eastsussex.gov.uk summary of accounts · 2015-06-24 · east sussex county council will, in...

Summary of Accounts2010/11

Your Council, Our promiseEast Sussex County Council will, in partnership, make the best use of resources to:• helpmakeEastSussexprosperousandsafe;• supportthemostvulnerablepeople;• improveanddeveloproadsandinfrastructure;• encouragepersonalandcommunityresponsibility;• deliverthelowestpossiblecounciltax;and• beavoiceforEastSussex,listeningandansweringtolocalpeople.

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Summary of Accounts 2010/11 2

Summary of AccountsWhatareAccountsandwhydoweproducethem?

WelcometotheCountyCouncil’ssummaryaccountsforthe2010/11financialyear.Bytheirverynature,ourfullstatutoryStatementofAccountsarecomplexdocumentsthathavetocomplywithstrictaccountingguidelines,andrunintomanypages.ThisshortdocumenthasbeenpreparedtogiveyouabriefinsightintothefinancesoftheCountyCouncilfortheyear.Itshowswherewehavespentandinvestedmoney,andwhatourfinancialpositionwasattheendofMarch2011.

LargeorganisationslikecompaniesorCouncilshavetokeepawrittenrecordoftheirincomeandexpenditure.Wealsohavetopublishtheserecordseachyear.Councilsmusttellthetaxpayersintheirareawheretheirmoneycamefrom,whattheydidwithit,whattheyown,andwhattheyowe.

During2010/11,theCouncilcompletedthemandatorytransitionofitsAccountingStatementstocomplywithInternationalFinancialReportingStandards(IFRS),witheffectfrom1April2010.Theseinternationalstandardsgovernthewayfinancialtransactionsarebroughtintoaccountandhowtheyarereported.ThetransitionhasaffectedboththeappearanceoftheCouncil’sAccountingStatementsandreportedfinancialbalances.IncomplyingwiththetransitiontoIFRS,theCouncilhashadtorevisitandrestatethepreviousyear’sfinancialstatements.

TheCouncilStatementofAccountsfor2010/11wascompletedandtheDirectorofCorporateResourceson30June2011formallyapprovedthedraftStatementofAccounts,inlinewiththeAccountsandAudit2011Regulations.Thefinalaudit,member’sapproval,andpublicationarerequiredtobecompletedby30thSeptember2011.

PKF(UK)LLPwasappointedbytheAuditCommission(theGovernment’spublic-spendingwatchdog)astheCouncil’sexternalauditors.TheCouncil’sauditorscanbecontactedat:

PKF(UK)LLPAccountants&BusinessAdvisersFarringdonPlace20FarringdonRoadLondonEC1M3APDirecttel02070650432Direct fax 020 7065 0650www.pkf.co.uk.

ThisleafletisasummaryoftheaccountsandisdesignedtohelpyougetabetterunderstandingoftheCouncil’sfinancesandourStatutoryStatementofAccounts.


How have we looked after the money?

Thefollowingstatementsdescribesomeofthekeypointsinourstewardshipof publicfunds.

Finances–RevenueSpending:

Ourfinancesfor2010/11arebroadlyinlinewiththecautiouspredictionsmadeearlierintheyearandarewithinthebudgetapprovedbytheCouncilinFebruary2010.

ThebudgetmanagementprocessesinplaceattheCouncilarerobustandworkingeffectively,inlinewiththekeyaimoftheCounciltodeliverqualityservicesatthelowestpossibleCouncilTax.TheprocessofReconcilingPolicyandResourcesisakeytooltofindingtherightbalance,asispromotingcustomer-focusedproductivityandefficiencyimprovements.

TheCouncil’spolicyonbalancesistomaintainalevelof2.25%ofthenetspending(excludingDedicatedSchoolsGrant).TheoverallfinancialsituationisregularlyreviewedandreportedtoCabinetaspartofthebudgetmonitoringprocess.

FinancialHealth:

TheCouncil’sspendingiscontrolledandcontainedwithinbudgets.TheCouncil’sreservesandprovisions(moneysetasideforthefuture),aresufficienttosafeguardfuturecoststhatmayarise.TheCouncilplansitsbudgetusinga4yearMediumTermFinancialPlan.ThistakesaccountofrisksinassessingfuturespendinglevelsandthelevelofreservesneededtoprotecttheCouncil’sfinances,dealwithrisksandpotentialfuturecosts(e.g.thecostoftheWastePrivateFinanceInitiative).


What did we spend the money on?

TheCouncil’sComprehensiveIncomeandExpenditureStatementisequivalenttotheProfitandLossAccountdisclosedincompanyaccounts.ItshowsthecostofrunningCouncilservicesduringthefinancialyear,wherethemoneycamefromtopayforservicesandthesurplusordeficitofincomeoverexpenditurefortheyear.Thisstatementoperatesinmuchthesamewayasahouseholdbudgetaccount(e.g.spendonmortgage,counciltax,utilities,food,etc)andthemoneythatcomesintotheaccount/household(e.g.wagesandsalaries).ThecostofrunningCouncilservices(e.g.staffsalaries,transport,premises,supplies,andservices)isshownnetofincomegenerated.

TheComprehensiveIncomeandExpenditureStatementhasprescribedheadingsforthetypesofexpenditureandshowstheamounttobefinancedfromlocalandnationaltax,togetherwiththerunningcostsoftheCouncilbetween1stApril2010and31stMarch2011asfollows:

Service Net Expenditure £ million

Educationandchildren’sservices 118.11

Adultsocialcareservices 177.73

Highwaysandtransportservices 41.18

Otherhousingservices 0.29

Cultural,environmental,regulatoryandplanningservices 34.43

Centralservicestothepublic 2.48

Corporateanddemocraticcore 2.47

Nondistributedcosts (114.04)

Net cost of services 262.65

Otheroperatingcosts 54.34

Cost of local services met by local and national taxes 316.99

Note:Non Distributed Costs (NDC) – this is past service costs relating to retirement benefits, i.e., the decrease in the present value of the defined benefit obligation for employee service in prior periods. The Past Service Cost figure for this year includes amounts in respect of efficiency and in respect of the changes to pension introduced in the Chancellor's budget statement on 22 June 2010 regarding calculations on future pension increases being linked to the Consumer Prices Index (CPI) and not the Retail Prices Index (RPI). The effect of this change comes through as a negative past service cost item in the revenue account.


How we spent the money

Where the money comes from

Inadditiontotheincomegeneratedbyservices,wefinancedourspendingusinglocaltaxesandgovernmentgrant.

Source of funding £ millionCouncil tax 238.83

Government Grants

NationalNon-domesticrates 87.42

Revenuesupportgrant 12.70

Areabasedgrant 33.75

CapitalGrantandContributions 50.31

Total Income 423.01

Note:Other (-18%) include the effect of future pension increases being linked to CPI and not the RPI, this change comes through as a negative past service cost item in the revenue account.

Council tax 56%

National non-domestic rates 21% Revenue support grant 3%

Area based grant 8%

Capital Grant andContributions 12%

Adultsocialcare56% Educationandchildren’sservices37%

HighwaysandTransport13% Other(-18%)

Corporate1% Cultural,environmental,regulatory andplanning11%

Counciltax56% Nationalnon-domesticrates21%

Revenuesupportgrant3% CapitalGrantandcontributions12%

Areabasedgrant8%


Did we have anything left over?

Aswellasthedirectcostofservices,theCouncilhasanumberofothercoststhatithastomeet.Theseincludetherepaymentofdebt,contributionstopayforcapitalexpendi-ture,andtransferstoandfromearmarkedreserves.Afterthesearecharged,therewasasurplusofincomeoverexpenditureof£1.77m.Asshowninthetablebelowthisisaschoolssurplusof£1.77m.

£ millionCostofservices 316.99

Incomefromtaxes/grant (423.01)

Surplus for the year (106.02)

ItemsnotchargeabletoCountyFund(seenoteabove) 104.25

Increase in County Fund/Schools balance for the year (1.77)

Movement within Balances £ millionCountyFund 0.00

Schools (1.77)

Increase in balances for the year (1.77)

Capital Income and Expenditure

Aswellastheday-to-dayrunningcosts,wealsospendmoneyonbuyingandimprov-ingtheCouncil’sassets,land,property,androads.Thisiscalledcapitalspendingandwehavetoaccountforthisseparatelyfromtherunningofday-to-dayservices.During2010/11,theCouncilspent£73.02milliononcapitalprojects,whichwasfundedbygrants,borrowing,capitalreceiptsandrevenuecontributions.

Capital spending (what we spent the money on) £ millionLandandbuildings 38.99

Roadsandinfrastructure 16.68

Capitalgrants 4.76

Vehicles,plantandequipment 3.58

Other(includingassetsunderconstruction) 9.01

Total Expenditure 73.02


Landandbuildings53% Roadsandinfrastructure23%

Capitalgrants7% Vehicles,plantandequipment5%

Other(includingassetsunder construction)12%

Financed by (How did we pay for it?) £ millionGrantsandcontributions–mainlyfromGovernment 59.13

Borrowing 6.02

Revenuecontributionsandreserves 6.87

Capital receipts 1.00

Total Financing 73.02

Grantsandcontributions81% Borrowing8%

Revenuecontributions Capitalreceipts1% andreserves10%

Land and buildings 53%

Roads and infrastructure 23%

Capital grants 7%

Vehicles, plant and equipment 5%

Other (including assets underconstruction) 12%

Grants and contributions 81%

Borrowing 8%

Revenue contributions and reserves 10%Capital receipts 1%


Simplified Balance Sheet

ThebalancesheetshowshowmuchtheCouncilisworthattheendofeachfinancialyear.Itsetsoutthevalueofitsassets,howmuchtheCouncilowes,andtheamountheldinreserves:

What the Council owns and owed £ millionWhat we own:

Land,infrastructures,buildingsandotherproperty 909.73

CashandInvestments 222.30

AmountownedtotheCouncil 57.82

Other 5.52

1,195.37

What we owe:

AmountowedbytheCouncil (83.19)

Borrowing (241.26)

Pension Liability (227.87)

Other (97.08)

(649.40)

Net value of what we own 545.97

Represented by:

Usablereserves(incl.Schools) 212.51

Unusablereserves 333.46

Net worth 545.97

ThefollowingareexamplesofmajorCapitalSchemeinvestmentduring2010/11:

• NewBexhillHighSchool–aschemeclassifiedunderBuildingSchoolsfortheFuture(BSF);

• BexhilltoHastingslinkroadstudies;

• Highwaymaintenance;

• NewArchiveandRecordsoffice;

• WarwickHouse–anewday-careandlibraryinSeaford;

• Buildingmaintenanceprogramme.


Cash Flow

Duringtheyear,approximately£1billionofcashflowedinandoutoftheCouncil’sbankaccounts:

Cash flow £ millionNetcashoverdrawnat1April2010 (32.48)

Cashinduringtheyear (949.86)

Cashoutduringtheyear 951.39

Net cash overdrawn at 31 March 2011 (30.95)

Aswithallourfinancialstatements,thecashflowpositionisasnapshotintime,withthepositionchangingdaily.Thecouncilhasanexcellentrecordofmanagingcasheffectively.

Schools

LocalauthoritiesaregivenaDedicatedSchoolsGrant(DSG)tobering-fencedforschoolsandpupilrelatedcosts.ThisgranthastobekeptseparatefromtheCountyBalances.

ThetotalamountofDedicatedSchoolGrantreceivedin2010/11was£275.98m,whichwassupplementedbyaCountyCouncilcontributiontotheSchoolbudgetof£2.92m.Inaddition,therewascarryforwardofthepreviousyearsunderspendof£1.36mgivingatotalincomeof£280.26m.Theactualamountspentwas£276.55m.TheSchoolbudgetunderspendof£3.71mwillbecarriedforwardandspentin2011/12.


Pension Fund

TheCountyCounciladministersthefundfromwhichpensionsarepaidtoformeremployeesoftheCountyCouncil,BrightonandHoveCityCouncil,BoroughandDistrictCouncilsinEastSussexandcertainotherbodies.Separatepensionarrangementsaremadeforteachersandfirefighters.TheFundismanagedunderthedirectionofthePensionFundInvestmentPanel,whichcomprisesthreemembersoftheCountyCouncil,twomembersofBrightonandHoveCityCouncil,anomineeoftheEastSussexBoroughandDistrictCouncilsandastaffrepresentative(appointedbyUnison,thepublicsectorunion).

Thepensionschemeisfinancedbycontributionsfromemployeesandemployers,togetherwithincomeandproceedsfromthefund’sinvestments. ThelatestactuarialvaluationoftheFundwascarriedoutasat31March2010.ThepurposeofthetriennialvaluationistocalculatethecontributionratesrequiredtobemadebyeachemployerparticipatingintheFund,whichtogetherwithinvestmentgrowthwillbesufficienttomeettheFund’sfutureliabilities.The2010valuationshowstheFundhasapastservicedeficit,being87%fundedinrespectofpastliabilities.Thiscompareswith89%fundedatthe2007valuation.ArecentsurveyofvaluationresultsforCountyCouncilfundscarriedoutbytheSocietyofCountyTreasurershasshownthatallCountyCouncilfundsareindeficit.TheEastSussexPensionFund,at87%funding,ishowever,oneofthebestfundedoutofthe34CountyCouncilFunds.


Our Carbon Reduction Commitment

TheCarbonReductionCommitmentenergyefficiencyscheme(CRC)wasintroducedinApril2010.ThisisoneofthemanyinitiativesdesignedtomeettheGovernment’scommitmentstoreducecarbonemissionsandfocusesprimarilyonenergyusagewithinbuildings.TheCouncilhasregisteredforinclusionwithinthisschemeasitsenergyusageexceedsthequalifyingthreshold.Recentchangestotheschememeanthatthefirstyear(2010/11)isareportingyearonlyandtherearenofinancialimplicationsforthecurrentyear.

In2011/12,thesecondyearoftheschemetheCouncilwillberequiredtoreportonitsenergyusageinbuildingsandtopurchasecarbonallowancesatafixedpriceof£12pertonofCO2.ItisestimatedthatbasedoncurrentlevelsofenergyusagethiswillcosttheCouncilintheregionof£394,000(excludingstreetlighting).Thishasbeenincludedinfinancialplanning.TheCouncilaspartofitscommitmenttoreducingitscarbonemissionsiswelladvancedinitspreparationstomeettherequirementsofthisscheme.Performanceintheearlyyearsoftheschemeismeasuredontwoearlyactionmetrics;

• Conversionofmeterstoautomaticmeterreading(AMR),and• Accreditationwitharecognisedcarbonbody.

TheCouncilbeganaprogrammeofmeterconversioninMarch2010andnowhas82%ofitselectricityand83%ofitsgasmetersconvertedtoAMR.InDecember2010,theCouncilgainedaccreditationwiththeCarbonTrustfortheperioduptoMarch2012.

Statement from the Director of Corporate Resources

Thisstatementgivesabriefoverviewofourperformanceandaccountssummaryfor2010/11.Itsummarisestheday-to-dayexpenditureandincomeandhighlightsthechangesinthefinancialpositionoftheCouncilduringtheyear.Ihopeithashelpedyoutogetabetterunderstandingofourfinancesandaccounts.

AsEastSussexCountyCouncil’sstatutoryChiefFinanceOfficer,IcanconfirmthattheCouncil’sStatementofAccountshasbeenpreparedinaccordancewithaccountingregulationsandcodesofpractice.Figuresinthissummaryarecompiledfromtheaccountsusingproperaccountingpractice.

TheaccountswillbeauditedbyPKF(UK)LLP.AfullcopyoftheauditedStatementofAccountswillbeavailableonrequestinOctober.

Sean NolanDirectorofCorporateResources


Have Your Say

Inpreparingitsaccounts,theCouncilhasattemptedtopresentdetailsofitsfinancesinawaythatisaccurate,thatmeetslegalrequirementsandisreasonablyeasytounderstand.However,effortsarecontinuingtoimprovethepresentationoffinancialinformation.

Letusknowwhatyouthink,withyourviews,comments,questions,orsuggestionsabout the full Statement of Accounts, the Summary of Accounts or Council finances in generalandhowyoufeeltheycouldbeimproved.

Pleasesendyourcommentsto:[email protected]

or to:

CRDFinanceEast Sussex County CouncilPOBox3CountyHallSt Anne’s CrescentLewesEast Sussex BN71UE

A full version of the Statement of Accounts can be found on the council’s website www.eastsussex.gov.uk/finance


Financial Terms explained

Wehavetriedtoavoidusingfinancialtermsinthisleaflet,butsomeareinevitable-heretheyareexplained:

Area Based GrantAgeneralgrantallocateddirectlytolocalauthoritiesasadditionalrevenuefundingtosupportitspriorityareas.

AssetsBuildings,land,vehiclesandmoneyinthebank.

BorrowingMoneywehaveborrowedtopayforfixedassetsandarerepayingoveranumber ofyears.

Capital expenditureSpendingonnewassets,vehicles,andtherefurbishmentofoldassetslikebuildings.

CreditorsThosetowhomweowemoney.

DebtorsPeopleororganisationswhooweusmoney.

DepreciationSomeassetslosevalueastheygetolder;thisiscalleddepreciation.

Dedicated Schools Grant (DSG)ACentralGovernmentspecificgrant;forfundingLocalAuthorityschoolsspending.

Fixed AssetsThingsthatwilllastmorethanoneyear.

Private Finance Initiative (PFI)Long-termcontractualpartnership,underwhichtheprivatesectortakesontherisksassociatedwiththedeliveryofpublicservicesinexchangeforpaymentstiedtoagreedstandardsofperformance.

ReservesSavingsormoneysetasideforthefuture.

Revenue expenditureSpending(andincome)ondaytodayrunningcosts,forexample,employeecosts.

StocksThingswehaveboughtbuthavenotyetused.

eastsussex.gov.uk summary of accounts · 2015-06-24 · east sussex county council will, in...

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