of the transactions that the Council has with other parties (e.g. Council tax bills &

Housing Benefits). The details of the grants received from government departments have

been set out in the previous note on the subjective analysis.

Members of the Council have direct control over the Council's financial and operating

policies. The total of Members' allowances paid in 2011-12 is shown in Note 22.

During 2011-12, works and services to the value of £4,463 (£49,365 for 2010-11) were

commissioned from one company in which one Member had an interest. Contracts were

entered into in full compliance with the Council's Standing Orders.

South Northamptonshire Council Grants Panel paid grants totalling £494 to voluntary

organisations where one Member had a position on the governing body. The relevant

Member did not take part in any discussion or decision relating to the grant.


50

Details of all these transactions are recorded in the Register of Members' Interests which is

open to public inspection at the Council Office, Springfields, Towcester, NN12 6AE during

office hours.

The precept payments made to Northamptonshire County Council and

Northamptonshire Police Authority amounted to £34,442,242 for 2011-12 (£34,350,286 for

2010-11) and £6,472,329 for 2011-12 (£6,455,020 for 2010-11) respectively.

Other Public Bodies - Precepts to Parish and Town Councils amounted to £1,924,298 for

2011-12 (£1,891,463 for 2010-11).

Officers of the Council declared interests of £10,566 in 2011-12 (£15,488 in 2010-11).

In 2011-12 a joint senior management team was implemented with Chief Executive,

Directors and senior management being shared between the South Northamptonshire

Council (SNC) and Cherwell District Council (CDC). Where existing members of staff were

re-employed in the new structure, the staff remained employed by their existing Council

and their costs were shared and appropriately charged to the other Council. In addition

other services have become shared for example Information Technology, Democratic

Process and Building Control. The charge from CDC to SNC was £832,031 and the charge

from SNC to CDC was £509,880 for 2011-12.

Other related parties include:

• The Joint Planning Unit (JPU) consisting of Daventry District Council, Northampton

Borough Council and Northampton County Council (expenditure of £211,000).

• The Community Safety Partnership Unit (CSPU) with Daventry District Council and

Northamptonshire Police Authority (expenditure of £49,244).

• Moat Lane Partnership with Morgan Sindall (income of £250,000).

• Moat Lane Partnership with Northamptonshire County Council (a partner but nil

transactions in 2011-12).

• Northamptonshire Waste Partnership which is a formal partnership consisting of all

eight Northamptonshire local authorities and is dedicated to reducing the amount

of waste going to landfill (expenditure of £25,000).

• South Northants Homes (income of £329,094 and expenditure of £41,953).

• SEMLEP (South East Midlands Local Enterprise Partnership) (expenditure of £7,000).

• South Northants Leisure Trust (expenditure of £176,246).


51

28 CAPITAL EXPENDITURE AND CAPITAL FINANCING

The total amount of capital expenditure incurred in the year is shown in the table below

(including the value of assets acquired under finance leases), together with the resources

that have been used to finance it. Where capital expenditure is to be financed in future

years by charges to revenue as assets are used by the Authority, the expenditure results in

an increase in the Capital Financing Requirement (CFR). The CFR is analysed in the

second part of this note.

2010-11 2011-12

£000 £000

Opening Capital Financing Requirement 797 662

Capital expenditure

Property, plant and equipment (non-leased) 2,135 954

Property, plant and equipment (leased) 77 659

Inventories (stock) 66 82

Intangible Assets 334 426

REFCUS* 876 954

TOTAL 3,488 3,075

Sources of capital finance

Capital Receipts Reserve

- new assets purchased 2,326 1,299

- Assets leased on finance (reduction of balance

sheet liability)

211 201

- REFCUS 488 657

Capital Grants 194 0

Capital Grants - REFCUS* 388 297

RCCO and other reserves 15 163

External Borrowing 0 0

Future Borrowing 0 0

Total 3,622 2,617

Closing Capital Financing Requirement 662 1,120

2010-11 2011-12

Explanation of movements in year £000 £000

Increase in underlying borrowing 0 0

Assets acquired under finance leases 77 659

Finance lease liability repayment (211) (201)

Increase/ (decrease) in Capital Financing

Requirement

(134) 458

*REFCUS stands for Revenue Expenditure Funded From Capital Under Statute. This is

expenditure on assets that do not belong to the Council and so do not appear on the

Council’s asset register. For example disabled adaptations through disabled facilities

grants.


52

29 LEASES

The council leases its waste vehicles and multifunctional devices (photocopiers) under

leases that are classed as finance leases and therefore the assets are shown on the

balance sheet as belonging to the Council. This is one of the significant changes to the

accounts under the IFRS standards as previously these were considered operating leases

and the assets were not shown on the balance sheet. Details of the leases are shown

below:

Finance Lease Net Present Value 31-Mar-11 31-Mar-12

£'000 £'000

Finance lease liabilities (net present value of minimum lease payments)

Current 141 216

Non-Current 397 872

Finance costs payable in future years 634 845

Minimum lease payments 1,172 1,933

Minimum lease payments Finance lease liabilities

31-Mar-11 31-Mar-12 31-Mar-11 31-Mar-12

£000 £000 £000 £000No later than one year 383 423 141 216Later than one year but not later than five years 789 1,329 397 751Later than five years 0 181 0 121Total 1,172 1,933 538 1,088

30 IMPAIRMENT LOSSES

Paragraph 4.7.4.2(1) of the Code requires disclosure by class of assets of the amounts for

impairment losses and impairment reversals charged to the Surplus or Deficit on the

Provision of Services and to Other Comprehensive Income and Expenditure. These

disclosures are consolidated in Notes 9 and 11 reconciling the movement over the year in

the Property, Plant and Equipment and Intangible Asset balances.

During 2011-12 the Council has recognised downward valuations in 11 assets, totalling

£2.7m as part of the five year rolling programme of external valuation. These asset

movements are noted in the Explanatory Foreword.

In addition there has been a retrospective downward valuation due to the application of

the Heritage Asset standard from 1st April 2010 (as outlined in note 1). Here a single asset

previously held at historical cost (£1.128m) in the community asset category, was

separated into two assets. One re-categorised as a heritage asset and valued at fair

value (£219k) and the other moved into the Moat Lane Regeneration category called

‘surplus assets’ and valued at fair value (£149k).

31 IAS 19 PENSION FUND NOTES - PARTICIPATION IN PENSION SCHEMES

As part of the terms and conditions of employment of its officers and other employees,

the authority offers retirement benefits through membership of the Local Government

Pension Scheme administered by Northamptonshire County Council. Although these

benefits will not actually become payable until after the employees retire, the council is

required to disclose the cost of these at the time that the employees earn their future

entitlement.

The arrangement is a funded defined benefit final salary scheme. This means that the

council and employees pay contributions into a fund, calculated at a level intended to

balance the pension liabilities with investment assets. The retirement benefits are


53

determined independently of the investments of the scheme and employers have an

obligation to make contributions where assets are insufficient to meet employee benefits.

South Northamptonshire Council recognises the cost of retirement benefits in the

Comprehensive Income and Expenditure Statement under Net Cost of Services when

they are earned by employees, rather than when the benefits are eventually paid as

pensions. However, the charge we are required to make against council tax is based on the cash contributions payable in the year, so the future cost of retirement benefits is

reversed out in the Movement in Reserves Statement so that it does not impact the

charge to council tax.

The date of the last actuarial valuation was 31st March 2010.

Valuation method

1. As required under the Accounting Standard IAS19 the Actuary has used the

projected unit credit method of valuation.

2. No allowance has been made for administration expenses in the present value of

the defined benefit obligation, or the balance sheet. Expenses are allowed for by way of

increase in the current service cost.

3. The last formal valuation of the Fund was carried out as at 31 March 2010. The

Actuary has projected the results of this valuation forward to 31 March 2012 using

approximate methods. The roll-forward allows for:

• changes in financial assumptions;

• additional benefit accrual;

• estimated cash flows over the period; and

• membership information.

4. In order to assess the value of the Council’s liabilities in the Fund as at 31 March

2012, the Actuary has rolled forward the value of the Council’s liabilities calculated at the

latest formal valuation for the Employer, allowing for the different financial assumptions

required under the Accounting Standard at the accounting date. In calculating the

current service cost the Actuary allowed for changes in the Council’s pensionable payroll

as estimated from contribution information provided. In calculating the asset share, the

Actuary rolled forward the Council’s share of the assets allocated as at the latest

valuation for the Council allowing for investment returns (estimated where necessary), the

effect of contributions paid into, and estimated benefits paid from, the Fund by the

Council and its employees.

5. In preparing the balance sheet at 31 March 2012 and the revenue account to 31

March 2012, no

allowance is made for the effect of and changes in the membership profile since 31

March 2011. The principal reason for this is that insufficient information was available to

the Actuary to allow them to make any such adjustment. However, for most employers,

the effect is likely to be immaterial in actuarial terms.

6. Whilst the liabilities calculated under the Accounting Standard include an

allowance for some premature retirements on grounds of ill-health, there is no allowance

for early retirements on grounds of redundancy or efficiency.

7. It is not possible to assess the accuracy of the estimated liability shown in the results

schedule without conducting a full valuation. Such a valuation is generally not practical

in the time available to meet the Council’s reporting requirements. The estimated liability

will not reflect differences in demographic experience from that assumed (e.g. early


54

retirements) or the impact of differences between aggregate changes in salary and

pension and changes for specific individuals.


55

i) The table below summaries the membership data

Total Salaries/Pensions Average

Number Age

31 January 2012 31 March 2010 31 January 2012 31 March 2010 31 March 2010Actives 193 208 5,079 5,401 50Deferred Pensioners 265 264 * 610 50Pensioners 281 274 * 1,606 66

*The actuary did not have current figures for the amount of pensions in payment and deferred pensions.Calculations are based on estimates from the latest formal valuation.

Deferred pensioners include undecided leavers and frozen refunds.

Salaries are actual, not full-time equivalent

ii) The assumed total pensionable payroll is:

Period Assumed Total Pensionable Payroll1 April 2011 to 31 March 2012 £5,164,0001 April 2012 to 31 March 2013 £5,079,000

iii) Early Retirements

There were a total of 3 new early retirements during the year 2011-12.

1 April 2011 to 31 March 2012 Number Total Pension Accrued Total Pension ActualRedundancy 2 £99,149 £99,149Efficiency 1 £6,421 £6,421

Assets and Liabilities in Relation to Retirement Benefits

a) Reconciliation of the opening and closing balances of the present value of the

scheme liabilities:

31 March 2011 31 March 2012

£000 £000Opening Balance 34,685 22,664Cash Payments to Pension Fund during the year (1,721) (1,728)Actuarial gain/ (loss) for the year (6,038) 4,431Appropriations to Pension Reserve during the year (4,262) 2,212Balance carried forward 22,664 27,579


56

Actuarial gains and losses are changes in the net pensions liability that arise because

events have not coincided with assumptions made at the last actuarial valuation or

because the actuaries have updated their assumptions. These are debited or credited to

the Pension Reserve.

2010-11 2011-12

£000 £000

Opening Balance 67,766 55,586

Current Service Cost 1,214 965

Interest Cost 3,431 3,043

Contribution by Scheme Participants 368 343

Actuarial Gains/ (Losses) ( 8,457) 2,795

Benefits Paid - Funded ( 2,055) ( 2,108)

Benefits Paid - Unfunded ( 150) ( 148)

Past Service (Costs) ( 6,588) 10

Curtailments 57 426

Closing Balance 55,586 60,912

Liabilities

b) Reconciliation of the opening and closing balances of the fair value of the scheme

assets:

Assets 2010-11 2011-12

£000 £000

Opening Balance 33,081 32,922

Expected Return on Scheme Assets 2,376 2,232

Actuarial Gains/ (Losses) ( 2,419) ( 1,636)

Contributions by the Employer 1,571 1,580

Contributions in respect of Unfunded Benefits* 150 148

Contribution by Scheme Participants 368 343

Benefits Paid - Funded ( 2,055) ( 2,108)

Benefits Paid – Unfunded* ( 150) ( 148)

Closing Balance 32,922 33,333

*This relates to the old pension gratuities scheme.

The expected return on assets is based on a consideration of the expected returns

available on the assets underlying the current investment policy. Expected yields on fixed

interest investments are based on gross redemption yields as at the Balance Sheet date.

Expected returns on equity investments reflect long-term real rates of return experienced

in the respective markets.


57

Reconciliation of transactions relating to Post-employment Benefits

Local Government Pension Scheme 2011 2012

£000 £000


Cost of Services

- current service cost 1,214 965

- past service costs / (gain) -6,588 10

- settlements and curtailments 57 426

Financing and Investment Income and Expenditure

-interest cost 3,431 3,043

- expected return on scheme assets -2,376 -2,232

Total Post Employment Benefit Charged to the Surplus or

Deficit on the Provision of Services -4,262 2,212

Other Post Employment Benefit Charged to the


- actuarial (gains) and losses -6,038 4,431

Total Post Employment Benefit Charged to the

Comprehensive Income and Expenditure Statement -10,300 6,643


- reversal of net charges made to the Surplus or Deficit for

the Provision of Services for post employment benefits in

accordance with the Code 4,262 -2,212

Actual amount charged against the General Fund Balance

for pensions in the year:

- employers’ contributions payable to scheme 1,721 1,728

The cumulative amount of actuarial gains and losses recognised in the Comprehensive

Income and Expenditure Statement to 31 March 2012 is a loss of £18,062,000.

Major categories of Plan Assets as a Percentage of Total Plan Assets

The Local Government Pension Schemes assets consist of the following categories, by

proportion of the total assets held

2011 2012

Equities 72.0% 71.0%

Bonds 20.0% 21.0%

Property 6.0% 6.0%

Cash 2.0% 2.0%

100.00% 100.00%

Investment Returns


58

The return on the Fund in market value terms for the year to 31 March 2012 is estimated

based on actual Fund returns (provided by Northamptonshire County Council to the

Actuaries Hymans Robertson LLP) and index returns where necessary.

Actual Rate of Return 1st April 2011 to 31st December 2011 (2.9%)

Estimated Rate of Return 1st April 2011 to 31st March 2012 1.8%

The bid value of the Fund’s Assets as at 31 March 2012 is £1,315m (31 March 2011 was

£1,281m) based on information provided by the County Council and Actuaries Hymans

Robertson LLP and adjusting for the difference between the mid-market (as supplied) and

bid value of the assets.

Principal Actuarial Assumptions as at 31st March 2012

Liabilities have been assessed on an actuarial basis using the projected unit method, an

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

about mortality rates, salary levels and so on. The scheme liabilities have been assessed

by Hymans Robertson LLP, an independent firm of actuaries, estimates being based on

the latest full valuation of the scheme as at 31 March 2007.

The principal assumptions used by the actuary have been

2010-11 2011-12

£000 £000

Discount Rate 5.50% 4.80%

Expected Return on Assets 6.80% 5.50%

Salary Increase Rate 5.10% 4.80%

Inflation/Pension Increase Rate 2.80% 2.50%

Mortality Assumptions

Longevity at 65 for Current Pensioners:

- Men 21.4 years 21.4

- Women 23.3 years 23.3

Longevity at 65 for Future Pensioners:

- Men 23.4 years 23.4

- Women 25.5 years 25.5

Equity Investments 7.50% 6.20%

Bonds 4.90% 3.50%

Property 5.50% 4.40%

Cash 4.60% 3.50%

Commutation

Take-up of Option to Convert Annual Pension into

Retirement Lump Sum pre April 2008 50% 50%

Take-up of Option to Convert Annual Pension into

Retirement Lump Sum post April 200875% 75%


59

Scheme History:

a) Present Value of Scheme Liabilities, Fair Value of Assets and Surplus Deficit in the

Scheme:

31 March 2008 2009 2010 2011 2012

£000 £000 £000 £000 £000

Fair Value of Employer Assets 30,592 23,972 33,081 32,922 33,333

Present Value of Scheme Liabilities (50,938) (43,527) ( 67,766) ( 55,586) ( 60,912)Surplus / (Deficit) in the Scheme (20,346) (19,555) (34,685) (22,664) (27,579)

Statutory arrangements for funding the deficit mean that the financial position of the

authority remains healthy. The deficit on the scheme will be made good by increased

contributions over the remaining working life of employee, as assessed by the scheme

actuary.

The projected pension expense for the year to 31 March 2012 is £1.81m. The total

contributions expected to be made to the scheme by the council in the year to 31 March

2012 is £1.31m.

History of Experienced Gains and Losses:

b) The actuarial gains identified as movements on the Pensions Reserve in 2011-12 can be

analysed into the following categories, measured as a percentage of assets or liabilities

at 31 March 2012:

31st March 2008 2009 2010 2011 2012

£000 £000 £000 £000 £000

Fair Value of Employer Assets 30,592 23,972 33,081 32,922 33,333

Experienced Gain/ (Loss) on

Assets (3,635) (8,893) 7,295 (2,419) (1,636)

Gain/ (Loss) as % of Asset Fair

Value -12% -37% 22% -7% -5%

Present Value of Liabilities (50,938) (43,527) (67,766) (55,586) (60,912)

Experienced Gain/ (Loss) on

Liabilities (2,398) (24) (131) 4,930 (838)Gain/ (Loss) as % of Total

Liabilities 5% 0% 0% -9% 1%

Projected pension expense:

c) The projected pension expense for the year to 31 March 2013.

Analysis of projected amount to be charged to operating profit for the year to 31 March

2013 is provided in the table below:


60

Year Ended: 31 March 2013 £000 % of pay

Projected Current Service Cost* 972 19.1%

Interest on Obligation 2,907 57.2%

Gain/(Loss) as % of Asset Fair Value (1,819) (35.8%)

Gain/(Loss) as % of Total Liabilities 2,060 40.5%

The information included for all of the pension disclosures is provided by Hymans

Robertson LLP, the Actuary for the Pension Fund. Further information can be found in the

County Council’s Pension Fund’s Annual Report which is available on request from the

Pensions Section [Resources Directorate PO Box 136, County Hall, Guildhall Road,

Northampton, NN1 1AT].

32 CONTINGENT ASSETS

Contingent Assets

VAT Repayment - Fleming Case

In 2009-10 the Council won a legal case to have a refund of VAT paid on Leisure Services.

The refunded payment included the initial VAT and simple interest. The Council has a

second claim lodged to have compound interest repaid. The value of this if successful is

estimated to be £130,000.

33 CONTINGENT LIABILITIES

(b) Contingent Liabilities

Land Charges - Property Search Information

Potential liability arising from the fact that under the Environmental Information

Regulations 2004 there is the possibility that search fees have been incorrectly charged

historically. An accurate estimate of financial effects is not possible given the uncertain

number of potential claimants and the extent to which any of the commercial search

agents actually made a financial loss. In 2010-11 the Council received a grant of £34,000

to help to offset this potential liability and this has been transferred to an ear-marked

reserve.


61

34 FINANCIAL INSTRUMENTS

Categories of Financial Instruments

i) Types of Financial Instruments

Accounting regulations require the ‘“financial instruments’ (investment, lending and

borrowing of the Council) shown on the balance sheet to be further analysed into various

defined categories. The investments, lending & borrowing disclosed in the balance sheet

are made up of the following categories of ‘financial instruments’:

a) Financial Instrument Balances for year ended 31 March 2012

Financial Instrument March 31st

2011

March 31st

2012

March 31st

2011

March 31st

2012

£000 £000 £000 £000

Investments (Assets)

Investments 5,032 5,032 12,473 10,061

Cash and Cash Equivalents 0 0 3,340 6,385

Debtors (Assets)

Loans and Receivables 0 0 0 0

Financial Assets carried at contract

amount (Trade Debtors)

0 0 1,167 1,244

Total Investments 5,032 5,032 16,980 17,690

Borrowings (Liabilities)

Financial liabilities at amortised cost

(bank overdraft)

0 0 550 494

Creditors (Liabilities)

Financial Liabilities carried at contract

amount (Trade Creditors)

1,273 0 1,414 2,079

Total Borrowings 1,273 0 1,964 2,573

Long Term Current


62

b) Gains and Losses on Financial Instruments

The gains and losses recognised in the Comprehensive Income and Expenditure Account

and in relation to financial instruments are made up as follows:

Liabilities at

amortised

cost

Loans &

Receivables

Available

for sale

assets

£000 £000 £000 £000

Interest & Investment Income 0 501 0 501

Net Gain/ (Loss) for the year 0 501 0 501

Liabilities at

amortised

cost

Loans &

Receivables

Available for

sale assets

£000 £000 £000 £000

Interest & Investment Income 0 587 0 587

Net Gain/ (Loss) for the year 0 587 0 587

Total

Total2010-11 Financial Year Financial

Liabilities

Financial Assets

2011-12 Financial Year Financial

Liabilities

Financial Assets

c) Fair Value of Assets and Liabilities Carried at Amortised Cost

The fair value of each class of financial assets and liabilities, which are carried in the

balance sheet at amortised cost, is disclosed below.

d) Methods and Assumptions in Valuation Technique

Loans and receivables are carried on the balance sheet at amortised cost, whereas

‘available for sale’ and ‘fair value through profit and loss’ investments are carried on the

balance sheet at fair value. The amortised cost consists of the nominal value of the

principal plus accrued interest as at year end.

The 2011-12 Code of Practice requires the fair values of the council’s investments to be

disclosed for comparison purposes. Fair value is the amount for which an asset could be

exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s-

length transaction. The fair value of a financial instrument on initial recognition is generally

the transaction price. The Council’s investment portfolio at year-end consisted entirely of

loans and receivable investments.

The fair value of an instrument is determined by calculating the Net Present Value (NPV)

of future cash flows, which provides an estimate of the value of payments in the future in

today’s terms.


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e) Assets and Liabilities

The fair values are calculated as follows:

f) Fair Value of Liabilities Carried at Amortised Cost

Financial Liability Carrying

Amount

Fair Value Carrying

Amount

Fair Value

£000 £000 £000 £000

Temporary Borrowing (Short Term) 0 0 0 0

Trade Creditors 1,414 1,414 2,079 2,079

Total Liabilities 1,414 1,414 2,079 2,079

31-Mar-11 31-Mar-12

g) Fair Value of Assets Carried at Amortised Cost

Financial Asset Carrying

Amount

Fair Value Carrying

Amount

Fair Value

£000 £000 £000 £000

Deposits with banks/building societies:

Cash Equivalents 3,339 3,339 6,385 6,385

Short Term (<1 Year) 12,473 12,473 10,061 10,061

Long Term (>1 Year) 5,032 5,593 5,032 5,236

Trade Debtors 1,167 1,167 1,244 1,244

Total Assets 22,011 22,572 22,722 22,926

31-Mar-11 31-Mar-12

The fair value for investments at the Balance Sheet date is higher than the carrying

amount because the interest rate on similar investments is now lower than that obtained

when the investment was originally made.

The Council’s management of treasury risks actively works to minimise the Council’s

exposure to the unpredictability of financial markets and to protect the financial

resources available to fund services. The Council has fully adopted CIPFA’s Code of

Treasury Management Practices and has written principles for risk management.

ii) Risk Management

a) Credit Risk

Credit risk arises from the short-term lending of surplus funds to banks, building societies

and other local authorities as well as credit exposures to the Council’s customers. This risk

is minimised through the Annual Treasury Management Strategy, which sets the policy of

the Council to place deposits only with a limited number of high quality banks and

building societies and to restrict lending to a prudent maximum amount for each

institution.


64

The Council has set counterparty limits, restricting the total amount of deposits with any

single institution/banking group to a maximum of £7.5 million.

The following analysis summarises the Council’s potential maximum exposure to credit risk,

based on the authorities experience over the past five years, and adjusted to reflect

current market conditions.

a) Credit Risk - Quantitative Notes

Amount

(Principal or

Outstanding

Balance)

Historical experience

of default (adjusted

to reflect market

conditions)

Estimated

maximum

exposure

to default

31-Mar-12 31-Mar-12

£000 % £000

Deposits with Banks and Building

Societies

Long-

Term

Short-

Term

Principal

Amount

Between one and two years:

Royal Bank of Scotland A F1 5,000,000 0 0

Less than 1 year:

Bank Of Scotland A F1 5,000,000 0 0

Barclays Bank A F1 3,000,000 0 0

Nationwide A+ F1 3,000,000 0 0

HSBC AA F1+ 2,000,000 0 0

Debt Management Office N/A N/A 3,100,000 0 0

Natwest Bank Call Account (plus

cash in hand plus petty cash)

A F1 285,419 0 0

Sub-Total: Deposits with banks

and building societies

21,385,419 0 0

Trade Debtors Outstanding

Balance

Sub-Total: Trade Debtors 1,244 1.69 21

Total 21,386,663 21

FITCH credit rating

Whilst the current economic climate has raised the overall possibility of investment

defaults, the Council maintains a strict credit criteria review for investment counterparties.

The Council expects full repayment on the due date of deposits placed with its existing

counterparties.


65

b) Debtor Risk

The Council does not generally allow credit for its trade debtors. Outstanding debt

overdue for payment can be analysed by age as follows

Duration outstanding 31-Mar-11 31-Mar-12

£000 £000

Total Debtors:

Debtors * 1,167 1,244

Outstanding Debt Overdue:

Between 1 and 13 days 72 102



42 days and older 85 92

Total Outstanding Debt 192 211

* Debtors figures exclude statutory obligations

c) Liquidity Risk

The Council manages its liquidity position through the risk management processes set out

above (setting and approval of Prudential Indicators, and approval of the Annual

Treasury Management Strategy), as well as through the active management of the cash

flow position. This seeks to ensure that cash is available when it is needed.

In the event of an unexpected cash requirement, the Council has access to borrowings

from the money markets to cover any short term cash flow need. The Council is also

required to provide a balanced budget through the Local Government Finance Act

1992, which ensures sufficient funds are raised to cover annual expenditure. There is

therefore no significant risk that it will be unable to raise finance to meet its commitments

under financial instruments.

The maturity structure of financial liabilities is as follows

Duration outstanding 31-Mar-11 31-Mar-12

£000 £000

Loans Outstanding:

Temporary Borrowing 0 0

Creditors * 1,414 2,079

Total 1,414 2,079

Outstanding Liabilities Overdue

Less than one year 1,414 2,079

Between one and two years 0 0

Between two and five years 0 0

More than five years 0 0

Total 1,414 2,079

* Creditors figures exclude statutory obligations.

All trade and other payables are due to be paid in less than one year.


66

d) Interest Rate Risk

The Council maintains a significant investment portfolio, and has no long term borrowing.

Whilst the cash flow procedures above are considered against prevailing market

conditions, a longer term risk to the Council relates to managing the exposure to

replacing financial instruments, such as longer term financial assets, as they mature.

An assessment of interest rate exposure is fed into the setting of the annual budget (and

ongoing monitoring), as well as the Medium Term Financial Strategy.

The maturity structure of investments held by the Council is as follows

Period remaining to maturity

at Balance Sheet date 31-Mar-11 31-Mar-12

£000 £000

Less than one year 15,638 16,385

Between one year and two years 5,000 5,000

More than two years 0 0

Total 20,638 21,385

Principal Invested

35 NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS - MARKET RISK

e) Interest Rate Risk

The Authority is exposed to risk in terms of its exposure to interest rate movements on its

investments. Movements in interest rates have an impact on the authority as Investments

at Fixed Rates will result in the Fair Value of the assets will fall.

Also, at times of low interest rates, the Authority will only be able to obtain low

percentages of return on its investments at fixed rates in any new investments placed.

The Authority currently does not have any investments at Variable Rates.

The Authority currently does not have any borrowings, including variable rate loans and

the Authority has a number of strategies for managing interest rate risk.

The Treasury Management Team has an active strategy for assessing interest rate

exposure that feeds into the setting of the annual budget and which is used to update

the forecasted out-turn during the year. This allows for any adverse changes to be

accommodated.

f) Price Risk

The Authority has no financial investments in equity shares and thus has no exposure to a

loss arising from movement in the prices of shares. Also, although the authority does have

a number of joint ventures, these organisations do not have any shares

g) Foreign Exchange Risk

The Authority has no financial assets or liabilities denominated in foreign currencies and

thus has no exposure to loss arising from movements in exchange rates.


67

36 HERITAGE ASSETS – SUMMARY OF TRANSACTIONS

This note shows Heritage Assets and Community Assets (as they are being given the same

accounting treatment as Heritage Assets) over a two year period that will be added to

each year until a five year overview is gained. They were identified in 2011-12 as part of

the change in accounting policies under IFRS and have been retrospectively applied to

1st April 2010.

The Heritage Asset Moat Lane – Bury Mount shown in the table below was purchased at

£1.128m and had been held on the balance sheet at this historical cost. Now it is

revalued at fair value at £219k (a downward valuation of £909k).

The Community Asset Marlow’s Meadow and Waterhall was purchased in two phases

and was partly held in ‘surplus assets’ (£291k) until prepared and available for use by the

general public.

2010-11 2011-12

£'000 £'000

Community Assets - Marlow's Meadow &

Waterhall, Easton Neston, Towcester

Balance Brought Forward 132 132

Additions - purchased 0 0

Additions - value donated 0 0

recategorisation 0 290

Impairments 0 0

Depreciation 0 0

Disposals 0 0

Balance Carried Forward 132 422

Heritage Assets: Art Collection




Impairments 0 0

Depreciation 0 0

Disposals 0 0


Heritage Assets: Civic Regalia




Impairments 0 0

Depreciation 0 0

Disposals 0 0


Heritage Assets: Bury Mount




Impairments 0 0

Depreciation 0 0

Disposals 0 0



68


69

37 HERITAGE ASSETS

Art Collection

The Collection consists of one painting and one statue.

This collection is held at Towcester Springfields in the lobby of the Council Chamber.

The art collection consists of:

- One painting of the landscape at Blisworth, Northamptonshire by the artist of Peter

Newcombe.

This has been valued at current market value.

- One bronze statue of a bell-tower (c. 0.5 m).

This has been valued at its current market value.

Depreciation has been considered for these assets and as they hold their value or

increase in value as they age, depreciation is not considered appropriate.

These assets are intended to be preserved in trust for future generations because of its

historical association.

Four Chains of Office – Councillor Regalia

This consists of four chains of office.

These chains are securely held at Towcester Springfields.

- This has been valued at current market value and insurance value.

Depreciation has been considered and is not appropriate for Civic Chains as they

are more likely to hold or increase in value with time.

This asset is intended to be preserved in trust for future generations because of its

historical and cultural association.

Moat Lane – Bury Mount

Bury Mount has been at the centre of Towcester since medieval times. Bury Mount Motte

is the remains of an earthwork motte and bailey fortification or ancient castle, and has

been designated a Scheduled Ancient Monument. The Motte probably dates back to

the 11th Century when it was a Norman fortification. The remains were restored in 2008

with an access ramp, landscaping around the River Tove and mill stream and

explanatory plaques. Following restoration, it has become a key attraction which

provided a new venue for the town and serves as the centrepiece of the wider Moat

Lane development.

It would have been strategically placed to control primary transport routes and river

crossings. The Towcester Motte controlled the junction of Watling Street and long distance

route from Southampton to Stamford which went through Winchester, Oxford, Brackley

and Northampton, now the A34 and A43 trunk roads.

- This has been valued by external valuation on April 1st 2012.

Depreciation has been considered and it is not appropriate as this asset is land.

This asset is intended to be preserved in trust for future generations because of its

historical association.


70

ACCOUNTING POLICIES

i. General Principles

The Statement of Accounts summarises the Authority’s transactions for the 2011-12

financial year and its position at the year-end of 31 March 2012. The Authority is required

to prepare an annual Statement of Accounts by the Accounts and Audit (England)

Regulations 2011, which those Regulations require to be prepared in accordance with

proper accounting practices.

These practices primarily comprise the Code of Practice on Local Authority Accounting in

the United Kingdom 2011-12 and the Service Reporting Code of Practice 2010-11,

supported by International Financial Reporting Standards (IFRS) and statutory guidance

issued under section 12 of the 2003 Act.

The accounting convention adopted in the Statement of Accounts is principally historical

cost, modified by the revaluation of certain categories of non-current assets and financial

instruments.

Main Changes to Accounting Policies since 2010-2011

For 2011-12 the amendments to accounting policies are:

The 2011-12 Code requires additional disclosures in respect of remuneration and exit

packages. Disclosure of remuneration and pension contributions in respect of senior

employees is required; this requirement was introduced in amendments to the Accounts

and Audit Regulations. In addition, the Code has introduced a requirement to disclose

the number and cost of exit packages agreed.

The 2011-12 Code adopts the requirements of FRS 30 Heritage Asset. Heritage assets are

carried at valuation, where possible, and additional disclosures are required. The Code

also permits, but does not require, authorities to adopt the measurement and disclosure

requirements within FRS 30 for community assets, SNC has adopted these changes.

ii. Accruals of Income and Expenditure

Activity is accounted for in the year that it takes place, not simply when cash payments

are made or received. In particular:

• Revenue from the sale of goods is recognised when the Authority transfers the

significant risks and rewards of ownership to the purchaser and it is probable that

economic benefits or service potential associated with the transaction will flow to the

Authority.

• Revenue from the provision of services is recognised when the Authority can measure

reliably the percentage of completion of the transaction and it is probable that

economic benefits or service potential associated with the transaction will flow to the

Authority.

• Supplies are recorded as expenditure when they are consumed – where there is a

gap between the date supplies are received and their consumption; they are carried

as inventories on the Balance Sheet.

• Expenses in relation to services received (including services provided by employees)

are recorded as expenditure when the services are received rather than when

payments are made.

• Interest receivable on investments and payable on borrowings is accounted for

respectively as income and expenditure on the basis of the effective interest rate for

the relevant financial instrument rather than the cash flows fixed or determined by the

contract.

• Where revenue and expenditure have been recognised but cash has not been

received or paid, a debtor or creditor for the relevant amount is recorded in the


71

Balance Sheet. Where debts may not be settled, the balance of debtors is written

down and a charge made to revenue for the income that might not be collected.

iii. Cash and Cash Equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable

without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid

investments that mature in three months or less from the date of acquisition and that are

readily convertible to known amounts of cash with insignificant risk of change in value.

In the Cash Flow Statement, cash and cash equivalents are shown net of bank overdrafts

that are repayable on demand and form an integral part of the Authority’s cash

management.

iv. Exceptional Items

When items of income and expense are material, their nature and amount is disclosed

separately, either on the face of the Comprehensive Income and Expenditure Statement

or in the notes to the accounts, depending on how significant the items are to an

understanding of the Authority’s financial performance.

v. Prior Period Adjustments, Changes in Accounting Policies and Estimates and Errors

Prior period adjustments may arise as a result of a change in accounting policies or to

correct a material error. Changes in accounting estimates are accounted for

prospectively, i.e. in the current and future years affected by the change and do not

give rise to a prior period adjustment.

Changes in accounting policies are only made when required by proper accounting

practices or the change provides more reliable or relevant information about the effect

of transactions, other events and conditions on the Authority’s financial position or

financial performance.

Where a change is made, it is applied retrospectively (unless stated otherwise) by

adjusting opening balances and comparative amounts for the prior period as if the new

policy had always been applied.

Material errors discovered in prior period figures are corrected retrospectively by

amending opening balances and comparative amounts for the prior period.

vi. Charges to Revenue for Non-current Assets

Services, support services and trading accounts are debited with the following amounts

to record the cost of holding non-current assets during the year:

• depreciation attributable to the assets used by the relevant service

• revaluation and impairment losses on assets used by the service where there are no

accumulated gains in the Revaluation Reserve against which the losses can be

written off

• amortisation of intangible assets attributable to the service.

The Authority is not required to raise council tax to fund depreciation, revaluation and

impairment losses or amortisation. However, it is required to make an annual contribution

from revenue towards the reduction in its overall borrowing requirement but as SNC does

not hold any debt this requirement is not applicable.

Depreciation, revaluation and impairment losses and amortisation are therefore replaced

by the contribution in the General Fund Balance by way of an adjusting transaction with

the Capital Adjustment Account in the Movement in Reserves Statement for the

difference between the two.


72

vii. Employee Benefits

Benefits Payable During Employment

Short-term employee benefits are those due to be settled within 12 months of the year-

end.

They include such benefits as wages and salaries, paid annual leave and paid sick leave,

bonuses and non-monetary benefits (e.g. cars) for current employees and are

recognised as an expense for services in the year in which employees render service to

the Authority. An accrual is made for the cost of holiday entitlements (or any form of

leave, e.g. time off in lieu) earned by employees but not taken before the year-end

which employees can carry forward into the next financial year. The accrual is made at

the wage and salary rates applicable in the following accounting year, being the period

in which the employee takes the benefit. The accrual is charged to Surplus or Deficit on

the Provision of Services, but then reversed out through the Movement in Reserves

Statement so that holiday benefits are charged to revenue in the financial year in which

the holiday absence occurs.

Termination Benefits

Termination benefits are amounts payable as a result of a decision by the Authority to

terminate an officer’s employment before the normal retirement date or an officer’s

decision to accept voluntary redundancy and are charged on an accruals basis to the

appropriate service in the Comprehensive Income and Expenditure Statement when the

Authority is demonstrably committed to the termination of the employment of an officer

or group of officers or making an offer to encourage voluntary redundancy.

SNC does not pay enhanced termination benefits.

Post-employment Benefits

Employees of the Authority are members of The Local Government Pensions Scheme,

administered by Northamptonshire County Council in conjunction with a firm of Actuaries

(Hymans Robertson LLP).

The schemes provides defined benefits to members (retirement lump sums and pensions)

earned as employees worked for the Authority.

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

The liabilities of the Northamptonshire pension fund attributable to the Authority are

included in the Balance Sheet on an actuarial basis using the projected unit method – i.e.

an assessment of the future payments that will be made in relation to retirement benefits

earned to date by employees, based on assumptions about mortality rates, employee

turnover rates, etc, and projections of projected earnings for current employees.

Liabilities are discounted to their value at current prices, using a discount rate of 5.5%

(based on the indicative rate of return on high quality corporate bond iBoxx Sterling

Corporates AA 15 years Index, with the removal of recently re-rated bonds from the

index).

The assets of the Northamptonshire pension fund attributable to the Authority are

included in the Balance Sheet at their fair value:

• quoted securities – current bid price

• property – market value.

The change in the net pensions liability is analysed into seven components:


73

• current service cost – the increase in liabilities as a result of years of service earned this

year – allocated in the Comprehensive Income and Expenditure Statement to the

services for which the employees worked.

• past service cost – the increase in liabilities arising from current year decisions whose

effect relates to years of service earned in earlier years – debited to the Surplus or

Deficit on the Provision of Services in the Comprehensive Income and Expenditure

Statement as part of Non Distributed Costs.

• interest cost – the expected increase in the present value of liabilities during the year

as they move one year closer to being paid – debited to the Financing and

Investment

Income and Expenditure line in the Comprehensive Income and Expenditure

Statement.

• expected return on assets – the annual investment return on the fund assets

attributable to the Authority, based on an average of the expected long-term return

– credited to the Financing and Investment Income and Expenditure line in the

Comprehensive Income and Expenditure Statement.

• gains or losses on settlements and curtailments – the result of actions to relieve the

Authority of liabilities or events that reduce the expected future service or accrual of

benefits of employees – debited or credited to the Surplus or Deficit on the Provision of

Services in the Comprehensive Income and Expenditure Statement as part of Non

Distributed Costs

• actuarial gains and losses – changes in the net pensions liability that arise because

events have not coincided with assumptions made at the last actuarial valuation or

because the actuaries have updated their assumptions – charged to the Pensions

Reserve

• contributions paid to the Northamptonshire pension fund – cash paid as employer’s

contributions to the pension fund in settlement of liabilities; not accounted for as an

expense.

In relation to retirement benefits, statutory provisions require the General Fund Balance to

be charged with the amount payable by the Authority to the pension fund or directly to

pensioners in the year, not the amount calculated according to the relevant accounting

standards. In the Movement in Reserves Statement, this means that there are

appropriations to and from the Pensions Reserve to remove the notional debits and

credits for retirement benefits and replace them with debits for the cash paid to the

pension fund and pensioners and any such amounts payable but unpaid at the year-

end. The negative balance that arises on the Pensions Reserve thereby measures the

beneficial impact to the General Fund of being required to account for retirement

benefits on the basis of cash flows rather than as benefits are earned by employees.

Discretionary Benefits

The Authority also has restricted powers to make discretionary awards of retirement

benefits in the event of early retirements. Any liabilities estimated to arise as a result of an

award to any member of staff are accrued in the year of the decision to make the award

and accounted for using the same policies as are applied to the Local Government

Pension Scheme.

SNC does not award discretionary benefits.

viii. Events After the Reporting Period

Events after the Balance Sheet date are those events, both favourable and

unfavourable, that occur between the end of the reporting period and the date when

the Statement of Accounts is authorised for issue. Two types of events can be identified:

• those that provide evidence of conditions that existed at the end of the reporting

period – the Statement of Accounts is adjusted to reflect such events

• those that are indicative of conditions that arose after the reporting period – the


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Statement of Accounts is not adjusted to reflect such events, but where a category of

events would have a material effect, disclosure is made in the notes of the nature of

the events and their estimated financial effect.

Events taking place after the date of authorisation for issue are not reflected in the

Statement of Accounts.

ix. Financial Instruments

Financial Liabilities

Financial liabilities are recognised on the Balance Sheet when the Authority becomes a

party to the contractual provisions of a financial instrument and are initially measured at

fair value and are carried at their amortised cost. As a debt free authority SNC does not

have significant Financial Liabilities

Financial Assets

Financial assets are classified into two types:

• loans and receivables – assets that have fixed or determinable payments but are not

quoted in an active market

• available-for-sale assets – assets that have a quoted market price and/or do not have

fixed or determinable payments.

Loans and Receivables

Loans and receivables are recognised on the Balance Sheet when the Authority

becomes a party to the contractual provisions of a financial instrument and are initially

measured at fair value. They are subsequently measured at their amortised cost. Annual

credits to the Financing and Investment Income and Expenditure line in the

Comprehensive Income and Expenditure Statement for interest receivable are based on

the carrying amount of the asset multiplied by the effective rate of interest for the

instrument. For most of the loans that the Authority has made, this means that the amount

presented in the Balance Sheet is the outstanding principal receivable (plus accrued

interest) and interest credited to the

Comprehensive Income and Expenditure Statement is the amount receivable for the

year in the loan agreement.

However, the Authority has made a number of loans to voluntary organisations at less

than market rates (soft loans). When soft loans are made, a loss is recorded in the

Comprehensive

Income and Expenditure Statement (debited to the appropriate service) for the present

value of the interest that will be foregone over the life of the instrument, resulting in a

lower amortised cost than the outstanding principal. Interest is credited to the Financing

and

Investment Income and Expenditure line in the Comprehensive Income and Expenditure

Statement at a marginally higher effective rate of interest than the rate receivable from

the voluntary organisations, with the difference serving to increase the amortised cost of

the loan in the Balance Sheet. Statutory provisions require that the impact of soft loans

on the

General Fund Balance is the interest receivable for the financial year – the reconciliation

of amounts debited and credited to the Comprehensive Income and Expenditure

Statement to the net gain required against the General Fund Balance is managed by a

transfer to or from the Financial Instruments Adjustment Account in the Movement in

Reserves Statement.


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Where assets are identified as impaired because of a likelihood arising from a past event

that payments due under the contract will not be made, the asset is written down and a

charge made to the relevant service (for receivables specific to that service) or the

Financing and Investment Income and Expenditure line in the Comprehensive Income

and Expenditure Statement. The impairment loss is measured as the difference between

the carrying amount and the present value of the revised future cash flows discounted at

the asset’s original effective interest rate.

Any gains and losses that arise on the derecognition of an asset are credited or debited

to the Financing and Investment Income and Expenditure line in the Comprehensive

Income and Expenditure Statement.

Available-for-Sale Assets

Available-for-sale assets are recognised on the Balance Sheet when the Authority

becomes a party to the contractual provisions of a financial instrument and are initially

measured and carried at fair value. Where the asset has fixed or determinable payments,

annual credits to the Financing and Investment Income and Expenditure line in the

Comprehensive Income and Expenditure Statement for interest receivable are based on

the amortised cost of the asset multiplied by the effective rate of interest for the

instrument. Where there are no fixed or determinable payments, income (e.g. dividends)

is credited to the Comprehensive Income and Expenditure Statement when it becomes

receivable by the Authority.

Assets are maintained in the Balance Sheet at fair value. Values are based on the

following principles:

• instruments with quoted market prices – the market price

• other instruments with fixed and determinable payments – discounted cash flow

analysis

• equity shares with no quoted market prices – independent appraisal of company

valuations.

Changes in fair value are balanced by an entry in the Available-for-Sale Reserve and the

gain/loss is recognised in the Surplus or Deficit on Revaluation of Available-for-Sale

Financial Assets. The exception is where impairment losses have been incurred – these are

debited to the Financing and Investment Income and Expenditure line in the

Comprehensive Income and Expenditure Statement, along with any net gain or loss for

the asset accumulated in the Available-for-Sale Reserve.

Where assets are identified as impaired because of a likelihood arising from a past event

that payments due under the contract will not be made (fixed or determinable

payments) or fair value falls below cost, the asset is written down and a charge made to

the Financing and Investment Income and Expenditure line in the Comprehensive

Income and Expenditure Statement. If the asset has fixed or determinable payments, the

impairment loss is measured as the difference between the carrying amount and the

present value of the revised future cash flows discounted at the asset’s original effective

interest rate. Otherwise, the impairment loss is measured as any shortfall of fair value

against the acquisition cost of the instrument (net of any principal repayment and

amortisation).

Any gains and losses that arise on the derecognition of the asset are credited or debited

to the Financing and Investment Income and Expenditure line in the Comprehensive

Income and Expenditure Statement, along with any accumulated gains or losses

previously recognised in the Available-for-Sale Reserve.

Where fair value cannot be measured reliably, the instrument is carried at cost (less any

impairment losses). Additional policy detail required where an authority has financial

assets at fair value through profit or loss (such as derivatives).


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Instruments Entered Into Before 1 April 2006

The Authority has not entered into financial guarantees prior to 1 April 2006 that are not

required to be accounted for as financial instruments.

x. Government Grants and Contributions

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

contributions and donations are recognised as due to the Authority when there is

reasonable assurance that:

• the Authority will comply with the conditions attached to the payments, and

• the grants or contributions will be received.

Amounts recognised as due to the Council are not credited to the Comprehensive

Income and Expenditure Statement until conditions attached to the grant or contribution

have been satisfied. Conditions are stipulations that specify that the future economic

benefits or service potential embodied in the asset in the form of the grant or contribution

are required to be consumed by the recipient as specified, or future economic benefits

or service potential must be returned to the transferor.

Monies advanced as grants and contributions for which conditions have not been

satisfied are carried in the Balance Sheet as creditors. When conditions are satisfied, the

grant or contribution is credited to the relevant service line (attributable revenue grants

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

grants and all capital grants) in the Comprehensive Income and Expenditure Statement.

Where capital grants are credited to the Comprehensive Income and Expenditure

Statement, they are reversed out of the General Fund Balance in the Movement in

Reserves Statement. Where the grant has yet to be used to finance capital expenditure, it

is posted to the Capital Grants Unapplied reserve. Where it has been applied, it is posted

to the Capital Adjustment Account. Amounts in the Capital Grants Unapplied reserve are

transferred to the Capital Adjustment Account once they have been applied to fund

capital expenditure.

xi. Heritage Assets

Heritage Assets are recognised and measured (including the treatment of revaluation

gains and losses) in accordance with the Authority’s accounting policies on property,

plant and equipment. However, some of the measurement rules are relaxed in relation to

heritage assets. These items are reported in the Balance Sheet at insurance valuation

which is based on market values. These insurance valuations are updated on an annual

basis. There is a five year rolling programme of valuation of land and buildings by an

external valuer.

The assets within the art collection and civic regalia are deemed to have indeterminate

lives and a high residual value; hence the Authority does not consider it appropriate to

charge depreciation.

Acquisitions are made by purchase or donation. Acquisitions are initially recognised at

cost and donations are recognised at valuation with valuations provided by the external

valuers and with reference to appropriate insurance values and commercial markets

using the most relevant and recent information from sales at auctions.

xii. Intangible Assets

Expenditure on non-monetary assets that do not have physical substance but are

controlled by the Authority as a result of past events (e.g. software licences) is capitalised

when it is expected that future economic benefits or service potential will flow from the

intangible asset to the Authority.


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Internally generated assets are capitalised where it is demonstrable that the project is

technically feasible and is intended to be completed (with adequate resources being

available) and the Authority will be able to generate future economic benefits or deliver

service potential by being able to sell or use the asset. Expenditure is capitalised where it

can be measured reliably as attributable to the asset and is restricted to that incurred

during the development phase (research expenditure cannot be capitalised).

Expenditure on the development of websites is not capitalised if the website is solely or

primarily intended to promote or advertise the Authority’s goods or services.

Intangible assets are measured initially at cost. Amounts are only revalued where the fair

value of the assets held by the Authority can be determined by reference to an active

market. In practice, no intangible asset held by the Authority meets this criterion, and

they are therefore carried at amortised cost. The depreciable amount of an intangible

asset is amortised over its useful life to the relevant service line(s) in the Comprehensive

Income and Expenditure Statement. An asset is tested for impairment whenever there is

an indication that the asset might be impaired – any losses recognised are posted to the

relevant service line(s) in the Comprehensive Income and Expenditure Statement. Any

gain or loss arising on the disposal or abandonment of an intangible asset is posted to the

Other Operating Expenditure line in the Comprehensive Income and Expenditure

Statement.

Where expenditure on intangible assets qualifies as capital expenditure for statutory

purposes, amortisation, impairment losses and disposal gains and losses are not permitted

to have an impact on the General Fund Balance. The gains and losses are therefore

reversed out of the General Fund Balance in the Movement in Reserves Statement and

posted to the

Capital Adjustment Account and (for any sale proceeds greater than £10,000) the

Capital Receipts Reserve.

xiii. Interests in Companies and Other Entities

The Authority has material interests in companies and other entities that have the nature

of subsidiaries, associates and jointly controlled entities and require it to prepare group

accounts. In the Authority’s own single-entity accounts, the interests in companies and

other entities are recorded as financial assets at cost, less any provision for losses.

Currently SNC has one interest in an entity. This is the West Northamptonshire Joint

Planning Unit (JPU) and is an associate. The JPU does not hold any assets.

xiv. Inventories and Long-term Contracts

Inventories are included in the Balance Sheet at the lower of cost and net realisable

value.

The cost of inventories is assigned using the weighted average costing formula.

Long-term contracts are accounted for on the basis of charging the Surplus or Deficit on

the

Provision of Services with the value of works and services received under the contract

during the financial year.

There are no material balances of inventories that have been acquired for less than their

fair value.

There are no material balances of inventories that are held for distribution at no charge or

for a nominal charge; or consumption in the production process of goods to be

distributed at no charge or for a nominal fee.


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xv. Investment Property

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

appreciation. The definition is not met if the property is used in any way to facilitate the

delivery of services or production of goods or is held for sale.

Investment properties are measured initially at cost and subsequently at fair value, based

on the amount at which the asset could be exchanged between knowledgeable parties

at arm’s-length. Properties are not depreciated but are revalued annually according to

market conditions at the year-end. Gains and losses on revaluation are posted to the

Financing and

Investment Income and Expenditure line in the Comprehensive Income and Expenditure

Statement. The same treatment is applied to gains and losses on disposal.

Rentals received in relation to investment properties are credited to the Financing and

Investment Income line and result in a gain for the General Fund Balance. However,

revaluation and disposal gains and losses are not permitted by statutory arrangements to

have an impact on the General Fund Balance. The gains and losses are therefore

reversed out of the General Fund Balance in the Movement in Reserves Statement and

posted to the

Capital Adjustment Account and (for any sale proceeds greater than £10,000) the

Capital Receipts Reserve.

Although SNC receives rent on a small number of assets, these assets are not held solely

for those rentals.

xvi. Jointly Controlled Operations and Jointly Controlled Assets

Jointly controlled operations are activities undertaken by the Authority in conjunction with

other venturers that involve the use of the assets and resources of the venturers rather

than the establishment of a separate entity. The Authority recognises on its Balance Sheet

the assets that it controls and the liabilities that it incurs and debits and credits the

Comprehensive Income and Expenditure Statement with the expenditure its incurs and

the share of income it earns from the activity of the operation.

Jointly controlled assets are items of property, plant or equipment that are jointly

controlled by the Authority and other venturers, with the assets being used to obtain

benefits for the

venturers. The joint venture does not involve the establishment of a separate entity. The

Authority accounts for only its share of the jointly controlled assets, the liabilities and

expenses that it incurs on its own behalf or jointly with others in respect of its interest in the

joint venture and income that it earns from the venture.

xvii. Leases

Leases are classified as finance leases where the terms of the lease transfer substantially

all the risks and rewards incidental to ownership of the property, plant or equipment from

the

lessor to the lessee. All other leases are classified as operating leases.

Where a lease covers both land and buildings, the land and buildings elements are

considered separately for classification. Arrangements that do not have the legal status

of a lease but convey a right to use an asset in return for payment are accounted for

under this policy where fulfilment of the arrangement is dependent on the use of specific

assets.

The Authority as Lessee

Finance Leases


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Property, plant and equipment held under finance leases is recognised on the Balance

Sheet at the commencement of the lease at its fair value measured at the lease’s

inception (or the present value of the minimum lease payments, if lower). The asset

recognised is matched by a liability for the obligation to pay the lessor. Initial direct costs

of the Authority are added to the carrying amount of the asset. Premiums paid on entry

into a lease are applied to writing down the lease liability. Contingent rents are charged

as expenses in the periods in which they are incurred.

Lease payments are apportioned between:

• a charge for the acquisition of the interest in the property, plant or equipment –

applied to write down the lease liability, and

• a finance charge (debited to the Financing and Investment Income and Expenditure

line in the Comprehensive Income and Expenditure Statement).

Property, Plant and Equipment recognised under finance leases is accounted for using

the policies applied generally to such assets, subject to depreciation being charged over

the lease term if this is shorter than the asset’s estimated useful life (where ownership of

the asset does not transfer to the authority at the end of the lease period).

The Authority is not required to raise council tax to cover depreciation or revaluation and

impairment losses arising on leased assets. Instead, a prudent annual contribution is made

from revenue funds towards the deemed capital investment in accordance with

statutory requirements. Depreciation and revaluation and impairment losses are therefore

substituted by a revenue contribution in the General Fund Balance, by way of an

adjusting transaction with the Capital Adjustment Account in the Movement in Reserves

Statement for the difference between the two.

Operating Leases

Rentals paid under operating leases are charged to the Comprehensive Income and

Expenditure Statement as an expense of the services benefiting from use of the leased

property, plant or equipment. Charges are made on a straight-line basis over the life of

the lease, even if this does not match the pattern of payments (e.g. there is a rent-free

period at

the commencement of the lease).

The Authority as Lessor

Finance Leases – SNC does not lease assets as a lessor on a finance lease basis, in that it

retains substantially the risks and rewards of the assets that it leases.

Operating Leases

Where the Authority grants an operating lease over a property or an item of plant or

equipment, the asset is retained in the Balance Sheet. Rental income is credited to the

Other Operating Expenditure line in the Comprehensive Income and Expenditure

Statement. Credits are made on a straight-line basis over the life of the lease, even if this

does not match the pattern of payments (e.g. there is a premium paid at the

commencement of the lease). Initial direct costs incurred in negotiating and arranging

the lease are added to the carrying amount of the relevant asset and charged as an

expense over the lease term on the same basis as rental income.

SNC has no material sale and leaseback assets.

xviii. Overheads and Support Services

The costs of overheads and support services are charged to those that benefit from the

supply or service in accordance with the costing principles of the CIPFA Service Reporting

Code of Practice 2011-12 (SeRCOP). The total absorption costing principle is used – the

full cost of overheads and support services are shared between users in proportion to the

benefits received.


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The bases of allocation are continually being refined and developed to reflect more

accurately where the costs are borne. Many of the charges are made on actual time

spent, other services are allocated on the following bases: -

Accountancy: Number of budget holders

Payroll: Estimated number of payslips

Creditors: Estimated number of invoices

Internal Audit: Annual audit plan

Computer Services: Estimated usage by number of officers

Sundry Debtors: Estimated number of invoices raised

Human Resources: Staff Time Apportionment by number of officers

Office Management: Estimated usage

Public Offices: Floor area estimated by number of windows per office

Other: Staff Time apportionment

The costs of service management are apportioned to the activities managed, based on

staff time apportionment.

The exceptions to the absorption costing principle are:

• Corporate and Democratic Core – costs relating to the Authority’s status as a

multifunctional, democratic organisation.

• Non Distributed Costs – the cost of discretionary benefits awarded to employees

retiring early and impairment losses chargeable on Assets Held for Sale.

These two cost categories are defined in SeRCOP and accounted for as separate

headings in the Comprehensive Income and Expenditure Statement, as part of Net

Expenditure on Continuing Services.

xix. Property, Plant and Equipment

Assets that have physical substance and are held for use in the production or supply of

goods or services, for rental to others, or for administrative purposes and that are

expected to be used during more than one financial year are classified as Property, Plant

and Equipment.

Recognition

Expenditure on the acquisition, creation or enhancement of Property, Plant and

Equipment is capitalised on an accruals basis, provided that it is probable that the future

economic benefits or service potential associated with the item will flow to the Authority

and the cost of the item can be measured reliably. Expenditure that maintains but does

not add to an asset’s potential to deliver future economic benefits or service potential

(i.e. repairs and maintenance) is charged as an expense when it is incurred.

Purchase of property, plant and equipment is recognised as capital expenditure when it

reaches £1,000 or more (i.e. the capital de minimis). If the expenditure is below £1,000 the

expenditure is treated as a revenue expense and the asset is not placed on the asset

register.

Measurement

Assets are initially measured at cost, comprising:

• the purchase price

• any costs attributable to bringing the asset to the location and condition necessary for

it to be capable of operating in the manner intended by management

• the initial estimate of the costs of dismantling and removing the item and restoring the

site on which it is located.


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The Authority does not capitalise borrowing costs incurred whilst assets are under

construction.

The cost of assets acquired other than by purchase is deemed to be its fair value, unless

the acquisition does not have commercial substance (i.e. it will not lead to a variation in

the cash flows of the Authority). In the latter case, where an asset is acquired via an

exchange, the cost of the acquisition is the carrying amount of the asset given up by the

Authority.

Donated assets are measured initially at fair value. The difference between fair value and

any consideration paid is credited to the Taxation and Non-specific Grant Income line of

the Comprehensive Income and Expenditure Statement, unless the donation has been

made conditionally. Until conditions are satisfied, the gain is held in the Donated Assets

Account.

Where gains are credited to the Comprehensive Income and Expenditure Statement,

they are reversed out of the General Fund Balance to the Capital Adjustment Account in

the Movement in Reserves Statement.

Assets are then carried in the Balance Sheet using the following measurement bases:

• infrastructure, community assets and assets under construction – depreciated

historical cost

• dwellings – fair value, determined using the basis of existing use value for social

housing

(EUV–SH)

• all other assets – fair value, determined as the amount that would be paid for the

asset in its existing use (existing use value – EUV).

Where there is no market-based evidence of fair value because of the specialist nature

of an asset, depreciated replacement cost (DRC) is used as an estimate of fair value.

Where non-property assets that have short useful lives or low values (or both),

depreciated historical cost basis is used as a proxy for fair value.

Assets included in the Balance Sheet at fair value are revalued sufficiently regularly to

ensure that their carrying amount is not materially different from their fair value at the

year-end, but as a minimum every five years. The external valuation programme is run on

a five year rolling basis with an internal valuation on an annual basis for all assets not

included in the rolling programme. Increases in valuations are matched by credits to the

Revaluation Reserve to recognise unrealised gains. [Exceptionally, gains might be

credited to the Surplus or Deficit on the Provision of Services where they arise from the

reversal of a loss previously charged to a service.]

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

• where there is a balance of revaluation gains for the asset in the Revaluation Reserve,

the carrying amount of the asset is written down against that balance (up to the

amount of the accumulated gains)

• where there is no balance in the Revaluation Reserve or an insufficient balance, the

carrying amount of the asset is written down against the relevant service line(s) in the


The Revaluation Reserve contains revaluation gains recognised since 1 April 2007 only,

the date of its formal implementation. Gains arising before that date have been

consolidated into the Capital Adjustment Account.

Impairment

Assets are assessed at each year-end as to whether there is any indication that an asset

may be impaired. Where indications exist and any possible differences are estimated to


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be material, the recoverable amount of the asset is estimated and, where this is less than

the carrying amount of the asset, an impairment loss is recognised for the shortfall.

Where impairment losses are identified, they are accounted for by:

• where there is a balance of revaluation gains for the asset in the Revaluation Reserve,

the carrying amount of the asset is written down against that balance (up to the

amount of the accumulated gains)

• where there is no balance in the Revaluation Reserve or an insufficient balance, the

carrying amount of the asset is written down against the relevant service line(s) in the


Where an impairment loss is reversed subsequently, the reversal is credited to the relevant

service line(s) in the Comprehensive Income and Expenditure Statement, up to the

amount of the original loss, adjusted for depreciation that would have been charged if

the loss had not been recognised.

Depreciation

Depreciation is provided for on all Property, Plant and Equipment assets by the systematic

allocation of their depreciable amounts over their useful lives. An exception is made for

assets without a determinable finite useful life (i.e. freehold land and certain Community

Assets) and assets that are not yet available for use (i.e. assets under construction).

Deprecation is calculated on the following bases:

• dwellings and other buildings – straight-line allocation over the useful life of the

property as estimated by the valuer

• vehicles – 30% of the value of each class of assets in the Balance Sheet, as advised by

a suitably qualified officer

• infrastructure – straight-line allocation over 25 years.

• the depreciable amount of an intangible asset is amortised over its useful life on a

straight line allocation where useful life is estimable and 30% reducing balance where

not.

• Plant, furniture and equipment – straight line basis over useful life.

Where an item of Property, Plant and Equipment asset has major components whose cost

is significant in relation to the total cost of the item, the components are depreciated

separately. The interpretation of the meanings of ‘major’ and significant cost’ for South

Northamptonshire Council’s policy requires components to be depreciated separately to

their host asset when:

• The host assets value is £500,000 (was £1,000,000) or more and

• Components of the host asset are of 20% (was 30%) or more of the value of the total

asset and

• Components whose estimated useful life is 80% or less than the estimated useful life of

the host asset.

Revaluation gains are also depreciated, with an amount equal to the difference

between current value depreciation charged on assets and the depreciation that would

have been chargeable based on their historical cost being transferred each year from

the Revaluation

Reserve to the Capital Adjustment Account.

Disposals and Non-current Assets Held for Sale

When it becomes probable that the carrying amount of an asset will be recovered

principally through a sale transaction rather than through its continuing use, it is

reclassified as an Asset Held for Sale. The asset is revalued immediately before

reclassification and then carried at the lower of this amount and fair value less costs to


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sell. Where there is a subsequent decrease to fair value less costs to sell, the loss is posted

to the Other Operating Expenditure line in the Comprehensive Income and Expenditure

Statement. Gains in fair value are recognised only up to the amount of any previously

losses recognised in the Surplus or Deficit on Provision of Services.

Depreciation is not charged on Assets Held for Sale.

If assets no longer meet the criteria to be classified as Assets Held for Sale, they are

reclassified back to non-current assets and valued at the lower of their carrying amount

before they were classified as held for sale; adjusted for depreciation, amortisation or

revaluations that would have been recognised had they not been classified as Held for

Sale, and their recoverable amount at the date of the decision not to sell.

SNC is not carrying a disposal group as an Asset Held for Sale.

Assets that are to be abandoned or scrapped are not reclassified as Assets Held for Sale.

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

Balance Sheet (whether Property, Plant and Equipment or Assets Held for Sale) is written

off to the Other Operating Expenditure line in the Comprehensive Income and

Expenditure Statement as part of the gain or loss on disposal. Receipts from disposals (if

any) are credited to the same line in the Comprehensive Income and Expenditure

Statement also as part of the gain or loss on disposal (i.e. netted off against the carrying

value of the asset at the time of disposal). Any revaluation gains accumulated for the

asset in the Revaluation Reserve are transferred to the Capital Adjustment Account.

Amounts received for a disposal in excess of £10,000 are categorised as capital receipts.

The balance of receipts is required to be credited to the Capital Receipts Reserve, and

can then only be used for new capital investment. Receipts are appropriated to the

Reserve from the General Fund Balance in the Movement in Reserves Statement.

The written-off value of disposals is not a charge against council tax, as the cost of non

current assets is fully provided for under separate arrangements for capital financing.

Amounts are appropriated to the Capital Adjustment Account from the General Fund

Balance in the Movement in Reserves Statement.

xx. Provisions, Contingent Liabilities and Contingent Assets

Provisions

Provisions are made where an event has taken place that gives the Authority a legal or

constructive obligation that probably requires settlement by a transfer of economic

benefits or service potential, and a reliable estimate can be made of the amount of the

obligation.

For instance, the Authority may be involved in a court case that could eventually result in

the making of a settlement or the payment of compensation. Provisions are charged as

an expense to the appropriate service line in the Comprehensive Income and

Expenditure Statement in the year that the authority becomes aware of the obligation,

and are measured at the best estimate at the balance sheet date of the expenditure

required to settle the obligation, taking into account relevant risks and uncertainties.

When payments are eventually made, they are charged to the provision carried in the

Balance Sheet. Estimated settlements are reviewed at the end of each financial year –

where it becomes less than probable that a transfer of economic benefits will now be

required (or a lower settlement than anticipated is made), the provision is reversed and

credited back to the relevant service.

Where some or all of the payment required to settle a provision is expected to be

recovered from another party (e.g. from an insurance claim), this is only recognised as


84

income for the relevant service if it is virtually certain that reimbursement will be received

if the authority settles the obligation.

Provision for Back Pay Arising from Unequal Pay Claims

The Authority has no claims for back pay arising from discriminatory payments incurred

before the Authority implemented its equal pay strategy.

Landfill Allowance Schemes

Not relevant for SNC as a Waste Collection Authority. Scheme applies to Waste Disposal

Authorities only.

Contingent Liabilities

A contingent liability arises where an event has taken place that gives the authority a

possible obligation whose existence will only be confirmed by the occurrence or

otherwise of uncertain future events not wholly within the control of the authority.

Contingent liabilities also arise in circumstances where a provision would otherwise be

made but either it is not probable that an outflow of resources will be required or the

amount of the obligation cannot be measured reliably. Contingent liabilities are not

recognised in the Balance Sheet but disclosed in a note to the accounts.

Contingent Assets

A contingent asset arises where an event has taken place that gives the authority a

possible asset whose existence will only be confirmed by the occurrence or otherwise of

uncertain future events not wholly within the control of the authority. Contingent assets

are not recognised in the Balance Sheet but disclosed in a note to the accounts where it

is probable that there will be an inflow of economic benefits or service potential.

xxi. Reserves

The Authority sets aside specific amounts as reserves for future policy purposes or to cover

contingencies. Reserves are created by appropriating amounts out of the General Fund

Balance in the Movement in Reserves Statement. When expenditure to be financed from

a reserve is incurred, it is charged to the appropriate service in that year to score against

the Surplus or Deficit on the Provision of Services in the Comprehensive Income and

Expenditure Statement. The reserve is then appropriated back into the General Fund

Balance in the Movement in Reserves Statement so that there is no net charge against

council tax for the expenditure. Certain reserves are kept to manage the accounting

processes for non-current assets, financial instruments, retirement and employee benefits

and do not represent usable resources for the Authority – these reserves are explained in

the relevant policies.

xxii. Revenue Expenditure Funded from Capital under Statute

Expenditure incurred during the year that may be capitalised under statutory provisions

but that does not result in the creation of a non-current asset has been charged as

expenditure to the relevant service in the Comprehensive Income and Expenditure

Statement in the year. Where the Authority has determined to meet the cost of this

expenditure from existing capital resources or by borrowing, a transfer in the Movement in

Reserves Statement from the General Fund Balance to the Capital Adjustment Account

then reverses out the amounts charged so that there is no impact on the level of council

tax.

xxiii. VAT

VAT payable is included as an expense only to the extent that it is not recoverable from

Her Majesty’s Revenue and Customs. VAT receivable is excluded from income. The

amount of VAT irrecoverable is negligible.


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COLLECTION FUND

The Collection Fund is an agent’s statement that reflects the statutory obligation for billing

authorities to maintain a separate Collection Fund. The statement shows the transactions

of the billing authority in relation to the collection from taxpayers and distribution to local

authorities and the Government of council tax and non-domestic rates.

Note

£000 £000 £000 £000INCOMEIncome from Council Tax 45,171 45,811Transfers from General Fund - Council Tax Benefits 3,223 3,233 - Transitional Relief 2 1

3,225 3,234Income from Non-Domestic Ratepayers 1 18,335 19,090Net Adjustments for Previous Years' Community Charges 0 0

66,731 68,135EXPENDITUREPrecepts and Demands - Northamptonshire County Council - Precept 34,366 34,491 - Northamptonshire Police Authority - Precept 6,458 6,481 - South Northamptonshire Council (incl. Parishes) - Precept 7,586 7,640

48,410 48,612Non-Domestic Rates - Payment to National Pool 18,229 18,985 - Costs of Collection 106 105

1 18,335 19,090Bad and Doubtful Debts - Council Tax write offs 57 33 - Change in provision for Council Tax bad debts ( 44) 13 31 64

Previous Year's Estimated Surplus/ (Deficit) - Northamptonshire County Council ( 16) ( 49) - Northamptonshire Police Authority ( 3) ( 9) - South Northamptonshire Council ( 4) ( 11)

( 23) ( 69)

66,735 67,697

Increase (Cr) / Decrease in Fund in Year 4 ( 438)

Balance brought forward 263 267

Balance carried forward 3 267 ( 171)

2010-11 2011-12


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COLLECTION FUND NOTES

1. Non-Domestic Rates (NDR)

The gross yield for the year was £22,410,436.10

Income from Non-Domestic Ratepayers can be calculated as follows:-

2010-11 2011-12£000 £000

Gross Yield for 2011-12 21,405 22,410

Adjustments for Previous Years ( 1,221) ( 398)

Allowances and Other Adjustments ( 1,860) ( 2,990)

(Increase)/ Decrease in Provision for Non-Collection 39 74

Interest on Overpayments ( 28) ( 6)

Income from Non-Domestic Ratepayers 18,335 19,090

The total non-domestic rateable value at 31st March 2012 was £52,800,934 and the

National Non-Domestic Rate multiplier for the year was 43.3p with a reduction to 42.6p for

small businesses. (In 2010-11, the multiplier was 41.4p for all properties with a reduction to

40.7p for small businesses. The reduction in multiplier followed the national revaluation

which came into effect on 1 April 2010.)

2. Council Taxbase

No. of Exemptions/ Effective No. Band D

Band Properties at Discounts/ of Properties Ratio Equivalents

1 April 2011 New properties

A* 0 (33) 33 5/9 18

A 1,951 390 1,561 6/9 1,041B 8,245 934 7,311 7/9 5,686C 8,968 772 8,196 8/9 7,286

D 5,706 458 5,248 9/9 5,248

E 5,298 320 4,978 11/9 6,084F 3,549 175 3,374 13/9 4,874

G 2,095 103 1,992 15/9 3,320

H 175 10 165 18/9 330TOTAL 35,987 3,129 32,858 33,887

Provision for Non-collection (1%) * 339

TAX BASE 33,548 * Non-collection includes allowance for successful appeals, bad debts and movements.


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3. Analysis of Balance Carried Forward

2010-11 2010-11 2011-12 2011-12

£000 £000 £000 £000

Collection Fund Surplus 267 ( 171)Deficit Estimated at 15.01.12 to be collected in 2012-13:

Northamptonshire County Council (shown under Debtors) ( 49) 1

Northamptonshire Police Authority (shown under Debtors) ( 9) 0

South Northamptonshire Council ( 11) ( 68) 0 1

Estimated Deficit (Surplus) 199 ( 170)

To be shared between:-

Northamptonshire County Council (shown under Debtors) ( 140) 120

Northamptonshire Police Authority (shown under Debtors) ( 26) 23South Northamptonshire Council ( 31) 27

( 198) 170

Balance on Collection Fund relating to

South Northamptonshire Council: 42 ( 27)SNC Proportion - (Shown in Collection Fund Adjustment

Account) 42 ( 27)


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GLOSSARY OF TERMS USED IN FINANCIAL STATEMENTS

Accrual

An amount included in the final accounts to cover income or spending during an

accounting period for goods or work done, but for which we have not received or made

a payment by the end of that accounting period.

Accumulated Absences Account

The Accumulated Absences Account absorbs the difference that would otherwise arise

on the General Fund Balance from accruing for compensated absences earned but not

taken in the year e.g. annual leave entitlement carried forward at 31 March. Statutory

arrangements require that the impact on the General Fund Balance is neutralised by

transfers to or from the Account.

Actuarial Gains and Losses

Actuarial gains and losses, in respect of the pension fund, arise where actual events have

not coincided with the actuarial assumptions made for the last valuation (known as

experience gains/losses) or the actuarial assumptions have changed. For example an

unexpectedly high pay award may have been made during the year or employee

turnover may have been greater than expected. Scheme assets will need to be revalued

on the basis of the revised information.

Actuarial valuation

This is when an actuary checks what the pension scheme’s assets are worth and

compares them with what the scheme owes. They then work out how much the

contributions from employers must be so that there will be enough money in the scheme

when people get their pensions.

Audit

An independent examination of the Council's accounts to ensure that they comply with

the necessary legislation and follow best accounting practice. The Council's accounts

are audited by the Audit Commission.

Audit Commission

The Audit Commission was established by the Local Government Finance Act 1982. It has

responsibility for the external audit of all local Council’s. It can either use district auditors

who are employed by the Audit Commission or firms of accountants.

Balances

The revenue reserves of the Council, made up of the accumulated surplus of income

over expenditure. Balances from part of our reserves.

Balance Sheet

The Balance Sheet is a snapshot of the accounts as at the 31st March. It includes the

assets and liabilities of all activities of the Council.

Business Rates or National Non-Domestic Rates (NNDR)

The rates paid by businesses. The money is collected by the Council and paid into a

central pool administered by the Government. The total collected is then redistributed to

Council’s on the basis of population.

Capital Adjustment Account

Reflects the timing difference between the cost of fixed assets consumed and the capital

financing set aside to pay for them.


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Capital Charge

A charge to reflect the cost of fixed assets used to provide services.

Capital Expenditure

Spending to buy significant fixed assets that we will use or benefit from for more than a

year (for example, land and buildings).

Capital Receipts

Proceeds of £10,000 or more from the sale of assets which have a long term value.

Cash and Cash Equivalents

Cash and Cash Equivalents comprises of cash on hand and demand deposits which are

short-term, highly liquid investments that are readily convertible to known amounts of

cash and which are subject to an insignificant risk of change in value. They must be held

for the purpose of meeting short-term cash commitments rather than for investment or

other purposes.

Cash Flow Statement

This consolidated statement summarises the inflows and outflows of cash arising from

transactions with third parties for revenue and capital purposes.

Chartered Institute of Public Finance and Accountancy (CIPFA)

The leading professional accountancy body for the public services. They set and monitor

professional standards and provide education and training in accountancy and financial

management. This is the main professional organisation for accountants working in the

public service.

CLG Communities and Local Government.

Code of Practice on Local Council Accounting

A guidance publication which interprets the requirements of International Financial

Reporting Standards in the United Kingdom.

Collection Fund

This account reflects the statutory requirement to maintain a separate Fund, which shows

the transactions of the billing Council in relation to National Non-Domestic Rates and

Council Tax, and illustrates the way in which these have been distributed to preceptors

and the Council’s General Fund. The Collection Fund is consolidated with the other

accounts of the Council.


The practical effect of the changes in the 2009 SORP is that the Collection Fund balance

in the Balance Sheet will disappear. The surplus/deficit will be shared out in its entirety

between the Council and its preceptors. The preceptors' share will be carried as

creditors/debtors, but the Council's share will be credited to it’s I+E Account. The

Collection Fund Adjustment Account is then needed to reconcile the net credit made to

the I+E Account for council tax to the statutory amount in the Statement of Movement -

i.e., the demand on the Collection Fund for the year, plus the statutory amount

payable/receivable for the year in relation to past deficits/surpluses.

Communities & Local Government (CLG)

CLG works to create a thriving, sustainable, vibrant community that improves everyone's

life.

Community Assets


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Assets that we plan to hold onto indefinitely, that have no set useful life and that may

have restrictions on being sold.

Commuted Sums

Commuted Sums are negotiated contributions from developers, usually under section 106

Planning Agreements. The amenities provided by this funding are generally on-site play

facilities; off-site sports facilities or 15 years open space grounds maintenance.

Comprehensive Income and Expenditure Account

The Income and Expenditure Account reports the net cost of the functions for which the

Council is responsible. It shows how the net cost has been financed from general

government grants and income from taxpayers.

Contingency

The money we set aside to pay for unexpected spending.

Contingent liabilities

An amount we could owe when we send the accounts for approval. We will include the

liability in the balance sheet if we can estimate it reasonably accurately. Otherwise we

would add the liability as a note to the accounts.

Contingent Assets and Liabilities

A condition which exists at the balance sheet date, where the outcome will be

confirmed only by the occurrence or non-occurrence of one or more uncertain future

events.

Corporate and Democratic Core

Corporate Management: concerns those activities and costs that provide the

“infrastructure” that allows services to be provided. Charges to this heading are strictly

regulated. If costs can be identified within individual service areas, they cannot be

charged here.

Council Tax

The local tax that pays for a proportion of council services. It replaced the poll tax in April

1993.

Creditors

Amounts we owe for work done, goods received or services provided which have not

been paid for by the end of the financial year.

Current Assets

An asset which will be used up during the next accounting period e.g. inventories

(stocks).

Current Liabilities

Amounts which will become due or could be called upon during the next accounting

period.

Current Service Cost

Current service (pension) cost is an estimate of the true economic cost of employing staff

in a financial year, earning years of service that will eventually entitle them to a lump sum

and a pension. It measures the full liability estimated to have been generated in the year

(at today’s prices) and is unaffected by whether the fund is in surplus or deficit.

Debtors


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Amounts we owe for work done, goods received or services provided which have not

been paid for by the end of the financial year.

Depreciation

The measure of the wearing out, consumption or other reduction in the useful economic

life of a fixed asset, whether arising from use, passage of time, or of obsolescence through

technological or other changes.

Earmarked Reserves

Reserves set aside for specific purposes.


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Exceptional Items

Items of income and expense that are deemed to be exceptional based on their

significance (material), their nature and amount is disclosed separately, either on the

face of the Comprehensive Income and Expenditure Statement or in the notes to the

accounts, depending on how significant the items are to an understanding of the

Council’s financial performance.

Expected Return on Assets

Under the provisions of IAS19 the expected return on assets is a measure of the return

(income from dividends, interest etc.) on the assets held by the scheme for the year. It is

not intended to reflect the actual returns, but a longer term measure, based on assets at

the start of the year, any movements during the year and an expected return factor.

Fair Value

The fair value of an asset is the price at which it could be exchanged in an "arms length"

transaction less, where applicable, any grants receivable towards the purchase or use of

that asset.

Finance Lease

A lease that transfers substantially all the risks and rewards of ownership of a fixed asset to

the lessee. Such a transfer may be presumed to occur if, at the inception of the lease, the

present value of the minimum lease payments, including any initial payment, amounts to

substantially all of the fair value of the leased asset.

Financial Instrument Adjustment Account

The SORP introduced the requirement to account for Financial Instruments based on a

new set of Financial Reporting Standards, IAS 32, IAS 39 and IFRS 7. This technical

guidance requires certain Financial Instruments such as loans and deposits to be valued

on the Balance Sheet in accordance with the financial reporting requirements rather

than being shown at their "nominal" value. This results in an impact on Service Cost and

Interest in the Income and Expenditure Account. However, Accounting Regulations have

been put in place to allow the impact of these new accounting requirements to be

adjusted in the Statement of Movement in the General Fund Balance. This adjustment has

resulted in creation of a Financial Instrument Adjustment Account on the Balance Sheet.

Fixed Asset

A tangible asset that yields benefit to the Council and the services it provides for a period

of time in excess of one year.

General Fund

This account shows the expenditure and income relating to all the services provided by

the Council and how the net cost of these services has been financed by the local

taxpayers and government grants.

Government Grants

Assistance by government and inter-government agencies and similar bodies, whether

local or national, or international, in the form of cash or transfers of assets to the Council in

return for past or future compliance with certain conditions.

Heritage Assets

A heritage asset is an asset with historical, artistic, scientific, technological, geophysical or

environmental qualities that is held and maintained principally for its contribution to

knowledge and culture. These are accounted for in accordance with FRS 30 Heritage

Assets as adopted in the Code of Practice on Local Council Accounting, as there is no

IFRS that deals with heritage assets. Heritage assets can be both tangible and intangible

in nature.


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Housing Benefit

Payments to people on low incomes to assist them in meeting their housing costs.

Impairment

Impairment occurs where the recoverable amount of the fixed asset is lower than the

carrying value amount.

Infrastructure Assets

Fixed assets that are immovable or not transferable, expenditure on which is recoverable

only by the continued use of the asset created. Examples of infrastructure assets would

be assets within the Town Centre Regeneration Scheme.

Intangible Assets

Expenditure which has been capitalised but which does not always produce a fixed

asset, e.g. grants, software licences.

Interest Cost

Under the provisions of IAS 19 interest cost is the amount needed to unwind the discount

applied in calculating the current service cost. Provisions made at present value in

previous years will need to be uplifted by a year’s discount in order to keep pace with

current values.

IFRS

International financial reporting standards (IFRS) represent a set of generally accepted

accounting principles (GAAP) used by companies to prepare financial statements.

International Financial Reporting Standards that have been developed by the

International Accounting Standards Board (IASB). These are a set of accounting rules

followed by, or being adopted by, more than 100 countries. All member states of the EU

are required to use IFRS as adopted by the EU for listed companies since 2005. This year is

the second year that Councils have been required to complete their Financial

Statements in accordance with IFRS.

International Accounting Standard 19 (Retirement Benefits)

The objectives of IAS19 are to ensure that financial statements contain adequate

disclosure of the cost of providing retirement benefits and the related gains, losses, assets

and liabilities. The financial statement should also reflect the assets and liabilities arising

from an employer’s retirement benefit obligations and any related funding at fair values.

In addition the operating costs of providing retirement benefits should be recognised in

the accounting period(s) in which the benefits are earned by the employees, and the

related finance costs and any other changes in value of the assets and liabilities should

be recognised in the accounting periods in which they arise.

Inventories

These comprise the following:-

a) goods or other assets purchased for resale;

b) consumable stores;

c) products and services in intermediate stages of completion; and

d) finished goods for resale.

Investments

A long-term investment is an investment for longer than twelve months. Investments which

do not meet these criteria are classed as short term investments and shown in current

assets.

Investment Properties


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Interest in land and / or buildings which is held for its investment potential, rather than its

use in the provision of the Council’s services to the public, any rental income being

negotiated at arms length.

Leasing

A way of paying for capital spending where we pay a rental charge for a certain period

of time. There are two main types of leasing arrangements.

a) Finance leases, which transfer all the risks and rewards of owning a fixed asset to the

person taking out the lease. These assets are included in the fixed assets in the balance

sheet.

b) Operating leases, where the leasing company owns the asset and the yearly rental is

charged direct to the income and expenditure account.

Local Government Pension Scheme (LGPS)

Northamptonshire District Council participates in the LGPS, which is a defined benefit

pension scheme based on final pensionable salary. The fund is administered by

Northamptonshire County Council.

Minimum Revenue Provision

The minimum amount of the Council’s external debt that must be repaid in accordance

with Government regulations, by the revenue account in the year of account.


This statement brings together all the recognised gains and losses of the Council during

the period and identifies those that have and have not been recognised in the Income

and Expenditure account. The statement separates the movements between revenue

and capital reserves

Net Book Value

The amount at which fixed assets are included in the balance sheet, i.e. their historical

cost or current value less the cumulative amounts provided for depreciation.

Non Distributed Costs

These tend to be costs which, because of their nature, cannot be allocated or

apportioned to services. They may include the costs associated with the unused shares of

IT facilities or other long-term unused but unrealisable assets. They may also include the

costs of past service, settlement and curtailment pension contributions.


Fixed assets held by the Council but not directly occupied, used or consumed in the

delivery of its services. Examples of non-operational assets include investment properties

and those assets which are surplus to requirements and which are being held pending

sale or redevelopment.

Operational Assets

Fixed assets held and occupied, used or consumed by the Council in the direct delivery

of those services for which it has a statutory or discretionary responsibility.

Past Service Costs

Under the provisions of IAS19 past service costs are non-periodic costs arising from

decisions in the current year but whose financial effect is derived from years of service

earned in earlier years. Most costs are likely to be discretionary benefits, including added

year liabilities. Any new added years liabilities/past service costs will need to be

recognised in non distributed costs.


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Pensions Reserve

The Pensions Reserve absorbs the timing differences arising from the different

arrangements for accounting for post employment benefits and for funding benefits in

accordance with statutory provisions.

Post Balance Sheet Events

Those events, both favourable and unfavourable, which occur between the balance

sheet date and the date on which the Statement of Accounts is signed by the

responsible officer and authorised for issue.


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Precepts

The amount that the Council is required to collect from council tax payers to fund

another, non tax collecting Council's expenditure. Precepts are issued by County, Parish

and Town Councils and the local police Council.

Prior Year Adjustments

Those material adjustments which apply to previous years, which have arisen from

changes in accounting policies or from the correction of fundamental errors. They do not

include adjustments of accounting estimates made in prior years.

Provision

An amount we set aside to provide for something we will need to pay, but where we do

not know the exact amount and the date on which it will arise.

PRP

Performance related pay.

Related Party Transactions

The Council is required to disclose any material transactions with related parties to ensure

that stakeholders are aware when these transactions take place and the amount and

implications of such transactions.

Reserves

Amounts of money put aside to meet certain categories of expenditure in order to avoid

fluctuations in the charge to the General Fund.

Revaluation Reserve

Records the unrealised net gains from revaluations made after 1st April 2007.

Revenue Expenditure

The Council’s day-to-day expenditure on items which include wages, stationery and

interest charges. Expenditure that is not capital expenditure.

Revenue Expenditure Funded from Capital under Statute (REFCUS)

Capital expenditure which does not result in, or remain matched with, tangible assets.

Examples of this include expenditure on items such as private sector housing grants or

expenses included in the promotion of a Private Act of Parliament.

Revenue Support Grant

The main non-service specific grant from Central Government to fund the Council’s

expenditure.

Service Reporting Code of Practice (SeRCOP)

This Code of Practice provides guidance on the reporting structure, to enable

consistency and comparison of costs with other Council’s. The highest structure level

shown in the statements are mandatory.

Useable Capital Receipts

The amount of capital receipts which the Council is able to use to finance capital

spending.

Useful Life The period over which the Council will derive benefits from the use of a fixed

asset.

Usable Reserves Reserves that can be applied to fund expenditure or to reduce council

tax.


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Unusable Reserves Reserves that are kept to manage the accounting processes for non-

current assets, financial instruments, and retirement and do not represent usable

resources for the Council.

south northamptonshire council statement of...

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